Execution Copy




                                 TRUST INDENTURE


                                     BETWEEN


                        NEW YORK STATE ENERGY RESEARCH
                            AND DEVELOPMENT AUTHORITY



                                       AND



                                HSBC BANK USA,
                                  as Trustee




                           Dated as of July 1, 1999



                                  -relating to-


              $292,700,000 Facilities Revenue Bonds, Series 1999A
            (Consolidated Edison Company of New York, Inc. Project)

<PAGE>






                                TABLE OF CONTENTS
                                                                      Page

                                    ARTICLE I
                      DEFINITIONS; COMPUTATIONS; CERTIFICATES AND OPINIONS;
                  EVIDENCE OF ACTION BY AUTHORITY

SECTION 1.01.     Definitions of Specific Terms............................I-1
SECTION 1.02.     Definitions of General Terms.............................I-26

                                   ARTICLE II
                             AUTHORIZATION OF BONDS

SECTION 2.01.     Limitation on Issuance of Bonds..........................II-1
SECTION 2.02.     Authorization of Bonds...................................II-1
SECTION 2.03.     Global Form; Securities Depository.......................II-2
SECTION 2.04.     Limitations on Transfer..................................II-4
SECTION 2.05.     Application of Bond Proceeds.............................II-5
SECTION 2.06.     Delivery of the Bonds....................................II-5

                                   ARTICLE III
                                INTEREST ON BONDS

SECTION 3.01.     Interest on Bonds-General................................III-1
SECTION 3.02.     Commercial Paper Rate....................................III-4
SECTION 3.03.     Auction Rate Period -Auction Rate:Auction Period-General III-5
SECTION 3.04.     Auction Rate Period - Auction Rate Bonds: Change of Auction
                  Period by Authority......................................III-5
SECTION 3.05.     Auction Rate Period - Auction Rate Bonds: Change of Auction
                  Date by Remarketing Agent................................III-6
SECTION 3.06.     Auction Rate Period - Auction Rate Bonds: Orders by Beneficial
                  Owners and Potential Beneficial Owners...................III-7
SECTION 3.07.     Auction Rate Period - Auction Rate Bonds: Submission of
                  Orders by Broker-Dealers to Auction Agent................III-9
SECTION 3.08.     Auction Rate Period - Auction Rate Bonds: Determination of
                  Sufficient Clearing Bids, Winning Bid Rate and Auction Rate
III-11
SECTION 3.09.     Auction Rate Period - Auction Rate Bonds: Acceptance and
                  Rejection of Submitted Bids and Submitted Sell Orders and
                  Allocation of Auction Rate Bonds.......................III-12
SECTION 3.10.     Auction Rate Period - Auction Rate Bonds: Adjustment in

                  Percentage.........................................III-15

                        CHANGES IN THE INTEREST RATE MODE
SECTION 4.01.     Optional Conversion to an Adjustable Rate by Authority...IV-1

SECTION 4.02.     Optional Conversion to Fixed Rate........................IV-3

SECTION 4.03.     Conversion Generally.....................................IV-5



                                    ARTICLE V

                  REDEMPTION AND PURCHASE OF BONDS

SECTION 5.01.     Optional Redemption......................................V-1

SECTION 5.02.     [Reserved]...............................................V-2

SECTION 5.03.     Tender for and Purchase upon Election of Holder..........V-2

SECTION 5.04.     Mandatory Tender for Purchase upon Change in the Interest Rate

                  Mode or on Business Day Following Certain Calculation Periods
 ...........................................................................V-3

SECTION 5.05.     Extraordinary Optional Redemption........................V-4

SECTION 5.06.     Special Tax Redemption Provisions........................V-4

SECTION 5.07.     Redemption at Demand of the State........................V-6

SECTION 5.08.     Mandatory Tender for Purchase Upon Expiration of any Support

                  Facility or Upon Delivery of a Credit Facility or an Alternate

                  Support Facility.........................................V-6

SECTION 5.09.     Mandatory Tender Upon Occurrence of any Terminating Event

 ...........................................................................V-7

SECTION 5.10.     General Provisions Applicable to Mandatory and Optional

                  Tenders for Purchase of Bonds............................V-7

SECTION 5.11.     Selection of Bonds to be Redeemed........................V-8

SECTION 5.12.     Notice of Redemption.....................................V-9

SECTION 5.13.     Bonds purchased for account of Liquidity Facility Issuer.V-10

SECTION 5.14.     Effect of Redemption.....................................V-10

SECTION 5.15.     Cancellation of Redeemed Bonds...........................V-11



                                   ARTICLE VI

                  SUPPORT FACILITY

SECTION 6.01.     Support Facility - General...............................VI-1

SECTION 6.02.     Alternate Support Facility...............................VI-1

SECTION 6.03.     Trustee not Responsible for Enforcement of Support Facility

 ...........................................................................VI-2



                                   ARTICLE VII

                  GENERAL TERMS AND PROVISIONS OF BONDS

SECTION 7.01.     Execution and Authentication of Bonds....................VII-1

SECTION 7.02.     Books of Registry........................................VII-1

SECTION 7.03.     Transfer, Registration and Exchange of Bonds.............VII-1

SECTION 7.04.     Mutilated, Lost, Stolen, or Destroyed Bonds..............VII-2

SECTION 7.05.     Temporary Bonds..........................................VII-3

SECTION 7.06.     Disposition of Bonds.....................................VII-4



                                  ARTICLE VIII

                  ESTABLISHMENT OF THE PROJECT FUND

SECTION 8.01.     Project Fund...........................................VIII-1



                                   ARTICLE IX

                  CREATION OF SPECIAL FUNDS AND ACCOUNTS;APPLICATION AND
                           INVESTMENT OF REVENUES

SECTION 9.01.     Creation of Funds and Accounts...........................IX-1

SECTION 9.02.     Deposit of Note Payments.................................IX-1

SECTION 9.03.     Application of Monies in the Bond Fund and the Bond

                  Purchase Fund............................................IX-3

SECTION 9.04.     Investment of Funds......................................IX-5



                                    ARTICLE X

                  PARTICULAR COVENANTS OF THE AUTHORITY

SECTION 10.01.    Payment of Principal of and Interest and Redemption Premium

                  on Bonds.................................................X-1

SECTION 10.02.    Performance of Covenants.................................X-1

SECTION 10.03.    Further Instruments......................................X-1

SECTION 10.04.    Inspection of Project Books..............................X-1

SECTION 10.05.    No Extension of Time of Payment of Interest..............X-1

SECTION 10.06.    Trustee's, Auction Agent's, Remarketing Agent's,

                  Broker-Dealers' Registrar and Paying Agent's and Indexing

                  Agent's Fees, Charges and Expenses.......................X-1

SECTION 10.07.    Agreement of the State of New York.......................X-2

SECTION 10.08.    Recording and Filing.....................................X-2

SECTION 10.09.    Rights Under the Participation Agreement and the Note....X-2



                                   ARTICLE XI

                  CONCERNING THE TRUSTEE; APPOINTMENT OFREGISTRAR AND PAYING
AGENT, REMARKETING AGENT, AUCTION AGENT AND INDEXING AGENT

SECTION 11.01.    Appointment of Trustee...................................XI-1

SECTION 11.02.    Indemnification of Trustee as Condition for Remedial Action

 ...........................................................................XI-1

SECTION 11.03.    Trustee Not Liable for Failure of the Authority or Company

                  to Act...................................................XI-1

SECTION 11.04.    Certain Duties and Responsibilities of the Trustee.......XI-2

SECTION 11.05.    Limitations on Obligations and Responsibilities of Trustee

 ...........................................................................XI-4

SECTION 11.06.    Compensation and Indemnification of Trustee..............XI-4

SECTION 11.07.    Statements from Trustee..................................XI-4

SECTION 11.08.    Notice of Default........................................XI-5

SECTION 11.09.    Trustee May Deal in Bonds................................XI-5

SECTION 11.10.    Trustee Not Responsible For Recitals.....................XI-5

SECTION 11.11.    Qualification of the Trustee.............................XI-5

SECTION 11.12.    Resignation and Removal of Trustee.......................XI-6

SECTION 11.13.    Successor Trustee........................................XI-7

SECTION 11.14.    Appointment of Remarketing Agent.........................XI-7

SECTION 11.15.    Appointment of Registrar and Paying Agent................XI-8

SECTION 11.16.    General Provisions Regarding Registrar and Paying Agent..XI-8

SECTION 11.17.    Payment of Registrar and Paying Agent; Indemnification...XI-9

SECTION 11.18.    Registrar and Paying Agent's Performance; Duty of Care...XI-9

SECTION 11.19.    Qualifications of Registrar and Paying Agent.............XI-10

SECTION 11.20.    Resignation or Removal of Registrar and Paying Agent and

                  Successor to Registrar and Paying Agent; Termination of

                  Registrar and Paying Agent's Obligations.................XI-10

SECTION 11.21.    Appointment of Auction Agent; Qualifications of

                  Auction Agent, Resignation; Removal......................XI-11

SECTION 11.22.    Appointment of Broker-Dealers............................XI-11

SECTION 11.23.    Appointment of Additional Paying Agents; Each Paying Agent

                  to Hold Money in Trust...................................XI-11

SECTION 11.24.    Appointment and Duties of Indexing Agents................XI-11

SECTION 11.25.    Qualifications of Indexing Agents........................XI-12



                                   ARTICLE XII

                  EVENTS OF DEFAULT; REMEDIES UPONOCCURRENCE THEREOF

SECTION 12.01.    Events of Default........................................XII-1

SECTION 12.02.    Notice to Holders and Others Upon Occurrence of an Event of

                  Default or a Failure to Deposit..........................XII-2

SECTION 12.03.    Declaration of Principal and Interest As Due.............XII-2

SECTION 12.04.    Action by Trustee Upon Occurrence of Event of Default....XII-3

SECTION 12.05.    Powers of Trustee With Respect to Participation Agreement

                  and Other Agreements.....................................XII-4

SECTION 12.06.    Disposition of Monies in Event of Insufficiencies in Funds

                  and Accounts.............................................XII-5

SECTION 12.07.    Effect of Delay or Omission; Waiver of Default; Direction of

                  Remedial Proceedings by the Holders......................XII-7

SECTION 12.08.    Suits or Actions by Holders; Any Holder May Enforce

                  Overdue Payment of His or Her Bond or Interest Thereon...XII-7

SECTION 12.09.    Remedies Not Exclusive...................................XII-8

SECTION 12.10.    Effect of Abandonment of Proceedings on Default..........XII-8

SECTION 12.11.    Interest on Overdue Amounts..............................XII-8



                                  ARTICLE XIII

                 EXECUTION OF INSTRUMENTS BY BONDHOLDERS AND OWNERSHIP OF
                 BONDS; EXCLUSION OF BONDSOWNED BY THE AUTHORITY OR THE COMPANY

SECTION 13.01.    Execution of Requests, Directions and Consents and Other

                  Instruments and Proof of Same; Ownership of Bonds and

                  Proof of Same..........................................XIII-1

SECTION 13.02.    Meetings of Holders....................................XIII-2

SECTION 13.03.    Exclusion of Bonds Held by or for the Authority, the Company

                  and of Bonds No Longer Deemed Outstanding Hereunder....XIII-3



                                   ARTICLE XIV

                  AMENDING AND SUPPLEMENTING THE INDENTURE,THE PARTICIPATION
AGREEMENT, THE REMARKETING AGREEMENT,AUCTION AGENCY AGREEMENT, BROKER-DEALER
                   AGREEMENTS,BOND PURCHASE TRUST AGREEMENT

SECTION 14.01.    Amending and Supplementing Indenture Without Consent of

                  Holders..................................................XIV-1

SECTION 14.02.    Amending and Supplementing Indenture with Consent of

                  Holders..................................................XIV-2

SECTION 14.03.    Notation upon Bonds; New Bonds Issued upon Amendments....XIV-3

SECTION 14.04.    Effectiveness of Supplemental Indentures.................XIV-3

SECTION 14.05.    Supplemental Indenture Affecting Support Facility Provider

 ...........................................................................XIV-4

SECTION 14.06.    Supplemental Participation Agreements Not Requiring the

                  Consent of the Holders...................................XIV-4

SECTION 14.07.    Notice and Consent for Supplemental Participation

                  Agreements Requiring the Consent of the Holders..........XIV-4

SECTION 14.08.    Effectiveness of Supplemental Participation Agreement....XIV-5

SECTION 14.09.    Amending and Supplementing the Remarketing Agreement,

                  Auction Agency Agreement, Broker-Dealer Agreements or

                  Bond Purchase Trust Agreement............................XIV-5



                                   ARTICLE XV

                  DEFEASANCE; MONEYS HELD FOR PAYMENT OFDEFEASED BONDS

SECTION 15.01.    Discharge of Liens and Pledges; Bonds No Longer Deemed to

                  be Outstanding Hereunder.................................XV-1

SECTION 15.02.    Release of Indenture, Termination of Right, Title and Interest

                  of Trustee...............................................XV-2

SECTION 15.03.    Bonds Not Presented for Payment When Due; Monies Held

                  for the Bonds after Due Date of Bonds....................XV-2



                                   ARTICLE XVI

                  FORM OF BONDS...AND ENDORSEMENT AND ASSIGNMENT PROVISIONS

SECTION 16.01.    Form of Bonds and Endorsement and Assignment Provisions..XVI-1



                                  ARTICLE XVII

                  MISCELLANEOUS

SECTION 17.01.    Benefits of Indenture Limited to Authority, Company,

                  Trustee, Registrar, Paying Agent and Auction Agent and Holders

                  of the Bonds...........................................XVII-1

SECTION 17.02.    Indenture a Contract; Indenture Binding Upon Successors or

                  Assigns of the Authority...............................XVII-1
SECTION 17.03.    Notice to Holders of Bonds.............................XVII-1

SECTION 17.04.    Waiver of Notice.......................................XVII-1

SECTION 17.05.    Effect of Saturdays, Sundays and Non-Business Days.....XVII-2

SECTION 17.06.    Partial Invalidity.....................................XVII-2

SECTION 17.07.    Law and Place of Enforcement of Indenture..............XVII-2

SECTION 17.08.    Requests, Approvals and Directions of Authority........XVII-2

SECTION 17.09.    Notices, Demands; Requests.............................XVII-2

SECTION 17.10.    Effect of Article and Section Headings and Table of Contents

 .........................................................................XVII-4

SECTION 17.11.    Indenture May be Executed in Counterparts; Effectiveness

                  of Indenture...........................................XVII-4

SECTION 17.12.    Liability of Authority Limited to Revenues.............XVII-4

SECTION 17.13     Waiver of Personal Liability...........................XVII-4








<PAGE>




            THIS  TRUST  INDENTURE,  made and dated as of the first day of July,
1999, by and between New York State Energy  Research and  Development  Authority
(the "Authority"),  a body corporate and politic,  constituting a public benefit
corporation,  and HSBC Bank USA,  as  trustee  (the  "Trustee"),  a  corporation
organized and existing  under and by virtue of the laws of the State of New York
with its principal corporate trust office located in The City of New York.

                         W I T N E S S E T H T H A T:

            WHEREAS,  pursuant to special act of the Legislature of the State of
New York  (Title 9 of Article 8 of the Public  Authorities  Law of New York,  as
from time to time  amended  and  supplemented,  herein  called the  "Act"),  the
Authority has been  established as a body corporate and politic,  constituting a
public benefit corporation; and

            WHEREAS, pursuant to the Act, the Authority is empowered to contract
with any power company to  participate in the  construction  of facilities to be
used for the furnishing of electric  energy to the extent required by the public
interest in development,  health,  recreation,  safety,  conservation of natural
resources and aesthetics; and

            WHEREAS,  pursuant to the Act, the Authority has also been empowered
to extend  credit and make loans from bond and note  proceeds  to any person for
the  construction,  acquisition and installation of, or for the reimbursement to
any person for costs not limited to, any land, works, system,  building or other
improvement,  and all real and personal properties of any nature or any interest
in any of them which are suitable for or related to the  furnishing,  generation
or production of energy or the conversion of oil-burning facilities to alternate
fuel; and

            WHEREAS,  the Authority is also  authorized  under the Act to borrow
money and issue its negotiable bonds and notes to provide  sufficient monies for
achieving  its  corporate   purposes  including  the  refunding  of  outstanding
obligations of the Authority; and

            WHEREAS,  the  Authority is also  authorized  under the Act to enter
into any contracts and to execute all  instruments  necessary or convenient  for
the  exercise  of its  corporate  powers and the  fulfillment  of its  corporate
purposes; and

            WHEREAS,  contemporaneously with the execution hereof,  Consolidated
Edison Company of New York,  Inc. (the "Company") and the Authority have entered
into a Participation  Agreement of even date herewith (herein referred to as the
"Participation  Agreement"),  providing for the refunding of Electric Facilities
Revenue Bonds,  Series 1989 C  (Consolidated  Edison  Company of New York,  Inc.
Project) and Electric  Facilities  Revenue  Bonds,  Series 1990 A  (Consolidated
Edison Company of New York, Inc. Project)  (collectively,  the "Prior Bonds") of
the Authority  which were issued to finance the  acquisition,  construction  and
installation of certain  facilities for the furnishing of electric energy within
the Company's service area and as part of such participation, that the Authority
issue bonds pursuant to the Act to provide funds to refund the Prior Bonds; and



<PAGE>



                                     -3-

            WHEREAS,  the  Participation  Agreement  provides that the Authority
will  issue its bonds  and make the  proceeds  of such  bonds  available  to the
Company to refund the Prior Bonds; and

            WHEREAS,  simultaneously  with the  issuance  and  delivery  of such
bonds,  the Company will execute and deliver a promissory note dated the date of
issuance  of such  bonds (the  "Note") as  evidence  of its  obligation  to make
payments required by the Participation Agreement; and

            WHEREAS,  pursuant to Resolution No. 934 adopted April 19, 1999, the
Authority has  determined to issue its Facilities  Revenue  Bonds,  Series 1999A
(Consolidated  Edison Company of New York, Inc.  Project) in an aggregate amount
not exceeding  $292,700,000 (the "Bonds") for the purpose of paying a portion of
the redemption price of the Prior Bonds; and

            WHEREAS,  all acts,  conditions and things  necessary or required by
the Constitution and statutes of the State of New York, or otherwise,  to exist,
happen,  and be performed as prerequisites to the passage of this Indenture,  do
exist, have happened, and have been performed; and

            WHEREAS,  the Trustee has accepted the trusts  created by this Trust
Indenture and in evidence thereof has joined in the execution hereof;

            NOW, THEREFORE, THIS TRUST INDENTURE WITNESSETH:



<PAGE>


            That in order to  declare  the terms and  conditions  upon which the
Bonds are  authenticated,  issued and  delivered,  and in  consideration  of the
premises and the  acceptance by the Trustee of the trusts hereby  created and of
the purchase and acceptance of the Bonds by the Holders  thereof,  and for other
good and valuable  consideration,  the receipt of which is hereby  acknowledged,
and in order to secure  payment of the  principal  of and  premium,  if any, and
interest on the Bonds  according  to their tenor and effect and the  performance
and  observance by the Authority of all  covenants,  agreements  and  conditions
herein and in the Bonds  contained,  the Authority has  acknowledged,  executed,
signed and delivered this Indenture and hereby assigns,  confirms,  pledges with
and sets over and entrusts to the Trustee hereunder, its successors in trust and
assigns, subject to the provisions of this Indenture (the following being called
the  "Trust  Estate"):  (1)  the  Revenues  (as  hereinafter  defined);  (2) the
Participation  Agreement  and the Note and all rights,  remedies and interest of
the Authority  under the  Participation  Agreement  and the Note,  and any other
agreement  relating to the Project  (exclusive  of the  Authority's  rights with
respect to (a) administrative compensation, attorney's fees and indemnification,
(b) the receipt of notices,  opinions,  reports, copies of instruments and other
items of a similar  nature  required to be delivered to the Authority  under the
Participation   Agreement,  (c)  granting  approvals  and  consents  and  making
determinations  when  required  under the  Participation  Agreement,  (d) making
requests for information  and  inspections in accordance with the  Participation
Agreement,  (e)  Article  III  and  Sections  4.02(f),  4.14  and  5.08  of  the
Participation  Agreement  and,  insofar as the  obligations of the Company under
Section 4.12 relate to taxes and assessments  imposed upon the Authority and not
the Trustee,  Section 4.12 thereof, and (f) the right to amend the Participation
Agreement);  (3) the Tax  Regulatory  Agreement,  and all rights,  remedies  and
interest  of the  Authority  thereunder,  subject to the  provisions  of the Tax
Regulatory  Agreement  relating to the amendment thereof and to a reservation by
the Authority of the right to enforce the obligations of the Company  thereunder
independently of the Trustee;  (4) all other monies,  rights and properties held
by the Trustee or other depositary under this Indenture including,  but only for
the benefit of the persons specified herein, the proceeds of any draw, borrowing
or  payment  under  any  Credit  Facility  (as  hereinafter  defined),  and  the
securities (and the interest, income and profits therefrom) in which such monies
may from time to time be  invested  (exclusive  of the  proceeds  of a Liquidity
Facility (as hereinafter defined) or the Project Fund (as hereinafter defined));
and (5) any and all other real or personal property of every nature from time to
time  hereafter  by  delivery  or by  writing of any kind  specially  mortgaged,
pledged,  or  hypothecated,  as and for additional  security  hereunder,  by the
Company in favor of the Trustee or the Authority which are hereby  authorized to
receive any and all such property at any and all times and to hold and apply the
same subject to the terms hereof.

            TO HAVE AND TO HOLD,  all and singular of said Trust Estate unto the
Trustee, its successors in trust and assigns,  forever, in trust,  nevertheless,
to  inure  to the use and  benefit  of the  Holders  of all the  Bonds,  for the
securing of the  observance  or  performance  of all the terms,  provisions  and
conditions  therein  and herein  contained  and for the equal and  proportionate
benefit and security of all and  singular the present and future  Holders of the
Bonds,  without  preference,  priority,  prejudice or  distinction as to lien or
otherwise of any Bond over any other Bond, to the end that each Holder of a Bond
shall  have the same  rights,  privileges  and lien  under and by virtue of this
Trust Indenture, except as hereinafter otherwise specifically provided;

            AND UPON THE CONDITION THAT, if the Authority shall cause to be paid
fully  and  promptly  and  indefeasibly   when  due  all  of  its  indebtedness,
liabilities,  obligations  and  sums  at  any  time  secured  hereby,  including
interest,  its Trustee's fees and reasonable  expenses (including its reasonable
attorneys' fees and expenses), and shall promptly, faithfully and strictly keep,
perform and observe,  or cause to be kept,  performed and  observed,  all of its
covenants, obligations,  warranties and agreements contained herein, then and in
such  event,  this Trust  Indenture  shall be and become  void and of no further
force and effect, otherwise the same shall remain in full force and effect.



<PAGE>


            THIS  TRUST  INDENTURE  FURTHER  WITNESSETH,  and  it  is  expressly
declared,  that  all  Bonds  issued  and  secured  hereunder  are to be  issued,
authenticated  and delivered and all said income and Revenues hereby pledged are
to be  dealt  with  and  disposed  of  under,  upon and  subject  to the  terms,
conditions,  stipulations,  covenants,  agreements, trusts, uses and purposes as
hereinafter  expressed,  and the Authority has agreed and  covenanted,  and does
hereby agree and  covenant,  with the Trustee and with the  respective  Holders,
from time to time, of the said Bonds, or any part thereof,  as follows (provided
that in the performance of the agreements of the Authority  herein contained any
obligation it may thereby incur for the payment of money shall never  constitute
a  general  or  moral  obligation  of the  State  of New  York or any  political
subdivision thereof within the meaning of any state constitutional  provision or
statutory  limitation,  and shall not be secured  directly or  indirectly by the
full faith and credit,  the general  credit or any revenue or taxes of the State
of New York or any political  subdivision  thereof,  but shall be payable solely
out of the income and Revenues derived under the Participation Agreement and the
Note and from  drawings  under the Credit  Facility,  if any, and other  monies,
rights and properties of the Trust Estate), that is to say:


<PAGE>



                                     I-16

                              ARTICLE IARTICLE I

     DEFINITIONS; COMPUTATIONS; CERTIFICATES AND OPINIONS; EVIDENCE OF ACTION BY
AUTHORITYDEFINITIONS;  COMPUTATIONS;  CERTIFICATES  AND  OPINIONS;  EVIDENCE  OF
ACTION BY AUTHORITY

     SECTION  1.01.  Definitions  of Specific  Terms.  Unless the context  shall
clearly indicate some other meaning or may otherwise require,  the terms defined
in this Section shall,  for all purposes of this Indenture and of any indenture,
resolution or other instrument  amendatory hereof or supplemental  hereto and of
any certificate,  opinion,  instrument or document herein or therein  mentioned,
have the meanings herein specified, with the following definitions to be equally
applicable to both the singular and plural forms of any terms herein defined and
vice versa.

            "Act" shall mean the New York State Energy  Research and Development
Authority Act, Title 9 of Article 8 of the Public  Authorities  Law of the State
of New York, as from time to time amended and supplemented.

            "Additional  Payments" shall mean the Additional Payments as defined
in Section 4.02(f) of the Participation Agreement.

            "Adjustable  Rate"  shall  mean  any of  the  following  types  of
interest  rates:  a Commercial  Paper Rate,  an Auction  Rate, a Daily Rate, a
Weekly Rate, a Monthly Rate, a Semi-annual Rate and a Term Rate.

            "Administration  Fees" shall mean the amounts payable by the Company
to the Authority  pursuant to Section 4.02(f) of the Participation  Agreement to
defray a portion of the expenses  incurred by the  Authority in  conducting  and
administering  its special  energy  project  programs and the amount  payable as
state bond  issuance  charge  pursuant to Section  4.02(f) of the  Participation
Agreement.

            "Affiliate"  shall mean any person known to the Auction  Agent to be
controlled by, in control of or under common control with the Company;  provided
that no Broker-Dealer  controlled by, in control of or under common control with
the  Company  shall be an  Affiliate  nor shall any  corporation  or any  person
controlled  by, in control of or in common  control with such  corporation be an
Affiliate solely because a director or executive  officer of such  Broker-Dealer
is also a director of the Company.

            "After-Tax  Equivalent Rate" on any date of determination shall mean
with  respect to Auction Rate Bonds,  the  interest  rate per annum equal to the
product of (x) Commercial  Paper/Treasury  Rate on such date and (y) (1.00 minus
the Statutory Corporate Tax Rate on such date).

            "Agent  Member"  shall  mean a member of, or  participant  in, the
Securities Depository.



<PAGE>


            "All Hold Rate" shall mean on any date of determination with respect
to Auction Rate Bonds the rate per annum equal to 85% (as such percentage may be
adjusted  pursuant to Section  3.10) of the lesser of (i) the  Commercial  Paper
Index on such date and (ii) the After-Tax Equivalent Rate on such date provided,
however,  that in no event shall such All Hold Rate exceed the maximum  rate, if
any, permitted by applicable law.

            "Alternate   Support  Facility"  shall  mean  any  Support  Facility
obtained  pursuant  to the  provisions  of  Section  6.02 in  replacement  of an
existing Support Facility.

            "Applicable  Percentage" on any date of determination shall mean the
percentage determined as set forth below (as such percentage may be adjusted for
Auction Rate Bonds pursuant to Section 3.10) based on the  prevailing  long-term
rating of the  Auction  Rate  Bonds in effect  at the close of  business  on the
Business Day immediately preceding such date of determination:

                                                    Applicable
           Prevailing Rating                        Percentage

           AAA/"Aaa"                                   175%
           AA/"Aa"                                     175%
           A/"A"                                       175%
           BBB/"Baa"                                   200%
           Below BBB/"Baa"                             265%

            For  purposes of this  definition,  the  "prevailing  rating" of the
Auction  Rate Bonds will be (a)  AAA/"Aaa,"  if the Auction  Rate Bonds,  have a
rating  of AAA or  better  by S&P and a  rating  of  "Aaa"  by  Moody's,  or the
equivalent of such ratings by a substitute rating agency or agencies selected as
provided  below,  (b) if not  AAA/"Aaa,"  then AA/"Aa" if the Auction Rate Bonds
have a rating  of AA- or  better  by S&P and a rating  of  "Aa3"  or  better  by
Moody's,  or the  equivalent  of such ratings by a substitute  rating  agency or
agencies selected as provided below, (c) if not AAA/"Aaa" or AA/"Aa," then A/"A"
if the  Auction  Rate Bonds have a rating of A- or better by S&P and a rating of
"A3" or better by Moody's,  or the  equivalent  of such  ratings by a substitute
rating  agency or agencies  selected as provided  below,  (d) if not  AAA/"Aaa,"
AA/"Aa" or A/"A," then  BBB/"Baa,"  if the  Auction  Rate Bonds have a rating of
BBB- or better by S&P and a rating  of  "Baa3"  or  better  by  Moody's,  or the
equivalent of such ratings by a substitute rating agency or agencies selected as
provided  below,  and (e) if not AAA/"Aaa,"  AA/"Aa",  A/"A" or BBB/"Baa,"  then
below  BBB/"Baa,"  whether  or not the  Auction  Rate  Bonds  are  rated  by any
securities rating agency.



<PAGE>


            If (x) the  Auction  Rate  Bonds,  are  rated by a rating  agency or
agencies  other than Moody's or S&P and (y) the Company has  delivered on behalf
of the Authority to the Trustee and the Auction Agent an instrument  designating
one or two of such rating  agencies to replace Moody's or S&P, or both, then for
purposes of the definition of "prevailing  rating" Moody's or S&P, or both, will
be deemed to have been replaced in accordance  with such  instrument;  provided,
however,  that  such  instrument  must  be  accompanied  by the  consent  of the
Remarketing  Agent. For purposes of this definition,  S&P's rating categories of
AAA, AA-, A- and BBB-, and Moody's  rating  categories of "Aaa," "Aa3," "A3" and
"Baa3,"  refer to and  include  the  respective  rating  categories  correlative
thereto in the event that either or both of such rating agencies have changed or
modified their generic  rating  categories.  If the  prevailing  ratings for the
Bonds are split between the  categories  set forth above,  the lower rating will
determine the prevailing rating.

            "Auction"  shall mean each  periodic  implementation  of the Auction
Procedures for Auction Rate Bonds.

            "Auction Agency  Agreement"  shall mean the Auction Agency Agreement
to be entered into between the Company and the Auction Agent with respect to the
Auction Rate Bonds, as from time to time amended and supplemented.

            "Auction Agent" shall mean any entity  appointed as such pursuant to
Section 11.21 and its successors and assigns.

            "Auction Date" shall mean with respect to each Auction  Period,  the
last Thursday of the  immediately  preceding  Auction  Period (or such other day
that the Remarketing Agent shall establish as the Auction Date therefor pursuant
to Section 3.05); provided,  that if such day is not a Business Day, the Auction
Date shall be the next succeeding Business Day.

            "Auction  Period"  shall mean,  after a Change in the Interest  Rate
Mode to an Auction Rate,  until the  effective  date of a Change in the Interest
Rate Mode or the  Stated  Maturity,  each  period  from and  including  the last
Interest  Payment  Date  for  the  immediately   preceding   Auction  Period  or
Calculation  Period,  as the case may be, to and including  the next  succeeding
Auction  Date or, in the event of a Change in the  Interest  Rate  Mode,  to but
excluding the effective date of such change,  provided, if any day that would be
the last day of any such period  does not  immediately  precede a Business  Day,
such period shall end on the next day which immediately precedes a Business Day.

            "Auction  Procedures"  shall mean with  respect to the Auction  Rate
Bonds the procedures set forth in Sections 3.06 through 3.09.

            "Auction  Rate"  shall mean with  respect to Auction  Rate Bonds and
each Auction  Period for such Auction Rate Bonds (other than an initial  Auction
Period after a Change in the Interest Rate Mode to an Auction Rate Period),  the
rate of interest per annum determined for the Bonds pursuant to Article III.

            "Auction  Rate  Bonds"  shall mean with  respect to an Auction  Rate
Period,  any Bonds or subseries of Bonds which bear the Auction Rate  determined
pursuant to Article III.

            "Auction Rate Bonds Period  Record Date" shall mean,  with respect
to each Interest Payment Date during an Auction Rate Period,  the Business Day
next preceding such Interest Payment Date.



<PAGE>


            "Auction Rate Period" shall mean any period during which the Auction
Rate  Bonds  bear  interest  at an  Auction  Rate  determined  pursuant  to  the
implementation of Auction Procedures established under Article III, which period
shall commence on the Closing Date if the Bonds initially are offered as Auction
Rate Bonds or on the effective  date of a Change in the Interest Rate Mode to an
Auction Rate and shall extend through the day immediately  preceding the earlier
of (a) the  effective  date of a Change  in the  Interest  Rate  Mode or (b) the
Stated Maturity.

            "Authority"   shall  mean  New  York  State   Energy   Research  and
Development  Authority,  the public benefit  corporation created by the Act, and
its successors and assigns.

            "Authorized Company  Representative" shall mean any officer or other
employee of the Company at the time  designated  to act on behalf of the Company
by written certificate furnished to the Authority and the Trustee containing the
specimen  signature  of such  person and signed on behalf of the  Company by its
Chairman,  President  or a Vice  President  and its  Secretary  or an  Assistant
Secretary.

            "Authorized Officer" shall mean the Chair, Vice-Chair,  President,
Vice President, Treasurer, Assistant Treasurer or Secretary of the Authority.

            "Available  Auction  Rate  Bonds"  shall  mean with  respect  to the
Auction Rate Bonds, Available Auction Rate Bonds as defined in Section 3.08.

            "Beneficial  Owner"  shall  mean with  respect to the  Auction  Rate
Bonds,  a  customer  of a  Broker-Dealer  who is listed on the  records  of that
Broker-Dealer (or, if applicable,  the Auction Agent) as a holder of the Auction
Rate Bonds.

            "Bid"  shall mean with  respect to the Auction  Rate  Bonds,  Bid as
defined in Section 3.06.

            "Bidder"  shall mean with respect to the Auction Rate Bonds,  Bidder
as defined in Section 3.06.

            "Bond Counsel" shall mean an attorney or firm or firms of attorneys,
satisfactory  to the  Authority  and  the  Trustee,  nationally  recognized  and
experienced in matters  relating to tax exemption of interest on bonds issued by
states and their political subdivisions.

            "Bond  Fund"  shall mean the  special  trust  fund of the  Authority
designated as "Consolidated  Edison Company of New York, Inc. Project Bond Fund"
created and established under, and to be held and administered by the Trustee as
provided  in,  Section  9.01 and,  unless the  context  shall  clearly  indicate
otherwise,  shall include the "Interest  Account," the "Principal  Account," and
the "Redemption Account" created and established therein.

            "Bond Purchase  Agreement"  shall mean the Bond Purchase  Agreement,
dated July 28, 1999,  among the Authority,  the Company and the underwriters for
the Bonds.



<PAGE>


            "Bond   Purchase   Fund"  shall  mean  the  Bond   Purchase   Fund
established pursuant to the Bond Purchase Trust Agreement.

            "Bond Purchase Trust  Agreement"  shall mean the Bond Purchase Trust
Agreement  dated as of the date hereof  between the  Authority and the Registrar
and Paying Agent, as from time to time amended or supplemented.

            "Bond   Year"  shall  have  the  meaning  set  forth  in  the  Tax
Regulatory Agreement.

            "Bondholder",  "Holder  of a Bond"  or  "Holder"  shall  mean  any
registered owner of a Bond.

            "Bonds" shall mean,  the  "Facilities  Revenue  Bonds,  Series 1999A
(Consolidated  Edison Company of New York, Inc. Project)" presently to be issued
as authorized in Section 2.02 at any time Outstanding.

            "Broker-Dealer"  shall  mean any  broker-dealer  (as  defined in the
Securities  Exchange Act),  commercial bank or other entity  permitted by law to
perform  the  functions  required  of a  Broker-Dealer  set forth in the Auction
Procedures  (i) that is an Agent Member (or an  affiliate  of an Agent  Member),
(ii)  that has been  selected  by the  Auction  Agent  with the  consent  of the
Remarketing  Agent,  and (iii) that has entered into a  Broker-Dealer  Agreement
with the Auction Agent that remains effective.

            "Broker-Dealer  Agreement"  shall mean each agreement  applicable to
the Auction Rate Bonds,  between a Broker-Dealer  and the Auction Agent pursuant
to which  the  Broker-Dealer,  among  other  things,  agrees to  participate  in
Auctions as set forth in the Auction  Procedures,  as from time to time  amended
and supplemented.

            "Business  Day" shall mean any day other than a Saturday,  Sunday or
other day on which  the New York  Stock  Exchange  or banks  are  authorized  or
obligated by law or executive  order to close in New York, New York, or any city
in which is located the principal  corporate  trust office of the Trustee or the
office of an issuer of a Support  Facility  at which  demands  for a draw on, or
borrowing or payment under, the Support Facility will be made.



<PAGE>


            "Calculation Period" shall mean (a) during any Commercial Paper Rate
Period  following a Change in the Interest Rate Mode to a Commercial  Paper Rate
Period,  the period from and including  the effective  date of the Change in the
Interest  Rate Mode to a Commercial  Paper Rate Period to but not  including any
day not more than 270 days  thereafter  which is a day  immediately  preceding a
Business Day established by the Remarketing  Agent pursuant to Section 3.02 and,
thereafter, any Calculation Period established by the Remarketing Agent pursuant
to  Section  3.02  which  shall  end on a day not  later  than 270 days from the
commencement  thereof;  (b) during any Daily Rate  Period,  the period  from and
including a Business Day to but not including the next succeeding  Business Day;
(c) during the first Weekly Rate Period,  the period from and including the date
of issuance of the Bonds to and including the following Tuesday,  and thereafter
the  period  from and  including  Wednesday  of each week to and  including  the
following  Tuesday and during any other Weekly Rate Period following a Change in
the  Interest  Rate Mode to a Weekly  Rate,  the period from and  including  the
effective  date of the Change in the  Interest  Rate Mode to and  including  the
following Tuesday,  and, thereafter,  the period from and including Wednesday of
each week to and including the  following  Tuesday;  (d) during any Monthly Rate
Period  following  a Change in the  Interest  Rate Mode to a Monthly  Rate,  the
period from and including the effective  date of the Change in the Interest Rate
Mode to but  excluding  the first  Business  Day of the  following  month,  and,
thereafter each period from and including the first Business Day of the month to
but excluding  the first  Business Day of the  following  month;  (e) during any
Semi-annual  Rate  Period  following  a Change  in the  Interest  Rate Mode to a
Semi-annual Rate, the period from and including the effective date of the Change
in the Interest Rate Mode to but excluding the next succeeding  Interest Payment
Date and,  thereafter,  each period from and including the day following the end
of the last  Calculation  Period to but excluding the next  succeeding  Interest
Payment Date;  (f) during any Term Rate Period,  any period of not less than 365
days from and including a Business Day to and including any day  (established by
the  Remarketing  Agent pursuant to Section 4.01.1) not later than the day prior
to the Stated Maturity;  and (g) during any Fixed Rate Period following a Change
in the Interest  Rate Mode to a Fixed Rate,  the period from and  including  the
effective  date  of the  Change  in the  Interest  Rate  Mode  through  the  day
immediately preceding the earlier of (x) the effective date of another Change in
the Interest Rate Mode, or (y) the Stated Maturity.

            "Change in the Interest Rate Mode" shall mean any change in the type
of interest rate borne by the Bonds pursuant to Section 4.01 or Section 4.02.

            "Change of  Preference  Law" shall mean any amendment to the Code or
other  statute  enacted by the Congress of the United  States or any  temporary,
proposed or final regulation  promulgated by the United States  Treasury,  after
the date hereof which (a) changes or would change any deduction, credit or other
allowance  allowable in computing liability for any federal tax with respect to,
or (b) imposes, or would impose,  reduces or would reduce, or increases or would
increase any federal tax  (including,  but not limited to,  preference or excise
taxes) upon, any interest earned by any holder of bonds the interest on which is
excluded from federal gross income under Section 103 of the Code.

            "Closing Date" shall mean the date on which the Note becomes legally
effective,  the  same  being  the date on which  the  Bonds  are paid for by and
delivered to the original purchasers thereof.

            "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.  Each reference to a section of the Code herein shall be deemed to
include the United States Treasury  Regulations proposed or in effect thereunder
and applied to the Bonds or the use of proceeds  thereof,  and also includes all
amendments  and  successor   provisions  unless  the  context  clearly  requires
otherwise.



<PAGE>


            "Commercial  Paper  Dealers"  means  the  commercial  paper  dealers
specified  by the  Authority  at the  request of the  Company at the time of any
Change in the Interest  Rate Mode to an Auction Rate, or in lieu of any thereof,
their  respective  affiliates or successors,  provided that any such entity is a
commercial paper dealer.

            "Commercial Paper Index," on any date of determination,  shall mean,
with  respect to  Auction  Rate  Bonds,  the  interest  index  published  by the
Remarketing  Agent  representing the weighted average of the yield on tax-exempt
commercial  paper, or tax-exempt  bonds bearing  interest at a commercial  paper
rate or pursuant to a commercial  paper mode,  having a range of  maturities  or
mandatory  purchase  dates between 25 and 36 days traded during the  immediately
preceding five Business Days.

            "Commercial  Paper Period  Record Date" shall mean,  with respect to
each Interest Payment Date during a Commercial  Paper Rate Period,  the Business
Day next preceding such Interest Payment Date.

            "Commercial  Paper Rate" shall mean with respect to each Calculation
Period during a Commercial  Paper Rate Period, a rate or rates of interest equal
to the rate or rates of interest  per annum  established  and  certified  to the
Trustee  (with a copy to the  Authority,  the Registrar and Paying Agent and the
Company) by the Remarketing  Agent no later than 12:00 noon (New York City time)
on and as of the Determination Date as the minimum rate or rates of interest per
annum which, in the opinion of the Remarketing  Agent, would be necessary on and
as of such day to remarket  Bonds in a secondary  market  transaction at a price
equal to the  principal  amount  thereof;  provided  that  such rate or rates of
interest shall not exceed the lesser of 110% of the Commercial  Paper Rate Index
on and as of such date and the Maximum Allowed Rate.



<PAGE>


            "Commercial  Paper  Rate  Index"  shall  mean  with  respect  to the
Determination  Date of each  Calculation  Period during a Commercial  Paper Rate
Period,  the average of yield  evaluations  at par,  determined  by the Indexing
Agent, of securities  (whether or not actually issued) all of which shall have a
term as near as practicable to such  Calculation  Period or which are subject to
optional or mandatory  tender by the owner  thereof at the end of a term as near
as practicable to such Calculation Period, the interest on which is not included
in gross income for federal income tax purposes,  of no fewer than ten Component
Issuers selected by the Indexing Agent,  including  issuers of commercial paper,
project notes, bond anticipation notes and tax anticipation  notes,  computed by
the  Indexing  Agent on and as of such  day.  If the Bonds are rated by a Rating
Agency in its highest note or commercial paper rating category or one of its two
highest  long-term debt rating  categories,  each Component Issuer must (a) have
outstanding  securities  rated  by a  Rating  Agency  in  its  highest  note  or
commercial paper rating category or (b) not have outstanding notes or commercial
paper rated by a Rating Agency but have outstanding securities rated by a Rating
Agency in one of its two highest long-term debt rating categories.  If the Bonds
are rated by a Rating Agency in a rating category that is lower than its highest
note or  commercial  paper  rating  category or its two highest  long-term  debt
rating  categories (and the Bonds are not rated in one of such categories by the
other Rating Agency), each Component Issuer must (a) have outstanding securities
rated by a Rating Agency in its note or commercial  paper rating  category which
is the same or correlative,  in the Indexing  Agent's  judgment,  to the note or
commercial  paper rating  category or the long-term debt rating  category of the
Bonds or (b) have  outstanding  securities  rated by a Rating Agency in the same
long-term debt rating  category as the Bonds are rated by that Rating Agency and
not have any outstanding  notes or commercial paper rated by such Rating Agency.
The  Indexing  Agent may change the  Component  Issuers from time to time in its
discretion,  subject to the foregoing requirements.  In addition, at the request
of the  Company and upon  delivery to the Trustee of an Opinion of Bond  Counsel
that such  action will not  adversely  affect the  exclusion  of interest on the
Bonds from gross income of the owners  thereof for federal  income tax purposes,
the  Authority,  with the consent of the Company,  may designate a new method of
setting the Commercial Paper Rate Index in the event any of the  above-described
methods are  determined by the  Authority to be  unavailable,  impracticable  or
unrealistic in the market place.

            "Commercial  Paper Rate Period"  shall mean any period  during which
the Bonds bear interest at a Commercial Paper Rate or Rates,  which period shall
commence  on the  effective  date of a Change  in the  Interest  Rate  Mode to a
Commercial  Paper Rate or Rates,  as the case may be, and extend through the day
immediately preceding the earlier of (a) the effective date of another Change in
the Interest Rate Mode or (b) the Stated Maturity.

            "Commercial  Paper/Treasury Rate" on any date of determination shall
mean with respect to Auction Rate Bonds (i) in the case of any Auction Period of
less than 49 days, the interest  equivalent of the 30-day rate, (ii) in the case
of any Auction Period of 49 days or more and but less than 70 days, the interest
equivalent  of the 60-day  rate,  (iii) in the case of any Auction  Period of 70
days or more but less  than 85 days,  the  arithmetic  average  of the  interest
equivalent  of the  60-day  and 90-day  rates,  (iv) in the case of any  Auction
Period of 85 days or more but less than 99 days, the interest  equivalent of the
90-day rate;  (v) in the case of any Auction  Period of 99 days or more but less
than 120 days, the arithmetic  average of the interest  equivalent of the 90-day
and 120-day  rates and,  (vi) in the case of any  Auction  Period of 120 days or
more but less than 141 days, the interest  equivalent of the 120-day rate, (vii)
in the case of any  Auction  Period  of 141 days or more but less than 162 days,
the  arithmetic  average of the interest  equivalent  of the 120-day and 180-day
rates,  (viii)  in the case of any  Auction  Period of 162 days or more but less
than 183 days, the interest  equivalent of the 180-day rate, (ix) in the case of
any  Auction  Period of 183 days or more,  the  Treasury  Rate for such  Auction
Period.  The  foregoing  rates shall in all cases,  except  with  respect to the
Treasury  Rate, be rates on  commercial  paper placed on behalf of issuers whose
corporate  bonds are rated "AA" by S&P, or the equivalent of such rating by S&P,
as made available on a discount  basis or otherwise by the Federal  Reserve Bank
of  New  York  for  the  Business  Day   immediately   preceding  such  date  of
determination,  or in the event that the Federal  Reserve  Bank of New York does
not make available any such rate, then the arithmetic  average of such rates, as
quoted on a discount basis or otherwise, by the Commercial Paper Dealers, to the
Auction  Agent  for the  close  of  business  on the  Business  Day  immediately
preceding such date of determination.



<PAGE>


If any Commercial  Paper Dealer does not quote a commercial  paper rate required
to determine the Commercial  Paper/Treasury Rate, the Commercial  Paper/Treasury
Rate  shall be  determined  on the  basis of a  commercial  paper  quotation  or
quotations  furnished by the  remaining  Commercial  Paper Dealer or  Commercial
Paper  Dealers  and  any  Substitute   Commercial  Paper  Dealer  or  Substitute
Commercial Paper Dealers selected by the Authority at the request of the Company
to provide such  quotation or quotations  not being  supplied by any  Commercial
Paper  Dealer  or  Commercial  Paper  Dealers,  as the  case  may be,  or if the
Authority  does not  select  any such  Substitute  Commercial  Paper  Dealer  or
Substitute Commercial Paper Dealers, by the remaining Commercial Paper Dealer or
Commercial  Paper  Dealers.  For  purposes  of this  definition,  the  "interest
equivalent"  of a rate  stated  on a  discount  basis (a  "discount  rate")  for
commercial  paper of a given day's maturity shall be equal to the product of (A)
100 times (B) the quotient  (rounded  upwards to the next higher  one-thousandth
(.001) of 1%) of (x) the discount rate  (expressed  in decimals)  divided by (y)
the difference  between (1) 1.00 and (2) a fraction the numerator of which shall
be the product of the discount rate  (expressed in decimals) times the number of
days in which such  commercial  paper matures and the denominator of which shall
be 360.

            "Commission" shall mean the Securities and Exchange Commission.

            "Company" shall mean Consolidated  Edison Company of New York, Inc.,
and any  surviving,  resulting or transferee  corporation as provided in Section
5.17 of the Participation Agreement.

            "Component  Issuers" shall mean issuers of securities,  the interest
on which is excluded from gross income for federal income tax purposes, selected
by the Indexing Agent.

            "Computation  Date"  shall mean each date which is one (1)  Business
Day prior to any Determination Date.

            "Computation  Period"  shall have the meaning set forth in the Tax
Regulatory Agreement.

            "Credit Facility" shall mean any Support Facility which provides for
the payments referred to in clause (ii) of the definition thereof.

            "Credit  Facility  Issuer"  shall  mean  any  bank or banks or other
financial institution or institutions, having issued any Credit Facility.

            "Current  Adjustable  Rate"  shall mean the  interest  rate borne by
Bonds  immediately  prior  to  a  Change  in  the  Interest  Rate  Mode  or  the
establishment of a Fixed Rate.

            "Daily Period Record Date" shall mean, with respect to each Interest
Payment Date during a Daily Rate Period,  the Business Day next  preceding  such
Interest Payment Date.



<PAGE>


            "Daily  Rate"  shall mean with  respect to each  Calculation  Period
during a Daily Rate Period, a rate of interest equal to the rate of interest per
annum  established  and certified to the Trustee (with a copy to the  Authority,
the  Registrar  and Paying  Agent and the Company) by the  Remarketing  Agent no
later than 12:00 noon (New York City time) on and as of the  Determination  Date
as the  minimum  rate  of  interest  per  annum  which,  in the  opinion  of the
Remarketing Agent, would be necessary on and as of such day to remarket Bonds in
a secondary market  transaction at a price equal to the principal amount thereof
plus accrued  interest  thereon;  provided that such rate of interest  shall not
exceed  the lesser of 110% of the Daily Rate Index on and as of such day and the
Maximum Allowed Rate.

            "Daily Rate Index" shall mean with respect to the Determination Date
of each  Calculation  Period during a Daily Rate Period,  the average of one-day
yield  evaluations  at par,  determined  by the Indexing  Agent,  of  securities
(whether or not actually issued), the interest on which is not included in gross
income for federal income tax purposes,  of no fewer than ten Component  Issuers
selected by the Indexing  Agent and which have  redemption or tender  provisions
comparable  to the then  applicable  provisions  of the Bonds,  computed  by the
Indexing Agent on and as of the Determination  Date. If the Bonds are rated by a
Rating Agency, each Component Issuer must have outstanding securities rated by a
Rating  Agency in a  short-term  debt rating  category  which is the same as the
short-term  debt  rating  category  in which the Bonds are rated.  The  specific
issuers  included in the  Component  Issuers may be changed from time to time by
the Indexing Agent in its discretion and shall be issuers whose  securities,  in
the judgment of the Indexing Agent, have  characteristics  similar to the Bonds.
In addition,  at the request of the Company and upon  delivery to the Trustee of
an  Opinion of Bond  Counsel  that such  action  will not  adversely  affect the
exclusion of interest on the Bonds from gross  income of the owners  thereof for
federal income tax purposes, the Authority, with the consent of the Company, may
designate  a new method of setting  the Daily Rate Index in the event any of the
above-described  methods are  determined  by the  Authority  to be  unavailable,
impracticable or unrealistic in the market place.

            "Daily Rate  Period"  shall mean any period  during which Bonds bear
interest at a Daily Rate which period shall  commence on the  effective  date of
the Change in the Interest  Rate Mode to a Daily Rate and shall  extend  through
the day immediately  preceding the earlier of (a) the effective date of a Change
in the Interest Rate Mode or (b) the Stated Maturity.

            "Determination  Date" shall mean, for any  Calculation  Period,  the
first Business Day occurring during such Calculation Period; provided,  however,
with  respect  to  Bonds  which  bear  interest  at the  Weekly  Rate,  for  the
Calculation  Period commencing on the Closing Date, the Determination Date shall
mean the Business Day  immediately  preceding such Closing Date, and thereafter,
each  Wednesday  or, if such  Wednesday is not a Business  Day, the Business Day
next preceding such Wednesday.

            "Direct-Pay Credit Facility" shall mean any Credit Facility which by
its terms permits the Trustee to draw moneys  thereunder for deposit in the Bond
Fund.

            "Event of  Default"  shall  mean  Event of  Default  as defined in
Section 12.01.

            "Existing  Holder"  shall mean with  respect to Auction Rate Bonds a
Broker-Dealer  that is listed as the holder of Auction Rate Bonds in the records
of the Auction Agent.

            "Failure  to  Deposit"  shall mean any  failure to make the  deposit
required by Section 9.02(a)(i) or 9.02(b)(i) by the time specified therein.



<PAGE>


            "Fiscal  Year"  shall  mean  the  fiscal  year  of  the  Company  as
established from time to time by the Company which as of the Closing Date is the
twelve-month  period commencing on January 1 of each calendar year and ending on
December 31 of the next calendar year.

            "Fitch" shall mean Fitch IBCA, Inc. and its successor or successors,
and if such corporation  shall for any reason no longer perform the functions of
a  securities  rating  agency  or shall be  replaced  by some  other  nationally
recognized rating agency by the Authority at the request of the Company, "Fitch"
shall be deemed  to refer to such  other  nationally  recognized  rating  agency
designated by the Authority at the request of the Company.

            "Fixed Rate" shall mean,  with  respect to a Fixed Rate Period,  the
rate of interest per annum established and certified to the Trustee (with a copy
to the  Authority,  the  Registrar  and  Paying  Agent and the  Company)  by the
Remarketing  Agent no later  than  12:00  noon (New York City time) on and as of
such date as the minimum rate of interest per annum which, in the opinion of the
Remarketing  Agent,  would be  necessary  on and as of such date to remarket the
Bonds  in a  secondary  market  transaction  at a  price  equal  to  100% of the
Outstanding principal amount thereof;  provided that such rate of interest shall
not exceed the lesser of 110% of the Fixed Rate Index on and as of such date and
18% per annum;

            "Fixed Rate  Conversion  Date" shall have the meaning set forth in
Section 4.02.

            "Fixed  Rate  Index"  shall  mean  with  respect  to  a  Fixed  Rate
Conversion  Date,  the  average of the yield  evaluations  (on the basis of full
coupon securities  trading at par with a term  approximately  equal to the Fixed
Rate Period) of  securities  (whether or not actually  issued),  the interest on
which is not included in gross  income for federal  income tax  purposes,  of no
fewer than ten Component Issuers selected by the Indexing Agent and which have a
long-term rating by a Rating Agency in the same rating category as the Bonds are
rated at the time by such Rating Agency or, if no such bonds are so rated, shall
be debt which,  in the  judgment of the  Indexing  Agent,  is of credit  quality
comparable to that of the Bonds, computed by the Indexing Agent on and as of the
Fixed Rate  Conversion  Date.  In the event  that the  Indexing  Agent  fails to
compute  the  Fixed  Rate  Index  and no other  qualified  municipal  securities
evaluation service can be appointed  Indexing Agent by the Authority,  the Fixed
Rate Index shall be determined by the Remarketing  Agent and shall be 90% of the
average  yield  shown  for the most  recent  calendar  month for  United  States
Treasury  notes or bonds  having  the same  number of years to  maturity  as the
number of 12-month  periods (or months if the Fixed Rate Period is less than one
year) in the Fixed Rate Period,  as published in the Federal Reserve Bulletin in
the last issue  before the Fixed Rate  Conversion  Date.  If that issue does not
contain  such a yield,  the  Fixed  Rate  Index  will be  determined  by  linear
interpolation  between the yields shown in that issue for United States Treasury
notes and bonds  having the next  shorter  and next  longer  number of years (or
months)  to  maturity.  In  addition,  at the  request of the  Company  and upon
delivery to the Trustee of an Opinion of Bond  Counsel that such action will not
adversely affect the exclusion of interest on the Bonds from gross income of the
owners thereof for federal income tax purposes, the Authority,  with the consent
of the  Company,  may  designate a new method of setting the Fixed Rate Index in
the event any of the above-described  methods are determined by the Authority to
be unavailable, impracticable or unrealistic in the market place.


<PAGE>


            "Fixed Rate  Period"  shall mean any period  during which Bonds bear
interest at a Fixed Rate, which period shall commence on the effective date of a
Change in the Interest Rate Mode to a Fixed Rate,  and shall extend  through the
day  immediately  preceding  the  earlier of (a) the  effective  date of another
Change in the Interest Rate Mode, or (b) the Stated Maturity.


            "Fixed Rate Record Date" shall mean,  with respect to each  Interest
Payment Date during a Fixed Rate  Period,  the  fifteenth  day of the month next
preceding  such Interest  Payment Date,  or, if such day shall not be a Business
Day, the next preceding Business Day.

            "Governmental  Obligations"  shall mean any of the following which
are non-callable:

            (a) direct general obligations of, or obligations the payment of the
      principal of and interest on which is  unconditionally  guaranteed by, the
      United States of America; and

            (b)  bonds,  debentures  or  notes  issued  by  Government  National
      Mortgage  Association,  Federal Financing Bank,  Federal Farm Credit Bank,
      Federal Land Bank,  Federal Home Loan Bank,  Farmers Home  Administration,
      Federal Home Mortgage  Association or any other comparable  federal agency
      hereafter created to the extent that said obligations are  unconditionally
      guaranteed by the United States of America.

            "Hold Order" shall mean with respect to the Auction Rate Bonds, Hold
Order as defined in Section 3.06.

            "Indenture" shall mean this Trust Indenture dated as of July 1, 1999
between  the  Authority  and  the  Trustee,  as  the  same  may  be  amended  or
supplemented.

            "Indexing   Agent"  shall  mean  the  Indexing  Agent  appointed  in
accordance with Section 11.24.

            "Initial  Liquidity  Facility" shall mean the Letter of Credit dated
July 29, 1999 issued by Morgan Guaranty Trust Company of New York.

            "Initial  Liquidity  Facility  Issuer" shall mean Morgan  Guaranty
Trust Company of New York.

            "Interest Payment Date" shall mean:

            (a) during each  Commercial  Paper Rate  Period,  the  Business  Day
      immediately succeeding the last day of any Calculation Period;



<PAGE>


            (b) during an Auction  Rate  Period (i) for an Auction  Period of 91
      days or less, the Business Day immediately  succeeding such Auction Period
      and (ii) for an Auction  Period of more than 91 days,  each 13th Wednesday
      after  the  first  day  of  such  Auction  Period  and  the  Business  Day
      immediately succeeding the last day of such Auction Period;

            (c) during each Daily Rate  Period,  the first  Business Day of each
      month thereof;

            (d) during each Weekly Rate Period,  the first  Business Day of each
      month thereof;

            (e) during each Monthly Rate Period,  the first Business Day of each
      month thereof;

            (f) during each Semi-annual Rate Period,  (i) the first Business Day
      of the sixth calendar month  following the month in which the first day of
      such Semi-annual  Rate Period occurred,  (ii) each anniversary of the date
      so  determined,  and (iii) each  anniversary of the first day of the first
      month of such Semi-annual Rate Period;

            (g) during each Term Rate Period,  (i) the first Business Day of the
      sixth  calendar  month  following the month in which the first day of such
      Term  Rate  Period  occurred,   (ii)  each  anniversary  of  the  date  so
      determined,  (iii) each anniversary of the first day of the first month of
      such Term Rate Period,  and (iv) the Business Day  immediately  succeeding
      such Term Rate Period;

            (h) the May 1 or November 1 next  succeeding a Fixed Rate Conversion
      Date and each May 1 and November 1 thereafter;  provided, however, that if
      the May 1 or  November  1 next  succeeding  a Fixed Rate  Conversion  Date
      occurs  less than  twenty-one  (21) days after such Fixed Rate  Conversion
      Date,  the first  Interest  Payment  Date  shall be the  second  such date
      following such Fixed Rate Conversion Date;

            (i)   a Fixed Rate Conversion Date;

            (j) any day on which  Bonds are  subject  to  mandatory  tender  for
      purchase  pursuant to Section  5.04,  5.08 or 5.09 or  redemption in whole
      pursuant to Section 5.01, 5.05, 5.06 or 5.07; and

            (k)   the Stated Maturity;

provided,  however,  that if any such date  determined  in any of the  foregoing
clauses is not a  Business  Day,  the  Interest  Payment  Date shall be the next
succeeding day which is a Business Day.

            "Investment Securities" shall mean any of the following which at the
time are  legal  investments  under  the  laws of the  State of New York for the
monies held hereunder:



<PAGE>


            (a) any  obligation  issued or guaranteed  by, or backed by the full
      faith  and  credit  of,  the  United  States  of  America  (including  any
      certificates  or any other  evidence of an ownership  interest in any such
      obligation  or  in  specified  portions  thereof,  which  may  consist  of
      specified portions of the principal thereof or the interest thereon);

            (b) deposit  accounts in, or  certificates of deposit issued by, and
      bankers  acceptance  of,  any bank,  trust  company  or  national  banking
      association  which is a member of the Federal  Reserve  System  (which may
      include the Trustee),  having  capital stock and surplus  aggregating  not
      less than $50,000,000;

            (c) deposit  accounts in, or  certificates  of deposit issued by and
      bankers acceptances of, any bank or trust company having capital stock and
      surplus  aggregating not less than  $50,000,000 and whose  obligations are
      rated not less than "A" or equivalent by Moody's or S&P;

            (d)  obligations  issued or guaranteed  by any person  controlled or
      supervised  by and acting as an  instrumentality  of the United  States of
      America  pursuant to the  authority  granted by the Congress of the United
      States;

            (e) commercial  paper rated in the highest  investment grade or next
      highest investment grade by Moody's or S&P;

            (f) obligations  rated not less than "A" or equivalent by Moody's or
      S&P issued or guaranteed by any state of the United States or the District
      of Columbia,  or any political  subdivision,  agency or instrumentality of
      any such state or District, or issued by any corporation;

            (g)  obligations  of a public  housing  authority  fully  secured by
      contracts with the United States;

            (h) repurchase  agreements with any bank or trust company  organized
      under  the laws of any  state  of the  United  States  of  America  or any
      national  banking  association  (including  the Trustee) or any government
      bond dealer  reporting to, trading with and recognized as a primary dealer
      by,  the  Federal  Reserve  Bank of New York  with  respect  to any of the
      foregoing obligations or securities. Any repurchase agreement entered into
      pursuant to this Indenture shall, by its terms, permit the Trustee to sell
      the  related  obligations  or  securities  if  the  other  party  to  such
      repurchase  agreement shall fail to repurchase promptly such obligation or
      security  on the  day  required  by the  repurchase  agreement.  All  such
      repurchase  agreements  shall also provide for the delivery of the related
      obligations or securities to the Trustee or a depositary of the Trustee;

            (i) money market or bond mutual funds,  which funds have a composite
      investment  grade rated not less than "A" or equivalent by Moody's or S&P;
      or



<PAGE>


            (j) investment  agreements with any bank or trust company  organized
      under  the laws of any  state  of the  United  States  of  America  or any
      national banking  association  (including the Trustee) or any governmental
      bond dealer  reporting to, trading with and recognized as a primary dealer
      by, the Federal Reserve Bank of New York, which has, or the parent company
      of which has,  long-term  debt rated at least "A" or its equivalent by S&P
      or Moody's, with respect to any of the obligations or securities specified
      in (a), (d), (e), (f) and (g) above. Any investment agreement entered into
      pursuant  to this  Indenture  shall,  by its  terms  provide  that (i) the
      invested funds are available for withdrawal without penalty or premium, at
      any time upon not more than seven days' prior notice  (which notice may be
      amended or withdrawn at any time prior to the specified  withdrawal date),
      and  (ii)  the  investment  agreement  is the  unconditional  and  general
      obligation  of, and is not  subordinated  to any other  obligation of, the
      provider thereof.

Any such  Investment  Securities  may be held by the Trustee in book entry form,
whereby  certificated  securities are held by an  independent  custodian and the
Trustee  is the  beneficial  owner  of all or a  portion  of  such  certificated
securities.

            "Liquidity  Facility"  shall mean a Support  Facility which provides
for the payments referred to in clause (i) of the definition thereof.

            "Liquidity  Facility  Issuer"  shall mean any bank or banks or other
financial institution or institutions, having issued any Liquidity Facility.

            "Maximum  Allowed Rate" shall mean as of any date 15% per annum,  or
if lower, the rate specified as such in any Support Facility then in effect.



<PAGE>


            "Maximum Auction Rate" shall mean on any date of determination  with
respect to Auction  Rate Bonds,  (i) in all cases other than as provided in (ii)
or  (iii)  below,  the  interest  rate per  annum  equal  to the  lesser  of (A)
Applicable  Percentage of the higher of the After-Tax Equivalent Rate determined
on such date with respect to a Standard  Auction Period and the Commercial Paper
Index, and (B) the maximum rate, if any,  permitted by applicable law, (ii) with
respect to any change in an Auction  Period and/or the Standard  Auction  Period
pursuant  to Section  3.04,  including  any  automatic  reversion  to a Standard
Auction  Period  pursuant to Section 3.03,  the interest rate per annum equal to
the  highest of (a) the  Applicable  Percentage  of the higher of the  After-Tax
Equivalent  Rate  determined  on such date with  respect to a  Standard  Auction
Period, and the Commercial Paper Index, and (b) the Applicable Percentage of the
higher of the After-Tax  Equivalent Rate determined on such date with respect to
the Auction Period which is proposed to be established and the Commercial  Paper
Index,  and  (c)  the  Applicable  Percentage  of the  higher  of the  After-Tax
Equivalent  Rate  determined on such date with respect to the Auction  Period in
effect  immediately  prior to such proposed change in the Auction Period and the
Commercial Paper Index, or (iii) with respect to any Change in the Interest Rate
Mode from an Auction Rate pursuant to Section 4.01 or any change from an Auction
Rate to a Fixed Rate pursuant to Section 4.02, the interest rate per annum equal
to the higher of (a) the  Applicable  Percentage  of the higher of the After-Tax
Equivalent  Rate  determined  on such date with  respect to a  Standard  Auction
Period and the Commercial Paper Index, and (b) the Applicable  Percentage of the
higher of the After-Tax  Equivalent Rate determined on such date with respect to
the Auction Period in effect  immediately  prior to such proposed change and the
Commercial Paper Index.

            "Monthly  Period  Record  Date" shall mean,  with  respect to each
Interest  Payment  Date  during  a  Monthly  Period,  the  Business  Day  next
preceding such Interest Payment Date.

            "Monthly  Rate" shall mean with respect to each  Calculation  Period
during a Monthly Rate Period,  a rate of interest  equal to the rate of interest
per  annum  established  and  certified  to the  Trustee  (with  a  copy  to the
Authority,  the Registrar and Paying Agent,  and the Company) by the Remarketing
Agent  no  later  than  12:00  noon  (New  York  City  time)  on  and  as of the
Determination  Date as the minimum  rate of  interest  per annum  which,  in the
opinion of the  Remarketing  Agent,  would be necessary on and as of such day to
remarket  Bonds  in a  secondary  market  transaction  at a price  equal  to the
principal  amount thereof;  provided that such rate of interest shall not exceed
the  lesser  of 110% of the  Monthly  Rate  Index on and as of such date and the
Maximum Allowed Rate.

            "Monthly  Rate Index" shall mean with  respect to the  Determination
Date of each  Calculation  Period  during a Monthly Rate Period,  the average of
30-day yield evaluations at par, determined by the Indexing Agent, of securities
(whether or not actually issued), the interest on which is not included in gross
income for federal income tax purposes,  of no fewer than ten Component  Issuers
selected by the Indexing Agent,  including issuers of commercial paper,  project
notes,  bond  anticipation  notes and tax  anticipation  notes,  computed by the
Indexing  Agent on and as of such day. If the Bonds are rated by a Rating Agency
in its  highest  note or  commercial  paper  rating  category  or one of its two
highest  long-term debt rating  categories,  each Component Issuer must (a) have
outstanding  securities  rated  by a  Rating  Agency  in  its  highest  note  or
commercial paper rating category or (b) not have outstanding notes or commercial
paper rated by a Rating Agency but have outstanding securities rated by a Rating
Agency in one of its two highest long-term debt rating categories.  If the Bonds
are rated by a Rating Agency in a rating category that is lower than its highest
note or  commercial  paper  rating  category or its two highest  long-term  debt
rating  categories (and the Bonds are not rated in one of such categories by the
other Rating Agency), each Component Issuer must (a) have outstanding securities
rated by a Rating Agency in its note or commercial  paper rating  category which
is the same or correlative,  in the Indexing  Agent's  judgment,  to the note or
commercial  paper rating  category or the long-term debt rating  category of the
Bonds or (b) have  outstanding  securities  rated by a Rating Agency in the same
long-term debt rating  category as the Bonds are rated by that Rating Agency and
not have any outstanding  notes or commercial paper rated by such Rating Agency.
The  Indexing  Agent may change the  Component  Issuers from time to time in its
discretion,  subject to the foregoing requirements.  In addition, at the request
of the  Company and upon  delivery to the Trustee of an Opinion of Bond  Counsel
that such  action will not  adversely  affect the  exclusion  of interest on the
Bonds from gross income of the owners  thereof for federal  income tax purposes,
the  Authority,  with the consent of the Company,  may designate a new method of
setting the Monthly Rate Index in the event any of the  above-described  methods
are determined by the Authority to be unavailable,  impracticable or unrealistic
in the market place.



<PAGE>


            "Monthly  Rate Period" shall mean any period during which Bonds bear
interest at a Monthly Rate which period shall  commence with the effective  date
of the  Change in the  Interest  Rate Mode to a  Monthly  Rate and shall  extend
through the day  immediately  preceding the earlier of (a) the effective date of
another Change in the Interest Rate Mode or (b) the Stated Maturity.

            "Moody's" shall mean Moody's Investors Service,  Inc., a corporation
organized and existing under the laws of the State of Delaware and its successor
or successors,  and if such  corporation  shall for any reason no longer perform
the  functions of a securities  rating  agency or if Moody's  shall be replaced,
subject to the definition of "prevailing rating" in the definition of Applicable
Percentage,  by some other nationally  recognized rating agency by the Authority
at the request of the Company,  "Moody's" shall be deemed to refer to such other
nationally  recognized  rating agency designated by the Authority at the request
of the Company.

            "Note" shall mean the promissory note of the Company executed by the
Company and delivered to the Trustee, to evidence the obligations of the Company
to repay  the loan to be made by the  Authority  pursuant  to the  Participation
Agreement.

            "Note Payments"  shall mean the portion of the Payments  required to
be made pursuant to Section 4.02 of the Participation  Agreement and the Note to
be applied to the payment of principal of, premium,  if any, and interest on the
Bonds.

            "Notice  of  Election  to Tender"  shall mean the notice  given by a
Holder of Bonds pursuant to Section 5.03.

            "Opinion  of Bond  Counsel"  shall mean a written  opinion of Bond
Counsel.

            "Option to Convert" shall mean the  Authority's  right and option to
convert the rate of interest  payable on the Bonds from an Adjustable  Rate to a
Fixed Rate as provided in Section 4.02.

            "Order"  shall mean with respect to Auction Rate Bonds,  an Order as
defined in Section 3.06.

            "Outstanding",  whether  appearing in upper or lower case, when used
with respect to any Bond shall mean,  as of any date,  any Bond  theretofore  or
thereupon being authenticated and delivered pursuant to this Indenture, except:

            10 a Bond  cancelled  by the Trustee or delivered to the Trustee for
      cancellation at or prior to such date;

            20 a Bond in lieu of or in substitution for which another Bond shall
      have been issued under Sections 5.10, 5.11, 7.03 , 7.04 or 7.05; and

            30 a Bond or portion  thereof deemed to have been paid in accordance
      with Section 15.01;


<PAGE>


provided,  however,  that with respect to Auction Rate Bonds for the purposes of
the Auction  Procedures on any Auction Date,  Auction Rate Bonds as to which the
Company or any  person  known to the  Auction  Agent to be an  Affiliate  of the
Company is the Existing Holder thereof shall be disregarded and deemed not to be
Outstanding.

            "Overdue Rate" shall mean on any date of  determination  265% of the
Commercial Paper Index on such date of determination;  provided that in no event
shall the Overdue Rate exceed the maximum rate, if any,  permitted by applicable
law.

            "Participation  Agreement"  shall mean the  Participation  Agreement
dated as of July 1, 1999, between the Authority and the Company,  as amended and
supplemented by Supplemental Participation Agreements from time to time.

            "Payments"  shall  mean  collectively  the Note  Payments  and the
Additional Payments.

            "Potential  Beneficial Owner" shall mean with respect to any Auction
Rate Bonds,  a customer of a  Broker-Dealer  that is not a Beneficial  Owner but
that wishes to purchase  Auction Rate Bonds, or that is a Beneficial  Owner that
wishes to purchase an additional principal amount of Auction Rate Bonds.

            "Potential  Holder"  shall  mean  a  Broker-Dealer  that  is  not an
Existing  Holder or that is an Existing Holder that wishes to become an Existing
Holder of an additional principal amount of Auction Rate Bonds.

            "Principal  Corporate  Trust  Office"  shall  mean 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 140
Broadway, New York, New York 10005-1180.

            "Project"  shall  mean  any  acquisition,   purchase,  construction,
reconstruction,  improvement,  betterment, extension and equipping, as described
in Exhibit A and  Exhibit B to the  Participation  Agreement  as the same may be
revised  from time to time to  reflect  any  changes or  substitutions  therein,
additions  thereto,  or  deletions  therefrom  permitted  by  the  Participation
Agreement.

            "Project  Fund"  shall mean the  special  trust fund  designated  as
"Consolidated  Edison  Company of New York,  Inc.  Series  1999A  Project  Fund"
created and established under, and to be held and administered by the Trustee as
provided in, Section 8.01.



<PAGE>


            "Purchase  Price" shall mean the purchase price of Bonds tendered or
deemed  tendered  for purchase  pursuant to Section  5.03,  5.04,  5.08 or 5.09,
consisting of the principal  amount of such Bonds  together with any accrued and
unpaid  interest  plus, in the event Bonds bearing  interest at a Term Rate or a
Fixed Rate are  subject to tender for  purchase  pursuant to Section  5.04,  any
premium which would have been required to be paid as part of redemption price on
any date on which such Bonds are  subject to tender for  purchase  if such Bonds
were subject to optional  redemption pursuant to Section 5.01 on such date. With
respect to Bonds  tendered for purchase on an Interest  Payment  Date,  Purchase
Price shall  include any accrued  interest on such Bonds which is not  otherwise
being paid pursuant to Section 9.03(a).

            "Purchaser's  Letter" shall mean a letter  substantially in the form
required by the Auction  Agency  Agreement,  addressed  to,  among  others,  the
Authority, the Auction Agent and a Broker-Dealer.

            "rate  index"  means the Daily Rate  Index,  the Fixed Rate Index,
the Commercial  Paper Rate Index, the Monthly Rate Index, the Semi-annual Rate
Index, the Term Rate Index, or the Weekly Rate Index.

            "Rating  Agency"  means  Moody's,  if the  Bonds  are then  rated by
Moody's,  S&P, if the Bonds are then rated by S&P,  and Fitch,  if the Bonds are
then rated by Fitch.

            "rating category" shall mean one of the generic rating categories of
a Rating  Agency,  without  regard to any refinement or gradation of such rating
category by a numerical modifier, plus or minus sign, or otherwise.

            "Record Date", at any time,  shall mean each Commercial Paper Period
Record Date during a  Commercial  Paper Rate  Period,  each  Auction  Rate Bonds
Period Record Date during an Auction Rate Period,  each Daily Period Record Date
during a Daily Rate Period,  each Weekly Period Record Date during a Weekly Rate
Period,  each Monthly  Period  Record Date during a Monthly  Rate  Period,  each
Semi-annual  Period  Record Date during a  Semi-annual  Rate  Period,  each Term
Period  Record  Date  during a Term Rate  Period and each Fixed Rate Record Date
during a Fixed Rate Period.

            "Registrar  and  Paying  Agent"  shall  mean  HSBC  Bank  USA in its
separate capacity as Registrar and Paying Agent for the Bonds, or its successors
or assigns.

            "Remarketing  Agent" shall mean the Remarketing Agent or Remarketing
Agents appointed  pursuant to Section 11.14, its or their successors or assigns,
including  without  limitation any "market agent"  appointed in connection  with
Auction Rate Bonds.

            "Remarketing  Agreement" shall mean the Remarketing  Agreement among
the Company and the Remarketing Agents dated as of July 29, 1999 and any similar
agreement  or  agreements   between  the  Company  and  one  or  more  successor
Remarketing Agents, as from time to time amended.



<PAGE>


            "Revenues"  shall mean and include all income,  revenues  and monies
derived by the Authority under the Participation  Agreement and the Note (except
administrative  compensation and indemnification payable under the Participation
Agreement), and, without limiting the generality of the foregoing, shall include
to the extent provided in this  Indenture,  earnings on the investment of monies
held under this Indenture and the proceeds of the sale of any such  investments.
The term "Revenues"  shall not include monies received as proceeds from the sale
of the Bonds or any other bonds, notes or evidences of indebtedness or as grants
or gifts.

            "S&P" shall mean Standard & Poor's Ratings  Services,  a division of
The  McGraw-  Hill  Companies  and  its  successor  or  successors,  and if such
corporation shall for any reason no longer perform the functions of a securities
rating  agency  or if S&P  shall  be  replaced,  subject  to the  definition  of
"prevailing  rating" in the definition of Applicable  Percentage,  by some other
nationally  recognized  rating  agency by the  Authority  at the  request of the
Company,  "S&P"  shall be deemed to refer to such  other  nationally  recognized
rating agency designated by the Authority at the request of the Company.

            "Securities  Depository" shall mean The Depository Trust Company and
its successors and assigns or if (i) the then Securities Depository resigns from
its functions as depository of the Bonds or (ii) the Authority  discontinues use
of the then Securities Depository pursuant to Section 2.03, any other securities
depository,  which agrees to follow the procedures  required to be followed by a
Securities  Depository in connection with the Bonds and which is selected by the
Authority,  with the consent of the Company,  the Trustee, the Auction Agent and
the Remarketing Agent pursuant to Section 2.03.

            "Securities  Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.

            "Sell Order"  shall mean with  respect to Auction  Rate Bonds,  Sell
Order as defined in Section 3.06.

            "Semi-annual  Period  Record Date" shall mean,  with respect to each
Interest Payment Date during a Semi-annual Rate Period, the fifteenth day of the
calendar month next preceding such Interest Payment Date.

            "Semi-annual  Rate"  shall  mean with  respect  to each  Calculation
Period during a Semi-annual Rate Period, a rate of interest equal to the rate of
interest per annum  established and certified to the Trustee (with a copy to the
Authority,  the Registrar  and Paying Agent and the Company) by the  Remarketing
Agent  no  later  than  12:00  noon  (New  York  City  time)  on  and  as of the
Determination  Date as the minimum  rate of  interest  per annum  which,  in the
opinion of the  Remarketing  Agent,  would be necessary on and as of such day to
remarket  Bonds  in a  secondary  market  transaction  at a price  equal  to the
principal  amount thereof;  provided that such rate of interest shall not exceed
the lesser of 110% of the Semi-annual  Rate Index on and as of such date and the
Maximum Allowed Rate.



<PAGE>


            "Semi-annual   Rate   Index"   shall   mean  with   respect  to  the
Determination  Date of each Calculation Period during a Semi-annual Rate Period,
the average of six-month  yield  evaluations at par,  determined by the Indexing
Agent, of securities (whether or not actually issued),  the interest on which is
not included in gross income for federal  income tax purposes,  of no fewer than
ten  Component  Issuers  selected by the Indexing  Agent,  including  issuers of
commercial paper,  project notes,  bond anticipation  notes and tax anticipation
notes,  computed by the  Indexing  Agent on and as of such day. If the Bonds are
rated by a Rating Agency in its highest note or commercial paper rating category
or one of its two highest  long-term  debt  rating  categories,  each  Component
Issuer  must (a) have  outstanding  securities  rated by a Rating  Agency in its
highest note or  commercial  paper rating  category or (b) not have  outstanding
notes  or  commercial  paper  rated  by a Rating  Agency  but  have  outstanding
securities  rated by a Rating  Agency in one of its two highest  long-term  debt
rating  categories.  If the  Bonds  are  rated  by a Rating  Agency  in a rating
category that is lower than its highest note or commercial paper rating category
or its two highest long-term debt rating categories (and the Bonds are not rated
in one of such  categories by the other Rating  Agency),  each Component  Issuer
must (a) have  outstanding  securities  rated by a Rating  Agency in its note or
commercial  paper  rating  category  which  is the same or  correlative,  in the
Indexing  Agent's  judgment,  to the note or commercial paper rating category or
the long-term  debt rating  category of the Bonds or the other debt  obligations
supported by support  facilities  issued by the issuer of a Support  Facility or
(b) have  outstanding  securities rated by a Rating Agency in the same long-term
debt rating  category as the Bonds are rated by that Rating  Agency and not have
any  outstanding  notes or  commercial  paper rated by such Rating  Agency.  The
Indexing  Agent  may  change  the  Component  Issuers  from  time to time in its
discretion,  subject to the foregoing requirements.  In addition, at the request
of the  Company and upon  delivery to the Trustee of an Opinion of Bond  Counsel
that such  action will not  adversely  affect the  exclusion  of interest on the
Bonds from gross income of the owners  thereof for federal  income tax purposes,
the  Authority,  with the consent of the Company,  may designate a new method of
setting  the  Semi-annual  Rate  Index in the event  any of the  above-described
methods are  determined by the  Authority to be  unavailable,  impracticable  or
unrealistic in the market place.

            "Semi-annual  Rate Period"  shall mean any period during which Bonds
bear  interest  at a  Semi-annual  Rate,  which  period  shall  commence  on the
effective date of a Change in the Interest Rate Mode to a Semi-annual  Rate, and
shall  extend  through  the day  immediately  preceding  the  earlier of (a) the
effective  date of another  Change in the Interest  Rate Mode, or (b) the Stated
Maturity.

            "Standard  Auction  Period" shall mean an Auction  Period of 35 days
unless a different  Standard  Auction Period is established  pursuant to Section
3.04.

            "Stated  Maturity,"  with respect to each series of Bonds shall mean
May 1, 2034, provided that, subject to the next sentence,  in any case where the
date of maturity of, or payment of premium on, interest on, or principal of, the
Bonds or the date fixed for redemption of any Bonds shall be on a day other than
a Business  Day, then payment of interest,  principal and premium,  if any, need
not be made on such date but may be made  (without  additional  interest) on the
next  succeeding  Business Day, with the same force and effect as if made on the
date of maturity or the date fixed for redemption.  Notwithstanding  anything in
this Indenture to the contrary, in no event shall the final maturity date of the
Bonds  extend  beyond 35 years  from the  Closing  Date,  and the  length of any
Auction Period shall be reduced at the discretion of the Authority to the extent
necessary to ensure compliance with the provisions of this sentence.



<PAGE>


            "Statutory  Corporate  Tax  Rate"  shall  mean  as of  any  date  of
determination  the highest  tax rate  bracket  (expressed  in  decimals)  now or
hereafter  applicable  in each  taxable  year on the  taxable  income  of  every
corporation  as set forth in  Section  11 of the Code or any  successor  section
without regard to any minimum  additional tax provision or provisions  regarding
changes in rates  during a taxable  year,  which on the date hereof is .35.  Any
change in the  Statutory  Corporate Tax Rate shall be evidenced by a certificate
of the Company.

            "Submission  Deadline"  shall mean 3:00 p.m., New York City time, on
the Business Day  preceding  any Auction Date or such other time on the Business
Day  preceding any Auction Date by which  Broker-Dealers  are required to submit
Orders to the Auction Agent as specified by the Auction Agent from time to time.

            "Submitted  Bid" shall mean with  respect  to  Auction  Rate  Bonds,
Submitted Bid as defined in Section 3.08.

            "Submitted  Hold  Order"  shall mean with  respect  to Auction  Rate
Bonds, Submitted Hold Order as defined in Section 3.08.

            "Submitted  Order"  shall mean with  respect to Auction  Rate Bonds,
Submitted Order as defined in Section 3.08.

            "Submitted  Sell  Order"  shall mean with  respect  to Auction  Rate
Bonds, Submitted Sell Order as defined in Section 3.08.

            "Substitute  Commercial  Paper  Dealers"  shall mean the  commercial
paper  dealers  specified by the  Authority at the request of the Company at the
time of any  Change  in the  Interest  Rate  Mode to an  Auction  Rate or  their
respective  affiliates or successors,  if any such person is a commercial  paper
dealer,  provided  that  none of such  persons  nor any of their  affiliates  or
successors shall be a Commercial Paper Dealer.

            "Substitute  U.S.  Government  Securities  Dealer"  shall mean the
dealer or dealers in U.S. government  securities specified by the Authority at
the request of the Company at the time of a Change in the  Interest  Rate Mode
to an Auction Rate, or their respective affiliates or successors,  if any such
person is a dealer in U.S. government  securities,  provided that none of such
persons nor any of their affiliates or successors  shall be a U.S.  Government
Securities Dealer.

            "Sufficient  Clearing  Bids" shall mean with respect to Auction Rate
Bonds, Sufficient Clearing Bids as defined in Section 3.08.

            "Supplemental  Indenture"  shall  mean  any  indenture  between  the
Trustee and the Authority  entered into  pursuant to and in compliance  with the
provisions of Article XIV hereof  amending or  supplementing  the  provisions of
this Indenture as originally executed or as theretofore amended or supplemented.

            "Supplemental  Participation  Agreement"  shall  mean  an  agreement
supplementing or amending the Participation Agreement.


<PAGE>


            "Support  Facility"  shall mean any instrument  satisfactory  to the
Authority  entered  into or obtained  in  connection  with the Bonds,  such as a
letter of credit,  committed line of credit,  insurance  policy,  surety bond or
standby bond purchase agreement, or any combination of the foregoing, and issued
by a  bank  or  banks,  other  financial  institution  or  institutions,  or any
combination of the foregoing  which provides for the payment of (i) the Purchase
Price on Bonds tendered for purchase  pursuant to the provisions  hereof and the
Bond Purchase Trust Agreement and/or (ii) principal of and interest on all Bonds
coming due and payable during the term thereof.  The Letter of Credit dated July
29, 1999 issued by Morgan Guaranty Trust Company of New York shall  constitute a
Support Facility within the meaning of this Indenture.

            "Support  Facility  Issuer"  shall mean any bank or banks,  or other
financial  institution  or  institutions  which  is the  issuer  of any  Support
Facility.

            "Tax Regulatory  Agreement" shall mean the Tax Regulatory Agreement,
dated the Closing Date,  between the Authority and the Company,  and any and all
modifications, alterations, amendments and supplements thereto.

            "Term Period Record Date" shall mean,  with respect to each Interest
Payment  Date during a Term Rate  Period,  the  fifteenth  day of the month next
preceding such Interest Payment Date.

            "Term  Rate"  shall  mean with  respect to each  Calculation  Period
during a Term Rate Period,  a rate of interest equal to the rate of interest per
annum  established  and certified to the Trustee (with a copy to the  Authority,
the  Registrar  and Paying  Agent and the Company) by the  Remarketing  Agent no
later than 12:00 noon (New York City time) on and as of the  Determination  Date
as the  minimum  rate  of  interest  per  annum  which,  in the  opinion  of the
Remarketing  Agent,  would be necessary  on and as of such day to remarket  such
Bonds in a secondary market transaction at a price equal to the principal amount
thereof; provided that such rate of interest shall not exceed the lesser of 110%
of the Term Rate Index on and as of such date and the Maximum Allowed Rate.



<PAGE>


            "Term Rate Index" shall mean with respect to the Determination  Date
of each Calculation  Period during a Term Rate Period,  the average of the yield
evaluations at par,  determined by the Indexing Agent, of securities (whether or
not actually issued),  having a term approximately equal to the Term Rate Period
or which are subject to optional or mandatory tender by the owner thereof at the
end of a term approximately equal to the Term Rate Period, the interest on which
is not included in gross  income for federal  income tax  purposes,  of no fewer
than ten  Component  Issuers  selected by the  Indexing  Agent,  computed by the
Indexing  Agent on and as of such day. If the Bonds are rated by a Rating Agency
in one of its two highest  long-term  debt  rating  categories,  each  Component
Issuer must have  outstanding  securities rated by a Rating Agency in one of its
two highest long-term debt rating categories. If the Bonds are rated by a Rating
Agency in a rating  category that is lower than its two highest  long-term  debt
rating  categories  (and the Bonds are not rated in one of the two highest  such
categories  by the  other  Rating  Agency),  each  Component  Issuer  must  have
outstanding  securities  rated by a Rating  Agency  in the same  long-term  debt
rating category as the Bonds are rated by that Rating Agency. The Indexing Agent
may change the Component Issuers from time to time in its discretion, subject to
the foregoing requirements.  In addition, at the request of the Company and upon
delivery to the Trustee of an Opinion of Bond  Counsel that such action will not
adversely affect the exclusion of interest on the Bonds from gross income of the
owners thereof for federal income tax purposes, the Authority,  with the consent
of the Company, may designate a new method of setting the Term Rate Index in the
event any of the  above-described  methods are determined by the Authority to be
unavailable, impracticable or unrealistic in the market place.

            "Term Rate  Period"  shall mean any period  during  which Bonds bear
interest at a Term Rate which period shall  commence with the effective  date of
the Change in the Interest Rate Mode to a Term Rate and shall extend through the
day  immediately  preceding  the  earlier of (a) the  effective  date of another
Change in the Interest Rate Mode or (b) the Stated Maturity.

            "Terminating  Event"  shall mean any event or events under the terms
of a Support  Facility  or any  agreement  providing  for the  issuance  of such
Support Facility which would cause the termination or expiration of such Support
Facility but would specifically allow for the mandatory tender of Bonds pursuant
to  Section  5.09 with a draw on or  borrowing  or payment  under  such  Support
Facility prior to such termination or expiration.  Specifically  with respect to
the Initial Liquidity Facility, the occurrence of an event of default under, and
as  defined  in,  the  related   Reimbursement   Agreement  shall  constitute  a
Terminating Event within the meaning of this Indenture.

            "Treasury Rate" on any date, shall mean (i) the yield, calculated in
accordance with prevailing industry convention, of the rate on the most recently
auctioned  direct  obligations of the U.S.  Government  having a maturity at the
time of issuance of 364 days or less with a  remaining  maturity  closest to the
length of such Auction Period, as quoted in The Wall Street Journal on such date
for the Business  Day next  preceding  such date;  or (ii) in the event that any
such rate is not published in The Wall Street Journal,  then the bond equivalent
yield,  calculated  in  accordance  with  prevailing  industry  convention,   as
calculated by reference to the arithmetic average of the bid price quotations of
the most recently  auctioned direct  obligation of the U.S.  Government having a
maturity at the time of  issuance of 364 days or less with a remaining  maturity
closest to the length of such Auction Period,  based on bid price  quotations on
such date obtained by the Auction Agent from U.S. Government Securities Data. If
any  U.S.  Government  Securities  Dealer  does  not  quote a rate  required  to
determine the Treasury  Rate, the Treasury Rate shall be determined on the basis
of the  quotation or  quotations  furnished  by the  remaining  U.S.  Government
Securities  Dealer or Dealers  and any  Substitute  U.S.  Government  Securities
Dealer or Dealers  selected  by the  Authority  at the request of the Company to
provide such rate or rates not being supplied by any U.S. Government  Securities
Dealer or U.S.  Government  Securities  Dealers,  as the case may be, or, if the
Authority does not select any such Substitute U.S. Government  Securities Dealer
or  Substitute  U.S.  Government  Securities  Dealers,  by  the  remaining  U.S.
Government Securities Dealer or U.S. Government Securities Dealers.

            "Trust  Estate" shall mean the meaning  assigned to such term in the
first paragraph following the recitals herein.



<PAGE>


            "Trustee" shall mean the corporation  having trust powers  appointed
by the  Authority as Trustee  hereunder and serving as such  hereunder,  and any
surviving,  resulting or transferee  corporation  as provided in Section  11.13.
References to principal office of the Trustee shall mean the Principal Corporate
Trust Office of the Trustee.

            "U.S.  Government" shall mean the federal government of the United
States of America.

            "U.S.  Government  Securities  Dealers" shall mean the Remarketing
Agents  for  any  Auction  Rate  Bonds,  or,  in lieu  of any  thereof,  their
respective  affiliates or successors,  provided that any such entity is a U.S.
Government securities dealer.

            "Weekly  Period  Record  Date"  shall  mean,  with  respect  to each
Interest  Payment  Date  during a Weekly  Rate  Period,  the  Business  Day next
preceding such Interest Payment Date.

            "Weekly  Rate" shall mean with  respect to each  Calculation  Period
during a Weekly Rate  Period,  a rate of interest  equal to the rate of interest
per  annum  established  and  certified  to the  Trustee  (with  a  copy  to the
Authority,  the Registrar  and Paying Agent and the Company) by the  Remarketing
Agent  no  later  than  12:00  noon  (New  York  City  time)  on  and  as of the
Determination  Date as the minimum  rate of  interest  per annum  which,  in the
opinion of the  Remarketing  Agent,  would be necessary on and as of such day to
remarket  Bonds  in a  secondary  market  transaction  at a price  equal  to the
principal amount thereof plus accrued interest thereon;  provided that such rate
of interest  shall not exceed the lesser of 110% of the Weekly Rate Index on and
as of such date and the Maximum Allowed Rate.



<PAGE>


            "Weekly  Rate Index"  shall mean with  respect to the  Determination
Date of each  Calculation  Period  during a Weekly Rate  Period,  the average of
30-day yield evaluations at par, determined by the Indexing Agent, of securities
(whether or not actually issued), the interest on which is not included in gross
income for federal income tax purposes,  of no fewer than ten Component  Issuers
selected by the Indexing Agent,  including issuers of commercial paper,  project
notes,  bond  anticipation  notes and tax  anticipation  notes,  computed by the
Indexing  Agent on and as of such day. If the Bonds are rated by a Rating Agency
in its  highest  note or  commercial  paper  rating  category  or one of its two
highest  long-term debt rating  categories,  each Component Issuer must (a) have
outstanding  securities  rated  by a  Rating  Agency  in  its  highest  note  or
commercial paper rating category or (b) not have outstanding notes or commercial
paper rated by a Rating Agency but have outstanding securities rated by a Rating
Agency in one of its two highest long-term debt rating categories.  If the Bonds
are rated by a Rating Agency in a rating category that is lower than its highest
note or  commercial  paper  rating  category or its two highest  long-term  debt
rating  categories (and the Bonds are not rated in one of such categories by the
other Rating Agency), each Component Issuer must (a) have outstanding securities
rated by a Rating Agency in its note or commercial  paper rating  category which
is the same or correlative,  in the Indexing  Agent's  judgment,  to the note or
commercial  paper rating  category or the long-term debt rating  category of the
Bonds or (b) have  outstanding  securities  rated by a Rating Agency in the same
long-term debt rating  category as the Bonds are rated by that Rating Agency and
not have any outstanding  notes or commercial paper rated by such Rating Agency.
The  Indexing  Agent may change the  Component  Issuers from time to time in its
discretion,  subject to the foregoing requirements.  In addition, at the request
of the  Company and upon  delivery to the Trustee of an Opinion of Bond  Counsel
that such  action will not  adversely  affect the  exclusion  of interest on the
Bonds from gross income of the owners  thereof for federal  income tax purposes,
the  Authority,  with the consent of the Company,  may designate a new method of
setting  the Weekly Rate Index in the event any of the  above-described  methods
are determined by the Authority to be unavailable,  impracticable or unrealistic
in the market place.

            "Weekly  Rate Period"  shall mean any period  during which the Bonds
bear interest at a Weekly Rate; the first such period shall commence on the date
of initial  issuance of the Bonds and shall extend  through the day  immediately
preceding the earlier of (a) the effective date of a Change in the Interest Rate
Mode or (b) the Stated Maturity.

            "Winning  Bid Rate" shall mean with  respect to Auction  Rate Bonds,
Winning Bid Rate as defined in Section 3.08.

     SECTION 1.02.  Definitions of General Terms. Whenever in this Indenture any
governmental unit including the Authority or any official,  officer, director or
department of a governmental unit, is defined or referred to, such definition or
reference shall be deemed to include the governmental unit or official, officer,
board, agency, commission,  body or department succeeding to or in whom or which
is  vested,  the  functions,  rights,  powers,  duties and  obligations  of such
governmental unit, official,  officer,  director or department,  as the case may
be, encompassed by this Indenture.

            Unless the context shall clearly indicate otherwise or may otherwise
require, in this Indenture words importing persons include firms,  partnerships,
associations,  corporations  (public  and  private),  public  bodies and natural
persons,  and also include  executors,  administrators,  trustees,  receivers or
other representatives.

            Unless the context shall clearly indicate otherwise or may otherwise
require  computation on other than an annual basis,  in this Indenture  whenever
any interest rate or rate of interest is defined or referred to, such rate shall
be a rate per annum.

            Unless the context shall clearly indicate otherwise or may otherwise
require,  in this  Indenture  (not  including in such term wherever used in this
paragraph any Supplemental Indenture): (i) references to articles,  sections and
other  subdivisions,  whether  by  number or  letter  or  otherwise,  are to the
respective  or  corresponding  articles,   sections  and  subdivisions  of  this
Indenture,  as such articles,  sections or subdivisions may be amended from time
to time; (ii) the terms "herein," "hereunder," "hereby," "hereto," "hereof," and
any similar terms,  refer to this Indenture and to this Indenture as a whole and
not to any particular article, section or subdivision hereof; and (iii) the word
"heretofore"  means before the time of effectiveness of this Indenture;  and the
word "hereafter" means after the time of effectiveness of this Indenture.


<PAGE>



                                     II-

                             ARTICLE IIARTICLE II

                 AUTHORIZATION OF BONDSAUTHORIZATION OF BONDS

     SECTION 2.01. Limitation on Issuance of Bonds. No Bonds may be issued under
the  provisions of this  Indenture  except in accordance  with the provisions of
this Article.

     SECTION  2.02.   Authorization  of  Bonds.  There  is  hereby  created  and
established  under this  Indenture one issue of revenue bonds of the  Authority,
limited to $292,700,000 in aggregate  principal amount,  of "Facilities  Revenue
Bonds, Series 1999A (Consolidated Edison Company of New York, Inc. Project)". In
order to distinguish  between Bonds which are subject to different interest rate
determination  methods and other features and to distinguish  the portion of the
Bonds to be remarketed by any  particular  Remarketing  Agent,  the Bonds may be
designated and redesignated  from time to time by the Authority in such a way as
to identify one or more subseries of the Bonds. Such subseries may be designated
as subseries A-1, subseries A-2, or subseries A-3, as the case may be, or may be
further redesignated as subseries A-1-1, subseries A-2-1, or subseries A-3-1, as
the case may be, and so forth.  Each Bond shall bear upon the face  thereof such
designation  or  redesignation,  if any.  In the  event  any  series of Bonds is
designated as one or more subseries,  all references to a series of the Bonds in
this Indenture shall refer to each such subseries  unless the context  otherwise
requires.  The Bonds, upon original issuance,  shall be issued in three separate
subseries  designated as "1999A-1" in the principal  amount of $97,600,000  (the
"Series 1999A-1  Bonds"),  "1999A-2" in the principal amount of $97,600,000 (the
"Series  1999A-2  Bonds") and "1999A-3" in the principal  amount of  $97,500,000
(the "Series 1999A-3 Bonds").

            2a The Bonds shall be secured by the Trust Estate. The lien, pledge,
charge and  assignment  of the Trust  Estate  created  hereby shall be valid and
binding from the time of the  effectiveness  of this Indenture,  as set forth in
Section 17.11,  and the Note Payments made under the Note and the  Participation
Agreement shall be immediately subject thereto upon receipt by the Trustee.

            3a The Bonds are limited obligations of the Authority payable solely
from  payments  to be  made  by  the  Company  pursuant  to  the  Note  and  the
Participation  Agreement and the other  monies,  rights and  properties  pledged
hereunder  including  the proceeds of the Support  Facility,  if any,  hereafter
obtained with respect  thereto and secured by a pledge from the Authority to the
Trustee of the  Participation  Agreement and the Note.  The Bonds shall not be a
debt of the  State of New York,  and the  State of New York  shall not be liable
thereon.

            4a The covenants and agreements  herein set forth to be performed by
the Authority shall be for the benefit, security and protection of any Holder of
the Bonds.

            5a Neither the Trustee nor any Holder of the Bonds shall be required
to see that the monies  derived  from such Bonds are  applied to the  purpose or
purposes for which such Bonds are issued.



<PAGE>


            6a The Bonds shall be issued under this Indenture for the purpose of
paying a portion of the redemption price of the Prior Bonds.

            7a The Bonds bearing a Commercial Paper Rate, a Daily Rate, a Weekly
Rate or a Monthly Rate shall be fully  registered  Bonds in the  denomination of
$100,000 or any integral  multiple  thereof.  The Bonds  bearing an Auction Rate
shall be fully  registered  Bonds in the denomination of $50,000 or any integral
multiple  thereof.  The Bonds bearing a Semi-annual Rate, a Term Rate or a Fixed
Rate  shall be fully  registered  Bonds in the  denomination  of  $5,000  or any
integral multiple thereof.

            8a The Bonds shall be numbered  consecutively  from "1999A-  [insert
"1, 2 or 3", as  appropriate]-1"  upwards as issued, or as otherwise provided by
the Registrar and Paying Agent. If the Bonds are redesignated to identify one or
more additional subseries,  the Bonds shall be numbered in accordance with their
subseries designation. The Bonds shall mature on the Stated Maturity.

            9a The Bonds shall be  initially  issued in fully  registered  form,
without coupons, and dated their date of first authentication and delivery.

            10a Upon any Change in the Interest Rate Mode to an Auction Rate for
an Auction Rate Period, there shall be Outstanding an aggregate principal amount
of not less  than  $20,000,000  of  Auction  Rate  Bonds  and in the  applicable
denominations set forth in Section 2.02.7.

     SECTION 2.03. Global Form; 1. Except as otherwise  provided in this Section
2.03, the Bonds in the form of one separate global bond for each subseries shall
be  registered  in the name of the  Securities  Depository  or its  nominee  and
ownership  thereof  shall be  maintained  in book entry  form by the  Securities
Depository for the account of the Agent Members thereof.

            Except as provided in subsections  (3) and (4) of this Section 2.03,
the Bonds of any subseries may be transferred, in whole but not in part, only to
the  Securities  Depository or a nominee of the Securities  Depository,  or to a
successor Securities Depository selected or approved by the Authority,  with the
consent  of the  Company,  the  Trustee,  the  Auction  Agent  (if  any) and the
Remarketing  Agent  for  such  subseries,  or to a  nominee  of  such  successor
Securities Depository. Each global certificate for the Bonds shall bear a legend
substantially to the following effect:  "Except as otherwise provided in Section
2.03 of the Indenture, this global bond may be transferred,  in whole but not in
part, only to the Securities Depository as defined in the Indenture or a nominee
of the  Securities  Depository or to a successor  Securities  Depository or to a
nominee of a successor Securities Depository."

            2a The Authority, the Company, the Trustee, the Registrar and Paying
Agent,  the  Auction  Agent (if any) and the  Remarketing  Agent  shall  have no
responsibility or obligation with respect to:



<PAGE>


            (a) the accuracy of the records of the Securities  Depository or any
      Agent  Member with  respect to any  beneficial  ownership  interest in the
      Bonds;

            (b) the delivery to any Agent Member,  beneficial owner of the Bonds
      or other person,  other than the  Securities  Depository or its nominee as
      registered owner, of any notice with respect to the Bonds;

            (c) the payment to any Agent Member,  beneficial  owner of the Bonds
      or other person,  other than the  Securities  Depository or its nominee as
      registered  owner, of any amount with respect to the principal or premium,
      if any, or interest on the Bonds;

            (d) its acceptance of any consent given by the Securities Depository
      or other action taken by the Securities Depository as registered owner; or

            (e) the selection by the Securities  Depository or any Agent Members
      of any  beneficial  owners to  receive  payment  in the event of a partial
      redemption of Bonds,  except for the Trustee's  obligations  under Section
      5.12.

So long as the  certificates  for the Bonds of any  subseries  issued  under the
Indenture are not issued  pursuant to subsection  (4) of this Section 2.03,  the
Authority, the Company, the Trustee, the Auction Agent (if any), the Remarketing
Agent and the Registrar and Paying Agent may treat the Securities Depository as,
and deem the  Securities  Depository to be, the absolute owner of such series or
subseries of Bonds for all purposes whatsoever, including without limitation:

            (a)   the payment of principal  and premium,  if any, and interest
      on such series or subseries of the Bonds;

            (b) giving  notices of redemption  and other matters with respect to
      such series or subseries of the Bonds; and

            (c)  registering  transfers with respect to such series or subseries
      of the Bonds.

            Payment by the Trustee of principal or redemption  price, if any, of
and  premium,  if any,  and  interest  on such Bonds to or upon the order of the
Securities Depository or its nominee during any period when it is the registered
owner of such Bonds shall be valid and effective to satisfy and discharge  fully
the Authority's obligation with respect to the amounts so paid.

            3a (a)  The  Authority  may  discontinue  the  use  of a  Securities
      Depository  for the  Bonds at the time of a Change  in the  Interest  Rate
      Mode.



<PAGE>


            (b)  Registered  ownership  of the Bonds may be  transferred  on the
      registration books of the Authority maintained by the Registrar and Paying
      Agent and the Bonds may be  delivered in physical  form to the  following:
      (i) any  successor  Securities  Depository  or its  nominee;  or (ii)  any
      person,  upon (A) the resignation of the Securities  Depository or (B) the
      termination by the Authority of the use of the Securities  Depository from
      its functions as depository as set forth in this section,  or (C) upon any
      Change in the  Interest  Rate Mode to any  Adjustable  Rate  other than an
      Auction Rate.

            (c) Upon any Change in the  Interest  Rate Mode to an Auction  Rate,
      the  Registrar  and Paying Agent shall  register the Auction Rate Bonds in
      the name of the Securities  Depository or its nominee and on the effective
      date  of such  change  provide  the  Company  with a list of the  Existing
      Holders of the Auction Rate Bonds.

            4a If at any time the Securities  Depository  notifies the Authority
and the  Company  that it is  unwilling  or unable  to  continue  as  Securities
Depository with respect to the Bonds or if at any time the Securities Depository
shall no longer be registered or in good standing under the Securities  Exchange
Act or  other  applicable  statute  or  regulation  and a  successor  Securities
Depository is not  appointed by the  Authority  with the consent of the Company,
the Trustee,  the Auction Agent (if any) and the  Remarketing  Agent,  within 90
days after the Authority and the Company  receive notice or become aware of such
condition,  as the case may be, this Section shall no longer be  applicable  and
the  Authority  shall  execute and the Trustee  shall  authenticate  and deliver
certificates  representing  the Bonds of such  series or  subseries  as provided
below.  In addition,  the Authority may determine at any time, at the request of
the Remarketing  Agent,  that the Bonds shall no longer be represented by global
bonds and that the provisions of  subsections  (1) and (2) above shall no longer
apply to such  series or  subseries  of Bonds.  In any such event the  Authority
shall  execute  and the Trustee  shall  authenticate  and  deliver  certificates
representing   the  Bonds  of  such  series  or  subseries  as  provided  below.
Certificates  for the Bonds of any series or subseries  issued in exchange for a
global bond  pursuant to this  subsection  shall be  registered in such names in
authorized denominations as the Securities Depository,  pursuant to instructions
from the Agent  Members or  otherwise,  shall  instruct  the  Authority  and the
Trustee.  The Trustee shall deliver such certificates  representing the Bonds of
such  series or  subseries  to the  persons  in whose  names  such  Bonds are so
registered on the Business Day immediately preceding the first day of an Auction
Period (with respect to Auction Rate Bonds during any Auction Rate  Period),  or
the  effective  date of a Change in the Interest  Rate Mode (with respect to any
other Change in the Interest Rate Mode), as the case may be.

            5a The Authority and the Trustee are hereby authorized to enter into
any  arrangements   determined   necessary  or  desirable  with  any  Securities
Depository  in order to  effectuate  this  Section and both of them shall act in
accordance  with this  Indenture and any such  agreement.  Without  limiting the
generality  of the  foregoing,  any such  arrangements  may alter the  manner of
effecting  delivery of Bonds and the  transfer of funds for the payment of Bonds
to the Securities Depository.



<PAGE>


     SECTION  2.04.  Limitations  on Transfer.  So long as the  ownership of the
Auction  Rate  Bonds  is  maintained  in  book-entry   form  by  the  Securities
Depository,  a  beneficial  owner or an  Existing  Holder may sell,  transfer or
otherwise  dispose of Auction  Rate Bonds only  pursuant  to a Bid or Sell Order
placed in an Auction or to a Broker-Dealer,  provided,  however,  that (a) sale,
transfer  or other  disposition  of Auction  Rate  Bonds  from a  customer  of a
Broker-Dealer  who is listed on the records of that  Broker-Dealer as the holder
of such Auction  Rate Bonds to that  Broker-Dealer  or another  customer of that
Broker-Dealer  shall not be deemed to be a sale,  transfer or other  disposition
for  purposes of this Section  2.04 if such  Broker-Dealer  remains the Existing
Holder of the Auction Rate Bonds so sold, transferred or disposed of immediately
after such sale,  transfer or  disposition  and (b) in the case of all transfers
other than pursuant to Auctions such Broker-Dealer to whom such transfer is made
shall advise the Auction Agent of such transfer.

     SECTION 2.05.  Application  of Bond  Proceeds.  The proceeds of sale of the
Bonds shall be deposited  with the Trustee for deposit in the Project Fund to be
paid out in accordance with Section 8.01.

     SECTION  2.06.  Delivery  of the Bonds.  The Bonds shall be executed by the
Authority  substantially  in the form  prescribed  by  Section  16.01 and in the
manner   herein  set  forth  and  shall  be  deposited   with  the  Trustee  for
authentication,  but  before  the Bonds  shall  initially  be  delivered  by the
Trustee, there shall be filed with the Trustee the following:

            (a)  an  order  executed  by an  Authorized  Officer  directing  the
      authentication  and  delivery  of the  Bonds to or upon  the  order of the
      Securities  Depository or its nominee,  upon payment to the Trustee of the
      purchase price therein set forth;

            (b)   a fully executed counterpart of this Indenture;

            (c)   a fully executed counterpart of the Participation Agreement;

            (d)   a fully executed counterpart of the Remarketing Agreement;

            (e)   the fully executed Initial Liquidity Facility;

            (f)   a fully  executed  counterpart  of the Bond  Purchase  Trust
      Agreement;

            (g)   the fully executed Note;

            (h)   a  fully   executed   counterpart   of  the  Tax  Regulatory
      Agreement;

            (i)  an  opinion  of  Counsel  to  the  Company,  addressed  to  the
      Underwriters  (as defined in the Bond Purchase  Agreement),  with reliance
      letter addressed to the Authority,  the Trustee and the Initial  Liquidity
      Facility Issuer,  substantially  to the effect,  and dated as, required by
      Section 7(d)(6)(ii) of the Bond Purchase Agreement;

            (j) opinion of counsel to the  Initial  Liquidity  Facility  Issuer,
      addressed to the Initial Liquidity Facility Issuer and the Company,  which
      opinion  authorizes  the  Underwriters  (as  defined in the Bond  Purchase
      Agreement), the Authority, the Trustee, the Registrar and Paying Agent and
      the Rating  Agencies to rely thereon as though such opinion were addressed
      to them,  substantially  to the effect required by Section  7(d)(6)(iv) of
      the Bond Purchase Agreement;



<PAGE>


            (k) Opinion of Bond Counsel to the  Authority and the Trustee (i) as
      to the validity of the Bonds and (ii) that all conditions precedent to the
      issuance of the Bonds have been met.

            When the documents  mentioned in clauses (a) to (k),  inclusive,  of
this Section  shall have been filed with the  Trustee,  and when the Bonds shall
have been executed and authenticated as required by this Indenture,  the Trustee
shall deliver the Bonds to the Securities  Depository,  but only upon payment to
the Trustee of the purchase price of the Bonds specified in said order.


<PAGE>



                                     III-

                                  ARTICLE III

                              INTEREST ON BONDS

     SECTION  3.01.  Interest on  Bonds-General  1.  Interest  accruing on Bonds
bearing  interest at a  Commercial  Paper Rate,  a Daily Rate,  a Weekly Rate, a
Monthly Rate or a Semi-annual  Rate,  shall be computed on the basis of a 365 or
366-day year, as applicable,  for the number of days actually elapsed.  Interest
accruing  on Bonds  bearing  interest  at a Term Rate or a Fixed  Rate  shall be
computed on the basis of a 360-day  year,  consisting of twelve (12) thirty (30)
day months. Interest accruing on Bonds bearing interest at an Auction Rate shall
be  computed  on the basis of a  360-day  year for the  number of days  actually
elapsed.  Bonds shall bear interest from the date of issuance thereof payable in
arrears on each  Interest  Payment  Date.  The Bonds  issued upon  transfers  or
exchanges  of Bonds shall bear  interest  from the  Interest  Payment  Date next
preceding their date of authentication,  unless the date of authentication is an
Interest  Payment  Date in which case such Bonds shall bear  interest  from such
date,  or  unless  the date of  authentication  is after  the  Record  Date next
preceding the next  succeeding  Interest  Payment Date, in which case such Bonds
shall bear interest from such next succeeding Interest Payment Date.

            2. The Bonds shall be initially issued as Weekly Rate Bonds during a
Weekly Rate Period. Each of the Series of Bonds shall bear interest at 3.10% for
the period from and including the date of issuance of the Bonds to and including
the  following  Tuesday.  From and after any  Change in the  Interest  Rate Mode
pursuant to Section 4.01 or 4.02, the Bonds with respect to which such change is
effective  shall bear interest  determined in accordance  with the provisions of
this Indenture  pertaining to the new Adjustable  Rate or the Fixed Rate, as the
case may be. Bonds shall bear  interest  for each  Calculation  Period,  Auction
Period or Fixed Rate  Period,  as the case may be, at the rate of  interest  per
annum  for  such  Calculation  Period,  Auction  Period  or  Fixed  Rate  Period
established in accordance with this Indenture. Interest shall be payable on each
Interest  Payment  Date by check  mailed to the  registered  owner at his or her
address as it appears on the registration books kept by the Registrar and Paying
Agent  pursuant to the  Indenture  at the close of  business  on the  applicable
Record  Date;  provided,  that  (i)  while  the  Securities  Depository  is  the
registered  owner of the Bonds,  all payments of principal of, premium,  if any,
and  interest on the Bonds  shall be paid to the  Securities  Depository  or its
nominee by wire  transfer,  (ii) prior to and including a Fixed Rate  Conversion
Date, interest on the Bonds shall be payable to any registered owner of at least
one million dollars  ($1,000,000) in aggregate principal amount of Bonds by wire
transfer,  upon written  notice  received by the  Registrar  and Paying Agent at
least five days prior to the applicable  Record Date, from such registered owner
containing the wire transfer  address (which shall be in the continental  United
States) to which such  registered  owner  wishes to have such wire  directed and
(iii) during a Commercial  Paper Rate Period,  interest  shall be payable on the
Bonds only upon  presentation and surrender  thereof to the Registrar and Paying
Agent upon purchase  thereof  pursuant to Section 5.03 and if such  presentation
and surrender is made by 2:00 p.m. (New York City time) such payment shall be by
wire transfer. If and to the extent that there shall be a default in the payment
of the interest due on any Interest  Payment Date,  such interest shall cease to
be payable


<PAGE>


to the person in whose  name each Bond of such  series  was  registered  on such
applicable  Record Date and shall be payable,  when and if paid to the person in
whose name each Bond of such  series is  registered  at the close of business on
the record date fixed therefor by the Trustee, which shall be the fifth Business
Day next preceding the date of the proposed  payment.  Except as provided above,
payment of the principal of and premium, if any, on all Bonds shall be made upon
the  presentation  and  surrender of such Bonds at the  principal  office of the
Registrar  and  Paying  Agent as the same  shall  become  due and  payable.  The
principal of and premium,  if any, and interest on the Bonds shall be payable in
lawful money of the United States of America.

            3. Not less than one Business Day prior to each Computation Date and
two Business  Days prior to a Fixed Rate  Conversion  Date,  the Indexing  Agent
shall establish and provide to the  Remarketing  Agent the related rate index as
set forth in the  definition of such rate index in Section 1.01;  provided that,
for each Calculation Period during a Daily Rate Period, the Indexing Agent shall
establish  and provide the related rate index to the  Remarketing  Agent on each
Determination  Date;  and provided  further that,  for each  Calculation  Period
during a Monthly Rate Period, the Indexing Agent shall establish and provide the
related  rate index to the  Remarketing  Agent not later  than each  Computation
Date. Notwithstanding the foregoing, in the event that the Remarketing Agent, in
its sole judgment,  shall determine on a Determination  Date that any Daily Rate
Index Weekly Rate Index or any  Commercial  Paper Rate Index so  established  is
sufficiently  non-representative of current market conditions that the Bonds may
not be  remarketed at par if such rate is set at a rate not greater than 110% of
the applicable rate index, the Remarketing  Agent may establish a new rate index
on a  Determination  Date  in  accordance  with  the  procedures  and  standards
described  in the  definition  of such rate index and for  purposes of such rate
index so  established,  all references to Indexing Agent in this Indenture shall
be deemed to refer to the  Remarketing  Agent.  On any date when any Weekly Rate
Index or any Commercial Paper Rate Index is established by the Remarketing Agent
pursuant to this  paragraph,  such rate index shall have the respective  meaning
set forth in  Section  1.01  (except  as  otherwise  provided  in the  preceding
sentence);  provided that for any Commercial  Paper Rate Index,  the Remarketing
Agent shall select  securities  (whether or not actually  issued)  having a term
approximately equal to the applicable  Commercial Paper Rate Period or which are
subject to optional  or  mandatory  tender by the owner  thereof at the end of a
term  approximately  equal to (or as close thereto as is practicably  available)
the applicable Commercial Paper Rate Period.

            4. By 12:00 noon (New York City time) on each  Determination Date or
by 3:00 p.m.  (New York City time) on each Auction Date, as the case may be, the
Remarketing Agent or the Auction Agent, as the case may be, shall make available
to the Authority,  the Trustee,  the Registrar and Paying Agent, any issuer of a
Support  Facility,  the Company,  any Broker-Dealer or any registered owner of a
Bond the interest rate or rates determined on such Determination Date or Auction
Date.



<PAGE>


            5. If for any  reason  on any  Determination  Date  (A) any  rate of
interest for a Calculation  Period is not determined by the  Remarketing  Agent,
(B) no  Remarketing  Agent  is  serving  as such  hereunder  or (C) the  rate so
determined is held to be invalid or unenforceable by a final judgment of a court
of competent  jurisdiction,  (i) during any Daily Rate Period, the interest rate
for the next  succeeding  Calculation  Period shall be the last interest rate in
effect, or, if a Daily Rate is not determined by the Remarketing Agent hereunder
for five or more  consecutive  Business  Days on the  next  and each  succeeding
Determination Date, the Daily Rate shall be a rate per annum equal to 80% of the
latest  30-day dealer  taxable  commercial  paper rate  published by the Federal
Reserve Bank of New York on or immediately before such Determination  Date, (ii)
during  any  Weekly  Rate  Period,  the  interest  rate for the next  succeeding
Calculation  Period shall be the last interest  rate in effect,  or, if a Weekly
Rate is not  determined  by the  Remarketing  Agent for two or more  consecutive
Calculation  Periods, the Weekly Rate shall be equal to 85% of the latest 30-day
dealer taxable  commercial  paper rate published by the Federal  Reserve Bank of
New York on or before the day next  preceding  such  Determination  Date,  (iii)
during any Monthly Rate, Semi-annual Rate or Term Rate Period, the interest rate
per annum for the next  succeeding  Calculation  Period shall be equal to 85% of
the rate  listed in the table most  recently  circulated  by the  United  States
Treasury  Department known as "Table  [applicable dates shown on the most recent
Table],  Maximum Interest Rate Payable on United States Treasury Certificates of
Indebtedness,  Notes and Bonds-State and Local Government  Series Subscribed for
During  Period  [applicable  dates  shown  on the  most  recent  Table]"  or any
substantially   equivalent  table  circulated  by  the  United  States  Treasury
Department for the maturity most closely  approximating the Calculation  Period,
and  (iv)  during  any  Commercial  Paper  Rate  Period,   the  next  succeeding
Calculation  Period shall be a  Calculation  Period  which shall  consist of the
period from and including the prior  Interest  Payment Date to but excluding the
first Business Day of the following calendar month and the Commercial Paper Rate
shall be equal to 85% of the interest  rate  applicable  to 90-day United States
Treasury Bills determined on the basis of the average per annum discount rate at
which  such  90-day  Treasury  Bills  shall  have been  sold at the most  recent
Treasury auction within the 30 days next preceding such Calculation  Period,  or
if there shall have been no such auction  within the 30 days next preceding such
Calculation  Period,  the  Commercial  Paper  Rate shall be equal to the rate of
interest  borne by such Bond during the next  preceding  Calculation  Period for
such Bond.  The rate of interest or  Calculation  Period and related  Commercial
Paper  Rate  shall  be  established  pursuant  to this  subsection  5 until  the
Remarketing Agent again determines the rates of interest or Calculation  Periods
and  related  Commercial  Paper Rates in  accordance  with this  Indenture.  The
Trustee shall,  upon the direction of the Company,  select any person  otherwise
meeting the qualifications of Section 11.14 to obtain, calculate and prepare any
of the information required by this subsection 5.

            6. The  determination  of any rate of  interest  by the  Remarketing
Agent in  accordance  with this  Indenture or by the Auction Agent in accordance
with  the  Auction   Procedures   applicable  to  Auction  Rate  Bonds,  or  the
establishment of Calculation Periods or Auction Periods by the Remarketing Agent
as  provided  in this  Indenture  shall  be  conclusive  and  binding  upon  the
Authority,  the Company,  the  Trustee,  the  Registrar  and Paying  Agent,  the
Remarketing  Agent,  the Auction Agent,  any issuer of a Support  Facility,  all
Broker-Dealers and the registered or beneficial owners of the Bonds.  Failure of
the Remarketing Agent, the Trustee,  the Registrar and Paying Agent, the Auction
Agent or the Securities Depository or any Securities  Depository  participant to
give any of the notices  described  in this  Indenture,  or any defect  therein,
shall  not  affect  the  interest  rate to be borne by any of the  Bonds nor the
applicable Calculation Period or Auction Period nor in any way change the rights
of the  registered  owners of the Bonds to tender their Bonds for purchase or to
have them redeemed in accordance with this Indenture.



<PAGE>


            7. No  transfer or exchange of Bonds shall be required to be made by
the  Registrar  and Paying  Agent after a Record Date until the next  succeeding
Interest Payment Date.

            8. Except as otherwise  provided in this  subsection  8, the Trustee
shall  calculate  and notify  the  Registrar  and Paying  Agent of the amount of
interest due and payable on each  Interest  Payment Date or date on which a Bond
is subject to purchase by 10:00 a.m. on the  Business  Day next  preceding  such
Interest Payment Date or date set for purchase,  as the case may be, unless such
date is a date on which  the  interest  rate is  determined,  in which  case the
amount of interest  due and payable  shall be  calculated  by 12:15 p.m. on such
date. In preparing  such  calculation  the Trustee may rely on  calculations  or
other services provided by the Auction Agent, the Remarketing Agent, the Company
or any person or persons  selected  by the Trustee in its  discretion.  During a
Commercial  Paper Rate Period,  the Remarketing  Agent shall notify the Trustee,
the Registrar and Paying Agent and the Company of the amount of interest due and
payable on each  Interest  Payment  Date by 10:00 a.m. on the  Business Day next
preceding such Interest Payment Date. During an Auction Rate Period, the Auction
Agent shall notify the Trustee and the Registrar and Paying Agent at least seven
days prior to each  Interest  Payment Date of the Auction Rate and the aggregate
amount of interest payable on such Interest Payment Date.

            9.  Anything  herein to the  contrary  notwithstanding,  in no event
shall the interest  rate borne by any Bond exceed the maximum rate  allowable by
applicable law.

     SECTION 3.02.  Commercial  Paper Rate. 1. During any Commercial  Paper Rate
Period,  at or prior to 12:00  noon (New York City  time) on each  Determination
Date, the  Remarketing  Agent shall  establish  Calculation  Periods and related
Commercial  Paper Rates.  In determining  Calculation  Periods,  the Remarketing
Agent shall take the  following  factors into account:  (i) existing  short-term
taxable and tax-exempt  market rates and indices of such short-term  rates, (ii)
the existing  market  supply and demand for  short-term  tax-exempt  securities,
(iii) existing yield curves for short-term and long-term  tax-exempt  securities
or  obligations  having a credit rating that is  comparable  to the Bonds,  (iv)
general economic  conditions,  (v) economic and financial factors present in the
securities  industry  that may affect or that may be  relevant  to the Bonds and
(vi) any  information  available  to the  Remarketing  Agent  pertaining  to the
Company  regarding  any events or  anticipated  events which could have a direct
impact on the  marketability  of or interest rates on the Bonds. The Remarketing
Agent shall select the Calculation  Periods and the applicable  Commercial Paper
Rates that,  together with all other Calculation  Periods and related Commercial
Paper Rates, in the sole judgment of the Remarketing  Agent,  will result in the
lowest  overall  borrowing  cost  on the  Bonds  or are  otherwise  in the  best
financial  interests of the Company,  as  determined  in  consultation  with the
Company. Any Calculation Period established  hereunder may not extend beyond the
second Business Day next preceding the expiration  date of the Support  Facility
or the day prior to the Stated Maturity.


<PAGE>


            2. The  Authority,  at the  request of the  Company,  may place such
limitations upon the establishment of Calculation Periods pursuant to subsection
1 hereof as may be set forth in a written  direction from the  Authority,  which
direction  must be received by the  Trustee and the  Remarketing  Agent prior to
10:00 a.m. (New York City time) on the day prior to any Determination Date to be
effective  on such date,  but only if the  Trustee  receives  an Opinion of Bond
Counsel to the effect  that such  action is  authorized  by this  Indenture,  is
permitted  under the Act and will not have an adverse effect on the exclusion of
interest on the Bonds from gross income for federal income tax purposes.

     SECTION 3.03.  Auction Rate Period - Auction Rate: Auction Period - General
1. During any Auction Rate Period, the Auction Rate Bonds shall bear interest at
the Auction Rate  determined as set forth in this Section 3.03 and Sections 3.04
through 3.10. The Auction Rate for any initial Auction Period  immediately after
any  Change in the  Interest  Rate Mode to an Auction  Rate for an Auction  Rate
Period,  shall be the rate of interest per annum determined and certified to the
Trustee  (with a copy to the  Authority,  the Registrar and Paying Agent and the
Company) by the Remarketing Agent on a date not later than the effective date of
such Change in the Interest Rate Mode as the minimum rate of interest  which, in
the opinion of the  Remarketing  Agent,  would be  necessary  as of such date to
market Auction Rate Bonds in a secondary market  transaction at a price equal to
the principal amount thereof;  provided that such interest rate shall not exceed
110% of the sum of the Commercial  Paper Index and .50% per annum. For any other
Auction  Period,  the Auction  Rate shall be the rate of interest per annum that
results from  implementation of the Auction  Procedures.  If on any Auction Date
the Auction Agent shall fail to take any action necessary to determine,  or take
any action which  effectively  prevents the determination of, a rate of interest
pursuant to the Auction  Procedures,  the Auction  Rate for the next  succeeding
Auction Period shall equal the Maximum Auction Rate as provided in clause (i) of
the  definition  thereof on and as of such Auction  Date.  Determination  of the
Auction Rate pursuant to the Auction Procedures shall be suspended upon a Change
in the  Interest  Rate  Mode,  the  occurrence  of a Failure  to  Deposit or the
occurrence of an Event of Default.  Upon the  occurrence of a Failure to Deposit
on any Auction Date, no Auction will be held,  all Submitted  Bids and Submitted
Sell Orders shall be rejected,  the existence of Sufficient  Clearing Bids shall
be of no effect and the  Auction  Rate for the next  succeeding  Auction  Period
shall equal the Maximum Auction Rate on and as of such Auction Date. The Auction
Rate  for  any  Auction  Period  or  remaining  portion  thereof  following  the
occurrence  of an  Event of  Default  shall  be  equal  to the  Overdue  Rate as
determined on and as of the immediately preceding Auction Date. The Overdue Rate
shall be redetermined by the Remarketing Agent on each Auction Date.

            2. Auction  Periods may be  established  pursuant to Section 3.04 at
any time unless a Failure to Deposit or an Event of Default has occurred and has
not been cured or waived. Each Auction Period shall be a Standard Auction Period
unless a different  Auction Period is  established  pursuant to Section 3.04 and
each Auction Period which  immediately  succeeds a  non-Standard  Auction Period
shall  be a  Standard  Auction  Period  unless a  different  Auction  Period  is
established pursuant to Section 3.04.



<PAGE>


     SECTION 3.04.  Auction Rate Period - Auction Rate Bonds:  Change of Auction
Period by  Authority  1.  During an Auction  Rate Period the  Authority,  at the
request of the Company,  may change the length of a single Auction Period or the
Standard  Auction Period by means of a written notice delivered at least 10 days
prior  to  the  Auction  Date  for  such  Auction  Period  to the  Trustee,  the
Remarketing Agent, the Auction Agent, the Company and the Securities  Depository
in substantially  the form furnished to the Trustee and the Auction Agent at the
time of a Change in the  Interest  Rate Mode to an  Auction  Rate.  Any  Auction
Period or Standard Auction Period  established by the Authority pursuant to this
Section 3.04 may not exceed 365 days in duration. If such Auction Period will be
of less than 28 days,  such notice shall be effective  only if it is accompanied
by a written  statement of the  Registrar  and Paying  Agent,  the Trustee,  the
Remarketing Agent, the Auction Agent and the Securities Depository to the effect
that  they are  capable  of  performing  their  duties  hereunder  and under the
Remarketing  Agreement  and the Auction  Agency  Agreement  with respect to such
Auction Period.  If such notice specifies a change in the length of the Standard
Auction Period,  such notice shall be effective only if it is accompanied by the
written  consent  of the  Remarketing  Agent to such  change.  The  length of an
Auction  Period or the Standard  Auction  Period may not be changed  pursuant to
this Section 3.04 unless  Sufficient  Clearing  Bids existed at both the Auction
immediately  preceding  the date the  notice  of such  change  was given and the
Auction immediately preceding such changed Auction Period.

            2. The change in length of an Auction Period or the Standard Auction
Period shall take effect only if (A) the Trustee and the Auction Agent  receive,
by 11:00 a.m. (New York City time) on the Business Day immediately preceding the
Auction Date for such Auction Period, a certificate from the Company,  on behalf
of the  Authority,  by  telecopy  or  similar  means in  substantially  the form
furnished  to the Trustee  and the Auction  Agent at the time of a Change in the
Interest  Rate Mode to an Auction  Rate  authorizing  the change in the  Auction
Period  or the  Standard  Auction  Period,  which  shall  be  specified  in such
certificate,  and  confirming  that Bond  Counsel  expects to be able to give an
Opinion of Bond Counsel on the first day of such Auction Period, (B) the Trustee
shall not have delivered to the Auction Agent by 12:00 noon (New York City time)
on the Auction Date for such Auction Period notice that a Failure to Deposit has
occurred,  (C) Sufficient Clearing Bids exist at the Auction on the Auction Date
for such Auction  Period,  and (D) the Trustee and the Auction  Agent receive by
9:30 a.m.  (New York City  time) on the  first day of such  Auction  Period,  an
opinion of Bond  Counsel to the effect that the change in the Auction  Period or
the Standard Auction Period is authorized by this Indenture,  is permitted under
the Act and will not have an adverse effect on the exclusion of interest on such
Bonds from gross  income for  federal  income  tax  purposes.  If the  condition
referred to in (A) above is not met,  the Auction  Rate for the next  succeeding
Auction  Period shall be determined  pursuant to the Auction  Procedures and the
next succeeding Auction Period shall be a Standard Auction Period. If any of the
conditions referred to in (B), (C) or (D) above is not met, the Auction Rate for
the next  succeeding  Auction  Period  shall equal the Maximum  Auction  Rate as
determined as of such Auction Date.



<PAGE>


     SECTION 3.05.  Auction Rate Period - Auction Rate Bonds:  Change of Auction
Date by Remarketing Agent.  During an Auction Rate Period the Remarketing Agent,
with the written  consent of the Company,  may change,  in order to conform with
then-current   market  practice  with  respect  to  similar   securities  or  to
accommodate economic and financial factors that may affect or be relevant to the
day of the week  constituting  an Auction Date,  the Auction Date for all future
Auction  Periods to a different day, so long as the first such Auction Date will
be a Business Day in the calendar week in which the next succeeding Auction Date
is then  scheduled  to occur.  If a change in an Auction Date is  undertaken  in
conjunction  with a change  in an  Auction  Period  and the  conditions  for the
establishment of such change in Auction Period are not met, the Auction Date may
be, and the next succeeding Auction Period may be adjusted to end on, a Business
Day in the calendar  week in which such Auction Date was  scheduled to occur and
such  Auction  Period  was  scheduled  to end to  accommodate  the change in the
Auction  Date.  The  Remarketing  Agent  shall  deliver a written  notice of its
determination  to change an Auction Date by means of a written notice  delivered
at least 10 days prior to the Auction Date  immediately  preceding  such Auction
Date to the  Authority,  the  Trustee,  the Auction  Agent,  the Company and the
Securities Depository which shall state (i) the determination of the Remarketing
Agent to change the Auction  Date,  (ii) the new Auction Date and (iii) the date
on which such  Auction  Date shall be  changed.  If as a result of any  proposed
change in the  Auction  Date any  Auction  Period  would be less than 28 days in
duration,  such notice shall be effective only if it is accompanied by a written
statement of the Auction Agent, the Registrar and Paying Agent, the Trustee, the
Remarketing  Agent and the  Securities  Depository  to the effect  that they are
capable of performing their duties hereunder and under the Remarketing Agreement
and Auction Agency Agreement with respect to any such Auction Period.

            SECTION 3.06.     Auction  Rate  Period -  Auction  Rate  Bonds:
Orders by Beneficial Owners and Potential Beneficial OwnersSECTION 3.06.
Auction Rate Period - Auction  Rate Bonds:  Orders by  Beneficial  Owners and
Potential Be. (a)  Prior  to the  Submission  Deadline  on each  Auction  Date
during the Auction Rate Period, the following orders may be submitted:

            (i)   each  Beneficial  Owner may submit to the  Broker-Dealer  by
      telephone or otherwise information as to:

                  (A) the principal amount of Outstanding Auction Rate Bonds, if
            any,  held by such  Beneficial  Owner  which such  Beneficial  Owner
            desires to continue to hold  without  regard to the Auction Rate for
            the next succeeding Auction Period;

                  (B) the principal amount of Outstanding Auction Rate Bonds, if
            any,  held by such  Beneficial  Owner  which such  Beneficial  Owner
            offers to sell if the Auction Rate for the next  succeeding  Auction
            Period  shall be less  than the rate  per  annum  specified  by such
            Beneficial Owner and/or

                  (C) the principal amount of Outstanding Auction Rate Bonds, if
            any,  held by such  Beneficial  Owner  which such  Beneficial  Owner
            offers  to sell  without  regard  to the  Auction  Rate for the next
            succeeding Auction Period;

            (ii) one or more  Broker-Dealers  may contact  Potential  Beneficial
      Owners by telephone or otherwise  to  determine  the  principal  amount of
      Auction Rate Bonds which each such  Potential  Beneficial  Owner offers to
      purchase if the Auction Rate for the next succeeding  Auction Period shall
      not be less than the interest rate per annum  specified by such  Potential
      Beneficial Owner.



<PAGE>


For the purposes  hereof,  the  communication  to a Broker-Dealer of information
referred  to in  clause  (i)(A),  (i)(B)  or  (i)(C)  or  clause  (ii)  above is
hereinafter  referred to as an "Order"  and  collectively  as "Orders"  and each
Beneficial  Owner  and  each  Potential  Beneficial  Owner  placing  an Order is
hereinafter  referred  to as a  "Bidder"  collectively  as  "Bidders";  an Order
containing  the  information  referred to in clause (i)(A) above is  hereinafter
referred  to as a "Hold  Order"  and  collectively  as "Hold  Orders";  an Order
containing the information  referred to in clause (i)(B) or clause (ii) above is
hereinafter  referred  to as a "Bid" and  collectively  as "Bids";  and an Order
containing  the  information  referred to in clause (i)(C) above is  hereinafter
referred to as a "Sell Order" and collectively as "Sell Orders".  The submission
by a  Broker-Dealer  of an Order to the Auction Agent shall likewise be referred
to herein as an "Order" and  collectively  as "Orders" and an Existing Holder or
Potential  Holder who places an Order with the Auction  Agent or on whose behalf
an Order is placed with the Auction  Agent shall  likewise be referred to herein
as a "Bidder" and collectively as "Bidders".

            (b)(i)  Subject  to  the  provisions  of  Section  3.07,  a Bid by a
      Beneficial  Owner or an Existing  Holder shall  constitute an  irrevocable
      offer to sell:

                  (A) the  principal  amount of  Outstanding  Auction Rate Bonds
            specified in such Bid if the Auction Rate determined on such Auction
            Date  shall be less  than the  interest  rate  per  annum  specified
            therein; or

                  (B) such  principal  amount  or a lesser  principal  amount of
            Outstanding  Auction  Rate  Bonds to be  determined  as set forth in
            subsection (a)(iv) of Section 3.09 if the Auction Rate determined on
            such  Auction  Date  shall be equal to the  interest  rate per annum
            specified therein; or

                  (C) such principal amount of Outstanding Auction Rate Bonds if
            the interest rate per annum  specified  therein shall be higher than
            the  Maximum  Auction  Rate,  or such  principal  amount or a lesser
            principal amount of Outstanding  Auction Rate Bonds to be determined
            as set  forth  in  subsection  (b)(iii)  of  Section  3.09  if  such
            specified  rate shall be higher  than the Maximum  Auction  Rate and
            Sufficient Clearing Bids do not exist.

            (ii) Subject to the  provisions  of Section  3.07, a Sell Order by a
      Beneficial  Owner or an Existing  Holder shall  constitute an  irrevocable
      offer to sell:

                  (A) the  principal  amount of  Outstanding  Auction Rate Bonds
            specified in such Sell Order; or

                  (B) such  principal  amount  or a lesser  principal  amount of
            Outstanding  Auction Rate Bonds as set forth in subsection  (b)(iii)
            of Section 3.09 if Sufficient Clearing Bids do not exist.

            (iii)  Subject  to  the  provisions  of  Section  3.07,  a Bid  by a
      Potential  Beneficial  Owner or a Potential  Holder  shall  constitute  an
      irrevocable offer to purchase:

                  (A) the  principal  amount of  Outstanding  Auction Rate Bonds
            specified in such Bid if the Auction Rate determined on such Auction
            Date shall be higher than the rate specified therein; or



<PAGE>


                  (B) such  principal  amount  or a lesser  principal  amount of
            Outstanding  Auction Rate Bonds as set forth in subsection (a)(v) of
            Section  3.09 if the Auction  Rate  determined  on such Auction Date
            shall be equal to such specified rate.

     SECTION  3.07.  Auction  Rate Period - Auction  Rate Bonds:  Submission  of
Orders by  Broker-Dealers  to Auction  Agent.  (a) During an Auction Rate Period
each  Broker-Dealer  shall  submit in writing to the Auction  Agent prior to the
Submission   Deadline  on  each  Auction  Date,  all  Orders  obtained  by  such
Broker-Dealer, designating itself (unless otherwise permitted by the Company) as
an  Existing  Holder in respect of the  principal  amount of Auction  Rate Bonds
subject to Orders  submitted or deemed  submitted to it by Potential  Beneficial
Owners, and shall specify with respect to each such Order:

            (i)   the name of the Bidder  placing  such Order  (which shall be
the Broker-Dealer unless otherwise permitted by the Company);

            (ii)  the  aggregate  principal  amount of Auction Rate Bonds that
      are subject to such Order;

            (iii) to the extent that such Bidder is an Existing Holder:

                  (A) the  principal  amount  of  Auction  Rate  Bonds,  if any,
            subject to any Hold Order placed by such Existing Holder;

                  (B) the  principal  amount  of  Auction  Rate  Bonds,  if any,
            subject  to any Bid  placed  by such  Existing  Holder  and the rate
            specified in such Bid; and

                  (C) the  principal  amount  of  Auction  Rate  Bonds,  if any,
            subject to any Sell Order placed by such Existing Holder; and

            (iv) to the extent such Bidder is a Potential Holder,  the principal
      amount of Auction Rate Bonds  subject to any Bid placed by such  Potential
      Holder and the rate specified in such Bid.

            (b) If any  rate  specified  in any Bid  contains  more  than  three
figures to the right of the decimal  point,  the Auction  Agent shall round such
rate up to the next highest one thousandth (.001) of 1%.

            (c) If an Order or Orders  covering  all  Outstanding  Auction  Rate
Bonds held by an Existing  Holder is not submitted to the Auction Agent prior to
the Submission Deadline,  the Auction Agent shall deem a Hold Order to have been
submitted on behalf of such Existing  Holder  covering the  principal  amount of
Outstanding  Auction Rate Bonds held by such Existing  Holder and not subject to
Orders submitted to the Auction Agent.



<PAGE>


            (d) Neither the Authority,  the Company, the Trustee nor the Auction
Agent shall be responsible for any failure of a Broker-Dealer to submit an Order
to the  Auction  Agent on  behalf  of any  Existing  Holder,  Beneficial  Owner,
Potential Holder or Potential Beneficial Owner.

            (e) If any Existing Holder submits  through a  Broker-Dealer  to the
Auction  Agent  one or more  Orders  covering  in the  aggregate  more  than the
principal amount of Auction Rate Bonds held by such Existing Holder, such Orders
shall be considered valid as follows and in the following order of priority:

                  (i) all Hold Orders shall be considered  valid, but only up to
      and  including  the  principal  amount of Auction  Rate Bonds held by such
      Existing  Holder,  and, if the aggregate  principal amount of Auction Rate
      Bonds subject to such Hold Orders exceeds the aggregate  principal  amount
      of  Outstanding  Auction  Rate Bonds  held by such  Existing  Holder,  the
      aggregate principal amount of Auction Rate Bonds subject to each such Hold
      Order shall be reduced pro rata to cover the aggregate principal amount of
      Outstanding Auction Rate Bonds held by such Existing Holder;

                  (ii) (A) any Bid shall be considered valid up to and including
            the excess of the principal amount of Outstanding Auction Rate Bonds
            held by such Existing Holder over the aggregate  principal amount of
            Auction  Rate  Bonds  subject  to any  Hold  Orders  referred  to in
            paragraph (i) above;

                        (B)  subject to clause  (A) above,  if more than one Bid
                  with the same rate is  submitted  on  behalf of such  Existing
                  Holder  and the  aggregate  principal  amount  of  Outstanding
                  Auction  Rate Bonds  subject to such Bids is greater than such
                  excess,  such  Bids  shall  be  considered  valid  up  to  and
                  including the amount of such excess, and, the principal amount
                  of Auction  Rate Bonds  subject to each Bid with the same rate
                  shall be  reduced  pro rata to cover the  principal  amount of
                  Auction Rate Bonds equal to such excess;

                        (C) subject to clauses  (A) and (B) above,  if more than
                  one Bid with  different  rates is  submitted on behalf of such
                  Existing  Holder,  such Bids shall be considered  valid in the
                  ascending  order of their  respective  rates until the highest
                  rate is reached at which such  excess  exists and then at such
                  rate up to and including the amount of such excess; and

                        (D) in any such event, the aggregate principal amount of
                  Outstanding Auction Rate Bonds, if any, subject to any portion
                  of Bids not valid under this  paragraph  (ii) shall be treated
                  as the  subject  of a Bid by a  Potential  Holder  at the rate
                  therein specified; and

                  (iii)  all Sell  Orders  shall be  considered  valid up to and
            including the excess of the principal amount of Outstanding  Auction
            Rate Bonds held by such Existing Holder over the aggregate principal
            amount of Auction Rate Bonds  subject to valid Hold Orders  referred
            to in paragraph (i) of this  subsection  (e) and valid Bids referred
            to in paragraph (ii) of this subsection (e).


<PAGE>


            (f) If more than one Bid for  Auction  Rate  Bonds is  submitted  on
behalf of any Potential  Holder,  each Bid submitted shall be a separate Bid for
Auction Rate Bonds with the rate and principal amount therein specified.

            (g) Any Bid or Sell Order  submitted by an Existing  Holder covering
an aggregate  principal  amount of Auction Rate Bonds not equal to $50,000 or an
integral  multiple  thereof  shall be rejected and shall be deemed a Hold Order.
Any Bid submitted by a Potential  Holder covering an aggregate  principal amount
of Auction Rate Bonds not equal to $50,000 or an integral multiple thereof shall
be rejected.

            (h) Any Bid  submitted by an Existing  Holder or a Beneficial  Owner
specifying  a rate lower than the All Hold Rate,  if any,  shall be treated as a
Bid  specifying the All Hold Rate, if any, and will not be accepted if submitted
by a Potential Beneficial Owner or a Potential Holder.

     SECTION 3.08.  Auction Rate Period - Auction Rate Bonds:  Determination  of
Sufficient  Clearing Bids,  Winning Bid Rate and Auction Rate:  Determination of
Sufficient C. (a) During an Auction Rate Period not earlier than the  Submission
Deadline on each Auction Date, the Auction Agent shall assemble all valid Orders
submitted or deemed  submitted to it by the  Broker-Dealers  (each such Order as
submitted or deemed submitted by a Broker-Dealer  being hereinafter  referred to
as a "Submitted  Hold Order," a "Submitted  Bid" or a "Submitted Sell Order," as
the case may be, or as a "Submitted Order") and shall determine:

                  (i) the excess of the total  principal  amount of  Outstanding
            Auction  Rate  Bonds  over  the   aggregate   principal   amount  of
            Outstanding  Auction  Rate Bonds  subject to  Submitted  Hold Orders
            (such excess being hereinafter referred to as the "Available Auction
            Rate Bonds"); and

                  (ii) from the Submitted Orders whether the aggregate principal
            amount of  Outstanding  Auction Rate Bonds subject to Submitted Bids
            by Potential Holders  specifying one or more rates equal to or lower
            than the Maximum Auction Rate exceeds or is equal to the sum of:

                        (A)  the  aggregate   principal  amount  of  Outstanding
                  Auction  Rate Bonds  subject  to  Submitted  Bids by  Existing
                  Holders  specifying  one or more rates higher than the Maximum
                  Auction Rate; and

                        (B)  the  aggregate   principal  amount  of  Outstanding
                  Auction Rate Bonds subject to Submitted Sell Orders

            (in the event of such excess or such  equality  (other than  because
            the sum of the  principal  amounts of Auction  Rate Bonds in clauses
            (A) and (B) above is zero  because  all of the  Outstanding  Auction
            Rate Bonds are subject to Submitted  Hold  Orders),  such  Submitted
            Bids by Potential  Holders are hereinafter  referred to collectively
            as "Sufficient Clearing Bids"); and


<PAGE>


                  (iii) if  Sufficient  Clearing  Bids  exist,  the lowest  rate
            specified in the Submitted Bids (the "Winning Bid Rate") which if:

                        (A)(I)  each   Submitted  Bid  from   Existing   Holders
                  specifying  such lowest rate and (II) all other Submitted Bids
                  from Existing  Holders  specifying  lower rates were rejected,
                  thus entitling  such Existing  Holders to continue to hold the
                  principal amount of Auction Rate Bonds that are the subject of
                  such Submitted Bids; and

                        (B)(I)  each  Submitted  Bid  from   Potential   Holders
                  specifying  such lowest rate and (II) all other Submitted Bids
                  from Potential  Holders  specifying lower rates were accepted,
                  would result in such Existing Holders  described in clause (A)
                  above  continuing  to hold an  aggregate  principal  amount of
                  Outstanding  Auction  Rate  Bonds  which,  when  added  to the
                  aggregate  principal amount of Outstanding  Auction Rate Bonds
                  to be purchased by such Potential  Holders described in clause
                  (B) above,  would  equal not less than the  Available  Auction
                  Rate Bonds.

            (b)  Promptly  after the Auction  Agent has made the  determinations
      pursuant to subsection  (a) of this Section 3.08,  the Auction  Agent,  by
      telecopy  confirmed  in writing,  shall advise the Company and the Trustee
      and the  Broker-Dealers  of the Maximum  Auction  Rate and the  components
      thereof on the Auction Date and, based on such determinations, the Auction
      Rate for the next succeeding Auction Period as follows:

                  (i) if Sufficient  Clearing  Bids exist,  the Auction Rate for
            the next  succeeding  Auction Period  therefor shall be equal to the
            Winning Bid Rate so determined;

                  (ii) if  Sufficient  Clearing  Bids do not exist  (other  than
            because all of the Outstanding Auction Rate Bonds are the subject of
            Submitted  Hold  Orders),  the Auction Rate for the next  succeeding
            Auction Period  therefor shall be equal to the Maximum Auction Rate;
            and

                  (iii)  if  all  of the  Auction  Rate  Bonds  are  subject  to
            Submitted  Hold  Orders,  the Auction  Rate for the next  succeeding
            Auction Period therefor shall be equal to the All Hold Rate.

     SECTION  3.09.  Auction  Rate Period - Auction Rate Bonds:  Acceptance  and
Rejection of Submitted  Bids and Submitted Sell Orders and Allocation of Auction
Rate Bonds: Acceptance and Rejection of Submitted Bids and Submitted Sell Orders
and A. During an Auction Rate Period Existing Holders shall continue to hold the
principal  amounts of Auction  Rate Bonds  that are  subject to  Submitted  Hold
Orders, and, based on the determinations made pursuant to subsection (a) of this
Section 3.09,  the Submitted Bids and Submitted Sell Orders shall be accepted or
rejected,  and the Auction  Agent shall take such other actions as are set forth
below:



<PAGE>


            (a) If  Sufficient  Clearing Bids exist,  all Submitted  Sell Orders
      shall be accepted and, subject to the provisions of paragraphs (e) and (f)
      of this  Section  3.09,  Submitted  Bids shall be  accepted or rejected as
      follows in the following  order of priority and all other  Submitted  Bids
      shall be rejected:

                  (i) Existing Holders'  Submitted Bids specifying any rate that
            is  higher  than the  Winning  Bid  Rate  shall  be  accepted,  thus
            requiring each such Existing Holder to sell the aggregate  principal
            amount of Auction Rate Bonds subject to such Submitted Bids;

                  (ii) Existing Holders' Submitted Bids specifying any rate that
            is lower than the Winning Bid Rate shall be rejected, thus entitling
            each  such  Existing  Holder  to  continue  to  hold  the  aggregate
            principal  amount of Auction  Rate Bonds  subject to such  Submitted
            Bids;

                  (iii)  Potential  Holders'  Submitted Bids specifying any rate
            that is lower  than the  Winning  Bid Rate shall be  accepted,  thus
            requiring  each such  Potential  Holder to  purchase  the  aggregate
            principal  amount of Auction  Rate Bonds  subject to such  Submitted
            Bids;

                  (iv) each Existing  Holder's  Submitted Bid  specifying a rate
            that is  equal to the  Winning  Bid Rate  shall  be  rejected,  thus
            entitling  such  Existing  Holder to continue to hold the  aggregate
            principal  amount of Auction  Rate Bonds  subject to such  Submitted
            Bid, unless the aggregate  principal  amount of Outstanding  Auction
            Rate Bonds subject to all such  Submitted Bids shall be greater than
            the principal amount of Auction Rate Bonds (the "remaining principal
            amount")  equal to the excess of  Available  Auction Rate Bonds over
            the aggregate  principal amount of the Auction Rate Bonds subject to
            Submitted  Bids  described  in  paragraphs  (ii)  and  (iii) of this
            subsection  (a), in which event such  Submitted Bid of such Existing
            Holder shall be rejected in part, and such Existing  Holder shall be
            entitled to continue to hold the  principal  amount of Auction  Rate
            Bonds subject to such  Submitted Bid, but only in an amount equal to
            the principal  amount of Auction Rate Bonds  obtained by multiplying
            the remaining principal amount by a fraction, the numerator of which
            shall be the principal amount of Outstanding Auction Rate Bonds held
            by  such  Existing  Holder  subject  to such  Submitted  Bid and the
            denominator  of which shall be the sum of the  principal  amounts of
            Auction Rate Bonds subject to such  Submitted  Bids made by all such
            Existing  Holders  that  specified  a rate equal to the  Winning Bid
            Rate; and



<PAGE>


                  (v) each  Potential  Holder's  Submitted Bid specifying a rate
            that is equal to the Winning Bid Rate shall be accepted  but only in
            an amount  equal to the  principal  amount  of  Auction  Rate  Bonds
            obtained  by  multiplying  the excess of the  Outstanding  Available
            Auction Rate Bonds over the  aggregate  principal  amount of Auction
            Rate Bonds subject to Submitted Bids  described in paragraphs  (ii),
            (iii) and (iv) of this subsection (a) by a fraction the numerator of
            which shall be the aggregate  principal amount of Auction Rate Bonds
            subject  to such  Submitted  Bid of such  Potential  Holder  and the
            denominator  of which  shall be the sum of the  principal  amount of
            Outstanding Auction Rate Bonds subject to Submitted Bids made by all
            such  Potential  Holders that  specified a rate equal to the Winning
            Bid Rate.

            (b) If Sufficient Clearing Bids do not exist (other than because all
      of the  Outstanding  Auction  Rate  Bonds are  subject to  Submitted  Hold
      Orders), subject to the provisions of subsection (e) of this Section 3.09,
      Submitted Orders shall be accepted or rejected as follows in the following
      order of priority and all other Submitted Bids shall be rejected:

                  (i) Existing Holders'  Submitted Bids specifying any rate that
            is  equal  to or  lower  than  the  Maximum  Auction  Rate  shall be
            rejected,  thus entitling  each such Existing  Holder to continue to
            hold the aggregate principal amount of Auction Rate Bonds subject to
            such Submitted Bids;

                  (ii) Potential  Holders'  Submitted  Bids  specifying any rate
            that is equal to or lower  than the  Maximum  Auction  Rate shall be
            accepted,  thus requiring each such Potential Holder to purchase the
            aggregate  principal  amount of Auction  Rate Bonds  subject to such
            Submitted Bids; and

                  (iii) each Existing Holder's Submitted Bid specifying any rate
            that is higher than the Maximum  Auction Rate and the Submitted Sell
            Order of each Existing Holder shall be accepted, thus entitling each
            Existing  Holder that  submitted any such Submitted Bid or Submitted
            Sell Order to sell the Auction Rate Bonds subject to such  Submitted
            Bid or  Submitted  Sell  Order,  but in both cases only in an amount
            equal to the  aggregate  principal  amount  of  Auction  Rate  Bonds
            obtained by multiplying  the aggregate  principal  amount of Auction
            Rate Bonds subject to Submitted  Bids described in paragraph (ii) of
            this  subsection (b) by a fraction,  the numerator of which shall be
            the aggregate  principal  amount of  Outstanding  Auction Rate Bonds
            held by such  Existing  Holder  subject  to  such  Submitted  Bid or
            Submitted  Sell  Order  and the  denominator  of which  shall be the
            aggregate principal amount of Outstanding Auction Rate Bonds subject
            to all such Submitted Bids and Submitted Sell Orders.

            (c)   If  all  Outstanding  Auction  Rate  Bonds  are  subject  to
      Submitted Hold Orders, all Submitted Bids shall be rejected.

            (d) If (i) the Auction Agent shall fail to take any action necessary
      to  determine,   or  take  any  action  which  effectively   prevents  the
      determination  of, an interest rate pursuant to the Auction  Procedures or
      (ii) the  conditions set forth in subsection 2 of Section 3.04 to effect a
      change in the Auction Period are not met, all Submitted Bids and Submitted
      Sell Orders shall be rejected and the  existence  of  Sufficient  Clearing
      Bids shall be of no effect.



<PAGE>


            (e) If, as a result of the procedures described in subsection (a) or
      (b) of this  Section  3.09,  any  Existing  Holder  would be  entitled  or
      required to sell, or any Potential Holder would be required to purchase, a
      principal  amount of Auction Rate Bonds that is not equal to $50,000 or an
      integral multiple thereof,  the Auction Agent shall, in such manner as, in
      its sole discretion,  it shall  determine,  round up or down the principal
      amount of such  Auction Rate Bonds to be purchased or sold by any Existing
      Holder or Potential  Holder so that the principal amount purchased or sold
      by each Existing  Holder or Potential  Holder shall be equal to $50,000 or
      an integral multiple thereof.

            (f) If, as a result of the procedures described in subsection (a) of
      this Section 3.09,  any Potential  Holder would be entitled or required to
      purchase less than $50,000 in aggregate  principal  amount of Auction Rate
      Bonds, the Auction Agent shall, in such manner as, in its sole discretion,
      it shall  determine,  allocate  Auction  Rate  Bonds  for  purchase  among
      Potential  Holders so that only Auction Rate Bonds in principal amounts of
      $50,000 or an integral  multiple  thereof are  purchased by any  Potential
      Holder,  even if such allocation  results in one or more of such Potential
      Holders not purchasing any Auction Rate Bonds.

            (g) Based on the results of each  Auction,  the Auction  Agent shall
      determine  the  aggregate  principal  amounts of Auction  Rate Bonds to be
      purchased and the aggregate  principal amounts of Auction Rate Bonds to be
      sold by Potential  Holders and Existing  Holders and, with respect to each
      Potential  Holder and Existing  Holder,  to the extent that such aggregate
      principal  amount  of  Auction  Rate  Bonds to be sold  differs  from such
      aggregate  principal  amount  of  Auction  Rate  Bonds  to  be  purchased,
      determine to which other  Potential  Holder(s) or Existing  Holder(s) they
      shall  deliver,  or from  which  other  Potential  Holder(s)  or  Existing
      Holder(s) they shall receive, as the case may be, Auction Rate Bonds.

            (h) None of the Authority,  the Company or any Affiliate thereof may
      submit an Order in any Auction  except as set forth in the next  sentence.
      Any Broker-Dealer that is an Affiliate of the Company may submit Orders in
      an Auction  but only if such  Orders are not for its own  account,  except
      that if such affiliated Broker-Dealer holds Auction Rate Bonds for its own
      account, it must submit a Sell Order on the next Auction Date with respect
      to such Auction Rate Bonds.



<PAGE>


     SECTION  3.10.  Auction  Rate Period - Auction  Rate Bonds:  Adjustment  in
Percentage.  1. During an Auction Rate Period the  Remarketing  Agent may adjust
the  percentage  used  in  determining  the All  Hold  Rate  and the  Applicable
Percentages  used in determining the Maximum Auction Rate if any such adjustment
is necessary, in the judgment of the Remarketing Agent, to reflect any Change of
Preference  Law such that the All Hold Rate and Maximum  Auction Rate shall have
substantially  equal market  values  before and after such Change of  Preference
Law.  In making  any such  adjustment,  the  Remarketing  Agent  shall  take the
following  factors,  as in  existence  both  before  and  after  such  Change of
Preference Law, into account: (i) short-term taxable and tax-exempt market rates
and  indices of such  short-term  rates,  (ii) the market  supply and demand for
short-term  tax-exempt  securities,   (iii)  yield  curves  for  short-term  and
long-term  tax-exempt  securities or obligations  having a credit rating that is
comparable to the Bonds,  (iv) general economic  conditions and (v) economic and
financial factors present in the securities industry that may affect or that may
be relevant to the Bonds.

            2. The  Remarketing  Agent shall  communicate its  determination  to
adjust the percentage  used in determining  the All Hold Rate and the Applicable
Percentages  used in determining the Maximum Auction Rate pursuant to subsection
1 hereof by means of a written notice  delivered at least five days prior to the
Auction Date on which the Remarketing  Agent desires to effect the change to the
Authority,  the Trustee,  the Auction Agent and the Company in substantially the
form attached to the Auction Agency Agreement.  Such notice is required to state
the  determination  of the  Remarketing  Agent to change such percentage and the
date such  adjustment is proposed to take effect (which date shall be an Auction
Date).  Upon  receiving  approval of the Company  (which  approval  shall not be
unreasonably  withheld), by means of a written notice delivered at least 10 days
prior to the Auction Date on which the  Remarketing  Agent desires to effect the
change to the Trustee,  the Authority and the Auction Agent in substantially the
form attached hereto as, or containing  substantially the information  contained
in,  Exhibit  E. Such  notice is  required  to state  the  determination  of the
Remarketing  Agent to change such  percentages  and the date such  adjustment is
proposed to take effect (which date shall be an Auction Date). Such notice shall
be effective  only if it is accompanied by the form of opinion that Bond Counsel
expects  to be  able  to give on such  Auction  Date  to the  effect  that  such
adjustment is authorized by this Indenture,  is permitted under the Act and will
not have an adverse  effect on the  exclusion  of interest  on the Auction  Rate
Bonds from gross income for federal  income tax  purposes.  The Auction Agent is
required to mail notice thereof to the Existing Holders within two Business Days
of receipt thereof.



<PAGE>


            3. An adjustment in the percentage  used in determining the All Hold
Rate and the Applicable Percentages used in determining the Maximum Auction Rate
shall take  effect on an Auction  Date only if (A) the  Trustee  and the Auction
Agent  receive,  by  11:00  a.m.  (New  York  City  time)  on the  Business  Day
immediately  preceding  such Auction  Date, a certificate  from the  Remarketing
Agent by  telecopy or similar  means,  (i)  authorizing  the  adjustment  of the
percentage used in determining the All Hold Rate and the Applicable  Percentages
used in  determining  the Maximum  Auction Rate which shall be specified in such
authorization,  and (ii) confirming that Bond Counsel expects to be able to give
an  opinion  on such  Auction  Date to the  effect  that the  adjustment  in the
percentage used in determining the All Hold Rate and the Applicable  Percentages
used in determining the Maximum Auction Rate is authorized by this Indenture, is
permitted  under the Act and will not have an adverse effect on the exclusion of
interest on the  Auction  Rate Bonds from gross  income for  federal  income tax
purposes,  and (B) the Trustee and the Auction  Agent  receive by 9:30 a.m. (New
York City time) on such Auction  Date,  an opinion of Bond Counsel to the effect
that the adjustment in the percentage  used in determining the All Hold Rate and
the  Applicable  Percentages  used in  determining  the Maximum  Auction Rate is
authorized by this  Indenture,  is permitted  under the Act and will not have an
adverse effect on the exclusion of interest on the Auction Rate Bonds from gross
income for federal  income tax  purposes.  If the  condition  referred to in (A)
above is not met, the existing  percentage used in determining the All Hold Rate
and the  Applicable  Percentages  used in determining  the Maximum  Auction Rate
shall  remain in effect and the  Auction  Rate for the next  succeeding  Auction
Period shall be determined pursuant to the Auction Procedures.  If the condition
referred to in (B) above is not met, the existing percentage used in determining
the All Hold Rate and the Applicable Percentages used in determining the Maximum
Auction Rate shall remain in effect and the Auction Rate for the next succeeding
Auction  Period  shall  equal the Maximum  Auction  Rate as  determined  on such
Auction Date.


<PAGE>



                                     IV-

                                  ARTICLE IV

                       CHANGES IN THE INTEREST RATE MODE

     SECTION 4.01. Optional Conversion to an Adjustable Rate by Authority. 1. At
the times specified  below,  the Bonds, in whole or in rity part, shall cease to
bear interest at the  Adjustable  Rate or the Fixed Rate then borne by the Bonds
and shall bear  interest at such  Adjustable  Rate as shall be  specified by the
Authority, at the request of the Company, in a written notice delivered at least
30 days prior to the proposed  effective date of the Change in the Interest Rate
Mode to the Trustee,  the Remarketing  Agent, the Registrar and Paying Agent and
the Company  (and to the Auction  Agent and the  Securities  Depository  if such
Change in the Interest Rate Mode is to or from an Auction Rate) in substantially
the form  attached  hereto  as,  or  containing  substantially  the  information
contained in Exhibit A hereto.  A Change in the  Interest  Rate Mode may only be
effected on a day on which the  affected  Bonds may be redeemed at the option of
the  Authority.  A notice of Change in the Interest Rate Mode shall be effective
only if it is accompanied by the form of opinion that Bond Counsel expects to be
able to give on the proposed  effective date of such Change in the Interest Rate
Mode to the effect that such Change in the Interest  Rate Mode is  authorized by
this  Indenture,  is permitted under the Act and will not have an adverse effect
on the exclusion of interest on such Bonds from gross income for federal  income
tax purposes.

            In the case of any Change in the Interest  Rate Mode to a Term Rate,
the notice  required by this section shall specify the length of the Calculation
Period and, unless otherwise specified, such Calculation Period shall thereafter
apply to the Bonds until a Change in the Interest Rate Mode effected pursuant to
Section 4.01 or Section 4.02. Any change in the Calculation Period during a Term
Rate Period shall be deemed an optional conversion pursuant to this Section 4.01
and may not be made unless all the requirements of a conversion pursuant to this
Section 4.01 are met.

            2. The Trustee  shall mail,  or cause the Registrar and Paying Agent
to mail, the notice received pursuant to subsection 1 of this Section 4.01 on or
before the third Business Day after receipt thereof to the Bondholders.

            3. A Change in the Interest Rate Mode to an Adjustable Rate shall be
effective pursuant to Subsection 1 of this Section 4.01 only if

            (A) with  respect  to any Change in the  Interest  Rate Mode from an
Auction  Rate or from a Fixed Rate to an  Adjustable  Rate,  the Trustee and the
Auction Agent (if any) shall receive:



<PAGE>


                  (i) a certificate of an Authorized  Company  Representative by
      no later than the tenth day prior to the effective  date of such Change in
      the  Interest  Rate Mode  stating  that a written  agreement  between  the
      Company and the Remarketing  Agent to remarket the Bonds on such effective
      date at a price of 100% of the principal  amount  thereof has been entered
      into,  which  agreement  (i) may be subject to such  reasonable  terms and
      conditions agreed to by the Remarketing Agent which in the judgment of the
      Remarketing   Agent  reflect  the  current  market   standards   regarding
      investment  banking  risk and (ii)  must  include  a  provision  requiring
      payment by the  Remarketing  Agent in same-day funds for any Bond tendered
      or deemed  tendered;  and that a Support Facility is in effect or has been
      obtained by the Company  with  respect to the Bonds and shall be in effect
      prior to such Change in the Interest Rate Mode and thereafter for a period
      of at least 364 days;

                  (ii)  by 11:00  a.m.  (New  York  City  time) on the  second
                                    Business Day prior to the  effective  date
                                    of such Change in the  Interest  Rate Mode
                                    by  telecopy  or other  similar  means,  a
                                    certificate  in  substantially   the  form
                                    attached    hereto   as,   or   containing
                                    substantially  the  information  contained
                                    in, Exhibit B hereto,  from the Company on
                                    behalf of the  Authority  (y)  authorizing
                                    the  establishment  of the new  Adjustable
                                    Rate and (z) confirming  that Bond Counsel
                                    expects  to be able to give an  opinion on
                                    the  effective  date of such Change in the
                                    Interest  Rate  Mode  to the  effect  that
                                    such Change in the  Interest  Rate Mode is
                                    authorized   by   this    Indenture,    is
                                    permitted  under the Act and will not have
                                    an  adverse  effect  on the  exclusion  of
                                    interest on the affected  Bonds from gross
                                    income for  federal  income tax  purposes;
                                    and

            (B) with  respect  to any  Change in the  Interest  Rate  Mode,  the
Trustee (and the Auction  Agent in the case of any Change in the  Interest  Rate
Mode to an Auction Rate), shall receive by 4:00 p.m., New York City time, on the
effective  date of such  Change in the  Interest  Rate Mode,  a  certificate  in
substantially  the form  attached  hereto as, or  containing  substantially  the
information   contained  in,  Exhibit  C  hereto,  from  an  Authorized  Company
Representative  that all of the  Bonds  tendered  or deemed  tendered  have been
purchased at a price equal to the principal amount thereof plus premium, if any,
plus any accrued and unpaid interest with funds provided from the remarketing of
such Bonds in accordance with the Remarketing Agreement,  from the proceeds of a
Support Facility,  or from funds deposited with the Trustee or the Registrar and
Paying Agent;

            (C) with  respect  to any  Change in the  Interest  Rate  Mode,  the
Trustee (and the Auction  Agent in the case of any Change in the  Interest  Rate
Mode to or from an Auction  Rate)  shall  receive,  by 9:30 a.m.  (New York City
time) on the effective date of such Change in the Interest Rate Mode, an Opinion
of Bond  Counsel to the effect  that such  Change in the  Interest  Rate Mode is
authorized by this  Indenture,  is permitted  under the Act and will not have an
adverse  effect on the exclusion of interest on such Bonds from gross income for
federal income tax purposes; and

            (D) with  respect  to any  Change  in the  Interest  Rate Mode to an
Adjustable  Rate (other than to an Auction  Rate),  the Trustee  shall receive a
Support   Facility   meeting  the   requirements   of  this  Indenture  and  the
Participation  Agreement  not less than one Business Day prior to the  effective
date of such Change in the Interest Rate Mode which is, by its terms,  in effect
prior to such effective date.



<PAGE>


            If any of the conditions  referred to in (A)(i) or (ii) above is not
met with respect to any Change in the Interest  Rate Mode from an Auction  Rate,
the Auction Rate for the next  succeeding  Auction  Period  shall be  determined
pursuant to the Auction Procedures  applicable to the Auction Rate Bonds. If the
condition  referred to in (B) above is not met with respect to any Change in the
Interest  Rate  Mode  from an  Auction  Rate,  the  Auction  Rate  for the  next
succeeding  Auction  Period  shall  be  equal  to the  Maximum  Auction  Rate as
determined on such Auction Date. If any of the conditions  referred to in (C) or
(D) above is not met with respect to any Change in the  Interest  Rate Mode from
an Auction Rate, the Auction Rate for the next  succeeding  Auction Period shall
equal the Maximum Auction Rate as determined on such Auction Date. If any of the
conditions  referred to in (B),  (C) or (D) above is not met with respect to any
other  Change in the  Interest  Rate  Mode,  the Bonds  shall  continue  to bear
interest at the Current  Adjustable  Rate or the current Fixed Rate, as the case
may be, and be subject to the  provisions of this Indenture  applicable  thereto
while the Bonds bear  interest at such  Current  Adjustable  Rate or the current
Fixed Rate, as the case may be;  provided,  however,  that  notwithstanding  the
failure to meet such  conditions,  the Bonds shall  remain  subject to mandatory
tender for purchase in  accordance  with Section  5.04.  If any of the foregoing
conditions  for a Change in the Interest  Rate Mode other than with respect to a
Change in the  Interest  Rate Mode from an Auction  Rate is not met, the Trustee
shall mail, or cause the  Registrar  and Paying Agent to mail to the  Authority,
the Company and the Holders  notice thereof in  substantially  the form attached
hereto as, or containing  substantially the information  contained in, Exhibit D
hereto within 3 Business Days after the failure to meet any of such conditions.

     SECTION  4.02.  Optional  Conversion  to a Fixed  Rate.  1.  The  Authority
reserves the right,  at the request of the Company,  to fix the rate of interest
per annum  which  Bonds will bear,  in whole or in part,  for the balance of the
term thereof or until the effective  date of a Change in the Interest Rate Mode;
provided  however,  that the  Authority  shall not  exercise  such right and the
Company  shall not request the  Authority to exercise such right except on a day
on which the affected Bonds may be redeemed at the option of the  Authority.  In
the event the  Authority,  at the request of the  Company,  as herein  provided,
exercises  its Option to  Convert,  the Bonds so  converted  shall cease to bear
interest at the Adjustable  Rate then borne by the Bonds and shall bear interest
at a Fixed Rate until  maturity or until the  effective  date of a Change in the
Interest  Rate Mode,  subject to the terms and  conditions  hereof  (the date on
which a Fixed  Rate  shall  take  effect  being  herein  called  a  "Fixed  Rate
Conversion  Date"). The Option to Convert may be exercised at any time through a
written notice given by the Authority, at the direction of the Company, not less
than 30 nor more than 45 days prior to the proposed Fixed Rate  Conversion  Date
to the Trustee,  the Registrar and Paying Agent, the Remarketing  Agent (and the
Auction Agent and the Securities Depository in the case of any change to a Fixed
Rate from an Auction Rate),  in  substantially  the form attached  hereto as, or
containing  substantially  the  information  contained in,  Exhibit A hereto.  A
notice  of  conversion  to a  Fixed  Rate  shall  be  effective  only  if  it is
accompanied by the form of opinion that Bond Counsel  expects to give on a Fixed
Rate  Conversion  Date to the effect that the  establishment  of a Fixed Rate is
authorized by this  Indenture,  is permitted  under the Act and will not have an
adverse  effect on the exclusion of interest on such Bonds from gross income for
federal income tax purposes.

            2. The Trustee  shall mail,  or cause the Registrar and Paying Agent
to mail, the notice received pursuant to subsection 1 of this Section 4.02 on or
before the third Business Day after receipt thereof to the Holders.


<PAGE>


            3. A Fixed Rate shall take effect only if

            (A) with  respect to a change to a Fixed Rate from an Auction  Rate,
the Trustee and the Auction Agent shall receive:

            (i) a certificate  of an  Authorized  Company  Representative  by no
      later than the tenth day prior to a Fixed  Rate  Conversion  Date  stating
      that a written  agreement  has been  entered  into by the  Company and the
      Remarketing  Agent  to  remarket  the  Bonds  affected  on  a  Fixed  Rate
      Conversion  Date at a price of not less than 100% of the principal  amount
      thereof,  which written  agreement (i) may be subject to reasonable  terms
      and conditions  imposed by the Remarketing  Agent which in the judgment of
      the  Remarketing   Agent  reflect  current  market   standards   regarding
      investment  banking  risk and (ii)  must  include  a  provision  requiring
      payment by the  Remarketing  Agent in same-day  funds for any Auction Rate
      Bonds tendered or deemed tendered; and

            (ii) by 11:00 a.m.  (New York City time) on the second  Business Day
      prior to a Fixed Rate Conversion Date, by telecopy or other similar means,
      a certificate in substantially  the form attached hereto as, or containing
      substantially  the  information  contained in, Exhibit B hereto,  from the
      Authority  (y)  authorizing  the  establishment  of a Fixed  Rate  and (z)
      confirming  that Bond  Counsel  expects to be able to give an opinion on a
      Fixed Rate  Conversion  Date to the effect that the change to a Fixed Rate
      is authorized by this  Indenture,  is permitted under the Act and will not
      have an adverse  effect on the  exclusion  of  interest  on the Bonds from
      gross income for federal income tax purposes; and

            (B) with  respect to any change to a Fixed Rate the Trustee (and the
Auction  Agent in the case of any change to a Fixed  Rate from an Auction  Rate)
receives on a Fixed Rate Conversion Date:

            (i) by 9:30 a.m.  (New York City time) an Opinion of Bond Counsel to
      the  effect  that the  conversion  to a Fixed Rate is  authorized  by this
      Indenture,  is permitted under the Act and will not have an adverse effect
      on the  exclusion  of interest on such Bonds from gross income for federal
      income tax purposes; and

            (ii)  by  4:00  p.m.   (New  York  City  time)  a   certificate   in
      substantially the form attached hereto as, or containing substantially the
      information  contained in,  Exhibit C hereto,  from an Authorized  Company
      Representative that all of the Bonds tendered or deemed tendered have been
      purchased at a price equal to the principal  amount  thereof plus premium,
      if any, plus any accrued and unpaid  interest with funds provided from the
      remarketing of such Bonds in accordance  with the  Remarketing  Agreement,
      from the proceeds of a Support Facility,  or from funds deposited with the
      Trustee or the Registrar and Paying Agent;



<PAGE>


            If any of the  conditions  referred to in (A) above are not met with
respect to any change to a Fixed Rate from an Auction Rate, the Auction Rate for
the next succeeding  Auction Period shall be determined  pursuant to the Auction
Procedures applicable to the Auction Rate Bonds. If the condition referred to in
(B) above is not met with  respect to any change to a Fixed Rate from an Auction
Rate, the Auction Rate for the next succeeding  Auction Period shall be equal to
the Maximum  Auction Rate as  determined  as of such Auction Date. If any of the
conditions  referred to in (B) above are not met with respect to any change from
any other  Adjustable  Rate to a Fixed Rate,  the Bonds  shall  continue to bear
interest  at the  Adjustable  Rate then borne by the Bonds and be subject to the
provisions of this Indenture applicable thereto while the Bonds bear interest at
such Adjustable Rate. If any of the foregoing conditions to the establishment of
a Fixed Rate (other than with  respect to any  attempted  change from an Auction
Rate to a Fixed  Rate)  are not met,  the  Trustee  shall  mail,  or  cause  the
Registrar  and  Paying  Agent  to mail to the  Authority,  the  Holders  and the
Company,  notice  thereof  in  substantially  the form  attached  hereto  as, or
containing substantially the information contained in, Exhibit D hereto within 3
Business Days after the failure to meet any of said conditions.

     SECTION  4.03.  Conversion  Generally.  1. In the  event of a Change in the
Interest  Rate Mode on less than all the  Bonds of a series or  subseries  to or
from an Auction  Rate,  the  minimum  aggregate  principal  amount of Bonds that
continue to bear,  or are  adjusted to bear  interest at an Auction  Rate for an
Auction Rate Period,  shall not be less than  $20,000,000  for such Auction Rate
Bonds.

            2. Upon any Change in the Interest Rate Mode to an Auction Rate, the
Authority  and the  Trustee,  shall take all steps  necessary to comply with any
agreement  entered into with a Securities  Depository or its nominee pursuant to
Section  2.03(5)  with  respect  to  such  Change  in the  Interest  Rate  Mode,
including,  without limitation, the purchase and designation of sufficient CUSIP
numbers to comply with the requirements of such Securities  Depository following
any such Change in the Interest Rate Mode.



<PAGE>


            3. If the interest rate on less than all Bonds is to be converted to
a new  Adjustable  Rate  pursuant to Section 4.01 or to a Fixed Rate pursuant to
Section  4.02,  the  particular  Bonds to be  converted  shall be  chosen by the
Trustee,  or the  Trustee  shall  direct the  Registrar  and Paying  Agent to so
choose,  in such  manner as the  Trustee or  Registrar  and Paying  Agent in its
discretion may deem proper;  provided,  however, that the portion of any Bond to
be  converted  shall be in the  principal  amount of  $100,000  or any  integral
multiple of such amount  during a  Commercial  Paper Rate  Period,  a Daily Rate
Period,  a Weekly Rate Period or a Monthly Rate Period,  $50,000 or any integral
multiple  thereof  during an  Auction  Rate  Period,  or $5,000 or any  integral
multiple  thereof at any other time and that, in selecting Bonds for conversion,
the Trustee or Registrar and Paying Agent shall treat each Bond as  representing
that number of Bonds which is obtained by dividing the principal  amount of such
registered Bond in excess of $100,000 by $100,000 during a Commercial Paper Rate
Period,  a Daily Rate  Period,  a Weekly Rate Period or a Monthly  Rate  Period,
$50,000  during an  Auction  Rate  Period,  and  $5,000 at any other  time (such
amounts  being  hereinafter  referred to as the  "applicable  units of principal
amount").  If it is  determined  that one or more,  but not all of the $100,000,
$50,000 or $5,000 units of principal  amount  represented by any such Bond is to
be converted, then upon notice of intention to convert such $100,000, $50,000 or
$5,000 unit or units  pursuant to Sections 4.01 or 4.02, as the case may be, the
Holders of such Bonds shall forthwith  surrender such Bonds to the Registrar and
Paying Agent for (1) payment of the purchase price  (including  the premium,  if
any, and accrued and unpaid  interest to the date fixed for  conversion)  of the
$100,000,  $50,000  or  $5,000  unit or units of  principal  amount  called  for
conversion  and (2) exchange for a new Bond or Bonds in the aggregate  principal
amount of the balance of the principal of such Bonds not subject to  conversion.
If the Holders of any such Bond of a denomination greater than $100,000, $50,000
or $5,000 shall fail to present such Bond to the Registrar and Paying Agent, for
payment and exchange as aforesaid, such Bond shall, nevertheless, become due and
payable on the date fixed for conversion to the extent of the $100,000,  $50,000
or $5,000 unit or units of principal  amount subject to such  conversion (and to
that extent only).

            4. Notwithstanding  anything in this Article IV to the contrary, the
Authority  may not effect a Change in the Interest Rate Mode pursuant to Section
4.01 and the  Authority  may not  exercise its option to convert to a Fixed Rate
pursuant to Section 4.02 if such action  would  require the payment of a premium
upon  purchase of Bonds  pursuant to Section  5.04 unless  there shall have been
deposited the full amount of such premium in trust with the Trustee prior to any
notification of a change pursuant to Section 4.01 or 4.02.


<PAGE>



                                      V-

                                  ARTICLE V

                      REDEMPTION AND PURCHASE OF BONDS

     SECTION  5.01.  Optional   Redemption.   The  Bonds  shall  be  subject  to
redemption, in whole or in part, at the option of the Authority upon the request
of the Company,  from related  payments made by the Company  pursuant to Section
6.02 of the Participation Agreement and any other monies held by the Trustee and
available to be applied to the  redemption  of Bonds as provided in this Section
5.01:

            (a) During any  Commercial  Paper Rate  Period,  such Bonds shall be
subject to redemption  on each Interest  Payment Date, as a whole or in part, at
the  principal  amount  thereof,  at a  redemption  price  equal  to 100% of the
principal amount.

            (b) During any  Auction  Rate  Period,  Auction  Rate Bonds shall be
subject to redemption  on the Business Day  immediately  preceding  each Auction
Date,  as a  whole  or in  part,  at a  redemption  price  equal  to 100% of the
principal  amount thereof plus accrued and unpaid interest to the date fixed for
redemption.

            (c)  During any Daily Rate  Period,  such Bonds  shall be subject to
redemption on any Business  Day, as a whole or in part, at the principal  amount
thereof,  plus accrued and unpaid interest to the date fixed for redemption,  if
any.

            (d) During any Weekly  Rate  Period,  such Bonds shall be subject to
redemption on any Business  Day, as a whole or in part, at the principal  amount
thereof,  plus accrued and unpaid interest to the date fixed for redemption,  if
any.

            (e) During any Monthly Rate  Period,  such Bonds shall be subject to
redemption  on each  Interest  Payment  Date,  as a  whole  or in  part,  at the
principal amount thereof.

            (f) During any Semi-annual Rate Period,  such Bonds shall be subject
to  redemption  on each  Interest  Payment  Date,  as a whole or in part, at the
principal amount thereof.



<PAGE>


            (g) During any Term Rate or Fixed Rate  Period,  such Bonds shall be
subject to redemption in whole at any time on any Business Day or in part on any
Interest  Payment Date as follows:  after the No-Call Period shown below,  which
shall begin on the first day of the Calculation  Period applicable to such Bonds
or on a Fixed Rate  Conversion  Date, as the case may be, at a redemption  price
equal,  initially,  to the principal amount thereof, plus a premium equal to the
percentage of the principal  amount to be redeemed shown in the Initial  Premium
column, plus accrued and unpaid interest if paid on a Business Day other than an
Interest  Payment Date. The premium  percentage  shall decline by the percentage
shown in the  Reduction  in Premium  column on each  anniversary  of the date on
which  such  Bonds are first  redeemable,  if the  Calculation  Period or period
remaining to the Stated  Maturity after a Fixed Rate Conversion Date is equal to
or greater than five years, and on each Interest Payment Date if the Calculation
Period or period  remaining to the Stated Maturity after a Fixed Rate Conversion
Date is less  than five  years,  until the  Bonds  shall be  redeemable  without
premium.

     Calculation Period or Period to Maturity
 Equal to or        But Less      No-Call         Initial      Reduction
Greater Than          Than         Period       Premium       in Premium

  18 years            N/A         10 Years         2 %        1/2%
  12 years          18 Years       8 Years         1 1/2      1/2
   7 Years          12 Years       6 Years         1          1/2
   5 Years           7 Years       4 Years         1/2        1/2
   4 Years           5 Years       3 Years         1/2        1/2
   3 Years           4 Years       2 Years         1/2        1/2
   0 Years           3 Years       Not callable

If upon  establishment of a Term Rate Period or a Fixed Rate Period, as the case
may be, the  Remarketing  Agent  certifies to the Trustee,  Bond Counsel and the
Authority  in  writing  that  the  foregoing  schedule  is not  consistent  with
then-prevailing  market conditions,  the Authority at the request of the Company
may revise the  foregoing  Initial  Premium,  Reductions  in Premium and No-Call
Periods  without the approval of the Holders to reflect  then-prevailing  market
conditions,  upon  receipt of an opinion of Bond  Counsel to the effect that any
revisions  pursuant to this paragraph,  either by itself or in conjunction  with
the  establishment of a Calculation  Period or a Fixed Rate, as the case may be,
are made in accordance with this Indenture,  is permitted under the Act and will
not  adversely  affect the  exclusion of interest on the Bonds from gross income
for federal income tax purposes.

            SECTION 5.02.     [Reserved]



<PAGE>


     SECTION 5.03.  Tender for and Purchase  upon Election of Holder.  1. During
any Daily Rate Period or Weekly Rate  Period,  any Bond or portion  thereof in a
principal  amount equal to an authorized  denomination (so long as the principal
amount not  purchased is an authorized  denomination)  shall be purchased on the
demand  of the  Holder  thereof  on any  Business  Day at a price  equal  to the
principal amount thereof plus accrued and unpaid  interest,  if any, to the date
of purchase, upon delivery to the Registrar and Paying Agent and the Remarketing
Agent at their  respective  principal  offices,  by the close of business on any
Business  Day of a Notice  of  Election  to  Tender  in  substantially  the form
attached hereto as, or containing  substantially  the information  contained in,
Exhibit  E hereto;  provided,  however,  that the  substance  of such  Notice of
Election to Tender must also be given  telephonically  to the Remarketing  Agent
prior to or  simultaneously  with delivery of such written Notice of Election to
Tender to the Remarketing  Agent. The date on which such Bond shall be purchased
shall,  at the request of the Holder thereof (i) if the Bond then bears interest
at a Daily Rate, be the date of delivery of such Notice of Election to Tender if
such Notice of Election to Tender is delivered to the Registrar and Paying Agent
and the Remarketing  Agent by 10:00 a.m.(New York City time) on such date or may
be any Business Day  thereafter,  and (ii) if the Bond then bears  interest at a
Weekly Rate,  shall be a Business  Day not prior to the 7th day next  succeeding
the date of the  delivery of such Notice of Election to Tender to the  Registrar
and Paying Agent and the Remarketing Agent.

            2. During any Monthly Rate Period or  Semi-annual  Rate Period,  any
Bond  or  portion  thereof  in  a  principal   amount  equal  to  an  authorized
denomination  (so long as the  principal  amount not  purchased is an authorized
denomination)  shall be  purchased  on the demand of the  Holder  thereof on the
first  Business Day following  each  Calculation  Period at a price equal to the
principal  amount  thereof,  upon delivery to the Registrar and Paying Agent and
the Remarketing  Agent,  at their  respective  principal  offices of a Notice of
Election to Tender in  substantially  the form attached  hereto as or containing
substantially  the information  contained in Exhibit E on or prior to a Business
Day which is not less than 10 days, in the case of Bonds  bearing  interest at a
Semi-annual  Rate, or 7 days, in the case of Bonds bearing interest at a Monthly
Rate,  prior to the  proposed  date of  purchase;  provided,  however,  that the
substance of such Notice of Election to Tender must also be given telephonically
to the  Remarketing  Agent  prior to or  simultaneously  with  delivery  of such
written Notice of Election to Tender to the Remarketing Agent.

            3.  Immediately  upon  receipt  of a Notice  of  Election  to Tender
delivered  pursuant to the  provisions of this Section  5.03,  the Registrar and
Paying Agent shall notify,  or cause to be notified,  the Trustee,  the Company,
the Authority and the  Remarketing  Agent, by telephone,  promptly  confirmed in
writing, of such receipt, specifying the contents thereof.

            4. Any  Notice of  Election  to Tender  shall be  irrevocable.  If a
Holder  fails to deliver the Bonds  referred to in such notice to the  Registrar
and Paying Agent, such Bonds shall nevertheless be deemed to have been purchased
on the date  established for the purchase  thereof,  no interest shall accrue on
such Bonds from and after the date of  purchase  and such  Holder  shall have no
rights  hereunder  thereafter  as the owner of such  Bonds  except  the right to
receive the purchase price of such Bonds.

            5. A Holder may not tender a Bond to the  Registrar and Paying Agent
pursuant to this Section while such Bond bears interest at a Fixed Rate.

     SECTION  5.04.  Mandatory  Tender for Purchase  upon Change in the Interest
Rate Mode or on Business Day Following Certain  Calculation  Periods.  1. Upon a
Change in the Interest Rate Mode, the Bonds shall be subject to mandatory tender
for purchase in accordance with the terms hereof,  on the effective date of such
Change in the Interest Rate Mode at the Purchase Price.

            2. During any Term Rate Period or Commercial Paper Rate Period,  the
Bonds shall be subject to mandatory  tender for purchase in accordance  with the
terms hereof on the Business Day immediately  following each Calculation Period,
each at a price equal to the Purchase Price.

            3.  Notice of  mandatory  tender for  purchase  upon a Change in the
Interest Rate Mode shall be in  substantially  the form  attached  hereto as, or
contain substantially the information contained in, Exhibit A hereto.


<PAGE>


            4. Any such notice of mandatory tender for purchase required by this
Section 5.04 shall be given by the Trustee, in the name of the Authority, or the
Trustee  shall cause the  Registrar  and Paying  Agent to give such notice (with
copies thereof to be given to the  Remarketing  Agent,  the Registrar and Paying
Agent, the Company, and in the case of Auction Rate Bonds, the Auction Agent and
the  Authority)  by  first-class  mail to the  Holders  of the Bonds  subject to
purchase at their addresses shown on the books of registry.

            5. Bonds held by or for the  account of the Company or the issuer of
a Support Facility are not subject to mandatory tender for purchase  pursuant to
this Section 5.04.

     SECTION  5.05.  Extraordinary  Optional  Redemption.  During  any Term Rate
Period or Fixed Rate Period,  the Bonds are also subject to redemption  prior to
maturity in whole at any time at the option of the  Authority,  exercised at the
direction of the Company,  upon notice given as provided in the Indenture,  at a
redemption  price equal to the principal  amount  thereof,  together with unpaid
interest  accrued  thereon  to the  date  fixed  for  redemption,  in any of the
following events:
                  (i) All or  substantially  all of the Project  shall have been
            damaged or destroyed or title to, or the  temporary use of, all or a
            substantial  portion of the Project  shall have been taken under the
            exercise  of  the  power  of  eminent  domain  by  any  governmental
            authority,  or person, firm or corporation acting under governmental
            authority, as in each case renders the Project unsatisfactory to the
            Company for its intended use;

                  (ii) Unreasonable burdens or excessive  liabilities shall have
            been imposed  upon the  Authority or the Company with respect to all
            or substantially all of the Project,  including  without  limitation
            the  imposition  of  federal,  state or other ad  valorem  property,
            income or other taxes  other than ad valorem  taxes in effect on the
            date of original  issuance of the Bonds levied upon privately  owned
            property used for the same general purpose as the Project; or

                  (iii) Any court or  regulatory  or  administrative  body shall
            enter or  adopt,  or fail to  enter or  adopt,  a  judgment,  order,
            approval,  decree,  rule or  regulation,  as a result  of which  the
            Company elects to cease operation of all or substantially all of the
            Project.



<PAGE>


     SECTION 5.06. Special Tax Redemption Provisions.  1. During any Semi-annual
Rate Period,  Term Rate Period or Fixed Rate Period,  the Bonds shall be subject
to mandatory redemption as a whole (provided,  however,  that the Bonds shall be
redeemed in part if the Company obtains an opinion of Bond Counsel to the effect
that,  by  redeeming  such portion of the Bonds,  the interest on the  remaining
Bonds will not be included  for Federal  income tax purposes in the gross income
of any owner of the Bonds  (other than an owner who is a  "substantial  user" of
the Project or a "related person" within the meaning of Section 147(a)(1) of the
Code)) at any time at a redemption  price equal to 100% of the principal  amount
thereof,  together with unpaid interest  accrued thereon to the redemption date,
if, in a published  or private  ruling of the Internal  Revenue  Service or in a
final,  nonappealable  judicial  decision by a court of  competent  jurisdiction
(provided  that the Company has been afforded the  opportunity to participate at
its own expense in the proceeding  resulting in such ruling or in the litigation
resulting in such  decision,  as the case may be), it is  determined  that, as a
result of a failure  by the  Company  to  observe  any  covenant,  agreement  or
representation in the Participation  Agreement or the Tax Regulatory  Agreement,
interest on the Bonds is included  for Federal  income tax purposes in the gross
income (as defined in Section 61 of the Code) of any owner of a Bond (other than
a "substantial  user" of the Project or a "related person" within the meaning of
Section  147(a)(1) of the Code),  and, in such event, the Bonds shall be subject
to such  mandatory  redemption not more than one hundred eighty (180) days after
receipt by the Trustee of notice of such published or private ruling or judicial
decision and a demand for  redemption of the Bonds.  The  occurrence of an event
requiring the  redemption of the Bonds under this  paragraph does not constitute
an  event  of  default  under  any  Note or  under  the  Indenture  and the sole
obligation  in such  event  shall be for the  Company  to prepay  the Note in an
amount sufficient to redeem the Bonds to the extent required by this paragraph.

            2. During any  Semi-annual  Rate  Period,  Term Rate Period or Fixed
Rate  Period,  the  Bonds may be  redeemed  in whole or in part at any time at a
redemption  price equal to 100% of the principal  amount thereof,  together with
accrued and unpaid interest  thereon to the redemption  date, if the Company has
determined,  on the basis of the advice of Bond Counsel that, as a result of any
action taken or expected to be taken,  or failure to take  action,  a reasonable
risk exists that interest on the bonds will not be excludable  from gross income
for federal tax purposes.  Such conclusion and certification  shall be evidenced
by delivery to the Trustee of a written  certificate  of an  Authorized  Company
Representative  to the effect  that the Company  has  reached  such  conclusion,
together with a copy of such advice of Bond Counsel.  The occurrence of an event
permitting  the redemption of the Bonds under this paragraph does not constitute
an  event  of  default  under  any  Note or  under  the  Indenture  and the sole
obligation  in such  event  shall be for the  Company  to prepay  the Note in an
amount sufficient to redeem the Bonds to the extent required by this paragraph.



<PAGE>


            3. During any  Semi-annual  Rate  Period,  Term Rate Period or Fixed
Rate  Period,  the Bonds  will also be  subject  to  mandatory  redemption  at a
redemption  price equal to one hundred  three  percent  (103%) of the  principal
amount thereof plus unpaid  interest  accrued  thereon to the redemption date if
the Company reasonably concludes and certifies to the Trustee that the business,
properties, condition (financial or otherwise), operations or business prospects
of the Company will be  materially  and  adversely  affected  unless the Company
takes or omits to take a specified  action and that the Company has been advised
in writing by Bond Counsel that the specified action or omission would cause the
use of the Project to be such that,  pursuant  to Section  150 of the Code,  the
Company  would not be entitled to deduct the  interest on the Bonds for purposes
of determining the Company's  Federal  taxable income,  for a period of not less
than ninety  (90)  consecutive  or  nonconsecutive  days  during a  twelve-month
period.  Such conclusion and certification shall be evidenced by delivery to the
Trustee of a written certificate of an Authorized Company  Representative to the
effect that the Company has reached such  conclusion,  together with a certified
copy of a resolution  of the Board of Trustees of the Company  authorizing  such
certificate  and a copy of such  advice of Bond  Counsel.  In the event that the
Bonds become subject to redemption as provided in this paragraph, the Bonds will
be redeemed in whole  unless  redemption  of a portion of the Bonds  outstanding
would, in the opinion of Bond Counsel,  have the result that interest payable on
the Bonds remaining  outstanding  after such redemption  would be deductible for
purposes of determining the Federal taxable income of the Company,  and, in such
event,  the Bonds to be redeemed  shall be selected (in the principal  amount of
$5,000 or any  integral  multiple  thereof)  from time to time at random in such
manner as the Trustee shall determine in accordance with the Indenture,  in such
amount as is necessary to  accomplish  that result.  The  occurrence of an event
requiring the  redemption of the Bonds under this  paragraph does not constitute
an  event  of  default  under  any  Note or  under  the  Indenture  and the sole
obligation  in such  event  shall be for the  Company  to prepay  the Note in an
amount sufficient to redeem the Bonds to the extent required by this paragraph.

     SECTION  5.07.  Redemption at Demand of the State.  In accordance  with the
provisions  of  Section  1864 of the  Act,  the  State  of New  York  may,  upon
furnishing  sufficient funds therefor,  require the Authority to redeem prior to
maturity,  as a whole,  the  Bonds on any  Interest  Payment  Date not less than
twenty  years  after  the  Closing  Date.  Any  such  redemption  shall  be at a
redemption price equal to the optional  redemption price, if any,  applicable on
such date set forth in Section 5.01 or if no such optional  redemption  price is
applicable at a redemption  price of 105% of the principal  amount  thereof,  in
either  case,  together  with accrued and unpaid  interest,  if any, to the date
fixed  for  redemption,  all in the  manner  provided  in this  Article  V.  The
Authority  shall deposit any such funds received by it with the Trustee.  During
any period during which no Direct-Pay Credit Facility is in effect,  the Trustee
shall deposit any such funds in the Bond Fund and, upon notice  published in the
manner  provided  in  Section  1864 of the Act,  shall  apply  such funds to the
redemption of the Bonds. During any period in which a Direct-Pay Credit Facility
is in effect,  the  Trustee  shall  deposit  any such funds  received by it in a
segregated sub-account in the Bond Fund, and upon notice published in the manner
provided in Section 1864 of the Act,  shall draw monies under the related Credit
Facility  pursuant to Article XV and apply such payment to the redemption of the
Bonds at the price and in the manner specified in the preceding  sentence.  Upon
the  application  of such Credit  Facility  payments,  the Trustee shall pay the
funds  furnished  by  the  State  to the  issuer  of the  Credit  Facility  with
instructions  to apply  such  funds to the  reimbursement  of the  issuer of the
Credit  Facility for such Support  Facility  payment.  Upon such  redemption and
notwithstanding anything to the contrary in Article XV, the Trustee shall assign
the Note relating to the Bonds to or as directed by the Authority.

     SECTION 5.08.  Mandatory Tender for Purchase Upon Expiration of any Support
Facility or Upon Delivery of a Credit Facility or an Alternate Support Facility.
1. Except as otherwise set forth in the last  sentence of this  subsection 1, on
the second  Business Day next  preceding  the date of  expiration of any Support
Facility  or any  Alternate  Support  Facility,  the Bonds  shall be  subject to
mandatory  purchase at the  Purchase  Price,  unless on or prior to the 35th day
prior to such date of  expiration  the  Company on behalf of the  Authority  has
furnished to the Trustee an agreement to extend such Support Facility. The Bonds
shall also be subject to mandatory  purchase at the Purchase  Price, on the date
there is delivered a Credit Facility or an Alternate  Support  Facility  meeting
the  requirements  of Section 6.02. No tender for purchase of any Bonds shall be
required  pursuant to this Section 5.08 during an Auction Rate Period or a Fixed
Rate Period.


<PAGE>


            2.  Notice of the  mandatory  tender for  purchase  pursuant to this
Section  5.08 shall be given on or prior to the 30th day  before the  expiration
date of the expiring  Support Facility or on or prior to the 30th day before the
delivery of any Support Facility, as the case may be, by the Trustee in the name
of the Authority  (with copies thereof given to the Authority,  the  Remarketing
Agent,  the issuer of a Support  Facility,  the  Company and the  Registrar  and
Paying  Agent)  by  first-class  mail to the  Holders  of the Bonds  subject  to
mandatory tender for purchase at their addresses shown on the books of registry.
Such notice shall be in  substantially  the form attached  hereto as, or contain
substantially the information contained in, Exhibit F hereto.

            3. Bonds held by or for the  account of the Company or the issuer of
a Support Facility are not subject to mandatory tender for purchase  pursuant to
this Section 5.08.

     SECTION 5.09. Mandatory Tender Upon Occurrence of any Terminating Event. 1.
Except as otherwise  set forth in the last  sentence of this  subsection 1, upon
the occurrence of any Terminating Event, the Bonds shall be subject to mandatory
tender for  purchase at the  Purchase  Price on a Business  Day  selected by the
Trustee; provided, however, such mandatory tender shall not occur later than the
7th  Business  Day  after  receipt  of notice  of the  Terminating  Event by the
Trustee. The Bonds will not be subject to mandatory tender for purchase pursuant
to this Section 5.09 during any Auction Rate Period or any Fixed Rate Period.

            2.  Notice of the  mandatory  tender for  purchase  required by this
Section 5.09 shall be in  substantially  the form attached hereto as, or contain
substantially the information  contained in, Exhibit F hereto and shall be given
to the Holders of the Bonds  subject to  mandatory  tender for purchase at their
addresses  shown on the books of registry on or before the second  Business  Day
after  receipt of notice of a  Terminating  Event from the issuer of the Support
Facility by the  Trustee,  in the name of the  Authority,  or the Trustee  shall
cause the Registrar and Paying Agent to give such notice, by first-class mail to
the Holders of the Bonds subject to purchase at their address shown on the books
of registry (with copies thereof given to the Authority,  the Remarketing Agent,
the Company and the Registrar and Paying Agent).

            3. Bonds held by or for the  account of the Company or the issuer of
a Support Facility are not subject to mandatory tender for purchase  pursuant to
this Section 5.09.



<PAGE>


     SECTION  5.10.  General  Provisions  Applicable  to Mandatory  and Optional
Tenders for Purchase of Bonds.  1. If interest has been paid on the Bonds, or an
amount  sufficient to pay interest  thereon has been deposited in the Bond Fund,
or an amount  sufficient to pay accrued interest  thereon,  if any, has been set
aside in the Bond Purchase Fund held under the Bond  Purchase  Trust  Agreement,
and the Purchase  Price shall be available in the Bond Purchase Fund for payment
of Bonds subject to tender for purchase  pursuant to Section 5.03, 5.04, 5.08 or
5.09, and if any Holder fails to deliver or does not properly  deliver the Bonds
to the  Registrar  and Paying Agent for which a Notice of Election to Tender has
been properly filed or which are subject to mandatory tender for purchase on the
purchase date therefor,  such Bonds shall  nevertheless  be deemed  tendered and
purchased on the date  established for the purchase  thereof,  no interest shall
accrue on such Bonds from and after the date of purchase and such former Holders
shall have no rights  hereunder as the registered  owners of such Bonds,  except
the right to receive the purchase price of and interest to the purchase date, if
any, on such Bonds upon  delivery  thereof to the  Registrar and Paying Agent in
accordance  with  the  provisions  hereof.  The  purchaser  of  any  such  Bonds
remarketed by the Remarketing  Agent, or the issuer of any Support Facility,  to
the extent Bonds are  purchased  with the proceeds of a draw on, or borrowing or
payment under,  the Support  Facility,  shall be treated as the registered owner
thereof for all  purposes  of the  Indenture.  The payment of Bonds  pursuant to
Section  5.03 shall be subject to delivery of such Bonds duly  endorsed in blank
for  transfer  or  accompanied  by an  instrument  of  transfer  thereof in form
satisfactory to the Registrar and Paying Agent executed in blank for transfer at
the principal office of the Registrar and Paying Agent at or prior to 10:00 a.m.
(11:30 a.m. for Bonds  bearing  interest at the Weekly Rate and 12:00 noon,  for
Bonds bearing  interest at the Daily Rate) (New York City time),  on a specified
purchase  date.  The  Registrar and Paying Agent may refuse to make payment with
respect to any Bonds tendered for purchase pursuant to Sections 5.03, 5.04, 5.08
or  5.09  not  endorsed  in  blank  or  for  which  an  instrument  of  transfer
satisfactory to the Registrar and Paying Agent has not been provided.

            2. The  Purchase  Price of Bonds  subject  to  tender  for  purchase
pursuant to Section 5.03, 5.04, 5.08 or 5.09 in an aggregate principal amount of
at least one  million  dollars  ($1,000,000)  shall be  payable  in  immediately
available  funds or by wire transfer upon written notice from the Holder thereof
containing the wire transfer  address (which shall be in the continental  United
States) to which such Holder wishes to have such wire directed,  if such written
notice is received  by the  Registrar  and Paying  Agent not less than five days
prior to the related purchase date.

            3.  Bonds  subject to  mandatory  tender for  purchase  pursuant  to
Sections  5.08 or 5.09 shall not be  remarketed  unless  and until an  Alternate
Support Facility meeting the requirements of Section 6.02 of the Indenture is in
full force and effect;  provided,  however,  that Bonds may be remarketed and no
such Alternate  Support Facility is required to be in effect if, at the time the
Bonds are sought to be remarketed, the Bonds bear interest at an Auction Rate or
a Fixed Rate.

            4. In the event Bonds tendered for purchase pursuant to Section 5.03
or 5.04  shall be paid from a drawing  under a  Liquidity  Facility,  such Bonds
shall not be remarketed unless and until the Registrar and Paying Agent has been
notified by the Liquidity  Facility Issuer and, upon receipt of such notice, the
Registrar  and Paying Agent has notified the  Remarketing  Agent that the amount
available for a drawing under such Liquidity Facility has been restored.



<PAGE>


     SECTION  5.11.  Selection  of Bonds to be Redeemed.  A redemption  of Bonds
shall be a  redemption  of the whole or of any part of the Bonds  from any funds
available  for  that  purpose  in a  principal  amount  equal  to an  authorized
denomination  (so long as the  principal  amount not  redeemed is an  authorized
denomination). If less than all Bonds shall be redeemed, the particular Bonds to
be redeemed  shall be chosen by the  Trustee,  or the Trustee  shall  direct the
Registrar and Paying Agent to so choose, as hereinafter  provided.  If less than
all the Bonds  shall be  called  for  redemption  under  any  provision  of this
Indenture  permitting such partial redemption,  the particular Bonds or portions
of Bonds to be redeemed shall be selected (a) first, from Bonds held or owned by
or for the issuer of a Support Facility  pursuant to any Support  Facility,  (b)
second, from Bonds for which the Registrar and Paying Agent has received,  prior
to such  selection,  a Notice of Election to Tender  requiring the Registrar and
Paying  Agent to  purchase  such  Bonds on the date on  which  the  Bonds  being
selected  are  to  be  redeemed  and  (c)  third,  from  all  other  Bonds  then
Outstanding,  by lot or on a pro rata basis by the Trustee or, upon direction of
the Trustee,  the Registrar  and Paying Agent,  in such manner as the Trustee or
Registrar and Paying Agent in its discretion may deem proper; provided, however,
that the portion of any Bond to be redeemed shall be in the principal  amount of
$100,000 or any integral multiple thereof during a Commercial Paper Rate Period,
a Daily Rate Period,  a Weekly Rate Period or a Monthly Rate Period,  $50,000 or
any integral  multiple  thereof during an Auction Rate Period,  or $5,000 or any
integral  multiple  thereof at any other time and that,  in selecting  Bonds for
redemption,  the Trustee or Registrar  and Paying Agent shall treat each Bond as
representing  that number of Bonds which is obtained by dividing  the  principal
amount of such  registered  Bond in  excess of  $100,000  by  $100,000  during a
Commercial  Paper Rate Period,  a Daily Rate  Period,  a Weekly Rate Period or a
Monthly Rate Period,  $50,000  during an Auction Rate Period,  and $5,000 at any
other time (such amounts being hereinafter  referred to as the "applicable units
of principal amount").  If it is determined that one or more, but not all of the
$100,000,  $50,000 or $5,000 units of principal  amount  represented by any such
Bond is to be called for  redemption,  then upon notice of  intention  to redeem
such $100,000,  $50,000 or $5,000 unit or units, the Holders of such Bonds shall
forthwith surrender such Bonds to the Registrar and Paying Agent for (1) payment
of the redemption price (including the redemption  premium,  if any, and accrued
interest to the date fixed for  redemption)  of the $100,000,  $50,000 or $5,000
unit or units of principal  amount called for  redemption and (2) exchange for a
new Bond or Bonds of the aggregate principal amount of the unredeemed balance of
the principal of such Bonds.  If the Holders of any such Bond of a  denomination
greater than $100,000,  $50,000 or $5,000 shall fail to present such Bond to the
Registrar  and Paying Agent,  for payment and exchange as  aforesaid,  such Bond
shall, nevertheless,  become due and payable on the date fixed for redemption to
the extent of the $100,000,  $50,000 or $5,000 unit or units of principal amount
called for redemption (and to that extent only).

     SECTION 5.12. Notice of Redemption.  1. Notice of redemption shall be given
by the Trustee by mailing a copy of the redemption notice by first-class mail at
least 30 days prior to the date fixed for redemption to the Holders of the Bonds
to be redeemed at the addresses shown on the  registration  books  maintained by
the Registrar and Paying Agent. Any redemption may be conditioned on the receipt
of moneys by the  Registrar and Paying Agent  sufficient  to pay the  redemption
price on the Redemption  Date of Bonds called for  redemption,  if the notice of
redemption so states.

            2. The  Registrar and Paying Agent shall not be required to transfer
or exchange Bonds during any period beginning at the opening of business fifteen
(15) days before the day of mailing of a notice of redemption  and ending at the
close of business on the day fixed for redemption;  provided,  however, that the
foregoing  shall not apply during a Daily Rate Period,  a Weekly Rate Period,  a
Commercial Paper Rate Period or an Auction Rate Period.



<PAGE>


            3. Each notice of redemption  shall state: (i) the full title of the
Bonds,  the redemption  date,  the place of redemption and the redemption  price
payable upon such  redemption;  (ii) that the  interest on the Bonds,  or on the
principal  amount  thereof to be redeemed,  shall cease to accrue from and after
such  redemption  date and (iii)  that on said date  there  will  become due and
payable  on the  Bonds the  principal  amount  thereof  to be  redeemed  and the
interest  accrued on such principal  amount to the redemption  date, if any, and
the premium, if any, thereon.  Each notice of redemption mailed to the Holder of
the  Bonds  shall,  if less  than the  entire  principal  sum  thereof  is to be
redeemed, also state the principal amount thereof and the distinctive numbers of
the Bonds to be redeemed and that such Bonds must be  surrendered to the Trustee
in exchange for the payment of the principal  amount  thereof to be redeemed and
the  issuance of a new Bond  equaling in  principal  amount that  portion of the
principal sum not to be redeemed of the Bonds to be surrendered.  The failure to
give  notice to any  Holder of a Bond or any  defects in such  notice  shall not
affect the proceedings for the redemption of the Bonds for which notice has been
properly given.

     SECTION 5.13.  Bonds  purchased for account of Liquidity  Facility  Issuer.
Bonds subject to mandatory purchase pursuant to Section 5.03, 5.04, 5.08 or 5.09
shall be  deemed  to be  purchased  by the  Company  except  to the  extent  the
Liquidity  Facility expressly provides that the Bonds are to be purchased by the
issuer of the Liquidity Facility in which event such Bonds shall be deemed to be
purchased by the issuer of the Liquidity Facility in a principal amount equal to
the amount of a draw on, or borrowing or payment under,  the Liquidity  Facility
for the  payment  of  Bonds  subject  to  purchase,  upon the  deposit  with the
Registrar  and Paying  Agent of the  proceeds of such draw on, or  borrowing  or
payment  under,  the  Liquidity  Facility in an amount equal to the principal of
such Bonds plus accrued  interest  thereon to the purchase  date, and such Bonds
shall not be deemed paid and shall remain outstanding hereunder until the issuer
of the Liquidity  Facility has been  reimbursed for such draws on, or borrowings
or payments  under,  the Liquidity  Facility to pay such principal and interest.
Unless the issuer of any Liquidity  Facility shall otherwise  direct,  any Bonds
purchased  by  the  issuer  of  the  Liquidity  Facility  shall  be  immediately
registered  in the  name of the  Company  except  to the  extent  the  Liquidity
Facility  expressly provides that the Bonds are to be purchased by the issuer of
the Liquidity Facility in which event such Bonds shall be registered in the name
of the  issuer  of the  Liquidity  Facility  as a Holder  and the  issuer of the
Liquidity  Facility  shall  have all  rights  of a Holder  of Bonds  under  this
Indenture.

     SECTION 5.14. Effect of Redemption.  If the Bonds have been duly called for
redemption and notice of the redemption  thereof has been duly given or provided
for as  hereinbefore  provided and if monies for the payment of the Bonds (or of
the principal  amount  thereof to be redeemed) and the interest to accrue to the
redemption  date  on the  Bonds  (or  of  the  principal  amount  thereof  to be
redeemed),  if any, and the premium, if any, thereon are held for the purpose of
such payment by the Trustee,  then the Bonds (or the principal amount thereof to
be redeemed) shall on the redemption date designated in such notice,  become due
and payable and  interest on the Bonds (or the  principal  amount  thereof to be
redeemed) so called for redemption  shall cease to accrue from such date and the
Holder thereof shall  thereafter have no rights  hereunder as the Holder of such
Bonds (or the  principal  amount  thereof to be redeemed)  except to receive the
principal  amount  thereof  and premium  (if any)  thereon  and  interest to the
redemption date.



<PAGE>


     SECTION 5.15.  Cancellation  of Redeemed  Bonds.  Any Bonds  surrendered or
redeemed  pursuant to the  provisions  of this Article shall be cancelled by the
Registrar and Paying Agent.

<PAGE>



                                     VI-

                                ARTICLE VI

                             SUPPORT FACILITY

     SECTION 6.01.  Support  Facility - General.  Pursuant to the  Participation
Agreement,  the Company has agreed not to request  that the  interest  rate mode
applicable to the Bonds be adjusted to an Adjustable  Rate other than an Auction
Rate unless  there  shall be in effect,  prior to the  applicable  Change in the
Interest  Rate  Mode,  one  or  more  Support  Facilities  which  (i)  meet  the
requirements  of this  Article VI and (ii) permit the Bonds to be rated at least
"A" by S&P or "A" by  Moody's or its  equivalent  by any  nationally  recognized
rating agency.  The Company has further agreed to maintain a Liquidity  Facility
meeting the  requirements  of the  Participation  Agreement  with respect to the
Bonds at all times,  except with respect to Bonds bearing interest at an Auction
Rate or a Fixed Rate. A Liquidity  Facility  also must be in effect prior to (i)
any Change in the Interest Rate Mode from an Auction Rate to another  Adjustable
Rate (other than a Change in the Interest Rate Mode to an Auction Rate Period or
a  conversion  to a Fixed Rate),  and (ii) any change in the Interest  Rate Mode
from a Fixed Rate to an  Adjustable  Rate (other  than a Change in the  Interest
Rate Mode to an Auction Rate  Period).  The Trustee  shall be  furnished  with a
certified copy of any Support Facility obtained pursuant to this Section 6.01.

            Any  Support  Facility  Issuer not  located in New York State  shall
provide  the Trustee  with a list of holidays on which it is closed  through the
next succeeding  January 1 at the beginning of the term of such Support Facility
and by January 1 of each year thereafter.

     SECTION 6.02.  Alternate Support  Facility.  (1) At any time, the Authority
may, at the request of the  Company,  provide for the delivery to the Trustee of
an Alternate Support Facility.  The terms of an Alternate Support Facility shall
be the same as the Support Facility in all respects material to the security for
the Bonds; provided that the termination date of such Alternate Support Facility
shall be a date not earlier than 364 days from its date of issuance,  subject to
earlier  termination  upon the occurrence of (i) a Terminating  Event or another
event  of  default   under  the  related   reimbursement   agreement   or  other
corresponding  agreement  relating to such Alternate Support Facility,  (ii) the
issuance of a subsequent  Alternate Support  Facility,  (iii) payment in full of
the  Outstanding  Bonds or (iv) a Change in the Interest Rate Mode to an Auction
Rate or a Fixed Rate.  On or prior to the date of the  delivery of an  Alternate
Support  Facility to the Trustee,  the Company  shall  furnish to the Trustee on
behalf of the Authority (a) an opinion of Bond Counsel stating that the delivery
of such  Alternate  Support  Facility  to the Trustee is  authorized  under this
Indenture and complies with the terms hereof and (b)  confirmation  from S&P, if
the Bonds are then rated by S&P,  from  Moody's,  if the Bonds are then rated by
Moody's,  or another rating  agency,  if the Bonds are then rated by such rating
agency,  to the  effect  that such  rating  agency  has  reviewed  the  proposed
Alternate  Support Facility and that the substitution of the proposed  Alternate
Support  Facility  for the Support  Facility  will not,  by itself,  result in a
reduction or withdrawal of its long or short-term  rating of the Bonds below the
rating  category of S&P or Moody's or such other rating agency,  as the case may
be, then in effect with respect to the Bonds.



<PAGE>


            (2) Nothing  contained  herein shall prevent the  Authority,  at the
request of the  Company,  from  delivering  an  Alternate  Support  Facility  in
substitution  for a Support  Facility  which  will  result  in a decline  in the
short-term or long-term  rating or both assigned to such Bonds by Moody's or S&P
or such  other  rating  agency as a result of the  Alternate  Support  Facility;
provided,  that (i) the opinion of Bond  Counsel  referred  to in the  preceding
paragraph is obtained;  provided  that such opinion  shall also be to the effect
that delivery of such Alternate  Support  Facility will not adversely affect the
exclusion  from gross  income of interest  on the Bonds for  federal  income tax
purposes  and (ii) all  Outstanding  Bonds are subject to  mandatory  tender for
purchase  pursuant to Section  5.08  (unless the Bonds bear an Auction Rate or a
Fixed Rate).  The Authority,  or the Company on behalf of the  Authority,  shall
deliver  notice to the  Trustee  of the  substitution  of an  Alternate  Support
Facility which will result in a decline in the  short-term or long-term  ratings
assigned to the Bonds  pursuant to this  subsection  2 of Section  6.02 at least
forty-five (45) days before the date of substitution.

     SECTION 6.03.  Trustee not Responsible for Enforcement of Support Facility.
The Trustee shall have no responsibility  with respect to the enforcement of any
Support Facility obtained hereunder.


<PAGE>



                                     VII-

                                  ARTICLE VII

                     GENERAL TERMS AND PROVISIONS OF BONDS

     SECTION 7.01.  Execution and  Authentication  of Bonds.  The Bonds shall be
executed on behalf of the Authority by the manual or facsimile  signature of its
Chair,  Vice-Chair,  President,  Treasurer  or any Vice  President  and shall be
sealed  with  the  seal  of the  Authority,  or in  lieu  thereof  shall  bear a
lithographed,  engraved or otherwise  reproduced facsimile of such seal attested
by the manual or facsimile signature of its Vice President, Treasurer, Secretary
or an Assistant Secretary.

            Bonds  bearing the manual  signature of the officer of the Authority
authorized  to execute  such Bonds in office on the date of such manual  signing
thereof  and  Bonds  bearing  the  facsimile  signature  of the  officer  of the
Authority  authorized  to  execute  such  Bonds  in  office  on the  date of the
reproducing  of such  facsimile  signature  on such  Bonds,  shall be valid  and
binding obligations in accordance with their terms,  notwithstanding that before
the delivery  thereof and payment  therefor the person whose  signature  appears
thereon shall have ceased to be such officer.

            Only Bonds having endorsed  thereon a certificate of  authentication
substantially in the form set forth in Article XVI, duly executed by the Trustee
shall be entitled to any right or benefit under this  Indenture.  No Bonds shall
be valid or  obligatory  for any purpose  unless and until such  certificate  of
authentication   shall  have  been  duly  executed  by  the  Trustee,  and  such
certificate  of the Trustee upon a Bond shall be  conclusive  evidence that such
Bond has been duly authenticated and delivered under this Indenture and that the
Holder  thereof is entitled to the  benefits of this  Indenture.  The  Trustee's
certificate  of  authentication  on any Bond  shall be  deemed to have been duly
executed if signed by an authorized officer of the Trustee.

     SECTION 7.02. Books of Registry . The Registrar and Paying Agent shall keep
or cause to be kept at its  principal  office books  (herein  referred to as the
"books of registry" or  "registration  books") for the registration and transfer
of the Bonds.  Upon  presentation  at its principal  office for such purpose the
Registrar  and  Paying  Agent,  under  such  reasonable  regulations  as it  may
prescribe, shall register or transfer, or cause to be registered or transferred,
on said books of  registry,  the Bonds as  hereinafter  set forth.  The books of
registry shall at all times during  business hours be open for inspection by the
Authority,  the  Company  and the  Trustee  or their duly  authorized  agents or
representatives.



<PAGE>


     SECTION 7.03. Transfer, Registration and Exchange of Bonds. The transfer of
the Bonds may be registered only upon the books of registry  required to be kept
pursuant to Section  7.02 upon  surrender  thereof to the  Registrar  and Paying
Agent, together with an assignment duly executed by the Holder thereof or his or
her duly authorized  agent and accompanied by a guarantee of signature,  each in
such form as shall be satisfactory  to the Registrar and Paying Agent.  Upon any
such  registration of transfer the Authority shall execute and the Trustee shall
authenticate  and  deliver  in  exchange  for  such  Bonds a new  Bond or  Bonds
registered in the name of the  transferee or  transferees  for a like  aggregate
principal  amount,  of any  denomination  or  denominations  authorized  by this
Indenture. No transfer of any Bond shall be effective until entered on the books
of registry.

            Any Bond  surrendered  in any such  registration  of transfer  shall
forthwith be cancelled by the Trustee. Any Bonds registered and transferred to a
new Holder  pursuant to this  Section  shall be  delivered  to the Holder at the
principal  office of the Registrar and Paying Agent or sent by first-class  mail
to the Holder at his or her request, risk and expense.

            Bonds,  upon  surrender  thereof at the  principal  corporate  trust
office of the  Registrar and Paying  Agent,  together  with an  assignment  duly
executed  by the  Holder or his or her  authorized  agent and  accompanied  by a
guarantee  of  signature,  each in such  form as  shall be  satisfactory  to the
Registrar  and  Paying  Agent,  may,  at the option of the  Holder  thereof,  be
exchanged for an equal aggregate  principal  amount of Bonds of any denomination
or denominations  authorized by this Indenture and in the same form as the Bonds
surrendered  for  exchange.  All Bonds so  surrendered  pursuant to this Section
shall be cancelled by the Trustee.

            Any Bonds to be delivered to the Holder upon any such exchange shall
be delivered to the Holder at the  principal  office of the Registrar and Paying
Agent or sent by  first-class  mail to the Holder thereof at his or her request,
risk and expense.

            Any taxes or other  governmental  charges  required  to be paid with
respect to the  registration  of transfer or exchange of the Bonds shall be paid
by the  Holder  requesting  registration  of such  transfer  or  exchange,  as a
condition  precedent to the  exercise of such  privilege.  The  Authority or the
Registrar  and  Paying  Agent,  or  both,  may  charge  the  Company  for  every
registration of transfer or exchange  sufficient to reimburse it for any and all
costs required to be paid in respect thereof.

     SECTION 7.04. Mutilated, Lost, Stolen, or Destroyed Bonds. In the event any
Bond shall be lost,  stolen,  destroyed,  wholly or in part, or so defaced as to
impair its value to the Holder,  the Trustee  shall,  upon  compliance  with the
terms  provided  by law,  authenticate  and  deliver a new Bond of like date and
tenor in exchange or replacement  therefor  against delivery for cancellation of
such mutilated Bond, or in lieu of and in replacement of a destroyed,  stolen or
lost Bond,  and upon  payment by the Holder of the  reasonable  expenses  of the
Registrar and Paying Agent and the Authority and the  reasonable  charges of the
Trustee and Registrar and Paying Agent in connection therewith and, in the event
that  the Bond is  destroyed,  stolen  or lost,  the  Holder's  filing  with the
Registrar  and Paying  Agent of  evidence  satisfactory  to it that the Bond was
destroyed, stolen or lost, of the Holder's ownership thereof, and furnishing the
Registrar and Paying Agent and the  Authority  such security and indemnity as is
satisfactory to them. Any  replacement  Bond issued under the provisions of this
Section  in  exchange  or  substitution  for the  defaced,  mutilated  or partly
destroyed  Bond or in  substitution  for the  allegedly  lost,  stolen or wholly
destroyed Bond shall be entitled to the identical  benefits under this Indenture
as was the original Bond in lieu of which such replacement Bond is issued.  Each
such replacement Bond shall be prepared in substantially  the same manner as the
original.



<PAGE>


            Notwithstanding  the foregoing  provisions  of this Section,  if the
lost,  stolen,  destroyed,  defaced or mutilated Bond has matured or been called
for  redemption and the date fixed for  redemption  thereof has arrived,  at the
option of the Trustee, payment of the amount due thereon may be made without the
issuance  of any  replacement  Bond upon  receipt of like  evidence,  indemnity,
security  and payment of expenses  and the  surrender  for  cancellation  of the
defaced or mutilated or partly  destroyed Bond and upon such other conditions as
the Trustee may prescribe.

            Except  as  provided  in  this  sentence  and  as  permitted  in the
following paragraph, any replacement Bond shall be in the form of the Bond being
replaced, and be dated the date of its issuance and bear such number as shall be
assigned  thereto  by the  Registrar  and  Paying  Agent,  with  such  subseries
designation,  if any, as may be deemed  appropriate  by the Registrar and Paying
Agent. The Registrar and Paying Agent shall make an appropriate  notation in the
books of  registry  that a  replacement  Bond has been  issued  in  exchange  or
substitution  for the  defaced,  mutilated,  lost,  stolen,  or wholly or partly
destroyed Bond.

            There may be imprinted or affixed on the face and the panel  portion
of any duplicate Bond a mark to identify such Bond as a replacement Bond.

            Prior to arranging for the  preparation or printing of a replacement
Bond,  the Trustee and the  Registrar  and Paying Agent may require a deposit by
the  Holder to secure  the  Trustee,  the  Registrar  and  Paying  Agent and the
Authority for costs and expenses incurred by them in the preparation,  printing,
execution and issuance of such replacement Bond.

            Any amount of such  deposit  received  by the  Registrar  and Paying
Agent in excess of the amount  required to reimburse  the  Registrar  and Paying
Agent,  the Trustee or the Authority for costs and expenses shall be returned to
the party which made the deposit.

            Any defaced,  mutilated or partly  destroyed Bond surrendered to the
Registrar  and Paying  Agent in  substitution  for a new Bond  pursuant  to this
Section shall be cancelled by the Trustee.

            Pending the preparation of definitive  Bonds,  interim receipts or
certificates  (herein referred to as "temporary Bonds") may initially be issued,
exchangeable for definitive  Bonds when the latter are ready for delivery.  Such
temporary Bonds may be printed,  lithographed  or typewritten,  shall be of such
denomination  or  denominations  as may be  determined  by the Authority and may
contain such  references to any of the  provisions  of this  Indenture as may be
appropriate.  If  temporary  Bonds are issued,  the  Authority  will cause to be
furnished  duly  executed  definitive  Bonds  without  delay,  and thereupon the
temporary Bonds may be surrendered for  cancellation at the principal  office of
the  Trustee  in  exchange  for  definitive  Bonds and  without  charge for such
exchange,  and the Registrar and Paying Agent shall deliver in exchange for such
temporary Bonds so surrendered an equal aggregate principal amount of definitive
duly executed  Bonds,  of  authorized  denominations.  Until so  exchanged,  the
temporary  Bonds shall be entitled to the same benefits  under this Indenture as
definitive Bonds.



<PAGE>


            Nothing  in  this   Indenture   shall  prevent  the  Authority  from
delivering,  and the Authority is hereby expressly permitted to deliver, Auction
Rate Bonds in typewritten form to the Securities  Depository as registered owner
thereof.

     SECTION 7.06.  Disposition of Bonds.  Any Bond surrendered to the Registrar
and  Paying  Agent for  payment  shall be  cancelled  upon such  payment  by the
Trustee.  The Trustee shall  destroy any cancelled  Bond which has been paid and
which bears any date two (2) years prior to the date of  destruction.  The Bonds
shall be destroyed by burning,  machine  shredding,  chemical  disintegration or
such other method as is approved by the  Authority.  The  Authority  may require
that such destruction be done in the presence of its appointee. When the Trustee
shall destroy any Bond, it shall deliver a certificate  of such  destruction  to
the Authority and the Company.




<PAGE>



                                    VIII-

                               ARTICLE VIII1

                     ESTABLISHMENT OF THE PROJECT FUND

           1. There is hereby created and established a special trust fund to
be  designated  "Consolidated  Edison  Company of New York,  Inc.  Series  1999A
Project Fund" (hereinafter  referred to as the "Project Fund") to be held by the
Trustee.  All income or gain on monies  deposited  in the Project  Fund shall be
retained therein.

            2. There shall be  deposited  into the Project  Fund the proceeds of
the Bonds issued hereunder.

            3. The monies on deposit from time to time in the Project Fund shall
be held  under and  subject to this  Indenture,  but shall not be subject to the
liens, pledges, charges,  assignments and trusts created hereby for the security
and  benefit  of the  Holders  of the Bonds and shall not be  available  for the
payment of Bonds  within the  meaning  of the  Indenture,  and shall be used and
applied  solely for the purpose of refunding the Prior Bonds in accordance  with
the remaining provisions of this Section.

            4. The Trustee is authorized  and directed to make payments from the
Project Fund to pay the redemption price of the Prior Bonds or costs incurred in
connection  therewith,  upon  receipt  of a  letter  or  letters  signed  by  an
Authorized Company Representative so directing.


<PAGE>



                                     IX-

                                ARTICLE IX

                        CREATION OF SPECIAL FUNDS AND ACCOUNTS;
                        APPLICATION AND INVESTMENT OF REVENUES

     SECTION 9.01.  Creation of Funds and Accounts.  (a) The following  fund and
the following accounts therein, which shall be a special fund and accounts to be
held by the Trustee, are hereby created and designated as set forth below:
            Bond Fund

                  (a)   Interest Account
                  (b)   Principal Account
                  (c)   Redemption Account

            The  designation  of each fund and  account  set forth  above  shall
include the term  "Consolidated  Edison Company of New York, Inc. Series 1999A,"
which term shall precede the designation as set forth above.  Such fund and each
such account is, however, sometimes referred to herein as set forth above.

            (b) The Bond  Fund  and the  accounts  therein  shall be held in the
custody of the Trustee.  All monies required to be deposited with or paid to the
Trustee  under any provision of this  Indenture  shall be held by the Trustee in
trust and applied only in accordance  with the  provisions of this Indenture and
shall be trust funds for the purposes specified in this Indenture.

     SECTION  9.02.  Deposit of Note  Payments.  Deposit of N. The Trustee shall
deposit  the Note  Payments  or other money set forth below in the Bond Fund and
credit the Accounts set forth below in the order set forth below:

            The Company shall deposit,  or cause to be deposited,  the following
in immediately  available funds with the Trustee as the Note Payments become due
under the  Participation  Agreement and the Note unless  sufficient  amounts are
then available in such Accounts to make the required payments therefrom:



<PAGE>


            (a)(i) During an Auction Rate Period,  no later than 12:00 noon (New
York City time) on the Business Day next preceding  each Interest  Payment Date,
into the Bond Fund for credit to the  Interest  Account an  aggregate  amount of
funds  available  on the next  Business Day in The City of New York equal to the
aggregate  amount  required  for the  payment  of the  interest  payable  on the
Outstanding Auction Rate Bonds, on such Interest Payment Date. In the event such
deposit is not made in  accordance  with this  paragraph  (i), the Trustee shall
immediately send a certificate to the Auction Agent and to the registered owners
of each series of Bonds by telex,  telecopy or similar means,  in  substantially
the form prescribed by the Auction Agency Agreement.  If such deposit is made by
the Company within 3 Business Days of the Business Day immediately preceding the
Interest  Payment Date, the Trustee shall  immediately send a certificate to the
Auction  Agent and to the  registered  owners of each  series of Bonds by telex,
telecopy or similar means in  substantially  the form  prescribed by the Auction
Agency Agreement.

            (ii) No later than 12:00 noon (New York City time) on each  Interest
Payment Date,  other than during an Auction Rate Period,  into the Bond Fund for
credit to the  Interest  Account  the  amount  required  for the  payment of the
interest payable on the Outstanding Bonds on such Interest Payment Date.

            At such  time as the  Company  elects  to  obtain,  and  there is in
effect, a Direct-Pay  Credit  Facility,  amounts required to be deposited in the
Bond Fund for credit to the Interest  Account  shall be derived  solely from the
following  sources of funds in the priority  indicated and shall be so deposited
and credited to the Interest Account on the date indicated:

                  (I) On each  Interest  Payment  Date,  the proceeds of a draw,
      borrowing or payment under the Direct-Pay Credit Facility; and

                  (II) On each Interest  Payment Date, any other monies provided
      by the Company for such purpose.

            (b) (i) During an Auction Rate Period, no later than 12:00 noon (New
York City time) on the second  Business Day next  preceding  each Auction  Date,
into the Bond Fund for credit to the Redemption  Account an aggregate  amount of
funds  available  on the next  Business Day in The City of New York equal to the
aggregate  amount  required to pay the  principal  of and  premium,  if any, and
accrued  interest on any Auction Rate Bonds,  called for  redemption;  provided,
however if the scheduled date of such deposit to the  Redemption  Account by the
Company is not a Business Day then the date for such  deposit to the  Redemption
Account by the Company shall be the first Business Day immediately preceding the
scheduled date of such deposit to the Redemption Account by the Company.  In the
event such  deposit  is not made in  accordance  with this  paragraph  (i),  the
Trustee  shall  immediately  send a  certificate  to the Auction Agent by telex,
telecopy or similar  means,  substantially  in the form  required by the Auction
Agency Agreement.  If such deposit is made by the Company within 3 Business Days
of the second  Business Day  immediately  preceding the Auction Date the Trustee
shall immediately send a certificate to the Auction Agent by telex,  telecopy or
similar  means,  substantially  in  the  form  required  by the  Auction  Agency
Agreement.

            (ii) Other than during an Auction Rate Period,  on the last Business
Day prior to the day on which any redemption is to occur or on the last Business
Day  prior  to the  Stated  Maturity,  into  the Bond  Fund  for  credit  to the
Redemption Account or the Principal Account, as appropriate, the amount required
to pay  principal  of and  premium,  if any,  and accrued  interest on any Bonds
called for redemption or at the Stated Maturity,  the amount required to pay the
principal of and accrued interest on the Bonds.



<PAGE>


            At such  time as the  Company  elects  to  obtain,  and  there is in
effect, a Direct-Pay  Credit  Facility,  amounts required to be deposited in the
Bond Fund for credit to the  Redemption  Account or the  Principal  Account,  as
appropriate,  shall be derived solely from the following sources of funds in the
priority  indicated  and shall be so deposited  and  credited in the  Redemption
Account or the Principal Account, as appropriate, on the date indicated:

                  (I) On the date any  redemption  is  scheduled to occur and on
      the Stated  Maturity,  the proceeds of a draw,  borrowing or payment under
      the Direct-Pay Credit Facility; and

                  (II) On the date any  redemption  is scheduled to occur and on
      the Stated  Maturity,  any other  monies  provided by the Company for such
      purpose.

            If other monies are  received by the Trustee as advance  payments of
Note Payments to be applied to the  redemption of all or a portion of the Bonds,
such monies  shall be  deposited  in the Bond Fund for credit to the  Redemption
Account therein.

     SECTION  9.03.  Application  of Monies in the Bond  Fund.  1. The Bond Fund
shall be used for the purpose of making  scheduled  payments of principal of and
interest on the Bonds and of making  payments of the  redemption  price of Bonds
then subject to redemption in the manner herein provided. The monies in the Bond
Fund shall be applied as follows:

            (a) Interest  Account.  On each Interest  Payment Date,  the Trustee
shall apply the amount of monies then credited to the Interest  Account equal to
the interest  then payable on the Bonds to the payment of such  interest on such
Interest Payment Date. In the event a Direct-Pay Credit Facility is in place and
payments are required to be made in the order specified in Section 9.02 (a)(ii),
the Trustee  shall  request a draw,  borrowing or payment  under the  Direct-Pay
Credit  Facility in accordance  with the terms thereof in an amount equal to the
amount  required to pay the interest  payable on the  Outstanding  Bonds on such
Interest  Payment  Date and shall  notify the  Company of the amount and date of
such request. If sufficient funds are not available under Section 9.02(a)(ii)(I)
to pay such interest,  the Trustee shall apply funds, if any, available pursuant
to  Section  9.02(a)(ii)(II),  to the  extent  necessary,  to  such  payment  of
interest.

            (b) Principal  Account.  On the Stated  Maturity,  the Trustee shall
apply the amount of monies then credited to the  Principal  Account equal to the
principal  amount of Bonds then payable to the payment of such principal on such
date. In the event a Direct-Pay  Credit Facility is in place,  the Trustee shall
request a draw,  borrowing or payment under the  Direct-Pay  Credit  Facility in
accordance with the terms thereof in the amount required,  to pay such principal
amount and shall notify the Company of the amount and date of such  request.  If
sufficient  funds are not  available  under Section  9.02(b)(ii)(I)  to pay such
principal,  the Trustee shall apply funds, if any, available pursuant to Section
9.02(b)(ii)(II), to the extent necessary, to such payment.



<PAGE>


            (c) Redemption Account. The Trustee shall redeem on the date set for
the redemption thereof, as provided in Article V of this Indenture,  a principal
amount of Bonds then subject to  redemption.  The Trustee  shall apply an amount
credited to the Redemption Account equal to the principal amount and premium, if
any, of Bonds then subject to redemption, together with accrued interest thereon
to the redemption date, to the payment of such Bonds on the redemption date from
funds described in Section 9.02(b).

            In the event a Direct-Pay  Credit Facility is in place,  the Trustee
shall request a draw under the Direct-Pay Credit Facility in accordance with the
terms  thereof,  in an amount equal to the amount  required to pay the principal
amount of Bonds then to be redeemed,  together with accrued  interest thereon to
the date set for  redemption and shall notify the Company of the date and amount
of such request.  If  sufficient  amounts to make such payment are not available
under Section 9.02(b)(ii)(I), the Trustee shall apply amounts, if any, available
pursuant to Section 9.02 (b)(ii)(II),  to the extent necessary, to such payment.
Such redemption shall be made pursuant to the provisions of Article V.

            Upon the  retirement  of any  portion  of the  Bonds  by  redemption
pursuant to the provisions of this Section 9.03, the Trustee shall file with the
Authority  and the  Company a  statement  stating  the  amounts  of the Bonds so
redeemed and setting forth the date of their  redemption  and the amount paid as
principal,  premium and interest  thereon.  The expenses in connection  with the
redemption of the Bonds shall be paid by the Company as Additional Payments.

            All monies in the Redemption  Account on the last Business Day prior
to the Stated Maturity shall be transferred to the Principal Account.

            2.  Bond  Purchase  Fund.   Pursuant  to  Section   4.02(d)  of  the
Participation  Agreement,  the Company has agreed that the Company shall, to the
extent not paid from a draw or payment under a Liquidity Facility, pay an amount
to the Trustee for payment to, or directly  to, the  Registrar  and Paying Agent
for deposit in the Bond Purchase Fund and credit to the Company  Account therein
established under the Bond Purchase Trust Agreement to be applied to the payment
of the Purchase Price of any Bond pursuant to the Bond Purchase Trust  Agreement
to the extent not  otherwise  provided  from the sources  described  in the Bond
Purchase Trust Agreement.

            In the  event  sufficient  funds  are not  available  under  Section
2.03(a)(i) of the Bond Purchase  Trust  Agreement to pay such Purchase  Price on
the date of purchase of any Bonds pursuant to Section 5.03,  5.04,  5.08 or 5.09
hereof, the Registrar and Paying Agent shall request a draw or payment under the
Liquidity  Facility in accordance with the terms thereof in the amount required,
together with amounts,  if any,  available under Section  2.03(a)(i) of the Bond
Purchase Trust  Agreement,  to pay the Purchase Price of such Bonds on such date
of  purchase,  and  shall  cause the  proceeds  of such  draw or  payment  to be
deposited in the Bond Purchase Fund under the Bond Purchase Trust  Agreement and
credited to the Liquidity  Facility Proceeds Account therein.  The Registrar and
Paying Agent shall notify the Company of the amount and date of such request.



<PAGE>


            The  Remarketing  Agent shall notify the  Registrar and Paying Agent
and the Trustee,  at or prior to 12:15 p.m.  (New York City time) on a specified
purchase  date,  of the amount of the proceeds of the related  remarketing,  and
shall specify whether remarketing proceeds (excluding any such proceeds from the
Company,  the  Authority or an affiliate of either)  equal to the full amount of
the Purchase  Price payable on such  purchase  date are held by the  Remarketing
Agent  and will be  available  on such  purchase  date for the  payment  of such
Purchase  Price,  and, if the amount of such  remarketing  proceeds that will be
available on such purchase date for the payment of such Purchase Price shall not
be equal to the full amount of the Purchase Price payable on such purchase date,
such notice shall specify the amount of the deficiency.  By 12:45 p.m. (New York
City  time) on such  purchase  date,  the  Remarketing  Agent  shall  pay to the
Registrar and Paying Agent,  for deposit in the Bond Purchase Fund and credit to
the  Remarketing  Proceeds  Account,  an  aggregate  amount of such  remarketing
proceeds  equal to the  amount  stated in such  notice to be  available  on such
purchase date for the payment of such Purchase Price.

            Monies in the Bond Fund and the  accounts  in such fund  shall be
invested  and  reinvested  by the  Trustee,  at the  direction  of the  Company,
promptly  confirmed  in  writing,  so  long  as the  Company  is not in  default
hereunder or under the  Participation  Agreement,  to the extent  reasonable and
practicable in Investment Securities selected by the Company and maturing in the
amounts  and at the times as  determined  by the  Company  so that the  payments
required  to be made  from  such  funds  and  accounts  may be made when due and
subsequent  to the  occurrence  of an Event of  Default  hereunder  or under the
Participation  Agreement,  the Trustee  shall invest and reinvest  monies in the
Bond Fund in Investment Securities maturing in such amounts and at such times as
the Trustee  determines so that payment  required to be made from such funds may
be made when due. Investment earnings shall be considered on deposit in any Fund
or Account as of the date they are actually received by the Trustee.

            Monies  on  deposit  in the  Project  Fund  shall  be  invested  and
reinvested  by the Trustee at the express  direction  of the  Company,  promptly
confirmed  in  writing,  so long as the  Company  is not in  default  under  the
Participation Agreement, to the extent reasonable and practicable, in Investment
Securities  maturing in such amounts and at such times as it is  anticipated  by
the Company that such monies will be required to pay the redemption price of the
Prior Bonds.

            The Trustee, with the consent of the Company, shall be authorized to
sell any  investment  when  necessary  to make the  payments to be made from the
funds and accounts therein. All earnings on and income from monies in said funds
and accounts (other than the Project Fund) created hereby shall be considered to
be Revenues and shall be held in the respective account in the Bond Fund for use
and application as are all other monies deposited in such accounts.  The Trustee
shall,  in the statement  required by Section  11.07,  set forth the  Investment
Securities held separately in, and the earnings realized on investment for, each
fund and account hereunder. The Trustee shall not be liable for any depreciation
in the  value  of the  Investment  Securities  acquired  hereunder  or any  loss
suffered in  connection  with any  investment  of funds made by it in accordance
herewith,  including,  without limitation,  any loss suffered in connection with
the sale of any investment pursuant hereto.

            The Trustee may make any such investments through its own investment
department upon direction of the Company.



<PAGE>


            All Investment  Securities shall constitute a part of the respective
fund and accounts therein from which the investment in Investment Securities was
made.


<PAGE>



                                      X-

                                 ARTICLE X

                      PARTICULAR COVENANTS OF THE AUTHORITY

     SECTION 10.01.  Payment of Principal of and Interest and Redemption Premium
on Bonds.  The  Authority  will  promptly pay solely from the Note  Payments and
other monies held by the Trustee and available  therefor,  the principal of, and
the interest on,  every Bond issued under and secured by the  Indenture  and any
premium  required to be paid for the retirement of said Bonds by redemption,  at
the places,  on the dates and in the manner  specified in this  Indenture and in
said Bonds according to the true intent and meaning thereof,  subject,  however,
to the provisions of Section 2.02.3.

     SECTION 10.02.  Performance  of Covenants . The Authority  will  faithfully
perform at all times all covenants,  undertakings,  stipulations  and provisions
contained in the Indenture,  in any and every Bond and in all proceedings of the
Authority pertaining thereto.

     SECTION 10.03.  Further  Instruments.  The Authority will from time to time
execute and deliver such further instruments and take such further action as may
be reasonable  and as may be required to carry out the purpose of the Indenture;
provided,  however,  that no such instruments or actions shall pledge the credit
of the  Authority  or the State of New York or the taxing  power of the State of
New York or otherwise be inconsistent with the provisions of Section 2.02.3.

     SECTION 10.04.  Inspection of Project Books. All books and documents in the
possession  of the  Authority  relating  to  the  Project  or the  Participation
Agreement shall at all times be open to inspection by such  accountants or other
agents as the Trustee may from time to time designate.

     SECTION  10.05.  No Extension  of Time of Payment of Interest.  In order to
prevent any  accumulation of claims for interest after  maturity,  the Authority
will not directly or indirectly extend or assent to the extension of the time of
payment of any claims for interest on, any of the Bonds and will not directly or
indirectly  be a party to or approve any such  arrangement  by  purchasing  such
claims for interest or in any other manner.  In case any such claim for interest
shall be extended in  violation  hereof,  such claim for  interest  shall not be
entitled,  in case of any default  hereunder,  to the benefit or security of the
Indenture  except  subject to the prior payment in full of the principal of, and
premium,  if any, on, all Bonds  issued and  outstanding  hereunder,  and of all
claims for interest which shall not have been so extended or funded.



<PAGE>


     SECTION   10.06.   Trustee's,   Auction   Agent's,   Remarketing   Agent's,
Broker-Dealers'  Registrar and Paying Agent's and Indexing Agent's Fees, Charges
and Expenses.  Pursuant to the  provisions of Section 4.02 of the  Participation
Agreement,  the Company has agreed to pay the fees and the expenses  (including,
in the case of the Trustee,  the Registrar and Paying Agent and the  Remarketing
Agent,  the  reasonable  fees and  expenses of counsel and  accountants)  of the
Trustee,  the  Registrar and Paying Agent,  Indexing  Agent,  and in the case of
Auction Rate Bonds, the Auction Agent, Remarketing Agent, and Broker-Dealers, in
the  amounts  set forth  more fully  therein,  and the  Authority  shall have no
liability for the payment of any fees or expenses of the Trustee,  the Registrar
and Paying  Agent,  Indexing  Agent and in the case of Auction  Rate Bonds,  the
Auction Agent, Remarketing Agent, and Broker-Dealers.

     SECTION 10.07.  Agreement of the State of New York. In accordance  with the
provisions  of  subdivision  11 of Section  1860 of the Act, the  Authority,  on
behalf of the  State of New  York,  does  hereby  pledge  to and agree  with the
Bondholders  that the State of New York will not limit or alter the  rights  and
powers  vested by the Act in the  Authority to fulfill the terms of any contract
made with  Bondholders,  or in any way impair the  rights and  remedies  of such
Bondholders,  until the Bonds,  together with the premium and interest  thereon,
with (to the extent  permitted by law)  interest on any unpaid  installments  of
interest, and all costs and expenses in connection with any action or proceeding
by or on behalf of such Bondholders, are fully met and discharged.

     SECTION  10.08.  Recording  and  Filing.   Pursuant  to  the  Participation
Agreement,  the Company  covenants  that it will cause all financing  statements
related to this  Indenture  and all  supplements  thereto and the  Participation
Agreement  and  all  supplements   thereto,  as  well  as  such  other  security
agreements,   financing   statements  and  all  supplements  thereto  and  other
instruments  as may be required from time to time to be kept, to be recorded and
filed in such  manner and in such places as may from time to time be required by
law in order to  preserve  and  protect  fully the  security  of Holders and the
rights of the  Trustee  hereunder,  and to take or cause to be taken any and all
other  action  necessary  to  perfect  the  security  interest  created  by this
Indenture.  The Company is obligated  under  Section  5.18 of the  Participation
Agreement to file all such financing statements and other security agreements.

     SECTION 10.09.  Rights Under the Participation  Agreement and the Note. The
Participation Agreement, a duly executed counterpart of the which has been filed
with the Trustee,  sets forth the covenants and obligations of the Authority and
the Company and reference is hereby made to the same for a detailed statement of
said  covenants and  obligations  of the Company  thereunder.  Subsequent to the
issuance of Bonds and prior to their  payment in full or  provision  for payment
thereof in accordance  with the  provisions  hereof,  neither the  Participation
Agreement nor the Note may be effectively amended, changed, modified, altered or
terminated  except in accordance with the provisions of Article XIV hereof.  The
Authority agrees that the Trustee,  in its name or in the name of the Authority,
may enforce all rights of the Authority and all obligations of the Company under
and pursuant to the  Participation  Agreement  and the Note for and on behalf of
the  Holders,  whether or not the  Authority is in default  hereunder.  The Note
heretofore  delivered to the Trustee evidences the obligations of the Company to
make certain  specified  payments  under the  Participation  Agreement.  Nothing
herein  contained  shall be construed to prevent the  Authority  from  enforcing
directly  any  or  all  of  its  rights  to   administrative   compensation   or
indemnification under the Participation Agreement.


<PAGE>



                                     XI-

                                  ARTICLE XI

                    CONCERNING THE TRUSTEE; APPOINTMENT OF
                REGISTRAR AND PAYING AGENT, REMARKETING AGENT,
                    AUCTION AGENT AND INDEXING AGENT

     SECTION 11.01.  Appointment of Trustee. HSBC Bank USA is hereby  appointed
the Trustee  hereunder  and by the  execution  of this  Indenture  accepts  such
appointment and without  further act, deed or conveyance,  shall be fully vested
with all the estate, properties,  rights, powers, trusts, duties and obligations
of the Trustee hereunder.

            The Trustee  shall set up suitable  accounts  for the deposit of the
Note Payments and for the payment of the Bonds and the interest  thereon and for
all other payments  provided or required by this Indenture,  including,  without
limiting the generality of any of the foregoing, setting up of the Funds created
by Articles VIII and IX.

     SECTION 11.02. Indemnification of Trustee as Condition for Remedial Action.
The Trustee  shall be under no  obligation to institute any suit, or to take any
remedial  proceeding under this Indenture,  or to enter any appearance or in any
way defend in any suit in which it may be made  defendant,  or to take any steps
in the  execution  of the trusts  hereby  created or in the  enforcement  of any
rights and powers  hereunder,  until it shall be indemnified to its satisfaction
against  any and all costs and  expenses,  outlays  and  counsel  fees and other
reasonable   disbursements,   and  against  all  liability;   the  Trustee  may,
nevertheless,  begin suit,  or appear in and defend suit, or do anything else in
its judgment proper to be done by it as such Trustee,  without indemnity, and in
such case the Trustee shall be reimbursed from the Additional  Payments required
to be made pursuant to the  Participation  Agreement for all costs and expenses,
outlays  and  counsel  fees  and  other  reasonable  disbursements  incurred  in
connection therewith. If the Company shall fail to make such reimbursement,  the
Trustee  may  reimburse  itself  from any  monies  in its  possession  under the
provisions  of this  Indenture  and shall be entitled to a  preference  over the
Bonds;  provided,  however,  that the  proceeds of a Support  Facility  shall be
applied solely as set forth  elsewhere  herein and in such Support  Facility and
shall not be applied to the reimbursement set forth in this Section 11.02.

     SECTION  11.03.  Trustee Not Liable for Failure of the Authority or Company
to Act. The Trustee shall not be liable or responsible because of the failure of
the  Authority  or the Company or any of their  employees  or agents to make any
collections  or deposits or to perform any act herein  required of the Authority
or the Company.  The Trustee shall not be responsible for the application of any
of the proceeds of the Bonds or any other monies deposited with it and paid out,
withdrawn or transferred hereunder if such application,  payment,  withdrawal or
transfer shall be made in accordance with the provisions of this Indenture.  The
immunities and exemptions  from liability of the Trustee  hereunder shall extend
to its directors, officers, employees and agents.



<PAGE>


     SECTION 11.04.  Certain  Duties and  Responsibilities  of the Trustee.  (a)
Except  during the  continuance  of an Event of Default ee  specified in Section
12.01 of which the  Trustee  has been  notified  or is deemed to have  notice as
provided in Section 11.08,

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

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

            (b) In case an Event of  Default  specified  in  Section  12.01  has
occurred and is  continuing  of which the Trustee has been notified or is deemed
to have notice as provided in Section 11.08,  the Trustee shall exercise such of
the rights and powers vested in it by this Indenture, and use the same degree of
care and skill in such  exercise,  as a prudent man would  exercise or use under
the circumstances in the conduct of his or her own affairs.

            (c) None of the provisions of this  Indenture  shall be construed to
relieve the Trustee from liability for negligent  action,  negligent  failure to
act, or willful misconduct, except that

            (1) this  subsection  (c) shall not be construed to limit the effect
      of subsection (a) of this Section;

            (2) the Trustee  shall not be liable for any error of judgment  made
      in good faith by any one of its  officers,  unless it shall be proved that
      the Trustee was negligent;

            (3) in the absence of bad faith on its part,  the  Trustee  shall be
      protected  and shall incur no liability in acting or  proceeding or in not
      acting or not proceeding upon any  resolution,  order,  notice,  telegram,
      request,  consent,  waiver,  certificate,  statement,  affidavit,  voucher
      requisition,  bond or other  paper or  document  which the  Trustee  shall
      believe  to be  genuine  and to have been  adopted or signed by the proper
      board or person or to have been prepared and furnished  pursuant to any of
      the  provisions  of this  Indenture,  or upon the  written  opinion of any
      attorney, engineer,  accountant or other expert believed by the Trustee to
      be qualified in relation to the subject  matter,  and the Trustee shall be
      under no duty to make any  investigation  or inquiry as to any  statements
      contained or matters referred to in any such instrument but may accept and
      rely upon the same as  conclusive  evidence  of the truth and  accuracy of
      such statements;



<PAGE>


            (4) 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  aggregate
      principal amount of the Outstanding Bonds 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 the provisions of this Indenture; and

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

            (d) Notwithstanding  anything contained elsewhere in this Indenture,
the  Trustee  shall  have the right to  reasonably  require,  in  respect of the
payment or  withdrawal  of any  monies or the  taking of any  action  whatsoever
within the purview of this  Indenture,  any  showings,  certificates,  opinions,
appraisals or other  information,  or corporate action or evidence  thereof,  in
addition to that  required by the terms  hereof as a condition of such action by
the Trustee.

            (e) The Trustee  may execute any of the trusts or powers  hereof and
perform  any of its duties by or through  attorneys,  agents or  receivers,  and
shall not be  responsible  for any  negligence  or misconduct on the part of any
such  attorney,  agent or receiver  appointed  by it if the  Trustee  shall have
exercised due care and diligence in  appointing  or selecting  such person,  and
shall be  entitled  to advice of counsel  concerning  all  matters of the trusts
hereof  and the  duties  hereunder,  and may in all  cases  pay such  reasonable
compensation  to all such  attorneys,  agents and receivers as may reasonably be
employed  in  connection  with the trusts  hereof.  The Trustee may act upon the
opinion or advice of any  attorney  or  attorneys  (who may be the  attorney  or
attorneys  for the  Authority  or the  Company),  approved by the Trustee in the
exercise of reasonable  care, and the Trustee shall not be  responsible  for any
loss or damage  resulting from any action or nonaction in good faith in reliance
upon such opinion or advice.

            (f) 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 a certificate of an Authorized Company Representative or an Authorized
Officer.

            (g) The Trustee shall not be accountable  for the use by the Company
of any proceeds of the Bonds authenticated or delivered hereunder.

            (h) The Trustee shall not be required to give any bonds or surety in
respect of the execution of its trusts and powers hereunder.

            (i) The  Trustee  may treat and deem the  Holder of any Bonds as set
forth in the books of the registry hereunder as the absolute owner thereof.


<PAGE>


     SECTION 11.05.  Limitations on Obligations and Responsibilities of Trustee.
The Trustee shall be under no  obligation to effect or maintain  insurance or to
renew any  policies  of  insurance  or to inquire as to the  sufficiency  of any
policies of  insurance  carried by the  Company,  or to report,  or make or file
claims or proof of loss for,  any loss or damage  insured  against  or which may
occur,  or to keep itself  informed or advised as to the payment of any taxes or
assessments,  or to require any such payment to be made. The Trustee,  except as
to the  acceptance  of the trusts by its  execution  of this  Indenture  and the
performance of its responsibilities  hereunder,  shall have no responsibility in
respect of the validity,  sufficiency,  due execution or  acknowledgment of this
Indenture,  or in respect of the  validity of the Bonds or the due  execution or
issuance  thereof.  The  Trustee  shall be under no  obligation  to see that any
duties herein or in the Participation  Agreement, the Remarketing Agreement, the
Auction Agency Agreement,  the  Broker-Dealer  Agreement or any Support Facility
imposed upon the Authority,  the Company, the issuer of any Support Facility, or
any party other than itself in its capacity as Trustee,  or any covenants herein
contained  on the part of any party other than itself in its capacity as Trustee
to be performed,  shall be done or performed,  and the Trustee shall be under no
obligation  for failure to see that any such duties or covenants  are so done or
performed.

     SECTION 11.06. Compensation and Indemnification of Trustee. The Company has
agreed in the  Participation  Agreement  (1) to pay to the Trustee  from time to
time reasonable  compensation  for all services  rendered by it hereunder (which
compensation  shall  not be  limited  by any  provision  of law in regard to the
compensation  of a  trustee  of an  express  trust);  (2)  except  as  otherwise
expressly  provided  herein,  to reimburse  the Trustee upon its request for all
reasonable expenses,  disbursements and advances incurred or made by the Trustee
in accordance  with any provision of this  Indenture  (including  the reasonable
compensation  and the expenses  and  disbursements  of its agents and  counsel),
except any such expense,  disbursement  or advance as may be attributable to its
negligence  or bad faith;  and (3) to indemnify  the Trustee for, and to hold it
harmless against,  any loss, liability or expense incurred without negligence or
bad faith on its part,  arising out of or in connection  with the  acceptance or
administration  of this trust,  including  the costs and  expenses of  defending
itself  against  any claim or  liability  in  connection  with the  exercise  or
performance of any of its powers or duties hereunder.

     SECTION  11.07.  Statements  from  Trustee.  It  shall  be the  duty of the
Trustee,  on or about the fifteenth  (15th) day of each month, and at such other
reasonable  time or times as may be  determined by the Authority or the Company,
to file with the Authority,  upon the written request thereof, and the Company a
statement setting forth in respect of the preceding calendar month:

            (a)  the  amount  withdrawn  or  transferred  by it and  the  amount
      received  by it and held on account of each Fund under the  provisions  of
      this Indenture;

            (b) the amount on deposit with it at the end of such calendar  month
      to the credit of each such Fund or Account;



<PAGE>


            (c) a monthly account of reconciliation  and income which includes a
      brief description of all obligations held by it as an investment of monies
      in each such Fund or Account;

            (d) the amount  applied  to the  redemption  of the Bonds  under the
      provisions  of  Article  V and  Section  9.03 and the  amount of the Bonds
      remaining Outstanding; and

            (e) any other  information  which the  Authority  or the Company may
      reasonably request.

            All records and files pertaining to the Bonds and the Company in the
custody of the Trustee shall be open at all  reasonable  times to the inspection
of the Authority, the Company and their agents and representatives.

     SECTION 11.08. Notice of Default. Except upon the happening of any Event of
Default specified in clauses (a) through (d),  inclusive,  of Section 12.01, the
Trustee  shall not be obliged to take  notice or be deemed to have notice of any
Event of Default  hereunder,  unless  specifically  notified  in writing of such
Event of Default by the issuer of any Support Facility,  the Remarketing  Agent,
the Auction Agent or the Holders of not less than  twenty-five  percent (25%) in
aggregate  principal  amount of the Bonds  Outstanding  and such written  notice
shall state that it is a "notice of default."

     SECTION 11.09.  Trustee May Deal in Bonds. The bank or trust company acting
as Trustee  under this  Indenture,  and its  directors,  officers,  employees or
agents,  may in good faith buy,  sell,  own,  hold and deal in the Bonds  issued
under and secured by this Indenture, and may join in the capacity of a Holder of
a Bond in any  action  which any Holder of a Bond may be  entitled  to take with
like effect as if such bank or trust  company  were not the  Trustee  under this
Indenture.

     SECTION  11.10.   Trustee  Not   Responsible  For  Recitals  The  recitals,
statements and representations  contained herein and in the Bonds shall be taken
and  construed  as made  by and on the  part  of the  Authority,  and not by the
Trustee,  and the Trustee assumes, and shall be under, no responsibility for the
correctness  of the same or for the  recording  or  re-recording  or  filing  or
refiling of the  Indenture  or any  supplements  thereto or any  instruments  of
further assurance (including financing  statements) except as otherwise provided
herein.  The Trustee  makes no  representations  as to the value of any property
pledged hereunder to the payment of Bonds or as to the title of the Authority or
the  Company  thereto or as to the  validity,  sufficiency  or  adequacy  of the
security afforded thereby or hereby or as to the validity of this Indenture, the
Note, the Participation Agreement, any Support Facility or of the Bonds.



<PAGE>


     SECTION 11.11.  Qualification of the Trustee. There shall at all times be a
Trustee  hereunder  which shall be a bank and/or trust company,  having combined
capital and  unimpaired  surplus of at least  $50,000,000,  duly  authorized  to
exercise  corporate  trust powers and subject to examination by federal or state
authority.  The Trustee  hereunder  shall not be required to  maintain,  and any
successor  Trustee shall not be required to have, an office in the city in which
the principal office of the initial Trustee hereunder is located.

            If at any time the Trustee  shall cease to be eligible in accordance
with the  provisions of this Section 11.11,  it shall resign  immediately in the
manner and with the effect specified in Section 11.12.

     SECTION 11.12.  Resignation  and Removal of Trustee.  (a) No resignation or
removal of the Trustee and no  appointment  of a successor  Trustee  pursuant to
this Article shall become  effective  until the acceptance of appointment by the
successor Trustee under Section 11.13.

            (b) The  Trustee  may  resign at any time by giving  written  notice
thereof to the  Authority  and the Company.  If an instrument of acceptance by a
successor  Trustee  shall not have been  delivered to the Trustee  within thirty
(30) days after the giving of such notice of resignation,  the retiring  Trustee
may  petition  any court of  competent  jurisdiction  for the  appointment  of a
successor Trustee.

            (c) The  Trustee may be removed at any time by demand of the Holders
of a  majority  in  principal  amount of the Bonds then  Outstanding,  signed in
person by such Holders or by their attorneys,  legal  representatives  or agents
and delivered to such Trustee,  the Authority and the Company (such demand to be
effective only when received by the Trustee, the Authority and the Company).

            (d) If at any time:

                  (1) the Trustee shall cease to be eligible under Section 11.11
      and shall fail to resign after  written  request by the  Authority or by a
      Holder who shall have been a bona fide Holder for at least six months, or

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

then, in either such case,  (i) the  Authority  may remove,  and the Company may
request the Authority to remove, the Trustee,  or (ii) any Holder who has been a
bona fide Holder for at least six months may, on behalf of herself and all other
similarly situated, petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor.



<PAGE>


            (e) If the Trustee shall resign,  be removed or become  incapable of
acting,  or if a vacancy shall occur in the office of the Trustee for any cause,
the Authority shall promptly  appoint a successor;  the Company or the issuer of
any  Support  Facility  or both  of  them,  having  the  right  to  request  the
appointment of a particular qualified institution as such successor.  Within one
year after such resignation,  removal or incapability, or the occurrence of such
vacancy,  a successor  Trustee may be appointed by an  instrument  or concurrent
instruments in writing executed by the Holders of a majority in principal amount
of the Bonds  then  Outstanding  delivered  to the  Authority  and the  retiring
Trustee,  and, upon such  delivery,  the successor  Trustee so appointed  shall,
forthwith upon its acceptance of such appointment,  become the successor Trustee
and supersede the successor Trustee appointed by the Authority.

            (f) The Authority shall give notice to the Trustee, the Company, the
Remarketing  Agent,  the Registrar  and Paying Agent,  the Auction Agent and the
Bondholders  of  each  resignation  and  each  removal  of a  Trustee  and  each
appointment of a successor Trustee in the manner set forth in Section 17.03 with
respect to  Bondholders  and  Section  17.09 with  respect to the  Company,  the
Auction Agent and the Remarketing  Agent. Each notice shall include the name and
address of the Principal Corporate Trust Office of the successor Trustee.

            (g) The Trustee at any time other than during the  continuance of an
Event of Default and for any reason may be removed by an  instrument in writing,
executed  by an  Authorized  Officer,  appointing  a  successor,  filed with the
Trustee so removed.

     SECTION  11.13.   Successor  Trustee.  Every  successor  Trustee  appointed
hereunder shall execute, acknowledge and deliver to its predecessor, and also to
the  Authority  and  the  Company,  an  instrument  in  writing  accepting  such
appointment hereunder, and thereupon such successor Trustee, without any further
act,  shall  become  fully  vested with all the rights,  immunities,  powers and
trusts and subject to all the duties and obligations,  of its  predecessor;  but
such predecessor shall, nevertheless,  on written request of its successor or of
the Authority and upon payment of expenses,  charges and other  disbursements of
such predecessor  which are payable pursuant to the provisions of Sections 11.02
and 11.06,  execute and deliver an  instrument  transferring  to such  successor
Trustee  all the  rights,  immunities,  powers  and  trusts of such  predecessor
hereunder;  and every predecessor  Trustee shall deliver all property and monies
held by it hereunder to its successor, subject,  nevertheless, to its first lien
and preference  provided for in Sections 11.02 and 11.06.  Should any instrument
in writing  from the  Authority  be required by any  successor  Trustee for more
fully vesting in such Trustee the rights,  immunities,  powers and trusts hereby
vested or intended to be vested in the predecessor  Trustee, any such instrument
in writing shall and will, on request,  be executed,  acknowledged and delivered
by the Authority.

            Notwithstanding any of the foregoing provisions of this Article, any
bank or trust company  having power to perform the duties and execute the trusts
of this  Indenture and otherwise  qualified to act as Trustee  hereunder with or
into which the bank or trust company acting as Trustee may be converted,  merged
or  consolidated,  or to which the corporate trust business assets as a whole or
substantially  as a whole of such bank or trust  company  may be sold,  shall be
deemed the successor of the Trustee.



<PAGE>


     SECTION 11.14. Appointment of Remarketing Agent. Salomon Smith Barney Inc.,
Morgan Stanley & Co. Incorporated and Banc One Capital Markets,  Inc. are hereby
appointed as the initial Remarketing Agents to serve as such under the terms and
provisions hereof and of the Remarketing Agreement for the Series 1999A-1 Bonds,
the  Series  1999A-2  Bonds and the  Series  1999A-3  Bonds,  respectively.  The
Remarketing Agent for any subseries,  including any successor appointed pursuant
hereto,  shall be a member of the National  Association  of Securities  Dealers,
Inc. having capitalization of at least $25,000,000,  and be authorized by law to
perform all the duties  imposed  upon it by this  Indenture,  the Bond  Purchase
Trust Agreement and the  Remarketing  Agreement.  The Remarketing  Agent for any
subseries of Bonds may be removed at any time by the Authority, upon thirty (30)
days'  notice,  acting at the written  direction of the Company by an instrument
signed by the  Authority  and filed with the Trustee,  the  Registrar and Paying
Agent, the Remarketing Agent and the Company. If there shall not be at least one
Remarketing  Agent  serving as such for any  subseries  of Bonds  following  the
effective date of a proposed removal of a Remarketing  Agent for such subseries,
no  such  removal  shall  take  effect  until  the  appointment  of a  successor
Remarketing  Agent for such subseries of Bonds.  The  Remarketing  Agent for any
subseries  of Bonds may resign  upon 30 days  written  notice  delivered  to the
Company,  the  Authority,  the Trustee,  the  Registrar and Paying Agent and the
issuer of any Support Facility.  The Company shall use its best efforts to cause
the  Authority  to appoint a  successor  Remarketing  Agent that is a  qualified
institution,  effective  as of the  effectiveness  of any  such  resignation  or
removal.  Each  successor  Remarketing  Agent shall be a  qualified  institution
selected and appointed by the Authority,  upon the written  request and with the
approval  of the  Company.  If there  shall be more than one  Remarketing  Agent
serving as such for a subseries of Bonds,  the Authority,  at the request of the
Company,   shall   designate  one  such   Remarketing   Agent  as   "Remarketing
Representative"  to act on behalf of all Remarketing  Agents for such subseries,
and  each  other  Remarketing  Agent  shall  agree  in  writing  to  accept  the
determinations of such Remarketing Representative.

     SECTION 11.15.  Appointment of Registrar and Paying Agent. HSBC Bank USA in
New York,  New York is hereby  appointed  to serve as the  Registrar  and Paying
Agent hereunder.  The Company shall have the right to request the appointment of
an institution  meeting the  requirements of Section 11.19 to serve as successor
thereto in the event of the removal or  resignation of such Registrar and Paying
Agent.

            The Trustee hereby appoints any Registrar and Paying Agent appointed
hereunder as authenticating agent.

            SECTION 11.16.    General  Provisions  Regarding  Registrar  and
Paying Agent.

            (a)   The Registrar and Paying Agent shall:

            (i) hold all Bonds  delivered to it for purchase  hereunder in trust
      for  the  benefit  of the  respective  Bondholders  which  shall  have  so
      delivered such Bonds until monies  representing the purchase price of such
      Bonds shall have been  delivered  to or for the account of or to the order
      of such Holders and deliver said Bonds in accordance  with the  provisions
      of this Indenture;

            (ii) hold all monies  delivered to it for the purchase of Bonds,  in
      trust for the  benefit  of the  person or entity  who has  delivered  such
      monies until the Bonds  purchased  with such monies have been delivered to
      or for the account of such person or entity as provided in this Indenture;


<PAGE>


            (iii) maintain the books of registry and keep such books and records
      as shall be consistent with prudent industry  practice and make such books
      and records  available  for  inspection  by the Trustee,  the  Remarketing
      Agent, the Authority and the Company at all reasonable times;

            (iv) perform the duties and  undertake the  obligations  assigned to
      them in Sections 7.02 through 7.06;

            (b) The  Registrar and Paying Agent may deem and treat the Holder of
any Bonds as set forth in the books of registry  hereunder as the absolute owner
thereof;

            (c) The  Registrar and Paying Agent may in good faith hold any other
form of  indebtedness  issued by the  Authority  or any  security  issued by the
Company,  or any affiliate of the Company;  own, accept or negotiate any drafts,
bills of exchange,  acceptances or obligations  thereof;  and make disbursements
therefor and enter into any commercial or business  arrangement  therewith;  all
without any  liability  on the part of such  Registrar  and Paying Agent for any
real or apparent conflict of interest by reason of any such actions; and

            (d) The  Registrar  and Paying Agent  agrees to  cooperate  with the
Trustee and the Company in preparing  and  conveying  information  necessary for
drawings under any Support Facility. To the extent that any other certificate to
be  submitted  by the Trustee to an issuer of a Support  Facility in  connection
with a drawing under the Support Facility requires the Trustee to state that the
Registrar and Paying Agent has certified certain information to the Trustee, the
Registrar and Paying Agent agrees to provide such  certification  to the Trustee
to the extent such information is known to it.

     SECTION 11.17. Payment of Registrar and Paying Agent; Indemnification.  The
Authority will cause the Company to agree in the Participation  Agreement to pay
all reasonable fees,  charges and expenses of the Registrar and Paying Agent for
acting under and pursuant to this  Indenture.  In addition,  the Authority  will
cause the  Company to agree in the  Participation  Agreement  to  indemnify  the
Registrar and Paying Agent and its directors, officers and employees against and
save them harmless from any and all losses, costs, charges, expenses,  judgments
and  liabilities  incurred while carrying out the  transactions  contemplated by
this  Indenture,  except that said  indemnity  does not apply to the extent that
they are caused by the  negligent  action,  negligent  failure to act or willful
misconduct  of the  Registrar  and  Paying  Agent  or its  directors,  officers,
employees or agents.



<PAGE>


     SECTION 11.18. Registrar and Paying Agent's Performance;  Duty of Care. The
duties and  obligations of the Registrar and Paying Agent re shall be determined
solely by the  provisions  of this  Indenture.  None of the  provisions  of this
Indenture  shall be  construed  to relieve the  Registrar  and Paying Agent from
liability for negligent action,  negligent failure to act or willful misconduct,
except that (a) the  Registrar  and Paying Agent shall not be liable  except for
the performance of such duties and obligations as are  specifically set forth in
this  Indenture,  and, in the absence of bad faith on the part of the  Registrar
and Paying Agent,  the Registrar and Paying Agent may  conclusively  rely, as to
the truth of the statements  expressed  therein,  upon any document furnished to
the  Registrar  and Paying  Agent and  conforming  to the  requirements  of this
Indenture  and the Registrar and Paying Agent may rely and shall be protected in
acting upon any document believed by it to be genuine and to have been signed or
presented by the proper party or parties, provided that, in the case of any such
document which by any provision of this Indenture is specifically required to be
furnished to the  Registrar  and Paying  Agent,  the  Registrar and Paying Agent
shall  be  under a duty to  examine  the  same to  determine  whether  or not it
conforms to the  requirements of this  Indenture,  and (b) no provisions of this
Indenture shall require the Registrar and Paying Agent to expend or risk its own
funds or otherwise  incur any financial  liability in the  performance of any of
its duties hereunder. The Registrar and Paying Agent may act upon the opinion or
advice of any  attorney or attorneys  (who may be the attorney or attorneys  for
the  Authority  or the  Company),  approved  by the  Trustee in the  exercise of
reasonable care, and the Registrar and Paying Agent shall not be responsible for
any loss or damage  resulting  from any  action or  nonaction  in good  faith in
reliance upon such opinion or advice.

     SECTION 11.19.  Qualifications of Registrar and Paying Agent. The Registrar
and Paying Agent,  including any successor appointed pursuant to this Indenture,
shall be a  corporation  duly  organized  under the laws of the United States of
America  or any  state or  territory  thereof,  having a  combined  capital  and
unimpaired  surplus of at least $50,000,000 and authorized by law to perform all
the duties imposed upon it by this  Indenture.  Unless the Bonds bear an Auction
Rate,  or a Fixed Rate,  the  Registrar and Paying Agent shall have an office or
agency in New York, New York capable of performing its obligations hereunder.

     SECTION  11.20.  Resignation  or Removal of Registrar  and Paying Agent and
Successor to Registrar  and Paying  Agent;  Termination  of Registrar and Paying
Agent's  Obligations.  The Registrar and Paying Agent may at any time resign and
be discharged of the duties and obligations created hereunder and under the Bond
Purchase Trust Agreement by giving at least sixty days' notice to the Authority,
the Company,  the Trustee and the  Remarketing  Agent.  The Registrar and Paying
Agent may be removed at any time upon and pursuant to the request of the Company
by an  instrument,  signed by the  Authority  and filed with the Trustee and the
Registrar and Paying Agent and the Company, provided that such removal shall not
take effect until the appointment of a successor Registrar and Paying Agent. The
Authority at the request of the Company shall appoint a successor  Registrar and
Paying  Agent  effective  as of the  effectiveness  of any such  resignation  or
removal.  Each  successor  Registrar  and  Paying  Agent  shall  be a  qualified
institution  selected  by the Company  and, so long as a Support  Facility is in
effect,  the issuer of a Support  Facility,  and approved  and  appointed by the
Authority.

            In the event of the  resignation  or  removal of the  Registrar  and
Paying  Agent,  the  Registrar  and Paying  Agent shall pay over and deliver any
monies and Bonds held by it in such capacity to its successor or, if there is no
successor,  to the  Trustee.  In the event  that  there is no  successor  to the
Registrar and Paying Agent on the effective date of its resignation,  the entity
acting as Trustee shall perform the functions of the Registrar and Paying Agent;
provided that monies held by the Trustee pursuant to this paragraph shall not be
deemed to be held by the Trustee in its capacity as Trustee.



<PAGE>


     SECTION  11.21.  Appointment of Auction  Agent;  Qualifications  of Auction
Agent, Resignation;  Removal. (1) On or before the effective date of a Change in
the  Interest  Rate  Mode to an  Auction  Rate,  an  Authorized  Officer  of the
Authority  upon the written  direction of an Authorized  Company  Representative
shall appoint an Auction Agent for the Bonds.  The Auction Agent shall  evidence
its acceptance of such  appointment by entering into an Auction Agency Agreement
with the Company.  The Auction  Agent shall be (a) a bank or trust  company duly
organized  under  the laws of the  United  States  of  America  or any  state or
territory  thereof  having its  principal  place of  business  in the Borough of
Manhattan,  in The City of New York and having a combined capital stock, surplus
and undivided  profits of at least  $25,000,000  or (b) a member of the National
Association of Securities  Dealers,  Inc.,  having a capitalization  of at least
$25,000,000  and, in either  case,  authorized  by law to perform all the duties
imposed upon it under the Auction Agency Agreement. The Auction Agent may at any
time  resign and be  discharged  of the duties and  obligations  created by this
Indenture by giving at least 90 days' notice to the  Trustee,  the Company,  the
Authority,  and in the case the Auction Agent is also serving as Trustee, to the
Remarketing  Agent.  During the Auction  Rate Period,  the Auction  Agent may be
removed at any time by the Authority  acting at the request of the Company by an
instrument  signed by the  Authority  and filed with the  Company,  the  Auction
Agent, the Remarketing Agent and the Registrar and Paying Agent upon at least 90
days' notice;  provided that if required by the Remarketing  Agent, an agreement
in substantially  the form of the Auction Agency Agreement shall be entered into
with a successor Auction Agent.

     SECTION 11.22.  Appointment of  Broker-Dealers.  Prior to any change in the
Interest  Rate Mode to an Auction Rate Period,  the Company with the approval of
the Authority shall appoint an initial  Broker-Dealer and any additional initial
Broker-Dealers.  Thereafter,  the Company may select,  with the  approval of the
Authority and the initial lead Broker-Dealer or any successor, from time to time
one or more additional  persons to serve as Broker-Dealers  under  Broker-Dealer
Agreements.

     SECTION 11.23.  Appointment of Additional Paying Agents;  Each Paying Agent
to Hold Money in Trust.  The Authority may at the request of the Company appoint
an  additional  Paying  Agent or Paying  Agents for the Bonds.  Each such Paying
Agent shall hold in trust  subject to the  provisions  of the  Indenture for the
benefit of the Holders all sums held by such Paying Agent for the payment of the
principal of, premium,  if any, and interest on the Bonds. Any such Paying Agent
may be any person or corporation authorized to perform such functions, including
to the extent permitted by law, the Company.

     SECTION 11.24.  Appointment  and Duties of Indexing  Agents.  The Authority
shall, with the approval of the Company,  appoint an Indexing Agent,  subject to
the conditions set forth in this Section.  There may be separate Indexing Agents
for the purpose of  calculating  each rate index  defined in Section  1.01.  The
Indexing Agent shall  designate to the Trustee its principal  office and signify
its  acceptance  of the duties and  obligations  imposed  upon it hereunder by a
written instrument of acceptance  delivered to the Authority,  the Trustee,  the
Company and the  Remarketing  Agent under which the  Indexing  Agent will agree,
particularly:



<PAGE>


            (a) to  compute  the Daily Rate  Index,  the  Commercial  Paper Rate
      Index, the Weekly Rate Index, the Monthly Rate Index, the Semi-annual Rate
      Index,  the Term Rate Index or the Fixed Rate  Index,  as the case may be,
      pursuant to and in accordance with Section 3.01, and to give notice to the
      Trustee,  the Registrar and Paying Agent,  the  Remarketing  Agent and the
      Company  of such  rate  index on the date of the  computation  thereof  in
      accordance with Section 3.01; and

            (b) to keep  such  books and  records  as shall be  consistent  with
      prudent industry practice and to make such books and records available for
      inspection by the Authority,  the Trustee, the Registrar and Paying Agent,
      the Remarketing Agent and the Company at all reasonable times.

            The Indexing  Agent will perform the duties  provided for in Section
3.01.  Whenever the Indexing  Agent makes a computation  under that Section,  it
will promptly notify the Trustee, the Registrar and Paying Agent, the Authority,
the Remarketing  Agent (and during any Auction Rate Period,  the Auction Agent),
and the Company of the results and date of computation.  The Indexing Agent will
keep adequate records  pertaining to the performance of its duties and allow the
Trustee,  Registrar and Paying Agent, the Authority,  the Remarketing  Agent and
the Company (and, if  appropriate,  the Auction Agent) to inspect the records at
reasonable times.

     SECTION 11.25. Qualifications of Indexing Agents. Each Indexing Agent shall
be a  commercial  bank,  a member  of the  National  Association  of  Securities
Dealers, Inc. or a nationally recognized municipal securities evaluation service
authorized  by law to perform all the duties  imposed upon it by the  Indenture.
Any Indexing  Agent may at any time resign and be  discharged  of the duties and
obligations  created by the Indenture by giving at least sixty (60) days' notice
to the  Authority,  the Company,  the  Remarketing  Agent and the  Trustee.  The
Indexing  Agent may be  removed at any time,  at the  written  direction  of the
Company, by an instrument,  signed by the Authority, filed with the Company, the
Indexing Agent,  the Remarketing  Agent,  the Trustee,  the Registrar and Paying
Agent and the issuer of a Support Facility, if any.


<PAGE>



                                     XII-

                                  ARTICLE XII

                       EVENTS OF DEFAULT; REMEDIES UPON
                            OCCURRENCE THEREOF


     SECTION 12.01.  Events of Default.  Each of the following is hereby defined
as and declared to be and shall constitute an "Event of Default":

            (a) Payment of the  principal  of and  premium,  if any, on any Bond
(whether by maturity,  proceedings for  redemption,  purchase in accordance with
Article V hereof or the Remarketing  Agreement,  or otherwise) shall not be made
when the same shall become due and payable; or

            (b) Payment of any  installment of interest on any Bond shall not be
made when the same  shall  become  due and  payable  and such  nonpayment  shall
continue for one (1) Business Day; or

            (c) The Trustee shall receive  written notice from the issuer of the
Support  Facility  of the  occurrence  of a  Terminating  Event under the Credit
Facility, if applicable, or the agreement providing for the issuance thereof; or

            (d)  Receipt by the  Trustee of written  notice  from the  financial
institution  providing any Credit  Facility  following a draw on or borrowing or
payment under such Credit Facility for the payment of interest on the Bonds that
the amount so drawn,  borrowed or paid has not been  reimbursed to the financial
institution  providing such Credit Facility  within the period  specified in the
agreement  providing  for the  issuance of the Credit  Facility,  together  with
interest  thereon,  if any,  owing  pursuant to the agreement  providing for the
issuance of such Credit Facility; or

            (e) The Authority shall fail in the due and punctual  performance of
any of the covenants, conditions,  agreements,  provisions or obligations, other
than as set  forth  in (a) and (b)  above,  contained  in the  Bonds  or in this
Indenture or in any  Supplemental  Indenture on the part of the  Authority to be
performed,  and such failure  shall  continue for ninety (90) days after written
notice  specifying such failure and requiring the same to be remedied shall have
been given to the Authority,  the Company, the Governor, the Comptroller and the
Attorney General of the State of New York, by the Trustee or to the Trustee, the
Authority  and the Company by the Holders of not less than  twenty-five  percent
(25%) in aggregate  principal  amount of the Bonds then  Outstanding as provided
for in Section  12.08;  provided  that if any such failure shall be such that it
cannot be cured or  corrected  within such ninety (90) day period,  it shall not
constitute  an Event of Default  hereunder if curative or  corrective  action is
instituted  within  such  period and  diligently  pursued  until the  failure of
performance is cured or corrected; or

            (f) The occurrence of an event of default as defined in Section 7.01
of the Participation Agreement.



<PAGE>


     SECTION 12.02.  Notice to Holders and Others Upon Occurrence of an Event of
Default  or a Failure  to  Deposit.  1. The  Trustee  shall  give  notice to the
Bondholders  of all Events of Default  within  sixty (60) days after the Trustee
has been  notified  thereof or is deemed to have  notice  thereof as provided in
Section  11.08,  unless  the Event of Default  shall have been cured  before the
giving of such notice or unless the Trustee  shall deem it in the best  interest
of the  Holders  to defer or  withhold  notice  under  this  Section;  provided,
however, that if a notice of an Event of Default is given to any Bondholder, the
Trustee  shall  concurrently  therewith  cause  a  copy  to be  provided  to all
beneficial owners.

            2. So long as ownership of the Auction Rate Bonds is  maintained  in
book-entry form by the Securities Depository, upon the occurrence of an Event of
Default,  the Trustee shall  immediately  send a notice thereof in substantially
the form  required by the Auction  Agency  Agreement to the Auction Agent and to
the registered Holders of each series of Bonds by telecopy or similar means.

            3. So long as the  ownership of the Auction Rate Bonds is maintained
in book-entry form by the Securities  Depository,  the Trustee shall immediately
send a notice in substantially the form required by the Auction Agency Agreement
to the Auction  Agent and to the  registered  Holders of each series of Bonds by
telecopy  or similar  means if an Event of  Default  has been cured or waived in
accordance with this Article XII.

            4. Upon the occurrence of a Failure to Deposit, or in the event such
failure to deposit  is cured,  the  Trustee  shall  give the  Auction  Agent the
notices referred to in Section 9.02(a)(i) or (b)(i), as the case may be.



<PAGE>


     SECTION  12.03.  Declaration  of Principal and Interest As Due. 1. Upon the
occurrence  and  continuation  of any Event of Default of which the  Trustee has
been notified or is deemed to have notice as provided in Section 11.08, then and
in every case the Trustee by a notice in writing to the  Authority,  the Company
and (to addresses then specified by the Authority) the Governor, the Comptroller
and the  Attorney  General  of the State of New York may,  and upon the  written
request or direction of the Holders of not less then  twenty-five  percent (25%)
in principal amount of the Bonds then Outstanding (determined in accordance with
the  provisions of Section  13.03)  shall,  declare the principal of and accrued
interest on all the Bonds then  Outstanding  (if not then due and payable) to be
due and payable immediately, and upon such declaration the same shall become due
and be immediately due and payable,  anything  contained in the Bonds or in this
Indenture to the contrary  notwithstanding.  If, however,  at any time after the
principal  of the Bonds shall have been so declared to be due and  payable,  and
before the entry of final  judgment or decree in any suit,  action or proceeding
instituted on account of such Event of Default,  or before the completion of the
enforcement  of any  other  remedy  under  this  Indenture,  monies  shall  have
accumulated in the Bond Fund  sufficient to pay the principal of and any premium
(or redemption price) on all Bonds (or portions of the principal amount thereof)
then or theretofore  required to be redeemed  pursuant to any provisions of this
Indenture  (excluding  principal  not then due except by reason of the aforesaid
declaration)  and all arrears of interest  and interest  then due, if any,  upon
Bonds then Outstanding and if the fees, compensation,  expenses,  disbursements,
advances and  liabilities  of the Trustee and all other  amounts then payable by
the Company under the Participation  Agreement and the Note shall have been paid
or a sum  sufficient to pay the same shall have been deposited with the Trustee,
and every  other  Event of Default  known to the  Trustee in the  observance  or
performance of any covenant, condition or agreement contained in the Bonds or in
this Indenture (other than default in the payment of the principal of such Bonds
then due only  because  of a  declaration  under this  Section)  shall have been
remedied to the satisfaction of the Trustee or, the Company shall be taking,  or
shall be  causing  to be taken,  appropriate  action in good faith to effect its
cure,  then and in every such case the Trustee may, and upon the written request
or direction  of the Holders of not less than a majority in principal  amount of
the Bonds  (determined in accordance  with the provisions of Section 13.03) then
Outstanding  shall,  by written notice to the Authority,  rescind and annul such
declaration and its consequences;  provided,  however,  that notwithstanding any
such  rescission  and annulment  during an Auction Rate Period,  the Bonds shall
continue to bear interest at the Overdue Rate for the applicable  period of time
determined  pursuant to Article III. No such rescission or annulment pursuant to
the next preceding  sentence shall extend to or affect any subsequent default or
impair any right consequent thereto.

     SECTION 12.04. Action by Trustee Upon Occurrence of Event of Default.  Upon
the  occurrence and  continuation  of an Event of Default lt the Trustee (i) for
and on behalf of the Holders of the Bonds,  shall have the same rights hereunder
which are  possessed by any Holders of the Bonds;  (ii) shall be  authorized  to
proceed,  in its own name and as trustee of an express  trust;  (iii) may pursue
any  available  remedy by action at law or suit in equity to enforce the payment
of the  principal of and interest  and premium,  if any, on the Bonds;  (iv) may
file such proofs of claim and other  papers or  documents as may be necessary or
advisable  in order to have the claims of such  Trustee  and of the  Bondholders
allowed in any judicial proceedings relative to the Company, its creditors,  its
property or the Bonds; and (v) may, and upon the written request or direction of
the Holders of not less than  twenty-five  percent (25%) in principal  amount of
the Bonds then  Outstanding  (determined  in accordance  with the  provisions of
Section 13.03),  with the prior written  consent of the Credit Facility  Issuer,
shall  proceed to protect  and enforce all rights of the Holders and the Trustee
under and as permitted by this  Indenture and the laws of the State of New York,
by such means or appropriate judicial proceedings as shall be suitable or deemed
by it most  effective in the premises,  including the  appointment  of temporary
trustees and any actions, suits or special proceedings at law or in equity or in
bankruptcy  or by  proceedings  in the  office  of any board or  officer  having
jurisdiction, or otherwise, whether for the specific enforcement of any covenant
or agreement  contained in this  Indenture,  or in aid of execution of any power
granted in this  Indenture or to enforce any other legal or  equitable  right or
remedy vested in the Holders of the Bonds or the Trustee by this Indenture or by
such laws, or for the appointment of a receiver. All rights of action (including
the right to file  proofs of claim)  under  this  Indenture  or under any of the
Bonds may be enforced by the Trustee  without the possession of any of the Bonds
or the production  thereof in any trial or other  proceedings  relating thereto.
Any such suit or  proceeding  instituted  by the Trustee shall be brought in its
name and as trustee of an express  trust  without  the  necessity  of joining as
plaintiffs or defendants any Holders of the Bonds,  and any recovery or judgment
shall be for the equal benefit of the Holders of the Outstanding Bonds.



<PAGE>


            In the  enforcement  of any remedy under this  Indenture the Trustee
shall be  entitled  to sue  for,  enforce  payment  of and  receive  any and all
amounts,  then  or  during  any  Event  of  Default  becoming,  and at any  time
remaining, due from the Company and unpaid under the Participation Agreement and
the  Note  for  principal,  premium,  interest  or  otherwise  under  any of the
provisions of this Indenture or of the Bonds,  with interest on overdue payments
if such  interest  then is  permitted  by the  laws of the  State  of New  York,
together  with  any  and  all  costs  and  expenses  of  collection  and  of all
proceedings hereunder and under such Bonds, without prejudice to any other right
or remedy of the Trustee or of the Holders,  and to recover and enforce judgment
or decree against the Company which is in default of its respective  obligations
under the  Participation  Agreement and the Note, but solely as provided  herein
and in such  Bonds,  for any  portion of such  amounts  remaining  unpaid,  with
interest,  costs and expenses, and to collect in any manner provided by law, the
monies  adjudged or decreed to be payable.  Any such judgment shall be recovered
by the Trustee, in its own name and as trustee of an express trust.

     SECTION 12.05.  Powers of Trustee With Respect to  Participation  Agreement
and Other  Agreements.  If the payments required to be paid to the Trustee under
the Participation Agreement and the Note or other agreement pledged and assigned
hereunder,  as the case may be, are not paid when due or upon the  happening and
continuance  of an Event of  Default  set forth in clause  (a) or (b) of Section
12.01, 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 all payments due and unpaid under the Participation
Agreement and the Note or other  agreement,  as the case may be, and required to
be paid to the  Trustee and may  prosecute  any such  action or  proceedings  to
judgment or final  decree,  and may enforce  any such  judgment or final  decree
against the Company or the obligor  under any other  agreement,  as the case may
be, and collect in the manner provided by law out of the property of the Company
or such obligor wherever situated, the monies adjudged or decreed to be payable.



<PAGE>


            In case there shall be pending proceedings for the bankruptcy or for
the  reorganization  of the  Company  under the  Participation  Agreement  or an
obligor under any other agreement  pledged and assigned  hereunder,  as the case
may be, under the Federal Bankruptcy Act or any other applicable law, or in case
a receiver or trustee shall have been  appointed for the property of the Company
under the  Participation  Agreement  and the Note or an obligor  under any other
agreement  pledged  and  assigned  hereunder,  as the case may be, the  Trustee,
regardless  of whether the  principal of the Bonds shall then be due and payable
as therein  expressed or by  declaration  or otherwise and regardless of whether
the Trustee  shall have made any demand  pursuant  to the power  vested in it by
this  Indenture,  shall be  entitled  and  empowered,  by  intervention  in such
proceedings  or  otherwise,  to file and prove a claim or  claims  for the whole
amount owing and unpaid under the  Participation  Agreement  and the Note by the
Company or under such other  agreement by such obligor,  as the case may be, and
to file such other papers or documents as may be necessary or advisable in order
to  have  the  claims  of  the  Trustee  (including  any  claim  for  reasonable
compensation  to the  Trustee,  its  agents,  attorneys  and  counsel,  and  for
reimbursement of all expenses and liabilities  incurred,  and all advances made,
by the  Trustee  except as a result of its  negligence  or bad faith) and of the
Holders  allowed in any such  judicial  proceedings  relative  to the Company or
other  obligor,  as the case may be,  or to the  creditors  or  property  of the
Company or other  obligor,  as the case may be, and to collect  and  receive any
monies  or  other  property  payable  or  deliverable  on  such  claims,  and to
distribute in accordance  with the provisions  hereof all amounts  received with
respect to the claims of the Holders and of the Trustee on their behalf, and any
receiver,  assignee  or  trustee  in  bankruptcy  or  reorganization  is  hereby
authorized to make such payments to the Trustee.

            Nothing herein contained shall be deemed to authorize the Trustee to
authorize  or consent to or accept or adopt on behalf of any Holders any plan of
reorganization,  arrangement,  adjustment or composition  affecting the Bonds or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holders in any such proceeding.

            The  provisions of this Section shall not be construed as in any way
limiting the powers of the Trustee, with respect to defaults by the Authority or
by the Company  under the  Participation  Agreement  and the Note, or an obligor
under any other agreement  pledged and assigned  hereunder,  as the case may be,
whether such powers be expressly or implicitly  granted to the Trustee elsewhere
in this  Indenture  or in the  Participation  Agreement  or the  Note  or  other
agreement,  as the case may be,  or as a denial  that the  Trustee  has any such
other  powers,  but the powers  granted to the Trustee by this Section  shall be
supplemental,  additional  and  cumulative to all other powers  possessed by the
Trustee with respect to defaults under this Indenture or under the Participation
Agreement,  the Note or other agreement pledged and assigned  hereunder,  as the
case may be.

     SECTION 12.06.  Disposition of Monies in Event of  Insufficiencies in Funds
and Accounts.  All monies (other than proceeds of any Support Facility) received
by the Trustee  pursuant to any right given or action taken under the provisions
of this  Article,  after  payment of the costs and  expenses of the  proceedings
resulting  in the  collection  of such  monies  and of the  expenses,  fees  and
advances  incurred or made by the Trustee  hereunder,  shall be deposited in the
Bond Fund. If at any time the monies in the Bond Fund shall not be sufficient to
pay the interest or principal or premium,  if any (or the redemption  price), of
the Bonds as the same  become  due and  payable  (whether  at  maturity  or upon
proceedings for the redemption  thereof or by  acceleration  or otherwise),  the
monies in such fund, together with any other monies then available or thereafter
becoming  available  for such  purpose,  whether  through  the  exercise  of the
remedies  provided  for in this  Article XII or  otherwise,  shall be applied as
follows:

            (a) Unless the  principal of all the Bonds shall have become due and
payable or shall have been declared due and payable  pursuant to the  provisions
of Section 12.03, all such monies shall be applied:

            First:  to  the  payment  to the  persons  entitled  thereto  of all
      installments  of interest  then due,  in the order of the  maturity of the
      installments  of such interest,  and if the amount  available shall not be
      sufficient to pay in full any particular installment,  then to the payment
      ratably, according to the amounts due on such installment,  to the persons
      entitled thereto, without any discrimination or preference; and



<PAGE>


            Second:  to the  payment  of  the  premium,  if  any,  on and  the
      principal of the Bonds,  to the purchase and  retirement of Bonds and to
      the redemption of Bonds,  all in accordance  with the provisions of this
      Indenture.

            (b) If the  principal  of all the Bonds  shall  have  become due and
payable or shall have been declared due and payable  pursuant to the  provisions
of  Section  12.03,  all such  monies  shall be  applied  to the  payment of the
principal and interest then due and unpaid,  with interest on such  principal as
aforesaid,  without  preference  or priority of  principal  over  interest or of
interest  over  principal,  or of any  installment  of  interest  over any other
installment  of interest,  or of any Bond over any other Bond,  according to the
amounts due  respectively  for principal and interest,  to the persons  entitled
thereto without any  discrimination or preference except as to any difference in
the respective rates of interest specified in the Bonds.

            (c) If the  principal of all the Bonds shall have been  declared due
and payable pursuant to the provisions of Section 12.03, and if such declaration
shall thereafter have been rescinded and annulled  pursuant to the provisions of
such Section 12.03, then, subject to the provisions of subparagraph (b) above of
this  paragraph  in the event that the  principal  of all the Bonds  shall later
become due and payable or be declared due and payable pursuant to the provisions
of Section 12.03,  the monies then held in the Bond Fund shall be applied to the
payment of the  principal  of and premium (or  redemption  price) on all matured
Bonds  and all Bonds (or  portions  of the  principal  amount  thereof)  then or
theretofore required to be redeemed pursuant to any provisions of this Indenture
(excluding  principal not then due except by reason of such declaration) and all
arrears  of  interest  and  interest  then  due,  if any,  upon all  Bonds  then
Outstanding,  and any  monies  thereafter  deposited  in the Bond Fund  shall be
applied in accordance with the provisions of Article IX.

            Whenever  monies are to be applied by the  Trustee  pursuant  to the
provisions of subparagraphs  (a) and (b) of this Section,  (i) such monies shall
be applied by the Trustee at such times,  and from time to time,  as the Trustee
in its sole discretion shall determine,  having due regard to the amount of such
monies  available  for  application  and the  likelihood  of  additional  monies
becoming available for such application in the future;  (ii) the deposit of such
monies, in trust for the proper purpose,  shall constitute proper application by
the Trustee;  and (iii) the Trustee  shall incur no liability  whatsoever to the
Authority,  to any Holder or to any other  person for any delay in applying  any
such monies, so long as the Trustee acts with reasonable  diligence,  having due
regard to the circumstances,  and ultimately applies the same in accordance with
such  provisions  of  this  Indenture  as  may be  applicable  at  the  time  of
application by the Trustee.  Whenever the Trustee shall exercise such discretion
in  applying  such  monies,  it shall fix the date  (which  shall be an Interest
Payment  Date unless the Trustee  shall deem another  date more  suitable)  upon
which such  application is to be made and upon such date interest on the amounts
of  principal to be paid on such date shall cease to accrue.  The Trustee  shall
give such notice as it may deem  appropriate of the fixing of any such date, and
shall not be  required  to make  payment to the Holder of any unpaid  Bond until
such Bond shall be surrendered to the Trustee for  appropriate  endorsement,  or
for cancellation if fully paid.



<PAGE>


     SECTION 12.07. Effect of Delay or Omission; Waiver of Default; Direction of
Remedial  Proceedings by the Holders.  No delay or omission of the Trustee or of
any Holder of the Bonds to exercise any right or power accruing upon any default
or Event of Default  shall  impair any such right or power or shall be construed
to be a waiver of any such default or acquiescence therein.

            Anything in this  Indenture  to the  contrary  notwithstanding,  the
Holders of not less than a majority in principal amount of the Bonds at the time
Outstanding (determined in accordance with the provisions of Section 13.03) with
the prior written  consent of the Credit Facility Issuer shall be authorized and
empowered and have the right,  by an instrument  or  concurrent  instruments  in
writing  delivered  to the  Trustee  on behalf of the  Holders of the Bonds then
Outstanding   to  consent  to  the  waiver  of  any  Event  of  Default  or  its
consequences,  and  the  Trustee  shall  waive  any  Event  of  Default  and its
consequences upon the written request of the Holders of such majority; provided,
however,  that there shall not be waived (i) any default in payment of principal
or premium when due or (ii) any default in payment when due of interest  unless,
in either case, prior to such waiver all arrears in principal,  premium, if any,
and interest,  with additional interest,  to the extent permitted by law, at the
rate then borne by the Bonds (which,  in the case of Auction Rate Bonds shall be
the Overdue Rate), and all fees and expenses of the Trustee shall have been paid
or provided for; provided,  however,  that  notwithstanding any such waiver, any
Auction  Rate Bonds shall  continue to bear  interest at the Overdue  Rate until
such Event of Default is cured.  No such  waiver  shall  extend to or affect any
other existing or subsequent default or Event of Default or impair any rights or
remedies consequent thereon.

            Anything in this  Indenture  to the  contrary  notwithstanding,  the
Holders of not less than  twenty-five  percent (25%) in principal  amount of the
Bonds at the time  Outstanding  (determined in accordance with the provisions of
Section  13.03) with the prior  written  consent of the Credit  Facility  Issuer
shall be  authorized  and  empowered  and have the right,  by an  instrument  or
concurrent  instruments  in writing  delivered to the Trustee to direct the time
and  method  of  conducting  any  proceeding  for any  remedy to be taken by the
Trustee or available to the Trustee or available to the Holders of the Bonds, or
exercising any trust or power conferred upon the Trustee hereunder provided: (1)
such  direction  shall  not be in  conflict  with any  rule of law or with  this
Indenture or expose the Trustee to personal liability,  or be unduly prejudicial
to Holders not joining  therein,  and (2) the Trustee may take any other  action
deemed proper by the Trustee which is not inconsistent with such direction.



<PAGE>


     SECTION 12.08. Suits or Actions by Holders;  Any Holder May Enforce Overdue
Payment of His or Her Bond or  Interest  Thereon.  No Holder of any of the Bonds
shall have any right to institute any suit, action or proceeding in equity or at
law for the execution of any trust  hereunder or for any other remedy  hereunder
unless  there  shall have  occurred an Event of Default of which the Trustee has
been notified or is deemed to have notice as provided in Section 11.08, and such
Holder previously shall have given to the Trustee written notice of the Event of
Default on account of which such suit, action or proceeding is to be instituted,
and  unless  also the  Holders  of not less than  twenty-five  percent  (25%) in
principal amount of the Bonds then  Outstanding  shall have made written request
of the Trustee  after the right to exercise  such powers or right of action,  as
the case may be,  shall have  accrued,  and shall have  afforded  the  Trustee a
period of 60 days either to proceed to exercise the powers  hereinabove  granted
or to  institute  such  action,  suit or  proceeding  in its or their name,  the
Trustee shall have been  indemnified by Holders against the costs,  expenses and
liabilities to be incurred in compliance  with such request,  and shall not have
received an inconsistent direction from the Holders of not less than twenty-five
percent  (25%) in  principal  amount  of the Bonds and the  Trustee  shall  have
refused or neglected to comply with such request within a reasonable time. It is
understood  and intended that no one or more Holders of the Bonds hereby secured
shall have any right in any  manner  whatever  by the  action of such  Holder or
Holders to affect,  disturb or prejudice the security of this  Indenture,  or to
enforce  any right  hereunder  except in the manner  herein  provided;  that all
proceedings at law or in equity shall be  instituted,  had and maintained in the
manner  herein  provided and for the benefit of all Holders of such  Outstanding
Bonds;  and that any individual  rights of action or other right given to one or
more of such Holders by law are  restricted by this  Indenture to the rights and
remedies herein provided.  Notwithstanding  the foregoing,  the Trustee shall be
under no obligation to exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Holders, unless such Holders
shall have offered to the Trustee  reasonable  security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction.

            Notwithstanding any other provision of this Indenture,  the right of
any Holder of a Bond to receive  payment of the principal of,  premium,  if any,
and interest on such Bond,  on or after the  respective  due dates  expressed in
such Bond, or to institute  suit for the  enforcement  of any such payment on or
after such  respective  dates,  shall not be impaired  or  affected  without the
consent of such  Holder,  except  that no Holder of any such Bond shall have the
right to institute any such suit, if and to the extent that the  institution  or
prosecution  thereof or the entry of judgment  therein would,  under  applicable
law, result in the surrender,  impairment,  waiver,  or loss of the lien of this
Indenture.

     SECTION  12.09.  Remedies  Not  Exclusive.  No  remedy by the terms of this
Indenture  conferred upon or reserved to the Trustee or the Holders of the Bonds
is intended to be  exclusive  of any other remedy so conferred or reserved or to
be exclusive of other remedies now or hereafter  existing at law or in equity or
by statute,  and each and every such remedy shall be cumulative  and shall be in
addition to any other remedy given hereunder to the Trustee or to the Holders of
the Bonds or now or hereafter existing at law or in equity or by statute.  Every
such  right,  power  and  remedy  given  hereunder  or by law or in equity or by
statute  may be  exercised  from  time to time  and as  often  as may be  deemed
expedient.

     SECTION 12.10. Effect of Abandonment of Proceedings on Default. In case any
proceeding  taken by the  Trustee or the  Holders of the Bonds on account of any
Event of Default shall have been discontinued or abandoned for any reason,  then
and in every such case the  Authority,  the  Trustee  and the  Holders  shall be
restored to their former positions and rights hereunder,  respectively,  and all
rights,  remedies,  powers and duties of the Trustee shall continue as though no
such proceeding had been taken.



<PAGE>


     SECTION 12.11.  Interest on Overdue Amounts. To the extent permitted by law
all amounts which are due and payable but which have not been so paid under this
Indenture  shall bear interest at the then current rate of interest on the Bonds
until paid; provided,  however,  that during any Auction Rate Period all amounts
which are due and owing but unpaid  hereunder shall bear interest at the Overdue
Rate until paid.


<PAGE>



                                    XIII-

                                ARTICLE XIII

                  EXECUTION OF INSTRUMENTS BY BONDHOLDERS AND
                    OWNERSHIP OF BONDS; EXCLUSION OF BONDS
                    OWNED BY THE AUTHORITY OR THE COMPANY

     SECTION  13.01.  Execution of Requests,  Directions  and Consents and Other
Instruments and Proof of Same;  Ownership of Bonds and Proof of Same.  Execution
of Requests,  Directions and Consents and Other Instru. Any request,  direction,
consent or other instrument  required by this Indenture to be signed or executed
by Holders of Bonds may be signed or  executed  by such  Holders in person or by
agent  or  agents  duly  appointed  in  writing,  and  may be in any  number  of
concurrent  writings of substantially  similar tenor.  Proof of the execution of
any such  request,  direction,  consent  or  other  instrument  or of a  writing
appointing  any such agent,  and of the holding or ownership of Bonds,  shall be
sufficient for any purpose of this Indenture and shall be conclusive in favor of
the Trustee  hereunder with regard to any action taken by it under such request,
direction,  consent or other instrument or of writing appointing any such agent,
if made in the following manner:

            (a) the fact and date of the  execution  by any  person  of any such
      request,  direction,  consent or other instrument in writing may be proved
      in any reasonable manner which the Trustee deems sufficient;

            (b) the  ownership of Bonds shall be proved by the books of registry
      kept under the provisions of this Indenture.

            Any  request,  direction,  consent or vote of the Holder of any Bond
shall bind and be  conclusive  upon the Holder of such Bond giving such request,
direction or consent or casting  such vote and upon every  future  Holder of the
same Bond in respect of  anything  done or suffered to be done by the Trustee or
otherwise,  or by the Holders of other  Bonds,  in  pursuance  of such  request,
direction,  consent or vote, and whether or not such future Holder has knowledge
of or information as to such request, direction,  consent or vote; provided that
any request, direction,  consent or vote of the Holder of a Bond required by any
of the  provisions  hereof may be revoked by the  Holder  giving  such  request,
direction,  consent  or vote or by a  subsequent  Holder if such  revocation  in
writing  is  filed  with the  Trustee,  prior  to the  time  when  the  request,
direction,  consent  or vote  of the  percentage  of the  Holders  of the  Bonds
required by such provision shall have been given and action taken by the Trustee
or otherwise, or by the Holders of other Bonds, under authority of such request,
direction, consent or vote.

            The  payment of or on account of  principal  to or upon the order of
the person in whose name the Bonds shall at the time be registered on said books
of  registry  and the  payment of interest to or upon the order of any person in
whose name the Bonds shall at the time be  registered on said books of registry,
shall be valid and  effectual  fully to  satisfy  and  discharge  all  liability
hereunder or upon the Bonds to the extent of the sum or sums so paid.

            The  Authority at the request of the Company may  establish a record
date for the taking of any action by the Holders.


<PAGE>


     SECTION 13.02.  Meetings of Holders. The Trustee or the Holders of not less
than twenty percent (20%) in principal  amount of the Bonds then Outstanding may
at any time call a meeting of the  Holders  of the Bonds for the  purpose of the
consenting to, the approving, the requesting, or the directing by the Holders of
the  Bonds  of any  action  required  to be  consented  to or  approved  by them
hereunder or which they may request or direct  hereunder to be taken, or for the
making by the Holders of any  appointments  they may make hereunder,  or for the
purpose of taking any other action which the Holders may take hereunder,  or for
any other purpose  concerning  the payment and security of the Bonds  hereunder.
Every such meeting shall be held at such place in The City of New York, State of
New York, as may be specified in the notice calling such meeting. Written notice
of such meeting,  stating the place and time of the meeting and in general terms
the  business to be  submitted,  shall be mailed to the Holders  whose names and
addresses  then appear upon the books of  registry by the  Registrar  and Paying
Agent or the Holders  calling such meeting,  not less than 20 days nor more than
60 days before such meeting.  Any meeting of Holders  shall,  however,  be valid
without  notice if the  Holders of all Bonds  then  Outstanding  are  present in
person or by proxy or if notice  is  waived  before or within 30 days  after the
meeting by those not so present.

            Attendance  and  voting by  Holders at  meetings  thereof  may be in
person or by proxy.  Holders of Bonds may,  by an  instrument  in writing  under
their hands, appoint any person or persons, with full power of substitution,  as
their proxy to attend and vote at any meeting for them.

            Persons  named  by the  Trustee,  or  elected  by the  Holders  of a
majority in principal  amount of the Bonds  represented at the meeting in person
or by proxy in the event the Trustee is not  represented at such meeting,  shall
act as temporary  Chairman and temporary  Secretary of any meeting of Holders. A
permanent Chairman and a permanent Secretary of such meeting shall be elected by
the Holders of a majority in principal  amount of the Bonds  represented at such
meeting in person or by proxy.  The  permanent  Chairman  of the  meeting  shall
appoint  two (2)  Inspectors  of Votes  who shall  count all votes  cast at such
meeting,  except votes on the election of Chairman and  Secretary as  aforesaid,
and who shall make and file with the  Secretary  of the  meeting and the Trustee
their verified report of all such votes cast at the meeting.

            The  Holders  of not less  than the  principal  amount  of the Bonds
required by the provisions hereof to consent to, approve,  request or direct any
action to be taken at a meeting of Holders, or required by the provisions hereof
to  make  any  appointments  to be  made at such  meeting,  or  required  by the
provisions hereof to take any other action to be taken at such meeting,  must be
present at such  meeting in person or by proxy in order to  constitute  a quorum
for the transaction of such business.  Less than a quorum,  however,  shall have
power  to  adjourn  the  meeting  from  time  to  time  without  notice  of such
adjournment  other  than the  announcement  thereof  at the  meeting;  provided,
however,  that if such  meeting is adjourned by less than a quorum for more than
ten (10) days, notice of such adjournment shall be given by the Trustee at least
five (5) days prior to the adjourned date of the meeting.



<PAGE>


            Any  Holder  of a Bond  shall be  entitled  in person or by proxy to
attend and vote at such meeting as Holder of the Bond or Bonds registered in his
or her name without producing such Bond or Bonds. Such persons and their proxies
shall,  if  required,  produce  such  proof  of  personal  identity  as shall be
satisfactory to the Secretary of the meeting.

            All proxies  presented  at such  meeting  shall be  delivered to the
Inspector of Votes and filed with the  Secretary of the meeting.  The right of a
proxy for a Holder to attend the meeting and act and vote  thereat may be proved
(subject to the Trustee's right to require  additional proof) by a written proxy
executed by such Holder as aforesaid.

            The   officers  or  nominees  of  the  Trustee  may  be  present  or
represented at such meeting and take part therein,  but shall not be entitled to
vote  thereat,  except for such  officers or nominees who are Holders or proxies
for Holders (including the Trustee).

            The vote at any such  meeting of the  Holder of any Bond,  or his or
her proxy,  entitled to vote thereat  shall be binding upon such Holder and upon
every subsequent  Holder of such Bond (whether or not such subsequent Holder has
notice thereof).

     SECTION 13.03. Exclusion of Bonds Held by or for the Authority, the Company
and of Bonds No Longer Deemed Outstanding Hereunder.  In determining whether the
Holders of the requisite  aggregate  principal amount of Bonds have concurred in
any demand,  request,  direction,  consent, vote or waiver under this Indenture,
any  Bonds  which  are  owned  by or on  behalf  of or for  the  account  of the
Authority,  the Company and, except for the purposes of Section 15.01, any Bonds
which are deemed no longer  Outstanding  hereunder  shall be disregarded and not
included for the purpose of any such determination,  and such Bonds shall not be
entitled  to vote  upon,  consent to or concur in any  action  provided  in this
Indenture, except that for the purposes of determining whether the Trustee shall
be protected in relying on any such demand, request, direction, consent, vote or
waiver  only  Bonds  which the  Trustee  knows are owned as  aforesaid  shall be
disregarded. The Trustee may require each Holder of a Bond or Bonds, before such
Holder's demand,  request,  direction,  consent,  vote or waiver shall be deemed
effective, to reveal if the Bonds as to which such demand,  request,  direction,
consent,  vote or waiver is made,  granted,  cast or given are  disqualified  as
provided in this Section.


<PAGE>



                                     XIV-
                                  ARTICLE XIV

                    AMENDING AND SUPPLEMENTING THE INDENTURE,
            THE PARTICIPATION AGREEMENT, THE REMARKETING AGREEMENT,
              AUCTION AGENCY AGREEMENT, BROKER-DEALER AGREEMENTS,
                         BOND PURCHASE TRUST AGREEMENT

     SECTION 14.01.  Amending and  Supplementing  Indenture  Without  Consent of
Holders.  The Authority  and the Trustee,  from time to time and at any time and
without the consent or concurrence of any Holder,  may enter into a Supplemental
Indenture,  (i) to make any changes,  modifications,  amendments or deletions to
this  Indenture  that may be required to permit the  Indenture  to be  qualified
under the Trust  Indenture  Act of 1939 of the United  States of America or (ii)
for any one or more of the following purposes:

            (a) (x) to make any changes or  corrections in this Indenture or any
      Supplemental  Indenture as to which the Authority  shall have been advised
      by  counsel  that the same are  required  for the  purpose  of  curing  or
      correcting  any  ambiguity  or  defective  or  inconsistent  provision  or
      omission or mistake or  manifest  error  contained  in this  Indenture  or
      Supplemental Indenture, or (y) to insert in this Indenture such provisions
      clarifying  matters  or  questions  arising  under this  Indenture  as are
      necessary  or  desirable  if such  provisions  shall  not  materially  and
      adversely affect the rights of the Holders;

            (b) to add additional  covenants and agreements of the Authority for
      the purpose of further securing the payment of the Bonds;

            (c) to  surrender  any  right,  power or  privilege  reserved  to or
      conferred upon the Authority by the terms of this Indenture;

            (d) to confirm as further  assurance any lien,  pledge or charge, or
      the subjection to any lien, pledge or charge,  created or to be created by
      the provisions of this Indenture or any Supplemental Indenture;

            (e) to grant to or confer upon the Holders  any  additional  rights,
      remedies, powers, authority or security that lawfully may be granted to or
      conferred  upon them, or to grant to or to confer upon the Trustee for the
      benefit of the Holders any additional rights, duties,  remedies,  power or
      authority;

            (f) to  provide  for the  issuance  of Bonds in book entry or coupon
      form, if at the time permitted by applicable law;

            (g)   to provide for the substitution of rating agencies;



<PAGE>


            (h) to provide for any new  administrative or procedural  provisions
      made  necessary or  desirable by the issuance of a Support  Facility or an
      Alternate Support Facility,  other credit,  liquidity or support facility,
      including,  but not limited to, any amendment necessary to obtain a rating
      on the Bonds based upon such facility; and

            (i) to modify,  amend or supplement  the Indenture in such manner as
      to permit the  qualification  of the Bonds for deposit  with a  Securities
      Depository,  and, in connection therewith, if they so determine, to add to
      the  Indenture,  such other terms,  conditions  and  provisions  as may be
      required to permit such qualification.

            No  Supplemental  Indenture  shall be  entered  into  unless  in the
opinion of Bond Counsel which shall be delivered to the Trustee  (which  opinion
may be combined  with the opinion  required by Section  14.04) the  execution of
such  Supplemental  Indenture is permitted by the  foregoing  provisions of this
Section and the provisions of such Supplemental  Indenture do not materially and
adversely affect the rights of the Holders of the Bonds and the Trustee may rely
on any such opinion.

     SECTION  14.02.  Amending  and  Supplementing  Indenture  with  Consent  of
Holders.  With the consent of the Holders of a majority in  principal  amount of
the Bonds then Outstanding,  the Authority and the Trustee from time to time and
at any time may enter into a  Supplemental  Indenture  for the purpose of adding
any  provisions  to,  or  changing  in  any  manner  or  eliminating  any of the
provisions  of,  this  Indenture,  or  modifying  or  amending  the  rights  and
obligations of the Authority  hereunder,  or modifying or amending in any manner
the rights of the Holders;  provided that,  without the specific  consent of the
Holders of all Bonds Outstanding which would be affected thereby no Supplemental
Indenture  amending or supplementing the provisions hereof shall: (a) change the
fixed  maturity  date for the payment of the principal of any Bond, or the dates
for the payment of interest  thereon or the terms of the purchase or  redemption
thereof,  or reduce  the  principal  amount of any Bond or the rate of  interest
thereon or the method of  calculating  the same except as otherwise  provided in
this Indenture;  or (b) reduce the aforesaid percentage of Bonds, the Holders of
which  are  required  to  consent  to any  Supplemental  Indenture  amending  or
supplementing  the  provisions  of this  Indenture;  or (c) give to any Bond any
preference over any other Bond secured hereby;  or (d) authorize the creation of
any pledge of payments under the Participation  Agreement or Note Payments prior
or superior to the pledge of a lien and charge thereon  assigned  herein for the
payment of the Bonds;  or (e) effect any change in the  purchase  or  redemption
provisions  relating to the Bonds;  or (f)  deprive any Holders in any  material
respect of the security afforded by this Indenture.  A modification or amendment
of the  provisions  of  Article IX hereof  with  respect to the Bond Fund or any
other Funds or Accounts  established thereby shall not be deemed a change in the
terms of payment;  provided that no such modification or amendment shall, except
upon the  consent of the  Holders  of all Bonds  Outstanding  affected  thereby,
reduce the amount or amounts required to be deposited in the Bond Fund.  Nothing
in this paragraph contained, however, shall be construed as making necessary the
approval  of  the  Holders  of  the  execution  of  any  Supplemental  Indenture
authorized by the provisions of Section 14.01.



<PAGE>


            The proof of the giving of any  consent by any  Holder  required  by
this Section and of the holding of the Bonds for the purpose of giving  consents
shall be made in accordance with the provisions of Article XIII. It shall not be
necessary that the consent of the Holders approve the particular form of wording
of the proposed supplemental amendment or supplement, but it shall be sufficient
if such consent approves the substance of the proposed  amendment or supplement.
After the  Holders of the  required  percentage  of Bonds shall have filed their
consents to the amending or supplementing  hereof pursuant to this Section,  the
Authority shall mail a copy of notice of such consent,  postage prepaid, to each
Holder at his or her address as it appears upon the books of registry and to the
Trustee.  Nothing in this paragraph  contained,  however,  shall be construed as
requiring  the  giving  of  notice  of any  amending  or  supplementing  of this
Indenture  authorized by this Section.  A record of the consents  shall be filed
with the  Trustee,  and shall be proof of the matters  therein  stated until the
contrary is proved.  No action or  proceeding  to set aside or  invalidate  such
Supplemental  Indenture  or any of the  proceedings  for its  adoption  shall be
instituted  or maintained  unless such action or proceeding is commenced  within
sixty (60) days after the mailing of the notice required by this paragraph.

            Notwithstanding  anything in this  Indenture  to the  contrary,  the
consent of the Holders of any Bonds or a portion thereof purchased subsequent to
a Change in the  Interest  Rate Mode  shall be deemed  given  with  respect to a
supplemental  Indenture  if the  Remarketing  Agent for the  Bonds so  purchased
consents in writing thereto and any  modification or amendment  effected thereby
is  disclosed  in the  official  statement  or other  public  offering  document
pursuant to which such Bonds or a portion thereof are remarketed.

     SECTION 14.03.  Notation upon Bonds; New Bonds Issued upon Amendments.  The
Bonds delivered after the effective date of any action taken as provided in this
Article,  if any, may and shall if required by the Trustee bear a notation as to
such action,  by endorsement or otherwise and in form approved by the Authority.
In that  case,  upon  demand  of any  Holder  at such  effective  date  and upon
presentation  of Bonds at the principal  office of the Trustee or other transfer
agent or registrar  hereunder for such Bonds, and at such additional offices, if
any, as the Authority  may select and  designate  for that  purpose,  a suitable
notation shall be made on the Bonds.

     SECTION 14.04. Effectiveness of Supplemental Indentures. Upon the execution
pursuant to this Article by the  Authority  and the Trustee of any  Supplemental
Indenture  amending or  supplementing  the  provisions of this Indenture and the
delivery to the  Trustee of an opinion of Bond  Counsel  that such  Supplemental
Indenture is permitted by the  provisions  of this Article XIV and has been duly
executed in accordance  with the  provisions  hereof and applicable law and that
the provisions thereof are valid (upon which opinion the Trustee, subject to the
provisions of Section 11.04, shall be fully protected in relying),  or upon such
later  date  as may be  specified  in  such  Supplemental  Indenture,  (i)  this
Indenture  and the Bonds shall be modified and amended in  accordance  with such
Supplemental  Indenture;  (ii) the  respective  rights,  limitations  of rights,
obligations,  duties and immunities  under this Indenture of the Authority,  the
Trustee, and the Holders shall thereafter be determined,  exercised and enforced
under  this  Indenture  subject  in  all  respects  to  such  modifications  and
amendments;  and (iii) all of the terms and conditions of any such  Supplemental
Indenture  shall be a part of the terms and  conditions of the Bonds and of this
Indenture for any and all purposes.



<PAGE>


     SECTION 14.05.  Supplemental Indenture Affecting Support Facility Provider.
No Supplemental  Indenture  which takes effect while any Support  Facility is in
effect may be entered into by the  Authority  and the Trustee or be consented to
by the Holders without  written  consent of the issuer of each Support  Facility
Issuer.

     SECTION  14.06.  Supplemental  Participation  Agreements  Not Requiring the
Consent of the Holders.  The  Authority  and the Company  may,  with the written
consent of the Trustee but without notice to or consent of any Holder, from time
to time and at any time, agree to such supplemental agreements supplementing the
Participation  Agreement or amendments to the  Participation  Agreement as shall
not be inconsistent with the terms and provisions of the Participation Agreement
or this Indenture and, in the opinion of the Authority, shall not be detrimental
to the interests of the Holders  (which  Supplemental  Participation  Agreements
shall thereafter form a part of the Participation Agreement):

            (a)   to cure any  ambiguity  or formal  defect or omission in the
      Participation Agreement or in any supplemental agreement;

            (b) to grant to or confer  upon the  Trustee  for the benefit of the
      Holders any additional  rights,  remedies,  powers,  authority or security
      that may  lawfully  be granted  to or  conferred  upon the  Holders or the
      Trustee;

            (c) to provide for any new  administrative,  security or  procedural
      provisions  necessitated by the issuance of an Alternate Support Facility;
      or

            (d) to provide for or add any further  changes or  corrections  that
      are  necessary  or  desirable  to comply with any  Supplemental  Indenture
      entered into pursuant to Section 14.01;

provided that no such  Supplemental  Participation  Agreement which takes effect
while a Support Facility is in effect shall be effective prior to the receipt by
such parties of the written consent of each Support Facility Issuer.

     SECTION 14.07. Notice and Consent for Supplemental Participation Agreements
Requiring  the Consent of the  Holders.  Except for  Supplemental  Participation
Agreements or amendments  provided for in Section  14.06,  neither the Authority
nor the Trustee shall agree or consent,  as the case may be, to any Supplemental
Participation  Agreement  or  amendment to the  Participation  Agreement  unless
notice of the proposed execution of such Supplemental Participation Agreement or
amendment  shall have been given and the  Holders  shall have  consented  to and
approved  the  execution  thereof in the same manner and form as provided for in
Section  14.02 in the case of  Supplemental  Indentures;  provided  that no such
Supplemental  Participation Agreement which materially and adversely affects any
issuer of a Support  Facility  (so long as such  Support  Facility is in effect)
shall be effective  prior to the receipt by such parties of the written  consent
of the issuer of such Support Facility.



<PAGE>


            Notwithstanding  anything in this  Indenture  to the  contrary,  the
consent of the Holders of any Bonds or a portion thereof purchased subsequent to
a Change in the  Interest  Rate Mode shall be deemed  given with  respect to any
Supplemental Participation Agreement or amendment to the Participation Agreement
if the Remarketing  Agent for the Bonds so purchased  consents in writing to any
modification or amendment  effected thereby and such  modification and amendment
is  disclosed  in the  official  statement  or other  public  offering  document
pursuant to which such Bonds or a portion thereof are remarketed.

            SECTION   14.08.   Effectiveness   of   Supplemental   Participation
Agreement.  Upon the execution pursuant to this Article and of applicable law
by the Authority  and the Company of any  Supplemental  Participation  Agreement
amending or supplementing the provisions of the Participation  Agreement and the
delivery to the  Trustee of an Opinion of Bond  Counsel  that such  Supplemental
Participation  Agreement is in due form,  has been duly  executed in  accordance
with the provisions  hereof and  applicable law and that the provisions  thereof
are valid (upon which opinion the Trustee,  subject to the provisions of Section
11.04,  shall be fully protected in relying),  or upon such later date as may be
specified in such Supplemental  Participation  Agreement,  (i) the Participation
Agreement  shall be modified and amended in  accordance  with such  Supplemental
Participation  Agreement;  (ii) the  respective  rights,  limitations of rights,
obligations,  duties and immunities  thereunder of the Authority and the Company
shall thereafter be determined, exercised and enforced thereunder subject in all
respects to such  modifications  and amendments;  and (iii) all of the terms and
conditions of any such Supplemental  Participation  Agreement shall be a part of
the terms and conditions thereof for any and all purposes.

     SECTION  14.09.  Amending  and  Supplementing  the  Remarketing  Agreement,
Auction  Agency  Agreement,  Broker-Dealer  Agreements  or Bond  Purchase  Trust
Agreement.  Amendments  of or  supplements  to the  Remarketing  Agreement,  the
Auction Agency Agreement, any Broker-Dealer Agreement or the Bond Purchase Trust
Agreement shall be made only in accordance with the terms thereof.


<PAGE>



                                     XV-

                                 ARTICLE XV

                    DEFEASANCE; MONEYS HELD FOR PAYMENT OF
                               DEFEASED BONDS

     SECTION 15.01. Discharge of Liens and Pledges; Bonds No Longer Deemed to be
Outstanding  Hereunder.  Bonds purchased pursuant to Section 5.03, 5.04, 5.08 or
5.09 shall  continue  to be  Outstanding  hereunder  until  such Bonds  shall be
cancelled  in  accordance  with  Section  5.15 or paid at  maturity  or redeemed
pursuant to Article V or otherwise  defeased.  The  obligations of the Authority
under this  Indenture and the liens,  pledges,  charges,  trusts,  covenants and
agreements of the  Authority,  herein made or provided for, shall be, subject to
the terms of Section  15.02,  fully  discharged and satisfied as to the Bonds or
portion  thereof  and the Bonds  shall no  longer  be  deemed to be  Outstanding
hereunder:

            (a) when the Bonds  shall  have been  cancelled,  or shall have been
surrendered for cancellation and are subject to cancellation, or shall have been
redeemed by the Trustee from monies held by it under this Indenture; or

            (b) if the  Bonds  have not been  cancelled  or so  surrendered  for
cancellation or subject to cancellation, or so redeemed, when (1) payment of the
principal of and premium,  if any, on the Bonds, plus interest on such principal
to the due date thereof  (whether such due date be by reason of maturity or upon
redemption or  prepayment,  or otherwise)  and of any Purchase Price which is or
may  become  due on such  Bonds  either (i) shall have been made or caused to be
made in accordance with the terms thereof,  or (ii) shall have been provided for
by  irrevocably   depositing   with  the  Trustee  in  trust,   and  irrevocably
appropriating  and  setting  aside  exclusively  for such  payments  (A)  monies
sufficient to make such payment, or (B) Governmental  Obligations maturing as to
principal  and  interest  in such  amounts  and at such times as will insure the
availability  of sufficient and timely monies to make such payments when due, or
(C) a combination of both such monies and  Governmental  Obligations,  whichever
the  Authority  deems to be in its best  interest,  (2)  there  shall  have been
delivered to the Trustee (x) a letter addressed to the Trustee from a nationally
recognized firm of independent  public  accountants  verifying the  mathematical
accuracy of the  sufficiency  of the deposit made pursuant to (ii) above and (y)
an opinion of Bond  Counsel to the effect that upon the  provision of payment on
the Bonds as  described  in (ii)  above,  the  Bonds are no longer  deemed to be
Outstanding  under  the  Indenture,  and  (3) all  necessary  and  proper  fees,
compensation  and  expenses  of the Trustee  pertaining  to the Bonds or portion
thereof with respect to which such deposit is made,  shall have been paid or the
payment thereof provided to the satisfaction of the Trustee.

            At  such  time  as  the  Bonds  shall  be  deemed  to be  no  longer
Outstanding hereunder,  as aforesaid,  such Bonds shall cease to accrue interest
from the due date thereof  (whether  such due date occurs by reason of maturity,
or upon  redemption or prepayment or otherwise)  and, except for the purposes of
any such payment from such monies or Governmental Obligations and except, in the
case of  Auction  Rate  Bonds,  to the  extent  provided  in the  definition  of
Outstanding  in  Article I shall no  longer be  secured  by or  entitled  to the
benefits of this Indenture.



<PAGE>


            Any such  monies so  deposited  with the Trustee as provided in this
Section may at the  direction of the Company also be invested and  reinvested in
Governmental Obligations,  maturing in the amounts and times as hereinbefore set
forth,  and all income  from all  Governmental  Obligations  in the hands of the
Trustee  pursuant to this  Section  which is not required for the payment of the
Bonds and interest  thereon with respect to which such monies shall have been so
deposited shall be paid to the Company or if any Bonds are then Outstanding,  be
deposited  in the Bond Fund and  credited to the  Principal  Account as and when
realized and collected,  for use and application as are other monies credited to
such Account.

            Anything in Article XV to the contrary notwithstanding, if monies or
Governmental  Obligations  have been  deposited  or set aside  with the  Trustee
pursuant to this Section for the payment of the Bonds, the Bonds shall be deemed
to have been paid in full. No amendment to the  provisions of this Article shall
be made without the consent of the Holders of the Bonds affected thereby.

            The  Trustee  shall  promptly  surrender  any Support  Facility  (if
appropriate  for the type of instrument or  instruments  then serving as Support
Facility)  to the issuer of such  Support  Facility  for  cancellation  or shall
otherwise take appropriate  action to terminate the Support  Facility  following
any such defeasance.

     SECTION  15.02.  Release  of  Indenture,  Termination  of Right,  Title and
Interest  of Trustee.  When the Bonds  shall be deemed to be paid in  accordance
with the provisions of Section 15.01, then and in the case all right,  title and
interest of the Trustee under this Indenture  shall thereupon  cease,  determine
and become  void,  and the Trustee in such case shall  release  this  Indenture,
shall  execute  such  documents to evidence  such  release as may be  reasonably
required by the  Authority and furnish the  Authority  with the same,  and shall
turn over to the Company any surplus monies and balances remaining in any of the
Funds and Accounts  created in or held under this  Indenture,  other than monies
and  Governmental  Obligations  held by it  pursuant  to  Section  15.01  or the
provisions  of Section  15.03 for the  redemption,  payment or prepayment of the
Bonds; otherwise, this Indenture shall be, continue and remain in full force and
effect.

            Notwithstanding  the  satisfaction  and discharge of this Indenture,
the rights of the  Trustee and the  Registrar  and Paying  Agent under  Sections
11.02, 11.06 and 11.17 shall survive defeasance of the Bonds hereunder.



<PAGE>


     SECTION  15.03.  Bonds Not Presented for Payment When Due;  Monies Held for
the  Bonds  after  Due Date of  Bonds.  Subject  to the  provisions  of the next
sentence of this paragraph, if the Bonds shall not be presented for payment when
the principal thereof shall become due, whether at maturity or at the date fixed
for  the  redemption  thereof,  or  otherwise,  and if  monies  or  Governmental
Obligations  shall  at such due date be held by the  Trustee  in trust  for that
purpose sufficient and available to pay the principal of and premium, if any, on
the Bonds,  together  with all  interest  due on such  principal to the due date
thereof  or to the date  fixed for  redemption  thereof,  all  liability  of the
Authority and the Company for such payment shall forthwith cease,  determine and
be completely  discharged,  and thereupon it shall be the duty of the Trustee to
hold said monies or Governmental  Obligations  without  liability to the Holders
for interest thereon, in trust for the benefit of the Holders,  which thereafter
shall be restricted  exclusively to said monies or Governmental  Obligations for
any  claim of  whatever  nature  on its part on or with  respect  to the  Bonds,
including for any claim for the payment thereof. Any such monies or Governmental
Obligations held by the Trustee for the Holders after the principal of the Bonds
or any  portion  thereof  with  respect  to which  such  monies or  Governmental
Obligations  have been so set aside  has  become  due and  payable  (whether  at
maturity  or upon  redemption  or  prepayment  or  otherwise)  shall  be  deemed
abandoned  property  when such  monies or  Governmental  Obligations  shall have
remained  unpaid or  undelivered to the Holder or Holders  entitled  thereto for
three years from the date the principal of the Bonds or any portion  thereof has
become due and payable and shall be subject to the laws of the State of New York
relating to disposition of unclaimed property.


<PAGE>



                                     XVI-

                            ARTICLE XVIARTICLE XVI

                                  FORM OF BONDS
                    AND ENDORSEMENT AND ASSIGNMENT PROVISIONS

            SECTION 16.01.    Form of Bonds and  Endorsement  and  Assignment
Provisions.  The   form  of   Bond,   the   form  of  the   certificate   of
authentication  thereof,  the form of  endorsement  to appear  thereon and the
form of  assignment  thereof shall be  substantially  in the form set forth in
Appendix A hereto.


<PAGE>



                                    XVII-

                               ARTICLE XVII

                              MISCELLANEOUS

     SECTION  17.01.  Benefits  of  Indenture  Limited  to  Authority,  Company,
Trustee,  Registrar and Paying Agent and Auction Agent and Holders of the Bonds.
With the  exception  of rights or benefits  herein  expressly  Bonds  conferred,
nothing  expressed or  mentioned in or to be implied from this  Indenture or the
Bonds is  intended or should be  construed  to confer upon or give to any person
other than the  Authority,  the Company,  the Trustee,  the Registrar and Paying
Agent,  the Auction  Agent and the  Holders of the Bonds any legal or  equitable
right,  remedy or claim under or by reason of or in respect to this Indenture or
any covenant,  condition,  stipulation,  promise,  agreement or provision herein
contained.  Unless otherwise  expressly set forth herein, this Indenture and all
of the covenants, conditions,  stipulations, promises, agreements and provisions
hereof are  intended to be and shall be for and inure to the sole and  exclusive
benefit of the  Authority,  the Company,  the Trustee,  the Registrar and Paying
Agent,  the  Auction  Agent and the  Holders of the Bonds as herein and  therein
provided.

     SECTION 17.02.  Indenture a Contract;  Indenture Binding Upon Successors or
Assigns of the Authority. In consideration of the acceptance of the Bonds by any
person  who  shall  hold the same from  time to time,  each of the  obligations,
duties,  limitations and restraints imposed by this Indenture upon the Authority
or any employee  thereof shall be deemed to be a covenant  between the Authority
and every Holder and this  Indenture  and every  provision  and covenant  hereof
shall be a  contract  by the  Authority  with the  Holders  of the Bonds  issued
hereunder to secure the full and final payment of the principal of, premium,  if
any, of and the interest on the Bonds  executed  and  delivered  hereunder.  The
provisions of the Act shall be a contract by the Authority  with the Holders and
the duties of the  Authority  and any  employee  thereof  under the Act shall be
enforceable by the Holders.  This Indenture shall be enforceable by the Holders,
by mandamus or other  appropriate  suit,  action or  proceeding  in any court of
competent  jurisdiction.  The  covenants and  agreements  herein set forth to be
performed by the Authority and any employee  thereof,  shall be for the benefit,
security and protection of the Holders. All the terms,  provisions,  conditions,
covenants,  warranties  and  agreements  contained  in this  Indenture  shall be
binding upon the assigns of the Authority, and shall inure to the benefit of the
Trustee, its successors or substitutes in trust and assigns, and the Holders.

     SECTION 17.03.  Notice to Holders of Bonds. Except as is otherwise provided
in this  Indenture,  any provision for the mailing of a notice or other paper to
the Holders shall be fully complied with if it is mailed postage prepaid, to the
Holder  of the  Bonds at such  Holder's  address  appearing  upon  the  books of
registry kept pursuant to Article VII.

     SECTION 17.04.  Waiver of Notice.  Whenever in this Indenture the giving of
notice by mail, publication, or otherwise is required, the giving of such notice
may be waived by the person entitled to receive such notice, and in any case the
giving or receipt  of such  notice  shall not be a  condition  precedent  to the
validity of any action taken in reliance upon such waiver.



<PAGE>


     SECTION 17.05.  Effect of Saturdays,  Sundays and Non-Business Days. Except
as otherwise specifically provided herein,  whenever this Indenture requires any
action to be taken on a  Saturday,  Sunday or other day which is not a  Business
Day, such action shall be taken on the first Business Day occurring  thereafter.
Except as otherwise specifically provided herein, whenever in this Indenture the
time within  which any action is required to be taken or within  which any right
will lapse or expire shall terminate on a Saturday, Sunday or other day which is
not a Business Day, such time shall  continue to run until  midnight on the next
succeeding Business Day.

     SECTION 17.06.  Partial Invalidity.  If any one or more of the covenants or
agreements  or portions  thereof  provided in this  Indenture on the part of the
Authority  or the Trustee to be  performed  should be  determined  by a court of
competent  jurisdiction  to be contrary to law, then such covenant or covenants,
or such  agreement or  agreements,  or such  portions  thereof,  shall be deemed
severable  from the  remaining  covenants  and  agreements  or portions  thereof
provided in this Indenture and the invalidity thereof shall in no way affect the
validity of the other  provisions  of this  Indenture  or of the Bonds,  but the
Holders shall retain all the rights and benefits  accorded to them hereunder and
under any applicable provisions of law.

            If any provisions of this Indenture shall be held or deemed to be or
shall,  in fact, be  inoperative or  unenforceable  or invalid in any particular
case in any  jurisdiction or jurisdictions  or in all  jurisdictions,  or in all
cases because it conflicts  with any  constitution  or statute or rule of public
policy, or for any other reason, such circumstances shall not have the effect of
rendering the provision in question  inoperative or  unenforceable or invalid in
any  other  case  or  circumstance,  or of  rendering  any  other  provision  or
provisions  herein  contained  inoperative  or  unenforceable  or invalid to any
extent whatsoever.

     SECTION 17.07.  Law and Place of  Enforcement of Indenture.  This Indenture
shall be construed and  interpreted in accordance  with the laws of the State of
New York and all  suits  and  actions  arising  out of this  Indenture  shall be
instituted in a court of competent jurisdiction in the State of New York.

     SECTION 17.08. Requests, Approvals and Directions of Authority. Whenever in
this Indenture a request, approval, direction or other action is required of the
Authority,  such  request,  approval,  direction or other action shall be in the
form of and evidenced by a certificate of an Authorized Officer of the Authority
unless otherwise provided herein.

     SECTION 17.09. Notices,  Demands;  Requests.  Except as otherwise set forth
herein,  all notices,  demands,  directions  and requests to be given to or made
hereunder by the Company, the Authority, the Trustee, the Remarketing Agent, the
Auction  Agent and the  Registrar  and  Paying  Agent  shall be given or made in
writing and shall be deemed to be properly  given or made if sent by first class
United States mail, postage prepaid, addressed as follows:



<PAGE>


(a)     As to the Company               4 Irving Place
                                        New York, New York 10003
                                        Attention: Secretary

(b)     As to the Authority             Corporate Plaza West
                                        286 Washington Avenue Extension
                                        Albany, New York 12203
                                        Attention: President

(c)     As to the Trustee               140 Broadway
                                        New York, New York 10005-1180
                                        Attention:Corporate Trust Administration

(d)     As to the Auction Agent         at the address specified in the
                                        Auction Agency Agreement

(e) As to the Remarketing Agents at the address specified in the applicable
Remarketing Agreement

(f)     As to the Registrar             140 Broadway
          and Paying Agent              New York, New York 10005-1180
                                        Attention:Corporate Trust Administration

            Any  such  notice,   demand,   direction  or  request  may  also  be
transmitted  to the  appropriate  above-mentioned  party by telegram,  telecopy,
telex or similar  means and shall be deemed to be properly  given or made at the
time of such  transmission if, and only if, such transmission of notice shall be
in writing and sent as specified above.

            Any notice, demand, direction or request given or transmitted to the
Trustee or the Authority shall be effective only upon receipt.

            Any of such addresses may be changed at any time upon written notice
of such change sent by first-class United States mail,  postage prepaid,  to the
other parties by the party affecting the change.



<PAGE>


            If the Bonds shall be rated by Moody's, the Trustee shall furnish to
Moody's at 99 Church Street, New York, New York, Attention: Corporate Department
Structured  Finance  Group or such other office as Moody's may  designate to the
Trustee, if the Bonds shall be rated by S&P, the Trustee shall furnish to S&P at
55 Water  Street,  New  York,  New  York  10041,  Attention:  Letter  of  Credit
Surveillance  Group, and if the Bonds shall be rated by Fitch, the Trustee shall
furnish to Fitch IBCA, Inc. at One State Street Plaza, New York, New York 10004,
Attention:  Letter of Credit  Surveillance Group (i) a copy of each amendment to
the Indenture,  Participation Agreement, Bond Purchase Trust Agreement, and each
Support  Facility of which it has  knowledge,  (ii)  notice of the  termination,
extension or expiration of any Support Facility,  (iii) notice of the payment of
all the Bonds (iv) notice of a Change in the Interest Rate Mode,  and (v) notice
of any  successor  Trustee,  Registrar  and Paying Agent or  Remarketing  Agent;
provided,  however,  that  failure by the Trustee to so notify  Moody's,  S&P or
Fitch shall not result in any liability on the part of the Trustee or affect the
validity of such documents or actions.

     SECTION  17.10.  Effect  of  Article  and  Section  Headings  and  Table of
Contents. The heading or titles of the several Articles and Sections hereof, and
any table of contents  appended hereto or to copies hereof,  shall be solely for
convenience  of  reference  and  shall not  affect  the  meaning,  construction,
interpretation or effect of this Indenture.

     SECTION 17.11. Indenture May be Executed in Counterparts;  Effectiveness of
Indenture.  This Indenture may be simultaneously executed in counterparts.  Each
such counterpart so executed shall be deemed to be an original, and all together
shall  constitute but one and the same  instrument.  This  Indenture  shall take
effect immediately upon the execution and delivery hereof.  Notwithstanding  the
actual date hereof,  for  convenience  and purposes of reference  this Indenture
shall be  dated as of July 1,  1999  and may be  cited  and  referred  to as the
"Indenture dated as of July 1, 1999".

     SECTION 17.12. Liability of Authority Limited to Revenues.  Notwithstanding
anything in this Indenture or in the Bonds contained, the Authority shall not be
required to advance any monies  derived  from any source other than the Revenues
and other assets  pledged  under this  Indenture for any of the purposes in this
Indenture  mentioned,  whether for the payment of the  principal  or  redemption
price of or  interest on the Bonds or for any other  purpose of this  Indenture.
Pursuant to Section 5.08 of the Participation  Agreement, the Company has agreed
to indemnify  and hold harmless the Authority and the Trustee from all liability
arising hereunder.

     SECTION 17.13 Waiver of Personal Liability.  No member,  officer,  agent or
employee of the Authority  shall be  individually  or personally  liable for the
payment of the  principal of or premium,  if any, or interest on the Bonds or be
subject to any personal  liability or  accountability  by reason of the issuance
thereof;  but nothing herein  contained shall relieve any such member,  officer,
agent or employee from the  performance  of any official duty provided by law or
by this Indenture.


<PAGE>


            IN WITNESS  WHEREOF,  the Authority has caused this  Indenture to be
executed by its President, Vice President or Treasurer and its corporate seal to
be hereunto  affixed and attested by its  Secretary,  and the Trustee has caused
this  Indenture  to be executed by its  authorized  officer,  all as of the date
first above written.

                                    NEW YORK STATE ENERGY RESEARCH
                                      AND DEVELOPMENT AUTHORITY


                                    By___________________________________
                                                President
(SEAL)

Attest:



---------------------------------------
    Secretary to the Board and Vice President
    for Governmental Relations


                                          HSBC BANK USA
                                             as Trustee,



                                          By_____________________________