Exhibit 4(b)(1)














                               AVISTA CORPORATION


                                       TO


                         UNION BANK OF CALIFORNIA, N.A.,

                                     Trustee

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


                                    INDENTURE


                            DATED AS OF _____ 1, 2004


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






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                               AVISTA CORPORATION


         RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939 AND
                  INDENTURE, DATED AS OF ______________ 1, 2004
         --------------------------------------------------------------


TRUST INDENTURE ACT SECTION                                 INDENTURE SECTION(S)

ss.310(a)(1)  ..............................................809
(a)(2)        ..............................................809
(a)(3)        ..............................................Not Applicable
(a)(4)        ..............................................Not Applicable
(b)           ..............................................808, 810
ss.311(a)     ..............................................813
(b)           ..............................................813
(c)           ..............................................813
ss.312(a)     ..............................................901
(b)           ..............................................901
(c)           ..............................................901
ss.313(a)     ..............................................902
(b)           ..............................................902
(c)           ..............................................902
(d)           ..............................................902
ss.314(a)     ..............................................902, 507
(b)           ..............................................Not Applicable
(c)(1)        ..............................................102
(c)(2)        ..............................................102
(c)(3)        ..............................................Not Applicable
(d)           ..............................................Not Applicable
(e)           ..............................................102
ss.315(a)     ..............................................801, 803
(b)           ..............................................802
(c)           ..............................................801
(d)           ..............................................801
(e)           ..............................................714
ss.316(a)     ..............................................712, 713
(a)(1)(A)     ..............................................702, 712
(a)(1)(B)     ..............................................713
(a)(2)        ..............................................Not Applicable
(b)           ..............................................708
ss.317(a)(1)  ..............................................703
(a)(2)        ..............................................705
(b)           ..............................................503
ss.318(a)     ..............................................107


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                                TABLE OF CONTENTS

                                                                            PAGE


Recital of the Company........................................................ 1



   ARTICLE ONE.  DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
      SECTION 101.  GENERAL DEFINITIONS........................................9
         ACT..................................................................10
         AFFILIATE............................................................10
         AUTHENTICATING AGENT.................................................10
         AUTHORIZED OFFICER...................................................10
         BOARD OF DIRECTORS...................................................10
         BOARD RESOLUTION.....................................................10
         BUSINESS DAY.........................................................10
         COMMISSION...........................................................10
         COMMON SECURITIES....................................................11
         COMPANY..............................................................11
         COMPANY ORDER" or "COMPANY REQUEST...................................11
         CORPORATE TRUST OFFICE...............................................11
         CORPORATION..........................................................11
         DECLARATION..........................................................11
         DISCOUNT SECURITY....................................................11
         INTEREST.............................................................11
         DOLLAR" or "$........................................................11
         ELIGIBLE OBLIGATIONS.................................................11
         EVENT OF DEFAULT.....................................................11
         FAIR VALUE...........................................................12
         GOVERNMENTAL AUTHORITY...............................................12
         GOVERNMENT OBLIGATIONS...............................................12
         HOLDER...............................................................12
         INDENTURE............................................................12
         INDEPENDENT EXPERT'S CERTIFICATE.....................................12
         INSTITUTIONAL TRUSTEE................................................12
         INTEREST PAYMENT DATE................................................12
         MATURITY.............................................................12
         NOTICE OF DEFAULT....................................................13
         OFFICER'S CERTIFICATE................................................13
         OPINION OF COUNSEL...................................................13
         OUTSTANDING..........................................................13
         PAYING AGENT.........................................................14
         PERIODIC OFFERING....................................................14

                                        3
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         PERSON...............................................................14
         PLACE OF PAYMENT.....................................................14
         PREDECESSOR SECURITY.................................................14
         PREFERRED SECURITIES.................................................15
         REDEMPTION DATE......................................................15
         REDEMPTION PRICE.....................................................15
         REGULAR RECORD DATE..................................................15
         REQUIRED CURRENCY....................................................15
         RESPONSIBLE OFFICER..................................................15
         SECURITIES...........................................................15
         SECURITY REGISTER....................................................15
         SECURITY REGISTRAR...................................................15
         SENIOR INDEBTEDNESS..................................................15
         SPECIAL RECORD DATE..................................................16
         STATED INTEREST RATE.................................................16
         STATED MATURITY......................................................16
         SUCCESSOR............................................................16
         TRANCHE..............................................................16
         TRUST................................................................16
         TRUSTEE..............................................................16
         TRUST INDENTURE ACT..................................................16
         TRUST SECURITIES.....................................................16
         TRUST SECURITIES GUARANTEE...........................................16
         UNITED STATES........................................................17
         UNPAID INTEREST......................................................17
      SECTION 102.  COMPLIANCE CERTIFICATES AND OPINIONS......................17
      SECTION 103.  CONTENT AND FORM OF DOCUMENTS DELIVERED TO TRUSTEE........17
      SECTION 104.  ACTS OF HOLDERS...........................................19
      SECTION 105.  NOTICES, ETC. TO TRUSTEE OR COMPANY.......................20
      SECTION 106.  NOTICE TO HOLDERS OF SECURITIES; WAIVER...................21
      SECTION 107.  CONFLICT WITH TRUST INDENTURE ACT.........................22
      SECTION 108.  EFFECT OF HEADINGS AND TABLE OF CONTENTS..................22
      SECTION 109.  SUCCESSORS AND ASSIGNS....................................22
      SECTION 110.  SEPARABILITY CLAUSE.......................................22
      SECTION 111.  BENEFITS OF INDENTURE.....................................22
      SECTION 112.  GOVERNING LAW.............................................22
      SECTION 113.  LEGAL HOLIDAYS............................................22

   ARTICLE TWO.   SECURITY FORMS
      SECTION 201.  FORMS GENERALLY...........................................23

   ARTICLE THREE. THE SECURITIES
      SECTION 301.  AMOUNT UNLIMITED; ISSUABLE IN SERIES......................24
      SECTION 302.  DENOMINATIONS.............................................28

                                       4
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      SECTION 303.  EXECUTION, DATING, CERTIFICATE OF AUTHENTICATION..........28
      SECTION 304.  TEMPORARY SECURITIES......................................31
      SECTION 305.  REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.......31
      SECTION 306.  MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES..........33
      SECTION 307.  PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED............34
      SECTION 308.  PERSONS DEEMED OWNERS.....................................35
      SECTION 309.  CANCELLATION BY SECURITY REGISTRAR........................35
      SECTION 310.  COMPUTATION OF INTEREST...................................36
      SECTION 311.  PAYMENT TO BE IN PROPER CURRENCY..........................36

   ARTICLE FOUR.  REDEMPTION OF SECURITIES
      SECTION 401.  APPLICABILITY OF ARTICLE..................................36
      SECTION 402.  ELECTION TO REDEEM; NOTICE TO TRUSTEE.....................36
      SECTION 403.  SELECTION OF SECURITIES TO BE REDEEMED....................37
      SECTION 404.  NOTICE OF REDEMPTION......................................37
      SECTION 405.  SECURITIES PAYABLE ON REDEMPTION DATE.....................38
      SECTION 406.  SECURITIES REDEEMED IN PART...............................39

   ARTICLE FIVE.  COVENANTS
      SECTION 501.  PAYMENT OF SECURITIES.....................................39
      SECTION 502.  MAINTENANCE OF OFFICE OR AGENCY...........................39
      SECTION 503.  MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.........40
      SECTION 504.  CORPORATE EXISTENCE.......................................41
      SECTION 505.  MAINTENANCE OF PROPERTIES.................................42
      SECTION 506.  WAIVER OF CERTAIN COVENANTS...............................42
      SECTION 507.  ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.............43
      SECTION 508.  RESTRICTION ON PAYMENT OF DIVIDENDS, ETC..................43
      SECTION 509.  AVA CAPITAL TRUST III.....................................44
      SECTION 510.  HOLDERS OF PREFERRED SECURITIES...........................44

   ARTICLE SIX.   SATISFACTION AND DISCHARGE
      SECTION 601.  SATISFACTION AND DISCHARGE OF SECURITIES..................44
      SECTION 602.  SATISFACTION AND DISCHARGE OF INDENTURE...................47
      SECTION 603.  APPLICATION OF TRUST MONEY................................47

   ARTICLE SEVEN. EVENTS OF DEFAULT; REMEDIES
      SECTION 701.  EVENTS OF DEFAULT.........................................48
      SECTION 702.  ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT........50
      SECTION 703.  COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT
                      BY TRUSTEE..............................................51
      SECTION 704.  APPLICATION OF MONEY COLLECTED............................51
      SECTION 705.  TRUSTEE MAY FILE PROOFS OF CLAIM..........................52
      SECTION 706.  TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION
                      OF SECURITIES...........................................53
      SECTION 707.  LIMITATION ON SUITS.......................................53
      SECTION 708.  UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
                    PREMIUM AND INTEREST......................................54

                                       5
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      SECTION 709.  RESTORATION OF RIGHTS AND REMEDIES........................54
      SECTION 710.  RIGHTS AND REMEDIES CUMULATIVE............................54
      SECTION 711.  DELAY OR OMISSION NOT WAIVER..............................55
      SECTION 712.  CONTROL BY HOLDERS OF SECURITIES..........................55
      SECTION 713.  WAIVER OF PAST DEFAULTS...................................55
      SECTION 714.  UNDERTAKING FOR COSTS.....................................56
      SECTION 715.  WAIVER OF STAY OR EXTENSION LAWS..........................56
      SECTION 716.  ACTION BY HOLDERS OF CERTAIN TRUST SECURITIES.............56

   ARTICLE EIGHT. THE TRUSTEE
      SECTION 801.  CERTAIN DUTIES AND RESPONSIBILITIES.......................57
      SECTION 802.  NOTICE OF DEFAULTS........................................58
      SECTION 803.  CERTAIN RIGHTS OF TRUSTEE.................................59
      SECTION 804.  NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES....60
      SECTION 805.  MAY HOLD SECURITIES.......................................60
      SECTION 806.  MONEY HELD IN TRUST.......................................60
      SECTION 807.  COMPENSATION AND REIMBURSEMENT............................60
      SECTION 808.  DISQUALIFICATION; CONFLICTING INTERESTS...................61
      SECTION 809.  CORPORATE TRUSTEE REQUIRED; ELIGIBILITY...................61
      SECTION 810.  RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.........62
      SECTION 811.  ACCEPTANCE OF APPOINTMENT BY SUCCESSOR....................64
      SECTION 812.  MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION
                      TO BUSINESS.............................................65
      SECTION 813.  PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.........65
      SECTION 814.  APPOINTMENT OF AUTHENTICATING AGENT.......................66

   ARTICLE NINE.  LISTS OF HOLDERS; REPORTS BY TRUSTEE AND COMPANY
      SECTION 901.  LISTS OF HOLDERS..........................................68
      SECTION 902.  REPORTS BY TRUSTEE AND COMPANY............................68

   ARTICLE TEN.  CONSOLIDATION, MERGER, CONVEYANCE OR OTHER TRANSFER
      SECTION 1001.  COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.....69
      SECTION 1002.  SUCCESSOR SUBSTITUTED....................................69
      SECTION 1003.  RELEASE OF COMPANY UPON CONVEYANCE OR OTHER TRANSFER.....70
      SECTION 1004.  MERGER INTO COMPANY......................................70
      SECTION 1005.  TRANSFER OF LESS THAN THE ENTIRETY.......................70

   ARTICLE ELEVEN.  SUPPLEMENTAL INDENTURES
      SECTION 1101.  SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.......73
      SECTION 1102.  SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS..........75
      SECTION 1103.  EXECUTION OF SUPPLEMENTAL INDENTURES.....................77
      SECTION 1104.  EFFECT OF SUPPLEMENTAL INDENTURES........................77
      SECTION 1105.  CONFORMITY WITH TRUST INDENTURE ACT......................77
      SECTION 1106.  REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.......77
      SECTION 1107.  MODIFICATION WITHOUT SUPPLEMENTAL INDENTURE..............77

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   ARTICLE TWELVE.  MEETINGS OF HOLDERS; ACTION WITHOUT MEETING
      SECTION 1201.  PURPOSES FOR WHICH MEETINGS MAY BE CALLED................78
      SECTION 1202.  CALL, NOTICE AND PLACE OF MEETINGS.......................78
      SECTION 1203.  PERSONS ENTITLED TO VOTE AT MEETINGS.....................79
      SECTION 1204.  QUORUM; ACTION...........................................79
      SECTION 1205.  ATTENDANCE AT MEETINGS; DETERMINATION OF VOTING
                       RIGHTS; CONDUCT AND ADJOURNMENT OF MEETINGS............80
      SECTION 1206.  COUNTING VOTES AND RECORDING ACTION OF MEETINGS..........81
      SECTION 1207.  ACTION WITHOUT MEETING...................................81

   ARTICLE THIRTEEN. IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
                       AND DIRECTORS
      SECTION 1301.  LIABILITY SOLELY CORPORATE...............................82

   ARTICLE FOURTEEN. SUBORDINATION OF SECURITIES
      SECTION 1401.  SECURITIES SUBORDINATE TO SENIOR INDEBTEDNESS............82
      SECTION 1402.  PAYMENT OVER OF PROCEEDS OF SECURITIES...................83
      SECTION 1403.  DISPUTES WITH HOLDERS OF CERTAIN SENIOR INDEBTEDNESS.....85
      SECTION 1404.  SUBROGATION..............................................85
      SECTION 1405.  OBLIGATION OF THE COMPANY UNCONDITIONAL..................85
      SECTION 1406.  PRIORITY OF SENIOR INDEBTEDNESS UPON MATURITY............86
      SECTION 1407.  TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS.................86
      SECTION 1408.  NOTICE TO TRUSTEE TO EFFECTUATE SUBORDINATION............87
      SECTION 1409.  MODIFICATION, EXTENSION, ETC. OF SENIOR INDEBTEDNESS
                       OF THE COMPANY.........................................87
      SECTION 1410.  TRUSTEE HAS NO FIDUCIARY DUTY TO HOLDERS OF SENIOR
                       INDEBTEDNESS OF THE COMPANY............................87
      SECTION 1411.  PAYING AGENTS OTHER THAN THE TRUSTEE.....................88
      SECTION 1412.  RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS NOT IMPAIRED....88
      SECTION 1413.  EFFECT OF SUBORDINATION PROVISIONS; TERMINATION..........88

   ARTICLE FIFTEEN.  EXCHANGE OF PREFERRED SECURITIES FOR SECURITIES
      SECTION 1501.  EXCHANGE OF PREFERRED SECURITIES FOR SECURITIES..........89

                                       7
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              INDENTURE, dated as of _____ 1, 2004 between AVISTA CORPORATION, a
corporation  duly  organized  and  existing  under  the  laws  of the  State  of
Washington  (hereinafter  sometimes  called  the  "Company"),  and UNION BANK OF
CALIFORNIA,  N.A., a corporation  duly  organized and existing under the laws of
California, as trustee (hereinafter sometimes called the "Trustee").

                             RECITALS OF THE COMPANY

              The Company has duly authorized the execution and delivery of this
Indenture  to  provide  for the  issuance  from  time  to time of its  unsecured
subordinated debentures, notes or other evidences of indebtedness (herein called
the  "Securities"),  to be issued in one or more series as contemplated  herein;
and all acts necessary to make this  Indenture a valid  agreement of the Company
have been performed.

              NOW, THEREFORE, THIS INDENTURE WITNESSETH that in consideration of
the premises and of the purchase of the Securities by the Holders thereof, it is
hereby  covenanted and agreed,  for the equal and ratable benefit of all Holders
of the  Securities  or of  series  thereof  (except  as  otherwise  contemplated
herein), as follows:

                                   ARTICLE ONE

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 101.  GENERAL DEFINITIONS.

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

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

                     (b)    all terms used herein without  definition  which are
              defined  in  the  Trust  Indenture  Act,  either  directly  or  by
              reference therein, have the meanings assigned to them therein;

                     (c)    all  accounting  terms not otherwise  defined herein
              have the meanings  assigned to them in accordance  with  generally
              accepted  accounting  principles in the United States, and, except
              as  otherwise  herein  expressly  provided,  the  term  "generally
              accepted  accounting  principles"  with respect to any computation
              required  or  permitted   hereunder  shall  mean  such  accounting
              principles as are  generally  accepted in the United States at the
              date of such  computation  or, at the election of the Company,  at
              the date of the execution and delivery of this Indenture;

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                     (d)    any reference to an "Article" or a "Section"  refers
              to an Article or a Section, as the case may be, of this Indenture;
              and

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

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

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

              "AUTHENTICATING AGENT" means any Person (other than the Company or
any Affiliate thereof) authorized by the Trustee to act on behalf of the Trustee
to authenticate the Securities of one or more series.

              "AUTHORIZED   OFFICER"  means  the  Chairman  of  the  Board,  the
President,  any Vice President,  the Treasurer,  any Assistant  Treasurer or the
Corporate   Secretary   or  any  other  duly   authorized   officer,   agent  or
attorney-in-fact of the Company named in an Officer's Certificate of the Company
signed by any of the aforesaid corporate officers.

              "BOARD OF  DIRECTORS"  means  either the board of directors of the
Company or any  committee  thereof duly  authorized to act in respect of matters
relating to this Indenture.

              "BOARD  RESOLUTION" means a copy of a resolution  certified by the
Corporate  Secretary or an Assistant  Corporate Secretary of the Company to have
been duly  adopted by the Board of  Directors  of the  Company and to be in full
force  and  effect  on the  date of such  certification,  and  delivered  to the
Trustee.

              "BUSINESS  DAY",  when used with  respect to a Place of Payment or
any other  particular  location  specified in the Securities or this  Indenture,
means any day,  other  than a Saturday  or  Sunday,  which is not a day on which
banking  institutions  or trust  companies  in such  Place of  Payment  or other
location are generally  authorized  or required by law,  regulation or executive
order to remain closed,  except as may be otherwise specified as contemplated by
Section 301.

              "COMMISSION" means the Securities and Exchange Commission, as from
time to time constituted,  created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the date of the execution and delivery of this
Indenture such Commission is not existing and

                                       9
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performing the duties now assigned to it under the Trust Indenture Act, then the
body, if any, performing such duties at such time.

              "COMMON  SECURITIES"  means any common trust interests issued by a
Trust or similar  securities  issued by  permitted  successors  to such Trust in
accordance with the Declaration pertaining to such Trust.

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

              "COMPANY  ORDER"  or  "COMPANY  REQUEST"  means,  respectively,  a
written order or request,  as the case may be, signed in the name of the Company
by an Authorized Officer and delivered to the Trustee.

              "CORPORATE  TRUST OFFICE" means the office of the Trustee at which
at any  particular  time its  corporate  trust  business  shall  be  principally
administered,  which  office at the date of the  execution  and delivery of this
Indenture is located at _____.

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

              "DECLARATION",  with respect to a Trust,  means the Declaration of
Trust  establishing  such Trust,  as the same shall be amended and restated from
time to time.

              "DISCOUNT  SECURITY"  means any  Security  which  provides  for an
amount  less than the  principal  amount  thereof to be due and  payable  upon a
declaration of  acceleration  of the Maturity  thereof  pursuant to Section 702.
"INTEREST" with respect to a Discount Security means interest,  if any, borne by
such Security at a Stated Interest Rate.

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

              "ELIGIBLE OBLIGATIONS" means:

                     (a)    with respect to Securities  denominated  in Dollars,
              Government Obligations; or

                     (b)    with respect to Securities denominated in a currency
              other  than  Dollars  or  in  a  composite  currency,  such  other
              obligations  or  instruments as shall be specified with respect to
              such Securities as contemplated by Section 301.

              "EVENT OF DEFAULT" has the meaning specified in Section 701.

                                       10
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              "FAIR VALUE" has the meaning specified in Section 1005.

              "GOVERNMENTAL AUTHORITY" means the government of the United States
or of any State or  Territory  thereof or of the  District of Columbia or of any
county,  municipality  or other  political  subdivision  of any thereof,  or any
department, agency, authority or other instrumentality of any of the foregoing.

              "GOVERNMENT OBLIGATIONS" means:

                     (a)    direct  obligations of, or obligations the principal
              of and interest on which are  unconditionally  guaranteed  by, the
              United States entitled to the benefit of the full faith and credit
              thereof; and

                     (b)    certificates,    depositary    receipts   or   other
              instruments   which  evidence  a  direct  ownership   interest  in
              obligations  described  in  clause  (a)  above or in any  specific
              interest or principal  payments due in respect thereof;  provided,
              however,  that  the  custodian  of such  obligations  or  specific
              interest or principal  payments  shall be a bank or trust  company
              (which may  include the  Trustee or any Paying  Agent)  subject to
              Federal  or  State  supervision  or  examination  with a  combined
              capital   and   surplus  of  at  least   Fifty   Million   Dollars
              ($50,000,000);  and  provided,  further,  that  except  as  may be
              otherwise  required by law, such  custodian  shall be obligated to
              pay to the holders of such  certificates,  depositary  receipts or
              other  instruments  the full amount  received by such custodian in
              respect of such obligations or specific  payments and shall not be
              permitted to make any deduction therefrom.

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

              "INDENTURE"  means this  instrument  as  originally  executed  and
delivered and as it may from time to time be amended and/or  supplemented by one
or more indentures or other instruments  supplemental  thereto or hereto entered
into pursuant to the applicable provisions hereof and shall include the terms of
particular series of Securities established as contemplated by Section 301.

              "INDEPENDENT  EXPERT'S  CERTIFICATE" has the meaning  specified in
Section 1005.

              "INSTITUTIONAL  TRUSTEE", with respect to a Trust, has the meaning
set forth in the Declaration establishing such Trust.

              "INTEREST  PAYMENT DATE",  when used with respect to any Security,
means the Stated Maturity of an installment of interest on such Security.

              "MATURITY", when used with respect to any Security, means the date
on which the principal of such Security or an installment  of principal  becomes
due and payable as provided in

                                       11
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such  Security  or in  this  Indenture,  whether  at  the  Stated  Maturity,  by
declaration of acceleration, upon call for redemption or otherwise.

              "NOTICE OF DEFAULT" has the meaning specified in Section 701.

              "OFFICER'S   CERTIFICATE"   means  a  certificate   signed  by  an
Authorized Officer of the Company and delivered to the Trustee.

              "OPINION OF COUNSEL" means a written  opinion of counsel,  who may
be counsel for the Company or other  counsel  acceptable  to the Trustee and who
may be an employee or Affiliate of the Company.

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

                     (a)    Securities  theretofore canceled or delivered to the
              Trustee for cancellation;

                     (b)    Securities deemed to have been paid for all purposes
              of this  Indenture in accordance  with Section 601 (whether or not
              the Company's  indebtedness  in respect thereof shall be satisfied
              and discharged for any other purpose); and

                     (c)    Securities  which have been paid pursuant to Section
              306 or in exchange for or in lieu of which other  Securities  have
              been authenticated and delivered pursuant to this Indenture, other
              than any such Securities in respect of which there shall have been
              presented to the Trustee proof  satisfactory to it and the Company
              that  such  Securities  are  held  by a  bona  fide  purchaser  or
              purchasers in whose hands such Securities are valid obligations of
              the Company;

provided,  however,  that  in  determining  whether  or not the  Holders  of the
requisite  principal amount of the Securities  Outstanding under this Indenture,
or the Outstanding  Securities of any series or Tranche, have given any request,
demand, authorization, direction, notice, consent or waiver hereunder or whether
or not a quorum is present at a meeting of Holders of Securities,

                     (x)    Securities owned by the Company or any other obligor
              upon the  Securities  or any  Affiliate  of the Company or of such
              other obligor (unless the Company,  such obligor or such Affiliate
              owns all  Securities  Outstanding  under  this  Indenture,  or all
              Outstanding  Securities of each such series and each such Tranche,
              as the case may be, determined  without regard to this clause (x))
              shall be  disregarded  and  deemed not to be  Outstanding,  except
              that,  in  determining  whether the Trustee  shall be protected in
              relying upon any such request, demand,  authorization,  direction,
              notice, consent or waiver or upon any such determination as to the
              presence of a quorum,  only Securities  which the Trustee knows to
              be so owned shall be so

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              disregarded;  provided,  however,  that  Securities so owned which
              have been pledged in good faith may be regarded as  Outstanding if
              it is established to the  reasonable  satisfaction  of the Trustee
              that the pledgee,  and not the Company,  any such other obligor or
              Affiliate of either thereof,  has the right so to act with respect
              to such  Securities and that the pledgee is not the Company or any
              other obligor upon the  Securities or any Affiliate of the Company
              or of such other obligor; and

                     (y)    the  principal  amount of a Discount  Security  that
              shall be deemed to be  Outstanding  for such purposes shall be the
              amount of the  principal  thereof that would be due and payable as
              of  the  date  of  such   determination   upon  a  declaration  of
              acceleration of the Maturity thereof pursuant to Section 702; and

provided,  further,  that, in the case of any Security the principal of which is
payable from time to time without presentment or surrender, the principal amount
of such  Security  that  shall be deemed to be  Outstanding  at any time for all
purposes of this Indenture shall be the original  principal  amount thereof less
the aggregate amount of principal thereof theretofore paid.

              "PAYING AGENT" means any Person, including the Company, authorized
by the Company to pay the principal of and premium, if any, or interest, if any,
on any Securities on behalf of the Company.

              "PERIODIC  OFFERING"  means an offering of  Securities of a series
from  time  to  time  any or all of the  specific  terms  of  which  Securities,
including without limitation the rate or rates of interest, if any, thereon, the
Stated  Maturity or Maturities  thereof and the redemption  provisions,  if any,
with respect  thereto,  are to be  determined  by the Company or its agents from
time to time  subsequent  to the  initial  request  for the  authentication  and
delivery of such  Securities by the Trustee,  all as contemplated in Section 301
and clause (b) of Section 303.

              "PERSON" means any individual,  corporation,  partnership, limited
liability  partnership,  limited  liability  company,  joint  venture,  trust or
unincorporated organization or any Governmental Authority.

              "PLACE OF PAYMENT",  when used with respect to the  Securities  of
any series,  or any Tranche  thereof,  means the place or places,  specified  as
contemplated by Section 301, at which,  subject to Section 502, principal of and
premium,  if any,  and  interest,  if any, on the  Securities  of such series or
Tranche are payable.

              "PREDECESSOR  SECURITY"  of any  particular  Security  means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such  particular  Security;  and,  for the purposes of this  definition,  any
Security  authenticated  and  delivered  under Section 306 in exchange for or in
lieu of a mutilated,  destroyed, lost or stolen Security shall be deemed (to the
extent  lawful) to evidence the same debt as the mutilated,  destroyed,  lost or
stolen Security.

                                       13
<PAGE>


              "PREFERRED  SECURITIES" means any preferred trust interests issued
by a Trust or similar securities issued by permitted successors to such Trust in
accordance with the Declaration pertaining to such Trust.

              "REDEMPTION  DATE",  when used with  respect to any Security to be
redeemed,  means  the date  fixed for such  redemption  by or  pursuant  to this
Indenture.

              "REDEMPTION  PRICE",  when used with respect to any Security to be
redeemed,  means  the  price  at  which it is to be  redeemed  pursuant  to this
Indenture.

              "REGULAR  RECORD  DATE" for the  interest  payable on any Interest
Payment Date on the  Securities of any series means the date  specified for that
purpose as contemplated by Section 301.

              "REQUIRED CURRENCY" has the meaning specified in Section 311.

              "RESPONSIBLE  OFFICER",  when used with  respect  to the  Trustee,
means any officer of the  Trustee  assigned  by the  Trustee to  administer  its
corporate trust matters.

              "SECURITIES"  means  any  bonds,  notes  and  other  evidences  of
indebtedness authenticated and delivered under this Indenture.

              "SECURITY  REGISTER" and "SECURITY  REGISTRAR" have the respective
meanings specified in Section 305.

              "SENIOR  INDEBTEDNESS"  means,  with  respect  to any  Person  (a)
indebtedness  (including premium, if any, and interest, if any, thereon) of such
Person for money  borrowed  or for the  deferred  purchase  price of property or
services in transactions  not in the ordinary course of business;  (b) all other
indebtedness  (including  premium,  if  any,  and  interest,  if  any,  thereon)
evidenced by bonds,  debentures,  notes or other similar instruments (other than
Securities)  issued by such  Person;  (c) all  obligations  of such Person under
lease  agreements  designating  such  Person  as  lessee,  irrespective  of  the
treatment of any such lease agreement for accounting, tax or other purposes; (d)
all obligations of such Person for reimbursement (including premium, if any, and
interest,  if  any  thereon)  in  respect  of any  letter  of  credit,  banker's
acceptance,  security purchase facility or similar credit  transaction;  (e) all
obligations  of the  character  referred  to in clauses (a) through (d) above of
other Persons for the payment of which such Person is  responsible  or liable as
obligor,  guarantor  or  otherwise;  and (f) all  obligations  of the  character
referred to in clauses (a)  through  (d) above of other  Persons  secured by any
lien on any property or asset of such Person  (whether or not such obligation is
assumed by such Person);  provided,  however, that Senior Indebtedness shall not
include (x) any such indebtedness  that is by its terms  subordinated to or pari
passu with the Securities; (y) any indebtedness between or among such Person and
its Affiliates, including all other debt securities and guarantees in respect of
such debt  securities,  issued to (i) any  Trust or (ii) any other  trust,  or a
trustee of such trust, partnership or other entity which is a financing

                                       14
<PAGE>


vehicle of such Person in connection with the issuance by such financing vehicle
of preferred  securities or (z) indebtedness for goods or materials purchased in
the ordinary course of business or for services  obtained in the ordinary course
of business or indebtedness consisting of trade payables.

              "SPECIAL  RECORD  DATE" for the payment of any Unpaid  Interest on
the  Securities  of any series  means a date fixed by the  Trustee  pursuant  to
Section 307.

              "STATED INTEREST RATE" means a rate (whether fixed or variable) at
which an  obligation  by its  terms  is  stated  to bear  simple  interest.  Any
calculation or other  determination to be made under this Indenture by reference
to the Stated Interest Rate on an obligation  shall be made (a) if the Company's
obligations in respect of any other  indebtedness  shall be evidenced or secured
in whole or in part by such obligation,  by reference to the lower of the Stated
Interest  Rate on such  obligation  and the Stated  Interest  Rate on such other
indebtedness  and (b)  without  regard  to the  effective  interest  cost to the
Company of such obligation or of any such other indebtedness.

              "STATED MATURITY", when used with respect to any obligation or any
installment of principal  thereof or interest  thereon,  means the date on which
the principal of such obligation or such installment of principal or interest is
stated to be due and payable  (without  regard to any provisions for redemption,
prepayment, acceleration, purchase or extension).

              "SUCCESSOR" has the meaning set forth in Section 1001.

              "TRANCHE"  means a group of  Securities  which (a) are of the same
series and (b) have identical terms except as to principal amount and/or date of
issuance.

              "TRUST" means AVA Capital Trust III, a statutory trust established
under the laws of the State of Delaware, and any other Trust established for the
purpose  of  issuing  securities  upon  the  issuance  and  delivery  to  it  of
Securities.

              "TRUSTEE"  means the Person  named as the  "Trustee"  in the first
paragraph of this  Indenture  until a successor  trustee  shall have become such
with  respect to one or more series of  Securities  pursuant  to the  applicable
provisions of this  Indenture,  and thereafter  "Trustee"  shall mean or include
each Person who is then a Trustee  hereunder,  and, if at any time there is more
than one such Person,  acting as trustee  hereunder,  "Trustee"  shall mean each
such Person so acting.

              "TRUST  INDENTURE ACT" means,  as of any time, the Trust Indenture
Act of 1939, or any successor statute, as in effect at such time.

              "TRUST SECURITIES",  with respect to a Trust, means the securities
issued by such Trust, as established in the Declaration of such Trust.

              "TRUST SECURITIES GUARANTEE" means the Guarantee Agreement between
the Company,  as Trust  Securities  Guarantor,  and a guarantee  trustee for the
benefit of the holders of Preferred  Securities and Common  Securities issued by
the Trust.

                                       15
<PAGE>


              "UNITED   STATES"  means  the  United   States  of  America,   its
territories,   its   possessions  and  other  areas  subject  to  its  political
jurisdiction.

              "UNPAID INTEREST" has the meaning specified in Section 307.

SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.

              Except as otherwise expressly provided in this Indenture, upon any
application  or request by the Company to the  Trustee to take any action  under
any  provision of this  Indenture,  the Company  shall furnish to the Trustee an
Officer's  Certificate stating that all conditions  precedent,  if any, provided
for in this  Indenture  relating to the proposed  action have been complied with
and an Opinion of Counsel  stating  that in the opinion of such counsel all such
conditions precedent,  if any, have been complied with, it being understood that
in the case of any such  application  or request as to which the  furnishing  of
such  documents is  specifically  required by any  provision  of this  Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.

              Every  certificate  or opinion with respect to  compliance  with a
condition or covenant provided for in this Indenture shall include:

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

                     (b)    a brief  statement as to the nature and scope of the
              examination or investigation upon which the statements or opinions
              contained in such certificate or opinion are based;

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

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

SECTION 103.  CONTENT AND FORM OF DOCUMENTS DELIVERED TO TRUSTEE.

                     (a)    Any  Officer's  Certificate  may be  based  (without
              further examination or investigation), insofar as it relates to or
              is  dependent  upon  legal   matters,   upon  an  opinion  of,  or
              representations by, counsel, unless, in any case, such officer has
              actual    knowledge   that   the   certificate   or   opinion   or
              representations  with  respect  to the  matters  upon  which  such
              Officer's Certificate may be based as aforesaid are erroneous.

                                       16
<PAGE>


              Any Opinion of Counsel may be based (without  further  examination
or  investigation),  insofar  as it  relates  to or is  dependent  upon  factual
matters,  information with respect to which is in the possession of the Company,
upon a  certificate  of, or  representations  by, an officer or  officers of the
Company,  unless  such  counsel has actual  knowledge  that the  certificate  or
opinion or  representations  with  respect to the matters upon which his opinion
may be based as aforesaid are erroneous. In addition, any Opinion of Counsel may
be based (without further  examination or investigation),  insofar as it relates
to or is  dependent  upon matters  covered in an Opinion of Counsel  rendered by
other  counsel,  upon such other  Opinion of Counsel,  unless  such  counsel has
actual knowledge that the Opinion of Counsel rendered by such other counsel with
respect  to the  matters  upon  which his  Opinion  of  Counsel  may be based as
aforesaid are erroneous.  If, in order to render any Opinion of Counsel provided
for herein,  the signer thereof shall deem it necessary that additional facts or
matters be stated in any Officer's  Certificate  provided for herein,  then such
certificate may state all such additional facts or matters as the signer of such
Opinion of Counsel may request.

              (b)    In any  case  where  several  matters  are  required  to be
certified  by, or covered by an opinion  of,  any  specified  Person,  it is not
necessary  that all such matters be certified  by, or covered by the opinion of,
only one such  Person,  or that  they be so  certified  or  covered  by only one
document,  but one such  Person may certify or give an opinion  with  respect to
some  matters and one or more other such  Persons as to other  matters,  and any
such Person may certify or give an opinion as to such  matters in one or several
documents. Where (i) any Person is required to make, give or execute two or more
applications,  requests, consents,  certificates,  statements, opinions or other
instruments under this Indenture,  or (ii) two or more Persons are each required
to make, give or execute any such application,  request,  consent,  certificate,
statement,  opinion  or  other  instrument,  any  such  applications,  requests,
consents, certificates,  statements, opinions or other instruments may, but need
not, be consolidated and form one instrument.

              (c)    Whenever,  subsequent  to the receipt by the Trustee of any
Board Resolution, Officer's Certificate, Opinion of Counsel or other document or
instrument,  a clerical,  typographical  or other  inadvertent or  unintentional
error or omission shall be discovered  therein, a new document or instrument may
be  substituted  therefor in corrected form with the same force and effect as if
originally filed in the corrected form and, irrespective of the date or dates of
the actual  execution  and/or  delivery  thereof,  such  substitute  document or
instrument shall be deemed to have been executed and/or delivered as of the date
or dates  required  with respect to the document or  instrument  for which it is
substituted. Anything in this Indenture to the contrary notwithstanding,  if any
such corrective  document or instrument  indicates that action has been taken by
or at the  request  of the  Company  which  could  not have  been  taken had the
original document or instrument not contained such error or omission, the action
so taken shall not be invalidated or otherwise rendered ineffective but shall be
and remain in full force and effect, except to the extent that such action was a
result of willful  misconduct or bad faith.  Without  limiting the generality of
the  foregoing,  any  Securities  issued under the  authority of such  defective
document or instrument shall nevertheless be

                                       17
<PAGE>


the valid  obligations of the Company entitled to the benefits  provided by this
Indenture equally and ratably with all other Outstanding  Securities,  except as
aforesaid.

SECTION 104.  ACTS OF HOLDERS.

              (a)    Any  request,  demand,  authorization,  direction,  notice,
consent, election, waiver or other action provided by this Indenture to be made,
given  or taken by  Holders  may be  embodied  in and  evidenced  by one or more
instruments of  substantially  similar tenor signed by such Holders in person or
by an agent duly appointed in writing or, alternatively,  may be embodied in and
evidenced by the record of Holders voting in favor thereof,  either in person or
by proxies duly appointed in writing,  at any meeting of Holders duly called and
held in accordance  with the provisions of Article  Twelve,  or a combination of
such  instruments  and any such  record.  Except as herein  otherwise  expressly
provided, such action shall become effective when such instrument or instruments
or record or both are delivered to the Trustee and, where it is hereby expressly
required,  to the Company.  Such  instrument or instruments  and any such record
(and the action  embodied  therein and evidenced  thereby) are herein  sometimes
referred to as the "ACT" of the Holders  signing such  instrument or instruments
and so voting at any such meeting.  Proof of execution of any such instrument or
of a writing  appointing  any such  agent,  or of the holding by any Person of a
Security,  shall be sufficient for any purpose of this Indenture and (subject to
Section 801) conclusive in favor of the Trustee and the Company,  if made in the
manner  provided in this Section.  The record of any meeting of Holders shall be
proved in the manner provided in Section 1206.

              (b)    The fact and date of the  execution  by any  Person  of any
such  instrument  or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer  authorized by
law to take  acknowledgments  of deeds,  certifying that the individual  signing
such instrument or writing  acknowledged to him the execution  thereof or may be
proved in any other manner  which the Trustee and the Company  deem  sufficient.
Where  such  execution  is by a  signer  acting  in a  capacity  other  than his
individual  capacity,  such  certificate  or  affidavit  shall  also  constitute
sufficient proof of his authority.

              (c)    The  ownership,   principal  amount  (except  as  otherwise
contemplated   in  clause  (y)  of  the  first  proviso  to  the  definition  of
Outstanding)  and serial numbers of Securities held by any Person,  and the date
of holding the same, shall be proved by the Security Register.

              (d)    Any  request,  demand,  authorization,  direction,  notice,
consent,  election,  waiver or other Act of a Holder  shall  bind  every  future
Holder of the same  Security  and the Holder of every  Security  issued upon the
registration of transfer  thereof or in exchange  therefor or in lieu thereof in
respect of anything  done,  omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.

              (e)    Until  such time as  written  instruments  shall  have been
delivered to the Trustee with respect to the  requisite  percentage of principal
amount of Securities for the action  contemplated by such instruments,  any such
instrument executed and delivered by or on behalf of a

                                       18
<PAGE>


Holder may be revoked with respect to any or all of such  Securities  by written
notice by such Holder or any  subsequent  Holder,  proven in the manner in which
such instrument was proven.

              (f)    Securities   of  any  series,   or  any  Tranche   thereof,
authenticated  and delivered after any Act of Holders may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any action
taken by such Act of Holders. If the Company shall so determine,  new Securities
of any series, or any Tranche thereof, so modified as to conform, in the opinion
of the Trustee and the  Company,  to such action may be prepared and executed by
the Company  and  authenticated  and  delivered  by the Trustee in exchange  for
Outstanding Securities of such series or Tranche.

              (g)    The Company may, at its option,  by Company  Order,  fix in
advance a record  date for the  determination  of Holders  entitled  to give any
request, demand, authorization,  direction, notice, consent, waiver or other Act
solicited by the Company,  but the Company  shall have no  obligation  to do so;
provided,  however, that the Company may not fix a record date for the giving or
making of any notice, declaration,  request or direction referred to in the next
sentence.  In addition,  the Trustee may, at its option, fix in advance a record
date for the  determination  of Holders of Securities of any series  entitled to
join in the  giving or  making of any  Notice of  Default,  any  declaration  of
acceleration  referred to in Section 702,  any request to institute  proceedings
referred to in Section 707 or any direction  referred to in Section 712, in each
case with  respect to  Securities  of such  series.  If any such  record date is
fixed, such request, demand,  authorization,  direction, notice, consent, waiver
or other Act, or such notice,  declaration,  request or direction,  may be given
before or after such record date, but only the Holders of record at the close of
business on the record  date shall be deemed to be Holders  for the  purposes of
determining (i) whether  Holders of the requisite  proportion of the Outstanding
Securities  have  authorized  or agreed or  consented  to such Act (and for that
purpose the  Outstanding  Securities  shall be  computed as of the record  date)
and/or (ii) which  Holders may revoke any such Act  (notwithstanding  subsection
(e) of this Section);  and any such Act, given as aforesaid,  shall be effective
whether or not the Holders  which  authorized or agreed or consented to such Act
remain Holders after such record date and whether or not the Securities  held by
such Holders remain Outstanding after such record date.

SECTION 105. NOTICES, ETC. TO TRUSTEE OR COMPANY.

              Any request, demand,  authorization,  direction,  notice, consent,
election,  waiver or Act of Holders or other  document  provided or permitted by
this  Indenture  to be made upon,  given or  furnished  to, or filed  with,  the
Trustee by any Holder or by the Company, or the Company by the Trustee or by any
Holder,  shall be  sufficient  for every  purpose  hereunder  (unless  otherwise
expressly provided herein) if in writing and delivered  personally to an officer
or other  responsible  employee of the  addressee,  or  transmitted by facsimile
transmission,  telex or other direct written  electronic  means to the telephone
number or other electronic communications address set forth for such party below
or otherwise as such party shall from time to time designate,  or transmitted by
registered mail,  charges prepaid,  to the applicable address set forth for such
party  below or to such  other  address  as such  party  may  from  time to time
designate:

                                       19
<PAGE>


                     If to the Trustee, to:

                              Union Bank of California, N.A.


                              Attention:
                                          --------------------------------
                              Facsimile:
                                          --------------------------------

                     If to the Company, to:

                              Avista Corporation
                              1411 East Mission Avenue
                              Spokane, Washington  99202
                              Attention:  [Treasurer]
                              Facsimile:  [(509) 482-4879]

              Any communication contemplated herein shall be deemed to have been
made,  given,  furnished  and  filed  if  personally  delivered,  on the date of
delivery,  if  transmitted  by  facsimile  transmission,  telex or other  direct
written  electronic  means, on the date of  transmission,  and if transmitted by
registered mail, on the date of receipt.

SECTION 106.  NOTICE TO HOLDERS OF SECURITIES; WAIVER.

              Except  as  otherwise   expressly  provided  herein,   where  this
Indenture  provides  for notice to Holders of any event,  such  notice  shall be
sufficiently  given,  and shall be deemed  given,  to Holders if in writing  and
mailed,  first-class  postage prepaid, to each Holder affected by such event, at
the address of such  Holder as it appears in the  Security  Register,  not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice.

              In case by reason of the  suspension of regular mail service or by
reason  of any other  cause it shall be  impracticable  to give  such  notice to
Holders by mail,  then such  notification  as shall be made with the approval of
the  Trustee  shall  constitute  a  sufficient  notification  for every  purpose
hereunder.  In any case where  notice to Holders is given by mail,  neither  the
failure to mail such  notice,  nor any  defect in any  notice so mailed,  to any
particular  Holder shall affect the  sufficiency  of such notice with respect to
other Holders.

              Any notice  required by this Indenture may be waived in writing by
the Person  entitled to receive  such notice,  either  before or after the event
otherwise to be specified  therein,  and such waiver shall be the  equivalent of
such notice.  Waivers of notice by Holders shall be filed with the Trustee,  but
such filing  shall not be a condition  precedent  to the  validity of any action
taken in reliance upon such waiver.

                                       20
<PAGE>


SECTION 107.  CONFLICT WITH TRUST INDENTURE ACT.

              If any provision of this Indenture limits,  qualifies or conflicts
with another provision hereof which is required or deemed to be included in this
Indenture by, or is otherwise  governed by, any provision of the Trust Indenture
Act, such other provision shall control;  and if any provision  hereof otherwise
conflicts with the Trust Indenture Act, the Trust Indenture Act shall control.

SECTION 108.  EFFECT OF HEADINGS AND TABLE OF CONTENTS.

              The Article and Section  headings in this  Indenture and the Table
of  Contents  are for  convenience  only and shall not affect  the  construction
hereof.

SECTION 109.  SUCCESSORS AND ASSIGNS.

              All  covenants  and  agreements  in this  Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.

SECTION 110.  SEPARABILITY CLAUSE.

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

SECTION 111.  BENEFITS OF INDENTURE.

              Nothing in this Indenture or the  Securities,  express or implied,
shall  give to any  Person,  other than the  parties  hereto,  their  successors
hereunder  and the Holders  and, to the extent  provided in Sections  104(a) and
716,  registered  holders  of Trust  Securities  (other  than  Trust  Securities
initially  issued and sold to the Company) and, so long as the notice  described
in Section 1413 shall not have been given, holders of Senior  Indebtedness,  any
benefit or any legal or equitable  right,  remedy or claim under this Indenture,
provided,  however, that so long as any Preferred Securities remain outstanding,
the holders of such Preferred  Securities,  subject to certain  limitations  set
forth in this  Indenture,  may  enforce  the  Company's  obligations  hereunder,
directly  against the Company,  as third party  beneficiaries  of this Indenture
without proceeding against the Trust issuing such Preferred Securities.

SECTION 112.  GOVERNING LAW.

              This  Indenture  and  the  Securities  shall  be  governed  by and
construed in accordance with the law of the State of New York (including without
limitation  Section  5-1401  of the  New  York  General  Obligations  Law or any
successor to such  statute),  except to the extent that the Trust  Indenture Act
shall be applicable.

                                       21
<PAGE>


SECTION 113.  LEGAL HOLIDAYS.

              In any case where any Interest  Payment Date,  Redemption  Date or
Stated  Maturity  of any  Security  shall not be a Business  Day at any Place of
Payment,  then  (notwithstanding any other provision of this Indenture or of the
Securities other than a contrary  provision in the Securities of any series,  or
any Tranche thereof, or in the indenture  supplemental  hereto, Board Resolution
or Officer's  Certificate  which establishes the terms of the Securities of such
series or Tranche)  payment of interest or principal  and premium,  if any, need
not be made at such Place of  Payment on such date,  but may be made on the next
succeeding  Business Day at such Place of Payment with the same force and effect
as if made on the Interest  Payment Date or  Redemption  Date,  or at the Stated
Maturity,  and, if such payment is made or duly  provided  for on such  Business
Day, no interest  shall  accrue on the amount so payable for the period from and
after such Interest  Payment Date,  Redemption Date or Stated  Maturity,  as the
case may be, to such Business Day.


                                   ARTICLE TWO

                                 SECURITY FORMS

SECTION 201.  FORMS GENERALLY.

              The definitive Securities of each series shall be in substantially
the  form or forms  established  in the  Officer's  Certificate,  the  indenture
supplemental  hereto or the Board Resolution  establishing  such series,  in any
case  with  such  appropriate  insertions,  omissions,  substitutions  and other
variations  as are required or permitted  by this  Indenture,  and may have such
letters,   numbers  or  other  marks  of  identification  and  such  legends  or
endorsements  placed  thereon as may be required to comply with the rules of any
securities  exchange or as may,  consistently  herewith,  be  determined  by the
officers executing such Securities,  as evidenced by their execution thereof. If
the form or forms of  Securities of any series are  established  in an Officer's
Certificate  or  a  Board  Resolution,   such  Officer's  Certificate  or  Board
Resolution  shall be delivered to the Trustee at or prior to the delivery of the
Company Order contemplated by Section 303 for the authentication and delivery of
such Securities.

              [Unless  otherwise  specified  as  contemplated  by Section 301 or
1101(f),  the]  Securities of each series shall be issuable in  registered  form
without coupons.  The definitive  Securities shall be produced in such manner as
shall be determined by the officers  executing such Securities,  as evidenced by
their execution thereof.

SECTION 202.  FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.

              The  Trustee's   certificate   of   authentication   shall  be  in
substantially the form set forth below:

                                       22
<PAGE>


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


---------------------------------
                                        as Trustee

                                        By: _____________________________
                                                 Authorized Officer



                                  ARTICLE THREE

                                 THE SECURITIES

SECTION 301.  AMOUNT UNLIMITED; ISSUABLE IN SERIES.

              The  aggregate   principal  amount  of  Securities  which  may  be
authenticated and delivered under this Indenture is unlimited.

              The  Securities  may be  issued  from  time to time in one or more
series.   Subject  to  the  last  paragraph  of  this  Section,   prior  to  the
authentication  and  delivery  of  Securities  of  any  series  there  shall  be
established  by  specification  in  an  Officer's  Certificate,  a  supplemental
indenture or in a Board Resolution:

                     (a)    the title of the  Securities  of such series  (which
              shall distinguish the Securities of such series from Securities of
              all other series);

                     (b)    any limit upon the aggregate principal amount of the
              Securities of such series which may be authenticated and delivered
              under this  Indenture  (except for  Securities  authenticated  and
              delivered upon registration of transfer of, or in exchange for, or
              in lieu of, other  Securities  of such series  pursuant to Section
              304,  305, 306, 406 or 1106 and except for any  Securities  which,
              pursuant  to  Section   303,   are  deemed   never  to  have  been
              authenticated and delivered hereunder);

                     (c)    the Persons  (without  specific  identification)  to
              whom  interest,  if any,  on  Securities  of such  series,  or any
              Tranche  thereof,  shall be payable,  if other than the Persons in
              whose  names  such   Securities   (or  one  or  more   Predecessor
              Securities) are registered at the close of business on the Regular
              Record Date for such interest;

                     (d)    the  date or dates on  which  the  principal  of the
              Securities of such series,  or any Tranche thereof,  is payable or
              any formulary or other method or other means by which such date or
              dates shall be determined,  by reference to an index or

                                       23
<PAGE>


              other fact or event  ascertainable  outside of this  Indenture  or
              otherwise  (without  regard  to  any  provisions  for  redemption,
              prepayment,  acceleration, purchase or extension)[; and the right,
              if any, to extend the Maturity of the  Securities  of such series,
              or any Tranche thereof, and the duration of any such extension;]

                     (e)    the rate or rates at which  the  Securities  of such
              series,  or any  Tranche  thereof,  shall  bear  interest,  if any
              (including the rate or rates at which overdue principal shall bear
              interest,  and the right,  if any, to extend the interest  payment
              periods and the duration of any such extension;  if different from
              the rate or rates at which such  Securities  shall  bear  interest
              prior to Maturity, and, if applicable,  the rate or rates at which
              overdue  premium or interest shall bear interest,  if any), or any
              formulary  or other  method or other  means by which  such rate or
              rates shall be  determined  by reference to an index or other fact
              or event ascertainable outside of this Indenture or otherwise; the
              date or dates from which such interest shall accrue;  the Interest
              Payment  Dates on which such  interest  shall be  payable  and the
              Regular  Record Date,  if any,  for the  interest  payable on such
              Securities on any Interest  Payment Date; the basis of computation
              of  interest,  if other than as provided in Section  310;  and the
              right,  if any,  to extend the  interest  payment  periods and the
              duration of any such extension;

                     (f)    the place or places at which  and/or the methods (if
              other than as provided  elsewhere in this  Indenture) by which (i)
              the  principal of and premium,  if any, and  interest,  if any, on
              Securities  of such  series,  or any  Tranche  thereof,  shall  be
              payable,  (ii)  registration  of  transfer of  Securities  of such
              series, or any Tranche thereof,  may be effected,  (iii) exchanges
              of  Securities  of such  series,  or any Tranche  thereof,  may be
              effected  and (iv)  notices  and demands to or upon the Company in
              respect of the Securities of such series,  or any Tranche thereof,
              and this Indenture may be served;  the Security  Registrar and any
              Paying Agent or Agents for such series or Tranche; and, if such is
              the case, that the principal of such  Securities  shall be payable
              without the presentment or surrender thereof;

                     (g)    the  period or periods  within  which or the date or
              dates on  which,  the  price or  prices at which and the terms and
              conditions  upon  which  the  Securities  of such  series,  or any
              Tranche  thereof,  may be  redeemed,  in whole or in part,  at the
              option of the Company [and any restrictions on such redemptions];

                     (h)    the  obligation  or  obligations,  if  any,  of  the
              Company to redeem or purchase the  Securities  of such series,  or
              any  Tranche  thereof,  pursuant  to any  sinking  fund  or  other
              mandatory  redemption  provisions  or at the  option  of a  Holder
              thereof  and the  period or  periods  within  which or the date or
              dates on  which,  the  price or  prices at which and the terms and
              conditions  upon  which  such  Securities  shall  be  redeemed  or
              purchased,  in whole or in part, pursuant to such obligation,  and

                                       24
<PAGE>


              applicable  exceptions to the  requirements  of Section 404 in the
              case of mandatory  redemption  or  redemption at the option of the
              Holder;

                     (i)    the   denominations  in  which  Securities  of  such
              series,  or any Tranche  thereof,  shall be issuable if other than
              denominations  of One Thousand  Dollars  ($1,000) and any integral
              multiple thereof (in the case of Securities issued to a Trust or a
              trustee of such trust in  connection  with the  issuance  of Trust
              Securities  by  such  Trust,   the   denomination  in  which  such
              Securities  shall be  issuable  if  other  than  denominations  of
              Twenty-Five Dollars ($25) and any integral multiple thereof);

                     (j)    the  currency  or  currencies,  including  composite
              currencies,  in which payment of the  principal of or premium,  if
              any, or interest, if any, on the Securities of such series, or any
              Tranche  thereof,  shall be payable (if other than in Dollars) and
              the  formulary  or  other  method  or other  means  by  which  the
              equivalent of any such amount in Dollars is to be  determined  for
              any  purpose,   including  for  the  purpose  of  determining  the
              principal  amount of such  Securities  deemed to be outstanding at
              any time;

                     (k)    if the principal of or premium, if any, or interest,
              if any, on the Securities of such series,  or any Tranche thereof,
              are to be  payable,  at the  election  of the  Company or a Holder
              thereof,  in a coin or  currency  other  than  that in  which  the
              Securities are stated to be payable,  the period or periods within
              which, and the terms and conditions upon which,  such election may
              be made;

                     (l)    if the principal of or premium, if any, or interest,
              if any, on the Securities of such series,  or any Tranche thereof,
              are to be  payable,  or are to be payable at the  election  of the
              Company or a Holder thereof, in securities or other property,  the
              type and  amount  of such  securities  or other  property,  or the
              formulary  or other  method or other  means by which  such  amount
              shall be determined,  and the period or periods within which,  and
              the terms and  conditions  upon which,  any such  election  may be
              made;

                     (m)    if the amount payable in respect of the principal of
              or premium, if any, or interest, if any, on the Securities of such
              series,  or any Tranche thereof,  may be determined with reference
              to an index or other fact or event  ascertainable  outside of this
              Indenture,  the manner in which such amounts  shall be  determined
              (to the  extent  not  established  pursuant  to clause (e) of this
              paragraph);

                     (n)    if other than the entire  principal  amount thereof,
              the portion of the principal  amount of Securities of such series,
              or any Tranche thereof, which shall be payable upon declaration of
              acceleration of the Maturity thereof pursuant to Section 702;

                                       25
<PAGE>


                     (o)    the terms, if any,  pursuant to which the Securities
              of such series,  or any Tranche thereof,  may be converted into or
              exchanged for shares of capital  stock or other  securities of the
              Company or any other Person;

                     (p)    the obligations or instruments,  if any, which shall
              be  considered  to be  Eligible  Obligations  in  respect  of  the
              Securities of such series, or any Tranche thereof,  denominated in
              a currency other than Dollars or in a composite currency,  and any
              additional or alternative  provisions for the reinstatement of the
              Company's  indebtedness  in respect of such  Securities  after the
              satisfaction and discharge thereof as provided in Section 601;

                     (q)    if the  Securities  of such  series,  or any Tranche
              thereof,  are to be issued in global form, (i) any  limitations on
              the rights of the Holder or Holders of such Securities to transfer
              or  exchange  the same or to obtain the  registration  of transfer
              thereof,  (ii) any  limitations  on the  rights  of the  Holder or
              Holders thereof to obtain certificates therefor in definitive form
              in lieu of  temporary  form and (iii)  any and all  other  matters
              incidental to such Securities;

                     (r)    if the  Securities  of such  series,  or any Tranche
              thereof,  are to be  issuable  as bearer  securities,  any and all
              matters incidental thereto which are not specifically addressed in
              a supplemental  indenture as contemplated by clause (f) of Section
              1101;

                     (s)    to the extent not established pursuant to clause (q)
              of this paragraph, any limitations on the rights of the Holders of
              the Securities of such Series, or any Tranche thereof, to transfer
              or  exchange  such  Securities  or to obtain the  registration  of
              transfer  thereof;  and if a service  charge  will be made for the
              registration of transfer or exchange of Securities of such series,
              or any Tranche thereof, the amount or terms thereof;

                     (t)    any  exceptions  to Section 113, or variation in the
              definition of Business Day, with respect to the Securities of such
              series, or any Tranche thereof; and

                     (u)    the designation of the Trust to which  Securities of
              such series are to be issued;

                     (v)    any other terms of the Securities of such series, or
              any Tranche thereof.

              With  respect  to  Securities  of a series  subject  to a Periodic
Offering,  the Officer's  Certificate,  the indenture supplemental hereto or the
Board Resolution which  establishes such series, as the case may be, may provide
general terms or parameters for Securities of such series and

                                       26
<PAGE>


provide  either that the specific  terms of  Securities  of such series,  or any
Tranche thereof,  shall be specified in a Company Order or that such terms shall
be  determined  by the  Company  or its  agents in  accordance  with  procedures
specified in a Company Order as contemplated by clause (b) of Section 303.

              Unless otherwise  specified with respect to a series of Securities
as contemplated by Section 301(b), any limit upon the aggregate principal amount
of a series of  Securities  may be increased  without the consent of any Holders
and additional  Securities of such series may be authenticated  and delivered up
to the limit upon the aggregate principal amount authorized with respect to such
series as so increased.

              Anything herein to the contrary notwithstanding, the Trustee shall
be under no obligation to authenticate and deliver  Securities of any series the
terms of which,  established as contemplated  by this Section,  would affect the
rights, duties, obligations, liabilities or immunities of the Trustee under this
Indenture or otherwise.

SECTION 302.  DENOMINATIONS.

              Unless  otherwise  provided  as  contemplated  by Section 301 with
respect to any series of Securities,  or any Tranche thereof,  the Securities of
each series shall be issuable in  denominations of One Thousand Dollars ($1,000)
and any integral  multiple thereof (in the case of securities  issued to a Trust
or a trustee of such trust in connection  with the issuance of Trust  Securities
by such Trust,  the Securities of each series shall be issuable in denominations
of Twenty-Five Dollars ($25) and any integral multiple thereof).

SECTION 303.  EXECUTION, DATING, AUTHENTICATION.

              Unless  otherwise  specified as  contemplated  by Section 301 with
respect to any series of  Securities,  or any Tranche  thereof,  the  Securities
shall be  executed on behalf of the Company by an  Authorized  Officer,  and may
have the corporate seal of the Company affixed thereto or reproduced thereon and
attested  by its  Secretary,  one  of its  Assistant  Secretaries  or any  other
Authorized  Officer.  The  signature  of any or all  of  these  officers  on the
Securities may be manual or facsimile.

              Securities   bearing  the  manual  or  facsimile   signatures   of
individuals who were at the time of execution Authorized Officers shall bind the
Company,  notwithstanding that such individuals,  or any of them, have ceased to
be such  Authorized  Officers prior to the  authentication  and delivery of such
Securities or were not such Authorized Officers at the date of such Securities.

              The Trustee shall authenticate and deliver Securities of a series,
for  original  issue,  at one time or from time to time in  accordance  with the
Company Order referred to below, upon receipt by the Trustee of:

                                       27
<PAGE>


                     (a)    the instrument or instruments  establishing the form
              or forms and terms of the  Securities of such series,  as provided
              in Sections 201 and 301;

                     (b)    a Company Order  requesting the  authentication  and
              delivery of such  Securities  and, to the extent that the terms of
              such  Securities  shall not have been  established in an Officer's
              Certificate,  an  indenture  supplemental  hereto  or  in a  Board
              Resolution,  all as  contemplated  by Sections 201 and 301, either
              (i) establishing such terms or (ii) in the case of Securities of a
              series  subject to a  Periodic  Offering,  specifying  procedures,
              acceptable  to  the  Trustee,  by  which  such  terms  are  to  be
              established   (which   procedures  may  provide,   to  the  extent
              acceptable  to  the  Trustee,   for  authentication  and  delivery
              pursuant to oral or  electronic  instructions  from the Company or
              any agent or agents  thereof,  which oral  instructions  are to be
              promptly confirmed  electronically or in writing),  in either case
              in  accordance  with  the  instrument  or  instruments   delivered
              pursuant to clause (a) above;

                     (c)    the  Securities  of such  series,  each  executed on
              behalf of the Company by an Authorized Officer;

                     (d)    an Opinion of Counsel to the effect that:

                            (i)    (A) the form or forms of such Securities have
                     been duly  authorized  by the  Company and (B) the forms of
                     such  Securities  have been  established in conformity with
                     the provisions of this Indenture;

                            (ii)   (A) the  terms of such  Securities  have been
                     duly  authorized  by the  Company and (B) the terms of such
                     Securities  have been  established  in conformity  with the
                     provisions of this Indenture; and

                            (iii)  when   such   Securities   shall   have  been
                     authenticated  and  delivered by the Trustee and issued and
                     delivered  by the  Company in the manner and subject to any
                     conditions  specified  in such  Opinion  of  Counsel,  such
                     Securities  will  constitute   valid   obligations  of  the
                     Company,   entitled  to  the  benefits   provided  by  this
                     Indenture  equally  and ratably  with all other  Securities
                     then Outstanding;

              provided,  however,  that,  with  respect to the  Securities  of a
              series  subject  to a  Periodic  Offering,  the  Trustee  shall be
              entitled to receive  such Opinion of Counsel only once at or prior
              to the  time  of the  first  authentication  and  delivery  of the
              Securities of such series  (provided  that such Opinion of Counsel
              addresses  the  authentication  and delivery of all  Securities of
              such  series)  and  that,  in lieu of the  opinions  described  in
              clauses (ii) and (iii) above, such Counsel may opine that:

                                       28
<PAGE>


                            (x)    when the terms of such Securities  shall have
                     been  established  pursuant to a Company Order or Orders or
                     pursuant to such  procedures as may be specified  from time
                     to time by a Company Order or Orders,  all as  contemplated
                     by and in accordance  with the  instrument  or  instruments
                     delivered  pursuant  to clause (a)  above,  such terms will
                     have been duly authorized by the Company and will have been
                     established  in  conformity  with  the  provisions  of this
                     Indenture; and

                            (y)    when  such  Securities  shall  have  been (1)
                     authenticated  and  delivered by the Trustee in  accordance
                     with this  Indenture and the Company Order or Orders or the
                     specified  procedures  referred  to in clause (x) above and
                     (2) issued and  delivered  by the Company in the manner and
                     subject  to any  conditions  specified  in such  Opinion of
                     Counsel,  such Securities will constitute valid obligations
                     of the Company,  entitled to the benefits  provided by this
                     Indenture  equally  and ratably  with all other  Securities
                     then Outstanding.

              With  respect  to  Securities  of a series  subject  to a Periodic
Offering,  the Trustee may  conclusively  rely, as to the  authorization  by the
Company of any of such  Securities,  the forms and terms  thereof,  the validity
thereof and the compliance of the  authentication  and delivery thereof with the
terms and conditions of this Indenture,  upon the Opinion or Opinions of Counsel
and the certificates and other documents  delivered  pursuant to this Article at
or prior to the time of the first  authentication  and delivery of Securities of
such series until any of such  opinions,  certificates  or other  documents have
been  superseded  or revoked or expire by their terms.  In  connection  with the
authentication  and  delivery of  Securities  of a series  subject to a Periodic
Offering,   the  Trustee   shall  be  entitled  to  assume  that  the  Company's
instructions  to  authenticate  and deliver such  Securities  do not violate any
applicable law or any applicable  rule,  regulation or order of any Governmental
Authority having jurisdiction over the Company.

              If the form or terms of the  Securities  of any  series  have been
established by or pursuant to an Officer's  Certificate  or Board  Resolution as
permitted  by  Sections  201 or  301,  the  Trustee  shall  not be  required  to
authenticate such Securities if the issuance of such Securities pursuant to this
Indenture will adversely  affect the Trustee's own rights,  duties or immunities
under the  Securities  and this  Indenture or otherwise in a manner which is not
reasonably acceptable to the Trustee.

              Unless  otherwise  specified as  contemplated  by Section 301 with
respect to any series of Securities, or any Tranche thereof, each Security shall
be dated the date of the authentication of such Security.

              Unless  otherwise  specified as  contemplated  by Section 301 with
respect to any series of Securities,  or any Tranche thereof,  no Security shall
be entitled to any benefit under this  Indenture or be valid or  obligatory  for
any purpose unless there appears on such Security a

                                       29
<PAGE>


certificate  of  authentication  substantially  in the form  provided for herein
executed by the Trustee or an  Authenticating  Agent by manual  signature  of an
authorized  officer  thereof,  and such  certificate  upon any Security shall be
conclusive  evidence,  and the only  evidence,  that such Security has been duly
authenticated  and  delivered  hereunder and is entitled to the benefits of this
Indenture.  Notwithstanding  the foregoing,  if (a) any Security shall have been
authenticated  and delivered  hereunder to the Company,  or any Person acting on
its behalf,  but shall never have been issued and sold by the  Company,  (b) the
Company shall deliver such Security to the Security  Registrar for  cancellation
or shall cancel such Security and deliver  evidence of such  cancellation to the
Trustee,  in each case as provided in Section 309,  and (c) the Company,  at its
election,  shall  deliver to the  Trustee a written  statement  (which  need not
comply with Section 102 and need not be accompanied by an Officer's  Certificate
or an Opinion of Counsel)  stating that such  Security has never been issued and
sold by the Company,  then,  for all purposes of this  Indenture,  such Security
shall be deemed never to have been  authenticated  and  delivered  hereunder and
shall never be entitled to the benefits hereof.

SECTION 304.  TEMPORARY SECURITIES.

              Pending the preparation of definitive Securities of any series, or
any Tranche thereof, the Company may execute, and upon Company Order the Trustee
shall  authenticate  and  deliver,   temporary  Securities  which  are  printed,
lithographed,  typewritten,  mimeographed, photocopied or otherwise produced, in
any  authorized  denomination,  substantially  of the  tenor  of the  definitive
Securities in lieu of which they are issued,  with such appropriate  insertions,
omissions,  substitutions  and other  variations as the officers  executing such
Securities may determine,  as evidenced by their  execution of such  Securities;
provided,   however,   that  temporary   Securities  need  not  recite  specific
redemption, sinking fund, conversion or exchange provisions.

              Except as otherwise  specified as contemplated by Section 301 with
respect to the  Securities  of any  series,  or any Tranche  thereof,  after the
preparation  of definitive  Securities of such series or Tranche,  the temporary
Securities of such series or Tranche shall be  exchangeable,  without  charge to
the Holder  thereof,  for  definitive  Securities of such series or Tranche upon
surrender of such  temporary  Securities  at the office or agency of the Company
maintained  pursuant to Section  502 in a Place of Payment for such  Securities.
Upon such  surrender  of  temporary  Securities,  the Company  shall,  except as
aforesaid,  execute and the Trustee shall  authenticate  and deliver in exchange
therefor  definitive  Securities  of the same series and Tranche,  of authorized
denominations and of like tenor and aggregate principal amount.

              Until  exchanged  in  full  as  hereinabove  provided,   temporary
Securities  shall in all  respects be entitled to the same  benefits  under this
Indenture as  definitive  Securities  of the same series and Tranche and of like
tenor authenticated and delivered hereunder.

                                       30
<PAGE>


SECTION 305.  REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.

              The  Company  shall  cause  to be  kept  in  one  of  the  offices
designated  pursuant to Section  502,  with  respect to the  Securities  of each
series, or any Tranche thereof,  a register (the "SECURITY  REGISTER") in which,
subject to such  reasonable  regulations as it may prescribe,  the Company shall
provide for the  registration  of  Securities  of such series or Tranche and the
registration  of transfer  thereof.  The Company  shall  designate one Person to
maintain the Security Register for the Securities of each series and such Person
is referred to herein, with respect to such series, as the "SECURITY REGISTRAR".
Anything herein to the contrary  notwithstanding,  the Company may designate one
or more of its  offices  or an office of any  Affiliate  as an office in which a
register with respect to the Securities of one or more series, or any Tranche or
Tranches thereof,  shall be maintained,  and the Company may designate itself or
any  Affiliate  as the  Security  Registrar  with respect to one or more of such
series.  The Security  Register  shall be open for inspection by the Trustee and
the Company at all reasonable times.

              Except as otherwise  specified as contemplated by Section 301 with
respect  to  the  Securities  of  any  series,  or  any  Tranche  thereof,  upon
presentment  for  registration  of  transfer  of any  Security of such series or
Tranche at the office or agency of the  Company  maintained  pursuant to Section
502 in a Place  of  Payment  for  such  series  or  Tranche,  and  further  upon
satisfaction  of any conditions  prescribed by applicable law, the Company shall
execute,  and the Trustee  shall  authenticate  and deliver,  in the name of the
designated  transferee or  transferees,  one or more new  Securities of the same
series and Tranche, of authorized  denominations and of like tenor and aggregate
principal amount.

              Except as otherwise  specified as contemplated by Section 301 with
respect to the Securities of any series, or any Tranche thereof, any Security of
such series or Tranche may be exchanged at the option of the Holder,  for one or
more new Securities of the same series and Tranche, of authorized  denominations
and of like  tenor and  aggregate  principal  amount,  upon  presentment  of the
Securities to be exchanged at any such office or agency. Whenever any Securities
are so presented for exchange and upon satisfaction of any conditions prescribed
by applicable law, the Company shall execute, and the Trustee shall authenticate
and deliver,  the Securities which the Holder making the exchange is entitled to
receive.

              All  Securities  delivered  upon any  registration  of transfer or
exchange of Securities shall be valid obligations of the Company, evidencing the
same respective obligations,  and being entitled to the same benefits under this
Indenture,  as the Securities  presented upon such  registration  of transfer or
exchange.

              Every  Security  presented  for  registration  of  transfer or for
exchange  shall (if so required  by the  Company,  the  Trustee or the  Security
Registrar) be duly endorsed or shall be accompanied  by a written  instrument of
transfer in form  satisfactory  to the Company,  and the Trustee or the Security
Registrar,  as the case may be,  duly  executed  by the  Holder  thereof  or his
attorney duly authorized in writing.

                                       31
<PAGE>


              Unless  otherwise  specified as  contemplated  by Section 301 with
respect to Securities of any series,  or any Tranche thereof,  no service charge
shall be made for any  registration  of transfer or exchange of Securities,  but
the Company may require  payment of a sum  sufficient  to cover any tax or other
governmental  charge that may be imposed in connection with any  registration of
transfer or exchange of  Securities,  other than  exchanges  pursuant to Section
304, 406 or 1106 not involving any transfer.

              The Company shall not be required to execute or to provide for the
registration of transfer of or the exchange of (a) Securities of any series,  or
any Tranche thereof,  during a period of fifteen (15) days immediately preceding
the date notice is to be given  identifying the serial numbers of the Securities
of such series or Tranche  called for redemption or (b) any Security so selected
for  redemption  in whole or in  part,  except  the  unredeemed  portion  of any
Security being redeemed in part.

SECTION 306.  MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.

              If any mutilated Security is presented to the Trustee, the Company
shall  execute  and the  Trustee  shall  authenticate  and  deliver in  exchange
therefor a new  Security of the same series and  Tranche,  and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.

              If there  shall be  delivered  to the  Company and the Trustee (a)
evidence to their satisfaction of the ownership of and the destruction,  loss or
theft of any  Security and (b) such  security or indemnity as may be  reasonably
required  by them to save  each of them and any  agent of any of them  harmless,
then,  in the absence of notice to the Company or the Trustee that such Security
is held by a Person deemed to be a protected purchaser under applicable law, the
Company shall execute and the Trustee shall authenticate and deliver, in lieu of
any such destroyed,  lost or stolen Security,  a new Security of the same series
and  Tranche,  and of like tenor and  principal  amount and bearing a number not
contemporaneously outstanding.

              Notwithstanding  the  foregoing,   in  case  any  such  mutilated,
destroyed,  lost or stolen  Security  has  become or is about to become  due and
payable,  the Company in its discretion  may, but subject to compliance with the
conditions set forth in the next preceding  paragraph,  instead of issuing a new
Security, pay such Security.

              Upon the  issuance of any new  Security  under this  Section,  the
Company may require  the payment of a sum  sufficient  to cover any tax or other
governmental  charge  that may be  imposed  in  relation  thereto  and any other
reasonable  expenses  (including  the  fees  and  expenses  of the  Trustee)  in
connection therewith.

              Every new Security of any series  issued  pursuant to this Section
in lieu of any destroyed,  lost or stolen Security shall  constitute an original
additional contractual obligation of the Company,  whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by

                                       32
<PAGE>


anyone  other than the Holder of such new  Security,  and any such new  Security
shall be entitled to all the benefits of this Indenture equally and ratably with
any and all other Securities of such series duly issued hereunder.

              The  provisions of this Section are  exclusive and shall  preclude
(to the  extent  lawful)  all other  rights  and  remedies  with  respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.

SECTION 307.  PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.

              Unless  otherwise  specified as  contemplated  by Section 301 with
respect to the Securities of any series, or any Tranche thereof, interest on any
Security which is payable,  and is punctually  paid or duly provided for, on any
Interest  Payment  Date shall be paid to the Person in whose name that  Security
(or one or more  Predecessor  Securities) is registered at the close of business
on the Regular Record Date for such interest.

              Any interest on any  Security of any series which is payable,  but
is not  punctually  paid or duly  provided  for, on any Interest  Payment  Date,
including  without  limitation  interest  the payment  period for which has been
extended as specified with respect to such series as contemplated by Section 301
(herein called "UNPAID  INTEREST"),  shall  forthwith cease to be payable to the
Holder on the related  Regular Record Date by virtue of having been such Holder,
and such Unpaid  Interest  may be paid by the  Company,  at its election in each
case, as provided in clause (a) or (b) below:

                     (a)    The Company may elect to make  payment of any Unpaid
              Interest  to the  Persons in whose  names the  Securities  of such
              series (or their respective Predecessor Securities) are registered
              at the  close of  business  on a date  (herein  called a  "SPECIAL
              RECORD DATE") for the payment of such Unpaid Interest, which shall
              be fixed in the  following  manner.  The Company  shall notify the
              Trustee in writing of the amount of Unpaid Interest proposed to be
              paid on each  Security of such series and the date of the proposed
              payment,  and at the same time the Company  shall deposit with the
              Trustee an amount of money equal to the aggregate  amount proposed
              to be paid in  respect  of such  Unpaid  Interest  or  shall  make
              arrangements satisfactory to the Trustee for such deposit prior to
              the date of the proposed payment,  such money when deposited to be
              held in trust for the  benefit  of the  Persons  entitled  to such
              Unpaid Interest as in this clause provided.  Thereupon the Trustee
              shall fix a Special  Record  Date for the  payment of such  Unpaid
              Interest  which  shall be not more than  thirty  (30) days and not
              less than ten (10) days prior to the date of the proposed  payment
              and not less than  twenty-five  (25) days after the receipt by the
              Trustee of the notice of the proposed  payment.  The Trustee shall
              promptly  notify the Company of such  Special  Record Date and, in
              the name and at the expense of the Company,  shall,  not less than
              fifteen (15) days prior to such Special Record Date,  cause notice
              of the  proposed  payment of such Unpaid  Interest and the Special
              Record

                                       33
<PAGE>


              Date therefor to be mailed,  first-class  postage prepaid, to each
              Holder of  Securities of such series at the address of such Holder
              as it appears in the  Security  Register.  Notice of the  proposed
              payment  of such  Unpaid  Interest  and the  Special  Record  Date
              therefor having been so mailed, such Unpaid Interest shall be paid
              to the  Persons in whose names the  Securities  of such series (or
              their  respective  Predecessor  Securities)  are registered at the
              close of business on such Special Record Date.

                     (b)    The Company may make payment of any Unpaid  Interest
              on the  Securities  of any series in any other  lawful  manner not
              inconsistent  with the requirements of any securities  exchange on
              which such  Securities may be listed,  and upon such notice as may
              be  required  by such  exchange,  if,  after  notice  given by the
              Company to the Trustee of the  proposed  payment  pursuant to this
              clause,  such manner of payment shall be deemed practicable by the
              Trustee.

              Subject to the  foregoing  provisions  of this Section and Section
305, each Security  delivered under this Indenture upon registration of transfer
of or in exchange for or in lieu of any other Security shall carry the rights to
interest  accrued and unpaid,  and to accrue,  which were  carried by such other
Security.

SECTION 308.  PERSONS DEEMED OWNERS.

              Prior to the due  presentment of any Security for  registration of
transfer,  the Company,  the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such  Security is  registered as the absolute
owner of such  Security  (subject  to  Sections  305 and 307) for the purpose of
receiving payment of principal of and premium, if any, and interest,  if any, on
such  Security  and for all  other  purposes  whatsoever,  whether  or not  such
Security be overdue,  and neither the Company,  nor the Trustee, or any agent of
the Company or the Trustee shall be affected by notice to the contrary.

SECTION 309.  CANCELLATION BY SECURITY REGISTRAR.

              All Securities presented for payment, redemption,  registration of
transfer or exchange  shall,  if presented to any Person other than the Security
Registrar,  be  delivered  to the  Security  Registrar  and, if not  theretofore
canceled,  shall be promptly canceled by the Security Registrar. The Company may
at any time deliver to the Security  Registrar for  cancellation  any Securities
previously  authenticated  and  delivered  hereunder  which the Company may have
acquired in any manner whatsoever or which the Company shall not have issued and
sold, and all Securities so delivered shall be promptly canceled by the Security
Registrar.  Unless by a Company  Order the Company  shall  direct that  canceled
Securities  be  returned to it, all  canceled  Securities  held by the  Security
Registrar  shall be  disposed of in  accordance  with the  Security  Registrar's
customary  procedures.  The Security  Registrar  shall  promptly  deliver to the
Company and the Trustee evidence of any cancellation by it of a Security, and of
any  disposition by it of a canceled  Security,  in accordance with this Section
309 to the Trustee and the Company.

                                       34
<PAGE>


SECTION 310.  COMPUTATION OF INTEREST.

              Except as otherwise  specified as  contemplated by Section 301 for
Securities of any series, or any Tranche thereof,  interest on the Securities of
each series  shall be computed on the basis of a three  hundred  sixty (360) day
year  consisting  of twelve (12) thirty (30) day months and, with respect to any
period less than a full  calendar  month,  on the basis of the actual  number of
days elapsed during such period.

SECTION 311.  PAYMENT TO BE IN PROPER CURRENCY.

              In the  case  of the  Securities  of any  series,  or any  Tranche
thereof,  denominated  in any  currency  other than  Dollars  or in a  composite
currency (the "REQUIRED  CURRENCY"),  except as otherwise specified with respect
to such Securities as contemplated by Section 301, the obligation of the Company
to make any  payment  of the  principal  thereof,  or the  premium,  if any,  or
interest, if any, thereon, shall not be discharged or satisfied by any tender by
the Company, or recovery by the Trustee, in any currency other than the Required
Currency,  except to the extent that such tender or recovery shall result in the
Trustee  timely  holding the full amount of the Required  Currency  then due and
payable. If any such tender or recovery is in a currency other than the Required
Currency,  the  Trustee may take such  actions as it  considers  appropriate  to
exchange  such  currency for the Required  Currency.  The costs and risks of any
such exchange, including without limitation the risks of delay and exchange rate
fluctuation,  shall be borne by the Company and the Company  shall  remain fully
liable for any shortfall or delinquency in the full amount of Required  Currency
then due and  payable,  and in no  circumstances  shall  the  Trustee  be liable
therefor except in the case of its negligence or willful misconduct.



                                  ARTICLE FOUR

                            REDEMPTION OF SECURITIES

SECTION 401.  APPLICABILITY OF ARTICLE.

              Securities  of any  series,  or any  Tranche  thereof,  which  are
redeemable  before their Stated  Maturity shall be redeemable in accordance with
their terms and (except as otherwise  specified as  contemplated  by Section 301
for Securities of such series or Tranche) in accordance with this Article.

SECTION 402.  ELECTION TO REDEEM; NOTICE TO TRUSTEE.

              The  election  of the  Company to redeem any  Securities  shall be
evidenced by a Board Resolution or an Officer's Certificate.  The Company shall,
at least  forty-five (45) days prior to the Redemption Date fixed by the Company
(unless a shorter  notice  shall be  satisfactory  to the  Trustee),  notify the
Trustee and in the case of Securities of a Series held by a Trust,  the Property
Trustee under the related Declaration establishing such Trust in writing of such
Redemption Date

                                       35
<PAGE>


and of the principal  amount of such  Securities to be redeemed.  In the case of
any redemption of Securities  (a) prior to the expiration of any  restriction on
such  redemption  provided in the terms of such  Securities or elsewhere in this
Indenture  or (b)  pursuant to an election of the Company  which is subject to a
condition  specified in the terms of such Securities,  the Company shall furnish
the  Trustee  with an  Officer's  Certificate  evidencing  compliance  with such
restriction or condition.

SECTION 403.  SELECTION OF SECURITIES TO BE REDEEMED.

              If less than all the  Securities  of any  series,  or any  Tranche
thereof, are to be redeemed,  the particular  Securities to be redeemed shall be
selected by the  Security  Registrar  from the  Outstanding  Securities  of such
series or Tranche not previously called for redemption,  by such method as shall
be  provided  for  such  series  or  Tranche,  or,  in the  absence  of any such
provision,  by such method of random  selection as the Security  Registrar shall
deem fair and appropriate and which may, in any case,  provide for the selection
for  redemption of portions (in any  authorized  denomination  for Securities of
such series or Tranche) of the principal  amount of Securities of such series or
Tranche having a denomination  larger than the minimum  authorized  denomination
for  Securities  of such  series  or  Tranche;  provided,  however,  that if, as
indicated  in an  Officer's  Certificate,  the  Company  shall  have  offered to
purchase all or any principal  amount of the Securities then  Outstanding of any
series, or any Tranche thereof, and less than all of such Securities as to which
such offer was made shall have been  tendered to the Company for such  purchase,
the  Security  Registrar,  if so directed  by Company  Order,  shall  select for
redemption all or any principal amount of such Securities which have not been so
tendered.

              The Security  Registrar  shall promptly notify the Company and the
Trustee in writing of the Securities selected for redemption and, in the case of
any Securities  selected to be redeemed in part, the principal amount thereof to
be redeemed.

              For all purposes of this Indenture,  unless the context  otherwise
requires,  all provisions relating to the redemption of Securities shall relate,
in the case of any  Securities  redeemed or to be redeemed  only in part, to the
portion of the principal  amount of such  Securities  which has been or is to be
redeemed.

SECTION 404.  NOTICE OF REDEMPTION.

              Notice of  redemption  shall be given in the  manner  provided  in
Section 106 to the Holders of the Securities to be redeemed not less than thirty
(30) nor more than sixty (60) days prior to the Redemption Date.

              All notices of redemption shall state:

                     (a)    the Redemption Date,

                     (b)    the Redemption Price,

                                       36
<PAGE>


                     (c)    if less  than all the  Securities  of any  series or
              Tranche are to be redeemed,  the  identification of the particular
              Securities to be redeemed and the portion of the principal  amount
              of any Security to be redeemed in part,

                     (d)    that on the Redemption  Date the  Redemption  Price,
              together with accrued  interest,  if any, to the Redemption  Date,
              will become due and payable upon each such Security to be redeemed
              and, if applicable,  that interest thereon will cease to accrue on
              and after said date,

                     (e)    the place or places where such  Securities are to be
              surrendered  for  payment  of the  Redemption  Price  and  accrued
              interest,   if  any,  unless  it  shall  have  been  specified  as
              contemplated  by Section 301 with respect to such  Securities that
              such surrender shall not be required,

                     (f)    that the  redemption is for a sinking or other fund,
              if such is the case, and

                     (g)    such  other   matters  as  the  Company  shall  deem
              desirable or appropriate.

              With  respect to any notice of  redemption  of  Securities  at the
election of the Company, unless, upon the giving of such notice, such Securities
shall be deemed to have been paid in  accordance  with Section 601,  such notice
may state that such  redemption  shall be  conditional  upon the  receipt by the
Paying  Agent or Agents for such  Securities,  on or prior to the date fixed for
such  redemption,  of money  sufficient to pay the principal of and premium,  if
any, and interest,  if any, on such  Securities and that if such money shall not
have been so received such notice shall be of no force or effect and the Company
shall not be required to redeem such  Securities.  In the event that such notice
of redemption  contains such a condition and such money is not so received,  the
redemption  shall not be made and within a  reasonable  time  thereafter  notice
shall be given, in the manner in which the notice of redemption was given,  that
such money was not so received and such  redemption was not required to be made,
and the  Paying  Agent or  Agents  for the  Securities  otherwise  to have  been
redeemed shall  promptly  return to the Holders  thereof any of such  Securities
which had been surrendered for payment upon such redemption.

              Notice of  redemption of Securities to be redeemed at the election
of the Company, and any notice of non-satisfaction of a condition for redemption
as aforesaid, shall be given by the Company or, at the Company's Request, by the
Security  Registrar  in the name and at the  expense of the  Company.  Notice of
mandatory  redemption of Securities shall be given by the Security  Registrar in
the name and at the expense of the Company.

                                       37
<PAGE>


SECTION 405.  SECURITIES PAYABLE ON REDEMPTION DATE.

              Notice of  redemption  having  been  given as  aforesaid,  and the
conditions,  if any,  set  forth  in such  notice  having  been  satisfied,  the
Securities or portions  thereof so to be redeemed shall, on the Redemption Date,
become due and payable at the Redemption Price therein  specified,  and from and
after such date (unless,  in the case of an unconditional  notice of redemption,
the Company  shall  default in the payment of the  Redemption  Price and accrued
interest,  if any) such  Securities or portions  thereof,  if  interest-bearing,
shall cease to bear interest. Upon surrender of any such Security for redemption
in accordance  with such notice,  such Security or portion thereof shall be paid
by the Company at the Redemption Price,  together with accrued interest, if any,
to the Redemption  Date;  provided,  however,  that no such surrender shall be a
condition to such payment if so  specified as  contemplated  by Section 301 with
respect to such  Security;  and  provided,  further,  that,  except as otherwise
specified  as  contemplated  by Section 301 with respect to such  Security,  any
installment of interest on any Security the Stated Maturity of which installment
is on or prior to the  Redemption  Date  shall be  payable to the Holder of such
Security, or one or more Predecessor Securities, registered as such at the close
of business on the related  Regular  Record Date  according to the terms of such
Security and subject to the provisions of Sections 305 and 307.

SECTION 406.  SECURITIES REDEEMED IN PART.

              Upon the surrender of any Security which is to be redeemed only in
part at a Place of Payment  therefor  (with,  if the  Company or the  Trustee so
requires,  due  endorsement  by, or a written  instrument  of  transfer  in form
satisfactory  to the Company or the Trustee,  as the case may be, duly  executed
by, the Holder thereof or his attorney duly authorized in writing),  the Company
shall execute,  and the Trustee shall  authenticate and deliver to the Holder of
such Security,  without service charge, a new Security or Securities of the same
series and Tranche, of any authorized  denomination requested by such Holder and
of like tenor and in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.


                                  ARTICLE FIVE

                                    COVENANTS

SECTION 501.  PAYMENT OF SECURITIES.

              The Company  shall pay the  principal of and premium,  if any, and
interest,  if any, on the Securities of each series in accordance with the terms
of such Securities and this Indenture.

SECTION 502.  MAINTENANCE OF OFFICE OR AGENCY.

              The  Company  shall  maintain  in each  Place of  Payment  for the
Securities  of each series,  or any Tranche  thereof,  an office or agency where
payment of such Securities  shall be made, where the registration of transfer or
exchange of such  Securities may be effected and where notices and demands to or
upon the Company in respect of such Securities and this Indenture may be served.
The Company shall give prompt written notice to the Trustee of the location, and
any

                                       38
<PAGE>


change in the  location,  of each such office or agency and prompt notice to the
Holders of any such  change in the manner  specified  in Section  106. If at any
time the Company  shall fail to maintain any such  required  office or agency in
respect of Securities of any series,  or any Tranche  thereof,  or shall fail to
furnish the Trustee with the address  thereof,  payment of such Securities shall
be made,  registration  of  transfer or  exchange  thereof  may be effected  and
notices and  demands in respect  thereof  may be served at the  Corporate  Trust
Office of the Trustee,  and the Company hereby appoints the Trustee as its agent
for all such purposes in any such event.

              The Company may also from time to time designate one or more other
offices or agencies with respect to the Securities of one or more series, or any
Tranche thereof,  for any or all of the foregoing  purposes and may from time to
time  rescind such  designations;  provided,  however,  that,  unless  otherwise
specified as  contemplated by Section 301 with respect to the Securities of such
series or Tranche, no such designation or rescission shall in any manner relieve
the Company of its  obligation to maintain an office or agency for such purposes
in each Place of Payment for such Securities in accordance with the requirements
set forth above.  The Company shall give prompt  written  notice to the Trustee,
and prompt notice to the Holders in the manner  specified in Section 106, of any
such  designation  or  rescission  and of any change in the location of any such
other office or agency.

              Anything  herein to the  contrary  notwithstanding,  any office or
agency required by this Section may be maintained at an office of the Company or
any Affiliate thereof, in which event the Company or such Affiliate, as the case
may be, shall perform all functions to be performed at such office or agency.

SECTION 503.  MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.

              If the Company  shall at any time act as its own Paying Agent with
respect to the Securities of any series, or any Tranche thereof, it shall, on or
before each due date of the principal of and premium,  if any, and interest,  if
any, on any of such  Securities,  segregate and hold in trust for the benefit of
the Persons  entitled  thereto a sum sufficient to pay the principal and premium
or  interest so  becoming  due until such sums shall be paid to such  Persons or
otherwise disposed of as herein provided.  The Company shall promptly notify the
Trustee of any failure by the Company (or any other obligor on such  Securities)
to make any payment of principal of or premium, if any, or interest,  if any, on
such Securities.

              Whenever the Company  shall have one or more Paying Agents for the
Securities of any series,  or any Tranche  thereof,  it shall, on or before each
due date of the principal of and premium, if any, and interest,  if any, on such
Securities,   deposit  with  such  Paying   Agents  sums   sufficient   (without
duplication)  to pay the principal and premium or interest so becoming due, such
sums  to be held in  trust  for the  benefit  of the  Persons  entitled  to such
principal,  premium or  interest,  and (unless such Paying Agent is the Trustee)
the Company shall promptly notify the Trustee of any failure by it so to act.

                                       39
<PAGE>


              The Company  shall cause each Paying Agent for the  Securities  of
any series,  or any Tranche thereof,  other than the Company or the Trustee,  to
execute  and  deliver to the Trustee an  instrument  in which such Paying  Agent
shall agree with the Trustee,  subject to the  provisions of this Section,  that
such Paying Agent shall:

                     (a)    hold  all  sums  held by it for the  payment  of the
              principal  of and premium,  if any, or  interest,  if any, on such
              Securities  in  trust  for the  benefit  of the  Persons  entitled
              thereto until such sums shall be paid to such Persons or otherwise
              disposed of as herein provided;

                     (b)    give  the  Trustee  notice  of  any  failure  by the
              Company (or any other  obligor upon such  Securities)  to make any
              payment of principal of or premium,  if any, or interest,  if any,
              on such Securities; and

                     (c)    at any  time  during  the  continuance  of any  such
              failure, upon the written request of the Trustee, forthwith pay to
              the  Trustee  all sums so held in trust by such  Paying  Agent and
              furnish to the Trustee such information as it possesses  regarding
              the names and addresses of the Persons entitled to such sums.

              The Company may at any time pay,  or by Company  Order  direct any
Paying  Agent to pay,  to the  Trustee  all sums held in trust by the Company or
such Paying  Agent,  such sums to be held by the Trustee upon the same trusts as
those upon which such sums were held by the Company or such Paying Agent and, if
so stated in a Company Order  delivered to the Trustee,  in accordance  with the
provisions  of Article  Six;  and,  upon such payment by any Paying Agent to the
Trustee,  such Paying Agent shall be released  from all further  liability  with
respect to such money.

              Any money  deposited with the Trustee or any Paying Agent, or then
held by the Company,  in trust for the payment of the  principal of and premium,
if any, or interest,  if any, on any Security and  remaining  unclaimed  for two
years after such principal and premium, if any, or interest,  if any, has become
due and  payable  shall be paid to the Company on Company  Request,  or, if then
held by the Company, shall be discharged from such trust; and, upon such payment
or  discharge,  the  Holder of such  Security  shall,  as an  unsecured  general
creditor  and not as the  Holder of an  Outstanding  Security,  look only to the
Company  for  payment  of the amount so due and  payable  and  remaining  unpaid
[(subject,  however, to the provisions of Article Fourteen)],  and all liability
of the Trustee or such Paying Agent with  respect to such trust  money,  and all
liability of the Company as trustee thereof,  shall thereupon  cease;  provided,
however,  that the Trustee or such Paying Agent,  before being  required to make
any such payment to the Company,  may at the expense of the Company  cause to be
mailed,  on one  occasion  only,  notice to such Holder that such money  remains
unclaimed and that, after a date specified therein, which shall not be less than
thirty (30) days from the date of such mailing,  any  unclaimed  balance of such
money then remaining will be paid to the Company.

                                       40
<PAGE>


SECTION 504.  CORPORATE EXISTENCE.

              Subject  to the  rights of the  Company  under  Article  Ten,  the
Company  shall do or cause to be done all things  necessary to preserve and keep
its corporate existence in full force and effect.

SECTION 505.  MAINTENANCE OF PROPERTIES .

              The Company  shall cause (or,  with  respect to property  owned in
common with others, make reasonable efforts to cause) all its properties used or
useful in the conduct of its businesses, considered as a whole, to be maintained
and kept in good  condition,  repair and working order and shall cause (or, with
respect to  property  owned in common with  others,  make  reasonable  effort to
cause)  to  be  made  such  repairs,  renewals,  replacement,   betterments  and
improvements  thereof,  as, in the judgment of the Company,  may be necessary in
order that the  operation  of such  properties,  considered  as a whole,  may be
conducted in accordance with common industry practice;  provided,  however, that
nothing in this section shall prevent the Company from discontinuing, or causing
the  discontinuance  of, the operation and maintenance of any of its properties;
and  provided,  further,  that nothing in this Section shall prevent the Company
from  selling,  transferring  or  otherwise  disposing  of, or causing the sale,
transfer or other disposition of any of its properties.

SECTION 506.  WAIVER OF CERTAIN COVENANTS.

              The Company may omit in any particular instance to comply with any
term, provision or condition set forth in

                     (a)    any covenant or  restriction  specified with respect
              to the  Securities  of any one or more  series,  or any Tranche or
              Tranches  thereof,  as  contemplated by Section 301, or by Section
              1201(b) if before the time for such  compliance  the  Holders of a
              majority  in  aggregate   principal   amount  of  the  Outstanding
              Securities  of all  series  and  Tranches  with  respect  to which
              compliance  with such  covenant or  restriction  is to be omitted,
              considered as one class,  shall,  by Act of such  Holders,  either
              waive  such   compliance  in  such  instance  or  generally  waive
              compliance  with such  term,  provision  or  condition;  provided,
              however,  that no such waiver shall be effective as to any matters
              contemplated  in clause (a),  (b) or (c) in Section  1102  without
              consent of the Holders specified in such Section; and

                     (b)    Section  504 or  Article  Ten if before the time for
              such  compliance the Holders of a majority in principal  amount of
              Securities  Outstanding under this Indenture shall, by Act of such
              Holders,   either  waive  such  compliance  in  such  instance  or
              generally waive compliance with such term, provision or condition;

but,  in either  case,  no such  waiver  shall  extend to or affect  such  term,
provision or condition except to the extent so expressly waived, and, until such
waiver shall become effective,  the obligations of the Company and the duties of
the Trustee in respect of any such term,  provision or condition shall remain in
full force and effect; provided, however, so long as a Trust holds Securities of
any series,

                                       41
<PAGE>


such Trust may not waive  compliance  or waive any default in  compliance by the
Company  with any  covenant or other term  contained  in this  Indenture  or the
Securities  of such  series  without  the  approval of the holders of at least a
majority in aggregate liquidation preference of the outstanding Trust Securities
issued by such Trust, obtained as provided in the Declaration pertaining to such
Trust.

SECTION 507.  ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.

              Not later than  December 1 in each year,  commencing  December  1,
____,  the Company shall deliver to the Trustee an Officer's  Certificate  which
need not comply with Section 102, executed by the principal  executive  officer,
the  principal  financial  officer or the  principal  accounting  officer of the
Company,  as to such officer's  knowledge of the Company's  compliance  with all
conditions and covenants under this Indenture,  such compliance to be determined
without  regard to any  period of grace or  requirement  of  notice  under  this
Indenture.

SECTION 508.  RESTRICTION ON PAYMENT OF DIVIDENDS, ETC.

              So  long  as  any  preferred   securities  of  any  series  remain
outstanding,  if, at any time (a) there shall have occurred and be continuing an
Event of Default  described  in clause (a) or (b) of Section 701 with respect to
the  Securities of any series,  (b) the Company shall have elected to extend any
interest  payment  period as  specified  with respect to the  Securities  of any
series,  or any Tranche  thereof,  as  contemplated  by Section 301 and any such
period,  as so extended,  shall be  continuing,  or (c) the Company  shall be in
default  in  respect  of its  payment  or  other  obligations  under  the  Trust
Securities  Guarantee  relating  to  any  Trust  Securities  (other  than  Trust
Securities initially issued and sold to the Company), then the Company shall not
(x) declare or pay any dividend on, make any distribution or liquidation payment
with respect to, or redeem,  purchase or exchange any of its capital stock,  (y)
make any  payment of  principal,  premium,  if any, or  interest,  if any, on or
repay,  repurchase or redeem any debt securities  (including  other  Securities)
that rank pari passu with or junior in right of  payment to the  Securities  and
(z) make any guarantee payments with respect to any of the foregoing (other than
payments under the Trust Securities Guarantee);  provided, however, that nothing
in this  Section  shall be deemed to prohibit  (i)  dividends  or  distributions
payable in shares of the Company's  capital  stock,  or in the form of warrants,
options or other rights,  where the dividend or distributed  stock issuable upon
exercise of the warrants,  options or other rights are the same stock as that on
which the  dividend is being paid or is PARI PASSU or junior to the stock,  (ii)
reclassification  of the  Company's  capital  stock or exchange or conversion of
shares of one class or series of the  Company's  capital  stock  into  shares of
another class or series of the Company's capital stock, (iii) purchases or other
acquisitions  of fractional  interests in shares of the Company's  capital stock
pursuant to the  conversion  or exchange  provisions of the capital stock or the
security  being  converted or  exchanged;  (iv)  redemption,  purchases or other
acquisitions of the Company's  capital stock in connection with the satisfaction
by the Company of its  obligations  under  provisions of the Company's  Restated
Articles of  Incorporation,  as  amended,  under any direct  purchase,  dividend
reinvestment,  customer purchase or employee benefit plans or under any contract
or security  requiring the Company to purchase shares of its capital stock;  and
(v) payments

                                       42
<PAGE>


under any Trust  Securities  Guarantee  executed  and  delivered  by the Company
concurrently with the issuance of any Preferred Securities.

SECTION 509.  AVA CAPITAL TRUST III.

              If  Securities  of any series are issued and  delivered to a Trust
(or a trustee  thereof) in  connection  with the issuance by such trust of Trust
Securities,  so long as such Trust  Securities  remain  outstanding  the Company
shall (a)  maintain  100%  direct  ownership,  by the  Company or any  Affiliate
thereof,  of the Trust  Securities  initially  issued and sold to the Company by
such  Trust,  except as  otherwise  provided  in Section  1005,  and (b) use all
reasonable  efforts to cause  such  Trust (i) to  maintain  its  existence  as a
business trust, except in connection with a distribution of Securities, with the
redemption, purchase or other acquisition and retirement of all Trust Securities
of  such  trust  or with  certain  mergers,  consolidations  or  other  business
combinations,  in each case as permitted by the  Declaration  establishing  such
Trust,  and (ii) to  otherwise  continue  not to be  treated  as an  association
taxable as a corporation for United States federal income tax purposes.

SECTION 510.  HOLDERS OF PREFERRED SECURITIES

              The Company agrees that,  for so long as any Preferred  Securities
remain  outstanding,  its obligations  under this Indenture will also be for the
benefit  of the  holders  from  time to time of  Preferred  Securities,  and the
Company  acknowledges  and agrees that such  holders will be entitled to enforce
this Indenture,  as third party  beneficiaries,  directly against the Company to
the same  extent as if such  holders of  Preferred  Securities  held a principal
amount of Securities equal to the stated liquidation preference of the Preferred
Securities held by such holders.


                                   ARTICLE SIX

                           SATISFACTION AND DISCHARGE

SECTION 601.  SATISFACTION AND DISCHARGE OF SECURITIES.

              Any Security or Securities, or any portion of the principal amount
thereof,  shall be deemed to have been paid for all purposes of this  Indenture,
and the entire indebtedness of the Company in respect thereof shall be satisfied
and discharged,  if there shall have been irrevocably deposited with the Trustee
or any Paying Agent (other than the Company), in trust:

                     (a)    money in an amount which shall be sufficient, or

                     (b)    in the case of a deposit  made prior to the Maturity
              of such  Securities  or portions  thereof,  Eligible  Obligations,
              which shall not contain  provisions  permitting  the redemption or
              other prepayment thereof at the option of the issuer thereof,  the
              principal  of and the  interest  on which  when due,  without  any
              regard to

                                       43
<PAGE>


              reinvestment thereof, will provide moneys which, together with the
              money,  if any,  deposited  with or  held by the  Trustee  or such
              Paying Agent, shall be sufficient, or

                     (c)    a   combination   of  (a)  or  (b)  which  shall  be
              sufficient,

to pay when due the principal of and premium, if any, and interest,  if any, due
and to become due on such  Securities or portions  thereof;  provided,  however,
that in the case of the provision for payment or redemption of less than all the
Securities of any series or Tranche,  such Securities or portions  thereof shall
have been selected by the Security Registrar as provided herein and, in the case
of a redemption,  the notice  requisite to the validity of such redemption shall
have been given or irrevocable authority shall have been given by the Company to
the Trustee to give such notice, under arrangements satisfactory to the Trustee;
and provided,  further, that the Company shall have delivered to the Trustee and
such Paying Agent:

                     (x)    if such  deposit  shall  have been made prior to the
              Maturity of such  Securities,  a Company  Order  stating  that the
              money and Eligible  Obligations  deposited in accordance with this
              Section shall be held in trust, as provided in Section 603;

                     (y)    if Eligible  Obligations  shall have been deposited,
              an  Opinion  of  Counsel  to  the  effect  that  such  obligations
              constitute  Eligible  Obligations  and do not  contain  provisions
              permitting  the  redemption  or other  prepayment  thereof  at the
              option of the issuer  thereof,  and an  opinion of an  independent
              public accountant of nationally  recognized standing,  selected by
              the Company,  to the effect that the other  requirements set forth
              in clause (b) and, if applicable,  (c) above have been  satisfied;
              and

                     (z)    if such  deposit  shall  have been made prior to the
              Maturity of such Securities,  an Officer's Certificate stating the
              Company's   intention   that,  upon  delivery  of  such  Officer's
              Certificate,  its  indebtedness  in respect of such  Securities or
              portions  thereof  will  have been  satisfied  and  discharged  as
              contemplated in this Section.

              Upon the deposit of money or  Eligible  Obligations,  or both,  in
accordance  with this Section,  together with the documents  required by clauses
(x), (y) and (z) above, the Trustee shall, upon Company Request,  acknowledge in
writing that such  Securities  or portions  thereof are deemed to have been paid
for all  purposes  of this  Indenture  and that the entire  indebtedness  of the
Company in respect  thereof has been satisfied and discharged as contemplated in
this Section. In the event that all of the conditions set forth in the preceding
paragraph  shall have been  satisfied in respect of any  Securities  or portions
thereof  except that,  for any reason,  the Officer's  Certificate  specified in
clause  (z)  (if  otherwise  required)  shall  not  have  been  delivered,  such
Securities or portions  thereof shall  nevertheless  be deemed to have been paid
for all  purposes  of this  Indenture,  and the  Holders of such  Securities  or
portions  thereof  shall  nevertheless  be no longer  entitled  to the  benefits
provided

                                       44
<PAGE>


by this  Indenture or of any of the  covenants of the Company under Article Five
(except the covenants  contained in Sections 502 and 503) or any other covenants
made in respect of such  Securities  or  portions  thereof  as  contemplated  by
Section 301 or Section  1201(b),  but the indebtedness of the Company in respect
of such  Securities  or  portions  thereof  shall  not be  deemed  to have  been
satisfied  and  discharged  prior to Maturity for any other  purpose;  and, upon
Company Request,  the Trustee shall  acknowledge in writing that such Securities
or  portions  thereof  are  deemed to have been  paid for all  purposes  of this
Indenture.

              If payment at Stated  Maturity of less than all of the  Securities
of any series,  or any Tranche thereof,  is to be provided for in the manner and
with the effect  provided in this Section,  the Security  Registrar shall select
such  Securities,  or  portions  of  principal  amount  thereof,  in the  manner
specified  by Section  403 for  selection  for  redemption  of less than all the
Securities of a series or Tranche.

              In the event that  Securities  which  shall be deemed to have been
paid for  purposes of this  Indenture,  and, if such is the case,  in respect of
which the Company's  indebtedness shall have been satisfied and discharged,  all
as provided in this Section, do not mature and are not to be redeemed within the
sixty  (60) day  period  commencing  with the date of the  deposit  of moneys or
Eligible  Obligations,   as  aforesaid,   the  Company  shall,  as  promptly  as
practicable,  give a notice,  in the same manner as a notice of redemption  with
respect to such Securities, to the Holders of such Securities to the effect that
such deposit has been made and the effect thereof.

              Notwithstanding  that any Securities  shall be deemed to have been
paid for  purposes of this  Indenture,  as  aforesaid,  the  obligations  of the
Company and the Trustee in respect of such  Securities  under Sections 304, 305,
306, 404, 502, 503, 807 and 814 and this Article shall survive.

              The  Company  shall pay,  and shall  indemnify  the Trustee or any
Paying  Agent with which  Eligible  Obligations  shall  have been  deposited  as
provided in this Section  against,  any tax,  fee or other charge  imposed on or
assessed against such Eligible Obligations or the principal or interest received
in respect of such Eligible Obligations, including, but not limited to, any such
tax payable by any entity  deemed,  for tax purposes,  to have been created as a
result of such deposit.

              Anything  herein to the contrary  notwithstanding,  (a) if, at any
time after a  Security  would be deemed to have been paid for  purposes  of this
Indenture,  and,  if such is the case,  the  Company's  indebtedness  in respect
thereof would be deemed to have been satisfied and discharged,  pursuant to this
Section (without regard to the provisions of this paragraph), the Trustee or any
Paying  Agent,  as the case may be, (i) shall be required to return the money or
Eligible Obligations,  or combination thereof, deposited with it as aforesaid to
the Company or any representative thereof, under any applicable Federal or State
bankruptcy,  insolvency  or other  similar  law or (ii) are  unable to apply any
money held by the  Trustee as  provided  in this  Section  with  respect to such
Security  by  reason  of any  order or  judgment  of any  court or  governmental
authority enjoining, restraining or otherwise prohibiting such application, such
Security shall thereupon be deemed  retroactively  not to have been paid and any
satisfaction  and discharge of the  Company's  indebtedness  in respect  thereof

                                       45
<PAGE>


shall retroactively be deemed not to have been effected, and such Security shall
be deemed to remain  Outstanding and (b) any  satisfaction  and discharge of the
Company's  indebtedness  in  respect  of any  Security  shall be  subject to the
provisions of the last paragraph of Section 503.

SECTION 602.  SATISFACTION AND DISCHARGE OF INDENTURE.

              This Indenture  shall upon Company  Request cease to be of further
effect  (except as  hereinafter  expressly  provided),  and the Trustee,  at the
expense of the Company,  shall  execute such  instruments  as the Company  shall
reasonably request to evidence and acknowledge the satisfaction and discharge of
this Indenture, when:

                     (a)    no Securities remain Outstanding hereunder; and

                     (b)    the  Company has paid or caused to be paid all other
              sums payable hereunder by the Company;

provided,  however,  that if, in accordance  with the last  paragraph of Section
601,  any  Security,  previously  deemed to have been paid for  purposes of this
Indenture,  shall  be  deemed  retroactively  not to  have  been so  paid,  this
Indenture shall thereupon be deemed retroactively not to have been satisfied and
discharged,  as  aforesaid,  and to remain in full  force  and  effect,  and the
Company  shall  execute  and  deliver  such  instruments  as the  Trustee  shall
reasonably request to evidence and acknowledge the same.

              Notwithstanding  the  satisfaction and discharge of this Indenture
as aforesaid, the obligations of the Company and the Trustee under Sections 304,
305, 306, 404, 502, 503, 807 and 814 and this Article shall survive.

              Upon  satisfaction  and discharge of this Indenture as provided in
this  Section,  the  Trustee  shall turn over to the  Company any and all money,
securities  and other  property  then held by the Trustee for the benefit of the
Holders of the Securities (other than money and Eligible Obligations held by the
Trustee  pursuant to Section  603) and shall  execute and deliver to the Company
such  instruments  as,  in the  judgment  of the  Company,  shall be  necessary,
desirable or appropriate to effect or evidence the satisfaction and discharge of
this Indenture.

SECTION 603.  APPLICATION OF TRUST MONEY.

              Neither the Eligible  Obligations nor the money deposited pursuant
to Section 601,  nor the  principal  or interest  payments on any such  Eligible
Obligations, shall be withdrawn or used for any purpose other than, and shall be
held in trust for,  the payment of the  principal  of and  premium,  if any, and
interest,  if any, on the Securities or portions of principal  amount thereof in
respect of which such deposit was made, all subject,  however, to the provisions
of Section 503; provided, however, that any cash received from such principal or
interest  payments  on such  Eligible  Obligations,  if not then needed for such
purpose, shall, to the extent practicable and upon Company

                                       46
<PAGE>


Request and delivery to the Trustee of the  documents  referred to in clause (y)
in the first  paragraph of Section 601, be invested in Eligible  Obligations  of
the type described in clause (b) in the first  paragraph of Section 601 maturing
at such times and in such  amounts  as shall be  sufficient,  together  with any
other moneys and the proceeds of any other Eligible Obligations then held by the
Trustee, to pay when due the principal of and premium, if any, and interest,  if
any, due and to become due on such  Securities or portions  thereof on and prior
to the Maturity  thereof,  and interest earned from such  reinvestment  shall be
paid over to the  Company  as  received,  free and clear of any  trust,  lien or
pledge under this  Indenture  [(except the lien provided by Section  807)];  and
provided,  further,  that any moneys held in accordance with this Section on the
Maturity  of all such  Securities  in excess of the amount  required  to pay the
principal  of and  premium,  if any,  and  interest,  if any,  then  due on such
Securities  shall be paid over to the Company free and clear of any trust,  lien
or pledge under this Indenture  [(except the lien provided by Section 807)]; and
provided,  further,  that if an Event of  Default  shall  have  occurred  and be
continuing, moneys to be paid over to the Company pursuant to this Section shall
be held until such Event of Default shall have been waived or cured.


                                  ARTICLE SEVEN

                           EVENTS OF DEFAULT; REMEDIES

SECTION 701.  EVENTS OF DEFAULT.

              "EVENT OF  DEFAULT",  wherever  used  herein  with  respect to the
Securities  of any series,  means any of the  following  events which shall have
occurred and be continuing:

              (a)    failure to pay  interest,  if any, on any  Security of such
       series  within  sixty (60) days after the same  becomes  due and  payable
       [(whether  or not  payment is  prohibited  by the  provisions  of Article
       Fourteen)];  provided,  however, that no such failure shall constitute an
       "Event of Default" if the Company  shall have made a valid  extension  of
       the interest payment period with respect to the Securities of such series
       if so provided  with  respect to such series as  contemplated  by Section
       301; or

              (b)    failure to pay the principal of or premium,  if any, on any
       Security of such series within three (3) Business Days after its Maturity
       [(whether  or not  payment is  prohibited  by the  provisions  of Article
       Fourteen)];  provided,  however, that no such failure shall constitute an
       "Event of Default" if the Company  shall have made a valid  extension  of
       the Maturity of the Securities of such series if so provided with respect
       to such series as contemplated by Section 301; or

              (c)    failure to perform or breach of any covenant or warranty of
       the  Company  in this  Indenture  (other  than a covenant  or  warranty a
       default in the  performance  of which or breach of which is  elsewhere in
       this Section specifically dealt with or which has expressly been included
       in this  Indenture  solely  for the  benefit  of one or  more  series  of
       Securities

                                       47
<PAGE>


       other than such  series) for a period of ninety (90) days after there has
       been  given,  by  registered  or  certified  mail,  to the Company by the
       Trustee,  or to the  Company  and the  Trustee by the Holders of at least
       thirty-three  per centum  (33%) in  principal  amount of the  Outstanding
       Securities of such series,  a written notice  specifying  such default or
       breach and  requiring it to be remedied and stating that such notice is a
       "NOTICE OF DEFAULT" hereunder, unless the Trustee, or the Trustee and the
       Holders of a principal  amount of Securities of such series not less than
       the principal amount of Securities the Holders of which gave such notice,
       as the case may be, shall agree in writing to an extension of such period
       prior to its  expiration;  provided,  however,  that the Trustee,  or the
       Trustee and the Holders of such  principal  amount of  Securities of such
       series,  as the  case  may be,  shall  be  deemed  to have  agreed  to an
       extension of such period if corrective action is initiated by the Company
       within such period and is being diligently pursued; or

              (d)    the entry by a court having jurisdiction in the premises of
       (i) a decree  or  order  for  relief  in  respect  of the  Company  in an
       involuntary  case or  proceeding  under any  applicable  Federal or State
       bankruptcy,  insolvency,  reorganization  or other  similar law or (ii) a
       decree  or order  adjudging  the  Company a  bankrupt  or  insolvent,  or
       approving as properly  filed a petition by one or more Persons other than
       the  Company   seeking   reorganization,   arrangement,   adjustment   or
       composition of or in respect of the Company under any applicable  Federal
       or State law, or appointing a custodian, receiver, liquidator,  assignee,
       trustee,  sequestrator  or other similar  official for the Company or for
       any  substantial  part of its  property,  or ordering the  winding-up  or
       liquidation  of its  affairs,  and any such decree or order for relief or
       any such other decree or order shall have remained unstayed and in effect
       for a period of ninety (90) consecutive days; or

              (e)    the  commencement  by the  Company of a  voluntary  case or
       proceeding under any applicable Federal or State bankruptcy,  insolvency,
       reorganization or other similar law or of any other case or proceeding to
       be adjudicated a bankrupt or insolvent,  or the consent by the Company to
       the entry of a decree or order for relief in respect of the  Company in a
       case or  proceeding  under any  applicable  Federal or State  bankruptcy,
       insolvency, reorganization or other similar law or to the commencement of
       any bankruptcy or insolvency case or proceeding  against the Company,  or
       the  filing by the  Company of a  petition  or answer or consent  seeking
       reorganization  or relief under any  applicable  Federal or State law, or
       the  consent  by the  Company to the  filing of such  petition  or to the
       appointment of or taking possession by a custodian, receiver, liquidator,
       assignee, trustee,  sequestrator or similar official of the Company or of
       any substantial part of its property,  or the making by the Company of an
       assignment for the benefit of creditors,  or the admission by the Company
       in writing of its  inability  to pay its debts  generally  as they become
       due, or the authorization of such action by the Board of Directors of the
       Company; or

              (f)    if such Securities  shall have been issued and delivered to
       a Trust (or trustee  thereof)  in  connection  with the  issuance by such
       Trust of Trust  Securities  and so long as such Trust  Securities  remain
       outstanding,   such  Trust  shall  have   voluntarily  or   involuntarily

                                       48
<PAGE>


       dissolved,  wound up its business or otherwise  terminated  its existence
       except in connection  with (i) the  distribution of Securities to holders
       of Trust Securities in liquidation of their interests in such Trust; (ii)
       the redemption of all or the outstanding  Trust  Securities of such Trust
       or (iii) certain mergers,  consolidations or other business combinations,
       each as permitted by the Declaration establishing such Trust, or

              (g)    any  other  Event of  Default  specified  with  respect  to
       Securities of such series.

SECTION 702.  ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.

              If an Event of Default shall have occurred and be continuing  with
respect to Securities of any series at the time Outstanding,  then in every such
case the Trustee or the Holders of not less than  thirty-three  per centum (33%)
in principal amount of the Outstanding Securities of such series may declare the
principal  amount (or,  if any of the  Securities  of such  series are  Discount
Securities,  such portion of the principal  amount of such  Securities as may be
specified  in the terms  thereof as  contemplated  by Section 301) of all of the
Outstanding  Securities  of  such  series  to be  due  and  payable  immediately
(provided  that the payment of principal and interest on such  Securities  shall
remain  subordinated to the extent provided in this  Indenture),  by a notice in
writing  to the  Company  (and to the  Trustee  if given by  Holders),  and upon
receipt by the Company of notice of such  declaration  such principal amount (or
specified amount),  together with premium, if any, and accrued interest, if any,
thereon, shall become immediately due and payable; provided, however, that if an
Event of Default shall have occurred and be continuing with respect to more than
one  series  of  Securities,  the  Trustee  or  the  Holders  of not  less  than
thirty-three  per centum (33%) in aggregate  principal amount of the Outstanding
Securities  of  all  such  series,  considered  as  one  class,  may  make  such
declaration of acceleration, and not the Holders of the Securities of any one of
such  series  (provided  that the  payment of  principal  and  interest  on such
Securities shall remain subordinated to the extent provided in this Indenture).

              At any  time  after  such a  declaration  of  acceleration  of the
maturity  of the  Securities  of any series  shall have been made,  but before a
judgment or decree for payment of the money due shall have been  obtained by the
Trustee as provided in this Article, [the Event or Events of Default giving rise
to such  declaration of  acceleration  shall,  without further act, be deemed to
have been cured,  and] such  declaration  and its  consequences  shall,  without
further act, be deemed to have been rescinded and annulled, if

                     (a)    the Company  shall have paid or  deposited  with the
              Trustee a sum sufficient to pay

                            (i)    all   overdue   interest,   if  any,  on  all
                     Securities of such series then Outstanding;

                            (ii)   the principal of and premium,  if any, on any
                     Securities  of such  series  then  Outstanding  which  have
                     become due otherwise than by such

                                       49
<PAGE>


                     declaration of acceleration  and interest,  if any, thereon
                     at  the  rate  or  rates   prescribed   therefor   in  such
                     Securities;

                            (iii)  interest,  if any, upon overdue interest,  if
                     any,  at the  rate or  rates  prescribed  therefor  in such
                     Securities,  to the extent that payment of such interest is
                     lawful; and

                            (iv)   all amounts due to the Trustee  under Section
                     807; and

                     (b)    all Event or  Events  of  Default  with  respect  to
              Securities  of such  series,  other  than the  non-payment  of the
              principal of Securities of such series which shall have become due
              solely by such declaration of acceleration,  shall have been cured
              or waived as provided in Section 713.

No such  rescission  shall affect any subsequent  Event of Default or impair any
right consequent thereon.

SECTION 703.  COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.

              If an Event of Default  described  in clause (a) or (b) of Section
701 shall have occurred and be continuing, the Company shall, upon demand of the
Trustee,  pay to it, for the  benefit of the  Holders of the  Securities  of the
series  with  respect to which such Event of Default  shall have  occurred,  the
whole amount then due and payable on such  Securities for principal and premium,
if any, and interest,  if any, and, in addition thereto,  such further amount as
shall be sufficient to cover any amounts due to the Trustee under Section 807.

              If the Company shall fail to pay such amounts  forthwith upon such
demand,  the Trustee,  in its own name and as trustee of an express  trust,  may
institute  a  judicial  proceeding  for the  collection  of the  sums so due and
unpaid,  may  prosecute  such  proceeding  to judgment  or final  decree and may
enforce the same against the Company or any other  obligor upon such  Securities
and collect the moneys  adjudged or decreed to be payable in the manner provided
by law out of the  property  of the  Company  or any  other  obligor  upon  such
Securities, wherever situated.

              If an Event of Default  with respect to  Securities  of any series
shall have occurred and be continuing, the Trustee may in its discretion proceed
to  protect  and  enforce  its  rights  and the  rights  of the  Holders  of the
Securities  of  such  series  then  outstanding  by  such  appropriate  judicial
proceedings  as the Trustee shall deem most effectual to protect and enforce any
such rights,  whether for the specific  enforcement of any covenant or agreement
in this Indenture or in aid of the exercise of any power granted  herein,  or to
enforce any other proper remedy.

SECTION 704.  APPLICATION OF MONEY COLLECTED.

              Any money collected by the Trustee  pursuant to this Article shall
be applied in the following  order, to the extent  permitted by law, at the date
or dates fixed by the Trustee and, in case


                                       50
<PAGE>


of the distribution of such money on account of principal or premium, if any, or
interest, if any, upon presentation of the Securities in respect of which or for
the  benefit of which such money  shall  have been  collected  and the  notation
thereon of the  payment if only  partially  paid and upon  surrender  thereof if
fully paid:

              FIRST: To the payment of all amounts due the Trustee under Section
       807;

              SECOND:  To the  payment of the whole  amount  then due and unpaid
       upon the  Outstanding  Securities for principal and premium,  if any, and
       interest,  if any,  in respect of which or for the  benefit of which such
       money has been collected; and in case such proceeds shall be insufficient
       to pay in full the whole  amount so due and unpaid upon such  Securities,
       then to the  payment of such  principal  and  interest,  if any,  thereon
       without any  preference or priority,  ratably  according to the aggregate
       amount so due and unpaid,  with any balance then remaining to the payment
       of premium,  if any, and, if so specified as  contemplated by Section 301
       with respect to the  Securities  of any series,  or any Tranche  thereof,
       interest,  if any, on overdue premium,  if any, and overdue interest,  if
       any, ratably as aforesaid, all to the extent permitted by applicable law;

              THIRD: To the payment of the remainder,  if any, to the Company or
       to whomsoever may be lawfully  entitled to receive the same or as a court
       of competent jurisdiction may direct.

SECTION 705.  TRUSTEE MAY FILE PROOFS OF CLAIM.

              In  case  of  the  pendency  of  any   receivership,   insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial  proceeding relative to the Company or any other obligor upon the
Securities  or the  property  of the  Company or of such other  obligor or their
creditors,  the Trustee (irrespective of whether the principal of the Securities
shall  then be due  and  payable  as  therein  expressed  or by  declaration  or
otherwise and  irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue  principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,

              (a)    to  file  and  prove  a  claim  for  the  whole  amount  of
       principal,  premium,  if any, and interest,  if any,  owing and unpaid in
       respect of the  Securities  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 amounts due to the Trustee  under  Section 807)
       and of the Holders allowed in such judicial proceeding, and

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

                                       51
<PAGE>


and any custodian,  receiver,  assignee,  trustee,  liquidator,  sequestrator or
other similar official in any such judicial  proceeding is hereby  authorized by
each  Holder to make such  payments  to the  Trustee  and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amounts due it under Section 807.

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

SECTION 706.  TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.

              All  rights of action and claims  under this  Indenture  or on the
Securities may be prosecuted and enforced by the Trustee  without the possession
of any of the  Securities or the production  thereof in any proceeding  relating
thereto,  and any such proceeding  instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after  provision  for the  payment  of the  reasonable  compensation,  expenses,
disbursements  and advances of the Trustee,  its agents and counsel,  be for the
ratable  benefit of the  Holders in  respect  of which  such  judgment  has been
recovered.

SECTION 707.  LIMITATION ON SUITS.

              No  Holder  shall  have any  right to  institute  any  proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless:

              (a)    such Holder shall have  previously  given written notice to
       the  Trustee  of a  continuing  Event  of  Default  with  respect  to the
       Securities of such series;

              (b)    the Holders of a majority in aggregate  principal amount of
       the Outstanding  Securities of all series in respect of which an Event of
       Default shall have occurred and be  continuing,  considered as one class,
       shall have made written  request to the Trustee to institute  proceedings
       in respect of such Event of Default in its own name as Trustee hereunder;

              (c)    such  Holder or Holders  shall have  offered to the Trustee
       reasonable  indemnity  against the costs,  expenses and liabilities to be
       incurred in compliance with such request;

              (d)    the  Trustee  for sixty (60) days after its receipt of such
       notice, request and offer of indemnity shall have failed to institute any
       such proceeding; and

              (e)    no direction  inconsistent  with such written request shall
       have been given to the  Trustee  during such sixty (60) day period by the
       Holders of a majority in aggregate

                                       52
<PAGE>


       principal  amount of the Outstanding  Securities of all series in respect
       of which an Event of  Default  shall  have  occurred  and be  continuing,
       considered as one class.

it being  understood and intended that no one or more of such Holders shall have
any right in any manner  whatever by virtue of, or by availing of, any provision
of this  Indenture to affect,  disturb or  prejudice  the rights of any other of
such Holders or to obtain or to seek to obtain  priority or preference  over any
other of such  Holders or to enforce any right under this  Indenture,  except in
the manner herein  provided and for the equal and ratable benefit of all of such
Holders.

SECTION 708.  UNCONDITIONAL  RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,  PREMIUM AND
              INTEREST.

              Notwithstanding any other provision in this Indenture,  the Holder
of any Security shall have the right,  which is absolute and  unconditional,  to
receive  payment of the  principal  of and  premium,  if any,  and  (subject  to
Sections  307)  interest,  if any, on such  Security  on the Stated  Maturity or
Maturities  expressed in such  Security (or, in the case of  redemption,  on the
Redemption  Date) and to institute suit for the enforcement of any such payment,
and such rights  shall not be impaired  without the consent of such  Holder.  In
addition,  in the case of  Securities  of a series held by a Trust,  a holder of
Preferred Securities may directly institute a proceeding against the Company for
enforcement  of  payment  to such  holder of  principal  of or  interest  on the
Securities  having  a  principal  amount  equal  to  the  aggregate  liquidation
preference amount of the Preferred Securities of such holder on or after the due
dates specified or provided for in the Securities.

SECTION 709.  RESTORATION OF RIGHTS AND REMEDIES.

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

SECTION 710.  RIGHTS AND REMEDIES CUMULATIVE.

              Except as otherwise provided in the last paragraph of Section 306,
no right or remedy  herein  conferred  upon or reserved to the Trustee or to the
Holders is intended  to be  exclusive  of any other  right or remedy,  and every
right and remedy shall,  to the extent  permitted by law, be  cumulative  and in
addition to every other right and remedy  given  hereunder  or now or  hereafter
existing at law or in equity or  otherwise.  The  assertion or employment of any
right or remedy  hereunder,  or  otherwise,  shall not  prevent  the  concurrent
assertion or employment of any other appropriate right or remedy.

                                       53
<PAGE>


SECTION 711.  DELAY OR OMISSION NOT WAIVER.

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

SECTION 712.  CONTROL BY HOLDERS OF SECURITIES.

              If an Event of Default  shall have  occurred and be  continuing in
respect of a series of Securities, the Holders of a majority in principal amount
of the Outstanding  Securities of such series shall have the right to direct the
time,  method and place of conducting any proceeding for any remedy available to
the  Trustee,  or  exercising  any trust or power  conferred on the Trustee with
respect to the Securities of such series; provided, however, that if an Event of
Default  shall have  occurred  and be  continuing  with respect to more than one
series of Securities, the Holders of a majority in aggregate principal amount of
the Outstanding  Securities of all such series,  considered as one class,  shall
have the right to make such direction,  and not the Holders of the Securities of
any one of such series; and provided, further, that

              (a)    such  direction  shall not be in conflict  with any rule of
       law or with this Indenture, and could not involve the Trustee in personal
       liability in  circumstances  where  indemnity would not, in the Trustee's
       sole discretion, be adequate,

              (b)    the Trustee may take any other action  deemed proper by the
       Trustee which is not inconsistent with such direction.

SECTION 713.  WAIVER OF PAST DEFAULTS.

              The  Holders of not less than a majority  in  aggregate  principal
amount of the Outstanding  Securities of any series may on behalf of the Holders
of all the  Securities  of such series then  outstanding  waive any past default
with respect to such series hereunder and its consequences, except a default

              (a)    in the payment of the  principal of or premium,  if any, or
       interest, if any, on any Security of such series then outstanding, or

              (b)    in respect of a covenant or  provision  hereof  which under
       Section  1102 cannot be  modified  or amended  without the consent of the
       Holder of each Outstanding  Security of such series  affected;  provided,
       however, that so long as a Trust holds the Securities of any series, such
       trust may not waive any past  default  without  the consent of at least a
       majority in aggregate  liquidation  preference of the  outstanding  Trust
       Securities issued by such Trust,  obtained as provided in the Declaration
       pertaining to such Trust. Any such waiver by

                                       54
<PAGE>


       holders of a majority in aggregate liquidation  preference of outstanding
       Preferred  Securities  issued by any such Trust  shall be deemed to be on
       behalf of all holders of Preferred Securities issued by any such Trust.

              Upon any such waiver,  such default shall cease to exist,  and any
and all Events of Default arising  therefrom shall be deemed to have been cured,
for every  purpose of this  Indenture;  but no such waiver  shall  extend to any
subsequent or other default or impair any right consequent thereon.

SECTION 714.  UNDERTAKING FOR COSTS.

              The  Company  and  the  Trustee  agree,  and  each  Holder  by its
acceptance of a Security  shall be deemed to have agreed,  that any court may in
its discretion  require,  in any suit for the enforcement of any right or remedy
under this  Indenture,  or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee,  the filing by any party  litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs,  including  reasonable  attorneys' fees,
against  any party  litigant  in such suit,  having due regard to the merits and
good faith of the claims or  defenses  made by such  party  litigant  all in the
manner, to the extent and except as provided in the Trust Indenture Act; but the
provisions  of this  Section  shall  not  apply  to any suit  instituted  by the
Company,  [to any suit instituted by the Trustee,  to any suit instituted by any
Holder,  or group of Holders,  holding in the aggregate more than ten per centum
(10%) in aggregate principal amount of the Outstanding  Securities of all series
in respect of which such suit may be brought, considered as one class, or to any
suit  instituted  by any  Holder  for  the  enforcement  of the  payment  of the
principal  of or premium,  if any, or  interest,  if any, on any  Security on or
after the Stated  Maturity or Maturities  expressed in such Security (or, in the
case of redemption, on or after the Redemption Date).]

SECTION 715.  WAIVER OF STAY OR EXTENSION LAWS.

              To the full  extent  that it may  lawfully  so agree,  the Company
shall not at any time set up,  claim or  otherwise  seek to take the  benefit or
advantage of any stay or extension law, now or hereafter in effect,  in order to
prevent or hinder the enforcement of this Indenture; and the Company, for itself
and all who may  claim  under  it,  so far as it or they  now or  hereafter  may
lawfully do so, hereby waives the benefit of all such laws.

SECTION 716.  ACTION BY HOLDERS OF CERTAIN TRUST SECURITIES.

              If the Securities of any series shall be held by the Institutional
Trustee of a Trust and if such Institutional Trustee, as such Holder, shall have
failed to exercise any of the rights and remedies available under this Indenture
to the Holders of such Securities, the holders of the Trust Securities issued by
such  Trust  (other  than  Trust  Securities  initially  issued  and sold to the
Company)  shall have and may exercise all such rights and remedies,  to the same
extent as if such holders of such Trust  Securities  held a principal  amount of
Securities of such series equal to the

                                       55
<PAGE>


liquidation  preference  of such  Trust  Securities,  without  first  proceeding
against such trustee or trust.  Notwithstanding the foregoing, in the case of an
Event of Default  described in clause (a) or (b) of Section 701,  each holder of
such Trust  Securities  shall have and may exercise all rights  available to the
Institutional  Trustee under Section 708 as the Holder of the Securities of such
series.

              If  action  shall  have  been  taken by both the  Holders  and the
holders of Trust Securities  (other than Trust  Securities  initially issued and
sold to the Company) to exercise  such rights as  contemplated  in the preceding
paragraph,  the action taken by holders of Trust Securities  shall control.  Any
such action taken by registered  holders of Trust  Securities shall be evidenced
to the Trustee in the same  manner as an Act of Holders,  as provided in Section
104(a).  The  Trustee  shall be entitled to rely on the books and records of the
related Trust in determining  the identities of the holders of Trust  Securities
(and, upon the reasonable request of the Trustee, the Company, as the sponsor of
such Trust,  shall,  at its own expense,  promptly  provide copies of applicable
portions  of such  books and  records to the  Trustee  to the extent  reasonably
necessary to enable the Trustee to make such determination).


                                  ARTICLE EIGHT

                                   THE TRUSTEE

SECTION 801.  CERTAIN DUTIES AND RESPONSIBILITIES.

              (a)    Except during the  continuance  of an Event of Default with
respect to Securities of any series,

                     (i)    the Trustee  undertakes to perform,  with respect to
              Securities of such series, 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

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

              (b)    In case an Event of Default with respect to  Securities  of
any series shall have occurred and be  continuing,  the Trustee shall  exercise,
with respect to Securities of such series,  such of the rights and powers vested
in it by this Indenture, and use the same degree of care and skill in

                                       56
<PAGE>


their exercise,  as a prudent man would exercise or use under the  circumstances
in the conduct of his own affairs.

              (c)    No  provision  of this  Indenture  shall  be  construed  to
relieve  the  Trustee  from  liability  for its own  negligent  action,  its own
negligent failure to act, or its own willful misconduct, except that:

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

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

                     (iii)  the Trustee  shall not be liable with respect to any
              action  taken  or  omitted  to be  taken  by it in good  faith  in
              accordance  with the  direction  of the  Holders of a majority  in
              principal amount of the Outstanding  Securities of any one or more
              series, as provided herein, relating to the time, method and place
              of  conducting  any  proceeding  for any remedy  available  to the
              Trustee,  or  exercising  any  trust or power  conferred  upon the
              Trustee,  under this  Indenture  with respect to the Securities of
              such series; and

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

              (d)    Whether  or  not  therein  expressly  so  provided,   every
provision of this  Indenture  relating to the conduct or affecting the liability
of or affording  protection to the Trustee shall be subject to the provisions of
this Section.

SECTION 802.  NOTICE OF DEFAULTS.

              The  Trustee  shall  give  notice of any  default  hereunder  with
respect to the  Securities  of any series to the Holders of  Securities  of such
series in the manner and to the extent  required to do so by the Trust Indenture
Act,  unless such default  shall have been cured or waived;  provided,  however,
that in the case of any default of the character specified in Section 701(c), no
such  notice to Holders  shall be given  until at least  seventy-five  (75) days
after the  occurrence  thereof;  and  provided,  further,  that,  subject to the
provisions of Section 801, the Trustee shall not be deemed to have  knowledge of
such default  unless either (i) a Responsible  Officer of the Trustee shall have
actual knowledge of such default or (ii) the Trustee shall have received written
notice  thereof  from the  Company  or any  Holder  or, in the case of a default
described in Section 701(d), from the holder


                                       57
<PAGE>


of any  indebtedness or from the trustee under any mortgage,  indenture or other
instrument  referred to in such Section.  For the purpose of this  Section,  the
term  "DEFAULT"  means any event which is, or after notice or lapse of time,  or
both,  would become,  an Event of Default with respect to the Securities of such
series.

SECTION 803.  CERTAIN RIGHTS OF TRUSTEE.

              Subject to the  provisions  of Section  801 and to the  applicable
provisions of the Trust Indenture Act:

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

              (b)    any  request,  direction  or act of the  Company  mentioned
       herein shall be  sufficiently  evidenced by a Company  Request or Company
       Order, or as otherwise  expressly  provided herein, and any resolution of
       the Board of Directors of the Company may be sufficiently  evidenced by a
       Board Resolution;

              (c)    whenever  in  the  administration  of  this  Indenture  the
       Trustee  shall deem it desirable  that a matter be proved or  established
       prior to taking,  suffering or omitting any action hereunder, the Trustee
       (unless other  evidence is  specifically  prescribed  herein) may, in the
       absence of bad faith on its part,  rely upon an Officer's  Certificate of
       the Company;

              (d)    the Trustee may consult with counsel and the written advice
       of such  counsel or any  Opinion of  Counsel  shall be full and  complete
       authorization and protection in respect of any action taken,  suffered or
       omitted by it hereunder in good faith and in reliance thereon;

              (e)    the Trustee shall be under no obligation to exercise any of
       the rights or powers  vested in it by this  Indenture  at the  request or
       direction of any Holder  pursuant to this  Indenture,  unless such Holder
       shall have  offered  to the  Trustee  reasonable  security  or  indemnity
       against the costs, expenses and liabilities which might be incurred by it
       complying with such request or direction;

              (f)    the  Trustee  shall not be bound to make any  investigation
       into  the  facts  or  matters  stated  in  any  resolution,  certificate,
       statement,  instrument,  opinion,  report,  notice,  request,  direction,
       consent, order, bond, debenture,  note, other evidence of indebtedness or
       other paper or document,  but the Trustee,  in its  discretion,  may make
       such further  inquiry or  investigation  into such facts or matters as it
       may see fit,  and, if the Trustee  shall  determine  to make such further
       inquiry  or   investigation,   it  shall  (subject  to  applicable  legal
       requirements)

                                       58
<PAGE>


       be entitled to examine,  during normal business hours, the books, records
       and premises of the Company, personally or by agent or attorney;

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

              (h)    the  Trustee  shall not be charged  with  knowledge  of any
       Event of Default with respect to the  Securities  of any series for which
       it is acting as Trustee  unless either (i) a  Responsible  Officer of the
       Trustee  shall  have  actual  knowledge  of the Event of  Default or (ii)
       written  notice of such  Event of  Default  shall  have been given to the
       Trustee by the Company,  any other  obligor on such  Securities or by any
       Holder of such Securities.

SECTION 804.  NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.

              The recitals  contained  herein and in the Securities  (except the
Trustee's  certificates of  authentication)  shall be taken as the statements of
the Company,  and neither the Trustee nor any  Authenticating  Agent assumes any
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities.  Neither the
Trustee  nor  any  Authenticating  Agent  shall  be  accountable  for the use or
application by the Company of Securities or the proceeds thereof.

SECTION 805.  MAY HOLD SECURITIES.

              Each of the Trustee,  any Authenticating  Agent, any Paying Agent,
any Security Registrar or any other agent of the Company or the Trustee,  in its
individual or any other capacity,  may become the owner or pledgee of Securities
and/or Preferred Securities, subject to Sections 808 and 813, may otherwise deal
with the Company with the same rights it would have if it were not such Trustee,
Authenticating Agent, Paying Agent, Security Registrar or other agent.

SECTION 806.  MONEY HELD IN TRUST.

              Money  held  by  the  Trustee  in  trust  hereunder  need  not  be
segregated  from other funds,  except to the extent required by law. The Trustee
shall be under no liability for interest on or investment of any money  received
by it hereunder  except as expressly  provided herein or otherwise  agreed with,
and for the sole benefit of, the Company.

SECTION 807.  COMPENSATION AND REIMBURSEMENT.

              The Company agrees

                                       59
<PAGE>


              (a)    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);

              (b)    except as otherwise expressly provided herein, to reimburse
       the Trustee upon its request for all reasonable  expenses,  disbursements
       and  advances  reasonably  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 to the extent that any such  expense,  disbursement  or
       advance as may be attributable to its negligence,  willful  misconduct or
       bad faith; and

              (c)    to  indemnify  the Trustee  and hold it  harmless  from and
       against any loss,  liability or expense reasonably incurred by it arising
       out of or in  connection  with the  acceptance or  administration  of the
       trust or trusts  hereunder or the  performance  of its duties  hereunder,
       including the reasonable  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, except to the extent that any such
       loss, liability or expense may be attributable to its negligence, willful
       misconduct or bad faith.

              As security for the  performance of the obligations of the Company
under this Section,  the Trustee shall have a lien prior to the Securities  upon
all  property  and funds  held or  collected  by the  Trustee as such other than
property and funds held in trust under Section 603 (except moneys payable to the
Company as provided in Section  603).  "TRUSTEE"  for  purposes of this  Section
shall include any predecessor Trustee;  provided,  however, that the negligence,
willful  misconduct or bad faith of any Trustee  hereunder  shall not affect the
rights of any other Trustee hereunder.

SECTION 808.  DISQUALIFICATION; CONFLICTING INTERESTS.

              If the  Trustee  shall have or acquire  any  conflicting  interest
within the meaning of the Trust  Indenture  Act, it shall either  eliminate such
conflicting interest or resign to the extent, in the manner and with the effect,
and  subject to the  conditions,  provided in the Trust  Indenture  Act and this
Indenture.  For purposes of Section  310(b)(1) of the Trust Indenture Act and to
the extent permitted thereby, the Trustee, in its capacity as trustee in respect
of the  Securities  of any  series,  shall not be  deemed to have a  conflicting
interest  arising from its capacity as trustee in respect of (i) the  Securities
of any other series and (ii) the Declaration and the Trust Securities  Guarantee
Agreement pertaining to each Trust.

SECTION 809.  CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.

              There shall at all times be a Trustee hereunder which shall be

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              (a)    a corporation  organized and doing  business under the laws
       of the United States,  any State or Territory  thereof or the District of
       Columbia,  authorized under such laws to exercise corporate trust powers,
       having a combined  capital and surplus of at least Fifty Million  Dollars
       ($[50],000,000)  and subject to  supervision  or  examination by Federal,
       State, Territorial or District of Columbia authority, or

              (b)    if and to the extent  permitted by the  Commission by rule,
       regulation  or order upon  application,  a  corporation  or other  Person
       organized  and doing  business  under  the laws of a foreign  government,
       authorized under such laws to exercise  corporate trust powers,  having a
       combined   capital  and  surplus  of  at  least  Fifty  Million   Dollars
       ($50,000,000) or the Dollar equivalent of the applicable foreign currency
       and subject to  supervision  or  examination by authority of such foreign
       government or a political subdivision thereof substantially equivalent to
       supervision  or  examination  applicable to United  States  institutional
       trustees,

and, in either case,  qualified  and  eligible  under this Article and the Trust
Indenture  Act. If such  corporation  publishes  reports of  condition  at least
annually,  pursuant  to  law or to  the  requirements  of  such  supervising  or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such  corporation  shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.  If at
any  time  the  Trustee  shall  cease  to be  eligible  in  accordance  with the
provisions  of  this  Section  or the  Trust  Indenture  Act,  it  shall  resign
immediately  in the  manner and with the effect  hereinafter  specified  in this
Article.

SECTION 810.  RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.

              (a)    No resignation or removal of the Trustee and no appointment
of a successor Trustee pursuant to this Article shall become effective until the
acceptance  of  appointment  by the  successor  Trustee in  accordance  with the
applicable requirements of Section 811.

              (b)    The  Trustee  may  resign at any time with  respect  to the
Securities  of one or more  series  by  giving  written  notice  thereof  to the
Company.  If the  instrument of acceptance  by a successor  Trustee  required by
Section 811 shall not have been delivered to the Trustee within thirty (30) days
after the  giving of such  notice of  resignation,  the  resigning  Trustee  may
petition any court of competent  jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such series.

              (c)    The Trustee may be removed at any time with  respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series delivered to the Trustee and to the
Company;  provided that so long as any Preferred  Securities remain outstanding,
the Trust which issued such  Preferred  Securities  shall not execute any Act to
remove the Trustee without the consent of the holders of a majority in aggregate
liquidation preference of Preferred Securities issued by such Trust outstanding,
obtained as provided in the Declaration pertaining to such Trust.

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<PAGE>


              (d)    If at any time:

                     (i)    the Trustee  shall fail to comply  with  Section 808
              after written request therefor by the Company or by any Holder who
              has been a bona fide Holder for at least six months, or

                     (ii)   the Trustee shall cease to be eligible under Section
              809 or Section 310(a) of the Trust Indenture Act and shall fail to
              resign  after  written  request  therefor by the Company or by any
              such Holder, or

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

then,  in any such case,  (x) the Company may remove the Trustee with respect to
all  Securities  or (y) subject to Section  714,  any Holder who has been a bona
fide  Holder for at least six (6) months may, on behalf of itself and all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Trustee with respect to all Securities and the appointment of a successor
Trustee or Trustees.

              (e)    If the Trustee shall resign, be removed or become incapable
of acting,  or if a vacancy  shall  occur in the office of Trustee for any cause
(other than as  contemplated  in clause (y) in subsection  (d) of this Section),
with respect to the  Securities  of one or more series,  the Company  shall take
prompt  steps to appoint a  successor  Trustee or Trustees  with  respect to the
Securities of that or those series (it being  understood that any such successor
Trustee may be appointed with respect to the Securities of one or more or all of
such series and that at any time there shall be only one Trustee with respect to
the  Securities of any  particular  series) and shall comply with the applicable
requirements  of Section  811. If,  within one (1) year after such  resignation,
removal or incapability,  or the occurrence of such vacancy, a successor Trustee
with  respect to the  Securities  of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding  Securities of such
series delivered to the Company and the retiring Trustee,  the successor Trustee
so  appointed  shall,  forthwith  upon its  acceptance  of such  appointment  in
accordance with the applicable requirements of Section 811, become the successor
Trustee  with  respect  to the  Securities  of such  series  and to that  extent
supersede  the  successor  Trustee  appointed  by the  Company.  If no successor
Trustee  with  respect  to the  Securities  of any  series  shall  have  been so
appointed by the Company or the Holders and accepted  appointment  in the manner
required  by  Section  811,  any  Holder  who has been a bona  fide  Holder of a
Security of such series for at least six (6) months may, on behalf of itself and
all others similarly situated,  petition any court of competent jurisdiction for
the  appointment  of a successor  Trustee with respect to the Securities of such
series.

              (f)    So long as no event  which is, or after  notice or lapse of
time,  or both,  would  become,  an Event of Default  shall have occurred and be
continuing, if the Company shall have

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<PAGE>


delivered to the Trustee or Trustees  with respect to the  Securities  of one or
more series (i) an instrument  executed by an Authorized  Officer of the Company
appointing  a  successor  Trustee  or  Trustees  with  respect  to such  series,
effective as of a date specified  therein,  and (ii) an instrument of acceptance
of such  appointment,  effective as of such date, by such  successor  Trustee or
Trustees in accordance with Section 811, the Trustee or Trustees with respect to
such series shall be deemed to have resigned as  contemplated  in subsection (b)
of this Section,  the successor Trustee or Trustees shall be deemed to have been
appointed  by the Company  pursuant to  subsection  (e) of this Section and such
appointment  shall be deemed to have been  accepted as  contemplated  in Section
811, all as of such date,  and all other  provisions of this Section and Section
811 shall be applicable to such  resignation,  appointment and acceptance except
to the extent  inconsistent with this subsection (f).

              (g)    The Company shall give notice of each  resignation and each
removal of the Trustee  with  respect to the  Securities  of any series and each
appointment of a successor  Trustee with respect to the Securities of any series
to all Holders of Securities of such series.  Each notice shall include the name
of the successor  Trustee with respect to the  Securities of such series and the
address of its corporate trust office.

SECTION 811.  ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.

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

              (b)    In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all) series, the Company,
the retiring  Trustee and each successor  Trustee with respect to the Securities
of such  series  shall  execute  and deliver an  indenture  supplemental  hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain  such  provisions  as shall be  necessary  or  desirable to transfer and
confirm to, and to vest in,  each  successor  Trustee  all the  rights,  powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates,  (2)
if the retiring  Trustee is not retiring with respect to all  Securities,  shall
contain  such  provisions  as shall be deemed  necessary or desirable to confirm
that all the rights,  powers,  trusts and duties of the  retiring  Trustee  with
respect  to the  Securities  of that or those  series as to which  the  retiring
Trustee is not retiring shall continue to be vested in the retiring  Trustee and
(3) shall add to or change any of the  provisions of this  Indenture as shall be
necessary  to  provide  for or  facilitate  the  administration  of  the  trusts
hereunder by more than one Trustee, it being understood that nothing

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<PAGE>


herein  or  in  such  supplemental  indenture  shall  constitute  such  Trustees
co-trustees  of the same trust and that each such Trustee  shall be trustee of a
trust or trusts hereunder  separate and apart from any trust or trusts hereunder
administered  by any other such Trustee;  and upon the execution and delivery of
such  supplemental  indenture the resignation or removal of the retiring Trustee
shall become  effective to the extent  provided  therein and each such successor
Trustee,  without  any further  act,  shall  become  vested with all the rights,
powers, trusts and duties of the retiring Trustee with respect to the Securities
of that or those  series  to which the  appointment  of such  successor  Trustee
relates;  but, on request of the Company or any successor Trustee, such retiring
Trustee,  upon payment of all sums owed to it,  shall duly assign,  transfer and
deliver to such  successor  Trustee all property and money held by such retiring
Trustee  hereunder  with  respect to the  Securities  of that or those series to
which the appointment of such successor Trustee relates.

              (c)    Upon reasonable request of any such successor Trustee,  the
Company  shall  execute  instruments  to more  fully and  certainly  vest in and
confirm to such successor  Trustee all rights,  powers and trusts referred to in
subsection (a) or (b) of this Section, as the case may be.

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

SECTION 812.  MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.

              Any corporation  into which the Trustee may be merged or converted
or with which it may be  consolidated,  or any  corporation  resulting  from any
merger,  conversion or  consolidation  to which the Trustee shall be a party, or
any  corporation  succeeding to all or  substantially  all the  corporate  trust
business  of the  Trustee,  shall be the  successor  of the  Trustee  hereunder,
provided such corporation  shall be otherwise  qualified and eligible under this
Article,  without the execution or filing of any paper or any further act on the
part of any of the  parties  hereto.  In case any  Securities  shall  have  been
authenticated,  but not delivered,  by the Trustee then in office, any successor
by merger,  conversion or consolidation to such authenticating Trustee may adopt
such  authentication  and deliver the Securities so authenticated  with the same
effect as if such successor Trustee had itself authenticated such Securities.

SECTION 813.  PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.

              If the Trustee shall be or become a creditor of the Company or any
other  obligor  upon the  Securities  (other  than by reason  of a  relationship
described in Section  311(b) of the Trust  Indenture  Act), the Trustee shall be
subject  to any  and  all  applicable  provisions  of the  Trust  Indenture  Act
regarding the  collection of claims  against the Company or such other  obligor.
For purposes of Section 311(b) of the Trust Indenture Act:

              (a)    the term "CASH  TRANSACTION" means any transaction in which
       full payment for goods or securities sold is made within seven days after
       delivery of the goods or securities in

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<PAGE>


       currency  or in checks or other  orders  drawn upon banks or bankers  and
       payable upon demand; and

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

SECTION 814.  APPOINTMENT OF AUTHENTICATING AGENT.

              The  Trustee may  appoint an  Authenticating  Agent or Agents with
respect to the Securities of one or more series,  or any Tranche thereof,  which
shall be authorized to act on behalf of the Trustee to  authenticate  Securities
of such series or Tranche issued upon original issuance, exchange,  registration
of  transfer or partial  redemption  thereof or  pursuant  to Section  306,  and
Securities so authenticated  shall be entitled to the benefits of this Indenture
and shall be valid and  obligatory for all purposes as if  authenticated  by the
Trustee  hereunder.  Wherever  reference  is  made  in  this  Indenture  to  the
authentication  and  delivery  of  Securities  by the  Trustee or the  Trustee's
certificate  of  authentication,  such  reference  shall be  deemed  to  include
authentication and delivery on behalf of the Trustee by an Authenticating  Agent
and a  certificate  of  authentication  executed  on behalf of the Trustee by an
Authenticating  Agent.  Each  Authenticating  Agent shall be  acceptable  to the
Company and shall at all times be a  corporation  organized  and doing  business
under the laws of the  United  States,  any State or  Territory  thereof  or the
District of Columbia or the  Commonwealth of Puerto Rico,  authorized under such
laws to act as  Authenticating  Agent,  having a combined capital and surplus of
not less than Fifty Million Dollars  ($50,000,000) and subject to supervision or
examination  by  Federal  or  State  authority.  If  such  Authenticating  Agent
publishes  reports of  condition  at least  annually,  pursuant to law or to the
requirements of said supervising or examining  authority,  then for the purposes
of this Section,  the combined capital and surplus of such Authenticating  Agent
shall be deemed to be its combined  capital and surplus as set forth in its most
recent report of condition so published.  If at any time an Authenticating Agent
shall cease to be eligible in  accordance  with the  provisions of this Section,
such  Authenticating  Agent shall resign  immediately in the manner and with the
effect specified in this Section.

              Any corporation into which an  Authenticating  Agent may be merged
or converted or with which it may be consolidated,  or any corporation resulting
from any merger,  conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation  succeeding to all or substantially  all of
the corporate  agency or corporate  trust business of an  Authenticating  Agent,
shall continue to be an Authenticating Agent, provided such corporation shall be
otherwise

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<PAGE>


eligible under this Section, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.

              An  Authenticating  Agent may resign at any time by giving written
notice  thereof to the Trustee and to the  Company.  The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation  or  upon  such  a  termination,   or  in  case  at  any  time  such
Authenticating  Agent  shall  cease  to  be  eligible  in  accordance  with  the
provisions of this Section,  the Trustee may appoint a successor  Authenticating
Agent which shall be  acceptable to the Company.  Any  successor  Authenticating
Agent upon acceptance of its appointment  hereunder shall become vested with all
the rights, powers and duties of its predecessor hereunder,  with like effect as
if originally  named as an  Authenticating  Agent.  No successor  Authenticating
Agent shall be appointed unless eligible under the provisions of this Section.

              The Company agrees to pay to each  Authenticating  Agent from time
to time reasonable compensation for its services under this Section.

              The provisions of Sections 308, 804 and 805 shall be applicable to
each Authenticating Agent.

              If an  appointment  with respect to the  Securities of one or more
series,  or any Tranche  thereof,  shall be made pursuant to this  Section,  the
Securities of such series or Tranche may have endorsed  thereon,  in addition to
the  Trustee's  certificate  of  authentication,  an  alternate  certificate  of
authentication substantially in the following form:

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

                                        ------------------------
                                        As Trustee


                                        By______________________
                                        As Authenticating Agent


                                        By______________________
                                        Authorized Officer


              If all of the Securities of a series may not be originally  issued
at  one  time,   and  if  the  Trustee  does  not  have  an  office  capable  of
authenticating  Securities upon original  issuance located in a Place of Payment
where the Company wishes to have  Securities of such series  authenticated  upon
original issuance, the Trustee, if so requested by the Company in writing (which
writing need

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<PAGE>


not  comply  with  Section  102 and need not be  accompanied  by an  Opinion  of
Counsel),  shall appoint, in accordance with this Section and in accordance with
such procedures as shall be acceptable to the Trustee,  an Authenticating  Agent
having an office in a Place of Payment designated by the Company with respect to
such series of Securities.


                                  ARTICLE NINE

                LISTS OF HOLDERS; REPORTS BY TRUSTEE AND COMPANY

SECTION 901.  LISTS OF HOLDERS.

              Semiannually,  not later than  __________  and  __________ in each
year,  commencing  __________,  ____,  and within thirty (30) days of such other
times as the Trustee may request in writing,  the Company shall furnish or cause
to be furnished to the Trustee  information as to the names and addresses of the
Holders,  as of a date no more than  fifteen  (15)  days  prior to the date such
information is so furnished, and the Trustee shall preserve such information and
similar  information  received  by it in any other  capacity  and  afford to the
Holders access to  information  so preserved by it, all to such extent,  if any,
and in such manner as shall be required by the Trust  Indenture  Act;  provided,
however, that no such list need be furnished so long as the Trustee shall be the
Security Registrar.

SECTION 902.  REPORTS BY TRUSTEE AND COMPANY.

              Not later than  __________  in each year,  commencing  __________,
____,  the  Trustee  shall  transmit to the  Holders,  the  Commission  and each
securities exchange upon which any Securities are listed, a report,  dated as of
the next  preceding  ______,  with  respect  to any  events  and  other  matters
described in Section  313(a) of the Trust  Indenture  Act, in such manner and to
the extent  required by the Trust  Indenture  Act. The Trustee shall transmit to
the  Holders,  the  Commission  and each  securities  exchange  upon  which  any
Securities  are  listed,  and the Company  shall file with the  Trustee  (within
thirty (30) days after filing with the  Commission  in the case of reports which
pursuant  to the  Trust  Indenture  Act must be filed  with the  Commission  and
furnished to the Trustee) and transmit to the Holders,  such other  information,
reports and other documents,  if any, at such times and in such manner, as shall
be required by the Trust  Indenture Act. The Company shall notify the Trustee of
the listing of any Securities on any securities exchange.

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<PAGE>


                                   ARTICLE TEN

                        CONSOLIDATION, MERGER, CONVEYANCE
                                OR OTHER TRANSFER

SECTION 1001.  COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.

              The  Company  shall not  consolidate  with or merge into any other
Person, or convey or otherwise transfer, or lease, all of its properties,  as or
substantially as an entirety, to any Person, unless:

              (a)    the Person formed by such  consolidation  or into which the
       Company is merged or the Person  which  acquires by  conveyance  or other
       transfer,  or which leases (for a term  extending  beyond the last Stated
       Maturity of the Securities  then  Outstanding),  all of the properties of
       the  Company,  as or  substantially  as an  entirety,  shall  be a Person
       organized and existing under the laws of the United States,  any State or
       Territory thereof or the District of Columbia or under the laws of Canada
       or any Province thereof (such Person being  hereinafter  sometimes called
       the "SUCCESSOR") and shall expressly assume, by an indenture supplemental
       hereto,  executed  and  delivered  to the  Trustee,  in  form  reasonably
       satisfactory  to  the  Trustee,  the  due  and  punctual  payment  of the
       principal  of and  premium,  if any,  and  interest,  if any,  on all the
       Securities  then  Outstanding and the performance and observance of every
       other  covenant  and  condition  of this  Indenture  to be  performed  or
       observed by the Company; and

              (b)    the  Company  shall  have   delivered  to  the  Trustee  an
       Officer's  Certificate  and an Opinion of  Counsel,  each of which  shall
       state that such  consolidation,  merger,  conveyance or other transfer or
       lease, and such supplemental indenture, comply with this Article and that
       all conditions precedent herein provided for relating to such transaction
       have been complied with.

              Anything in this  Indenture to the contrary  notwithstanding,  the
conveyance or other transfer by the Company of all of its  facilities(a) for the
generation of electric  energy,  (b) for the  transmission of electric energy or
(c) for the  distribution  of electric  energy and/or  natural gas, in each case
considered  alone,  or all of its  facilities  described in clauses (a) and (b),
considered together,  or all of its facilities described in clauses (b) and (c),
considered  together,  shall in no event be deemed to constitute a conveyance or
other transfer of all the properties of the Company,  as or  substantially as an
entirety,  unless,  immediately following such conveyance or other transfer, the
Company shall own no properties in the other such  categories of property not so
conveyed or otherwise transferred.  The character of particular facilities shall
be  determined  by reference to the Uniform  System of Accounts  prescribed  for
public utilities and licensees subject to the Federal Power Act, as amended,  to
the extent applicable.

                                       68
<PAGE>


SECTION 1002.  SUCCESSOR SUBSTITUTED.

              Upon  any  consolidation  or  merger  or any  conveyance  or other
transfer  of all  the  properties  of the  Company,  as or  substantially  as an
entirety,  in accordance  with Section 1001, the Successor shall succeed to, and
be substituted for, and may exercise every power and right of, the Company under
this  Indenture  with the same effect as if such Successor had been named as the
"Company"  herein.  Without  limiting  the  generality  of  the  foregoing,  the
Successor  may execute and deliver to the  Trustee,  and  thereupon  the Trustee
shall,  subject to the  provisions of Article Three,  authenticate  and deliver,
Securities.  All Securities so executed by the Successor,  and authenticated and
delivered  by the  Trustee,  shall in all  respects be entitled to the  benefits
provided by this  Indenture  equally and ratably with all  Securities  executed,
authenticated  and  delivered  prior to the  time  such  consolidation,  merger,
conveyance or other transfer became effective.

SECTION 1003.  RELEASE OF COMPANY UPON CONVEYANCE OR OTHER TRANSFER.

              In the case of a  conveyance  or other  transfer  to any Person or
Persons  as  contemplated  in Section  1001,  upon the  satisfaction  of all the
conditions  specified in Section 1001 the Company  (such term being used in this
Section  without  giving  effect  to such  transaction)  shall be  released  and
discharged  from all  obligations  and covenants under this Indenture and on and
under all Securities then  Outstanding  (unless the Company shall have delivered
to the Trustee an instrument in which it shall waive such release and discharge)
and the  Trustee  shall  acknowledge  in writing  that the  Company  has been so
released and discharged.

SECTION 1004.  MERGER INTO COMPANY.

              Nothing in this  Indenture  shall be deemed to prevent or restrict
any consolidation or merger after the consummation of which the Company would be
the surviving or resulting  corporation or any conveyance or other transfer,  or
lease of any part of the properties of the Company which does not constitute the
entirety, or substantially the entirety, thereof.

SECTION 1005.  TRANSFER OF LESS THAN THE ENTIRETY.

       (a)    If the Company  shall have conveyed or otherwise  transferred  any
part of its properties which does not constitute the entirety,  or substantially
the entirety,  thereof to another corporation meeting the requirements set forth
in clause (a) of the first paragraph of Section 1001 and if:

              (i)    the  transferee  of  such  part  of the  properties  of the
       Company  shall have  executed  and  delivered to the Trustee an indenture
       supplemental  hereto,  in form  reasonably  satisfactory  to the Trustee,
       which  contains an assumption by such  transferee of the due and punctual
       payment of the principal of and premium, if any, and interest, if any, on
       all the Securities then Outstanding and the performance and observance of
       every  covenant  and  condition  of this  Indenture  to be  performed  or
       observed by the Company;

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<PAGE>


              (ii)   there  shall  have  been   delivered   to  the  Trustee  an
       Independent Expert's Certificate

                     (A)    describing  the  property so  conveyed or  otherwise
              transferred  (such description of property to be made by reference
              either to specific  items,  units  and/or  elements of property or
              portions  thereof,   on  a  percentage  or  Dollar  basis,  or  to
              properties  reflected in specified accounts in the Company's books
              of account or  portions  thereof,  on a Dollar  basis);  provided,
              however,   that  such   property   shall  be  identified  in  such
              certificate  as facilities  for the  generation,  transmission  or
              distribution of electric energy or for the storage, transportation
              or distribution of natural gas;

                     (B)    stating,  in the judgment of the  signers,  the Fair
              Value to the  transferee  of the property so conveyed or otherwise
              transferred;

                     (C)    stating an amount equal to seventy  percent (70%) of
              the amount stated pursuant to clause (B) above; provided, however,
              that there shall be excluded  from the property so  evaluated  any
              property subject to any mortgage, deed of trust, security interest
              or other lien which secures indebtedness for borrowed money or for
              the deferred purchase price of property;

                     (D)    stating an amount equal to the  aggregate  principal
              amount of the Securities then Outstanding; and

                     (E)    stating  that the amount  stated  pursuant to clause
              (D) above does not exceed the amount stated pursuant to clause (C)
              above;

              (iii)  the Company shall have assigned or otherwise transferred to
       such transferee all Trust  Securities  (initially  issued and sold to the
       Company)  then  outstanding,  and such  transferee  shall have  expressly
       assumed all obligations under all Trust Securities Guarantees; and

              (iv)   the  Company  shall  have   delivered  to  the  Trustee  an
       Officer's Certificate and an Opinion of Counsel each of which shall state
       that such  conveyance or other transfer and such  supplemental  indenture
       comply with this Section and that all  conditions  precedent  relating to
       such  transactions  provided  for in this  Section and  otherwise in this
       Indenture have been complied with;

then, upon the satisfaction of all such conditions,

              (x)    the  Company  shall be  released  and  discharged  from all
       obligations  and  covenants  under  this  Indenture  and on and under all
       Securities then  Outstanding  (unless the Company shall have delivered to
       the Trustee an instrument in which it shall waive such

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       release and discharge), and the Trustee shall acknowledge in writing that
       the Company has been so released and discharged; and

              (y)    if the Company shall have been  released and  discharged as
       contemplated in clause (x) above,  such transferee  shall succeed to, and
       be  substituted  for,  and may  exercise  every  right and power of,  the
       Company under this Indenture  with the same effect as if such  transferee
       had been named the "Company" herein;  and without limiting the generality
       of the  foregoing,  such  transferee  shall be deemed a  "Successor"  for
       purposes of Section 1002 and for all other purposes of this Indenture.

(b)    For purposes of this Section:

              "FAIR VALUE" means the fair value of such  property so conveyed or
       otherwise transferred as may be determined by reference to (a) the amount
       which would be likely to be obtained in an arm's-length  transaction with
       respect to such  property  between an informed  and willing  buyer and an
       informed and willing seller, under no compulsion, respectively, to buy or
       sell, (b) the amount of investment  with respect to such property  which,
       together  with  a  reasonable  return  thereon,  would  be  likely  to be
       recovered  through  ordinary  business  operations or otherwise,  (c) the
       cost, accumulated  depreciation and replacement cost with respect to such
       property and/or (d) any other relevant factors;  provided,  however, that
       (x) the Fair Value of property shall be determined  without deduction for
       any mortgage,  deed of trust,  pledge,  security  interest,  encumbrance,
       lease, reservation,  restriction,  servitude,  charge or similar right or
       any other lien of any kind on such property and (y) the Fair Value to the
       transferee of any property  shall not reflect any  reduction  relating to
       the fact that such property may be of less value to a Person which is not
       the owner or operator of the  property or any portion  thereof  than to a
       Person  which is such owner or  operator.  Fair Value may be  determined,
       without  physical  inspection,  by the use of accounting and  engineering
       records and other data  maintained  by the Company or the  transferee  or
       otherwise available to the Expert certifying the same.


              "INDEPENDENT  EXPERT'S  CERTIFICATE" means a certificate signed by
       an authorized  officer of the  transferee  and by an  Independent  Expert
       (which  Independent  Expert  shall be  selected  either  by the  board of
       directors or by an authorized officer of the transferee, the execution of
       such certificate by such authorized officer to be conclusive  evidence of
       such  selection)  and  delivered  to the  Trustee.  For  purposes of this
       definition,  (a) "EXPERT" means a Person which is an engineer,  appraiser
       or other expert and which,  with respect to any  certificate to be signed
       by such Person and  delivered to the  Trustee,  is qualified to pass upon
       the matter set forth in such  certificate;  (b) "ENGINEER" means a Person
       engaged in the engineering profession or otherwise qualified to pass upon
       engineering matters (including,  but not limited to, a Person licensed as
       a professional engineer, whether

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<PAGE>


       or not then engaged in the  engineering  profession)  and (c) "APPRAISER"
       means  a  Person  engaged  in the  business  of  appraising  property  or
       otherwise  qualified  to pass upon the Fair Value or fair market value of
       property.  "INDEPENDENT", when applied to any Expert, means such a Person
       who (a) is in fact  independent,  (b) does not have any  direct  material
       financial  interest  in  the  transferee  or  in  any  obligor  upon  the
       Securities  or in any Affiliate of the  transferee,  (c) is not connected
       with the  transferee  or such  other  obligor  as an  officer,  employee,
       promoter,   underwriter,   trustee,   partner,  director  or  any  person
       performing  similar  functions  and (d) is approved by the Trustee in the
       exercise of reasonable care.


                                 ARTICLE ELEVEN

                             SUPPLEMENTAL INDENTURES

SECTION 1101.  SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.

              Without the consent of any  Holders,  the Company and the Trustee,
at any  time  and  from  time to time,  may  enter  into one or more  indentures
supplemental hereto, in form reasonably  satisfactory to the Trustee, for any of
the following purposes:

                     (a)    to evidence the  succession of another Person to the
              Company and the  assumption by any such successor of the covenants
              of the Company  herein and in the  Securities,  all as provided in
              Article Ten; or

                     (b)    to add one or more covenants of the Company or other
              provisions  for the  benefit of all  Holders or for the benefit of
              the Holders of, or to remain in effect only so long as there shall
              be Outstanding, Securities of one or more specified series, or one
              or more specified  Tranches thereof,  or to surrender any right or
              power herein conferred upon the Company; or

                     (c)    to  change  or  eliminate   any  provision  of  this
              Indenture or to add any new provision to this Indenture; provided,
              however,  that if  such  change,  elimination  or  addition  shall
              adversely  affect the  interests  of the  Holders  of  Outstanding
              Securities of any series or Tranche in any material respect,  such
              change,  elimination  or  addition  shall  become  effective  with
              respect to such  series or  Tranche  only in  accordance  with the
              provisions  of Section  1102 or when no Security of such series or
              Tranche remains Outstanding; or

                     (d)    to provide collateral security for the Securities or
              any series thereof; or

                     (e)    to establish  the form or terms of Securities of any
              series or Tranche as contemplated by Sections 201 and 301; or

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<PAGE>


                     (f)    to provide for the  authentication  and  delivery of
              bearer securities and coupons  appertaining  thereto  representing
              interest,   if  any,  thereon  and  for  the  procedures  for  the
              registration,  exchange and replacement thereof and for the giving
              of notice to, and the  solicitation of the vote or consent of, the
              holders  thereof,  and for any and all  other  matters  incidental
              thereto; or

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

                     (h)    to provide for the procedures required to permit the
              Company to utilize,  at its option, a  non-certificated  system of
              registration for all, or any series or Tranche of, the Securities;
              or

                     (i)    to  change  any  place  or  places   where  (1)  the
              principal of and premium, if any, and interest,  if any, on all or
              any  series  of  Securities,  or any  Tranche  thereof,  shall  be
              payable,  (2) all or any  series  of  Securities,  or any  Tranche
              thereof, may be surrendered for registration of transfer,  (3) all
              or any  series  of  Securities,  or any  Tranche  thereof,  may be
              surrendered  for  exchange  and (4) notices and demands to or upon
              the Company in respect of all or any series of Securities,  or any
              Tranche thereof, and this Indenture may be served; or

                     (j)    to cure any ambiguity,  to correct or supplement any
              provision  herein which may be defective or inconsistent  with any
              other  provision  herein;  or to make  any  other  changes  to the
              provisions  hereof  or to add other  provisions  with  respect  to
              matters or questions  arising under this Indenture,  provided that
              such other  changes or additions  shall not  adversely  affect the
              interests of the Holders of Securities of any series or Tranche in
              any material respect.

              Without  limiting the  generality of the  foregoing,  if the Trust
Indenture  Act as in effect at the date of the  execution  and  delivery of this
Indenture or at any time thereafter shall be amended and

                     (x)    if any  such  amendment  shall  require  one or more
              changes to any  provisions  hereof or the inclusion  herein of any
              additional  provisions,  or shall by operation of law be deemed to
              effect such changes or incorporate such provisions by reference or
              otherwise,  this Indenture shall be deemed to have been amended so
              as to conform to such  amendment to the Trust  Indenture  Act, and
              the  Company  and the  Trustee  may,  without  the  consent of any
              Holders,  enter into an indenture  supplemental hereto to evidence
              such amendment hereof; or

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<PAGE>


                     (y)    if any  such  amendment  shall  permit  one or  more
              changes to, or the elimination of, any provisions hereof which, at
              the  date of the  execution  and  delivery  hereof  or at any time
              thereafter,  are  required  by  the  Trust  Indenture  Act  to  be
              contained herein or are contained herein to reflect any provisions
              of the  Trust  Indenture  Act as in  effect  at  such  date,  this
              Indenture  shall be  deemed to have been  amended  to effect  such
              changes or  elimination,  and the  Company  and the  Trustee  may,
              without  the  consent  of any  Holders,  enter  into an  indenture
              supplemental hereto to evidence such amendment.

SECTION 1102.  SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.

              Subject to the provisions of Section 1101, with the consent of the
Holders of a majority in aggregate  principal  amount of the  Securities  of all
series then Outstanding under this Indenture, considered as one class, by Act of
said  Holders  delivered  to the  Company and the  Trustee,  the Company and the
Trustee may enter into an indenture or  indentures  supplemental  hereto for the
purpose of adding any  provisions  to, or changing in any manner or  eliminating
any of the provisions of, this Indenture; provided, however, that if there shall
be  Securities of more than one series  Outstanding  hereunder and if a proposed
supplemental  indenture  shall  directly  affect  the  rights of the  Holders of
Securities of one or more,  but less than all, of such series,  then the consent
only  of  the  Holders  of a  majority  in  aggregate  principal  amount  of the
Outstanding  Securities  of all series so directly  affected,  considered as one
class, shall be required;  and provided,  further, that if the Securities of any
series  shall  have been  issued in more than one  Tranche  and if the  proposed
supplemental  indenture  shall  directly  affect  the  rights of the  Holders of
Securities of one or more, but less than all, of such Tranches, then the consent
only  of  the  Holders  of a  majority  in  aggregate  principal  amount  of the
Outstanding  Securities of all Tranches so directly affected,  considered as one
class,  shall be required;  and  provided,  further,  that no such  supplemental
indenture shall:

                     (a)    change the Stated  Maturity of the  principal of, or
              any installment of principal of or interest on, any Security other
              than pursuant to the terms thereof, or reduce the principal amount
              thereof  or the rate of  interest  thereon  (or the  amount of any
              installment   of  interest   thereon)  or  change  the  method  of
              calculating  such rate or reduce any premium payable  thereon,  or
              reduce the amount of the  principal of any Discount  Security that
              would be due and payable upon a declaration of acceleration of the
              Maturity  thereof  pursuant to Section  702, or change the coin or
              currency (or other property), in which any Security or premium, if
              any, or interest,  if any, thereon is payable, or impair the right
              to institute  suit for the  enforcement  of any such payment on or
              after the Maturity of any Security, without, in any such case, the
              consent of the Holder of such Security; or

                     (b)    reduce the  percentage  in  principal  amount of the
              Outstanding  Securities  of any  series  (or,  if  applicable,  in
              liquidation preference of any series of Trust Securities),  or any
              Tranche  thereof,  the consent of the Holders of which is required
              for any such supplemental indenture, or the consent of the Holders
              of which

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<PAGE>


              is required  for any waiver of  compliance  with any  provision of
              this Indenture or of any default  hereunder and its  consequences,
              or reduce the  requirements  of Section 1204 for quorum or voting,
              without,  in any such  case,  the  consent  of the  Holder of each
              Outstanding Security of such series or Tranche; or

                     (c)    modify  any  of  the  provisions  of  this  Section,
              Section 506 or Section 713 with respect to the  Securities  of any
              series or any Tranche  thereof (except to increase the percentages
              in  principal  amount  referred  to in this  Section or such other
              Sections or to provide  that other  provisions  of this  Indenture
              cannot be  modified  or waived)  without,  in any such  case,  the
              consent of the Holder of each Outstanding  Security of such series
              or  Tranche;  provided,  however,  that this  clause  shall not be
              deemed to  require  the  consent  of any  Holder  with  respect to
              changes in the references to "the Trustee" and concomitant changes
              in this Section,  or the deletion of this  proviso,  in accordance
              with the requirements of Sections 811(b) and 1101(g).

              A  supplemental  indenture  which (x)  changes or  eliminates  any
covenant or other  provision of this Indenture which has expressly been included
solely for the  benefit of the  Holders of, or which is to remain in effect only
so long as  there  shall be  Outstanding,  Securities  of one or more  specified
series,  or one or more  Tranches  thereof,  or (y)  modifies  the rights of the
Holders of  Securities  of such series or Tranches with respect to such covenant
or other  provision,  shall be  deemed  not to  affect  the  rights  under  this
Indenture of the Holders of Securities of any other series or Tranche.

              Notwithstanding  the  foregoing,  so long as any of the  Preferred
Securities  remain  outstanding,  the Trustee may not consent to a  supplemental
indenture  under this  Section  1102  without  the prior  consent,  obtained  as
provided in a  Declaration  pertaining  to a Trust which  issued such  Preferred
Securities  of the holders of not less than a majority in aggregate  liquidation
preference of all Trust Securities issued by such Trust affected,  considered as
one class,  or, in the case of changes  described  in clauses  (a),  (b) and (c)
above, 100% in aggregate liquidation preference of all such Preferred Securities
then outstanding which would be affected thereby, considered as one class.

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

              Anything in this Indenture to the contrary notwithstanding, if the
Officer's Certificate,  supplemental indenture or Board Resolution,  as the case
may be,  establishing  the Securities of any series or Tranche shall so provide,
(a) the  Holders  of such  Securities  shall be  deemed to have  consented  to a
supplemental  indenture containing the additions,  changes or eliminations to or
from the  Indenture  which shall be  specified  in such  Officer's  Certificate,
supplemental indenture or Board Resolution  establishing such series or Tranche,
(b) no Act of such  Holders  shall be required to evidence  such consent and (c)
such consent may be counted in the

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<PAGE>


determination of whether or not the Holders of the requisite principal amount of
Securities shall have consented to such supplemental indenture.

SECTION 1103.  EXECUTION OF SUPPLEMENTAL INDENTURES.

              In executing,  or accepting the additional  trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture,  the Trustee shall be entitled to receive,
and  (subject  to Section  801) shall be fully  protected  in relying  upon,  an
Opinion of Counsel stating that the execution of such supplemental  indenture is
authorized  or  permitted by this  Indenture.  The Trustee may, but shall not be
obligated  to,  enter into any such  supplemental  indenture  which  affects the
Trustee's own rights, duties,  immunities or liabilities under this Indenture or
otherwise.

SECTION 1104.  EFFECT OF SUPPLEMENTAL INDENTURES.

              Upon the  execution  and  delivery of any  supplemental  indenture
under this Article this Indenture shall be modified in accordance therewith, and
such  supplemental  indenture  shall  form a part  of  this  Indenture  for  all
purposes; and every Holder of Securities theretofore or thereafter authenticated
and delivered  hereunder  shall be bound  thereby.  Any  supplemental  indenture
permitted by this Article may restate this Indenture in its entirety,  and, upon
the execution and delivery  thereof,  any such restatement  shall supersede this
Indenture as theretofore in effect for all purposes.

SECTION 1105.  CONFORMITY WITH TRUST INDENTURE ACT.

              Every  supplemental  indenture  executed  pursuant to this Article
shall conform to the requirements of the Trust Indenture Act.

SECTION 1106.  REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.

              Securities of any series,  or any Tranche  thereof,  authenticated
and delivered after the execution of any supplemental indenture pursuant to this
Article  may,  and shall if  required  by the  Trustee,  bear a notation in form
approved  by the  Trustee as to any  matter  provided  for in such  supplemental
indenture.  If the Company shall so determine,  new Securities of any series, or
any Tranche  thereof,  so modified as to conform,  in the opinion of the Trustee
and the Company, to any such supplemental indenture may be prepared and executed
by the Company and  authenticated  and  delivered by the Trustee in exchange for
Outstanding Securities of such series or Tranche.

SECTION 1107.  MODIFICATION WITHOUT SUPPLEMENTAL INDENTURE.

              To the extent,  if any, that the terms of any particular series of
Securities   shall  have  been  established  in  or  pursuant  to  an  Officer's
Certificate or a Board  Resolution as  contemplated by Section 301, and not in a
supplemental  indenture  hereto,  additions to, changes in or the elimination of
any  of  such  terms  may be  effected  by  means  of a  supplemental  Officer's
Certificate or a

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<PAGE>


supplemental  Board  Resolution,  as the case may be, delivered to, and accepted
by, the Trustee; provided, however, that such supplemental Officer's Certificate
or  supplemental  Board  Resolution  shall not be  accepted  by the  Trustee  or
otherwise be effective  unless all conditions set forth in this Indenture  which
would be required to be satisfied if such additions, changes or elimination were
contained in a supplemental  indenture shall have been appropriately  satisfied.
Upon  the  acceptance  thereof  by  the  Trustee,  any  supplemental   Officer's
Certificate  or  supplemental   Board   Resolution  shall  be  deemed  to  be  a
"supplemental indenture" for purposes of Section 1104 and 1106.


                                 ARTICLE TWELVE

                   MEETINGS OF HOLDERS; ACTION WITHOUT MEETING

SECTION 1201.  PURPOSES FOR WHICH MEETINGS MAY BE CALLED.

              A meeting of Holders of Securities of one or more, or all, series,
or any Tranche or Tranches  thereof,  may be called at any time and from time to
time  pursuant  to this  Article  to  make,  give or take any  request,  demand,
authorization,  direction,  notice,  consent, waiver or other action provided by
this  Indenture  to be made,  given or taken by  Holders of  Securities  of such
series or Tranches.

SECTION 1202.  CALL, NOTICE AND PLACE OF MEETINGS.

              (a)    The  Trustee  may at any time call a meeting  of Holders of
Securities of one or more, or all, series,  or any Tranche or Tranches  thereof,
for any purpose  specified in Section  1201, to be held at such time and (except
as provided in  subsection  (b) of this Section) at such place in the Borough of
Manhattan,  The City of New York, as the Trustee shall  determine,  or, with the
approval  of the  Company,  at any other  place.  Notice of every such  meeting,
setting  forth the time and the place of such  meeting and in general  terms the
action  proposed  to be taken at such  meeting,  shall be given,  in the  manner
provided in Section 106, not less than twenty-one (21) nor more than one hundred
eighty (180) days prior to the date fixed for the meeting.

              (b)    The  Trustee  may be asked to call a meeting of the Holders
of  Securities  of one or more,  or all,  series,  or any  Tranche  or  Tranches
thereof,  by the Company or by the Holders of  thirty-three  per centum (33%) in
aggregate principal amount of all of such series and Tranches, considered as one
class,  for any purpose  specified in Section 1201, by written  request  setting
forth in reasonable  detail the action  proposed to be taken at the meeting.  If
the  Trustee  shall have been asked by the  Company to call such a meeting,  the
Company  shall  determine  the time and place for such meeting and may call such
meeting by giving notice  thereof in the manner  provided in  subsection  (a) of
this Section, or shall direct the Trustee, in the name and at the expense of the
Company,  to give such notice. If the Trustee shall have been asked to call such
a meeting by Holders in  accordance  with this  subsection  (b), and the Trustee
shall not have  given the notice of such  meeting  within  twenty-one  (21) days
after  receipt  of such  request  or shall not  thereafter  proceed to cause the
meeting to be held as provided  herein,  then the Holders of  Securities of such

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<PAGE>


series and Tranches, in the principal amount above specified,  may determine the
time and the place in the Borough of Manhattan, The City of New York, or in such
other place as shall be  determined  or approved by the Company for such meeting
and may call such meeting for such purposes by giving notice thereof as provided
in subsection (a) of this Section.

              (c)    Any  meeting of Holders of  Securities  of one or more,  or
all, series, or any Tranche or Tranches  thereof,  shall be valid without notice
if the Holders of all  Outstanding  Securities  of such  series or Tranches  are
present  in person or by proxy and if  representatives  of the  Company  and the
Trustee  are  present,  or if notice is  waived in  writing  before or after the
meeting by the Holders of all  Outstanding  Securities  of such  series,  or any
Tranche  or  Tranches  thereof,  or by such of  them as are not  present  at the
meeting in person or by proxy, and by the Company and the Trustee.

SECTION 1203.  PERSONS ENTITLED TO VOTE AT MEETINGS.

              To be entitled to vote at any meeting of Holders of  Securities of
one or more, or all, series, or any Tranche or Tranches thereof,  a Person shall
be (a) a  Holder  of one or  more  Outstanding  Securities  of  such  series  or
Tranches,  or (b) a Person  appointed by an instrument in writing as proxy for a
Holder  or  Holders  of one or more  Outstanding  Securities  of such  series or
Tranches by such Holder or  Holders.  The only  Persons who shall be entitled to
attend any meeting of Holders of  Securities  of any series or Tranche  shall be
the  Persons   entitled  to  vote  at  such  meeting  and  their  counsel,   any
representatives  of the Trustee and its counsel and any  representatives  of the
Company and its counsel.

SECTION 1204.  QUORUM; ACTION.

              The Persons  entitled to vote a majority  in  aggregate  principal
amount of the Outstanding  Securities of the series and Tranches with respect to
which a meeting shall have been called as hereinbefore  provided,  considered as
one class,  shall  constitute a quorum for a meeting of Holders of Securities of
such series and Tranches;  provided,  however, that if any action is to be taken
at such  meeting  which this  Indenture  expressly  provides may be taken by the
Holders of a specified  percentage,  which is less than a majority, in principal
amount of the Outstanding Securities of such series and Tranches,  considered as
one class, the Persons  entitled to vote such specified  percentage in principal
amount of the Outstanding Securities of such series and Tranches,  considered as
one class, shall constitute a quorum. In the absence of a quorum within one hour
of the time appointed for any such meeting,  the meeting  shall,  if convened at
the request of Holders of Securities of such series and Tranches,  be dissolved.
In any  other  case the  meeting  may be  adjourned  for such  period  as may be
determined  by the  chairman of the  meeting  prior to the  adjournment  of such
meeting.  In the  absence  of a  quorum  at any  such  adjourned  meeting,  such
adjourned  meeting may be further adjourned for such period as may be determined
by the  chairman  of the  meeting  prior to the  adjournment  of such  adjourned
meeting. Except as provided by Section 1205(e), notice of the reconvening of any
meeting  adjourned  for more than thirty (30) days shall be given as provided in
Section  106 not less than ten (10) days prior to the date on which the  meeting

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is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting
shall state expressly the percentage, as provided above, of the principal amount
of the Outstanding Securities of such series and Tranches which shall constitute
a quorum.

              Except as limited by Section 1102, any  resolution  presented to a
meeting or  adjourned  meeting duly  reconvened  at which a quorum is present as
aforesaid  may be  adopted  only by the  affirmative  vote of the  Holders  of a
majority in aggregate  principal  amount of the  Outstanding  Securities  of the
series and Tranches  with respect to which such meeting  shall have been called,
considered as one class;  provided,  however,  that,  except as so limited,  any
resolution  with respect to any action which this Indenture  expressly  provides
may be taken by the  Holders  of a  specified  percentage,  which is less than a
majority,  in principal amount of the Outstanding  Securities of such series and
Tranches,  considered as one class,  may be adopted at a meeting or an adjourned
meeting  duly  reconvened  and at which a quorum is present as  aforesaid by the
affirmative vote of the Holders of such specified percentage in principal amount
of the  Outstanding  Securities of such series and  Tranches,  considered as one
class.

              Any resolution  passed or decision taken at any meeting of Holders
of Securities  duly held in accordance with this Section shall be binding on all
the Holders of  Securities of the series and Tranches with respect to which such
meeting  shall have been  held,  whether or not  present or  represented  at the
meeting.

SECTION 1205. ATTENDANCE AT MEETINGS;  DETERMINATION  OF VOTING RIGHTS;  CONDUCT
              AND ADJOURNMENT OF MEETINGS.

              (a)    Attendance at meetings of Holders of  Securities  may be in
person or by proxy;  and, to the extent  permitted  by law, any such proxy shall
remain in effect and be binding upon any future  Holder of the  Securities  with
respect  to which it was given  unless  and until  specifically  revoked  by the
Holder  or  future  Holder  (except  as  provided  in  Section  104(g))  of such
Securities before being voted.

              (b)    Notwithstanding any other provisions of this Indenture, the
Trustee may make such  reasonable  regulations  as it may deem advisable for any
meeting  of  Holders  of  Securities  in regard to proof of the  holding of such
Securities and of the  appointment  of proxies and in regard to the  appointment
and duties of inspectors of votes,  the submission  and  examination of proxies,
certificates  and other  evidence of the right to vote,  and such other  matters
concerning  the conduct of the meeting as it shall deem  appropriate.  Except as
otherwise  permitted  or required by any such  regulations  and  approved by the
Company,  the holding of Securities  shall be proved in the manner  specified in
Section  104 and the  appointment  of any proxy  shall be  proved in the  manner
specified in Section 104. Such regulations may provide that written  instruments
appointing  proxies,  regular on their face,  may be presumed  valid and genuine
without the proof specified in Section 104 or other proof.

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<PAGE>


              (c)    The Trustee shall,  by an instrument in writing,  appoint a
temporary chairman of the meeting,  unless the meeting shall have been called by
the  Company or by Holders as  provided  in Section  1202(b),  in which case the
Company or the  Holders of  Securities  of the series and  Tranches  calling the
meeting,  as the case may be, shall in like manner appoint a temporary chairman.
A permanent  chairman and a permanent  secretary of the meeting shall be elected
by vote of the Persons entitled to vote a majority in aggregate principal amount
of the  Outstanding  Securities  of all series and Tranches  represented  at the
meeting, considered as one class.

              (d)    At any  meeting  each  Holder or proxy shall be entitled to
one vote for each One Thousand Dollars ($1,000)  principal amount of Outstanding
Securities held or represented by such Holder;  provided,  however, that no vote
shall be cast or counted at any meeting in respect of any Security challenged as
not Outstanding and ruled by the chairman of the meeting to be not  Outstanding.
The chairman of the meeting shall have no right to vote, except as a Holder of a
Security or proxy.

              (e)    Any meeting duly called pursuant to Section 1202 at which a
quorum is present may be adjourned from time to time by Persons entitled to vote
a majority in aggregate  principal  amount of the Outstanding  Securities of all
series and Tranches represented at the meeting, considered as one class; and the
meeting may be held as so adjourned without further notice.

SECTION 1206.  COUNTING VOTES AND RECORDING ACTION OF MEETINGS.

              The vote upon any  resolution  submitted to any meeting of Holders
shall be by written  ballots on which shall be subscribed  the signatures of the
Holders  or of their  representatives  by proxy and the  principal  amounts  and
serial numbers of the  Outstanding  Securities,  of the series and Tranches with
respect to which the meeting  shall have been  called,  held or  represented  by
them.  The permanent  chairman of the meeting  shall  appoint two  inspectors of
votes  who  shall  count  all  votes  cast at the  meeting  for or  against  any
resolution  and who shall make and file with the  secretary of the meeting their
verified written reports of all votes cast at the meeting. A record in duplicate
of the proceedings of each meeting of Holders shall be prepared by the secretary
of the meeting and there shall be attached to such record the  original  reports
of the inspectors of votes on any vote by ballot taken thereat and affidavits by
one or more persons  having  knowledge of the facts  setting forth a copy of the
notice of the  meeting  and  showing  that such  notice was given as provided in
Section 1202 and, if  applicable,  Section  1204.  Each copy shall be signed and
verified by the  affidavits  of the  permanent  chairman  and  secretary  of the
meeting and one such copy shall be delivered to the Company,  and another to the
Trustee to be preserved by the Trustee,  the latter to have attached thereto the
ballots  voted at the  meeting.  Any  record so  signed  and  verified  shall be
conclusive evidence of the matters therein stated.

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<PAGE>


SECTION 1207.  ACTION WITHOUT MEETING.

              In  lieu  of a  vote  of  Holders  at a  meeting  as  hereinbefore
contemplated in this Article,  any request,  demand,  authorization,  direction,
notice,  consent,  waiver or other action may be made, given or taken by Holders
by written instruments as provided in Section 104.


                                ARTICLE THIRTEEN

                IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
                                  AND DIRECTORS

SECTION 1301.  LIABILITY SOLELY CORPORATE.

              No recourse  shall be had for the payment of the  principal  of or
premium, if any, or interest, if any, on any Securities, or any part thereof, or
for  any  claim  based  thereon  or  otherwise  in  respect  thereof,  or of the
indebtedness represented thereby, or upon any obligation,  covenant or agreement
under  this  Indenture,  against  any  incorporator,   stockholder,  officer  or
director, as such, past, present or future, of the Company or of any predecessor
or  successor  of either of them  (either  directly  or through the Company or a
predecessor  or  successor  of  either  of  them),  whether  by  virtue  of  any
constitutional  provision,  statute or rule of law or by the  enforcement of any
assessment or penalty or otherwise;  it being  expressly  agreed and  understood
that this Indenture and all the Securities are solely corporate  obligations and
that no personal  liability  whatsoever  shall attach to, or be incurred by, any
incorporator,  stockholder, officer or director, past, present or future, of the
Company or of any  predecessor  or  successor,  either  directly  or  indirectly
through the Company or any predecessor or successor, because of the indebtedness
hereby authorized or under or by reason of any of the obligations,  covenants or
agreements  contained  in this  Indenture or in any of the  Securities  or to be
implied herefrom or therefrom;  and such personal  liability,  if any, is hereby
expressly   waived  and  released  as  a  condition  of,  and  as  part  of  the
consideration for, the execution and delivery of this Indenture and the issuance
of the Securities.


                                ARTICLE FOURTEEN

                           SUBORDINATION OF SECURITIES

SECTION 1401.  SECURITIES SUBORDINATE TO SENIOR INDEBTEDNESS.

              The Company, for itself, its successors and assigns, covenants and
agrees,  and each Holder of the  Securities  of each series,  by its  acceptance
thereof, likewise covenants and agrees, that the payment of the principal of and
premium,  if any, and  interest,  if any, on each and all of the  Securities  is
hereby  expressly  subordinated  and subject to the extent and in the manner set
forth in this  Article,  in right of payment to the prior payment in full of all
Senior Indebtedness of the Company.

                                       81
<PAGE>


              Each Holder of the  Securities of each series,  by its  acceptance
thereof, authorizes and directs the Trustee on its behalf to take such action as
may be necessary or appropriate to effectuate the  subordination  as provided in
this Article, and appoints the Trustee its attorney-in-fact for any and all such
purposes.

SECTION 1402.  PAYMENT OVER OF PROCEEDS OF SECURITIES.

              In the event (a) of any  insolvency or bankruptcy  proceedings  or
any receivership,  liquidation,  reorganization or other similar  proceedings in
respect  of  the  Company  or a  substantial  part  of its  property,  or of any
proceedings  for  liquidation,  dissolution or other  winding-up of the Company,
whether  or not  involving  insolvency  or  bankruptcy,  or (b)  subject  to the
provisions of Section 1403,  that (i) a default shall have occurred with respect
to the payment of principal of or interest on or other monetary  amounts due and
payable on any Senior  Indebtedness  of the  Company,  or (ii) there  shall have
occurred a default (other than a default in the payment of principal or interest
or  other   monetary   amounts  due  and  payable)  in  respect  of  any  Senior
Indebtedness,  as defined  therein or in the instrument  under which the same is
outstanding, permitting the holder or holders thereof to accelerate the maturity
thereof  (with notice or lapse of time,  or both),  and such default  shall have
continued  beyond the period of grace, if any, in respect  thereof,  and, in the
case of subclauses  (i) and (ii) of this clause (b), such default shall not have
been  cured  or  waived  or shall  not have  ceased  to  exist,  or (c) that the
principal  of and accrued  interest on the  Securities  of any Series shall have
been declared due and payable pursuant to Section 701 and such declaration shall
not have been rescinded and annulled as provided in Section 702, then:

                     (1)    the  holders  of  all  Senior  Indebtedness  of  the

             Company  shall first be  entitled  to receive  payment of the full
              amount due thereon, or provision shall be made for such payment in
              money  or  money's  worth,  before  the  Holders  of  any  of  the
              Securities  are  entitled  to  receive a payment on account of the
              principal  of or interest  on the  indebtedness  evidenced  by the
              Securities,  including,  without  limitation,  any  payments  made
              pursuant to Article Four;

                     (2)    any  payment by, or  distribution  of assets of, the
              Company of any kind or  character,  whether in cash,  property  or
              securities,  to which any Holder or the Trustee  would be entitled
              except  for the  provisions  of  this  Article,  shall  be paid or
              delivered  by the Person  making  such  payment  or  distribution,
              whether a trustee in bankruptcy, a receiver or liquidating trustee
              or otherwise,  directly to the holders of such Senior Indebtedness
              of the Company or their  representative or  representatives  or to
              the  trustee  or  trustees  under any  indenture  under  which any
              instruments  evidencing  any of such  Senior  Indebtedness  of the
              Company may have been issued,  ratably  according to the aggregate
              amounts remaining unpaid on account of such Senior Indebtedness of
              the Company held or represented  by each, to the extent  necessary
              to make payment in full of all Senior  Indebtedness of the Company
              remaining unpaid after giving effect to any concurrent  payment or


                                       82
<PAGE>


              distribution (or provision therefor) to the holders of such Senior
              Indebtedness of the Company, before any payment or distribution is
              made  to  the  Holders  of  the  indebtedness   evidenced  by  the
              Securities or to the Trustee under this Indenture; and

                     (3)    in the event that,  notwithstanding  the  foregoing,
              any payment by, or  distribution  of assets of, the Company of any
              kind or character,  whether in cash,  property or  securities,  in
              respect  of  principal  of or  interest  on the  Securities  or in
              connection  with any repurchase by the Company of the  Securities,
              shall be received  by the Trustee or any Holder  before all Senior
              Indebtedness  of the Company is paid in full, or provision is made
              for such  payment  in money or  money's  worth,  such  payment  or
              distribution  in  respect  of  principal  of or  interest  on  the
              Securities or in connection  with any repurchase by the Company of
              the  Securities  shall be paid over to the  holders of such Senior
              Indebtedness   of  the   Company   or  their   representative   or
              representatives  or to the trustee or trustees under any indenture
              under   which  any   instruments   evidencing   any  such   Senior
              Indebtedness  of the  Company  may have been  issued,  ratably  as
              aforesaid,   for   application   to  the  payment  of  all  Senior
              Indebtedness of the Company remaining unpaid until all such Senior
              Indebtedness  of the Company  shall have been paid in full,  after
              giving  effect  to any  concurrent  payment  or  distribution  (or
              provision  therefor) to the holders of such Senior Indebtedness of
              the Company.

              Notwithstanding  the  foregoing,  at any time  after the 123rd day
following  the date of  deposit  of cash or  Eligible  Obligations  pursuant  to
Section 601  (provided  all  conditions  set out in such Section shall have been
satisfied),  the funds so deposited and any interest thereon will not be subject
to any  rights of  holders  of Senior  Indebtedness  of the  Company  including,
without limitation,  those arising under this Article Fourteen; provided that no
event  described  in clause (e) of Section  701 with  respect to the Company has
occurred during such 123-day period.

              For purposes of this Article  only,  the words "cash,  property or
securities"  shall not be deemed to  include  shares of stock of the  Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan or reorganization  or readjustment  which are subordinate
in right of payment to all Senior  Indebtedness  of the Company which may at the
time be  outstanding  to the same extent as, or to a greater  extent  than,  the
Securities are so subordinated as provided in this Article. The consolidation of
the Company with, or the merger of the Company into, another  corporation or the
liquidation or  dissolution of the Company  following the conveyance or transfer
of its  property as an entirety,  or  substantially  as an entirety,  to another
corporation  upon the terms and  conditions  provided  for in Article Ten hereof
shall not be deemed a dissolution, winding-up, liquidation or reorganization for
the purposes of this Section 1402 if such other corporation  shall, as a part of
such consolidation,  merger,  conveyance or transfer, comply with the conditions
stated in Article Ten hereof.  Nothing in Section  1401 or in this  Section 1402
shall  apply to claims of, or  payments  to, the  Trustee  under or  pursuant to
Section 807.

                                       83
<PAGE>


SECTION 1403.  DISPUTES WITH HOLDERS OF CERTAIN SENIOR INDEBTEDNESS.

              Any  failure by the  Company to make any payment on or perform any
other  obligation in respect of Senior  Indebtedness of the Company,  other than
any indebtedness  incurred by the Company or assumed or guaranteed,  directly or
indirectly,  by the  Company  for  money  borrowed  (or any  deferral,  renewal,
extension  or  refunding  thereof)  or any  other  obligation  as to  which  the
provisions  of this  Section  shall  have  been  waived  by the  Company  in the
instrument or instruments by which the Company incurred,  assumed, guaranteed or
otherwise created such indebtedness or obligation, shall not be deemed a default
under  clause (b) of Section  1402 if (i) the  Company  shall be  disputing  its
obligation to make such payment or perform such  obligation  and (ii) either (A)
no final  judgment  relating to such dispute shall have been issued  against the
Company which is in full force and effect and is not subject to further  review,
including a judgment  that has become final by reason of the  expiration  of the
time within which a party may seek further appeal or review, or (B) in the event
that a judgment that is subject to further review or appeal has been issued, the
Company shall in good faith be  prosecuting  an appeal or other  proceeding  for
review and a stay or execution  shall have been obtained  pending such appeal or
review.

SECTION 1404.  SUBROGATION.

              Senior  Indebtedness  of the  Company  shall not be deemed to have
been paid in full  unless  the  holders  thereof  shall have  received  cash (or
securities or other  property  satisfactory  to such holders) in full payment of
such Senior  Indebtedness of the Company then outstanding.  Subject to the prior
payment in full of all Senior  Indebtedness  of the  Company,  the rights of the
Holders of the  Securities  shall be  subrogated to the rights of the holders of
Senior   Indebtedness  of  the  Company  to  receive  any  further  payments  or
distributions of cash,  property or securities of the Company  applicable to the
holders of the Senior Indebtedness of the Company until all amounts owing on the
Securities  shall be paid in full; and such payments or  distributions  of cash,
property or securities  received by the Holders of the Securities,  by reason of
such subrogation, which otherwise would be paid or distributed to the holders of
such Senior  Indebtedness  of the Company  shall,  as between the  Company,  its
creditors other than the holders of Senior Indebtedness of the Company,  and the
Holders,  be deemed to be a payment  by the  Company  to or on account of Senior
Indebtedness  of the Company,  it being  understood  that the provisions of this
Article are and are  intended  solely for the purpose of defining  the  relative
rights  of the  Holders,  on  the  one  hand,  and  the  holders  of the  Senior
Indebtedness of the Company, on the other hand.

SECTION 1405.  OBLIGATION OF THE COMPANY UNCONDITIONAL.

              Nothing  contained in this Article or elsewhere in this  Indenture
or in the Securities is intended to or shall impair,  as among the Company,  its
creditors  other than the holders of Senior  Indebtedness of the Company and the
Holders, the obligation of the Company, which is absolute and unconditional,  to
pay to the Holders the  principal of and interest on the  Securities as and when
the same shall  become due and payable in  accordance  with their  terms,  or is
intended to or shall affect the relative  rights of the Holders and creditors of
the Company other than the holders of

                                       84
<PAGE>


Senior Indebtedness of the Company, nor shall anything herein or therein prevent
the Trustee or any Holder from  exercising all remedies  otherwise  permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this  Article  of the  holders of Senior  Indebtedness  of the  Company in
respect  of cash,  property  or  securities  of the  Company  received  upon the
exercise of any such remedy.

              Upon any payment or  distribution  of assets or  securities of the
Company  referred to in this  Article,  the  Trustee  and the  Holders  shall be
entitled to rely upon any order or decree of a court of  competent  jurisdiction
in which such dissolution, winding-up, liquidation or reorganization proceedings
are pending for the purpose of ascertaining  the Persons entitled to participate
in such distribution,  the holders of the Senior Indebtedness of the Company and
other  indebtedness of the Company,  the amount thereof or payable thereon,  the
amount or amounts paid or  distributed  thereon,  and all other facts  pertinent
thereto or to this Article.

              [The  Trustee  shall  be  entitled  to  conclusively  rely  on the
delivery  to it of a written  notice by a Person  representing  himself  to be a
holder of Senior Indebtedness of the Company (or a representative of such holder
or a trustee under any indenture under which any instruments evidencing any such
Senior  Indebtedness of the Company may have been issued) to establish that such
notice has been given by a holder of such Senior  Indebtedness of the Company or
such  representative  or trustee on behalf of such holder. In the event that the
Trustee  determines in good faith that further evidence is required with respect
to the right of any Person as a holder of Senior  Indebtedness of the Company to
participate in any payment or distribution pursuant to this Article, the Trustee
may request such Person to furnish  evidence to the reasonable  satisfaction  of
the Trustee as to the amount of Senior  Indebtedness of the Company held by such
Person,  the extent to which such  Person is  entitled  to  participate  in such
payment  or  distribution  and any other  facts  pertinent  to the right of such
Person under this Article,  and, if such evidence is not furnished,  the Trustee
may defer any payment to such Person pending  judicial  determination  as to the
right of such Person to receive such payment or distribution.]

SECTION 1406. PRIORITY OF SENIOR INDEBTEDNESS UPON MATURITY.

              Upon the maturity of the principal of any Senior  Indebtedness  of
the Company by lapse of time,  acceleration or otherwise,  all matured principal
of Senior  Indebtedness of the Company and interest and premium, if any, thereon
shall first be paid in full before any payment of principal or premium,  if any,
or interest, if any, is made upon the Securities or before any Securities can be
acquired by the Company or any sinking  fund payment is made with respect to the
Securities  (except  that  required  sinking  fund  payments  may be  reduced by
Securities  acquired  before such  maturity of such Senior  Indebtedness  of the
Company).

SECTION 1407. TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS.

              The  Trustee  shall be  entitled  to all  rights set forth in this
Article with respect to any Senior  Indebtedness of the Company at any time held
by it, to the same extent as any other holder

                                       85
<PAGE>


of Senior Indebtedness of the Company. Nothing in this Article shall deprive the
Trustee of any of its rights as such holder.

SECTION 1408. NOTICE TO TRUSTEE TO EFFECTUATE SUBORDINATION.

              Notwithstanding  the  provisions  of  this  Article  or any  other
provision of the  Indenture,  the Trustee shall not be charged with knowledge of
the  existence  of any facts which would  prohibit  the making of any payment of
moneys to or by the  Trustee  unless  and  until a  Responsible  Officer  of the
Trustee  shall have received  written  notice  thereof from the Company,  from a
Holder or from a holder of any Senior  Indebtedness  of the  Company or from any
representative  or  representatives  of such  holder or any  trustee or trustees
under any  indenture  under  which any  instruments  evidencing  any such Senior
Indebtedness  of the Company  may have been issued and,  prior to the receipt of
any such written notice, the Trustee shall be entitled,  subject to Section 801,
in all respects to assume that no such facts exist; provided,  however, that, if
prior to the fifth  Business  Day  preceding  the date  upon  which by the terms
hereof any such moneys may become  payable for any  purpose,  or in the event of
the  execution  of an  instrument  pursuant  to Section 602  acknowledging  that
Securities or portions  thereof are deemed to have been paid for all purposes of
this  Indenture,  acknowledging  that the entire  indebtedness of the Company in
respect thereof has been satisfied and discharged or acknowledging  satisfaction
and  discharge  of this  Indenture,  then if prior to the  second  Business  Day
preceding the date of such  execution,  the Trustee shall not have received with
respect to such moneys the notice provided for in this Section,  then,  anything
herein  contained  to the  contrary  notwithstanding,  the  Trustee  may, in its
discretion,  receive such moneys  and/or apply the same to the purpose for which
they were  received,  and shall not be affected  by any notice to the  contrary,
which may be received by it on or after such date;  provided,  however,  that no
such application  shall affect the obligations under this Article of the persons
receiving such moneys from the Trustee.

SECTION 1409. MODIFICATION, EXTENSION, ETC. OF SENIOR INDEBTEDNESS OF THE
              COMPANY.

              The holders of Senior  Indebtedness  of the Company  may,  without
affecting in any manner the subordination of the payment of the principal of and
premium,  if any, and interest,  if any, on the Securities,  at any time or from
time to time and in their absolute discretion,  agree with the Company to change
the manner, place or terms of payment,  change or extend the time of payment of,
or  renew  or  alter,  any  Senior  Indebtedness  of the  Company,  or  amend or
supplement  any  instrument  pursuant  to which any Senior  Indebtedness  of the
Company is issued,  or exercise or refrain  from  exercising  any other of their
rights  under  the  Senior  Indebtedness  of  the  Company  including,   without
limitation,  the waiver of default  thereunder,  all without notice to or assent
from the Holders or the Trustee.

                                       86
<PAGE>


SECTION 1410. TRUSTEE HAS NO FIDUCIARY DUTY TO HOLDERS OF SENIOR INDEBTEDNESS OF
              THE COMPANY.

              With respect to the holders of Senior Indebtedness of the Company,
the Trustee  undertakes  to perform or to observe only such of its covenants and
objectives  as are  specifically  set forth in this  Indenture,  and no  implied
covenants or obligations  with respect to the holders of Senior  Indebtedness of
the Company shall be read into this Indenture  against the Trustee.  The Trustee
shall  not be  deemed  to owe  any  fiduciary  duty  to the  holders  of  Senior
Indebtedness  of the Company,  and shall not be liable to any such holders if it
shall  mistakenly pay over or deliver to the Holders or the Company or any other
Person,  money or assets  to which any  holders  of Senior  Indebtedness  of the
Company shall be entitled by virtue of this Article or otherwise.

SECTION 1411. PAYING AGENTS OTHER THAN THE TRUSTEE.

              In case at any time any Paying Agent other than the Trustee  shall
have been  appointed  by the  Company  and be then  acting  hereunder,  the term
"Trustee" as used in this Article  shall in such case (unless the context  shall
otherwise  require) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee;  provided,
however,  that Sections 1407, 1408 and 1410 shall not apply to the Company if it
acts as Paying Agent.

SECTION 1412. RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS NOT IMPAIRED.

              No right of any present or future holder of Senior Indebtedness of
the Company to enforce the subordination  herein shall at any time or in any way
be  prejudiced  or  impaired  by any act or  failure  to act on the  part of the
Company or by any  noncompliance  by the Company with the terms,  provisions and
covenants of this Indenture, regardless of any knowledge thereof any such holder
may have or be otherwise charged with.

SECTION 1413. EFFECT OF SUBORDINATION PROVISIONS; TERMINATION.

              Notwithstanding  anything contained herein to the contrary,  other
than as provided in the immediately  succeeding sentence,  all the provisions of
this Indenture shall be subject to the provisions of this Article, so far as the
same may be applicable thereto.

              Notwithstanding  anything  contained  herein to the contrary,  the
provisions  of this  Article  Fourteen  shall be of no  further  effect  and the
Securities  shall no longer be  subordinated  in right of  payment  to the prior
payment of such Senior  Indebtedness  of the  Company if the Company  shall have
delivered to the Trustee a notice to such effect.  Any such notice  delivered by
the Company shall not be deemed to be a  supplemental  indenture for purposes of
Article Twelve hereof.

                                       87
<PAGE>


                                [ARTICLE FIFTEEN

                 EXCHANGE OF PREFERRED SECURITIES FOR SECURITIES

SECTION 1501. EXCHANGE OF PREFERRED SECURITIES FOR SECURITIES.

              (a)    If at any time the  Company  or any of its  Affiliates  (in
either case, a "Company Affiliated  Owner/Holder") is the owner or Holder of any
Preferred Securities of a Trust, such Company Affiliated Owner/Holder shall have
the right to  deliver  to the  Institutional  Trustee  of such Trust all or such
portion of its  Preferred  Securities  as it elects  and  receive,  in  exchange
therefore,  a like amount of Securities.  Such election (i) shall be exercisable
effective on any Interest Payment Date by such Sponsor  Affiliated  Owner/Holder
delivering  to the  Institutional  Trustee  a written  notice  of such  election
specifying the liquidation amount of Preferred  Securities with respect to which
such election is being made and the Interest Payment Date on which such exchange
shall  occur,  which  Interest  Payment Date shall be not less than ten Business
Days after the date of receipt by the Institutional  Trustee or its designee the
Preferred  Securities  which are the subject of such  election by 10:00 A.M. New
York time,  on the  Interest  Payment  Date on which such  exchange is to occur.
After the  exchange,  such  Preferred  Securities  will be canceled  and will no
longer  be  deemed  to be  outstanding  and all  rights  of the  Company  or its
Affiliate(s) with respect to such Preferred Securities will cease.

              (b)    In the case of an exchange  described  in Section  1501(a),
the Trust  will,  on the date of such  exchange,  exchange  Securities  having a
principal  amount equal to the aggregate  liquidation  amount of the outstanding
Common  Securities  of such  Trust,  multiplied  by the  ratio of the  aggregate
liquidation  amount of the Preferred  Securities  exchanged  pursuant to Section
1501(a) divided by the aggregate  liquidation amount of the Preferred Securities
outstanding  immediately prior to such exchange, for such proportional amount of
Common Securities held by the Sponsor (which contemporaneously shall be canceled
and no longer be deemed to be outstanding);  provided, that the Sponsor delivers
or caused to be  delivered  to the  Institutional  Trustee or its  designee  the
required  amount of Common  Securities  to be  exchanged  by 10:00 A.M. New York
time, on the Interest Payment Date on which such exchange is to occur.]



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


              This  instrument  may be executed  in any number of  counterparts,
each of which  so  executed  shall be  deemed  to be an  original,  but all such
counterparts shall together constitute one and the same instrument.

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<PAGE>


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

                           AVISTA CORPORATION


                           By:
                              --------------------------------
                                 Name:  Malyn K. Malquist
                                 Title: Senior Vice President,
                                           Chief Financial Officer and Treasurer


                           UNION BANK OF CALIFORNIA, N.A., Trustee


                           By:
                              --------------------------------


                                       89