REGISTERED                                        REGISTERED

        PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

         EXTENDIBLE NOTE DUE JUNE 15, 2001, SERIES C

 NO. __ PRINCIPAL AMOUNT:
                         $----------

                     CUSIP: 744 573 AE 6




         Unless  and  until it is  exchanged  in whole or in
part for  Notes in  definitive  form,  this  Note may not be
transferred except as a whole by the Depositary to a nominee
of the  Depositary or by a nominee of the  Depositary to the
Depositary  or another  nominee of the  Depositary or by the
Depositary or any such nominee to a successor  Depositary or
a  nominee  of  such  successor   Depositary.   Unless  this
certificate is presented by an authorized  representative of
The Depository Trust Company (55 Water Street, New York, New
York) ("DTC"),  to the issuer or its agent for  registration
of transfer, exchange or payment, and any certificate issued
is  registered  in the name of Cede & Co. or such other name
as requested by an authorized  representative of DTC and any
payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER
USE  HEREOF  FOR VALUE OR  OTHERWISE  BY OR TO ANY PERSON IS
WRONGFUL since the registered owner hereof,  Cede & Co., has
an interest herein.

         PUBLIC SERVICE  ENTERPRISE  GROUP  INCORPORATED,  a
corporation  duly  organized and existing  under the laws of
the  State  of  New  Jersey  (herein   referred  to  as  the
"Company"),  for value  received,  hereby promises to pay to
CEDE & CO., or  registered  assigns,  the  principal  amount
of____________ Million Dollars  ($___,000,000),  on June 15,
2001 ("Stated  Maturity")  (unless and to the extent earlier
redeemed or repaid  prior to such date) and to pay  interest
thereon from June 15, 1999 or from the most recent  Interest
Payment Date (as defined  below) to which  interest has been
paid or duly  provided for in arrears on September 15, 1999,
December 15, 1999 and March 15, 2000,  and any other date as
shall be established  by the Company as an interest  payment
date in  accordance  with the  provisions  set  forth  below
(each,  an  "Interest  Payment  Date"),  and at  maturity or
earlier  redemption,  until the principal  hereof is paid or
made available for payment.  Interest payments for this Note
shall  include   interest  accrued  to  but  excluding  each
Interest   Payment  Date.  The  interest  so  payable,   and
punctually  paid  or  duly  provided  for,  on any  Interest
Payment Date shall, as provided in the Indenture (as defined
below),  be paid to the  Person in whose  name this Note (or
one or more  Predecessor  Securities)  is  registered at the
close of business on the Regular Record Date, which shall be
the 15th  calendar day (whether or not a Business  Day) next
preceding  such Interest  Payment Date.  Except as otherwise
provided in the Indenture,  any interest not punctually paid
or  duly   provided  for  on  any   Interest   Payment  Date
("Defaulted  Interest")  shall forthwith cease to be payable
to the Holder on the  Regular  Record  Date with  respect to
such  Interest  Payment  Date by virtue of having  been such
Holder  and may  either  (1) be paid to the  Person in whose
name this Note (or one or more  Predecessor  Securities)  is
registered at the close of business on a Special Record Date
for the  payment of such  Defaulted  Interest to be fixed by
the  Trustee (as  defined  below),  notice of which shall be
given to  Holders  of Notes not less  than 10 days  prior to
such Special  Record Date, or (2) be paid at any time in any
other lawful manner not  inconsistent  with the requirements
of any securities exchange on which the Notes may be listed,
and upon such notice as may be  required  by such  exchange,
all as more fully provided in the Indenture.  Payment of the
principal  of and  interest,  if any,  on this Note shall be
made at the Corporate  Trust Office of the Trustee or at the
office or agency of the Trustee  maintained for that purpose
in the Borough of  Manhattan,  The City of New York,  and at
any other  office or agency  maintained  by the  Company for
such purpose,  in such coin or currency of the United States
of America  as at the time of  payment  is legal  tender for
payment of public and private debts; provided, however, that
at the option of the  Company,  payment of  interest  may be
made by check  mailed to the address of the Person  entitled
thereto  as  such  address  shall  appear  in  the  Security
Register and provided, further, that the Holder of this Note
shall be entitled to receive  payments of  principal  of and
interest,   if  any,  on  this  Note  by  wire  transfer  of
immediately  available  funds if  appropriate  wire transfer
instructions  have been  received  in writing by the Trustee
not less than 15 days prior to the applicable payment date.


         Reference is hereby made to the further  provisions
of this Note set forth below, which further provisions shall
for all  purposes  have the same  effect  as if set forth at
this place.



         Unless the certificate of authentication hereon has
been   executed  by  the  Trustee  or  its  duly   appointed
co-authenticating agent by manual signature, this Note shall
not be  entitled to any benefit  under the  Indenture  or be
valid or obligatory for any purpose.



<PAGE>



         IN WITNESS WHEREOF, Public Service Enterprise Group
Incorporated  has caused this Instrument to be signed by the
signature  or  facsimile  signature  of its  Chairman of the
Board, its President, a Vice President,  its Treasurer or an
Assistant  Treasurer  and  attested by its  Secretary  or an
Assistant Secretary by his signature or a facsimile thereof,
and its corporate  seal or a facsimile of its corporate seal
to be affixed hereunto or imprinted hereon.



(SEAL)         PUBLIC SERVICE ENTERPRISE
                   GROUP INCORPORATED

               By:   MORTON A. PLAWNER
             --- ---------------------------
               Title: Vice President


Attest:

EDWARD J. BIGGINS, JR.
-------------------------------
Title:  Secretary


Dated: June 15, 1999




           TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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


FIRST UNION NATIONAL BANK, as Trustee


By:    FRANK GALLAGHER
   -----------------------
     Authorized Signatory


<PAGE>



         This  Note  is one of a duly  authorized  issue  of
securities  (the  "Securities")  of the Company  (which term
includes  any  successor  corporation  under  the  Indenture
hereinafter referred to) issued and to be issued pursuant to
such Indenture.  This Security is one of a Series designated
by the Company as its  Extendible  Notes due June 15,  2001,
Series C (the  "Notes").  The  Indenture  does not limit the
aggregate principal amount of the Notes or the Securities.

         The  Company   issued  this  Note  pursuant  to  an
Indenture,  dated as of  November  1, 1998 (the  "Indenture"
which term, for the purpose of this Note,  shall include the
Officers'   Certificate  dated  June  15,  1999,   delivered
pursuant  to  Section  301 of the  Indenture),  between  the
Company  and First  Union  National  Bank,  as trustee  (the
"Trustee,"  which term includes any successor  trustee under
the  Indenture),  to  which  Indenture  and  all  indentures
supplemental   thereto   reference  is  hereby  made  for  a
statement of the respective  rights,  limitations of rights,
duties and immunities thereunder of the Company, the Trustee
and  Holders  of the Notes and of the terms  upon  which the
Notes are, and are to be, authenticated and delivered.

         The Notes are  issuable as  Registered  Securities,
without  coupons,  in denominations of $1,000 and any amount
in excess  thereof which is an integral  multiple of $1,000.
As  provided  in  the   Indenture  and  subject  to  certain
limitations  therein set forth, Notes are exchangeable for a
like  aggregate  principal  amount of Notes of like tenor of
any  authorized  denomination,  as  requested  by the Holder
surrendering  the same,  upon surrender of the Note or Notes
to be  exchanged  at any  office or agency  described  below
where Notes may be presented for registration of transfer.

         Certain  provisions  relating to the remarketing of
the Notes set forth  below are  contained  in a  Remarketing
Agreement  dated  as of  June  15,  1999  (the  "Remarketing
Agreement")  between the Company and Merrill Lynch,  Pierce,
Fenner  & Smith  Incorporated,  as  Remarketing  Agent  (the
"Remarketing Agent").

         During the period from and including  June 15, 1999
to  but  excluding  March  15,  2000  (the  "Initial  Spread
Period"), interest on this Note shall be payable in arrears,
on September 15, 1999, December 15, 1999 and March 15, 2000,
except as described below.  During the Initial Spread Period
the interest rate on the Notes shall be reset quarterly,  on
June 15, 1999, September 15, 1999 and December 15, 1999 (the
"Interest  Reset  Date" in  respect  of the  Initial  Spread
Period),  and the Notes  shall bear  interest at a per annum
rate  (computed  on the basis of the  actual  number of days
elapsed  over a 360-day  year)  equal to LIBOR  (as  defined
below) for the applicable  Interest Reset Period (as defined
below), plus the Initial Spread (as defined below). Interest
on this Note shall accrue from and including the most recent
Interest  Payment  Date to which  interest  has been paid or
duly provided for to but excluding the  applicable  Interest
Payment Date, Stated Maturity or date of earlier redemption,
as the case may be.  The  "Initial  Interest  Reset  Period"
shall be the period from and  including the date of original
issuance of the Notes to but  excluding  September 15, 1999.
Thereafter,  each "Interest Reset Period" during the Initial
Spread  Period  shall  be  the  quarterly  period  from  and
including  the  most  recent  Interest  Reset  Date  to  but
excluding  the  next  succeeding   Interest  Reset  Date  or
Remarketing  Reset  Date  (as  defined  below),  as the case
maybe.

         The  Spread  applicable  to the  Notes  during  the
Initial Spread Period shall be 0.40% (the "Initial Spread"),
and the  interest  rate  mode  used for the  Initial  Spread
Period shall be the "Floating Rate Mode". Thus, the interest
rate per annum for the Notes  during  the  Initial  Interest
Reset Period shall be equal to LIBOR,  determined as of June
11, 1999,  plus the Initial  Spread.  The interest  rate per
annum for each  succeeding  Interest Reset Period during the
Initial  Spread  Period shall equal LIBOR for such  Interest
Reset  Period  plus  the  Initial   Spread,   calculated  as
described below. Thereafter,  the Spread shall be determined
in the  manner  described  herein for each  period  from and
including each Remarketing  Reset Date (as defined below) to
but excluding each next  succeeding  Remarketing  Reset Date
or, as the case maybe, Stated Maturity (a "Subsequent Spread
Period"),  which  will be one or more  periods  of at  least
three  months and not more than the period  remaining to the
Stated  Maturity of this Note (or any  integral  multiple of
three months therein), designated by the Company, commencing
on the 15th day of September, December, March or June (or as
otherwise specified by the Company and the Remarketing Agent
on  the  applicable  Duration/Mode  Determination  Date  (as
defined below) in connection with the  establishment of each
Subsequent Spread Period),  as applicable (each such date, a
"Remarketing  Reset  Date"),  provided,   however,  that  no
Subsequent  Spread  Period  may end on or after  the  Stated
Maturity.  The initial Remarketing Reset Date shall be March
15, 2000.

         If this  Note is to be reset to the  Floating  Rate
Mode, as agreed to by the Remarketing  Agent and the Company
on a  Duration/Mode  Determination  Date,  then  during  the
corresponding  Subsequent  Spread  Period,  (i) the interest
rate  on the  Notes  will be  reset  monthly,  quarterly  or
semiannually (each, an "Interest Reset Period") and interest
on the Notes will be payable  either  monthly,  quarterly or
semiannually  on such dates  (each such date,  an  "Interest
Payment Date" in respect of such Subsequent  Spread Period),
in each  case as  specified  by the  Remarketing  Agent  and
Enterprise  on the  applicable  Duration/Mode  Determination
Date and (ii) the Notes  will bear  interest  at a per annum
rate  (computed  on the basis of the  actual  number of days
elapsed  over  a  360-day  year)  equal  to  LIBOR  for  the
applicable   Interest  Reset  Period,  plus  the  applicable
Spread,  as determined on the relevant Spread  Determination
Date.   Unless   otherwise   specified  on  the   applicable
Duration/Mode  Determination  Date for Notes in the Floating
Rate Mode,  interest on this Note shall be  payable,  in the
case of Notes  which reset (i)  monthly,  on the 15th day of
each  month;  (ii)  quarterly,  on  the  15th  day  of  each
September,  December,  March or June; and (iii) semiannually
on the 15th day of each March and  September.  The first day
of an  Interest  Reset  Period is  referred  to herein as an
"Interest  Reset Date" in respect of the  Subsequent  Spread
Period and,  unless  otherwise  specified on the  applicable
15th day of each month;  (ii) quarterly,  on the 15th day of
September,  December,  March or June; and (iii) semiannually
on the 15th day of each March and September.

         The  interest  rate in  effect on each day shall be
(i) if such day is an Interest Reset Date, the interest rate
determined  as of the Floating Rate  Determination  Date (as
defined  below)  immediately  preceding  such Interest Reset
Date or (ii) if such day is not an Interest  Reset Date, the
interest   rate   determined   as  of  the   Floating   Rate
Determination  Date  immediately  preceding  the most recent
Interest Reset Date.

         If any Interest  Payment Date (other than at Stated
Maturity),  redemption date,  repayment date, Interest Reset
Date or  Remarketing  Reset Date in the  Floating  Rate Mode
would  otherwise  be a day  that is not a  Business  Day (as
defined below), such Interest Payment Date, redemption date,
repayment  date,  Interest Reset Date or  Remarketing  Reset
Date shall be postponed to the next succeeding day that is a
Business  Day,  except that if such  Business  Day is in the
next succeeding  calendar month, such Interest Payment Date,
redemption  date,  repayment  date,  Interest  Reset Date or
Remarketing Reset Date shall be the next preceding  Business
Day.

         The interest rate applicable to each Interest Reset
Period  commencing on the related  Interest Reset Date shall
be the rate  determined as of the  applicable  Floating Rate
Determination  Date. The "Floating Rate Determination  Date"
shall be the second London  Business Day (as defined  below)
immediately preceding the applicable Interest Reset Date.

         For the Initial  Spread Period and if the Notes are
reset to the  Floating  Rate  Mode for a  Subsequent  Spread
Period,  LIBOR  shall be  determined  by the Rate  Agent (as
defined   below)  as  of  the   applicable   Floating   Rate
Determination   Date  in   accordance   with  the  following
provisions:

     (i)  LIBOR  shall  be  determined  on the  basis of the
          offered rates for deposits in U.S.  dollars of not
          less than  U.S.$1,000,000  of the applicable Index
          Maturity  (as defined  below),  commencing  on the
          second London Business Day  immediately  following
          such  Floating  Rate  Determination   Date,  which
          appears on Telerate  page 3750 (as defined  below)
          as of  approximately  11:00 a.m.,  London time, on
          such Floating Rate Determination  Date.  "Telerate
          page 3750"  means the display  designated  on page
          "3750" on Bridge  Telerate,  Inc.  (or such  other
          page as may replace the 3750 page on that service,
          any  successor  service or such  other  service or
          services  as  may  be  nominated  by  the  British
          Bankers' Association for the purpose of displaying
          London  interbank  offered  rates for U.S.  dollar
          deposits).  If no rate  appears on  Telerate  page
          3750,  LIBOR for such Floating Rate  Determination
          Date shall be determined  in  accordance  with the
          provisions of paragraph (ii) below.

     (ii) With respect to a Floating Rate Determination Date
          on which no rate appears on Telerate  page 3750 as
          of approximately  11:00 a.m., London time, on such
          Floating Rate  Determination  Date, the Rate Agent
          shall request the principal London offices of each
          of  four  major  reference  banks  in  the  London
          interbank  market  selected  by the Rate  Agent to
          provide  the Rate  Agent with a  quotation  of the
          rate at which  deposits  of the  applicable  Index
          Maturity in U.S. dollars, commencing on the second
          London  Business Day  immediately  following  such
          Floating Rate  Determination  Date, are offered by
          it to prime banks in the London interbank  markets
          as of  approximately  11:00 a.m.,  London time, on
          such  Floating  Rate   Determination   Date  in  a
          principal  amount  equal to an  amount of not less
          than  U.S.$1,000,000  that is representative for a
          single transaction in such market at such time. If
          at least two such  quotations are provided,  LIBOR
          for such Floating Rate Determination Date shall be
          the   arithmetic   mean  of  such   quotations  as
          calculated  by the Rate  Agent.  If fewer than two
          quotations  are provided,  LIBOR for such Floating
          Rate  Determination  Date shall be the  arithmetic
          mean of the rates quoted as of approximately 11:00
          a.m.,  New York City time,  on such  Floating Rate
          Determination  Date by  three  major  banks in The
          City of New York selected by the Rate Agent (after
          consultation  with the  Company) for loans in U.S.
          dollars   to   leading   European   banks  of  the
          applicable Index Maturity commencing on the second
          London  Business Day  immediately  following  such
          Floating   Rate   Determination   Date  and  in  a
          principal  amount  equal to an  amount of not less
          than  U.S.$1,000,000  that is representative for a
          single  transaction  in such  market at such time;
          provided,  however,  that if the banks selected as
          aforesaid  by the Rate  Agent are not  quoting  as
          mentioned  in  this   sentence,   LIBOR  for  such
          Floating  Rate  Determination  Date shall be LIBOR
          determined   with   respect  to  the   immediately
          preceding Floating Rate Determination  Date, or in
          the case of the first Floating Rate  Determination
          Date, LIBOR for the Initial Interest Reset Period.

                  The "Index  Maturity"  applicable to Notes
   in the Floating  Rate Mode shall be, in the case of Notes
   resetting (i) monthly,  one month; (ii) quarterly,  three
   months; and (iii) semiannually, six months.

                  If this  Note is to be reset to the  Fixed
   Rate  Mode,   as  agreed  to  by  the   Company  and  the
   Remarketing Agent on a Duration/Mode  Determination Date,
   then the  applicable  Fixed  Rate  for the  corresponding
   Subsequent  Spread  Period  shall be  determined  by 4:00
   p.m., New York City time, on the third Business Day prior
   to the Remarketing  Reset Date for such Subsequent Spread
   Period  (the  "Fixed  Rate   Determination   Date"),   in
   accordance with the following provisions:  the Fixed Rate
   shall be determined by adding (i) the  applicable  Spread
   (as determined by the Remarketing  Agent and agreed to by
   the   Company  on  the   immediately   preceding   Spread
   Determination   Date)  to  (ii)  the  yield  to  maturity
   determined by 4:00 p.m., New York City time, on the Fixed
   Rate  Determination Date (expressed as a bond equivalent,
   on the basis of a year of 365 or 366 days, as applicable,
   and applied on a daily  basis) of the  applicable  United
   States  Treasury  security,  selected  by the Rate  Agent
   after  consultation with the Remarketing Agent, as having
   a maturity  comparable  to the duration  selected for the
   following  Subsequent Spread Period,  which would be used
   in  accordance  with  customary   financial  practice  in
   pricing  new  issues  of  corporate  debt  securities  of
   comparable  maturity  to the  duration  selected  for the
   following Subsequent Spread Period.

                  Interest  in the Fixed  Rate Mode shall be
   computed on the basis of a 360-day year of twelve  30-day
   months.  Such interest shall be payable  semiannually  in
   arrears on the Interest  Payment Dates (i.e.,  March 15th
   and September  15th,  unless  otherwise  specified by the
   Company  and  the  Remarketing  Agent  on the  applicable
   Duration/Mode Determination Date) at the applicable Fixed
   Rate, as determined on the Fixed Rate Determination Date,
   beginning on the  applicable  Remarketing  Reset Date and
   continuing  for the duration of the  relevant  Subsequent
   Spread Period.

                  If any Interest  Payment Date,  redemption
   date or  repayment  date in the  Fixed  Rate  Mode  would
   otherwise  be a day that is not a Business Day (in either
   case,  other than any Interest  Payment Date,  redemption
   date or repayment date that falls on a Remarketing  Reset
   Date,  in which case each such date shall be postponed to
   the next day that is a Business Day), the related payment
   of  principal  and  interest  shall  be made on the  next
   succeeding  Business  Day as if it were  made on the date
   such payment was due, and no interest shall accrue on the
   amounts  so payable  for the  period  from and after such
   date to the next succeeding Business Day.

                  Unless  notice of  redemption of the Notes
   as a whole  has been  given,  after  the  Initial  Spread
   Period, the duration,  redemption dates,  redemption type
   (i.e.,  par, premium or make-whole,  as described below),
   redemption  prices  (if  applicable),   repayment  dates,
   Remarketing  Reset Date,  Interest Reset Dates,  Interest
   Payment Dates,  interest rate mode (i.e., Fixed Rate Mode
   or Floating  Rate Mode,  as  described  below),  optional
   repayment terms, if any, and any other relevant terms for
   each  Subsequent  Spread Period shall be agreed to by the
   Company and the Remarketing  Agent by 3:00 p.m., New York
   City  time,  on the  eighth  Business  Day  prior  to the
   Remarketing  Reset Date which  commences such  Subsequent
   Spread Period (the "Duration/Mode  Determination  Date").
   In addition, the Spread for each Subsequent Spread Period
   shall be established by 3:00 p.m., New York City time, on
   the fourth  Business Day prior to the  Remarketing  Reset
   Date which commences such  Subsequent  Spread Period (the
   "Spread  Determination  Date").  Interest  on  this  Note
   during each  Subsequent  Spread Period shall  accrue,  as
   applicable,  either (i) at a floating interest rate (such
   Note being in the "Floating  Rate Mode" and such interest
   rate being a "Floating Rate") or (ii) at a fixed interest
   rate (such  Note being in the "Fixed  Rate Mode" and such
   interest  being  a  "Fixed   Rate"),   in  each  case  as
   determined  by the  Remarketing  Agent and the Company in
   accordance  with  the   Remarketing   Agreement  and  the
   applicable   Remarketing  Agency  Agreement  (as  defined
   below).

                  The  term  "Business  Day"  means  any day
   other than a Saturday or Sunday or a day on which banking
   institutions  in The  City of New York  are  required  or
   authorized  to close and, if this Note is in the Floating
   Rate  Mode  (as  defined  below),  that is also a  London
   Business  Day. The term "London  Business  Day" means any
   day on which  dealings in  deposits  in U.S.  dollars are
   transacted in the London interbank market.

                  IN  THE  EVENT   THAT  THE   COMPANY   AND
   REMARKETING  AGENT  DO NOT  AGREE ON THE  SPREAD  FOR ANY
   SUBSEQUENT  SPREAD  PERIOD,  THEN THE COMPANY IS REQUIRED
   UNCONDITIONALLY TO REPURCHASE AND RETIRE ALL OF THE NOTES
   ON THE REMARKETING RESET DATE AT A PRICE EQUAL TO 100% OF
   THE PRINCIPAL AMOUNT OF THE NOTES,  TOGETHER WITH ACCRUED
   AND UNPAID INTEREST, IF ANY, THEREON TO BUT EXCLUDING THE
   REMARKETING RESET DATE.

                  All   percentages   resulting   from   any
   calculation  of any interest  rate for this Note shall be
   rounded,  if  necessary,   to  the  nearest  one  hundred
   thousandth   of  a  percentage   point,   with  five  one
   millionths of a percentage  point rounded  upward and all
   dollar amounts shall be rounded to the nearest cent, with
   one-half cent being rounded upward.

                  In  the   event   the   Company   and  the
   Remarketing  Agent  agree  on the  Spread  on the  Spread
   Determination  Date with respect to any Subsequent Spread
   Period and the  Company and the  Remarketing  Agent enter
   into a Remarketing  Agency  Agreement  (the  "Remarketing
   Agency Agreement") on such Spread  Determination Date, on
   the   Remarketing   Reset  Date  which   commences   such
   Subsequent   Spread   Period,    this   Note   shall   be
   automatically   tendered,  or  deemed  tendered,  to  the
   Remarketing  Agent  for  remarketing  by the  Remarketing
   Agent  on the  Remarketing  Reset  Date  at  100%  of the
   principal amount hereof (the "Purchase Price") unless the
   beneficial  owner of this Note,  at such owner's  option,
   upon giving notice as provided below (the "Hold Notice"),
   elects  not to tender  this  Note.  Subject to the second
   succeeding paragraph, the Purchase Price shall be paid by
   the  Remarketing  Agent in  accordance  with the standard
   procedures of DTC, which  currently  provide for payments
   in same-day  funds.  Interest  accrued on such Notes with
   respect to the preceding interest period shall be paid by
   the Company in the manner described above.

                  The Hold  Notice  must be  received by the
   Remarketing   Agent   through   DTC   during  the  period
   commencing  at 3:00  p.m.,  New York  City  time,  on the
   Duration/Mode  Determination  Date  and  ending  at 12:00
   noon, New York City time, on the third Business Day prior
   to the Remarketing  Reset Date for such Subsequent Spread
   Period (the "Notice Date");  provided,  however,  that if
   the Remarketing  Agent and Enterprise are unable to agree
   on the Spread for such Subsequent Spread Period, any Hold
   Notices  received  will  be  null  and  void.  Except  as
   otherwise   provided   below,  a  Hold  Notice  shall  be
   irrevocable.  If a Hold  Notice is not  received  for any
   reason by the Remarketing Agent with respect to this Note
   by 12:00 noon,  New York City time,  on the Notice  Date,
   the beneficial owner of this Note shall be deemed to have
   elected  to  tender   this  Note  for   purchase  by  the
   Remarketing Agent.

                  In the event that the Remarketing Agent is
   unable to remarket some or all of the tendered Notes and,
   in its sole  discretion,  chooses  not to  purchase  such
   tendered Notes, the Company is obligated  unconditionally
   to purchase and retire on the Remarketing  Reset Date the
   remaining  unsold tendered Notes at a price equal to 100%
   of the principal amount thereof,  plus accrued and unpaid
   interest,  if any, thereon to the applicable  Remarketing
   Reset Date.

                  Notwithstanding  anything to the  contrary
   contained  herein,  the Remarketing  Agent shall have the
   option,  but not the  obligation,  to purchase  any Notes
   tendered  to it that it is not able to  remarket.  If the
   Remarketing  Agent  is  unable  to  remarket  the  entire
   principal amount of all Notes tendered on any Remarketing
   Reset Date and, in its sole  discretion,  the Remarketing
   Agent  chooses not to purchase such  tendered  Notes,  it
   shall  promptly  notify the Company and the  Trustee.  No
   beneficial  owner of any Note  shall  have any  rights or
   claims against the  Remarketing  Agent as a result of the
   Remarketing Agent not purchasing such Notes.

                  The term  "Remarketing  Agent"  means  the
   nationally  recognized   broker-dealer  selected  by  the
   Company  to act as  Remarketing  Agent.  Pursuant  to the
   Remarketing  Agreement,  Merrill Lynch, Pierce,  Fenner &
   Smith  Incorporated  has  agreed  to act  as  Remarketing
   Agent. The term "Rate Agent" means the entity selected by
   the Company as its agent to  determine  (i) LIBOR and the
   interest rate on the Notes for any Interest  Reset Period
   and/or  (ii) the  yield  to  maturity  on the  applicable
   United   States   Treasury   security  that  is  used  in
   connection with the determination of the applicable Fixed
   Rate, and the ensuing applicable Fixed Rate.  Pursuant to
   the Remarketing Agreement,  Merrill Lynch, Pierce, Fenner
   & Smith  Incorporated  has agreed to act as Rate Agent in
   respect  of  any  Fixed  Rate  Mode,  and  pursuant  to a
   Calculation  Agency Agreement,  First Union National Bank
   has  agreed to act as the Rate  Agent in  respect  of any
   Floating Rate Mode. The Company,  in its sole discretion,
   may change the  Remarketing  Agent and the Rate Agent for
   any  Subsequent  Spread Period at any time on or prior to
   3:00  p.m.,  New York  City  time,  on the  Duration/Mode
   Determination Date relating thereto.

                  This  Note  may  not  be  redeemed  by the
   Company  prior to March 15, 2000.  On that date,  on each
   subsequent  Remarketing  Reset Date and on those Interest
   Payment  Dates or other  dates  specified  as  redemption
   dates by the Company on the  Duration/Mode  Determination
   Date in connection with any Subsequent Spread Period, the
   Notes may be redeemed,  at the option of the Company,  in
   whole or in  part,  upon  notice  thereof  (as  described
   below)  given  at any time  during  the 30  calendar  day
   period  ending on the  eighth  Business  Day prior to the
   redemption date (or fifteen  Business Days,  prior to the
   redemption date in the case of a partial redemption),  in
   accordance  with  the  redemption  type  selected  on the
   Duration/Mode  Determination  Date.  This  Note  is  also
   subject to redemption in accordance with other provisions
   specified  above.  In the event that less than all of the
   outstanding  Notes  are to be  redeemed,  the Notes to be
   redeemed  shall be selected by such method as the Company
   shall deem fair and appropriate.

                  The  redemption  type to be  chosen by the
   Company and the  Remarketing  Agent on the  Duration/Mode
   Determination  Date with respect to any Subsequent Spread
   Period may be one of the following as defined herein: (i)
   Par  Redemption;   (ii)  Premium  Redemption;   or  (iii)
   Make-Whole Redemption.  "Par Redemption" means redemption
   at a  redemption  price  equal  to 100% of the  principal
   amount  thereof,  plus unpaid interest  thereon,  if any,
   accrued  to the  redemption  date.  "Premium  Redemption"
   means  redemption at a redemption price or prices greater
   than 100% of the principal  amount  thereof,  plus unpaid
   interest thereon, if any, accrued to the redemption date,
   as determined on the  Duration/Mode  Determination  Date.
   "Make-Whole  Redemption" means redemption at a redemption
   price equal to the  Make-Whole  Amount (as defined below)
   with respect to such Notes. Unless otherwise specified by
   the   Company   and   the   Remarketing   Agent   on  any
   Duration/Mode  Determination  Date, the  redemption  type
   shall be Par  Redemption.  The  redemption in part of any
   Notes  must  be  in  increments  of  $1,000  or  integral
   multiples thereof.

                  "Make-Whole  Amount" means,  in connection
   with any optional redemption of any Note, an amount equal
   to the greater of (i) 100% of its  principal  amount plus
   accrued  interest,   if  any,  thereon  to  the  date  of
   redemption  and (ii) the sum of the present values of the
   remaining  scheduled  payments of principal  and interest
   thereon  discounted  to  the  date  of  redemption  on  a
   semiannual  basis  (assuming a 360-day year consisting of
   twelve 30-day  months) at the  applicable  Treasury Yield
   plus the Reinvestment Spread.

                  "Treasury  Yield"  means,  with respect to
   any redemption date  applicable to any of the Notes,  the
   rate per annum equal to the semiannual  equivalent  yield
   to maturity of the Comparable Treasury Issue,  assuming a
   price for the Comparable  Treasury Issue  (expressed as a
   percentage  of  its   principal   amount)  equal  to  the
   applicable  Comparable Treasury Price for such redemption
   date.

                  "Comparable  Treasury  Issue" means,  with
   respect to the Notes  subject to  redemption,  the United
   States  Treasury  security  selected  by the  Remarketing
   Agent as having a maturity  comparable  to the  remaining
   term of the Notes that would be utilized,  at the time of
   selection  and in  accordance  with  customary  financial
   practice,   in  pricing  new  issues  of  corporate  debt
   securities of comparable  maturity to the remaining  term
   of the Notes.  "Comparable  Treasury  Price" means,  with
   respect to any  redemption  date  applicable to the Notes
   subject to redemption,  (i) the average of the applicable
   Reference  Treasury Dealer Quotations for such redemption
   date,  after  excluding  the  highest  and lowest of such
   applicable Reference Treasury Dealer Quotations,  or (ii)
   if the  Trustee  obtains  fewer than four such  Reference
   Treasury  Dealer  Quotations,  the  average  of all  such
   Quotations,  or  (iii)  if only  one  Reference  Treasury
   Dealer Quotation is received, such Quotation.  "Reference
   Treasury Dealer  Quotations"  means, with respect to each
   Reference Treasury Dealer and any redemption date for the
   Notes subject to redemption,  the average,  as determined
   by the  Trustee,  of the bid  and  asked  prices  for the
   Comparable  Treasury  Issue for the Notes  (expressed  in
   each case as a percentage of its principal amount) quoted
   in writing  to the  Trustee  by such  Reference  Treasury
   Dealer at 3:30 p.m. on the third business  day  preceding
   such redemption date.

                  "Reference  Treasury  Dealer" means,  with
   respect to the Notes subject to redemption, at least four
   primary U.S.  Government  securities  dealers in New York
   City as the Company shall  select,  which may include the
   Remarketing Agent or an affiliate thereof.

                  "Reinvestment  Spread" means, with respect
   to the Notes subject to redemption,  a number,  expressed
   as a number of basis points or as a percentage,  selected
   by the Company and agreed to by the Remarketing  Agent on
   the Duration/Mode Determination Date.

                  All notices of redemption  shall state the
   redemption date, the redemption  price, if fewer than all
   the   Outstanding   Notes   are  to  be   redeemed,   the
   identification  (and, in the case of partial  redemption,
   the  principal  amounts)  of the  particular  Notes to be
   redeemed,  that on the  redemption  date  the  redemption
   price  shall  become due and payable  upon each Note,  or
   portion  thereof,  to be redeemed,  that interest on each
   Note, or portion  thereof,  called for  redemption  shall
   cease to accrue on the  redemption  date and the place or
   places where Notes may be surrendered for redemption.

                  In the event of redemption of this Note in
   part  only,  a new Note or Notes  of like  tenor  for the
   unredeemed  portion  hereof shall be issued in authorized
   denominations  in the name of the Holder  hereof upon the
   cancellation hereof.

                  For  all  purposes  of this  Note  and the
   Indenture,  unless the context  otherwise  requires,  all
   provisions  relating to the  redemption by the Company of
   this  Note  shall  relate,  in the case that this Note is
   redeemed or to be redeemed by the Company only in part to
   that  portion of the  principal  amount of this Note that
   has been or is to be redeemed.

                  The Notes will not be subject to repayment
   at the option of the Holders thereof prior to the initial
   Remarketing  Reset  Date.  Thereafter,  if the Company so
   elects on the Duration/Mode  Determination Date preceding
   a Subsequent Spread Period,  the Notes will be subject to
   repayment  at the option of the holders  thereof,  during
   such  Subsequent  Spread  Period,  on such date(s) as the
   Company may select,  in whole or in part in increments of
   $1,000 or  integral  multiples  thereof,  at a  repayment
   price equal to 100% of the unpaid  principal amount to be
   repaid,  together with unpaid interest accrued thereon to
   but  excluding the date of repayment or within such other
   notice  period  as may  be  specified  on the  applicable
   Duration/Mode Determination Date.

                  If an Event of  Default  (as set  forth in
   the  Indenture)  with respect to Notes shall occur and be
   continuing,  the  principal  of the Notes may be declared
   due  and  payable  in the  manner  and  with  the  effect
   provided in the Indenture.

                  The   Indenture   permits,    in   certain
   circumstances  therein  specified,  the amendment thereof
   without the consent of the Holders of the Securities. The
   Indenture  also  permits,   with  certain  exceptions  as
   therein   provided,   the   amendment   thereof  and  the
   modification  of the  rights  and  obligations  under the
   Indenture of the Company and the rights of Holders of the
   Securities  of  each  series  to be  affected  under  the
   Indenture at any time by the Company and the Trustee with
   the  consent of the  Holders of a majority  in  aggregate
   principal   amount   of  the   Securities   at  the  time
   Outstanding of each series to be affected.  The Indenture
   also  contains  provisions  permitting  the  Holders of a
   majority in aggregate  principal amount of the Securities
   of each series at the time Outstanding,  on behalf of the
   Holders of all the  Securities  of such series,  to waive
   compliance by the Company with certain  provisions of the
   Indenture and certain past  defaults  under the Indenture
   and their consequences. Any such consent or waiver by the
   Holder of this Note shall be conclusive  and binding upon
   such Holder and upon all future  Holders of this Note and
   of any Note  issued  upon the  registration  of  transfer
   hereof or in exchange herefor or in lieu hereof,  whether
   or not  notation  of such  consent or waiver is made upon
   this Note.

                  No reference  herein to the  Indenture and
   no provision of this Note,  subject to the provisions for
   satisfaction   and  discharge  in  Article  Four  of  the
   Indenture,  shall alter or impair the  obligation  of the
   Company, which is absolute and unconditional,  to pay the
   principal  of and  interest  on this  Note at the  times,
   place  and  rate,  and in the  coin or  currency,  herein
   prescribed.

                  The  Indenture  permits  the  Company,  by
   irrevocably   depositing,   in  amounts  and   maturities
   sufficient to pay and discharge at the Stated Maturity or
   redemption   date,   as  the  case  may  be,  the  entire
   indebtedness  on all  Outstanding  Notes,  cash  or  U.S.
   Government  Obligations  with the Trustee in trust solely
   for the benefit of the Holders of all Outstanding  Notes,
   to defease the Indenture with respect to such Notes,  and
   upon such  deposit  the  Company  shall be deemed to have
   paid  and  discharged  its  entire  indebtedness  on such
   Notes. Thereafter,  Holders would be able to look only to
   such trust fund for payment of principal  and interest at
   the Stated  Maturity or redemption  date, as the case may
   be.

                  As provided in the  Indenture  and subject
   to certain limitations therein set forth, the transfer of
   Notes  is  registrable  in the  Security  Register,  upon
   surrender of a Note for  registration  of transfer at the
   Corporate Trust Office of the Trustee or at the office or
   agency of the  Trustee in the Borough of  Manhattan,  The
   City of New York, or at such other offices or agencies as
   the  Company  may   designate,   duly   endorsed  by,  or
   accompanied  by a written  instrument of transfer in form
   satisfactory  to the Company and the  Security  Registrar
   duly  executed by, the Holder hereof or his attorney duly
   authorized  in  writing,  and  thereupon  one or more new
   Notes of like tenor, of authorized  denominations and for
   the same aggregate  principal amount,  shall be issued to
   the designated transferee or transferees.

                  No  service  charge  shall  be made by the
   Company,  the Trustee or the Security  Registrar  for any
   such  registration  of  transfer  or  exchange,  but  the
   Company may require  payment of a sum sufficient to cover
   any  tax  or  other   governmental   charge   payable  in
   connection  therewith  (other than exchanges  pursuant to
   Sections 304, 906 or 1107 of the Indenture, not involving
   any transfer).

                  Prior to due  presentment of this Note for
   registration  of transfer,  the Company,  the Trustee and
   any agent of the  Company  or the  Trustee  may treat the
   Person in whose name this Note is registered as the owner
   hereof  for all  purposes,  whether  or not this  Note be
   overdue,  and  neither the  Company,  the Trustee nor any
   such agent shall be affected by notice to the contrary.

                  This  Note  shall  be   governed   by  and
   construed in accordance  with the law of the State of New
   Jersey without regard to principles of conflicts of laws.

                  All  undefined  terms  used in  this  Note
   which  are  defined  in  the  Indenture  shall  have  the
   meanings assigned to them in the Indenture.



<PAGE>


                        ABBREVIATIONS

         The  following  abbreviations,  when  used  in  the
inscription  on  the  face  of  this  instrument,  shall  be
construed as though they were written out in full  according
to applicable laws or regulations:

TEN COM - as tenants in common          UNIF GIFT MIN ACT _____Custodian _____
                                                         (Cust.)        (Minor)

TEN ENT - as tenants by the             Under Uniform Gifts to Minor Act
                                                     (State)

JT TEN  - as joint tenants with right
          of survivorship and not as
          tenants in common

         Additional  abbreviations  may also be used  though
not in the above list.

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

FOR VALUE RECEIVED, the undersigned hereby sells(s), assign(s)
and transfer(s) unto

Please Insert Social Security or Employer
Identification number of assignee

|-------------------------------|
|                               |
|-------------------------------|


------------------------------------------------------------
         Please Print or Typewrite Name and Address
            Including Postal Zip Code of Assignee
------------------------------------------------------------

The  within  Security  and  all  rights  thereunder,  hereby
irrevocably        constituting        and        appointing
__________________________   attorney   to   transfer   said
Security  on the books of the  Company,  with full  power of
substitution in the premises.

Dated:  __________            _______________________
                                    Signature

NOTICE:      The   signature   to   this   assignment   must
             correspond with the name as it appears upon the
             face of the  within  Note in every  particular,
             without alteration or enlargement or any change
             whatever.