PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED


                                       and



                      FIRST UNION NATIONAL BANK, as Trustee



                                    INDENTURE

                           Dated as of January 1, 1998


                          Providing for the Issuance of
              Deferrable Interest Subordinated Debentures in Series
                                    including


           7.44% Deferrable Interest Subordinated Debentures, Series A


<PAGE>

                                TABLE OF CONTENTS


                                                                        Page

ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE


SECTION 1.01   Definitions..............................................  2
SECTION 1.02   Other Definitions........................................  6
SECTION 1.03   Incorporation by Reference of Trust Indenture Act........  7
SECTION 1.04   Rules of Construction....................................  7
SECTION 1.05   Acts of Holders and Holders of Preferred Securities......  8

ARTICLE 2
THE DEBENTURES; THE SERIES A DEBENTURES


SECTION 2.01   Issue of Debentures Generally............................  9
SECTION 2.02   Terms and Form of the Series A Debentures................ 10
SECTION 2.03   Payment of Principal and Interest........................ 11
SECTION 2.04   Execution, Authentication and Delivery................... 13
SECTION 2.05   Registrar and Paying Agent............................... 14
SECTION 2.06   Paying Agent to Hold Money in Trust...................... 15
SECTION 2.07   Debentureholder Lists.................................... 15
SECTION 2.08   Transfer and Exchange.................................... 16
SECTION 2.09   Replacement Debentures................................... 16
SECTION 2.10   Outstanding Debentures; Determinations of Holders' Action 17
SECTION 2.11   Temporary Debentures..................................... 18
SECTION 2.12   Book-Entry System........................................ 18
SECTION 2.13   Cancellation............................................. 19

ARTICLE 3
REDEMPTION


SECTION 3.01   Redemption: Notice to Trustee............................ 20
SECTION 3.02   Selection of Debentures to be Redeemed................... 20
SECTION 3.03   Notice of Redemption..................................... 20
SECTION 3.04   Effect of Notice of Redemption........................... 21
SECTION 3.05   Deposit of Redemption Price.............................. 21
SECTION 3.06   Debentures Redeemed in Part.............................. 22


ARTICLE 4
COVENANTS


SECTION 4.01   Payment of Debentures.................................... 22
SECTION 4.02   Prohibition Against Dividends............................ 23
SECTION 4.03   SEC Reports.............................................. 23
SECTION 4.04   Compliance Certificates.................................. 23
SECTION 4.05   Further Instruments and Acts............................. 24
SECTION 4.06   Payments for Consents.................................... 24
SECTION 4.07   Payment of Expenses of Trust I........................... 24

ARTICLE 5
SUCCESSOR CORPORATION


SECTION 5.01   When the Company May Merge............................... 24

ARTICLE 6
DEFAULTS AND REMEDIES


SECTION 6.01   Events of Default........................................ 25
SECTION 6.02   Acceleration............................................. 26
SECTION 6.03   Other Remedies........................................... 27
SECTION 6.04   Waiver of Past Defaults.................................. 27
SECTION 6.05   Control by Majority...................................... 28
SECTION 6.06   Limitation on Suits...................................... 28
SECTION 6.07   Rights of Holders to Receive Payment..................... 29
SECTION 6.08   Collection Suit by the Trustee........................... 29
SECTION 6.09   The Trustee May File Proofs of Claim..................... 29
SECTION 6.10   Priorities............................................... 30
SECTION 6.11   Undertaking for Costs.................................... 30
SECTION 6.12   Waiver of Stay........................................... 30


<PAGE>


ARTICLE 7
THE TRUSTEE


SECTION 7.01   Duties of the Trustee.................................... 31
SECTION 7.02   Rights of the Trustee.................................... 32
SECTION 7.03   Individual Rights of the Trustee......................... 32
SECTION 7.04   The Trustee's Disclaimer................................. 32
SECTION 7.05   Notice of Defaults....................................... 33
SECTION 7.06   Reports by Trustee to Holders............................ 33
SECTION 7.07   Compensation and Indemnity............................... 33
SECTION 7.08   Replacement of Trustee................................... 34
SECTION 7.09   Successor Trustee by Merger.............................. 35
SECTION 7.10   Eligibility: Disqualification............................ 35
SECTION 7.11   Preferential Collection of Claims Against the Company.... 35

ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE;
DEFEASANCE OF CERTAIN OBLIGATIONS; UNCLAIMED MONEYS

SECTION 8.01   Satisfaction and Discharge of Indenture.................. 35
SECTION 8.02   Application by Trustee of Funds Deposited for Payment of 
               Debentures............................................... 37
SECTION 8.03   Repayment of Moneys Held by Paying Agent................. 37
SECTION 8.04   Return of Moneys Held by the Trustee and Paying Agent
               Unclaimed for Three Years................................ 37

ARTICLE 9
AMENDMENTS


SECTION 9.01   Without Consent of Holders............................... 37
SECTION 9.02   With Consent of Holders.................................. 38
SECTION 9.03   Compliance with Trust Indenture Act...................... 39
SECTION 9.04   Revocation and Effect of Consents; Waivers and Actions... 39
SECTION 9.05   Notation on or Exchange of Debentures.................... 40
SECTION 9.06   Trustee to Execute Supplemental Indentures............... 40
SECTION 9.07   Effect of Supplemental Indentures........................ 40

ARTICLE 10
SUBORDINATION


SECTION 10.01  Debentures Subordinated to Senior Indebtedness........... 40
SECTION 10.02  Priority and Payment of Proceeds in Certain Events:
               Remedies Standstill...................................... 41
SECTION 10.03  Payments which May Be Made Prior to Notice............... 42
SECTION 10.04  Rights of Holders of Senior Indebtedness Not to Be
               Impaired................................................. 42
SECTION 10.05  Trustee May Take Action to Effectuate Subordination...... 42
SECTION 10.06  Subrogation.............................................. 42
SECTION 10.07  Obligations of Company Unconditional; Reinstatement...... 43
SECTION 10.08  Trustee Entitled to Assume Payments Not Prohibited in
               Absence of Notice........................................ 43
SECTION 10.09  Right of Trustee to Hold Senior Indebtedness............. 44

ARTICLE 11
MISCELLANEOUS

SECTION 11.01  Trust Indenture Act Controls............................. 44
SECTION 11.02  Notices.................................................. 45
SECTION 11.03  Communication by Holders with Other Holders.............. 45
SECTION 11.04  Certificate and Opinion as to Conditions Precedent....... 46
SECTION 11.05  Statements Required in Certificate or Opinion............ 46
SECTION 11.06  Severability Clause...................................... 46
SECTION 11.07  Rules by Trustee, Paying Agent and Registrar............. 47
SECTION 11.08  Legal Holidays........................................... 47
SECTION 11.09  Governing Law............................................ 47
SECTION 11.10  No Recourse Against Others............................... 47
SECTION 11.11  Successors............................................... 47
SECTION 11.12  Multiple Original Copies of this Indenture............... 47
SECTION 11.13  No Adverse Interpretation of Other Agreements............ 48
SECTION 11.14  Table of Contents; Headings.............................. 48
SECTION 11.15  Benefits of the Indenture................................ 48


<PAGE>



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

Trust Indenture                        Indenture
 Act Section                             Section

ss.310(a)(1)                        7.10
        (a)(2)                      7.10
        (a)(3)                      Not Applicable
        (a)(4)                      Not Applicable
        (a)(5)                      Not Applicable
        (b)                         7.08; 7.10; 11.01
        (c)                         Not Applicable
ss.311(a)                           7.11
        (b)                         7.11
        (c)                         Not Applicable
ss.312(a)                           2.07
        (b)                         11.03
        (c)                         11.03
ss.313(a)                           7.06
        (b)(1)                      Not Applicable
        (b)(2)                      7.06
        (c)                         7.06; 11.02
        (d)                         7.06
ss.314(a)                           4.03; 11.02
        (b)                         Not Applicable
        (c)(1)                      2.02; 11.04; 11.05
        (c)(2)                      2.02; 11.04; 11.05
        (c)(3)                      Not Applicable
        (d)                         Not Applicable
        (e)                         11.05
        (f)                         Not Applicable
ss.315(a)                           7.01(b)
        (b)                         7.05, 11.02
        (c)                         7.01(a)
        (d)                         7.01(c)
        (e)                         6.11
ss.316(a)(1)(A)                     6.05
        (a)(1)(B)                   6.04
        (a)(2)                      Not Applicable
        (a)(last sentence)          2.10
        (b)                         6.07
        (c)                         1.05
ss.317(a)(1)                        6.08
        (a)(2)                      6.09
        (b)                         2.06
ss.318(a)                           11.01
        (b)                         Not Applicable
        (c)                         11.01
------------------

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

                     INDENTURE,  dated  as of  January  1,  1998 by and  between
Public Service Enterprise Group  Incorporated,  a corporation duly organized and
existing  under the laws of the State of New Jersey (the  "Company"),  and First
Union National Bank, a national banking  association duly organized and existing
under the laws of the United States of America, as trustee (the "Trustee")

                     WHEREAS,  the  Company  may  from  time to time  create  or
establish  one or more  statutory  business  trusts  for the  purpose of issuing
undivided  beneficial  interests in the assets thereof (the "Trust  Securities")
and using the  proceeds  thereof to acquire the  Company's  Deferrable  Interest
Subordinated Debentures.

                     WHEREAS,   pursuant  to  an  Amended  and  Restated   Trust
Agreement  dated as of January  20,  1998 (the  "Trust I  Agreement")  among the
Company,  as depositor,  First Union  National  Bank,  as Property  Trustee (the
"Property Trustee I"), the Delaware Trustee named therein and the Administrative
Trustee  named  therein,  there has been  declared  and  established  Enterprise
Capital Trust I, a Delaware business trust ("Trust I").

                     WHEREAS,  Trust I intends  to issue  its Trust  Securities,
including its 7.44% Trust Originated Preferred Securities representing undivided
beneficial  interests in the assets of Trust I, having a  liquidation  amount of
$25 per security and having  rights  provided  therefor in the Trust I Agreement
(the "Series A Preferred Securities").

                     WHEREAS,  the Company has  authorized  the  issuance of its
7.44%  Deferrable  Interest  Subordinated  Debentures,  Series A (the  "Series A
Debentures")  to be purchased by Trust I with the proceeds from the issuance and
sale of its Trust  Securities,  and to provide  therefor,  the  Company has duly
authorized the execution and delivery of this Indenture.

                     WHEREAS, all things necessary to make the securities issued
hereunder,  when duly issued and executed by the Company and  authenticated  and
delivered  hereunder,  the valid  obligations  of the Company,  and to make this
Indenture  a  valid  and  binding  agreement  of  the  Company,  enforceable  in
accordance with its terms, have been done.

                     NOW THEREFORE:

                     Each  of the  Company  and  the  Trustee,  intending  to be
legally bound  hereby,  agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders (as hereinafter defined) of the
securities issued hereunder, including the Series A Debentures:


                                    ARTICLE 1
                   DEFINITIONS AND INCORPORATION BY REFERENCE

                     SECTION 1.01         Definitions

                     "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. When used with respect to any Person,
"control"  means the power to direct the management and policies of such Person,
directly or indirectly,  whether through the ownership of voting securities,  by
contract  or  otherwise;  and the  terms  "controlling"  and  "controlled"  have
meanings correlative to the foregoing.

                     "Board of  Directors"  means the Board of  Directors of the
Company or any committee thereof duly authorized to act on behalf of such Board.

                     "Board  Resolution"  means  (i)  a  copy  of  a  resolution
certified  by the  Secretary or the  Assistant  Secretary of the Company to have
been duly adopted by the Board of  Directors  and to be in full force and effect
on the  date  of such  certification  and  delivered  to the  Trustee  or (ii) a
certificate  signed by the  authorized  officer or officers to whom the Board of
Directors  has  delegated  its  authority,  and in each case,  delivered  to the
Trustee.

                     "Business  Day"  means  any day that is not a  Saturday,  a
Sunday  or a day on which  banking  institutions  in The City of New York or the
State of New Jersey are  authorized  or  required by law or  executive  order to
close.

                     "Capital   Lease   Obligations"   of  a  Person  means  any
obligation  which is required to be  classified  and  accounted for as a capital
lease on the face of a balance sheet of such Person  prepared in accordance with
GAAP.

                     "Capital Stock" means any and all shares, interests, rights
to  purchase,  warrants,  options,  participation  or  other  equivalents  of or
interests in (however designated) corporate stock.

                     "Company"   means   Public   Service    Enterprise    Group
Incorporated, a New Jersey corporation, or any successor thereto.

                     "Company  Order" means a written request or order signed in
the name of the  Company by an  Officer  of the  Company  and  delivered  to the
Trustee.

                     "Debentureholder"  or "Holder" means a Person in whose name
a Debenture is registered on the Registrar's books.

                     "Debentures" shall mean any of the securities of any series
issued, authenticated and delivered under this Indenture.

                     "Default"  means  any event  which  is, or after  notice or
passage of time, or both, would be, an Event of Default
pursuant to Section 6.01 hereof.

                     "Exchange Act" means the  Securities  Exchange Act of 1934,
as amended.

                     "Extension   Period",   with   respect  to  any  series  of
Debentures,  means the period  during  which the Company may elect to extend the
interest  payment  period on such series of the  Debentures  pursuant to Section
4.01(b) hereof; provided that no Extension Period shall extend beyond the Stated
Maturity Date or the Redemption Date of any Debenture of such series.

                     "GAAP" means generally accepted  accounting  principles set
forth in the opinions and  pronouncements of the Accounting  Principles Board of
the American  Institute of  Certified  Public  Accountants  and  statements  and
pronouncements of the Financial Accounting Standards Board.

                     "Indebtedness"   means,   without   duplication,   (i)  the
principal of and premium (if any) in respect of (A)  indebtedness of the Company
for money borrowed and (B)  indebtedness  evidenced by  securities,  debentures,
bonds or other similar instruments issued by the Company; (ii) all Capital Lease
Obligations  of the  Company;  (iii) all  obligations  of the Company  issued or
assumed  as the  deferred  purchase  price of  property,  all  conditional  sale
obligations  of the Company and all  obligations  of the Company under any title
retention  agreement  (but  excluding  trade  accounts  payable  arising  in the
ordinary  course of  business);  (iv) all  obligations  of the  Company  for the
reimbursement  of any  obligation,  any letter of credit,  banker's  acceptance,
security purchase facility or similar credit transaction (other than obligations
with respect to letters of credit securing  obligations  (other than obligations
described  in (i) through  (iii) above)  entered into in the ordinary  course of
business by the Company to the extent such  letters of credit are not drawn upon
or, if and to the extent drawn upon,  such drawing is  reimbursed  no later than
the  third  business  day  following  receipt  by the  Company  of a demand  for
reimbursement  following  payment on the applicable  letter of credit);  (v) all
obligations of the type referred to in clauses (i) through (iv) of other Persons
and all  dividends of other  Persons  (other than the  Preferred  Securities  or
similar  securities)  for the payment of which,  in either case,  the Company is
responsible or liable as obligor,  guarantor or otherwise (other than the Series
A  Guarantee  Agreement  or  obligations  ranking  pari  passu with the Series A
Guarantee  Agreement);  and (vi) all  obligations  of the  type  referred  to in
clauses (i) through (v) of other Persons  secured by any lien on any property or
asset of the Company (whether or not such obligation is assumed by the Company),
the amount of such obligation being deemed to be the lesser of the value of such
property  or  assets or the  amount  of the  obligation  so  secured;  provided,
however,   that  Indebtedness  will  not  include   endorsements  of  negotiable
instruments for collection in the ordinary course of business.

                     "Indenture"   means   this   indenture,   as   amended   or
supplemented  from time to time in accordance  with the terms hereof,  including
the provisions of the TIA that are deemed to be a part hereof.

                     "Interest  Payment  Date",  when used with  respect  to the
Debentures  of any  series,  means the stated  maturity  of any  installment  of
interest on the Debentures of that series.

                     "Issue Date", with respect to a series of Debentures, means
the date on which the Debentures of such series are originally issued.

                     "Officer"  means,  with  respect  to any  corporation,  the
Chairman of the Board,  the Chief  Executive  Officer,  the President,  any Vice
President,  the  Treasurer,  any  Assistant  Treasurer,  the  Secretary  or  any
Assistant Secretary of such corporation.

                     "Officer's   Certificate"   means  a  written   certificate
containing  the  applicable  information  specified in Sections  11.04 and 11.05
hereof,  signed  in the  name of the  Company  by any one of its  Officers,  and
delivered to the Trustee.

                     "Opinion of Counsel" means a written opinion containing the
applicable  information  specified in Sections 11.04 and 11.05 hereof,  by legal
counsel who is reasonably acceptable to the Trustee.

                     "Paying  Agent" means any Person  authorized by the Company
to pay the principal of and premium,  if any, and interest on the  Debentures of
any series on behalf of the Company.

                     "Person" means any  individual,  corporation,  partnership,
limited liability  company,  joint venture,  association,  joint-stock  company,
trust,  unincorporated  organization,  government  or any  agency  or  political
subdivision thereof or any other entity.

                     "Predecessor  Debentures" of any particular Debenture means
every  previous  Debenture  evidencing all or a portion of the same debt as that
evidenced by such particular Debenture; and for purposes of this definition, any
Debenture  authenticated and delivered under Section 2.09 hereof in exchange for
or in lieu of a mutilated,  destroyed,  lost or stolen Debenture shall be deemed
to evidence the same debt as the mutilated, destroyed, lost or stolen Debenture.

                     "Preferred Securities" means the Trust Originated Preferred
Securities of a Trust, representing undivided beneficial interests in the assets
of such Trust.

                     "Property  Trustee I" means First Union  National  Bank and
its successors and assigns, as property trustee under the Trust I Agreement.

                     "Record   Date",   with   respect  to  any  series  of  the
Debentures,  means the Regular  Record Date, the Special Record Date or any date
set to  determine  the Holders of  Debentures  of such series  entitled to vote,
consent,  make a request  or  exercise  any  other  right  associated  with such
Debentures.

                     "Redemption  Date",  with respect to the  Debentures of any
series to be redeemed,  means the date specified for the  redemption  thereof in
accordance with the terms thereof and pursuant to Article 3 of this Indenture.

                     "Redemption  Price",  with respect to the Debentures of any
series to be redeemed, means the price at which such Debenture is to be redeemed
in  accordance  with  the  terms  thereof  and  pursuant  to  Article  3 of this
Indenture.

                     "Regular Record Date",  with respect to an interest payment
on the Debentures of a series, means the date set forth in this Indenture or the
supplemental  indenture  creating such series for the  determination  of Holders
entitled to receive payment of interest on the next succeeding  Interest Payment
Date.

                     "SEC" or  "Commission"  means the  Securities  and Exchange
Commission.

                     "Securities Act" means the Securities Act of 1933, amended.

                     "Senior  Indebtedness"  means all Indebtedness,  except for
Indebtedness  that is by its  terms  subordinated  to or  pari  passu  with  the
Debentures.  Notwithstanding  anything to the contrary in the foregoing,  Senior
Indebtedness shall not include any Indebtedness between or among the Company and
any Affiliate.

                     "Series  A  Debentures"  means any of the  Company's  7.44%
Deferrable  Interest  Subordinated  Debentures,   Series  A  issued  under  this
Indenture.

                     "Series  A  Guarantee   Agreement"   means  the   Guarantee
Agreement  issued  by the  Company  with  respect  to  the  Series  A  Preferred
Securities,  in which the Company irrevocably and unconditionally  agrees to pay
the Guarantee  Payments (as defined in the Series A Guarantee  Agreement) to the
holders of the Series A Preferred Securities.

                     "Series  A  Preferred   Securities"   means  the  undivided
beneficial  interests in the assets of Trust I, having a  liquidation  amount of
$25 per security and having rights provided therefor in the Trust I Agreement.

                     "Special  Record  Date" for the  payment  of any  Defaulted
Interest on the Debentures of any series means the date  determined  pursuant to
Section 2.03 hereof.

                     "Stated  Maturity  Date",  with  respect to any  Debenture,
means the date  specified  for such  Debenture  as the  fixed  date on which the
principal of such Debenture is due and payable.

                     "Subsidiary"    means   any    corporation,    association,
partnership,  trust or other business entity of which more than 50% of the total
voting  power  of  shares  of  Capital  Stock  or  other  interests   (including
partnership  interests)  entitled  (without  regard  to  the  occurrence  of any
contingency) to vote in the election of directors,  managers or trustees thereof
is at the time owned or controlled,  directly or indirectly, by (i) the Company,
(ii)  the  Company  and  one  or  more  Subsidiaries,   or  (iii)  one  or  more
Subsidiaries.

                     "TIA" means the Trust Indenture Act of 1939, as amended and
as in effect on the date of this Indenture;  provided,  however, that if the TIA
is amended  after  such date,  TIA  means,  to the extent  required  by any such
amendment, the TIA as so amended.

                     "Trust" means any statutory  business  trust created by the
Company to issue Trust  Securities and to use the proceeds from the sale thereof
to purchase Debentures.

                     "Trust  I" means  Enterprise  Capital  Trust I, a  Delaware
statutory  business trust created under the Delaware Business Trust Act, Chapter
38 of Title 12 of the Delaware Code, 12 Del. C. ss. 3801, et seq.

                     "Trust I Agreement"  means the Amended and  Restated  Trust
Agreement  dated as of January 20, 1998 among the Company,  as Depositor,  First
Union National Bank, as Property Trustee, the Delaware Trustee named therein and
the  Administrative  Trustee  named  therein,  as the  same may be  amended  and
modified from time to time.

                     "Trust  Officer",  when used with  respect to the  Trustee,
means  any  Senior  Vice  President,  any Vice  President,  any  Assistant  Vice
President, any Trust Officer, or Assistant Trust Officer or any other officer of
the Corporate Trust Department of the Trustee customarily  performing  functions
similar to those  performed  by any of the above  designated  officers  and also
means, with respect to a particular corporate trust matter, any other officer to
whom  such  matter  is  referred  because  of that  officer's  knowledge  of and
familiarity with the particular subject.

                     "Trust Securities" means the undivided beneficial interests
in the assets of a Trust.

                     "Trustee"   means  First  Union  National  Bank,   until  a
successor  replaces it pursuant to the  applicable  provisions of this Indenture
and, thereafter, shall mean such successor.

                     "U.S. Government  Obligations" means direct obligations (or
certificates  representing  an ownership  interest in such  obligations)  of the
United States of America (including any agency or  instrumentality  thereof) for
the  payment of which the full faith and credit of the United  States of America
is pledged and which are not callable at the issuer's option.

                     "Wholly  Owned  Subsidiary"  means  a  Subsidiary  all  the
Capital Stock of which (other than directors' qualifying shares) is owned by the
Company or another Wholly Owned Subsidiary.

                         SECTION 1.02 Other Definitions

           TERM                               DEFINED IN SECTION

           "Act"............................          1.05
           "Bankruptcy Law".................          6.01
           "Custodian"......................          6.01
           "Defaulted Interest".............          2.03
           "Depositary".....................          2.12
           "Global Debenture"...............          2.12
           "Legal Holiday"..................         11.08
           "Notice of Default"..............          6.01
           "Register".......................          2.05
           "Registrar"......................          2.05
           "Successor"......................          5.01


         SECTION 1.03 Incorporation by Reference of Trust Indenture Act

                     Whenever this  Indenture  refers to a provision of the TIA,
such  provision  is  incorporated  by  reference  in and  made a  part  of  this
Indenture.  The  following TIA terms used in this  Indenture  have the following
meanings:

                    "indenture securities" means the Debentures.

                    "indenture  security  holder"  means  a  Debentureholder  or
                     Holder.

                    "indenture to be qualified" means this Indenture.

                    "indenture  trustee" or  "institutional  trustee"  means the
                     Trustee.

                    "obligor" on the indenture  securities means the Company and
                     any other obligor on the Debentures.

                     All other TIA terms used in this Indenture that are defined
by the TIA,  defined by TIA reference to another  statute or defined by SEC rule
have the meanings assigned to them by such definitions.

                       SECTION 1.04 Rules of Construction

   Unless the context otherwise requires:

   (1)   Each capitalized term has the meaning assigned to it;

   (2)   an accounting term not otherwise defined has the meaning assigned to it
         in accordance with GAAP;

   (3)   "or" is not exclusive;

   (4)   "including" means including, without limitation;

   (5)   words in the singular include the plural, and words in the plural 
         include the singular; and

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


        SECTION 1.05 Acts of Holders and Holders of Preferred Securities


                     (a) Any request, demand, authorization,  direction, notice,
consent,  waiver or other action provided by this Indenture to be given or taken
by  Holders  or by  holders  of  Preferred  Securities  may be  embodied  in and
evidenced by one or more  instruments of  substantially  similar tenor signed by
such Holders or holders of Preferred Securities,  as applicable, in person or by
an agent duly  appointed in writing and,  except as herein  otherwise  expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is hereby expressly required,  to the
Company.  Such instrument or instruments  (and the action  embodied  therein and
evidenced  thereby) are herein sometimes  referred to as the "Act" of Holders or
holders of Preferred Securities signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient  for any purpose of this  Indenture and conclusive in favor of the
Trustee and the Company, if made in the manner provided in this Section.

                     (b) The fact and date of the execution by any Person of any
such  instrument  or writing may be proved in any manner which the Trustee deems
sufficient.

                     (c) The  ownership  of  Debentures  shall be  proved by the
Register.

                     (d) Any request, demand, authorization,  direction, notice,
consent,  waiver or other Act of the  Holder of any  Debenture  shall bind every
future  Holder of the same  Debenture and the Holder of every  Debenture  issued
upon the  registration  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 Debenture.

                     (e) If the Company  solicits  from the Holders any request,
demand,  authorization,  direction,  notice,  consent,  waiver or other Act, the
Company  may, at its option,  by or  pursuant  to a  resolution  of its Board of
Directors,  fix in  advance  a Record  Date  for the  determination  of  Holders
entitled  to  give  such  request,  demand,  authorization,  direction,  notice,
consent, waiver or other Act, but the Company shall have no obligation to do so.
If such a Record Date is fixed, such request, demand, authorization,  direction,
notice,  consent,  waiver or other Act may be given  before or after such Record
Date,  but only  Holders of record at the close of  business on such Record Date
shall be deemed to be Holders for the purposes of determining whether Holders of
the requisite proportion of outstanding  Debentures have authorized or agreed or
consented to such request, demand,  authorization,  direction,  notice, consent,
waiver or other Act, and for that purpose the  outstanding  Debentures  shall be
computed as of such Record Date.

                                    ARTICLE 2
                     THE DEBENTURES; THE SERIES A DEBENTURES

                   SECTION 2.01 Issue of Debentures Generally

                     The aggregate  principal amount of any series of Debentures
which may be authenticated  and delivered under this Indenture is limited to the
aggregate  liquidation  amount of the Trust  Securities of the Trust  purchasing
such Debentures.

                     The  Debentures may be issued in one or more series as from
time to time shall be authorized by the Board of Directors.

                     The Debentures of each series and the Trustee's Certificate
of Authentication shall be substantially in the forms to be attached as exhibits
to the Indenture or supplemental indenture creating such series, but in the case
of any  series of  Debentures  other  than the  Series A  Debentures,  with such
inclusions,  omissions and  variations as to letters,  numbers or other marks of
identification  or  designation  and  such  legends  or  endorsements   printed,
lithographed or engraved  thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Indenture, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any securities  exchange on which such  Debentures may
be listed, or to conform to usage.

                     Other  series of  Debentures  may differ  from the Series A
Debentures, and as and between series, in respect of any or all of the following
matters:

     (a) designation;

     (b) Stated  Maturity  Date  or  Dates,  which  may be
         serial  and the  Company's  option,  if  any,  to
         change the Stated Maturity Date or Dates;

     (c) interest rate or method of determination of the interest rate;

     (d) the basis upon which  interest  shall be computed
         if other than a 360-day  year  composed of twelve
         30-day months;

     (e) Interest Payment Dates and the Regular Record Dates therefor;

     (f) the maximum duration of the Extension Period;

     (g) Issue Date or Dates and interest accrual provisions;

     (h) authorized denominations;

     (i) the place or places for the payment of principal (and premium, if any)
         and interest;

     (j) the aggregate principal amount of Debentures of such series which may
         be issued;

     (k) the optional and mandatory redemption provisions, if any;

     (l) provisions, if any, for any sinking or analogous fund; and

     (m) any other  provisions  expressing or referring to
         the  terms   and   conditions   upon   which  the
         Debentures  of such series are to be issued under
         this Indenture which are not in conflict with the
         provisions of this Indenture.

in each  case as  determined  by the Board of  Directors  and  specified  in the
supplemental indenture creating such series.

             SECTION 2.02 Terms and Form of the Series A Debentures


                     (a) The Series A  Debentures  shall be  designated  "Public
Service Enterprise Group Incorporated,  7.44% Deferrable  Interest  Subordinated
Debentures,  Series A." The Series A Debentures and the Trustee's Certificate of
Authentication  shall be substantially in the form of Exhibit A attached hereto.
The  Series A  Debentures  shall  initially  be issued as global  Debentures  in
accordance  with the  provisions  of Section  2.12 of this  Indenture,  with The
Depository  Trust Company as Depositary.  The terms and provisions  contained in
the Series A Debentures shall constitute,  and are hereby expressly made, a part
of this Indenture.  The Company and the Trustee, by their execution and delivery
of this Indenture,  expressly agree to such terms and provisions and to be bound
thereby.

                     (b) The aggregate  principal  amount of Series A Debentures
outstanding  at any time may not  exceed  $231,958,775  except  as  provided  in
Section  2.09  hereof.  The  Series  A  Debentures  shall be  authenticated  and
delivered  upon  delivery to the Trustee of items  specified in Section  2.04(d)
hereof.

                     (c) The Stated  Maturity Date of the Series A Debentures is
March 31, 2047.

                     (d) The interest  rate of the Series A Debentures  is 7.44%
per annum.  The Interest Payment Dates for the Series A Debentures are March 31,
June 30,  September 30 and December 31 of each year,  commencing March 31, 1998.
In the  event  that  any date on  which  interest  is  payable  on the  Series A
Debentures is not a Business Day, then payment of interest  payable on such date
will be made on the next day which is a Business  Day (and  without any interest
or other payment in respect of any such delay), except that if such Business Day
is in the next  succeeding  calendar  year,  such  payment  shall be made on the
immediately  preceding Business Day, in each case with the same force and effect
as if made on such date. The Regular Record Date for each Interest  Payment Date
for the Series A  Debentures  shall be the 15th day  (whether  or not a Business
Day) of the last month of each calendar quarter, provided that if Trust I is the
sole Holder of the Series A Debentures or the Series A Debentures  are issued in
book-entry-only  form, the Regular Record Date shall be the close of business on
the Business Day immediately preceding such Interest Payment Date.

                     Each Series A Debenture  shall bear interest from its Issue
Date or from the most recent  Interest  Payment Date to which  interest has been
paid or duly provided for with respect to such Series A Debenture;  except that,
so long as there is no existing  Defaulted  Interest (as defined in Section 2.03
hereof) or Extension  Period on the Series A Debentures,  any Series A Debenture
authenticated  by the Trustee  between the Regular  Record Date for any Interest
Payment  Date and such  Interest  Payment  Date  shall bear  interest  from such
Interest Payment Date.

                     Overdue principal of and interest on any Series A Debenture
and interest  which has been deferred  pursuant to Section  4.01(b) hereof shall
bear interest (to the extent that the payment of such interest  shall be legally
enforceable) at a rate per annum equal to the interest rate per annum payable on
such Series A Debenture.

                     (e) The  Series  A  Debentures  shall be  issuable  only in
registered  form  without  coupons  and  only  in  denominations  of $25 and any
integral multiple thereof.

                     (f)  The  maximum   Extension   Period  for  the  Series  A
Debentures shall be 20 consecutive quarters.

                 SECTION 2.03 Payment of Principal and Interest

                     Unless  otherwise  specified  pursuant to Section  2.01(d),
interest on the  Debentures  shall be  computed  on the basis of a 360-day  year
composed of twelve 30-day  months,  and for any period shorter than thirty days,
interest  will be computed on the basis of the actual  number of days elapsed in
such period.

                     Unless  otherwise  provided  with  respect  to a series  of
Debentures,

                    (i)       the  principal  and   Redemption   Price  of  and
                              interest  on each  Debenture  shall be payable in
                              such coin or  currency  of the  United  States of
                              America as at the time of payment is legal tender
                              for the payment of public and private debts;

                    (ii)      the  principal  and   Redemption   Price  of  any
                              Debenture  and  interest  payable  on the  Stated
                              Maturity Date (if other than an Interest  Payment
                              Date) or  Redemption  Date shall be payable  upon
                              surrender  of such  Debenture  at the  office  or
                              agency of any Paying Agent therefor; and

                    (iii)     interest  on  any  Debenture  shall  be  paid  on 
                              each Interest Payment Date therefor to the  Holder
                              thereof  at the close of  business  on the  Record
                              Date  therefor,  such  interest  to be  payable by
                              check mailed to the address of the Person entitled
                              thereto as such address  appears on the  Register;
                              provided however,  that (1) at the written request
                              of the  Holder of at least  $10,000,000  aggregate
                              principal  amount of  Debentures  received  by the
                              Registrar  not later than the Regular  Record Date
                              for such Interest  Payment Date,  interest accrued
                              on such Debenture will be payable by wire transfer
                              within   the   continental    United   States   in
                              immediately  available  funds to the bank  account
                              number of such Holder  specified  in such  request
                              and entered on the Register by the  Registrar  and
                              (2) payments made in respect of global  Debentures
                              shall be made in  immediately  available  funds to
                              the Depositary.

                     Except as  specified  pursuant  to Section  2.01 or Section
4.01(b) hereof,  interest on any Debenture  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 Debenture (or one or more  Predecessor  Debentures) is
registered  at the  close  of  business  on the  Regular  Record  Date  for such
interest.  Any interest on any Debenture which is payable, but is not punctually
paid  or  duly  provided  for,  on any  Interest  Payment  Date  (herein  called
"Defaulted  Interest")  shall forthwith cease to be payable to the Holder on the
relevant  Regular  Record  Date by virtue of having been such  Holder,  and such
Defaulted Interest may be paid by the Company,  at its election in each case, as
provided in Clause (1) and (2) below:

                     (1) The Company may elect to make payment of any  Defaulted
Interest  to the  Persons in whose  names the  Debentures  (or their  respective
Predecessor  Debentures)  are  registered  at the close of business on a Special
Record Date for the payment of such Defaulted Interest,  which shall be fixed in
the following manner. The Company shall, not less than 15 Business Days prior to
the date of the  proposed  payment,  notify the Trustee and the Paying  Agent in
writing  of the  amount  of  Defaulted  Interest  proposed  to be  paid  on each
Debenture and the date of the proposed payment, and at the same time the Company
shall  deposit with the Paying  Agent an amount of money equal to the  aggregate
amount  proposed to be paid in respect of such Defaulted  Interest or shall make
arrangements satisfactory to the Paying Agent for such deposit prior to the date
of the proposed  payment,  such money when deposited to be held in trust for the
benefit of the  Persons  entitled to such  Defaulted  Interest as in this Clause
provided.  The Special  Record Date for the payment of such  Defaulted  Interest
shall be the close of  business on the tenth  calendar  day prior to the date of
the proposed  payment.  The Trustee shall, in the name and at the expense of the
Company, cause notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be given to the Holders thereof, not less than 7
calendar days prior to such Special Record Date.  Notice of the proposed payment
of such  Defaulted  Interest and the Special  Record Date  therefor  having been
given,  such Defaulted  Interest shall be paid to the Persons in whose names the
Debentures (or their  respective  Predecessor  Debentures) are registered at the
close of  business  on such  Special  Record Date and shall no longer be payable
pursuant to the following Clause (2).

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

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

               SECTION 2.04 Execution, Authentication and Delivery

                     (a) The  Debentures  shall be  executed  on  behalf  of the
Company by its Chairman, its President or one of its Vice Presidents,  under its
corporate seal imprinted or reproduced  thereon and attested by its Secretary or
one of its  Assistant  Secretaries.  The  signature  of any such  Officer on the
Debentures may be manual or facsimile.

                     (b) Debentures  bearing the manual or facsimile  signatures
of  individuals  who were at any time the proper  Officers of the Company  shall
bind the  Company,  notwithstanding  that such  individuals  or any of them have
ceased to hold such  offices  prior to the  authentication  and delivery of such
Debentures or did not hold such offices at the date of such Debentures.

                     (c) No  Debenture  shall be entitled  to any benefit  under
this Indenture or be valid or obligatory for any purpose unless there appears on
such Debenture a Certificate of  Authentication  duly executed by the Trustee by
manual signature of a Trust Officer, and such Certificate of Authentication upon
any Debenture  shall be conclusive  evidence,  and the only evidence,  that such
Debenture has been duly authenticated and made available for delivery hereunder.

                     (d) The Trustee shall  authenticate and deliver  Debentures
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:

                          (1) a Board Resolution approving the form or forms and
terms of such Debentures;

                          (2) a Company Order requesting the  authentication and
delivery  of such  Debentures  and  stating  the  identity  of the Trust and the
aggregate  liquidation amount of the Trust Securities to be issued  concurrently
with such Debentures;

                          (3) unless previously  delivered,  this Indenture or a
supplemental  indenture  hereto  setting forth the form of such  Debentures  and
establishing the terms thereof;

                          (4) the Debentures of such series,  executed on behalf
of the Company in accordance with Section 2.04(a) hereof;

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

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

                              (ii)  such  Debentures,   when  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,  will have
been duly issued  under this  Indenture  and will  constitute  valid and legally
binding  obligations of the Company,  entitled to the benefits  provided by this
Indenture,  and  enforceable  in  accordance  with their terms,  subject,  as to
enforcement  to laws  relating to or  affecting  generally  the  enforcement  of
creditors' rights, including, without limitation, bankruptcy and insolvency laws
and to general principles of equity  (regardless of whether such  enforceability
is considered in a proceeding in equity or at law); and

                              (iii)  that  this  Indenture  or any  supplemental
indenture referred to in clause (3) above has been duly authorized, executed and
delivered  by the Company and is a valid  instrument  legally  binding  upon the
Company,  enforceable in accordance with its terms, subject as to enforcement to
laws relating to or affecting creditors' rights, including,  without limitation,
bankruptcy and insolvency laws and to general  principles of equity  (regardless
of whether such  enforceability  is  considered  in a proceeding in equity or at
law); and

                              (iv) that all  consents,  approvals  and orders of
any commission, governmental authority or agency required in connection with the
issuance and delivery of such Debentures have been obtained.

                     (e) an Officer's Certificate  certifying that no Default or
Event of Default has occurred and is continuing.

                     (f) The  Trustee  shall act as the  initial  authenticating
agent.  Thereafter,   the  Trustee  may  appoint  an  authenticating  agent.  An
authenticating agent may authenticate Debentures whenever the Trustee may do so.
Each  reference in this  Indenture  to  authentication  by the Trustee  includes
authentication  by such agent.  The Trustee shall pay any  authenticating  agent
appointed  by the  Trustee  reasonable  compensation  for its  services  and the
Trustee shall be reimbursed for such payment by the Company  pursuant to Section
7.07 hereof.  The  provisions set forth in Section 7.02,  Section 7.03,  Section
7.04 and Section 7.07 hereof shall be applicable to any authenticating agent.

                     SECTION 2.05 Registrar and Paying Agent

                     The  Company  shall  maintain  or cause  to be  maintained,
within or  outside  the  State of New  Jersey,  an  office  or agency  where the
Debentures  may be  presented  for  registration  of  transfer  or for  exchange
("Registrar"), a Paying Agent at whose office the Debentures may be presented or
surrendered for payment, and an office or agency where notices and demands to or
upon the Company in respect of the  Debentures and this Indenture may be served.
The Registrar  shall keep a register (the  "Register")  of the Debentures and of
their transfer and exchange.  The Company may have one or more co-Registrars and
one or more additional Paying Agents. The term Registrar includes any additional
registrar and the term Paying Agent  includes any additional  paying agent.  The
corporate  office of the Trustee in Newark,  New Jersey,  shall initially be the
Registrar for the Series A Debentures and agent for service of notice or demands
on the  Company,  and the Trustee  shall  initially  be the Paying Agent for the
Series A Debentures.

                     The  Company  shall  enter  into  an   appropriate   agency
agreement with any Registrar,  Paying Agent or co-Registrar  (if not the Company
or the Trustee or an affiliate of the Trustee).  The agreement  shall  implement
the provisions of this  Indenture  that relate to such agent.  The Company shall
give  prompt  written  notice to the Trustee and to the Holders of any change of
location  of such  office or agency.  If at any time the  Company  shall fail to
maintain or cause to be maintained  any such required  office or agency or shall
fail to furnish  the  Trustee  with the  address  thereof,  such  presentations,
surrenders,  notices  and  demands  may be made or served at the  address of the
Trustee set forth in Section 11.02 hereof.  The Company shall notify the Trustee
of the name and  address of any such agent.  If the Company  fails to maintain a
Registrar,  Paying Agent or agent for service of notices or demands, the Trustee
shall act as such and shall be entitled  to  appropriate  compensation  therefor
pursuant to Section 7.07 hereof. The Company or any Affiliate of the Company may
act Paying Agent,  Registrar or co-Registrar or agent for service of notices and
demands.

                     The  Company  may also from time to time  designate  one or
more  other  offices  or  agencies  where the  Debentures  may be  presented  or
surrendered  for any or all such purposes and may from time to time rescind such
designations.  The Company will give prompt written notice to the Trustee and to
the Holders of any such  designation or rescission and of any change in location
of any such other office or agency.

                SECTION 2.06 Paying Agent to Hold Money in Trust


                     Except as otherwise  provided  herein,  prior to or on each
due date of the principal of and premium (if any) and interest on any Debenture,
the Company shall deposit with the Paying Agent a sum of money sufficient to pay
such principal, premium (if any) and interest so becoming due. The Company shall
require  each Paying  Agent  (other than the Trustee or the Company) to agree in
writing that such Paying Agent shall hold in trust for the benefit of Holders or
the Trustee all money held by the Paying  Agent for the payment of  principal of
and premium (if any) and interest on the Debentures and shall notify the Trustee
of any Default by the Company in making any such payment. At any time during the
continuance of any such Default, the Paying Agent shall, upon the request of the
Trustee, forthwith pay to the Trustee all money so held in trust and account for
any money  disbursed  by it. The Company at any time may require as Paying Agent
to pay all  money  held  by it to the  Trustee  and to  account  for  any  money
disbursed by it. Upon doing so, the Paying Agent shall have no further liability
for the money so paid over to the Trustee.  If the Company,  a Subsidiary  or an
Affiliate of either of them acts as Paying Agent,  it shall  segregate the money
held by it as Paying Agent and hold it as a separate trust fund.

                       SECTION 2.07 Debentureholder Lists

                     The  Trustee  shall  preserve  in as  current  a form as is
reasonably  practicable  the most recent list  available  to it of the names and
addresses of Debentureholders.  If the Trustee is not the Registrar, the Company
shall cause to be furnished to the Trustee on or before the Record Date for each
Interest  Payment  Date and at such other  times as the  Trustee  may request in
writing,  within five Business Days of such request, a list, in such form as the
Trustee may reasonably require of the names and addresses of Debentureholders.

                       SECTION 2.08 Transfer and Exchange

                     When  Debentures  are  presented  to  the  Registrar  or  a
co-Registrar  with a request to register the transfer or to exchange them for an
equal  principal  amount of  Debentures  of the same series of other  authorized
denominations, the Registrar shall register the transfer or make the exchange as
requested  if its  reasonable  requirements  for such  transactions  are met. To
permit  registrations  of transfer and exchanges,  the Company shall execute and
the Trustee shall authenticate Debentures, all at the Registrar's request.

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

                     The Company shall not require  payment of a service  charge
for any registration of transfer or exchange of Debentures,  but the Company may
require  payment  of a sum  sufficient  to pay all taxes,  assessments  or other
governmental  charges that may be imposed in connection with the registration of
the transfer or exchange of Debentures from the Debentureholder  requesting such
transfer or exchange  (other than any  exchange of a temporary  Debenture  for a
definitive Debenture not involving any change in ownership).

                     The  Company  shall  not  be  required  to  make,  and  the
Registrar  need not register,  transfers or exchanges of (a) any Debenture for a
period  beginning  at the  opening of  business  15 days before the mailing of a
notice of redemption  of  Debentures  and ending at the close of business on the
day of such mailing or (b) any  Debenture  selected,  called or being called for
redemption,  except,  in the case of any  Debenture to be redeemed in part,  the
portion thereof not to be redeemed.

                       SECTION 2.09 Replacement Debentures

                     If  (a)  any  mutilated  Debenture  is  surrendered  to the
Company or the Trustee,  or (b) the Company and the Trustee receive  evidence to
their satisfaction of the destruction, loss or theft of any Debenture, and there
is delivered  to the Company and the Trustee such  Debenture or indemnity as may
be  required  by them to save each of them  harmless,  then,  in the  absence of
notice to the Company or the Trustee that such  Debenture has been acquired by a
bona  fide  purchaser,  the  Company  shall  execute  in  exchange  for any such
mutilated Debenture or in lieu of any such destroyed,  lost or stolen Debenture,
a new  Debenture  of the same  series  and of like tenor and  principal  amount,
bearing  a number  not  contemporaneously  outstanding,  and the  Trustee  shall
authenticate and make such new Debenture available for delivery.

                     In case  any  such  mutilated,  destroyed,  lost or  stolen
Debenture  has become or is about to become due and  payable,  or is about to be
redeemed  by the  Company  pursuant  to  Article 3 hereof,  the  Company  in its
discretion  may,  instead  of  issuing a new  Debenture,  pay or  purchase  such
Debenture, as the case may be.

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

                     Every new Debenture issued pursuant to this Section 2.09 in
lieu of any mutilated,  destroyed,  lost or stolen Debenture shall constitute an
original  additional  contractual  obligation of the Company (whether or not the
mutilated, destroyed, lost or stolen Debenture shall be at any time enforceable)
and shall be entitled to all benefits of this Indenture equally and ratably with
any and all other Debentures duly issued hereunder.

                     The provisions of this Section 2.09 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 Debentures.

     SECTION 2.10 Outstanding Debentures; Determinations of Holders' Action

                     Debentures  outstanding  at any time are all the Debentures
authenticated by the Trustee except for those canceled by it, those delivered to
it for  cancellation,  those  mutilated,  destroyed,  lost or stolen  Debentures
referred to in Section 2.09 hereof,  those  redeemed by the Company  pursuant to
Article 3 hereof, and those described in this Section 2.10 as not outstanding. A
Debenture does not cease to be  outstanding  because the Company or a Subsidiary
or Affiliate thereof holds the Debenture; provided, however, that in determining
whether the Holders of the requisite  principal  amount of Debentures have given
or concurred in any request, demand,  authorization,  direction, notice, consent
or  waiver  hereunder,  Debentures  owned  by the  Company  or a  Subsidiary  or
Affiliate  (other than any Trust so long as any of the  Preferred  Securities of
such  Trust  are  outstanding)  shall  be  disregarded  and  deemed  not  to  be
outstanding.

                     Subject to the foregoing,  only  Debentures  outstanding at
the time of such  determination  shall be considered  in any such  determination
(including determinations pursuant to Articles 3, 6 and 9).

                     If a Debenture is replaced pursuant to Section 2.09 hereof,
it ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Debenture is held by a bona fide purchaser.

                     If the Paying  Agent  (other than the  Company)  holds,  in
accordance with this  Indenture,  at the Stated Maturity Date or on a Redemption
Date,  money  sufficient  to pay  the  Debentures  payable  on that  date,  then
immediately on the Stated Maturity Date or such Redemption Date, as the case may
be, such Debentures shall cease to be outstanding, and interest, if any, on such
Debentures shall cease to accrue.

                        SECTION 2.11 Temporary Debentures

                     The Company may execute temporary Debentures,  and upon the
Company's  Order,  the  Trustee  shall  authenticate  and  make  such  temporary
Debentures  available  for  delivery.  Temporary  Debentures  shall be  printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination,  in the same series and principal  amount and of like tenor as the
definitive Debentures in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the Officers of the
Company  executing such Debentures may determine,  as conclusively  evidenced by
their execution of such Debentures.

                     After  the  preparation  of  definitive   Debentures,   the
temporary Debentures shall be exchangeable for definitive Debentures of the same
series upon surrender of the temporary Debentures at the office or agency of the
Company  designated  for such purpose  pursuant to Section 2.05 hereof,  without
charge to the Holders  thereof.  Upon surrender for  cancellation  of any one or
more temporary Debentures,  the Company shall execute a like principal amount of
definitive  Debentures of the same series of authorized  denominations,  and the
Trustee,  upon  receipt of a Company  Order,  shall  authenticate  and make such
Debentures available for delivery in exchange therefor.  Until so exchanged, the
temporary  Debentures  shall in all  respects be  entitled to the same  benefits
under this Indenture as definitive Debentures.

                         SECTION 2.12 Book-Entry System

                     In order to utilize a book-entry-only system for all or any
portion of the  Debentures of any series,  all or a portion of the Debentures of
any series may be issued in the form of one or more fully registered  Debentures
of the same series for the aggregate principal amount of such Debentures of each
Issue Date, interest rate and Stated Maturity Date (a "global Debenture"), which
global  Debenture  shall  be  registered  in the  name  of the  depositary  (the
"Depositary")  selected  by the  Company  or in the  name of  such  Depositary's
nominee.  Each  global  Debenture  shall  be  delivered  by the  Trustee  to the
Depositary or pursuant to the  Depositary's  instruction and shall bear a legend
substantially to the following effect:  "Except as otherwise provided in Section
2.12 of the Indenture,  this Debenture may be  transferred,  in whole but not in
part, only to another nominee of the Depositary or to a successor  Depositary or
to a nominee of such successor Depositary."

                     Notwithstanding any other provision of this Section 2.12 or
of Section 2.08 hereof,  a global  Debenture may be transferred in whole but not
in part and in the manner provided in Section 2.08 hereof,  only by a nominee of
the  Depositary  for such series,  or by the Depositary or any such nominee of a
successor Depositary for such series selected or approved by the Company or to a
nominee of such successor Depositary.

                     If (i) at any time the Depositary for global  Debentures of
any series of Debentures  notifies the Company that it is unwilling or unable to
continue  as  Depositary  for  such  global  Debentures  or if at any  time  the
Depositary for such global  Debentures  shall no longer be registered or in good
standing under the Exchange Act or other applicable statute or regulation, and a
successor  Depositary for such global Debentures is not appointed by the Company
within 90 days after the Company  receives  such notice or becomes aware of such
condition,  as the  case  may  be,  (ii)  the  Company  determines  in its  sole
discretion,  that the Debentures of any series shall no longer be represented by
one or  more  global  Debentures  and  delivers  to  the  Trustee  an  Officer's
Certificate  evidencing such  determination  or (iii) an Event of Default occurs
and is  continuing,  then the  provisions  of this  Section 2.12 shall no longer
apply to the Debentures of such series.  In such event, the Company will execute
and the  Trustee,  upon  receipt of an  Officer's  Certificate  evidencing  such
determination by the Company,  will authenticate and deliver  Debentures of such
series  and  of  like  tenor  in  definitive   registered  form,  in  authorized
denominations,  and in aggregate  principal amount equal to the principal amount
of the global Debentures of such series in exchange for such global  Debentures.
Upon the  exchange  of  global  Debentures  for such  Debentures  in  definitive
registered  form  without  coupons,  in  authorized  denominations,  the  global
Debentures  shall be cancelled by the Trustee.  Such  Debentures  in  definitive
registered  form  issued in  exchange  for global  Debentures  pursuant  to this
Section  2.12  shall  be  registered  in  such  names  and  in  such  authorized
denominations  as the Depositary,  pursuant to  instructions  from its direct or
indirect  participants  or otherwise,  shall  instruct the Trustee.  The Trustee
shall deliver such  Debentures to the Persons in whose names such Debentures are
so registered.

                     Except as provided above, owners of beneficial interests in
a global  Debenture  shall not be  entitled  to  receive  physical  delivery  of
Debentures in definitive form and will not be considered the Holders thereof for
any purpose under this Indenture.

                     Members of or participants in the Depositary  shall have no
rights under this Indenture  with respect to any global  Debenture held on their
behalf by the Depositary,  and such  Depositary or its nominee,  as the case may
be, may be treated by the Company,  the Trustee, and any agent of the Company or
the Trustee as the Holder of such global Debentures for all purposes whatsoever.
Notwithstanding  the foregoing,  nothing  herein shall prevent the Company,  the
Trustee,  or any agent of the Company or the Trustee,  from giving effect to any
written  certification proxy or other authorization  furnished by the Depositary
or impair,  as between  the  Depositary  and its  members or  participants,  the
operation of customary practices governing exercise of the rights of a Holder of
any  Debenture,  including  without  limitation the granting of proxies or other
authorization   of   participants   to  give  or  take  any   request,   demand,
authorization, direction, notice, consent, waiver or other action which a Holder
is entitled to give or take under this Indenture.

                     SECTION 2.13 Cancellation

                     All Debentures  surrendered for payment,  redemption by the
Company  pursuant  to Article 3 hereof or  registration  of transfer or exchange
shall, if surrendered to any Person other than the Trustee,  be delivered to the
Trustee and shall be promptly  canceled by the  Trustee.  The Company may at any
time  deliver  to  the  Trustee  for  cancellation  any  Debentures   previously
authenticated  and made available for delivery  hereunder  which the Company may
have acquired in any manner whatsoever, and all Debentures so delivered shall be
promptly  canceled  by the  Trustee.  The  Company  may not reissue or issue new
Debentures  to replace  Debentures  it has paid or  delivered to the Trustee for
cancellation. No Debentures shall be authenticated in lieu of or in exchange for
any  Debentures  canceled as provided in this Section 2.13,  except as expressly
permitted by this Indenture.  All canceled  Debentures held by the Trustee shall
be destroyed by the Trustee,  and the Trustee  shall  deliver a  certificate  of
destruction to the Company.


                                    ARTICLE 3
                                   REDEMPTION

                   SECTION 3.01 Redemption: Notice to Trustee

                     (a) The Series A Debentures are subject to redemption prior
to maturity as provided therein.

                     (b) The  redemption  terms  for any  additional  series  of
Debentures  shall be as specified in the  supplemental  indenture  creating such
series of Debentures.

                     (c) If any or  all  of the  Debentures  are to be  redeemed
pursuant to Section  3.01 (a) or (b) hereof,  the Company  shall  deliver to the
Trustee at least 45 days prior to the Redemption Date a Company Order specifying
the series and principal  amount of Debentures to be redeemed and the Redemption
Date and  Redemption  Price for such  Debentures.  Such  Company  Order shall be
accompanied by a Board Resolution authorizing such redemption. If the Debentures
of a series are held by a Trust,  the Company  shall also deliver a copy of such
Company Order to the Property Trustee for such Trust.

               SECTION 3.02 Selection of Debentures to be Redeemed


                     If less than all the outstanding Debentures of a series are
to be redeemed at any time,  the Trustee  shall  select the  Debentures  of such
series to be redeemed by lot or by any other method the Trustee  considers  fair
and  appropriate.  The Trustee shall make the selection at least 30 but not more
than 60 days before the  Redemption  Date from  outstanding  Debentures  of such
series not previously  called for redemption.  Provisions of this Indenture that
apply to Debentures  called for redemption  also apply to portions of Debentures
called for  redemption.  The Trustee  shall  notify the Company  promptly of the
Debentures or portions of Debentures to be redeemed.

                        SECTION 3.03 Notice of Redemption

                     At  least  30 days but not  more  than 60 days  before  the
Redemption  Date,  the  Trustee,  in the  Company's  name  and at the  Company's
expense,  shall mail or cause to be mailed a notice of redemption by first-class
mail,  postage  prepaid,  to each  Holder of  Debentures  to be redeemed at such
Holder's last address as it appears in the Register.

                     The notice of redemption  shall  identify the Debentures to
be redeemed, the provision of the Debentures or this Indenture pursuant to which
the Debentures called for redemption are being redeemed and shall state:

                     (1) the Redemption Date;

                     (2) the Redemption Price;

                     (3) the name and address of the Paying Agent;

                     (4) that  payment  of the  Redemption  Price of  Debentures
called for redemption will be made only upon surrender of such Debentures to the
Paying Agent;

                     (5) if fewer  than all the  outstanding  Debentures  of any
series are to be  redeemed,  the  identification  and  principal  amounts of the
particular Debentures to be redeemed and that, on and after the Redemption Date,
upon  surrender of such  Debentures,  a new  Debenture or Debentures of the same
series  and of like  tenor and in a  principal  amount  equal to the  unredeemed
portion thereof will be issued; and

                     (6)  that,  unless  the  Company  defaults  in  paying  the
Redemption Price of the Debentures called for redemption,  plus accrued interest
thereon to the Redemption Date, interest will cease to accrue on such Debentures
on and after the Redemption Date.

                     Any  notice  of  redemption  given in the  manner  provided
herein shall be  conclusively  presumed to have been given,  whether or not such
notice is actually received.  Failure to mail any notice or defect in the mailed
notice or the mailing  thereof in respect of any Debenture  shall not affect the
validity of the redemption of any other Debenture.

                   SECTION 3.04 Effect of Notice of Redemption

                     After  notice  of  redemption  has been  given,  Debentures
called for redemption shall become due and payable on the Redemption Date and at
the Redemption  Price and from and after the Redemption Date (unless the Company
shall default in the payment of the Redemption Price and accrued interest), such
Debentures  shall cease to bear interest.  Upon the later of the Redemption Date
and  the  date  such  Debentures  are  surrendered  to the  Paying  Agent,  such
Debentures shall be paid at the Redemption  Price,  plus accrued interest to the
Redemption  Date,  provided that  installments of interest on Debentures with an
Interest  Payment  Date  which is on or prior to the  Redemption  Date  shall be
payable  to  the  Holders  of  such  Debentures,  or  one  or  more  Predecessor
Debentures,  registered  as such at the close of business on the Regular  Record
Dates therefor according to their terms and provisions.

                    SECTION 3.05 Deposit of Redemption Price

                     On or prior  to the  Redemption  Date,  the  Company  shall
deposit  with the Paying  Agent (or if the Company or an Affiliate is the Paying
Agent,  shall  segregate and hold in trust or cause such  Affiliate to segregate
and hold in trust) money  sufficient to pay the Redemption Price of, and accrued
interest on, all Debentures to be redeemed on that  Redemption  Date. The Paying
Agent shall  return to the Company any money in excess of the amount  sufficient
to pay the  Redemption  Price of, and accrued  interest on, all Debentures to be
redeemed  and any  interest  accrued on the amount  deposited  pursuant  to this
Section 3.05.

                    SECTION 3.06 Debentures Redeemed in Part

                     Upon surrender of a Debenture that is redeemed in part, the
Trustee shall authenticate for the Holder a new Debenture of the same series and
in a principal amount equal to the unredeemed portion of such Debenture.

                                    ARTICLE 4
                                    COVENANTS

                       SECTION 4.01 Payment of Debentures

                     (a) The Company shall pay the principal of and premium,  if
any, and interest (including interest accruing during an Extension Period and/or
on or after the filing of a petition in bankruptcy or reorganization relating to
the Company,  whether or not a claim for post-filing interest is allowed in such
proceeding)  on the  Debentures  on or  prior  to the  dates  and in the  manner
provided in such  Debentures or pursuant to this  Indenture.  An  installment of
principal,  premium,  if  any,  or  interest  shall  be  considered  paid on the
applicable  due date if on such date the Trustee or the Paying Agent  holds,  in
accordance with this Indenture,  money sufficient to pay all of such installment
then due.  With  respect to any  Debenture,  the Company  shall pay  interest on
overdue  principal and interest on overdue  installments of interest  (including
interest  accruing during an Extension Period and/or on or after the filing of a
petition in bankruptcy or reorganization relating to the Company, whether or not
a claim for post-filing  interest is allowed in such proceeding),  to the extent
lawful,  at the rate per annum borne by such  Debenture,  compounded  quarterly.
Interest on overdue  interest  shall  accrue from the date such  amounts  become
overdue.

                     (b)  Notwithstanding  the  provisions  of  Section  4.01(a)
hereof or any other provision herein to the contrary, the Company shall have the
right in its  sole and  absolute  discretion  at any time and from  time to time
while the  Debentures  of any  series  are  outstanding,  so long as no Event of
Default  with  respect  to  such  series  of  Debentures  has  occurred  and  is
continuing,  to defer  payments of interest by extending  the  interest  payment
period for such series of Debentures for the Extension  Period, if any, for such
series of  Debentures,  provided  that such  Extension  Period  shall not extend
beyond the Stated  Maturity  Date or  Redemption  Date of any  Debenture of such
series,  and  provided  further  that at the end of each  Extension  Period  the
Company shall pay all interest then accrued and unpaid  (together  with interest
thereon to the extent permitted by applicable law at the rate per annum borne by
such Debentures).  Prior to the termination of an Extension Period,  the Company
may shorten or may further extend the interest payment period for such series of
Debentures,  provided that such Extension Period together with all such previous
and  further  extensions  may not exceed the maximum  duration of the  Extension
Period for such series of Debentures  or extend beyond the Stated  Maturity Date
or Redemption  Date of any Debenture of such series.  The Company shall give the
Trustee  notice of the Company's  election to begin an Extension  Period for any
series of  Debentures  and any  shortening  or  extension  thereof  at least one
Business  Day prior to the date the notice of the record or payment  date of the
related  distribution on the Preferred  Securities  issued by the Trust which is
the Holder of the  Debentures  of such series or the date payment of interest on
such Debentures is required to be given to any national  securities  exchange on
which  such  Preferred  Securities  or  Debentures  are  then  listed  or  other
applicable  self-regulatory  organization,  but in any  event  not less than two
Business  Days prior to the Record  Date fixed by the Company for the payment of
such  interest.  The  Company  shall give or cause the Trustee to give notice (a
form of which shall be provided by the Company to the Trustee) of the  Company's
election  to begin an  Extension  Period to the  Holders  by first  class  mail,
postage prepaid.

                SECTION 4.02 Prohibition Against Dividends, etc.

                     The Company  shall not declare or pay any  dividend  on, or
redeem, purchase,  acquire or make a liquidation payment with respect to, any of
its Capital  Stock (i) during an  Extension  Period,  (ii) if at such time there
shall have occurred and is continuing any Default or Event of Default,  or (iii)
if the  Company  shall  be in  default  with  respect  to its  payment  or other
obligations under any Guarantee Agreement.

                            SECTION 4.03 SEC Reports

                     The  Company  shall file with the  Trustee,  within 15 days
after it  files  them  with the SEC,  copies  of its  annual  report  and of the
information,  documents  and other reports (or copies of such portions of any of
the  foregoing  as the SEC may by rules  and  regulations  prescribe)  which the
Company is required to file with the SEC  pursuant to Section 13 or 15(d) of the
Exchange  Act. If the Company is not subject to the  reporting  requirements  of
Section 13 or 15(d) of the Exchange Act, the Company shall file with the Trustee
such information, documents and other reports (or copies of such portions of any
of the foregoing as the SEC may by rules and  regulations  prescribe)  which are
specified  in Sections 13 or 15(d) of the Exchange  Act. The Company  shall also
comply with the provisions of Section 314(a) of the TIA.

                      SECTION 4.04 Compliance Certificates

                     (a) The Company  shall  deliver to the  Trustee,  within 90
days  after  the  end of  each  of the  Company's  fiscal  years,  an  Officer's
Certificate  stating  whether or not the signer knows of any Default or Event of
Default.  Such  certificate  shall  contain a  certification  from the principal
executive officer,  principal financial officer or principal  accounting officer
of the Company as to his or her knowledge of the Company's  compliance  with all
conditions  and  covenants  under this  Indenture.  For purposes of this Section
4.04(a),  such  compliance  shall be determined  without regard to any period of
grace or requirement of notice  provided under this  Indenture.  If such Officer
does know of such a Default or Event of Default, the Officer's Certificate shall
describe any such Default or Event of Default,  and its status.  Such  Officer's
Certificate need not comply with Sections 11.04 and 11.05 hereof.

                     (b)  The   Company   shall   deliver  to  the  Trustee  any
information   reasonably  requested  by  the  Trustee  in  connection  with  the
compliance by the Trustee or the Company with the TIA.

                    SECTION 4.05 Further Instruments and Acts

                     Upon request of the Trustee,  the Company shall execute and
deliver such further  instruments  and do such further acts as may be reasonably
necessary  or  proper  to  carry  out  more  effectively  the  purposes  of this
Indenture.

                       SECTION 4.06 Payments for Consents

                     Neither the Company nor any Subsidiary  shall,  directly or
indirectly,  pay or  cause  to be  paid  any  consideration,  whether  by way of
interest,  fee or  otherwise,  to any  Holder  of  any  Debentures  for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Debentures  unless such  consideration is offered to be
paid or agreed to be paid to all Holders of the Debentures who so consent, waive
or agree to amend in the time frame set forth in the documents  soliciting  such
consent, waiver or agreement.

                   SECTION 4.07 Payment of Expenses of Trust I

                     The Company covenants for the benefit of the Holders of the
Series A Debentures to pay all of the obligations, costs and expenses of Trust I
in accordance with Section 2.03(b) of the Trust I Agreement and to pay the taxes
of Trust I in accordance  with Section 2.03(c) of the Trust I Agreement in order
to permit  Trust I to make  distributions  on and  redemptions  of the  Series A
Preferred Securities in accordance with Article IV of the Trust I Agreement.


                                    ARTICLE 5
                              SUCCESSOR CORPORATION

                  SECTION 5.01 When the Company May Merge, Etc.

                     The Company may not consolidate with or merge with or into,
or sell,  convey,  transfer or lease its properties and assets as an entirety or
substantially  as  an  entirety  (either  in  one  transaction  or a  series  of
transactions) to, any Person unless:

                     (1) the Person formed by or surviving such consolidation or
merger or to which such sale, conveyance, transfer or lease shall have been made
(the "Successor") if other than the Company, (a) is organized and existing under
the laws of the United States of America or any State thereof or the District of
Columbia, and (b) shall expressly assume by a supplemental  indenture,  executed
and  delivered  to the Trustee,  in form  satisfactory  to the Trustee,  all the
obligations of the Company under the Debentures and the Indenture;

                     (2)  immediately  prior to and after giving  effect to such
transaction  (and treating any  Indebtedness  which becomes an obligation of the
Successor  Person or any  Subsidiary as a result of such  transaction  as having
been  incurred  by  such  Person  or  such   Subsidiary  at  the  time  of  such
transaction),  no  Default  or Event  of  Default  shall  have  occurred  and be
continuing; and

                     (3)  the  Company  delivers  to the  Trustee  an  Officer's
Certificate  and an Opinion of Counsel,  each stating  that such  consolidation,
merger,  sale,  conveyance,  transfer or lease and such  supplemental  indenture
comply with this Indenture.

                     The  Successor  will be the  successor to the Company,  and
will be  substituted  for, and may exercise every right and power and become the
obligor on the  Debentures  with the same  effect as if the  Successor  had been
named as the Company herein but, in the case of a sale, conveyance,  transfer or
lease of all or substantially all of the assets of the Company,  the predecessor
Company will not be released  from its  obligation  to pay the  principal of and
premium, if any, and interest on the Debentures.


                                    ARTICLE 6
                              DEFAULTS AND REMEDIES

                         SECTION 6.01 Events of Default

                     An "Event of Default" occurs with respect to the Debentures
of any series if one of the following shall have occurred and be continuing:

                     (1) The  Company  defaults  in the  payment,  when  due and
payable,  of (a)  interest  on any  Debenture  of that  series  and the  default
continues for a period of 30 days; provided, that during an Extension Period for
the Debentures of that series, failure to pay interest on the Debentures of that
series shall not constitute a Default or Event of Default hereunder,  or (b) the
principal of or premium,  if any, on any Debentures of that series when the same
becomes due and payable on the Stated Maturity Date thereof,  upon acceleration,
on any Redemption Date, or otherwise;

                     (2) The Company  defaults in the performance of or fails to
comply with any of its other  covenants or agreements in the  Debentures of that
series  or this  Indenture  or in any  supplemental  indenture  under  which the
Debentures of that series may have been issued and such failure continues for 60
days after receipt by the Company of a "Notice of Default";

                     (3) The  Company  pursuant  to or within the meaning of any
Bankruptcy Law:

                          (a) commences a voluntary case or proceeding;

                          (b)  consents  to the  entry  of an order  for  relief
against it in an involuntary case or proceeding;

                          (c) consents to the  appointment  of a Custodian of it
or for all or  substantially  all of its property,  and such  Custodian is  not 
discharged within 60 days;

                          (d) makes a general  assignment for the benefit of its
creditors; or

                          (e) admits in writing its  inability  to pay its debts
generally as they become due; or

                     (4) A court of  competent  jurisdiction  enters an order or
decree under any Bankruptcy Law that:

                          (a)  is  for  relief   against   the   Company  in  an
involuntary case or proceeding;

                          (b)  appoints a  Custodian  of the  Company for all or
substantially all of its properties;

                          (c) orders the liquidation of the Company;

                          (d) and in each  case  the  order  or  decree  remains
unstayed and in effect for 60 days.

                     The foregoing will constitute an Event of Default  whatever
the  reason  for any such  Event of  Default  and  whether  it is  voluntary  or
involuntary  or is effected  by  operation  of law or pursuant to any  judgment,
decree  or  order  of  any  court  or  any  order,  rule  or  regulation  of any
administrative or governmental body.

                     The term  "Bankruptcy  Law"  means  Title 11 of the  United
States  Code,  or any  similar  federal or state law for the relief of  debtors.
"Custodian" means any receiver,  trustee,  assignee,  liquidator,  sequestrator,
custodian or similar official under any Bankruptcy Law.

                     A Default under clause (2) above is not an Event of Default
until (i) the  Trustee  provides a "Notice  of  Default"  to the  Company or the
Holders of at least 25% in aggregate  principal amount of the Debentures of that
series at the time  outstanding  or, if that series of  Debentures  is held by a
Trust,  the  holders  of at least  25% in  aggregate  liquidation  amount of the
outstanding  Preferred Securities of that Trust provide a "Notice of Default" to
the Company and the  Trustee  and (ii) the  Company  does not cure such  Default
within the time specified in clause (2) above after receipt of such notice.  Any
such notice must specify the Default,  demand that it be remedied and state that
such notice is a "Notice of Default."

                            SECTION 6.02 Acceleration

                     If any Event of Default with respect to the  Debentures  of
any series  other than an Event of  Default  under  clause (3) or (4) of Section
6.01 hereof occurs and is continuing, the Trustee or the Holders of at least 25%
in aggregate  principal amount of the Debentures of that series then outstanding
may declare the principal of all the  Debentures of that series due and payable,
provided  that in the case of a series of  Debentures  then held by a Trust,  if
upon an Event of Default  with  respect  to the  Debentures  of that  series the
Trustee has, or the Holders of at least 25% in aggregate principal amount of the
Debentures  of  that  series  have,  failed  to  declare  the  principal  of the
Debentures of that series to be immediately  due and payable,  the holders of at
least  25%  in  aggregate   liquidation  amount  of  the  outstanding  Preferred
Securities  of that  Trust  shall  have such right by a notice in writing to the
Company and the Trustee.  If an Event of Default  specified in clause (3) or (4)
of  Section  6.01  hereof  occurs,  the  principal  of and  interest  on all the
Debentures  shall ipso facto become and be immediately  due and payable  without
any declaration or other act on the part of the Trustee or any Debentureholders.
Upon such an  acceleration,  such principal,  together with all interest accrued
thereon, shall be due and payable immediately.

                     The Holders of at least a majority in  aggregate  principal
amount of the Debentures of that series at the time  outstanding,  in each case,
by notice to the Trustee,  may rescind such an acceleration and its consequences
if the  rescission  would not  conflict  with any  judgment or decree and if all
existing  Events of Default with respect to such series of Debentures  have been
cured or waived  except  nonpayment of principal or interest that has become due
solely  because of  acceleration,  provided that if the principal of a series of
Debentures  has been  declared  due and payable by the holders of the  Preferred
Series of a Trust,  no  rescission  of  acceleration  will be  effective  unless
consented  to by the  holders of at least a majority  in  aggregate  liquidation
amount of the  Preferred  Securities  of that Trust.  No such  rescission  shall
affect any subsequent Default or impair any right consequent thereto.

                           SECTION 6.03 Other Remedies

                     If an  Event  of  Default  occurs  and is  continuing,  the
Trustee  may,  in its own name or as  trustee of an  express  trust,  institute,
pursue and prosecute any proceeding,  including,  without limitation, any action
at law or suit in equity  or other  judicial  or  administrative  proceeding  to
collect  the  payment of  principal  of or  premium,  if any, or interest on the
Debentures of the series that is in default,  to enforce the  performance of any
provision of the  Debentures  of that series or this  Indenture or to obtain any
other available remedy.

                     The Trustee may maintain a  proceeding  even if it does not
possess any of the  Debentures or does not produce any of the  Debentures in the
proceeding.  A delay or  omission by the  Trustee,  any  Debentureholder  or the
holders of Preferred  Securities in exercising any right or remedy accruing upon
an Event of Default shall not impair such right or remedy or constitute a waiver
of, or  acquiescence  in, such Event of Default.  No remedy is  exclusive of any
other remedy. All available remedies are cumulative.

                     SECTION 6.04 Waiver of Past Defaults

                     If a Default or Event of Default  with  respect to a series
of Debentures has occurred and is continuing, the Holders of at least a majority
in  aggregate  principal  amount of the  Debentures  of that  series at the time
outstanding, or, if that series of Debentures is held by a Trust, the holders of
at least a majority in aggregate  liquidation amount of the Preferred Securities
of that Trust, in each case by notice to the Trustee and the Company,  may waive
an existing Default or Event of Default and its consequences except a Default or
Event of Default in the  payment of the  principal  of or  premium,  if any,  or
interest on any Debenture of that series.  When a Default or Event of Default is
waived,  it is deemed  cured and shall cease to exist,  but no such waiver shall
extend to any  subsequent  or other  Default  or Event of  Default or impair any
consequent right.

                        SECTION 6.05 Control by Majority

                     The Holders of at least a majority in  aggregate  principal
amount of the  Debentures of each series  affected (with each such series voting
as a class) or, if that series of Debentures is held by a Trust,  the holders of
at least a majority in aggregate  liquidation amount of the Preferred Securities
of that  Trust,  may  direct  the  time,  method  and  place of  conducting  any
proceeding for any remedy available to the Trustee or of exercising any trust or
power  conferred on the Trustee.  However,  the Trustee may refuse to follow any
direction  that  conflicts  with  law or  this  Indenture  or that  the  Trustee
determines  in  good  faith  is  unduly  prejudicial  to  the  rights  of  other
Debentureholders or may involve the Trustee in personal  liability.  The Trustee
may take any other action deemed proper by the Trustee which is not inconsistent
with  such  direction,  including  withholding  notice  to  the  Holders  of the
Debentures  of  continuing  default  (except in the payment of the  principal of
(other than any mandatory sinking fund payment) or premium,  if any, or interest
on any Debentures) if the Trustee considers it in the interest of the Holders of
the Debentures to do so.

                        SECTION 6.06 Limitation on Suits

                     Except as provided  in Section  6.07  hereof,  no Holder of
Debentures or holder of Preferred Securities of the Trust which is the Holder of
that series of Debentures  may pursue any remedy with respect to this  Indenture
or the Debentures unless:

                     (1)  the  Holders  of  Debentures  or the  holders  of such
Preferred Securities give to the Trustee written notice stating that an Event of
Default with respect to the corresponding Debentures is continuing;

                     (2) the  Holders  of at least  25% in  aggregate  principal
amount  of the  Debentures  of that  series  or the  holders  of at least 25% in
aggregate liquidation amount of such Preferred Securities make a written request
to the Trustee to pursue a remedy;

                     (3)  the  Holders  of  Debentures  or the  holders  of such
Preferred  Securities provide to the Trustee  reasonable  security and indemnity
against any loss, liability or expense satisfactory to the Trustee;

                     (4) the Trustee does not comply with the request  within 60
days after  receipt of the notice,  the  request  and the offer of security  and
indemnity; and

                     (5) during  such 60 day  period,  the Holders of at least a
majority in aggregate  principal  amount of the Debentures of that series or the
holders of at least a majority in aggregate liquidation amount of such Preferred
Securities do not give the Trustee a direction inconsistent with the request.

                     A Holder of Debentures or a holder of Preferred  Securities
may not use this Indenture to prejudice the rights of another Debentureholder or
a holder of  Preferred  Securities  or to obtain a preference  or priority  over
another Debentureholder or holder of Preferred Securities.

                SECTION 6.07 Rights of Holders to Receive Payment

                     Notwithstanding any other provision of this Indenture,  the
right of any Holder to receive  payment of the principal of and premium (if any)
or interest on the  Debentures  held by such Holder,  on or after the respective
due dates expressed in the Debentures (in the case of interest,  as the same may
be extended  pursuant to Section  4.01(b)  hereof) or any  Redemption  Date,  is
absolute  and  unconditional  and such right and the right to bring suit for the
enforcement of any such payment on or after such  respective  dates shall not be
impaired  or affected  adversely  without  the  consent of such  Holder.  If the
Debentures  of a series  are then  held by a Trust,  each  holder  of  Preferred
Securities of such Trust shall have the right to bring suit directly against the
Company for the  enforcement  of payment to such holder in respect of Debentures
of such series in a principal amount equal to the aggregate  liquidation  amount
of the Preferred Securities of such holder.

                   SECTION 6.08 Collection Suit by the Trustee

                     If an Event of Default  described in Section 6.01(1) hereof
occurs and is continuing,  the Trustee may recover  judgment in its own name and
as  trustee of an  express  trust  against  the  Company  or any  obligor on the
Debentures  for the whole amount owing with  respect to the  Debentures  and the
amounts provided for in Section 7.07 hereof.

                SECTION 6.09 The 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 its properties or assets,
the Trustee shall be entitled and empowered,  by intervention in such proceeding
or otherwise:

                     (1) to file and prove a claim  for the whole  amount of the
principal of and premium,  if any,  and interest on the  Debentures  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 the reasonable  compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel) and
of the Holders allowed in such judicial proceeding; and

                     (2) to collect  and  receive  any moneys or other  property
payable or  deliverable  on any such claims and to distribute  the same; and any
Custodian 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 the
Trustee  any  amount  due  it  for  the   reasonable   compensation,   expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof.

                     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
Debentures 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 6.10 Priorities

                     If the Trustee  collects any money pursuant to this Article
6, it shall,  subject to Article 10 hereof,  pay out the money in the  following
order:

                  FIRST: to the Trustee for  amounts  due under  Section  7.07
                         hereof;

                 SECOND: to Holders of  Debentures in respect of which or for
                         the benefit of which such money has been  collected for
                         amounts  due  and  unpaid  on such  Debentures  for the
                         principal amount, Redemption Price or interest, if any,
                         as the  case may be,  ratably,  without  preference  or
                         priority of any kind, according to such amounts due and
                         payable on such Debentures; and

                  THIRD: the balance, if any, to the Company.

     Except as  otherwise  set forth in the  Debentures,  the  Trustee may fix a
Record Date and payment  date for any  payment to  Debentureholders  pursuant to
this Section 6.10.

                       SECTION 6.11 Undertaking for Costs

                     In any  suit for the  enforcement  of any  right or  remedy
under this  Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee,  a court in its  discretion  may require the filing by
any party litigant (other than the Trustee) in the suit of an undertaking to pay
the costs of the suit,  and the court in its  discretion  may assess  reasonable
costs,  including  reasonable  attorneys'  fees and expenses,  against any party
litigant  in the suit,  having  due  regard to the  merits and good faith of the
claims or defenses made by the party litigant.  This Section 6.11 does not apply
to a suit  by the  Trustee,  a suit by a  Holder  of  Debentures  or  holder  of
Preferred  Securities  pursuant  to Section  6.07 hereof or a suit by Holders of
Debentures of more than 10% in aggregate  principal  amount of the Debentures of
any series or, if a series of Debentures is held by a Trust, the holders of more
than 10% in aggregate  liquidation  amount of the  Preferred  Securities of that
Trust.

              SECTION 6.12 Waiver of Stay; Extension or Usury Laws

                     The Company  covenants  (to the extent that it may lawfully
do so) that it will  not at any  time  insist  upon,  or plead or in any  manner
whatsoever  claim or take the benefit or advantage of, any stay or extension law
or any usury or other law  wherever  enacted,  now or at any time  hereafter  in
force, that would prohibit or forgive the Company from paying all or any portion
of the  principal  of or  premium,  if any, or  interest  on the  Debentures  as
contemplated herein or affect the covenants or the performance by the Company of
its obligations under this Indenture; and the Company (to the extent that it may
lawfully do so) hereby  expressly  waives all benefit or  advantage  of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.


                                    ARTICLE 7
                                   THE TRUSTEE

                       SECTION 7.01 Duties of the Trustee

                     (a) If an Event of Default  occurs and is  continuing  with
respect to the  Debentures of any series,  the Trustee shall exercise the rights
and powers  vested in it by this  Indenture  with respect to that series and use
the same  degree  of care and  skill in its  exercise  as a  prudent  man  would
exercise or use under the circumstances in the conduct of his own affairs.

                     (b) Except  during the  continuance  of an Event of Default
with respect to the Debentures of any series,  (i) the Trustee need perform only
those duties with respect to that series that are specifically set forth in this
Indenture or the TIA and no others;  and (ii) in the absence of bad faith on its
part, the Trustee may  conclusively  rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the  requirements  of this Indenture.
However,  in the case of any  certificates  or opinions  which by any  provision
hereof are  specifically  required to be furnished  to the Trustee,  the Trustee
shall  examine the  certificates  and opinions to determine  whether or not they
conform to the requirements of this Indenture.

                     (c) The Trustee may not be relieved from  liability for its
own  negligent  action,  its own  negligent  failure  to act or its own  willful
misconduct, except that:

                          (i) this Section  7.01(c) does not limit the effect of
Section 7.01(b) hereof;

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

                          (iii) the Trustee  shall not be liable with respect to
any  action  it  takes  or omits  to take in good  faith  in  accordance  with a
direction received by it pursuant to Section 6.05 hereof.

                     (d)Every  provision  of  this  Indenture  that  in any  way
relates to the  Trustee is subject  to  Section  7.01(a),  (b),  (c) and (e) and
Section 7.02 hereof.

                     (e)The  Trustee  may refuse to perform any duty or exercise
any  right or power or  extend  or risk its own  funds or  otherwise  incur  any
financial  liability  unless  it  receives  security  and  indemnity  reasonably
satisfactory to it against any loss, liability or expense (including  reasonable
counsel fees).

                     (f)Money held by the Trustee in trust hereunder need not be
segregated  from other funds  except to the extent  required  by law.  Except as
otherwise  provided in Section 3.05 and Section 8.01 hereof,  the Trustee  shall
not be liable for interest on any money held by it hereunder.

                       SECTION 7.02 Rights of the Trustee

                     (a) The Trustee may rely on any document  believed by it to
be  genuine  and to have been  signed or  presented  by the proper  person.  The
Trustee need not investigate any fact or matter stated in the document.

                     (b) Before the Trustee acts or refrains from acting, it may
require an Officer's Certificate and, if appropriate, an Opinion of Counsel. The
Trustee  shall  not be liable  for any  action it takes or omits to take in good
faith in reliance on such Officer's Certificate and Opinion of Counsel.

                     (c) The  Trustee  may act  through  agents and shall not be
responsible  for the  misconduct or negligence of any agent  appointed  with due
care.

                     (d) The Trustee shall not be liable for any action it takes
or omits to take in good faith which it reasonably  believes to be authorized or
within its rights or powers.

                     (e) The Trustee may consult with  counsel of its  selection
and the  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.

                     (f) The Trustee  shall be under no  obligation  to exercise
any of the rights or powers  vested in it by this  Indenture  at the  request or
direction of any of the Holders pursuant to this Indenture,  unless such Holders
shall have offered to the Trustee reasonable  security and indemnity against the
costs, expenses and liabilities  (including reasonable counsel fees) which might
be incurred by it in compliance with such request or direction.

                  SECTION 7.03 Individual Rights of the Trustee

                     The Trustee in its  individual  or any other  capacity  may
become  the owner or  pledgee  of  Debentures  and may  otherwise  deal with the
Company  or its  Affiliates  with the same  rights it would  have if it were not
Trustee.  Any Paying Agent,  Registrar or co-registrar may do the same with like
rights. However, the Trustee must comply with Sections 7.10 and 7.11 hereof.

                      SECTION 7.04 The Trustee's Disclaimer

                     The Trustee makes no  representation  as to the validity or
adequacy  of  this  Indenture  or  the  Debentures.  The  Trustee  shall  not be
accountable for the Company's use of the proceeds from the  Debentures,  and the
Trustee  shall not be  responsible  for any  statement in this  Indenture or the
Debentures or any report or certificate  issued by the Company  hereunder or any
registration  statement  relating to the  Debentures  (other than the  Trustee's
Certificate of Authentication and the Trustee's Statement of Eligibility on Form
T-1), or the determination as to which beneficial owners are entitled to receive
any notices hereunder.

                         SECTION 7.05 Notice of Defaults

                     If a Default  occurs and is continuing  with respect to the
Debentures  of any series and if it is known to the Trustee,  the Trustee  shall
mail to each Holder of a Debenture of that series  notice of the Default  within
90 days after it becomes  known to the Trustee  unless such  Default  shall have
been  cured or  waived.  Except in the case of a Default  described  in  Section
6.01(1)  hereof,  the  Trustee  may  withhold  such  notice  if and so long as a
committee of Trust  Officers in good faith  determines  that the  withholding of
such notice is in the interests of the Holders of the Debentures of that series.
The Trustee  shall not be charged with  knowledge of any Default  (except in the
case of a Default  under Section  6.01(1)  hereof)  unless a  responsible  Trust
Officer  assigned to the  Corporate  Trust  Department of the Trustee shall have
actual knowledge of the Default.  The second sentence of this Section 7.05 shall
be in  lieu of the  proviso  to TIA  Section  315(b).  Said  proviso  is  hereby
expressly excluded from this Indenture, as permitted by the TIA.

                   SECTION 7.06 Reports by Trustee to Holders

                     Within 60 days after each May 31, beginning with the May 31
next  following  the date of this  Indenture,  the  Trustee  shall  mail to each
Debentureholder,  and such other holders that have submitted  their names to the
Trustee for such  purpose,  a brief report dated as of such May 31 in accordance
with and to the extent required under TIA Section 313.

                     A copy  of  each  report  at the  time  of its  mailing  to
Debentureholders  shall be filed with the  Company,  the SEC and any  securities
exchange  on which the  Debentures  are listed.  The Company  agrees to promptly
notify the Trustee  whenever  the  Debentures  become  listed on any  securities
exchange and of any listing thereof.

                     SECTION 7.07 Compensation and Indemnity

                     The Company agrees:

                     (1)  to  pay  to  the  Trustee   from  time  to  time  such
compensation  as shall be agreed in writing  between the Company and the Trustee
for all  services  rendered by it  hereunder  (which  compensation  shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);

                     (2)  to   reimburse   the  Trustee  upon  its  request  for
reasonable expenses,  disbursements and advances incurred or made by the Trustee
in accordance  with any provision of this  Indenture  (including  the reasonable
compensation and the expenses, and advances of its agents and counsel,  provided
that prior to any Event of Default,  the Trustee  shall only have one  counsel),
including all reasonable  expenses and advances  incurred or made by the Trustee
in  connection  with any Event of Default or any  membership  on any  creditors'
committee,  except any such  expense or  advance as may be  attributable  to its
negligence or bad faith; and

                     (3) to indemnify the Trustee,  its officers,  directors and
shareholders,  for, and to hold it harmless against, any and all loss, liability
or expense,  incurred  without  negligence  or willful  misconduct  on its part,
arising out of or in connection  with the acceptance or  administration  of this
trust, including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder.

                     Before, after or during an Event of Default with respect to
the Debentures of a series, the Trustee shall have a claim and lien prior to the
Debentures  of that series as to all property and funds held by it hereunder for
any  amount  owing it for its  fees  and  expenses  or any  predecessor  Trustee
pursuant to this Section 7.07,  except with respect to funds held by the Trustee
or any Paying Agent in trust for the payment of principal of or premium, if any,
or interest on  particular  Debentures  pursuant to Section 2.06 or Section 8.01
hereof.

                     The Company's payment obligations  pursuant to this Section
7.07 are not  subject to  Article 10 of this  Indenture  and shall  survive  the
discharge  of this  Indenture.  When the  Trustee  renders  services  or  incurs
expenses after the occurrence of a Default specified in Section 6.01 hereof, the
compensation  for services and expenses are intended to  constitute  expenses of
administration under any Bankruptcy Law.

                       SECTION 7.08 Replacement of Trustee

                     The Trustee  may resign at any time,  by so  notifying  the
Company  in  writing  at  least  30  days  prior  to the  date  of the  proposed
resignation;  provided,  however, no such resignation shall be effective until a
successor  Trustee has accepted its  appointment  pursuant to this Section 7.08.
The  Holders  of at  least a  majority  in  aggregate  principal  amount  of the
Debentures  at the time  outstanding  may remove the Trustee by so notifying the
Trustee in writing and may appoint a successor  Trustee,  which shall be subject
to the consent of the Company  unless an Event of Default  has  occurred  and is
continuing. The Trustee shall resign if:

        (1) the Trustee fails to comply with Section 7.10 hereof;

        (2) the Trustee is adjudged bankrupt or insolvent;

        (3) a receiver or public officer takes charge of the Trustee or its
            property; or

        (4) the Trustee otherwise becomes incapable of acting.

If the  Trustee  resigns or is  removed or if a vacancy  exists in the office of
Trustee for any reason,  the Company shall promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment to the
retiring Trustee and to the Company. Thereupon the resignation or removal of the
retiring Trustee shall become  effective,  and the successor  Trustee shall have
all the  rights,  powers and duties of the  Trustee  under this  Indenture.  The
successor  Trustee shall mail a notice of its  succession  to  Debentureholders.
Subject to payment of all amounts owing to the Trustee under Section 7.07 hereof
and subject  further to its lien under Section 7.07, the retiring  Trustee shall
promptly  transfer all property held by it as Trustee to the successor  Trustee.
If a successor  Trustee  does not take office  within 30 days after the retiring
Trustee resigns or is removed, the Company or the Holders of at least a majority
in aggregate  principal  amount of the  Debentures at the time  outstanding  may
petition any court of competent  jurisdiction for the appointment of a successor
Trustee.

                     If the Trustee  fails to comply with  Section  7.10 hereof,
any  Debentureholder  may petition any court of competent  jurisdiction  for its
removal and the appointment of a successor Trustee.

                    SECTION 7.09 Successor Trustee by Merger

                     If the Trustee  consolidates with, merges or converts into,
or transfers all or substantially  all its corporate trust business or assets to
another corporation, the resulting,  surviving or transferee corporation without
any further act shall be the successor Trustee.

                   SECTION 7.10 Eligibility: Disqualification

                     The Trustee shall at all times satisfy the  requirements of
TIA Sections  310(a)(1) and  310(a)(2).  The Trustee (or any  Affiliate  thereof
which has  unconditionally  guaranteed the obligations of the Trustee hereunder)
shall have a combined  capital and surplus of at least  $50,000,000 as set forth
in its most recently  published  annual  report of condition.  The Trustee shall
comply  with  TIA  Section  310(b).  In  determining  whether  the  Trustee  has
conflicting  interests  as  defined in TIA  Section  310(b)(1),  the  provisions
contained in the proviso to TIA Section 310(b)(1) and the Trustee's Statement of
Eligibility on Form T-1 shall be deemed incorporated herein.

       SECTION 7.11 Preferential Collection of Claims Against the Company

                     If and when the  Trustee  shall be or become a creditor  of
the Company, the Trustee shall be subject to the provisions of the TIA regarding
the collection of claims against the Company.

                                    ARTICLE 8
                    SATISFACTION AND DISCHARGE OF INDENTURE;
               DEFEASANCE OF CERTAIN OBLIGATIONS; UNCLAIMED MONEYS

              SECTION 8.01 Satisfaction and Discharge of Indenture

                     The Company shall be deemed to have paid and discharged the
entire indebtedness on any series of the Debentures  outstanding on the date the
Company has irrevocably deposited or caused to be irrevocably deposited with the
Trustee or any Paying  Agent as trust  funds in trust,  specifically  pledged as
security  for,  and  dedicated  solely  to, the  benefit  of the  Holders of the
Debentures  of such series (1) cash  (which may be held in an  interest  bearing
account insured by the Federal Deposit  Insurance  Corporation) in an amount, or
(2) U.S. Government  Obligations,  maturing as to principal and interest at such
times and in such  amounts as will  ensure the  availability  of cash,  or (3) a
combination thereof, sufficient to pay the principal of and premium, if any, and
interest on all Debentures of such series then outstanding, provided that in the
case of  redemption,  notice of redemption  shall have been given or the Company
shall have irrevocably  instructed the Trustee to give such notice;  and further
provided that the following conditions shall have been met:

                     (A) no  Default  or Event of  Default  with  respect to the
Debentures  of such series has  occurred and is  continuing  on the date of such
deposit or occurs as a result of such deposit;

                     (B) the Company has  delivered  to the Trustee an Officer's
Certificate certifying that there does not exist (i) a default in the payment of
all or any  portion  of any  Senior  Indebtedness  or  (ii)  any  other  default
affecting Senior Indebtedness permitting its acceleration as the result of which
the maturity of Senior Indebtedness has been accelerated;

                     (C) the Company has  delivered  to the Trustee (i) either a
private  Internal  Revenue Service ruling or an Opinion of Counsel to the effect
that the Holders of the  Debentures  of such series will not  recognize  income,
gain or loss for  federal  income  tax  purposes  as a result  of such  deposit,
defeasance  and discharge and will be subject to federal  income tax on the same
amount  and in the  manner  and at the same times as would have been the case if
such deposit,  defeasance  and  discharge  had not  occurred,  and an Opinion of
Counsel to the effect that (A) the deposit shall not result in the Company,  the
Trustee or, if the  Debentures  of such  series are held by a Trust,  such Trust
being deemed to be an "investment  company" under the Investment  Company Act of
1940,  as  amended,  and (B) such  deposit  creates  a valid  trust in which the
Holders of the  Debentures of such series have the sole  beneficial  interest or
that the Holders of the  Debentures  of such series  have a  nonavoidable  first
priority security interest in such trust; and

                     (D) the Company has  delivered  to the Trustee an Officer's
Certificate  and an  Opinion  of  Counsel,  each  stating  that  all  conditions
precedent  relating to the defeasance  contemplated  by this provision have been
complied with.

                     Upon  such  deposit,  provisions  of  this  Indenture  with
respect to such series of Debentures  shall no longer be in effect (except as to
(1) the rights of  registration  of transfer and exchange of  Debentures of such
series, (2) the replacement of apparently mutilated, defaced, destroyed, lost or
stolen  Debentures  of  such  series,  (3)  the  rights  of the  Holders  of the
Debentures  of such  series to receive  payments  of the  principal  thereof and
premium,  if any,  and  interest  thereon,  (4) the rights of the Holders of the
Debentures of such series as  beneficiaries  hereof with respect to the property
so deposited with the Trustee  payable to all or any of them, (5) the obligation
of the Company to maintain an office or agency for payments on and  registration
of transfer of the Debentures of such series,  (6) the rights,  obligations  and
immunities of the Trustee  hereunder,  and (7) the obligations of the Company to
the Trustee for  compensation  and indemnity under Section 7.07 hereof;  and the
Trustee  shall,  at the  request  and  expense of the  Company,  execute  proper
instruments acknowledging the same.

             SECTION 8.02 Application by Trustee of Funds Deposited
                            for Payment of Debentures

                     Subject to Section 8.04 hereof,  all moneys  deposited with
the Trustee  pursuant to Section  8.01 hereof shall be held in trust and applied
by it to the payment, either directly or through any Paying Agent (including the
Company acting as its own Paying Agent), to the Holders of the Debentures of the
series for the payment or  redemption  of which such moneys have been  deposited
with the Trustee,  of all sums due and to become due thereon for  principal  and
interest;  but such money need not be segregated  from other funds except to the
extent required by law.

              SECTION 8.03 Repayment of Moneys Held by Paying Agent

                     In connection with the  satisfaction  and discharge of this
Indenture,  all moneys then held by any Paying Agent under this Indenture shall,
upon  demand  of the  Company,  be  repaid  to it or  paid to the  Trustee,  and
thereupon  such Paying Agent shall be released from all further  liability  with
respect to such moneys.

          SECTION 8.04 Return of Moneys Held by the Trustee and Paying
                         Agent Unclaimed for Three Years

                     Any  moneys  deposited  with or paid to the  Trustee or any
Paying  Agent for the  payment  of the  principal  of and  premium,  if any,  or
interest on the Debentures of any series and not applied but remaining unclaimed
for three years after the date when such principal, premium, if any, or interest
shall have become due and payable shall,  unless otherwise required by mandatory
provisions  of  applicable  escheat or abandoned or unclaimed  property  law, be
repaid to the Company by the Trustee or such  Paying  Agent,  and the Holders of
such Debentures  shall,  unless  otherwise  required by mandatory  provisions of
applicable escheat or abandoned or unclaimed property laws, thereafter look only
to the Company for any payment which such Holder may be entitled to collect, and
all  liability  of the Trustee or any Paying  Agent with  respect to such moneys
shall thereupon cease.


                                    ARTICLE 9
                                   AMENDMENTS

                     SECTION 9.01 Without Consent of Holders

                     From time to time,  when  authorized by a resolution of the
Board of  Directors,  the  Company  and the  Trustee,  without  notice to or the
consent  of  any  Holders  of the  Debentures,  may  amend  or  supplement  this
Indenture:

   (1)    to cure any ambiguity, defect or inconsistency;

   (2)    to comply with Article 5 hereof;

   (3)    to provide for uncertificated Debentures in addition to or in place
          of certificated Debentures;

   (4)    to make any other change that does not in the reasonable judgment of
          the Company adversely affect the rights of any Debentureholder;

   (5)    to comply with any requirement of the SEC in connection with the
          qualification of this Indenture under the TIA; or

   (6)    to set forth the terms and conditions, which shall not be inconsistent
          with this Indenture, of any series of Debentures (other than the 
          Series A Debentures) that are to be issued hereunder and the form of
          Debentures of such series.

                      SECTION 9.02 With Consent of Holders

                     The Company and the Trustee may amend this Indenture in any
manner not  permitted  by Section  9.01 or may waive  future  compliance  by the
Company with any provisions of this Indenture with the consent of the Holders of
at least a majority in  aggregate  principal  amount of the  Debentures  of each
series  affected  thereby.  Such an  amendment  or waiver may not,  without  the
consent of each Holder of the Debentures affected thereby:

               (1)  reduce the principal amount of such Debentures;

               (2)  reduce the principal  amount of such  Debentures the Holders
                    of which must consent to an amendment of this Indenture or a
                    waiver;

               (3)  change  the  stated  maturity  of  the  principal  of or the
                    interest on or rate of interest of such Debentures;

               (4)  change adversely to the Holders the redemption provisions of
                    Article 3 hereof;

               (5)  change the currency in respect of which the payments on such
                    Debentures are to be made;

               (6)  make any change in Article 10 hereof that adversely  affects
                    the rights of the Holders of the Debentures or any change to
                    any other Section hereof that adversely affects their rights
                    under Article 10 hereof; or

               (7)  change Section 6.07 hereof;

provided that, in the case of the  outstanding  Debentures of a series then held
by a Trust, no such amendment  shall be made that adversely  affects the holders
of the Preferred Securities of that Trust, and no waiver of any Event of Default
with respect to the  Debentures of that series or  compliance  with any covenant
under  this  Indenture  shall be  effective,  without  the prior  consent of the
holders  of at least a  majority  of the  aggregate  liquidation  amount  of the
outstanding  Preferred  Securities  of that  Trust or the  holder  of each  such
Preferred Security, as applicable.

                     A  supplemental  indenture  that changes or eliminates  any
covenant or other  provision of this  Indenture that has expressly been included
solely for the benefit of one or more particular series of Debentures,  or which
modifies the rights of the Holders of  Debentures of such series with respect to
such covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Debentures of any other series.

                     It shall not be necessary for the consent of the Holders of
Debentures or holders of Preferred Securities under this Section 9.02 to approve
the  particular  form of any proposed  amendment,  but it shall be sufficient if
such consent approves the substance thereof.

                     If  certain   Holders  agree  to  defer  or  waive  certain
obligations of the Company  hereunder  with respect to Debentures  held by them,
such  deferral  or waiver  shall not affect  the  rights of any other  Holder to
receive the payment or performance required hereunder in a timely manner.

                     After an  amendment  or  waiver  under  this  Section  9.02
becomes  effective,  the  Company  shall  mail to each  Holder a notice  briefly
describing  the  amendment  or waiver.  Any  failure of the Company to mail such
notices, or any defect therein,  shall not, however, in any way impair or affect
the validity of such amendment or waiver.

                SECTION 9.03 Compliance with Trust Indenture Act

                     Every  supplemental  indenture  executed  pursuant  to this
Article 9 shall comply with the TIA.

       SECTION 9.04 Revocation and Effect of Consents; Waivers and Actions

                     Until an  amendment,  waiver  or other  action  by  Holders
becomes  effective,  a  consent  to it or any  other  action  by a  Holder  of a
Debenture  hereunder is a continuing  consent by the Holder and every subsequent
Holder of that  Debenture or portion of the  Debenture  that  evidences the same
obligation  as the  consenting  Holder's  Debenture,  even  if  notation  of the
consent,  waiver  or  action is not made on such  Debenture.  However,  any such
Holder or subsequent Holder may revoke the consent,  waiver or action as to such
Holder's  Debenture  or portion of the  Debenture  if the Trustee  receives  the
notice of  revocation  before the consent of the requisite  aggregate  principal
amount of such  Debentures  then  outstanding has been obtained and not revoked.
After an  amendment,  waiver or action  becomes  effective,  it shall bind every
Holder of the  Debentures of the related  series,  except as provided in Section
9.02 hereof.

                     The  Company  may,  but shall not be  obligated  to,  fix a
Record Date for the purpose of  determining  the Persons  entitled to consent to
any amendment or waiver. If a Record Date is fixed,  then,  notwithstanding  the
first two  sentences of the  immediately  preceding  paragraph,  only Holders of
Debentures or holders of Preferred  Securities,  as  applicable,  on such Record
Date or their duly designated proxies, and only those Persons, shall be entitled
to  consent to such  amendment,  supplement  or waiver or to revoke any  consent
previously  given,  whether or not such  Persons  continue to be such after such
Record Date.  No such consent  shall be valid or effective for more than 90 days
after such Record Date.

               SECTION 9.05 Notation on or Exchange of Debentures

                     Debentures  of the related  series  authenticated  and made
available  for  delivery  after  the  execution  of any  supplemental  indenture
pursuant to this  Article 9 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  Debentures so
modified  as to  conform,  in the  opinion  of the  Trustee  and  the  Board  of
Directors,  to any such  supplemental  indenture may be prepared and executed by
the Company and  authenticated and made available for delivery by the Trustee in
exchange for outstanding Debentures.

             SECTION 9.06 Trustee to Execute Supplemental Indentures

                     The  Trustee  shall  execute  any  supplemental   indenture
authorized  pursuant to this Article 9 if the  supplemental  indenture  does not
adversely affect the rights,  duties,  liabilities or immunities of the Trustee.
If it does,  the  Trustee  may,  but need not,  execute  it. In  executing  such
supplemental  indenture the Trustee  shall be entitled to receive,  and shall be
fully protected in relying upon, an Officer's Certificate and Opinion of Counsel
stating  that such  supplemental  indenture is  authorized  or permitted by this
Indenture.

                 SECTION 9.07 Effect of Supplemental Indentures

                     Upon the execution of any supplemental indenture under this
Article 9, 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  Debentures  of the related  series  theretofore  or  thereafter
authenticated and made available for delivery hereunder shall be bound thereby.

                                   ARTICLE 10
                                  SUBORDINATION

          SECTION 10.01 Debentures Subordinated to Senior Indebtedness

                     Notwithstanding  the  provisions  of Section 6.10 hereof or
any other provision herein or in any Debenture, the Company and the Trustee and,
by their  acceptance  thereof,  the Holders of the  Debentures (a) covenants and
agrees that all payments by the Company of the principal of and premium, if any,
and interest on the Debentures (other than Debentures which have been discharged
pursuant to Article 8) shall be  subordinated  in accordance with the provisions
of this Article 10 to the prior payment in full, in cash or cash equivalents, of
all amounts payable on, under or in connection with Senior Indebtedness, and (b)
acknowledges that holders of Senior Indebtedness are or shall be relying on this
Article 10.

        SECTION 10.02 Priority and Payment of Proceeds in Certain Events:
                               Remedies Standstill

                     (a)  Upon  any  payment  or   distribution   of  assets  or
securities of the Company, as the case may be, of any kind or character, whether
in cash, property or securities,  upon any dissolution or winding up or total or
partial  liquidation  or  reorganization  of the Company,  whether  voluntary or
involuntary,  or in bankruptcy,  insolvency,  receivership or other proceedings,
all  amounts  payable  on,  under  or in  connection  with  Senior  Indebtedness
(including any interest accruing on such Senior  Indebtedness  subsequent to the
commencement of a bankruptcy,  insolvency or similar  proceeding) shall first be
paid in full in  cash,  or  payment  provided  for in cash or cash  equivalents,
before the  Holders or the  Trustee on behalf of the  Holders or the  holders of
Preferred  Securities  shall be entitled to receive from the Company any payment
of  principal  of  or  premium,  if  any,  or  interest  on  the  Debentures  or
distribution of any assets or securities.

                     (b) No direct or  indirect  payment  by or on behalf of the
Company of principal of or premium, if any, or interest on the Debentures (other
than  Debentures  which have been  discharged  pursuant to Article  8),  whether
pursuant to the terms of the Debentures or upon acceleration or otherwise, shall
be made if, at the time of such  payment,  there  exists  (i) a  default  in the
payment of all or any  portion of any Senior  Indebtedness  and the  Trustee has
received  written  notice  thereof  from the  Company,  from  holders  of Senior
Indebtedness or from any trustee,  representative or agent therefor, or (ii) any
other default affecting Senior Indebtedness as a result of which the maturity of
Senior  Indebtedness  has been  accelerated and the Trustee has received written
notice  from the  Company,  from  holders  of  Senior  Indebtedness  or from any
trustee,  representative or agent therefor, and such default shall not have been
cured or waived by or on behalf of the holders of such Senior Indebtedness.

                     (c)   If,    notwithstanding   the   foregoing   provisions
prohibiting such payment or  distribution,  the Trustee or any Holder shall have
received  any  payment on account of the  principal  of or  premium,  if any, or
interest on the Debentures when such payment is prohibited by this Section 10.02
and  before  all  amounts  payable  on,  under  or  in  connection  with  Senior
Indebtedness  are  paid in full in cash or cash  equivalents,  then  and in such
event  (subject to the  provisions  of Section  10.08  hereof)  such  payment or
distribution  shall be  received  and held in trust  for the  holders  of Senior
Indebtedness  and, at the written  direction of the trustee,  representative  or
agent for the holders of the Senior  Indebtedness,  shall be paid to the holders
of the Senior Indebtedness  remaining unpaid to the extent necessary to pay such
Senior Indebtedness in full in cash or cash equivalents.

                     Upon any payment or  distribution  of assets or  securities
referred to in this Article 10, 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,
and upon a  certificate  of the  receiver,  trustee in  bankruptcy,  liquidating
trustee,  agent  or  other  Person  making  any such  payment  or  distribution,
delivered to the Trustee for the purpose of ascertaining the Persons entitled to
participate in such distribution,  the holders of Senior  Indebtedness 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 10.

            SECTION 10.03 Payments which May Be Made Prior to Notice

                     Nothing in this Article 10 or  elsewhere in this  Indenture
shall prevent (i) the Company,  except under the conditions described in Section
10.02  hereof,  from making  payments  of  principal  of or premium,  if any, or
interest on the  Debentures or from  depositing  with the Trustee any monies for
such payments,  or (ii) the  application by the Trustee of any monies  deposited
with it for the purpose of making such  payments of principal of or premium,  if
any, or interest on the Debentures,  to the Holders entitled thereto,  unless at
least one  Business  Day prior to the date when  such  payment  would  otherwise
(except for the  prohibitions  contained in Section 10.02 hereof) become due and
payable the Trustee  shall have  received  the written  notice  provided  for in
Section 10.02(b)(i) or (ii) hereof.

    SECTION 10.04 Rights of Holders of Senior Indebtedness Not to Be Impaired

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

                     The  provisions  of this  Article 10 are intended to be for
the  benefit  of, and shall be  enforceable  directly  by, the holders of Senior
Indebtedness.  Notwithstanding  anything to the  contrary in this Article 10, to
the extent any Holders or the Trustee  have paid over or delivered to any holder
of Senior  Indebtedness  any payment or distribution  received on account of the
principal  of or premium  (if any) or interest  on the  Debentures  to which any
other  holder of Senior  Indebtedness  shall be entitled to share in  accordance
with Section 10.02 hereof, no holder of Senior  Indebtedness  shall have a claim
or right  against any Holders or the Trustee with respect to any such payment or
distribution or as a result of the failure to make payments or  distributions to
such other holder of Senior Indebtedness.

       SECTION 10.05 Trustee May Take Action to Effectuate Subordination

                     Each  Holder of a  Debenture,  by his  acceptance  thereof,
authorizes  and  directs the Trustee on his behalf to take such action as may be
required  by  the  trustee,  representative  or  agent  for  holders  of  Senior
Indebtedness  or by the Company to effectuate,  as between the holders of Senior
Indebtedness and the Holders,  the  subordination as provided in this Article 10
and appoints the Trustee his attorney-in-fact for any and all such purposes.

                     SECTION 10.06 Subrogation

                     Upon the payment in full, in cash or cash  equivalents,  of
all Senior  Indebtedness,  any Holder shall be  subrogated  to the rights of the
holders of such Senior  Indebtedness  to receive  payments or  distributions  of
assets of the Company  made on such  Senior  Indebtedness  until the  Debentures
shall be paid in full; and for the purposes of such subrogation,  no payments or
distributions  to holders of such Senior  Indebtedness  of any cash  property or
securities to which such Holders of the Debentures  would be entitled except for
this  Article 10, and no payment  pursuant to this Article 10 to holders of such
Senior  Indebtedness  by such Holders of the  Debentures,  shall, as between the
Company,  its creditors other than holders of such Senior  Indebtedness and such
Holders of the  Debentures,  be deemed to be a payment  by the  Company to or on
account of such Senior Indebtedness,  it being understood that the provisions of
this Article 10 are solely for the purpose of defining  the  relative  rights of
the holders of such Senior  Indebtedness,  on the one hand,  and such Holders of
the Debentures, on the other hand.

                     If  any  payment  or   distribution  to  which  Holders  of
Debentures  would  otherwise  have been entitled but for the  provisions of this
Article 10 shall have been applied,  pursuant to this Article 10, to the payment
of all Senior  Indebtedness then and in such case such Holders of the Debentures
shall be entitled to receive from the holders of such Senior Indebtedness at the
time  outstanding  any  payments or  distributions  received by such  holders of
Senior  Indebtedness in excess of the amount  sufficient to pay, in cash or cash
equivalents, all such Senior Indebtedness in full.

       SECTION 10.07 Obligations of Company Unconditional; Reinstatement

                     Nothing in this Article 10 or  elsewhere in this  Indenture
or in any Debenture is intended to or shall  impair,  as between the Company and
Holders of the Debentures,  the  obligations of the Company,  which are absolute
and unconditional,  to pay to such Holders the principal of and premium, if any,
and interest on the Debentures 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 such Holders of the Debentures and creditors of the Company other than
the holders of the Senior  Indebtedness,  nor shall  anything  herein or therein
prevent  the  Trustee  or any  Holder  of  Debentures  or  holder  of  Preferred
Securities,  as applicable,  from exercising all remedies otherwise permitted by
applicable law under this Indenture,  subject to the rights,  if any, under this
Article  10 of the  holders  of such  Senior  Indebtedness  in  respect of cash,
property or  securities  of the Company  received  upon the exercise of any such
remedy.

                     The failure to make a scheduled  payment of principal of or
premium,  if any, or interest on the Debentures by reason of Section 10.02 shall
not be construed  as  preventing  the  occurrence  of an Event of Default  under
Section 6.01 hereof;  provided,  however,  that if (i) the conditions preventing
the  making of such  payment  no longer  exist,  and (ii)  such  Holders  of the
Debentures  are made whole with respect to such omitted  payments,  the Event of
Default relating thereto (including any failure to pay any accelerated  amounts)
shall be  automatically  waived,  and the  provisions of the Indenture  shall be
reinstated as if no such Event of Default had occurred.

             SECTION 10.08 Trustee Entitled to Assume Payments Not
                           Prohibited in Absence of Notice


                     The Trustee or Paying  Agent shall not be charged  with the
knowledge of the  existence of any default in the payment of all or a portion of
any Senior  Indebtedness or any other default affecting Senior Indebtedness as a
result of which the maturity of the Senior  Indebtedness  has been  accelerated,
unless and until the Trustee or Paying Agent shall have received  written notice
thereof from the Company or one or more holders of Senior  Indebtedness  or from
any trustee,  representative  or agent  therefor or unless the Trustee or Paying
Agent otherwise had actual knowledge  thereof;  and, prior to the receipt of any
such written  notice or actual  knowledge of a responsible  Trust Officer in the
Corporate Trust Department of the Trustee or Paying Agent, the Trustee or Paying
Agent may conclusively assume that no such facts exist.

                     Unless at least one  Business Day prior to the date when by
the terms of this  Indenture  any monies are to be deposited by the Company with
the Trustee or any Paying Agent for any purpose (including,  without limitation,
the  payment  of the  principal  of or  premium,  if  any,  or  interest  on any
Debenture), the Trustee or Paying Agent shall have received with respect to such
monies the notice  provided for in Section 10.02 or a responsible  Trust Officer
in the  Corporate  Trust  Department  of the Trustee or Paying  Agent shall have
actual  knowledge  of default  in the  payment of all or a portion of any Senior
Indebtedness or any other default affecting Senior Indebtedness as the result of
which the maturity of the Senior Indebtedness has been accelerated,  the Trustee
or Paying  Agent shall have full power and  authority  to receive and apply such
monies to the  purpose  for which they were  received.  Neither of them shall be
affected  by any notice to the  contrary,  which may be received by either on or
after  such  date.  The  foregoing  shall not apply to the  Paying  Agent if the
Company is acting as Paying Agent. Nothing in this Section 10.08 shall limit the
right of the holders of Senior  Indebtedness to recover payments as contemplated
by Section 10.02  hereof.  The Trustee or Paying Agent shall be entitled to rely
on the delivery to it of a written  notice by a Person  representing  himself or
itself to be a holder of such Senior Indebtedness (or a trustee,  representative
or agent on behalf of such holder) to establish  that such notice has been given
by a holder of such Senior Indebtedness or a trustee, representative or agent on
behalf of any such holder.  The Trustee  shall not be deemed to have any duty to
the holders (and shall be fully protected in relying upon such notice) of Senior
Indebtedness.

           SECTION 10.09 Right of Trustee to Hold Senior Indebtedness

                     The Trustee  and any Paying  Agent shall be entitled to all
of the rights set forth in this Article 10 in respect of any Senior Indebtedness
at any time held by them to the same  extent as any other  holder of such Senior
Indebtedness,  and nothing in this  Indenture  shall be construed to deprive the
Trustee or any Paying Agent of any of its rights as such holder.

                                   ARTICLE 11
                                  MISCELLANEOUS

                   SECTION 11.01 Trust Indenture Act Controls

     If any provision of this Indenture limits,  qualifies or conflicts with the
duties  imposed by  operation of  subsection  (c) of Section 318 of the TIA, the
imposed duties shall control.  The provisions of Sections 310 to 317, inclusive,
of the TIA that impose duties on any Person (including provisions  automatically
deemed  included  in an  indenture  unless  the  indenture  provides  that  such
provisions are excluded) are a part of and govern this Indenture, except as, and
to the extent, they are expressly excluded from this Indenture,  as permitted by
the TIA.

                              SECTION 11.02 Notices

                     Any  notice,  request or other  communication  required  or
permitted to be given hereunder shall be in writing and delivered, telecopied or
mailed by first-class mail, postage prepaid, addressed as follows:

                     if to the Company:

                               Public Service Enterprise Group Incorporated
                               80 Park Plaza
                               P.O. Box 1171
                               Newark, New Jersey 07101
                               Facsimile No.: (973) 596-6309
                               Attention: Treasurer

                     if to the Trustee:

                               First Union National Bank
                               765 Broad Street
                               Newark, New Jersey 07101
                               Facsimile No.:  (973) 430-4963
                               Attention: Corporate Trust Department

                     The Company or the Trustee,  by giving notice to the other,
may  designate  additional  or different  addresses  for  subsequent  notices of
communications.  The  Company  shall  notify  the  holder,  if  any,  of  Senior
Indebtedness of any such additional or different  addresses of which the Company
receives notice from the Trustee.

                     Any  notice  or  communication  given to a  Debentureholder
shall be mailed or delivered  to the  Debentureholder  at the  Debentureholder's
address as it appears on the Register of the Registrar and shall be sufficiently
given if mailed within the time prescribed.

                     Failure   to  mail  a   notice   or   communication   to  a
Debentureholder  or any  defect  in it shall not  affect  its  sufficiency  with
respect to other Debentureholders. If a notice or communication is mailed in the
manner  provided  above,  it is  duly  given,  whether  or not  received  by the
addressee.

                     If the  Company  mails a  notice  or  communication  to the
Debentureholders, it shall mail a copy to the Trustee and each Registrar, Paying
Agent or co-Registrar.

            SECTION 11.03 Communication by Holders with Other Holders

                     Debentureholders  may communicate,  pursuant to TIA Section
312(b),  with other  Debentureholders  with  respect to their  rights under this
Indenture or the Debentures. The Company, the Trustee, the Registrar, the Paying
Agent and anyone else shall have the protection of TIA Section 312(c).

        SECTION 11.04 Certificate and Opinion as to Conditions Precedent

                     Upon any  request  or  application  by the  Company  to the
Trustee to take any action under this  Indenture,  the Company  shall furnish to
the Trustee:

                    (1)  an Officer's Certificate  (complying with Section 11.05
                         hereof)  stating  that, in the opinion of such Officer,
                         all  conditions  precedent to the taking of such action
                         have been complied with; and

                    (2)  if appropriate,  an Opinion of Counsel  (complying with
                         Section 11.05  hereof)  stating that, in the opinion of
                         such  counsel  all  such  conditions  precedent  to the
                         taking of such action have been complied with.

          SECTION 11.05 Statements Required in Certificate or Opinion

                     Each  Officer's  Certificate  and  Opinion of Counsel  with
respect  to  compliance  with a  covenant  or  condition  provided  for in  this
Indenture shall include:

                    (1)  a  statement  that each Person  making  such  Officer's
                         Certificate   or  Opinion  of  Counsel  has  read  such
                         covenant or condition;

                    (2)  a brief  statement  as to the  nature  and scope of the
                         examination or investigation  upon which the statements
                         or opinions contained in such Officer's  Certificate or
                         Opinion of Counsel are based;

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

                    (4)  a statement  that, in the opinion of such Person,  such
                         covenant or condition has been complied with; provided,
                         however,  that  with  respect  to  matters  of fact not
                         involving any legal  conclusion,  an Opinion of Counsel
                         may rely on an Officer's Certificate or certificates of
                         public officials.

                       SECTION 11.06 Severability Clause

     If any provision in this Indenture or in the  Debentures  shall be invalid,
illegal or  unenforceable,  the  validity,  legality and  enforceability  of the
remaining provisions shall not in any way be affected or impaired thereby.

           SECTION 11.07 Rules by Trustee, Paying Agent and Registrar

     The  Trustee  may make  reasonable  rules for  action  by or a  meeting  of
Debentureholders.  The Registrar and Paying Agent may make reasonable  rules for
their functions.

                          SECTION 11.08 Legal Holidays

     A "Legal  Holiday" is any day other than a Business  Day. If any  specified
date  (including a date for giving notice) is a Legal Holiday,  the action to be
taken on such date shall be taken on the next succeeding day that is not a Legal
Holiday,  and if such action is a payment in respect of the  Debentures,  unless
otherwise  specified  pursuant to Section 2.01 hereof no principal,  premium (if
any) or interest  installment  shall accrue for the intervening  period;  except
that if any interest  payment is due on a Legal Holiday and the next  succeeding
day is in the next  succeeding  calendar year, such payment shall be made on the
Business Day immediately preceding such Legal Holiday.

                           SECTION 11.09 Governing Law

     This  Indenture  and the  Debentures  shall be governed by and construed in
accordance with the laws of the State of New Jersey as applied to contracts made
and performed  within the State of New Jersey,  without regard to its principles
of conflicts of laws.

                    SECTION 11.10 No Recourse Against Others

     No director,  officer,  employee or  stockholder,  as such,  of the Company
shall have any liability for any obligations of the Company under the Debentures
or this  Indenture or for any claim based on, in respect of or by reason of such
obligations their creation. By accepting a Debenture, each Debentureholder shall
waive and release all such  liability.  The waiver and release  shall be part of
the consideration for the issue of the Debentures.

                            SECTION 11.11 Successors

     All agreements of the Company in this  Indenture and Debentures  shall bind
its  successors  and assigns.  All  agreements of the Trustee in this  Indenture
shall bind its successors and assigns.

            SECTION 11.12 Multiple Original Copies of this Indenture

     The  parties may sign any number of copies of this  Indenture.  Each signed
copy  shall  be an  original,  but  all of  them  together  represent  the  same
agreement. Any signed copy shall be sufficient proof of this Indenture.

          SECTION 11.13 No Adverse Interpretation of Other Agreements

     This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or any  subsidiary.  Any such  indenture,  loan or debt
agreement may not be used to interpret this Indenture.

                 SECTION 11.14 Table of Contents; Headings, Etc.

     The Table of Contents,  Cross-Reference Table, and headings of the Articles
and Sections of this Indenture  have been inserted for  convenience of reference
only,  are not to be  considered  a part  hereof,  and shall in no way modify or
restrict any of the terms or provisions hereof.

                     SECTION 11.15 Benefits of the Indenture

     Except as otherwise  expressly  provided  herein with respect to holders of
Senior  Indebtedness  and  holders  of  Preferred  Securities,  nothing  in this
Indenture or in the  Debentures,  express or implied,  shall give to any person,
other than the parties hereto and their successors  hereunder and the Holders of
the  Debentures,  any benefit or any legal or equitable  right,  remedy or claim
under this Indenture.



<PAGE>


                                   SIGNATURES


     IN WITNESS WHEREOF, the undersigned,  being duly authorized,  have executed
this Indenture on behalf of the  respective  parties hereto as of the date first
above written.

                            PUBLIC SERVICE ENTERPRISE
                               GROUP INCORPORATED


                                       By:   FRED F. SAUNDERS

                                      Name:  Fred F. Saunders

                                     Title:  Assistant Treasurer  



                           FIRST UNION NATIONAL BANK,
                                   as Trustee

                                       By:   MELISSA MATTHEWS

                                      Name:  Melissa Matthews

                                     Title:  Vice President




<PAGE>
                                    Exhibit A

                  PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
                7.44% Deferrable Interest Subordinated Debenture,
                                    Series A


No. 1

                     Public Service Enterprise Group Incorporated,  a New Jersey
corporation (the "Company",  which term includes any successor corporation under
the Indenture  hereinafter referred to), for value received,  hereby promises to
pay to Enterprise  Capital Trust I or registered  assigns,  the principal sum of
$231,958,775 Dollars on March 31, 2047 and to pay interest on said principal sum
from January 20, 1998 or from the most recent Interest  Payment Date (as defined
below)  to which  interest  has been paid or duly  provided  for,  quarterly  in
arrears on March 31, June 30, September 30 and December 31, commencing March 31,
1998 (each, an "Interest  Payment  Date"),  at the rate of 7.44% per annum until
the  principal  hereof  shall have  become due and  payable,  and on any overdue
principal and (to the extent that payment of such interest is enforceable  under
applicable  law) on any  overdue  installment  of  interest at the same rate per
annum.  The amount of interest  payable on any  Interest  Payment  Date shall be
computed on the basis of a 360-day year of twelve  30-day  months.  In the event
that any Interest  Payment Date is not a Business  Day,  then  interest  will be
payable on the next  succeeding  day which is a Business  Day (and  without  any
interest or other  payment in respect of any such delay),  except that,  if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately  preceding Business Day, in each case with the same force and
effect  as if made on such  date.  The  interest  installment  so  payable,  and
punctually  paid or duly  provided  in the  Indenture,  be paid to the Person in
whose name this  Debenture is registered at the close of business on the Regular
Record Date for such interest installment,  which shall be the 15th day (whether
or not a Business Day) of the last month of each calendar quarter, provided that
if all of the Series A Debentures (as defined below) are then held by Enterprise
Capital  Trust  I  (the  "Trust")  or  the  Series  A  Debentures  are  held  in
book-entry-only  form, the Regular Record Date shall be the close of business on
the Business Day  immediately  preceding  such Interest  Payment Date.  Any such
interest  installment  not punctually  paid or duly provided for shall forthwith
cease to be payable to the Holders on such Regular  Record Date, and may be paid
to the  Person  in whose  name  this  Debenture  is  registered  at the close of
business on a Special  Record Date to be fixed by the Trustee (as defined below)
for the payment of such defaulted interest, notice whereof shall be given to the
Holders of the Series A Debentures  not less than 7 calendar  days prior to such
Special Record Date, as more fully provided in the Indenture.

                     Payment of the principal of and interest on this  Debenture
will be made 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.
Payments of interest on an Interest Payment Date will be made by check mailed to
the Holder  hereof at the address shown in the Register or, at the option of the
Holder hereof, to such other place in the United States of America as the Holder
hereof shall designate to the Trustee in writing.  At the request of a Holder of
at least $10,000,000 aggregate principal amount of Series A Debentures, interest
on such  Debentures  will be payable  by wire  transfer  within the  continental
United  States  in  immediately  available  funds  to the  bank  account  number
specified in writing by such Holder to the Registrar prior to the Regular Record
Date.

                     The  principal  amount  hereof and any  interest due on the
Stated Maturity Date or a Redemption Date (other than an Interest  Payment Date)
will be paid only upon  surrender of this  Debenture at the principal  corporate
office of First Union National Bank, Paying Agent, in Newark,  New Jersey, or at
such other office or agency of the Paying Agent as the Company  shall  designate
by written notice to the Holder of this Debenture.

                     The  indebtedness  evidenced by this  Debenture  is, to the
extent provided in the Indenture, subordinate and subject in right of payment to
the prior  payment in full of all Senior  Indebtedness,  and this  Debenture  is
issued  subject to the  provisions of the Indenture  with respect  thereto.  The
Holder of this  Debenture,  by  accepting  the same,  (a) agrees to and shall be
bound by such  provisions,  (b) authorizes and directs the Trustee on his behalf
to take  such  action as may be  necessary  or  appropriate  to  acknowledge  or
effectuate  the  subordination  so  provided  and (c)  appoints  the Trustee his
attorney-in-fact for any and all such purposes. The Holder of this Debenture, by
his  acceptance  hereof,  hereby  waives  all  notice of the  acceptance  of the
subordination provisions contained herein and in the Indenture by each holder of
Senior Indebtedness,  whether now outstanding or hereafter incurred,  and waives
reliance by each such holder upon said provisions.

                     This  Debenture  is  one  of a duly  authorized  series  of
Debentures  of the  Company  (herein  sometimes  referred  to as the  "Series  A
Debentures"),  specified in the Indenture, limited in aggregate principal amount
to  $231,958,775,  issued under and pursuant to an Indenture dated as January 1,
1998 (the  "Indenture")  executed  and  delivered  between the Company and First
Union  National  Bank, as trustee (the  "Trustee").  The Series A Debentures are
initially  being  issued to the Trust,  to be held on behalf of the Trust by its
property trustee (the "Property Trustee"). Concurrently with the issuance of the
Series A  Debentures,  the Trust is issuing its trust  securities,  representing
undivided  beneficial  interests  in the  assets  of the  Trust  and  having  an
aggregate  liquidation  amount  equal to the  principal  amount of the  Series A
Debentures,  including the Trust's 7.44% Trust Originated  Preferred  Securities
(the  "Preferred  Securities").  By the terms of the  Indenture,  Debentures are
issuable  in  series  which may vary as to  amount,  date of  maturity,  rate of
interest and in other respects as in the Indenture  provided.  Reference is made
to the  Indenture  for a  description  of the  rights,  limitations  of  rights,
obligations,  duties and immunities  thereunder of the Trustee,  the Company and
Holders of the Debentures.  Each term used in this Debenture which is defined in
the  Indenture and not defined  herein shall have the meaning  assigned to it in
the Indenture.

                     At the option of the Company,  the Series A Debentures  are
redeemable prior to maturity (i) at any time on or after March 31, 2003 in whole
or in part, and (ii) if a Special Event shall occur and be continuing,  in whole
(but not in part),  in each case at 100% of the  principal  amount  thereof plus
accrued  interest to the Redemption  Date. A "Special Event" shall mean either a
"Tax Event" or an  "Investment  Company  Event." "Tax Event" shall mean that the
Company shall have received an opinion of counsel (which may be regular  counsel
to the Company or an  Affiliate,  but not an employee  thereof and which must be
acceptable to the Property Trustee of the Trust)  experienced in such matters to
the effect  that,  as a result of any  amendment  to, or change  (including  any
announced  prospective  change) in, the laws (or any regulations  thereunder) of
the United States or any political  subdivision or taxing  authority  thereof or
therein  affecting  taxation,  or as a  result  of any  official  administrative
pronouncement  or  judicial  decision  interpreting  or  applying  such  laws or
regulations,  which amendment or change is effective or such  interpretation  or
pronouncement  is  announced  on or  after  the  date of  original  issuance  of
Preferred  Securities,  there is more  than an  insubstantial  risk that (i) the
Trust is subject to United  States  Federal  income tax with respect to interest
received on the Debentures, (ii) interest payable by the Company to the Trust on
the Series A Debentures  will not be deductible for United States Federal income
tax  purposes or (iii) the Trust is subject to more than a de minimis  amount of
other taxes,  duties,  assessments or other  governmental  charges.  "Investment
Company  Event" shall mean the  occurrence of a change in law or regulation or a
change in  interpretation or application of law or regulation by any legislative
body, court,  governmental agency or regulatory authority (a "Change in 1940 Act
Law") to the  effect  that the  Trust is or will be  considered  an  "investment
company" that is required to be registered  under the Investment  Company Act of
1940, as amended, which Change in 1940 Act Law becomes effective on or after the
date of original issuance of the Preferred Securities.

                     At  least  30 days but not  more  than 60 days  before  the
Redemption  Date,  the  Trustee  shall  mail or  caused to be mailed a notice of
redemption by  first-class  mail,  postage  prepaid,  to each Holder of Series A
Debentures to be redeemed.

                     In the event of redemption of this  Debenture in part only,
a new Series A Debenture or Debentures for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.

                     In case an Event of  Default  with  respect to the Series A
Debentures occurs and is continuing, the principal of and interest on the Series
A Debentures may (and, in certain  circumstances,  shall) be declared,  and upon
such declaration shall become, due and payable,  in the manner,  with the effect
and subject to the conditions provided in the Indenture.

                     The Indenture  contains  provisions  for  defeasance at any
time of the entire indebtedness of this Debenture upon compliance by the Company
with certain conditions set forth therein.

                     Subject  to  certain  exceptions  in  the  Indenture  which
require the consent of every  Holder,  the Company and the Trustee may amend the
Indenture or may waive future  compliance by the Company with any  provisions of
the  Indenture,  with the  consent  of the  Holders  of at least a  majority  in
aggregate  principal  amount of the Debentures of each series affected  thereby,
provided  that  if the  Series  A  Debentures  are  held by the  Trust,  no such
amendment  or  waiver  that  adversely  affects  the  holders  of the  Preferred
Securities  shall be  effective  without the prior  consent of the holders of at
least a majority in aggregate  liquidation  amount of the outstanding  Preferred
Securities.  Subject to certain exceptions in the Indenture, without the consent
of any  Debentureholder,  the Company and the Trustee may amend the Indenture to
cure  any  ambiguity,  defect  or  inconsistency,  to  bind a  successor  to the
obligations  of the  Indenture,  to provide  for  uncertificated  Debentures  in
addition to  certificated  Debentures,  to comply with any  requirements  of the
Debentures  and the Securities  and Exchange  Commission in connection  with the
qualification of the Indenture under the TIA, or to make any change that, in the
reasonable judgment of the Company,  does not adversely affect the rights of any
Debentureholder. Amendments bind all Holders and subsequent Holders.

                     No reference  herein to the  Indenture  and no provision of
this  Debenture or 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  Debenture  at the time and  place  and at the rate and in the
money herein prescribed.

                     So long as no Event of Default with respect to the Series A
Debentures has occurred and is  continuing,  the Company shall have the right at
any time and from  time to time to extend  the  interest  payment  period of the
Series A Debentures for up to 20 consecutive  quarters (the "Extension Period"),
provided that no Extension  Period shall extend beyond the Stated  Maturity Date
or  Redemption  Date of any  Series  A  Debenture.  At the end of the  Extension
Period,  the Company  shall pay all interest  then accrued and unpaid  (together
with  interest  thereon  at the rate  specified  for the  Series  A  Debentures,
compounded quarterly, to the extent that payment of such interest is enforceable
under applicable law). During such Extension Period, the Company may not declare
or pay any dividend on, redeem, purchase,  acquire or make a liquidation payment
with respect to, any of its capital stock.  Prior to the termination of any such
Extension Period, the Company may further extend such Extension Period, provided
that  such  Extension  Period,  together  with all  such  previous  and  further
extensions, shall not exceed 20 consecutive quarters and shall not extend beyond
the Stated  Maturity Date or Redemption  Date of any Series A Debenture.  At the
termination  of any such  Extension  Period and upon the  payment of all amounts
then due, the Company may elect to begin a new Extension Period,  subject to the
foregoing restrictions.

                     Series A Debentures  are issuable only in  registered  form
without coupons in denominations of $25 and any integral  multiple  thereof.  As
provided in the Indenture and subject to certain  limitations therein set forth,
this Debenture is exchangeable for a like aggregate principal amount of Series A
Debentures of a different  authorized  denomination,  as requested by the Holder
surrendering the same.

                     As  provided  in  the  Indenture  and  subject  to  certain
limitations  therein set forth,  this  Debenture is  transferable  by the Holder
hereof upon  surrender of this  Debenture  for  registration  of transfer at the
office  or agency  of the  Registrar  accompanied  by a  written  instrument  or
instruments of transfer in form  satisfactory  to the Registrar duly executed by
the Holder hereof or his attorney duly authorized in writing,  and thereupon one
or more new Series A Debentures  of  authorized  denominations  and for the same
aggregate  principal  amount  will be issued  to the  designated  transferee  or
transferees.  No  service  charge  will be made for any such  transfer,  but the
Company  may  require  payment  of a sum  sufficient  to cover  any tax or other
governmental charge payable in relation thereto.

                     Prior to presentment  for  registration of transfer of this
Debenture, the Company, the Trustee, any Paying Agent and any Registrar may deem
and treat the Holder  hereof as the absolute  owner hereof  (whether or not this
Debenture  shall be  overdue  and  notwithstanding  any notice of  ownership  or
writing  hereon  made by anyone  other than the  Registrar)  for the  purpose of
receiving  payment of or on account of the  principal  hereof and  interest  due
hereon and for all other  purposes,  and neither the Company nor the Trustee nor
any  Paying  Agent nor any  Registrar  shall be  affected  by any  notice to the
contrary.

                     No recourse  shall be had for the payment of the  principal
of or the  interest  on  this  Debenture,  or for any  claim  based  hereon,  or
otherwise in respect hereof, or based on or in respect of the Indenture, against
any incorporator,  stockholder officer or director,  past, present or future, as
such, of the Company or of any predecessor or successor corporation,  whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise,  all such liability being, by the acceptance
hereof  and as part of the  consideration  for the  issuance  hereof,  expressly
waived and released.

                     This  Debenture  shall  not be valid  until  an  authorized
signatory of the Trustee  manually signs and dates the Trustee's  Certificate of
Authentication below.

                     IN WITNESS  WHEREOF,  the Company has caused this Debenture
to be signed  manually or by  facsimile  by its duly  authorized  officers and a
facsimile of its corporate seal to be affixed hereto or imprinted hereon.


                            PUBLIC SERVICE ENTERPRISE
                               GROUP INCORPORATED


                                     By:     FRED F. SAUNDERS

[SEAL]                               Name:   Fred F. Saunders

                                     Title:  Assistant Treasurer


                                    Attest:

                              PATRICK M. BURKE
                            -----------------------
                             (Assistant) Secretary


<PAGE>


                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

                     This is one of the Debentures, of the series designated,
referred to in the within-mentioned Indenture.

FIRST UNION NATIONAL BANK, as Trustee



By: MELISSA MATTHEWS
    --------------------
    Authorized Signatory

Dated: January 20, 1998


<PAGE>


                                 ASSIGNMENT FORM

                     To assign this  Debenture,  fill in the form below:  (I) or
(we) assign and transfer this Debenture to:

           _______________________________________________________
           (Insert assignee's social security or tax I.D. number)

              _______________________________________________________
              (Print or type assignee's name, address and zip code)

and irrevocably appoint ____________________ agent to transfer this Debenture on
the books of the Register. The agent may substitute another to act for him.

Dated: _______________                       Signature:____________________

                         (Sign exactly as your name appears on the other side of
                          this Debenture)

Signature Guaranty: ____________________