Document:

Exhibit 4.5

                                   GLOBAL NOTE

UNLESS THIS  CERTIFICATE  IS PRESENTED BY AN  AUTHORIZED  REPRESENTATIVE  OF THE
DEPOSITORY   TRUST  COMPANY  (55  WATER  STREET,   NEW  YORK,   NEW  YORK)  (THE
"DEPOSITORY")  TO PSEG  POWER  LLC OR ITS AGENT FOR  REGISTRATION  OF  TRANSFER,
EXCHANGE OR PAYMENT,  AND SUCH  CERTIFICATE  ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO., OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED  REPRESENTATIVE  OF
THE DEPOSITORY,  ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL,  SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.

UNLESS AND UNTIL THIS  CERTIFICATE IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
CERTIFICATED  FORM, THIS CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITORY TO A NOMINEE THEREOF OR BY A NOMINEE THEREOF TO THE DEPOSITORY OR
ANOTHER  NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR OF THE DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR.

CUSIP NO. 69362B AG 7                                        $[PRINCIPAL AMOUNT]
No. R-1

                                 PSEG POWER LLC
                           8-5/8% Senior Note due 2031

                                   GLOBAL NOTE

      PSEG POWER LLC, a Delaware limited liability company (herein referred to
as the "Company," which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to Cede & Co., or registered assigns, the principal sum of $[PRINCIPAL AMOUNT]
(or such lesser amount as shall be the outstanding principal amount of this
Global Note shown in Schedule A hereto) on April 15, 2031 (the "Stated Maturity
Date"), unless redeemed in accordance with the provisions of this Global Note,
and to pay interest on the outstanding principal amount of this Global Note from
April 16, 2001, semi-annually in arrears on April 15 and October 15 of each
year, commencing October 15, 2001 (each, an "Interest Payment Date") at 8-5/8%
per annum until the principal hereof is paid or duly provided for. Interest
payable on each Interest Payment Date will include interest accrued from and
including April 16, 2001 or from and including the most recent Interest Payment
Date to which interest has been paid or duly provided for, as the case may be,
to but excluding such Interest Payment Date. Interest will be computed based on
a 360-day year consisting of twelve 30-day months.

<PAGE>
                                       2

      Each of Nuclear, Fossil and ER&T has jointly, severally and
unconditionally, guaranteed the payment of principal, premium, if any, and
interest with respect to this Global Note.

      The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, except as provided below, be paid to the person (the
"Holder") in whose name this Global Note (or one or more Predecessor Notes) is
registered at the close of business on the fifteenth day (whether or not a
Business Day (as defined below)) immediately preceding the applicable Interest
Payment Date (a "Regular Record Date"). Any such interest not so punctually paid
or duly provided for ("Defaulted Interest") will forthwith cease to be payable
to the Holder on such Regular Record Date and may either be paid to the person
in whose name this Global Note (or one or more Predecessor Notes) is registered
at the close of business on a special record date (the "Special Record Date")
for the payment of such Defaulted Interest to be fixed by the Trustee
hereinafter referred to, notice whereof shall be given to the Holder of this
Global Note not less than ten days prior to such Special Record Date, or may be
paid at any time in any other lawful manner, all as more fully provided in the
Indenture.

      For purposes of this Global Note, "Business Day" means each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in Newark, New Jersey and The City of New York are authorized or
obligated by law or executive order to close.

      Payments of principal, premium, if any, and interest with respect to this
Global Note will be made in such coin or currency of the United States of
America as at the time of payment is legal tender for the payment of pubic and
private debts. Payment of the principal of and any premium on this Global Note
on the Stated Maturity Date or date of earlier redemption will be made in
immediately available funds against presentation of this Global Note at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York. Payments of interest on an Interest Payment
Date will be made, at the option of the Company, by check mailed to the Holder
entitled thereto at the applicable address appearing in the Security Register or
by transfer of immediately available funds to an account maintained by the payee
with a bank located in the United States of America; provided, however, that so
long as Cede & Co. is the Holder of this Global Note, payments of interest on an
Interest Payment Date will be made in immediately available funds.

      Any payment of principal, premium or interest required to be made with
respect to this Global Note on a day that is not a Business Day need not be made
on such day, but may be made on the next succeeding Business Day with the same
force and effect as if made on such day and no additional interest shall be
payable on the next succeeding Business Day as a result of such delayed payment.

      General. This Global Note is one of the duly authorized series of
securities of the Company (the "Securities"), issued or to be issued under the
Indenture, dated as of April 16, 2001, among The Bank of New York, as trustee
(the "Trustee"), the Company, Fossil, Nuclear and ER&T (together with all
supplements thereto, the "Indenture"), to which Indenture reference is hereby
made for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, Fossil, Nuclear, ER&T, the Trustee and
each of the holders of the Securities and of the terms upon which the Securities
are, and are to be,

<PAGE>
                                       3

authenticated and delivered and transferred. The Notes will be limited to
$500,000,000 aggregate principal amount, except as permitted in the Indenture,
and will be subject, without the consent of the holders of any series of
Securities under the Indenture, to the issuance of additional Notes in the
future having the same terms, other than the date of original issuance and the
date on which interest begins to accrue, so as to form one series with the
Notes. All terms used in this Global Note which are not defined herein shall
have the meanings given to them in the Indenture.

      Guarantee of ER&T Obligations; Payment of Dividends by ER&T to the
Company. The provisions of Section 1009 of the Indenture relating to the
guarantee of the Obligations of ER&T by the Company and the provisions of
Section 1010 of the Indenture relating to the payment of dividends by ER&T to
the Company shall apply to this Global Note.

      Events of Default. If an Event of Default with respect to the Notes shall
have occurred and be continuing, the principal of the Notes may be declared due
and payable in the manner and with the effect provided in the Indenture.

      Redemption. This Global Note (or portion thereof) will be redeemable at
the option of the Company, in whole or in part at any time, on at least 30 days
but not more than 60 days prior written notice mailed to the Holder hereof, at a
price the (the "Redemption Price") equal to the greater of (i) 100% of the
principal amount of this Global Note (or portion thereof) to be redeemed, or
(ii) the sum, as determined by the Calculation Agent (as defined below), of the
present values of the principal amount of this Global Note (or portion thereof)
to be redeemed and the remaining scheduled payments of interest thereon from the
date of redemption (the "Redemption Date") to April 15, 2011 (the "Remaining
Life"), discounted from their respective payment dates to the Redemption Date on
a semiannual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Treasury Rate (as defined below) plus 40 basis points, plus, in either
case, unpaid interest thereon accrued to the Redemption Date.

      If money sufficient to pay the Redemption Price of this Global Note (or
portion hereof) to be redeemed on a Redemption Date is deposited with the
Trustee or a Paying Agent on or before such Redemption Date and certain other
conditions are satisfied, then on and after such Redemption Date, interest will
cease to accrue on this Global Note (or such portion hereof) called for
redemption.

      This Global Note will not be entitled to the benefit of, or be subject to,
any sinking fund.

      Certain Definitions. "Comparable Treasury Issue" means, with respect to
any Redemption Date for this Global Note (or portion hereof) to be redeemed, the
United

<PAGE>
                                       4

States Treasury security selected by the Independent Investment Banker (as
defined below) as having the maturity comparable to the Remaining Life of this
Global Note (or portion hereof) to be redeemed that would be utilized, at the
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity with the
Remaining Life of this Global Note (or portion hereof) to be redeemed.

      "Calculation Agent" means The Bank of New York or such successor
Calculation Agent as is appointed by the Company.

      "Comparable Treasury Price" means, with respect to any Redemption Date for
this Global Note (or portion hereof) to be redeemed, (a) the average of four
Reference Treasury Dealer Quotations (as defined below) for the Redemption Date
for this Global Note (or portion hereof) to be redeemed, after excluding the
highest and lowest of such Reference Treasury Dealer Quotations, obtained by the
Calculation Agent, or, (b) if the Calculation Agent obtains fewer than four
Reference Treasury Dealer Quotations, the average of all such quotations.

      "Independent Investment Banker" means the Reference Treasury Dealer
appointed by the Trustee after consultation with the Company. "Reference
Treasury Dealer" means each of four primary U.S. Government securities dealers
in New York City selected by the Trustee in consultation with the Company and
initially will include Morgan Stanley & Co. Incorporated and Salomon Smith
Barney, Inc. If any Reference Treasury Dealer ceases to be a primary U.S.
government securities dealer, the Trustee will substitute another primary U.S.
government securities dealer for that dealer.

      "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Calculation Agent, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Calculation Agent by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding such Redemption Date.

      "Treasury Rate" means, with respect to any Redemption Date: (a) the yield
for the maturity corresponding to the Comparable Treasury Issue, under the
heading that represents the average for the immediately preceding week appearing
in the most recently published statistical release designated "H.15(519)" or any
successor publication that is published weekly by the Board of Governors of the
Federal Reserve System and that establishes yields on actively traded United
States Treasury securities adjusted to constant maturity under the caption
"Treasury Constant Maturities," provided, that if no maturity is within three
months before or after the Stated Maturity Date, the yields for the two
published maturities most closely corresponding to the Comparable Treasury Issue
will be determined and the Treasury Rate shall be interpolated or extrapolated
from those yields on a straight line basis, rounding to the nearest month; or
(b) if the release referred to in clause (a) (or any successor release) is not
published during the week preceding the calculation date or does not contain the
yields referred to above, the rate per annum equal to the semiannual equivalent
yield to maturity of the Comparable Treasury Issue, calculated using a price for
the Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for such Redemption Date. The
Treasury Rate will be calculated on the third Business Day preceding the
Redemption Date.

<PAGE>
                                       5

      Reports. So long as this Global Note remains Outstanding, the Company will
file with the Trustee, within 30 days of filing them with the Securities and
Exchange Commission (the "SEC"), copies of the current, quarterly and annual
reports 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) that the Company is required to file with the SEC pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). If the Company is not subject to the requirements of Section 13
or Section 15(d) of the Exchange Act and this Global Note remains Outstanding,
the Company must nevertheless file with the SEC (if permitted) and the Trustee,
on the date upon which the Company would have been required to file with the
SEC, current, quarterly and annual financial statements, including any notes
thereto (and with respect to annual reports, an auditor's report by a firm of
established national reputation, upon which the Trustee may conclusively rely),
and a "Management's Discussion and Analysis of Financial Condition and Results
of Operations," both comparable to that which the Company would have been
required to include in such current, quarterly and annual reports, information,
documents or other reports on Forms 8-K, 10-Q and 10-K if the Company was
subject to the requirements of Section 13 or 15(d) of the Exchange Act; provided
that the Company will not be required to register under the Exchange Act by
virtue of this provision, if not otherwise required to do so.

      Modification and Waivers; Obligations of the Company Absolute. The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Company and
each Guarantor and the rights of the Holders of the Securities of each series.
Such amendment may be effected under the Indenture at any time by the Company,
each Guarantor and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of all Securities issued under the Indenture at the
time Outstanding and affected thereby. The Indenture also contains provisions
permitting the Holders of a majority in aggregate principal amount of the
Securities at the time Outstanding, on behalf of the Holders of all Outstanding
Securities, to waive compliance by the Company with certain provisions of the
Indenture. Furthermore, provisions in the Indenture permit the Holders of a
majority in aggregate principal amount of the Outstanding Securities of an
individual series, to waive, on behalf of all of the Holders of Securities of
such individual series, certain past defaults under the Indenture and their
consequences. Any such consent or waiver shall be conclusive and binding upon
the Holder of this Global Note and upon all future Holders of this Global Note
and of any Note issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Note.

      No reference herein to the Indenture and no provision of this Global Note
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal, premium, if any, and
interest with respect to this Global Note at the times, place and rate, and in
the coin or currency herein prescribed.

      Defeasance and Covenant Defeasance. The Indenture contains provisions for
defeasance at any time of (a) the entire indebtedness of the Company on this
Global Note and (b) certain restrictive covenants and the related defaults and
Events of Default, upon compliance by the Company with certain conditions set
forth in the Indenture, which provisions apply to this Global Note.

<PAGE>
                                       6

      Authorized Denominations. The Notes are issuable only in registered form
without coupons in minimum denominations of $100,000 and integral multiples of
$1,000 in excess thereof.

      Registration of Transfer or Exchange of this Global Note. As provided in
the Indenture and subject to certain limitations herein and therein set forth,
the transfer of this Global Note is registrable in the Security Register upon
surrender of this Global Note for registration of transfer at the office or
agency of the Company in any place where the principal of (and premium, if any)
and interest on this Global Note are payable, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Global Notes, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.

      As provided in the Indenture and subject to certain limitations herein and
therein set forth, the Global Notes are exchangeable for a like aggregate
principal amount of Global Notes of different authorized denominations, as
requested by the Holders surrendering the same.

      This Global Note is a Global Security within the meaning of the Indenture.
If The Depository Trust Company is at any time unwilling, unable or ineligible
to continue as depository and a successor depository is not appointed by the
Company within 90 days or an Event of Default under the Indenture has occurred
and is continuing, the Company will issue Notes in certificated form in exchange
for this Global Security. In addition, the Company may at any time determine not
to have Notes represented by one or more Global Securities and, in such event,
will issue Notes in certificated form in exchange in whole for this Global
Security. In any such instance, an owner of a beneficial interest in this Global
Note will receive Notes in certificated form equal in principal amount to such
beneficial interest and to have such Notes registered in its name. Notes so
issued in certificated form will be issued in denominations of $100,000 and
integral multiples of $1,000 in excess thereof and will be issued in registered
form only, without coupons.

      No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

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

      Interests in this Global Note are exchangeable or transferable in whole or
in part for interests in the Temporary Regulation S Global Note or Regulation S
Global Note, in each case of the same series, only if such exchange or transfer
complies with the Indenture.

      Governing Law. This Global Note shall be governed by and construed in
accordance with the law of the State of New York.

<PAGE>
                                       7

      Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Global Note shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.

      IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its facsimile corporate seal.

Dated:           , 2001                              PSEG POWER LLC

                                                     By: _______________________
                                                                President

                                                     Attest: ___________________
                                                                Secretary

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

                                                     THE BANK OF NEW YORK,
                                                           as Trustee

Dated: __________________

                                                     By: _______________________
                                                          Authorized Signatory

<PAGE>
                                       8

                                 ASSIGNMENT FORM

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

                  (Insert assignee's soc. sec. or tax I.D. No.)

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

and irrevocably appoint ______________________ agent to transfer this Security
on the books of the Company. The agent may substitute another to act for him.

Dated: _____________________                 Signed: ___________________________

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

Signature Guarantee: ___________________________________________________________

Dated: _____________________                 Signed: ___________________________

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

Signature Guarantee: ___________________________________________________________

<PAGE>

                                   SCHEDULE A

                              SCHEDULE OF EXCHANGES
                              ---------------------

The following exchanges of Notes for Notes represented by this Temporary Global
Note have been made:

<TABLE>
<CAPTION>
===============================================================================================================
                                                 Change in
                                                 Principal
Principal                                        Amount of this          Principal
amount of this                                   Global Note             amount of this         Notation made
Global Note as            Date exchange          due to                  Global Note            by or on behalf
of      , 2001            made                   exchange                due to exchange        of the Company
---------------------------------------------------------------------------------------------------------------
<S>                       <C>                    <C>                     <C>                    <C>
 $[PRINCIPAL
   AMOUNT]
---------------------------------------------------------------------------------------------------------------

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

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

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

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

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

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

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

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

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

===============================================================================================================
</TABLE>Exhibit 4.2

                            PSEG Energy Holdings Inc.

                          8.625% Senior Notes due 2008

                   Exchange and Registration Rights Agreement

                                                                February 8, 2001

Lehman Brothers Inc.
UBS Warburg LLC
Morgan Stanley & Co. Incorporated
Salomon Smith Barney Inc.
c/o   Lehman Brothers Inc.
      Three World Financial Center
      New York, New York 10285

Ladies and Gentlemen:

PSEG Energy Holdings Inc., a New Jersey corporation (the "Company"), proposes to
issue and sell to the Purchasers (as defined herein) upon the terms set forth in
the Purchase  Agreement (as defined herein) its 8.625% Senior Notes due 2008. As
an  inducement  to the  Purchasers  to enter into the Purchase  Agreement and in
satisfaction of a condition to the obligations of the Purchasers thereunder, the
Company  agrees  with the  Purchasers  for the  benefit of holders  (as  defined
herein) from time to time of the  Registrable  Securities (as defined herein) as
follows:

Certain  Definitions.  For  purposes of this  Exchange and  Registration  Rights
Agreement, the following terms shall have the following respective meanings:

            "Base Interest" shall mean the interest that would otherwise  accrue
      on the  Securities  under the terms  thereof  and the  Indenture,  without
      giving effect to the provisions of this Agreement.

            The term "broker-dealer"  shall mean any broker or dealer registered
      with the Commission under the Exchange Act.

            "Closing  Date"  shall  mean the date on which  the  Securities  are
      initially issued.

            "Commission"  shall mean the United States  Securities  and Exchange
      Commission,  or any other  federal  agency at the time  administering  the
      Exchange Act or the Securities Act,  whichever is the relevant statute for
      the particular purpose.

            "Effective Time," in the case of (i) an Exchange Registration, shall
      mean the time and date as of which the  Commission  declares  the Exchange
      Registration  Statement effective or as of which the Exchange Registration
      Statement otherwise becomes effective and (ii) a Shelf Registration, shall
      mean  the time and date as of which  the  Commission  declares  the  Shelf
      Registration  Statement  effective  or as of which the Shelf  Registration
      Statement otherwise becomes effective.

            "Electing  Holder" shall mean any holder of  Registrable  Securities
      that has returned a completed and signed Notice and  Questionnaire  to the
      Company in accordance with Section 3(d)(ii) or 3(d)(iii) hereof.

            "Exchange  Act" shall mean the  Securities  Exchange Act of 1934, or
      any successor thereto, as the same shall be amended from time to time.

            "Exchange  Offer" shall have the meaning assigned thereto in Section
      2(a) hereof.

            "Exchange  Registration"  shall have the meaning assigned thereto in
      Section 3(c) hereof.
<PAGE>

            "Exchange  Registration  Statement"  shall have the meaning assigned
      thereto in Section 2(a) hereof.

            "Exchange  Securities"  shall have the meaning  assigned  thereto in
      Section 2(a) hereof.

            The term  "holder"  shall  mean  each of the  Purchasers  and  other
      persons who acquire  Registrable  Securities  from time to time (including
      any  successors or assigns),  in each case for so long as such person owns
      any Registrable Securities.

            "Indenture"  shall mean the Indenture,  dated as of October 8, 1999,
      between the Company and First Union National Bank, as Trustee, as the same
      shall be amended from time to time.

            "Notice and Questionnaire" means a Notice of Registration  Statement
      and  Selling  Securityholder  Questionnaire  substantially  in the form of
      Exhibit A hereto.

            The  term   "person"   shall   mean  a   corporation,   association,
      partnership,  organization,  business, individual, government or political
      subdivision thereof or governmental agency.

            "Purchase Agreement" shall mean the Purchase Agreement,  dated as of
      February 1, 2001,  between the Purchasers and the Company  relating to the
      Securities.

            "Purchasers"  shall mean the  Purchasers  named in Schedule I to the
      Purchase Agreement.

            "Registrable  Securities"  shall  mean  the  Securities;   provided,
      however, that a Security shall cease to be a Registrable Security when (i)
      in the circumstances contemplated by Section 2(a) hereof, the Security has
      been  exchanged  for  an  Exchange   Security  in  an  Exchange  Offer  as
      contemplated in Section 2(a) hereof  (provided that any Exchange  Security
      that, pursuant to the last two sentences of Section 2(a), is included in a
      prospectus for use in connection with resales by  broker-dealers  shall be
      deemed to be a  Registrable  Security  with respect to Sections 5, 6 and 9
      until resale of such  Registrable  Security has been  effected  within the
      180-day  period  referred to in Section 2(a));  (ii) in the  circumstances
      contemplated  by  Section  2(b)  hereof,  a Shelf  Registration  Statement
      registering  such Security  under the  Securities Act has been declared or
      becomes effective and such Security has been sold or otherwise transferred
      by the holder  thereof  pursuant to and in a manner  contemplated  by such
      effective  Shelf  Registration  Statement;  (iii)  such  Security  is sold
      pursuant to Rule 144 under circumstances in which any legend borne by such
      Security relating to restrictions on  transferability  thereof,  under the
      Securities Act or otherwise,  is removed by the Company or pursuant to the
      Indenture; (iv) such Security is eligible to be sold pursuant to paragraph
      (k) of Rule 144; or (v) such Security shall cease to be outstanding.

            "Registration  Default" shall have the meaning  assigned  thereto in
      Section 2(c) hereof.

            "Registration  Expenses" shall have the meaning  assigned thereto in
      Section 4 hereof.

            "Resale Period" shall have the meaning  assigned  thereto in Section
      2(a) hereof.

            "Restricted  Holder" shall mean (i) a holder that is an affiliate of
      the  Company  within the meaning of Rule 405,  (ii) a holder who  acquires
      Exchange Securities outside the ordinary course of such holder's business,
      (iii) a holder who has arrangements or  understandings  with any person to
      participate in the Exchange Offer for the purpose of distributing Exchange
      Securities  and  (iv) a holder  that is a  broker-dealer,  but  only  with
      respect to Exchange Securities received by such broker-dealer  pursuant to
      an Exchange Offer in exchange for Registrable  Securities  acquired by the
      broker-dealer directly from the Company.

            "Rule 144," "Rule 405" and "Rule 415" shall mean, in each case, such
      rule promulgated under the Securities Act (or any successor provision), as
      the same shall be amended from time to time.

            "Securities" shall mean,  collectively,  the 8.625% Senior Notes due
      2008  of  the  Company  to be  issued  and  sold  to the  Purchasers,  and
      securities  issued in exchange therefor or in lieu thereof pursuant to the
      Indenture.

            "Securities  Act"  shall  mean the  Securities  Act of 1933,  or any
      successor thereto, as the same shall be amended from time to time.

                                       2
<PAGE>

            "Shelf  Registration"  shall have the  meaning  assigned  thereto in
      Section 2(b) hereof.

            "Shelf  Registration  Statement"  shall  have the  meaning  assigned
      thereto in Section 2(b) hereof.

            "Special  Interest"  shall  have the  meaning  assigned  thereto  in
      Section 2(c) hereof.

            "Subsidiary"  shall mean a "significant  subsidiary" as such term is
      defined in Rule 1-02 of Regulation S-X.

            "Trust Indenture Act" shall mean the Trust Indenture Act of 1939, or
      any successor  thereto,  and the rules,  regulations and forms promulgated
      thereunder, all as the same shall be amended from time to time.

Unless the context  otherwise  requires,  any reference herein to a "Section" or
"clause" refers to a Section or clause, as the case may be, of this Exchange and
Registration Rights Agreement,  and the words "herein," "hereof" and "hereunder"
and other words of similar import refer to this Exchange and Registration Rights
Agreement as a whole and not to any particular Section or other subdivision.

Registration Under the Securities Act.

Except as set forth in Section 2(b) below,  the Company agrees to file under the
Securities  Act,  as soon as  practicable,  but no later than 240 days after the
Closing Date, a  registration  statement  relating to an offer to exchange (such
registration statement, the "Exchange Registration  Statement",  and such offer,
the  "Exchange  Offer")  any  and  all of the  Securities  for a like  aggregate
principal amount of debt securities issued by the Company, which debt securities
are substantially  identical to the Securities (and are entitled to the benefits
of a trust indenture which is substantially identical to the Indenture or is the
Indenture and which has been qualified under the Trust  Indenture  Act),  except
that they have been registered pursuant to an effective  registration  statement
under  the  Securities  Act and do not  contain  provisions  for the  additional
interest   contemplated   in  Section  2(c)  below  (such  new  debt  securities
hereinafter  called  "Exchange  Securities").  The  Company  agrees  to use  its
reasonable best efforts to cause the Exchange  Registration  Statement to become
effective under the Securities Act as soon as practicable, but no later than 270
days after the Closing Date.  The Exchange  Offer will be  registered  under the
Securities  Act on the  appropriate  form and will  comply  with all  applicable
tender offer rules and  regulations  under the Exchange Act. The Company further
agrees to use its best  efforts to commence  and  complete  the  Exchange  Offer
promptly, but no later than 45 days after such registration statement has become
effective,  hold the  Exchange  Offer  open  for at  least 30 days and  exchange
Exchange  Securities  for all  Registrable  Securities  that have been  properly
tendered and not withdrawn on or prior to the expiration of the Exchange  Offer.
The  Exchange  Offer  will be deemed to have been  "completed"  only if the debt
securities  received by holders  other than  Restricted  Holders in the Exchange
Offer for Registrable  Securities  are, upon receipt,  transferable by each such
holder  without  restriction  under the  Securities Act and the Exchange Act and
without  material  restrictions  under  the  blue  sky or  securities  laws of a
substantial majority of the States of the United States of America. The Exchange
Offer  shall be deemed to have been  completed  upon the earlier to occur of (i)
the  Company  having  exchanged  the  Exchange  Securities  for all  outstanding
Registrable  Securities  pursuant  to the  Exchange  Offer and (ii) the  Company
having exchanged,  pursuant to the Exchange Offer,  Exchange  Securities for all
Registrable Securities that have been properly tendered and not withdrawn before
the expiration of the Exchange Offer,  which shall be on a date that is at least
30 days following the commencement of the Exchange Offer. The Company agrees (x)
to include in the Exchange  Registration  Statement a prospectus  for use in any
resales by any holder of Exchange  Securities that is a broker-dealer and (y) to
keep such Exchange  Registration  Statement  effective for a period (the "Resale
Period")  beginning  when Exchange  Securities  are first issued in the Exchange
Offer and ending upon the earlier of the  expiration  of the 180th day after the
Exchange Offer has been completed or such time as such  broker-dealers no longer
own any  Registrable  Securities.  With  respect to such  Exchange  Registration
Statement,  such holders shall have the benefit of the rights of indemnification
and contribution set forth in Sections 6(a), (c), (d) and (e) hereof.

If (i) on or  prior  to the  time  the  Exchange  Offer  is  completed  existing
Commission interpretations are changed such that the debt securities received by
holders  other than  Restricted  Holders in the Exchange  Offer for  Registrable
Securities  are not or would not be,  upon  receipt,  transferable  by each such
holder without restriction under the Securities Act, (ii) the Exchange Offer has
not been  completed  within 315 days  following  the  Closing  Date or (iii) the
Exchange  Offer is not  available to any holder of the  Securities,  the Company
shall,  in lieu of (or, in the case of clause (iii),  in addition to) conducting
the Exchange Offer  contemplated  by Section 2(a), file under the Securities Act
as soon as  practicable,  but no later  than the later of 30 days after the time
such obligation to file arises, a "shelf"  registration  statement providing for
the  registration  of,  and the sale on a  continuous  or  delayed  basis by the
holders  of,  all of the  Registrable

                                       3
<PAGE>

Securities,  pursuant to Rule 415 or any similar rule that may be adopted by the
Commission  (such  filing,  the  "Shelf   Registration"  and  such  registration
statement,  the "Shelf Registration  Statement").  The Company agrees to use its
reasonable best efforts (x) to cause the Shelf Registration  Statement to become
or be  declared  effective  no later than 30 days after such Shelf  Registration
Statement is filed and to keep such Shelf  Registration  Statement  continuously
effective  for a period ending on the earlier of the second  anniversary  of the
Effective  Time or such time as there are no longer any  Registrable  Securities
outstanding,  provided, however, that no holder shall be entitled to be named as
a selling  securityholder  in the  Shelf  Registration  Statement  or to use the
prospectus  forming a part thereof for resales of Registrable  Securities unless
such holder is an Electing Holder, and (y) after the Effective Time of the Shelf
Registration  Statement,  promptly upon the request of any holder of Registrable
Securities that is not then an Electing  Holder,  to take any action  reasonably
necessary to enable such holder to use the prospectus forming a part thereof for
resales of Registrable  Securities,  including,  without limitation,  any action
necessary  to  identify  such  holder as a selling  securityholder  in the Shelf
Registration Statement, provided, however, that nothing in this Clause (y) shall
relieve  any such  holder of the  obligation  to return a  completed  and signed
Notice and  Questionnaire  to the Company in accordance  with Section  3(d)(iii)
hereof. The Company further agrees to supplement or make amendments to the Shelf
Registration  Statement,  as and when  required  by the  rules,  regulations  or
instructions  applicable to the  registration  form used by the Company for such
Shelf  Registration  Statement or by the Securities Act or rules and regulations
thereunder  for shelf  registration,  and the Company  agrees to furnish to each
Electing  Holder copies of any such  supplement or amendment  prior to its being
used or promptly following its filing with the Commission.

In the  event  that (i) the  Company  has not filed  the  Exchange  Registration
Statement  or Shelf  Registration  Statement on or before the date on which such
registration statement is required to be filed pursuant to Section 2(a) or 2(b),
respectively, or (ii) such Exchange Registration Statement or Shelf Registration
Statement has not become effective or been declared  effective by the Commission
on or before the date on which such registration statement is required to become
or be declared  effective  pursuant to Section  2(a) or 2(b),  respectively,  or
(iii) the Exchange Offer has not been completed within 45 days after the initial
effective date of the Exchange  Registration  Statement relating to the Exchange
Offer (if the Exchange  Offer is then  required to be made) or (iv) any Exchange
Registration  Statement or Shelf Registration Statement required by Section 2(a)
or 2(b) hereof is filed and declared  effective but shall  thereafter  either be
withdrawn  by the Company or shall  become  subject to an  effective  stop order
issued   pursuant  to  Section  8(d)  of  the   Securities  Act  suspending  the
effectiveness of such registration  statement (except as specifically  permitted
herein)  without  being  succeeded  immediately  by an  additional  registration
statement  filed and declared  effective (each such event referred to in clauses
(i) through  (iv),  a  "Registration  Default"  and each period  during  which a
Registration  Default has occurred and is continuing,  a  "Registration  Default
Period"),  then, as liquidated damages for such Registration Default, subject to
the  provisions of Section  9(b),  special  interest  ("Special  Interest"),  in
addition to the Base Interest, shall accrue at a per annum rate of 0.25% for the
first 90 days of the Registration  Default Period,  at a per annum rate of 0.50%
for the second 90 days of the Registration  Default Period,  at a per annum rate
of 0.75% for the third 90 days of the  Registration  Default Period and at a per
annum rate of 1.0%  thereafter  for the  remaining  portion of the  Registration
Default Period.

The Company  shall take all actions  necessary or advisable to be taken by it to
ensure  that  the   transactions   contemplated   herein  are   effected  as  so
contemplated.

Any reference herein to a registration  statement as of any time shall be deemed
to include any document incorporated,  or deemed to be incorporated,  therein by
reference  as of  such  time  and any  reference  herein  to any  post-effective
amendment to a registration  statement as of any time shall be deemed to include
any document incorporated, or deemed to be incorporated, therein by reference as
of such time.

                                       4
<PAGE>

Registration Procedures.

If the  Company  files a  registration  statement  pursuant  to Section  2(a) or
Section 2(b), the following  provisions  shall apply: At or before the Effective
Time of the Exchange Registration or the Shelf Registration, as the case may be,
the Company shall qualify the Indenture  under the Trust  Indenture Act of 1939.
In the event that such  qualification  would  require the  appointment  of a new
trustee under the Indenture,  the Company shall appoint a new trustee thereunder
pursuant to the applicable provisions of the Indenture.

In connection with the Company's obligations with respect to the registration of
Exchange   Securities   as   contemplated   by  Section   2(a)  (the   "Exchange
Registration"),  if applicable, the Company shall, as soon as practicable (or as
otherwise specified):

prepare and file with the  Commission,  as soon as practicable but no later than
240 days after the Closing Date, an Exchange Registration  Statement on any form
which may be utilized by the Company and which shall permit the  Exchange  Offer
and resales of Exchange Securities by broker-dealers during the Resale Period to
be effected as contemplated by Section 2(a), and use its reasonable best efforts
to cause such  Exchange  Registration  Statement to become  effective as soon as
practicable  thereafter,  but no later than 270 days after the Closing  Date; as
soon as  practicable  prepare and file with the Commission  such  amendments and
supplements to such Exchange Registration  Statement and the prospectus included
therein as may be necessary to effect and  maintain  the  effectiveness  of such
Exchange  Registration  Statement for the periods and purposes  contemplated  in
Section  2(a)  hereof  and as may  be  required  by  the  applicable  rules  and
regulations  of the Commission  and the  instructions  applicable to the form of
such Exchange  Registration  Statement,  and promptly provide each broker-dealer
holding  Exchange  Securities  with such  number  of  copies  of the  prospectus
included  therein  (as then  amended  or  supplemented),  in  conformity  in all
material  respects with the  requirements  of the  Securities  Act and the Trust
Indenture Act and the rules and  regulations  of the Commission  thereunder,  as
such broker-dealer  reasonably may request prior to the expiration of the Resale
Period,  for use in  connection  with resales of Exchange  Securities;  promptly
notify  each  broker-dealer  that  has  requested  or  received  copies  of  the
prospectus included in such registration  statement,  and confirm such advice in
writing,  (A)  when  such  Exchange  Registration  Statement  or the  prospectus
included  therein or any  prospectus  amendment or supplement or  post-effective
amendment  has been  filed,  and,  with  respect to such  Exchange  Registration
Statement or any post-effective  amendment,  when the same has become effective,
(B) of any  comments  by the  Commission  and  by  the  blue  sky or  securities
commissioner  or regulator  of any state with respect  thereto or any request by
the  Commission  for  amendments or  supplements  to such Exchange  Registration
Statement or prospectus or for  additional  information,  (C) of the issuance by
the Commission of any stop order  suspending the  effectiveness of such Exchange
Registration  Statement or the initiation or threatening of any  proceedings for
that  purpose,  (D) if at any time the  representations  and  warranties  of the
Company  contemplated  by Section 5 cease to be true and correct in all material
respects,  (E) of the receipt by the Company of any notification with respect to
the suspension of the  qualification of the Exchange  Securities for sale in any
jurisdiction  or the  initiation  or  threatening  of any  proceeding  for  such
purpose,  or (F) at any time  during  the Resale  Period  when a  prospectus  is
required  to  be  delivered   under  the  Securities  Act,  that  such  Exchange
Registration  Statement,  prospectus,  prospectus  amendment  or  supplement  or
post-effective  amendment  does not  conform  in all  material  respects  to the
applicable  requirements  of the Securities Act and the Trust  Indenture Act and
the rules and  regulations  of the  Commission  thereunder or contains an untrue
statement of a material  fact or omits to state any material fact required to be
stated  therein or necessary to make the  statements  therein not  misleading in
light of the circumstances then existing;

in  the  event  that  the  Company  would  be  required,   pursuant  to  Section
3(c)(iii)(F)  above, to notify any broker-dealers  holding Exchange  Securities,
without  delay  prepare and furnish to each such holder a  reasonable  number of
copies of a prospectus  supplemented or amended so that, as thereafter delivered
to  purchasers  of such  Exchange  Securities  during  the Resale  Period,  such
prospectus shall conform in all material respects to the applicable requirements
of the Securities Act and the Trust  Indenture Act and the rules and regulations
of the  Commission  thereunder  and shall not contain an untrue  statement  of a
material fact or omit to state a material fact required to be stated  therein or
necessary  to make  the  statements  therein  not  misleading  in  light  of the
circumstances then existing;

use its best  efforts  to obtain  the  withdrawal  of any order  suspending  the
effectiveness  of such  Exchange  Registration  Statement or any  post-effective
amendment thereto at the earliest practicable date;

use its  reasonable  best  efforts  to (A)  register  or  qualify  the  Exchange
Securities  under the securities laws or blue sky laws of such  jurisdictions as
are  contemplated by Section 2(a) no later than the

                                       5
<PAGE>

commencement   of  the  Exchange   Offer,   (B)  keep  such   registrations   or
qualifications  in  effect  and  comply  with  such  laws  so as to  permit  the
continuance of offers,  sales and dealings therein in such  jurisdictions  until
the  expiration  of the Resale  Period and (C) take any and all other actions as
may be reasonably  necessary or advisable to enable each  broker-dealer  holding
Exchange Securities to consummate the disposition thereof in such jurisdictions;
provided,  however,  that the Company shall not be required for any such purpose
to (1) qualify as a foreign corporation in any jurisdiction wherein it would not
otherwise  be  required  to qualify  but for the  requirements  of this  Section
3(c)(vi),  (2) consent to general service of process in any such jurisdiction or
(3) make any  changes  to its  certificate  of  incorporation  or by-laws or any
agreement between it and its stockholders;

use its  reasonable  best  efforts to obtain the  consent  or  approval  of each
governmental agency or authority,  whether federal, state or local, which may be
required  to  effect  the  Exchange  Registration,  the  Exchange  Offer and the
offering and sale of Exchange  Securities  by  broker-dealers  during the Resale
Period;

provide  a  CUSIP  number  for all  Exchange  Securities,  not  later  than  the
applicable Effective Time;

comply with all applicable  rules and  regulations of the  Commission,  and make
generally  available to its  securityholders as soon as practicable but no later
than  eighteen  months after the effective  date of such  Exchange  Registration
Statement,  an earning  statement of the Company and its subsidiaries  complying
with  Section  11(a) of the  Securities  Act  (including,  at the  option of the
Company, Rule 158 thereunder).

In  connection  with  the  Company's  obligations  with  respect  to  the  Shelf
Registration,  if applicable,  the Company shall,  as soon as practicable (or as
otherwise specified):

prepare and file with the  Commission,  as soon as  practicable  but in any case
within  the  time  periods  specified  in  Section  2(b),  a Shelf  Registration
Statement  on any form which may be  utilized  by the  Company  and which  shall
register all of the Registrable  Securities for resale by the holders thereof in
accordance  with such method or methods of  disposition  as may be  specified by
such of the holders as, from time to time,  may be Electing  Holders and use its
best efforts to cause such Shelf  Registration  Statement to become effective as
soon as practicable but in any case within the time periods specified in Section
2(b);

not  less  than 30  calendar  days  prior  to the  Effective  Time of the  Shelf
Registration  Statement,  mail the Notice and  Questionnaire  to the  holders of
Registrable  Securities;  no holder  shall be  entitled to be named as a selling
securityholder in the Shelf Registration Statement as of the Effective Time, and
no holder  shall be entitled to use the  prospectus  forming a part  thereof for
resales of Registrable Securities at any time, unless such holder has returned a
completed and signed Notice and Questionnaire to the Company by the deadline for
response set forth therein; provided, however, holders of Registrable Securities
shall  have at least 28  calendar  days  from the date on which the  Notice  and
Questionnaire  is first mailed to such holders to return a completed  and signed
Notice and Questionnaire to the Company;

after the Effective Time of the Shelf Registration  Statement,  upon the request
of any holder of  Registrable  Securities  that is not then an Electing  Holder,
promptly  send a Notice and  Questionnaire  to such  holder;  provided  that the
Company  shall not be  required  to take any  action  to name  such  holder as a
selling  securityholder  in the Shelf  Registration  Statement or to enable such
holder to use the  prospectus  forming a part thereof for resales of Registrable
Securities  until such  holder has  returned a completed  and signed  Notice and
Questionnaire to the Company;

as soon as practicable  prepare and file with the Commission such amendments and
supplements to such Shelf  Registration  Statement and the  prospectus  included
therein as may be necessary to effect and  maintain  the  effectiveness  of such
Shelf Registration Statement for the period specified in Section 2(b) hereof and
as may be required by the applicable rules and regulations of the Commission and
the instructions  applicable to the form of such Shelf  Registration  Statement,
and furnish to the Electing  Holders copies of any such  supplement or amendment
simultaneously with or prior to its being used or filed with the Commission;

comply with the provisions of the Securities Act with respect to the disposition
of all  of  the  Registrable  Securities  covered  by  such  Shelf  Registration
Statement in accordance with the intended methods of disposition by the Electing
Holders provided for in such Shelf Registration Statement;

provide (A) the Electing Holders, (B) the underwriters (which term, for purposes
of this  Exchange and  Registration  Rights  Agreement,  shall  include a person
deemed to be an  underwriter  within  the  meaning of  Section  2(a)(11)  of the
Securities Act), if any, thereof, (C) any sales or placement agent therefor, (D)
counsel for any such  underwriter or agent and (E) not more than one counsel for
all the Electing  Holders the  opportunity to participate in the  preparation of
such Shelf  Registration  Statement,  each prospectus  included therein or filed
with the Commission and each amendment or supplement thereto;

                                       6
<PAGE>

for a  reasonable  period  prior  to  the  filing  of  such  Shelf  Registration
Statement,  and throughout the period  specified in Section 2(b), make available
at reasonable times, at the Company's  principal place of business or such other
reasonable  place for inspection by the persons  referred to in Section 3(d)(vi)
who shall certify to the Company that they have a current  intention to sell the
Registrable  Securities pursuant to the Shelf  Registration,  such financial and
other information and books and records of the Company,  and cause the officers,
employees,  counsel and independent  certified public accountants of the Company
to respond to such inquiries,  as shall be reasonably necessary, in the judgment
of the respective  counsel referred to in such Section,  to conduct a reasonable
investigation  within the meaning of Section 11 of the Securities Act; provided,
however,  that each such party shall be required to maintain in  confidence  and
not to  disclose  to any other  person any  information  or  records  reasonably
designated  by the  Company as being  confidential,  until such time as (A) such
information  becomes  a matter  of  public  record  (whether  by  virtue  of its
inclusion in such registration statement or otherwise), or (B) such person shall
be required so to disclose such  information  pursuant to a subpoena or order of
any court or other  governmental  agency or body  having  jurisdiction  over the
matter (subject to the  requirements  of such order,  and only after such person
shall have given the Company prompt prior written  notice of such  requirement),
or (C) such  information is required to be set forth in such Shelf  Registration
Statement or the  prospectus  included  therein or in an amendment to such Shelf
Registration Statement or an amendment or supplement to such prospectus in order
that such Shelf Registration Statement,  prospectus, amendment or supplement, as
the case may be, complies with applicable requirements of the federal securities
laws and the rules and  regulations  of the  Commission  and does not contain an
untrue  statement of a material  fact or omit to state  therein a material  fact
required to be stated  therein or necessary to make the  statements  therein not
misleading in light of the circumstances then existing;

promptly  notify each of the  Electing  Holders,  any sales or  placement  agent
therefor and any underwriter thereof (which notification may be made through any
managing  underwriter  that is a  representative  of such  underwriter  for such
purpose)  and confirm such advice in writing,  (A) when such Shelf  Registration
Statement or the  prospectus  included  therein or any  prospectus  amendment or
supplement or post-effective amendment has been filed, and, with respect to such
Shelf Registration Statement or any post-effective  amendment, when the same has
become  effective,  (B) of any comments by the Commission and by the blue sky or
securities  commissioner  or regulator of any state with respect  thereto or any
request  by  the   Commission  for  amendments  or  supplements  to  such  Shelf
Registration Statement or prospectus or for additional  information,  (C) of the
issuance by the  Commission of any stop order  suspending the  effectiveness  of
such Shelf  Registration  Statement  or the  initiation  or  threatening  of any
proceedings  for  that  purpose,  (D) if at any  time  the  representations  and
warranties of the Company  contemplated by Section 3(d)(xvii) or Section 5 cease
to be true and  correct  in all  material  respects,  (E) of the  receipt by the
Company of any notification  with respect to the suspension of the qualification
of the Registrable  Securities for sale in any jurisdiction or the initiation or
threatening  of any  proceeding  for such purpose,  or (F) if at any time when a
prospectus is required to be delivered under the Securities Act, that such Shelf
Registration  Statement,  prospectus,  prospectus  amendment  or  supplement  or
post-effective  amendment  does not  conform  in all  material  respects  to the
applicable  requirements  of the Securities Act and the Trust  Indenture Act and
the rules and  regulations  of the  Commission  thereunder or contains an untrue
statement of a material  fact or omits to state any material fact required to be
stated  therein or necessary to make the  statements  therein not  misleading in
light of the circumstances then existing;

use its reasonable best efforts to obtain the withdrawal of any order suspending
the effectiveness of such registration statement or any post-effective amendment
thereto at the earliest practicable date;

if requested by any managing underwriter or underwriters, any placement or sales
agent or any Electing Holder, promptly incorporate in a prospectus supplement or
post-effective amendment such information as is required by the applicable rules
and  regulations  of  the  Commission  and  as  such  managing   underwriter  or
underwriters,  such agent or such Electing Holder  specifies  should be included
therein  relating  to the  terms  of the  sale of such  Registrable  Securities,
including  information  with  respect  to the  principal  amount of  Registrable
Securities  being sold by such Electing Holder or agent or to any  underwriters,
the name and  description of such Electing  Holder,  agent or  underwriter,  the
offering price of such  Registrable  Securities and any discount,  commission or
other  compensation  payable in respect  thereof,  the purchase price being paid
therefor  by such  underwriters  and  with  respect  to any  other  terms of the
offering of the  Registrable  Securities to be sold by such  Electing  Holder or
agent or to such underwriters;  and make all required filings of such prospectus
supplement  or  post-effective  amendment  promptly  after  notification  of the
matters to be  incorporated  in such  prospectus  supplement  or  post-effective
amendment;

furnish  to each  Electing  Holder,  each  placement  or  sales  agent,  if any,
therefor, each underwriter,  if any, thereof and the respective counsel referred
to in Section  3(d)(vi) an executed copy (or, in the case of an Electing Holder,
a conformed copy) of such Shelf Registration Statement,  each such amendment and
supplement  thereto (in each case including all exhibits thereto (in the case of
an Electing  Holder of

                                       7
<PAGE>

Registrable  Securities,  upon request) and documents  incorporated by reference
therein)  and  such  number  of  copies  of such  Shelf  Registration  Statement
(excluding  exhibits  thereto and documents  incorporated  by reference  therein
unless specifically so requested by such Electing Holder,  agent or underwriter,
as the case may be) and of the  prospectus  included in such Shelf  Registration
Statement (including each preliminary prospectus and any summary prospectus), in
conformity in all material  respects  with the  applicable  requirements  of the
Securities Act and the Trust  Indenture Act and the rules and regulations of the
Commission thereunder, and such other documents, as such Electing Holder, agent,
if any, and underwriter,  if any, may reasonably  request in order to facilitate
the  offering  and  disposition  of the  Registrable  Securities  owned  by such
Electing  Holder,  offered  or  sold  by  such  agent  or  underwritten  by such
underwriter and to permit such Electing Holder, agent and underwriter to satisfy
the prospectus  delivery  requirements  of the  Securities  Act; and the Company
hereby  consents to the use of such prospectus  (including such  preliminary and
summary  prospectus)  and any  amendment  or  supplement  thereto  by each  such
Electing Holder and by any such agent and underwriter,  in each case in the form
most recently  provided to such person by the Company,  in  connection  with the
offering  and  sale of the  Registrable  Securities  covered  by the  prospectus
(including  such  preliminary  and  summary  prospectus)  or any  supplement  or
amendment thereto;

use  reasonable  best  efforts  to  (A)  register  or  qualify  the  Registrable
Securities  to be  included  in such  Shelf  Registration  Statement  under such
securities  laws or blue sky laws of such  jurisdictions  as any Electing Holder
and each placement or sales agent,  if any,  therefor and  underwriter,  if any,
thereof shall reasonably request,  (B) keep such registrations or qualifications
in effect and comply with such laws so as to permit the  continuance  of offers,
sales and  dealings  therein in such  jurisdictions  during the period the Shelf
Registration is required to remain effective under Section 2(b) above and for so
long  as may  be  necessary  to  enable  any  such  Electing  Holder,  agent  or
underwriter to complete its  distribution  of Securities  pursuant to such Shelf
Registration  Statement  and  (C)  take  any  and all  other  actions  as may be
reasonably necessary or advisable to enable each such Electing Holder, agent, if
any,  and   underwriter,   if  any,  to  consummate  the   disposition  in  such
jurisdictions  of such  Registrable  Securities;  provided,  however,  that  the
Company  shall not be required  for any such purpose to (1) qualify as a foreign
corporation  in any  jurisdiction  wherein it would not otherwise be required to
qualify  but for the  requirements  of this  Section  3(d)(xii),  (2) consent to
general  service of process in any such  jurisdiction or (3) make any changes to
its certificate of incorporation or by-laws or any agreement  between it and its
stockholders;

use its  reasonable  best  efforts to obtain the  consent  or  approval  of each
governmental agency or authority,  whether federal, state or local, which may be
required to effect the Shelf  Registration or the offering or sale in connection
therewith or to enable the selling holder or holders to offer,  or to consummate
the disposition of, their Registrable Securities;

unless any Registrable  Securities  shall be in book-entry only form,  cooperate
with the Electing Holders and the managing  underwriters,  if any, to facilitate
the timely  preparation  and delivery of certificates  representing  Registrable
Securities  to be sold,  which  certificates,  if so required by any  securities
exchange  upon which any  Registrable  Securities  are listed,  shall be penned,
lithographed  or engraved,  or produced by any  combination of such methods,  on
steel engraved borders,  and which  certificates  shall not bear any restrictive
legends; and, in the case of an underwritten  offering,  enable such Registrable
Securities  to be in such  denominations  and  registered  in such  names as the
managing  underwriters  may request at least two business days prior to any sale
of the Registrable Securities;

provide a CUSIP  number  for all  Registrable  Securities,  not  later  than the
applicable Effective Time;

enter  into one or more  underwriting  agreements,  engagement  letters,  agency
agreements,  "best efforts"  underwriting  agreements or similar agreements,  as
appropriate,  including  customary  provisions  relating to indemnification  and
contribution,  and take  such  other  actions  in  connection  therewith  as any
Electing Holders  aggregating at least 20% in aggregate  principal amount of the
Registrable  Securities  at the  time  outstanding  shall  request  in  order to
expedite or facilitate the disposition of such Registrable Securities;

whether or not an agreement of the type referred to in Section  3(d)(xvi) hereof
is entered into and whether or not any portion of the offering  contemplated  by
the  Shelf  Registration  is an  underwritten  offering  or is  made  through  a
placement or sales agent or any other entity, (A) make such  representations and
warranties  to the Electing  Holders and the  placement or sales agent,  if any,
therefor and the underwriters,  if any, thereof in form,  substance and scope as
are customarily made in connection with an offering of debt securities  pursuant
to any  appropriate  agreement or to a registration  statement filed on the form
applicable  to the Shelf  Registration;  (B) obtain an opinion of counsel to the
Company in customary  form and covering  such matters,  of the type  customarily
covered by such an  opinion,  as the  managing  underwriters,  if any, or as any
Electing  Holders  of  at  least  20%  in  aggregate  principal  amount  of  the
Registrable Securities at the time outstanding may reasonably request, addressed
to such Electing Holder or Electing Holders and the placement or sales agent, if
any, therefor and the underwriters, if any, thereof

                                       8
<PAGE>

and dated the effective date of such Shelf  Registration  Statement (and if such
Shelf Registration  Statement contemplates an underwritten offering of a part or
all of the  Registrable  Securities,  dated  the date of the  closing  under the
underwriting agreement relating thereto) (it being agreed that the matters to be
covered by such opinion shall include the due incorporation and good standing of
the  Company  and its  Subsidiaries;  the  qualification  of the Company and its
Subsidiaries   to   transact   business   as  foreign   corporations;   the  due
authorization,  execution  and  delivery of the  relevant  agreement of the type
referred  to in Section  3(d)(xvi)  hereof;  the due  authorization,  execution,
authentication  and  issuance,  and  the  validity  and  enforceability,  of the
Securities;  the absence of material legal or governmental proceedings involving
the Company;  the absence of a breach by the Company or any of its  Subsidiaries
of, or a default  under,  material  agreements  binding  upon the Company or any
Subsidiary of the Company; the absence of governmental  approvals required to be
obtained in connection with the Shelf Registration, the offering and sale of the
Registrable  Securities,  this Exchange and Registration Rights Agreement or any
agreement  of the type  referred  to in Section  3(d)(xvi)  hereof,  except such
approvals  as may be  required  under  state  securities  or blue sky laws;  the
material  compliance  as to form of such Shelf  Registration  Statement  and any
documents  incorporated  by  reference  therein  and of the  Indenture  with the
requirements of the Securities Act and the Trust Indenture Act and the rules and
regulations of the Commission thereunder,  respectively;  and, as of the date of
the  opinion   and  of  the  Shelf   Registration   Statement   or  most  recent
post-effective  amendment  thereto,  as the case may be, the  absence  from such
Shelf  Registration  Statement  and the  prospectus  included  therein,  as then
amended  or  supplemented,  and from the  documents  incorporated  by  reference
therein (in each case other than the financial  statements  and other  financial
information  contained therein) of an untrue statement of a material fact or the
omission  to state  therein a material  fact  necessary  to make the  statements
therein  not  misleading  (in the case of such  documents,  in the  light of the
circumstances  existing  at the time that such  documents  were  filed  with the
Commission  under the  Exchange  Act));  (C) obtain a "cold  comfort"  letter or
letters  from  the  independent  certified  public  accountants  of the  Company
addressed to the selling Electing Holders, the placement or sales agent, if any,
therefor or the underwriters,  if any, thereof,  dated (i) the effective date of
such Shelf Registration  Statement and (ii) the effective date of any prospectus
supplement to the prospectus  included in such Shelf  Registration  Statement or
post-effective  amendment to such Shelf  Registration  Statement  which includes
unaudited  or  audited  financial  statements  as of a  date  or  for  a  period
subsequent  to that of the latest such  statements  included in such  prospectus
(and, if such Shelf Registration Statement contemplates an underwritten offering
pursuant to any prospectus  supplement to the prospectus  included in such Shelf
Registration  Statement or post-effective  amendment to such Shelf  Registration
Statement which includes unaudited or audited financial  statements as of a date
or for a period  subsequent  to that of the latest such  statements  included in
such prospectus,  dated the date of the closing under the underwriting agreement
relating  thereto),  such letter or letters to be in customary form and covering
such  matters of the type  customarily  covered  by  letters  of such type;  (D)
deliver such documents and certificates,  including officers'  certificates,  as
may be reasonably requested by any Electing Holders of at least 20% in aggregate
principal  amount of the Registrable  Securities at the time  outstanding or the
placement or sales agent,  if any,  therefor and the managing  underwriters,  if
any, thereof to evidence the accuracy of the representations and warranties made
pursuant to clause (A) above or those  contained  in Section 5(a) hereof and the
compliance with or satisfaction of any agreements or conditions contained in the
underwriting  agreement or other agreement entered into by the Company;  and (E)
undertake such obligations  relating to expense  reimbursement,  indemnification
and contribution as are provided in Section 6 hereof;

notify in writing each holder of  Registrable  Securities of any proposal by the
Company to amend or waive any provision of this Exchange and Registration Rights
Agreement  pursuant  to  Section  9(h)  hereof  and of any  amendment  or waiver
effected pursuant  thereto,  each of which notices shall contain the text of the
amendment or waiver proposed or effected, as the case may be;

in the event that any  broker-dealer  registered  under the  Exchange  Act shall
underwrite  any  Registrable  Securities  or  participate  as  a  member  of  an
underwriting  syndicate or selling group or "assist in the distribution" (within
the  meaning  of  the  Conduct  Rules  (the  "Conduct  Rules)  of  the  National
Association of Securities  Dealers,  Inc. ("NASD") or any successor thereto,  as
amended  from time to time)  thereof,  whether  as a holder of such  Registrable
Securities  or as an  underwriter,  a  placement  or sales  agent or a broker or
dealer in respect thereof, or otherwise,  assist such broker-dealer in complying
with the  requirements  of such Conduct Rules,  including by (A) if such Conduct
Rules shall so  require,  engaging a  "qualified  independent  underwriter"  (as
defined in such Conduct Rules) to  participate  in the  preparation of the Shelf
Registration  Statement  relating to such  Registrable  Securities,  to exercise
usual  standards of due diligence in respect  thereto and, if any portion of the
offering  contemplated by such Shelf  Registration  Statement is an underwritten
offering or is made through a placement or sales agent,  to recommend  the yield
of such Registrable Securities,  (B) indemnifying any such qualified independent
underwriter to the extent of the  indemnification  of  underwriters  provided in
Section  6  hereof  (or to such  other  customary  extent  as may be  reasonably
requested by such  underwriter),  and (C)  providing  such  information  to such

                                       9
<PAGE>

broker-dealer as may be required in order for such  broker-dealer to comply with
the requirements of the Conduct Rules; and

comply with all applicable  rules and  regulations of the  Commission,  and make
generally  available to its  securityholders  as soon as practicable  but in any
event not later than  eighteen  months  after the  effective  date of such Shelf
Registration Statement, an earning statement of the Company and its subsidiaries
complying with Section 11(a) of the Securities Act (including,  at the option of
the Company, Rule 158 thereunder).

In  the  event  that  the  Company  would  be  required,   pursuant  to  Section
3(d)(viii)(F)  above,  to notify the Electing  Holders,  the  placement or sales
agent, if any,  therefor and the managing  underwriters,  if any,  thereof,  the
Company shall without delay prepare and furnish to each of the Electing Holders,
to each placement or sales agent, if any, and to each such underwriter,  if any,
a reasonable  number of copies of a prospectus  supplemented or amended so that,
as thereafter delivered to purchasers of Registrable Securities, such prospectus
shall conform in all material  respects to the  applicable  requirements  of the
Securities Act and the Trust  Indenture Act and the rules and regulations of the
Commission  thereunder  and shall not contain an untrue  statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the circumstances then
existing.  Each Electing  Holder agrees that upon receipt of any notice from the
Company  pursuant to Section  3(d)(viii)(F)  hereof,  such Electing Holder shall
forthwith discontinue the disposition of Registrable  Securities pursuant to the
Shelf  Registration  Statement  applicable to such Registrable  Securities until
such Electing  Holder shall have received copies of such amended or supplemented
prospectus,  and if so directed  by the  Company,  such  Electing  Holder  shall
deliver  to the  Company  (at the  Company's  expense)  all  copies,  other than
permanent  file  copies,  then  in  such  Electing  Holder's  possession  of the
prospectus  covering such Registrable  Securities at the time of receipt of such
notice.

In the event of a Shelf Registration, in addition to the information required to
be provided by each Electing Holder in its Notice Questionnaire, the Company may
require  such  Electing  Holder  to  furnish  to  the  Company  such  additional
information  regarding such Electing Holder and such Electing  Holder's intended
method of distribution of Registrable  Securities as may be required in order to
comply with the Securities  Act. Each such Electing  Holder agrees to notify the
Company as promptly as  practicable  of any  inaccuracy or change in information
previously furnished by such Electing Holder to the Company or of the occurrence
of any event in either case as a result of which any prospectus relating to such
Shelf  Registration  contains or would contain an untrue statement of a material
fact regarding such Electing Holder or such Electing Holder's intended method of
disposition of such  Registrable  Securities or omits to state any material fact
regarding  such Electing  Holder or such Electing  Holder's  intended  method of
disposition  of such  Registrable  Securities  required to be stated  therein or
necessary  to make  the  statements  therein  not  misleading  in  light  of the
circumstances  then  existing,  and  promptly  to  furnish  to the  Company  any
additional  information  required to correct and update any previously furnished
information or required so that such prospectus shall not contain,  with respect
to such Electing Holder or the disposition of such  Registrable  Securities,  an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements  therein not misleading in
light of the circumstances then existing.

Until the  expiration of two years after the Closing Date, the Company will not,
and will not permit any of its  "affiliates" (as defined in Rule 144) to, resell
any of the Securities  that have been  reacquired by any of them except pursuant
to an effective registration statement under the Securities Act.

                                       10
<PAGE>

Registration Expenses.

The Company  agrees to bear and to pay or cause to be paid promptly all expenses
incident to the Company's  performance  of or compliance  with this Exchange and
Registration  Rights  Agreement,  including  (a) all  Commission  and  any  NASD
registration,   filing  and  review  fees  and  expenses   including   fees  and
disbursements  of counsel for the  placement or sales agent or  underwriters  in
connection with such registration,  filing and review, (b) all fees and expenses
in connection  with the  qualification  of the  Securities for offering and sale
under the State  securities  and blue sky laws referred to in Section  3(d)(xii)
hereof and  determination of their  eligibility for investment under the laws of
such  jurisdictions  as any managing  underwriters  or the Electing  Holders may
designate,  including  any fees and  disbursements  of counsel for the  Electing
Holders or underwriters in connection with such qualification and determination,
(c) all expenses relating to the preparation, printing, production, distribution
and reproduction of each registration  statement required to be filed hereunder,
each prospectus  included therein or prepared for distribution  pursuant hereto,
each  amendment or  supplement to the  foregoing,  the expenses of preparing the
Securities   for  delivery  and  the  expenses  of  printing  or  producing  any
underwriting agreements,  agreements among underwriters,  selling agreements and
blue sky or legal  investment  memoranda  and all other  documents in connection
with the  offering,  sale or delivery of Securities to be disposed of (including
certificates representing the Securities), (d) messenger, telephone and delivery
expenses  relating  to the  offering,  sale or delivery  of  Securities  and the
preparation of documents  referred in clause (c) above, (e) fees and expenses of
the Trustee  under the  Indenture,  any agent of the Trustee and any counsel for
the Trustee and of any  collateral  agent or  custodian,  (f) internal  expenses
(including  all salaries and expenses of the  Company's  officers and  employees
performing legal or accounting duties), (g) fees,  disbursements and expenses of
counsel and independent  certified public  accountants of the Company (including
the expenses of any opinions or "cold comfort"  letters  required by or incident
to such performance and compliance), (h) fees, disbursements and expenses of any
"qualified  independent  underwriter"  engaged  pursuant  to  Section  3(d)(xix)
hereof,  (i) fees,  disbursements  and  expenses of one counsel for the Electing
Holders  retained in connection  with a Shelf  Registration,  as selected by the
Electing  Holders of at least a majority in  aggregate  principal  amount of the
Registrable  Securities  held  by  Electing  Holders  (which  counsel  shall  be
reasonably  satisfactory  to the  Company),  (j) any fees charged by  securities
rating  services  for  rating  the  Securities,   and  (k)  fees,  expenses  and
disbursements of any other persons,  including special experts,  retained by the
Company in connection with such  registration  (collectively,  the "Registration
Expenses").  To the extent that any Registration Expenses are incurred,  assumed
or paid by any holder of Registrable  Securities or any placement or sales agent
therefor or underwriter thereof, the Company shall reimburse such person for the
full amount of the Registration  Expenses so incurred,  assumed or paid promptly
after receipt of a request therefor.  Notwithstanding the foregoing, the holders
of the Registrable  Securities  being  registered  shall pay all agency fees and
commissions and underwriting discounts and commissions  attributable to the sale
of such Registrable  Securities and the fees and disbursements of any counsel or
other advisors or experts retained by such holders (severally or jointly), other
than the counsel and experts specifically referred to above.

Representations and Warranties.

The Company represents and warrants to, and agrees with, each Purchaser and each
of the holders from time to time of Registrable Securities that:

Each registration  statement covering Registrable Securities and each prospectus
(including any preliminary or summary prospectus) contained therein or furnished
pursuant to Section  3(d) or Section 3(c) hereof and any further  amendments  or
supplements to any such  registration  statement or prospectus,  when it becomes
effective or is filed with the Commission,  as the case may be, and, in the case
of an  underwritten  offering  of  Registrable  Securities,  at the  time of the
closing under the underwriting  agreement relating thereto,  will conform in all
material  respects  to the  requirements  of the  Securities  Act and the  Trust
Indenture Act and the rules and  regulations  of the  Commission  thereunder and
will not  contain  an untrue  statement  of a  material  fact or omit to state a
material fact required to be stated  therein or necessary to make the statements
therein not misleading; and at all times subsequent to the Effective Time when a
prospectus  would be required to be delivered  under the  Securities  Act, other
than from (i) such time as a notice has been  given to  holders  of  Registrable
Securities  pursuant to Section  3(d)(viii)(F)  or Section  3(c)(iii)(F)  hereof
until  (ii)  such time as the  Company  furnishes  an  amended  or  supplemented
prospectus  pursuant  to Section  3(e) or  Section  3(c)(iv)  hereof,  each such
registration  statement,  and each prospectus (including any summary prospectus)
contained therein or furnished  pursuant to Section 3(d) or Section 3(c) hereof,
as then amended or  supplemented,  will conform in all material  respects to the
requirements of the Securities Act and the Trust Indenture Act and the rules and
regulations  of the  Commission  thereunder  and  will  not  contain  an  untrue
statement  of a material  fact or omit to state a

                                       11
<PAGE>

material fact required to be stated  therein or necessary to make the statements
therein  not  misleading  in the  light  of  the  circumstances  then  existing;
provided,  however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished  in  writing  to the  Company  by a holder of  Registrable  Securities
expressly for use therein.

Any documents incorporated by reference in any prospectus referred to in Section
5(a) hereof,  when they become or became effective or are or were filed with the
Commission,  as the case may be,  will  conform  or  conformed  in all  material
respects to the  requirements  of the  Securities  Act or the  Exchange  Act, as
applicable,  and none of such  documents  will  contain or  contained  an untrue
statement  of a material  fact or will omit or omitted to state a material  fact
required to be stated  therein or necessary to make the  statements  therein not
misleading;  provided,  however, that this representation and warranty shall not
apply to any  statements  or omissions  made in reliance  upon and in conformity
with information  furnished in writing to the Company by a holder of Registrable
Securities expressly for use therein.

The  compliance  by the Company with all of the  provisions of this Exchange and
Registration  Rights Agreement and the  consummation of the transactions  herein
contemplated will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture,  mortgage,  deed of
trust,  loan  agreement or other  material  agreement or instrument to which the
Company or any  Subsidiary  of the Company is a party or by which the Company or
any Subsidiary of the Company is bound or to which any of the property or assets
of the Company or any Subsidiary of the Company is subject, nor will such action
result in any violation of the provisions of the  certificate of  incorporation,
as amended,  or the by-laws of the Company or any statute or any order,  rule or
regulation of any court or governmental  agency or body having jurisdiction over
the Company or any subsidiary of the Company or any of their properties;  and no
consent,  approval,  authorization,  order,  registration or qualification of or
with  any  such  court  or  governmental  agency  or  body is  required  for the
consummation  by the Company of the  transactions  contemplated by this Exchange
and Registration Rights Agreement,  except the registration under the Securities
Act of the Securities,  qualification of the Indenture under the Trust Indenture
Act   and   such   consents,   approvals,   authorizations,   registrations   or
qualifications  as may be required  under State  securities  or blue sky laws in
connection with the offering and distribution of the Securities.

This  Exchange  and  Registration  Rights  Agreement  has been duly  authorized,
executed and delivered by the Company.

Indemnification.

Indemnification  by the Company.  The Company will  indemnify  and hold harmless
each  of  the  holders  of  Registrable   Securities  included  in  an  Exchange
Registration  Statement,  each of the Electing Holders of Registrable Securities
included in a Shelf Registration Statement and each person who participates as a
placement  or sales agent or as an  underwriter  in any offering or sale of such
Registrable Securities against any losses, claims, damages or liabilities, joint
or several, to which such holder,  agent or underwriter may become subject under
the  Securities  Act or otherwise,  insofar as such losses,  claims,  damages or
liabilities  (or actions in respect  thereof)  arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Exchange Registration Statement or Shelf Registration Statement, as the case may
be, under which such Registrable Securities were registered under the Securities
Act,  or any  preliminary,  final or  summary  prospectus  contained  therein or
furnished  by  the  Company  to any  such  holder,  Electing  Holder,  agent  or
underwriter,  or any  amendment or  supplement  thereto,  or arise out of or are
based upon the  omission or alleged  omission to state  therein a material  fact
required to be stated  therein or necessary to make the  statements  therein not
misleading, and will reimburse such holder, such Electing Holder, such agent and
such underwriter for any legal or other expenses  reasonably incurred by them in
connection  with  investigating  or  defending  any such action or claim as such
expenses are incurred;  provided,  however, that the Company shall not be liable
to any such  person in any such case to the extent  that any such  loss,  claim,
damage  or  liability  arises  out of or is based  upon an untrue  statement  or
alleged  untrue   statement  or  omission  or  alleged  omission  made  in  such
registration  statement,  or  preliminary,   final  or  summary  prospectus,  or
amendment or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by such person expressly for use therein.

Indemnification by the Holders and any Agents and Underwriters.  The Company may
require,  as  a  condition  to  including  any  Registrable  Securities  in  any
registration  statement  filed  pursuant to Section  2(b) hereof and to entering
into any  underwriting  agreement with respect  thereto,  that the Company shall
have received an  undertaking  reasonably  satisfactory  to it from the Electing
Holder of such  Registrable  Securities and from each  underwriter  named in any
such  underwriting  agreement,  severally and not jointly,  to (i) indemnify and
hold  harmless the Company,  and all other  holders of  Registrable  Securities,
against any losses,  claims, damages or liabilities to which the Company or such
other holders of Registrable

                                       12
<PAGE>

Securities may become subject, under the Securities Act or otherwise, insofar as
such losses,  claims,  damages or  liabilities  (or actions in respect  thereof)
arise out of or are based upon an untrue  statement or alleged untrue  statement
of a material fact contained in such registration statement, or any preliminary,
final or summary prospectus contained therein or furnished by the Company to any
such  Electing  Holder,  agent or  underwriter,  or any  amendment or supplement
thereto,  or arise out of or are based upon the omission or alleged  omission to
state therein a material fact required to be stated therein or necessary to make
the statements  therein not misleading,  in each case to the extent, but only to
the extent,  that such untrue  statement or alleged untrue statement or omission
or alleged  omission was made in reliance  upon and in  conformity  with written
information  furnished  to the Company by such  Electing  Holder or  underwriter
expressly for use therein, and (ii) reimburse the Company for any legal or other
expenses  reasonably incurred by the Company in connection with investigating or
defending  any such action or claim as such  expenses  are  incurred;  provided,
however,  that no such Electing Holder shall be required to undertake  liability
to any person  under this  Section  6(b) for any amounts in excess of the dollar
amount of the proceeds to be received by such  Electing  Holder from the sale of
such Electing Holder's Registrable Securities pursuant to such registration.

Notices of Claims,  Etc.  Promptly after receipt by an  indemnified  party under
subsection (a) or (b) above of written notice of the commencement of any action,
such  indemnified  party  shall,  if a claim in  respect  thereof  is to be made
against an indemnifying party pursuant to the  indemnification  provisions of or
contemplated by this Section 6, notify such indemnifying party in writing of the
commencement  of such  action;  but the  omission so to notify the  indemnifying
party  shall  not  relieve  it  from  any  liability  which  it may  have to any
indemnified  party  otherwise  than under the  indemnification  provisions of or
contemplated  by Section 6(a) or 6(b)  hereof.  In case any such action shall be
brought against any indemnified party and it shall notify an indemnifying  party
of the  commencement  thereof,  such  indemnifying  party  shall be  entitled to
participate  therein  and, to the extent that it shall  wish,  jointly  with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (who shall not, except
with the  consent of the  indemnified  party,  be  counsel  to the  indemnifying
party),  and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof,  such indemnifying party shall
not be liable to such indemnified  party for any legal expenses of other counsel
or any other expenses,  in each case  subsequently  incurred by such indemnified
party, in connection  with the defense  thereof other than  reasonable  costs of
investigation.  In no event shall an  indemnifying  party be liable for fees and
expenses of more than one counsel (in addition to local  counsel)  separate from
their own counsel for all indemnified  parties in connection with any one action
or separate but similar or related actions in the same jurisdiction  arising out
of the same general  allegations or circumstances.  No indemnifying party shall,
without the written consent of the indemnified  party,  effect the settlement or
compromise  of, or consent to the entry of any  judgment  with  respect  to, any
pending or  threatened  action or claim in respect of which  indemnification  or
contribution may be sought hereunder (whether or not the indemnified party is an
actual or  potential  party to such  action or claim)  unless  such  settlement,
compromise or judgment (i) includes an unconditional  release of the indemnified
party from all  liability  arising out of such action or claim and (ii) does not
include a statement as to or an admission of fault,  culpability or a failure to
act by or on behalf of any indemnified party.

Contribution.  If for any reason the indemnification  provisions contemplated by
Section 6(a) or Section 6(b) are unavailable to or insufficient to hold harmless
an indemnified  party in respect of any losses,  claims,  damages or liabilities
(or actions in respect  thereof)  referred to  therein,  then each  indemnifying
party shall contribute to the amount paid or payable by such  indemnified  party
as a result of such  losses,  claims,  damages  or  liabilities  (or  actions in
respect  thereof) in such  proportion as is  appropriate to reflect the relative
fault of the indemnifying party and the indemnified party in connection with the
statements  or  omissions  which  resulted in such  losses,  claims,  damages or
liabilities  (or  actions in  respect  thereof),  as well as any other  relevant
equitable  considerations.  The relative  fault of such  indemnifying  party and
indemnified  party shall be  determined  by reference  to,  among other  things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged  omission to state a material  fact relates to  information  supplied by
such indemnifying  party or by such indemnified party, and the parties' relative
intent,  knowledge,  access to information and opportunity to correct or prevent
such  statement or omission.  The parties hereto agree that it would not be just
and equitable if contributions  pursuant to this Section 6(d) were determined by
pro rata allocation (even if the holders or any agents or underwriters or all of
them were  treated  as one entity for such  purpose)  or by any other  method of
allocation which does not take account of the equitable  considerations referred
to in this Section 6(d). The amount paid or payable by an indemnified party as a
result of the losses,  claims,  damages,  or liabilities  (or actions in respect
thereof) referred to above shall be deemed to include any legal or other fees or
expenses  reasonably  incurred  by such  indemnified  party in  connection  with
investigating  or  defending  any such  action  or  claim.  Notwithstanding  the
provisions of this Section  6(d), no holder shall be required to contribute  any
amount in  excess of the  amount  by which  the  dollar  amount of the  proceeds
received  by such  holder  from the sale of any  Registrable  Securities  (after
deducting any fees,  discounts and commissions  applicable  thereto)

                                       13
<PAGE>

exceeds the amount of any damages which such holder has otherwise  been required
to pay by reason of such  untrue or alleged  untrue  statement  or  omission  or
alleged omission,  and no underwriter shall be required to contribute any amount
in excess  of the  amount  by which  the  total  price at which the  Registrable
Securities  underwritten by it and distributed to the public were offered to the
public  exceeds the amount of any damages which such  underwriter  has otherwise
been  required to pay by reason of such untrue or alleged  untrue  statement  or
omission or alleged omission.  No person guilty of fraudulent  misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution   from  any  person   who  was  not   guilty  of  such   fraudulent
misrepresentation.  The  holders'  and  any  underwriters'  obligations  in this
Section  6(d) to  contribute  shall be several in  proportion  to the  principal
amount of Registrable Securities registered or underwritten, as the case may be,
by them and not joint.

The  obligations of the Company under this Section 6 shall be in addition to any
liability  which the Company may otherwise have and shall extend,  upon the same
terms and  conditions,  to each  officer,  director  and partner of each holder,
agent and underwriter and each person, if any, who controls any holder, agent or
underwriter within the meaning of the Securities Act; and the obligations of the
holders and any agents or  underwriters  contemplated by this Section 6 shall be
in addition to any liability which the respective  holder,  agent or underwriter
may otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company (including any person who, with his consent,
is named in any  registration  statement  as about to become a  director  of the
Company) and to each person, if any, who controls the Company within the meaning
of the Securities Act.

Underwritten Offerings.

Selection of Underwriters.  If any of the Registrable  Securities covered by the
Shelf  Registration  are to be sold pursuant to an  underwritten  offering,  the
managing  underwriter  or  underwriters  thereof shall be designated by Electing
Holders  holding  at least a  majority  in  aggregate  principal  amount  of the
Registrable  Securities  to be included  in such  offering,  provided  that such
designated managing underwriter or underwriters is or are reasonably  acceptable
to the Company.

Participation by Holders.  Each holder of Registrable  Securities  hereby agrees
with  each  other  such  holder  that  no such  holder  may  participate  in any
underwritten  offering  hereunder  unless  such  holder  (i) agrees to sell such
holder's  Registrable  Securities  on the  basis  provided  in any  underwriting
arrangements  approved  by  the  persons  entitled  hereunder  to  approve  such
arrangements  and (ii)  completes  and  executes all  questionnaires,  powers of
attorney,  indemnities,  underwriting  agreements and other documents reasonably
required under the terms of such underwriting arrangements.

Rule 144.

The Company  covenants  to the  holders of  Registrable  Securities  that to the
extent it shall be required to do so under the Exchange  Act, the Company  shall
timely file the reports required to be filed by it under the Exchange Act or the
Securities Act (including the reports under Section 13 and 15(d) of the Exchange
Act  referred to in  subparagraph  (c)(1) of Rule 144 adopted by the  Commission
under  the  Securities  Act)  and  the  rules  and  regulations  adopted  by the
Commission  thereunder,  and shall  take such  further  action as any  holder of
Registrable  Securities may reasonably request,  all to the extent required from
time to time to  enable  such  holder  to sell  Registrable  Securities  without
registration  under the Securities  Act within the  limitations of the exemption
provided by Rule 144 under the Securities  Act, as such Rule may be amended from
time to time, or any similar or successor rule or regulation  hereafter  adopted
by the Commission.  Upon the request of any holder of Registrable  Securities in
connection  with that  holder's  sale  pursuant to Rule 144,  the Company  shall
deliver to such holder a written  statement as to whether it has  complied  with
such requirements.

                                       14
<PAGE>

Miscellaneous.

No Inconsistent  Agreements.  The Company  represents,  warrants,  covenants and
agrees that it has not granted,  and shall not grant,  registration  rights with
respect  to  Registrable  Securities  or any  other  securities  which  would be
inconsistent  with the terms contained in this Exchange and Registration  Rights
Agreement.

Specific  Performance.  The parties  hereto  acknowledge  that there would be no
adequate  remedy at law if the Company  fails to perform any of its  obligations
hereunder  and that the  Purchasers  and the  holders  from  time to time of the
Registrable  Securities  may be  irreparably  harmed  by any such  failure,  and
accordingly agree that the Purchasers and such holders, in addition to any other
remedy to which they may be entitled  at law or in equity,  shall be entitled to
compel  specific  performance  of the  obligations  of the  Company  under  this
Exchange and  Registration  Rights  Agreement in  accordance  with the terms and
conditions of this Exchange and Registration  Rights Agreement,  in any court of
the United States or any State thereof having jurisdiction.

Notices.   All   notices,   requests,   claims,   demands,   waivers  and  other
communications  hereunder  shall be in writing  and shall be deemed to have been
duly given when  delivered by hand, if delivered  personally  or by courier,  or
three days after being  deposited in the mail  (registered  or  certified  mail,
postage prepaid,  return receipt requested) as follows: If to the Company, to it
at 80 Park Plaza,  Newark,  NJ 07102, and if to a holder, to the address of such
holder set forth in the security register or other records of the Company, or to
such other  address as the Company or any such holder may have  furnished to the
other in  writing  in  accordance  herewith,  except  that  notices of change of
address shall be effective only upon receipt.

Parties  in  Interest.  All  the  terms  and  provisions  of this  Exchange  and
Registration  Rights Agreement shall be binding upon, shall inure to the benefit
of and shall be  enforceable  by the parties hereto and the holders from time to
time of the Registrable  Securities and the respective successors and assigns of
the parties  hereto and such  holders.  In the event that any  transferee of any
holder of Registrable  Securities shall acquire Registrable  Securities,  in any
manner, whether by gift, bequest, purchase,  operation of law or otherwise, such
transferee shall, without any further writing or action of any kind, be deemed a
beneficiary  hereof for all purposes and such  Registrable  Securities  shall be
held  subject  to all of the  terms of this  Exchange  and  Registration  Rights
Agreement, and by taking and holding such Registrable Securities such transferee
shall be entitled to receive the benefits of, and be conclusively deemed to have
agreed  to be  bound  by all of the  applicable  terms  and  provisions  of this
Exchange and Registration Rights Agreement. If the Company shall so request, any
such successor,  assign or transferee shall agree in writing to acquire and hold
the Registrable Securities subject to all of the applicable terms hereof.

Survival. The respective indemnities,  agreements,  representations,  warranties
and each other  provision  set forth in this  Exchange and  Registration  Rights
Agreement  or made  pursuant  hereto  shall  remain  in full  force  and  effect
regardless of any investigation (or statement as to the results thereof) made by
or on behalf of any holder of Registrable Securities,  any director,  officer or
partner of such holder,  any agent or  underwriter  or any director,  officer or
partner thereof,  or any controlling  person of any of the foregoing,  and shall
survive delivery of and payment for the Registrable  Securities  pursuant to the
Purchase  Agreement and the transfer and registration of Registrable  Securities
by such holder and the consummation of an Exchange Offer.

Governing Law. This Exchange and Registration Rights Agreement shall be governed
by and construed in accordance with the laws of the State of New York.

Headings.  The  descriptive  headings of the several  Sections and paragraphs of
this Exchange and  Registration  Rights  Agreement are inserted for  convenience
only,  do not  constitute  a part  of  this  Exchange  and  Registration  Rights
Agreement and shall not affect in any way the meaning or  interpretation of this
Exchange and Registration Rights Agreement.

Entire Agreement;  Amendments.  This Exchange and Registration  Rights Agreement
and the other writings  referred to herein (including the Indenture and the form
of Securities) or delivered pursuant hereto which form a part hereof contain the
entire  understanding  of the parties with respect to its subject  matter.  This
Exchange and Registration  Rights Agreement  supersedes all prior agreements and
understandings  between the parties  with  respect to its subject  matter.  This
Exchange and Registration  Rights Agreement may be amended and the observance of
any term of this  Exchange  and  Registration  Rights  Agreement  may be  waived
(either  generally  or in a  particular  instance  and either  retroactively  or
prospectively) only by a written instrument duly executed by the Company and the
holders of at least a majority in aggregate  principal amount of the Registrable
Securities at the time outstanding. Each holder of any Registrable Securities at
the time or  thereafter  outstanding  shall be bound by any  amendment or waiver
effected  pursuant to this Section 9(h),  whether or not any notice,  writing or
marking  indicating  such  amendment  or  waiver  appears  on  such  Registrable
Securities or is delivered to such holder.

                                       15
<PAGE>

Inspection. For so long as this Exchange and Registration Rights Agreement shall
be in effect,  this Exchange and  Registration  Rights  Agreement and a complete
list of the names and  addresses  of all the holders of  Registrable  Securities
shall be made  available for  inspection  and copying on any business day by any
holder of Registrable  Securities for proper  purposes only (which shall include
any purpose related to the rights of the holders of Registrable Securities under
the Securities,  the Indenture and this Agreement) at the offices of the Company
at the address  thereof set forth in Section 9(c) above and at the office of the
Trustee under the Indenture.

Counterparts.  This  agreement  may be executed by the parties in  counterparts,
each of which  shall  be  deemed  to be an  original,  but all  such  respective
counterparts shall together constitute one and the same instrument.

                                       16
<PAGE>

      If the foregoing is in accordance with your understanding, please sign and
return to us  counterparts  hereof,  and upon the  acceptance  hereof by you, on
behalf of each of the Purchasers,  this letter and such acceptance  hereof shall
constitute a binding  agreement  between each of the Purchasers and the Company.
It is  understood  that your  acceptance of this letter on behalf of each of the
Purchasers is pursuant to the  authority set forth in a form of Agreement  Among
Purchasers,  the form of which shall be submitted to the Company for examination
upon  request,  but  without  warranty on your part as to the  authority  of the
signers thereof.

                                         Very truly yours,

                                         PSEG Energy Holdings Inc.

                                         By: /s/ Robert J. Dougherty, Jr.
                                             -----------------------------------
                                             Name:  Robert J. Dougherty, Jr.
                                             Title: President
                                                    and Chief Operating Officer

Accepted as of the date hereof:

Lehman Brothers Inc.
UBS Warburg LLC
Morgan Stanley & Co. Incorporated
Salomon Smith Barney Inc.

By: Lehman Brothers Inc.

       /s/  James W. Merli
--------------------------------------
     Name:  James W. Merli
     Title: Managing Director

     On behalf of the Purchasers

                                       17
<PAGE>

                                    Exhibit A
                            PSEG Energy Holdings Inc.

                         INSTRUCTION TO DTC PARTICIPANTS

                                (Date of Mailing)

                     URGENT - IMMEDIATE ATTENTION REQUESTED

                        DEADLINE FOR RESPONSE: [DATE] *

The Depository  Trust Company  ("DTC") has  identified you as a DTC  Participant
through  which  beneficial  interests  in the PSEG  Energy  Holdings  Inc.  (the
"Company") 8.625% Senior Notes due 2008 (the "Securities") are held.

The Company is in the process of registering the Securities under the Securities
Act of 1933 for resale by the beneficial owners thereof.  In order to have their
Securities  included  in the  registration  statement,  beneficial  owners  must
complete and return the enclosed  Notice of  Registration  Statement and Selling
Securityholder Questionnaire.

It is important that beneficial  owners of the Securities  receive a copy of the
enclosed  materials as soon as possible as their  rights to have the  Securities
included in the  registration  statement  depend upon their returning the Notice
and  Questionnaire  by [Deadline  For  Response].  Please  forward a copy of the
enclosed  documents  to  each  beneficial  owner  that  holds  interests  in the
Securities  through you. If you require more copies of the enclosed materials or
have any  questions  pertaining  to this  matter,  please  contact  PSEG  Energy
Holdings Inc. in writing at 80 Park Plaza,  Newark,  NJ 07102 or by telephone at
(973) 456-3581.

----------
* Not less than 28 calendar days from date of mailing.

                                      A-1
<PAGE>

                            PSEG Energy Holdings Inc.

                        Notice of Registration Statement
                                       and
                      Selling Securityholder Questionnaire

(Date)

Reference is hereby made to the Exchange and Registration  Rights Agreement (the
"Exchange and Registration  Rights Agreement") between PSEG Energy Holdings Inc.
(the "Company") and the Purchasers  named therein.  Pursuant to the Exchange and
Registration  Rights  Agreement,  the Company  has filed with the United  States
Securities and Exchange  Commission (the "Commission") a registration  statement
on Form S-3 (the "Shelf Registration Statement") for the registration and resale
under Rule 415 of the Securities Act of 1933, as amended (the "Securities Act"),
of the Company's 8.625% Senior Notes due 2008 (the "Securities").  A copy of the
Exchange and Registration  Rights Agreement is attached hereto.  All capitalized
terms not otherwise  defined herein shall have the meanings  ascribed thereto in
the Exchange and Registration Rights Agreement.

Each beneficial  owner of Registrable  Securities (as defined below) is entitled
to have the  Registrable  Securities  beneficially  owned by it  included in the
Shelf Registration  Statement.  In order to have Registrable Securities included
in the Shelf Registration  Statement,  this Notice of Registration Statement and
Selling  Securityholder  Questionnaire  ("Notice  and  Questionnaire")  must  be
completed, executed and delivered to the Company at the address set forth herein
for  receipt  ON  OR  BEFORE  [Deadline  for  Response].  Beneficial  owners  of
Registrable  Securities who do not complete,  execute and return this Notice and
Questionnaire by such date (i) will not be named as selling  securityholders  in
the Shelf  Registration  Statement and (ii) may not use the Prospectus forming a
part thereof for resales of Registrable Securities.

Certain legal consequences arise from being named as a selling securityholder in
the Shelf Registration  Statement and related Prospectus.  Accordingly,  holders
and beneficial owners of Registrable Securities are advised to consult their own
securities law counsel  regarding the  consequences  of being named or not being
named as a  selling  securityholder  in the  Shelf  Registration  Statement  and
related Prospectus.

The term  "Registrable  Securities" is defined in the Exchange and  Registration
Rights Agreement.

                                      A-2
<PAGE>

                                    ELECTION

The undersigned holder (the "Selling  Securityholder") of Registrable Securities
hereby elects to include in the Shelf  Registration  Statement  the  Registrable
Securities  beneficially  owned  by  it  and  listed  below  in  Item  (3).  The
undersigned,  by signing and returning this Notice and Questionnaire,  agrees to
be bound with respect to such Registrable Securities by the terms and conditions
of this  Notice and  Questionnaire  and the  Exchange  and  Registration  Rights
Agreement,  including,  without  limitation,  Section  6  of  the  Exchange  and
Registration Rights Agreement, as if the undersigned Selling Securityholder were
an original party thereto.

Upon any sale of  Registrable  Securities  pursuant  to the  Shelf  Registration
Statement, the Selling Securityholder will be required to deliver to the Company
and Trustee the Notice of Transfer  set forth as Exhibit B to the  Exchange  and
Registration Rights Agreement.

The Selling  Securityholder  hereby  provides the following  information  to the
Company and  represents  and  warrants  that such  information  is accurate  and
complete:

                                      A-3
<PAGE>

                                  QUESTIONNAIRE

(1)  (a)      Full Legal Name of Selling Securityholder:

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

     (b)      Full  Legal Name of  Registered  Holder (if not the same as in (a)
              above) of Registrable Securities Listed in Item (3) below:

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

     (c)      Full Legal Name of DTC  Participant  (if applicable and if not the
              same as (b) above) Through Which Registrable  Securities Listed in
              Item (3) below are Held:

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

(2)           Address for Notices to Selling Securityholder:

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

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

              ------------------------------------------------------------------
              Telephone:
                             ---------------------------------------------------
              Fax:
                             ---------------------------------------------------
              Contact Person:
                             ---------------------------------------------------

(3)           Beneficial Ownership of Securities:

              Except as set forth below in this Item (3), the  undersigned  does
              not beneficially own any Securities.

     (a)      Principal amount of Registrable Securities beneficially owned:

              ------------------------------------------------------------------
              CUSIP No(s). of such Registrable Securities:

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

     (b)      Principal  amount  of Securities other than Registrable Securities
              beneficially owned:

              ------------------------------------------------------------------
              CUSIP No(s). of such other Securities:
                                                    ----------------------------

     (c)      Principal  amount of Registrable  Securities which the undersigned
              wishes to be included in the Shelf Registration  Statement:

              ------------------------------------------------------------------
              CUSIP No(s). of such Registrable Securities  to be included in the
              Shelf Registration Statement:

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

(4)           Beneficial Ownership of Other Securities of the Company:

              Except  as set  forth  below in this  Item  (4),  the  undersigned
              Selling  Securityholder  is not the beneficial or registered owner
              of any other securities of the Company,  other than the Securities
              listed above in Item (3).

              State any exceptions here:

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

(5)           Relationships with the Company:

              Except as set forth below, neither the Selling  Securityholder nor
              any of its  affiliates,  officers,  directors or principal  equity
              holders  (5% or more) has held any  position  or office or has had
              any  other  material   relationship   with  the  Company  (or  its
              predecessors or affiliates) during the past three years.

              State any exceptions here:

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

                                      A-4
<PAGE>

(6)           Plan of Distribution:

              Except as set forth below, the undersigned Selling  Securityholder
              intends to distribute the Registrable  Securities  listed above in
              Item (3) only as follows (if at all): Such Registrable  Securities
              may be sold from time to time directly by the undersigned  Selling
              Securityholder   or,    alternatively,    through    underwriters,
              broker-dealers or agents. Such Registrable  Securities may be sold
              in one or more  transactions at fixed prices, at prevailing market
              prices at the time of sale,  at varying  prices  determined at the
              time of sale, or at negotiated prices.  Such sales may be effected
              in transactions  (which may involve crosses or block transactions)
              (i) on any national  securities  exchange or quotation  service on
              which  the  Registered  Securities  may be listed or quoted at the
              time  of  sale,  (ii) in the  over-the-counter  market,  (iii)  in
              transactions  otherwise  than on such  exchanges or services or in
              the  over-the-counter  market,  or (iv)  through  the  writing  of
              options. In connection with sales of the Registrable Securities or
              otherwise,  the  Selling  Securityholder  may enter  into  hedging
              transactions  with  broker-dealers,  which  may in turn  engage in
              short sales of the Registrable Securities in the course of hedging
              the positions  they assume.  The Selling  Securityholder  may also
              sell  Registrable   Securities   short  and  deliver   Registrable
              Securities  to close out such short  positions,  or loan or pledge
              Registrable  Securities  to  broker-dealers  that in turn may sell
              such securities.

              State any exceptions here:

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

By signing below, the Selling  Securityholder  acknowledges  that it understands
its obligation to comply, and agrees that it will comply, with the provisions of
the  Exchange  Act  and  the  rules  and  regulations  thereunder,  particularly
Regulation M.

In the event that the Selling Securityholder transfers all or any portion of the
Registrable  Securities  listed in Item (3) above  after the date on which  such
information  is provided to the Company,  the Selling  Securityholder  agrees to
notify  the  transferee(s)  at the  time  of the  transfer  of  its  rights  and
obligations   under  this  Notice  and   Questionnaire   and  the  Exchange  and
Registration Rights Agreement.

By signing below, the Selling  Securityholder  consents to the disclosure of the
information  contained  herein in its answers to Items (1) through (6) above and
the  inclusion  of such  information  in the Shelf  Registration  Statement  and
related Prospectus. The Selling Securityholder understands that such information
will be relied upon by the Company in  connection  with the  preparation  of the
Shelf Registration Statement and related Prospectus.

In accordance with the Selling Securityholder's obligation under Section 3(d) of
the Exchange and  Registration  Rights  Agreement to provide such information as
may be required by law for inclusion in the Shelf  Registration  Statement,  the
Selling Securityholder agrees to promptly notify the Company of any inaccuracies
or changes in the information  provided herein which may occur subsequent to the
date  hereof at any time  while  the Shelf  Registration  Statement  remains  in
effect.  All notices  hereunder  and pursuant to the  Exchange and  Registration
Rights Agreement shall be made in writing,  by hand-delivery,  first-class mail,
or air courier guaranteeing overnight delivery as follows:

                                      A-5
<PAGE>

To the Company:

                             PSEG Energy Holdings Inc.
                             80 Park Plaza, T-22
                             P.O. Box 1171
                             Newark, New Jersey 07101
                             Attention: Treasurer

Once this Notice and Questionnaire is executed by the Selling Securityholder and
received by the  Company,  the terms of this Notice and  Questionnaire,  and the
representations  and  warranties  contained  herein,  shall be binding on, shall
inure to the benefit of and shall be enforceable  by the respective  successors,
heirs,  personal  representatives,  and  assigns of the  Company and the Selling
Securityholder (with respect to the Registrable Securities beneficially owned by
such Selling  Securityholder  and listed in Item (3) above. This Agreement shall
be governed in all respects by the laws of the State of New York.

IN WITNESS WHEREOF,  the  undersigned,  by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.

Dated:
      ----------------------

      --------------------------------------------------------------------------
      Selling Securityholder
      (Print/type full legal name of beneficial owner of Registrable Securities)

      By:
         -----------------------------------------------------------------------
      Name:
      Title:

PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON
OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY AT:

                                      PSEG Energy Holdings Inc.
                                      80 Park Plaza, T-22
                                      P.O. Box 1171
                                      Newark, New Jersey 07101
                                      Attention: Treasurer

                                      A-6
<PAGE>

                                    Exhibit B

              NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT

First Union National Bank
PSEG Energy Holdings Inc.
c/o   First Union National Bank
      21 South Street, 3rd Floor
      Morristown, New Jersey 07960

Attention: Trust Officer

   Re:  PSEG Energy Holdings Inc. (the "Company")
        8.625% Senior Notes due 2008

Dear Sirs:

Please be  advised  that  _____________________  has  transferred  $____________
aggregate  principal  amount  of  the  above-referenced  Notes  pursuant  to  an
effective  Registration  Statement on Form S-3 (File No. 333-____ ) filed by the
Company.

We hereby  certify that the  prospectus  delivery  requirements,  if any, of the
Securities Act of 1933, as amended, have been satisfied and that the above-named
beneficial  owner of the Notes is named as a "Selling  Holder" in the Prospectus
dated [date] or in supplements  thereto, and that the aggregate principal amount
of the Notes  transferred are the Notes listed in such Prospectus  opposite such
owner's name.

Dated:                                          Very truly yours,

                                                --------------------------------
                                                (Name)

                                                By:
                                                   -----------------------------
                                                       (Authorized Signature)

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