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                                                                     EXHIBIT 4.2

                              COMPUTER MOTION, INC.

                            1997 STOCK INCENTIVE PLAN

         This 1997 STOCK INCENTIVE PLAN (the "Plan") is hereby established by
Computer Motion, Inc., a California corporation (the "Company"), and adopted by
its Board of Directors as of the ____ day of April, 1997 (the "Effective Date").

                                   ARTICLE 1.

                              PURPOSES OF THE PLAN

         1.1 PURPOSES. The purposes of the Plan are (a) to enhance the Company's
ability to attract and retain the services of qualified employees, officers and
directors (including non-employee officers and directors), and consultants and
other service providers upon whose judgment, initiative and efforts the
successful conduct and development of the Company's business largely depends,
and (b) to provide additional incentives to such persons or entities to devote
their utmost effort and skill to the advancement and betterment of the Company,
by providing them an opportunity to participate in the ownership of the Company
and thereby have an interest in the success and increased value of the Company.

                                   ARTICLE 2.

                                   DEFINITIONS

         For purposes of this Plan, the following terms shall have the meanings
indicated:

         2.1 ADMINISTRATOR. "Administrator" means the Board or, if the Board
delegates responsibility for any matter to the Committee, the term Administrator
shall mean the Committee.

         2.2 AFFILIATED COMPANY. "Affiliated Company" means any "parent
corporation" or "subsidiary corporation" of the Company, whether now existing or
hereafter created or acquired, as those terms are defined in Sections 424(e) and
424(f) of the Code, respectively.

         2.3 BOARD. "Board" means the Board of Directors of the Company.

         2.4 CHANGE IN CONTROL. "Change in Control" shall mean (i) the
acquisition, directly or indirectly, by any person or group (within the meaning
of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) of the
beneficial ownership of securities of the Company possessing more than fifty
percent (50%) of the total combined voting power of all outstanding securities
of the Company; (ii) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction in which the holders of the
outstanding voting securities of the Company immediately prior to such merger or
consolidation hold, in the aggregate, securities possessing more than fifty
percent (50%) of the total combined voting power of all outstanding voting
securities of the surviving entity immediately after such merger or
consolidation; (iii) a reverse merger in which the Company is the surviving
entity but in which securities possessing more than fifty percent (50%) of the
total combined voting power of all outstanding voting securities of the Company
are transferred to or acquired by a person or persons different from the persons
holding

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those securities immediately prior to such merger; (iv) the sale, transfer or
other disposition (in one transaction or a series of related transactions) of
all or substantially all of the assets of the Company; or (v) approval by the
shareholders of a plan or proposal for the liquidation or dissolution of the
Company.

         2.5 CODE. "Code" means the Internal Revenue Code of 1986, as amended
from time to time.

         2.6 COMMITTEE. "Committee" means a committee of two or more members of
the Board appointed to administer the Plan, as set forth in Section 7.1 hereof.

         2.7 COMMON STOCK. "Common Stock" means the Common Stock, no par value,
of the Company, subject to adjustment pursuant to Section 4.2 hereof.

         2.8 DISABILITY. "Disability" means permanent and total disability as
defined in Section 22(e)(3) of the Code. The Administrator's determination of a
Disability or the absence thereof shall be conclusive and binding on all
interested parties.

         2.9 EFFECTIVE DATE. "Effective Date" means the date on which the Plan
is adopted by the Board, as set forth on the first page hereof.

         2.10 EXERCISE PRICE. "Exercise Price" means the purchase price per
share of Common Stock payable upon exercise of an Option.

         2.11 FAIR MARKET VALUE. "Fair Market Value" on any given date means the
value of one share of Common Stock, determined as follows:

                  (a) If the Common Stock is then listed or admitted to trading
on a NASDAQ market system or a stock exchange which reports closing sale prices,
the Fair Market Value shall be the closing sale price on the date of valuation
on such NASDAQ market system or principal stock exchange on which the Common
Stock is then listed or admitted to trading, or, if no closing sale price is
quoted on such day, then the Fair Market Value shall be the closing sale price
of the Common Stock on such NASDAQ market system or such exchange on the next
preceding day for which a closing sale price is reported.

                  (b) If the Common Stock is not then listed or admitted to
trading on a NASDAQ market system or a stock exchange which reports closing sale
prices, the Fair Market Value shall be the average of the closing bid and asked
prices of the Common Stock in the over-the-counter market on the date of
valuation.

                  (c) If neither (a) nor (b) is applicable as of the date of
valuation, then the Fair Market Value shall be determined by the Administrator
in good faith using any reasonable method of valuation, which determination
shall be conclusive and binding on all interested parties.

         2.12 INCENTIVE OPTION. "Incentive Option" means any Option designated
and qualified as an "incentive stock option" as defined in Section 422 of the
Code.

         2.13 INCENTIVE OPTION AGREEMENT. "Incentive Option Agreement" means an
Option Agreement with respect to an Incentive Option.

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         2.14 NASD DEALER. "NASD Dealer" means a broker-dealer that is a member
of the National Association of Securities Dealers, Inc.

         2.15 NONQUALIFIED OPTION. "Nonqualified Option" means any Option that
is not an Incentive Option. To the extent that any Option designated as an
Incentive Option fails in whole or in part to qualify as an Incentive Option,
including, without limitation, for failure to meet the limitations applicable to
a 10% Shareholder or because it exceeds the annual limit provided for in Section
5.6 below, it shall to that extent constitute a Nonqualified Option.

         2.16 NONQUALIFIED OPTION AGREEMENT. "Nonqualified Option Agreement"
means an Option Agreement with respect to a Nonqualified Option.

         2.17 OFFEREE. "Offeree" means a Participant to whom a Right to Purchase
has been offered or who has acquired Restricted Stock under the Plan.

         2.18 OPTION. "Option" means any option to purchase Common Stock granted
pursuant to the Plan.

         2.19 OPTION AGREEMENT. "Option Agreement" means the written agreement
entered into between the Company and the Optionee with respect to an Option
granted under the Plan.

         2.20 OPTIONEE. "Optionee" means a Participant who holds an Option.

         2.21 PARTICIPANT. "Participant" means an individual or entity who holds
an Option, a Right to Purchase or Restricted Stock under the Plan.

         2.22 PURCHASE PRICE. "Purchase Price" means the purchase price per
share of Restricted Stock payable upon acceptance of a Right to Purchase.

         2.23 RESTRICTED STOCK. "Restricted Stock" means shares of Common Stock
issued pursuant to Article 6 hereof, subject to any restrictions and conditions
as are established pursuant to such Article 6.

         2.24 RIGHT TO PURCHASE. "Right to Purchase" means a right to purchase
Restricted Stock granted to an Offeree pursuant to Article 6 hereof.

         2.25 SERVICE PROVIDER. "Service Provider" means a consultant or other
person or entity who provides services to the Company or an Affiliated Company
and who the Administrator authorizes to become a Participant in the Plan.

         2.26 STOCK PURCHASE AGREEMENT. "Stock Purchase Agreement" means the
written agreement entered into between the Company and the Offeree with respect
to a Right to Purchase offered under the Plan.

         2.27 10% SHAREHOLDER. "10% Shareholder" means a person who, as of a
relevant date, owns or is deemed to own (by reason of the attribution rules
applicable under Section 424(d) of the Code) stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company or of an
Affiliated Company.

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                                   ARTICLE 3.

                                   ELIGIBILITY

         3.1 INCENTIVE OPTIONS. Officers and other key employees of the Company
or of an Affiliated Company (including members of the Board if they are
employees of the Company or of an Affiliated Company) are eligible to receive
Incentive Options under the Plan.

         3.2 NONQUALIFIED OPTIONS AND RIGHTS TO PURCHASE. Officers and other key
employees of the Company or of an Affiliated Company, members of the Board
(whether or not employed by the Company or an Affiliated Company), and Service
Providers are eligible to receive Nonqualified Options or Rights to Purchase
under the Plan.

         3.3 LIMITATION ON SHARES. In no event shall any Participant be granted
Options or Rights to Purchase in any one calendar year pursuant to which the
aggregate number of shares of Common Stock that may be acquired thereunder
exceeds 500,000 shares.

                                   ARTICLE 4.

                                   PLAN SHARES

         4.1 SHARES SUBJECT TO THE PLAN. A total of 2,000,000 shares of Common
Stock may be issued under the Plan, subject to adjustment as to the number and
kind of shares pursuant to Section 4.2 hereof. For purposes of this limitation,
in the event that (a) all or any portion of any Option or Right to Purchase
granted or offered under the Plan can no longer under any circumstances be
exercised, or (b) any shares of Common Stock are reacquired by the Company
pursuant to an Incentive Option Agreement, Nonqualified Option Agreement or
Stock Purchase Agreement, the shares of Common Stock allocable to the
unexercised portion of such Option or such Right to Purchase, or the shares so
reacquired, shall again be available for grant or issuance under the Plan.

         4.2 CHANGES IN CAPITAL STRUCTURE. In the event that the outstanding
shares of Common Stock are hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares or other securities of the
Company by reason of a recapitalization, stock split, combination of shares,
reclassification, stock dividend, or other change in the capital structure of
the Company, then appropriate adjustments shall be made by the Administrator to
the aggregate number and kind of shares subject to this Plan, and the number and
kind of shares and the price per share subject to outstanding Option Agreements,
Rights to Purchase and Stock Purchase Agreements in order to preserve, as nearly
as practical, but not to increase, the benefits to Participants.

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                                   ARTICLE 5.

                                     OPTIONS

         5.1 OPTION AGREEMENT. Each Option granted pursuant to this Plan shall
be evidenced by an Option Agreement which shall specify the number of shares
subject thereto, the Exercise Price per share, and whether the Option is an
Incentive Option or Nonqualified Option. As soon as is practical following the
grant of an Option, an Option Agreement shall be duly executed and delivered by
or on behalf of the Company to the Optionee to whom such Option was granted.
Each Option Agreement shall be in such form and contain such additional terms
and conditions, not inconsistent with the provisions of this Plan, as the
Administrator shall, from time to time, deem desirable, including, without
limitation, the imposition of any rights of first refusal and resale obligations
upon any shares of Common Stock acquired pursuant to an Option Agreement. Each
Option Agreement may be different from each other Option Agreement.

         5.2 EXERCISE PRICE. The Exercise Price per share of Common Stock
covered by each Option shall be determined by the Administrator, subject to the
following: (a) the Exercise Price of an Incentive Option shall not be less than
100% of Fair Market Value on the date the Incentive Option is granted, (b) the
Exercise Price of a Nonqualified Option shall not be less than 85% of Fair
Market Value on the date the Nonqualified Option is granted, and (c) if the
person to whom an Incentive Option is granted is a 10% Shareholder on the date
of grant, the Exercise Price shall not be less than 110% of Fair Market Value on
the date the Option is granted.

         5.3 PAYMENT OF EXERCISE PRICE. Payment of the Exercise Price shall be
made upon exercise of an Option and may be made, in the discretion of the
Administrator, subject to any legal restrictions, by: (a) cash; (b) check; (c)
the surrender of shares of Common Stock owned by the Optionee that have been
held by the Optionee for at least six (6) months, which surrendered shares shall
be valued at Fair Market Value as of the date of such exercise; (d) the
Optionee's promissory note in a form and on terms acceptable to the
Administrator; (e) the cancellation of indebtedness of the Company to the
Optionee; (f) the waiver of compensation due or accrued to the Optionee for
services rendered; (g) provided that a public market for the Common Stock
exists, a "same day sale" commitment from the Optionee and an NASD Dealer
whereby the Optionee irrevocably elects to exercise the Option and to sell a
portion of the shares so purchased to pay for the Exercise Price and whereby the
NASD Dealer irrevocably commits upon receipt of such shares to forward the
Exercise Price directly to the Company; (h) provided that a public market for
the Common Stock exists, a "margin" commitment from the Optionee and an NASD
Dealer whereby the Optionee irrevocably elects to exercise the Option and to
pledge the shares so purchased to the NASD Dealer in a margin account as
security for a loan from the NASD Dealer in the amount of the Exercise Price,
and whereby the NASD Dealer irrevocably commits upon receipt of such shares to
forward the Exercise Price directly to the Company; or (i) any combination of
the foregoing methods of payment or any other consideration or method of payment
as shall be permitted by applicable corporate law.

         5.4 TERM AND TERMINATION OF OPTIONS. The term and provisions for
termination of each Option shall be as fixed by the Administrator, but no Option
may be exercisable more than ten (10) years after the date it is granted. An
Incentive Option granted to a person who is a 10% Shareholder on the date of
grant shall not be exercisable more than five (5) years after the date it is
granted.

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         5.5 VESTING AND EXERCISE OF OPTIONS. Each Option shall vest and become
exercisable in one or more installments at such time or times and subject to
such conditions, including without limitation the achievement of specified
performance goals or objectives, as shall be determined by the Administrator.

         5.6 ANNUAL LIMIT ON INCENTIVE OPTIONS. To the extent required for
"incentive stock option" treatment under Section 422 of the Code, the aggregate
Fair Market Value (determined as of the time of grant) of the Common Stock shall
not, with respect to which Incentive Options granted under this Plan and any
other plan of the Company or any Affiliated Company become exercisable for the
first time by an Optionee during any calendar year, exceed $100,000.

         5.7 NONTRANSFERABILITY OF OPTIONS. No Option shall be assignable or
transferable except by will or the laws of descent and distribution, and during
the life of the Optionee shall be exercisable only by such Optionee; provided,
however, that, in the discretion of the Administrator, any Option may be
assigned or transferred in any manner which an "incentive stock option" is
permitted to be assigned or transferred under the Code.

         5.8 RIGHTS AS SHAREHOLDER. An Optionee or permitted transferee of an
Option shall have no rights or privileges as a shareholder with respect to any
shares covered by an Option until such Option has been duly exercised and
certificates representing shares purchased upon such exercise have been issued
to such person.

                                   ARTICLE 6.

                               RIGHTS TO PURCHASE

         6.1 NATURE OF RIGHT TO PURCHASE. A Right to Purchase granted to an
Offeree entitles the Offeree to purchase, for a Purchase Price determined by the
Administrator, shares of Common Stock subject to such terms, restrictions and
conditions as the Administrator may determine at the time of grant ("Restricted
Stock"). Such conditions may include, but are not limited to, continued
employment or the achievement of specified performance goals or objectives.

         6.2 ACCEPTANCE OF RIGHT TO PURCHASE. An Offeree shall have no rights
with respect to the Restricted Stock subject to a Right to Purchase unless the
Offeree shall have accepted the Right to Purchase within ten (10) days (or such
longer or shorter period as the Administrator may specify) following the grant
of the Right to Purchase by making payment of the full Purchase Price to the
Company in the manner set forth in Section 6.3 hereof and by executing and
delivering to the Company a Stock Purchase Agreement. Each Stock Purchase
Agreement shall be in such form, and shall set forth the Purchase Price and such
other terms, conditions and restrictions of the Restricted Stock, not
inconsistent with the provisions of this Plan, as the Administrator shall, from
time to time, deem desirable. Each Stock Purchase Agreement may be different
from each other Stock Purchase Agreement.

         6.3 PAYMENT OF PURCHASE PRICE. Subject to any legal restrictions,
payment of the Purchase Price upon acceptance of a Right to Purchase Restricted
Stock may be made, in the discretion of the Administrator, by: (a) cash; (b)
check; (c) the surrender of shares of Common Stock owned by the Offeree that
have been held by the Offeree for at least six (6) months, which surrendered
shares shall be valued at Fair Market Value as of the date of such exercise; (d)
the

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Offeree's promissory note in a form and on terms acceptable to the
Administrator; (e) the cancellation of indebtedness of the Company to the
Offeree; (f) the waiver of compensation due or accrued to the Offeree for
services rendered; or (g) any combination of the foregoing methods of payment or
any other consideration or method of payment as shall be permitted by applicable
corporate law.

         6.4 RIGHTS AS A SHAREHOLDER. Upon complying with the provisions of
Section 6.2 hereof, an Offeree shall have the rights of a shareholder with
respect to the Restricted Stock purchased pursuant to the Right to Purchase,
including voting and dividend rights, subject to the terms, restrictions and
conditions as are set forth in the Stock Purchase Agreement. Unless the
Administrator shall determine otherwise, certificates evidencing shares of
Restricted Stock shall remain in the possession of the Company until such shares
have vested in accordance with the terms of the Stock Purchase Agreement.

         6.5 RESTRICTIONS. Shares of Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as
specifically provided in the Stock Purchase Agreement. In the event of
termination of a Participant's employment, service as a director of the Company
or Service Provider status for any reason whatsoever (including death or
disability), the Stock Purchase Agreement may provide, in the discretion of the
Administrator, that the Company shall have the right, exercisable at the
discretion of the Administrator, to repurchase (i) at the original Purchase
Price, any shares of Restricted Stock which have not vested as of the date of
termination, and (ii) at Fair Market Value, any shares of Restricted Stock which
have vested as of such date, on such terms as may be provided in the Stock
Purchase Agreement.

         6.6 VESTING OF RESTRICTED STOCK. The Stock Purchase Agreement shall
specify the date or dates, the performance goals or objectives which must be
achieved, and any other conditions on which the Restricted Stock may vest.

         6.7 DIVIDENDS. If payment for shares of Restricted Stock is made by
promissory note, any cash dividends paid with respect to the Restricted Stock
may be applied, in the discretion of the Administrator, to repayment of such
note.

         6.8 NONASSIGNABILITY OF RIGHTS. No Right to Purchase shall be
assignable or transferable except by will or the laws of descent and
distribution or as otherwise provided by the Administrator.

                                   ARTICLE 7.

                           ADMINISTRATION OF THE PLAN

         7.1 ADMINISTRATOR. Authority to control and manage the operation and
administration of the Plan shall be vested in the Board, which may delegate such
responsibilities in whole or in part to a committee consisting of two (2) or
more members of the Board (the "Committee"). Members of the Committee may be
appointed from time to time by, and shall serve at the pleasure of, the Board.
As used herein, the term "Administrator" means the Board or, with respect to any
matter as to which responsibility has been delegated to the Committee, the term
Administrator shall mean the Committee.

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         7.2 POWERS OF THE ADMINISTRATOR. In addition to any other powers or
authority conferred upon the Administrator elsewhere in the Plan or by law, the
Administrator shall have full power and authority: (a) to determine the persons
to whom, and the time or times at which, Incentive Options or Nonqualified
Options shall be granted and Rights to Purchase shall be offered, the number of
shares to be represented by each Option and Right to Purchase and the
consideration to be received by the Company upon the exercise thereof; (b) to
interpret the Plan; (c) to create, amend or rescind rules and regulations
relating to the Plan; (d) to determine the terms, conditions and restrictions
contained in, and the form of, Option Agreements and Stock Purchase Agreements;
(e) to determine the identity or capacity of any persons who may be entitled to
exercise a Participant's rights under any Option or Right to Purchase under the
Plan; (f) to correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any Option Agreement or Stock Purchase
Agreement; (g) to accelerate the vesting of any Option or release or waive any
repurchase rights of the Company with respect to Restricted Stock; (h) to extend
the exercise date of any Option or acceptance date of any Right to Purchase; (i)
to provide for rights of first refusal and/or repurchase rights; (j) to amend
outstanding Option Agreements and Stock Purchase Agreements to provide for,
among other things, any change or modification which the Administrator could
have provided for upon the grant of an Option or Right to Purchase or in
furtherance of the powers provided for herein; and (k) to make all other
determinations necessary or advisable for the administration of the Plan, but
only to the extent not contrary to the express provisions of the Plan. Any
action, decision, interpretation or determination made in good faith by the
Administrator in the exercise of its authority conferred upon it under the Plan
shall be final and binding on the Company and all Participants.

         7.3 LIMITATION ON LIABILITY. No employee of the Company or member of
the Board or Committee shall be subject to any liability with respect to duties
under the Plan unless the person acts fraudulently or in bad faith. To the
extent permitted by law, the Company shall indemnify each member of the Board or
Committee, and any employee of the Company with duties under the Plan, who was
or is a party, or is threatened to be made a party, to any threatened, pending
or completed proceeding, whether civil, criminal, administrative or
investigative, by reason of such person's conduct in the performance of duties
under the Plan.

                                   ARTICLE 8.

                                CHANGE IN CONTROL

         8.1 CHANGE IN CONTROL. In order to preserve a Participant's rights with
respect to Options and Rights to Purchase in the event of a Change in Control of
the Company, (i) the vesting of Options or Rights to Purchase shall
automatically accelerate immediately prior to the consummation of such Change in
Control, and (ii) the Administrator in its discretion may, at any time an Option
or Right to Purchase is granted, or at any time thereafter, take one or more of
the following actions: (A) provide for the purchase or exchange of each Option
or Right to Purchase for an amount of cash or other property having a value
equal to the difference, or spread, between (x) the value of the cash or other
property that the Participant would have received pursuant to such Change in
Control transaction in exchange for the shares issuable upon exercise of the
Option or Right to Purchase had the Option or Right to Purchase been exercised
immediately prior to such Change in Control transaction and (y) the Exercise
Price of such Option or the Purchase Price under such Right to Purchase, (B)
adjust the terms of the Options and Rights to Purchase in a manner determined by
the Administrator to reflect the Change in Control, (C) cause the Options and
Rights to Purchase to be assumed, or new rights substituted therefor, by another
entity, through the continuance of the Plan and the assumption of outstanding
Options and Rights to Purchase, or the substitution for such Options and Rights
to Purchase of new options and

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new rights to purchase of comparable value covering shares of a successor
corporation, with appropriate adjustments as to the number and kind of shares
and Exercise Prices, in which event the Plan and such Options and Rights to
Purchase, or the new options and rights to purchase substituted therefor, shall
continue in the manner and under the terms so provided, or (D) make such other
provision as the Administrator may consider equitable. If the Administrator does
not take any of the forgoing actions, all Options and Rights to Purchase shall
terminate upon the consummation of the Change in Control and the Administrator
shall cause written notice of the proposed transaction to be given to all
Participants not less than fifteen (15) days prior to the anticipated effective
date of the proposed transaction. If the Administrator does not cause the
assumption or substitution as set forth in clause (C) of the preceding sentence,
the time periods relating to the exercise or realization of all outstanding
Options, Rights to Purchase and Restricted Stock shall automatically accelerate
immediately prior to the consummation of such Change in Control. If the
Administrator does cause such assumption or substitution, and a Participant is
subsequently terminated involuntarily and without cause, then the time periods
relating to the exercise or realization of all Options, Rights to Purchase and
Restricted Stock that were held by such Participant at the time of the Change of
Control and which remain unexercised or subject to forfeiture shall
automatically accelerate immediately prior to such termination or resignation.

                                   ARTICLE 9.

                      AMENDMENT AND TERMINATION OF THE PLAN

         9.1 AMENDMENTS. The Board may from time to time alter, amend, suspend
or terminate the Plan in such respects as the Board may deem advisable. No such
alteration, amendment, suspension or termination shall be made which shall
substantially affect or impair the rights of any Participant under an
outstanding Option Agreement or Stock Purchase Agreement without such
Participant's consent. The Board may alter or amend the Plan to comply with
requirements under the Code relating to Incentive Options or other types of
options which give Optionees more favorable tax treatment than that applicable
to Options granted under this Plan as of the date of its adoption. Upon any such
alteration or amendment, any outstanding Option granted hereunder may, if the
Administrator so determines and if permitted by applicable law, be subject to
the more favorable tax treatment afforded to an Optionee pursuant to such terms
and conditions.

         9.2 PLAN TERMINATION. Unless the Plan shall theretofore have been
terminated, the Plan shall terminate on the tenth (10th) anniversary of the
Effective Date and no Options or Rights to Purchase may be granted under the
Plan thereafter, but Option Agreements, Stock Purchase Agreements and Rights to
Purchase then outstanding shall continue in effect in accordance with their
respective terms.

                                   ARTICLE 10.

                                 TAX WITHHOLDING

         10.1 WITHHOLDING. The Company shall have the power to withhold, or
require a Participant to remit to the Company, an amount sufficient to satisfy
any applicable Federal, state, and local tax withholding requirements with
respect to any Options exercised or Restricted Stock issued under the Plan. To
the extent permissible under applicable tax, securities and other laws, the
Administrator may, in its sole discretion and upon such terms and conditions as
it may deem appropriate, permit a Participant to satisfy his or her obligation
to pay any such tax, in whole or in

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part, up to an amount determined on the basis of the highest marginal tax rate
applicable to such Participant, by (a) directing the Company to apply shares of
Common Stock to which the Participant is entitled as a result of the exercise of
an Option or as a result of the purchase of or lapse of restrictions on
Restricted Stock or (b) delivering to the Company shares of Common Stock owned
by the Participant. The shares of Common Stock so applied or delivered in
satisfaction of the Participant's tax withholding obligation shall be valued at
their Fair Market Value as of the date of measurement of the amount of income
subject to withholding.

                                   ARTICLE 11.

                                  MISCELLANEOUS

         11.1 BENEFITS NOT ALIENABLE. Other than as provided above, benefits
under the Plan may not be assigned or alienated, whether voluntarily or
involuntarily. Any unauthorized attempt at assignment, transfer, pledge or other
disposition shall be without effect.

         11.2 NO ENLARGEMENT OF EMPLOYEE RIGHTS. This Plan is strictly a
voluntary undertaking on the part of the Company and shall not be deemed to
constitute a contract between the Company and any Participant to be
consideration for, or an inducement to, or a condition of, the employment of any
Participant. Nothing contained in the Plan shall be deemed to give the right to
any Participant to be retained as an employee of the Company or any Affiliated
Company or to limit the right of the Company or any Affiliated Company to
discharge any Participant at any time.

         11.3 APPLICATION OF FUNDS. The proceeds received by the Company from
the sale of Common Stock pursuant to Option Agreements and Stock Purchase
Agreements, except as otherwise provided herein, will be used for general
corporate purposes.

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         2.27 10% SHAREHOLDER. "10% Shareholder" means a person who, as of a
relevant date, owns or is deemed to own (by reason of the attribution rules
applicable under Section 424(d) of the Code) stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company or of an
Affiliated Company.

                                   ARTICLE 3.
                                   ELIGIBILITY

         3.1 INCENTIVE OPTIONS. Officers and other key employees of the Company
or of an Affiliated Company (including members of the Board if they are
employees of the Company or of an Affiliated Company) are eligible to receive
Incentive Options under the Plan.

         3.2 NONQUALIFIED OPTIONS AND RIGHTS TO PURCHASE. Officers and other key
employees of the Company or of an Affiliated Company, members of the Board
(whether or not employed by the Company or an Affiliated Company), and Service
Providers are eligible to receive Nonqualified Options or Rights to Purchase
under the Plan.

         3.3 LIMITATION ON SHARES. In no event shall any Participant be granted
Options or Rights to Purchase in any one calendar year pursuant to which the
aggregate number of shares of Common Stock that may be acquired thereunder
exceeds 500,000 shares.

                                   ARTICLE 4.

                                   PLAN SHARES

         4.1 SHARES SUBJECT TO THE PLAN. A total of 2,000,000 shares of Common
Stock may be issued under the Plan, subject to adjustment as to the number and
kind of shares pursuant to Section 4.2 hereof. For purposes of this limitation,
in the event that (a) all or any portion of any Option or Right to Purchase
granted or offered under the Plan can no longer under any circumstances be
exercised, or (b) any shares of Common Stock are reacquired by the Company
pursuant to an Incentive Option Agreement, Nonqualified Option Agreement or
Stock Purchase Agreement, the shares of Common Stock allocable to the
unexercised portion of such Option or such Right to Purchase, or the shares so
reacquired, shall again be available for grant or issuance under the Plan.

         4.2 CHANGES IN CAPITAL STRUCTURE. In the event that the outstanding
shares of Common Stock are hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares or other securities of the
Company by reason of a recapitalization, stock split, combination of shares,
reclassification, stock dividend, or other change in the capital structure of
the Company, then appropriate adjustments shall be made by the Administrator to
the aggregate number and kind of shares subject to this Plan, and the number and
kind of shares and the price per share subject to outstanding Option Agreements,
Rights to Purchase and Stock Purchase Agreements in order to preserve, as nearly
as practical, but not to increase, the benefits to Participants.Exhibit 4(a)

                             AEP TEXAS NORTH COMPANY

                                       AND

                                BANK ONE, N. A.,

                                   AS TRUSTEE

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

                                    INDENTURE

                          Dated as of February 1, 2003

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

<PAGE>

                              CROSS-REFERENCE TABLE

    Section of
Trust Indenture Act                                                  Section of
of 1939, as amended                                                  Indenture
-------------------                                                -------------

310(a)   ......................................................       7.09
310(b)   ......................................................       7.08
         ......................................................       7.10
310(c)   ......................................................     Inapplicable
311(a)   ......................................................       7.13
311(b)   ......................................................       7.13
311(c)   ......................................................     Inapplicable
312(a)   ......................................................       5.01
         ......................................................       5.02(a)
312(b)   ......................................................       5.02(c)
         ......................................................       5.02(d)
312(c)   ......................................................       5.02(e)
313(a)   ......................................................       5.04(a)
313(b)   ......................................................       5.04(b)
313(c)   ......................................................       5.04(a)
         ......................................................       5.04(b)
313(d)   ......................................................       5.04(c)
314(a)   ......................................................       5.03
314(b)   ......................................................     Inapplicable
314(c)   ......................................................      13.06(a)
314(d)   ......................................................     Inapplicable
314(e)   ......................................................      13.06(b)
314(f)   ......................................................     Inapplicable
315(a)   ......................................................       7.01(a)
         ......................................................       7.02
315(b)   ......................................................       6.07
315(c)   ......................................................       7.01(a)
315(d)   ......................................................       7.01(b)
315(e)   ......................................................       6.08
316(a)   ......................................................       6.06
         ......................................................       8.04
316(b)   ......................................................       6.04
316(c)   ......................................................       8.01
317(a)   ......................................................       6.02
317(b)   ......................................................       4.03
318(a)   ......................................................      13.08

<PAGE>

                                TABLE OF CONTENTS

         This Table of Contents does not constitute part of the Indenture and
should not have any bearing upon the interpretation of any of its terms or
provisions

                                    RECITALS:

Purpose of Indenture...........................................................1
Compliance with legal requirements.............................................1
Purpose of and consideration for Indenture.....................................1

ARTICLE ONE - DEFINITIONS

         Section 1.01

                  Definitions..................................................2

ARTICLE TWO - ISSUE, DESCRIPTION, TERMS, EXECUTION,
REGISTRATION AND EXCHANGE OF SECURITIES

         Section 2.01
                  Designation, terms, amount, authentication
                  and delivery of Securities...................................8

         Section 2.02
                  Form of Security and Trustee's certificate...................9

         Section 2.03..........................................................9
                  Date and denominations of Securities,
                  and provisions for payment of principal,
                  premium and interest.........................................9

         Section 2.04
                  Execution of Securities.....................................11

         Section 2.05
                  Exchange of Securities......................................12

         Section 2.06
                  Temporary Securities........................................13

         Section 2.07
                  Mutilated, destroyed, lost or
                  stolen Securities...........................................14

         Section 2.08
                  Cancellation of surrendered Securities......................14

                                       i
<PAGE>

         Section 2.09
                  Provisions of Indenture and Securities
                  for sole benefit of parties and
                  Securityholders.............................................15

         Section 2.10
                  Appointment of Authenticating Agent.........................15

         Section 2.11
                  Global Security.............................................15

         Section 2.12
                  Payment in Proper Currency..................................16

         Section 2.13
                  Identification of Securities................................17

ARTICLE THREE - REDEMPTION OF SECURITIES AND
SINKING FUND PROVISIONS

         Section 3.01
                  Redemption of Securities....................................17

         Section 3.02
                  Notice of redemption........................................17

         Section 3.03
                  When Securities called for
                  redemption become due and payable...........................18

         Section 3.04
                  Sinking Fund for Securities.................................19

         Section 3.05
                  Satisfaction of Sinking Fund................................19
                  Payments with Securities

         Section 3.06
                  Redemption of Securities for
                  Sinking Fund................................................19

ARTICLE FOUR - PARTICULAR COVENANTS OF THE COMPANY

         Section 4.01
                  Payment of principal (and premium
                  if any) and interest on Securities..........................20

         Section 4.02

                                       ii
<PAGE>

                  Maintenance of office or agency for payment of
                  Securities, designation of office or agency for
                  payment, registration, transfer and exchange
                  of Securities...............................................20

         Section 4.03
                  Duties of paying agent......................................20

         Section 4.04
                  Appointment to fill vacancy in
                  office of Trustee...........................................21

         Section 4.05
                  Restriction on consolidation,
                  merger or sale..............................................21

ARTICLE FIVE - SECURITYHOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE

         Section 5.01
                  Company to furnish Trustee information
                  as to names and addresses of
                  Securityholders.............................................21

         Section 5.02
                  Trustee to preserve information
                  as to names and addresses of
                  Securityholders received by it
                  in capacity of paying agent.................................22

         Section 5.03
                  Annual and other reports to be filed
                  by Company with Trustee.....................................23

         Section 5.04
                  Trustee to transmit annual report
                  to Securityholders..........................................24

ARTICLE SIX - REMEDIES OF THE TRUSTEE AND
SECURITYHOLDERS ON EVENT OF DEFAULT

         Section 6.01
                  Events of default defined...................................25
         Section 6.02

                                      iii
<PAGE>

                  Covenant of Company to pay to
                  Trustee whole amount due on
                  Securities on default in payment
                  of interest or principal (and
                  premium, if any)............................................27

         Section 6.03
                  Application of monies collected by Trustee..................28

         Section 6.04
                  Limitation on suits by holders of Securities................29

         Section 6.05
                  Remedies Cumulative.........................................29

         Section 6.06
                  Rights of holders of majority in
                  principal amount of Securities to
                  direct trustee and to waive defaults........................30

         Section 6.07
                  Trustees to give notice of defaults
                  known to it, but may withhold in
                  certain circumstances.......................................30

         Section 6.08
                  Requirements of an undertaking to pay
                  costs in certain suits under Indenture
                  or against Trustee..........................................31

ARTICLE SEVEN - CONCERNING THE TRUSTEE

         Section 7.01
                  Upon Event of Default occurring and continuing,
                  Trustee shall exercise powers vested in it, and
                  use same degree of care and skill in their exercise,
                  as prudent individual will use..............................31

         Section 7.02
                  Trustee may rely on documents believed
                  genuine and properly signed or presented....................32

         Section 7.03
                  Trustee not liable for recitals in
                  Indenture or in Securities..................................34

                                       iv
<PAGE>

         Section 7.04
                  Trustee, paying agent or Security
                  Registrar may own Security..................................34

         Section 7.05
                  Monies received by Trustee to be held
                  in Trust without interest...................................34

         Section 7.06
                  Trustee entitled to compensation,
                   reimbursement and indemnity................................34

         Section 7.07
                  Right of Trustee to rely on certificate
                  of officers of Company where no other
                  evidence specifically prescribed............................35

         Section 7.08
                  Trustee acquiring conflicting interest
                  to eliminate conflict or resign.............................35

         Section 7.09
                  Requirements for eligibility of
                  trustee.....................................................35

         Section 7.10
                  Resignation of Trustee and
                  appointment of successor....................................35

         Section 7.11
                  Acceptance by successor Trustee.............................37

         Section 7.12
                  Successor to Trustee by merger, consolidation
                  of succession to business...................................38

         Section 7.13
                  Limitations on rights of Trustee as a
                  creditor to obtain payment of certain
                  claims......................................................38

ARTICLE EIGHT - CONCERNING THE SECURITYHOLDERS

                                       v
<PAGE>

         Section 8.01
                  Evidence of action by Securityholders.......................38

         Section 8.02
                  Proof of execution of instruments and of
                  holding of Securities.......................................39

         Section 8.03
                  Who may be deemed owners of Securities......................39

         Section 8.04
                  Securities owned by Company or controlled
                  or controlling companies disregarded for
                  certain purposes............................................39

         Section 8.05
                  Instruments executed by Securityholders
                  bind future holders.........................................40

ARTICLE NINE - SUPPLEMENTAL INDENTURES

         Section 9.01
                  Purposes for which supplemental indenture
                  may be entered into without consent of
                  Securityholders.............................................40

         Section 9.02
                  Modification of Indenture with consent
                  of Securityholders..........................................42

         Section 9.03
                  Effect of supplemental indentures...........................43

         Section 9.04
                  Securities may bear notation of changes
                  by supplemental indentures..................................44

         Section 9.05
                  Opinion of Counsel..........................................44

ARTICLE TEN - CONSOLIDATION, MERGER AND SALE

         Section 10.01
                  Consolidations or mergers of Company
                  and sales or conveyances of property
                  of Company permitted........................................44
         Section 10.02

                                       vi
<PAGE>

                  Rights and duties of successor company......................44

         Section 10.03
                  Opinion of Counsel..........................................45

ARTICLE ELEVEN - DEFEASANCE AND CONDITIONS TO DEFEASANCE; UNCLAIMED MONIES

         Section 11.01
                  Defeasance and conditions to defeasance.....................45

         Section 11.02
                  Application by Trustee of funds deposited
                  for payment of Securities...................................47

         Section 11.03
                  Repayment of monies held by paying agent....................47

         Section 11.04
                  Repayment of monies held by Trustee.........................47

         Section 11.05
                  Delivery of Officer's Certificate
                  and Opinion of Counsel......................................47

ARTICLE TWELVE - IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS

         Section 12.01
                  Incorporators, Stockholders, officers and
                  directors of Company exempt from individual
                  liability...................................................47

ARTICLE THIRTEEN - MISCELLANEOUS PROVISIONS

         Section 13.01
                  Successors and assigns of Company
                  bound by Indenture..........................................48

         Section 13.02
                  Acts of board, committee or officer
                  of successor company valid..................................48

         Section 13.03
                  Surrender of powers by Company................................
         Section 13.04

                                      vii
<PAGE>

                  Required notices or demands may by
                  served by mail..............................................48

         Section 13.05
                  Indenture and Securities to be construed
                  in accordance with laws of the State
                  of New York.................................................49

         Section 13.06
                  Officers' Certificate and Opinion of
                  Counsel to be furnished upon applications
                  or demands by company.......................................49

         Section 13.07
                  Payments due on non-Business Days...........................49

         Section 13.08
                  Provisions required by Trust Indenture
                  Act of 1939 to control......................................49

         Section 13.09
                  Indenture may be executed in counterparts...................49

         Section 13.10
                  Separability of Indenture provisions........................49

         Section 13.11
                  Assignment by Company to subsidiary.........................50

         Section 13.12
                  Headings....................................................50

         Section 13.13
                  Securities in Foreign Currencies

ACCEPTANCE OF TRUST BY TRUSTEE................................................51

TESTIMONIUM...................................................................51

SIGNATURES AND SEALS..........................................................51

ACKNOWLEDGEMENTS..............................................................52

                                      viii
<PAGE>

         THIS INDENTURE,  dated as of the 1st day of February, 2003, between AEP
TEXAS NORTH COMPANY, a corporation duly organized and existing under the laws of
the State of Texas  (hereinafter  sometimes  referred to as the "Company"),  and
BANK ONE, N. A., a national banking association  organized under the laws of the
United States, as trustee (hereinafter sometimes referred to as the "Trustee"):

         WHEREAS,  for its  lawful  corporate  purposes,  the  Company  has duly
authorized  the  execution  and  delivery of this  Indenture  to provide for the
issuance  of  unsecured  promissory  notes or other  evidences  of  indebtedness
(hereinafter  referred  to  as  the  "Securities"),  in an  unlimited  aggregate
principal amount to be issued from time to time in one or more series as in this
Indenture   provided,   as  registered   Securities   without  coupons,   to  be
authenticated by the certificate of the Trustee,  and which will rank pari passu
with all other unsecured and unsubordinated debt of the Company;

         WHEREAS,  to provide the terms and conditions upon which the Securities
are to be authenticated,  issued and delivered,  the Company has duly authorized
the execution of this Indenture;

         WHEREAS,  the Securities and the  certificate of  authentication  to be
borne  by  the  Securities  (the  "Certificate  of  Authentication")  are  to be
substantially  in such forms as may be approved  by a Company  Order (as defined
below), or set forth in this Indenture or in any indenture  supplemental to this
Indenture;

         AND  WHEREAS,  all acts and  things  necessary  to make the  Securities
issued  pursuant  hereto,  when  executed by the Company and  authenticated  and
delivered by the Trustee as in this Indenture provided,  the valid,  binding and
legal  obligations  of the Company,  and to  constitute  these  presents a valid
indenture and agreement  according to its terms, have been done and performed or
will be done and  performed  prior to the issuance of such  Securities,  and the
execution  of  this  Indenture  has  been  and  the  issuance  hereunder  of the
Securities  has  been  or  will  be  prior  to  issuance  in all  respects  duly
authorized,  and the Company, in the exercise of the legal right and power in it
vested, executes this Indenture and proposes to make, execute, issue and deliver
the Securities;

         NOW, THEREFORE, THIS INDENTURE WITNESSETH:

         That in order to  declare  the  terms  and  conditions  upon  which the
Securities  are  and  are to be  authenticated,  issued  and  delivered,  and in
consideration of the premises,  of the purchase and acceptance of the Securities
by the holders  thereof and of the sum of one dollar  ($1.00) to it duly paid by
the Trustee at the execution of these  presents,  the receipt  whereof is hereby
acknowledged,  the Company covenants and agrees with the Trustee,  for the equal
and  proportionate  benefit (subject to the provisions of this Indenture) of the
respective   holders  from  time  to  time  of  the   Securities,   without  any
discrimination,  preference  or priority of any one  Security  over any other by
reason  of  priority  in the time of  issue,  sale or  negotiation  thereof,  or
otherwise, except as provided herein, as follows:

<PAGE>

                                   ARTICLE ONE
                                   DEFINITIONS

         SECTION  1.01.  The terms  defined in this  Section  (except as in this
Indenture otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Indenture, any Company Order, any Board Resolution, and
any indenture  supplemental  hereto shall have the respective meanings specified
in this Section. All other terms used in this Indenture which are defined in the
Trust  Indenture Act of 1939, as amended,  or which are by reference in such Act
defined in the  Securities Act of 1933, as amended  (except as herein  otherwise
expressly  provided or unless the context  otherwise  requires),  shall have the
meanings  assigned  to  such  terms  in  said  Trust  Indenture  Act and in said
Securities Act as in force at the date of the execution of this instrument.

Affiliate:

The term  "Affiliate"  of the Company shall mean any company at least a majority
of whose outstanding voting stock shall at the time be owned by the Company,  or
by one or more direct or indirect  subsidiaries  of or by the Company and one or
more direct or indirect  subsidiaries  of the Company.  For the purposes only of
this definition of the term "Affiliate",  the term "voting stock", as applied to
the  stock of any  company,  shall  mean  stock of any class or  classes  having
ordinary  voting power for the  election of a majority of the  directors of such
company,  other than stock having such power only by reason of the occurrence of
a contingency.

Authenticating Agent:

         The term "Authenticating Agent" shall mean an authenticating agent with
respect to all or any of the series of Securities, as the case may be, appointed
with respect to all or any series of the Securities,  as the case may be, by the
Trustee pursuant to Section 2.10.

Authorized Officer:

The  term  "Authorized  Officer"  shall  mean the  Chairman  of the  Board,  the
President,  any Vice President,  the Treasurer,  any Assistant  Treasurer or any
other officer or agent of the Company duly  authorized by the Board of Directors
to act in respect of matters relating to this Indenture.

Board of Directors or Board:

The term "Board of  Directors"  or "Board"  shall mean the Board of Directors of
the Company, or any duly authorized committee of such Board.

Board Resolution:

The term "Board  Resolution" shall mean a copy of a resolution  certified by the
Secretary or an Assistant  Secretary of the Company to have been duly adopted by
the Board of  Directors  and to be in full  force and effect on the date of such
certification.

                                       2
<PAGE>

Business Day:

The term "Business Day",  with respect to any Security,  shall mean any day that
(a) in the Place of Payment  (or in any of the Places of  Payment,  if more than
one) in which  amounts are payable as specified in the form of such Security and
(b) in the city in which the Trustee  administers  its corporate trust business,
is not a day on which banking  institutions are authorized or required by law or
regulation to close.

Certificate:

The term "Certificate" shall mean a certificate signed by an Authorized Officer.
The Certificate need not comply with the provisions of Section 13.06.

Commission:

The term "Commission" shall mean the Securities and Exchange Commission, as from
time to time constituted,  created under the Securities Exchange Act of 1934, as
amended  (the  "Exchange  Act") or if at any time  after the  execution  of this
instrument  such  Commission  is not  existing  and  performing  the  duties now
assigned to it under the Trust Indenture Act, then the body, if any,  performing
such duties on such date.

Company:

The term  "Company"  shall mean AEP Texas  North  Company,  a  corporation  duly
organized and existing under the laws of Texas,  and,  subject to the provisions
of Article Ten, shall also include its successors and assigns.

Company Order:

The term  "Company  Order" shall mean a written  order signed in the name of the
Company by an Authorized Officer and the Secretary or an Assistant  Secretary of
the Company, pursuant to a Board Resolution establishing a series of Securities.

Corporate Trust Office:

The term "Corporate  Trust Office" shall mean the office of the Trustee at which
at any  particular  time its  corporate  trust  business  shall  be  principally
administered,  which office at the date of the  execution  of this  Indenture is
located at .

Default:

The term "Default"  shall mean any event,  act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.

Depository:

The term "Depository"  shall mean, with respect to Securities of any series, for
which the  Company  shall  determine  that such  Securities  will be issued as a
Global Security, The

                                       3
<PAGE>

Depository Trust Company,  New York, New York,  another clearing agency,  or any
successor  registered  as a  clearing  agency  under the  Exchange  Act or other
applicable  statute or regulation,  which, in each case,  shall be designated by
the Company pursuant to either Section 2.01 or 2.11.

Discount Security:

The term  "Discount  Security"  means any Security  which provides for an amount
less than the principal  amount thereof to be due and payable upon a declaration
of acceleration of the maturity thereof pursuant to Section 6.01(b).

Dollar:

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

Eligible Obligations:

The term "Eligible Obligations" means (a) with respect to Securities denominated
in  Dollars,  Governmental  Obligations;  or  (b)  with  respect  to  Securities
denominated  in a currency other than Dollars or in a composite  currency,  such
other  obligations  or  instruments  as shall be specified  with respect to such
Securities, as contemplated by Section 2.01.

Event of Default:

The term "Event of Default" with respect to  Securities  of a particular  series
shall mean any event  specified  in Section  6.01,  continued  for the period of
time, if any, therein designated.

Global Security:

The term "Global Security" shall mean, with respect to any series of Securities,
a Security  executed by the  Company  and  authenticated  and  delivered  by the
Trustee to the Depository or pursuant to the  Depository's  instruction,  all in
accordance  with the  Indenture,  which shall be  registered  in the name of the
Depository or its nominee.

Governmental Authority:

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

Governmental Obligations:

The term  "Governmental  Obligations"  shall mean securities that are (i) direct
obligations  of the United  States of America  for the payment of which its full
faith and  credit is  pledged  or (ii)  obligations  of a person  controlled  or
supervised by and acting as an agency or  instrumentality  of the United States,
the payment of which is  unconditionally  guaranteed  as a full faith and credit
obligation  by the United  States,  which,  in either case,  are not callable or
redeemable at the option

                                       4
<PAGE>

of the issuer thereof,  and shall also include a depository  receipt issued by a
bank (as defined in Section  3(a)(2) of the  Securities Act of 1933, as amended)
as custodian  with  respect to any such  Governmental  Obligation  or a specific
payment of principal of or interest on any such Governmental  Obligation held by
such  custodian  for the  account  of the  holder  of such  depository  receipt;
provided  that (except as required by law) such  custodian is not  authorized to
make any  deduction  from the amount  payable  to the holder of such  depository
receipt  from  any  amount   received  by  such  custodian  in  respect  of  the
Governmental  Obligation or the specific  payment of principal of or interest on
the Governmental Obligation evidenced by such depository receipt.

Indenture:

The term "Indenture" shall mean this instrument as originally  executed,  or, if
amended or supplemented as herein provided,  as so amended or supplemented,  and
shall  include the terms of a particular  series of  Securities  established  as
contemplated by Section 2.01.

Instructions:

The term "Instructions" shall mean instructions acceptable to the Trustee issued
pursuant to a Company Order in connection with a Periodic Offering and signed by
an  Authorized  Officer.  Instructions  need not comply with the  provisions  of
Section 13.06.

Interest:

The term "interest" when used with respect to  non-interest  bearing  Securities
shall mean interest  payable after maturity  (whether at stated  maturity,  upon
acceleration or redemption or otherwise) or after the date, if any, on which the
Company  becomes  obligated  to  acquire a  Security,  whether  by  purchase  or
otherwise.

Interest Payment Date:

The term  "Interest  Payment Date" when used with respect to any  installment of
interest on a Security of a particular  series shall mean the date  specified in
such  Security  or  in  a  Board  Resolution,  Company  Order  or  an  indenture
supplemental  hereto  with  respect to such series as the fixed date on which an
installment  of interest  with respect to  Securities  of that series is due and
payable.

Officers' Certificate:

The  term  "Officers'  Certificate"  shall  mean  a  certificate  signed  by  an
Authorized  Officer and by the Secretary or Assistant  Secretary of the Company.
Each such  certificate  shall  include the  statements  provided  for in Section
13.06, if and to the extent required by the provisions thereof.

Opinion of Counsel:

The term "Opinion of Counsel"  shall mean an opinion in writing  signed by legal
counsel, who may be an employee of or counsel for the Company. Each such opinion
shall include the statements provided for in Section 13.06, if and to the extent
required by the provisions thereof.

                                       5
<PAGE>

Outstanding:

The term  "outstanding",  when used with  reference to Securities of any series,
shall,  subject to the  provisions of Section 8.04,  mean, as of any  particular
time, all Securities of that series  theretofore  authenticated and delivered by
the Trustee under this Indenture,  except (a) Securities theretofore canceled by
the Trustee or any paying agent, or delivered to the Trustee or any paying agent
for  cancellation  or which have  previously  been  canceled;  (b) Securities or
portions  thereof  for the  payment or  redemption  of which  monies or Eligible
Obligations in the necessary  amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or shall have been set
aside and  segregated  in trust by the Company (if the Company  shall act as its
own paying agent);  provided,  however,  that if such  Securities or portions of
such Securities are to be redeemed prior to the maturity thereof, notice of such
redemption  shall have been given as in Article  Three  provided,  or  provision
satisfactory to the Trustee shall have been made for giving such notice; and (c)
Securities in lieu of or in substitution  for which other  Securities shall have
been  authenticated  and delivered  pursuant to the terms of Section  2.07.  The
principal  amount of a Discount  Security that shall be deemed to be Outstanding
for purposes of this Indenture shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon a declaration
of acceleration of the maturity thereof.

Periodic Offering:

The term  "Periodic  Offering"  means an offering of Securities of a series from
time to time,  during which any or all of the specific terms of the  Securities,
including without limitation the rate or rates of interest, if any, thereon, the
maturity or  maturities  thereof and the  redemption  provisions,  if any,  with
respect  thereto,  are to be  determined  by the  Company or its agents upon the
issuance of such Securities.

Person:

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

Place of Payment:

The term "Place of Payment"  shall mean the place or places where the  principal
of and  interest,  if any,  on the  Securities  of any  series  are  payable  as
specified in accordance with Section 2.01.

Predecessor Security:

The term  "Predecessor  Security" of any  particular  Security  shall mean every
previous Security evidencing all or a portion of the same debt as that evidenced
by such  particular  Security;  and,  for the purposes of this  definition,  any
Security  authenticated  and  delivered  under  Section  2.07 in lieu of a lost,
destroyed  or stolen  Security  shall be deemed to evidence the same debt as the
lost, destroyed or stolen Security.

                                       6
<PAGE>

Responsible Officer:

The term "Responsible  Officer" when used with respect to the Trustee shall mean
the chairman of the board of directors,  the president,  any vice president, the
secretary,  the treasurer, any trust officer, any corporate trust officer or any
other  officer  or  assistant  officer  of the  Trustee  customarily  performing
functions  similar to those  performed  by the  persons who at the time shall be
such officers,  respectively,  or to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with the particular subject.

Security or Securities:

The term  "Security" or "Securities"  shall mean any Security or Securities,  as
the case may be, authenticated and delivered under this Indenture.

Securityholder:

The term  "Securityholder",  "holder of Securities" or "registered holder" shall
mean the person or persons in whose name or names a particular Security shall be
registered on the books of the Company kept for that purpose in accordance  with
the terms of this Indenture.

Series:

The term  "series"  means a series of  Securities  established  pursuant to this
Indenture and includes, if the context so requires, each Tranche thereof.

Tranche:

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

Trustee:

The term "Trustee" shall mean Bank One, N. A., and, subject to the provisions of
Article Seven,  shall also include its  successors  and assigns,  and, if at any
time there is more than one person acting in such capacity hereunder,  "Trustee"
shall  mean each such  person.  The term  "Trustee"  as used with  respect  to a
particular  series of the Securities shall mean the trustee with respect to that
series.

Trust Indenture Act:

The term "Trust  Indenture  Act",  subject to the  provisions of Sections  9.01,
9.02, and 10.01,  shall mean the Trust  Indenture Act of 1939, as amended and in
effect at the date of execution of this Indenture.

United States:

The term "United  States" means the United States of America,  its  Territories,
its possessions and other areas subject to its political jurisdiction.

                                       7
<PAGE>

                                  ARTICLE TWO

                      ISSUE, DESCRIPTION, TERMS, EXECUTION,
                     REGISTRATION AND EXCHANGE OF SECURITIES

         SECTION 2.01. The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.

         The  Securities  may be issued  from time to time in one or more series
and in one or more  Tranches  thereof.  Each  series  shall be  authorized  by a
Company Order or Orders or one or more  indentures  supplemental  hereto,  which
shall  specify  whether  the  Securities  of such  series  shall be subject to a
Periodic Offering. The Company Order or Orders or supplemental indenture and, in
the case of a Periodic Offering,  Instructions or other procedures acceptable to
the Trustee specified in such Company Order or Orders, shall establish the terms
of the series,  which may  include the  following:  (i) any  limitations  on the
aggregate  principal amount of the Securities to be authenticated  and delivered
under this Indenture as part of such series (except for Securities authenticated
and delivered  upon  registration  of transfer of, in exchange for or in lieu of
other Securities of that series); (ii) the stated maturity or maturities of such
series;  (iii) the date or dates from which interest shall accrue,  the Interest
Payment  Dates  on  which  such  interest  will  be  payable  or the  manner  of
determination  of such  Interest  Payment  Dates  and the  record  date  for the
determination  of holders  to whom  interest  is  payable  on any such  Interest
Payment Date;  (iv) the interest rate or rates (which may be fixed or variable),
or method of calculation of such rate or rates, for such series;  (v) the terms,
if any, regarding the redemption,  purchase or repayment of such series (whether
at the option of the  Company or a holder of the  Securities  of such series and
whether pursuant to a sinking fund or analogous  provisions,  including payments
made in cash in  anticipation  of future  sinking fund  obligations),  including
redemption,  purchase or repayment date or dates of such series, if any, and the
price or prices and other terms and  conditions  applicable to such  redemption,
purchase  or  repayment  (including  any  premium);  (vi)  whether  or  not  the
Securities  of such series  shall be issued in whole or in part in the form of a
Global  Security  and, if so, the  Depositary  for such Global  Security and the
related  procedures  with  respect  to  transfer  and  exchange  of such  Global
Security;  (vii)  the  designation  of  such  series;  (viii)  the  form  of the
Securities of such series; (ix) the maximum annual interest rate, if any, of the
Securities  permitted for such series; (x) whether the Securities of such series
shall be  subject  to  Periodic  Offering;  (xi)  the  currency  or  currencies,
including  composite  currencies,  in which  payment  of the  principal  of (and
premium, if any) and interest on the Securities of such series shall be payable,
if other than  Dollars;  (xii) any other  information  necessary to complete the
Securities  of such  series;  (xiii) the  establishment  of any office or agency
pursuant  to  Section  4.02  hereof  and any  other  place or  places  which the
principal  of and  interest,  if any,  on  Securities  of that  series  shall be
payable;  (xiv) if other than  denominations of $1,000 or any integral  multiple
thereof,  the  denominations  in which the  Securities  of the  series  shall be
issuable; (xv) the obligations or instruments, if any, which shall be considered
to be  Eligible  Obligations  in  respect  of  the  Securities  of  such  series
denominated in a currency other than Dollars or in a composite  currency;  (xvi)
whether  or not the  Securities  of such  series  shall be  issued  as  Discount
Securities and the terms thereof,  including the portion of the principal amount
thereof which shall be payable upon  declaration of acceleration of the maturity
thereof pursuant to Section 6.01(b);  (xvii) if the principal of and premium, if
any, or interest,  if any, on such Securities are to be payable, at the election
of the Company or the holder thereof, in coin or currency, including

                                       8
<PAGE>

composite  currencies,  other than that in which the Securities are stated to be
payable,  the period or periods within which,  and the terms and conditions upon
which,  such  election  shall be made;  (xviii)  if the  amount  of  payment  of
principal of and premium, if any, or interest, if any, on such Securities may be
determined  with reference to an index,  formula or other method,  or based on a
coin or  currency  other  than that in which  the  Securities  are  stated to be
payable, the manner in which such amount shall be determined;  (xix) whether the
provisions of Section 4.05 and Article Ten (or portions  thereof) shall apply to
the  Securities  of a  series;  and  (xx)any  other  terms  of such  series  not
inconsistent with this Indenture.

         All  Securities  of any one  series  shall be  substantially  identical
except as to denomination and except as may otherwise be provided in or pursuant
to any such Company Order or in any indentures supplemental hereto.

         If any of the terms of the  series  are  established  by  action  taken
pursuant to a Company Order,  a copy of an appropriate  record of the applicable
Board Resolution  shall be certified by the Secretary or an Assistant  Secretary
of the Company and  delivered  to the Trustee at or prior to the delivery of the
Company Order setting forth the terms of that series.

         SECTION 2.02.  The Securities of any series shall be  substantially  of
the tenor and  purport (i) as set forth in one or more  indentures  supplemental
hereto or as provided in a Company Order, or (ii) with respect to any Tranche of
Securities of a series subject to Periodic Offering,  to the extent permitted by
any of the documents  referred to in clause (i) above,  in  Instructions,  or by
other  procedures  acceptable to the Trustee  specified in such Company Order or
Orders, in each case with such appropriate insertions, omissions,  substitutions
and other  variations  as are required or permitted by this  Indenture,  and may
have such letters,  numbers or other marks of  identification or designation and
such legends or endorsements  printed,  lithographed or engraved  thereon as the
Company may deem appropriate and as are not inconsistent  with the provisions of
this Indenture, or as may be required to comply with any law or with any rule or
regulation  made  pursuant  thereto or with any rule or  regulation of any stock
exchange on which  Securities of that series may be listed or of the Depository,
or to conform to usage.

         The Trustee's Certificate of Authentication shall be in substantially
the following form:

         "This is one of the Securities of the series designated in accordance
         with, and referred to in, the within-mentioned Indenture.

         Dated:

         BANK ONE, N. A.

         By:___________________________
              Authorized Signatory"

         SECTION 2.03. The Securities shall be issuable as registered Securities
and in the denominations of $1,000 or any integral multiple thereof,  subject to
Sections  2.01(xi) and (xiv).  The Securities of a particular  series shall bear
interest payable on the dates and at the rate or rates

                                       9
<PAGE>

specified  with  respect  to that  series.  Except  as  otherwise  specified  as
contemplated  by  Section  2.01,  the  principal  of  and  the  interest  on the
Securities of any series,  as well as any premium  thereon in case of redemption
thereof  prior to maturity,  shall be payable in Dollars at the office or agency
of the Company  maintained  for that purpose.  Each Security  shall be dated the
date of its authentication.

         The  interest  installment  on any  Security  which is payable,  and is
punctually  paid  or  duly  provided  for,  on any  Interest  Payment  Date  for
Securities  of that  series  shall  be paid to the  person  in whose  name  said
Security (or one or more  Predecessor  Securities) is registered at the close of
business on the regular record date for such interest  installment,  except that
interest  payable on redemption or maturity shall be payable as set forth in the
Company Order or indenture  supplemental  hereto  establishing the terms of such
series of Securities.  Except as otherwise  specified as contemplated by Section
2.01,  interest on Securities will be computed on the basis of a 360-day year of
twelve 30-day months.

         Any interest on any Security  which is payable,  but is not  punctually
paid or duly  provided for, on any Interest  Payment Date for  Securities of the
same series (herein called  "Defaulted  Interest")  shall  forthwith cease to be
payable to the registered  holder on the relevant  regular record date by virtue
of having been such holder;  and such  Defaulted  Interest  shall be paid by the
Company, at its election, as provided in clause (1) or clause (2) below:

                  (1) The Company may make payment of any Defaulted  Interest on
         Securities  to the  persons in whose  names such  Securities  (or their
         respective  Predecessor  Securities)  are  registered  at the  close of
         business on a special  record  date for the  payment of such  Defaulted
         Interest,  which shall be fixed in the  following  manner:  the Company
         shall notify the Trustee in writing of the amount of Defaulted Interest
         proposed to be paid on each such  Security and the date of the proposed
         payment,  and at the  same  time the  Company  shall  deposit  with the
         Trustee an amount of money equal to the aggregate amount proposed to be
         paid in respect of such Defaulted  Interest or shall make  arrangements
         satisfactory  to the Trustee for such deposit  prior to the date of the
         proposed payment, such money when deposited to be held in trust for the
         benefit of the persons  entitled to such Defaulted  Interest as in this
         clause provided.  Thereupon the Trustee shall fix a special record date
         for the payment of such Defaulted Interest which shall not be more than
         15 nor less than 10 days prior to the date of the proposed  payment and
         not less than 10 days after the receipt by the Trustee of the notice of
         the proposed payment.  The Trustee shall promptly notify the Company of
         such  special  record  date and,  in the name and at the expense of the
         Company,  shall cause notice of the proposed  payment of such Defaulted
         Interest and the special record date therefor to be mailed, first class
         postage  prepaid,  to each  Securityholder  at his or her address as it
         appears in the Security  Register (as  hereinafter  defined),  not less
         than 10 days prior to such special record date.  Notice of the proposed
         payment of such Defaulted Interest and the special record date therefor
         having been mailed as aforesaid,  such Defaulted Interest shall be paid
         to the  persons in whose  names such  Securities  (or their  respective
         Predecessor  Securities) are registered on such special record date and
         shall be no longer payable pursuant to the following clause (2).

                  (2) The Company may make payment of any Defaulted  Interest on
         any

                                       10
<PAGE>

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

         Unless otherwise set forth in a Company Order or one or more indentures
supplemental  hereto establishing the terms of any series of Securities pursuant
to Section 2.01 hereof,  the term "regular  record date" as used in this Section
with respect to a series of Securities with respect to any Interest Payment Date
for such series  shall mean either the  fifteenth  day of the month  immediately
preceding  the month in which an  Interest  Payment  Date  established  for such
series  pursuant to Section 2.01 hereof shall occur,  if such  Interest  Payment
Date is the  first  day of a month,  or the last  day of the  month  immediately
preceding  the month in which an  Interest  Payment  Date  established  for such
series  pursuant to Section 2.01 hereof shall occur,  if such  Interest  Payment
Date is the  fifteenth  day of a month,  whether  or not such date is a Business
Day.

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

         SECTION  2.04.  The  Securities  shall,  subject to the  provisions  of
Section  2.06,  be  printed  on steel  engraved  borders  or fully or  partially
engraved,  or legibly typed, as the proper officer of the Company may determine,
and  shall be signed on behalf of the  Company  by an  Authorized  Officer.  The
signature of such Authorized Officer upon the Securities may be in the form of a
facsimile  signature  of a present or any future  Authorized  Officer and may be
imprinted or otherwise  reproduced  on the  Securities  and for that purpose the
Company  may use the  facsimile  signature  of any person who shall have been an
Authorized  Officer,  notwithstanding  the fact that at the time the  Securities
shall be  authenticated  and  delivered  or disposed  of such person  shall have
ceased to be an Authorized Officer.

         Only  such   Securities  as  shall  bear  thereon  a   Certificate   of
Authentication  substantially  in the  form  established  for  such  Securities,
executed  manually  by an  authorized  signatory  of  the  Trustee,  or  by  any
Authenticating  Agent with respect to such Securities,  shall be entitled to the
benefits of this  Indenture  or be valid or  obligatory  for any  purpose.  Such
certificate executed by the Trustee, or by any Authenticating Agent appointed by
the Trustee with respect to such Securities,  upon any Security  executed by the
Company shall be conclusive evidence that the Security so authenticated has been
duly  authenticated  and  delivered  hereunder  and that the  registered  holder
thereof is entitled to the benefits of this Indenture.

         At any time and from time to time after the  execution  and delivery of
this Indenture, the Company may deliver Securities of any series executed by the
Company  to  the  Trustee  for   authentication,   together  with  an  indenture
supplemental  hereto or a Company Order for the  authentication  and delivery of
such Securities and the Trustee, in accordance with such supplemental  indenture
or Company Order,  shall  authenticate  and deliver such  Securities;  provided,
however,  that in the case of  Securities  offered in a Periodic  Offering,  the
Trustee shall

                                       11
<PAGE>

authenticate  and deliver such  Securities  from time to time in accordance with
Instructions  or such  other  procedures  acceptable  to the  Trustee  as may be
specified  by or  pursuant  to such  supplemental  indenture  or  Company  Order
delivered  to the  Trustee  prior to the  time of the  first  authentication  of
Securities of such series.

         In   authenticating   such  Securities  and  accepting  the  additional
responsibilities  under this  Indenture  in  relation  to such  Securities,  the
Trustee shall receive and (subject to Section 7.01) shall be fully  protected in
relying upon, (i) an Opinion of Counsel and (ii) and Officers' Certificate, each
stating that the form and terms thereof have been established in conformity with
the  provisions of this  Indenture;  provided,  however,  that,  with respect to
Securities  of a series  subject to a Periodic  Offering,  the Trustee  shall be
entitled to receive such Opinion of Counsel and Officers'  Certificate only once
at or prior to the time of the first authentication of Securities of such series
and that, in such opinion or certificate,  the opinion or certificate  described
above may state that when the terms of such Securities, or each Tranche thereof,
shall have been established pursuant to a Company Order or Orders or pursuant to
such  procedures  acceptable  to the  Trustee,  as may be specified by a Company
Order,  such terms will have been  established in conformity with the provisions
of this Indenture.  Each Opinion of Counsel and Officers'  Certificate delivered
pursuant to this Section 2.04 shall include all statements prescribed in Section
13.06(b).  Such  Opinion of Counsel  shall also be to the effect  that when such
Securities have been executed by the Company and authenticated by the Trustee in
accordance  with the provisions of this Indenture and delivered to and duly paid
for  by  the  purchasers  thereof,  they  will  be  valid  and  legally  binding
obligations of the Company,  enforceable in accordance with their terms (subject
to customary exceptions) and will be entitled to the benefits of this Indenture.

         With respect to Securities of a series subject to a Periodic  Offering,
the Trustee may conclusively rely, as to the authorization by the Company of any
of such  Securities,  the forms and terms  thereof and the  legality,  validity,
binding effect and enforceability  thereof,  upon the Company Order,  Opinion of
Counsel,  Officers'  Certificate  and  other  documents  delivered  pursuant  to
Sections 2.01 and this Section,  as  applicable,  at or prior to the time of the
first  authentication of Securities of such series unless and until such Company
Order,  Opinion of Counsel,  Officers'  Certificate or other documents have been
superseded or revoked or expire by their terms.

         The Trustee shall not be required to  authenticate  such  Securities if
the  issue  of such  Securities  pursuant  to this  Indenture  will  affect  the
Trustee's  own  rights,  duties  or  immunities  under the  Securities  and this
Indenture or otherwise in a manner  which is not  reasonably  acceptable  to the
Trustee.

         SECTION  2.05.  (a)  Securities  of any  series may be  exchanged  upon
presentation  thereof at the office or agency of the Company designated for such
purpose,  for other Securities of such series of authorized  denominations,  and
for a like aggregate principal amount, upon payment of a sum sufficient to cover
any tax or other  governmental  charge in relation  thereto,  all as provided in
this Section.  In respect of any  Securities so  surrendered  for exchange,  the
Company shall execute,  the Trustee shall authenticate and such office or agency
shall deliver in exchange therefor the Security or Securities of the same series
which the  Securityholder  making the  exchange  shall be  entitled  to receive,
bearing numbers not contemporaneously outstanding.

                                       12
<PAGE>

         (b) The  Company  shall  keep,  or cause to be kept,  at its  office or
agency  designated  for such purpose in the Borough of  Manhattan,  the City and
State of New York, or such other  location  designated by the Company a register
or registers (herein referred to as the "Security  Register") in which,  subject
to such reasonable  regulations as it may prescribe,  the Company shall register
the Securities  and the transfers of Securities as in this Article  provided and
which at all reasonable  times shall be open for inspection by the Trustee.  The
registrar for the purpose of  registering  Securities and transfer of Securities
as herein  provided  shall be appointed as  authorized  by Board  Resolution  or
Company Order (the "Security Registrar").

         Upon  surrender for transfer of any Security at the office or agency of
the Company  designated  for such purpose in the Borough of Manhattan,  the City
and State of New  York,  or other  location  as  aforesaid,  the  Company  shall
execute,  the Trustee shall authenticate and such office or agency shall deliver
in the name of the transferee or transferees a new Security or Securities of the
same series as the Security presented for a like aggregate principal amount.

         All Securities presented or surrendered for exchange or registration of
transfer,  as provided in this Section,  shall be accompanied (if so required by
the Company or the Security Registrar) by a written instrument or instruments of
transfer,  in form satisfactory to the Company or the Security  Registrar,  duly
executed by the registered holder or by his duly authorized attorney in writing.

         (c) Except as  provided  in the first  paragraph  of Section  2.07,  no
service  charge  shall be made for any exchange or  registration  of transfer of
Securities,  or issue of new  Securities  in case of partial  redemption  of any
series, but the Company may require payment of a sum sufficient to cover any tax
or other governmental charge in relation thereto,  other than exchanges pursuant
to Section 2.06, Section 3.03(b) and Section 9.04 not involving any transfer.

         (d) The Company  shall  neither be required  (i) to issue,  exchange or
register the transfer of any Securities during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of  redemption  of
less than all the  outstanding  Securities  of the same series and ending at the
close of business on the day of such mailing,  nor (ii) to register the transfer
of or exchange of any  Securities of any series or portions  thereof  called for
redemption or as to which the holder thereof has exercised its right, if any, to
require the Company to repurchase such Security in whole or in part, except that
portion of such Security not required to be repurchased.  The provisions of this
Section 2.05 are, with respect to any Global  Security,  subject to Section 2.11
hereof.

         SECTION 2.06.  Pending the preparation of definitive  Securities of any
series, the Company may execute, and the Trustee shall authenticate and deliver,
temporary  Securities  (printed,  lithographed or typewritten) of any authorized
denomination, and substantially in the form of the definitive Securities in lieu
of which they are issued, but with such omissions,  insertions and variations as
may be  appropriate  for temporary  Securities,  all as may be determined by the
Company. Every temporary Security of any series shall be executed by the Company
and  be   authenticated   by  the  Trustee  upon  the  same  conditions  and  in
substantially  the  same  manner,  and  with  like  effect,  as  the  definitive
Securities of such series in accordance with Section 2.04.  Without  unnecessary
delay the Company will execute and will furnish  definitive  Securities  of such
series and  thereupon  any or all  temporary  Securities  of such  series may be

                                       13
<PAGE>

surrendered in exchange therefor (without charge to the holders thereof), at the
office or agency of the  Company  designated  for the  purpose,  and the Trustee
shall  authenticate and such office or agency shall deliver in exchange for such
temporary   Securities  an  equal  aggregate   principal  amount  of  definitive
Securities of such series,  unless the Company advises the Trustee to the effect
that  definitive  Securities  need not be executed and  furnished  until further
notice from the Company.  Until so exchanged,  the temporary  Securities of such
series shall be entitled to the same benefits under this Indenture as definitive
Securities of such series authenticated and delivered hereunder.

         SECTION 2.07. In case any temporary or definitive Security shall become
mutilated  or be  destroyed,  lost or stolen,  the Company  (subject to the next
succeeding sentence) shall execute, and upon its request the Trustee (subject as
aforesaid)  shall  authenticate  and deliver,  a new Security of the same series
bearing a number not contemporaneously outstanding, in exchange and substitution
for the mutilated  Security,  or in lieu of and in substitution for the Security
so  destroyed,  lost or stolen.  In every case the  applicant  for a substituted
Security  shall  furnish to the  Company  and to the  Trustee  such  security or
indemnity  as may be  required  by them to save each of them  harmless,  and, in
every case of  destruction,  loss or theft,  the applicant shall also furnish to
the  Company  and  to  the  Trustee  evidence  to  their   satisfaction  of  the
destruction,  loss or theft of the  applicant's  Security  and of the  ownership
thereof.  The Trustee may authenticate any such substituted Security and deliver
the same  upon the  written  request  or  authorization  of any  officer  of the
Company. Upon the issuance of any substituted Security,  the Company may require
the payment of a sum  sufficient to cover any tax or other  governmental  charge
that may be imposed in relation  thereto and any other  expenses  (including the
fees and  expenses of the  Trustee)  connected  therewith.  In case any Security
which has matured or is about to mature shall become  mutilated or be destroyed,
lost or stolen, the Company may, instead of issuing a substitute  Security,  pay
or authorize the payment of the same (without  surrender  thereof  except in the
case of a mutilated Security) if the applicant for such payment shall furnish to
the Company and to the Trustee such security or indemnity as they may require to
save them harmless, and, in case of destruction,  loss or theft, evidence to the
satisfaction of the Company and the Trustee of the destruction, loss or theft of
such Security and of the ownership thereof.

         Every  Security  issued  pursuant to the  provisions of this Section in
substitution  for any Security  which is  mutilated,  destroyed,  lost or stolen
shall constitute an additional contractual obligation of the Company, whether or
not the  mutilated,  destroyed,  lost or stolen  Security  shall be found at any
time, or be enforceable by anyone,  and shall be entitled to all the benefits of
this Indenture equally and proportionately  with any and all other Securities of
the same series duly issued  hereunder.  All Securities  shall be held and owned
upon the express  condition  that the foregoing  provisions  are exclusive  with
respect to the  replacement or payment of mutilated,  destroyed,  lost or stolen
Securities,  and shall  preclude (to the extent lawful) any and all other rights
or remedies, notwithstanding any law or statute existing or hereafter enacted to
the  contrary  with  respect  to  the   replacement  or  payment  of  negotiable
instruments or other securities without their surrender.

         SECTION 2.08.  All Securities  surrendered  for the purpose of payment,
redemption,  exchange  or  registration  of  transfer,  or for credit  against a
sinking fund,  shall,  if  surrendered  to the Company or any paying  agent,  be
delivered to the Trustee for  cancellation,  or, if  surrendered to the Trustee,
shall be  canceled  by it,  and no  Securities  shall be issued in lieu  thereof
except as

                                       14
<PAGE>

expressly  required or permitted by any of the provisions of this Indenture.  On
request of the  Company,  the  Trustee  shall  deliver to the  Company  canceled
Securities  held by the Trustee.  In the absence of such request the Trustee may
dispose of canceled  Securities in accordance with its standard  procedures.  If
the  Company  shall  otherwise  acquire  any of the  Securities,  however,  such
acquisition   shall  not  operate  as  a  redemption  or   satisfaction  of  the
indebtedness  represented  by such  Securities  unless  and  until  the same are
delivered to the Trustee for cancellation.

         SECTION 2.09.  Nothing in this Indenture or in the Securities,  express
or  implied,  shall  give  or be  construed  to  give  to any  person,  firm  or
corporation,  other than the parties  hereto and the holders of the  Securities,
any legal or  equitable  right,  remedy  or claim  under or in  respect  of this
Indenture, or under any covenant,  condition or provision herein contained;  all
such  covenants,  conditions  and  provisions  being for the sole benefit of the
parties hereto and of the holders of the Securities.

         SECTION  2.10.  So long as any of the  Securities  of any series remain
outstanding there may be an  Authenticating  Agent for any or all such series of
Securities   which  the  Trustee   shall  have  the  right  to   appoint.   Said
Authenticating  Agent  shall be  authorized  to act on behalf of the  Trustee to
authenticate Securities of such series issued upon exchange, transfer or partial
redemption  thereof,  and Securities so  authenticated  shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes as
if authenticated by the Trustee  hereunder.  All references in this Indenture to
the  authentication  of  Securities  by the  Trustee  shall be deemed to include
authentication   by  an   Authenticating   Agent  for  such  series  except  for
authentication  upon original issuance or pursuant to Section 2.07 hereof.  Each
Authenticating  Agent  shall  be  acceptable  to  the  Company  and  shall  be a
corporation which has a combined capital and surplus,  as most recently reported
or determined by it,  sufficient under the laws of any jurisdiction  under which
it is  organized or in which it is doing  business to conduct a trust  business,
and which is otherwise  authorized  under such laws to conduct such business and
is subject to supervision or examination by Federal or State authorities.  If at
any time any Authenticating  Agent shall cease to be eligible in accordance with
these provisions it shall resign immediately.

         Any  Authenticating  Agent may at any time  resign  by  giving  written
notice of resignation to the Trustee and to the Company.  The Trustee may at any
time (and  upon  request  by the  Company  shall)  terminate  the  agency of any
Authenticating   Agent  by  giving   written   notice  of  termination  to  such
Authenticating  Agent  and to the  Company.  Upon  resignation,  termination  or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint an
eligible successor Authenticating Agent acceptable to the Company. Any successor
Authenticating Agent, upon acceptance of its appointment hereunder, shall become
vested with all the rights, powers and duties of its predecessor hereunder as if
originally named as an Authenticating  Agent pursuant hereto. The Company agrees
to pay to each  Authenticating  Agent from time to time reasonable  compensation
for its services under this Section.

         SECTION 2.11.  (a) If the Company shall  establish  pursuant to Section
2.01 that the  Securities  of a  particular  series are to be issued as a Global
Security,  then the Company shall execute and the Trustee  shall,  in accordance
with Section 2.04,  authenticate and deliver,  a Global Security which (i) shall
represent,  and  shall  be  denominated  in an  amount  equal  to the  aggregate
principal  amount of, all of the  Outstanding  Securities  of such series,  (ii)
shall be registered in the

                                       15
<PAGE>

name  of the  Depository  or its  nominee,  (iii)  shall  be  authenticated  and
delivered  by the Trustee to the  Depository  or  pursuant  to the  Depository's
instruction and (iv) shall bear a legend  substantially to the following effect:
"Except as otherwise  provided in Section 2.11 of the  Indenture,  this Security
may be  transferred,  in whole but not in part,  only to another  nominee of the
Depository  or to a  successor  Depository  or to a  nominee  of such  successor
Depository."

         (b) Notwithstanding the provisions of Section 2.05, the Global Security
of a  series  may be  transferred,  in whole  but not in part and in the  manner
provided in Section 2.05,  only to another  nominee of the  Depository  for such
series, or to a successor Depository for such series selected or approved by the
Company or to a nominee of such successor Depository.

         (c) If at any time the Depository  for a series of Securities  notifies
the Company that it is unwilling  or unable to continue as  Depository  for such
series  or if at any time the  Depository  for such  series  shall no  longer be
registered  or in good  standing  under the  Exchange  Act, or other  applicable
statute  or  regulation  and a  successor  Depository  for  such  series  is not
appointed by the Company  within 90 days after the Company  receives such notice
or becomes aware of such condition,  as the case may be, this Section 2.11 shall
no longer be  applicable  to the  Securities of such series and the Company will
execute,  and subject to Section 2.05, the Trustee will authenticate and deliver
Securities  of such series in definitive  registered  form without  coupons,  in
authorized  denominations,  and in an  aggregate  principal  amount equal to the
principal  amount of the Global  Security of such  series in  exchange  for such
Global  Security.  In addition,  the Company may at any time  determine that the
Securities of any series shall no longer be represented by a Global Security and
that the provisions of this Section 2.11 shall no longer apply to the Securities
of such series.  In such event the Company will execute,  and subject to Section
2.05,  the Trustee,  upon receipt of an Officers'  Certificate  evidencing  such
determination by the Company,  will authenticate and deliver  Securities of such
series  in   definitive   registered   form  without   coupons,   in  authorized
denominations,  and in an  aggregate  principal  amount  equal to the  principal
amount of the  Global  Security  of such  series  in  exchange  for such  Global
Security.  Upon the  exchange  of the Global  Security  for such  Securities  in
definitive  registered form without coupons,  in authorized  denominations,  the
Global Security shall be canceled by the Trustee.  Such Securities in definitive
registered  form issued in  exchange  for the Global  Security  pursuant to this
Section  2.11(c)  shall  be  registered  in such  names  and in such  authorized
denominations  as the Depository,  pursuant to  instructions  from its direct or
indirect participants or otherwise,  shall instruct the Security Registrar.  The
Trustee shall  deliver such  Securities  to the  Depository  for delivery to the
persons in whose names such Securities are so registered.

         SECTION 2.12. In the case of the  Securities of any series  denominated
in any currency  other than Dollars or in a composite  currency  (the  "Required
Currency"),  except as otherwise  specified  with respect to such  Securities as
contemplated  by Section 2.01, the obligation of the Company to make any payment
of the  principal  thereof,  or the  premium or interest  thereon,  shall not be
discharged  or  satisfied  by any  tender by the  Company,  or  recovery  by the
Trustee, in any currency other than the Required Currency,  except to the extent
that such tender or recovery shall result in the Trustee timely holding the full
amount of the  Required  Currency  then due and  payable.  If any such tender or
recovery is in a currency other than the Required Currency, the Trustee may take
such  actions as it  considers  appropriate  to exchange  such  currency for the
Required Currency. The costs and risks of any such exchange,  including, without
limitation, the risks of delay and exchange rate fluctuation,  shall be borne by
the Company, the Company shall

                                       16
<PAGE>

remain  fully  liable for any  shortfall  or  delinquency  in the full amount of
Required  Currency  then due and  payable,  and in no  circumstances  shall  the
Trustee  be liable  therefor  except in the case of its  negligence  or  willful
misconduct.

         SECTION 2.13. The Company in issuing Securities may use "CUSIP" numbers
(if then  generally  in use) and,  if so used,  the  Trustee  shall use  "CUSIP"
numbers in notices of  redemption  as a  convenience  to holders of  Securities;
provided that any such notice may state that no representation is made as to the
correctness  of such numbers either as printed on the Securities or contained in
any  notice of  redemption  and that  reliance  may be placed  only on the other
identification numbers printed on the Securities,  and any such redemption shall
not be affected by any defect in or omission of such numbers.  The Company shall
promptly notify the Trustee of any change in the CUSIP numbers.

                                 ARTICLE THREE
              REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS

         SECTION  3.01.  The  Company  may redeem the  Securities  of any series
issued  hereunder  on and  after  the  dates  and in  accordance  with the terms
established for such series pursuant to Section 2.01 hereof.

         SECTION  3.02.  (a) In case the Company  shall desire to exercise  such
right to redeem all or, as the case may be, a portion of the  Securities  of any
series in accordance  with the right  reserved so to do, it shall give notice of
such  redemption  to holders of the  Securities of such series to be redeemed by
mailing,  first class postage prepaid, a notice of such redemption not less than
30 days and not more than 60 days before the date fixed for  redemption  of that
series to such  holders at their last  addresses  as they shall  appear upon the
Security  Register.  Any notice  which is mailed in the manner  herein  provided
shall be  conclusively  presumed  to have been duly  given,  whether  or not the
registered  holder receives the notice.  In any case,  failure duly to give such
notice to the holder of any Security of any series  designated for redemption in
whole or in part, or any defect in the notice,  shall not affect the validity of
the proceedings for the redemption of any other Securities of such series or any
other  series.  In the  case  of  any  redemption  of  Securities  prior  to the
expiration of any  restriction on such  redemption or subject to compliance with
certain conditions provided in the terms of such Securities or elsewhere in this
Indenture,  the Company shall furnish the Trustee with an Officers'  Certificate
evidencing compliance with any such restriction or condition.

         Unless  otherwise so provided as to a particular  series of Securities,
if at the time of mailing of any notice of redemption the Company shall not have
deposited  with the paying agent an amount in cash  sufficient  to redeem all of
the Securities  called for redemption,  including  accrued  interest to the date
fixed for redemption,  such notice shall state that it is subject to the receipt
of  redemption  moneys  by the  paying  agent on or  before  the date  fixed for
redemption  (unless such redemption is mandatory) and such notice shall be of no
effect unless such moneys are so received on or before such date.

         Each such notice of  redemption  shall  identify the  Securities  to be
redeemed  (including  CUSIP  numbers,  if  any),  specify  the  date  fixed  for
redemption and the redemption price at which

                                       17
<PAGE>

Securities  of that series are to be  redeemed,  and shall state that payment of
the  redemption  price of such  Securities  to be  redeemed  will be made at the
office  or  agency of the  Company,  upon  presentation  and  surrender  of such
Securities,  that interest accrued to the date fixed for redemption will be paid
as specified in said notice,  that from and after said date  interest will cease
to accrue and that the redemption is for a sinking fund, if such is the case. If
less than all the  Securities of a series are to be redeemed,  the notice to the
holders of  Securities  of that  series to be redeemed in whole or in part shall
specify the particular  Securities to be so redeemed. In case any Security is to
be redeemed in part only,  the notice which relates to such Security shall state
the portion of the principal amount thereof to be redeemed, and shall state that
on and after  the  redemption  date,  upon  surrender  of such  Security,  a new
Security  or  Securities  of  such  series  in  principal  amount  equal  to the
unredeemed portion thereof will be issued.

         (b) If less than all the Securities of a series are to be redeemed, the
Company  shall give the Trustee at least 45 days'  notice in advance of the date
fixed for redemption  (unless the Trustee shall agree to a shorter period) as to
the aggregate  principal amount of Securities of the series to be redeemed,  and
thereupon the Trustee  shall select,  by lot or in such other manner as it shall
deem  appropriate  and fair in its  discretion  and  which may  provide  for the
selection  of a portion or portions  (equal to $1,000 or any  integral  multiple
thereof, subject to Sections 2.01(xi) and (xiv)) of the principal amount of such
Securities of a  denomination  larger than $1,000  (subject as  aforesaid),  the
Securities to be redeemed and shall  thereafter  promptly  notify the Company in
writing of the numbers of the Securities to be redeemed, in whole or in part.

         The  Company  may, if and  whenever  it shall so elect,  by delivery of
instructions signed on its behalf by an Authorized Officer, instruct the Trustee
or any paying  agent to call all or any part of the  Securities  of a particular
series for  redemption  and to give notice of redemption in the manner set forth
in this Section, such notice to be in the name of the Company or its own name as
the Trustee or such paying agent may deem advisable. In any case in which notice
of  redemption  is to be given by the  Trustee  or any such  paying  agent,  the
Company shall deliver or cause to be delivered to, or permit to remain with, the
Trustee  or such  paying  agent,  as the case may be,  such  Security  Register,
transfer  books or other  records,  or suitable  copies or  extracts  therefrom,
sufficient to enable the Trustee or such paying agent to give any notice by mail
that may be required under the provisions of this Section.

         SECTION 3.03. (a) If the giving of notice of redemption shall have been
completed as above  provided,  the  Securities  or portions of Securities of the
series to be redeemed  specified  in such notice shall become due and payable on
the date and at the place  stated in such  notice at the  applicable  redemption
price,  together with,  subject to the Company Order or  supplemental  indenture
hereto establishing the terms of such series of Securities,  interest accrued to
the date fixed for  redemption  and interest on such  Securities  or portions of
Securities  shall  cease to accrue on and after the date  fixed for  redemption,
unless the Company  shall  default in the payment of such  redemption  price and
accrued  interest  with  respect to any such  Security  or portion  thereof.  On
presentation  and  surrender of such  Securities  on or after the date fixed for
redemption  at the place of payment  specified  in the notice,  said  Securities
shall be paid and redeemed at the applicable  redemption  price for such series,
together with,  subject to the Company Order or  supplemental  indenture  hereto
establishing the terms of such series of Securities, interest accrued thereon to
the date fixed for redemption.

                                       18
<PAGE>

         (b) Upon  presentation  of any  Security of such series  which is to be
redeemed  in  part  only,  the  Company  shall  execute  and the  Trustee  shall
authenticate  and the office or agency  where the  Security is  presented  shall
deliver to the holder thereof,  at the expense of the Company, a new Security or
Securities of the same series,  of authorized  denominations in principal amount
equal to the unredeemed portion of the Security so presented.

         SECTION 3.04. The provisions of this Section 3.04 and Sections 3.05 and
3.06 shall be applicable to any sinking fund for the retirement of Securities of
a series,  except as  otherwise  specified as  contemplated  by Section 2.01 for
Securities of such series.

         The minimum  amount of any sinking  fund  payment  provided  for by the
terms of Securities of any series is herein referred to as a "mandatory  sinking
fund payment",  and any payment in excess of such minimum amount provided for by
the terms of  Securities  of any series is herein  referred  to as an  "optional
sinking fund payment". If provided for by the terms of Securities of any series,
the cash  amount of any sinking  fund  payment  may be subject to  reduction  as
provided in Section  3.05.  Each sinking  fund  payment  shall be applied to the
redemption  of  Securities  of such  series  as  provided  for by the  terms  of
Securities of such series.

         SECTION 3.05. The Company (i) may deliver  Outstanding  Securities of a
series (other than any previously called for redemption) and (ii) may apply as a
credit Securities of a series which have been redeemed either at the election of
the Company  pursuant to the terms of such Securities or through the application
of  permitted  optional  sinking  fund  payments  pursuant  to the terms of such
Securities,  in each case in  satisfaction  of all or any part of any  mandatory
sinking fund payment;  provided that such Securities have not been previously so
credited. Such Securities shall be received and credited for such purpose by the
Trustee at the  redemption  price  specified in such  Securities  for redemption
through operation of the mandatory sinking fund and the amount of such mandatory
sinking fund payment shall be reduced accordingly.

         SECTION 3.06.  Not less than 45 days prior to each sinking fund payment
date for any series of  Securities,  the Company  will deliver to the Trustee an
Officers'  Certificate  specifying  the amount of the next ensuing  sinking fund
payment  for that  series  pursuant  to the terms of that  series,  the  portion
thereof, if any, which is to be satisfied by delivering and crediting Securities
of that series  pursuant to Section 3.05 and the basis for such credit and will,
together with such Officers' Certificate,  deliver to the Trustee any Securities
to be so delivered.  Not less than 30 days before each such sinking fund payment
date the Trustee  shall select the  Securities  to be redeemed upon such sinking
fund  payment  date in the manner  specified in Section 3.02 and cause notice of
the  redemption  thereof  to be given in the name of and at the  expense  of the
Company  in the  manner  provided  in Section  3.02,  except  that the notice of
redemption  shall  also  state  that the  Securities  of such  series  are being
redeemed by operation  of the sinking  fund and the sinking  fund payment  date.
Such notice having been duly given,  the redemption of such Securities  shall be
made upon the terms and in the manner stated in Section 3.03.

                                       19
<PAGE>

                                  ARTICLE FOUR
                       PARTICULAR COVENANTS OF THE COMPANY

         The Company  covenants and agrees for each series of the  Securities as
follows:

         SECTION 4.01.  The Company will duly and  punctually pay or cause to be
paid the  principal of (and premium,  if any) and interest on the  Securities of
that  series  at the  time and  place  and in the  manner  provided  herein  and
established with respect to such Securities.

         SECTION  4.02.  So  long  as  any  series  of  the  Securities   remain
outstanding,  the Company agrees to maintain an office or agency with respect to
each such series, which shall be in the Borough of Manhattan, the City and State
of New York or at such other  location  or  locations  as may be  designated  as
provided  in this  Section  4.02,  where (i)  Securities  of that  series may be
presented  for  payment,  (ii)  Securities  of that series may be  presented  as
hereinabove  authorized  for  registration  of transfer and exchange,  and (iii)
notices and demands to or upon the Company in respect of the  Securities of that
series and this Indenture may be given or served,  such  designation to continue
with respect to such office or agency until the Company shall, by written notice
signed by an  Authorized  Officer and delivered to the Trustee,  designate  some
other  office or agency  for such  purposes  or any of them.  If at any time the
Company shall fail to maintain any such required  office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, notices and
demands may be made or served at the Corporate Trust Office of the Trustee,  and
the  Company  hereby  appoints  the  Trustee  as its agent to  receive  all such
presentations,  notices and demands.  The Trustee will  initially  act as paying
agent for the Securities.

         The Company may also from time to time, by written  notice signed by an
Authorized  Officer and  delivered to the Trustee,  designate  one or more other
offices or agencies for the foregoing  purposes within or outside the Borough of
Manhattan,   City  of  New  York,  and  may  from  time  to  time  rescind  such
designations; provided, however, that no such designation or rescission shall in
any manner  relieve  the  Company of its  obligations  to  maintain an office or
agency in the Borough of Manhattan, City of New York for the foregoing purposes.
The Company will give prompt  written notice to the Trustee of any change in the
location of any such other office or agency.

         SECTION  4.03.  (a) If the  Company  shall  appoint  one or more paying
agents for all or any series of the  Securities,  other  than the  Trustee,  the
Company  will cause each such paying agent to execute and deliver to the Trustee
an instrument  in which such agent shall agree with the Trustee,  subject to the
provisions of this Section:

                  (1) that it will  hold all sums  held by it as such  agent for
         the payment of the  principal of (and  premium,  if any) or interest on
         the  Securities of that series  (whether such sums have been paid to it
         by the Company or by any other obligor of such Securities) in trust for
         the benefit of the persons entitled thereto;

                  (2) that it will give the Trustee notice of any failure by the
         Company  (or by any  other  obligor  of such  Securities)  to make  any
         payment of the  principal of (and  premium,  if any) or interest on the
         Securities of that series when the same shall be due

                                       20
<PAGE>

         and payable;

                  (3) that it will,  at any time during the  continuance  of any
         failure referred to in the preceding  paragraph (a)(2) above,  upon the
         written  request of the Trustee,  forthwith pay to the Trustee all sums
         so held in trust by such paying agent; and

                  (4) that it will  perform all other  duties of paying agent as
         set forth in this Indenture.

         (b) If the Company  shall act as its own paying  agent with  respect to
any  series  of the  Securities,  it  will on or  before  each  due  date of the
principal of (and premium, if any) or interest on Securities of that series, set
aside,  segregate  and hold in trust for the  benefit  of the  persons  entitled
thereto a sum sufficient to pay such principal (and premium, if any) or interest
so becoming  due on  Securities  of that series until such sums shall be paid to
such  persons or  otherwise  disposed of as herein  provided  and will  promptly
notify the Trustee of such action, or any failure (by it or any other obligor on
such  Securities)  to take such action.  Whenever the Company  shall have one or
more paying agents for any series of Securities, it will, prior to each due date
of the principal of (and premium,  if any) or interest on any Securities of that
series, deposit with the paying agent a sum sufficient to pay the principal (and
premium,  if any) or interest so becoming  due, such sum to be held in trust for
the benefit of the persons entitled to such principal,  premium or interest, and
(unless such paying agent is the Trustee) the Company will  promptly  notify the
Trustee of its action or failure so to act.

         (c) Anything in this Section to the contrary  notwithstanding,  (i) the
agreement  to hold sums in trust as provided  in this  Section is subject to the
provisions  of Section  11.04,  and (ii) the  Company  may at any time,  for the
purpose of obtaining the satisfaction and discharge of this Indenture or for any
other  purpose,  pay, or direct any paying agent to pay, to the Trustee all sums
held in trust by the Company or such paying  agent,  such sums to be held by the
Trustee  upon the same terms and  conditions  as those upon which such sums were
held by the Company or such paying  agent;  and, upon such payment by any paying
agent to the  Trustee,  such paying  agent  shall be  released  from all further
liability with respect to such money.

         SECTION  4.04.  The  Company,  whenever  necessary  to  avoid or fill a
vacancy in the office of  Trustee,  will  appoint,  in the  manner  provided  in
Section  7.10,  a  Trustee,  so that  there  shall  at all  times  be a  Trustee
hereunder.

         SECTION  4.05.  Unless  a  Company  Order  or  supplemental   indenture
establishing the series of Securities provides otherwise,  the Company will not,
while any of the Securities remain outstanding, consolidate with, or merge into,
or merge into itself, or sell or convey all or substantially all of its property
to any other  Person  unless the  provisions  of Article Ten hereof are complied
with.

                                  ARTICLE FIVE
                SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY
                                 AND THE TRUSTEE

         SECTION 5.01.  The Company will furnish or cause to be furnished to the
Trustee (a) on

                                       21
<PAGE>

each regular record date (as defined in Section 2.03) for the Securities of each
Tranche of a series a list, in such form as the Trustee may reasonably  require,
of the names and  addresses of the holders of such Tranche of  Securities  as of
such regular record date,  provided,  that the Company shall not be obligated to
furnish or cause to be  furnished  such list at any time that the list shall not
differ in any respect from the most recent list  furnished to the Trustee by the
Company and (b) at such other times as the Trustee may request in writing within
30 days after the receipt by the Company of any such request,  a list of similar
form and  content as of a date not more than 15 days prior to the time such list
is furnished;  provided,  however, no such list need be furnished for any series
for which the Trustee shall be the Security Registrar.

         SECTION 5.02. (a) The Trustee shall  preserve,  in as current a form as
is reasonably practicable,  all information as to the names and addresses of the
holders of  Securities  contained  in the most  recent list  furnished  to it as
provided  in  Section  5.01 and as to the  names and  addresses  of  holders  of
Securities  received by the Trustee in its  capacity as Security  Registrar  (if
acting in such capacity).

         (b) The Trustee may  destroy  any list  furnished  to it as provided in
Section 5.01 upon receipt of a new list so furnished.

         (c)  In  case  three  or  more  holders  of   Securities  of  a  series
(hereinafter  referred to as "applicants") apply in writing to the Trustee,  and
furnish to the Trustee  reasonable  proof that each such  applicant  has owned a
Security  for a  period  of at  least  six  months  preceding  the  date of such
application,   and  such  application  states  that  the  applicants  desire  to
communicate  with other  holders of  Securities of such series or holders of all
Securities  with  respect to their  rights  under this  Indenture  or under such
Securities,  and is  accompanied  by a copy  of  the  form  of  proxy  or  other
communication which such applicants propose to transmit, then the Trustee shall,
within  five  Business  Days  after  the  receipt  of such  application,  at its
election, either:

                  (1)  afford  to  such  applicants  access  to the  information
         preserved at the time by the Trustee in accordance  with the provisions
         of subsection (a) of this Section 5.02; or

                  (2) inform such  applicants  as to the  approximate  number of
         holders of Securities of such series or of all Securities,  as the case
         may be, whose names and addresses  appear in the information  preserved
         at the  time by the  Trustee,  in  accordance  with the  provisions  of
         subsection (a) of this Section 5.02, and as to the approximate  cost of
         mailing   to  such   Securityholders   the   form  of  proxy  or  other
         communication, if any, specified in such application.

         (d) If the Trustee shall elect not to afford such applicants  access to
such  information,   the  Trustee  shall,  upon  the  written  request  of  such
applicants, mail to each holder of such series or of all Securities, as the case
may be, whose name and address appears in the information  preserved at the time
by the Trustee in  accordance  with the  provisions  of  subsection  (a) of this
Section  5.02,  a copy of the  form of proxy  or  other  communication  which is
specified in such  request,  with  reasonable  promptness  after a tender to the
Trustee  of the  material  to be mailed and of  payment,  or  provision  for the
payment,  of the reasonable  expenses of mailing,  unless within five days after
such  tender,  the  Trustee  shall  mail to such  applicants  and file  with the
Commission,  together  with a copy  of the  material  to be  mailed,  a  written
statement to the effect

                                       22
<PAGE>

that, in the opinion of the Trustee,  such mailing would be contrary to the best
interests of the holders of Securities of such series or of all  Securities,  as
the case may be,  or would be in  violation  of  applicable  law.  Such  written
statement  shall specify the basis of such  opinion.  If the  Commission,  after
opportunity for a hearing upon the objections specified in the written statement
so filed, shall enter an order refusing to sustain any of such objections or if,
after  the  entry of an order  sustaining  one or more of such  objections,  the
Commission  shall find,  after notice and opportunity for hearing,  that all the
objections so sustained have been met and shall enter an order so declaring, the
Trustee  shall mail  copies of such  material to all such  Securityholders  with
reasonable  promptness  after the entry of such  order and the  renewal  of such
tender;  otherwise,  the Trustee shall be relieved of any  obligation or duty to
such applicants respecting their application.

         (e) Each and every holder of the  Securities,  by receiving and holding
the same,  agrees with the Company and the Trustee  that neither the Company nor
the  Trustee  nor any  paying  agent nor any  Security  Registrar  shall be held
accountable by reason of the disclosure of any such  information as to the names
and addresses of the holders of Securities in accordance  with the provisions of
subsection  (c) of this  Section,  regardless  of the  source  from  which  such
information was derived,  and that the Trustee shall not be held  accountable by
reason of mailing any material  pursuant to a request made under said subsection
(c).

         SECTION  5.03.  (a) The Company  covenants  and agrees to file with the
Trustee,  within 30 days after the Company is required to file the same with the
Commission,  a copy of the annual reports and of the information,  documents and
other  reports  (or a copy  of  such  portions  of any of the  foregoing  as the
Commission may from time to time by rules and regulations  prescribe)  which the
Company may be required  to file with the  Commission  pursuant to Section 13 or
Section  15(d) of the  Exchange  Act; or, if the Company is not required to file
information,  documents or reports pursuant to either of such sections,  then to
file  with the  Trustee  and,  unless  the  Commission  shall  not  accept  such
information,  documents or reports, the Commission, in accordance with the rules
and  regulations  prescribed  from time to time by the  Commission,  such of the
supplementary  and  periodic  information,  documents  and reports  which may be
required  pursuant to Section 13 of the  Exchange  Act, in respect of a security
listed and  registered  on a national  securities  exchange as may be prescribed
from time to time in such rules and regulations.

         (b) The Company  covenants  and agrees to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from time to
time by the Commission, such additional information,  documents and reports with
respect to compliance by the Company with the conditions and covenants  provided
for in this  Indenture  as may be  required  from time to time by such rules and
regulations.

         (c) The Company  covenants and agrees to transmit by mail,  first class
postage  prepaid,  or reputable  over-night  delivery service which provides for
evidence of receipt, to the Securityholders, as their names and addresses appear
upon the  Security  Register,  within 30 days after the filing  thereof with the
Trustee, such summaries of any information, documents and reports required to be
filed by the Company  pursuant to subsections (a) and (b) of this Section as may
be  required  by  rules  and  regulations  prescribed  from  time to time by the
Commission.

                                       23
<PAGE>

         (d) The Company  covenants and agrees to furnish to the Trustee,  on or
before  May 15 in  each  calendar  year  in  which  any of  the  Securities  are
outstanding, or on or before such other day in each calendar year as the Company
and the Trustee may from time to time agree upon, a Certificate as to compliance
with all conditions  and covenants  under this  Indenture.  For purposes of this
subsection (d), such compliance shall be determined without regard to any period
of grace or requirement of notice provided under this Indenture.

         (e) Delivery of such  information,  documents or reports to the Trustee
pursuant to Section  5.03(a) or 5.03(b) is for  informational  purposes only and
the Trustee's  receipt thereof shall not constitute  constructive  notice of any
information   contained  therein  or  determinable  from  information  contained
therein,  including,  in the case of Section 5.03(b),  the Company's  compliance
with any of the covenants hereunder.

         SECTION 5.04. (a) On or before July 15 in each year in which any of the
Securities  are  outstanding,  the Trustee shall  transmit by mail,  first class
postage  prepaid,  to the  Securityholders,  as their names and addresses appear
upon the Security  Register,  a brief report dated as of the  preceding  May 15,
with respect to any of the following  events which may have occurred  within the
previous  twelve months (but if no such event has occurred within such period no
report need be transmitted):

                  (1) any change to its eligibility  under Section 7.09, and its
         qualifications under Section 310(b) of the Trust Indenture Act;

                  (2) the creation of or any material  change to a  relationship
         specified  in  paragraphs  (1) through (10) of Section 310 of the Trust
         Indenture Act;

                  (3) the  character  and  amount  of any  advances  (and if the
         Trustee elects so to state,  the  circumstances  surrounding the making
         thereof)  made by the Trustee (as such) which remain unpaid on the date
         of such  report,  and for the  reimbursement  of which it claims or may
         claim a lien  or  charge,  prior  to  that  of the  Securities,  on any
         property or funds held or collected  by it as trustee if such  advances
         so  remaining  unpaid  aggregate  more than 1/2 of 1% of the  principal
         amount of the Securities outstanding on the date of such report;

                  (4) any change to the amount, interest rate, and maturity date
         of all other indebtedness owing by the Company, or by any other obligor
         on the Securities,  to the Trustee in its individual  capacity,  on the
         date of such report,  with a brief  description of any property held as
         collateral  security  therefor,  except any  indebtedness  based upon a
         creditor  relationship  arising in any manner  described in  paragraphs
         (2), (3), (4) or (6) of Section 311(b) of the Trust Indenture Act;

                  (5) any change to the property and funds,  if any,  physically
         in the possession of the Trustee as such on the date of such report;

                  (6) any  release,  or release  and  substitution,  of property
         subject to the lien, if any, of this Indenture  (and the  consideration
         thereof, if any) which it has not previously reported;

                                       24
<PAGE>

                  (7) any additional  issue of Securities  which the Trustee has
         not previously reported; and

                  (8) any action taken by the Trustee in the  performance of its
         duties under this Indenture  which it has not  previously  reported and
         which  in  its  opinion   materially  affects  the  Securities  or  the
         Securities  of any  series,  except any action in respect of a default,
         notice of which has been or is to be withheld by it in accordance  with
         the provisions of Section 6.07.

         (b) The Trustee shall transmit by mail, first class postage prepaid, to
the  Securityholders,  as their names and  addresses  appear  upon the  Security
Register,  a brief  report  with  respect  to the  character  and  amount of any
advances (and if the Trustee elects so to state, the  circumstances  surrounding
the  making  thereof)  made by the  Trustee  as such  since the date of the last
report transmitted  pursuant to the provisions of subsection (a) of this Section
(or if no such report has yet been so  transmitted,  since the date of execution
of this Indenture), for the reimbursement of which it claims or may claim a lien
or charge  prior to that of the  Securities  of any series on  property or funds
held or collected  by it as Trustee,  and which it has not  previously  reported
pursuant  to this  subsection  if such  advances  remaining  unpaid  at any time
aggregate  more than 10% of the  principal  amount of  Securities of such series
outstanding  at such time,  such report to be  transmitted  within 90 days after
such time.

         (c) A copy of each such report shall, at the time of such  transmission
to  Securityholders,  be filed by the Trustee with the Company,  with each stock
exchange upon which any  Securities  are listed (if so listed) and also with the
Commission.  The Company agrees to notify the Trustee when any Securities become
listed on any stock exchange.

                                  ARTICLE SIX
                   REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
                               ON EVENT OF DEFAULT

         SECTION 6.01.  (a) Whenever used herein with respect to Securities of a
particular  series,  "Event of Default"  means any one or more of the  following
events which has occurred and is continuing:

                  (1) default in the payment of any installment of interest upon
         any of the Securities of that series, as and when the same shall become
         due and  payable,  and  continuance  of such default for a period of 30
         days;

                  (2) default in the payment of the principal of (or premium, if
         any,  on) any of the  Securities  of that  series  as and when the same
         shall  become due and payable  whether at  maturity,  upon  redemption,
         pursuant to any sinking fund  obligation,  by declaration or otherwise,
         and continuance of such default for a period of 3 Business Days;

                  (3)  failure  on the part of the  Company  duly to  observe or
         perform any other of the  covenants  or  agreements  on the part of the
         Company with respect to that series  contained  in such  Securities  or
         otherwise  established  with  respect  to  that  series  of  Securities
         pursuant to Section 2.01 hereof or contained in this  Indenture  (other
         than a

                                       25
<PAGE>

         covenant  or  agreement  which  has  been  expressly  included  in this
         Indenture  solely for the benefit of one or more  series of  Securities
         other than such series) for a period of 90 days after the date on which
         written  notice of such failure,  requiring the same to be remedied and
         stating that such notice is a "Notice of Default" hereunder, shall have
         been given to the Company by the Trustee,  by  registered  or certified
         mail,  or to the Company and the Trustee by the holders of at least 33%
         in  principal  amount  of the  Securities  of that  series  at the time
         outstanding;

                  (4) a decree or order by a court  having  jurisdiction  in the
         premises  shall have been entered  adjudging the Company as bankrupt or
         insolvent,   or  approving  as  properly   filed  a  petition   seeking
         liquidation  or   reorganization  of  the  Company  under  the  Federal
         Bankruptcy Code or any other similar  applicable  Federal or State law,
         and such decree or order shall have  continued  unvacated  and unstayed
         for a period of 90 consecutive  days; or an  involuntary  case shall be
         commenced  under such Code in respect of the Company and shall continue
         undismissed for a period of 90 consecutive  days or an order for relief
         in such case shall have been  entered;  or a decree or order of a court
         having  jurisdiction  in the  premises  shall have been entered for the
         appointment  on the ground of insolvency or bankruptcy of a receiver or
         custodian  or  liquidator  or  trustee or  assignee  in  bankruptcy  or
         insolvency of the Company or of its property,  or for the winding up or
         liquidation  of its  affairs,  and  such  decree  or order  shall  have
         remained in force unvacated and unstayed for a period of 90 consecutive
         days;

                  (5) the Company shall institute  proceedings to be adjudicated
         a voluntary  bankrupt,  or shall  consent to the filing of a bankruptcy
         proceeding  against  it, or shall file a petition  or answer or consent
         seeking liquidation or reorganization under the Federal Bankruptcy Code
         or any other similar  applicable Federal or State law, or shall consent
         to the filing of any such petition, or shall consent to the appointment
         on the ground of insolvency or bankruptcy of a receiver or custodian or
         liquidator  or trustee or assignee in bankruptcy or insolvency of it or
         of its  property,  or  shall  make an  assignment  for the  benefit  of
         creditors; or

                  (6) the  occurrence of any other Event of Default with respect
         to Securities of such series, as contemplated by Section 2.01 hereof.

         (b) The  Company  shall  file with the  Trustee  written  notice of the
occurrence  of any Event of Default  within five  Business Days of the Company's
becoming aware of any such Event of Default. In each and every such case, unless
the principal of all the Securities of that series shall have already become due
and payable, either the Trustee or the holders of not less than 33% in aggregate
principal amount of the Securities of that series then outstanding hereunder, by
notice  in  writing  to the  Company  (and  to the  Trustee  if  given  by  such
Securityholders),  may declare the principal (or, if any of such  Securities are
Discount  Securities,  such portion of the  principal  amount  thereof as may be
specified by their terms as  contemplated by Section 2.01) of all the Securities
of that series to be due and payable immediately,  and upon any such declaration
the same  shall  become  and  shall be  immediately  due and  payable,  anything
contained in this  Indenture or in the  Securities of that series or established
with  respect to that  series  pursuant to Section  2.01 hereof to the  contrary
notwithstanding.

                                       26
<PAGE>

         (c) Section 6.01(b),  however,  is subject to the condition that if, at
any time after the principal of the Securities of that series shall have been so
declared due and  payable,  and before any judgment or decree for the payment of
the monies due shall have been obtained or entered as hereinafter provided,  the
Company shall pay or shall deposit with the Trustee a sum  sufficient to pay all
matured  installments of interest upon all the Securities of that series and the
principal of (and  premium,  if any, on) any and all  Securities  of that series
which shall have become due otherwise than by  acceleration  (with interest upon
such  principal  and  premium,  if any,  and, to the extent that such payment is
enforceable under applicable law, upon overdue installments of interest,  at the
rate per annum  expressed in the  Securities  of that series to the date of such
payment or deposit) and the amount  payable to the Trustee  under  Section 7.06,
and any and all  defaults  under the  Indenture,  other than the  nonpayment  of
principal on  Securities of that series which shall not have become due by their
terms,  shall have been remedied or waived as provided in Section 6.06, then and
in every such case the holders of a majority in  aggregate  principal  amount of
the Securities of that series then outstanding, by written notice to the Company
and to the Trustee,  may rescind and annul such declaration and its consequences
with respect to that series of Securities;  but no such rescission and annulment
shall  extend to or shall  affect any  subsequent  default,  or shall impair any
right consequent thereon.

         (d) In case the Trustee has been  directed by  Securityholders  and has
proceeded to enforce any right with respect to  Securities  of that series under
this Indenture and such  proceedings  shall have been  discontinued or abandoned
because of such  rescission  or  annulment or for any other reason or shall have
been  determined  adversely  to the  Trustee,  then and in every  such  case the
Company and the Trustee shall be restored respectively to their former positions
and rights hereunder, and all rights, remedies and powers of the Company and the
Trustee shall continue as though no such proceedings had been taken.

         SECTION  6.02.  (a) The  Company  covenants  that in case an  Event  of
Default described in subsection  6.01(a)(1) or (a)(2) shall have occurred and be
continuing, upon demand of the Trustee, the Company will pay to the Trustee, for
the benefit of the holders of the  Securities  of that series,  the whole amount
that then shall have become due and payable on all such Securities for principal
(and  premium,  if any) or interest,  or both, as the case may be, with interest
upon the overdue principal (and premium, if any) and (to the extent that payment
of such interest is enforceable under applicable law and without  duplication of
any  other  amounts  paid  by the  Company  in  respect  thereof)  upon  overdue
installments  of interest at the rate per annum  expressed in the  Securities of
that  series;  and,  in  addition  thereto,  such  further  amount  as  shall be
sufficient to cover the costs and expenses of collection, and the amount payable
to the Trustee under Section 7.06.

         (b) In case the Company  shall fail  forthwith to pay such amounts upon
such demand,  the Trustee,  in its own name and as trustee of an express  trust,
shall be entitled and empowered to institute any action or proceedings at law or
in equity for the  collection  of the sums so due and unpaid,  and may prosecute
any such action or proceeding  to judgment or final decree,  and may enforce any
such  judgment or final  decree  against the Company or other  obligor  upon the
Securities  of that series and collect in the manner  provided by law out of the
property  of the Company or other  obligor  upon the  Securities  of that series
wherever situated the monies adjudged or decreed to be payable.

                                       27
<PAGE>

         (c) In case of any receivership,  insolvency, liquidation,  bankruptcy,
reorganization,   readjustment,   arrangement,  composition  or  other  judicial
proceedings affecting the Company, any other obligor on such Securities,  or the
creditors  or property of either,  the Trustee  shall have power to intervene in
such  proceedings and take any action therein that may be permitted by the court
and shall (except as may be otherwise  provided by law) be entitled to file such
proofs of claim and other papers and  documents as may be necessary or advisable
in order to have the claims of the Trustee and of the holders of  Securities  of
such series allowed for the entire amount due and payable by the Company or such
other  obligor  under  this  Indenture  at  the  date  of  institution  of  such
proceedings  and for any  additional  amount which may become due and payable by
the Company or such other  obligor  after such date,  and to collect and receive
any monies or other property  payable or  deliverable on any such claim,  and to
distribute  the same after the  deduction  of the amount  payable to the Trustee
under  Section  7.06;  and any  receiver,  assignee or trustee in  bankruptcy or
reorganization is hereby authorized by each of the holders of Securities of such
series to make such payments to the Trustee,  and, in the event that the Trustee
shall consent to the making of such payments  directly to such  Securityholders,
to pay to the Trustee any amount due it under Section 7.06.

         (d) All rights of action and of asserting  claims under this Indenture,
or under any of the terms established with respect to Securities of that series,
may be enforced by the Trustee without the possession of any of such Securities,
or the production thereof at any trial or other proceeding relative thereto, and
any such suit or  proceeding  instituted  by the Trustee shall be brought in its
own name as trustee of an express  trust,  and any  recovery of judgment  shall,
after  provision  for payment to the  Trustee of any  amounts due under  Section
7.06,  be for the  ratable  benefit  of the  holders of the  Securities  of such
series.

         In case of an  Event  of  Default  hereunder,  the  Trustee  may in its
discretion  proceed  to protect  and  enforce  the  rights  vested in it by this
Indenture by such  appropriate  judicial  proceedings  as the Trustee shall deem
most  effectual to protect and enforce any of such  rights,  either at law or in
equity or in bankruptcy or otherwise,  whether for the specific  enforcement  of
any covenant or agreement  contained in the  Indenture or in aid of the exercise
of any power  granted  in this  Indenture,  or to  enforce  any  other  legal or
equitable right vested in the Trustee by this Indenture or by law.

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

         SECTION 6.03. Any monies  collected by the Trustee  pursuant to Section
6.02 with respect to a particular  series of Securities  shall be applied in the
order  following,  at the date or dates fixed by the Trustee and, in case of the
distribution  of such monies on account of  principal  (or  premium,  if any) or
interest,  upon  presentation  of the several  Securities  of that  series,  and
stamping thereon the payment, if only partially paid, and upon surrender thereof
if fully paid:

                  FIRST:  To the payment of costs and expenses of collection and
         of all

                                       28
<PAGE>

         amounts payable to the Trustee under Section 7.06;

                  SECOND: To the payment of the amounts then due and unpaid upon
         Securities  of such  series for  principal  (and  premium,  if any) and
         interest,  in respect  of which or for the  benefit of which such money
         has been  collected,  ratably,  without  preference  or priority of any
         kind,  according to the amounts due and payable on such  Securities for
         principal (and premium, if any) and interest, respectively; and

                  THIRD:   To the Company.

         SECTION  6.04.  No holder of any  Security of any series shall have any
right by virtue or by availing of any  provision of this  Indenture to institute
any suit, action or proceeding in equity or at law upon or under or with respect
to this Indenture or for the  appointment  of a receiver or trustee,  or for any
other remedy  hereunder,  unless such holder  previously shall have given to the
Trustee  written  notice of an Event of Default and of the  continuance  thereof
with respect to Securities of such series  specifying such Event of Default,  as
hereinbefore  provided,  and  unless  also the  holders  of not less than 33% in
aggregate  principal  amount of the  Securities of such series then  outstanding
shall have made written request upon the Trustee to institute such action,  suit
or proceeding in its own name as trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs,  expenses
and liabilities to be incurred  therein or thereby,  and the Trustee for 60 days
after its receipt of such  notice,  request and offer of  indemnity,  shall have
failed to institute any such action, suit or proceeding; it being understood and
intended,  and being  expressly  covenanted  by the  taker  and  holder of every
Security of such series with every other such taker and holder and the  Trustee,
that no one or more holders of Securities of such series shall have any right in
any  manner  whatsoever  by  virtue  or by  availing  of any  provision  of this
Indenture to affect, disturb or prejudice the rights of the holders of any other
of such  Securities,  or to obtain or seek to obtain priority over or preference
to any other such holder,  or to enforce any right under this Indenture,  except
in the manner herein  provided and for the equal,  ratable and common benefit of
all holders of Securities of such series.  For the protection and enforcement of
the provisions of this Section,  each and every  Securityholder  and the Trustee
shall be entitled to such relief as can be given either at law or in equity.

         Notwithstanding  any other provisions of this Indenture,  however,  the
right of any holder of any Security to receive  payment of the principal of (and
premium, if any) and interest on such Security, as therein provided, on or after
the  respective  due  dates  expressed  in  such  Security  (or in the  case  of
redemption, on the redemption date), or to institute suit for the enforcement of
any such payment on or after such respective dates or redemption date, shall not
be impaired or affected without the consent of such holder.

         SECTION 6.05.  (a) All powers and remedies given by this Article to the
Trustee or to the  Securityholders  shall,  to the extent  permitted  by law, be
deemed cumulative and not exclusive of any others thereof or of any other powers
and  remedies  available  to the  Trustee or the holders of the  Securities,  by
judicial  proceedings or otherwise,  to enforce the performance or observance of
the  covenants  and   agreements   contained  in  this  Indenture  or  otherwise
established with respect to such Securities.

                                       29
<PAGE>

         (b) No delay or  omission of the Trustee or of any holder of any of the
Securities  to exercise  any right or power  accruing  upon any Event of Default
occurring and continuing as aforesaid  shall impair any such right or power,  or
shall  be  construed  to be a  waiver  of any such  default  or an  acquiescence
therein;  and, subject to the provisions of Section 6.04, every power and remedy
given by this Article or by law to the Trustee or to the  Securityholders may be
exercised from time to time, and as often as shall be deemed  expedient,  by the
Trustee or by the Securityholders.

         SECTION 6.06. The holders of a majority in aggregate  principal  amount
of the  Securities  of  any  series  at  the  time  outstanding,  determined  in
accordance  with Section 8.04,  shall have the right to direct the time,  method
and place of conducting any proceeding for any remedy  available to the Trustee,
or exercising  any trust or power  conferred on the Trustee with respect to such
series; provided, however, that such direction shall not be in conflict with any
rule of law or with  this  Indenture  or  unduly  prejudicial  to the  rights of
holders of Securities of any other series at the time outstanding  determined in
accordance with Section 8.04 not parties  thereto.  Subject to the provisions of
Section  7.01,  the  Trustee  shall have the right to decline to follow any such
direction  if the  Trustee  in good faith  shall,  by a  Responsible  Officer or
Officers of the Trustee, determine that the proceeding so directed might involve
the  Trustee in  personal  liability.  The  holders of a majority  in  aggregate
principal  amount  of the  Securities  of any  series  at the  time  outstanding
affected  thereby,  determined in accordance with Section 8.04, may on behalf of
the holders of all of the  Securities  of such series  waive any past default in
the performance of any of the covenants contained herein or established pursuant
to Section  2.01 with  respect to such  series  and its  consequences,  except a
default in the payment of the principal of, or premium,  if any, or interest on,
any of the  Securities  of that series as and when the same shall  become due by
the terms of such Securities otherwise than by acceleration (unless such default
has been cured and a sum sufficient to pay all matured  installments of interest
and principal  otherwise than by acceleration and any premium has been deposited
with the Trustee (in accordance with Section  6.01(c))) or a call for redemption
of Securities of that series.  Upon any such waiver, the default covered thereby
shall be deemed to be cured for all purposes of this  Indenture and the Company,
the Trustee and the holders of the  Securities  of such series shall be restored
to their former positions and rights hereunder, respectively; but no such waiver
shall extend to any  subsequent or other default or impair any right  consequent
thereon.

         SECTION 6.07. The Trustee shall, within 90 days after the occurrence of
a default  with respect to a particular  series,  transmit by mail,  first class
postage prepaid, to the holders of Securities of that series, as their names and
addresses appear upon the Security Register, notice of all defaults with respect
to that series known to the Trustee,  unless such defaults shall have been cured
or waived before the giving of such notice (the term "defaults" for the purposes
of this Section being hereby  defined to be the events  specified in subsections
(1),  (2),  (3),  (4),  (5), (6) and (7) of Section  6.01(a),  not including any
periods of grace provided for therein and  irrespective  of the giving of notice
provided for by subsection (4) of Section  6.01(a));  provided,  that, except in
the case of default in the payment of the  principal of (or premium,  if any) or
interest  on any of the  Securities  of that  series  or in the  payment  of any
sinking or analogous fund  installment  established with respect to that series,
the Trustee shall be protected in withholding  such notice if and so long as the
board of directors,  the executive committee,  or a trust committee of directors
and/or  Responsible  Officers,  of the Trustee in good faith  determine that the
withholding  of such notice is in the  interests of the holders of Securities of
that series;  provided

                                       30
<PAGE>

further,  that in the case of any default of the character  specified in Section
6.01(a)(4)  with  respect to  Securities  of such  series no such  notice to the
holders of the  Securities  of that series shall be given until at least 30 days
after the occurrence thereof.

         The  Trustee  shall  not be deemed to have  knowledge  of any  default,
except (i) a default under subsection  (a)(1),  (a)(2) or (a)(3) of Section 6.01
as long as the Trustee is acting as paying  agent for such series of  Securities
or (ii) any default as to which the Trustee shall have received  written  notice
or a Responsible Officer charged with the administration of this Indenture shall
have obtained written notice.

         SECTION 6.08. All parties to this Indenture  agree,  and each holder of
any Securities by his or her acceptance  thereof shall be deemed to have agreed,
that any court may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against the Trustee for
any action taken or omitted by it as Trustee,  the filing by any party  litigant
in such  suit of an  undertaking  to pay the costs of such  suit,  and that such
court  may in its  discretion  assess  reasonable  costs,  including  reasonable
attorneys' fees,  against any party litigant in such suit,  having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit instituted by the
Trustee,   to  any  suit   instituted  by  any   Securityholder,   or  group  of
Securityholders,  holding  more than 10% in  aggregate  principal  amount of the
outstanding  Securities  of  any  series,  or to  any  suit  instituted  by  any
Securityholder  for the  enforcement  of the  payment  of the  principal  of (or
premium,  if any) or interest on any  Security of such  series,  on or after the
respective due dates expressed in such Security or established  pursuant to this
Indenture.

                                 ARTICLE SEVEN
                             CONCERNING THE TRUSTEE

         SECTION 7.01.  (a) The Trustee,  prior to the occurrence of an Event of
Default  with  respect  to  Securities  of a series  and after the curing of all
Events of Default  with  respect to  Securities  of that  series  which may have
occurred,  shall  undertake to perform with respect to Securities of such series
such  duties  and  only  such  duties  as are  specifically  set  forth  in this
Indenture,  and no  implied  covenants  or  obligations  shall be read into this
Indenture  against  the  Trustee.  In case an Event of Default  with  respect to
Securities  of a series has occurred  (which has not been cured or waived),  the
Trustee  shall  exercise  with respect to  Securities of that series such of the
rights and powers  vested in it by this  Indenture,  and use the same  degree of
care and skill in their  exercise,  as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.

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

                  (1)  prior  to the  occurrence  of an Event  of  Default  with
         respect  to  Securities  of a series and after the curing or waiving of
         all such Events of Default  with  respect to that series which may have
         occurred:

                                       31
<PAGE>

                           (i) the duties and  obligations  of the Trustee shall
                  with respect to Securities of such series be determined solely
                  by the express  provisions of this Indenture,  and the Trustee
                  shall not be liable with respect to  Securities of such series
                  except for the  performance of such duties and  obligations as
                  are specifically  set forth in this Indenture,  and no implied
                  covenants  or  obligations  shall be read into this  Indenture
                  against the Trustee; and

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

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

                  (3) the Trustee shall not be liable with respect to any action
         taken or omitted to be taken by it in good faith in accordance with the
         direction  of the  holders  of not less than a  majority  in  principal
         amount of the Securities of any series at the time outstanding relating
         to the time,  method and place of  conducting  any  proceeding  for any
         remedy  available  to the  Trustee,  or  exercising  any trust or power
         conferred  upon the Trustee  under this  Indenture  with respect to the
         Securities of that series; and

                  (4) none of the provisions  contained in this Indenture  shall
         require the Trustee to expend or risk its own funds or otherwise  incur
         or risk personal  financial  liability in the performance of any of its
         duties  or in the  exercise  of any of its  rights  or  powers,  if the
         Trustee  reasonably  believes  that  the  repayment  of such  funds  or
         liability  is not  reasonably  assured  to it under  the  terms of this
         Indenture or adequate  indemnity  against  such risk is not  reasonably
         assured to it.

         (c) Whether or not therein  expressly so provided,  every  provision of
this  Indenture  relating  to the  conduct  or  affecting  the  liability  of or
affording protection to the Trustee, or any other capacity the Trustee may serve
hereunder, shall be subject to the provisions of this Section 7.01.

         SECTION 7.02. Except as otherwise provided in Section 7.01:

         (a) The Trustee may  conclusively  rely and shall be fully protected in
acting or refraining  from acting upon any resolution,  certificate,  statement,
instrument, opinion, report, notice, request, direction, consent, order, demand,
approval,  bond,  security or other  paper or document  believed by it (i) to be
genuine and (ii) to have been signed or presented by the proper

                                       32
<PAGE>

party or parties;

         (b) Any request,  direction,  order or demand of the Company  mentioned
herein shall be  sufficiently  evidenced by a Board  Resolution  or an Officers'
Certificate (unless other evidence in respect thereof is specifically prescribed
herein);

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

         (d) The Trustee  shall be under no  obligation  to exercise  any of the
rights  or  powers  vested  in it by this  Indenture  at the  request,  order or
direction  of any of the  Securityholders,  pursuant to the  provisions  of this
Indenture,  unless  such  Securityholders  shall  have  offered  to the  Trustee
security  or  indemnity  satisfactory  to it  against  the costs,  expenses  and
liabilities  which may be incurred therein or thereby;  nothing herein contained
shall, however, relieve the Trustee of the obligation, upon the occurrence of an
Event of Default with respect to a series of the Securities  (which has not been
cured or waived) to exercise  with respect to  Securities of that series such of
the rights and powers vested in it by this Indenture, and to use the same degree
of care and skill in their  exercise,  as a prudent  man would  exercise  or use
under the circumstances in the conduct of his own affairs;

         (e) The Trustee  shall not be liable for any action taken or omitted to
be taken by it in good faith and believed by it to be  authorized  or within the
discretion or rights or powers conferred upon it by this Indenture;

         (f) The Trustee shall not be bound to make any  investigation  into the
facts or matters stated in any resolution,  certificate,  statement, instrument,
opinion, report, notice, request, consent,  direction,  order, demand, approval,
bond, security, or other papers or documents,  unless requested in writing so to
do by the  holders  of not less  than a  majority  in  principal  amount  of the
outstanding  Securities of the particular series affected thereby (determined as
provided in Section  8.04);  provided,  however,  that if the  payment  within a
reasonable time to the Trustee of the costs,  expenses or liabilities  likely to
be incurred by it in the making of such  investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it by
the terms of this  Indenture,  the  Trustee  may  require  reasonable  indemnity
against  such costs,  expenses or  liabilities  as a condition  precedent  to so
proceeding.  The reasonable  expense of every such examination  shall be paid by
the Company  or, if paid by the  Trustee,  shall be repaid by the  Company  upon
demand.  Notwithstanding the foregoing,  the Trustee, in its direction, may make
such further inquiry or  investigation  into such facts or matters as it may see
fit. In making any  investigation  required or authorized by this  subparagraph,
the  Trustee  shall be entitled to examine  books,  records and  premises of the
Company, personally or by agent or attorney;

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

         (h) The permissive right of the Trustee to do things enumerated in this
Indenture shall

                                       33
<PAGE>

not be construed as a duty.

         SECTION 7.03. (a) The recitals  contained  herein and in the Securities
(other than the Certificate of  Authentication on the Securities) shall be taken
as the statements of the Company,  and the Trustee assumes no responsibility for
the correctness of the same.

         (b)  The  Trustee  makes  no  representations  as to  the  validity  or
sufficiency of this Indenture or of the Securities.

         (c) The Trustee shall not be accountable  for the use or application by
the Company of any of the Securities or of the proceeds of such  Securities,  or
for the use or  application of any monies paid over by the Trustee in accordance
with any provision of this Indenture or established pursuant to Section 2.01, or
for the use or application of any monies received by any paying agent other than
the Trustee.

         SECTION 7.04. The Trustee or any paying agent or Security Registrar, in
its  individual  or any other  capacity,  may  become  the owner or  pledgee  of
Securities  with the same  rights it would have if it were not  Trustee,  paying
agent or Security Registrar.

         SECTION 7.05.  Subject to the provisions of Section  11.04,  all monies
received by the Trustee shall, until used or applied as herein provided, be held
in  trust  for the  purposes  for  which  they  were  received,  but need not be
segregated  from other funds  except to the extent  required by law. The Trustee
shall be under no liability for interest on any monies  received by it hereunder
except such as it may agree in writing with the Company to pay thereon.

         SECTION  7.06.  (a) The  Company  covenants  and  agrees  to pay to the
Trustee  from time to time,  and the Trustee  shall be entitled  to,  reasonable
compensation  (which  shall not be limited by any  provision of law in regard to
the compensation of a trustee of an express trust) for all services  rendered by
it in the  execution  of the  trusts  hereby  created  and in the  exercise  and
performance  of any of the powers and duties  hereunder of the Trustee,  and the
Company  will pay or reimburse  the Trustee upon its request for all  reasonable
expenses,  disbursements  and  advances  incurred  or  made  by the  Trustee  in
accordance  with  any  of  the  provisions  of  this  Indenture  (including  the
reasonable  compensation  and the reasonable  expenses and  disbursements of its
counsel and agents and of all persons not  regularly  in its employ)  except any
such expense, disbursement or advance as may arise from its negligence,  willful
misconduct  or bad faith.  The Company also  covenants to indemnify  the Trustee
(and its officers, agents, directors and employees) for, and to hold it harmless
against,  any loss,  liability or expense incurred without  negligence,  willful
misconduct  or bad faith on the part of the  Trustee  and  arising  out of or in
connection with the acceptance or  administration  of this trust,  including the
reasonable costs and expenses of defending itself against any claim or liability
in connection  with the exercise or  performance  of any of its powers or duties
hereunder.

         (b) The obligations of the Company under this Section to compensate and
indemnify  the  Trustee  and to pay  or  reimburse  the  Trustee  for  expenses,
disbursements and advances shall constitute additional  indebtedness  hereunder.
Such  additional  indebtedness  shall be  secured by a lien prior to that of the
Securities upon all property and funds held or collected by the Trustee as

                                       34
<PAGE>

such,  except  funds held in trust for the benefit of the holders of  particular
Securities.

         (c) Without  prejudice  to any other  rights  available  to the Trustee
under  applicable law, when the Trustee incurs  expenses or renders  services in
connection with an Event of Default, the expenses (including  reasonable charges
and expenses of its counsel) and  compensation  for its services are intended to
constitute  expenses  of  administration   under  applicable  federal  or  state
bankruptcy, insolvency or similar law.

         (d) The provisions of this Section 7.06 shall survive the  satisfaction
and discharge of this Indenture or the appointment of a successor trustee.

         SECTION 7.07. Except as otherwise provided in Section 7.01, whenever in
the administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
suffering or omitting to take any action  hereunder,  such matter  (unless other
evidence  in respect  thereof be herein  specifically  prescribed)  may,  in the
absence of bad faith on the part of the  Trustee,  be deemed to be  conclusively
proved and established by an Officers'  Certificate delivered to the Trustee and
such certificate,  in the absence of bad faith on the part of the Trustee, shall
be full warrant to the Trustee for any action  taken,  suffered or omitted to be
taken by it under the provisions of this Indenture upon the faith thereof.

         SECTION 7.08.   If   the  Trustee  has  acquired  or  shall  acquire  a
conflicting  interest within the meaning of the Trust Indenture Act, the Trustee
shall either eliminate such interest or resign,  to the extent and in the manner
provided by, and subject to the provisions of, the Trust  Indenture Act and this
Indenture.

         SECTION 7.09. There shall at all times be a Trustee with respect to the
Securities issued hereunder which shall at all times be a corporation  organized
and doing  business  under the laws of the United States of America or any State
or Territory  thereof or of the District of Columbia,  or a corporation or other
person permitted to act as trustee by the Commission, authorized under such laws
to exercise corporate trust powers,  having a combined capital and surplus of at
least 50 million dollars,  and subject to supervision or examination by Federal,
State,  Territorial,  or  District of Columbia  authority.  If such  corporation
publishes  reports of  condition  at least  annually,  pursuant to law or to the
requirements of the aforesaid  supervising or examining authority,  then for the
purposes of this Section,  the combined  capital and surplus of such corporation
shall be deemed to be its combined  capital and surplus as set forth in its most
recent report of condition so published. The Company may not, nor may any person
directly or indirectly controlling,  controlled by, or under common control with
the Company, serve as Trustee. In case at any time the Trustee shall cease to be
eligible in accordance  with the  provisions of this Section,  the Trustee shall
resign immediately in the manner and with the effect specified in Section 7.10.

         SECTION 7.10. (a) The Trustee or any successor hereafter appointed, may
at any time  resign  with  respect to the  Securities  of one or more  series by
giving  written  notice  thereof to the  Company and by  transmitting  notice of
resignation by mail, first class postage prepaid, to the Securityholders of such
series,  as their names and addresses  appear upon the Security  Register.  Upon
receiving  such notice of  resignation,  the Company  shall  promptly  appoint a
successor

                                       35
<PAGE>

trustee  with respect to  Securities  of such series by written  instrument,  in
duplicate,  executed  by order  of the  Board  of  Directors,  one copy of which
instrument  shall be  delivered  to the  resigning  Trustee  and one copy to the
successor trustee. If no successor trustee shall have been so appointed and have
accepted  appointment  within  30 days  after  the  mailing  of such  notice  of
resignation,   the  resigning  Trustee  may  petition  any  court  of  competent
jurisdiction  for  the  appointment  of a  successor  trustee  with  respect  to
Securities of such series,  or any  Securityholder of that series who has been a
bona fide  holder of a  Security  or  Securities  for at least six  months  may,
subject to the  provisions  of Section 6.08, on behalf of himself and all others
similarly  situated,  petition any such court for the appointment of a successor
trustee.  Such court may  thereupon  after such  notice,  if any, as it may deem
proper and prescribe, appoint a successor trustee.

         (b) In case at any time any of the following shall occur:

                  (1) the Trustee  shall fail to comply with the  provisions  of
         Section 7.08 after  written  request  therefor by the Company or by any
         Securityholder  who  has  been a bona  fide  holder  of a  Security  or
         Securities for at least six months; or

                  (2) The Trustee shall cease to be eligible in accordance  with
         the  provisions  of Section 7.09 and shall fail to resign after written
         request therefor by the Company or by any such Securityholder; or

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

then,  in any such case,  the Company may remove the Trustee with respect to all
Securities and appoint a successor trustee by written instrument,  in duplicate,
executed by order of the Board of Directors,  one copy of which instrument shall
be  delivered to the Trustee so removed and one copy to the  successor  trustee,
or,  subject  to the  provisions  of  Section  6.08,  unless,  with  respect  to
subsection  (b)(1) above,  the Trustee's duty to resign is stayed as provided in
Section  310(b) of the Trust  Indenture Act, any  Securityholder  who has been a
bona fide  holder of a Security  or  Securities  for at least six months may, on
behalf of  himself  and all others  similarly  situated,  petition  any court of
competent  jurisdiction  for the removal of the Trustee and the appointment of a
successor trustee. Such court may thereupon after such notice, if any, as it may
deem proper and prescribe, remove the Trustee and appoint a successor trustee.

         (c) The  holders of a majority  in  aggregate  principal  amount of the
Securities  of any  series at the time  outstanding  may at any time  remove the
Trustee with respect to such series and appoint a successor trustee.

         (d) Any  resignation  or removal of the  Trustee and  appointment  of a
successor  trustee with respect to the Securities of a series pursuant to any of
the  provisions  of this  Section  shall become  effective  upon  acceptance  of
appointment by the successor trustee as provided in Section 7.11.

                                       36
<PAGE>

         (e) Any  successor  trustee  appointed  pursuant to this Section may be
appointed  with respect to the  Securities  of one or more series or all of such
series,  and at any time there  shall be only one  Trustee  with  respect to the
Securities of any particular series.

         SECTION 7.11. (a) In case of the  appointment  hereunder of a successor
trustee  with  respect  to all  Securities,  every  such  successor  trustee  so
appointed  shall  execute,  acknowledge  and  deliver to the  Company and to the
retiring  Trustee an instrument  accepting such  appointment,  and thereupon the
resignation or removal of the retiring  Trustee shall become  effective and such
successor  trustee,  without any further act, deed or  conveyance,  shall become
vested with all the rights,  powers,  trusts and duties of the retiring Trustee;
but, on the  request of the  Company or the  successor  trustee,  such  retiring
Trustee  shall,  upon payment of its charges,  execute and deliver an instrument
transferring to such successor trustee all the rights, powers, and trusts of the
retiring  Trustee and shall duly assign,  transfer and deliver to such successor
trustee all property and money held by such retiring Trustee hereunder,  subject
to any prior lien provided for in Section 7.06(b).

         (b) In case of the  appointment  hereunder of a successor  trustee with
respect to the Securities of one or more (but not all) series, the Company,  the
retiring  Trustee and each  successor  trustee with respect to the Securities of
one or more series shall  execute and deliver an indenture  supplemental  hereto
wherein each successor trustee shall accept such appointment and which (1) shall
contain  such  provisions  as shall be  necessary  or  desirable to transfer and
confirm to, and to vest in,  each  successor  trustee  all the  rights,  powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor trustee relates,  (2)
shall  contain  such  provisions  as shall be deemed  necessary  or desirable to
confirm that all the rights,  powers,  trusts and duties of the retiring Trustee
with respect to the  Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the  provisions of this  Indenture as shall be
necessary  to  provide  for or  facilitate  the  administration  of  the  trusts
hereunder by more than one Trustee,  it being  understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same  trust,  that  each  such  Trustee  shall be  trustee  of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder  administered by
any other such Trustee and that no Trustee shall be  responsible  for any act or
failure  to act on the  part  of any  other  Trustee  hereunder;  and  upon  the
execution and delivery of such supplemental indenture the resignation or removal
of the retiring Trustee shall become  effective to the extent provided  therein,
such  retiring  Trustee  shall with respect to the  Securities  of that or those
series  to which the  appointment  of such  successor  trustee  relates  have no
further  responsibility  for  the  exercise  of  rights  and  powers  or for the
performance  of the  duties and  obligations  vested in the  Trustee  under this
Indenture,  and each such  successor  trustee,  without any further act, deed or
conveyance,  shall become vested with all the rights,  powers, trusts and duties
of the retiring  Trustee with respect to the  Securities of that or those series
to which the appointment of such successor  trustee relates;  but, on request of
the Company or any successor  trustee,  such retiring Trustee shall duly assign,
transfer and deliver to such successor  trustee,  to the extent  contemplated by
such  supplemental  indenture,  the  property  and money  held by such  retiring
Trustee  hereunder  with  respect to the  Securities  of that or those series to
which the appointment of such successor trustee relates.

         (c) Upon  request of any such  successor  trustee,  the  Company  shall
execute any and

                                       37
<PAGE>

all instruments  for more fully and certainly  vesting in and confirming to such
successor  trustee all such rights,  powers and trusts  referred to in paragraph
(a) or (b) of this Section, as the case may be.

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

         (e) Upon  acceptance of appointment by a successor  trustee as provided
in this Section,  the Company shall  transmit  notice of the  succession of such
trustee hereunder by mail, first class postage prepaid, to the  Securityholders,
as their names and addresses appear upon the Security  Register.  If the Company
fails to transmit such notice within ten days after acceptance of appointment by
the  successor  trustee,  the  successor  trustee  shall cause such notice to be
transmitted at the expense of the Company.

         SECTION 7.12. Any  corporation  into which the Trustee may be merged or
converted or with which it may be  consolidated,  or any  corporation  resulting
from any merger,  conversion  or  consolidation  to which the Trustee shall be a
party,  or  any  corporation  succeeding  to  all  or  substantially  all of the
corporate  trust business of the Trustee,  shall be the successor of the Trustee
hereunder,  provided such corporation shall be qualified under the provisions of
the Trust  Indenture  Act and eligible  under the  provisions  of Section  7.09,
without the  execution  or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary  notwithstanding.  In
case any Securities  shall have been  authenticated,  but not delivered,  by the
Trustee then in office, any successor by merger,  conversion or consolidation to
such  authenticating  Trustee  may adopt such  authentication  and  deliver  the
Securities so  authenticated  with the same effect as if such successor  Trustee
had itself authenticated such Securities.

         SECTION  7.13.  If and when the Trustee  shall become a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall be subject
to the  provisions of the Trust  Indenture  Act  regarding  collection of claims
against the Company (or any other obligor upon the Securities).

                                 ARTICLE EIGHT
                         CONCERNING THE SECURITYHOLDERS

         SECTION  8.01.  Whenever  in this  Indenture  it is  provided  that the
holders of a majority or specified  percentage in aggregate  principal amount of
the Securities of a particular  series may take any action (including the making
of any demand or  request,  the giving of any  notice,  consent or waiver or the
taking of any other action), the fact that at the time of taking any such action
the holders of such majority or specified  percentage of that series have joined
therein may be  evidenced  by any  instrument  or any number of  instruments  of
similar tenor executed by such holders of Securities of that series in person or
by agent or proxy appointed in writing.

         If the Company shall solicit from the Securityholders of any series any
request,  demand,  authorization,  direction,  notice,  consent, waiver or other
action,   the  Company  may,  at  its  option,  as  evidenced  by  an  Officers'
Certificate, fix in advance a record date for such series for the

                                       38
<PAGE>

determination  of  Securityholders   entitled  to  give  such  request,  demand,
authorization,  direction,  notice,  consent,  waiver or other  action,  but the
Company shall have no obligation to do so. If such a record date is fixed,  such
request,  demand,  authorization,  direction,  notice,  consent, waiver or other
action  may  be  given   before  or  after  the  record   date,   but  only  the
Securityholders  of record at the close of  business on the record date shall be
deemed  to  be   Securityholders   for  the  purposes  of  determining   whether
Securityholders  of the requisite  proportion of outstanding  Securities of that
series  have  authorized  or  agreed  or  consented  to  such  request,  demand,
authorization,  direction, notice, consent, waiver or other action, and for that
purpose the  outstanding  Securities  of that series shall be computed as of the
record date; provided that no such  authorization,  agreement or consent by such
Securityholders  on the record  date shall be deemed  effective  unless it shall
become effective pursuant to the provisions of this Indenture not later than six
months after the record date.

         In determining whether the holders of the requisite aggregate principal
amount of Securities  of a particular  series have  concurred in any  direction,
consent  or waiver  under this  Indenture,  the  principal  amount of a Discount
Security that shall be deemed to be  outstanding  for such purposes shall be the
amount of the principal  thereof that would be due and payable as of the date of
such  determination  upon a declaration of acceleration of the maturity  thereof
pursuant to Section 6.01.

         SECTION 8.02.  Subject to the provisions of Section 7.01,  proof of the
execution of any  instrument  by a  Securityholder  (such proof will not require
notarization)  or his agent or proxy and proof of the  holding  by any person of
any of the Securities shall be sufficient if made in the following manner:

         (a) The fact  and  date of the  execution  by any  such  person  of any
instrument may be proved in any reasonable manner acceptable to the Trustee.

         (b) The  ownership  of  Securities  shall  be  proved  by the  Security
Register  of such  Securities  or by a  certificate  of the  Security  Registrar
thereof.

         (c) The  Trustee  may  require  such  additional  proof  of any  matter
referred to in this Section as it shall deem necessary.

         SECTION 8.03. Prior to the due presentment for registration of transfer
of any  Security,  the Company,  the Trustee,  any paying agent and any Security
Registrar  may deem and treat the  person in whose name such  Security  shall be
registered  upon the books of the Company as the absolute owner of such Security
(whether or not such Security shall be overdue and notwithstanding any notice of
ownership or writing  thereon made by anyone other than the Security  Registrar)
for the purpose of  receiving  payment of or on account of the  principal of and
premium, if any, and (subject to Section 2.03) interest on such Security and for
all other purposes; and neither the Company nor the Trustee nor any paying agent
nor any Security Registrar shall be affected by any notice to the contrary.

         SECTION  8.04.  In  determining  whether the  holders of the  requisite
aggregate  principal amount of Securities of a particular  series have concurred
in any  direction,  consent or waiver under this  Indenture,  Securities of that
series which are owned by the Company or any other

                                       39
<PAGE>

obligor on the Securities of that series or by any person directly or indirectly
controlling  or  controlled  by or under common  control with the Company or any
other obligor on the Securities of that series shall be  disregarded  and deemed
not to be outstanding for the purpose of any such determination, except that for
the purpose of determining  whether the Trustee shall be protected in relying on
any such direction,  consent or waiver, only Securities of such series which the
Trustee actually knows are so owned shall be so disregarded. Securities so owned
which have been  pledged in good faith may be  regarded as  outstanding  for the
purposes of this Section,  if the pledgee shall establish to the satisfaction of
the Trustee the pledgee's  right so to act with respect to such  Securities  and
that  the  pledgee  is  not a  person  directly  or  indirectly  controlling  or
controlled by or under direct or indirect common control with the Company or any
such other obligor.  In case of a dispute as to such right,  any decision by the
Trustee  taken  upon the  advice  of  counsel  shall be full  protection  to the
Trustee.

         SECTION  8.05.  At any time prior to (but not after) the  evidencing to
the  Trustee,  as provided in Section  8.01,  of the taking of any action by the
holders of the  majority or  percentage  in  aggregate  principal  amount of the
Securities of a particular series specified in this Indenture in connection with
such  action,  any holder of a  Security  of that  series  which is shown by the
evidence to be included in the Securities the holders of which have consented to
such action may, by filing  written  notice with the Trustee,  and upon proof of
holding as provided in Section 8.02,  revoke such action so far as concerns such
Security.  Except  as  aforesaid  any such  action  taken by the  holder  of any
Security  shall be  conclusive  and binding upon such holder and upon all future
holders  and owners of such  Security,  and of any  Security  issued in exchange
therefor, on registration of transfer thereof or in place thereof,  irrespective
of whether or not any notation in regard thereto is made upon such Security. Any
action taken by the holders of the majority or percentage in aggregate principal
amount of the Securities of a particular  series  specified in this Indenture in
connection with such action shall be conclusively  binding upon the Company, the
Trustee and the holders of all the Securities of that series.

                                  ARTICLE NINE
                             SUPPLEMENTAL INDENTURES

         SECTION  9.01.  In addition  to any  supplemental  indenture  otherwise
authorized  by  this  Indenture,   the  Company,  when  authorized  by  a  Board
Resolution,  and the Trustee may from time to time and at any time enter into an
indenture  or  indentures  supplemental  hereto  (which  shall  conform  to  the
provisions of the Trust Indenture Act as then in effect), without the consent of
the Securityholders, for one or more of the following purposes:

         (a) to evidence the  succession of another  person to the Company,  and
the assumption by any such  successor of the covenants of the Company  contained
herein or otherwise established with respect to the Securities; or

         (b) to add to the  covenants  of the Company  such  further  covenants,
restrictions,  conditions or provisions for the protection of the holders of the
Securities of all or any series,  and to make the occurrence,  or the occurrence
and continuance, of a default in any of such additional covenants, restrictions,
conditions  or  provisions a default or an Event of Default with respect to such
series permitting the enforcement of all or any of the several remedies provided
in this

                                       40
<PAGE>

Indenture as herein set forth;  provided,  however,  that in respect of any such
additional  covenant,  restriction,  condition  or provision  such  supplemental
indenture  may provide for a  particular  period of grace after  default  (which
period may be shorter or longer than that allowed in the case of other defaults)
or may provide for an immediate  enforcement  upon such default or may limit the
remedies  available  to the Trustee  upon such default or may limit the right of
the holders of a majority in aggregate  principal  amount of the  Securities  of
such series to waive such default; or

         (c) to cure any  ambiguity or to correct or  supplement  any  provision
contained  herein or in any  supplemental  indenture  which may be  defective or
inconsistent  with any other provision  contained  herein or in any supplemental
indenture,  or to make such other  provisions  in regard to matters or questions
arising under this Indenture as shall not be inconsistent with the provisions of
this  Indenture and shall not  adversely  affect the interests of the holders of
the Securities of any series; or

         (d) to change or eliminate any of the  provisions of this  Indenture or
to add any new provision to this Indenture; provided, however, that such change,
elimination  or addition  shall become  effective only when there is no Security
outstanding  of any series  created prior to the execution of such  supplemental
indenture that is entitled to the benefit of such provisions; or

         (e) to  establish  the form or terms of  Securities  of any  series  as
permitted by Section 2.01; or

         (f) to add any additional  Events of Default with respect to all or any
series of outstanding Securities; or

         (g) to provide collateral security for the Securities; or

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

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

         (j) to  change  any  place or places  where  (1) the  principal  of and
premium, if any, and interest,  if any, on all or any series of Securities shall
be  payable,  (2)  all or any  series  of  Securities  may  be  surrendered  for
registration of transfer, (3) all or any series of Securities may be surrendered
for  exchange  and (4)  notices and demands to or upon the Company in respect of
all or any series of  Securities  and this  Indenture  may be served;  provided,
however,  that any such place  shall be located in New York,  New York or be the
principal office of the Company; or

         (k) to provide for the payment by the Company of additional  amounts in
respect of certain  taxes  imposed on certain  holders and for the  treatment of
such additional amounts as

                                       41
<PAGE>

interest and for all matters incidental thereto; or

         (l) to provide for the issuance of Securities denominated in a currency
other than  Dollars or in a composite  currency  and for all matters  incidental
thereto.

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

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

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

                  (z) if, by reason of any such amendment, one or more
         provisions which, at the date of the execution and delivery hereof or
         at any time thereafter, are required by the Trust Indenture Act to be
         contained herein shall be deemed to be incorporated herein by reference
         or otherwise, or otherwise made applicable hereto, and shall no longer
         be required to be contained herein, the Company and the Trustee may,
         without the consent of any Securityholders, enter into a supplemental
         indenture hereto to effect the elimination of such provisions.

         The  Trustee  is  hereby  authorized  to join with the  Company  in the
execution  of  any  such  supplemental  indenture,   and  to  make  any  further
appropriate agreements and stipulations which may be therein contained,  but the
Trustee  shall not be  obligated to enter into any such  supplemental  indenture
which  affects  the  Trustee's  own  rights,  duties or  immunities  under  this
Indenture or otherwise.

         Any supplemental indenture authorized by the provisions of this Section
may be  executed  by the  Company  and the  Trustee  without  the consent of the
holders of any of the Securities at the time outstanding, notwithstanding any of
the provisions of Section 9.02.

         SECTION 9.02. With the consent  (evidenced as provided in Section 8.01)
of the holders of not less than a majority in aggregate  principal amount of the
Securities of each series affected by such supplemental  indenture or indentures
at the time outstanding, the Company, when authorized by a Board Resolution, and
the Trustee may from time to time and at any time enter

                                       42
<PAGE>

into an indenture or indentures  supplemental hereto (which shall conform to the
provisions  of the Trust  Indenture  Act as then in effect)  for the  purpose of
adding any  provisions  to or changing in any manner or  eliminating  any of the
provisions of this Indenture or of any supplemental indenture or of modifying in
any manner the rights of the holders of the Securities of such series under this
Indenture;  provided,  however,  that no such  supplemental  indenture shall (i)
extend  the fixed  maturity  of any  Securities  of any  series,  or reduce  the
principal  amount  thereof,  or reduce the rate or extend the time of payment of
interest thereon,  or reduce any premium payable upon the redemption thereof, or
reduce the amount of the principal of a Discount  Security that would be due and
payable upon a declaration of acceleration of the maturity  thereof  pursuant to
Section  6.01,  without  the  consent  of the  holders  of  each  Security  then
outstanding  and affected,  (ii) reduce the aforesaid  percentage of Securities,
the holders of which are required to consent to any such supplemental indenture,
or reduce the  percentage  of  Securities,  the holders of which are required to
waive any  default  and its  consequences,  without the consent of the holder of
each  Security  then  outstanding  and  affected  thereby,  or (iii)  modify any
provision of Section  6.01(c)  (except to increase the  percentage  of principal
amount of securities  required to rescind and annul any  declaration  of amounts
due and payable under the Securities) without the consent of the holders of each
Security then outstanding and affected thereby.

         Upon the  request of the  Company,  accompanied  by a Board  Resolution
authorizing  the  execution  of any such  supplemental  indenture,  and upon the
filing with the Trustee of evidence of the consent of  Securityholders  required
to consent thereto as aforesaid,  the Trustee shall join with the Company in the
execution of such  supplemental  indenture  unless such  supplemental  indenture
affects the Trustee's own rights,  duties or immunities  under this Indenture or
otherwise,  in which case the  Trustee may in its  discretion,  but shall not be
obligated to, enter into such supplemental indenture.

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

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

         Promptly  after the  execution  by the  Company  and the Trustee of any
supplemental  indenture pursuant to the provisions of this Section,  the Trustee
shall transmit by mail, first class postage prepaid, a notice,  setting forth in
general   terms  the   substance  of  such   supplemental   indenture,   to  the
Securityholders  of all series  affected  thereby as their  names and  addresses
appear  upon the  Security  Register.  Any  failure of the  Trustee to mail such
notice, or any defect therein,  shall not, however,  in any way impair or affect
the validity of any such supplemental indenture.

         SECTION 9.03. Upon the execution of any supplemental indenture pursuant
to the  provisions of this Article or of Section 10.01,  this  Indenture  shall,
with  respect to such  series,  be and be deemed to be  modified  and amended in
accordance therewith and the respective rights,

                                       43
<PAGE>

limitations of rights,  obligations,  duties and immunities under this Indenture
of the Trustee, the Company and the holders of Securities of the series affected
thereby shall thereafter be determined, exercised and enforced hereunder subject
in all  respects to such  modifications  and  amendments,  and all the terms and
conditions of any such supplemental  indenture shall be and be deemed to be part
of the terms and conditions of this Indenture for any and all purposes.

         SECTION  9.04.  Securities  of any series,  affected by a  supplemental
indenture,  authenticated and delivered after the execution of such supplemental
indenture  pursuant to the  provisions of this  Article,  Article Two or Article
Seven or of Section 10.01,  may bear a notation in form approved by the Company,
provided such form meets the requirements of any exchange upon which such series
may be listed, as to any matter provided for in such supplemental  indenture. If
the Company shall so determine,  new Securities of that series so modified as to
conform,  in the opinion of the Board of Directors,  to any modification of this
Indenture  contained in any such  supplemental  indenture may be prepared by the
Company,  authenticated  by the  Trustee  and  delivered  in  exchange  for  the
Securities of that series then outstanding.

         SECTION 9.05.  The Trustee,  subject to the provisions of Section 7.01,
shall be entitled to receive,  and shall be fully  protected in relying upon, an
Opinion  of Counsel  as  conclusive  evidence  that any  supplemental  indenture
executed  pursuant to this Article is  authorized  or permitted by, and conforms
to, the terms of this  Article and that it is proper for the  Trustee  under the
provisions of this Article to join in the execution thereof.

                                  ARTICLE TEN
                         CONSOLIDATION, MERGER AND SALE

         SECTION  10.01.  Unless  a  Company  Order  or  supplemental  indenture
establishing a series of Securities  provides  otherwise,  nothing  contained in
this Indenture or in any of the Securities  shall prevent any  consolidation  or
merger  of the  Company  with or into  any  other  corporation  or  corporations
(whether or not affiliated with the Company),  or successive  consolidations  or
mergers in which the Company or its successor or successors  shall be a party or
parties, or shall prevent any sale, conveyance, transfer or other disposition of
all or  substantially  all of the  property of the Company or its  successor  or
successors  as an  entirety,  or  substantially  as an  entirety,  to any  other
corporation  (whether or not  affiliated  with the Company or its  successor  or
successors)  authorized to acquire and operate the same; provided,  however, the
Company hereby covenants and agrees that, upon any such  consolidation,  merger,
sale, conveyance, transfer or other disposition, the due and punctual payment of
the principal of (premium,  if any) and interest on all of the Securities of all
series in  accordance  with the terms of each series,  according to their tenor,
and the due and punctual  performance  and  observance  of all the covenants and
conditions of this  Indenture  with respect to each series or  established  with
respect to such series  pursuant to Section  2.01 to be kept or performed by the
Company,  shall be expressly  assumed,  by supplemental  indenture  (which shall
conform  to the  provisions  of the  Trust  Indenture  Act as  then  in  effect)
satisfactory in form to the Trustee executed and delivered to the Trustee by the
entity formed by such  consolidation,  or into which the Company shall have been
merged, or by the entity which shall have acquired such property.

         SECTION  10.02.  Unless  a  Company  Order  or  supplemental  indenture
establishing a

                                       44
<PAGE>

series of Securities provides otherwise:

         (a) In  case  of any  such  consolidation,  merger,  sale,  conveyance,
transfer  or  other  disposition  and  upon  the  assumption  by  the  successor
corporation,  by supplemental  indenture,  executed and delivered to the Trustee
and satisfactory in form to the Trustee,  of the due and punctual payment of the
principal of and premium,  if any, and interest on all of the  Securities of all
series outstanding and the due and punctual  performance of all of the covenants
and conditions of this  Indenture or established  with respect to each series of
the  Securities  pursuant to Section 2.01 to be kept or performed by the Company
with respect to each series, such successor  corporation shall succeed to and be
substituted for the Company, with the same effect as if it had been named herein
as the party of the first part, and thereupon  (provided,  that in the case of a
lease,  the term of the lease is at least as long as the longest maturity of any
Securities  outstanding  at such  time)  the  predecessor  corporation  shall be
relieved  of  all  obligations  and  covenants  under  this  Indenture  and  the
Securities. Such successor corporation thereupon may cause to be signed, and may
issue  either  in its  own  name  or in the  name of the  Company  or any  other
predecessor  obligor on the  Securities,  any or all of the Securities  issuable
hereunder  which  theretofore  shall not have been  signed  by the  Company  and
delivered to the Trustee; and, upon the order of such successor company, instead
of the Company, and subject to all the terms, conditions and limitations in this
Indenture  prescribed,  the Trustee  shall  authenticate  and shall  deliver any
Securities which previously shall have been signed and delivered by the officers
of the predecessor Company to the Trustee for authentication, and any Securities
which  such  successor  corporation  thereafter  shall  cause to be  signed  and
delivered to the Trustee for that purpose. All the Securities so issued shall in
all respects  have the same legal rank and benefit  under this  Indenture as the
Securities theretofore or thereafter issued in accordance with the terms of this
Indenture  as though all of such  Securities  had been issued at the date of the
execution hereof.

         (b) In  case  of any  such  consolidation,  merger,  sale,  conveyance,
transfer or other  disposition  such changes in phraseology and form (but not in
substance)  may be made in the  Securities  thereafter  to be  issued  as may be
appropriate.

         (c) Nothing  contained in this  Indenture  or in any of the  Securities
shall  prevent the Company  from merging into itself or acquiring by purchase or
otherwise all or any part of the property of any other  corporation  (whether or
not affiliated with the Company).

         SECTION 10.03. The Trustee,  subject to the provisions of Section 7.01,
may  receive  an  Opinion  of  Counsel  as  conclusive  evidence  that  any such
consolidation,  merger, sale, conveyance, transfer or other disposition, and any
such assumption, comply with the provisions of this Article.

                                 ARTICLE ELEVEN
            DEFEASANCE AND CONDITIONS TO DEFEASANCE; UNCLAIMED MONIES

         SECTION  11.01.  Securities  of a series may be defeased in  accordance
with  their  terms and,  unless  the  Company  Order or  supplemental  indenture
establishing the series otherwise

                                       45
<PAGE>

provides, in accordance with this Article.

         The  Company  at any  time  may  terminate  as to a  series  all of its
obligations for such series under this Indenture  ("legal  defeasance  option").
The Company at any time may  terminate as to a series its  obligations,  if any,
under any  restrictive  covenant which may be applicable to a particular  series
("covenant  defeasance  option").  However,  in the case of the legal defeasance
option,  the Company's  obligations in Sections 2.05, 2.07, 4.02, 7.06, 7.10 and
11.04  shall  survive  until  the   Securities  of  the  series  are  no  longer
outstanding;  thereafter the Company's  obligations  in Sections 7.06,  7.10 and
11.04 shall survive.

         The Company may exercise its legal  defeasance  option  notwithstanding
its prior exercise of its covenant  defeasance  option. If the Company exercises
its legal defeasance option, a series may not be accelerated because of an Event
of Default.  If the Company exercises its covenant  defeasance  option, a series
may not be  accelerated  by reference to any  restrictive  covenant which may be
applicable to a particular series so defeased under the terms of the series.

         The  Trustee,  upon  request  of and at the  cost  and  expense  of the
Company, shall, subject to compliance with Section 13.06, acknowledge in writing
the discharge of those obligations that the Company terminates.

         The Company may exercise as to a series its legal defeasance option or
its covenant defeasance option if:

                  (1) The Company irrevocably deposits in trust with the Trustee
         or another trustee (x) money in an amount which shall be sufficient; or
         (y)  Eligible  Obligations  the  principal of and the interest on which
         when due, without regard to reinvestment  thereof, will provide moneys,
         which,  together  with  the  money,  if any,  deposited  or held by the
         Trustee  or  such  other  trustee,  shall  be  sufficient;   or  (z)  a
         combination   of  money  and  Eligible   Obligations   which  shall  be
         sufficient,  to pay the principal of and premium, if any, and interest,
         if any,  due  and to  become  due on such  Securities  on or  prior  to
         maturity;

                  (2) the Company  delivers to the Trustee a Certificate  to the
         effect  that the  requirements  set forth in clause (1) above have been
         satisfied;

                  (3) immediately after the deposit no Default exists; and

                  (4) the Company  delivers to the Trustee an Opinion of Counsel
         to the effect  that  holders of the series will not  recognize  income,
         gain or loss  for  Federal  income  tax  purposes  as a  result  of the
         defeasance  but will realize  income,  gain or loss on the  Securities,
         including payments of interest thereon,  in the same amounts and in the
         same  manner  and at the same time as would  have been the case if such
         defeasance had not occurred and which, in the case of legal defeasance,
         shall be (x)  accompanied by a ruling of the Internal  Revenue  Service
         issued to the  Company  or (y)  based on a change in law or  regulation
         occurring after the date hereof; and

                  (5) the deposit  specified  in  paragraph  (1) above shall not
         result in the Company,  the Trustee or the trust  created in connection
         with such defeasance being

                                       46
<PAGE>

         deemed an  "investment  company"  under the  Investment  Company Act of
         1940, as amended.

         In the event the  Company  exercises  its  option to effect a  covenant
defeasance  with respect to the Securities of any series as described  above and
the Securities of that series are thereafter declared due and payable because of
the occurrence of any Event of Default other than the Event of Default caused by
failing to comply with the covenants which are defeased, the amount of money and
securities  on deposit with the Trustee may not be sufficient to pay amounts due
on the Securities of that series at the time of the acceleration  resulting from
such  Event of  Default.  However,  the  Company  shall  remain  liable for such
payments.

         SECTION 11.02.  All monies or Eligible  Obligations  deposited with the
Trustee  pursuant to Section 11.01 shall be held in trust and shall be available
for payment as due, either  directly or through any paying agent  (including the
Company acting as its own paying agent), to the holders of the particular series
of  Securities  for the payment or  redemption  of which such monies or Eligible
Obligations have been deposited with the Trustee.

         SECTION 11.03.  In connection  with the  satisfaction  and discharge of
this Indenture all monies or Eligible  Obligations then held by any paying agent
under the provisions of this  Indenture  shall,  upon demand of the Company,  be
paid to the Trustee and  thereupon  such paying agent shall be released from all
further liability with respect to such monies or Eligible Obligations.

         SECTION 11.04.  Any monies or Eligible  Obligations  deposited with any
paying agent or the Trustee,  or then held by the Company,  in trust for payment
of principal of or premium or interest on the Securities of a particular  series
that are not applied but remain  unclaimed by the holders of such Securities for
at least two years after the date upon which the principal of (and  premium,  if
any) or  interest  on such  Securities  shall have  respectively  become due and
payable,  upon the written request of the Company and unless otherwise  required
by mandatory provisions of applicable escheat or abandoned or unclaimed property
law,  shall be repaid to the  Company on May 31 of each year or (if then held by
the Company) shall be discharged from such trust; and thereupon the paying agent
and the Trustee  shall be released  from all further  liability  with respect to
such monies or  Eligible  Obligations,  and the holder of any of the  Securities
entitled to receive  such payment  shall  thereafter,  as an  unsecured  general
creditor, look only to the Company for the payment thereof.

         SECTION 11.05.  In connection  with any  satisfaction  and discharge of
this Indenture pursuant to this Article Eleven, the Company shall deliver to the
Trustee an  Officers'  Certificate  and an Opinion of Counsel to the effect that
all  conditions  precedent  in this  Indenture  provided  for  relating  to such
satisfaction and discharge have been complied with.

                                 ARTICLE TWELVE
                IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
                                  AND DIRECTORS

         SECTION 12.01.  No recourse under or upon any  obligation,  covenant or
agreement of

                                       47
<PAGE>

this Indenture,  or of any Security, or for any claim based thereon or otherwise
in respect thereof, shall be had against any incorporator,  stockholder, officer
or  director,  past,  present  or  future  as  such,  of the  Company  or of any
predecessor or successor corporation,  either directly or through the Company or
any  such  predecessor  or  successor  corporation,  whether  by  virtue  of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise;  it being expressly understood that this Indenture and the
obligations issued hereunder are solely corporate obligations,  and that no such
personal  liability whatever shall attach to, or is or shall be incurred by, the
incorporators, stockholders, officers or directors as such, of the Company or of
any  predecessor  or  successor  corporation,  or any of  them,  because  of the
creation of the  indebtedness  hereby  authorized,  or under or by reason of the
obligations,  covenants or agreements  contained in this  Indenture or in any of
the  Securities  or  implied  therefrom;  and  that  any and all  such  personal
liability  of every  name and  nature,  either at common  law or in equity or by
constitution  or statute,  of, and any and all such  rights and claims  against,
every such  incorporator,  stockholder,  officer or director as such, because of
the creation of the indebtedness hereby authorized, or under or by reason of the
obligations,  covenants or agreements  contained in this  Indenture or in any of
the Securities or implied therefrom, are hereby expressly waived and released as
a condition of, and as a consideration  for, the execution of this Indenture and
the issuance of such Securities.

                                ARTICLE THIRTEEN
                            MISCELLANEOUS PROVISIONS

         SECTION 13.01. All the covenants, stipulations, promises and agreements
in this  Indenture  contained  by or on behalf  of the  Company  shall  bind its
successors and assigns, whether so expressed or not.

         SECTION 13.02. Any act or proceeding by any provision of this Indenture
authorized  or  required  to be done or  performed  by any board,  committee  or
officer of the Company shall and may be done and  performed  with like force and
effect by the corresponding board,  committee or officer of any corporation that
shall at the time be the lawful sole successor of the Company.

         SECTION  13.03.  The  Company  by  instrument  in writing  executed  by
authority of  two-thirds  of its Board of Directors and delivered to the Trustee
may surrender any of the powers reserved to the Company under this Indenture and
thereupon such power so surrendered  shall  terminate both as to the Company and
as to any successor corporation.

         SECTION 13.04. Except as otherwise expressly provided herein any notice
or demand which by any  provision of this  Indenture is required or permitted to
be given or served by the Trustee or by the holders of  Securities  to or on the
Company may be given or served by being deposited first class postage prepaid in
a post office letter box addressed (until another address is filed in writing by
the Company with the Trustee),  as follows: AEP Texas North Company, 1 Riverside
Plaza, Columbus, Ohio 43215, Attention: Treasurer. Any notice, election, request
or demand by the Company or any  Securityholder  to or upon the Trustee shall be
deemed to have been  sufficiently  given or made, for all purposes,  if given or
made in writing at the Corporate Trust Office of the Trustee.

                                       48
<PAGE>

         SECTION 13.05. This Indenture and each Security shall be deemed to be a
contract  made  under the laws of the State of New  York,  and for all  purposes
shall be construed in accordance with the laws of said State.

         SECTION 13.06. (a) Upon any application or demand by the Company to the
Trustee to take any action under any of the  provisions of this  Indenture,  the
Company shall furnish to the Trustee an Officers'  Certificate  stating that all
conditions  precedent  provided for in this  Indenture  relating to the proposed
action have been  complied  with and an Opinion of Counsel  stating  that in the
opinion of such counsel all such  conditions  precedent have been complied with,
except  that in the case of any  such  application  or  demand  as to which  the
furnishing of such documents is  specifically  required by any provision of this
Indenture  relating to such  particular  application  or demand,  no  additional
certificate or opinion need be furnished.

         (b) Each  certificate  or opinion  provided for in this  Indenture  and
delivered to the Trustee with respect to compliance with a condition or covenant
in this  Indenture  (other  than the  certificate  provided  pursuant to Section
5.03(d) of this Indenture)  shall include (1) a statement that the person making
such  certificate  or opinion has read such covenant or  condition;  (2) a brief
statement as to the nature and scope of the  examination or  investigation  upon
which the  statements or opinions  contained in such  certificate or opinion are
based;  (3) a statement that, in the opinion of such person,  he or she has made
such  examination  or  investigation  as is  necessary  to enable  him or her to
express an informed  opinion as to whether or not such covenant or condition has
been complied  with; and (4) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been complied with.

         SECTION 13.07.  Except as provided pursuant to Section 2.01 pursuant to
a Company Order, or established in one or more  indentures  supplemental to this
Indenture,  in any case where the date of maturity of  principal  or an Interest
Payment Date of any Security or the date of redemption, purchase or repayment of
any  Security  shall not be a Business Day then payment of interest or principal
(and premium,  if any) may be made on the next succeeding  Business Day with the
same force and effect as if made on the nominal date of maturity or  redemption,
and no interest shall accrue for the period after such nominal date.

         SECTION  13.08.  If  and to the  extent  that  any  provision  of  this
Indenture  limits,  qualifies or conflicts  with the duties imposed by the Trust
Indenture Act, such imposed duties shall control.

         SECTION  13.09.  This  Indenture  may  be  executed  in any  number  of
counterparts,  each of which shall be an original;  but such counterparts  shall
together constitute but one and the same instrument.

         SECTION 13.10.  In case any one or more of the provisions  contained in
this  Indenture or in the  Securities of any series shall for any reason be held
to be  invalid,  illegal  or  unenforceable  in any  respect,  such  invalidity,
illegality  or  unenforceability  shall not affect any other  provisions of this
Indenture or of such Securities, but this Indenture and such Securities shall be
construed as if such  invalid or illegal or  unenforceable  provision  had never
been contained herein or therein.

                                       49
<PAGE>

         SECTION  13.11.  The Company will have the right at all times to assign
any of its rights or  obligations  under the  Indenture  to a direct or indirect
wholly owned subsidiary of the Company;  provided that, in the event of any such
assignment, the Company will remain liable for all such obligations.  Subject to
the  foregoing,  this Indenture is binding upon and inures to the benefit of the
parties thereto and their respective  successors and assigns. This Indenture may
not otherwise be assigned by the parties thereto.

         SECTION 13.12.  The Article and Section  Headings in this Indenture and
the  Table of  Contents  are for  convenience  only and  shall  not  affect  the
construction hereof.

         SECTION 13.13.  Whenever this Indenture  provides for any action by, or
the determination of any rights of, holders of Securities of any series in which
not all of such Securities are denominated in the same currency,  in the absence
of any  provision  to the  contrary in the form of  Security  of any  particular
series,  any amount in respect of any Security  denominated  in a currency other
than Dollars shall be treated for any such action or  determination of rights as
that amount of Dollars that could be obtained for such amount on such reasonable
basis of exchange and as of the record date with respect to  Securities  of such
series (if any) for such action or  determination  of rights (or, if there shall
be no applicable  record date, such other date reasonably  proximate to the date
of such  action or  determination  of rights) as the  Company  may  specify in a
written notice to the Trustee or, in the absence of such written notice,  as the
Trustee may determine.

                                       50
<PAGE>

         Bank One, N.A., as Trustee, hereby accepts the trusts in this Indenture
declared and provided, upon the terms and conditions hereinabove set forth.

         IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed,  and their respective  corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.

                                            AEP TEXAS NORTH COMPANY

                                            By /s/ Susan Tomasky
                                               Vice President
Attest:

By /s/ T. G. Berkemeyer
   Assistant Secretary

                                            BANK ONE, N. A.,
                                            as Trustee

                                            By /s/ Jeffery L. Eubank
                                               Vice President

Attest:

By /s/ David B. Knox
   Trust Officer

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