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As filed with the Securities and Exchange Commission on February 5, 2002

Registration No. 333-81440

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

APEX MORTGAGE CAPITAL, INC.
(Exact name of registrant as specified in its charter)

Maryland	95-4650863
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

865 South Figueroa Street
Los Angeles, California 90017
(213) 244-0440
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)

PHILIP A. BARACH
President and Chief Executive Officer
Apex Mortgage Capital, Inc.
865 South Figueroa Street
Los Angeles, California 90017
(213) 244-0440
(Name, address, including zip code, and telephone number,
including area code, of agent for service)

Copy to:

Peter T. Healy, Esq.
O'Melveny & Myers LLP
275 Battery Street, Suite 2600
San Francisco, California 94111
(415) 984-8833

Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this registration statement, as determined by the registrant.

      If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. / /

      If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to rule 415 under the Securities Act of 1933, as amended, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. /x/

      If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / /

      If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering. / /

      If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. / /

We hereby amend this registration statement on such date or dates as may be necessary to delay its effective date until we file a further amendment which specifically states that this registration statement will thereafter become effective in accordance with Section 8(a) of the Securities Act, or until the registration statement becomes effective on such date as the Commission, acting pursuant to Section 8(a), may determine.

PROSPECTUS

Apex Mortgage Capital, Inc.

$250,000,000

Common Stock
Preferred Stock
Warrants
Debt Securities

      We are Apex Mortgage Capital, Inc., a real estate investment trust that primarily invests in United States agency and other highly-rated single-family real estate fixed-rate and adjustable-rate mortgage-related assets.

      We may offer and sell an indeterminate number of shares of our common stock, preferred stock, warrants and debt securities from time to time under this prospectus.

      We may offer these securities separately or as units which may include combinations of the securities. We will describe in a prospectus supplement, which must accompany this prospectus, the securities we are offering and selling, as well as the specific terms of the securities. Those terms may include:

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maturity date



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interest rate



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ranking



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liquidation preference



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public offering price



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redemption terms



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sinking fund terms



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amounts payable at maturity



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conversion terms



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listing on a securities exchange



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voting rights



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ownership and transfer restrictions

      We may offer these securities in amounts, at prices and on terms determined at the time of offering. We may sell the securities directly to you, through agents we select, or through underwriters and dealers we select. If we use agents, underwriters or dealers to sell the securities, we will name them and describe their compensation in a prospectus supplement.

      Our common stock is traded on the American Stock Exchange under the symbol "AXM."

      Our principal executive offices are located at 865 South Figueroa Street, Suite 1800, Los Angeles, California 90017, and our telephone number is (213) 244-0440.

      This prospectus may not be used for the sale of securities unless accompanied by a prospectus supplement.

Investing in our common stock involves risks.
Please read "Risk Factors" beginning on page 3.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is February 5, 2002

No dealer, salesperson or other person is authorized to distribute any information or to represent anything not contained in or incorporated by reference in this prospectus or the accompanying prospectus supplement. You must not rely on any unauthorized information or representations. This prospectus and the accompanying prospectus supplement constitute an offer to sell our common stock only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.

FORWARD-LOOKING STATEMENTS

        This prospectus contains or incorporates by reference forward-looking statements. Forward-looking statements are those that predict or describe future events or trends and that do not relate solely to historical matters. You can generally identify forward-looking statements as statements containing the words "will," "believe," "expect," "anticipate," "intend," "estimate," "assume" or other similar expressions. You should not rely on our forward-looking statements because the matters they describe are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond our control, including the following:

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changes in short-term interest rates;



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changes in the markets for real estate assets and the general economy;



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increases in the prepayment rates related to our mortgage-related assets;



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our ability to use borrowings to finance the acquisition of our mortgage-related assets;



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our ability to maintain our qualification as a real estate investment trust for federal income tax purposes; and



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changes in government regulations affecting our business.

        Other risks, uncertainties and factors, including those discussed under "Risk Factors" in this prospectus or described in reports that we file from time to time with the Securities and Exchange Commission, could cause our actual results to differ materially from those projected in any forward-looking statements we make. We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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RISK FACTORS

An investment in our securities involves various risks. You should carefully consider the following risk factors in conjunction with the other information contained and incorporated by reference in this prospectus before purchasing our securities. If any of the risks discussed in this prospectus actually occur, our business, operating results, prospects or financial condition could be harmed. This could cause the market price of our securities to decline and could cause you to lose all or part of your investment.

Risks Related to our Business

We may incur losses on our fixed-rate investments during periods of rising interest rates.

        We generally fund our acquisition of fixed-rate mortgage-related assets with short-term borrowings. During periods of rising interest rates, our costs associated with borrowings used to fund acquisition of fixed-rate assets are subject to increases while the income we earn from these assets remains substantially fixed. This reduces the net interest spread between the fixed-rate mortgage-related assets that we purchase and our borrowings used to purchase them, which could cause us to suffer a loss. For example, our losses incurred in 2000 arose in part as a result of the reduced net interest spread between our fixed-rate mortgage-related assets and our borrowings used to purchase them.

Interest rate caps on our adjustable-rate mortgage-related assets may reduce our income during periods of rising interest rates.

        Periodic and lifetime interest rate caps typically apply to adjustable-rate mortgage-related assets, which limit the amount that an applicable asset's interest rate can increase or decrease during any particular period. Our borrowings will not be subject to similar limitations on any increases in the applicable interest rate. If interest rates increase, the rates we pay on our borrowings could increase without limitation, while the interest rates we receive on our mortgage-related assets could be limited. This problem is magnified for our adjustable-rate mortgage-related assets that are not fully indexed. Further, some adjustable-rate mortgage-related assets may be subject to periodic payment caps that result in a portion of the interest being deferred and added to the principal outstanding. As a result, we could receive less cash income on adjustable-rate mortgage-related assets than we need to pay interest on our related borrowings. These factors could lower our net interest income or cause us to suffer a net loss during periods of rising interest rates.

Interest rate mismatches between our adjustable-rate mortgage-related assets and our borrowings used to fund our purchases of the assets may reduce our income during periods of changing interest rates.

        We fund most of our acquisitions of adjustable-rate mortgage-related assets with borrowings that have interest rates based on indices and repricing terms similar to, but of shorter maturities than, the interest rate indices and repricing terms of the mortgage-related assets. Therefore, in most cases the interest rate indices and repricing terms of the mortgage-related assets that we acquire and their funding sources will not be identical, thereby creating an interest rate mismatch between assets and liabilities. While the historical spread between relevant short-term interest rate indices has been relatively stable, there have been periods when the spread between these indices was volatile. During periods of changing interest rates, these mismatches could reduce our net income, dividend yield or the market price of our common stock.

Failure to design or implement an effective hedging strategy to manage interest rate risk may decrease our income from our mortgage-related assets and may cause us to incur losses.

        We develop and use an objective interest rate risk management strategy, also called a hedging strategy, in an effort to minimize the impact of interest rate changes. However, developing an objective and effective hedging strategy is difficult, and no strategy can completely insulate us from risks

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associated with interest rate changes. Hedging techniques involving the use of mortgage derivative securities are highly complex and may produce volatile returns. In addition, hedging strategies typically involve transaction costs that increase dramatically during periods of rising and fluctuating interest rates. These hedging techniques may not have a beneficial impact on our net income. Our net losses incurred in 2000 were in part a result of ineffective hedging strategies.

        In addition, the REIT provisions of the tax code may substantially limit our ability to engage in hedging transactions. In particular, our hedging activities are limited by the tax code's asset rules and sources-of-income rules applicable to REITs. These constraints in the tax code may prevent us from effectively implementing the optimal hedging strategies that would further insulate our net income from changes in the interest rates.

If we incorrectly predict the level of prepayments that our mortgage-related assets will experience, we may select an inappropriate and, thus, ineffective hedging strategy.

        We select hedging techniques based partly on predicted levels of prepayments by mortgage borrowers of our mortgage-related assets. Many mortgage borrowers have the option of prepaying their mortgages under specified conditions. Prepayment rates tend to decrease during periods of rising interest rates and to increase during periods of declining interest rates. Fixed-rate assets generally are acquired with a projected weighted average life based on assumptions regarding prepayments. In general, when we acquire a fixed-rate mortgage-related asset or a capped adjustable-rate mortgage-related asset with borrowed money, we enter into an interest rate swap agreement or other hedging instrument in order to fix our borrowing costs for a period close to the expected average life of the fixed-rate or capped rate asset. This strategy is designed to protect us from rising interest rates by fixing our borrowing costs for the expected lifetime of the asset. Whether our selected hedging strategy is effective will depend significantly upon whether we correctly predict the level of prepayments by the borrowers of our mortgages.

        If prepayments of our mortgage-related assets are slower than we predict, then the life of our mortgage-related assets will be longer and the effectiveness of our hedging techniques will be reduced. However, if prepayment rates decline, as often occurs in a rising interest rate environment, the life of the mortgage-related asset could extend beyond the term of the swap agreement or other hedging instrument. This situation would negatively impact our profits since the income we earn on the fixed-rate asset will remain fixed, but after the expiration of the hedging instrument our borrowing costs will become variable. This is also known as extension risk. We may have to refinance our borrowing at the new, higher prevailing interest rate, thus reducing or eliminating our net interest income from the mortgage-related asset. This situation may also cause the market value of our mortgage-related assets to decline, with little or no offsetting gain from the related hedging transactions. In some situations, we may be forced to sell assets and incur losses to maintain adequate liquidity. Our hedging activity is also limited by the requirements of the tax code applicable to us as a REIT.

        Conversely, if prepayments of our mortgage-related assets are faster than we predict, as may occur in a falling interest rate environment, the average life of our mortgage-related assets becomes shorter than the life of the related hedging instrument. If this were to happen, we may be forced to reinvest our funds in mortgage-related assets with interest rates lower than that of the related hedging instrument, which would result in the narrowing of interest rate spreads or may cause losses.

Increased levels of prepayments from mortgage-related assets may also decrease net interest income.

        We anticipate that a substantial portion of adjustable-rate mortgage-related assets may bear initial interest rates that are lower than their "fully indexed" rates, which are equivalent to the applicable index rate plus a margin. If an adjustable-rate mortgage-related asset is prepaid prior to or soon after

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the time of adjustment to a fully indexed rate, we will have held the mortgage-related asset while it was less profitable and lost the opportunity to receive interest at the fully indexed rate over the remainder of its expected life. In addition, the prepayment of a mortgage-related asset that we purchased at a premium would result in our immediately writing-off any remaining capitalized premium amount and, consequently, suffering a corresponding reduction in net interest income. We may also acquire mortgage derivative securities that represent the right to receive interest only or a disproportionately large amount of interest, which would similarly experience a lower rate of return in the event of faster than expected prepayments. Finally, if we are unable to acquire new mortgage-related assets to replace the prepaid mortgage-related assets, our financial condition, cash flow and results of operations could suffer.

We face potential net interest losses and operating losses in connection with our substantial use of leverage when purchasing mortgage-related assets.

        We borrow substantial sums against our existing mortgage-related assets to acquire additional mortgage-related assets and thereby to increase the overall size of our mortgage-related asset portfolio. We generally expect that up to 92% of our total mortgage-related assets will be financed with borrowed funds.

        Our leveraging strategy increases the risks of our operations in several ways.

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The use of leverage increases our risk of loss resulting from various factors, including rising interest rates, downturns in the economy or deteriorations in the conditions of any of our mortgage-related assets.



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A majority of our borrowings are secured by our mortgage-related assets, primarily under reverse repurchase agreements. These loans are "marked-to-market" based on the market value of the mortgage-related assets pledged to secure the specific borrowings at a given time. Some mortgage-related assets may be cross-collateralized to secure multiple borrowing obligations to a particular lender. A decline in the market value of the mortgage-related assets used to secure these debt obligations could limit our ability to borrow or result in lenders requiring us to pledge additional collateral to secure our borrowings. In that situation, we could be required to sell mortgage-related assets under adverse market conditions in order to obtain the additional collateral required by the lender. If these sales are made at prices lower than the carrying value of the mortgage-related assets, we would experience losses.



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A default of a mortgage-related asset that constitutes collateral for a loan could also result in an involuntary liquidation of the mortgage-related asset, including any cross-collateralized mortgage-related assets. This would result in a loss to us of the difference between the value of the mortgage-related asset upon liquidation and the amount borrowed against the mortgage-related asset.



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To the extent we are compelled to liquidate qualified REIT assets to repay debts, our compliance with the REIT rules regarding our assets and our sources of income could be negatively affected, which would jeopardize our status as a REIT. Losing our REIT status would cause us to lose tax advantages applicable to REITs and may decrease our overall profitability and distributions to our stockholders.

        In these ways, the use of leverage increases our risk of loss and may reduce our net income by increasing the risks associated with other risk factors, including a decline in the market value of our mortgage-related assets or a default of a mortgage-related asset.

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We may invest in "inverse floaters," which generally experience greater volatility in their market prices, thus exposing us to greater risk with respect to their rate of return.

        We may acquire a type of securities called "inverse floaters," which may behave similarly to securities that are leveraged since their interest rates usually vary by a magnitude much greater than the magnitude of the index rate of interest. The leverage-like characteristics of inverse floaters result in greater volatility in their market prices. Thus, our acquisition of inverse floaters exposes us to the risk of greater volatility in our portfolio, which could adversely affect our net income and overall profitability.

We depend on borrowings to purchase mortgage-related assets. If we fail to obtain or renew sufficient funding on favorable terms, we will be limited in our ability to acquire mortgage-related assets and our earnings and profitability could decline.

        We depend on short-term borrowings to fund acquisitions of mortgage-related assets. Accordingly, our ability to achieve our investment objectives depends on our ability to borrow money in sufficient amounts and on favorable terms. In addition, we must be able to renew or replace our maturing short-term borrowings on a continuous basis. Moreover, we are dependent upon a few lenders to provide the primary credit facilities for our purchases of mortgage-related assets.

        If we are not able to renew or replace maturing borrowings, we may be required to sell our mortgage-related assets under adverse market conditions and may incur permanent capital losses as a result. In addition, the failure to renew or replace mature borrowings may require us to terminate hedge positions, which could result in further losses. Any number of these factors in combination may cause difficulties for us, including a possible liquidation of a major portion of our portfolio at disadvantageous prices with consequent losses, which may render us insolvent.

Possible market developments could cause our lenders to require us to pledge additional assets as collateral. If our assets are insufficient to meet the collateral requirements, then we may be compelled to liquidate particular assets at an inopportune time.

        Possible market developments, including a sharp rise in interest rates, a change in prepayment rates or increasing market concern about the value or liquidity of one or more types of mortgage-related assets in which our portfolio is concentrated, may reduce the market value of our portfolio, which may cause our lenders to require additional collateral. This requirement for additional collateral may compel us to liquidate our assets at a disadvantageous time, thus adversely affecting our operating results and net profitability. For example, our losses incurred in 2000 resulted in part from our decision to liquidate assets in response to a decline in the market value of our investment portfolio.

Our use of repurchase agreements to borrow funds may give our lenders greater rights in the event that either we or a lender files for bankruptcy.

        Our borrowings under repurchase agreements may qualify for special treatment under the bankruptcy code, giving our lenders the ability to avoid the automatic stay provisions of the bankruptcy code and to take possession of and liquidate our collateral under the repurchase agreements without delay in the event that we file for bankruptcy. Furthermore, the special treatment of repurchase agreements under the bankruptcy code may make it difficult for us to recover our pledged assets in the event that a lender files for bankruptcy. Thus, the use of repurchase agreements exposes our pledged assets to risk in the event of a bankruptcy filing by either a lender or us.

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Because we invest in assets that experience periods of illiquidity, we may lose profits or be prevented from earning capital gains if we cannot sell mortgage-related assets at an opportune time.

        We bear the risk of being unable to dispose of our mortgage-related assets at advantageous times or in a timely manner because mortgage-related assets experience periods of illiquidity. The lack of liquidity may result from the absence of a willing buyer or an established market for these assets, as well as legal or contractual restrictions on resale. As a result, the illiquidity of mortgage-related assets may cause us to lose profits or the ability to earn capital gains.

Because the majority of our portfolio is classified as trading securities, changes in the market value of our portfolio could result in increased net income volatility, including the reporting of net losses.

        On January 1, 2001, we adopted Statement of Financial Accounting Standards, or SFAS, No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended, and reclassified our existing mortgage-related assets portfolio from the available-for-sale category of SFAS No. 115 to the trading category. The primary impact of this accounting change is that both unrealized and realized gains and losses on our mortgage-related assets portfolio and the related hedging instruments will be included in net income each reporting period. This will likely significantly increase the volatility of our quarterly earnings in future periods. In periods in which the fair market value of our mortgage-related assets portfolio net of hedging transactions were to decline in value, we could report net losses that could be material.

Because we depend on the management company and its personnel for successful operations, the loss of any of its key personnel could severely and detrimentally affect our operations.

        We depend on the diligence, experience and skill of the officers and employees of the management company for the selection, structuring and monitoring of our mortgage-related assets and associated borrowings. We depend on our officers and directors to monitor the management company. Currently, our senior officers are Messrs. Barach, Gundlach and DeVito. We have not entered into employment agreements with our senior officers, nor do we require the management company to employ specific personnel or to dedicate employees solely to our business. These individuals are free to engage in competitive activities in our industry. The loss of any key person could harm our entire business, financial condition, cash flow and results of operations.

Our board of directors may change our operating policies and strategies without prior notice or stockholder approval.

        Summaries of our current operating policies and strategies are contained in the annual and quarterly reports we file with the Securities and Exchange Commission, which are incorporated by reference in this prospectus. However, our board of directors can modify or waive these policies without prior notice and without stockholder approval. We cannot predict the effect any changes to our current operating policies and strategies may have on our business and operating results or our stock price; however, the effects may be adverse.

Risks Related to Conflicts of Interest

Since the management company may receive a significant fee if we terminate the management agreement, we may not be able to economically terminate the management agreement in the event that the management company fails to meet our expectations.

        If we terminate the management agreement, or if we decide not to renew it, then we may have to pay a significant fee to the management company. The actual amount of the fee is not known because the fair market value of the management agreement cannot be determined in advance with certainty. Paying this fee would reduce the cash available for distribution to stockholders and may cause us to suffer a net operating loss. Consequently, we may not be able to terminate the management agreement economically even if we are dissatisfied with the management company's performance.

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The management company and its affiliates may allocate mortgage-related opportunities to other entities, and thus may divert attractive investment opportunities away from us.

        The management company and its affiliates purchase and manage mortgage securities for third-party accounts. The management company has no obligation to make investment opportunities available to us. As a result, the management company may face a conflict of interest between allocating assets and other mortgage-related opportunities to us or to other accounts managed by it or its affiliates. In addition, the management company and its affiliates may from time to time purchase mortgage securities for their own accounts. These conflicts may result in decisions or allocations of mortgage securities by the management company that are not in our best interest.

The compensation structure for the management company creates an incentive for the management company to increase the riskiness of our mortgage portfolio in order to maximize its compensation.

        In addition to its base management compensation, the management company earns incentive compensation for each fiscal year equal to 30% of our net income in excess of the amount that would produce an annualized return on equity equal to the ten-year United States treasury rate plus 1%. As a result, the management company shares in our profits but not in our losses. Consequently, as the management company evaluates for us different mortgage-related assets for investment and different investment strategies, there is a risk that the management company will cause us to assume more risk than is prudent in an attempt to increase its incentive compensation. Other key criteria related to determining appropriate investments and investment strategies, including the preservation of capital, may be unduly ignored at the expense of the management company's emphasis on maximization of income.

Because the management company may render services to other mortgage investors, this could reduce the amount of time and effort that the management company devotes to us and, consequently, our profitability and overall management could suffer.

        The management agreement does not restrict the right of the management company or any of its officers, directors, employees or affiliates from doing business, including the rendering of advice in the purchase of mortgage-related assets that meet our investment criteria, with any other person or entity. The management company may also advise other mortgage-related entities, including REITs, that invest in residential or commercial mortgages or other residential and non-residential mortgage securities. However, members of the mortgage-backed securities group of The TCW Group, Inc. or any successor group will not provide any active management services to a residential mortgage REIT, other than ourselves, that invests primarily in high-quality mortgage securities comparable to our investments. In addition to the management company's ability to do business with any other third party, the management agreement does not specify a minimum time period that the manager and its personnel must devote to us. The ability of the management company to engage in these business activities could reduce their time and effort dedicated to managing us.

Risks Related to REIT Compliance and Other Matters

If we are disqualified as a REIT, we will be subject to tax as a regular corporation and face substantial tax liability.

        We currently operate, and we intend to continue to operate, so as to qualify as a REIT under the tax code. However, we may not remain qualified as a REIT in the future. Qualification as a REIT involves the application of highly technical and complex tax code provisions for which only a limited

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number of judicial or administrative interpretations exist. If we fail to qualify as a REIT in any tax year, then:

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we would be taxed as a regular domestic corporation, which, among other things, means being disallowed from deducting distributions to stockholders in computing taxable income and being subject to federal income tax on our taxable income at regular corporate rates;



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any resulting tax liability could be substantial and would reduce the amount of cash available for distribution to stockholders; and



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unless we were entitled to relief under applicable statutory provisions, we would be disqualified from treatment as a REIT for the subsequent four taxable years following the year during which we lost our qualification, and thus, our cash available for distribution to stockholders would be reduced for each of the years during which we were not permitted to qualify as a REIT.

        Even if we remain qualified for taxation as a REIT, we may be subject to federal taxes based on some of our activities, which could result in decreased cash available for distribution to our stockholders.

Complying with REIT requirements may cause us to forego otherwise attractive opportunities.

        In order to qualify as a REIT for federal income tax purposes, we must continually satisfy tests concerning, among other things, our sources of income, the nature and diversification of our mortgage-related assets, the amounts we distribute to our stockholders and the ownership of our stock. We may also be required to make distributions to stockholders at disadvantageous times or when we do not have funds readily available for distribution. Thus, compliance with REIT requirements may hinder our ability to operate solely on the basis of maximizing profits.

Complying with REIT requirements may limit our ability to hedge effectively.

        The REIT provisions of the tax code may substantially limit our ability to hedge mortgage-related assets and related borrowings by requiring us to limit our income in each year from "qualified hedges," together with any other income not generated from qualified REIT real estate assets, to less than 25% of our gross income. In addition, we must limit our aggregate income from hedging and services from all sources, other than from qualified REIT real estate assets or qualified hedges, to less than 5% of our annual gross income. As a result, we may have to limit our use of advantageous hedging techniques, which may result in greater risks associated with changes in the interest rates. If we were to violate the 25% or 5% limitations, we may have to pay a penalty tax equal to the amount of income in excess of those limitations. In the case of a willful violation, we could lose our REIT status for federal income tax purposes.

Complying with REIT requirements may force us to liquidate otherwise attractive investments.

        In order to qualify as a REIT, we must also ensure that at the end of each calendar quarter, at least 75% of the value of our assets consists of cash, cash items, government securities and qualified REIT real estate assets. The remainder of our investment in securities cannot include more than 10% of the outstanding voting securities of any one issuer or 10% of the total value of the outstanding securities of any one issuer. In addition, no more than 5% by value of our assets can consist of the securities of any one issuer. If we fail to comply with these requirements, we must dispose of a portion of our assets within 30 days after the end of the calendar quarter in order to avoid losing our REIT status and suffering adverse tax consequences.

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Complying with REIT requirements may force us to borrow to make distributions to stockholders.

        From time to time, we may generate taxable income greater than our net income for financial reporting purposes from, among other things, amortization of capitalized purchase premiums, or our taxable income may be greater than our cash flow available for distribution to stockholders. If we do not have other funds available in these situations, we may be unable to distribute substantially all of our taxable income as required by the REIT provisions of the tax code. Thus, we could be required to borrow funds, sell a portion of our mortgage-related assets at disadvantageous prices or find another alternative. These options could increase our costs or reduce our equity.

Failure to maintain an exemption from the Investment Company Act would adversely affect our results of operations.

        We conduct our business in a manner that allows us to avoid being regulated as an investment company under the Investment Company Act. The Investment Company Act exempts entities that are primarily engaged in the business of purchasing or otherwise acquiring "mortgages and other liens on and interests in real estate." Under the SEC's current interpretation, qualification for this exemption requires us to maintain at least 55% of our assets directly in specific types of real estate interests, including, among other things, mortgage loans and qualifying pass-through certificates, which are securities representing interests in "pools" of mortgage loans secured by residential real property in which payments of both interest and principal on the securities are generally made monthly. In order to constitute a qualifying real estate interest under this 55% requirement, a real estate interest must meet various criteria. For instance, unless the mortgage securities in which we may invest represent all the certificates issued with respect to an underlying pool of mortgage loans, they may be treated as securities separate from the underlying mortgage loans. Thus, in attempting to avoid being regulated as an investment company under the Investment Company Act, we may forego acquiring otherwise attractive mortgage-related assets. If we fail to continue to qualify for an exemption from registration as an investment company, our ability to use leverage would be substantially reduced and we would be unable to conduct our business as planned.

Risks Related to Our Securities and Other Matters

Our stock price may be volatile, which could result in substantial losses for our stockholders.

        The market price of our common stock could be subject to wide fluctuations in response to a number of factors, including:

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issuing new equity securities pursuant to this offering or otherwise;



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the amount of our common stock outstanding and the trading volume of our stock;



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actual or anticipated changes in our future financial performance;



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changes in financial estimates of us by securities analysts;



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competitive developments, including announcements by us or our competitors of new products or services or significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments;



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the operating and stock performance of our competitors;



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changes in interest rates; and



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additions or departures of key personnel at the management company.

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We may incur excess inclusion income that would increase the tax liability of our stockholders.

        In general, dividend income that a tax-exempt entity receives from us should not constitute unrelated business or trade income as defined in Section 512 of the tax code, or UBTI. If, however, we realize excess inclusion income and allocate it to stockholders, this income cannot be offset by net operating losses. If the stockholder is a tax-exempt entity, then this income would be fully taxable as UBTI under Section 512 of the tax code. If the stockholder is foreign, then it would be subject to federal income tax withholding on this income without reduction pursuant to any otherwise applicable income-tax treaty.

        Excess inclusion income would be generated if we were to issue debt obligations with two or more maturities and the terms of the payments on these obligations bore a relationship to the payments that we received on our mortgage-related assets securing those debt obligations. We generally structure our borrowing arrangements in a manner designed to avoid generating significant amounts of excess inclusion income. We do, however, enter into various reverse repurchase agreements that have differing maturity dates and afford the lender the right to sell any pledged mortgage securities if we default on our obligations. The IRS may determine that these borrowings give rise to excess inclusion income that should be allocated among stockholders. Furthermore, some types of tax-exempt entities, including, without limitation, voluntary employee benefit associations and entities that have borrowed funds to acquire their shares of our common stock, may be required to treat a portion of or all of the dividends they may receive from us as UBTI. We also invest in equity securities of other REITs. If we were to receive excess inclusion income from another REIT, we may be required to distribute the excess inclusion income to our shareholders which may result in the recognition of UBTI.

Our charter does not permit ownership of over 9.8% of our common or preferred stock and attempts to acquire our common or preferred stock in excess of the 9.8% limit are void.

        For the purpose of preserving our REIT qualification and for other reasons, our charter prohibits direct or constructive ownership of more than 9.8% of the lesser of the total number or value of the outstanding shares of our common stock or more than 9.8% of the outstanding shares of our preferred stock. Our charter's constructive ownership rules are complex and may cause the outstanding stock owned by a group of related individuals or entities to be deemed to be constructively owned by one individual or entity. As a result, the acquisition of less than 9.8% of the outstanding stock by an individual or entity could cause that individual or entity to own constructively in excess of 9.8% of the outstanding stock, and thus be subject to our charter's ownership limit. Any attempt to own or transfer shares of our common or preferred stock in excess of the ownership limit shall be void, and will result in the shares being transferred by operation of law to a charitable trust.

Because provisions contained in Maryland law, our charter, our bylaws and our stockholder rights plan may have an anti-takeover effect, investors may be prevented from receiving a "control premium" for their shares.

        Provisions contained in our charter and bylaws, as well as Maryland corporate law, may have anti-takeover effects that delay, defer or prevent a takeover attempt, which may prevent stockholders from receiving a "control premium" for their shares. For example, these provisions may defer or prevent tender offers for our common stock or purchases of large blocks of our common stock, thereby limiting the opportunities for our stockholders to receive a premium for their common stock over then-prevailing market prices. These provisions include the following:

        Ownership limit.    The ownership limit in our charter limits related investors, including, among other things, any voting group, from acquiring over 9.8% of our common stock without our permission.

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        Preferred stock.    Our charter authorizes our board of directors to issue preferred stock in one or more classes and to establish the preferences and rights of any class of preferred stock issued. These actions are to be taken without soliciting stockholder approval.

        Staggered board.    Our board of directors is divided into three classes of directors. The terms of each class expire in different years. Directors of each class serve for a three-year term and until their successors are elected and qualified. The affirmative vote of two-thirds of all outstanding common stock is required to remove a director.

        Maryland business combination statute.    Under the Maryland General Corporation Law, some "business combinations" between a Maryland corporation and any person who owns, directly or indirectly, 10% or more of the voting power of the corporation's shares of capital stock must be approved by holders of at least 80% of the voting shares. In addition, a holder of 10% or more of the voting power of a corporation's shares may not engage in a business combination with the corporation for five years following the date he or she became a 10% holder.

        Maryland control share acquisition statute.    Maryland law provides that "control shares" of a corporation acquired in a "control share acquisition" shall have no voting rights except to the extent approved by a vote of two-thirds of the votes eligible under the statute to be cast on the matter, unless the corporation has opted out of the Control Share Acquisition statute. "Control shares" are voting shares of beneficial interest that, if aggregated with all other shares of beneficial interest previously acquired by the acquiror, would entitle the acquiror to exercise voting power in electing directors within one of the following ranges of voting power: one-fifth or more but less than one-third, one-third or more but less than a majority or a majority of all voting powers.

        Control shares do not include shares of beneficial interest the acquiring person is then entitled to vote as a result of previously having obtained stockholder approval. A "control share acquisition" means the acquisition of control shares, subject to some exceptions.

        If voting rights are not approved at a stockholders meeting then, subject to some conditions and limitations, the issuer may redeem any or all of the control shares for fair value not previously approved. If voting rights for control shares are approved at a stockholders meeting and the acquiror becomes entitled to vote a majority of the shares of beneficial interest entitled to vote, all other stockholders may exercise appraisal rights.

        Our bylaws contain a provision exempting from the control share acquisition statute any and all acquisitions by any person of our common stock. However, our board of directors may decide to amend or eliminate the provision at any time in the future.

        Shareholder rights plan.    We have adopted a shareholder rights plan that may discourage any investor from acquiring over 15% of our common stock because, upon this type of acquisition without board approval, all other common stockholders will have the right to purchase a specified amount of our common stock at a 50% discount from the market price. Our shareholder rights plan is incorporated by reference as an exhibit to the registration statement of which this prospectus is a part.

Future offerings of debt securities, which would be senior to our common stock upon liquidation, or equity securities, which would dilute our existing stockholders and may be senior to our common stock for the purposes of dividend distributions, may adversely affect the market price of our common stock.

        In the future, we may attempt to increase our capital resources by making additional offerings of debt or equity securities, including commercial paper, medium-term notes, senior or subordinated notes and classes of preferred stock or common stock. Upon liquidation, holders of our debt securities and shares of preferred stock and lenders with respect to other borrowings will receive a distribution of our available assets prior to the holders of our common stock. Additional equity offerings by us may dilute

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the holdings of our existing stockholders or reduce the market price of our common stock, or both. Our preferred stock, if issued, would have a preference on dividend payments that could limit our ability to make a dividend distribution to the holders of our common stock. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, our stockholders bear the risk of our future offerings reducing the market price of our common stock or diluting their stock holdings in us.

We have not developed or implemented a disaster recovery plan for our information systems, which could adversely affect business operations should a major physical disaster occur.

        We are dependent upon functioning information systems to conduct business. A system failure or malfunction may result in an inability to process transactions or otherwise lead to disrupted operations. Although we regularly backup our programs and data, we do not currently have a comprehensive disaster recovery plan providing a hot site facility for immediate system recovery should a major physical disaster occur at our executive offices.

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USE OF PROCEEDS

        Unless otherwise specified in the related prospectus supplement, we intend to use the net proceeds from any sale of securities under this prospectus and any accompanying prospectus supplement for general corporate purposes, including, without limitation, the purchase of mortgage-related assets consistent with our investment policy. Pending full use or investment in the desired mix of mortgage-related assets, net proceeds may be committed to short-term investments.

RATIO OF EARNINGS TO FIXED CHARGES

        The following table sets forth our consolidated ratios of earnings to fixed charges for the periods presented:

	Nine Months Ended September 30, 2001	Year Ended December 31, 2000	Year Ended December 31, 1999	Year Ended December 31, 1998	Period from December 9, 1997 to December 31, 1997
Ratio	1.70	0.16	1.26	1.15	2.35

        We computed the ratios of earnings to fixed charges by dividing earnings (excluding cumulative effect of a change in accounting principle in 2001) by fixed charges. For this purpose, earnings consist of pre-tax income from continuing operations plus fixed charges less capitalized interest. Fixed charges consist of interest expense and capitalized interest.

        Because as of the date of this prospectus we have never issued any shares of preferred stock, our ratios of earnings to combined fixed charges and preferred stock dividends are identical to our ratios of earnings to fixed charges for the periods presented above.

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OUR COMPANY

        We are a financial services company that primarily acquires United States agency and other highly-rated single-family real estate fixed-rate and adjustable-rate mortgage-related assets. We use our equity capital and borrowed funds to generate income based on the difference between the yield on our mortgage-related assets and the cost of our borrowings. We have elected to be taxed as a real estate investment trust, or REIT, under the United States internal revenue code. As long as we retain our REIT status, we generally will not be subject to federal taxes on our income to the extent that we distribute our net income to our stockholders. We operate in accordance with our investment, leverage, interest rate risk management and REIT compliance policies, which our board of directors reviews and approves at least annually. We are managed pursuant to a management agreement with TCW Investment Management Company.

        As of September 30, 2001, we had $539,466,000 in assets, $487,016,000 in liabilities and $52,450,000 in equity. As of that date, approximately 96% of our assets consisted either of mortgage-backed securities guaranteed by an agency of the United States government, such as the Government National Mortgage Association, Fannie Mae and the Federal Home Loan Mortgage Corp., or other mortgage-related securities rated AAA by one or more nationally recognized rating agencies.

        TCW Investment Management Company manages our day-to-day operations pursuant to a management agreement and the direction and oversight of our board of directors. A majority of our board of directors is unaffiliated with the management company or The TCW Group, Inc., the parent company of the management company. The management company's key officers and our investment management team is comprised of selected members of The TCW Group, Inc.'s mortgage-backed securities group, all of whom have experience in raising capital for, investing in and managing fixed-income instruments. An external management structure allows us to take advantage of the existing operational systems, expertise and economies of scale associated with the management company's current business operations.

        The management company was established in 1987 as an investment adviser registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940. The TCW Group, Inc. was established in 1971 and manages both domestic and international investments for a range of clients with diverse investment objectives. As of September 30, 2001, the TCW group of companies had under management or committed to management approximately $74.7 billion, of which $35.6 billion consisted of United States fixed-income instruments. Of that $35.6 billion of fixed-income instruments, $23.2 billion consisted of mortgage-related assets which are managed by the mortgage-backed securities group of the TCW group of companies. The majority of our executive officers are senior members of the mortgage-backed securities group.

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DESCRIPTION OF OUR CAPITAL STOCK

        The description of our capital stock set forth below does not purport to be complete and is qualified in its entirety by reference to our charter, as amended and restated, and our bylaws, copies of which are exhibits to the registration statement of which this prospectus is a part.

General

        Under our charter, the total number of shares of all classes of stock that we have authority to issue as of the date of this prospectus is 150,000,000 consisting of 100,000,000 shares of common stock, par value $0.01 per share, and 50,000,000 shares of preferred stock, par value $0.01 per share. As of September 30, 2001, there were 5,753,000 shares of our common stock and no shares of our preferred stock outstanding. In addition, in the fourth fiscal quarter of 2001, we issued 9,775,000 shares of our common stock in registered public offerings, increasing the total number of shares of our common stock outstanding as of December 11, 2001 to 15,528,000. As of February 4, 2002, the total number of shares of our common stock outstanding was 15,555,500.

Our Common Stock

        Subject to any preferential rights of any outstanding class of our preferred stock and to the provisions of our charter regarding the restrictions on the transfer of stock, the holders of our common stock are entitled to distributions as our board of directors may declare from time to time from funds legally available for this purpose and, upon liquidation, are entitled to receive pro rata all of our assets available for distributions to holders after payment of or adequate provision for all our known debts and liabilities. All shares of our common stock issued in connection with this prospectus will be duly authorized, fully paid and non-assessable, and the holders of these shares will not have preemptive rights.

        Subject to the provisions of our charter regarding the restrictions on transfer of stock, the holders of our outstanding common stock are entitled to one vote per share on all matters voted on by our common stockholders, including elections of directors. Our common stockholders exclusively possess all voting power, except as otherwise required by law or as provided in any resolution adopted by our board of directors with respect to any class of our preferred stock establishing the powers, designations, preferences and relative, participating, option or other special rights of the series. Our charter does not provide for cumulative voting in the election of directors.

        Our charter provides for a staggered board of directors consisting of three classes of directors as nearly equal in number as practicable. Each class holds office until the third annual meeting of stockholders following the annual meeting of stockholders at which such class of directors was elected. The provisions relating to the staggered board may be amended only upon the vote of the holders of at least two-thirds of the capital stock entitled to vote for the election of directors.

        Pursuant to the Maryland General Corporation Law, a Maryland corporation generally cannot dissolve, amend its charter, merge, sell all or substantially all of its assets, engage in a share exchange or engage in similar transactions outside the ordinary course of business unless approved by the affirmative vote of stockholders holding at least two-thirds of the shares entitled to vote on the matter unless a lesser percentage, but not less than a majority of all of the votes entitled to be cast on the matter, is set forth in the corporation's charter. Our charter does not provide for a lesser percentage in any of these situations except for charter amendments, which may be approved by a majority of our stockholders. Most amendments to our charter require approval by our stockholders by an affirmative vote of a majority of all votes entitled to be cast.

Investors

        The approximate number of record holders of our common stock as of February 4, 2002 was 83.

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Transfer Agent and Registrar

        The Bank of New York is the transfer agent and registrar for our common stock.

Our Preferred Stock

        We may issue shares of our preferred stock from time to time, in one or more classes, as authorized by our charter and our board of directors. To date, our board of directors has authorized only one series of preferred stock in connection with our shareholder rights agreement. Prior to issuance of shares of each class, our board of directors is required by the Maryland General Corporation Law and our charter to fix for each class, subject to the provisions of our charter regarding the restrictions on transfer of stock, the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption, as are permitted by Maryland law. Our preferred stock will, when issued, be duly authorized, fully paid and non-assessable. Our board of directors could authorize the issuance of shares of our preferred stock with terms and conditions that could have the effect of discouraging a takeover or other transactions that our common stockholders might believe to be in their best interests or in which holders of some, or a majority, of the shares of our common stock might receive a premium for their shares over the then market price of shares of our common stock. Any preferred stock we issue from time to time may rank senior to our common stock as to dividends and may rank senior to our common stock as to distributions in the event of our liquidation, dissolution or winding up. The ability of our board of directors to issue preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, adversely affect the voting powers of our common stockholders.

        Terms.    The following description of our preferred stock sets forth certain general terms and provisions of the preferred stock to which any prospectus supplement may relate. The statements below describing the preferred stock are in all respects subject to and qualified by reference to the applicable provisions of our charter and any supplement to our charter designating terms of a series of preferred stock.

        The prospectus supplement relating to any offer of preferred stock under this prospectus will include specific terms of the offered preferred stock, including:

(1)

The title and stated value of the preferred stock;



(2)

The number of shares, the liquidation preference per share and the offering price of the preferred stock;



(3)

The dividend rate(s), period(s) and/or payment date(s) or related method(s) of calculation applicable to the preferred stock;



(4)

The date from which dividends on the preferred stock shall accrue, if applicable;



(5)

The procedures for any auction and remarketing, if any, for the preferred stock;



(6)

The provision for a sinking fund, if any, for the preferred stock;



(7)

The provision for redemption, if applicable, of the preferred stock;



(8)

Any listing of the preferred stock on any securities exchange;



(9)

The terms and conditions, if applicable, upon which the preferred stock will be convertible into shares of our common stock, including the conversion price (or related manner of calculation);



(10)

Any other specific terms, preferences, rights, limitations or restrictions of the preferred stock;

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(11)

A supplemental discussion of federal income tax considerations applicable to the preferred stock;



(12)

The relative ranking and preference of the preferred stock as to dividend rights and rights upon liquidation, dissolution or winding up of our affairs;



(13)

Any limitations on issuance of any series of preferred stock ranking senior to or on a parity with the series of preferred stock as to dividend rights and rights upon liquidation, dissolution or winding up of our affairs; and



(14)

Any limitations on direct or beneficial ownership and restrictions on transfer, in each case as may be appropriate to preserve our status as a REIT.

        Rank.    Unless otherwise specified in the applicable prospectus supplement, the preferred stock will, with respect to dividend rights and rights upon liquidation, dissolution or winding up, rank (i) senior to all classes or series of our common stock, and to all equity securities ranking junior to the offered preferred stock; (ii) on a parity with all equity securities issued by us, the terms of which specifically provide that such equity securities rank on a parity with the preferred stock; and (iii) junior to all equity securities issued by us, the terms of which specifically provide that such equity securities rank senior to the preferred stock. The term "equity securities" does not include convertible debt securities.

        Dividends.    Holders of the preferred stock of each series will be entitled to receive, when, as and if declared by our board of directors, out of our assets legally available for payment, cash dividends at such rates and on such dates as will be set forth in the applicable prospectus supplement. Each of these dividends shall be payable to holders of record as they appear on our share transfer books on the record dates fixed by our board of directors.

        Dividends on any series of preferred stock may be cumulative or non-cumulative, as provided in the applicable prospectus supplement. Dividends, if cumulative, will be cumulative from and after the date set forth in the applicable prospectus supplement. If our board of directors fails to declare a dividend payable on a dividend payment date on any series of preferred stock for which dividends are non-cumulative, then the holders of that series of preferred stock will have no right to receive a dividend in respect of the dividend period ending on that dividend payment date, and we will have no obligation to pay the dividend accrued for that period, whether or not dividends on that series are declared payable on any future dividend payment date.

        If preferred stock of any series is outstanding, no dividends will be declared or paid or set apart for payment on any of our capital stock or any other series ranking, as to dividends, on a parity with or junior to the series of preferred stock for any period unless (i) if the series of preferred stock has a cumulative dividend, full cumulative dividends have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof is set apart for such payment on the preferred stock of the series for all past dividend periods and the then current dividend period or (ii) if the series of preferred stock does not have a cumulative dividend, full dividends for the then current dividend period have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment of the dividends is set apart for the payment on that series of preferred stock. When dividends are not paid in full (or a sum sufficient for full payment is not so set apart) on preferred stock of any series and the shares of any other series of preferred stock ranking on a parity as to dividends with that series of preferred stock, all dividends declared upon that series of preferred stock and any other series of preferred stock ranking on a parity as to dividends will be declared pro rata so that the amount of dividends declared per share of that series of preferred stock and any other series of preferred stock ranking on a parity as to dividends will in all cases bear to each other the same ratio that accrued dividends per share on that series of preferred stock (which will not include any accrual in respect of unpaid dividends for prior dividend periods if the preferred stock does not have a cumulative dividend) and any other series of preferred stock ranking on a parity as to dividends bear to each other. No

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interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on preferred stock of the series which may be in arrears.

        Except as provided in the immediately preceding paragraph, unless (i) if the series of preferred stock has a cumulative dividend, full cumulative dividends on the preferred stock of the series have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment of the dividend is set apart for payment for all past dividend periods and the then current dividend period, and (ii) if the series of preferred stock does not have a cumulative dividend, full dividends on the preferred stock of the series have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment of the dividends is set apart for payment for the then current dividend period, no dividends (other than in shares of our common stock or other shares of capital stock ranking junior to the preferred stock of the relevant series as to dividends and upon liquidation) shall be declared or paid or set aside for payment nor shall any other distribution be declared or made upon our common stock, or any of our other share capital ranking junior to or on a parity with the relevant series of preferred stock as to dividends or upon liquidation, nor will any shares of our common stock, or any other shares of our capital stock ranking junior to or on a parity with the relevant series of preferred stock as to dividends or upon liquidation be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any shares) by us (except by conversion into or exchange for other shares of our capital stock ranking junior to the relevant series of preferred stock as to dividends and upon liquidation).

        Any dividend payment made on shares of a series of preferred stock shall first be credited against the earliest accrued but unpaid dividend due with respect to shares of such series which remains payable.

        Redemption.    If so provided in the applicable prospectus supplement, the preferred stock will be subject to mandatory redemption or redemption at our option, as a whole or in part, in each case upon the terms, at the times and at the redemption prices set forth in the prospectus supplement.

        The prospectus supplement relating to a series of preferred stock that is subject to mandatory redemption will specify the number of shares of the preferred stock that will be redeemed by us in each year commencing after a date to be specified, at a redemption price per share to be specified, together with an amount equal to all accrued and unpaid dividends on the shares (which will not, if the preferred stock does not have a cumulative dividend, include any accrual in respect of unpaid dividends for prior dividend periods) to the date of redemption. The redemption price may be payable in cash or other property, as specified in the applicable prospectus supplement. If the redemption price for preferred stock of any series is payable only from the net proceeds of the issuance of shares of our capital stock, the terms of the preferred stock may provide that, if no shares of capital stock will have been issued or to the extent the net proceeds from any issuance are insufficient to pay in full the aggregate redemption price then due, the preferred stock will automatically and mandatorily be converted into the applicable shares of our capital pursuant to conversion provisions specified in the applicable prospectus supplement.

        Notwithstanding the foregoing, unless (a) if a series of preferred stock has a cumulative dividend, full cumulative dividends on all shares of the series of preferred stock will have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof set apart for payment for all past dividend periods and the then current dividend period, and (b) if a series of preferred stock does not have a cumulative dividend, full dividends on all shares of the preferred stock of the series have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment of the dividends set apart for payment for the then current dividend period, no shares of the series of preferred stock will be redeemed unless all outstanding shares of the preferred stock of the relevant series are simultaneously redeemed; provided, however, that the foregoing shall not prevent the purchase or acquisition of preferred stock of the relevant series to

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preserve our REIT status or pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding shares of preferred stock of that series. In addition, unless (i) if the relevant series of preferred stock has a cumulative dividend, full cumulative dividends on all outstanding shares of the series of preferred stock have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment of the dividends set apart for payment for all past dividend periods and the then current dividend period, and (ii) if the relevant series of preferred stock does not have a cumulative dividend, full dividends on the preferred stock of the relevant series have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment of the dividends set apart for payment for the then current dividend period, we will not purchase or otherwise acquire directly or indirectly any shares of preferred stock of the relevant series (except by conversion into or exchange for shares of our capital ranking junior to the preferred stock of the relevant series as to dividends and upon liquidation); provided, however, that the foregoing shall not prevent the purchase or acquisition of shares of preferred stock of the relevant series to preserve our REIT status or pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding shares of preferred stock of the relevant series.

        If fewer than all of the outstanding shares of preferred stock of any series are to be redeemed, the number of shares to be redeemed will be determined by us and such shares may be redeemed pro rata from the holders of record of the shares in proportion to the number of the shares held or for which redemption is requested by the holder (with adjustments to avoid redemption of fractional shares) or by lot in a manner determined by us.

        Notice of redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each holder of record of preferred stock of any series to be redeemed at the address shown on our share transfer books. Each notice will state: (a) the redemption date; (b) the number of shares and series of the preferred stock to be redeemed; (c) the redemption price; (d) the place or places where certificates for the preferred stock are to be surrendered for payment of the redemption price; (e) that dividends on the shares to be redeemed will cease to accrue on such redemption date; and (f) the date upon which the holder's conversion rights, if any, as to the shares will terminate. If fewer than all the shares of preferred stock of any series are to be redeemed, the notice mailed to each holder of the shares shall also specify the number of shares of preferred stock to be redeemed from each holder. If notice of redemption of any preferred stock has been given and if the funds necessary for the redemption have been set aside by us in trust for the benefit of the holders of any preferred stock so called for redemption, then from and after the redemption date dividends will cease to accrue on the preferred stock, and all rights of the holders of such shares will terminate, except the right to receive the redemption price.

        Liquidation Preference.    Upon any voluntary or involuntary liquidation, dissolution or winding up of our affairs, then, before any distribution or payment will be made to the holders of our common stock or any other class or series of our capital stock ranking junior to the preferred stock in the distribution of assets upon any liquidation, dissolution or winding up of our affairs, the holders of each series of preferred stock will be entitled to receive out of our assets legally available for distribution to shareholders liquidating distributions in the amount of the liquidation preference per share as set forth in the applicable prospectus supplement, plus an amount equal to all dividends accrued and unpaid thereon, which shall not include any accumulation in respect of unpaid noncumulative dividends for prior dividend periods. After payment of the full amount of the liquidating distributions to which they are entitled, the holders of preferred stock will have no right or claim to any of our remaining assets. In the event that, upon any voluntary or involuntary liquidation, dissolution or winding up, our available assets are insufficient to pay the amount of the liquidating distributions on all outstanding shares of our preferred stock and the corresponding amounts payable on all shares of other classes or series of our capital stock ranking on a parity with the preferred stock in the distribution of assets, then the holders of the preferred stock and all other classes or series of capital stock ranking on a parity

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with the preferred stock in the distribution of assets will share ratably in the distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled.

        If liquidating distributions will have been made in full to all holders of preferred stock, our remaining assets will be distributed among the holders of any other classes or series of capital stock ranking junior to the preferred stock upon liquidation, dissolution or winding up, according to their respective rights and preferences and in each case according to their respective number of shares. For such purposes, our consolidation or merger with or into any other corporation, trust or entity, or the sale, lease or conveyance of all or substantially all of our property or business, will not be deemed to constitute a liquidation, dissolution or winding up of our affairs.

        Voting Rights.    Holders of the preferred stock will not have any voting rights, except as set forth below or as otherwise from time to time required by law or as indicated in the applicable prospectus supplement.

        Unless provided otherwise for any series of preferred stock, so long as any shares of preferred stock of a series remain outstanding, we will not, without the affirmative vote or consent of the holders of at least two-thirds of the shares of the relevant series of preferred stock outstanding at the time, given in person or by proxy, either in writing or at a meeting (the relevant series voting separately as a class), (a) authorize or create, or increase the authorized or issued amount of, any class or series of capital stock ranking prior to the series of preferred stock with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or winding up or reclassify any of our authorized capital stock into such shares, or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase any such shares; or (b) amend, alter or repeal the provisions of our charter or the articles supplementary for the relevant series of preferred stock, whether by merger, consolidation or otherwise, so as to materially and adversely affect any right, preference, privilege or voting power of the relevant series of preferred stock; provided, however, with respect to the occurrence of any event set forth in (b) above, so long as the relevant series of preferred stock remains outstanding with terms materially unchanged, taking into account that upon the occurrence of the event we may not be the surviving entity, the occurrence of the event shall not be deemed to materially and adversely affect the rights, preferences, privileges or voting power of holders of the preferred stock and provided further that (i) any increase in the amount of the authorized preferred stock or the creation or issuance of any other series of preferred stock, or (ii) any increase in the amount of authorized shares of the relevant series or any other series of preferred stock, in each case ranking on a parity with or junior to the preferred stock of the relevant series in payment of dividends or the distribution of assets upon liquidation, dissolution or winding up, will not be deemed to materially and adversely affect rights, preferences, privileges or voting powers of the holders of the preferred stock.

        The voting provisions described above will not apply if, at or prior to the time when the act with respect to which a vote would otherwise be required will be effected, all outstanding shares of the relevant series of preferred stock have been redeemed or called for redemption and sufficient funds have been deposited in trust to effect the redemption.

        Conversion Rights.    The terms and conditions, if any, upon which any series of preferred stock is convertible into shares of our common stock will be set forth in the applicable prospectus supplement. These terms will include the number of shares of our common stock into which the shares of preferred stock are convertible, the conversion price (or manner of calculation), the conversion period, provisions as to whether conversion will be at the option of the holders of the preferred stock or at our option, the events requiring an adjustment of the conversion price and provisions affecting conversion in the event of the redemption of the relevant series of preferred stock.

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Ownership Restrictions

        Two of the requirements that must be met in order for us to qualify for the tax benefits accorded by the REIT provisions of the tax code are that:

•

during the last half of each taxable year not more than 50% in value of the outstanding shares may be owned directly or indirectly by five or fewer individuals, i.e., the "5/50 Rule"; and



•

our shares of stock must be beneficially owned by 100 or more persons for at least 335 days of each taxable year of 12 months or a proportionately smaller number of days for a shorter period, also known as the "100 Stockholder Rule."

        In order that we may meet these requirements at all times, our charter prohibits any person from acquiring or holding, directly or indirectly, shares of our common stock in excess of 9.8% in value or in number of shares, whichever is more restrictive, of the aggregate of the outstanding shares of our common stock or in excess of 9.8% in value or in number of shares, whichever is more restrictive, of the aggregate of the outstanding shares of our preferred stock.

        For purposes of the 5/50 Rule, the constructive ownership provisions applicable under Section 544 of the tax code attribute ownership of securities owned by a corporation, partnership, estate or trust proportionately to its stockholders, partners or beneficiaries, attribute ownership of securities owned by family members and partners to other members of the same family, treat securities with respect to which a person has an option to purchase as actually owned by that person, and set forth application of these attribution provisions with respect to our common stock that is constructively owned by virtue of such provisions, i.e., "reattribution." Thus, for purposes of determining whether a person holds shares of our common stock in violation of the ownership limitations set forth in our charter, many types of entities may own directly more than the 9.8% limit because these entities' shares are attributed to their individual stockholders. On the other hand, a person will be treated as owning not only shares of common stock actually or beneficially owned, but also any shares of common stock attributed to the person under the attribution rules described above. Accordingly, under some circumstances, shares of our common stock owned by a person who individually owns less than 9.8% of the shares outstanding may nevertheless be in violation of the ownership limitations set forth in our charter. Ownership of shares of our common stock through attribution is generally referred to as constructive ownership. The 100 Stockholder Rule, referred to above, is determined by actual, and not constructive, ownership.

        Our charter further provides that if any transfer of shares of our common stock which, if effective, would result in any person beneficially or constructively owning shares of our common stock in excess or in violation of the above transfer or ownership limitations, then that number of shares of our common stock the beneficial or constructive ownership of which otherwise would cause the person to violate the limitations, rounded to the nearest whole share, shall be automatically transferred to a trust for the exclusive benefit of one or more charitable beneficiaries, and the intended transferee shall not acquire any rights in the shares. Shares of our common stock held by a trustee shall be issued and outstanding shares of common stock. The intended transferee shall not benefit economically from ownership of any shares held in trust, shall have no rights to dividends, and shall not possess any rights to vote or other rights attributable to the shares held in the trust. The trustee of the trust shall have all voting rights and rights to dividends or other distributions with respect to shares held in the trust, which rights shall be exercised for the exclusive benefit of the charitable beneficiary. Any dividend or other distribution paid to the intended transferee prior to our discovery that shares of our common stock have been transferred to the trustee shall be paid by the recipient of such dividend or distribution to the trustee upon demand and any dividend or other distribution authorized but unpaid shall be paid when due to the trustee. Our board of directors may, in its discretion, waive these requirements on owning shares in excess of the ownership limitations, so long as the waiver does not cause us to fail to qualify as a REIT.

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        Within 20 days of receiving notice from us that shares of our common stock have been transferred to the trust, the trustee shall sell the shares held in the trust to a person, designated by the trustee, whose ownership of the shares will not violate the ownership limitations set forth in the charter. Upon the sale, the interest of the charitable beneficiary in the shares sold shall terminate and the trustee shall distribute the net proceeds of the sale to the intended transferee and to the charitable beneficiary as follows. The intended transferee shall receive the lesser of:

•

the price paid by the intended transferee for the shares or, if the intended transferee did not give value for the shares in connection with the event causing the shares to be held in the trust, i.e., in the case of a gift, devise or other similar transaction, the market price, as explained further below, of the shares on the day of the event causing the shares to be held in the trust; and



•

the price per share received by the trustee from the sale or other disposition of the shares held in the trust.

        Any net sales proceeds in excess of the amount payable to the intended transferee shall be immediately paid to the charitable beneficiary. In addition, shares of our common stock transferred to the trustee shall be deemed to have been offered for sale to us, or our designee, at a price per share equal to the lesser of (i) the price per share in the transaction that resulted in the transfer of the shares to the trust, or, in the case of a devise or gift, the market price at the time of the devise or gift, and (ii) the market price on the date we, or our designee, accept the offer. We shall have the right to accept the offer for a period of 90 days after the later of (x) the date of the event that resulted in the shares being transferred to the trust, and (y) the date we determine in good faith that an event has occurred that resulted in the shares being transferred to the trust if we did not previously receive notice of such event as required by our charter. Upon the sale to us, the interest of the charitable beneficiary in the shares sold shall terminate and the trustee shall distribute the net proceeds of the sale to the intended transferee.

        The term "market price" on any date shall mean, with respect to any class or series of outstanding shares of our stock, the closing price for the shares on that date. The "closing price" on any date shall mean the last sale price for the shares, regular way, or, in case no sale takes place on that day, the average of the closing bid and asked prices, regular way, for the shares, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the American Stock Exchange or, if the shares are not listed or admitted to trading on the American Stock Exchange, as reported on the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares are listed or admitted to trading or, if the shares are not listed or admitted to trading on any national securities exchange, the last quoted price, or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc., Automated Quotation Systems, or, if the system is no longer in use, the principal other automated quotation system that may then be in use or, if the shares are not quoted by that organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the shares selected by our board of directors or, in the event that no trading price is available for the shares, the fair market value of the shares, as determined in good faith by our board of directors.

        We are required to send stockholder demand letters to some of our stockholders of record within 30 days of the end of each taxable year. These stockholder demand letters must be sent to all record owners of:

•

5% or more of our stock, if we have 2,000 or more stockholders of record;

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•

1% or more of our stock, if we have more than 200 but less than 2,000 stockholders of record; or



•

0.5% or more of our stock, if we have 200 or fewer stockholders of record.

        In response to the stockholder demand letters, the stockholders of record are required to provide certain information to us enabling us to determine the actual (direct and indirect) ownership of our stock. Each direct or indirect owner shall provide us with additional information as we may reasonably request in order to determine the effect, if any, of his ownership on our status as a REIT and to ensure compliance with the ownership limitations.

        Our charter's ownership limit will not be automatically removed even if the REIT provisions of the tax code are changed so as to remove any ownership concentration limitation. Any change of the ownership limit would require an amendment to the charter. An amendment requires the affirmative vote of holders holding at least two-thirds of the outstanding shares entitled to vote on the matter.

        All certificates representing shares of our common or preferred stock will bear a legend referring to the restrictions described above.

Limitations on Changes in Control

General

        The provisions of our charter and bylaws providing for ownership limitations, a staggered board of directors and the authorization of our board of directors to issue preferred stock without stockholder approval could have the effect of delaying, deferring or preventing a change in control of or the removal of existing management, and as a result could prevent our stockholders from being paid a premium over the then-prevailing market price for their shares of our common stock.

Shareholder Rights Agreement

        We have adopted a shareholder rights agreement to enable our stockholders to receive fair and equal treatment in the event of any proposed acquisition of us, among other things. Our shareholder rights agreement may have the effect of delaying, deferring or preventing a change in control of and, therefore, could adversely affect our stockholders' ability to realize a premium over the then-prevailing market price for our common stock in connection with a change in control transaction. A fuller description of our shareholder rights agreement can be found in our Current Report on Form 8-K filed with the SEC on July 27, 1999, which includes the shareholder rights agreement as an exhibit.

        In connection with the adoption of the shareholder rights agreement, our board of directors declared a dividend distribution of one preferred stock purchase right for each outstanding share of our common stock to stockholders of record as of the close of business on July 30, 1999. Each preferred stock purchase right entitles the registered holder of this right to purchase from us one one-hundredth of a share of our Series A Junior Participating Preferred Stock, par value $0.01 per share at a cash exercise price of $50.00, subject to adjustment.

        The preferred stock purchase rights are currently not exercisable and are attached to and trade with all shares of our common stock outstanding as of, and issued subsequent to, the July 30, 1999 record date. The preferred stock purchase rights will separate from our common stock and will become exercisable upon the earlier of:

•

ten business days following a public announcement that a person or group of affiliated or associated persons, an "acquiring person", has acquired, or obtained the right to acquire, beneficial ownership of 15% or more of the outstanding shares of our common stock, other than as a result of repurchases of stock by us or inadvertent actions by institutional or other stockholders; or



•

ten business days, or a later date as our board of directors shall determine, following the commencement of a tender offer or exchange offer that would result in a person or group becoming an "acquiring person," as described above.

        The preferred stock purchase rights will expire at 5:00 P.M. (Eastern Standard Time) on July 30, 2009, unless we redeem or exchange these rights before this date.

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DESCRIPTION OF WARRANTS

        We have no warrants or other stock purchase rights outstanding other than options issued under our 1997 Stock Option Plan. We may issue warrants for the purchase of preferred stock or common stock. Warrants may be issued independently, together with any other securities offered by any prospectus supplement or through a dividend or other distribution to our stockholders and may be attached to or separate from the related securities. Warrants may be issued under a warrant agreement to be entered into between us and a warrant agent specified in the applicable prospectus supplement. The warrant agent will act solely as our agent in connection with the warrants of a particular series and will not assume any obligation or relationship of agency or trust for or with any holders or beneficial owners of warrants. The following sets forth certain general terms and provisions of the warrants that may be offered under this prospectus. Further terms of the warrants and the applicable warrant agreement will be set forth in the applicable prospectus supplement.

        The applicable prospectus supplement will describe the terms of the warrants in respect of which this prospectus is being delivered, including, where applicable, the following: (a) the title of the warrants; (b) the aggregate number of the warrants; (c) the price or prices at which the warrants will be issued; (d) the designation, number and terms of the shares of preferred stock or common stock purchasable upon exercise of the warrants; (e) the designation and terms of the other securities, if any, with which the warrants are issued and the number of the warrants issued with each security; (f) the date, if any, on and after which the warrants and the related preferred stock or common stock, if any, will be separately transferable; (g) the price at which each share of preferred stock or common stock purchasable upon exercise of the warrants may be purchased; (h) the date on which the right to exercise the warrants will commence and the date on which that right will expire; (i) the minimum or maximum amount of the warrants which may be exercised at any one time; (j) information with respect to book-entry procedures, if any; (k) a discussion of federal income tax considerations; and (l) any other terms of the warrants, including terms, procedures and limitations relating to the transferability, exchange and exercise of the warrants.

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DESCRIPTION OF DEBT SECURITIES

General

        The debt securities offered under this prospectus and any applicable prospectus supplement (the "Debt Securities") will be our direct unsecured obligations and may be either senior Debt Securities ("Senior Securities") or subordinated Debt Securities ("Subordinated Securities"). The Debt Securities will be issued under one or more indentures, each dated as of a date prior to the issuance of the Debt Securities to which it relates. Senior Securities and Subordinated Securities may be issued under separate indentures (respectively, a "Senior Indenture" and a "Subordinated Indenture"), in each case between us and a trustee (a "Trustee"), which may be the same Trustee. The Senior Indenture and the Subordinated Indenture, as amended or supplemented from time to time, are sometimes referred to in this prospectus collectively as the "Indentures." The Indentures will be subject to and governed by the Trust Indenture Act of 1939, as amended (the "TIA"). The statements made under this heading relating to the Debt Securities and the Indentures are summaries of their anticipated provisions, do not purport to be complete and are qualified in their entirety by reference to the Indentures and the Debt Securities.

        Capitalized terms used in this section and not defined will have the meanings assigned to them in the applicable Indenture. References to the "Company" in this section are to Apex Mortgage Capital, Inc.

Terms

        General.    The indebtedness represented by the Senior Securities will rank equally with all other unsecured and unsubordinated indebtedness of the Company. The indebtedness represented by Subordinated Securities will be subordinated in right of payment to the prior payment in full of the Senior Debt of the Company as described under "—Subordination." The particular terms of the Debt Securities offered by a prospectus supplement will be described in the applicable prospectus supplement, along with any applicable modifications of or additions to the general terms of the Debt Securities as described in this prospectus and in the applicable Indenture and any applicable federal income tax considerations. Accordingly, for a description of the terms of any series of Debt Securities, reference must be made to both the applicable prospectus supplement and the description of the Debt Securities set forth in this prospectus.

        Except as set forth in any prospectus supplement, the Debt Securities may be issued without limit as to aggregate principal amount, in one or more series, in each case as the Company establishes from time to time or as set forth in the applicable Indenture or in one or more indentures supplemental to the applicable Indenture. All Debt Securities of one series need not be issued at the same time and, unless otherwise provided, a series may be reopened, without the consent of the holders of the Debt Securities of the relevant series, for issuance of additional Debt Securities of the series.

        Each Indenture will provide that the Company may, but need not, designate more than one Trustee thereunder, each with respect to one or more series of Debt Securities. Any Trustee under an Indenture may resign or be removed with respect to one or more series of Debt Securities and a successor Trustee may be appointed to act with respect to such series. In the event that two or more persons are acting as Trustee with respect to different series of Debt Securities, each such Trustee shall be a Trustee of a trust under the applicable Indenture separate and apart from the trust administered by any other Trustee, and, except as otherwise indicated herein, any action described herein to be taken by each Trustee may be taken by each such Trustee with respect to, and only with respect to, the one or more series of Debt Securities for which it is Trustee under the applicable Indenture.

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        The following summaries set forth certain general terms and provisions of the Indentures and the Debt Securities. The prospectus supplement relating to the series of Debt Securities being offered will contain further terms of such Debt Securities, including the following specific terms:

(1)

The title of such Debt Securities and whether such Debt Securities are Senior Securities or Subordinated Securities;



(2)

The aggregate principal amount of such Debt Securities and any limit on such aggregate principal amount;



(3)

The price (expressed as a percentage of the principal amount thereof) at which such Debt Securities will be issued and, if other than the principal amount thereof, the portion of the principal amount thereof payable upon declaration of acceleration of the maturity thereof, or (if applicable) the portion of the principal amount of such Debt Securities that is convertible into shares of the Company's common stock or preferred stock, or the method by which any such portion shall be determined;



(4)

If convertible, the terms on which such Debt Securities are convertible, including the initial conversion price or rate and the conversion period and any applicable limitations on the ownership or transferability of the Company's common stock or preferred stock receivable on conversion;



(5)

The date or dates, or the method for determining such date or dates, on which the principal of such Debt Securities will be payable;



(6)

The rate or rates (which may be fixed or variable), or the method by which such rate or rates shall be determined, at which such Debt Securities will bear interest, if any;



(7)

The date or dates, or the method for determining such date or dates, from which any such interest will accrue, the dates on which any such interest will be payable, the record dates for such interest payment dates, or the method by which such dates shall be determined, the persons to whom such interest shall be payable, and the basis upon which interest shall be calculated if other than that of a 360-day year of twelve 30-day months;



(8)

The place or places where the principal of (and premium or Make-Whole Amount (as may be defined in the Indenture), if any) and interest, if any, on such Debt Securities will be payable, where such Debt Securities may be surrendered for conversion or registration of transfer or exchange and where notices or demands to or upon the Company in respect of such Debt Securities and the applicable Indenture may be served;



(9)

The period or periods, if any, within which, the price or prices at which and the other terms and conditions upon which such Debt Securities may, pursuant to any optional or mandatory redemption provisions, be redeemed, as a whole or in part, at the option of the Company;



(10)

The obligation, if any, of the Company to redeem, repay or purchase such Debt Securities pursuant to any sinking fund or analogous provision or at the option of a holder thereof, and the period or periods within which, the price or prices at which and the other terms and conditions upon which such Debt Securities will be redeemed, repaid or purchased, as a whole or in part, pursuant to such obligation;



(11)

If other than U.S. dollars, the currency or currencies in which such Debt Securities are denominated and payable, which may be a foreign currency or units of two or more foreign currencies or a composite currency or currencies, and the terms and conditions relating thereto;



(12)

Whether the amount of payments of principal of (and premium or Make-Whole Amount, if any) or interest, if any, on such Debt Securities may be determined with reference to an

27

index, formula or other method (which index, formula or method may, but need not be, based on a currency, currencies, currency unit or units, or composite currency or currencies) and the manner in which such amounts shall be determined;

(13)

Whether the principal of (and premium or Make-Whole Amount, if any) or interest or Additional Amounts (as may be defined in the Indenture), if any, on the Debt Securities of the series are to be payable, at the election of the Company or a holder thereof, in a currency or currencies, currency unit or units or composite currency or currencies other than that in which such Debt Securities are denominated or stated to be payable, the period or periods within which, and the terms and conditions upon which, such election may be made, and the time and manner of, and identity of the exchange rate agent with responsibility for, determining the exchange rate between the currency or currencies, currency unit or units or composite currency or currencies in which such Debt Securities are denominated or stated to be payable and the currency or currencies, currency unit or units or composite currency or currencies in which such Debt Securities are to be so payable;



(14)

Provisions, if any, granting special rights to the holders of Debt Securities of the series upon the occurrence of such events as may be specified;



(15)

Any deletions from, modifications of or additions to the Events of Default (as defined in the Indenture) or covenants of the Company with respect to Debt Securities of the series, whether or not such Events of Default or covenants are consistent with the Events of Default or covenants set forth herein;



(16)

Whether Debt Securities of the series are to be issuable as Registered Securities, Bearer Securities (with or without coupons) or both, any restrictions applicable to the offer, sale or delivery of Bearer Securities and the terms upon which Bearer Securities of the series may be exchanged for Registered Securities of the series and vice versa (if permitted by applicable laws and regulations), whether any Debt Securities of the series are to be issuable initially in temporary global form and whether any Debt Securities of the series are to be issuable in permanent global form with or without coupons and, if so, whether beneficial owners of interests in any such permanent global Security may exchange such interests for Debt Securities of such series and of like tenor of any authorized form and denomination and the circumstances under which any such exchanges may occur, if other than in the manner provided in the Indenture, and, if Registered Securities of the series are to be issuable as a Global Security, the identity of the depository for such series;



(17)

The date as of which any Bearer Securities of the series and any temporary Global Security representing outstanding Debt Securities of the series shall be dated if other than the date of original issuance of the first Security of the series to be issued;



(18)

The Person to whom any interest on any Registered Security of the series shall be payable, if other than the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, the manner in which, or the Person to whom, any interest on any Bearer Security of the series shall be payable, if otherwise than upon presentation and surrender of the coupons appertaining thereto as they severally mature, and the extent to which, or the manner in which, any interest payable on a temporary Global Security on an Interest Payment Date will be paid if other than in the manner provided in the Indenture;



(19)

The applicability, if any, of the defeasance and covenant defeasance provisions of the Indenture to the Debt Securities of the series;



(20)

If the Debt Securities of such series are to be issuable in definitive form (whether upon original issue or upon exchange of a temporary security of such series) only upon receipt of

28

certain certificates or other documents or satisfaction of other conditions, then the form and/or terms of such certificates, documents or conditions;

(21)

If the Debt Securities of the series are to be issued upon the exercise of warrants, the time, manner and place for such Debt Securities to be authenticated and delivered;



(22)

Whether and under what circumstances the Company will pay Additional Amounts as contemplated by the Indenture on the Debt Securities of the series to any holder who is not a United States person (including any modification to the definition of such term) in respect of any tax, assessment or governmental charge and, if so, whether the Company will have the option to redeem such Debt Securities rather than pay such Additional Amounts (and the terms of any such option);



(23)

The obligation, if any, of the Company to permit the conversion of the Debt Securities of such series into the Company's common stock or preferred stock, as the case may be, and the terms and conditions upon which such conversion shall be effected (including, without limitation, the initial conversion price or rate, the conversion period, any adjustment of the applicable conversion price and any requirements relative to the reservation of such shares for purposes of conversion); and



(24)

Any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture).

        If so provided in the applicable prospectus supplement, the Debt Securities may be issued at a discount below their principal amount and provide for less than the entire principal amount thereof to be payable upon declaration of acceleration of the maturity thereof ("Original Issue Discount Securities"). In such cases, all material U.S. federal income tax, accounting and other considerations applicable to Original Issue Discount Securities will be described in the applicable prospectus supplement.

        Change of Control, Highly Leveraged Transactions and Similar Transactions.    Except as may be set forth in any prospectus supplement, the Debt Securities will not contain any provisions that would limit the ability of the Company to incur indebtedness or that would afford holders of any series of Debt Securities protection in the event of a highly leveraged or similar transaction, or in the event of a change of control, involving the Company that may adversely affect holders of Debt Securities. To the extent that any covenant or provision governing any series of Debt Securities that would afford protection to holders of such series of Debt Securities in the event of a highly leveraged or similar transaction or a change of control may be (a) waived by the board of directors or the relevant Trustee or (b) limited in its applicability in the event of a leveraged buy-out or similar transaction initiated or supported by the Company, management of the Company or any affiliate, the relevant prospectus supplement will describe such provisions.

        Any prospectus supplement relating to a series of Debt Securities that is subject to optional redemption, prepayment or conversion of such series of Debt Securities upon the occurrence of a change of control or other similar events will describe, to the extent applicable, the following:

(1)

the effect that such provisions may have in deterring mergers, tender offers or other takeover attempts, as well as any possible adverse effect on the market price of the Company's securities or its ability to obtain additional financing in the future;



(2)

the Company's obligation to comply with the requirements of Rule 14(e)-1 under the Exchange Act and any other applicable securities laws in connection with such provisions and any related offers by the Company, and to the extent that a series of convertible Debt Securities are the subject of the prospectus supplement, the Company's obligation to comply with Rule 13e-4;

29

(3)

whether the occurrence of the specified events may give rise to cross-defaults on other indebtedness resulting in effective subordination of the Company's obligation to make payments on such series of Debt Securities;



(4)

any legal or financial limitations on the Company's ability to repurchase the series of Debt Securities offered by the prospectus supplement upon the triggering of an "event risk" provision requiring such a repurchase or offer to repurchase;



(5)

the impact, if any, under the Indenture or other governing instruments of any failure to repurchase or offer to repurchase, including whether such failure following a change of control or similar event will (or would, after the lapse of time or giving of notice, or both) result in an event of default with respect to such series of Debt Securities;



(6)

that there can be no assurance that sufficient funds will be available to the Company to make any required repurchase at the time such "event risk" provision is triggered;



(7)

the material effect of any subordination of payment on such series of Debt Securities to other obligations of the Company or its subsidiaries that may be accelerated as a result of a change in control, fundamental change or "poison put" provision on such change in control, fundamental change or "poison put" provision and on such series of Debt Securities;



(8)

the material effect, if any, of any anti-takeover provision relating to the Company's equity securities on the Company's outstanding debt securities, including the series of Debt Securities offered by the prospectus supplement;



(9)

to the extent that the term "change of control" includes the concept of "all or substantially all," how such concept is quantified or what is the established meaning of such concept under applicable law and the Indenture and, in the event that there is no definition or established meaning for such concept, the effect of such uncertainty on the ability of holders of such series of Debt Securities to determine when a "change of control" has occurred; and



(10)

other material effects and limitations of "change of control," as applicable to such series of Debt Securities, including whether "change of control" provisions will be triggered if a change in control of the Company's Board of Directors occurs as a result of a proxy contest involving solicitation of revocable proxies.

Denomination, Interest, Registration and Transfer

        Unless otherwise described in the applicable prospectus supplement, the Debt Securities of any series will be issuable in denominations of $1,000 and integral multiples thereof.

        Unless otherwise specified in the applicable prospectus supplement, the principal of (and applicable premium or Make-Whole Amount, if any) and interest on any series of Debt Securities will be payable at the corporate trust office of the applicable Trustee, the address of which will be stated in the applicable prospectus supplement; provided that, at the option of the Company, payment of interest may be made by check mailed to the address of the person entitled thereto as it appears in the applicable register for such Debt Securities or by wire transfer of funds to such person at an account maintained within the United States.

        Any interest not punctually paid or duly provided for on any Interest Payment Date with respect to a Debt Security ("Defaulted Interest") will forthwith cease to be payable to the holder on the applicable Regular Record Date and may either be paid to the Person in whose name such Debt Security is registered at the close of business on a special record date (the "Special Record Date") for the payment of such Defaulted Interest to be fixed by the Trustee, in which case notice thereof shall be given to the holder of such Debt Security not less than 10 days prior to such Special Record Date, or

30

may be paid at any time in any other lawful manner, all as more completely described in the applicable Indenture.

        Subject to certain limitations imposed upon Debt Securities issued in book- entry form, the Debt Securities of any series will be exchangeable for any authorized denomination of other Debt Securities of the same series and of a like aggregate principal amount and tenor upon surrender of such Debt Securities at the corporate trust office of the applicable Trustee or at the office of any transfer agent designated by the Company for such purpose. In addition, subject to certain limitations imposed upon Debt Securities issued in book-entry form, the Debt Securities of any series may be surrendered for conversion or registration of transfer or exchange thereof at the corporate trust office of the applicable Trustee or at the office of any transfer agent designated by the Company for such purpose. Every Debt Security surrendered for conversion, registration of transfer or exchange must be duly endorsed or accompanied by a written instrument of transfer, and the person requesting such action must provide evidence of title and identity satisfactory to the applicable Trustee or transfer agent. No service charge will be made for any registration of transfer or exchange of any Debt Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. If the applicable prospectus supplement refers to any transfer agent (in addition to the applicable Trustee) initially designated by the Company with respect to any series of Debt Securities, the Company may at any time rescind the designation of any such transfer agent or approve a change in the location through which any such transfer agent acts, except that the Company will be required to maintain a transfer agent in each place of payment for such series. The Company may at any time designate additional transfer agents with respect to any series of Debt Securities.

        Neither the Company nor any Trustee shall be required to (a) issue, register the transfer of or exchange Debt Securities of any series during a period beginning at the opening of business 15 days before selection of any Debt Securities selected for redemption and ending at the close of business on the day of mailing of the notice of redemption; (b) register the transfer of or exchange any Debt Security, or portion thereof, so selected for redemption, in whole or in part, except the unredeemed portion of any Debt Security being redeemed in part; or (c) issue, register the transfer of or exchange any Debt Security that has been surrendered for repayment at the option of the holder, except the portion, if any, of such Debt Security not to be so repaid.

Merger, Consolidation or Sale of Assets

        The Indentures will provide that the Company may, without the consent of the holders of any outstanding Debt Securities, consolidate with, or sell, lease or convey all or substantially all of its assets to, or merge with or into, any other entity provided that (a) either the Company shall be the continuing entity, or the successor entity (if other than the Company) formed by or resulting from any such consolidation or merger or which shall have received the transfer of such assets is organized under the laws of any domestic jurisdiction and assumes the Company's obligations to pay principal of (and premium or Make-Whole Amount, if any) and interest on all of the Debt Securities and the due and punctual performance and observance of all of the covenants and conditions contained in each Indenture; (b) immediately after giving effect to such transaction and treating any indebtedness that becomes an obligation of the Company or any subsidiary as a result thereof as having been incurred by the Company or such subsidiary at the time of such transaction, no Event of Default under the Indentures, and no event which, after notice or the lapse of time, or both, would become such an Event of Default, shall have occurred and be continuing; and (c) an officers' certificate and legal opinion covering such conditions shall be delivered to each Trustee.

Covenants

        The covenants of the Company with respect to any series of Debt Securities will be set forth in the applicable prospectus supplement.

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Events of Default, Notice and Waiver

        Unless otherwise provided in the applicable prospectus supplement, each Indenture will provide that the following events are "Events of Default" with respect to any series of Debt Securities issued thereunder: (a) default in the payment of any interest on or any Additional Amount payable in respect of any Debt Security of such series when such interest or Additional Amount becomes due and payable that continues for a period of 30 days; (b) default in the payment of the principal of (or premium or Make-Whole Amount, if any, on) any Debt Security of such series when due and payable; (c) default in making any sinking fund payment as required for any Debt Security of such series; (d) default in the performance, or breach, of any other covenant or warranty of the Company in the Indenture with respect to the Debt Securities of such series and continuance of such default or breach for a period of 60 days after written notice as provided in the Indenture; (e) default under any bond, debenture, note, mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any indebtedness for money borrowed by the Company (or by any Subsidiary, the repayment of which the Company has guaranteed or for which the Company is directly responsible or liable as obligor or guarantor), having an aggregate principal amount outstanding of at least $100,000,000, whether such indebtedness now exists or shall hereafter be created, which default shall have resulted in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise have become due and payable, without such indebtedness having been discharged, or such acceleration having been rescinded or annulled, within a period of 10 days after written notice to the Company as provided in the Indenture; (f) the entry by a court of competent jurisdiction of one or more judgments, orders or decrees against the Company or any of its Subsidiaries in an aggregate amount (excluding amounts covered by insurance) in excess of $100,000,000 and such judgments, orders or decrees remain undischarged, unstayed and unsatisfied in an aggregate amount (excluding amounts covered by insurance) in excess of $100,000,000 for a period of 30 consecutive days; (g) certain events of bankruptcy, insolvency or reorganization, or court appointment of a receiver, liquidator or trustee of the Company or any Significant Subsidiary; and (h) any other event of default provided with respect to a particular series of Debt Securities. The term "Significant Subsidiary" has the meaning ascribed to such term in Regulation S-X promulgated under the Securities Act.

        If an Event of Default under any Indenture with respect to Debt Securities of any series at the time outstanding occurs and is continuing, then in every such case the applicable Trustee or the holders of not less than 25% in principal amount of the Debt Securities of that series will have the right to declare the principal amount (or, if the Debt Securities of that series are Original Issue Discount Securities or indexed securities, such portion of the principal amount as may be specified in the terms thereof) of, and premium or Make-Whole Amount, if any, on, all the Debt Securities of that series to be due and payable immediately by written notice thereof to the Company (and to the applicable Trustee if given by the holders). However, at any time after such a declaration of acceleration with respect to Debt Securities of such series has been made, but before a judgment or decree for payment of the money due has been obtained by the applicable Trustee, the holders of not less than a majority in principal amount of outstanding Debt Securities of such series may rescind and annul such declaration and its consequences if (a) the Company shall have deposited with the applicable Trustee all required payments of the principal of (and premium or Make-Whole Amount, if any) and interest on the Debt Securities of such series, plus certain fees, expenses, disbursements and advances of the applicable Trustee and (b) all Events of Default, other than the non-payment of accelerated principal (or specified portion thereof and the premium or Make-Whole Amount, if any), with respect to Debt Securities of such series have been cured or waived as provided in such Indenture. The Indentures will also provide that the holders of not less than a majority in principal amount of the outstanding Debt Securities of any series may waive any past default with respect to such series and its consequences, except a default (i) in the payment of the principal of (or premium or Make-Whole Amount, if any) or interest on any Debt Security of such series or (ii) in respect of a covenant or provision contained in

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the applicable Indenture that cannot be modified or amended without the consent of the holder of each outstanding Debt Security affected thereby.

        The Indentures will require each Trustee to give notice to the holders of Debt Securities within 90 days of a default under the applicable Indenture unless such default shall have been cured or waived; provided, however, that such Trustee may withhold notice to the holders of any series of Debt Securities of any default with respect to such series (except a default in the payment of the principal of (or premium or Make-Whole Amount, if any) or interest on any Debt Security of such series or in the payment of any sinking fund installment in respect of any Debt Security of such series) if specified responsible officers of such Trustee consider such withholding to be in the interest of such holders.

        The Indentures will provide that no holders of Debt Securities of any series may institute any proceedings, judicial or otherwise, with respect to such Indenture or for any remedy thereunder, except in the case of failure of the applicable Trustee, for 60 days, to act after it has received a written request to institute proceedings in respect of an Event of Default from the holders of not less than 25% in principal amount of the outstanding Debt Securities of such series, as well as an offer of indemnity reasonably satisfactory to it. This provision will not prevent, however, any holder of Debt Securities from instituting suit for the enforcement of payment of the principal of (and premium or Make-Whole Amount, if any) and interest on such Debt Securities at the respective due dates or redemption dates thereof.

        The Indentures will provide that, subject to provisions in each Indenture relating to its duties in case of default, a Trustee will be under no obligation to exercise any of its rights or powers under an Indenture at the request or direction of any holders of any series of Debt Securities then outstanding under such Indenture, unless such holders shall have offered to the Trustee thereunder reasonable security or indemnity. The holders of not less than a majority in principal amount of the outstanding Debt Securities of any series (or of all Debt Securities then outstanding under an Indenture, as the case may be) shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the applicable Trustee, or of exercising any trust or power conferred upon such Trustee. However, a Trustee may refuse to follow any direction which is in conflict with any law or the applicable Indenture, which may involve such Trustee in personal liability or which may be unduly prejudicial to the holders of Debt Securities of such series not joining therein.

        Within 120 days after the close of each fiscal year, the Company will be required to deliver to each Trustee a certificate, signed by one of several specified officers of the Company, stating whether or not such officer has knowledge of any default under the applicable Indenture and, if so, specifying each such default and the nature and status thereof.

Modification of the Indentures

        Modifications and amendments of an Indenture will be permitted to be made only with the consent of the holders of not less than a majority in principal amount of all outstanding Debt Securities issued under such Indenture affected by such modification or amendment; provided, however, that no such modification or amendment may, without the consent of the holder of each such Debt Security affected thereby, (a) change the stated maturity of the principal of, or any installment of interest (or premium or Make-Whole Amount, if any) on, any such Debt Security; (b) reduce the principal amount of, or the rate or amount of interest on, or any premium or Make-Whole Amount payable on redemption of, any such Debt Security, or reduce the amount of principal of an Original Issue Discount Security that would be due and payable upon declaration of acceleration of the maturity thereof or would be provable in bankruptcy, or adversely affect any right of repayment of the holder of any such Debt Security; (c) change the place of payment, or the coin or currency, for payment of principal of, premium or Make-Whole Amount, if any, or interest on any such Debt Security; (d) impair the right to institute suit for the enforcement of any payment on or with respect to any such

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Debt Security; (e) reduce the above-stated percentage of outstanding Debt Securities of any series necessary to modify or amend the applicable Indenture, to waive compliance with certain provisions thereof or certain defaults and consequences thereunder or to reduce the quorum or voting requirements set forth in the applicable Indenture; or (f) modify any of the foregoing provisions or any of the provisions relating to the waiver of certain past defaults or certain covenants, except to increase the required percentage to effect such action or to provide that certain other provisions may not be modified or waived without the consent of the holder of such Debt Security.

        The holders of a majority in aggregate principal amount of the outstanding Debt Securities of each series may, on behalf of all holders of Debt Securities of that series, waive, insofar as that series is concerned, compliance by the Company with certain restrictive covenants of the applicable Indenture.

        Modifications and amendments of an Indenture will be permitted to be made by the Company and the respective Trustee thereunder without the consent of any holder of Debt Securities for any of the following purposes: (a) to evidence the succession of another person to the Company as obligor under such Indenture; (b) to add to the covenants of the Company for the benefit of the holders of all or any series of Debt Securities or to surrender any right or power conferred upon the Company in such Indenture; (c) to add events of default for the benefit of the holders of all or any series of Debt Securities; (d) to add or change any provisions of an Indenture to facilitate the issuance of, or to liberalize certain terms of, Debt Securities in bearer form, or to permit or facilitate the issuance of Debt Securities in uncertificated form, provided that such action shall not adversely affect the interests of the holders of the Debt Securities of any series in any material respect; (e) to change or eliminate any provisions of an Indenture, provided that any such change or elimination shall become effective only when there are no Debt Securities outstanding of any series created prior thereto which are entitled to the benefit of such provision; (f) to secure the Debt Securities; (g) to establish the form or terms of Debt Securities of any series, including the provisions and procedures, if applicable, for the conversion of such Debt Securities into common stock or preferred stock of the Company; (h) to provide for the acceptance of appointment by a successor Trustee or facilitate the administration of the trusts under an Indenture by more than one Trustee; (i) to cure any ambiguity, defect or inconsistency in an Indenture, provided that such action shall not adversely affect the interests of holders of Debt Securities of any series issued under such Indenture; or (j) to supplement any of the provisions of an Indenture to the extent necessary to permit or facilitate defeasance and discharge of any series of such Debt Securities, provided that such action shall not adversely affect the interests of the holders of the outstanding Debt Securities of any series.

        The Indentures will provide that in determining whether the holders of the requisite principal amount of outstanding Debt Securities of a series have given any request, demand, authorization, direction, notice, consent or waiver thereunder or whether a quorum is present at a meeting of holders of Debt Securities, (a) the principal amount of an Original Issue Discount Security that shall be deemed to be outstanding shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon declaration of acceleration of the maturity thereof, (b) the principal amount of any Debt Security denominated in a foreign currency that shall be deemed outstanding shall be the U.S. dollar equivalent, determined on the issue date for such Debt Security, of the principal amount (or, in the case of an Original Issue Discount Security, the U.S. dollar equivalent on the issue date of such Debt Security of the amount determined as provided in (a) above), (c) the principal amount of an indexed security that shall be deemed outstanding shall be the principal face amount of such indexed security at original issuance, unless otherwise provided with respect to such indexed security pursuant such Indenture, and (d) Debt Securities owned by the Company or any other obligor upon the Debt Securities or any affiliate of the Company or of such other obligor shall be disregarded.

        The Indentures will contain provisions for convening meetings of the holders of Debt Securities of a series. A meeting will be permitted to be called at any time by the applicable Trustee, and also, upon

34

request, by the Company or the holders of at least 10% in principal amount of the outstanding Debt Securities of such series, in any such case upon notice given as provided in such Indenture. Except for any consent that must be given by the holder of each Debt Security affected by certain modifications and amendments of an Indenture, any resolution presented at a meeting or adjourned meeting duly reconvened at which a quorum is present may be adopted by the affirmative vote of the holders of a majority in principal amount of the outstanding Debt Securities of that series; provided, however, that, except as referred to above, any resolution with respect to any request, demand, authorization, direction, notice, consent, waiver or other action that may be made, given or taken by the holders of a specified percentage, which is less than a majority, in principal amount of the outstanding Debt Securities of a series may be adopted at a meeting or adjourned meeting or adjourned meeting duly reconvened at which a quorum is present by the affirmative vote of the holders of such specified percentage in principal amount of the outstanding Debt Securities of that series. Any resolution passed or decision taken at any meeting of holders of Debt Securities of any series duly held in accordance with an Indenture will be binding on all holders of Debt Securities of that series. The quorum at any meeting called to adopt a resolution, and at any reconvened meeting, will be persons holding or representing a majority in principal amount of the outstanding Debt Securities of a series; provided, however, that if any action is to be taken at such meeting with respect to a consent or waiver which may be given by the holders of not less than a specified percentage in principal amount of the outstanding Debt Securities of a series, the persons holding or representing such specified percentage in principal amount of the outstanding Debt Securities of such series will constitute a quorum.

        Notwithstanding the foregoing provisions, the Indentures will provide that if any action is to be taken at a meeting of holders of Debt Securities of any series with respect to any request, demand, authorization, direction, notice, consent, waiver and other action that such Indenture expressly provides may be made, given or taken by the holders of a specified percentage in principal amount of all outstanding Debt Securities affected thereby, or of the holders of such series and one or more additional series: (a) there shall be no minimum quorum requirement for such meeting, and (b) the principal amount of the outstanding Debt Securities of such series that vote in favor of such request, demand, authorization, direction, notice, consent, waiver or other action shall be taken into account in determining whether such request, demand, authorization, direction, notice, consent, waiver or other action has been made, given or taken under such Indenture.

Subordination

        Unless otherwise provided in the applicable prospectus supplement, Subordinated Securities will be subject to the following subordination provisions.

        Upon any distribution to creditors of the Company in a liquidation, dissolution or reorganization, the payment of the principal of and interest on any Subordinated Securities will be subordinated to the extent provided in the applicable Indenture in right of payment to the prior payment in full of all Senior Debt (as defined below), but the obligation of the Company to make payments of the principal of and interest on such Subordinated Securities will not otherwise be affected. No payment of principal or interest will be permitted to be made on Subordinated Securities at any time if a default on Senior Debt exists that permits the holders of such Senior Debt to accelerate its maturity and the default is the subject of judicial proceedings or the Company receives notice of the default. After all Senior Debt is paid in full and until the Subordinated Securities are paid in full, holders will be subrogated to the rights of holders of Senior Debt to the extent that distributions otherwise payable to holders have been applied to the payment of Senior Debt. The Subordinated Indenture will not restrict the amount of Senior Indebtedness or other indebtedness of the Company and its subsidiaries. As a result of these subordination provisions, in the event of a distribution of assets upon insolvency, holders of Subordinated Indebtedness may recover less, ratably, than general creditors of the Company.

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        Senior Debt will be defined in the applicable Indenture as the principal of and interest on, or substantially similar payments to be made by the Company in respect of, the following, whether outstanding at the date of execution of the applicable Indenture or thereafter incurred, created or assumed:(a) indebtedness of the Company for money borrowed or represented by purchase-money obligations, (b) indebtedness of the Company evidenced by notes, debentures, or bonds, or other securities issued under the provisions of an indenture, fiscal agency agreement or other agreement, (c) obligations of the Company as lessee under leases of property either made as part of any sale and leaseback transaction to which the Company is a party or otherwise, (d) indebtedness of partnerships and joint ventures which is included in the consolidated financial statements of the Company, (e) indebtedness, obligations and liabilities of others in respect of which the Company is liable contingently or otherwise to pay or advance money or property or as guarantor, endorser or otherwise or which the Company has agreed to purchase or otherwise acquire, and (f) any binding commitment of the Company to fund any real estate investment or to fund any investment in any entity making such real estate investment, in each case other than (1) any such indebtedness, obligation or liability referred to in clauses (a) through (f) above as to which, in the instrument creating or evidencing the same pursuant to which the same is outstanding, it is provided that such indebtedness, obligation or liability is not superior in right of payment to the Subordinated Securities or ranks pari passu with the Subordinated Securities, (2) any such indebtedness, obligation or liability which is subordinated to indebtedness of the Company to substantially the same extent as or to a greater extent than the Subordinated Securities are subordinated, and (3) the Subordinated Securities. There will not be any restrictions in any Indenture relating to Subordinated Securities upon the creation of additional Senior Debt.

        If this prospectus is being delivered in connection with a series of Subordinated Securities, the accompanying prospectus supplement or the information incorporated herein by reference will set forth the approximate amount of Senior Debt outstanding as of the end of the Company's most recent fiscal quarter.

Discharge, Defeasance and Covenant Defeasance

        Unless otherwise indicated in the applicable prospectus supplement, the Company will be permitted, at its option, to discharge certain obligations to holders of any series of Debt Securities issued under any Indenture that have not already been delivered to the applicable Trustee for cancellation and that either have become due and payable or will become due and payable within one year (or scheduled for redemption within one year) by irrevocably depositing with the applicable Trustee, in trust, funds in such currency or currencies, currency unit or units or composite currency or currencies in which such Debt Securities are payable in an amount sufficient to pay the entire indebtedness on such Debt Securities in respect of principal (and premium or Make-Whole Amount, if any) and interest to the date of such deposit (if such Debt Securities have become due and payable) or to the stated maturity or redemption date, as the case may be.

        The Indentures will provide that, unless otherwise indicated in the applicable prospectus supplement, the Company may elect either (a) to defease and be discharged from any and all obligations with respect to such Debt Securities (except for the obligation to pay additional amounts, if any, upon the occurrence of certain events of tax, assessment or governmental charge with respect to payments on such Debt Securities and the obligations to register the transfer or exchange of such Debt Securities, to replace temporary or mutilated, destroyed, lost or stolen Debt Securities, to maintain an office or agency in respect of such Debt Securities, to hold moneys for payment in trust and, with respect to Subordinated Debt Securities which are convertible or exchangeable, the right to convert or exchange) ("defeasance") or (b) to be released from its obligations with respect to such Debt Securities under the applicable Indenture or, if provided in the applicable prospectus supplement, its obligations with respect to any other covenant, and any omission to comply with such obligations shall not

36

constitute an Event of Default with respect to such Debt Securities ("covenant defeasance"), in either case upon the irrevocable deposit by the Company with the applicable Trustee, in trust, of an amount, in such currency or currencies, currency unit or units or composite currency or currencies in which such Debt Securities are payable at stated maturity, or Government Obligations (as defined below), or both, applicable to such Debt Securities, which through the scheduled payment of principal and interest in accordance with their terms will provide money in an amount sufficient to pay the principal of (and premium or Make-Whole Amount, if any) and interest on such Debt Securities, and any mandatory sinking fund or analogous payments thereon, on the scheduled due dates therefor.

        Such a trust will only be permitted to be established if, among other things, the Company has delivered to the applicable Trustee an opinion of counsel (as specified in the applicable Indenture) to the effect that the holders of such Debt Securities will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such defeasance or covenant defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance or covenant defeasance had not occurred, and such opinion of counsel, in the case of defeasance, will be required to refer to and be based upon a ruling received from or published by the Internal Revenue Service or a change in applicable United States federal income tax law occurring after the date of the Indenture. In the event of such defeasance, the holders of such Debt Securities would thereafter be able to look only to such trust fund for payment of principal (and premium or Make-Whole Amount, if any) and interest.

        "Government Obligations" means securities that are (a) direct obligations of the United States of America or the government which issued the foreign currency in which the Debt Securities of a particular series are payable, for the payment of which its full faith and credit is pledged or (b) obligations of a person controlled or supervised by and acting as an agency or instrumentality of the United States of America or such government which issued the foreign currency in which the Debt Securities of such series are payable, the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America or such other government, which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank or trust company as custodian with respect to any such Government Obligation or a specific payment of interest on or principal of any such Government Obligation held by such custodian for the account of the holder of a 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 the custodian in respect of the Government Obligation or the specific payment of interest on or principal of the Government Obligation evidenced by such depository receipt.

        Unless otherwise provided in the applicable prospectus supplement, if after the Company has deposited funds and/or Government Obligations to effect defeasance or covenant defeasance with respect to Debt Securities of any series, (a) the holder of a Debt Security of such series is entitled to, and does, elect pursuant to the applicable Indenture or the terms of such Debt Security to receive payment in a currency, currency unit or composite currency other than that in which such deposit has been made in respect of such Debt Security, or (b) a Conversion Event (as defined below) occurs in respect of the currency, currency unit or composite currency in which such deposit has been made, the indebtedness represented by such Debt Security will be deemed to have been, and will be, fully discharged and satisfied through the payment of the principal of (and premium or Make-Whole Amount, if any) and interest on such Debt Security as they become due out of the proceeds yielded by converting the amount so deposited in respect of such Debt Security into the currency, currency unit or composite currency in which such Debt Security becomes payable as a result of such election or such cessation of usage based on the applicable market exchange rate. "Conversion Event" means the cessation of use of (i) a currency, currency unit or composite currency both by the government of the country which issued such currency and for the settlement of transactions by a central bank or other

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public institutions of or within the international banking community, (ii) the ECU both within the European Monetary System and for the settlement of transactions by public institutions of or within the European Communities or (iii) any currency unit or composite currency other than the ECU for the purposes for which it was established. Unless otherwise provided in the applicable prospectus supplement, all payments of principal of (and premium or Make-Whole Amount, if any) and interest on any Debt Security that is payable in a foreign currency that ceases to be used by its government of issuance shall be made in U.S. dollars.

        In the event the Company effects covenant defeasance with respect to any Debt Securities and such Debt Securities are declared due and payable because of the occurrence of any Event of Default, the amount in such currency, currency unit or composite currency in which such Debt Securities are payable, and Government Obligations on deposit with the applicable Trustee, will be sufficient to pay amounts due on such Debt Securities at the time of their stated maturity but may not be sufficient to pay amounts due on such Debt Securities at the time of the acceleration resulting from such of Event of Default. However, the Company would remain liable to make payment of such amounts due at the time of acceleration.

        The applicable prospectus supplement may further describe the provisions, if any, permitting such defeasance or covenant defeasance, including any modifications to the provisions described above, with respect to the Debt Securities of or within a particular series.

Conversion Rights

        The terms and conditions, if any, upon which the Debt Securities are convertible into common stock or preferred stock of the Company will be set forth in the applicable prospectus supplement relating thereto. Such terms will include whether such Debt Securities are convertible into shares of common stock or preferred stock of the Company, the conversion price (or manner of calculation thereof), the conversion period, provisions as to whether conversion will be at the option of the holders or the Company, the events requiring an adjustment of the conversion price and provisions affecting conversion in the event of the redemption of such Debt Securities and any restrictions on conversion, including restrictions directed at maintaining the Company's REIT status.

Book-Entry System

        The Debt Securities of a series may be issued in whole or in part in the form of one or more global securities ("Global Securities") that will be deposited with, or on behalf of, a depository (the "Depository") identified in the applicable prospectus supplement. Global Securities, if any, issued in the United States are expected to be deposited with the Depository Trust Company, as Depository. Global Securities may be issued in fully registered form and may be issued in either temporary or permanent form. Unless and until it is exchanged in whole or in part for the individual Debt Securities represented thereby, a Global Security may not be transferred except as a whole by the Depository for such Global Security to a nominee of such Depository or by a nominee of such Depository to such Depository or another nominee of such Depository or by such Depository or any nominee of such Depositor to a successor Depository or any nominee of such successor.

        The specific terms of the depository arrangement with respect to a series of Debt Securities will be described in the applicable prospectus supplement. The Company expects that unless otherwise indicated in the applicable prospectus supplement, the following provisions will apply to depository arrangements.

        The certificates representing the Debt Securities will be issued in the form of one or more fully registered Global Securities without coupons. It is expected that the Debt Securities initially will be represented by a single permanent global certificate in definitive fully registered form (the "Global Note") and will be deposited with, or on behalf of, The Depository Trust Company ("DTC") and

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registered in the name of Cede & Co., as nominee of DTC. and that the Debt Securities will not be issuable in definitive form. Unless and until it is exchanged in whole or in part for the individual Notes represented thereby, interests in the Global Note may not be transferred except as a whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC or by DTC or any nominee of DTC to a successor depository or any nominee of such successor.

        DTC has advised the Company of the following information regarding DTC: DTC is a limited purpose trust company created to hold securities for its participating organizations (collectively, the "Participants" or "DTC's Participants") and to facilitate the clearance and settlement of transactions in such securities between Participants through electronic book-entry changes in the accounts of its Participants. DTC's Participants include securities brokers and dealers, banks and trust companies, clearing corporations and certain other organizations. Access to DTC's system is also available to other entities such as banks, brokers, dealers and trust companies (collectively, the "Indirect Participants" or "DTC's Indirect Participants") that clear through or maintain a custodial relationship with a Participant, either directly or indirectly. Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through DTC's Participants or DTC's Indirect Participants.

        The Company expects that, pursuant to procedures established by DTC, ownership of the Notes evidenced by the Global Note will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by DTC (with respect to the interests of DTC's Participants), DTC's Participants and DTC's Indirect Participants. Neither the Company nor the Trustee will have any responsibility or liability for any aspect of the records of DTC or for maintaining, supervising or reviewing any records of DTC relating to the Notes. Holders are advised that the laws of some states require that certain persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer Notes evidenced by Global Securities will be limited to such extent.

        So long as the holder of the Global Note is the registered owner of any Notes, the holder of the Global Note will be considered the sole holder under the Indenture of any Notes evidenced by the Global Note. Beneficial owners of Notes evidenced by the Global Note will not be considered the owners or holders thereof under the Indenture for any purpose, including with respect to the giving of any direction, instructions or approvals to the Trustee thereunder. Accordingly, each person owning a beneficial interest in the Global Note must rely on the procedures of DTC and, if such person is not a Participant, on the procedures of the Participant through which such person owns its interests, to exercise any rights of a holder under the Indenture. The Company understands that, under existing industry practice, if it requests any action of holders or if an owner of a beneficial interest in the Global Note desires to give or take any action which a holder is entitled to give or take under the Indenture, DTC would authorize the Participants holding the relevant beneficial interest to give or take such action, and such Participants would authorize beneficial owners through such Participants to give or take such actions or would otherwise act upon the instructions of beneficial owners holding through them.

        Payments in respect of the principal of, premium, if any, and interest on, any Notes registered in the name of the holder of the Global Note on the applicable record date will be payable by the Trustee to or at the direction of the holder of the Global Note in its capacity as the registered holder under the Indenture. Under the terms of the Indenture, the Company and the Trustee may treat the persons in whose names Notes, including the Global Note, are registered as the owners thereof for the purpose of receiving such payments. Consequently, neither the Company nor the Trustee has or will have any responsibility or liability for the payment of such amounts to beneficial owners of Notes (including principal, premium, if any, and interest). The Company believes, however, that it is currently the policy of DTC to immediately credit the accounts of the relevant Participants with such payments, in amounts proportionate to their respective holdings of beneficial interests in the relevant security as shown on the records of DTC. Payments by DTC's Participants and DTC's Indirect Participants to the beneficial

39

owners of Notes will be governed by standing instructions and customary practice and will be the responsibility of DTC's Participants for DTC's Indirect Participants.

        Neither the Company nor the Trustee will be liable for any delay by the holder of the Global Note or DTC in identifying the beneficial owners of Notes and the Company and the Trustee may conclusively rely on, and will be protected in relying on, instructions from the holder of the Global Note or DTC for all purposes. The rules applicable to DTC and its Participants are on file with the SEC.

        If a Depository for any Debt Securities is at any time unwilling, unable or ineligible to continue as depository and a successor depository is not appointed by the Company within 90 days, the Company will issue individual Debt Securities in exchange for the Global Security representing such Debt Securities. In addition, the Company may at any time and in its sole discretion, subject to any limitations described in the applicable prospectus supplement, determine not to have any of such Debt Securities represented by one or more Global Securities and in such event will issue individual Debt Securities in exchange for the Global Security or Securities representing such Debt Securities. Individual Debt Securities so issued will be issued in denominations of $1,000 and integral multiple thereof.

Payment

        Unless otherwise specified in the applicable prospectus supplement, the principal of (and applicable premium or Make-Whole Amount, if any) and interest on any series of Debt Securities will be payable at the corporate trust office of the Trustee, the address of which will be stated in the applicable prospectus supplement; provided that, at the option of the Company, payment of interest may be made by check mailed to the address of the person entitled thereto as it appears in the applicable register for such Debt Securities or by wire transfer of funds to such person at an account maintained within the United States.

        All moneys paid by the Company to a paying agent or a Trustee for the payment of the principal of or any premium, Make-Whole Amount or interest on any Debt Security which remain unclaimed at the end of two years after such principal, premium, Make-Whole Amount or interest has become due and payable will be repaid to the Company, and the holder of such Debt Security thereafter may look only to the Company for payment thereof.

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SELECTED PROVISIONS OF MARYLAND LAW AND OUR CHARTER AND BYLAWS

        The following summary of selected provisions of the Maryland General Corporation Law, as amended from time to time, and of our charter and bylaws does not purport to be complete and is subject to and qualified in its entirety by reference to Maryland law and to our charter and bylaws, copies of which are filed as exhibits to the registration statement of which this prospectus is a part.

Removal of Directors

        Our charter provides that a director may be removed from office at any time but only by the affirmative vote of the holders of at least two-thirds of the votes of the shares entitled to be cast in the election of directors.

Business Combinations

        Under the Maryland General Corporation Law, some business combinations, including a merger, consolidation, share exchange or, in some circumstances, an asset transfer or issuance or reclassification of equity securities, between:

•

a Maryland corporation, and



•

any person who beneficially owns 10% or more of the voting power of the corporation's shares, or



•

an affiliate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then outstanding voting stock of the corporation, also known as an "interested stockholder," or



•

an affiliate of an interested stockholder, are prohibited for five years after the most recent date on which the interested stockholder becomes an "interested stockholder."

        Thereafter, any of these business combinations must be recommended by the corporation's board of directors and approved by the affirmative vote of at least:

•

80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation, voting together as a single voting group; and



•

two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than voting stock held by the interested stockholder with whom, or with whose affiliate, the business combination is to be effected, unless, among other conditions, the corporation's common stockholders receive a minimum price, as defined in the Maryland General Corporation Law, for their shares and the consideration is received in cash or in the same form as previously paid by the interested stockholder for its shares.

        The Maryland General Corporation Law does not apply, however, to business combinations that are approved or exempted by the board of directors of the corporation prior to the time that the interested stockholder becomes an "interested stockholder."

        Our board of directors has adopted a resolution exempting us from the business combination provisions of the Maryland General Corporation Law. The resolution is irrevocable and cannot be repealed or modified by our board of directors at any time in the future.

Control Share Acquisitions

        The Maryland General Corporation Law provides that "control shares" of a Maryland corporation acquired in a "control share acquisition" have no voting rights except to the extent approved by a vote of two-thirds of the votes entitled to be cast on the matter, excluding shares of stock owned by the

41

acquiror, by officers or by directors who are employees of the corporation. "Control shares" are voting shares of stock which, if aggregated with all other shares of stock previously acquired by the acquiror or in respect of which the acquiror is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquiror to exercise voting power in electing directors within one of the following ranges of voting power:

•

one-tenth or more but less than one-third;



•

one-third or more but less than a majority; or



•

a majority or more of all voting power.

        Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval. A "control share acquisition" means the acquisition of control shares, subject to some exceptions.

        A person who has made or proposes to make a control share acquisition, upon satisfaction of specific conditions, including an undertaking to pay expenses, may compel the board of directors of the corporation to call a special meeting of stockholders to be held within 50 days of demand to consider the voting rights of the shares. If no request for a meeting is made, the corporation may itself present the question at any stockholders meeting.

        If voting rights are not approved at the meeting or if the acquiring person does not deliver an acquiring person statement as required by the statute, then, subject to specific conditions and limitations, the corporation may redeem any or all of the control shares, except those for which voting rights have previously been approved, for fair value determined, without regard to the absence of voting rights for the control shares, as of the date of the last control share acquisition by the acquiror or of any meeting of stockholders at which the voting rights of the shares are considered and not approved. If voting rights for control shares are approved at a stockholders' meeting and the acquiror becomes entitled to vote a majority of the shares entitled to vote, all other stockholders may exercise appraisal rights. The fair value of the shares as determined for purposes of the appraisal rights may not be less than the highest price per share paid by the acquiror in the control share acquisition.

        The control share acquisition statute does not apply:

•

to shares acquired in a merger, consolidation or share exchange if the corporation is a party to the transaction; or



•

to acquisitions approved or exempted by the charter or bylaws of the corporation.

        Our bylaws contain a provision exempting shares of our common stock from the control share acquisition statute any and all acquisitions by any person. We may amend or eliminate this provision at any time in the future.

Interested Party Transactions

        Pursuant to our charter and bylaws, we will not enter into any transactions or agreements with any of our directors, officers or affiliates except as approved by a majority of our board of directors, including a majority of the independent directors. We have no restrictions on any of our directors, officers or affiliates from engaging for their own account in business activities of the types conducted or to be conducted by us and our affiliates.

Amendments to Our Charter

        We reserve the right to make amendments to our charter, including any amendment which alters the contract rights of any shares of outstanding stock, as currently provided in our charter. Our charter may be amended only by the affirmative vote of holders of shares entitled to cast not less than a

42

majority of all the votes entitled to be cast on the matter. Provisions on removal of directors and other provisions, however, may be amended only by the affirmative vote of holders of shares entitled to cast not less than two-thirds of all the votes entitled to be cast in the election of directors.

Duration and Dissolution

        Our charter provides that we shall have a perpetual duration. Our dissolution must be approved by the affirmative vote of holders of shares entitled to cast not less than two-thirds of all the votes entitled to be cast on the matter.

Advance Notice of Director Nominations and New Business

        Our bylaws provide that:

•

with respect to an annual meeting of our stockholders, nominations of persons for election to our board of directors and the proposal of business to be considered by our stockholders may be made only (i) pursuant to our notice of the meeting, (ii) by our board of directors, or (iii) by a stockholder who is entitled to vote at the meeting and has complied with the advance notice procedures set forth in the bylaws; and



•

with respect to special meetings of stockholders, only the business specified in our notice of meeting may be brought before the meeting of stockholders and nominations of persons for election to our board of directors may be made only (i) pursuant to our notice of the meeting, (ii) by our board of directors, or (iii) provided that our board of directors has determined that directors shall be elected at the meeting by holders of shares entitled to cast not less than 50% of the votes entitled to be cast at such meeting who comply with the advance notice provisions set forth in the bylaws.

Possible Anti-Takeover Effect of Selected Provisions of Maryland Law and of Our Charter and Bylaws

        The control share acquisition provisions of the Maryland General Corporation Law, if we decide in the future to rescind our election to be exempt therefrom, the provisions of our charter on removal of directors and the advance notice provisions could delay, defer or prevent a change in control of our company or other transaction that might involve a premium price for holders of our common stock or otherwise be in their best interest.

Reports to Stockholders

        We will furnish our stockholders with annual reports containing audited financial statements and such other periodic reports as we may determine to furnish or as may be required by law.

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FEDERAL INCOME TAX CONSIDERATIONS

        The following discussion summarizes particular United States federal income tax considerations regarding our qualification and taxation as a REIT and particular United States federal income tax consequences resulting from the acquisition, ownership and disposition of our securities. This discussion is based on current law and assumes that we have qualified at all times throughout our existence, and will continue to qualify, as a REIT for United States federal income tax purposes. The following discussion is not exhaustive of all possible tax considerations. This summary neither gives a detailed discussion of any state, local or foreign tax considerations nor discusses all of the aspects of United States federal income taxation that may be relevant to you in light of your particular circumstances or to particular types of holders of our securities, including insurance companies, tax-exempt entities, financial institutions or broker-dealers, foreign corporations or partnerships, and persons who are not citizens or residents of the United States, subject to special treatment under the United States federal income tax laws. This discussion assumes that you will hold our securities as a "capital asset," generally property held for investment, under the tax code.

        You are urged to consult with your own tax advisor regarding the specific consequences to you of the purchase, ownership and sale of securities in an entity electing to be taxed as a REIT, including the federal, state, local, foreign and other tax considerations of such purchase, ownership, sale and election and the potential changes in applicable tax laws.

General

        Our qualification and taxation as a REIT depends upon our ability to continue to meet the various qualification tests imposed under the tax code and discussed below relating to our actual annual operating results, asset diversification, distribution levels and diversity of stock ownership. Accordingly, the actual results of our operations for any particular taxable year may not satisfy these requirements. Further, the anticipated income tax treatment described in this prospectus may be changed, perhaps retroactively, by legislative, administrative or judicial action at any time.

        We have made an election to be taxed as a REIT under the tax code commencing with our taxable year ended December 31, 1997. We currently expect to continue operating in a manner that will permit us to maintain our qualification as a REIT. All qualification requirements for maintaining our REIT status, however, may not have been or will not continue to be met.

        So long as we qualify for taxation as a REIT, we generally will not be required to pay federal corporate income taxes on our net income that is currently distributed to our stockholders. This treatment substantially eliminates the "double taxation" that ordinarily results from investment in a corporation. Double taxation means taxation once at the corporate level when income is earned and once again at the stockholder level when this income is distributed. We will be required to pay federal income tax, however, as follows:

•

we will be required to pay tax at regular corporate rates on any undistributed "real estate investment trust taxable income," including undistributed net capital gains;



•

we may be required to pay the "alternative minimum tax" on our items of tax preference;



•

if we have (a) net income from the sale or other disposition of "foreclosure property" which is held primarily for sale to customers in the ordinary course of business, or (b) other nonqualifying income from foreclosure property, we will be required to pay tax at the highest corporate rate on this income. Foreclosure property is generally defined as property acquired through foreclosure or after a default on a loan secured by the property or a lease of the property.

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        We will be required to pay a 100% tax on any net income from prohibited transactions. Prohibited transactions are, in general, sales or other taxable dispositions of property, other than foreclosure property, held primarily for sale to customers in the ordinary course of business. Under existing law, whether property is held as inventory or primarily for sale to customers in the ordinary course of a trade or business depends on all the facts and circumstances surrounding the particular transaction.

        If we fail to satisfy the 75% gross income test or the 95% gross income test discussed below, but nonetheless maintain our qualification as a REIT because certain other requirements are met, we will be subject to a tax equal to:

•

the greater of (i) the amount by which 75% of our gross income exceeds the amount qualifying under the 75% gross income test described below, and (ii) the amount by which 90% of our gross income exceeds the amount qualifying under the 95% gross income test described below, multiplied by



•

a fraction intended to reflect our profitability.

        We will be required to pay a 4% excise tax on the excess of the required distribution over the amounts actually distributed if we fail to distribute during each calendar year at least the sum of:

•

85% of our real estate investment trust ordinary income for the year;



•

95% of our real estate investment trust capital gain net income for the year; and



•

any undistributed taxable income from prior periods.

        If we acquire any asset from a corporation which is or has been taxed as a C corporation under the tax code in a transaction in which the basis of the asset in our hands is determined by reference to the basis of the asset in the hands of the C corporation, and we subsequently recognize gain on the disposition of the asset during the ten-year period beginning on the date on which we acquired the asset, then we will be required to pay tax at the highest regular corporate tax rate on this gain to the extent of the excess of:

•

the fair market value of the asset, over



•

our adjusted basis in the asset, in each case determined as of the date on which we acquired the asset. A C corporation is generally defined as a corporation required to pay full corporate-level tax. The results described in this paragraph with respect to the recognition of gain assume that we will make an election under IRS Notice 88-19 or Treasury Regulation Section 1.337(d)-5T.

Requirements for Qualification as a REIT

        The tax code defines a REIT as a corporation, trust or association:

•

that is managed by one or more trustees or directors;



•

that issues transferable shares or transferable certificates to evidence beneficial ownership;



•

that would be taxable as a domestic corporation but for tax code Sections 856 through 860;



•

that is not a financial institution or an insurance company within the meaning of the tax code;



•

that is beneficially owned by 100 or more persons;



•

not more than 50% in value of the outstanding stock of which is owned, actually or constructively, by five or fewer individuals, including specified entities, during the last half of each taxable year; and



•

that meets other tests, described below, regarding the nature of its income and assets and the amount of its distributions.

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        The tax code provides that all of the first four conditions stated above must be met during the entire taxable year and that the fifth condition must be met during at least 335 days of a taxable year of twelve months, or during a proportionate part of a taxable year of less than twelve months. The fifth and sixth conditions do not apply until after the first taxable year for which an election is made to be taxed as a REIT.

        For purposes of the sixth condition, pension funds and other specified tax-exempt entities generally are treated as individuals, except that a "look-through" exception applies with respect to pension funds.

Stock Ownership Tests

        Our stock must be beneficially held by at least 100 persons, the "100 Stockholder Rule," and no more than 50% of the value of our stock may be owned, directly or indirectly, by five or fewer individuals at any time during the last half of the taxable year, the "5/50 Rule." For purposes of the 100 Stockholder Rule only, most tax-exempt entities, including employee benefit trusts and charitable trusts, but excluding trusts described in Section 401(a) of the tax code and exempt under Section 501(a) of the tax code, are generally treated as individuals for these purposes. These stock ownership requirements must be satisfied in each taxable year other than the first taxable year for which an election is made to be taxed as a REIT. We are required to solicit information from certain of our record stockholders to verify actual stock ownership levels, and our charter provides for restrictions regarding the transfer of our stock in order to aid in meeting the stock ownership requirements. If we were to fail either of the stock ownership tests, we would generally be disqualified from REIT status, unless, in the case of the 5/50 Rule requirement, the "good faith" exemption under the tax code was available.

Income Tests

        We must satisfy two gross income requirements annually to maintain our qualification as a REIT:

•

We must derive directly or indirectly at least 75% of our gross income, excluding gross income from prohibited transactions, from specified real estate sources, including rental income, interest on obligations secured by mortgages on real property or on interests in real property, gain from the disposition of "qualified real estate assets," i.e., interests in real property, mortgages secured by real property or interests in real property, and some other assets, and income from certain types of temporary investments, the 75% gross income test; and



•

We must derive at least 95% of our gross income, excluding gross income from prohibited transactions, from (a) the sources of income that satisfy the 75% gross income test, (b) dividends, interest and gain from the sale or disposition of stock or securities, including some interest rate swap and cap agreements, options, futures and forward contracts entered into to hedge variable rate debt incurred to acquire qualified real estate assets, or (c) any combination of the foregoing.

        For purposes of the 75% and 95% gross income tests, a REIT is deemed to have earned a proportionate share of the income earned by any partnership, or any limited liability company treated as a partnership for federal income tax purposes, in which it owns an interest, which share is determined by reference to its capital interest in such entity, and is deemed to have earned the income earned by any qualified REIT subsidiary.

        Interest earned by a REIT does not qualify as income meeting the 75% or 95% gross income tests if the determination of all or some of the amount of interest depends in any way on the income or profits of any person. Interest will not be disqualified from meeting such tests, however, solely by reason of being based on a fixed percentage or percentages of receipts or sales.

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        If we fail to satisfy one or both of the 75% or 95% gross income tests for any taxable year, we may nevertheless qualify as a REIT for the year if we are entitled to relief under the tax code. Generally, we may avail ourselves to the relief provisions if:

•

our failure to meet these tests was due to reasonable cause and not due to willful neglect;



•

we attach a schedule of the sources of our income to our federal income tax return; and



•

any incorrect information on the schedule was not due to fraud with intent to evade tax.

        We may not, however, be entitled to the benefit of these relief provisions in all circumstances. If these relief provisions do not apply to a particular set of circumstances, we will not qualify as a REIT.

Asset Tests

        At the close of each quarter of our taxable year, we must satisfy four tests relating to the nature and diversification of its assets:

•

at least 75% of the value of our total assets must be represented by qualified real estate assets, including mortgage loans, cash, cash items and government securities;



•

not more than 25% of our total assets may be represented by securities, other than those securities included in the 75% asset test;



•

of the investments included in the 25% asset class, the value of any one issuer's securities may not exceed 5% of the value of our total assets, and we may not own more than 10% by vote or value of any one issuer's outstanding securities, in each case except with respect to stock of any "taxable REIT subsidiaries"; and



•

the value of the securities we own in any taxable REIT subsidiaries may not exceed 20% of the value of its total assets.

        For these purposes, we will be deemed to own a proportionate share of the assets of any partnership, or any limited liability company treated as a partnership for federal income tax purposes, in which we own an interest, which share is determined by reference to our capital interest in the entity, and will be deemed to own the assets owned by any qualified REIT subsidiary.

        After initially meeting the asset tests at the close of any quarter, we will not lose our status as a REIT for failure to satisfy the asset tests at the end of a later quarter solely by reason of changes in asset values. If we fail to satisfy the asset tests because we acquire securities or other property during a quarter, we can cure this failure by disposing of sufficient nonqualifying assets within 30 days after the close of that quarter. For this purpose, an increase in our interests in any partnership or limited liability company in which we own an interest will be treated as an acquisition of a portion of the securities or other property owned by that partnership or limited liability company.

Annual Distribution Requirements

        To maintain our qualification as a REIT, we are required to distribute dividends, other than capital gain dividends, to our stockholders in an amount at least equal to the sum of:

•

90% of our "REIT taxable income," and



•

90% of our after tax net income, if any, from foreclosure property, minus



•

the excess of the sum of specified items of our noncash income items over 5% of "REIT taxable income," as described below.

        Our "REIT taxable income" is computed without regard to the dividends paid deduction and net capital gain. In addition, for purposes of this test, non-cash income means income attributable to

47

leveled stepped rents, original issue discount on purchase money debt, or a like-kind exchange that is later determined to be taxable. In addition, if we dispose of any asset we acquired from a corporation which is or has been a C corporation in a transaction in which our basis in the asset is determined by reference to the basis of the asset in the hands of that C corporation, we would be required to distribute at least 90% of the after-tax gain, if any, we recognize on a disposition of the asset within the ten-year period following our acquisition of such asset, to the extent that such gain does not exceed the excess of:

•

the fair market value of the asset on the date we acquired the asset, over



•

our adjusted basis in the asset on the date we acquired the asset.

        We must make these distributions in the taxable year to which they relate, or in the following taxable year if they are declared before we timely file our tax return for that year and paid on or before the first regular dividend payment following the declaration.

        Dividends distributed by us must not be preferential. To avoid being preferential, every stockholder of the class of stock to which a distribution is made must be treated the same as every other stockholder of that class, and no class of stock may be treated other than according to its dividend rights as a class. To the extent that we do not distribute all of our net capital gain, or distribute at least 90%, but less than 100%, of our "REIT taxable income," as adjusted, we will be required to pay tax on this income at regular ordinary and capital gain corporate tax rates.

Failure to Qualify as a REIT

        If we fail to qualify for taxation as a REIT in any taxable year, and the relief provisions of the tax code do not apply, we will be required to pay tax, including any alternative minimum tax, on our taxable income at regular corporate rates. Distributions to stockholders in any year in which we fail to qualify as a REIT will not be deductible by us and we will not be required to distribute any amounts to our stockholders. As a result, we anticipate that our failure to qualify as a REIT would reduce the cash available for distribution to our stockholders. In addition, if we fail to qualify as a REIT, all distributions to stockholders will be taxable at ordinary income rates to the extent of our current and accumulated earnings and profits. In this event, corporate distributees may be eligible for the dividends-received deduction. Unless entitled to relief under specific statutory provisions, we will also be disqualified from taxation as a REIT for the four taxable years following the year in which we lose our qualification.

Taxation of Taxable United States Stockholders

        When we refer to a United States stockholder, we mean a holder of our common or preferred stock that is for federal income tax purposes:

•

an individual who is a citizen or resident of the United States;



•

a corporation created or organized in or under the laws of the United States, any state thereof or the District of Columbia; or



•

a partnership, trust or estate treated as a domestic partnership, trust or estate.

        For any taxable year for which we qualify for taxation as a REIT, amounts distributed to taxable United States stockholders will be taxed as follows.

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Distributions Generally

        Distributions out of our current or accumulated earnings and profits, other than capital gain dividends, will be taxable to United States stockholders as ordinary income. For purposes of determining whether distributions are out of current or accumulated earnings and profits, our earnings and profits will be allocated first to any of our outstanding preferred stock and then to our common stock. Provided that we continue to qualify as a REIT, dividends paid by us will not be eligible for the dividends received deduction generally available to United States stockholders that are corporations. To the extent that we make distributions in excess of current and accumulated earnings and profits, the distributions will be treated as a tax-free return of capital to each United States stockholder, and will reduce the adjusted tax basis which each United States stockholder has in our stock by the amount of the distribution, but not below zero. Distributions in excess of a United States stockholder's adjusted tax basis in its stock will be taxable as capital gain, and will be taxable as long-term capital gain if the stock has been held for more than one year. If we declare a dividend in October, November, or December of any calendar year which is payable to stockholders of record on a specified date in that month and actually pay the dividend during January of the following calendar year, the dividend is deemed to be paid by us and received by the stockholder on December 31st of the previous year. Stockholders may not include in their own income tax returns any of our net operating losses or capital losses.

        For purposes of the discussion in this prospectus, the term "United States stockholder" means a holder of our stock that is, for United States federal income tax purposes:

•

a citizen or resident of the United States;



•

a corporation, partnership, or other entity created or organized in or under the laws of the United States or of any state thereof or in the District of Columbia, unless Treasury regulations provide otherwise;



•

an estate the income of which is subject to United States federal income taxation regardless of its source; or



•

a trust whose administration is subject to the primary supervision of a United States court and which has one or more United States persons who have the authority to control all substantial decisions of the trust.

Capital Gain Distributions

        Distributions designated by us as net capital gain dividends will be taxable to United States stockholders as capital gain income. This capital gain income will be taxable to non-corporate United States stockholders at a 20% or 25% rate based on the characteristics of the asset we sold that produced the gain. United States stockholders that are corporations may be required to treat up to 20% of certain capital gain dividends as ordinary income.

Retention of Net Capital Gains

        We may elect to retain, rather than distribute as a capital gain dividend, our net capital gains. If we were to make this election, we would pay tax on such retained capital gains. In such a case, our stockholders would generally:

•

include their proportionate share of our undistributed net capital gains in their taxable income;



•

receive a credit for their proportionate share of the tax paid by us in respect of our net capital gain; and

49

•

increase the adjusted basis of their stock by the difference between the amount of their share of the our net capital gain and their share of the tax paid by us.

Passive Activity Losses and Investment Interest Limitations

        Distributions we make and gains arising from the sale or exchange of our stock by a United States stockholder will not be treated as passive activity income. As a result, United States stockholders will not be able to apply any "passive losses" against income or gains relating to our stock. Distributions by us, to the extent they do not constitute a return of capital, generally will be treated as investment income for purposes of computing the investment interest limitation under the tax code.

Dispositions of Stock

        A United States stockholder that sells or disposes of our stock will recognize gain or loss for federal income tax purposes in an amount equal to the difference between the amount of cash or the fair market value of any property the stockholder receives on the sale or other disposition and the stockholder's adjusted tax basis in the stock. This gain or loss will be capital gain or loss if the stockholder has held the stock as a capital asset, and will be long-term capital gain or loss if the stockholder has held the stock for more than one year. In general, any loss recognized by a United States stockholder upon the sale or other disposition of our stock that the stockholder has held for six months or less will be treated as long-term capital loss to the extent the stockholder received distributions from us which were required to be treated as long-term capital gains.

Taxation of Tax-Exempt Stockholders

        The IRS has ruled that amounts distributed as a dividend by a REIT will be treated as a dividend by the recipient and excluded from the calculation of UBTI when received by a tax-exempt entity. Based on that ruling, provided that a tax-exempt stockholder has not held our common or preferred stock as "debt financed property" within the meaning of the tax code, i.e., property the acquisition or holding of which is financed through a borrowing by the tax-exempt United States stockholder, the stock is not otherwise used in an unrelated trade or business, and we do not hold a residual interest in a real estate mortgage investment conduit, REMIC, that gives rise to "excess inclusion" income, as defined in Section 860E of the tax code, dividend income on our stock and income from the sale of our stock should not be UBTI to a tax-exempt stockholder. However, if we were to hold residual interests in a REMIC, or if a pool of its assets were to be treated as a "taxable mortgage pool," a portion of the dividends paid to a tax-exempt stockholder may be subject to tax as UBTI. Although we do not believe that we, or any portion of our assets, will be treated as a taxable mortgage pool, no assurance can be given that the IRS might not successfully maintain that such a taxable mortgage pool exists.

        For tax-exempt stockholders that are social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts, and qualified group legal services plans exempt from federal income taxation under Sections 501(c)(7), (c)(9), (c)(17) and (c)(20) of the tax code, respectively, income from an investment in our stock will constitute UBTI unless the organization is able to properly claim a deduction for amounts set aside or placed in reserve for certain purposes so as to offset the income generated by its investment in our stock. Any prospective investors should consult their tax advisors concerning these "set aside" and reserve requirements.

        Notwithstanding the above, however, a portion of the dividends paid by a "pension-held REIT" may be treated as UBTI as to any pension trust which:

•

is described in Section 401(a) of the tax code; and



•

holds more than 10%, by value, of the interests in the REIT.

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        Tax-exempt pension funds that are described in Section 401(a) of the tax code are referred to below as "qualified trusts."

        A REIT is a "pension-held REIT" if:

•

it would not have qualified as a REIT but for the fact that Section 856(h)(3) of the tax code provides that stock owned by a qualified trust shall be treated, for purposes of the 100 Stockholder Rule, described above, as owned by the beneficiaries of the trust, rather than by the trust itself; and



•

either at least one qualified trust holds more than 25%, by value, of the interests in the REIT, or one or more qualified trusts, each of which owns more than 10%, by value, of the interests in the REIT, holds in the aggregate more than 50%, by value, of the interests in the REIT.

        The percentage of any REIT dividend treated as UBTI is equal to the ratio of:

•

the UBTI earned by the REIT, treating the REIT as if it were a qualified trust and therefore subject to tax on UBTI, to



•

the total gross income of the REIT.

        A de minimis exception applies where the percentage is less than 5% for any year. As a result of the limitations on the transfer and ownership of stock contained in our charter, we do not expect to be classified as a "pension-held REIT."

Taxation of Non-United States Stockholders

        The rules governing federal income taxation of "non- United States stockholders" are complex and no attempt will be made herein to provide more than a summary of these rules. "Non- United States stockholders" mean beneficial owners of shares of our common or preferred stock that are not United States stockholders.

        PROSPECTIVE NON-UNITED STATES STOCKHOLDERS SHOULD CONSULT THEIR TAX ADVISORS TO DETERMINE THE IMPACT OF FOREIGN, FEDERAL, STATE, AND LOCAL INCOME TAX LAWS WITH REGARD TO AN INVESTMENT IN OUR STOCK AND OF OUR ELECTION TO BE TAXED AS A REAL ESTATE INVESTMENT TRUST, INCLUDING ANY REPORTING REQUIREMENTS.

        Distributions to non-United States stockholders that are not attributable to gain from our sale or exchange of United States real property interests and that are not designated by us as capital gain dividends or retained capital gains will be treated as dividends of ordinary income to the extent that they are made out of our current or accumulated earnings and profits. These distributions will generally be subject to a withholding tax equal to 30% of the distribution unless an applicable tax treaty reduces or eliminates that tax. However, if income from an investment in our stock is treated as effectively connected with the non-United States stockholder's conduct of a United States trade or business, the non-United States stockholder generally will be subject to federal income tax at graduated rates in the same manner as United States stockholders are taxed with respect to those distributions, and also may be subject to the 30% branch profits tax in the case of a non-United States stockholder that is a corporation. We expect to withhold tax at the rate of 30% on the gross amount of any distributions made to a non-United States stockholder unless:

•

a lower treaty rate applies and any required form, for example IRS Form W-8BEN, evidencing eligibility for that reduced rate is filed by the non-United States stockholder with us; or



•

the non-United States stockholder files an IRS Form W-8ECI with us claiming that the distribution is effectively connected income.

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        Any portion of the dividends paid to non-United States stockholders that is treated as excess inclusion income from a REMIC will not be eligible for exemption from the 30% withholding tax or a reduced treaty rate.

        Distributions in excess of our current and accumulated earnings and profits will not be taxable to non-United States stockholders to the extent that these distributions do not exceed the adjusted basis of the stockholder's stock, but rather will reduce the adjusted basis of that stock. To the extent that distributions in excess of current and accumulated earnings and profits exceed the adjusted basis of a non-United States stockholder's stock, these distributions will give rise to tax liability if the non-United States stockholder would otherwise be subject to tax on any gain from the sale or disposition of its stock, as described below. Because it generally cannot be determined at the time a distribution is made whether or not such distribution may be in excess of current and accumulated earnings and profits, the entire amount of any distribution normally will be subject to withholding at the same rate as a dividend. However, amounts so withheld are refundable to the extent the distribution is subsequently determined to be in excess of our current and accumulated earnings and profits. We are also required to withhold 10% of any distribution in excess of our current accumulated earnings and profits if our stock is not a United States real property interest because we are a domestically controlled REIT, as discussed below. Consequently, although we intend to withhold at a rate of 30% on the entire amount of any distribution, to the extent that we do not do so, any portion of a distribution not subject to withholding at a rate of 30% may be subject to withholding at a rate of 10%.

        For any year in which we qualify as a REIT, distributions that are attributable to gain from the sale or exchange of a United States real property interest, which includes some interests in real property, but generally does not include mortgage loans or mortgage-backed securities, will be taxed to a non-United States stockholder under the provisions of the Foreign Investment in Real Property Tax Act of 1980, or FIRPTA. Under FIRPTA, distributions attributable to gain from sales of United States real property interests are taxed to a non-United States stockholder as if that gain were effectively connected with the stockholder's conduct of a United States trade or business. Non-United States stockholders thus would be taxed at the normal capital gain rates applicable to stockholders, subject to applicable alternative minimum tax and a special alternative minimum tax in the case of nonresident alien individuals. Distributions subject to FIRPTA also may be subject to the 30% branch profits tax in the hands of a non-United States corporate stockholder. We are required to withhold 35% of any distribution that we designate as a United States real property capital gains dividend. The amount withheld is creditable against the non-United States stockholder's FIRPTA tax liability.

        Gains recognized by a non-United States stockholder upon a sale of our common or preferred stock generally will not be taxed under FIRPTA if we are a domestically controlled REIT, which is a REIT in which at all times during a specified testing period less than 50% in value of the stock was held directly or indirectly by non-United States stockholders. Because our common stock is, and our preferred stock may be, publicly traded, we cannot assure our investors that we are or will remain a domestically controlled REIT. Alternatively, a non-United States stockholder that owns, actually or constructively, 5% or less of our stock throughout a specified testing period will not recognize taxable gain on the sale of our stock under FIRPTA if the shares are traded on an established securities market.

        Gains not subject to FIRPTA will be taxable to a non-United States stockholder if:

•

the non-United States stockholder's investment in the common or preferred stock is effectively connected with a trade or business in the United States, in which case the non-United States

stockholder will be subject to the same treatment as United States stockholders with respect to that gain; or

•

the non-United States stockholder is a nonresident alien individual who was present in the United States for 183 days or more during the taxable year and other conditions are met, in

52

which case the nonresident alien individual will be subject to a 20% or 25% tax on the individual's capital gains.

        If gain from the sale of the common or preferred stock were subject to taxation under FIRPTA, the non-United States stockholder would be subject to the same treatment as United States stockholders with respect to that gain, subject to applicable alternative minimum tax, a special alternative minimum tax in the case of nonresident alien individuals, and the possible application of the 30% branch profits tax in the case of non-United States corporations.

Taxation of Holders of Debt Securities

        The following is a general discussion of the tax consequences of holding our debt securities. The following discussion assumes that the debt securities will not be issued with original issue discount and will not be held by tax-exempt or non-United States holders. If these assumptions are not satisfied with respect to any issuance of debt securities, additional tax considerations will be disclosed in the applicable prospectus supplement.

Stated Interest and Market Discount

        Holders of debt securities will be required to include stated interest on the debt securities in gross income for federal income tax purposes in accordance with their methods of accounting for tax purposes. Purchasers of debt securities should be aware that the holding and disposition of debt securities may be affected by the market discount provisions of the tax code. These rules generally provide that if a holder of a debt instrument purchases it at a market discount and subsequently recognizes gain on a disposition of the debt instrument, including a gift or payment on maturity, the lesser of such gain or appreciation, in the case of a gift, and the portion of the market discount that accrued while the debt instrument was held by such holder will be treated as ordinary interest income at the time of the disposition. For this purpose, a purchase at a market discount includes a purchase after original issuance at a price below the debt instrument's stated principal amount. The market discount rules also provide that a holder who acquires a debt instrument at a market discount and who does not elect to include such market discount in income on a current basis may be required to defer a portion of any interest expense that may otherwise be deductible on any indebtedness incurred or maintained to purchase or carry such debt instrument until the holder disposes of the debt instrument in a taxable transaction.

        A holder of a debt instrument acquired at a market discount may elect to include the market discount in income as the discount thereon accrues, either on a straight line basis or, if elected, on a constant interest rate basis. The current inclusion election, once made, applies to all market discount obligations acquired by such holder on or after the first day of the first taxable year to which the election applies and may not be revoked without the consent of the Internal Revenue Service. If a holder of a debt security elects to include market discount in income in accordance with the preceding sentence, the foregoing rules with respect to the recognition of ordinary income on a sale or particular other dispositions of such debt security and the deferral of interest deductions on indebtedness related to such debt security would not apply.

Amortizable Bond Premium

        Generally, if the tax basis of an obligation held as a capital asset exceeds the amount payable at maturity of the obligation, such excess may constitute amortizable bond premium that the holder may elect to amortize under the constant interest rate method and deduct the amortized premium over the period from the holder's acquisition date to the obligation's maturity date. A holder who elects to amortize bond premium must reduce the tax basis in the related obligation by the amount of the aggregate deductions allowable for amortizable bond premium.

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        The amortizable bond premium deduction is treated as an offset to interest income on the related security for federal income tax purposes. Each prospective purchaser is urged to consult his tax advisor as to the consequences of the treatment of such premium as an offset to interest income for federal income tax purposes.

Disposition

        In general, a holder of a debt security will recognize gain or loss upon the sale, exchange, redemption, payment upon maturity or other taxable disposition of the debt security. The gain or loss is measured by the difference between (a) the amount of cash and the fair market value of property received and (b) the holder's tax basis in the debt security as increased by any market discount previously included in income by the holder and decreased by any amortizable bond premium deducted over the term of the debt security. However, the amount of cash and the fair market value received excludes cash or other property attributable to the payment of accrued interest not previously included in income, which amount will be taxable as ordinary income. Subject to the market discount and amortizable bond premium rules above, any such gain or loss will generally be long-term capital gain or loss, provided the debt security was a capital asset in the hands of the holder and had been held for more than one year.

Information Reporting and Backup Withholding

        We report to our United States holders of our securities and the IRS the amount of dividends and interest paid during each calendar year, and the amount of any tax withheld. Under the backup withholding rules, such a holder may be subject to backup withholding at the rate of 31% with respect to dividends and interest paid unless the holder is a corporation or comes within other exempt categories and, when required, demonstrates this fact, or provides a taxpayer identification number or social security number, certifying as to no loss of exemption from backup withholding, and otherwise complies with applicable requirements of the backup withholding rules. A United States holder that does not provide us with its correct taxpayer identification number or social security number may also be subject to penalties imposed by the IRS. A United States holder can meet this requirement by providing us with a properly completed and executed copy of IRS Form W-9 or a substantially similar form. Backup withholding is not an additional tax. Any amount paid as backup withholding will be creditable against the holder's income tax liability. In addition, we may be required to withhold a portion of capital gain distributions to any stockholders who fail to certify their non-foreign status.

        The Economic Growth and Tax Relief Reconciliation Act of 2001, signed into law on June 7, 2001, will reduce the backup withholding tax rate from 31% to 30.5% for amounts distributed after August 6, 2001. The backup withholding tax rate will then be gradually reduced each year until 2006, when the backup-withholding rate will be 28%.

State, Local and Foreign Taxation

        We may be required to pay state, local and foreign taxes in various state, local and foreign jurisdictions, including those in which we transact business or makes investments, and our stockholders may be required to pay state, local and foreign taxes in various state, local and foreign jurisdictions, including those in which they reside. Our state, local and foreign tax treatment may not conform to the federal income tax consequences summarized above. In addition, a stockholder's state, local and foreign tax treatment may not conform to the federal income tax consequences summarized above. Consequently, prospective investors should consult their tax advisors regarding the effect of state, local and foreign tax laws on an investment in our stock.

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ERISA CONSIDERATIONS

        In considering an investment in our securities, a fiduciary of a profit-sharing, pension stock bonus plan or individual retirement account ("IRA"), including a plan for self-employed individuals and their employees or any other employee benefit plan subject to Prohibited Transaction provisions of the Code or the fiduciary responsibility provisions of ERISA (an "ERISA Plan") should consider (a) whether the ownership of our securities is in accordance with the documents and instruments governing such ERISA Plan, (b) whether the ownership of our securities is consistent with the fiduciary's responsibilities and satisfies the requirements of Part 4 of Subtitle B of Title I of ERISA (where applicable) and, in particular, the diversification, prudence and liquidity requirements of Section 404 of ERISA, (c) ERISA's prohibitions in improper delegation of control over, or responsibility for, "plan assets" and ERISA's imposition of co-fiduciary liability on a fiduciary who participates in, permits (by action or inaction) the occurrence of, or fails to remedy a known breach of duty by another fiduciary and (d) the need to value the assets of the ERISA Plan annually.

        In regard to the "plan assets" issue noted in clause (c) above, we believe that our common stock qualifies as a "publicly offered security," and, therefore, the acquisition of our common stock by ERISA Plans should not cause our assets to be treated as assets of such investing ERISA Plans for purposes of the fiduciary responsibility provisions of ERISA or the prohibited transaction provisions of the Code. Upon our issuance of any other class of equity interest, we intend to take reasonable steps to qualify for an exemption under ERISA such that ownership of such interests by ERISA Plans will not cause our assets to be treated as Plan assets. If our assets were determined to be Plan assets, in whole or in part, there could be a number of adverse consequences under ERISA and the Tax Code. For example, if we were to engage in a transaction with a Party-in-Interest with respect to any plan investing in our equity interests, such as the purchase, sale or leasing of real property with a Plan sponsor (or an affiliate), the transaction would be prohibited under ERISA and the Tax Code, and we and such Plan sponsor could be subject to sanctions.

        Fiduciaries of ERISA Plans and IRAs should consult with and rely upon their own advisors in evaluating the consequences under the fiduciary provisions of ERISA and the Code of an investment in common stock or any other class of our stock in light of their own circumstances. The sale of our securities to an ERISA Plan is in no respect a representation by us or any other person that such an investment meets all relevant legal requirements with respect to investments by ERISA Plans generally or that such an investment is appropriate for any particular ERISA Plans or that an exemption from the Plan asset rules is or will be applicable.

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PLAN OF DISTRIBUTION

        We may sell shares of our common stock to or through one or more underwriters or dealers for public offering and sale by or through them, directly to one or more purchasers, through agents or through any combination of these methods of sale. We may also sell directly to investors through subscription rights distributed to our stockholders on a pro rata basis. In connection with any distribution of subscription rights to stockholders, if all of the underlying securities are not subscribed for, we may sell the unsubscribed shares of our common stock directly to third parties or may engage the services of one or more underwriters, dealers or agents, including standby underwriters, to sell the unsubscribed securities to third parties.

        The distribution of shares of our common stock may be effected from time to time in one or more transactions at a fixed price or prices, which may be changed, at market prices prevailing at the time of sale, at prices related to such prevailing market prices, or at negotiated price, any of which may represent a discount from the prevailing market prices.

        In connection with the sale of securities, underwriters or agents may receive compensation from us or from purchasers of shares of our common stock, for whom they may act as agents, in the form of discounts, concessions or commissions. Underwriters may sell securities to or through dealers, and these dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they may act as agents. Underwriters, dealers, and agents that participate in the distribution of securities may be deemed to be underwriters under the Securities Act, and any discounts or commissions they receive from us and any profit on the resale of securities they realize may be deemed to be underwriting discounts and commissions under the Securities Act. Any underwriter or agent will be identified, and any compensation we pay them will be described in the applicable prospectus supplement.

        Unless we specify otherwise in the related prospectus supplement, each class or series of securities will be a new issue with no established trading market, other than shares of our common stock, which is listed on the American Stock Exchange. Any shares of our common stock sold under a prospectus supplement will be listed on the American Stock Exchange, subject to official notice of issuance. It is possible that one or more underwriters may make a market in our common stock, but will not be obligated to do so and may discontinue any market making at any time without notice. Therefore, no assurance can be given as to the liquidity of the trading market for our common stock.

        We may enter into agreements with underwriters, dealers and agents who participate in the distribution of our common stock, and under such agreements these parties may be entitled to indemnification by us against certain liabilities, including liabilities under the Securities Act.

        Underwriters, dealers and agents may engage in transactions with, or perform services for, us, or be our tenants, in the ordinary course of business.

        If indicated in the applicable prospectus supplement, we will authorize dealers acting as our agents to solicit offers by institutions to purchase shares of our common stock from us at the public offering price set forth in the relevant prospectus supplement under delayed delivery contracts providing for payment and delivery on the date or dates stated in the relevant prospectus supplement. Each delayed delivery contract will be for an amount not less than, and the aggregate principal amount of securities sold pursuant to delayed delivery contracts shall be not less nor more than, the respective amounts stated in the applicable prospectus supplement. Institutions with whom delayed delivery contracts, when authorized, may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions, and other institutions, but will in all cases be subject to our approval. Delayed delivery contracts will not be subject to any conditions except (i) the purchase by an institution of the securities covered by its delayed delivery contracts may not at the time of delivery be prohibited under the laws of any jurisdiction in the United States to which the

56

institution is subject, and (ii) if the securities are being sold to underwriters, we will be required to have sold to such underwriters the total principal amount of the securities less the principal amount thereof covered by delayed delivery contracts. The underwriters and any other agents will not have any responsibility in respect of the validity or performance of delayed delivery contracts.

        In order to comply with the securities laws of certain states, if applicable, the shares of our common stock offered hereby will be sold in such jurisdictions only through registered or licensed brokers or dealers. In addition, in certain states securities may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.

        Under applicable rules and regulations under the Exchange Act, under certain circumstances a person engaged in the distribution of the securities offered under this prospectus and the accompanying prospectus supplement may not simultaneously engage in market making activities with respect to our common stock for a specified period prior to the commencement of such distribution.

WHERE YOU CAN FIND MORE INFORMATION

        We are subject to the information requirements of the Securities Exchange Act of 1934, the Exchange Act, and in accordance with the Exchange Act we file reports, proxy statements and other information with the SEC. Our reports, proxy statements and most other information that we file with the SEC may be inspected and copied at the public reference facilities maintained by the SEC at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's regional office located at Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of this material may be obtained by mail from the Public Reference Section of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site that contains our reports, proxy statements and other information as well as documents from other companies that file electronically with the SEC, and the address is http://www.sec.gov.

        This prospectus and the accompanying prospectus supplement are only a part of a registration statement we filed with the SEC under the Securities Act of 1933 and, therefore, they do not include all of the information contained in the registration statement. We have also filed exhibits and schedules to the registration statement that are excluded from this prospectus and the accompanying supplement. Among such exhibits are a number of our material contracts, and you should refer to the applicable exhibit for the complete text of any such contract described in this prospectus. You may inspect or obtain a copy of the registration statement, including exhibits and schedules, as described in the previous paragraph.

        Our internet address is www.apexreit.com. The information contained on our website and on any websites linked by our website, however, is not part of this prospectus and you should not rely on such information in deciding whether to invest in our securities.

        Our common stock is traded on the American Stock Exchange under the symbol "AXM." Our reports and proxy statements are also available for inspection at the offices of the American Stock Exchange at 86 Trinity Place, New York, New York 10006-1881.

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INFORMATION INCORPORATED BY REFERENCE

        The SEC allows us to "incorporate by reference" the information that we file with the SEC. This means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus, except for any information superseded by information in this prospectus. We have filed with the SEC and hereby incorporate by reference:

•

our Annual Report on Form 10-K for the fiscal year ended December 31, 2000;



•

our Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2001, June 30, 2001 and September 30, 2001;



•

our Proxy Statement filed with the SEC on April 30, 2001;



•

the description of our common stock included in our registration statement on Form 8-A, filed with the SEC on November 21, 1997, including the information incorporated therein by reference and including any amendment or reports filed for the purpose of updating such description; and



•

the description of the preferred stock purchase rights under our Shareholder Rights Plan included in our registration statement on Form 8-A, filed with the SEC on July 27, 1999, including the information incorporated therein by reference and including any amendment or reports filed for the purpose of updating such description.

        Any documents we file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus and prior to the termination of the offering will automatically be deemed to be incorporated by reference in this prospectus and to be a part of this prospectus from the date of filing those documents (except that each time we file a new annual report on Form 10-K, any of such documents filed prior to such filing shall no longer be incorporated into this prospectus). Any statement contained in this prospectus or in a document incorporated by reference shall be deemed to be modified or superseded for all purposes to the extent that a statement contained in those documents modifies or supersedes that statement. Any statements so modified or superseded will not be deemed to constitute a part of this prospectus, except as so modified or superseded.

        We will provide without charge to each person to whom this prospectus is delivered, upon written or oral request, a copy of any or all of the documents referred to above which have been or may be incorporated by reference in this prospectus. Requests for these documents should be directed to Ms. Racheal Perry, Apex Mortgage Capital, Inc., 865 South Figueroa Street, 21st floor, Los Angeles, California 90017, telephone: (213) 244-0561.

        You should rely only on the information contained in or incorporated by reference into this prospectus or the accompanying prospectus supplement. Neither we nor any underwriter have authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. The information in this prospectus and the accompanying prospectus supplement is current as of their respective dates.

EXPERTS

        The financial statements incorporated in this prospectus by reference from the Company's Annual Report on Form 10-K for the year ended December 31, 2000 have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report, which is incorporated herein by reference, and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

LEGAL MATTERS

        Selected legal matters, including certain securities matters and federal tax matters, will be passed upon for us by O'Melveny & Myers LLP, San Francisco, California. Certain other legal matters, including the validity of the securities offered in this prospectus and selected legal matters related to Maryland law, will be passed upon for us by Ballard Spahr Andrews & Ingersoll, LLP, Baltimore, Maryland.

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PART II.    INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14.    Other Expenses of Issuance and Distribution

        The following table sets forth the costs and expenses, payable by us in connection with the issuance and distribution of the securities being registered. All amounts are estimates except the SEC registration fee.

Description		Amount
SEC Registration Fee		$	23,000
American Stock Exchange Fees			43,750
National Association of Securities Dealers Fees			14,000
Printing and Engraving			250,000
Legal Fees and Expenses			500,000
Accountants' Fees and Expenses			250,000
Miscellaneous			10,000
	Total	$	1,090,750

ITEM 15.    Indemnification of Directors and Officers.

        Section 2-418 of the Maryland General Corporation Law permits us to indemnify, subject to the exceptions set forth therein, any director or officer of our company who is made a party to any proceeding by reason of service in that capacity to the company, or who is or was serving as such with respect to another entity at the request of our company. The Maryland General Corporation Law also provides that we may purchase insurance on behalf of our directors, officers, employees or agents.

        Our charter and bylaws require us to provide for indemnification of our officers and directors substantially identical in scope to that permitted under Section 2-418 of the Maryland General Corporation Law. Our bylaws also provide that we must pay the expenses of our officers and directors (acting in their capacity as such) incurred in defending any action, suit or proceeding, whether civil, criminal, administrative or investigative, as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of the director or officer to repay all amounts so advanced if it is ultimately determined by a court of appropriate jurisdiction that the officer or director is not entitled to be indemnified by us.

        We have agreed to indemnify our directors and officers to the fullest extent permitted by applicable provisions of the Maryland General Corporation Law, provided that we approve any settlement of a third party action against a director or officer, and subject to limitations for actions initiated by the director or officer, penalties paid by insurance, and violations of Section 16(b) of the Exchange Act and similar laws.

        Our charter limits the liability of our directors and officers for money damages to our Company and our stockholders to the fullest extent permitted from time to time by Maryland law. Maryland law presently permits the liability of directors and officers to a corporation or its stockholders for money damages to be limited, except:

•

to the extent that it is proved that the director or officer actually received an improper benefit or profit in money, property or services; or



•

if a judgment or other final adjudication adverse to the director or officer is entered in a proceeding based on a finding that the director's or officer's action, or failure to act, was the result of active and deliberate dishonesty and was material to the cause of action adjudicated in the proceeding.

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This provision does not limit our ability or our stockholders' ability to obtain other relief, such as an injunction or rescission.

ITEM 16.    Exhibits.

        The following exhibits are part of this Registration Statement on Form S-3 and are numbered in accordance with Item 601 of Regulation S-K.

Exhibit No.	Description
1.1	Form of Underwriting Agreement.*
4.1	Articles of Amendment and Restatement of the Company, as filed with the State Department of Assessments and Taxation of Maryland on November 25, 1997, (previously filed as Exhibit 3.1 to the Company's Registration Statement on Form S-11 (Commission File No. 333-36069) Amendment No. 3 (filed November 21, 1997) and incorporated herein by reference).
4.2	Articles Supplementary relating to the Company's Series A Junior Participating Preferred Stock, as filed with the State Department of Assessments and Taxation of the State of Maryland on July 26, 1999 (previously filed as Exhibit 3.1 to the Company's Current Report on Form 8-K, dated June 30, 1999 and filed July 27, 1999, and incorporated herein by reference).
4.3	Form of Share Certificate for Common Stock (previously filed as Exhibit 4.3 to the Company's Current Report on Form 8-K, dated June 30, 1999 and filed July 27, 1999, and incorporated herein by reference).
4.4	Amended and Restated Bylaws of the Company as currently in effect (previously filed as Exhibit 4.4 to the Company's Registration Statement on Form S-2, Commission File No. 333-73448, Amendment No. 1, filed November 27, 2001 and incorporated herein by reference).
4.5	Shareholder Rights Agreement between the Company and The Bank of New York, as Rights Agent (including as Exhibit B the form of Rights Certificate) (previously filed as Exhibit 4.1 to the Company's Current Report on Form 8-K, dated June 30, 1999 and filed July 27, 1999, and incorporated herein by reference).
4.6	Form of Indenture between Apex Mortgage Capital, Inc. and the Trustee relating to Senior Debt Securities.**
4.7	Form of Indenture between Apex Mortgage Capital, Inc. and the Trustee relating to Subordinated Debt Securities.**
4.8	Form of Certificate of Articles Supplementary designating Preferred Stock.*
4.9	Form of Warrant Agreement.*
5.1	Opinion of Ballard Spahr Andrews & Ingersoll as to legality of the shares being registered.†
8.1	Opinion of O'Melveny & Myers LLP as to certain federal income tax matters.**
12.1	Calculation of Ratios of Earnings to Fixed Charges.†
23.1	Consent of Deloitte & Touche LLP.**
23.2	Consent of O'Melveny & Myers LLP (included within the opinion filed as Exhibit 8.1).**
23.3	Consent of Ballard Spahr Andrews & Ingersoll (included within the opinion filed as Exhibit 5.1).†
24.1	Powers of Attorney.†

*

To be filed by amendment or incorporated by reference in connection with any offered securities.

**

Filed herewith.

†

Previously filed.

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ITEM 17.    Undertakings

        (a)  Apex Mortgage Capital, Inc. hereby undertakes:

        (1)  To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

          (i)  To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

        (ii)  To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof which individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high and of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement;

        (iii)  To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply insofar as the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement.

        (2)  That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

        (3)  To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

        (b)  Apex Mortgage Capital, Inc. hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offering therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

        (c)  Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described under Item 15 of this registration statement, or otherwise (other than insurance), the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in such Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the Securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in such Act and will be governed by the final adjudication of such issue.

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SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Los Angeles, State of California, on February 5, 2002.

APEX MORTGAGE CAPITAL, INC.
By:	/s/  PHILIP A. BARACH        Philip A. Barach         President and Chief Executive Officer

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the dates indicated.

Signature	Title
*     Philip A. Barach	President, Chief Executive Officer and Director
*     Jeffrey E. Gundlach	Chief Investment Officer and Vice Chairman of the Board of Directors
*     David S. DeVito	Interim Chief Financial Officer and Controller
*     Marc I. Stern	Chairman of the Board of Directors
*     Peter G. Allen	Director
John C. Argue	Director
*     John A. Gavin	Director
*     Carl C. Gregory, III	Director

*By:
/s/  PHILIP A. BARACH Philip A. Barach
Attorney-in-Fact
February 5, 2002

S-1

EXHIBIT INDEX

Pursuant to Item 601(a)(2) of Regulation S-K, this exhibit index immediately precedes the exhibits.

Exhibit No.	Description
1.1	Form of Underwriting Agreement.*
4.1	Articles of Amendment and Restatement of the Company, as filed with the State Department of Assessments and Taxation of Maryland on November 25, 1997, (previously filed as Exhibit 3.1 to the Company's Registration Statement on Form S-11 (Commission File No. 333-36069) Amendment No. 3 (filed November 21, 1997) and incorporated herein by reference).
4.2	Articles Supplementary relating to the Company's Series A Junior Participating Preferred Stock, as filed with the State Department of Assessments and Taxation of the State of Maryland on July 26, 1999 (previously filed as Exhibit 3.1 to the Company's Current Report on Form 8-K, dated June 30, 1999 and filed July 27, 1999, and incorporated herein by reference).
4.3	Form of Share Certificate for Common Stock (previously filed as Exhibit 4.3 to the Company's Current Report on Form 8-K, dated June 30, 1999 and filed July 27, 1999, and incorporated herein by reference).
4.4	Amended and Restated Bylaws of the Company as currently in effect (previously filed as Exhibit 4.4 to the Company's Registration Statement on Form S-2, Commission File No. 333-73448, Amendment No. 1, filed November 27, 2001 and incorporated herein by reference).
4.5	Shareholder Rights Agreement between the Company and The Bank of New York, as Rights Agent (including as Exhibit B the form of Rights Certificate) (previously filed as Exhibit 4.1 to the Company's Current Report on Form 8-K, dated June 30, 1999 and filed July 27, 1999, and incorporated herein by reference).
4.6	Form of Indenture between Apex Mortgage Capital, Inc. and the Trustee relating to Senior Debt Securities.**
4.7	Form of Indenture between Apex Mortgage Capital, Inc. and the Trustee relating to Subordinated Debt Securities.**
4.8	Form of Certificate of Articles Supplementary designating Preferred Stock.*
4.9	Form of Warrant Agreement.*
5.1	Opinion of Ballard Spahr Andrews & Ingersoll as to legality of the shares being registered.†
8.1	Opinion of O'Melveny & Myers LLP as to certain federal income tax matters.**
12.1	Calculation of Ratios of Earnings to Fixed Charges.†
23.1	Consent of Deloitte & Touche LLP.**
23.2	Consent of O'Melveny & Myers LLP (included within the opinion filed as Exhibit 8.1).**
23.3	Consent of Ballard Spahr Andrews & Ingersoll (included within the opinion filed as Exhibit 5.1).†
24.1	Powers of Attorney.†

*

To be filed by amendment or incorporated by reference in connection with any offered securities.

**

Filed herewith.

†

Previously filed.

QuickLinks

FORWARD-LOOKING STATEMENTS
RISK FACTORS
Risks Related to our Business
Risks Related to Conflicts of Interest
Risks Related to REIT Compliance and Other Matters
Risks Related to Our Securities and Other Matters
USE OF PROCEEDS
RATIO OF EARNINGS TO FIXED CHARGES
OUR COMPANY
DESCRIPTION OF OUR CAPITAL STOCK
DESCRIPTION OF WARRANTS
DESCRIPTION OF DEBT SECURITIES
SELECTED PROVISIONS OF MARYLAND LAW AND OUR CHARTER AND BYLAWS
FEDERAL INCOME TAX CONSIDERATIONS
ERISA CONSIDERATIONS
PLAN OF DISTRIBUTION
WHERE YOU CAN FIND MORE INFORMATION
INFORMATION INCORPORATED BY REFERENCE
EXPERTS
LEGAL MATTERS
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. Other Expenses of Issuance and Distribution
ITEM 15. Indemnification of Directors and Officers.
ITEM 16. Exhibits.
ITEM 17. Undertakings

SIGNATURES
EXHIBIT INDEX

EX-4.6

                                                                     Exhibit 4.6

                           APEX MORTGAGE CAPITAL, INC.

                                       TO

                                  [           ]

                                     TRUSTEE

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

                                    INDENTURE

                        DATED AS OF ______________, 200_

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

                             SENIOR DEBT SECURITIES






                                TABLE OF CONTENTS



                                                                                                      PAGE
                                                                                                      ----

                                                                                                   
RECITALS OF THE COMPANY.................................................................................7

ARTICLE ONE - DEFINITIONS AND OTHER PROVISIONS OF GENERAL...............................................7

SECTION 101.  Definitions...............................................................................7

SECTION 102. Compliance Certificates and Opinions......................................................18

SECTION 103.  Form of Documents Delivered to Trustee...................................................19

SECTION 104. Acts of Holders...........................................................................19

SECTION 105.  Notices, etc., to Trustee and Company....................................................21

SECTION 106.  Notice to Holders: Waiver................................................................22

SECTION 107.  Counterparts; Effect of Headings and Table of Contents...................................23

SECTION 108.  Successors and Assigns...................................................................23

SECTION 109.  Severability Clause......................................................................23

SECTION 110.  Benefits of Indenture....................................................................23

SECTION 111.  Governing Law............................................................................23

SECTION 112.  Legal Holidays...........................................................................23

SECTION 113.  Immunity of Stockholders, Directors, Officers and Agents of the Company..................24

SECTION 114.  Conflict with Trust Indenture Act........................................................24

ARTICLE TWO - SECURITIES FORMS.........................................................................24

SECTION 201.  Forms of Securities......................................................................24

SECTION 202.  Form of Trustee's Certificate of Authentication..........................................25

SECTION 203.  Securities Issuable in Global Form.......................................................25

ARTICLE THREE - THE SECURITIES.........................................................................26

SECTION 301.  Amount Unlimited; Issuable in Series.....................................................26

SECTION 302.  Denominations............................................................................30

SECTION 303.  Execution, Authentication, Delivery and Dating...........................................30

SECTION 304.  Temporary Securities.....................................................................33

SECTION 305.  Registration, Registration of Transfer and Exchange......................................35

SECTION 306.  Mutilated, Destroyed, Lost and Stolen Securities.........................................39

SECTION 307.  Payment of Interest; Interest Rights Preserved...........................................40


                                       2


SECTION 308.  Persons Deemed Owners....................................................................42

SECTION 309.  Cancellation.............................................................................43

SECTION 310.  Computation of Interest..................................................................43

ARTICLE FOUR - SATISFACTION AND DISCHARGE..............................................................43

SECTION 401.  Satisfaction and Discharge of Indenture..................................................43

SECTION 402.  Application of Trust Funds...............................................................45

ARTICLE FIVE - REMEDIES................................................................................45

SECTION 501.  Events of Default........................................................................45

SECTION 502.  Acceleration of Maturity; Rescission and Annulment.......................................47

SECTION 503.  Collection of Indebtedness and Suits for Enforcement by Trustee..........................48

SECTION 504.  Trustee May File Proofs of Claim.........................................................49

SECTION 505.  Trustee May Enforce Claims Without Possession of Securities or Coupons...................50

SECTION 506. Application of Money Collected............................................................50

SECTION 507.  Limitation on Suits......................................................................51

SECTION 508.  Unconditional Right of Holders to Receive Principal, Premium or Make-Whole Amount,
         if any, and Interest..........................................................................51

SECTION 509.  Restoration of Rights and Remedies.......................................................52

SECTION 510.  Rights and Remedies Cumulative...........................................................52

SECTION 511.  Delay or Omission Not Waiver.............................................................52

SECTION 512.  Control by Holders of Securities.........................................................52

SECTION 513.  Waiver of Past Defaults..................................................................53

SECTION 514.  Waiver of Usury, Stay or Extension Laws..................................................53

SECTION 515.  Undertaking for Costs....................................................................53

ARTICLE SIX - THE TRUSTEE..............................................................................54

SECTION 601.  Notice of Defaults.......................................................................54

SECTION 602.  Certain Rights of Trustee................................................................54

SECTION 603.  Not Responsible for Recitals or Issuance of Securities...................................56

SECTION 604.  May Hold Securities......................................................................56

SECTION 605.  Money Held in Trust......................................................................56

SECTION 606.  Compensation and Reimbursement...........................................................56

SECTION 607.  Corporate Trustee Required; Eligibility; Conflicting Interests...........................57


                                       3


SECTION 608.  Resignation and Removal; Appointment of Successor........................................57

SECTION 609.  Acceptance of Appointment by Successor...................................................59

SECTION 610.  Merger, Conversion, Consolidation or Succession to Business..............................60

SECTION 611.  Appointment of Authenticating Agent......................................................61

SECTION 612.  Certain Duties and Responsibilities of the Trustee.......................................62

ARTICLE SEVEN - HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY......................................64

SECTION 701.  Disclosure of Names and Addresses of Holders.............................................64

SECTION 702.  Reports by Trustee.......................................................................64

SECTION 703.  Reports by Company.......................................................................64

SECTION 704.  Company to Furnish Trustee Names and Addresses of Holders................................65

ARTICLE EIGHT - CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE.......................................65

SECTION 801.  Consolidations and Mergers of Company and Sales, Leases and Conveyances Permitted
         Subject to Certain Conditions.................................................................65

SECTION 802.  Rights and Duties of Successor Corporation...............................................66

SECTION 803.  Officers' Certificate and Opinion of Counsel.............................................66

ARTICLE NINE - SUPPLEMENTAL INDENTURES.................................................................66

SECTION 901.  Supplemental Indentures Without Consent of Holders.......................................66

SECTION 902.  Supplemental Indentures with Consent of Holders..........................................68

SECTION 903.  Execution of Supplemental Indentures.....................................................69

SECTION 904.  Effect of Supplemental Indentures........................................................69

SECTION 905.  Conformity with Trust Indenture Act......................................................70

SECTION 906.  Reference in Securities to Supplemental Indentures.......................................70

ARTICLE TEN - COVENANTS................................................................................70

SECTION 1001.  Payment of Principal, Premium or Make-Whole Amount, if any; and Interest................70

SECTION 1002.  Maintenance of Office or Agency.........................................................70

SECTION 1003.  Money for Securities Payments to Be Held in Trust.......................................72

ARTICLE ELEVEN - REDEMPTION OF SECURITIES..............................................................73

SECTION 1101.  Applicability of Article................................................................73

SECTION 1102.  Election to Redeem; Notice to Trustee...................................................73

SECTION 1103.  Selection by Trustee of Securities to Be Redeemed.......................................74


                                       4


SECTION 1104.  Notice of Redemption....................................................................74

SECTION 1105.  Deposit of Redemption Price.............................................................76

SECTION 1106.  Securities Payable on Redemption Date...................................................76

SECTION 1107.  Securities Redeemed in Part.............................................................77

ARTICLE TWELVE - SINKING FUNDS.........................................................................77

SECTION 1201.  Applicability of Article................................................................77

SECTION 1202.  Satisfaction of Sinking Fund Payments with Securities...................................77

SECTION 1203. Redemption of Securities for Sinking Fund................................................78

ARTICLE THIRTEEN - REPAYMENT AT THE OPTION OF HOLDERS..................................................78

SECTION 1301.  Applicability of Article................................................................78

SECTION 1302.  Repayment of Securities.................................................................78

SECTION 1303.  Exercise of Option......................................................................79

SECTION 1304.  When Securities Presented for Repayment Become Due and Payable..........................80

SECTION 1305.  Securities Repaid in Part...............................................................81

ARTICLE FOURTEEN - DEFEASANCE AND COVENANT DEFEASANCE..................................................81

SECTION 1401.  Applicability of Article:  Company's Option to Effect Defeasance or Covenant
         Defeasance....................................................................................81

SECTION 1402.  Defeasance and Discharge................................................................81

SECTION 1403.  Covenant Defeasance.....................................................................82

SECTION 1404.  Conditions to Defeasance or Covenant Defeasance.........................................82

SECTION 1405.  Deposited Money and Government Obligations to Be Held in Trust; Other Miscellaneous
         Provisions....................................................................................84

ARTICLE FIFTEEN - MEETINGS OF HOLDERS OF SECURITIES....................................................85

SECTION 1501.  Purposes for Which Meetings May Be Called...............................................85

SECTION 1502.  Call, Notice and Place of Meetings......................................................85

SECTION 1503.  Persons Entitled to Vote at Meetings....................................................86

SECTION 1504.  Quorum; Action..........................................................................86

SECTION 1505.  Determination of Voting Rights; Conduct and Adjournment of Meetings.....................87

SECTION 1506.  Counting Votes and Recording Action of Meetings.........................................88

SIGNATURES AND SEALS...................................................................................88



                                       5


APEX MORTGAGE CAPITAL, INC.
                  Reconciliation and tie between Trust Indenture Act of 1939
(the "Trust Indenture Act" or "TIA") and Indenture, dated as of
________________, 200_.



Trust Indenture Act Section                                           Indenture Section
- ---------------------------                                           -----------------

                                                                 
Section 310(a)(1)...............................                                    607
         (a)(2).................................                                    607
         (b)....................................                               607, 608

Section 312(c)..................................                                    701

Section 313(a)..................................                                    702
         (c)....................................                                    702

Section 314(a)..................................                                    703
         (c)(1).................................                                    102
         (c)(2).................................                                    102
         (e)....................................                                    102

Section 315(b)..................................                                    601

Section 316(a) (last sentence)..................                    101 ("Outstanding")
         (a)(1)(A)..............................                               502, 512
         (a)(1)(B)..............................                                    513
         (b)....................................                                    508

Section 317(a)(1)...............................                                    503
         (a)(2).................................                                    504

Section 318(a)..................................                                    111
         (c)....................................                                    111



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

NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.

                  Attention should also be directed to TIA Section 318(c), which
provides that the provisions of TIA Sections 310 to and including 317 of the
Trust Indenture Act are a part of and govern every qualified indenture, whether
or not physically contained therein.


                                       6


         INDENTURE, dated as of _________________, 200_, between APEX MORTGAGE
CAPITAL, INC., a corporation organized under the laws of the State of Maryland
(hereinafter called the "Company"), having its principal office at 865 South
Figueroa Street, Los Angeles, California 90017 and [_________________], a
banking association organized under the laws of the [_________________________]
as Trustee hereunder (hereinafter called the "Trustee"), having a Corporate
Trust Office at  [_________________________________].

                             RECITALS OF THE COMPANY

                  The Company deems it necessary to issue from time to time for
its lawful purposes senior debt securities (hereinafter called the "Securities")
evidencing its senior indebtedness, and has duly authorized the execution and
delivery of this Indenture to provide for the issuance from time to time of the
Securities, to be issued in one or more Series as provided in this Indenture.

                  This Indenture is subject to the provisions of the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act" or "TIA"), that are
deemed to be incorporated into this Indenture and shall, to the extent
applicable, be governed by such provisions.

All things necessary to make this Indenture a valid agreement of the Company, in
accordance with its terms, have been done.

                  NOW, THEREFORE, THIS INDENTURE WITNESSETH:

                  For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities, as
follows:

    ARTICLE ONE - DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

                  SECTION 101. DEFINITIONS. For all purposes of this Indenture,
except as otherwise expressly provided or unless the context otherwise requires:


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


                          (2) all other terms used herein which are defined
in the TIA, either directly or by reference therein, have the meanings
assigned to them therein, and the terms "cash transactions" and
"self-liquidating paper," as used in TIA Section 311,


                                       7


shall have the meanings assigned to them in the rules of the Commission
adopted under the TIA; 8

                          (3) all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance with GAAP; and

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

                  "Act," when used with respect to any Holder, has the meaning
specified in Section 104.

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

                  "Authenticating Agent" means any Person authorized by the
Trustee pursuant to Section 611 hereof to act on behalf of the Trustee to
authenticate Securities.

                  "Authorized Newspaper" means a newspaper, printed in the
English language or in an official language of the country of publication,
customarily published on each Business Day, whether or not published on
Saturdays, Sundays or holidays, and of general circulation in each place in
connection with which the term is used or in the financial community of each
such place. Whenever successive publications are required to be made in
Authorized Newspapers, the successive publications may be made in the same or
in different Authorized Newspapers in the same city meeting the foregoing
requirements and in each case on any Business Day.

                  "Bankruptcy Law" has the meaning specified in Section 501.

                  "Bearer Security" means any Security established pursuant
to Section 201 which is payable to bearer.

                  "Board of Directors" means the board of directors of the
Company or any committee of that board duly authorized to act hereunder.

                  "Board Resolution" means 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


                                       8


Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

                  "Business Day," when used with respect to any Place of Payment
or any other particular location referred to in this Indenture or in the
Securities, means, unless otherwise specified with respect to any Securities
issued pursuant to Section 301, any day, other than a Saturday or Sunday, that
is not a day on which banking institutions in that Place of Payment or
particular location are authorized or required by law, regulation or executive
order to close.

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

                  "Clearstream" means Clearstream Banking, S.A., or its
successor.

                  "Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, or, if at any time after 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 performing such duties on such date.

                  "Common Stock" means, with respect to any Person, all shares
of capital stock issued by such Person other than Preferred Stock.

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

                  "Company Request" and "Company Order" mean, respectively, a
written request or order signed in the name of the Company by its Chairman of
the Board, the President or a Vice President, and by its Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Company, and
delivered to the Trustee.

                  "Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker as having a maturity
comparable to the remaining term of the Notes to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of such Notes. "Independent Investment Banker"
means one of the Reference Treasury Dealers appointed by the Trustee after
consultation with the Company.

                  "Comparable Treasury Price" means, with respect to any
redemption date, (i) the average of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
on the third business day preceding


                                       9



such a redemption date, as set forth in the daily statistical release (or any
successor release) published by the Federal Reserve Bank of New York and
designated "Composite 3:30 p.m. Quotations for U.S. Government Securities" or
(ii) if such release (or any successor release) is not published or does not
contain such prices on such business day, the average of all Reference
Treasury Dealer Quotations for such redemption date.

                  "Consolidated Net Assets" means as of any particular time the
aggregate amount of assets (less applicable reserves and other properly
deductible items) after deducting therefrom all current liabilities except for
(a) notes and loans payable, (b) current maturities of long-term debt and (c)
current maturities of obligations under capital leases, all as set forth on the
most recent consolidated balance sheet of the Company and its consolidated
Subsidiaries and computed in accordance with generally accepted accounting
principles and practices as in effect on [_____________] [the date of the Senior
Indenture].

                  "Conversion Event" means the cessation of use of (i) a Foreign
Currency both by the government of the country which issued such currency and
for the settlement of transactions by a central bank or other public
institutions of or within the international banking community, (ii) the euro
both within the European Monetary System and for the settlement of transactions
by public institutions of or within the European Communities or (iii) any
currency unit (or composite currency) other than the euro for the purposes for
which it was established.

                  "Corporate Trust Office" means the office of the Trustee at
which, at any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at
[______________________].

          "corporation" includes corporations, associations, companies and
business trusts.

          "coupon" means any interest coupon appertaining to a Bearer Security.

          "Custodian" has the meaning specified in Section 501.

          "Defaulted Interest" has the meaning specified in Section 307.

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

                   "Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels office, or its successor as operator of the Euroclear System.

                  "European Communities" means the European Economic Community,
the European Coal and Steel Community and the European Atomic Energy Community.


                                       10



                  "European Monetary System" means the European Monetary System
established by the Resolution of December 5, 1978 of the Council of the European
Communities.

                  "Event of Default" has the meaning specified in Article Five.

                  "Foreign Currency" means any currency, currency unit or
composite currency, including, without limitation, the euro, issued by the
government of one or more countries other than the United States of America or
by any recognized confederation or association of such governments.

                  "GAAP" means, except as otherwise provided herein, generally
accepted accounting principles, as in effect from time to time, as used in the
United States applied on a consistent basis.

                  "Global Security" means a Security evidencing all or a part of
a series of Securities issued to and registered in the name of the depository
for such series, or its nominee, in accordance with Section 305, and bearing the
legend prescribed in Section 203.

                  "Government Obligations" means securities which are (i) direct
obligations of the United States of America or the government which issued the
Foreign Currency in which the Securities of a particular series are payable, 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 of America or such government which issued the Foreign
Currency in which the Securities of such series are payable, the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States of America or such other government, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any such Government Obligation or a specific payment of interest on
or principal of any such Government Obligation held by such custodian for the
account of the holder of a 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 the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt.

                  "Guaranty" by any Person means any Obligation, contingent or
otherwise, of such Person guaranteeing any Indebtedness of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, and including,
without limitation, every Obligation of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment of such Indebtedness, (ii) to purchase property, securities or
services for the purpose of assuring the holder of such


                                       11



Indebtedness of the payment of such Indebtedness or (iii) to maintain working
capital, equity capital or other financial statement condition or liquidity
of the primary obligor so as to enable the primary obligor to pay such
Indebtedness; provided, however, that a Guaranty by any Person shall not
include endorsements by such Person for collection or deposit, in either case
in the ordinary course of business. The terms "Guaranteed," "Guaranteeing"
and "Guarantor" shall have meanings correlative to the foregoing.

                  "Holder" means, in the case of a Registered Security, the
Person in whose name a Security is registered in the Security Register and, in
the case of a Bearer Security, the bearer thereof and, when used with respect to
any coupon, shall mean the bearer thereof.

                  "Indebtedness" means, with respect to any Person, without
duplication, (i) any Obligation of such Person relating to any indebtedness of
such Person (A) for borrowed money (whether or not the recourse of the lender is
to the whole of the assets, of such person or only to a portion thereof), (B)
evidenced by notes, debentures or similar instruments (including purchase money
obligations) given in connection with the acquisition of any property or assets
(other than trade accounts payable for inventory or similar property acquired in
the ordinary course of business), including securities, for the payment of which
such Person is liable, directly or indirectly, or the payment of which is
secured by a lien, charge or encumbrance on property or assets of such Person,
(C) for goods, materials or services purchased in the ordinary course of
business (other than trade accounts payable arising in the ordinary course of
business), (D) with respect to letters of credit or bankers acceptances issued
for the account of such Person or performance, surety or similar bonds, (E) for
the payment of money relating to a Capitalized Lease Obligation or (F) under
interest rate swaps, caps or similar agreements and foreign exchange contracts,
currency swaps or similar agreements; (ii) any liability of others of the kind
described in the preceding clause (i), which such Person has Guaranteed or which
is otherwise its legal liability; and (iii) any and all deferrals, renewals,
extensions and refunding of, or amendments, modifications or supplements to, any
liability of the kind described in any of the preceding clauses (i) or (ii).

                  "Indenture" means this instrument as originally executed or as
it may be supplemented or amended from time to time by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
and shall include the terms of particular series of Securities established as
contemplated by Section 301; provided, however, that, if at any time more than
one Person is acting as Trustee under this instrument, "Indenture" shall mean,
with respect to any one or more series of Securities for which such Person is
Trustee, this instrument as originally executed or as it may be supplemented or
amended from time to time by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof and shall include the terms of
the or those particular series of Securities for which such Person is Trustee
established as contemplated by Section 301, exclusive, however, of any
provisions or terms which relate solely to other series of Securities for which
such Person is Trustee, regardless of when such terms or provisions were
adopted, and exclusive of


                                       12



any provisions or terms adopted by means of one or more indentures
supplemental hereto executed and delivered after such Person had become such
Trustee but to which such Person, as such Trustee, was not a party.

                  "Indexed Security" means a Security the terms of which provide
that the principal amount thereof payable at Stated Maturity may be more or less
than the principal face amount thereof at original issuance.

                  "Interest," when used with respect to an Original Issue
Discount Security which by its terms bears interest only after Maturity, shall
mean interest payable after Maturity.

                  "Interest Payment Date," when used with respect to any
Security, means the Stated Maturity of an installment of interest on such
Security.

                  "Make-Whole Amount," when used with respect to any Security,
means the amount, if any, in addition to principal which is required by a
Security, under the terms and conditions specified therein or as otherwise
specified as contemplated by Section 301, to be paid by the Company to the
Holder thereof in connection with any optional redemption or accelerated payment
of such Security.

                  "Maturity," when used with respect to any Security, means the
date on which the principal of such Security or an installment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, notice of redemption, notice of
option to elect repayment or otherwise.

                  "Obligation" of any Person with respect to any specified
Indebtedness means any obligation of such Person to pay principal, premium,
interest (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to such Person, whether or not a claim
for such post-petition interest is allowed in such Proceeding), penalties,
reimbursement or indemnification amounts, fees, expenses or other amounts
relating to such Indebtedness.

                  "Officers' Certificate" means a certificate signed by the
Chairman of the Board of Directors, the President or a Vice President and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Company, and delivered to the Trustee.

                  "Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Company or who may be an employee of or other counsel for
the Company and who shall be satisfactory to the Trustee.

                  "Original Issue 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 502.


                                       13



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

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


                   (ii) Securities, or portions thereof, for whose payment or
redemption (including repayment at the option of the Holder) money in the
necessary amount has been theretofore deposited with the Trustee or any Paying
Agent (other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the Holders
of such Securities and any coupons appertaining thereto; provided, however,
that, if such Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made;

                   (iii) Securities, except to the extent provided in Sections
1402 and 1403, with respect to which the Company has effected defeasance
and/or covenant defeasance as provided in Article Fourteen; and

                   (iv) Securities which have been paid pursuant to Section 306
or in exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser in
whose hands such Securities are valid obligations of the Company. Provided,
however, that in determining whether the Holders of the requisite principal
amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by TIA Section 313, (i) the principal amount of an
Original Issue Discount Security that may be counted in making such
determination or calculation and that shall be deemed to be Outstanding for such
purpose shall be equal to the amount of principal thereof that would be (or
shall have been declared to be) due and payable, at the time of such
determination, upon a declaration of acceleration of the maturity thereof
pursuant to Section 502, (ii) the principal amount of any Security denominated
in a Foreign Currency that may be counted in making such determination or
calculation and that shall be deemed Outstanding for such purpose shall be equal
to the Dollar equivalent, determined pursuant to Section 301 as of the date such
Security is originally issued by the Company, of the principal amount (or, in
the case of an Original Issue Discount Security, the Dollar equivalent as of
such date of original issuance of the amount determined as provided in clause
(i) above) of such Security, (iii) the principal amount of any Indexed Security
that


                                       14



may be counted in making such determination or calculation and that shall be
deemed outstanding for such purpose shall be equal to the principal face
amount of such Indexed Security at original issuance, unless otherwise
provided with respect to such Security pursuant to Section 301, and (iv)
Securities owned by the Company or any other obligor upon the Securities or
any Affiliate of the Company or of such other obligor shall be disregarded
and deemed not to be Outstanding, except that, in determining whether the
Trustee shall be protected in making such calculation or in relying upon any
such request, demand, authorization, direction, notice, consent or waiver,
only Securities which the Trustee knows to be so owned shall be so
disregarded. Securities owned as provided in clause (iv) above which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or
any other obligor upon the Securities or any Affiliate of the Company or of
such other obligor. In case of a dispute as to such right, the advice of
counsel shall be full protection in respect of any decision made by the
Trustee in accordance with such advice.

                  "Paying Agent" means any Person authorized by the Company to
pay the principal of (and premium or Make-Whole Amount, if any) or interest on
any Securities or coupons on behalf of the Company.

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

                  "Place of Payment," when used with respect to the Securities
of or within any series, means the place or places where the principal of (and
premium or Make-Whole Amount, if any) and interest on such Securities are
payable as specified as contemplated by Sections 301 and 1002.

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

                  "Preferred Stock" means, with respect to any Person, all
capital stock issued by such Person that are entitled to a preference or
priority over any other capital stock issued by such Person with respect to any
distribution of such Person's assets, whether by dividend or upon any voluntary
or involuntary liquidation, dissolution or winding up.


                                       15



                  "Redemption Date," when used with respect to any Security to
be redeemed, in whole or in part, means the date fixed for such redemption by or
pursuant to this Indenture.

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

                  "Reference Treasury Dealer" means each of [_________________],
and their respective successors; provided, however, that if any of the foregoing
shall cease to be a primary U.S. Government securities dealer in New York City
(a "Primary Treasury Dealer"), the Company shall substitute therefor another
Primary Treasury Dealer.

                  "Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any redemption date, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m.
on the third business day preceding such redemption date.

                  "Registered Security" shall mean any Security which is
registered in the Security Register.

                  "Regular Record Date" for the interest payable on any Interest
Payment Date on the Registered Securities of or within any series means the date
specified for that purpose as contemplated by Section 301, whether or not a
Business Day.

                  "Repayment Date" means, when used with respect to any Security
to be repaid at the option of the Holder, the date fixed for such repayment by
or pursuant to this Indenture.

                  "Repayment Price" means, when used with respect to any
Security to be repaid at the option of the Holder, the price at which it is to
be repaid by or pursuant to this Indenture.

                  "Responsible Officer," when used with respect to the Trustee,
means the chairman or vice-chairman of the board of directors, the chairman or
vice-chairman of the executive committee of the board of directors, the
president, any vice president (whether or not designated by a number or a word
or words added before or after the title "vice president"), the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
or any other officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of such officer's knowledge and familiarity with the
particular subject.


                                       16



                  "Security" has the meaning stated in the first recital of this
Indenture and, more particularly, means any Security or Securities authenticated
and delivered under this Indenture; provided, however, that, if at any time
there is more than one Person acting as Trustee under this Indenture,
"Securities" with respect to the Indenture as to which such Person is Trustee
shall have the meaning stated in the first recital of this Indenture and shall
more particularly mean Securities authenticated and delivered under this
Indenture, exclusive, however, of Securities of any series as to which such
Person is not Trustee.

                  "Security Register" and "Security Registrar" have the
respective meanings specified in Section 305.

                  "Significant Subsidiary" means any Subsidiary which is a
"significant subsidiary" (as defined in Article I, Rule 1-02 of Regulation S-X,
promulgated under the Securities Act of 1933) of the Company.

                  "Special Record Date" for the payment of any Defaulted
Interest on the Registered Securities of or within any series means a date fixed
by the Company pursuant to Section 307.

                  "Stated Maturity," when used with respect to any Security or
any installment of principal thereof or interest thereon, means the date
specified in such Security or a coupon representing such installment of interest
as the fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.

                  "Subsidiary" means, with respect to any Person, any
corporation, limited liability company, partnership or other entity of which a
majority of (i) the voting power of the voting equity securities or (ii) the
outstanding equity interests of which are owned, directly or indirectly, by such
Person. For the purposes of this definition, "voting equity securities" means
equity securities having voting power for the election of directors, whether at
all times or only so long as no senior class of security has such voting power
by reason of any contingency.

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

                  "Trust Indenture Act" or "TIA" means the Trust Indenture Act
of 1939, as amended and as in force at the date as of which this Indenture was
executed, except as provided in Section 905.

                  "Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder;
provided, however, that if at any time there


                                       17



is more than one such Person, "Trustee" as used with respect to the
Securities of any series shall mean only the Trustee with respect to
Securities of that series.

                  "United States" means, unless otherwise specified with respect
to any Securities pursuant to Section 301, the United States of America
(including the states and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction.

                  "United States Person" means, unless otherwise specified with
respect to any Securities pursuant to Section 301, an individual who is a
citizen or resident of the United States, a corporation, partnership or other
entity created or organized in or under the laws of the United States or an
estate or trust the income of which is subject to United States Federal income
taxation regardless of its source.

                  "Yield to Maturity" means the yield to maturity, computed at
the time of issuance of a Security (or, if applicable, at the most recent
redetermination of interest on such Security) and as set forth in such Security
in accordance with generally accepted United States bond yield computation
principles.

                  SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.

                  Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (including certificates
delivered pursuant to Section 1008) shall include:

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

                    (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;

                                       18



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

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

                  SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.

                  Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon an Opinion of Counsel, or a
certificate or representations by counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the opinion, certificate or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such Opinion of Counsel or certificate or
representations may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information as to such factual matters is in the
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.

                  Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.

                  SECTION 104. ACTS OF HOLDERS. (i) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders of the Outstanding Securities of
all series or one or more series, as the case may be, may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Holders in person or by agents duly appointed in writing. If Securities of
a series are issuable as Bearer Securities, any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders of Securities of such series may, alternatively, be
embodied in and evidenced by the record of Holders of Securities of such series
voting in favor thereof, either in person or by proxies duly appointed in
writing, at any meeting of Holders of Securities of such series duly called and
held in accordance with the provisions of Article Fifteen, or a combination of
such instruments and any such record.


                                       19


Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments or record or both are delivered
to the Trustee and, where it is hereby expressly required, to the Company.
Such instrument or instruments and any such record (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act"
of the Holders signing such instrument or instruments or so voting at any
such meeting. Proof of execution of any such instrument or of a writing
appointing any such agent, or of the holding by any Person of a Security,
shall be sufficient for any purpose of this Indenture and conclusive in favor
of the Trustee and the Company and any agent of the Trustee or the Company,
if made in the manner provided in this Section. The record of any meeting of
Holders of Securities shall be proved in the manner provided in Section 1506.

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

                  (iii) The ownership of Registered Securities shall be proved
by the Security Register. As to any matter relating to beneficial ownership
interests in any Global Security, the appropriate depository's records shall be
dispositive for purposes of this Indenture.

                  (iv) The ownership of Bearer Securities may be proved by the
production of such Bearer Securities or by a certificate executed, as
depository, by any trust company, bank, banker or other depository, wherever
situated, if such certificate shall be deemed by the Trustee to be satisfactory,
showing that at the date therein mentioned such Person had on deposit with such
depository, or exhibited to it, the Bearer Securities therein described; or such
facts may be proved by the certificate or affidavit of the Person holding such
Bearer Securities, if such certificate or affidavit is deemed by the Trustee to
be satisfactory. The Trustee and the Company may assume that such ownership of
any Bearer Security continues until (1) another certificate or affidavit bearing
a later date issued in respect of the same Bearer Security is produced, or (2)
such Bearer Security is produced to the Trustee by some other Person, or (3)
such Bearer Security is surrendered in exchange for a Registered Security, or
(4) such Bearer Security is no longer Outstanding. The ownership of Bearer
Securities may also be proved in any other manner which the Trustee deems
sufficient.

                  (v) If the Company shall solicit from the Holders of
Registered Securities any request, demand, authorization, direction, notice,
consent, waiver or other


                                       20



Act, the Company may, at its option, in or pursuant to a Board Resolution,
fix in advance a record date for the determination of Holders entitled to
give such request, demand, authorization, direction, notice, consent, waiver
or other Act, but the Company shall have no obligation to do so.
Notwithstanding TIA Section 316(c), such record date shall be the record date
specified in or pursuant to such Board Resolution, which shall be a date not
earlier than the date 30 days prior to the first solicitation of Holders
generally in connection therewith and not later than the date such
solicitation is completed. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other Act may be
given before or after such record date, but only the Holders of record at the
close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
Outstanding Securities have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or other
Act, and for that purpose the Outstanding Securities shall be computed as of
such record date; provided that no such authorization, agreement or consent
by the Holders on such record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than
eleven months after the record date.

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

         SECTION 105. NOTICES, ETC., TO TRUSTEE AND COMPANY. Any request,
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,

                  (1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee at [__________________________]; or

                  (2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the first
paragraph of this Indenture or at any other address previously furnished in
writing to the Trustee by the Company, Attention: Chief Financial Officer, or

                  (3) either the Trustee or the Company, by the other party,
shall be sufficient for every purpose hereunder if given by facsimile
transmission, receipt confirmed by telephone followed by an original copy
delivered by guaranteed overnight


                                       21



courier; if to the Trustee at facsimile number [_________________]; and if to
the Company at facsimile number (213) 244-0645.

                  SECTION 106. NOTICE TO HOLDERS: WAIVER. Where this Indenture
provides for notice of any event to Holders of Registered Securities by the
Company or the Trustee, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each such Holder affected by such event, at his address as
it appears in the Security Register, not later than the latest date, if any, and
not earlier than the earliest date, if any, prescribed for the giving of such
notice. In any case where notice to Holders of Registered Securities is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders of Registered Securities or the sufficiency of any
notice to Holders of Bearer Securities given as provided herein. Any notice
mailed to a Holder in the manner herein prescribed shall be conclusively deemed
to have been received by such Holder, whether or not such Holder actually
receives such notice.

                  If by reason of the suspension of or irregularities in regular
mail service or by reason of any other cause it shall be impracticable to give
such notice by mail, then such notification to Holders of Registered Securities
as shall be made with the approval of the Trustee shall constitute a sufficient
notification to such Holders for every purpose hereunder.

                  Except as otherwise expressly provided herein or otherwise
specified with respect to any Securities pursuant to Section 301, where this
Indenture provides for notice to Holders of Bearer Securities of any event, such
notice shall be sufficiently given if published in an Authorized Newspaper in
The City of New York and in such other city or cities as may be specified in
such Securities on a Business Day, such publication to be not later than the
latest date, if any, and not earlier than the earliest date, if any, prescribed
for the giving of such notice. Any such notice shall be deemed to have been
given on the date of such publication or, if published more than once, on the
date of the first such publication.

                  If by reason of the suspension of publication of any
Authorized Newspaper or Authorized Newspapers or by reason of any other cause it
shall be impracticable to publish any notice to Holders of Bearer Securities as
provided above, then such notification to Holders of Bearer Securities as shall
be given with the approval of the Trustee shall constitute sufficient notice to
such Holders for every purpose hereunder. Neither the failure to give notice by
publication to any particular Holder of Bearer Securities as provided above, nor
any defect in any notice so published, shall affect the sufficiency of such
notice with respect to other Holders of Bearer Securities or the sufficiency of
any notice to Holders of Registered Securities given as provided herein.


                                       22



                  Any request, demand, authorization, direction, notice, consent
or waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication.

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

                  SECTION 107. Counterparts; Effect of Headings and Table of
Contents. This Indenture may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Indenture. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.

                  SECTION 108. SUCCESSORS AND ASSIGNS. All covenants and
agreements in this Indenture by the Company shall bind its successors and
assigns, whether so expressed or not.

                  SECTION 109. SEVERABILITY CLAUSE. In case any provision in
this Indenture or in any Security or coupon shall be held invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

                  SECTION 110. BENEFITS OF INDENTURE. Nothing in this Indenture
or in the Securities or coupons, express or implied, shall give to any Person,
other than the parties hereto, any Security Registrar, any Paying Agent, any
Authenticating Agent and their successors hereunder and the Holders any benefit
or any legal or equitable right, remedy or claim under this Indenture.

                  SECTION 111. GOVERNING LAW. This Indenture and the Securities
and coupons shall be governed by and construed in accordance with the law of
______________. This Indenture is subject to the provisions of the TIA that are
required to be part of this Indenture and shall, to the extent applicable, be
governed by such provisions.

                  SECTION 112. LEGAL HOLIDAYS. In any case where any Interest
Payment Date, Redemption Date, Repayment Date, sinking fund payment date, Stated
Maturity or Maturity of any Security or the last date on which a Holder has the
right to exchange a Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or any
Security or coupon other than a provision in the Securities of any series which
specifically states that such provision shall apply in lieu hereof), payment of
interest or principal (and premium or Make-Whole Amount, if any) or exchange of
such security need not be made at such


                                       23



Place of Payment on such date, but (except as otherwise provided in the
supplemental indenture with respect to such Security) may be made on the next
succeeding Business Day at such Place of Payment with the same force and
effect as if made on the Interest Payment Date, Redemption Date, Repayment
Date or sinking fund payment date, or at the Stated Maturity or Maturity, or
on such last day for exchange, provided that no interest shall accrue on the
amount so payable for the period from and after such Interest Payment Date,
Redemption Date, Repayment Date, sinking fund payment date, Stated Maturity
or Maturity, as the case may be.

                  SECTION 113. Immunity of Stockholders, Directors, Officers and
Agents of the Company. No recourse under or upon any obligation, covenant or
agreement contained in this Indenture, or in any Security, or because of any
indebtedness evidenced thereby, shall be had against any past, present or future
stockholder, employee, officer or director, as such, of the Company or of any
successor, either directly or through the Company or any successor, under any
rule of law, statute or constitutional provision or by the enforcement of any
assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the
Securities by the Holders and as part of the consideration for the issue of the
Securities.

                  SECTION 114. CONFLICT WITH TRUST INDENTURE ACT. If any
provision hereof limits, qualifies or conflicts with another provision hereof
which is required or deemed to be included in this Indenture by any of the
provisions of the Trust Indenture Act, such required provision shall control. If
any provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.

                         ARTICLE TWO - SECURITIES FORMS

                  SECTION 201. FORMS OF SECURITIES. The Registered Securities,
if any, of each series and the Bearer Securities, if any, of each series and
related coupons shall be substantially in the form of Exhibit A hereto or in
such other form as shall be established in one or more indentures supplemental
hereto or approved from time to time by or pursuant to a Board Resolution in
accordance with Section 301, shall have such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture or any indenture supplemental hereto, and may have such letters,
numbers or other marks of identification or designation and such legends or
endorsements placed 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 the Securities may be
listed, or to conform to usage.


                                       24



                  Unless otherwise specified as contemplated by Section 301,
Bearer Securities shall have interest coupons attached.

                  The definitive Securities and coupons shall be printed,
lithographed or engraved or produced by any combination of these methods on a
steel engraved border or steel engraved borders or mechanically reproduced on
safety paper or may be produced in any other manner, all as determined by the
officers executing such Securities or coupons, as evidenced by their execution
of such Securities or coupons.

                  SECTION 202. Form of Trustee's Certificate of Authentication.
Subject to Section 611, the Trustee's certificate of authentication shall be in
substantially the following form:

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

                                                     [___________________]
                                                     as Trustee


                                                     Dated:______________
                                                     By:____________________
                                                        Authorized Signatory

                  SECTION 203. SECURITIES ISSUABLE IN GLOBAL FORM. If Securities
of or within a series are issuable in the form of one or more Global Securities,
then, notwithstanding clause (8) of Section 301 and the provisions of Section
302, any such Global Security or Securities may provide that it or they shall
represent the aggregate amount of all Outstanding Securities of such series (or
such lesser amount as is permitted by the terms thereof) from time to time
endorsed thereon and may also provide that the aggregate amount of Outstanding
Securities of such series represented thereby may from time to time be increased
or decreased to reflect exchanges. Any endorsement of any Global Security to
reflect the amount, or any increase or decrease in the amount, or changes in the
rights of Holders thereof, of Outstanding Securities represented thereby shall
be made by the Trustee in such manner or by such Person or Persons as shall be
specified therein or in the Company Order to be delivered to the Trustee
pursuant to Section 303 or 304. Subject to the provisions of Section 303 and, if
applicable, Section 304, the Trustee shall deliver and redeliver any Global
Security in permanent global form in the manner and upon instructions given by
the Person or Persons specified therein or in the applicable Company Order. If a
Company Order pursuant to Section 303 or 304 has been, or simultaneously is,
delivered, any instructions by the Company with respect to endorsement or
delivery or redelivery of a Global Security shall be in writing but need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel.

                  The provisions of the last sentence of Section 303 shall apply
to any Security represented by a Global Security if such Security was never
issued and sold by


                                       25



the Company and the Company delivers to the Trustee the Global Security
together with written instructions (which need not comply with Section 102
and need not be accompanied by an Opinion of Counsel) with regard to the
reduction in the principal amount of Securities represented thereby, together
with the written statement contemplated by the last sentence of Section 303.

                  Notwithstanding the provisions of Section 307, unless
otherwise specified as contemplated by Section 301, payment of principal of and
any premium or Make-Whole Amount, if any, and interest on any Global Security in
permanent global form shall be made to the registered Holder thereof.

                  Notwithstanding the provisions of Section 308 and except as
provided in the preceding paragraph, the Company, the Trustee and any agent of
the Company and the Trustee shall treat as the Holder of such principal amount
of Outstanding Securities represented by a permanent Global Security (i) in the
case of a permanent Global Security in registered form, the Holder of such
permanent Global Security in registered form, or (ii) in the case of a permanent
Global Security in bearer form, Euroclear or Clearstream.

                  Any Global Security authenticated and delivered hereunder
shall bear a legend in substantially the following form:

                  "This Security is a Global Security within the meaning set
forth in the Indenture hereinafter referred to and is registered in the name of
a Depository or a nominee of a Depository. This Security is exchangeable for
Securities registered in the name of a person other than the Depository or its
nominee only in the limited circumstances described in the Indenture, and may
not be transferred except as a whole by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or its nominee to a successor
Depository or its nominee."

                         ARTICLE THREE - THE SECURITIES

                  SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES. The
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.

                  The Securities may be issued in one or more series. There
shall be established in one or more Board Resolutions or pursuant to authority
granted by one or more Board Resolutions and, subject to Section 303, set forth
in an Officers' Certificate, or established in one or more indentures
supplemental hereto, prior to the issuance of Securities of any series:

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


                                       26



                                    (2)      Any limit upon the aggregate
principal amount of the Securities of the series that may be authenticated and
delivered under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Securities of the series pursuant to Section 304, 305, 306, 906, 1107 or
1305);

                                    (3)      The price (expressed as a
percentage of the principal amount thereof) at which such Securities will be
issued and, if other than the principal amount thereof, the portion of the
principal amount thereof payable upon declaration of acceleration of the
maturity thereof;

                                    (4)      The date or dates, or the method
for determining such date or dates, on which the principal of such Securities
will be payable;


                                    (5)      The rate or rates (which may be
fixed or variable), or the method by which such rate or rates shall be
determined, at which such Securities will bear interest, if any;



                                    (6)      The date or dates, or the method
for determining such date or dates, from which any such interest will accrue,
the dates on which any such interest will be payable, the record dates for such
interest payment dates, or the method by which such dates shall be determined,
the persons to whom such interest shall be payable, and the basis upon which
interest shall be calculated if other than that of a 360-day year of twelve
30-day months;

                                    (7)      The place or places where the
principal of (and premium or Make-Whole Amount, if any) and interest, if any, on
such Securities will be payable, where such Securities may be surrendered for
registration of transfer or exchange and where notices or demands to or upon the
Company in respect of such Securities and this Indenture may be served;

                                    (8)      The period or periods, if any,
within which, the price or prices at which and the other terms and conditions
upon which such Securities may, pursuant to any optional or mandatory redemption
provisions, be redeemed, as a whole or in part, at the option of the Company;

                                    (9)      The obligation, if any, of the
Company to redeem, repay or purchase such Securities pursuant to any sinking
fund or analogous provision or at the option of a holder thereof, and the period
or periods within which, the price or


                                       27



prices at which and the other terms and conditions upon which such Securities
will be redeemed, repaid or purchased, as a whole or in part, pursuant to
such obligation;

                                    (10)     If other than Dollars, the currency
or currencies in which such Securities are denominated and payable, which may be
a foreign currency or units of two or more foreign currencies or a composite
currency or currencies, the manner of determining the equivalent thereof in
Dollars for purposes of the definition of "Outstanding" in Section 101, and the
terms and conditions relating thereto;

                                    (11)     Whether the amount of payments of
principal of(and premium or Make-Whole Amount, if any, including any amount due
upon redemption, if any) or interest, if any, on such Securities may be
determined with reference to an index, formula or other method (which index,
formula or method may, but need not be, based on the yield on or trading price
of other securities,including United States Treasury securities or on a
currency, currencies, currency unit or units, or composite currency or
currencies) and the manner in which such amounts shall be determined;

                                    (12)     Whether the principal of (and
premium or Make-Whole Amount, if any) or interest on the Securities of the
series are to be payable, at the election of the Company or a holder thereof, in
a currency or currencies, currency unit or units or composite currency or
currencies other than that in which such Securities are denominated or stated to
be payable, the period or periods within which, and the terms and conditions
upon which, such election may be made, and the time and manner of, and identity
of the exchange rate agent with responsibility for, determining the exchange
rate between the currency or currencies, currency unit or units or composite
currency or currencies in which such Securities are denominated or stated to be
payable and the currency or currencies, currency unit or units or composite
currency or currencies in which such Securities are to be so payable;

                                    (13)     Provisions, if any, granting
special rights to the holders of Securities of the series upon the occurrence of
such events as may be specified;


                                    (14)     Any deletions from, modifications
of or additions to the Events of Default or covenants of the Company with
respect to Securities of the series, whether or not such Events of Default or
covenants are consistent with the Events of Default or covenants set forth
herein;


                                       28



                                    (15)     Whether and under what
circumstances the Company will pay any additional amounts on such Securities in
respect of any tax, assessment or governmental charge and, if so, whether the
Company will have the option to redeem such Securities in lieu of making such
payment;

                                    (16)     Whether Securities of the series
are to be issuable as Registered Securities, Bearer Securities (with or without
coupons) or both, any restrictions applicable to the offer, sale or delivery of
Bearer Securities and the terms upon which Bearer Securities of the series may
be exchanged for Registered Securities of the series and vice versa (if
permitted by applicable laws and regulations), whether any Securities of the
series are to be issuable initially in temporary global form and whether any
Securities of the series are to be issuable in permanent global form with or
without coupons and, if so, whether beneficial owners of interests in any such
permanent global Security may exchange such interests for Securities of such
series and of like tenor of any authorized form and denomination and the
circumstances under which any such exchanges may occur, if other than in the
manner provided in the Indenture, and, if Registered Securities of the series
are to be issuable as a Global Security, the identity of the depository for such
series;

                                    (17)     The date as of which any Bearer
Securities of the series and any temporary Global Security representing
outstanding Securities of the series shall be dated if other than the date of
original issuance of the first Security of the series to be issued;

                                    (18)     The Person to whom any interest on
any Registered Security of the series shall be payable, if other than the Person
in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, the manner in which, or the Person to whom, any interest on any Bearer
Security of the series shall be payable, if otherwise than upon presentation and
surrender of the coupons appertaining thereto as they severally mature, and the
extent to which, or the manner in which, any interest payable on a temporary
Global Security on an Interest Payment Date will be paid if other than in the
manner provided herein;

                                    (19)     The applicability, if any, of the
defeasance and covenant defeasance provisions of Article Fourteen hereof to the
Securities of the series;


                                    (20)     If the Securities of such series
are to be issuable in definitive form (whether upon original issue or upon
exchange of a temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of


                                       29



other conditions, then the form and/or terms of such certificates, documents
or conditions; and

                                    (21)     Any other terms of the series
(which terms shall not be inconsistent with the provisions of this Indenture).
All Securities of any one series and the coupons appertaining to any Bearer
Securities of such series shall be substantially identical except, in the case
of Registered Securities, as to denomination and except as may otherwise be
provided in or pursuant to such Board Resolution (subject to Section 303) and
set forth in such Officers' Certificate or in any such indenture supplemental
hereto. All Securities of any one series need not be issued at the same time
and, unless otherwise provided, a series may be reopened, without the consent of
the Holders, for issuances of additional Securities of such series.

                  If any of the terms of the Securities of any series are
established by action taken pursuant to one or more Board Resolutions, a copy of
an appropriate record of such action(s) 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 Officers' Certificate setting forth the terms of the
Securities of such series.

                  SECTION 302. DENOMINATIONS. The Securities of each series
shall be issuable in such denominations as shall be specified as contemplated by
Section 301. With respect to Securities of any series denominated in Dollars, in
the absence of any such provisions with respect to the Securities of any series,
the Securities of such series, other than Global Securities (which may be of any
denomination), shall be issuable in denominations of $1,000 and any integral
multiple thereof.

                  SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities and any coupons appertaining thereto shall be executed on behalf
of the Company by its Chairman of the Board, its President or one of its Vice
Presidents, under its corporate seal reproduced thereon, and attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities and coupons may be manual or facsimile signatures of
the present or any future such authorized officer and may be imprinted or
otherwise reproduced on the Securities.

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

                  At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any series,
together with any coupon appertaining thereto, executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such


                                      30


Securities; provided, however, that, in connection with its original issuance,
no Bearer Security shall be mailed or otherwise delivered to any location in the
United States; and provided further that, unless otherwise specified with
respect to any series of Securities pursuant to Section 301, a Bearer Security
may be delivered in connection with its original issuance only if the Person
entitled to receive such Bearer Security shall have furnished a certificate to
Euroclear or Clearstream, as the case may be, in such form as may be specified
with respect to any series of Securities pursuant to Section 301, dated no
earlier than 15 days prior to the earlier of the date on which such Bearer
Security is delivered and the date on which any temporary Security first becomes
exchangeable for such Bearer Security in accordance with the terms of such
temporary Security and this Indenture. If any Security shall be represented by a
permanent global Bearer Security, then, for purposes of this Section and Section
304, the notation of a beneficial owner's interest therein upon original
issuance of such Security or upon exchange of a portion of a temporary Global
Security shall be deemed to be delivery in connection with its original issuance
of such beneficial owner's interest in such permanent Global Security. Except as
permitted by Section 306, the Trustee shall not authenticate and deliver any
Bearer Security unless all appurtenant coupons for interest then matured have
been detached and canceled.

                  If all the Securities of any series are not to be issued at
one time and if the Board Resolution or supplemental indenture establishing such
series shall so permit, such Company Order may set forth procedures acceptable
to the Trustee for the issuance of such Securities and determining the terms of
particular Securities of such series, such as interest rate or formula, maturity
date, date of issuance and date from which interest shall accrue. In
authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to TIA Section 315(a) through 315(d)) shall be
fully protected in relying upon,

                           (i)      an Opinion of Counsel stating that

                                    (a)      the form or forms of such
Securities and any coupons have been established in conformity with the
provisions of this Indenture;

                                    (b)      the terms of such Securities and
any coupons have been established in conformity with the provisions of this
Indenture; and

                                    (c)      such Securities, together with any
coupons appertaining thereto, when completed by appropriate insertions and
executed and delivered by the Company to the Trustee for authentication in
accordance with this Indenture, authenticated and delivered by the Trustee in
accordance with this Indenture and issued by the Company in the manner and
subject to any conditions specified in such Opinion of Counsel, will constitute
legal, valid and legally binding obligations of the


                                      31


Company, enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization and other similar
laws of general applicability relating to or affecting the enforcement of
creditors' rights generally and to general equitable principles; and

                           (ii)     an Officers' Certificate stating that all
conditions precedent provided for in this Indenture relating to the issuance
of the Securities have been complied with and that, to the best of the
knowledge of the signers of such certificate, that no Event of Default with
respect to any of the Securities shall have occurred and be continuing. If
such form or terms have been so established, 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,
obligations or immunities under the Securities and this Indenture or
otherwise in a manner which is not reasonably acceptable to the Trustee.

                  Notwithstanding the provisions of Section 301 and of the
preceding paragraph, if all the Securities of any series are not to be issued at
one time, it shall not be necessary to deliver an Officers' Certificate
otherwise required pursuant to Section 301 or a Company Order, or an Opinion of
Counsel or an Officers' Certificate otherwise required pursuant to the preceding
paragraph at the time of issuance of each Security of such series, but such
order, opinion and certificates, with appropriate modifications to cover such
future issuances, shall be delivered at or before the time of issuance of the
first Security of such series.

                  Each Registered Security shall be dated the date of its
authentication and each Bearer Security shall be dated as of the date specified
as contemplated by Section 301.

                  No Security or coupon shall be entitled to any benefit under
this Indenture or be valid or obligatory for any purpose unless there appears on
such Security or Security to which such coupon appertains a certificate of
authentication substantially in the form provided for herein duly executed by
the Trustee by manual signature of an authorized signatory, and such certificate
upon any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder and is entitled to
the benefits of this Indenture. Notwithstanding the foregoing, if any Security
(including a Global Security) shall have been authenticated and delivered
hereunder but never issued and sold by the Company, and the Company shall
deliver such Security to the Trustee for cancellation as provided in Section 309
together with a written statement (which need not comply with Section 102 and
need not be accompanied by an Opinion of Counsel) stating that such Security has
never been issued and sold by the Company, for all purposes of this Indenture
such Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.


                                      32



                  SECTION 304.  TEMPORARY SECURITIES.

                  (a) Pending the preparation of definitive Securities of any
series, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued, in registered form, or, if authorized, in bearer form with one or
more coupons or without coupons, and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as conclusively evidenced by their execution of such
Securities. In the case of Securities of any series, such temporary Securities
may be in global form.

                  Except in the case of temporary Global Securities (which shall
be exchanged as otherwise provided herein or as otherwise provided in or
pursuant to a Board Resolution), if temporary Securities of any series are
issued, the Company will cause definitive Securities of that series to be
prepared without unreasonable delay. After the preparation of definitive
Securities of such series, the temporary Securities of such series shall be
exchangeable for definitive Securities of such series upon surrender of the
temporary Securities of such series at the office or agency of the Company in a
Place of Payment for that series, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Securities of any series
(accompanied by any non-matured coupons appertaining thereto), the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of definitive Securities of the same series of authorized
denominations; provided, however, that no definitive Bearer Security shall be
delivered in exchange for a temporary Registered Security; and provided further
that a definitive Bearer Security shall be delivered in exchange for a temporary
Bearer Security only in compliance with the conditions set forth in Section 303.
Until so exchanged, the temporary Securities of any series shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities
of such series.

                  (b) Unless otherwise provided in or pursuant to a Board
Resolution, the following provisions of this Section 304(b) shall govern the
exchange of temporary Securities other than through the facilities of The
Depository Trust Company. If any such temporary Security is issued in global
form, then such temporary Global Security shall, unless otherwise provided
therein, be delivered to the London office of a depository or common depository
(the "Common Depository"), for the benefit of Euroclear and Clearstream, for
credit to the respective accounts of the beneficial owners of such Securities
(or to such other accounts as they may direct).

                  Without unnecessary delay but in any event not later than the
date specified in, or determined pursuant to the terms of, any such temporary
Global Security (the "Exchange Date"), the Company shall deliver to the Trustee
definitive Securities, in aggregate principal amount equal to the principal
amount of such temporary Global


                                      33



Security, executed by the Company. On or after the Exchange Date, such temporary
Global Security shall be surrendered by the Common Depository to the Trustee, as
the Company's agent for such purpose, to be exchanged, in whole or from time to
time in part, for definitive Securities without charge, and the Trustee shall
authenticate and deliver, in exchange for each portion of such temporary Global
Security, an equal aggregate principal amount of definitive Securities of the
same series of authorized denominations and of like tenor as the portion of such
temporary Global Security to be exchanged. The definitive Securities to be
delivered in exchange for any such temporary Global Security shall be in bearer
form, registered form, permanent global bearer form or permanent global
registered form, or any combination thereof, as specified as contemplated by
Section 301, and, if any combination thereof is so specified, as requested by
the beneficial owner thereof; provided, however, that, unless otherwise
specified in such temporary Global Security, upon such presentation by the
Common Depository, such temporary Global Security is accompanied by a
certificate dated the Exchange Date or a subsequent date and signed by Euroclear
as to the portion of such temporary Global Security held for its account then to
be exchanged and a certificate dated the Exchange Date or a subsequent date and
signed by Clearstream as to the portion of such temporary Global Security held
for its account then to be exchanged, each in such form as may be established
pursuant to Section 301; and provided further that definitive Bearer Securities
shall be delivered in exchange for a portion of a temporary Global Security only
in compliance with the requirements of Section 303.

                  Unless otherwise specified in such temporary Global Security,
the interest of a beneficial owner of Securities of a series in a temporary
Global Security shall be exchanged for definitive Securities of the same series
and of like tenor following the Exchange Date when the account holder instructs
Euroclear or Clearstream, as the case may be, to request such exchange on his
behalf and delivers to Euroclear or Clearstream, as the case may be, a
certificate in such form as may be established pursuant to Section 301, dated no
earlier than 15 days prior to the Exchange Date, copies of which certificate
shall be available from the offices of Euroclear and Clearstream, the Trustee,
any Authenticating Agent appointed for such series of Securities and each Paying
Agent. Unless otherwise specified in such temporary Global Security, any such
exchange shall be made free of charge to the beneficial owners of such temporary
Global Security, except that a Person receiving definitive Securities must bear
the cost of insurance, postage, transportation and the like unless such Person
takes delivery of such definitive Securities in person at the offices of
Euroclear or Clearstream. Definitive Securities in bearer form to be delivered
in exchange for any portion of a temporary Global Security shall be delivered
only outside the United States.

                  Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of the same series and of like
tenor authenticated and delivered hereunder, except that, unless otherwise
specified as contemplated by Section 301, interest payable on a temporary Global
Security on an Interest Payment Date for Securities of such series occurring
prior to the applicable Exchange Date shall be payable


                                      34



to Euroclear and Clearstream on such Interest Payment Date upon delivery by
Euroclear and Clearstream to the Trustee of a certificate or certificates in
such form as may be established pursuant to Section 301, for credit without
further interest on or after such Interest Payment Date to the respective
accounts of Persons who are the beneficial owners of such temporary Global
Security on such Interest Payment Date and who have each delivered to Euroclear
or Clearstream, as the case may be, a certificate dated no earlier than 15 days
prior to the Interest Payment Date occurring prior to such Exchange Date in
such form as may be established pursuant to Section 301. Notwithstanding
anything to the contrary herein contained, the certifications made pursuant to
this paragraph shall satisfy the certification requirements of the preceding two
paragraphs of this Section 304(b) and of the third paragraph of Section 303 of
this Indenture and the interests of the Persons who are the beneficial owners of
the temporary Global Security with respect to which such certification was made
will be exchanged for definitive Securities of the same series and of like tenor
on the Exchange Date or the date of certification if such date occurs after the
Exchange Date, without further act or deed by such beneficial owners. Except as
otherwise provided in this paragraph, no payments of principal or interest owing
with respect to a beneficial interest in a temporary Global Security will be
made unless and until such interest in such temporary Global Security shall have
been exchanged for an interest in a definitive Security. Any interest so
received by Euroclear and Clearstream and not paid as herein provided shall be
returned to the Trustee prior to the expiration of two years after such Interest
Payment Date in order to be repaid to the Company.

                  SECTION 305. Registration, Registration of Transfer and
Exchange. The Company shall cause to be kept at the Corporate Trust Office of
the Trustee or in any office or agency of the Company in a Place of Payment a
register for each series of Securities (the registers maintained in such office
or in any such office or agency of the Company in a Place of Payment being
herein sometimes referred to collectively as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Registered Securities and of transfers of
Registered Securities. The Security Register shall be in written form or any
other form capable of being converted into written form within a reasonable
time. The Trustee, at its Corporate Trust Office, is hereby initially appointed
"Security Registrar" for the purpose of registering Registered Securities and
transfers of Registered Securities on such Security Register as herein provided.
In the event that the Trustee shall cease to be Security Registrar, it shall
have the right to examine the Security Register at all reasonable times.

                  Subject to the provisions of this Section 305, upon surrender
for registration of transfer of any Registered Security of any series at any
office or agency of the Company in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Registered
Securities of the same series, of any authorized denominations and of a like
aggregate principal amount, bearing a number not contemporaneously outstanding,
and containing identical terms and provisions.


                                      35



                  Subject to the provisions of this Section 305, at the option
of the Holder, Registered Securities of any series may be exchanged for other
Registered Securities of the same series, of any authorized denomination or
denominations and of a like aggregate principal amount, containing identical
terms and provisions, upon surrender of the Registered Securities to be
exchanged at any such office or agency. Whenever any such Registered Securities
are so surrendered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Registered Securities which the Holder
making the exchange is entitled to receive. Unless otherwise specified with
respect to any series of Securities as contemplated by Section 301, Bearer
Securities may not be issued in exchange for Registered Securities.

                  If (but only if) permitted by the applicable Board Resolution
and (subject to Section 303) set forth in the applicable Officers' Certificate,
or in any indenture supplemental hereto, delivered as contemplated by Section
301, at the option of the Holder, Bearer Securities of any series may be
exchanged for Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor, upon surrender
of the Bearer Securities to be exchanged at any such office or agency, with all
unmatured coupons and all matured coupons in default thereto appertaining. If
the Holder of a Bearer Security is unable to produce any such unmatured coupon
or coupons or matured coupon or coupons in default, any such permitted exchange
may be effected if the Bearer Securities are accompanied by payment in funds
acceptable to the Company in an amount equal to the face amount of such missing
coupon or coupons, or the surrender of such missing coupon or coupons may be
waived by the Company and the Trustee if there is furnished to them such
security or indemnity as they may require to save each of them and any Paying
Agent harmless. If thereafter the Holder of such Security shall surrender to any
Paying Agent any such missing coupon in respect of which such a payment shall
have been made, such Holder shall be entitled to receive the amount of such
payment; provided, however, that, except as otherwise provided in Section 1002,
interest represented by coupons shall be payable only upon presentation and
surrender of those coupons at an office or agency located outside the United
States. Notwithstanding the foregoing, in case a Bearer Security of any series
is surrendered at any such office or agency in a permitted exchange for a
Registered Security of the same series and like tenor after the close of
business at such office or agency on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (ii) any Special Record Date and before the opening of business at such
office or agency on the related proposed date for payment of Defaulted Interest,
such Bearer Security shall be surrendered without the coupon relating to such
Interest Payment Date or proposed date for payment, as the case may be, and
interest or Defaulted Interest, as the case may be, will not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.


                                      36



                  Notwithstanding the foregoing, except as otherwise specified
as contemplated by Section 301, any permanent Global Security shall be
exchangeable only as provided in this paragraph. If the depository for any
permanent Global Security is The Depository Trust Company ("DTC"), then, unless
the terms of such Global Security expressly permit such Global Security to be
exchanged in whole or in part for definitive Securities, a Global Security may
be transferred, in whole but not in part, only to a nominee of DTC, or by a
nominee of DTC to DTC, or to a successor to DTC for such Global Security
selected or approved by the Company or to a nominee of such successor to DTC. If
at any time DTC notifies the Company that it is unwilling or unable to continue
as depository for the applicable Global Security or Securities or if at any time
DTC ceases to be a clearing agency registered under the Securities Exchange Act
of 1934 if so required by applicable law or regulation, the Company shall
appoint a successor depository with respect to such Global Security or
Securities. If (x) a successor depository for such Global Security or Securities
is not appointed by the Company within 90 days after the Company receives such
notice or becomes aware of such unwillingness, inability or ineligibility, (y)
an Event of Default has occurred and is continuing and the beneficial owners
representing a majority in principal amount of the applicable series of
Securities represented by such Global Security or Securities advise DTC to cease
acting as depository for such Global Security or Securities or (z) the Company,
in its sole discretion, determines at any time that all Outstanding Securities
(but not less than all) of any series issued or issuable in the form of one or
more Global Securities shall no longer be represented by such Global Security or
Securities, then the Company shall execute, and the Trustee shall authenticate
and deliver definitive Securities of like series, rank, tenor and terms in
definitive form in an aggregate principal amount equal to the principal amount
of such Global Security or Securities. If any beneficial owner of an interest in
a permanent global Security is otherwise entitled to exchange such interest for
Securities of such series and of like tenor and principal amount of another
authorized form and denomination, as specified as contemplated by Section 301
and provided that any applicable notice provided in the permanent Global
Security shall have been given, then without unnecessary delay but in any event
not later than the earliest date on which such interest may be so exchanged, the
Company shall execute, and the Trustee shall authenticate and deliver definitive
Securities in aggregate principal amount equal to the principal amount of such
beneficial owner's interest in such permanent Global Security. On or after the
earliest date on which such interests may be so exchanged, such permanent Global
Security shall be surrendered for exchange by DTC or such other depository as
shall be specified in the Company Order with respect thereto to the Trustee, as
the Company's agent for such purpose; provided, however, that no such exchanges
may occur during a period beginning at the opening of business 15 days before
any selection of Securities to be redeemed and ending on the relevant Redemption
Date if the Security for which exchange is requested may be among those selected
for redemption; and provided further that no Bearer Security delivered in
exchange for a portion of a permanent Global Security shall be mailed or
otherwise delivered to any location in the United States. If a Registered
Security is issued in exchange for any portion of a permanent Global Security
after the close of business at the office or agency where such exchange occurs
on (i) any Regular Record Date and before the opening of business at


                                      37


such office or agency on the relevant Interest Payment Date, or (ii) any
Special Record Date and the opening of business at such office or agency on
the related proposed date for payment of Defaulted Interest, interest or
Defaulted Interest, as the case may be, will not be payable on such Interest
Payment Date or proposed date for payment, as the case may be, in respect of
such Registered Security, but will be payable on such Interest Payment Date
or proposed date for payment, as the case may be, only to the Person to whom
interest in respect of such portion of such permanent Global Security is
payable in accordance with the provisions of this Indenture.

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

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

                  No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 304, 906, 1107 or 1305 not involving any
transfer.

                  The Company or the Trustee, as applicable, shall not be
required (i) to issue, register the transfer of or exchange any Security if such
Security may be among those selected for redemption during a period beginning at
the opening of business 15 days before selection of the Securities to be
redeemed under Section 1103 and ending at the close of business on (A) if such
Securities are issuable only as Registered Securities, the day of the mailing of
the relevant notice of redemption and (B) if such Securities are issuable as
Bearer Securities, the day of the first publication of the relevant notice of
redemption or, if such Securities are also issuable as Registered Securities and
there is no publication, the mailing of the relevant notice of redemption, or
(ii) to register the transfer of or exchange any Registered Security so selected
for redemption in whole or in part, except, in the case of any Registered
Security to be redeemed in part, the portion thereof not to be redeemed, or
(iii) to exchange any Bearer Security so selected for redemption except that
such a Bearer Security may be exchanged for a Registered Security of that series
and like tenor, provided that such Registered Security shall be simultaneously
surrendered for redemption, or (iv) to issue, register the transfer of or
exchange any Security which has been surrendered for repayment at the option of
the Holder, except the portion, if any, of such Security not to be so repaid.


                                      38



                  SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security or a Security with a mutilated coupon appertaining to
it is surrendered to the Trustee or the Company, together with, in proper cases,
such security or indemnity as may be required by the Company or the Trustee to
save each of them or any agent of either of them harmless, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and principal amount, containing identical terms
and provisions and bearing a number not contemporaneously outstanding, with
coupons corresponding to the coupons, if any, appertaining to the surrendered
Security.

                  If there shall be delivered to the Company and to the Trustee
(i) evidence to their satisfaction of the destruction, loss or theft of any
Security or coupon, and (ii) such security or indemnity as may be required by
them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security or coupon has
been acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security or in exchange for the Security to which a
destroyed, lost or stolen coupon appertains (with all appurtenant coupons not
destroyed, lost or stolen), a new Security of the same series and principal
amount, containing identical terms and provisions and bearing a number not
contemporaneously outstanding, with coupons corresponding to the coupons, if
any, appertaining to such destroyed, lost or stolen Security or to the Security
to which such destroyed, lost or stolen coupon appertains.

                  Notwithstanding the provisions of the previous two paragraphs,
in case any such mutilated, destroyed, lost or stolen Security or coupon has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, with coupons corresponding to the coupons, if
any, appertaining to such destroyed, lost or stolen Security or to the Security
to which such destroyed, lost or stolen coupon appertains, pay such Security or
coupon; provided, however, that payment of principal of (and premium or
Make-Whole Amount, if any), and any interest on, Bearer Securities shall, except
as otherwise provided in Section 1002, be payable only at an office or agency
located outside the United States and, unless otherwise specified as
contemplated by Section 301, any interest on Bearer Securities shall be payable
only upon presentation and surrender of the coupons appertaining thereto.

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

                  Every new Security of any series with its coupons, if any,
issued pursuant to this Section in lieu of any destroyed, lost or stolen
Security, or in exchange for a Security to which a destroyed, lost or stolen
coupon appertains, shall constitute an


                                      39


original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security and its coupons, if any, or the destroyed,
lost or stolen coupon shall be at any time enforceable by anyone, and shall
be entitled to all the benefits of this Indenture equally and proportionately
with any and all other Securities of that series and their coupons, if any,
duly issued hereunder.

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

                  SECTION 307. Payment of Interest; Interest Rights
Preserved. Except as otherwise specified with respect to a series of
Securities in accordance with the provisions of Section 301, interest on any
Registered Security that is payable, and is punctually paid or duly provided
for, on any Interest Payment Date shall be paid to the Person in whose name
that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest at the office
or agency of the Company maintained for such purpose pursuant to Section
1002; provided, however, that each installment of interest on any Registered
Security may at the Company's option be paid by (i) mailing a check for such
interest, payable to or upon the written order of the Person entitled thereto
pursuant to Section 308, to the address of such Person as it appears on the
Security Register or (ii) transfer to an account maintained by the payee
located inside the United States.

                  Unless otherwise provided as contemplated by Section 301
with respect to the Securities of any series, payment of interest may be
made, in the case of a Bearer Security, by transfer to an account maintained
by the payee with a bank located outside the United States.

                  Unless otherwise provided as contemplated by Section 301,
every permanent global Security will provide that interest, if any, payable
on any Interest Payment Date will be paid to DTC, Euroclear and/or
Clearstream, as the case may be, with respect to that portion of such
permanent global Security held for its account by Cede & Co. or the Common
Depository, as the case may be, for the purpose of permitting such party to
credit the interest received by it in respect of such permanent global
Security to the accounts of the beneficial owners thereof.

                  In case a Bearer Security of any series is surrendered in
exchange for a Registered Security of such series after the close of business
(at an office or agency in a Place of Payment for such series) on any Regular
Record Date and before the opening of business (at such office or agency) on
the next succeeding Interest Payment Date, such Bearer Security shall be
surrendered without the coupon relating to such Interest Payment Date and
interest will not be payable on such Interest Payment Date in respect of the
Registered Security issued in exchange for such Bearer Security, but will be
payable only to the Holder of such coupon when due in accordance with the
provisions of this Indenture.


                                      40



                  Except as otherwise specified with respect to a series of
Securities in accordance with the provisions of Section 301, any interest on
any Registered Security of any series that is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the registered
Holder thereof on the relevant Regular Record Date by virtue of having been
such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in clause (1) or (2) below:

                                    (1)      The Company may elect to make
payment of any Defaulted Interest to the Persons in whose names the
Registered Securities of such series (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 Registered Security
of such series and the date of the proposed payment (which shall not be less
than 20 days after such notice is received by the Trustee), and at the same
time the Company shall deposit with the Trustee an amount of money in the
currency or currencies, currency unit or units or composite currency or
currencies in which the Securities of such series are payable (except as
otherwise specified pursuant to Section 301 for the Securities of such
series) 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 on or 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 be not more than 15 days
and not 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 Holder of Registered Securities of such series at his address as it
appears in the Security Register not less than 10 days prior to such Special
Record Date. The Trustee may, in its discretion, in the name and at the
expense of the Company, cause a similar notice to be published at least once
in an Authorized Newspaper in each Place of Payment, but such publications
shall not be a condition precedent to the establishment of 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 the Registered
Securities of such series (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following clause (2). In case a Bearer
Security of any series is surrendered at the office or agency in a Place of
Payment for such series in exchange for a Registered Security of such series
after the close of


                                      41



business at such office or agency on any Special Record Date and before the
opening of business at such office or agency on the related proposed date for
payment of Defaulted Interest, such Bearer Security shall be surrendered
without the coupon relating to such proposed date of payment and Defaulted
Interest will not be payable on such proposed date of payment in respect of
the Registered Security issued in exchange for such Bearer Security, but will
be payable only to the Holder of such coupon when due in accordance with the
provisions of this Indenture.

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

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

                  SECTION 308. PERSONS DEEMED OWNERS. Prior to due
presentment of a Registered Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Registered Security is registered as the owner
of such Security for the purpose of receiving payment of principal of (and
premium or Make-Whole Amount, if any), and (subject to Sections 305 and 307)
interest on, such Registered Security and for all other purposes whatsoever,
whether or not such Registered Security be overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary. All such payments so made to any such Person, or upon
such Person's order, shall be valid, and, to the extent of the sum or sums so
paid, effectual to satisfy and discharge the liability for money payable upon
any such Security.

                  Title to any Bearer Security and any coupons appertaining
thereto shall pass by delivery. The Company, the Trustee and any agent of the
Company or the Trustee may treat the Holder of any Bearer Security and the
Holder of any coupon as the absolute owner of such Security or coupon for the
purpose of receiving payment thereof or on account thereof and for all other
purposes whatsoever, whether or not such Security or coupon be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.

                  No Holder of any beneficial interest in any Global Security
held on its behalf by a depository shall have any rights under this Indenture
with respect to such Global Security and such depository shall be treated by
the Company, the Trustee, and any agent of the Company or the Trustee as the
owner of such Global Security for all purposes whatsoever. None of the
Company, the Trustee, any Paying Agent or the


                                      42



Security Registrar will have any responsibility or liability for any aspect
of the records relating to or payments made on account of beneficial
ownership interests of a Global Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.

                  Notwithstanding the foregoing, with respect to any Global
Security, nothing herein shall prevent the Company, the Trustee, or any agent
of the Company or the Trustee, from giving effect to any written
certification, proxy or other authorization furnished by any depository, as a
Holder, with respect to such Global Security or impair, as between such
depository and owners of beneficial interests in such Global Security, the
operation of customary practices governing the exercise of the rights of such
depository (or its nominee) as Holder of such Global Security.

                  SECTION 309. CANCELLATION. All Securities and coupons
surrendered for payment, redemption, repayment at the option of the Holder,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee, and any such Securities and coupons and Securities
and coupons surrendered directly to the Trustee for any such purpose shall be
promptly cancelled by it. The Company may at any time deliver to the Trustee
for cancellation any Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and
may deliver to the Trustee (or to any other Person for delivery to the
Trustee) for cancellation any Securities previously authenticated hereunder
which the Company has not issued and sold, and all Securities so delivered
shall be promptly cancelled by the Trustee. If the Company shall so 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 surrendered to the Trustee for cancellation. No
Securities shall be authenticated in lieu of or in exchange for any
Securities cancelled as provided in this Section, except as expressly
permitted by this Indenture. Cancelled Securities and coupons held by the
Trustee shall be destroyed by the Trustee and the Trustee shall deliver a
certificate of such destruction to the Company, unless the Trustee is
otherwise directed by a Company Order.

                  SECTION 310. COMPUTATION OF INTEREST. Except as otherwise
specified as contemplated by Section 301 with respect to Securities of any
series, interest on the Securities of each series shall be computed on the
basis of a 360-day year consisting of twelve 30-day months.

                    ARTICLE FOUR - SATISFACTION AND DISCHARGE

                  SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE. This
Indenture shall upon Company Request cease to be of further effect with
respect to any series of Securities specified in such Company Request (except
as to any surviving rights of registration of transfer or exchange of
Securities of such series herein expressly provided for), and the Trustee,
upon receipt of a Company Order, and at the expense of


                                      43



the Company, shall execute instruments in form and substance satisfactory to
the Trustee and the Company acknowledging satisfaction and discharge of this
Indenture as to such series when

                  (1) either

                           (A)      all Securities of such series theretofore
authenticated and delivered and all coupons, if any, appertaining thereto
(other than (i) coupons appertaining to Bearer Securities surrendered for
exchange for Registered Securities and maturing after such exchange, whose
surrender is not required or has been waived as provided in Section 305, (ii)
Securities and coupons of such series which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section 306, (iii)
coupons appertaining to Securities called for redemption and maturing after
the relevant Redemption Date, whose surrender has been waived as provided in
Section 1106, and (iv) Securities and coupons of such series for whose
payment money has theretofore been deposited in trust or segregated and held
in trust by the Company and thereafter repaid to the Company or discharged
from such trust, as provided in Section 1003) have been delivered to the
Trustee for cancellation; or

                           (B)      all Securities of such series and, in the
case of (i) or (ii) below, any coupons appertaining thereto not theretofore
delivered to the Trustee for cancellation (i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one year, or
(iii) if redeemable at the option of the Company, are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the name, and at the
expense, of the Company, and the Company, in the case of (i), (ii) or (iii)
above, has irrevocably deposited or caused to be deposited with the Trustee
as trust funds in trust for the purpose an amount in the currency or
currencies, currency unit or units or composite currency or currencies in
which the Securities of such series are payable, sufficient to pay and
discharge the entire indebtedness on such Securities and such coupons not
theretofore delivered to the Trustee for cancellation, for principal (and
premium or Make-Whole Amount, if any) and interest to the date of such
deposit (in the case of Securities which have become due and payable) or to
the Stated Maturity or Redemption Date, as the case may be; (2) the Company
has paid or caused to be paid all other sums payable hereunder by the
Company; and (3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of
this Indenture as to such series have been complied with.

                  Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee and any predecessor
Trustee under Section 606, the obligations of the Company to any
Authenticating Agent under Section 611 and, if money shall have been
deposited with and held by the Trustee pursuant to subclause


                                      44



(B) of clause (1) of this Section, the obligations of the Trustee under
Section 402 and the last paragraph of Section 1003 shall survive.

                  SECTION 402. APPLICATION OF TRUST FUNDS. Subject to the
provisions of the last paragraph of Section 1003, all money deposited with
the Trustee pursuant to Section 401 shall be held in trust and applied by it,
in accordance with the provisions of the Securities, the coupons and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium or
Make-Whole Amount, if any), and any interest for whose payment such money has
been deposited with or received by the Trustee, but such money need not be
segregated from other funds except to the extent required by law.

                             ARTICLE FIVE - REMEDIES

                  SECTION 501. EVENTS OF DEFAULT. "Event of Default,"
wherever used herein with respect to any particular series of Securities,
means any one of the following events (whatever the reason for such Event of
Default and whether or not it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):

                                    (1)      default in the payment of any
interest on any Security of that series or of any coupon appertaining
thereto, when such interest or coupon becomes due and payable, and
continuance of such default for a period of 30 days; or

                                    (2)      default in the payment of the
principal of (or premium or Make-Whole Amount, if any, on) any Security of
that series when it becomes due and payable at its Maturity; or

                                    (3)      default in the deposit of any
sinking fund payment, when and as due by the terms of any Security of that
series; or

                                    (4)      default in the performance, or
breach, of any covenant or warranty of the Company in this Indenture with
respect to any Security of that series (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this Section
specifically dealt with), and continuance of such default or breach for a
period of 60 days after there has been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in principal amount of the Outstanding Securities of
that series a


                                      45



written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder; or

                                    (5)      default under any bond,
debenture, note, mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any indebtedness for
money borrowed by the Company (or by any Subsidiary, the repayment of which
the Company has guaranteed or for which the Company is directly responsible
or liable as obligor or guarantor), having an aggregate principal amount
outstanding of at least $100,000,000, whether such indebtedness now exists or
shall hereafter be created, which default shall have resulted in such
indebtedness becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable, without such
indebtedness having been discharged, or such acceleration having been
rescinded or annulled, within a period of 10 days after there shall have been
given, by registered or certified mail, to the Company by the Trustee or to
the Company and the Trustee by the Holders of at least 10% in principal
amount of the Outstanding Securities of that series a written notice
specifying such default and requiring the Company to cause such indebtedness
to be discharged or cause such acceleration to be rescinded or annulled and
stating that such notice is a "Notice of Default" hereunder; or

                                    a court of competent jurisdiction enters
one or more judgments, orders or decrees in an aggregate amount (excluding
amounts covered by insurance) in excess of $100,000,000 and such judgments,
orders or decrees remain undischarged, unstayed and unsatisfied in an
aggregate amount (excluding amounts covered by insurance) in excess of
$100,000,000 for a period of 30 consecutive days; or

                                    (7)      the Company or any Significant
Subsidiary pursuant to or within the meaning of any Bankruptcy Law:

                                            (A)      commences a voluntary
case,

                                            (B)      consents to the entry of
an order for relief against it in an involuntary case,

                                            (C)      consents to the
appointment of a Custodian of it or for all or substantially all of its
property, or

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

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


                                      46



                                            (A)      is for relief against
the Company or any Significant Subsidiary in an involuntary case,

                                            (B)      appoints  a  Custodian
of the Company or any Significant Subsidiary or for all or substantially all
of either of its property, or

                                            (C)      orders  the  liquidation
 of the Company or any Significant Subsidiary, and the order or decree
remains unstayed and in effect for 90 days; or

                                    (9)     any other Event of Default
provided with respect to Securities of that series.

                  As used in this Section 501, the term "Bankruptcy Law"
means title 11, U.S. Code or any similar Federal or state law for the relief
of debtors and the term "Custodian" means any receiver, trustee, assignee,
liquidator or other similar official under any Bankruptcy Law.

                  SECTION 502. Acceleration of Maturity; Rescission and
Annulment. If an Event of Default with respect to Securities of any series at
the time Outstanding occurs and is continuing, then and in every such case
the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal amount (or,
if Securities of that Series are Original Issue Discount Securities or
Indexed Securities, such portion of the principal as may be specified in the
terms thereof) of all the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if
given by the Holders), and upon any such declaration such principal or
specified portion thereof shall become immediately due and payable.

                  At any time after such a declaration of acceleration with
respect to Securities of any series has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of a majority in principal
amount of the Outstanding Securities of that series, by written notice to the
Company and the Trustee, may rescind and annul such declaration of
acceleration and its consequences if:

                                    (1)      the Company has paid or
deposited with the Trustee a sum sufficient to pay in the currency, currency
unit or composite currency in which the Securities of such series are payable
(except as otherwise specified pursuant to Section 301 for the Securities of
such series):


                                      47



                                            (A)      all  overdue
installments of interest on all Outstanding Securities of that series and any
related coupons,

                                            (B)      the  principal of (and
premium or Make-Whole Amount, if any, on) any Outstanding Securities of that
series which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates borne by or provided
for in such Securities,

                                            (C)      to the  extent  that
payment of such interest is lawful, interest upon overdue installments of
interest at the rate or rates borne by or provided for in such Securities, and

                                            (D)      all sums paid or
advanced by the Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel; and

                                    (2)     all  Events of  Default  with
respect to Securities of that series, other than the nonpayment of the
principal of (or premium or Make-Whole Amount, if any) or interest on
Securities of that series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513. No such
rescission shall affect any subsequent default or impair any right consequent
thereon.

         SECTION  503. Collection of Indebtedness and Suits for Enforcement
by Trustee. The Company covenants that if:

                                    (1)     default is made in the  payment
of any installment of interest on any Security of any series and any related
coupon when such interest becomes due and payable and such default continues
for a period of 30 days, or

                                    (2)     default  is made in the  payment
of the principal of (or premium or Make-Whole Amount, if any, on) any
Security of any series at its Maturity, then the Company will, upon demand of
the Trustee, pay to the Trustee, for the benefit of the Holders of such
Securities of such series and coupons, the whole amount then due and payable
on such Securities and coupons for principal (and premium or Make-Whole
Amount, if any) and interest, with interest upon any overdue principal (and
premium or Make-Whole Amount, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue installments of
interest at the rate or rates borne by or provided for in such Securities,
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including the


                                      48



reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.

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

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

                  SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM. In case of
the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities
or the property of the Company or of such other obligor or their creditors,
the Trustee (irrespective of whether the principal of the Securities of any
series shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any
demand on the Company for the payment of overdue principal premium or
Make-Whole Amount, if any, or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise:

                                    (i)      to file and prove a claim for
the whole amount, or such lesser amount as may be provided for in the
Securities of such series, of principal (and premium or Make-Whole Amount, if
any) and interest owing and unpaid in respect of the Securities and to file
such other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and of the Holders allowed in such judicial proceeding, and

                                   (ii)     to collect and receive any moneys
or other property payable or deliverable on any such claims and to distribute
the same; and any custodian, receiver, assignee, trustee, liquidator,
sequestrator (or other similar official) in any such judicial proceeding is
hereby authorized by each Holder of Securities of such series and coupons to
make such payments to the Trustee, and in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any


                                      49



amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee and any predecessor Trustee, their agents and
counsel, and any other amounts due the Trustee or any predecessor Trustee
under Section 606. Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
of a Security or coupon any plan of reorganization, arrangement, adjustment
or composition affecting the Securities or coupons or the rights of any
Holder thereof, or to authorize the Trustee to vote in respect of the claim
of any Holder of a Security or coupon in any such proceeding.

                  In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture
to which the Trustee shall be a party) the Trustee shall be held to represent
all the Holders of the Securities, and it shall not be necessary to make any
Holders of the Securities parties to any such proceedings.

                  SECTION 505. Trustee May Enforce Claims Without Possession
of Securities or Coupons. All rights of action and claims under this
Indenture or any of the Securities or coupons may be prosecuted and enforced
by the Trustee without the possession of any of the Securities or coupons or
the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities and coupons in respect of
which such judgment has been recovered.

                  SECTION 506. APPLICATION OF MONEY COLLECTED. Any money
collected by the Trustee pursuant to this Article shall be applied in the
following order, at the date or dates fixed by the Trustee and, in case of
the distribution of such money on account of principal (or premium or
Make-Whole Amount, if any) or interest, upon presentation of the Securities
or coupons, or both, as the case may be, and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:

                           FIRST: To the payment of all amounts due the
Trustee and any predecessor Trustee under Section 606;

                           SECOND: To the payment of the amounts then due and
unpaid upon the Securities and coupons for principal (and premium or
Make-Whole Amount, 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 aggregate amounts due and payable
on such Securities and coupons for principal (and premium or Make- Whole
Amount, if any) and interest, respectively; and

                           THIRD: To the payment of the remainder, if any, to
the Company.


                                      50



                  SECTION 507. LIMITATION ON SUITS. No Holder of any Security
of any series or any related coupon shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder,
unless:

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

                                    (2)      the Holders of not less than 25%
in principal amount of the Outstanding Securities of that series shall have
made written request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee hereunder;


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

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

                                    (5)      no direction inconsistent with
such  written request has been given to the Trustee during such 60-day period
by the Holders of a majority in principal amount of the Outstanding
Securities of that series; it being understood and intended that no one or
more of such Holders shall have any right in any manner whatever by virtue
of, or by availing of, any provision of this Indenture to affect, disturb or
prejudice the rights of any other of such Holders, or to obtain or to seek to
obtain priority or preference over any other of such Holders or to enforce
any right under this Indenture, except in the manner herein provided and for
the equal and ratable benefit of all such Holders.

                  SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium or Make-Whole Amount, if any, and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Security or coupon shall have the right which is absolute and unconditional
to receive payment of the principal of (and premium or Make-Whole Amount, if
any) and (subject to Sections 305 and 307) interest on such Security or
payment of such coupon on the respective due dates expressed in such Security
or coupon (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.


                                      51



                  SECTION 509. RESTORATION OF RIGHTS AND REMEDIES. If the
Trustee or any Holder of a Security or coupon has instituted any proceeding
to enforce any right or remedy under this Indenture and such proceeding has
been discontinued or abandoned for any reason, or has been determined
adversely to the Trustee or to such Holder, then and in every such case, the
Company, the Trustee and the Holders of Securities and coupons shall, subject
to any determination in such proceeding, be restored severally and
respectively to their former positions hereunder and thereafter all rights
and remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.

                  SECTION 510. RIGHTS AND REMEDIES CUMULATIVE. Except as
otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities or coupons in the last paragraph of
Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders of Securities or coupons is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.

                  SECTION 511. DELAY OR OMISSION NOT WAIVER. No delay or
omission of the Trustee or of any Holder of any Security or coupon to
exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default
or an acquiescence therein. Every right and remedy given by this Article or
by law to the Trustee or to the Holders may be exercised from time to time,
and as often as may be deemed expedient, by the Trustee or by the Holders of
Securities or coupons, as the case may be.

                  SECTION 512. CONTROL BY HOLDERS OF SECURITIES. The Holders
of not less than a majority in principal amount of the Outstanding Securities
of any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee with respect to the
Securities of such series, provided that

                                    (1)      such direction shall not be in
conflict with any rule of law or with this Indenture,

                                    (2)      the Trustee may take any other
action deemed proper by the Trustee which is not inconsistent with such
direction, and


                                      52



                                    (3)      the Trustee need not take any
action which might involve it in personal liability or be unduly prejudicial
to the Holders of Securities of such series not joining therein. Nothing in
this Indenture shall impair the right of the Trustee in its discretion to
take any action deemed proper by the Trustee and which is not inconsistent
with such direction by Holders.

                  SECTION 513. WAIVER OF PAST DEFAULTS. The Holders of not
less than a majority in principal amount of the Outstanding Securities of any
series may on behalf of the Holders of all the Securities of such series and
any related coupons waive any past default hereunder with respect to such
series and its consequences, except a default

                                    (1)      in the payment of the principal
of (or premium or Make-Whole Amount, if any) or interest on any Security of
such series or any related coupons, or

                                    (2)      in respect of a covenant or
provision hereof which under Article Nine cannot be modified or amended
without the consent of the Holder of each Outstanding Security of such series
affected.

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

                  SECTION 514. WAIVER OF USURY, STAY OR EXTENSION LAWS. The
Company covenants (to the extent that it may lawfully do so) that it will not
at any time insist upon, or plead, or in any manner whatsoever claim or take
the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.

                  SECTION 515. UNDERTAKING FOR COSTS. All parties to this
Indenture agree, and each Holder of any Security by his 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 Holder, or group of Holders, holding in the


                                      53



aggregate more than 10% in principal amount of the Outstanding Securities of
any series, or to any suit instituted by any Holder for the enforcement of
the payment of the principal of (or premium or Make-Whole Amount, if any) or
interest on any Security on or after the respective Stated Maturities
expressed in such Security (or, in the case of redemption, on or after the
Redemption Date).

                            ARTICLE SIX - THE TRUSTEE

                  SECTION 601. NOTICE OF DEFAULTS. Within 90 days after the
occurrence of any default hereunder with respect to the Securities of any
series, the Trustee shall transmit in the manner and to the extent provided
in TIA Section 313(c), notice of such default hereunder known to the Trustee,
unless such default shall have been cured or waived; provided, however, that,
except in the case of a default in the payment of the principal of (or
premium or Make-Whole Amount, if any) or interest on any Security of such
series, or in the payment of any sinking or purchase fund installment with
respect to the Securities of such 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 the Securities and coupons of
such series; and provided further that in the case of any default or breach
of the character specified in Section 501(4) with respect to the Securities
and coupons of such series, no such notice to Holders shall be given until at
least 60 days after the occurrence thereof. For the purpose of this Section,
the term "default" means any event which is, or after notice or lapse of time
or both would become, an Event of Default with respect to the Securities of
such series.

                  SECTION 602. Certain Rights of Trustee. Subject to the
provisions of TIA Section 315(a) through 315(d):

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

                                    (2)      any request or direction of the
Company mentioned herein shall be sufficiently evidenced by a Company Request
or Company Order (other than delivery of any Security, together with any
coupons appertaining thereto, to the Trustee for authentication and delivery
pursuant to Section 303 which shall be sufficiently evidenced as provided
therein) and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;


                                      54



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

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

                                    (5)     the  Trustee  shall be  under  no
 obligation to exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Holders of Securities of
any series or any related coupons pursuant to this Indenture, unless such
Holders shall have offered to the Trustee security or indemnity reasonably
satisfactory to the Trustee against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction;

                                    (6)      the Trustee shall not be bound
to make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, coupon or other paper or
document, unless requested in writing so to do by the Holders of not less
than a majority in aggregate principal amount of the Outstanding Securities
of any series; provided 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
expenses or liabilities as a condition to proceeding; the reasonable expenses
of every such examination shall be paid by the Holders or, if paid by the
Trustee, shall be repaid by the Holders upon demand. The Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, relevant to the facts or matters that
are the subject of its inquiry, personally or by agent or attorney;

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


                                      55



                                    (8)      the Trustee shall not be liable
for any action taken, suffered or omitted by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Indenture.

                  The Trustee shall not be required to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers, if
it shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably
assured to it.

                  Except during the continuance of an Event of Default, the
Trustee undertakes to perform 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.

                  SECTION 603. Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Securities, except the
Trustee's certificate of authentication, and in any coupons shall be taken as
the statements of the Company, and neither the Trustee nor any Authenticating
Agent assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.

                  SECTION 604. MAY HOLD SECURITIES. The Trustee, any Paying
Agent, Security Registrar, Authenticating Agent or any other agent of the
Company, in its individual or any other capacity, may become the owner or
pledgee of Securities and coupons and, subject to TIA Sections 310(b) and
311, may otherwise deal with the Company with the same rights it would have
if it were not Trustee, Paying Agent, Security Registrar, Authenticating
Agent or such other agent.

                  SECTION 605. MONEY HELD IN TRUST. Money held by the Trustee
in trust hereunder need not be segregated from other funds except to the
extent required by law. The Trustee shall be under no liability for interest
on any money received by it hereunder except as otherwise agreed with the
Company.

                  SECTION 606. COMPENSATION AND REIMBURSEMENT. The Company
agrees:

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


                                      56



                                    (2)      except as otherwise expressly
provided herein, to reimburse each of the Trustee and any predecessor Trustee
upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the reasonable expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and

                                    (3)      to indemnify each of the Trustee
and any predecessor Trustee for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.

                  When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 501(7) or Section
501(8), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable Federal or state bankruptcy,
insolvency or other similar law.

                  As security for the performance of the obligations of the
Company under this Section, the Trustee shall have a lien prior to the
Securities upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the payment of principal of (or premium
or Make-Whole Amount, if any) or interest on particular Securities or any
coupons.

                  The provisions of this Section shall survive the
termination of this Indenture.

                  SECTION 607. Corporate Trustee Required; Eligibility;
Conflicting Interests. There shall at all times be a Trustee hereunder which
shall be eligible to act as Trustee under TIA Section 310(a)(1) and shall
have at all times a combined capital and surplus of at least $50,000,000. If
the Trustee publishes reports of condition at least annually, pursuant to law
or the requirements of Federal, state, territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section,
the combined capital and surplus of the Trustee shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article. Neither the Company nor any Person directly or indirectly
controlling, controlled by, or under common control with the Company shall
serve as Trustee.

                SECTION 608.  RESIGNATION AND REMOVAL; APPOINTMENT OF
SUCCESSOR.


                                      57



                           (1)      No resignation or removal of the Trustee
and no appointment of a successor Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor Trustee
in accordance with the applicable requirements of Section 609.

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

                           (3)      The Trustee may be removed at any time
with respect to the Securities of any series by Act of the Holders of a
majority in principal amount of the Outstanding Securities of such series
delivered to the Trustee and to the Company.

                           (4)      If at any time:

                                    (a)      the Trustee shall fail to comply
with the provisions of TIA Section 310(b) after written request therefor by
the Company or by any Holder of a Security who has been a bona fide Holder of
a Security for at least six months, or

                                    (b)      the Trustee shall cease to be
eligible under Section 607 and shall fail to resign after written request
therefor by the Company or by any Holder of a Security who has been a bona
fide Holder of a Security for at least six months, or

                                    (c)      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, (i) the Company by or pursuant to a Board Resolution may
remove the Trustee and appoint a successor Trustee with respect to all
Securities, or (ii) subject to TIA Section 315(e), any Holder of a Security
who has been a bona fide Holder of a Security 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 with respect to all
Securities and the appointment of a successor Trustee or Trustees.

                           (5)      If the Trustee shall resign, be removed
or become incapable of acting, or if a vacancy shall occur in the office of
Trustee for any cause with respect to


                                      58



the Securities of one or more series, the Company, by or pursuant to a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that
any such successor Trustee may be appointed with respect to the Securities of
one or more or all of such series and that at any time there shall be only
one Trustee with respect to the Securities of any particular series). If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to the
Securities of any series shall be appointed by Act of the Holders of a
majority in principal amount of the Outstanding Securities of such series
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become
the successor Trustee with respect to the Securities of such series and to
that extent supersede the successor Trustee appointed by the Company. If no
successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders of Securities and accepted
appointment in the manner hereinafter provided, any Holder of a Security who
has been a bona fide Holder of a Security of such series for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor
Trustee with respect to Securities of such series.

                           (6)      The Company shall give notice of each
resignation and each removal of the Trustee with respect to the Securities of
any series and each appointment of a successor Trustee with respect to the
Securities of any series in the manner provided for notices to the Holders of
Securities in Section 106. Each notice shall include the name of the
successor Trustee with respect to the Securities of such series and the
address of its Corporate Trust Office.

                  SECTION 609. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. (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 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 nevertheless to its claim, if any, provided for in Section
606.

                           (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, pursuant to Article Nine


                                      59



hereof, wherein each successor Trustee shall accept such appointment and
which (1) shall contain such provisions as shall be necessary or desirable to
transfer and confirm to, and to vest in, each successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates, (2) if the retiring Trustee is not retiring with respect to
all Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart
from any trust or trusts hereunder administered by any other such Trustee;
and upon the execution and delivery of such supplemental indenture the
resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, without any further
act, 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 all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.

                           (c)      Upon request of any such successor
Trustee, the Company shall execute any and 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
609, as the case may be.

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

                  SECTION 610. Merger, Conversion, Consolidation or
Succession to Business. Any corporation into which the Trustee may be merged
or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation succeeding to all or substantially all
of the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be otherwise qualified and
eligible under this Article, without the execution or filing of any paper or
any further act on the part of any of the parties hereto. In case any
Securities or coupons shall have been authenticated, but not delivered, by
the Trustee then in office, any successor by merger,


                                      60



conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities or coupons so authenticated with
the same effect as if such successor Trustee had itself authenticated such
Securities or coupons. In case any Securities or coupons shall not have been
authenticated by such predecessor Trustee, any such successor Trustee may
authenticate and deliver such Securities or coupons, in either its own name
or that of its predecessor Trustee, with the full force and effect which this
Indenture provides for the certificate of authentication of the Trustee.

                  SECTION 611. APPOINTMENT OF AUTHENTICATING AGENT. At any
time when any of the Securities remain Outstanding, the Trustee may appoint
an Authenticating Agent or Agents with respect to one or more series of
Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon exchange, registration of
transfer or partial redemption or repayment 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. Any such appointment shall be evidenced by an instrument in
writing signed by a Responsible Officer of the Trustee, a copy of which
instrument shall be promptly furnished to the Company. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by
the Trustee or the Trustee's certificate of authentication, such reference
shall be deemed to include authentication and delivery on behalf of the
Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all
times be a bank or trust company or corporation organized and doing business
and in good standing under the laws of the United States of America or of any
state or the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and subject to supervision or examination by Federal or state
authorities. If such Authenticating Agent publishes reports of condition at
least annually, pursuant to law or the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section,
the combined capital and surplus of such Authenticating Agent shall be deemed
to be its combined capital and surplus as set forth in its most recent report
of condition so published. In case at any time an Authenticating Agent shall
cease to be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.

                  Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent,
shall continue to be an Authenticating Agent, provided such corporation shall
be otherwise eligible under this Section, without the execution or filing of
any paper or further act on the part of the Trustee or the Authenticating
Agent.


                                      61



                  An Authenticating Agent for any series of Securities may at
any time resign by giving written notice of resignation to the Trustee for
such series and to the Company. The Trustee for any series of Securities may
at any time terminate the agency of an Authenticating Agent by giving written
notice of termination to such Authenticating Agent and to the Company. Upon
receiving such a notice of resignation or upon such a termination, or in case
at any time such Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, the Trustee for such series
may appoint a successor Authenticating Agent which shall be acceptable to the
Company and shall give notice of such appointment to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve in the manner set forth in Section 106. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with
all the rights, powers and duties of its predecessor hereunder, with like
effect as if originally named as an Authenticating Agent herein. No successor
Authenticating Agent shall be appointed unless eligible under the provisions
of this Section.

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

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

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

                                                     [                       ]
                                                      -----------------------
                                                      as Trustee

Dated:                                      By:
      -------------                             ----------------
                                                        as Authenticating Agent

Dated:                                      By:
      -------------                             ----------------
                                                         Authorized Signatory

              SECTION 612.  CERTAIN DUTIES AND RESPONSIBILITIES OF THE
TRUSTEE.

                  (a) With respect to the Securities of any series, except
during the continuance of an Event of Default with respect to the Securities
of such series:

                           (1)      the Trustee undertakes to perform such
duties and only such duties as are specifically set forth in this Indenture,
and no implied covenants or obligations shall be read into this Indenture
against the Trustee; and


                                      62



                           (2)      in the absence of bad faith on its part,
the Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or opinion 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 shall not be
under any duty to verify the contents or accuracy thereof.

                  (b) In case an Event of Default with respect to the
Securities of any series has occurred and is continuing, the Trustee shall,
with respect to Securities of such series, exercise 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.

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

                           (1)      this Subsection shall not be construed to
limit the effect of Subsection (a) of this Section;

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

                           (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 a majority in principal
amount of the Outstanding Securities of any series relating to the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under
this Indenture with respect to the Securities of such series; and

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

                  (d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to the
provisions of this Section 612.


                                      63



         ARTICLE SEVEN - HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

                  SECTION 701. Disclosure of Names and Addresses of Holders.
Every Holder of Securities or coupons, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any Authenticating Agent nor any Paying Agent nor any Security
Registrar shall be held accountable by reason of the disclosure of any
information as to the names and addresses of the Holders of Securities in
accordance with TIA Section 312, 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 TIA
Section 312(b).

                  SECTION 702. REPORTS BY TRUSTEE. The Trustee shall transmit
to Holders such reports concerning the Trustee and its actions under this
Indenture as may be required by TIA Section 313 at the times and in the
manner provided by the TIA, which shall initially be not less than every
twelve months commencing on [_________________], 200_. A copy of each such
report shall, at the time of such transmission to Holders, be filed by the
Trustee with each stock exchange, if any, upon which any Securities are
listed, with the Commission and with the Company. The Company will notify the
Trustee when any Securities are listed on any stock exchange.

                   SECTION 703.  REPORTS BY COMPANY.  The Company will:

                                    (1)      file with the Trustee, within 15
days after the Company is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other
reports (or copies 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 Securities Exchange Act of 1934; or, if the Company is not
required to file information, documents or reports pursuant to either of such
Sections, then it will file with the Trustee and the Commission, in
accordance with 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 Securities
Exchange Act of 1934 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;

                                    (2)      file with the Trustee and the
Commission, in accordance with 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
of this Indenture as may be required from time to time by such rules and
regulations; and


                                      64



                                    (3)      transmit by mail to the Holders
of Securities, within 30 days after the filing thereof with the Trustee, in
the manner and to the extent provided in TIA Section 313(c), such summaries
of any information, documents and reports required to be filed by the Company
pursuant to paragraphs (1) and (2) of this Section as may be required by
rules and regulations prescribed from time to time by the Commission.

                  SECTION  704. Company to Furnish Trustee Names and
Addresses of Holders. The Company will furnish or cause to be furnished to
the Trustee:

                           (a)      semiannually, not later than 15 days
after the Regular Record Date for interest for each series of Securities, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders of Registered Securities of such series as of such
Regular Record Date, or if there is no Regular Record Date for interest for
such series of Securities, semiannually, upon such dates as are set forth in
the Board Resolution or indenture supplemental hereto authorizing such
series, 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, that, so
long as the Trustee is the Security Registrar, no such list shall be required
to be furnished.

     ARTICLE EIGHT - CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE

                  SECTION 801. Consolidations and Mergers of Company and
Sales, Leases and Conveyances Permitted Subject to Certain Conditions. The
Company may consolidate with, or sell, lease or convey all or substantially
all of its assets to, or merge with or into any other corporation, provided
that in any such case, (1) either the Company shall be the continuing
corporation, or the successor corporation shall be a corporation organized
and existing under the laws of the United States or a State thereof and such
successor corporation shall expressly assume the due and punctual payment of
the principal of (and premium or Make-Whole Amount, if any) and any interest
on all of the Securities, according to their tenor, and the due and punctual
performance and observance of all of the covenants and conditions of this
Indenture to be performed by the Company by supplemental indenture, complying
with Article Nine hereof, satisfactory to the Trustee, executed and delivered
to the Trustee by such corporation and (2) immediately after giving effect to
such transaction and treating any indebtedness which becomes an obligation of
the Company or any Subsidiary as a result thereof as having been incurred by
the Company or such Subsidiary at the time of such transaction, no Event of
Default, and no event which, after notice or the lapse of time, or both,
would become an Event of Default, shall have occurred and be continuing.


                                      65



                  SECTION 802. RIGHTS AND DUTIES OF SUCCESSOR CORPORATION. In
case of any such consolidation, merger, sale, lease or conveyance and upon
any such assumption by the successor corporation, 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 the
predecessor corporation, except in the event of a lease, shall be relieved of
any further obligation 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, 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
corporation, 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 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.

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

                  SECTION 803. Officers' Certificate and Opinion of Counsel.
Any consolidation, merger, sale, lease or conveyance permitted under Section
801 is also subject to the condition that the Trustee receive an Officers'
Certificate and an Opinion of Counsel to the effect that any such
consolidation, merger, sale, lease or conveyance, and the assumption by any
successor corporation, complies with the provisions of this Article and that
all conditions precedent herein provided for relating to such transaction
have been complied with.

                     ARTICLE NINE - SUPPLEMENTAL INDENTURES

                  SECTION 901. Supplemental Indentures Without Consent of
Holders. Without the consent of any Holders of Securities or coupons, the
Company, when authorized by or pursuant to a Board Resolution, and the
Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any
of the following purposes:

                                    (1)      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 and in the Securities; or


                                      66



                                    (2)      to add to the covenants of the
Company for the benefit of the Holders of all or any series of Securities
(and if such covenants are to be for the benefit of less than all series of
Securities, stating that such covenants are expressly being included solely
for the benefit of such series) or to surrender any right or power herein
conferred upon the Company; or

                                    (3)      to add any additional Events of
Default for the benefit of the Holders of all or any series of Securities
(and if such Events of Default are to be for the benefit of less than all
series of Securities, stating that such Events of Default are expressly being
included solely for the benefit of such series); provided, however, that in
respect of any such additional Events of Default 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 that or those
series of Securities to which such additional Events of Default apply to
waive such default; or

                                    (4)      to add to or change any of the
provisions of this Indenture to provide that Bearer Securities may be
registrable as to principal, to change or eliminate any restrictions on the
payment of principal of or premium or Make-Whole Amount, if any, or interest
on Bearer Securities, to permit Bearer Securities to be issued in exchange
for Registered Securities, to permit Bearer Securities to be issued in
exchange for Bearer Securities of other authorized denominations or to permit
or facilitate the issuance of Securities in uncertificated form, provided
that any such action shall not adversely affect the interests of the Holders
of Securities of any series or any related coupons in any material respect; or

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

                                    (6)      to secure the Securities; or

                                    (7)      to establish the form or terms
of  Securities of any series and any related coupons as permitted by Sections
201 and 301; or

                                    (8)      to evidence and provide for the
acceptance of appointment hereunder by a successor Trustee with respect to
the Securities of one or more series and to add to or change any of the
provisions of this Indenture as shall be


                                      67



necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee; or

                                    (9)      to cure any ambiguity, to
correct  or supplement any provision herein which may be defective or
inconsistent with any other provision herein, or to make any other provisions
with respect to matters or questions arising under this Indenture which shall
not be inconsistent with the provisions of this Indenture, provided such
provisions shall not adversely affect the interests of the Holders of
Securities of any series or any related coupons in any material respect; or

                                   (10)     to supplement any of the
provisions of this Indenture to such extent as shall be necessary to permit
or facilitate the defeasance and discharge of any series of Securities
pursuant to Sections 401, 1402 and 1403; provided that any such action shall
not adversely affect the interests of the Holders of Securities of such
series and any related coupons or any other series of Securities in any
material respect.

                  SECTION 902. Supplemental Indentures with Consent of
Holders. With the consent of the Holders of not less than a majority in
principal amount of all Outstanding Securities affected by such supplemental
indenture, by Act of said Holders delivered to the Company and the Trustee,
the Company, when authorized by or pursuant to a Board Resolution, and the
Trustee may enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of modifying in any manner the
rights of the Holders of Securities and any related coupons under this
Indenture; provided, however, that no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Security affected
thereby:

                                    (1)      change the Stated Maturity of
the principal of (or premium or Make-Whole Amount, if any, on) or any
installment of principal of or interest on, any Security; or reduce the
principal amount thereof or the rate or amount of interest thereon, or any
premium or Make-Whole Amount payable upon the redemption thereof, or reduce
the amount of the principal of an Original Issue Discount Security that would
be due and payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502 or the amount thereof provable in bankruptcy pursuant
to Section 504, or adversely affect any right of repayment at the option of
the Holder of any Security, or change any Place of Payment where, or the
currency orcurrencies, currency unit or units or composite currency or
currencies in which, any Security or any premium or Make-Whole Amount or the
interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof (or,
in the case of redemption or repayment at the option of the Holder, on or
after the Redemption Date or the Repayment Date, as the case may be), or


                                      68



                                    (2)      reduce the percentage in
principal amount of the Outstanding Securities of any series, the consent of
whose Holders is required for any such supplemental indenture, or the consent
of whose Holders is required for any waiver with respect to such series (or
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences) provided for in this Indenture, or reduce
the requirements of Section 1504 for quorum or voting, or

                                    (3)      modify any of the provisions of
this Section, Section 513 or Section 1009, except to increase the required
percentage to effect such action or to provide that certain other provisions
of this Indenture cannot be modified or waived without the consent of the
Holder of each Outstanding Security affected thereby, provided, however, that
this clause shall not be deemed to require the consent of any Holder with
respect to changes in the references to "the Trustee" and concomitant changes
in this Section 902 and Section 1009, or the deletion of this proviso, in
accordance with the requirements of Sections 609(b) and 901(11).

                  It shall not be necessary for any Act of Holders under this
Section 902 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.

                  A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture which has expressly been
included solely for the benefit of one or more particular series of
Securities, or which modifies the rights of the 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.

                  SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES. In
executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modification thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and
shall be fully protected in relying upon, an Opinion of Counsel stating that
the execution of such supplemental indenture is authorized or permitted by
this Indenture. The Trustee may, but shall not be obligated to, enter into
any such supplemental indenture which affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise.

                  SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the
execution of any supplemental indenture under this Article, this Indenture
shall be modified in accordance therewith, and such supplemental indenture
shall form a part of this Indenture for all purposes; and every Holder of
Securities theretofore or thereafter authenticated and delivered hereunder
and of any coupon appertaining thereto shall be bound thereby.


                                      69



                  SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT. Every
supplemental indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect.

                  SECTION 906. Reference in Securities to Supplemental
Indentures. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and
shall, if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Securities of any series so modified as to
conform, in the opinion of the Trustee and the Company, to any such
supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities of such series.

                             ARTICLE TEN - COVENANTS

                  SECTION 1001. Payment of Principal, Premium or Make-Whole
Amount, if any; and Interest. The Company covenants and agrees for the
benefit of the Holders of each series of Securities that it will duly and
punctually pay the principal of (and premium or Make-Whole Amount, if any)
and interest on the Securities of that series in accordance with the terms of
such series of Securities, any coupons appertaining thereto and this
Indenture. Unless otherwise specified as contemplated by Section 301 with
respect to any series of Securities, any interest due on Bearer Securities on
or before Maturity shall be payable only upon presentation and surrender of
the several coupons for such interest installments as are evidenced thereby
as they severally mature. Unless otherwise specified with respect to
Securities of any series pursuant to Section 301, at the option of the
Company, all payments of principal may be paid by check to the registered
Holder of the Registered Security or other person entitled thereto against
surrender of such Security.

                  SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY. If
Securities of a series are issuable only as Registered Securities, the
Company shall maintain in each Place of Payment for any series of Securities
an office or agency where Securities of that series may be presented or
surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this
Indenture may be served. If Securities of a series are issuable as Bearer
Securities, the Company will maintain: (A) in the Borough of Manhattan, The
City of New York, an office or agency where any Registered Securities of that
series may be presented or surrendered for payment, where any Registered
Securities of that series may be surrendered for registration of transfer,
where Securities of that series may be surrendered for exchange, where
notices and demands to or upon the Company in respect of the Securities of
that series and this Indenture may be served and where Bearer Securities of
that series and related coupons may be presented or surrendered for payment
in the circumstances described in the following paragraph (and not
otherwise); (B) subject to any laws or regulations applicable thereto, in a
Place of Payment for that series which is located


                                      70



outside the United States, an office or agency where Securities of that
series and related coupons may be presented and surrendered for payment;
provided, however, that if the Securities of that series are listed on any
stock exchange located outside the United States and such stock exchange
shall so require, the Company will maintain a Paying Agent for the Securities
of that series in any required city located outside the United States, as the
case may be, so long as the Securities of that series are listed on such
exchange; and (C) subject to any laws or regulations applicable thereto, in a
Place of Payment for that series located outside the United States an office
or agency where any Registered Securities of that series may be surrendered
for registration of transfer, where Securities of that series may be
surrendered for exchange and where notices and demands to or upon the Company
in respect of the Securities of that series and this Indenture may be served.
The Company will give prompt written notice to the Trustee of the location,
and any change in the location, of each such office or agency. 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, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, except that Bearer Securities of that
series and the related coupons may be presented and surrendered for payment
at the offices specified in the Security, in London, England, and the Company
hereby appoints the same as its agent to receive such respective
presentations, surrenders, notices and demands, and the Company hereby
appoints the Trustee its agent to receive all such presentations, surrenders,
notices and demands.

                  Unless otherwise specified with respect to any Securities
pursuant to Section 301, no payment of principal, premium or Make-Whole
Amount or interest on Bearer Securities shall be made at any office or agency
of the Company in the United States or by check mailed to any address in the
United States or by transfer to an account maintained with a bank located in
the United States; provided, however, that, if the Securities of a series are
payable in Dollars, payment of principal of and any premium or Make-Whole
Amount and interest on any Bearer Security shall be made at the office of the
Company's Paying Agent in the Borough of Manhattan, The City of New York, if
(but only if) payment in Dollars of the full amount of such principal,
premium or Make-Whole Amount, or interest, as the case may be, at all offices
or agencies outside the United States maintained for the purpose by the
Company in accordance with this Indenture, is illegal or effectively
precluded by exchange controls or other similar restrictions.

                  The Company may from time to time designate one or more
other offices or agencies where the Securities of one or more series may be
presented or surrendered for any or all of such purposes, 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
obligation to maintain an office or agency in accordance with the
requirements set forth above for Securities of any series for such purposes.
The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency. Unless otherwise specified with respect to any Securities
pursuant to Section 301 with respect to a series of


                                      71



Securities, the Company hereby designates as a Place of Payment for each
series of Securities the office or agency of the Company in the Borough of
Manhattan, The City of New York, and initially appoints the Trustee at its
Corporate Trust Office as Paying Agent in such city and as its agent to
receive all such presentations, surrenders, notices and demands.

                  Unless otherwise specified with respect to any Securities
pursuant to Section 301, if and so long as the Securities of any series (i)
are denominated in a Foreign Currency or (ii) may be payable in a Foreign
Currency, or so long as it is required under any other provision of the
Indenture, then the Company will maintain with respect to each such series of
Securities, or as so required, at least one exchange rate agent.

                  SECTION 1003. Money for Securities Payments to Be Held in
Trust. If the Company shall at any time act as its own Paying Agent with
respect to any series of any Securities and any related coupons, it will, on
or before each due date of the principal of (and premium or Make-Whole
Amount, if any), or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum in the currency or currencies, currency unit or units or composite
currency or currencies in which the Securities of such series are payable
(except as otherwise specified pursuant to Section 301 for the Securities of
such series) sufficient to pay the principal (and premium or Make-Whole
Amount, if any) or interest so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided, and will promptly
notify the Trustee of its action or failure so to act.

                  Whenever the Company shall have one or more Paying Agents
for any series of Securities and any related coupons, it will, on or before
each due date of the principal of (and premium or Make-Whole Amount, if any),
or interest on any Securities of that series, deposit with a Paying Agent a
sum (in the currency or currencies, currency unit or units or composite
currency or currencies described in the preceding paragraph) sufficient to
pay the principal (and premium or Make-Whole Amount, 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 Make-Whole Amount, if any, 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.

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

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


                                      72



                                    (2)      give the Trustee notice of any
default by the Company (or any other obligor upon the Securities) in the
making of any such payment of principal (and premium or Make-Whole Amount, if
any) or interest on the Securities of that series; and

                                    (3)      at any time during the
continuance of any such default upon the written request of the Trustee,
forthwith pay to the Trustee all sums so held in trust by such Paying Agent.

                  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 by Company Order direct any Paying Agent to pay, to the Trustee all
sums held in trust by the Company or such Paying Agent, such sums to be held
by the Trustee upon the same trusts as those upon which such sums were held
by the Company or such Paying Agent; and, upon such payment by any Paying
Agent to the Trustee, such Paying Agent shall be released from all further
liability with respect to such sums.

                  Except as otherwise provided in the Securities of any
series, any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of (and
premium or Make-Whole Amount, if any) or interest on any Security of any
series and remaining unclaimed for two years after such principal (and
premium or Make-Whole Amount, if any) or interest has become due and payable
shall be paid to the Company upon Company Request or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company
for payment of such principal of (and premium or Make-Whole Amount, if any)
or interest on any Security, without interest thereon, and all liability of
the Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of the Company cause to be published
once, in an Authorized Newspaper, notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30
days from the date of such publication, any unclaimed balance of such money
then remaining will be repaid to the Company.

                    ARTICLE ELEVEN - REDEMPTION OF SECURITIES

                  SECTION 1101. APPLICABILITY OF ARTICLE. Securities of any
series which are redeemable before their Stated Maturity shall be redeemable
in accordance with their terms and (except as otherwise specified as
contemplated by Section 301 for Securities of any series) in accordance with
this Article.

                  SECTION 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE. The
election of the Company to redeem any Securities shall be evidenced by or
pursuant to a Board Resolution. In case of any redemption at the election of the
Company of less than all of


                                      73



the Securities of any series, the Company shall, at least 45 days prior to
the giving of the notice of redemption in Section 1104 (unless a shorter
notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities of such series to
be redeemed. In the case of any redemption of Securities prior to the
expiration of any restriction on such redemption 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 such
restriction.

                  SECTION 1103. Selection by Trustee of Securities to Be
Redeemed. If less than all the Securities of any series issued on the same
day with the same terms are to be redeemed, the particular Securities to be
redeemed shall be selected not more than 60 days prior to the Redemption Date
by the Trustee, from the Outstanding Securities of such series issued on such
date with the same terms not previously called for redemption, by such method
as the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof)
of the principal amount of Securities of such series of a denomination larger
than the minimum authorized denomination for Securities of that series.

                  The Trustee shall promptly notify the Company and the
Security Registrar (if other than itself) in writing of the Securities
selected for redemption and, in the case of any Securities selected for
partial redemption, the principal amount thereof to be redeemed.

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

                  SECTION 1104. NOTICE OF REDEMPTION. Notice of redemption
shall be given in the manner provided in Section 106, not less than 30 days
nor more than 60 days prior to the Redemption Date, unless a shorter period
is specified by the terms of such series established pursuant to Section 301,
to each Holder of Securities to be redeemed, but failure to give such notice
in the manner herein provided to the Holder of any Security designated for
redemption as a whole or in part, or any defect in the notice to any such
Holder, shall not affect the validity of the proceedings for the redemption
of any other such Security or portion thereof.

                  Any notice that is mailed to the Holders of Registered
Securities in the manner herein provided shall be conclusively presumed to
have been duly given, whether or not the Holder receives the notice.

                  All notices of redemption shall state:

                                    (1)     the Redemption Date,


                                      74



                                    (2)      the Redemption Price, accrued
interest to the Redemption Date payable as provided in Section 1106, if any,

                                    (3)      if less than all Outstanding
Securities of any series are to be redeemed, the identification (and, in the
case of partial redemption, the principal amount) of the particular Security
or Securities to be redeemed,

                                    (4)      in case any Security is to be
redeemed in part only, the notice which relates to such Security shall state
that on and after the Redemption Date, upon surrender of such Security, the
holder will receive, without a charge, a new Security or Securities of
authorized denominations for the principal amount thereof remaining
unredeemed,

                                    (5)      that on the Redemption Date the
Redemption Price and accrued interest to the Redemption Date payable as
provided in Section 1106, if any, will become due and payable upon each such
Security, or the portion thereof, to be redeemed and, if applicable, that
interest thereon shall cease to accrue on and after said date,

                                    (6)      the Place or Places of Payment
where such Securities, together in the case of Bearer Securities with all
coupons appertaining thereto, if any, maturing after the Redemption Date, are
to be surrendered for payment of the Redemption Price and accrued interest,
if any,

                                    (7)      that the redemption is for a
sinking fund, if such is the case,

                                    (8)      that, unless otherwise specified
in such notice, Bearer Securities of any series, if any, surrendered for
redemption must be accompanied by all coupons maturing subsequent to the date
fixed for redemption or the amount of any such missing coupon or coupons will
be deducted from the Redemption Price, unless security or indemnity
satisfactory to the Company, the Trustee for such series and any Paying Agent
is furnished,

                                    (9)      if Bearer Securities of any
series are to be redeemed and any Registered Securities of such series are
not to be redeemed, and if such Bearer Securities may be exchanged for
Registered Securities not subject to redemption on this Redemption Date
pursuant to Section 305 or otherwise, the last date, as determined by the
Company, on which such exchanges may be made, and


                                      75



                                    (10)     the CUSIP number of such Security,
if any. Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.

                  SECTION 1105. DEPOSIT OF REDEMPTION PRICE. On or prior to
any Redemption Date, the Company shall deposit with the Trustee or with a
Paying Agent (or, if the Company is acting as its own Paying Agent, which it
may not do in the case of a sinking fund payment under Article Twelve,
segregate and hold in trust as provided in Section 1003) an amount of money
in the currency or currencies, currency unit or units or composite currency
or currencies in which the Securities of such series are payable (except as
otherwise specified pursuant to Section 301 for the Securities of such
series) sufficient to pay on the Redemption Date the Redemption Price of, and
(except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities or portions thereof which are to be redeemed
on that date.

                  SECTION 1106. SECURITIES PAYABLE ON REDEMPTION DATE. Notice
of redemption having been given as aforesaid, the Securities so to be
redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified in the currency or currencies, currency
unit or units or composite currency or currencies in which the Securities of
such series are payable (except as otherwise specified pursuant to Section
301 for the Securities of such series) (together with accrued interest, if
any, to the Redemption Date), and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall, if the same were interest-bearing, cease to
bear interest and the coupons for such interest appertaining to any Bearer
Securities so to be redeemed, except to the extent provided below, shall be
void. Upon surrender of any such Security for redemption in accordance with
said notice, together with all coupons, if any, appertaining thereto maturing
after the Redemption Date, such Security shall be paid by the Company at the
Redemption Price, together with accrued interest, if any, to the Redemption
Date; provided, however, that installments of interest on Bearer Securities
whose Stated Maturity is on or prior to the Redemption Date shall be payable
only at an office or agency located outside the United States (except as
otherwise provided in Section 1002) and, unless otherwise specified as
contemplated by Section 301, only upon presentation and surrender of coupons
for such interest; and provided further that installments of interest on
Registered Securities whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
307.

                  If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of such missing
coupon or coupons may be waived by the Company and the Trustee if there be
furnished to them


                                      76



such security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Security shall
surrender to the Trustee or any Paying Agent any such missing coupon in
respect of which a deduction shall have been made from the Redemption Price,
such Holder shall be entitled to receive the amount so deducted; provided,
however, that interest represented by coupons shall be payable only at an
office or agency located outside the United States (except as otherwise
provided in Section 1002) and, unless otherwise specified as contemplated by
Section 301, only upon presentation and surrender of those coupons.

                  If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal (and premium or
Make-Whole Amount, if any) shall, until paid, bear interest from the
Redemption Date at the rate borne by the Security.

                  SECTION 1107. SECURITIES REDEEMED IN PART. Any Registered
Security which is to be redeemed only in part (pursuant to the provisions of
this Article or of Article Twelve) shall be surrendered at a Place of Payment
therefor (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company
and the Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing) and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security without service
charge a new Security or Securities of the same series, of any authorized
denomination as requested by such Holder in aggregate principal amount equal
to and in exchange for the unredeemed portion of the principal of the
Security so surrendered. If a Global Security is so surrendered, the Company
shall execute and the Trustee shall authenticate and deliver to the
depository, without service charge, a new Global Security in a denomination
equal to and in exchange for the unredeemed portion of the principal of the
Global Security so surrendered.

                         ARTICLE TWELVE - SINKING FUNDS

                  SECTION 1201. APPLICABILITY OF ARTICLE. The provisions of
this Article shall be applicable to any sinking fund for the retirement of
Securities of a series except as otherwise specified as contemplated by
Section 301 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 such Securities of any series is herein
referred to as an "optional sinking fund payment." If provided for by the
terms of any Securities of any series, the cash amount of any mandatory
sinking fund payment may be subject to reduction as provided in Section 1202.
Each sinking fund payment shall be applied to the redemption of Securities of
any series as provided for by the terms of Securities of such series.

                  SECTION 1202. Satisfaction of Sinking Fund Payments with
Securities. The Company may, in satisfaction of all or any part of any mandatory
sinking fund payment with respect to the Securities of a series, (1) deliver
Outstanding Securities of


                                      77



such series (other than any previously called for redemption) together in the
case of any Bearer Securities of such series with all unmatured coupons
appertaining thereto and (2) apply as a credit Securities of such 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, as provided
for by the terms of such Securities, or which have otherwise been acquired by
the Company; provided that such Securities so delivered or applied as a
credit have not been previously so credited. Such Securities shall be
received and credited for such purpose by the Trustee at the applicable
Redemption Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such mandatory sinking fund
payment shall be reduced accordingly.

                  SECTION 1203. REDEMPTION OF SECURITIES FOR SINKING FUND.
Not less than 60 days prior to each sinking fund payment date for Securities
of any series, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash in the currency
or currencies, currency unit or units or composite currency or currencies in
which the Securities of such series are payable (except as otherwise
specified pursuant to Section 301 for the Securities of such series) and the
portion thereof, if any, which is to be satisfied by delivering and crediting
Securities of that series pursuant to Section 1202, and the optional amount,
if any, to be added in cash to the next ensuing mandatory sinking fund
payment, and will also deliver to the Trustee any Securities to be so
delivered and credited. If such Officers' Certificate shall specify an
optional amount to be added in cash to the next ensuing mandatory sinking
fund payment, the Company shall thereupon be obligated to pay the amount
therein specified. 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 1103 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 1104. Such notice
having been duly given, the redemption of such Securities shall be made upon
the terms and in the manner stated in Sections 1106 and 1107.

              ARTICLE THIRTEEN - REPAYMENT AT THE OPTION OF HOLDERS

                  SECTION 1301. APPLICABILITY OF ARTICLE. Repayment of
Securities of any series before their Stated Maturity at the option of
Holders thereof shall be made in accordance with the terms of such
Securities, if any, and (except as otherwise specified by the terms of such
series established pursuant to Section 301) in accordance with this Article.

                  SECTION 1302. REPAYMENT OF SECURITIES. Securities of any
series subject to repayment in whole or in part at the option of the Holders
thereof will, unless otherwise provided in the terms of such Securities, be
repaid at a price equal to the principal amount thereof, together with interest,
if any, thereon accrued to the Repayment


                                      78



Date specified in or pursuant to the terms of such Securities. The Company
covenants that on or prior to the Repayment Date it will deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) an
amount of money in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 301 for the
Securities of such series) sufficient to pay the principal (or, if so
provided by the terms of the Securities of any series, a percentage of the
principal) of, and (except if the Repayment Date shall be an Interest Payment
Date) accrued interest on, all the Securities or portions thereof, as the
case may be, to be repaid on such date.

                  SECTION 1303. EXERCISE OF OPTION. Securities of any series
subject to repayment at the option of the Holders thereof will contain an
"Option to Elect Repayment" form on the reverse of such Securities. In order
for any Security to be repaid at the option of the Holder, the Trustee must
receive at the Place of Payment therefor specified in the terms of such
Security (or at such other place or places of which the Company shall from
time to time notify the Holders of such Securities) not earlier than 60 days
nor later than 30 days prior to the Repayment Date (1) the Security so
providing for such repayment together with the "Option to Elect Repayment"
form on the reverse thereof duly completed by the Holder (or by the Holder's
attorney duly authorized in writing) or (2) a telegram, telex, facsimile
transmission or a letter from a member of a national securities exchange, or
the National Association of Securities Dealers, Inc. ("NASD"), or a
commercial bank or trust company in the United States setting forth the name
of the Holder of the Security, the principal amount of the Security, the
principal amount of the Security to be repaid, the CUSIP number, if any, or a
description of the tenor and terms of the Security, a statement that the
option to elect repayment is being exercised thereby and a guarantee that the
Security to be repaid, together with the duly completed form entitled "Option
to Elect Repayment" on the reverse of the Security, will be received by the
Trustee not later than the fifth Business Day after the date of such
telegram, telex, facsimile transmission or letter; provided, however, that
such telegram, telex, facsimile transmission or letter shall only be
effective if such Security and form duly completed are received by the
Trustee by such fifth Business Day. If less than the entire principal amount
of such Security is to be repaid in accordance with the terms of such
Security, the principal amount of such Security to be repaid, in increments
of the minimum denomination for Securities of such series, and the
denomination or denominations of the Security or Securities to be issued to
the Holder for the portion of the principal amount of such Security
surrendered that is not to be repaid, must be specified. The principal amount
of any Security providing for repayment at the option of the Holder thereof
may not be repaid in part if, following such repayment, the unpaid principal
amount of such Security would be less than the minimum authorized
denomination of Securities of the series of which such Security to be repaid
is a part. Except as otherwise may be provided by the terms of any Security
providing for repayment at the option of the Holder thereof, exercise of the
repayment option by the Holder shall be irrevocable unless waived by the
Company.


                                      79


                  SECTION 1304. When Securities Presented for Repayment
Become Due and Payable. If Securities of any series providing for repayment
at the option of the Holders thereof shall have been surrendered as provided
in this Article and as provided by or pursuant to the terms of such
Securities, such Securities or the portions thereof, as the case may be, to
be repaid shall become due and payable and shall be paid by the Company on
the Repayment Date therein specified, and on and after such Repayment Date
(unless the Company shall default in the payment of such Securities on such
Repayment Date) such Securities shall, if the same were interest-bearing,
cease to bear interest and the coupons for such interest appertaining to any
Bearer Securities so to be repaid, except to the extent provided below, shall
be void. Upon surrender of any such Security for repayment in accordance with
such provisions, together with all coupons, if any, appertaining thereto
maturing after the Repayment Date, the principal amount of such Security so
to be repaid shall be paid by the Company, together with accrued interest, if
any, to the Repayment Date; provided, however, that coupons whose Stated
Maturity is on or prior to the Repayment Date shall be payable only at an
office or agency located outside the United States (except as otherwise
provided in Section 1002) and, unless otherwise specified pursuant to Section
301, only upon presentation and surrender of such coupons; and provided
further that, in the case of Registered Securities, installments of interest,
if any, whose Stated Maturity is on or prior to the Repayment Date shall be
payable (but without interest thereon, unless the Company shall default in
the payment thereof) to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
307.

                  If any Bearer Security surrendered for repayment shall not
be accompanied by all appurtenant coupons maturing after the Repayment Date,
such Security may be paid after deducting from the amount payable therefor as
provided in Section 1302 an amount equal to the face amount of all such
missing coupons, or the surrender of such missing coupon or coupons may be
waived by the Company and the Trustee if there be furnished to them such
security or indemnity as they may require to save each of them and any Paying
Agent harmless. If thereafter the Holder of such Security shall surrender to
the Trustee or any Paying Agent any such missing coupon in respect of which a
deduction shall have been made as provided in the preceding sentence, such
Holder shall be entitled to receive the amount so deducted; provided,
however, that interest represented by coupons shall be payable only at an
office or agency located outside the United States (except as otherwise
provided in Section 1002) and, unless otherwise specified as contemplated by
Section 301, only upon presentation and surrender of those coupons.

                  If the principal amount of any Security surrendered for
repayment shall not be so repaid upon surrender thereof, such principal
amount (together with interest, if any, thereon accrued to such Repayment
Date) shall, until paid, bear interest from the Repayment Date at the rate of
interest or Yield to Maturity (in the case of Original Issue Discount
Securities) set forth in such Security.


                                      80



                  SECTION 1305. SECURITIES REPAID IN PART. Upon surrender of
any Registered Security which is to be repaid in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder of such
Security, without service charge and at the expense of the Company, a new
Registered Security or Securities of the same series, of any authorized
denomination specified by the Holder, in an aggregate principal amount equal
to and in exchange for the portion of the principal of such Security so
surrendered which is not to be repaid.

              ARTICLE FOURTEEN - DEFEASANCE AND COVENANT DEFEASANCE

                  SECTION 1401. Applicability of Article: Company's Option to
Effect Defeasance or Covenant Defeasance. If, pursuant to Section 301,
provision is made for either or both of (a) defeasance of the Securities of
or within a series under Section 1402 or (b) covenant defeasance of the
Securities of or within a series under Section 1403, then the provisions of
such Section or Sections, as the case may be, together with the other
provisions of this Article (with such modifications thereto as may be
specified pursuant to Section 301 with respect to any Securities), shall be
applicable to such Securities and any coupons appertaining thereto, and the
Company may at its option by Board Resolution, at any time, with respect to
such Securities and any coupons appertaining thereto, elect to have Section
1402 (if applicable) or Section 1403 (if applicable) be applied to such
Outstanding Securities and any coupons appertaining thereto upon compliance
with the conditions set forth below in this Article.

                  SECTION 1402. DEFEASANCE AND DISCHARGE. Upon the Company's
exercise of the above option applicable to this Section with respect to any
Securities of or within a series, the Company shall be deemed to have been
discharged from its obligations with respect to such Outstanding Securities
and any coupons appertaining thereto on the date the conditions set forth in
Section 1404 are satisfied (hereinafter, "defeasance"). For this purpose,
such defeasance means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by such Outstanding Securities
and any coupons appertaining thereto, which shall thereafter be deemed to be
"Outstanding" only for the purposes of Section 1405 and the other Sections of
this Indenture referred to in clauses (A) and (B) below, and to have
satisfied all of its other obligations under such Securities and any coupons
appertaining thereto and this Indenture insofar as such Securities and any
coupons appertaining thereto are concerned (and the Trustee, at the expense
of the Company, shall execute proper instruments acknowledging the same),
except for the following which shall survive until otherwise terminated or
discharged hereunder: (A) the rights of Holders of such Outstanding
Securities and any coupons appertaining thereto to receive, solely from the
trust fund described in Section 1404 and as more fully set forth in such
Section, payments in respect of the principal of (and premium or Make-Whole
Amount, if any) and interest, if any, on such Securities and any coupons
appertaining thereto when such payments are due, (B) the Company's
obligations with respect to such Securities under Sections 305, 306, 1002 and
1003, (C) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and (D) this Article. Subject to compliance with this Article
Fourteen, the Company may


                                      81



exercise its option under this Section notwithstanding the prior exercise of
its option under Section 1403 with respect to such Securities and any coupons
appertaining thereto.

                  SECTION 1403. COVENANT DEFEASANCE. Upon the Company's
exercise of the above option applicable to this Section with respect to any
Securities of or within a series, the Company shall be released from its
obligations under Sections 1004 to 1009, inclusive, and, if specified
pursuant to Section 301, its obligations under any other covenant contained
herein or in any indenture supplemental hereto, with respect to such
Outstanding Securities and any coupons appertaining thereto on and after the
date the conditions set forth in Section 1404 are satisfied (hereinafter,
"covenant defeasance"), and such Securities and any coupons appertaining
thereto shall thereafter be deemed to be not "Outstanding" for the purposes
of any direction, waiver, consent or declaration or Act of Holders (and the
consequences of any thereof) in connection with Sections 1004 to 1009,
inclusive, or such other covenant, but shall continue to be deemed
"Outstanding" for all other purposes hereunder. For this purpose, such
covenant defeasance means that, with respect to such Outstanding Securities
and any coupons appertaining thereto, the Company may omit to comply with and
shall have no liability in respect of any term, condition or limitation set
forth in any such Section or such other covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such Section
or such other covenant or by reason of reference in any such Section or such
other covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a default or an Event of Default
under Section 501(4) or 501(8) or otherwise, as the case may be, but, except
as specified above, the remainder of this Indenture and such Securities and
any coupons appertaining thereto shall be unaffected thereby.

                  SECTION 1404. Conditions to Defeasance or Covenant
Defeasance. The following shall be the conditions to application of Section
1402 or Section 1403 to any Outstanding Securities of or within a series and
any coupons appertaining thereto:

                           (a)      The Company shall irrevocably have
deposited or caused to be deposited with the Trustee (or another trustee
satisfying the requirements of Section 607 who shall agree to comply with the
provisions of this Article Fourteen applicable to it) as trust funds in trust
for the purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of such
Securities and any coupons appertaining thereto, (1) an amount in such
currency, currencies or currency unit in which such Securities and any
coupons appertaining thereto are then specified as payable at Stated
Maturity, or (2) Government Obligations applicable to such Securities and
coupons appertaining thereto (determined on the basis of the currency,
currencies or currency unit in which such Securities and coupons appertaining
thereto are then specified as payable at Stated Maturity) which through the
scheduled payment of principal and interest in respect thereof in accordance
with their terms will provide, not later than the due date of any payment of
principal of (and premium or Make-Whole Amount, if any) and interest, if any,
on such Securities and any


                                      82



coupons appertaining thereto, money in an amount, or (3) a combination
thereof, in any case, in an amount, sufficient, without consideration of any
reinvestment of such principal and interest, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge, and
which shall be applied by the Trustee (or other qualifying trustee) to pay
and discharge, (i) the principal of (and premium or Make-Whole Amount, if
any) and interest, if any, on such Outstanding Securities and any coupons
appertaining thereto on the Stated Maturity of such principal or installment
of principal or interest and (ii) any mandatory sinking fund payments or
analogous payments applicable to such Outstanding Securities and any coupons
appertaining thereto on the day on which such payments are due and payable in
accordance with the terms of this Indenture and of such Securities and any
coupons appertaining thereto.

                           (b)      Such defeasance or covenant defeasance
shall not result in a breach or violation of, or constitute a default under,
this Indenture or any other material agreement or instrument to which the
Company is a party or by which it is bound.

                           (c)      No Event of Default or event which with
notice or lapse of time or both would become an Event of Default with respect
to such Securities and any coupons appertaining thereto shall have occurred
and be continuing on the date of such deposit or, insofar as Sections 501(6)
and 501(7) are concerned, at any time during the period ending on the 91st
day after the date of such deposit (it being understood that this condition
shall not be deemed satisfied until the expiration of such period).

                           (d)      In the case of an election under Section
1402, the Company shall have delivered to the Trustee an Opinion of Counsel
stating that (i) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling, or (ii) since the date of
execution of this Indenture, there has been a change in the applicable
Federal income tax law, in either case to the effect that, and based thereon
such opinion shall confirm that, the Holders of such Outstanding Securities
and any coupons appertaining thereto will not recognize income, gain or loss
for Federal income tax purposes as a result of such defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such defeasance had not
occurred.

                           (e)      In the case of an election under Section
1403, the Company shall have delivered to the Trustee an Opinion of Counsel
to the effect that the Holders of such Outstanding Securities and any coupons
appertaining thereto will not recognize income, gain or loss for Federal
income tax purposes as a result of such covenant defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such covenant defeasance had
not occurred.


                                      83



                           (f)      The Company shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
all conditions precedent to the defeasance under Section 1402 or the covenant
defeasance under Section 1403 (as the case may be) have been complied with
and an Opinion of Counsel to the effect that either (i) as a result of a
deposit pursuant to subsection (a) above and the related exercise of the
Company's option under Section 1402 or Section 1403 (as the case may be),
registration is not required under the Investment Company Act of 1940, as
amended, by the Company, with respect to the trust funds representing such
deposit or by the Trustee for such trust funds or (ii) all necessary
registrations under said Act have been effected.

                           (g)      Notwithstanding any other provisions of
this Section, such defeasance or covenant defeasance shall be effected in
compliance with any additional or substitute terms, conditions or limitations
which may be imposed on the Company in connection therewith pursuant to
Section 301.

                  SECTION 1405. Deposited Money and Government Obligations to
Be Held in Trust; Other Miscellaneous Provisions. Subject to the provisions
of the last paragraph of Section 1003, all money and Government Obligations
(or other property as may be provided pursuant to Section 301) (including the
proceeds thereof) deposited with the Trustee (or other qualifying trustee,
collectively for purposes of this Section 1405, the "Trustee") pursuant to
Section 1404 in respect of any Outstanding Securities of any series and any
coupons appertaining thereto shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and any coupons
appertaining thereto and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its own Paying
Agent) as the Trustee may determine, to the Holders of such Securities and
any coupons appertaining thereto of all sums due and to become due thereon in
respect of principal (and premium or Make-Whole Amount, if any) and interest,
but such money need not be segregated from other funds except to the extent
required by law.

                  Unless otherwise specified with respect to any Security
pursuant to Section 301, if, after a deposit referred to in Section 1404(a)
has been made, (a) the Holder of a Security in respect of which such deposit
was made is entitled to, and does, elect pursuant to Section 301 or the terms
of such Security to receive payment in a currency or currency unit other than
that in which the deposit pursuant to Section 1404(a) has been made in
respect of such Security, or (b) a Conversion Event occurs in respect of the
currency or currency unit in which the deposit pursuant to Section 1404(a)
has been made, the indebtedness represented by such Security and any coupons
appertaining thereto shall be deemed to have been, and will be, fully
discharged and satisfied through the payment of the principal of (and premium
or Make-Whole Amount, if any), and interest, if any, on such Security as the
same becomes due out of the proceeds yielded by converting (from time to time
as specified below in the case of any such election) the amount or other
property deposited in respect of such Security into the currency or currency
unit in which such Security becomes payable as a result of such election or


                                      84



Conversion Event based on the applicable market exchange rate for such
currency or currency unit in effect on the second Business Day prior to each
payment date, except, with respect to a Conversion Event, for such currency
or currency unit in effect (as nearly as feasible) at the time of the
Conversion Event.

                  The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the Government
Obligations deposited pursuant to Section 1404 or the principal and interest
received in respect thereof other than any such tax, fee or other charge
which by law is for the account of the Holders of such Outstanding Securities
and any coupons appertaining thereto.

                  Anything in this Article to the contrary notwithstanding,
subject to Section 606, the Trustee shall deliver or pay to the Company from
time to time upon Company Request any money or Government Obligations (or
other property and any proceeds therefrom) held by it as provided in Section
1404 which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to
the Trustee, are in excess of the amount thereof which would then be required
to be deposited to effect a defeasance or covenant defeasance, as applicable,
in accordance with this Article.

               ARTICLE FIFTEEN - MEETINGS OF HOLDERS OF SECURITIES

                  SECTION 1501. PURPOSES FOR WHICH MEETINGS MAY BE CALLED. A
meeting of Holders of Securities of any series may be called at any time and
from time to time pursuant to this Article to make, give or take any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be made, given or taken by Holders of
Securities of such series.

                  SECTION 1502. CALL, NOTICE AND PLACE OF MEETINGS. (a)
Trustee may at any time call a meeting of Holders of Securities of any series
for any purpose specified in Section 1501, to be held at such time and at
such place as the Trustee shall determine. Notice of every meeting of Holders
of Securities of any series, setting forth the time and the place of such
meeting and in general terms the action proposed to be taken at such meeting,
shall be given, in the manner provided in Section 106, not less than 20 nor
more than 180 days prior to the date fixed for the meeting.

                           (b)      In case at any time the Company, pursuant
to a Board Resolution, or the Holders of at least 25% in principal amount of
the Outstanding Securities of any series shall have requested the Trustee to
call a meeting of the Holders of Securities of such series for any purpose
specified in Section 1501, by written request setting forth in reasonable
detail the action proposed to be taken at the meeting, and the Trustee shall
not have made the first publication of the notice of such meeting within 20
days after receipt of such request or shall not thereafter proceed to cause
the meeting to be held as provided herein, then the Company or the Holders of
Securities of such series in the amount above specified, as the case may be,
may determine the time and the place


                                     85



for such meeting and may call such meeting for such purposes by giving notice
thereof as provided in subsection (a) of this Section.

                  SECTION 1503. PERSONS ENTITLED TO VOTE AT MEETINGS. To be
entitled to vote at any meeting of Holders of Securities of any series, a
Person shall be (1) a Holder of one or more Outstanding Securities of such
series, or (2) a Person appointed by an instrument in writing as proxy for a
Holder or Holders of one or more Outstanding Securities of such series by
such Holder or Holders. The only Persons who shall be entitled to be present
or to speak at any meeting of Holders of Securities of any series shall be
the Persons entitled to vote at such meeting and their counsel, any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.

                  SECTION 1504. QUORUM; ACTION. The Persons entitled to vote
a majority in principal amount of the Outstanding Securities of a series
shall constitute a quorum for a meeting of Holders of Securities of such
series; provided, however, that if any action is to be taken at such meeting
with respect to a consent or waiver which this Indenture expressly provides
may be given by the Holders of not less than a specified percentage in
principal amount of the Outstanding Securities of a series, the Persons
entitled to vote such specified percentage in principal amount of the
Outstanding Securities of such series shall constitute a quorum. In the
absence of a quorum within 30 minutes after the time appointed for any such
meeting, the meeting shall, if convened at the request of Holders of
Securities of such series, be dissolved. In any other case the meeting may be
adjourned for a period of not less than 10 days as determined by the chairman
of the meeting prior to the adjournment of such meeting. In the absence of a
quorum at the reconvening of any such adjourned meeting, such adjourned
meeting may be further adjourned for a period of not less than 10 days; at
the reconvening of any meeting adjourned or further adjourned for lack of a
quorum, the persons entitled to vote 25% in aggregate principal amount of the
then Outstanding Securities shall constitute a quorum for the taking of any
action set forth in the notice of the original meeting. Notice of the
reconvening of any adjourned meeting shall be given as provided in Section
1502(a), except that such notice need be given only once not less than five
days prior to the date on which the meeting is scheduled to be reconvened.

                  Except as limited by the proviso to Section 902, any
resolution presented to a meeting or adjourned meeting duly reconvened at
which a quorum is present as aforesaid may be adopted by the affirmative vote
of the persons entitled to vote a majority in aggregate principal amount of
the Outstanding Securities represented at such meeting; provided, however,
that, except as limited by the proviso to Section 902, any resolution with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action which this Indenture expressly provides may be made,
given or taken by the Holders of a specified percentage, which is less than a
majority, in principal amount of the Outstanding Securities of a series may
be adopted at a meeting or an adjourned meeting duly reconvened and at which
a quorum is present as aforesaid by the affirmative vote of the Holders of
such specified percentage in principal amount of the Outstanding Securities
of that series.


                                      86



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

                  Notwithstanding the foregoing provisions of this Section
1504, if any action is to be taken at a meeting of Holders of Securities of
any series with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that this Indenture expressly
provides may be made, given or taken by the Holders of a specified percentage
in principal amount of all Outstanding Securities affected thereby, or of the
Holders of such series and one or more additional series:

                                    (i)      there shall be no minimum quorum
requirement for such meeting; and

                                    (ii)     the principal amount of the
Outstanding Securities of such series that vote in favor of such request,
demand, authorization, direction, notice, consent, waiver or other action
shall be taken into account in determining whether such request, demand,
authorization, direction, notice, consent, waiver or other action has been
made, given or taken under this Indenture.

                  SECTION 1505. Determination of Voting Rights; Conduct and
Adjournment of Meetings. (a) Notwithstanding any provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Holders of Securities of a series in regard to
proof of the holding of Securities of such series and of the appointment of
proxies and in regard to the appointment and duties of inspectors of votes,
the submission and examination of proxies, certificates and other evidence of
the right to vote, and such other matters concerning the conduct of the
meeting as it shall deem appropriate. Except as otherwise permitted or
required by any such regulations, the holding of Securities shall be proved
in the manner specified in Section 104 and the appointment of any proxy shall
be proved in the manner specified in Section 104 or by having the signature
of the Person executing the proxy witnessed or guaranteed by any trust
company, bank or banker authorized by Section 104 to certify to the holding
of Bearer Securities. Such regulations may provide that written instruments
appointing proxies, regular on their face, may be presumed valid and genuine
without the proof specified in Section 104 or other proof.

                           (b)      The Trustee shall, by an instrument in
writing appoint a temporary chairman of the meeting, unless the meeting shall
have been called by the Company or by Holders of Securities as provided in
Section 1502(b), in which case the Company or the Holders of Securities of
the series calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary
of the meeting shall be elected by vote of the Persons entitled to vote


                                      87



a majority in principal amount of the Outstanding Securities of such series
represented at the meeting.

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

                           (d)      Any meeting of Holders of Securities of
any series duly called pursuant to Section 1502 at which a quorum is present
may be adjourned from time to time by Persons entitled to vote a majority in
principal amount of the Outstanding Securities of such series represented at
the meeting, and the meeting may be held as so adjourned without further
notice.

                  SECTION 1506. Counting Votes and Recording Action of
Meetings. The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers
of the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and
who shall make and file with the secretary of the meeting their verified
written reports in duplicate of all votes cast at the meeting. A record, at
least in duplicate, of the proceedings of each meeting of Holders of
Securities of any Series shall be prepared by the secretary of the meeting
and there shall be attached to said record the original reports of the
inspectors of votes on any vote by ballot taken thereat and affidavits by one
or more persons having knowledge of the fact, setting forth a copy of the
notice of the meeting and showing that said notice was given as provided in
Section 1502 and, if applicable, Section 1504. Each copy shall be signed and
verified by the affidavits of the permanent chairman and secretary of the
meeting and one such copy shall be delivered to the Company and another to
the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting. Any record so signed and verified
shall be conclusive evidence of the matters therein stated.

                              SIGNATURES AND SEALS

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

                           APEX MORTGAGE CAPITAL, INC.


                                     88



                                    By:
                                        --------------------------
                                        [              ]
                                         --------------
                                        [              ]
                                         --------------
                 Attest:
                        ----------------------
                                        Title:



                                       [                  ],
                                        ------------------
                                       as Trustee

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



                 Attest:
                        ----------------------
                                        Title:



                                      89



                                 ACKNOWLEDGMENT

STATE OF [____________________])

                                ) ss: COUNTY OF                      )


On the [_______________________] 200__, before me personally came
[_________________], to me known, who, being by me duly sworn, did depose and
say that he is the [__________________] of APEX MORTGAGE CPITAL, INC., one of
the parties described in and which executed the foregoing instrument, and that
he signed his name thereto by authority of the Board of Directors.

[Notarial Seal]

- ------------------------------
Notary Public
Commission Expires

STATE OF [________________])

                                    ) ss: COUNTY OF                 )


On the [____________________________] 200__, before me personally came
[_________________], to me known, who, being by me duly sworn, did depose and
say that he/she is a [______________] of [___________________], one of the
parties described in and which executed the foregoing instrument, and that
he/she signed his/her name thereto by authority of the Board of Directors.

[Notarial Seal]

- ------------------------------
Notary Public
Commission Expires



                                     90


                                    EXHIBIT A
              FORM OF REDEEMABLE OR NON-REDEEMABLE SENIOR SECURITY
                               [Face of Security]


[If the Holder of this Security (as indicated below) is The Depository Trust
Company ("DTC") or a nominee of DTC, this Security is a Global Security and the
following two legends apply:

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

UNLESS AND UNTIL THIS SECURITY IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES
IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
DTC TO A NOMINEE THEREOF OR BY A NOMINEE THEREOF TO DTC OR ANOTHER NOMINEE OF
DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE OF SUCH
SUCCESSOR.]

[If this Security is an Original Issue Discount Security, insert -- FOR PURPOSES
OF SECTION 1273 and 1275 OF THE UNITED STATES INTERNAL REVENUE CODE, THE AMOUNT
OF ORIGINAL ISSUE DISCOUNT ON THIS SECURITY IS % OF ITS PRINCIPAL AMOUNT, THE
ISSUE DATE IS , 20__ [AND] THE YIELD TO MATURITY IS %. [THE METHOD USED TO
DETERMINE THE AMOUNT OF ORIGINAL ISSUE DISCOUNT APPLICABLE TO THE SHORT ACCRUAL
PERIOD OF _______ , 20__ TO _______ , 20__ , IS ____ % OF THE PRINCIPAL AMOUNT
OF THIS SECURITY.]

                         APEX MORTGAGE CAPITAL, INC.
                          [Designation of Series]

No. _______                                $ _______



                                      91



APEX MORTGAGE CAPITAL, INC., a Maryland corporation (herein referred to as the
"Company," which term includes any successor corporation under the Indenture
referred to on the reverse hereof), for value received, hereby promises to pay
to ______________________________ or registered assigns the principal sum of
_______ Dollars on _____________________ (the "Stated Maturity Date") [or insert
date fixed for earlier redemption (the "Redemption Date," and together with the
Stated Maturity Date with respect to principal repayable on such date, the
"Maturity Date.")]

[If the Security is to bear interest prior to Maturity, insert -- and to pay
interest thereon from ______________ or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, semi-annually on
__________ and _________ in each year (each, an "Interest Payment Date"),
commencing __________, at the rate of __% per annum, until the principal hereof
is paid or duly provided for. The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in such
Indenture, be paid to the Holder in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the ________ or ______ (whether or
not a Business Day), as the case may be, next preceding such Interest Payment
Date [at the office or agency of the Company maintained for such purpose;
provided, however, that such interest may be paid, at the Company's option, by
mailing a check to such Holder at its registered address or by transfer of funds
to an account maintained by such Holder within the United States]. Any such
interest not so punctually paid or duly provided for shall forthwith cease to be
payable to the Holder on such Regular Record Date, and may be paid to the Holder
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or may be paid at any time in any other lawful manner
not inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in the Indenture. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.]

[If the Security is not to bear interest prior to Maturity, insert -- The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at the
[Stated] Maturity Date and in such case the overdue principal of this Security
shall bear interest at the rate of % per annum (to the extent that the payment
of such interest shall be legally enforceable), which shall accrue from the date
of such default in payment to the date payment of such principal has been made
or duly provided for. Interest on any overdue principal shall be payable on
demand. Any such interest on any overdue principal that is not so paid on demand
shall bear interest at the rate of % per annum (to the extent that the payment
of such interest shall be legally enforceable), which shall accrue from the date
of such demand for payment to the


                                      92



date payment of such interest has been made or duly provided for, and such
interest shall also be payable on demand.]

The principal of this Security payable on the Stated Maturity Date [or the
principal of, premium or Make-Whole Amount, if any, and, if the Redemption Date
is not an Interest Payment Date, interest on this Security payable on the
Redemption Date] will be paid against presentation of this Security at the
office or agency of the Company maintained for that purpose in
___________________, in such coin or currency of the United States of America as
at the time of payment is legal tender for the payment of public and private
debts.

Interest payable on this Security on any Interest Payment Date and on the
[Stated] Maturity Date [or Redemption Date, as the case may be,] will include
interest accrued from and including the next preceding Interest Payment Date in
respect of which interest has been paid or duly provided for (or from and
including ____________, if no interest has been paid on this Security) to but
excluding such Interest Payment Date or the [Stated] Maturity Date [or
Redemption Date, as the case may be.] If any Interest Payment Date or the
[Stated] Maturity Date or [Redemption Date] falls on a day that is not a
Business Day, as defined below, principal, premium or Make-Whole Amount, if any,
and/or interest payable with respect to such Interest Payment Date or [Stated]
Maturity Date [or Redemption Date, as the case may be,] will be paid on the next
succeeding Business Day with the same force and effect as if it were paid on the
date such payment was due, and no interest shall accrue on the amount so payable
for the period from and after such Interest Payment Date or [Stated] Maturity
Date [or Redemption Date, as the case may be.] "Business Day" means any day,
other than a Saturday or Sunday, on which banks in __________________ are not
required or authorized by law or executive order to close.

[If this Security is a Global Security, insert -- All payments of principal,
premium or Make-Whole Amount, if any, and interest in respect of this Security
will be made by the Company in immediately available funds.]

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

Unless the Certificate of Authentication hereon has been executed by the Trustee
by manual signature of one of its authorized signatories, this Security shall
not be entitled to any benefit under the Indenture, or be valid or obligatory
for any purpose.


                                     93



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

Dated:_______________      APEX MORTGAGE CAPITAL, INC.

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

                                       Attest:
                                              --------------
                                                 Secretary




                                     94



                              [Reverse of Security]

                           APEX MORTGAGE CAPITAL, INC.


This Security is one of a duly authorized issue of securities of the Company
(herein called the "Securities"), issued and to be issued in one or more series
under an Indenture, dated as of _____________, 200_ (herein called the
"Indenture") between the Company and _________________, as Trustee (herein
called the "Trustee," which term includes any successor trustee under the
Indenture with respect to the series of which this Security is a part), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Securities, and of
the terms upon which the Securities are, and are to be, authenticated and
delivered. This Security is one of the duly authorized series of Securities
designated on the face hereof (collectively, the "Securities"), [if applicable,
insert -- and the aggregate principal amount of the Securities to be issued
under such series is limited to $______ (except for Securities authenticated and
delivered upon transfer of, or in exchange for, or in lieu of other
Securities).] All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.

If an Event of Default, as defined in the Indenture, shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.

[If applicable, insert -- The Securities may not be redeemed prior to the Stated
Maturity Date.]

[If applicable, insert -- The Securities are subject to redemption [ (l) (If
applicable, insert -- on _________ in any year commencing with the year ____ and
ending with the year ____ through operation of the sinking fund for this series
at a Redemption Price equal to 100% of the principal amount, and (2) ] [If
applicable, insert -- at any time [on or after ___________], as a whole or in
part, at the election of the Company, at the following Redemption Prices
(expressed as percentages of the principal amount):

 If redeemed on or before _______, __% and if redeemed during the 12-month
period beginning _______ of the years indicated at the Redemption Prices
indicated below.

      Year        Redemption Price            Year         Redemption Price


                                      95



and thereafter at a Redemption Price equal to __% of the principal amount,
together in the case of any such redemption [If applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date; provided, however, that installments of interest on this
Security whose Stated Maturity is on or prior to such Redemption Date will be
payable to the Holder of this Security, or one or more Predecessor Securities,
of record at the close of business on the relevant Record Dates referred to on
the face hereof, all as provided in the Indenture.]

         [If applicable, insert -- The Securities are subject to redemption (1)
on _______ in any year commencing with the year ____ and ending with the year
____ through operation of the sinking fund for this series at the Redemption
Prices for redemption through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below, and (2) at
any time [on or after _______], as a whole or in part, at the election of the
Company, at the Redemption Prices for redemption otherwise than through
operation of the sinking fund (expressed as percentages of the principal amount)
set forth in the table below: If redeemed during the 12-month period beginning
________ of the years indicated,

               Redemption Price for          Redemption Price for
                Redemption Through           Redemption Otherwise
                 Operation of the           Than Through Operation
     Year          Sinking Fund               of the Sinking Fund



and thereafter at a Redemption Price equal to ____% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date;
provided, however, that installments of interest on this Security whose Stated
Maturity is on or prior to such Redemption Date will be payable to the Holder of
this Security, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.]

         [If applicable, insert -- Notwithstanding the foregoing, the Company
may not, prior to _______, redeem any Securities as contemplated by [Clause (2)
of] the preceding paragraph as a part of, or in anticipation of, any refunding
operation by the application, directly or indirectly, of moneys borrowed having
an interest cost to the Company (calculated in accordance with generally
accepted financial practice) of less than __% per annum.]


                                      96



         [If applicable, insert -- The sinking fund for the Securities provides
for the redemption on _______ in each year, beginning with the year ____ and
ending with the year ____, of [not less than] $_______] [("mandatory sinking
fund") and not more than $_______] aggregate principal amount of the Securities.
[The Securities acquired or redeemed by the Company otherwise than through
[mandatory] sinking fund payments may be credited against subsequent [mandatory]
sinking fund payments otherwise required to be made in the [describe order]
order in which they become due.]]

         Notice of redemption will be given by mail to Holders of Securities,
not less than 30 nor more than 60 days prior to the Redemption Date, all as
provided in the Indenture.

         In the event of redemption of this Security in part only, a new
Security or Securities for the unredeemed portion hereof shall be issued in the
name of the Holder hereof upon the cancellation hereof.

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of not
less than a majority of the aggregate principal amount of all Securities issued
under the Indenture at the time Outstanding and affected thereby. The Indenture
also contains provisions permitting the Holders of not less than a majority of
the aggregate principal amount of the Outstanding Securities, on behalf of the
Holders of all such Securities, to waive compliance by the Company with certain
provisions of the Indenture. Furthermore, provisions in the Indenture permit the
Holders of not less than a majority of the aggregate principal amount, in
certain instances, of the Outstanding Securities of any series to waive, on
behalf of all of the Holders of Securities of such series, certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and other Securities issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.

         No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium or
Make-Whole Amount, if any) and interest on this Security at the times, places
and rate, and in the coin or currency, herein prescribed.

         As provided in the Indenture and subject to certain limitations therein
[and herein] set forth, the transfer of this Security is registrable in the
Security Register of the Company upon surrender of this Security for
registration of transfer at the office or


                                      97



agency of the Company in any place where the principal of (and premium or
Make-Whole Amount, if any) and interest on this Security are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or by his attorney duly authorized in writing, and thereupon
one or more new Securities, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.


                                      98



         As provided in the Indenture and subject to certain limitations therein
[and herein] set forth, this Security is exchangeable for a like aggregate
principal amount of Securities of different authorized denominations but
otherwise having the same terms and conditions, as requested by the Holder
hereof surrendering the same.

         The Securities of this series are issuable only in registered form
[without coupons] in denominations of $_______ and any integral multiple
thereof.

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

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

         No recourse shall be had for the payment of the principal of or premium
or Make-Whole Amount, if any, or the interest on this Security, or for any claim
based hereon, or otherwise in respect hereof, or based on or in respect of the
Indenture or any indenture supplemental thereto, against any past, present or
future stockholder, employee, officer or director, as such, of the Company or of
any successor, either directly or through the Company or any successor, whether
by virtue of any constitution, statute or rule of law or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.

         The Indenture and the Securities shall be governed by and construed in
accordance with the laws of [__________________] applicable to agreements made
and to be performed entirely in such State.


                                      99

EX-4.7

                                                                 Exhibit 4.7

                           APEX MORTGAGE CAPITAL, INC.


                                       TO


                                  [           ]

                                     TRUSTEE


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

                                    INDENTURE

                        DATED AS OF ______________, 200_


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

                          SUBORDINATED DEBT SECURITIES




                                TABLE OF CONTENTS
                                -----------------


                                                                                                               PAGE
                                                                                                               ----
                                                                                                            
RECITALS OF THE COMPANY..........................................................................................8

ARTICLE ONE - DEFINITIONS AND....................................................................................8

SECTION 101.  Definitions........................................................................................8

SECTION 102.  Compliance Certificates and Opinions..............................................................18

SECTION 103.  Form of Documents Delivered to Trustee............................................................19

SECTION 104.  Acts of Holders...................................................................................19

SECTION 105.  Notices, etc., to Trustee and Company.............................................................21

SECTION 106.  Notice to Holders:  Waiver........................................................................21

SECTION 107.  Counterparts; Effect of Headings and Table of Contents............................................22

SECTION 108.  Successors and Assigns............................................................................22

SECTION 109.  Severability Clause...............................................................................22

SECTION 110.  Benefits of Indenture.............................................................................22

SECTION 111.  Governing Law.....................................................................................22

SECTION 112.  Legal Holidays....................................................................................22

SECTION 113.  Immunity of Stockholders, Directors, Officers and Agents of the Company...........................23

SECTION 114.  Conflict with Trust Indenture Act.................................................................23

ARTICLE TWO - SECURITIES FORMS..................................................................................23

SECTION 201.  Forms of Securities...............................................................................23

SECTION 202.  Form of Trustee's Certificate of Authentication...................................................24

SECTION 203.  Securities Issuable in Global Form................................................................24

ARTICLE THREE - THE SECURITIES..................................................................................25

SECTION 301.  Amount Unlimited; Issuable in Series..............................................................25

SECTION 302.  Denominations.....................................................................................28

SECTION 303.  Execution, Authentication, Delivery and Dating....................................................28

SECTION 304.  Temporary Securities..............................................................................30

SECTION 305.  Registration, Registration of Transfer and Exchange...............................................33

SECTION 306.  Mutilated, Destroyed, Lost and Stolen Securities..................................................36

SECTION 307.  Payment of Interest; Interest Rights Preserved....................................................37

SECTION 308.  Persons Deemed Owners.............................................................................39

SECTION 309.  Cancellation......................................................................................40

SECTION 310.  Computation of Interest...........................................................................40

ARTICLE FOUR - SATISFACTION AND DISCHARGE.......................................................................40

SECTION 401.  Satisfaction and Discharge of Indenture...........................................................40

SECTION 402.  Application of Trust Funds........................................................................41

ARTICLE FIVE - REMEDIES.........................................................................................42

SECTION 501.  Events of Default.................................................................................42

SECTION 502.  Acceleration of Maturity; Rescission and Annulment................................................43

SECTION 503.  Collection of Indebtedness and Suits for Enforcement by Trustee...................................44

SECTION 504.  Trustee May File Proofs of Claim..................................................................45

SECTION 505.  Trustee May Enforce Claims Without Possession of Securities or Coupons............................46

SECTION 506.  Application of Money Collected....................................................................46


                                      2



SECTION 507.  Limitation on Suits...............................................................................46

SECTION 508.  Unconditional Right of Holders to Receive Principal, Premium or Make-Whole Amount, if any,
         and Interest...........................................................................................47

SECTION 509.  Restoration of Rights and Remedies................................................................47

SECTION 510.  Rights and Remedies Cumulative....................................................................47

SECTION 511.  Delay or Omission Not Waiver......................................................................48

SECTION 512.  Control by Holders of Securities..................................................................48

SECTION 513.  Waiver of Past Defaults...........................................................................48

SECTION 514.  Waiver of Usury, Stay or Extension Laws...........................................................49

SECTION 515.  Undertaking for Costs.............................................................................49

ARTICLE SIX - THE TRUSTEE.......................................................................................49

SECTION 601.  Notice of Defaults................................................................................49

SECTION 602.  Certain Rights of Trustee.........................................................................49

SECTION 603.  Not Responsible for Recitals or Issuance of Securities............................................51

SECTION 604.  May Hold Securities...............................................................................51

SECTION 605.  Money Held in Trust...............................................................................51

SECTION 606.  Compensation and Reimbursement....................................................................51

SECTION 607.  Corporate Trustee Required; Eligibility; Conflicting Interests....................................52

SECTION 608.  Resignation and Removal; Appointment of Successor.................................................52

SECTION 609.  Acceptance of Appointment by Successor............................................................54

SECTION 610.  Merger, Conversion, Consolidation or Succession to Business.......................................55

SECTION 611.  Appointment of Authenticating Agent...............................................................55

SECTION 612.  Certain Duties and Responsibilities of the Trustee................................................57

ARTICLE SEVEN - HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY...............................................58

SECTION 701.  Disclosure of Names and Addresses of Holders......................................................58

SECTION 702.  Reports by Trustee................................................................................58

SECTION 703.  Reports by Company................................................................................58

SECTION 704.  Company to Furnish Trustee Names and Addresses of Holders.........................................59

ARTICLE EIGHT - CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE................................................59

SECTION 801.  Consolidations and Mergers of Company and Sales, Leases and Conveyances Permitted Subject
         to Certain Conditions..................................................................................59

SECTION 802.  Rights and Duties of Successor Corporation........................................................60


                                      3



SECTION 803.  Officers' Certificate and Opinion of Counsel......................................................60

ARTICLE NINE - SUPPLEMENTAL INDENTURES..........................................................................60

SECTION 901.  Supplemental Indentures Without Consent of Holders................................................60

SECTION 902.  Supplemental Indentures with Consent of Holders...................................................62

SECTION 903.  Execution of Supplemental Indentures..............................................................63

SECTION 904.  Effect of Supplemental Indentures.................................................................63

SECTION 905.  Conformity with Trust Indenture Act...............................................................63

SECTION 906.  Reference in Securities to Supplemental Indentures................................................63

ARTICLE TEN - COVENANTS.........................................................................................64

SECTION 1001.  Payment of Principal, Premium or Make-Whole Amount, if any; and Interest.........................64

SECTION 1002.  Maintenance of Office or Agency..................................................................64

SECTION 1003.  Money for Securities Payments to Be Held in Trust................................................65

ARTICLE ELEVEN - REDEMPTION OF SECURITIES.......................................................................67

SECTION 1101.  Applicability of Article.........................................................................67

SECTION 1102.  Election to Redeem; Notice to Trustee............................................................67

SECTION 1103.  Selection by Trustee of Securities to Be Redeemed................................................67

SECTION 1104.  Notice of Redemption.............................................................................67

SECTION 1105.  Deposit of Redemption Price......................................................................69

SECTION 1106.  Securities Payable on Redemption Date............................................................69

SECTION 1107.  Securities Redeemed in Part......................................................................70

ARTICLE TWELVE - SINKING FUNDS..................................................................................70

SECTION 1201.  Applicability of Article.........................................................................70

SECTION 1202.  Satisfaction of Sinking Fund Payments with Securities............................................71

SECTION 1203.  Redemption of Securities for Sinking Fund........................................................71

ARTICLE THIRTEEN - REPAYMENT AT THE OPTION OF HOLDERS...........................................................71

SECTION 1301.  Applicability of Article.........................................................................71

SECTION 1302.  Repayment of Securities..........................................................................71

SECTION 1303.  Exercise of Option...............................................................................72

SECTION 1304.  When Securities Presented for Repayment Become Due and Payable...................................72

SECTION 1305.  Securities Repaid in Part........................................................................73

ARTICLE FOURTEEN - DEFEASANCE AND COVENANT DEFEASANCE...........................................................73


                                      4



SECTION 1401.  Applicability of Article:  Company's Option to Effect Defeasance or Covenant Defeasance..........73

SECTION 1402.  Defeasance and Discharge.........................................................................74

SECTION 1403.  Covenant Defeasance..............................................................................74

SECTION 1404.  Conditions to Defeasance or Covenant Defeasance..................................................75

SECTION 1405.  Deposited Money and Government Obligations to Be Held in Trust; Other Miscellaneous
         Provisions.............................................................................................76

ARTICLE FIFTEEN - MEETINGS OF HOLDERS OF SECURITIES.............................................................77

SECTION 1501.  Purposes for Which Meetings May Be Called........................................................77

SECTION 1502.  Call, Notice and Place of Meetings...............................................................77

SECTION 1503.  Persons Entitled to Vote at Meetings.............................................................78

SECTION 1504.  Quorum; Action...................................................................................78

SECTION 1505.  Determination of Voting Rights; Conduct and Adjournment of Meetings..............................79

SECTION 1506.  Counting Votes and Recording Action of Meetings..................................................80

ARTICLE SIXTEEN - SUBORDINATION OF SECURITIES...................................................................80

SECTION 1601.  Agreement to Subordinate.........................................................................80

SECTION 1602.  Payment Over of Proceeds upon Dissolution, Etc...................................................81

SECTION 1603.  No Payment When Senior Debt in Default...........................................................82

SECTION 1604.  Reliance by Senior Debt on Subordination Provisions..............................................83

SECTION 1605.  Subrogation to Rights of Holders of Senior Debt..................................................83

SECTION 1606.  Provisions Solely to Define Relative Rights......................................................83

SECTION 1607.  Trustee to Effectuate Subordination..............................................................83

SECTION 1608.  No Waiver of Subordination Provisions............................................................84

SECTION 1609.  Notice to Trustee................................................................................84

SECTION 1610.  Reliance on Judicial Order or Certificate of Liquidating Agent...................................85

SECTION 1611.  Trustee Not Fiduciary for Holders of Senior Debt.................................................85

SECTION 1612.  Rights of Trustee as Holder of Senior Debt; Preservation of Trustee's Rights.....................86

SECTION 1613.  Article Applicable to Paying Agents..............................................................86

ARTICLE SEVENTEEN - CONVERSION OF SECURITIES....................................................................86

SECTION 1701.  Applicability of Article; Conversion Privilege and Conversion Price..............................86

SECTION 1702.  Exercise of Conversion Privilege.................................................................87

SECTION 1703.  Fractions of Shares..............................................................................88


                                      5



SECTION 1704.  Adjustment of Conversion Price...................................................................88

SECTION 1705.  Notice of Adjustments of Conversion Price........................................................92

SECTION 1706.  Notice of Certain Corporate Action...............................................................92

SECTION 1707.  Company to Reserve Common Stock..................................................................93

SECTION 1708.  Taxes on Conversion..............................................................................93

SECTION 1709.  Covenants as to Common Stock.....................................................................93

SECTION 1710.  Cancellation of Converted Securities.............................................................93

SECTION 1711.  Provisions in Case of Consolidation, Merger or Sale of Assets; Special Distributions.............93

SECTION 1712.  Trustee Adjustment Disclaimer; Company Determination Final.......................................95

SECTION 1713.  When No Adjustment Required......................................................................95

SECTION 1714.  Equivalent Adjustments...........................................................................95

SIGNATURES AND SEALS............................................................................................97

ACKNOWLEDGMENT..................................................................................................98

EXHIBIT A.......................................................................................................99



                                      6



                          APEX MORTGAGE CAPITAL, INC.


                  Reconciliation and tie between Trust Indenture Act of 1939
(the "Trust Indenture Act" or "TIA") and Indenture, dated as of
________________, 200_.



Trust Indenture Act Section                                   Indenture Section
- ---------------------------                                   -----------------
                                                         
Section 310(a)(1)...............................                            607
         (a)(2).................................                            607
         (b)....................................                       607, 608

Section 312(c)..................................                            701

Section 313(a)..................................                            702
         (c)....................................                            702

Section 314(a)..................................                            703
         (c)(1).................................                            102
         (c)(2).................................                            102
         (e)....................................                            102

Section 315(b)..................................                            601

Section 316(a) (last sentence)..................            101 ("Outstanding")
         (a)(1)(A)..............................                       502, 512
         (a)(1)(B)..............................                            513
         (b)....................................                            508

Section 317(a)(1)...............................                            503
         (a)(2).................................                            504

Section 318(a)..................................                            111
         (c)....................................                            111

- -------------------
                  NOTE: This reconciliation and tie shall not, for any purpose,
be deemed to be a part of the Indenture.

                  Attention should also be directed to TIA Section 318(c), which
provides that the provisions of TIA Sections 310 to and including 317 of the
Trust Indenture Act are a part of and govern every qualified indenture, whether
or not physically contained therein.


                                      7



         INDENTURE, dated as of _________________, 200_, between APEX
MORTGAGE CAPITAL, INC., a corporation organized under the laws of the State
of Maryland (hereinafter called the "Company"), having its principal office
at 865 South Figueroa Street, Los Angeles, California 90017 and
[_________________], a banking association organized under the laws of the
[_____________________________] as Trustee hereunder (hereinafter called the
"Trustee"), having a Corporate Trust Office at

[---------------------------------].

                             RECITALS OF THE COMPANY

                  The Company deems it necessary to issue from time to time
for its lawful purposes subordinated debt securities (hereinafter called the
"Securities") evidencing its unsecured and subordinated indebtedness, and has
duly authorized the execution and delivery of this Indenture to provide for
the issuance from time to time of the Securities, to be issued in one or more
Series as provided in this Indenture.

                  This Indenture is subject to the provisions of the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act" or "TIA"), that
are deemed to be incorporated into this Indenture and shall, to the extent
applicable, be governed by such provisions.

                  All things necessary to make this Indenture a valid
agreement of the Company, in accordance with its terms, have been done.

         NOW, THEREFORE, THIS INDENTURE WITNESSETH:

                  For and in consideration of the premises and the purchase
of the Securities by the Holders thereof, it is mutually covenanted and
agreed, for the equal and proportionate benefit of all Holders of the
Securities, as follows:

                          ARTICLE ONE - DEFINITIONS AND
                     OTHER PROVISIONS OF GENERAL APPLICATION

                  SECTION 101. Definitions. For all purposes of this
Indenture, except as otherwise expressly provided or unless the context
otherwise requires:

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

                  (2) all other terms used herein which are defined in the
                  TIA, either directly or by reference therein, have the
                  meanings assigned to them therein, and the terms "cash
                  transaction" and "self-liquidating paper," as used in TIA
                  Section 311, shall have the meanings assigned to them in
                  the rules of the Commission adopted under the TIA;

                  (3) all accounting terms not otherwise defined herein have
                  the meanings assigned to them in accordance with GAAP; and


                                      8



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

                  "Act," when used with respect to any Holder, has the meaning
         specified in Section 104.

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

                  "Authenticating Agent" means any Person authorized by the
Trustee pursuant to Section 611 hereof to act on behalf of the Trustee to
authenticate Securities.

                  "Authorized Newspaper" means a newspaper, printed in the
English language or in an official language of the country of publication,
customarily published on each Business Day, whether or not published on
Saturdays, Sundays or holidays, and of general circulation in each place in
connection with which the term is used or in the financial community of each
such place. Whenever successive publications are required to be made in
Authorized Newspapers, the successive publications may be made in the same or
in different Authorized Newspapers in the same city meeting the foregoing
requirements and in each case on any Business Day.

                  "Bankruptcy Law" has the meaning specified in Section 501.

                  "Bearer Security" means any Security established pursuant
to Section 201 which is payable to bearer.

                  "Board of Directors" means the board of directors of the
Company or any committee of that board duly authorized to act hereunder.

                  "Board Resolution" means 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, and delivered to the Trustee.

                  "Business Day," when used with respect to any Place of
Payment or any other particular location referred to in this Indenture or in
the Securities, means, unless otherwise specified with respect to any
Securities issued pursuant to Section 301, any day, other than a Saturday or
Sunday, that is not a day on which banking institutions in that Place of
Payment or particular location are authorized or required by law, regulation
or executive order to close.

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

                  "Clearstream" means Clearstream Banking, S.A., or its
successor.


                                      9



                  "Commission" means the Securities and Exchange Commission,
as from time to time constituted, created under the Securities Exchange Act
of 1934, or, if at any time after 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 performing such duties on such date.

                  "Common Stock" means, with respect to any Person, all
shares of capital stock issued by such Person other than Preferred Stock.

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

                  "Company Request" and "Company Order" mean, respectively, a
written request or order signed in the name of the Company by its Chairman of
the Board, the President or a Vice President, and by its Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company,
and delivered to the Trustee.

                  "Comparable Treasury Issue" means the United States
Treasury security selected by an Independent Investment Banker as having a
maturity comparable to the remaining term of the Notes to be redeemed that
would be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of such Notes. "Independent
Investment Banker" means one of the Reference Treasury Dealers appointed by
the Trustee after consultation with the Company.

                  "Comparable Treasury Price" means, with respect to any
redemption date, (i) the average of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) on the third business day preceding such redemption date,
as set forth in the daily statistical release (or any successor release)
published by the Federal Reserve Bank of New York and designated "Composite
3:30 p.m. Quotations for U.S. Government Securities" or (ii) if such release
(or any successor release) is not published or does not contain such prices
on such business day, the average of all Reference Treasury Dealer Quotations
for such redemption date.

                  "Consolidated Net Assets" means as of any particular time
the aggregate amount of assets (less applicable reserves and other properly
deductible items) after deducting therefrom all current liabilities except
for (a) notes and loans payable, (b) current maturities of long-term debt and
(c) current maturities of obligations under capital leases, all as set forth
on the most recent consolidated balance sheet of the Company and its
consolidated Subsidiaries and computed in accordance with generally accepted
accounting principles and practices as in effect on [_____________]
[the date of the Senior Indenture].

                  "Conversion Event" means the cessation of use of (i) a
Foreign Currency both by the government of the country which issued such
currency and for the settlement of transactions by a central bank or other
public institutions of or within the international banking community, (ii)
the euro both within the European Monetary System and for the settlement of
transactions by public institutions of or within the European Communities or
(iii) any currency unit (or composite currency) other than the euro for the
purposes for which it was established.


                                      10



                  "Corporate Trust Office" means the office of the Trustee at
which, at any particular time, its corporate trust business shall be
principally administered, which office at the date hereof is located at
[__________________________].

                  "Corporation" includes corporations, associations,
companies and business trusts.

                  "Coupon" means any interest coupon appertaining to a Bearer
Security.

                  "Custodian" has the meaning specified in Section 501.

                  "Defaulted Interest" has the meaning specified in Section
307.

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

                   "Euroclear" means Morgan Guaranty Trust Company of New
York, Brussels office, or its successor as operator of the Euroclear System.

                  "European Communities" means the European Economic
Community, the European Coal and Steel Community and the European Atomic
Energy Community.

                  "European Monetary System" means the European Monetary
System established by the Resolution of December 5, 1978 of the Council of
the European Communities.

                  "Event of Default" has the meaning specified in Article
Five.

                  "Exchange Act" means the Securities Exchange Act of 1934,
as amended, or any successor statute.

                  "Foreign Currency" means any currency, currency unit or
composite currency, including, without limitation, the euro, issued by the
government of one or more countries other than the United States of America
or by any recognized confederation or association of such governments.

                  "GAAP" means, except as otherwise provided herein,
generally accepted accounting principles, as in effect from time to time, as
used in the United States applied on a consistent basis.

                  "Global Security" means a Security evidencing all or a part
of a series of Securities issued to and registered in the name of the
depository for such series, or its nominee, in accordance with Section 305,
and bearing the legend prescribed in Section 203.

                  "Government Obligations" means securities which are (i)
direct obligations of the United States of America or the government which
issued the Foreign Currency in which the Securities of a particular series
are payable, 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 of America or such government
which issued the Foreign Currency in which the Securities of such series are
payable, the payment of which is


                                      11



unconditionally guaranteed as a full faith and credit obligation by the
United States of America or such other government, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall
also include a depository receipt issued by a bank or trust company as
custodian with respect to any such Government Obligation or a specific
payment of interest on or principal of any such Government Obligation held by
such custodian for the account of the holder of a 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 the custodian in respect of the
Government Obligation or the specific payment of interest on or principal of
the Government Obligation evidenced by such depository receipt.

                  "Guaranty" by any Person means any Obligation, contingent
or otherwise, of such Person guaranteeing any Indebtedness of any other
Person (the "primary obligor") in any manner, whether directly or indirectly,
and including, without limitation, every Obligation of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or to purchase (or to advance or supply funds for the
purchase of) any security for the payment of such Indebtedness, (ii) to
purchase property, securities or services for the purpose of assuring the
holder of such Indebtedness of the payment of such Indebtedness or (iii) to
maintain working capital, equity capital or other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness; provided, however, that a Guaranty by any
Person shall not include endorsements by such Person for collection or
deposit, in either case in the ordinary course of business. The terms
"Guaranteed," "Guaranteeing" and "Guarantor" shall have meanings correlative
to the foregoing.

                  "Holder" means, in the case of a Registered Security, the
Person in whose name a Security is registered in the Security Register and,
in the case of a Bearer Security, the bearer thereof and, when used with
respect to any coupon, shall mean the bearer thereof.

                  "Indebtedness" means, with respect to any Person, without
duplication, (i) any Obligation of such Person relating to any indebtedness
of such Person (A) for borrowed money (whether or not the recourse of the
lender is to the whole of the assets, of such person or only to a portion
thereof), (B) evidenced by notes, debentures or similar instruments
(including purchase money obligations) given in connection with the
acquisition of any property or assets (other than trade accounts payable for
inventory or similar property acquired in the ordinary course of business),
including securities, for the payment of which such Person is liable,
directly or indirectly, or the payment of which is secured by a lien, charge
or encumbrance on property or assets of such Person, (C) for goods, materials
or services purchased in the ordinary course of business (other than trade
accounts payable arising in the ordinary course of business), (D) with
respect to letters of credit or bankers acceptances issued for the account of
such Person or performance, surety or similar bonds, (E) for the payment of
money relating to a Capitalized Lease Obligation or (F) under interest rate
swaps, caps or similar agreements and foreign exchange contracts, currency
swaps or similar agreements; (ii) any liability of others of the kind
described in the preceding clause (i), which such Person has Guaranteed or
which is otherwise its legal liability; and (iii) any and all deferrals,
renewals, extensions and refunding of, or amendments, modifications or
supplements to, any liability of the kind described in any of the preceding
clauses (i) or (ii).


                                      12



                  "Indenture" means this instrument as originally executed or
as it may be supplemented or amended from time to time by one or more
indentures supplemental hereto entered into pursuant to the applicable
provisions hereof, and shall include the terms of particular series of
Securities established as contemplated by Section 301; provided, however,
that, if at any time more than one Person is acting as Trustee under this
instrument, "Indenture" shall mean, with respect to any one or more series of
Securities for which such Person is Trustee, this instrument as originally
executed or as it may be supplemented or amended from time to time by one or
more indentures supplemental hereto entered into pursuant to the applicable
provisions hereof and shall include the terms of the or those particular
series of Securities for which such Person is Trustee established as
contemplated by Section 301, exclusive, however, of any provisions or terms
which relate solely to other series of Securities for which such Person is
Trustee, regardless of when such terms or provisions were adopted, and
exclusive of any provisions or terms adopted by means of one or more
indentures supplemental hereto executed and delivered after such Person had
become such Trustee but to which such Person, as such Trustee, was not a
party.

                  "Indexed Security" means a Security the terms of which
provide that the principal amount thereof payable at Stated Maturity may be
more or less than the principal face amount thereof at original issuance.

                  "Interest," when used with respect to an Original Issue
Discount Security which by its terms bears interest only after Maturity,
shall mean interest payable after Maturity.

                  "Interest Payment Date," when used with respect to any
Security, means the Stated Maturity of an installment of interest on such
Security.

                  "Make-Whole Amount," when used with respect to any
Security, means the amount, if any, in addition to principal which is
required by a Security, under the terms and conditions specified therein or
as otherwise specified as contemplated by Section 301, to be paid by the
Company to the Holder thereof in connection with any optional redemption or
accelerated payment of such Security.

                  "Maturity," when used with respect to any Security, means
the date on which the principal of such Security or an installment of
principal becomes due and payable as therein or herein provided, whether at
the Stated Maturity or by declaration of acceleration, notice of redemption,
notice of option to elect repayment or otherwise.

                  "Obligation" of any Person with respect to any specified
Indebtedness means any obligation of such Person to pay principal, premium,
interest (including interest accruing on or after the filing of any petition
in bankruptcy or for reorganization relating to such Person, whether or not a
claim for such post-petition interest is allowed in such Proceeding),
penalties, reimbursement or indemnification amounts, fees, expenses or other
amounts relating to such Indebtedness.

                  "Officers' Certificate" means a certificate signed by the
Chairman of the Board of Directors, the President or a Vice President and by
the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary of the Company, and delivered to the Trustee.


                                      13



                  "Opinion of Counsel" means a written opinion of counsel,
who may be counsel for the Company or who may be an employee of or other
counsel for the Company and who shall be satisfactory to the Trustee.

                  "Original Issue 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 502.

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

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

                  (ii) Securities, or portions thereof, for whose payment or
                  redemption (including repayment at the option of the
                  Holder) money in the necessary amount has been theretofore
                  deposited with the Trustee or any Paying Agent (other than
                  the Company) in trust or set aside and segregated in trust
                  by the Company (if the Company shall act as its own Paying
                  Agent) for the Holders of such Securities and any coupons
                  appertaining thereto; provided, however, that, if such
                  Securities are to be redeemed, notice of such redemption
                  has been duly given pursuant to this Indenture or provision
                  therefor satisfactory to the Trustee has been made;

                  (iii) Securities, except to the extent provided in Sections
                  1402 and 1403, with respect to which the Company has
                  effected defeasance and/or covenant defeasance as provided
                  in Article Fourteen; and

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

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder or are
present at a meeting of Holders for quorum purposes, and for the purpose of
making the calculations required by TIA Section 313, (i) the principal amount
of an Original Issue Discount Security that may be counted in making such
determination or calculation and that shall be deemed to be Outstanding for
such purpose shall be equal to the amount of principal thereof that would be
(or shall have been declared to be) due and payable, at the time of such
determination, upon a declaration of acceleration of the maturity thereof
pursuant to Section 502, (ii) the principal amount of any Security
denominated in a Foreign Currency that may be counted in making such
determination or calculation and that shall be deemed Outstanding for such
purpose shall be equal to the Dollar equivalent, determined pursuant to
Section 301 as of the date such Security is originally issued by the Company,
of the principal amount (or, in the case of an Original Issue Discount
Security, the Dollar equivalent as


                                      14



of such date of original issuance of the amount determined as provided in
clause (i) above) of such Security, (iii) the principal amount of any Indexed
Security that may be counted in making such determination or calculation and
that shall be deemed outstanding for such purpose shall be equal to the
principal face amount of such Indexed Security at original issuance, unless
otherwise provided with respect to such Security pursuant to Section 301, and
(iv) Securities owned by the Company or any other obligor upon the Securities
or any Affiliate of the Company or of such other obligor shall be disregarded
and deemed not to be Outstanding, except that, in determining whether the
Trustee shall be protected in making such calculation or in relying upon any
such request, demand, authorization, direction, notice, consent or waiver,
only Securities which the Trustee knows to be so owned shall be so
disregarded. Securities owned as provided in clause (iv) above which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or
any other obligor upon the Securities or any Affiliate of the Company or of
such other obligor. In case of a dispute as to such right, the advice of
counsel shall be full protection in respect of any decision made by the
Trustee in accordance with such advice.

                  "Paying Agent" means any Person authorized by the Company
to pay the principal of (and premium or Make-Whole Amount, if any) or
interest on any Securities or coupons on behalf of the Company.

                  "Payment Blockage Notice" and "Payment Blockage Period"
have the respective meanings specified in Section 1603.

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

                  "Place of Payment," when used with respect to the
Securities of or within any series, means the place or places where the
principal of (and premium or Make-Whole Amount, if any) and interest on such
Securities are payable as specified as contemplated by Sections 301 and 1002.

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

                  "Preferred Stock" means, with respect to any Person, all
capital stock issued by such Person that are entitled to a preference or
priority over any other capital stock issued by such Person with respect to
any distribution of such Person's assets, whether by dividend or upon any
voluntary or involuntary liquidation, dissolution or winding up.

         "Proceeding" has the meaning specified in Section 1602.


                                      15



                  "Redemption Date," when used with respect to any Security
to be redeemed, in whole or in part, means the date fixed for such redemption
by or pursuant to this Indenture.

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

                  "Reference Treasury Dealer" means each of
[__________________], and their respective successors; provided, however,
that if any of the foregoing shall cease to be a primary U.S. Government
securities dealer in New York City (a "Primary Treasury Dealer"), the Company
shall substitute therefor another Primary Treasury Dealer.

                  "Reference Treasury Dealer Quotations" means, with respect
to each Reference Treasury Dealer and any redemption date, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Trustee by such Reference Treasury Dealer at
5:00 p.m. on the third business day preceding such redemption date.

         "Registered Security" shall mean any Security which is registered in
the Security Register.

                  "Regular Record Date" for the interest payable on any
Interest Payment Date on the Registered Securities of or within any series
means the date specified for that purpose as contemplated by Section 301,
whether or not a Business Day.

                  "Repayment Date" means, when used with respect to any
Security to be repaid at the option of the Holder, the date fixed for such
repayment by or pursuant to this Indenture.

                  "Repayment Price" means, when used with respect to any
Security to be repaid at the option of the Holder, the price at which it is
to be repaid by or pursuant to this Indenture.

                  "Responsible Officer," when used with respect to the
Trustee, means the chairman or vice-chairman of the board of directors, the
chairman or vice-chairman of the executive committee of the board of
directors, the president, any vice president (whether or not designated by a
number or a word or words added before or after the title "vice president"),
the secretary, any assistant secretary, the treasurer, any assistant
treasurer, the cashier, any assistant cashier, any trust officer or assistant
trust officer, the controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of
such officer's knowledge and familiarity with the particular subject.

                  "Security" has the meaning stated in the first recital of
this Indenture and, more particularly, means any Security or Securities
authenticated and delivered under this Indenture; provided, however, that, if
at any time there is more than one Person acting as Trustee under this
Indenture, "Securities" with respect to the Indenture as to which such Person
is Trustee shall have the meaning stated in the first recital of this
Indenture and shall more particularly mean Securities authenticated and
delivered under this Indenture, exclusive, however, of Securities of any
series as to which such Person is not Trustee.


                                      16



                  "Security Register" and "Security Registrar" have the
respective meanings specified in Section 305.

                  "Senior Debt" means Indebtedness of the Company, whether
outstanding on the date of this Indenture or thereafter created, incurred,
assumed or guaranteed by the Company, other than the following: (1) any
Indebtedness as to which, in the instrument evidencing such Indebtedness or
pursuant to which such Indebtedness was issued, it is expressly provided that
such Indebtedness is subordinate in right of payment to all Indebtedness of
the Company not expressly subordinated to such Indebtedness; (2) any
Indebtedness which by its terms refers explicitly to the Securities and
states that such Indebtedness shall not be senior, shall be pari passu or
shall be subordinated in right of payment to the Securities; and (3) with
respect to any series of Securities, any Indebtedness of the Company
evidenced by Securities of the same or of another series. Notwithstanding
anything to the contrary in the foregoing, Senior Debt shall not include: (a)
Indebtedness of or amounts owed by the Company for compensation to employees,
or for goods, materials or services purchased in the ordinary course of
business, or (b) Indebtedness of the Company to a Subsidiary of the Company.

                  "Significant Subsidiary" means any Subsidiary which is a
"significant subsidiary" (as defined in Article I, Rule 1-02 of Regulation
S-X, promulgated under the Securities Act of 1933) of the Company.

                  "Special Record Date" for the payment of any Defaulted
Interest on the Registered Securities of or within any series means a date
fixed by the Company pursuant to Section 307.

                  "Stated Maturity," when used with respect to any Security
or any installment of principal thereof or interest thereon, means the date
specified in such Security or a coupon representing such installment of
interest as the fixed date on which the principal of such Security or such
installment of principal or interest is due and payable.

                  "Subsidiary" means, with respect to any Person, any
corporation, limited liability company, partnership or other entity of which
a majority of (i) the voting power of the voting equity securities or (ii)
the outstanding equity interests of which are owned, directly or indirectly,
by such Person. For the purposes of this definition, "voting equity
securities" means equity securities having voting power for the election of
directors, whether at all times or only so long as no senior class of
security has such voting power by reason of any contingency.

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

                  "Trust Indenture Act" or "TIA" means the Trust Indenture
Act of 1939, as amended and as in force at the date as of which this
Indenture was executed, except as provided in Section 905.

                  "Trustee" means the Person named as the "Trustee" in the
first paragraph of this Indenture until a successor Trustee shall have become
such pursuant to the applicable provisions


                                      17



of this Indenture, and thereafter "Trustee" shall mean or include each Person
who is then a Trustee hereunder; provided, however, that if at any time there
is more than one such Person, "Trustee" as used with respect to the
Securities of any series shall mean only the Trustee with respect to
Securities of that series.

                  "United States" means, unless otherwise specified with
respect to any Securities pursuant to Section 301, the United States of
America (including the states and the District of Columbia), its territories,
its possessions and other areas subject to its jurisdiction.

                  "United States Person" means, unless otherwise specified
with respect to any Securities pursuant to Section 301, an individual who is
a citizen or resident of the United States, a corporation, partnership or
other entity created or organized in or under the laws of the United States
or an estate or trust the income of which is subject to United States Federal
income taxation regardless of its source.

                  "Yield to Maturity" means the yield to maturity, computed
at the time of issuance of a Security (or, if applicable, at the most recent
redetermination of interest on such Security) and as set forth in such
Security in accordance with generally accepted United States bond yield
computation principles.

                  SECTION 102. Compliance Certificates and Opinions. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all
such conditions precedent, if any, have been complied with, except that in
the case of any such application or request as to which the furnishing of
such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate
or opinion need be furnished.

                  Every certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture (including
certificates delivered pursuant to Section 1008) shall include:

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

                  (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 each such
                  individual, he has made such examination or investigation
                  as is necessary to enable him to express an informed
                  opinion as to whether or not such condition or covenant has
                  been complied with; and

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


                                      18



                  SECTION 103. Form of Documents Delivered to Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.

                  Any certificate or opinion of an officer of the Company may
be based, insofar as it relates to legal matters, upon an Opinion of Counsel,
or a certificate or representations by counsel, unless such officer knows, or
in the exercise of reasonable care should know, that the opinion, certificate
or representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such Opinion of Counsel or certificate or
representations may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Company stating that the information as to such factual matters is in the
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.

                  Where any Person is required to make, give or execute two
or more applications, requests, consents, certificates, statements, opinions
or other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.

                  SECTION 104. Acts of Holders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders of the Outstanding Securities
of all series or one or more series, as the case may be, may be embodied in
and evidenced by one or more instruments of substantially similar tenor
signed by such Holders in person or by agents duly appointed in writing. If
Securities of a series are issuable as Bearer Securities, any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Holders of Securities of
such series may, alternatively, be embodied in and evidenced by the record of
Holders of Securities of such series voting in favor thereof, either in
person or by proxies duly appointed in writing, at any meeting of Holders of
Securities of such series duly called and held in accordance with the
provisions of Article Fifteen, or a combination of such instruments and any
such record. Except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments or record or both are
delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments and any such record (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as
the "Act" of the Holders signing such instrument or instruments or so voting
at any such meeting. Proof of execution of any such instrument or of a
writing appointing any such agent, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and
conclusive in favor of the Trustee and the Company and any agent of the
Trustee or the Company, if made in the manner provided in this Section. The
record of any meeting of Holders of Securities shall be proved in the manner
provided in Section 1506.

                  (b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of
such execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying


                                      19



that the individual signing such instrument or writing acknowledged to him
the execution thereof. Where such execution is by a signer acting in a
capacity other than his individual capacity, such certificate or affidavit
shall also constitute sufficient proof of his authority. The fact and date of
the execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other reasonable manner
which the Trustee deems sufficient.

                  (c) The ownership of Registered Securities shall be proved
by the Security Register. As to any matter relating to beneficial ownership
interests in any Global Security, the appropriate depository's records shall
be dispositive for purposes of this Indenture.

                  (d) The ownership of Bearer Securities may be proved by the
production of such Bearer Securities or by a certificate executed, as
depository, by any trust company, bank, banker or other depository, wherever
situated, if such certificate shall be deemed by the Trustee to be
satisfactory, showing that at the date therein mentioned such Person had on
deposit with such depository, or exhibited to it, the Bearer Securities
therein described; or such facts may be proved by the certificate or
affidavit of the Person holding such Bearer Securities, if such certificate
or affidavit is deemed by the Trustee to be satisfactory. The Trustee and the
Company may assume that such ownership of any Bearer Security continues until
(1) another certificate or affidavit bearing a later date issued in respect
of the same Bearer Security is produced, or (2) such Bearer Security is
produced to the Trustee by some other Person, or (3) such Bearer Security is
surrendered in exchange for a Registered Security, or (4) such Bearer
Security is no longer Outstanding. The ownership of Bearer Securities may
also be proved in any other manner which the Trustee deems sufficient.

                  (e) If the Company shall solicit from the Holders of
Registered Securities any request, demand, authorization, direction, notice,
consent, waiver or other Act, the Company may, at its option, in or pursuant
to a Board Resolution, fix in advance a record date for the determination of
Holders entitled to give such request, demand, authorization, direction,
notice, consent, waiver or other Act, but the Company shall have no
obligation to do so. Notwithstanding TIA Section 316(c), such record date
shall be the record date specified in or pursuant to such Board Resolution,
which shall be a date not earlier than the date 30 days prior to the first
solicitation of Holders generally in connection therewith and not later than
the date such solicitation is completed. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other
Act may be given before or after such record date, but only the Holders of
record at the close of business on such record date shall be deemed to be
Holders for the purposes of determining whether Holders of the requisite
proportion of Outstanding Securities have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other Act, and for that purpose the Outstanding Securities shall be computed
as of such record date; provided that no such authorization, agreement or
consent by the Holders on such record date shall be deemed effective unless
it shall become effective pursuant to the provisions of this Indenture not
later than eleven months after the record date.

                  (f) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the


                                      20



Trustee, any Security Registrar, any Paying Agent, any Authenticating Agent
or the Company in reliance thereon, whether or not notation of such action is
made upon such Security.

                  SECTION 105. Notices, etc., to Trustee and Company. Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Holders or other document provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with,

                  (1) the Trustee by any Holder or by the Company shall be
                  sufficient for every purpose hereunder if made, given,
                  furnished or filed in writing to or with the Trustee at
                  [__________________________]; or

                  (2) the Company by the Trustee or by any Holder shall be
                  sufficient for every purpose hereunder (unless otherwise
                  herein expressly provided) if in writing and mailed, first
                  class postage prepaid, to the Company addressed to it at
                  the address of its principal office specified in the first
                  paragraph of this Indenture or at any other address
                  previously furnished in writing to the Trustee by the
                  Company, Attention: Chief Financial Officer, or

                  (3) either the Trustee or the Company, by the other party,
                  shall be sufficient for every purpose hereunder if given by
                  facsimile transmission, receipt confirmed by telephone
                  followed by an original copy delivered by guaranteed
                  overnight courier; if to the Trustee at facsimile number
                  [_________________]; and if to the Company at facsimile
                  number (213) 244-0645.

                  SECTION 106. Notice to Holders: Waiver. Where this
Indenture provides for notice of any event to Holders of Registered
Securities by the Company or the Trustee, such notice shall be sufficiently
given (unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each such Holder affected by such event, at
his address as it appears in the Security Register, not later than the latest
date, if any, and not earlier than the earliest date, if any, prescribed for
the giving of such notice. In any case where notice to Holders of Registered
Securities is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders of Registered
Securities or the sufficiency of any notice to Holders of Bearer Securities
given as provided herein. Any notice mailed to a Holder in the manner herein
prescribed shall be conclusively deemed to have been received by such Holder,
whether or not such Holder actually receives such notice.

                  If by reason of the suspension of or irregularities in
regular mail service or by reason of any other cause it shall be
impracticable to give such notice by mail, then such notification to Holders
of Registered Securities as shall be made with the approval of the Trustee
shall constitute a sufficient notification to such Holders for every purpose
hereunder.

                  Except as otherwise expressly provided herein or otherwise
specified with respect to any Securities pursuant to Section 301, where this
Indenture provides for notice to Holders of Bearer Securities of any event,
such notice shall be sufficiently given if published in an Authorized
Newspaper in The City of New York and in such other city or cities as may be
specified in such Securities on a Business Day, such publication to be not
later than the latest date, if any, and not earlier than the earliest date,
if any, prescribed for the giving of such notice.


                                      21



Any such notice shall be deemed to have been given on the date of such
publication or, if published more than once, on the date of the first such
publication.

                  If by reason of the suspension of publication of any
Authorized Newspaper or Authorized Newspapers or by reason of any other cause
it shall be impracticable to publish any notice to Holders of Bearer
Securities as provided above, then such notification to Holders of Bearer
Securities as shall be given with the approval of the Trustee shall
constitute sufficient notice to such Holders for every purpose hereunder.
Neither the failure to give notice by publication to any particular Holder of
Bearer Securities as provided above, nor any defect in any notice so
published, shall affect the sufficiency of such notice with respect to other
Holders of Bearer Securities or the sufficiency of any notice to Holders of
Registered Securities given as provided herein.

                  Any request, demand, authorization, direction, notice,
consent or waiver required or permitted under this Indenture shall be in the
English language, except that any published notice may be in an official
language of the country of publication.

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

                  SECTION 107. Counterparts; Effect of Headings and Table of
Contents. This Indenture may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Indenture. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.

                  SECTION 108. Successors and Assigns. All covenants and
agreements in this Indenture by the Company shall bind its successors and
assigns, whether so expressed or not.

                  SECTION 109. Severability Clause. In case any provision in
this Indenture or in any Security or coupon shall be held invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

                  SECTION 110. Benefits of Indenture. Nothing in this
Indenture or in the Securities or coupons, express or implied, shall give to
any Person, other than the parties hereto, any Security Registrar, any Paying
Agent, any Authenticating Agent and their successors hereunder and the
Holders any benefit or any legal or equitable right, remedy or claim under
this Indenture.

                  SECTION 111. Governing Law. This Indenture and the
Securities and coupons shall be governed by and construed in accordance with
the law of ________. This Indenture is subject to the provisions of the TIA
that are required to be part of this Indenture and shall, to the extent
applicable, be governed by such provisions.

                  SECTION 112. Legal Holidays. In any case where any Interest
Payment Date, Redemption Date, Repayment Date, sinking fund payment date,
Stated Maturity or Maturity of


                                      22



any Security or the last date on which a Holder has the right to convert or
exchange a Security shall not be a Business Day at any Place of Payment, then
(notwithstanding any other provision of this Indenture or any Security or
coupon other than a provision in the Securities of any series which
specifically states that such provision shall apply in lieu hereof), payment
of interest or principal (and premium or Make-Whole Amount, if any) or
conversion or exchange of such security need not be made at such Place of
Payment on such date, but (except as otherwise provided in the supplemental
indenture with respect to such Security) may be made on the next succeeding
Business Day at such Place of Payment with the same force and effect as if
made on the Interest Payment Date, Redemption Date, Repayment Date or sinking
fund payment date, or at the Stated Maturity or Maturity, or on such last day
for conversion or exchange, provided that no interest shall accrue on the
amount so payable for the period from and after such Interest Payment Date,
Redemption Date, Repayment Date, sinking fund payment date, Stated Maturity
or Maturity, as the case may be.

                  SECTION 113. Immunity of Stockholders, Directors, Officers
and Agents of the Company. No recourse under or upon any obligation, covenant
or agreement contained in this Indenture, or in any Security, or because of
any indebtedness evidenced thereby, shall be had against any past, present or
future stockholder, employee, officer or director, as such, of the Company or
of any successor, either directly or through the Company or any successor,
under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of the Securities by the Holders and as part of the consideration
for the issue of the Securities.

                  SECTION 114. Conflict with Trust Indenture Act. If any
provision hereof limits, qualifies or conflicts with another provision hereof
which is required or deemed to be included in this Indenture by any of the
provisions of the Trust Indenture Act, such required provision shall control.
If any provision of this Indenture modifies or excludes any provision of the
Trust Indenture Act that may be so modified or excluded, the latter provision
shall be deemed to apply to this Indenture as so modified or to be excluded,
as the case may be.

                         ARTICLE TWO - SECURITIES FORMS

                  SECTION 201. Forms of Securities. The Registered
Securities, if any, of each series and the Bearer Securities, if any, of each
series and related coupons shall be substantially in the form of Exhibit A
hereto or in such other form as shall be established in one or more
indentures supplemental hereto or approved from time to time by or pursuant
to a Board Resolution in accordance with Section 301, shall have such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture or any indenture supplemental hereto,
and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements placed 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 the Securities may be listed, or to conform to usage.

                  Unless otherwise specified as contemplated by Section 301,
Bearer Securities shall have interest coupons attached.


                                      23



                  The definitive Securities and coupons shall be printed,
lithographed or engraved or produced by any combination of these methods on a
steel engraved border or steel engraved borders or mechanically reproduced on
safety paper or may be produced in any other manner, all as determined by the
officers executing such Securities or coupons, as evidenced by their
execution of such Securities or coupons.

                  SECTION 202. Form of Trustee's Certificate of
Authentication. Subject to Section 611, the Trustee's certificate of
authentication shall be in substantially the following form:

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

                                            [                   ]
                                            as Trustee


Dated: ______________                       By:_______________________________
                                                    Authorized Signatory

                  SECTION 203. Securities Issuable in Global Form. If
Securities of or within a series are issuable in the form of one or more
Global Securities, then, notwithstanding clause (8) of Section 301 and the
provisions of Section 302, any such Global Security or Securities may provide
that it or they shall represent the aggregate amount of all Outstanding
Securities of such series (or such lesser amount as is permitted by the terms
thereof) from time to time endorsed thereon and may also provide that the
aggregate amount of Outstanding Securities of such series represented thereby
may from time to time be increased or decreased to reflect exchanges. Any
endorsement of any Global Security to reflect the amount, or any increase or
decrease in the amount, or changes in the rights of Holders thereof, of
Outstanding Securities represented thereby shall be made by the Trustee in
such manner or by such Person or Persons as shall be specified therein or in
the Company Order to be delivered to the Trustee pursuant to Section 303 or
304. Subject to the provisions of Section 303 and, if applicable, Section
304, the Trustee shall deliver and redeliver any Global Security in permanent
global form in the manner and upon instructions given by the Person or
Persons specified therein or in the applicable Company Order. If a Company
Order pursuant to Section 303 or 304 has been, or simultaneously is,
delivered, any instructions by the Company with respect to endorsement or
delivery or redelivery of a Global Security shall be in writing but need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel.

                  The provisions of the last sentence of Section 303 shall
apply to any Security represented by a Global Security if such Security was
never issued and sold by the Company and the Company delivers to the Trustee
the Global Security together with written instructions (which need not comply
with Section 102 and need not be accompanied by an Opinion of Counsel) with
regard to the reduction in the principal amount of Securities represented
thereby, together with the written statement contemplated by the last
sentence of Section 303.

                  Notwithstanding the provisions of Section 307, unless
otherwise specified as contemplated by Section 301, payment of principal of
and any premium or Make-Whole


                                      24



Amount, if any, and interest on any Global Security in permanent global form
shall be made to the registered Holder thereof.

                  Notwithstanding the provisions of Section 308 and except as
provided in the preceding paragraph, the Company, the Trustee and any agent
of the Company and the Trustee shall treat as the Holder of such principal
amount of Outstanding Securities represented by a permanent Global Security
(i) in the case of a permanent Global Security in registered form, the Holder
of such permanent Global Security in registered form, or (ii) in the case of
a permanent Global Security in bearer form, Euroclear or Clearstream.

                  Any Global Security authenticated and delivered hereunder
shall bear a legend in substantially the following form:

                  "This Security is a Global Security within the meaning set
forth in the Indenture hereinafter referred to and is registered in the name
of a Depository or a nominee of a Depository. This Security is exchangeable
for Securities registered in the name of a person other than the Depository
or its nominee only in the limited circumstances described in the Indenture,
and may not be transferred except as a whole by the Depository to a nominee
of the Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository or by the Depository or its nominee to a
successor Depository or its nominee."

                         ARTICLE THREE - THE SECURITIES

                  SECTION 301. Amount Unlimited; Issuable in Series. The
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.

                  The Securities may be issued in one or more series. There
shall be established in one or more Board Resolutions or pursuant to
authority granted by one or more Board Resolutions and, subject to Section
303, set forth in an Officers' Certificate, or established in one or more
indentures supplemental hereto, prior to the issuance of Securities of any
series:

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

                  (2) Any limit upon the aggregate principal amount of the
                  Securities of the series that may be authenticated and
                  delivered under this Indenture (except for Securities
                  authenticated and delivered upon registration of transfer of,
                  or in exchange for, or in lieu of, other Securities of the
                  series pursuant to Section 304, 305, 306, 906, 1107 or 1305);

                  (3) The price (expressed as a percentage of the principal
                  amount thereof) at which such Securities will be issued
                  and, if other than the principal amount thereof, the
                  portion of the principal amount thereof payable upon
                  declaration of acceleration of the maturity thereof, or (if
                  applicable) the portion of the principal amount of such
                  Securities that is convertible into Common Stock or
                  Preferred Stock, or the method by which any such portion
                  shall be determined;

                  (4) If convertible, the terms on which such Securities are
                  convertible, including the initial conversion price or rate
                  and the conversion period and any


                                      25



                  applicable limitations on the ownership or transferability
                  of Common Stock or Preferred Stock receivable on conversion;

                  (5) The date or dates, or the method for determining such
                  date or dates, on which the principal of such Securities
                  will be payable;

                  (6) The rate or rates (which may be fixed or variable), or
                  the method by which such rate or rates shall be determined,
                  at which such Securities will bear interest, if any;

                  (7) The date or dates, or the method for determining such
                  date or dates, from which any such interest will accrue,
                  the dates on which any such interest will be payable, the
                  record dates for such interest payment dates, or the method
                  by which such dates shall be determined, the persons to
                  whom such interest shall be payable, and the basis upon
                  which interest shall be calculated if other than that of a
                  360-day year of twelve 30-day months;

                  (8) The place or places where the principal of (and premium
                  or Make-Whole Amount, if any) and interest, if any, on such
                  Securities will be payable, where such Securities may be
                  surrendered for conversion or registration of transfer or
                  exchange and where notices or demands to or upon the
                  Company in respect of such Securities and this Indenture
                  may be served;

                  (9) The period or periods, if any, within which, the price
                  or prices at which and the other terms and conditions upon
                  which such Securities may, pursuant to any optional or
                  mandatory redemption provisions, be redeemed, as a whole or
                  in part, at the option of the Company;

                  (10) The obligation, if any, of the Company to redeem,
                  repay or purchase such Securities pursuant to any sinking
                  fund or analogous provision or at the option of a holder
                  thereof, and the period or periods within which, the price
                  or prices at which and the other terms and conditions upon
                  which such Securities will be redeemed, repaid or
                  purchased, as a whole or in part, pursuant to such
                  obligation;

                  (11) If other than Dollars, the currency or currencies in
                  which such Securities are denominated and payable, which
                  may be a foreign currency or units of two or more foreign
                  currencies or a composite currency or currencies, the
                  manner of determining the equivalent thereof in Dollars for
                  purposes of the definition of "Outstanding" in Section 101,
                  and the terms and conditions relating thereto;

                  (12) Whether the amount of payments of principal of (and
                  premium or Make-Whole Amount, if any, including any amount
                  due upon redemption, if any) or interest, if any, on such
                  Securities may be determined with reference to an index,
                  formula or other method (which index, formula or method
                  may, but need not be, based on the yield on or trading
                  price of other securities, including United States Treasury
                  securities or on a currency, currencies, currency unit or
                  units, or composite currency or currencies) and the manner
                  in which such amounts shall be determined;


                                      26



                  (13) Whether the principal of (and premium or Make-Whole
                  Amount, if any) or interest on the Securities of the series
                  are to be payable, at the election of the Company or a
                  holder thereof, in a currency or currencies, currency unit
                  or units or composite currency or currencies other than
                  that in which such Securities are denominated or stated to
                  be payable, the period or periods within which, and the
                  terms and conditions upon which, such election may be made,
                  and the time and manner of, and identity of the exchange
                  rate agent with responsibility for, determining the
                  exchange rate between the currency or currencies, currency
                  unit or units or composite currency or currencies in which
                  such Securities are denominated or stated to be payable and
                  the currency or currencies, currency unit or units or
                  composite currency or currencies in which such Securities
                  are to be so payable;

                  (14) Provisions, if any, granting special rights to the
                  holders of Securities of the series upon the occurrence of
                  such events as may be specified;

                  (15) Any deletions from, modifications of or additions to
                  the Events of Default or covenants of the Company with
                  respect to Securities of the series, whether or not such
                  Events of Default or covenants are consistent with the
                  Events of Default or covenants set forth herein;

                  (16) Whether and under what circumstances the Company will
                  pay any additional amounts on such Securities in respect of
                  any tax, assessment or governmental charge and, if so,
                  whether the Company will have the option to redeem such
                  Securities in lieu of making such payment;

                  (17) Whether Securities of the series are to be issuable as
                  Registered Securities, Bearer Securities (with or without
                  coupons) or both, any restrictions applicable to the offer,
                  sale or delivery of Bearer Securities and the terms upon
                  which Bearer Securities of the series may be exchanged for
                  Registered Securities of the series and vice versa (if
                  permitted by applicable laws and regulations), whether any
                  Securities of the series are to be issuable initially in
                  temporary global form and whether any Securities of the
                  series are to be issuable in permanent global form with or
                  without coupons and, if so, whether beneficial owners of
                  interests in any such permanent global Security may
                  exchange such interests for Securities of such series and
                  of like tenor of any authorized form and denomination and
                  the circumstances under which any such exchanges may occur,
                  if other than in the manner provided in the Indenture, and,
                  if Registered Securities of the series are to be issuable
                  as a Global Security, the identity of the depository for
                  such series;

                  (18) The date as of which any Bearer Securities of the
                  series and any temporary Global Security representing
                  outstanding Securities of the series shall be dated if
                  other than the date of original issuance of the first
                  Security of the series to be issued;

                  (19) The Person to whom any interest on any Registered
                  Security of the series shall be payable, if other than the
                  Person in whose name that Security (or one or more
                  Predecessor Securities) is registered at the close of
                  business on the Regular


                                      27



                  Record Date for such interest, the manner in which, or the
                  Person to whom, any interest on any Bearer Security of the
                  series shall be payable, if otherwise than upon
                  presentation and surrender of the coupons appertaining
                  thereto as they severally mature, and the extent to which,
                  or the manner in which, any interest payable on a temporary
                  Global Security on an Interest Payment Date will be paid if
                  other than in the manner provided herein;

                  (20) The applicability, if any, of the defeasance and
                  covenant defeasance provisions of Article Fourteen hereof
                  to the Securities of the series;

                  (21) If the Securities of such series are to be issuable in
                  definitive form (whether upon original issue or upon
                  exchange of a temporary Security of such series) only upon
                  receipt of certain certificates or other documents or
                  satisfaction of other conditions, then the form and/or
                  terms of such certificates, documents or conditions;

                  (22) The obligation, if any, of the Company to permit the
                  conversion of the Securities of such series into Common
                  Stock or Preferred Stock, as the case may be, and the terms
                  and conditions upon which such conversion shall be effected
                  (including, without limitation, the initial conversion
                  price or rate, the conversion period, any adjustment of the
                  applicable conversion price and any requirements relative
                  to the reservation of such shares for purposes of
                  conversion); and

                  (23) Any other terms of the series (which terms shall not
                  be inconsistent with the provisions of this Indenture).

                  All Securities of any one series and the coupons
appertaining to any Bearer Securities of such series shall be substantially
identical except, in the case of Registered Securities, as to denomination
and except as may otherwise be provided in or pursuant to such Board
Resolution (subject to Section 303) and set forth in such Officers'
Certificate or in any such indenture supplemental hereto. All Securities of
any one series need not be issued at the same time and, unless otherwise
provided, a series may be reopened, without the consent of the Holders, for
issuances of additional Securities of such series. If any of the terms of the
Securities of any series are established by action taken pursuant to one or
more Board Resolutions, a copy of an appropriate record of such action(s)
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 Officers'
Certificate setting forth the terms of the Securities of such series.

                  SECTION 302. Denominations. The Securities of each series
shall be issuable in such denominations as shall be specified as contemplated
by Section 301. With respect to Securities of any series denominated in
Dollars, in the absence of any such provisions with respect to the Securities
of any series, the Securities of such series, other than Global Securities
(which may be of any denomination), shall be issuable in denominations of
$1,000 and any integral multiple thereof.

                  SECTION 303. Execution, Authentication, Delivery and
Dating. The Securities and any coupons appertaining thereto shall be executed
on behalf of the Company by its Chairman of the Board, its President or one
of its Vice Presidents, under its corporate seal


                                      28



reproduced thereon, and attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities and
coupons may be manual or facsimile signatures of the present or any future
such authorized officer and may be imprinted or otherwise reproduced on the
Securities.

          Securities or coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities or
coupons. At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities of any series, together
with any coupon appertaining thereto, executed by the Company to the Trustee
for authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities; provided, however,
that, in connection with its original issuance, no Bearer Security shall be
mailed or otherwise delivered to any location in the United States; and
provided further that, unless otherwise specified with respect to any series
of Securities pursuant to Section 301, a Bearer Security may be delivered in
connection with its original issuance only if the Person entitled to receive
such Bearer Security shall have furnished a certificate to Euroclear or
Clearstream, as the case may be, in the form set forth in Exhibit B-1 to this
Indenture or such other certificate as may be specified with respect to any
series of Securities pursuant to Section 301, dated no earlier than 15 days
prior to the earlier of the date on which such Bearer Security is delivered
and the date on which any temporary Security first becomes exchangeable for
such Bearer Security in accordance with the terms of such temporary Security
and this Indenture. If any Security shall be represented by a permanent
global Bearer Security, then, for purposes of this Section and Section 304,
the notation of a beneficial owner's interest therein upon original issuance
of such Security or upon exchange of a portion of a temporary Global Security
shall be deemed to be delivery in connection with its original issuance of
such beneficial owner's interest in such permanent Global Security. Except as
permitted by Section 306, the Trustee shall not authenticate and deliver any
Bearer Security unless all appurtenant coupons for interest then matured have
been detached and canceled. If all the Securities of any series are not to be
issued at one time and if the Board Resolution or supplemental indenture
establishing such series shall so permit, such Company Order may set forth
procedures acceptable to the Trustee for the issuance of such Securities and
determining the terms of particular Securities of such series, such as
interest rate or formula, maturity date, date of issuance and date from which
interest shall accrue. In authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such
Securities, the Trustee shall be entitled to receive, and (subject to TIA
Section 315(a) through 315(d)) shall be fully protected in relying upon,

                  (i) an Opinion of Counsel stating that

                           (a) the form or forms of such Securities and any
                  coupons have been established in conformity with the
                  provisions of this Indenture;

                           (b) the terms of such Securities and any coupons
                  have been established in conformity with the provisions of
                  this Indenture; and (c) such Securities, together with any
                  coupons appertaining thereto, when completed by appropriate

                                      29



                  insertions and executed and delivered by the Company to the
                  Trustee for authentication in accordance with this
                  Indenture, authenticated and delivered by the Trustee in
                  accordance with this Indenture and issued by the Company in
                  the manner and subject to any conditions specified in such
                  Opinion of Counsel, will constitute legal, valid and
                  legally binding obligations of the Company, enforceable in
                  accordance with their terms, subject to applicable
                  bankruptcy, insolvency, fraudulent transfer, reorganization
                  and other similar laws of general applicability relating to
                  or affecting the enforcement of creditors' rights generally
                  and to general equitable principles; and

                  (ii) an Officers' Certificate stating that all conditions
                  precedent provided for in this Indenture relating to the
                  issuance of the Securities have been complied with and
                  that, to the best of the knowledge of the signers of such
                  certificate, that no Event of Default with respect to any
                  of the Securities shall have occurred and be continuing.

If such form or terms have been so established, 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,
obligations or immunities under the Securities and this Indenture or
otherwise in a manner which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding paragraph,
if all the Securities of any series are not to be issued at one time, it
shall not be necessary to deliver an Officers' Certificate otherwise required
pursuant to Section 301 or a Company Order, or an Opinion of Counsel or an
Officers' Certificate otherwise required pursuant to the preceding paragraph
at the time of issuance of each Security of such series, but such order,
opinion and certificates, with appropriate modifications to cover such future
issuances, shall be delivered at or before the time of issuance of the first
Security of such series.

                  Each Registered Security shall be dated the date of its
authentication and each Bearer Security shall be dated as of the date
specified as contemplated by Section 301.

                  No Security or coupon shall be entitled to any benefit
under this Indenture or be valid or obligatory for any purpose unless there
appears on such Security or Security to which such coupon appertains a
certificate of authentication substantially in the form provided for herein
duly executed by the Trustee by manual signature of an authorized signatory,
and such certificate upon any Security shall be conclusive evidence, and the
only evidence, that such Security has been duly authenticated and delivered
hereunder and is entitled to the benefits of this Indenture. Notwithstanding
the foregoing, if any Security (including a Global Security) shall have been
authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 309 together with a written statement
(which need not comply with Section 102 and need not be accompanied by an
Opinion of Counsel) stating that such Security has never been issued and sold
by the Company, for all purposes of this Indenture such Security shall be
deemed never to have been authenticated and delivered hereunder and shall
never be entitled to the benefits of this Indenture.

         SECTION 304.  Temporary Securities.


                                      30




                  (a) Pending the preparation of definitive Securities of any
                  series, the Company may execute, and upon Company Order the
                  Trustee shall authenticate and deliver, temporary Securities
                  which are printed, lithographed, typewritten, mimeographed or
                  otherwise produced, in any authorized denomination,
                  substantially of the tenor of the definitive Securities in
                  lieu of which they are issued, in registered form, or, if
                  authorized, in bearer form with one or more coupons or without
                  coupons, and with such appropriate insertions, omissions,
                  substitutions and other variations as the officers executing
                  such Securities may determine, as conclusively evidenced by
                  their execution of such Securities. In the case of Securities
                  of any series, such temporary Securities may be in global
                  form. Except in the case of temporary Global Securities (which
                  shall be exchanged as otherwise provided herein or as
                  otherwise provided in or pursuant to a Board Resolution), if
                  temporary Securities of any series are issued, the Company
                  will cause definitive Securities of that series to be prepared
                  without unreasonable delay. After the preparation of
                  definitive Securities of such series, the temporary Securities
                  of such series shall be exchangeable for definitive Securities
                  of such series upon surrender of the temporary Securities of
                  such series at the office or agency of the Company in a Place
                  of Payment for that series, without charge to the Holder. Upon
                  surrender for cancellation of any one or more temporary
                  Securities of any series (accompanied by any non-matured
                  coupons appertaining thereto), the Company shall execute and
                  the Trustee shall authenticate and deliver in exchange
                  therefor a like principal amount of definitive Securities of
                  the same series of authorized denominations; provided,
                  however, that no definitive Bearer Security shall be delivered
                  in exchange for a temporary Registered Security; and provided
                  further that a definitive Bearer Security shall be delivered
                  in exchange for a temporary Bearer Security only in compliance
                  with the conditions set forth in Section 303. Until so
                  exchanged, the temporary Securities of any series shall in all
                  respects be entitled to the same benefits under this Indenture
                  as definitive Securities of such series.

                  (b) Unless otherwise provided in or pursuant to a Board
                  Resolution, the following provisions of this Section 304(b)
                  shall govern the exchange of temporary Securities other than
                  through the facilities of The Depository Trust Company. If any
                  such temporary Security is issued in global form, then such
                  temporary Global Security shall, unless otherwise provided
                  therein, be delivered to the London office of a depository or
                  common depository (the "Common Depository"), for the benefit
                  of Euroclear and Clearstream, for credit to the respective
                  accounts of the beneficial owners of such Securities (or to
                  such other accounts as they may direct).

                  Without unnecessary delay but in any event not later than the
date specified in, or determined pursuant to the terms of, any such temporary
Global Security (the "Exchange Date"), the Company shall deliver to the Trustee
definitive Securities, in aggregate principal amount equal to the principal
amount of such temporary Global Security, executed by the Company. On or after
the Exchange Date, such temporary Global Security shall be surrendered by the
Common Depository to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Securities
without charge, and the Trustee shall authenticate and deliver, in exchange for
each portion of such temporary Global Security, an


                                      31



equal aggregate principal amount of definitive Securities of the same series of
authorized denominations and of like tenor as the portion of such temporary
Global Security to be exchanged. The definitive Securities to be delivered in
exchange for any such temporary Global Security shall be in bearer form,
registered form, permanent global bearer form or permanent global registered
form, or any combination thereof, as specified as contemplated by Section 301,
and, if any combination thereof is so specified, as requested by the beneficial
owner thereof; provided, however, that, unless otherwise specified in such
temporary Global Security, upon such presentation by the Common Depository, such
temporary Global Security is accompanied by a certificate dated the Exchange
Date or a subsequent date and signed by Euroclear as to the portion of such
temporary Global Security held for its account then to be exchanged and a
certificate dated the Exchange Date or a subsequent date and signed by
Clearstream as to the portion of such temporary Global Security held for its
account then to be exchanged, each in the form set forth in Exhibit A-2 to this
Indenture or in such other form as may be established pursuant to Section 301;
and provided further that definitive Bearer Securities shall be delivered in
exchange for a portion of a temporary Global Security only in compliance with
the requirements of Section 303.

                  Unless otherwise specified in such temporary Global Security,
the interest of a beneficial owner of Securities of a series in a temporary
Global Security shall be exchanged for definitive Securities of the same series
and of like tenor following the Exchange Date when the account holder instructs
Euroclear or Clearstream, as the case may be, to request such exchange on his
behalf and delivers to Euroclear or Clearstream, as the case may be, a
certificate in the form set forth in Exhibit B-1 to this Indenture (or in such
other form as may be established pursuant to Section 301), dated no earlier than
15 days prior to the Exchange Date, copies of which certificate shall be
available from the offices of Euroclear and Clearstream, the Trustee, any
Authenticating Agent appointed for such series of Securities and each Paying
Agent. Unless otherwise specified in such temporary Global Security, any such
exchange shall be made free of charge to the beneficial owners of such temporary
Global Security, except that a Person receiving definitive Securities must bear
the cost of insurance, postage, transportation and the like unless such Person
takes delivery of such definitive Securities in person at the offices of
Euroclear or Clearstream. Definitive Securities in bearer form to be delivered
in exchange for any portion of a temporary Global Security shall be delivered
only outside the United States.

                  Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of the same series and of like
tenor authenticated and delivered hereunder, except that, unless otherwise
specified as contemplated by Section 301, interest payable on a temporary Global
Security on an Interest Payment Date for Securities of such series occurring
prior to the applicable Exchange Date shall be payable to Euroclear and
Clearstream on such Interest Payment Date upon delivery by Euroclear and
Clearstream to the Trustee of a certificate or certificates in such form as may
be established pursuant to Section 301, for credit without further interest on
or after such Interest Payment Date to the respective accounts of Persons who
are the beneficial owners of such temporary Global Security on such Interest
Payment Date and who have each delivered to Euroclear or Clearstream, as the
case may be, a certificate dated no earlier than 15 days prior to the Interest
Payment Date occurring prior to such Exchange Date in such form as may be
established pursuant to Section 301. Notwithstanding anything to the contrary
herein contained, the certifications made pursuant to this paragraph shall
satisfy the certification requirements of the preceding two paragraphs of this
Section 304(b) and of the third paragraph


                                      32



of Section 303 of this Indenture and the interests of the Persons who are the
beneficial owners of the temporary Global Security with respect to which such
certification was made will be exchanged for definitive Securities of the same
series and of like tenor on the Exchange Date or the date of certification if
such date occurs after the Exchange Date, without further act or deed by such
beneficial owners. Except as otherwise provided in this paragraph, no payments
of principal or interest owing with respect to a beneficial interest in a
temporary Global Security will be made unless and until such interest in such
temporary Global Security shall have been exchanged for an interest in a
definitive Security. Any interest so received by Euroclear and Clearstream and
not paid as herein provided shall be returned to the Trustee prior to the
expiration of two years after such Interest Payment Date in order to be repaid
to the Company.

                  SECTION 305. Registration, Registration of Transfer and
Exchange. The Company shall cause to be kept at the Corporate Trust Office of
the Trustee or in any office or agency of the Company in a Place of Payment a
register for each series of Securities (the registers maintained in such office
or in any such office or agency of the Company in a Place of Payment being
herein sometimes referred to collectively as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Registered Securities and of transfers of
Registered Securities. The Security Register shall be in written form or any
other form capable of being converted into written form within a reasonable
time. The Trustee, at its Corporate Trust Office, is hereby initially appointed
"Security Registrar" for the purpose of registering Registered Securities and
transfers of Registered Securities on such Security Register as herein provided.
In the event that the Trustee shall cease to be Security Registrar, it shall
have the right to examine the Security Register at all reasonable times.

                  Subject to the provisions of this Section 305, upon surrender
for registration of transfer of any Registered Security of any series at any
office or agency of the Company in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Registered
Securities of the same series, of any authorized denominations and of a like
aggregate principal amount, bearing a number not contemporaneously outstanding,
and containing identical terms and provisions.

                  Subject to the provisions of this Section 305, at the option
of the Holder, Registered Securities of any series may be exchanged for other
Registered Securities of the same series, of any authorized denomination or
denominations and of a like aggregate principal amount, containing identical
terms and provisions, upon surrender of the Registered Securities to be
exchanged at any such office or agency. Whenever any such Registered Securities
are so surrendered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Registered Securities which the Holder
making the exchange is entitled to receive. Unless otherwise specified with
respect to any series of Securities as contemplated by Section 301, Bearer
Securities may not be issued in exchange for Registered Securities.

                  If (but only if) permitted by the applicable Board Resolution
and (subject to Section 303) set forth in the applicable Officers' Certificate,
or in any indenture supplemental hereto, delivered as contemplated by Section
301, at the option of the Holder, Bearer Securities of any series may be
exchanged for Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor, upon surrender
of the Bearer


                                      33



Securities to be exchanged at any such office or agency, with all unmatured
coupons and all matured coupons in default thereto appertaining. If the Holder
of a Bearer Security is unable to produce any such unmatured coupon or coupons
or matured coupon or coupons in default, any such permitted exchange may be
effected if the Bearer Securities are accompanied by payment in funds acceptable
to the Company in an amount equal to the face amount of such missing coupon or
coupons, or the surrender of such missing coupon or coupons may be waived by the
Company and the Trustee if there is furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Security shall surrender to any Paying Agent any
such missing coupon in respect of which such a payment shall have been made,
such Holder shall be entitled to receive the amount of such payment; provided,
however, that, except as otherwise provided in Section 1002, interest
represented by coupons shall be payable only upon presentation and surrender of
those coupons at an office or agency located outside the United States.
Notwithstanding the foregoing, in case a Bearer Security of any series is
surrendered at any such office or agency in a permitted exchange for a
Registered Security of the same series and like tenor after the close of
business at such office or agency on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (ii) any Special Record Date and before the opening of business at such
office or agency on the related proposed date for payment of Defaulted Interest,
such Bearer Security shall be surrendered without the coupon relating to such
Interest Payment Date or proposed date for payment, as the case may be, and
interest or Defaulted Interest, as the case may be, will not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.

                  Notwithstanding the foregoing, except as otherwise specified
as contemplated by Section 301, any permanent Global Security shall be
exchangeable only as provided in this paragraph. If the depository for any
permanent Global Security is The Depository Trust Company ("DTC"), then, unless
the terms of such Global Security expressly permit such Global Security to be
exchanged in whole or in part for definitive Securities, a Global Security may
be transferred, in whole but not in part, only to a nominee of DTC, or by a
nominee of DTC to DTC, or to a successor to DTC for such Global Security
selected or approved by the Company or to a nominee of such successor to DTC. If
at any time DTC notifies the Company that it is unwilling or unable to continue
as depository for the applicable Global Security or Securities or if at any time
DTC ceases to be a clearing agency registered under the Securities Exchange Act
of 1934 if so required by applicable law or regulation, the Company shall
appoint a successor depository with respect to such Global Security or
Securities. If (x) a successor depository for such Global Security or Securities
is not appointed by the Company within 90 days after the Company receives such
notice or becomes aware of such unwillingness, inability or ineligibility, (y)
an Event of Default has occurred and is continuing and the beneficial owners
representing a majority in principal amount of the applicable series of
Securities represented by such Global Security or Securities advise DTC to cease
acting as depository for such Global Security or Securities or (z) the Company,
in its sole discretion, determines at any time that all Outstanding Securities
(but not less than all) of any series issued or issuable in the form of one or
more Global Securities shall no longer be represented by such Global Security or
Securities, then the


                                      34



Company shall execute, and the Trustee shall authenticate and deliver definitive
Securities of like series, rank, tenor and terms in definitive form in an
aggregate principal amount equal to the principal amount of such Global Security
or Securities. If any beneficial owner of an interest in a permanent global
Security is otherwise entitled to exchange such interest for Securities of such
series and of like tenor and principal amount of another authorized form and
denomination, as specified as contemplated by Section 301 and provided that any
applicable notice provided in the permanent Global Security shall have been
given, then without unnecessary delay but in any event not later than the
earliest date on which such interest may be so exchanged, the Company shall
execute, and the Trustee shall authenticate and deliver definitive Securities
in aggregate principal amount equal to the principal amount of such beneficial
owner's interest in such permanent Global Security. On or after the earliest
date on which such interests may be so exchanged, such permanent Global Security
shall be surrendered for exchange by DTC or such other depository as shall be
specified in the Company Order with respect thereto to the Trustee, as the
Company's agent for such purpose; provided, however, that no such exchanges may
occur during a period beginning at the opening of business 15 days before any
selection of Securities to be redeemed and ending on the relevant Redemption
Date if the Security for which exchange is requested may be among those selected
for redemption; and provided further that no Bearer Security delivered in
exchange for a portion of a permanent Global Security shall be mailed or
otherwise delivered to any location in the United States. If a Registered
Security is issued in exchange for any portion of a permanent Global Security
after the close of business at the office or agency where such exchange occurs
on (i) any Regular Record Date and before the opening of business at such office
or agency on the relevant Interest Payment Date, or (ii) any Special Record Date
and the opening of business at such office or agency on the related proposed
date for payment of Defaulted Interest, interest or Defaulted Interest, as the
case may be, will not be payable on such Interest Payment Date or proposed date
for payment, as the case may be, in respect of such Registered Security, but
will be payable on such Interest Payment Date or proposed date for payment, as
the case may be, only to the Person to whom interest in respect of such portion
of such permanent Global Security is payable in accordance with the provisions
of this Indenture.

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

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

                  No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 304, 9.6, 11.7 or 13.5 not involving any
transfer. The Company or the Trustee, as applicable, shall not be required (i)
to issue, register the transfer of or exchange any Security if such Security may
be among those selected for redemption during a period beginning at the opening
of business 15 days before


                                      35



selection of the Securities to be redeemed under Section 1103 and ending at the
close of business on (A) if such Securities are issuable only as Registered
Securities, the day of the mailing of the relevant notice of redemption and (B)
if such Securities are issuable as Bearer Securities, the day of the first
publication of the relevant notice of redemption or, if such Securities are also
issuable as Registered Securities and there is no publication, the mailing of
the relevant notice of redemption, or (ii) to register the transfer of or
exchange any Registered Security so selected for redemption in whole or in part,
except, in the case of any Registered Security to be redeemed in part, the
portion thereof not to be redeemed, or (iii) to exchange any Bearer Security so
selected for redemption except that such a Bearer Security may be exchanged for
a Registered Security of that series and like tenor, provided that such
Registered Security shall be simultaneously surrendered for redemption, or (iv)
to issue, register the transfer of or exchange any Security which has been
surrendered for repayment at the option of the Holder, except the portion, if
any, of such Security not to be so repaid.

                  SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security or a Security with a mutilated coupon appertaining to
it is surrendered to the Trustee or the Company, together with, in proper cases,
such security or indemnity as may be required by the Company or the Trustee to
save each of them or any agent of either of them harmless, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and principal amount, containing identical terms
and provisions and bearing a number not contemporaneously outstanding, with
coupons corresponding to the coupons, if any, appertaining to the surrendered
Security. If there shall be delivered to the Company and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
or coupon, and (ii) such security or indemnity as may be required by them to
save each of them and any agent of either of them harmless, then, in the absence
of notice to the Company or the Trustee that such Security or coupon has been
acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security or in exchange for the Security to which a
destroyed, lost or stolen coupon appertains (with all appurtenant coupons not
destroyed, lost or stolen), a new Security of the same series and principal
amount, containing identical terms and provisions and bearing a number not
contemporaneously outstanding, with coupons corresponding to the coupons, if
any, appertaining to such destroyed, lost or stolen Security or to the Security
to which such destroyed, lost or stolen coupon appertains.

                  Notwithstanding the provisions of the previous two paragraphs,
in case any such mutilated, destroyed, lost or stolen Security or coupon has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, with coupons corresponding to the coupons, if
any, appertaining to such destroyed, lost or stolen Security or to the Security
to which such destroyed, lost or stolen coupon appertains, pay such Security or
coupon; provided, however, that payment of principal of (and premium or
Make-Whole Amount, if any), and any interest on, Bearer Securities shall, except
as otherwise provided in Section 1002, be payable only at an office or agency
located outside the United States and, unless otherwise specified as
contemplated by Section 301, any interest on Bearer Securities shall be payable
only upon presentation and surrender of the coupons appertaining thereto. Upon
the issuance of any new Security under this Section, the Company may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Trustee) connected therewith.


                                      36



                  Every new Security of any series with its coupons, if any,
issued pursuant to this Section in lieu of any destroyed, lost or stolen
Security, or in exchange for a Security to which a destroyed, lost or stolen
coupon appertains, shall constitute an original additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen Security
and its coupons, if any, or the destroyed, lost or stolen coupon shall be at any
time enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of that
series and their coupons, if any, duly issued hereunder.

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

                  SECTION 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise specified with respect to a series of Securities in
accordance with the provisions of Section 301, interest on any Registered
Security that is payable, and is punctually paid or duly provided for, on any
Interest Payment Date shall be paid to the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest at the office or agency of the
Company maintained for such purpose pursuant to Section 1002; provided, however,
that each installment of interest on any Registered Security may at the
Company's option be paid by (i) mailing a check for such interest, payable to or
upon the written order of the Person entitled thereto pursuant to Section 308,
to the address of such Person as it appears on the Security Register or (ii)
transfer to an account maintained by the payee located inside the United States.

                  Unless otherwise provided as contemplated by Section 301 with
respect to the Securities of any series, payment of interest may be made, in the
case of a Bearer Security, by transfer to an account maintained by the payee
with a bank located outside the United States.

                  Unless otherwise provided as contemplated by Section 301,
every permanent global Security will provide that interest, if any, payable on
any Interest Payment Date will be paid to DTC, Euroclear and/or Clearstream, as
the case may be, with respect to that portion of such permanent global Security
held for its account by Cede & Co. or the Common Depository, as the case may be,
for the purpose of permitting such party to credit the interest received by it
in respect of such permanent global Security to the accounts of the beneficial
owners thereof.

                  In case a Bearer Security of any series is surrendered in
exchange for a Registered Security of such series after the close of business
(at an office or agency in a Place of Payment for such series) on any Regular
Record Date and before the opening of business (at such office or agency) on the
next succeeding Interest Payment Date, such Bearer Security shall be surrendered
without the coupon relating to such Interest Payment Date and interest will not
be payable on such Interest Payment Date in respect of the Registered Security
issued in exchange for such Bearer Security, but will be payable only to the
Holder of such coupon when due in accordance with the provisions of this
Indenture. Except as otherwise specified with respect to a series of Securities
in accordance with the provisions of Section 301, any interest on any Registered
Security of any series that is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (herein called "Defaulted Interest")
shall forthwith cease to be payable to the registered Holder thereof on the
relevant Regular Record Date by virtue of having been such


                                      37



Holder, and such Defaulted Interest may be paid by the Company, at its election
in each case, as provided in clause (1) or (2) below:

                  (1) The Company may elect to make payment of any Defaulted
                  Interest to the Persons in whose names the Registered
                  Securities of such series (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 Registered
                  Security of such series and the date of the proposed payment
                  (which shall not be less than 20 days after such notice is
                  received by the Trustee), and at the same time the Company
                  shall deposit with the Trustee an amount of money in the
                  currency or currencies, currency unit or units or composite
                  currency or currencies in which the Securities of such series
                  are payable (except as otherwise specified pursuant to Section
                  301 for the Securities of such series) 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 on or 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 be not more than 15 days
                  and not 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 Holder of Registered
                  Securities of such series at his address as it appears in the
                  Security Register not less than 10 days prior to such Special
                  Record Date. The Trustee may, in its discretion, in the name
                  and at the expense of the Company, cause a similar notice to
                  be published at least once in an Authorized Newspaper in each
                  Place of Payment, but such publications shall not be a
                  condition precedent to the establishment of 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 the Registered Securities of such
                  series (or their respective Predecessor Securities) are
                  registered at the close of business on such Special Record
                  Date and shall no longer be payable pursuant to the following
                  clause (2). In case a Bearer Security of any series is
                  surrendered at the office or agency in a Place of Payment for
                  such series in exchange for a Registered Security of such
                  series after the close of business at such office or agency on
                  any Special Record Date and before the opening of business at
                  such office or agency on the related proposed date for payment
                  of Defaulted Interest, such Bearer Security shall be
                  surrendered without the coupon relating to such proposed date
                  of payment and Defaulted Interest will not be payable on such
                  proposed date of payment in respect of the Registered Security
                  issued in exchange for such Bearer Security, but will be
                  payable only to the Holder of such coupon when due in
                  accordance with the provisions of this Indenture.


                                      38



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

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

                  SECTION 308. Persons Deemed Owners. Prior to due presentment
of a Registered Security for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may treat the Person in whose name
such Registered Security is registered as the owner of such Security for the
purpose of receiving payment of principal of (and premium or Make-Whole Amount,
if any), and (subject to Sections 305 and 307) interest on, such Registered
Security and for all other purposes whatsoever, whether or not such Registered
Security be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary. All such
payments so made to any such Person, or upon such Person's order, shall be
valid, and, to the extent of the sum or sums so paid, effectual to satisfy and
discharge the liability for money payable upon any such Security.

                  Title to any Bearer Security and any coupons appertaining
thereto shall pass by delivery. The Company, the Trustee and any agent of the
Company or the Trustee may treat the Holder of any Bearer Security and the
Holder of any coupon as the absolute owner of such Security or coupon for the
purpose of receiving payment thereof or on account thereof and for all other
purposes whatsoever, whether or not such Security or coupon be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.

                  No Holder of any beneficial interest in any Global Security
held on its behalf by a depository shall have any rights under this Indenture
with respect to such Global Security and such depository shall be treated by the
Company, the Trustee, and any agent of the Company or the Trustee as the owner
of such Global Security for all purposes whatsoever. None of the Company, the
Trustee, any Paying Agent or the Security Registrar will have any responsibility
or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests of a Global Security or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.

                  Notwithstanding the foregoing, with respect to any Global
Security, nothing herein shall prevent the Company, the Trustee, or any agent of
the Company or the Trustee, from giving effect to any written certification,
proxy or other authorization furnished by any depository, as a Holder, with
respect to such Global Security or impair, as between such depository and owners
of beneficial interests in such Global Security, the operation of customary
practices governing the exercise of the rights of such depository (or its
nominee) as Holder of such Global Security.


                                      39



                  SECTION 309. Cancellation. All Securities and coupons
surrendered for payment, redemption, repayment at the option of the Holder,
conversion or registration of transfer or exchange or for credit against any
sinking fund payment shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee, and any such Securities and coupons and Securities
and coupons surrendered directly to the Trustee for any such purpose shall be
promptly cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and may deliver to
the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder which the Company
has not issued and sold, and all Securities so delivered shall be promptly
cancelled by the Trustee. If the Company shall so 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
surrendered to the Trustee for cancellation. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. Cancelled
Securities and coupons held by the Trustee shall be destroyed by the Trustee and
the Trustee shall deliver a certificate of such destruction to the Company,
unless the Trustee is otherwise directed by a Company Order.

                  SECTION 310. Computation of Interest. Except as otherwise
specified as contemplated by Section 301 with respect to Securities of any
series, interest on the Securities of each series shall be computed on the basis
of a 360-day year consisting of twelve 30-day months.

                    ARTICLE FOUR - SATISFACTION AND DISCHARGE

                  SECTION 401. Satisfaction and Discharge of Indenture. This
Indenture shall upon Company Request cease to be of further effect with respect
to any series of Securities specified in such Company Request (except as to any
surviving rights of registration of transfer or exchange of Securities of such
series herein expressly provided for), and the Trustee, upon receipt of a
Company Order, and at the expense of the Company, shall execute instruments in
form and substance satisfactory to the Trustee and the Company acknowledging
satisfaction and discharge of this Indenture as to such series when

                  (1)      either

                           (A) all Securities of such series theretofore
                  authenticated and delivered and all coupons, if any,
                  appertaining thereto (other than (i) coupons appertaining to
                  Bearer Securities surrendered for exchange for Registered
                  Securities and maturing after such exchange, whose surrender
                  is not required or has been waived as provided in Section 305,
                  (ii) Securities and coupons of such series which have been
                  destroyed, lost or stolen and which have been replaced or paid
                  as provided in Section 306, (iii) coupons appertaining to
                  Securities called for redemption and maturing after the
                  relevant Redemption Date, whose surrender has been waived as
                  provided in Section 1106, and (iv) Securities and coupons of
                  such series for whose payment money has theretofore been
                  deposited in trust or segregated and held in trust by the
                  Company and thereafter repaid to the Company or discharged
                  from such trust, as provided in Section 1003) have been
                  delivered to the Trustee for cancellation; or



                                       40


                           (B) all Securities of such series and, in the case of
                  (i) or (ii) below, any coupons appertaining thereto not
                  theretofore delivered to the Trustee for cancellation

                                    (i) have become due and payable, or

                                    (ii) will become due and payable at their
                           Stated Maturity within one year, or

                                    (iii) if redeemable at the option of the
                           Company, are to be called for redemption within one
                           year under arrangements satisfactory to the Trustee
                           for the giving of notice of redemption by the Trustee
                           in the name, and at the expense, of the Company,

                  and the Company, in the case of (i), (ii) or (iii) above, has
                  irrevocably deposited or caused to be deposited with the
                  Trustee as trust funds in trust for the purpose an amount in
                  the currency or currencies, currency unit or units or
                  composite currency or currencies in which the Securities of
                  such series are payable, sufficient to pay and discharge the
                  entire indebtedness on such Securities and such coupons not
                  theretofore delivered to the Trustee for cancellation, for
                  principal (and premium or Make-Whole Amount, if any) and
                  interest to the date of such deposit (in the case of
                  Securities which have become due and payable) or to the Stated
                  Maturity or Redemption Date, as the case may be;

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

                  (3) the Company has delivered to the Trustee an Officers'
                  Certificate and an Opinion of Counsel, each stating that all
                  conditions precedent herein provided for relating to the
                  satisfaction and discharge of this Indenture as to such series
                  have been complied with.


Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee and any predecessor Trustee under
Section 606, the obligations of the Company to any Authenticating Agent under
Section 611 and, if money shall have been deposited with and held by the Trustee
pursuant to subclause (B) of clause (1) of this Section, the obligations of the
Trustee under Section 402 and the last paragraph of Section 1003 shall survive.

                  SECTION 402. Application of Trust Funds. Subject to the
provisions of the last paragraph of Section 1003, all money deposited with the
Trustee pursuant to Section 401 shall be held in trust and applied by it, in
accordance with the provisions of the Securities, the coupons and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium or
Make-Whole Amount, if any), and any interest for whose payment such money has
been deposited with or received by the Trustee, but such money need not be
segregated from other funds except to the extent required by law.


                                       41


                             ARTICLE FIVE - REMEDIES

                  SECTION 501. Events of Default. "Event of Default," wherever
used herein with respect to any particular series of Securities, means any one
of the following events (whatever the reason for such Event of Default and
whether or not it shall be voluntary or involuntary or be effected by operation
of law or pursuant to any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body):

                  (1) default in the payment of any interest on any Security of
                  that series or of any coupon appertaining thereto, when such
                  interest or coupon becomes due and payable, and continuance of
                  such default for a period of 30 days; or

                  (2) default in the payment of the principal of (or premium or
                  Make-Whole Amount, if any, on) any Security of that series
                  when it becomes due and payable at its Maturity; or

                  (3) default in the deposit of any sinking fund payment, when
                  and as due by the terms of any Security of that series; or

                  (4) default in the performance, or breach, of any covenant or
                  warranty of the Company in this Indenture with respect to any
                  Security of that series (other than a covenant or warranty a
                  default in whose performance or whose breach is elsewhere in
                  this Section specifically dealt with), and continuance of such
                  default or breach for a period of 60 days after there has been
                  given, by registered or certified mail, to the Company by the
                  Trustee or to the Company and the Trustee by the Holders of at
                  least 25% in principal amount of the Outstanding Securities of
                  that series a written notice specifying such default or breach
                  and requiring it to be remedied and stating that such notice
                  is a "Notice of Default" hereunder; or

                  (5) default under any bond, debenture, note, mortgage,
                  indenture or instrument under which there may be issued or by
                  which there may be secured or evidenced any indebtedness for
                  money borrowed by the Company (or by any Subsidiary, the
                  repayment of which the Company has guaranteed or for which the
                  Company is directly responsible or liable as obligor or
                  guarantor), having an aggregate principal amount outstanding
                  of at least $100,000,000, whether such indebtedness now exists
                  or shall hereafter be created, which default shall have
                  resulted in such indebtedness becoming or being declared due
                  and payable prior to the date on which it would otherwise have
                  become due and payable, without such indebtedness having been
                  discharged, or such acceleration having been rescinded or
                  annulled, within a period of 10 days after there shall have
                  been given, by registered or certified mail, to the Company by
                  the Trustee or to the Company and the Trustee by the Holders
                  of at least 10% in principal amount of the Outstanding
                  Securities of that series a written notice specifying such
                  default and requiring the Company to cause such indebtedness
                  to be discharged or cause such acceleration to be rescinded or
                  annulled and stating that such notice is a "Notice of Default"
                  hereunder; or


                                       42


                  (6) a court of competent jurisdiction enters one or more
                  judgments, orders or decrees in an aggregate amount (excluding
                  amounts covered by insurance) in excess of $100,000,000 and
                  such judgments, orders or decrees remain undischarged,
                  unstayed and unsatisfied in an aggregate amount (excluding
                  amounts covered by insurance) in excess of $100,000,000 for a
                  period of 30 consecutive days; or

                  (7) the Company or any Significant Subsidiary pursuant to or
                  within the meaning of any Bankruptcy Law:

                           (A) commences a voluntary case,

                           (B) consents to the entry of an order for relief
                  against it in an involuntary case,

                           (C) consents to the appointment of a Custodian of it
                  or for all or substantially all of its property, or

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

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

                           (A) is for relief against the Company or any
                  Significant Subsidiary in an involuntary case,

                           (B) appoints a Custodian of the Company or any
                  Significant Subsidiary or for all or substantially all of
                  either of its property, or

                           (C) orders the liquidation of the Company or any
                  Significant Subsidiary, and the order or decree remains
                  unstayed and in effect for 90 days; or

                  (9) any other Event of Default provided with respect to
                  Securities of that series.


As used in this Section 501, the term "Bankruptcy Law" means title 11, U.S. Code
or any similar Federal or state law for the relief of debtors and the term
"Custodian" means any receiver, trustee, assignee, liquidator or other similar
official under any Bankruptcy Law.

                  SECTION 502. Acceleration of Maturity; Rescission and
Annulment. If an Event of Default with respect to Securities of any series at
the time Outstanding occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
Securities of that Series are Original Issue Discount Securities or Indexed
Securities, such portion of the principal as may be specified in the terms
thereof) of all the Securities of that series to be due and payable immediately,
by a notice in writing to the Company (and to the Trustee if given by the
Holders), and upon any such declaration such principal or specified portion
thereof shall become immediately due and payable. At any time after such a
declaration


                                       43


of acceleration with respect to Securities of any series has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of a
majority in principal amount of the Outstanding Securities of that series, by
written notice to the Company and the Trustee, may rescind and annul such
declaration of acceleration and its consequences if:

                  (1) the Company has paid or deposited with the Trustee a sum
                  sufficient to pay in the currency, currency unit or composite
                  currency in which the Securities of such series are payable
                  (except as otherwise specified pursuant to Section 301 for the
                  Securities of such series):

                           (A) all overdue installments of interest on all
                  Outstanding Securities of that series and any related coupons,

                           (B) the principal of (and premium or Make-Whole
                  Amount, if any, on) any Outstanding Securities of that series
                  which have become due otherwise than by such declaration of
                  acceleration and interest thereon at the rate or rates borne
                  by or provided for in such Securities,

                           (C) to the extent that payment of such interest is
                  lawful, interest upon overdue installments of interest at the
                  rate or rates borne by or provided for in such Securities, and

                           (D) all sums paid or advanced by the Trustee
                  hereunder and the reasonable compensation, expenses,
                  disbursements and advances of the Trustee, its agents and
                  counsel; and

                  (2) all Events of Default with respect to Securities of that
                  series, other than the nonpayment of the principal of (or
                  premium or Make-Whole Amount, if any) or interest on
                  Securities of that series which have become due solely by such
                  declaration of acceleration, have been cured or waived as
                  provided in Section 513.

No such rescission shall affect any subsequent default or impair any right
consequent thereon.

                  SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee. The Company covenants that if:

                  (1) default is made in the payment of any installment of
                  interest on any Security of any series and any related coupon
                  when such interest becomes due and payable and such default
                  continues for a period of 30 days, or

                  (2) default is made in the payment of the principal of (or
                  premium or Make-Whole Amount, if any, on) any Security of any
                  series at its Maturity,


then the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities of such series and coupons, the whole
amount then due and payable on such Securities and coupons for principal (and
premium or Make-Whole Amount, if any) and interest, with interest upon any
overdue principal (and premium or Make-Whole Amount, if any)


                                       44


and, to the extent that payment of such interest shall be legally
enforceable, upon any overdue installments of interest at the rate or rates
borne by or provided for in such Securities, and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.

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

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

                  SECTION 504. Trustee May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Securities of any series
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal, premium or Make-Whole Amount,
if any, or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise:

                  (i) to file and prove a claim for the whole amount, or such
                  lesser amount as may be provided for in the Securities of such
                  series, of principal (and premium or Make-Whole Amount, if
                  any) and interest owing and unpaid in respect of the
                  Securities and to file such other papers or documents as may
                  be necessary or advisable in order to have the claims of the
                  Trustee (including any claim for the reasonable compensation,
                  expenses, disbursements and advances of the Trustee, its
                  agents and counsel) and of the Holders allowed in such
                  judicial proceeding, and

                  (ii) to collect and receive any moneys or other property
                  payable or deliverable on any such claims and to distribute
                  the same; and any custodian, receiver, assignee, trustee,
                  liquidator, sequestrator (or other similar official) in any
                  such judicial proceeding is hereby authorized by each Holder
                  of Securities of such series and coupons to make such payments
                  to the Trustee, and in the event that the Trustee shall
                  consent to the making of such payments directly to the
                  Holders, to pay to the Trustee any amount due to it for the
                  reasonable compensation, expenses, disbursements and advances
                  of the Trustee and any predecessor


                                       45


                  Trustee, their agents and counsel, and any other amounts due
                  the Trustee or any predecessor Trustee under Section 606.
                  Nothing herein contained shall be deemed to authorize the
                  Trustee to authorize or consent to or accept or adopt on
                  behalf of any Holder of a Security or coupon any plan of
                  reorganization, arrangement, adjustment or composition
                  affecting the Securities or coupons or the rights of any
                  Holder thereof, or to authorize the Trustee to vote in
                  respect of the claim of any Holder of a Security or coupon in
                  any such proceeding.

                  In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture to
which the Trustee shall be a party) the Trustee shall be held to represent all
the Holders of the Securities, and it shall not be necessary to make any Holders
of the Securities parties to any such proceedings.

                  SECTION 505. Trustee May Enforce Claims Without Possession of
Securities or Coupons. All rights of action and claims under this Indenture or
any of the Securities or coupons may be prosecuted and enforced by the Trustee
without the possession of any of the Securities or coupons or the production
thereof in any proceeding relating thereto, and any such proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Holders of the
Securities and coupons in respect of which such judgment has been recovered.

                  SECTION 506. Application of Money Collected. Any money
collected by the Trustee pursuant to this Article shall be applied in the
following order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal (or premium or Make-Whole
Amount, if any) or interest, upon presentation of the Securities or coupons, or
both, as the case may be, and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:

                  FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 606;

                  SECOND: To the payment of the amounts then due and unpaid upon
the Securities and coupons for principal (and premium or Make-Whole Amount, 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 aggregate amounts due and payable on such Securities and
coupons for principal (and premium or Make-Whole Amount, if any) and interest,
respectively; and

         THIRD:  To the payment of the remainder, if any, to the Company.

                  SECTION 507. Limitation on Suits. No Holder of any Security of
any series or any related coupon shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:


                                       46


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

                  (2) the Holders of not less than 25% in principal amount of
                  the Outstanding Securities of that series shall have made
                  written request to the Trustee to institute proceedings in
                  respect of such Event of Default in its own name as Trustee
                  hereunder;

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

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

                  (5) no direction inconsistent with such written request has
                  been given to the Trustee during such 60-day period by the
                  Holders of a majority in principal amount of the Outstanding
                  Securities of that series;


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

                  SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium or Make-Whole Amount, if any, and Interest. Notwithstanding
any other provision in this Indenture, the Holder of any Security or coupon
shall have the right which is absolute and unconditional to receive payment of
the principal of (and premium or Make-Whole Amount, if any) and (subject to
Sections 305 and 307) interest on such Security or payment of such coupon on the
respective due dates expressed in such Security or coupon (or, in the case of
redemption, on the Redemption Date) and to institute suit for the enforcement of
any such payment, and such rights shall not be impaired without the consent of
such Holder.

                  SECTION 509. Restoration of Rights and Remedies. If the
Trustee or any Holder of a Security or coupon has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, the Company, the
Trustee and the Holders of Securities and coupons shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.

                  SECTION 510. Rights and Remedies Cumulative. Except as
otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities or coupons in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders of Securities or coupons is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by
law, be


                                       47


cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.

                  SECTION 511. Delay or Omission Not Waiver. No delay or
omission of the Trustee or of any Holder of any Security or coupon to exercise
any right or remedy accruing upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders of Securities or
coupons, as the case may be.

                  SECTION 512. Control by Holders of Securities. The Holders of
not less than a majority in principal amount of the Outstanding Securities of
any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee with respect to the Securities of
such series, provided that

                  (1) such direction shall not be in conflict with any rule of
                  law or with this Indenture,

                  (2) the Trustee may take any other action deemed proper by the
                  Trustee which is not inconsistent with such direction, and

                  (3) the Trustee need not take any action which might involve
                  it in personal liability or be unduly prejudicial to the
                  Holders of Securities of such series not joining therein.

                  Nothing in this Indenture shall impair the right of the
Trustee in its discretion to take any action deemed proper by the Trustee and
which is not inconsistent with such direction by Holders.

                  SECTION 513. Waiver of Past Defaults. The Holders of not less
than a majority in principal amount of the Outstanding Securities of any series
may on behalf of the Holders of all the Securities of such series and any
related coupons waive any past default hereunder with respect to such series and
its consequences, except a default

                  (1) in the payment of the principal of (or premium or
                  Make-Whole Amount, if any) or interest on any Security of such
                  series or any related coupons, or

                  (2) in respect of a covenant or provision hereof which under
                  Article Nine cannot be modified or amended without the consent
                  of the Holder of each Outstanding Security of such series
                  affected. Upon any such waiver, such default shall cease to
                  exist, and any Event of Default arising therefrom shall be
                  deemed to have been cured, for every purpose of this
                  Indenture; but no such waiver shall extend to any subsequent
                  or other default or Event of Default or impair any right
                  consequent thereon.


                                       48


                  SECTION 514. Waiver of Usury, Stay or Extension Laws. The
Company covenants (to the extent that it may lawfully do so) that it will not at
any time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.

                  SECTION 515. Undertaking for Costs. All parties to this
Indenture agree, and each Holder of any Security by his 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 Holder, or group
of Holders, holding in the aggregate more than 10% in principal amount of the
Outstanding Securities of any series, or to any suit instituted by any Holder
for the enforcement of the payment of the principal of (or premium or Make-Whole
Amount, if any) or interest on any Security on or after the respective Stated
Maturities expressed in such Security (or, in the case of redemption, on or
after the Redemption Date).

                            ARTICLE SIX - THE TRUSTEE

                  SECTION 601. Notice of Defaults. Within 90 days after the
occurrence of any default hereunder with respect to the Securities of any
series, the Trustee shall transmit in the manner and to the extent provided in
TIA Section 313(c), notice of such default hereunder known to the Trustee,
unless such default shall have been cured or waived; provided, however, that,
except in the case of a default in the payment of the principal of (or premium
or Make-Whole Amount, if any) or interest on any Security of such series, or in
the payment of any sinking or purchase fund installment with respect to the
Securities of such 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 the Securities and coupons of such series; and provided further that
in the case of any default or breach of the character specified in Section
501(4) with respect to the Securities and coupons of such series, no such notice
to Holders shall be given until at least 60 days after the occurrence thereof.
For the purpose of this Section, the term "default" means any event which is, or
after notice or lapse of time or both would become, an Event of Default with
respect to the Securities of such series.

                  SECTION 602. Certain Rights of Trustee. Subject to the
provisions of TIA Section 315(a) through 315(d):


                                       49


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

                  (2) any request or direction of the Company mentioned herein
                  shall be sufficiently evidenced by a Company Request or
                  Company Order (other than delivery of any Security, together
                  with any coupons appertaining thereto, to the Trustee for
                  authentication and delivery pursuant to Section 303 which
                  shall be sufficiently evidenced as provided therein) and any
                  resolution of the Board of Directors may be sufficiently
                  evidenced by a Board Resolution;

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

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

                  (5) the Trustee shall be under no obligation to exercise any
                  of the rights or powers vested in it by this Indenture at the
                  request or direction of any of the Holders of Securities of
                  any series or any related coupons pursuant to this Indenture,
                  unless such Holders shall have offered to the Trustee security
                  or indemnity reasonably satisfactory to the Trustee against
                  the costs, expenses and liabilities which might be incurred by
                  it in compliance with such request or direction;

                  (6) the Trustee shall not be bound to make any investigation
                  into the facts or matters stated in any resolution,
                  certificate, statement, instrument, opinion, report, notice,
                  request, direction, consent, order, bond, debenture, note,
                  coupon or other paper or document, unless requested in writing
                  so to do by the Holders of not less than a majority in
                  aggregate principal amount of the Outstanding Securities of
                  any series; provided 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 expenses or liabilities as a
                  condition to proceeding; the reasonable expenses of every such
                  examination shall be paid by the Holders or, if paid by the
                  Trustee, shall be repaid by the Holders upon demand. The
                  Trustee, in its discretion, may make such further inquiry or
                  investigation into such facts or matters as it may see fit,
                  and, if the Trustee shall determine to make such further
                  inquiry or investigation, it shall be entitled to


                                       50



                  examine the books, records and premises of the Company,
                  relevant to the facts or matters that are the subject of its
                  inquiry, personally or by agent or attorney;

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

                  (8)  the Trustee shall not be liable for any action taken,
                  suffered or omitted by it in good faith and reasonably
                  believed by it to be authorized or within the discretion or
                  rights or powers conferred upon it by this Indenture.

                  The Trustee shall not be required to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.

                  Except during the continuance of an Event of Default, the
Trustee undertakes to perform 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.

                  SECTION 603. Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Securities, except the
Trustee's certificate of authentication, and in any coupons shall be taken as
the statements of the Company, and neither the Trustee nor any Authenticating
Agent assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.

                  SECTION 604. May Hold Securities. The Trustee, any Paying
Agent, Security Registrar, Authenticating Agent or any other agent of the
Company, in its individual or any other capacity, may become the owner or
pledgee of Securities and coupons and, subject to TIA Sections 310(b) and 311,
may otherwise deal with the Company with the same rights it would have if it
were not Trustee, Paying Agent, Security Registrar, Authenticating Agent or such
other agent.

                  SECTION 605. Money Held in Trust. Money held by the Trustee in
trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Company.

         SECTION 606.  Compensation and Reimbursement.  The Company agrees:

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


                                       51


                  (2)  except as otherwise expressly provided herein, to
                  reimburse each of the Trustee and any predecessor Trustee upon
                  its request for all reasonable expenses, disbursements and
                  advances incurred or made by the Trustee in accordance with
                  any provision of this Indenture (including the reasonable
                  compensation and the reasonable expenses and disbursements of
                  its agents and counsel), except any such expense, disbursement
                  or advance as may be attributable to its negligence or bad
                  faith; and

                  (3)  to indemnify each of the Trustee and any predecessor
                  Trustee for, and to hold it harmless against, any loss,
                  liability or expense incurred without negligence or bad faith
                  on its part, arising out of or in connection with the
                  acceptance or administration of the trust or trusts hereunder,
                  including the costs and expenses of defending itself against
                  any claim or liability in connection with the exercise or
                  performance of any of its powers or duties hereunder.

                  When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 501(7) or Section
501(8), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable Federal or state bankruptcy,
insolvency or other similar law.

                  As security for the performance of the obligations of the
Company under this Section, the Trustee shall have a lien prior to the
Securities upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the payment of principal of (or premium or
Make-Whole Amount, if any) or interest on particular Securities or any coupons.

         The provisions of this Section shall survive the termination of this
Indenture.

                  SECTION 607. Corporate Trustee Required; Eligibility;
Conflicting Interests. There shall at all times be a Trustee hereunder which
shall be eligible to act as Trustee under TIA Section 310(a)(1) and shall have
at all times a combined capital and surplus of at least $50,000,000. If the
Trustee publishes reports of condition at least annually, pursuant to law or
the requirements of Federal, state, territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of the Trustee shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article. Neither the Company
nor any Person directly or indirectly controlling, controlled by, or under
common control with the Company shall serve as Trustee.

         SECTION 608.  Resignation and Removal; Appointment of Successor.

                  (a)  No resignation or removal of the Trustee and no
                  appointment of a successor Trustee pursuant to this Article
                  shall become effective until the acceptance of appointment by
                  the successor Trustee in accordance with the applicable
                  requirements of Section 609.


                                       52


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

                  (c)  The Trustee may be removed at any time with respect to
                  the Securities of any series by Act of the Holders of a
                  majority in principal amount of the Outstanding Securities of
                  such series delivered to the Trustee and to the Company.

                  (d)  If at any time:

                       (1)  the Trustee shall fail to comply with the provisions
                  of TIA Section 310(b) after written request therefor by the
                  Company or by any Holder of a Security who has been a bona
                  fide Holder of a Security for at least six months, or

                       (2)  the Trustee shall cease to be eligible under
                  Section 607 and shall fail to resign after written request
                  therefor by the Company or by any Holder of a Security who has
                  been a bona fide Holder of a Security for at least six months,
                  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, (i) the Company by or pursuant to a Board Resolution may
remove the Trustee and appoint a successor Trustee with respect to all
Securities, or (ii) subject to TIA Section 315(e), any Holder of a Security who
has been a bona fide Holder of a Security 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 with respect to all Securities and
the appointment of a successor Trustee or Trustees.

                  (e)  If the Trustee shall resign, be removed or become
                  incapable of acting, or if a vacancy shall occur in the office
                  of Trustee for any cause with respect to the Securities of one
                  or more series, the Company, by or pursuant to a Board
                  Resolution, shall promptly appoint a successor Trustee or
                  Trustees with respect to the Securities of that or those
                  series (it being understood that any such successor Trustee
                  may be appointed with respect to the Securities of one or more
                  or all of such series and that at any time there shall be only
                  one Trustee with respect to the Securities of any particular
                  series). If, within one year after such resignation, removal
                  or incapability, or the occurrence of such vacancy, a
                  successor Trustee with respect to the Securities of any series
                  shall be appointed by Act of the Holders of a majority in
                  principal amount of the Outstanding Securities of such series
                  delivered to the Company and the retiring Trustee, the
                  successor Trustee so appointed shall, forthwith upon its
                  acceptance of such appointment, become the


                                       53


                  successor Trustee with respect to the Securities of such
                  series and to that extent supersede the successor Trustee
                  appointed by the Company. If no successor Trustee with
                  respect to the Securities of any series shall have been so
                  appointed by the Company or the Holders of Securities and
                  accepted appointment in the manner hereinafter provided, any
                  Holder of a Security who has been a bona fide Holder of a
                  Security of such series for at least six months may, on
                  behalf of himself and all others similarly situated, petition
                  any court of competent jurisdiction for the appointment of a
                  successor Trustee with respect to Securities of such series.

                  (f)  The Company shall give notice of each resignation and
                  each removal of the Trustee with respect to the Securities of
                  any series and each appointment of a successor Trustee with
                  respect to the Securities of any series in the manner provided
                  for notices to the Holders of Securities in Section 106. Each
                  notice shall include the name of the successor Trustee with
                  respect to the Securities of such series and the address of
                  its Corporate Trust Office.

         SECTION 609.  Acceptance of Appointment by Successor.

                  (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 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 nevertheless to its claim, if any, provided
                  for in Section 6.6.

                  (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, pursuant to Article Nine hereof, wherein
                  each successor Trustee shall accept such appointment and which
                  (1) shall contain such provisions as shall be necessary or
                  desirable to transfer and confirm to, and to vest in, each
                  successor Trustee all the rights, powers, trusts and duties of
                  the retiring Trustee with respect to the Securities of that or
                  those series to which the appointment of such successor
                  Trustee relates, (2) if the retiring Trustee is not retiring
                  with respect to all Securities, shall contain such provisions
                  as shall be deemed necessary or desirable to confirm that all
                  the rights, powers, trusts and duties of the retiring Trustee
                  with respect to the Securities of that or those series as to
                  which the retiring Trustee is not retiring shall continue to
                  be vested in the retiring Trustee, and (3) shall add to or
                  change any of the provisions of this Indenture as shall be
                  necessary to provide


                                       54


                  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 and that each
                  such Trustee shall be trustee of a trust or trusts hereunder
                  separate and apart from any trust or trusts hereunder
                  administered by any other such Trustee; and upon the
                  execution and delivery of such supplemental indenture the
                  resignation or removal of the retiring Trustee shall become
                  effective to the extent provided therein and each such
                  successor Trustee, without any further act, 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
                  all property and money held by such retiring Trustee
                  hereunder with respect to the Securities of that or those
                  series to which the appointment of such successor Trustee
                  relates.

                  (c)  Upon request of any such successor Trustee, the Company
                  shall execute any and 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 6.9, as the case may be.

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

                  SECTION 610. Merger, Conversion, Consolidation or Succession
to Business. Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities or coupons 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 or coupons so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities or coupons. In case any Securities or coupons
shall not have been authenticated by such predecessor Trustee, any such
successor Trustee may authenticate and deliver such Securities or coupons, in
either its own name or that of its predecessor Trustee, with the full force and
effect which this Indenture provides for the certificate of authentication of
the Trustee.

                  SECTION 611. Appointment of Authenticating Agent. At any time
when any of the Securities remain Outstanding, the Trustee may appoint an
Authenticating Agent or Agents with respect to one or more series of Securities
which shall be authorized to act on behalf of the Trustee to authenticate
Securities of such series issued upon exchange, registration of transfer or
partial redemption or repayment 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. Any such
appointment shall be evidenced by an instrument in writing


                                       55


signed by a Responsible Officer of the Trustee, a copy of which instrument
shall be promptly furnished to the Company. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or
the Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a bank or trust company or
corporation organized and doing business and in good standing under the laws of
the United States of America or of any state or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by Federal or state authorities. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case at any
time an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.

                  Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or further act on the part of the Trustee or the Authenticating Agent.

                  An Authenticating Agent for any series of Securities may at
any time resign by giving written notice of resignation to the Trustee for such
series and to the Company. The Trustee for any series of Securities may at any
time terminate the agency of an Authenticating Agent by giving written notice
of termination to such Authenticating Agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee for such series may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall give
notice of such appointment to all Holders of Securities of the series with
respect to which such Authenticating Agent will serve in the manner set forth
in Section 106. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and
duties of its predecessor hereunder, with like effect as if originally named as
an Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.

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

                  If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to or in lieu of the


                                       56


Trustee's certificate of authentication, an alternate certificate of
authentication substantially in the following form:

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

                                                         [             ]
                                                         as Trustee


Dated: ____________                             By:_____________________________
                                                      as Authenticating Agent


Dated: ____________                             By:_____________________________
                                                      as Authenticating Agent


         SECTION 612.  Certain Duties and Responsibilities of the Trustee.

                  (a)  With respect to the Securities of any series, except
                  during the continuance of an Event of Default with respect to
                  the Securities of such series:

                       (1)  the Trustee undertakes to perform such duties and
                  only such duties as are specifically set forth in this
                  Indenture, and no implied covenants or obligations shall be
                  read into this Indenture against the Trustee; and

                       (2)  in the absence of bad faith on its part, the Trustee
                  may conclusively rely, as to the truth of the statements and
                  the correctness of the opinions expressed therein, upon
                  certificates or opinions furnished to the Trustee and
                  conforming to the requirements of this Indenture; 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 shall not be under any
                  duty to verify the contents or accuracy thereof.

                  (b)  In case an Event of Default with respect to the
                  Securities of any series has occurred and is continuing, the
                  Trustee shall, with respect to Securities of such series,
                  exercise 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.

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

                       (1)  this Subsection shall not be construed to limit the
                  effect of Subsection (a) of this Section;


                                       57


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

                       (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 a majority in
                  principal amount of the Outstanding Securities of any series
                  relating to the time, method and place of conducting any
                  proceeding for any remedy available to the Trustee, or
                  exercising any trust or power conferred upon the Trustee,
                  under this Indenture with respect to the Securities of such
                  series; and

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

                  (d)  Whether or not therein expressly so provided, every
                  provision of this Indenture relating to the conduct or
                  affecting the liability of or affording protection to the
                  Trustee shall be subject to the provisions of this Section
                  612.

        ARTICLE SEVEN - HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

                  SECTION 701. Disclosure of Names and Addresses of Holders.
Every Holder of Securities or coupons, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any Authenticating Agent nor any Paying Agent nor any Security Registrar shall
be held accountable by reason of the disclosure of any information as to the
names and addresses of the Holders of Securities in accordance with TIA Section
312, 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 TIA Section 312(b).

                  SECTION 702. Reports by Trustee. The Trustee shall transmit to
Holders such reports concerning the Trustee and its actions under this Indenture
as may be required by TIA Section 313 at the times and in the manner provided by
the TIA, which shall initially be not less than every twelve months commencing
on [_________________], 200_. A copy of each such report shall, at the time of
such transmission to Holders, be filed by the Trustee with each stock exchange,
if any, upon which any Securities are listed, with the Commission and with the
Company. The Company will notify the Trustee when any Securities are listed on
any stock exchange.

         SECTION 703.  Reports by Company.  The Company will:

                  (1)  file with the Trustee, within 15 days after the Company
                  is required to file the same with the Commission, copies of
                  the annual reports and of the information, documents and other
                  reports (or copies 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


                                       58


                  pursuant to Section 13 or Section 15(d) of the Securities
                  Exchange Act of 1934; or, if the Company is not required to
                  file information, documents or reports pursuant to either of
                  such Sections, then it will file with the Trustee and the
                  Commission, in accordance with 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 Securities
                  Exchange Act of 1934 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;

                  (2)  file with the Trustee and the Commission, in accordance
                  with 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 of this Indenture as may be required from time
                  to time by such rules and regulations; and

                  (3)  transmit by mail to the Holders of Securities, within 30
                  days after the filing thereof with the Trustee, in the manner
                  and to the extent provided in TIA Section 313(c), such
                  summaries of any information, documents and reports required
                  to be filed by the Company pursuant to paragraphs (1) and (2)
                  of this Section as may be required by rules and regulations
                  prescribed from time to time by the Commission.

                  SECTION 704. Company to Furnish Trustee Names and Addresses of
Holders. The Company will furnish or cause to be furnished to the Trustee:

                  (a)  semiannually, not later than 15 days after the Regular
                  Record Date for interest for each series of Securities, a
                  list, in such form as the Trustee may reasonably require, of
                  the names and addresses of the Holders of Registered
                  Securities of such series as of such Regular Record Date, or
                  if there is no Regular Record Date for interest for such
                  series of Securities, semiannually, upon such dates as are set
                  forth in the Board Resolution or indenture supplemental hereto
                  authorizing such series, 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, that, so long as the Trustee is the Security Registrar, no
such list shall be required to be furnished.

        ARTICLE EIGHT - CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE

                  SECTION 801. Consolidations and Mergers of Company and Sales,
Leases and Conveyances Permitted Subject to Certain Conditions. The Company may
consolidate with, or sell, lease or convey all or substantially all of its
assets to, or merge with or into any other corporation, provided that in any
such case, (1) either the Company shall be the continuing corporation, or the
successor corporation shall be a corporation organized and existing under the


                                       59


laws of the United States or a State thereof and such successor corporation
shall expressly assume the due and punctual payment of the principal of (and
premium or Make-Whole Amount, if any) and any interest on all of the Securities,
according to their tenor, and the due and punctual performance and observance of
all of the covenants and conditions of this Indenture to be performed by the
Company by supplemental indenture, complying with Article Nine hereof,
satisfactory to the Trustee, executed and delivered to the Trustee by such
corporation and (2) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company or any
Subsidiary as a result thereof as having been incurred by the Company or such
Subsidiary at the time of such transaction, no Event of Default, and no event
which, after notice or the lapse of time, or both, would become an Event of
Default, shall have occurred and be continuing.

                  SECTION 802. Rights and Duties of Successor Corporation. In
case of any such consolidation, merger, sale, lease or conveyance and upon any
such assumption by the successor corporation, 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 the predecessor
corporation, except in the event of a lease, shall be relieved of any further
obligation 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, 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 corporation, 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 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.

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

                  SECTION 803. Officers' Certificate and Opinion of Counsel. Any
consolidation, merger, sale, lease or conveyance permitted under Section 801 is
also subject to the condition that the Trustee receive an Officers' Certificate
and an Opinion of Counsel to the effect that any such consolidation, merger,
sale, lease or conveyance, and the assumption by any successor corporation,
complies with the provisions of this Article and that all conditions precedent
herein provided for relating to such transaction have been complied with.

                     ARTICLE NINE - SUPPLEMENTAL INDENTURES

                  SECTION 901. Supplemental Indentures Without Consent of
Holders. Without the consent of any Holders of Securities or coupons, the
Company, when authorized by or pursuant to a Board Resolution, and the Trustee,
at any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:


                                       60


                  (1) 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 and in the
                  Securities; or

                  (2) to add to the covenants of the Company for the benefit of
                  the Holders of all or any series of Securities (and if such
                  covenants are to be for the benefit of less than all series of
                  Securities, stating that such covenants are expressly being
                  included solely for the benefit of such series) or to
                  surrender any right or power herein conferred upon the
                  Company; or

                  (3) to add any additional Events of Default for the benefit of
                  the Holders of all or any series of Securities (and if such
                  Events of Default are to be for the benefit of less than all
                  series of Securities, stating that such Events of Default are
                  expressly being included solely for the benefit of such
                  series); provided, however, that in respect of any such
                  additional Events of Default 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 that or
                  those series of Securities to which such additional Events of
                  Default apply to waive such default; or

                  (4) to add to or change any of the provisions of this
                  Indenture to provide that Bearer Securities may be registrable
                  as to principal, to change or eliminate any restrictions on
                  the payment of principal of or premium or Make-Whole Amount,
                  if any, or interest on Bearer Securities, to permit Bearer
                  Securities to be issued in exchange for Registered Securities,
                  to permit Bearer Securities to be issued in exchange for
                  Bearer Securities of other authorized denominations or to
                  permit or facilitate the issuance of Securities in
                  uncertificated form, provided that any such action shall not
                  adversely affect the interests of the Holders of Securities of
                  any series or any related coupons in any material respect; or

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

                  (6) to secure the Securities; or

                  (7) to establish the form or terms of Securities of any series
                  and any related coupons as permitted by Sections 201 and 301;
                  or

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


                                       61



                  (9) to cure any ambiguity, to correct or supplement any
                  provision herein which may be defective or inconsistent with
                  any other provision herein, or to make any other provisions
                  with respect to matters or questions arising under this
                  Indenture which shall not be inconsistent with the provisions
                  of this Indenture, provided such provisions shall not
                  adversely affect the interests of the Holders of Securities of
                  any series or any related coupons in any material respect; or

                  (10) to supplement any of the provisions of this Indenture to
                  such extent as shall be necessary to permit or facilitate the
                  defeasance and discharge of any series of Securities pursuant
                  to Sections 401, 1402 and 1403; provided that any such action
                  shall not adversely affect the interests of the Holders of
                  Securities of such series and any related coupons or any other
                  series of Securities in any material respect; or

                  (11) to make provisions with respect to Holders' rights of
                  conversion with respect to any series of Securities pursuant
                  to Articles Seventeen.

                  SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal amount
of all Outstanding Securities affected by such supplemental indenture, by Act of
said Holders delivered to the Company and the Trustee, the Company, when
authorized by or pursuant to a Board Resolution, and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities and any related coupons under this Indenture; provided, however, that
no such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby:

                  (1) change the Stated Maturity of the principal of (or premium
                  or Make-Whole Amount, if any, on) or any installment of
                  principal of or interest on, any Security; or reduce the
                  principal amount thereof or the rate or amount of interest
                  thereon, or any premium or Make-Whole Amount payable upon the
                  redemption thereof, or reduce the amount of the principal of
                  an Original Issue Discount Security that would be due and
                  payable upon a declaration of acceleration of the Maturity
                  thereof pursuant to Section 502 or the amount thereof provable
                  in bankruptcy pursuant to Section 504, or adversely affect any
                  right of repayment at the option of the Holder of any
                  Security, or change any Place of Payment where, or the
                  currency or currencies, currency unit or units or composite
                  currency or currencies in which, any Security or any premium
                  or Make-Whole Amount or the interest thereon is payable, or
                  impair the right to institute suit for the enforcement of any
                  such payment on or after the Stated Maturity thereof (or, in
                  the case of redemption or repayment at the option of the
                  Holder, on or after the Redemption Date or the Repayment Date,
                  as the case may be), or (if Securities of such series are
                  convertible) adversely affect the right of the Holder to
                  convert any Security as provided in Article Seventeen, or
                  modify the provisions of this Indenture with respect to the
                  subordination of the Securities in a manner materially adverse
                  to the Holders; or


                                       62



                  (2) reduce the percentage in principal amount of the
                  Outstanding Securities of any series, the consent of whose
                  Holders is required for any such supplemental indenture, or
                  the consent of whose Holders is required for any waiver with
                  respect to such series (or compliance with certain provisions
                  of this Indenture or certain defaults hereunder and their
                  consequences) provided for in this Indenture, or reduce the
                  requirements of Section 1504 for quorum or voting, or

                  (3) modify any of the provisions of this Section, Section 513
                  or Section 1009, except to increase the required percentage to
                  effect such action or to provide that certain there provisions
                  of this Indenture cannot be modified or waived without the
                  consent of the Holder of each Outstanding Security affected
                  thereby, provided, however, that this clause shall not be
                  deemed to require the consent of any Holder with respect to
                  changes in the references to "the Trustee" and concomitant
                  changes in this Section 902 and Section 1009, or the deletion
                  of this proviso, in accordance with the requirements of
                  Sections 609(b) and 901(11).

                  It shall not be necessary for any Act of Holders under this
Section 902 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.

                  A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture which has expressly been included
solely for the benefit of one or more particular series of Securities, or which
modifies the rights of the 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.

                  SECTION 903. Execution of Supplemental Indentures. In
executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modification thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and shall
be fully protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.

                  SECTION 904. Effect of Supplemental Indentures. Upon the
execution of any supplemental indenture under this Article, this Indenture shall
be modified in accordance therewith, and such supplemental indenture shall form
a part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder and of any
coupon appertaining thereto shall be bound thereby.

                  SECTION 905. Conformity with Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect.

                  SECTION 906. Reference in Securities to Supplemental
Indentures. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall,
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the


                                       63



Company shall so determine, new Securities of any series so modified as to
conform, in the opinion of the Trustee and the Company, to any such
supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities of such series.

                             ARTICLE TEN - COVENANTS

                  SECTION 1001. Payment of Principal, Premium or Make-Whole
Amount, if any; and Interest. The Company covenants and agrees for the benefit
of the Holders of each series of Securities that it will duly and punctually pay
the principal of (and premium or Make-Whole Amount, if any) and interest on the
Securities of that series in accordance with the terms of such series of
Securities, any coupons appertaining thereto and this Indenture. Unless
otherwise specified as contemplated by Section 301 with respect to any series of
Securities, any interest due on Bearer Securities on or before Maturity shall be
payable only upon presentation and surrender of the several coupons for such
interest installments as are evidenced thereby as they severally mature. Unless
otherwise specified with respect to Securities of any series pursuant to Section
301, at the option of the Company, all payments of principal may be paid by
check to the registered Holder of the Registered Security or other person
entitled thereto against surrender of such Security.

                  SECTION 1002. Maintenance of Office or Agency. If Securities
of a series are issuable only as Registered Securities, the Company shall
maintain in each Place of Payment for any series of Securities an office or
agency where Securities of that series may be presented or surrendered for
payment or conversion, where Securities of that series may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities of that series and this Indenture may
be served. If Securities of a series are issuable as Bearer Securities, the
Company will maintain: (A) in the Borough of Manhattan, The City of New York, an
office or agency where any Registered Securities of that series may be presented
or surrendered for payment or conversion, where any Registered Securities of
that series may be surrendered for registration of transfer, where Securities of
that series may be surrendered for exchange, where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served and where Bearer Securities of that series and related coupons may
be presented or surrendered for payment or conversion in the circumstances
described in the following paragraph (and not otherwise); (B) subject to any
laws or regulations applicable thereto, in a Place of Payment for that series
which is located outside the United States, an office or agency where Securities
of that series and related coupons may be presented and surrendered for payment;
provided, however, that if the Securities of that series are listed on any stock
exchange located outside the United States and such stock exchange shall so
require, the Company will maintain a Paying Agent for the Securities of that
series in any required city located outside the United States, as the case may
be, so long as the Securities of that series are listed on such exchange; and
(C) subject to any laws or regulations applicable thereto, in a Place of Payment
for that series located outside the United States an office or agency where any
Registered Securities of that series may be surrendered for registration of
transfer, where Securities of that series may be surrendered for exchange and
where notices and demands to or upon the Company in respect of the Securities of
that series and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change in the location,
of each such office or agency. 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


                                       64



thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, except that Bearer
Securities of that series and the related coupons may be presented and
surrendered for payment or conversion at the offices specified in the
Security, in London, England, and the Company hereby appoints the same as its
agent to receive such respective presentations, surrenders, notices and
demands, and the Company hereby appoints the Trustee its agent to receive all
such presentations, surrenders, notices and demands.

                  Unless otherwise specified with respect to any Securities
pursuant to Section 301, no payment of principal, premium or Make-Whole Amount
or interest on Bearer Securities shall be made at any office or agency of the
Company in the United States or by check mailed to any address in the United
States or by transfer to an account maintained with a bank located in the United
States; provided, however, that, if the Securities of a series are payable in
Dollars, payment of principal of and any premium or Make-Whole Amount and
interest on any Bearer Security shall be made at the office of the Company's
Paying Agent in the Borough of Manhattan, The City of New York, if (but only if)
payment in Dollars of the full amount of such principal, premium or Make-Whole
Amount, or interest, as the case may be, at all offices or agencies outside the
United States maintained for the purpose by the Company in accordance with this
Indenture, is illegal or effectively precluded by exchange controls or other
similar restrictions.

                  The Company may from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all of such purposes, 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 obligation to maintain
an office or agency in accordance with the requirements set forth above for
Securities of any series for such purposes. The Company will give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency. Unless otherwise specified with
respect to any Securities pursuant to Section 301 with respect to a series of
Securities, the Company hereby designates as a Place of Payment for each series
of Securities the office or agency of the Company in the Borough of Manhattan,
The City of New York, and initially appoints the Trustee at its Corporate Trust
Office as Paying Agent in such city and as its agent to receive all such
presentations, surrenders, notices and demands.

                  Unless otherwise specified with respect to any Securities
pursuant to Section 301, if and so long as the Securities of any series (i) are
denominated in a Foreign Currency or (ii) may be payable in a Foreign Currency,
or so long as it is required under any other provision of the Indenture, then
the Company will maintain with respect to each such series of Securities, or as
so required, at least one exchange rate agent.

                  SECTION 1003. Money for Securities Payments to Be Held in
Trust. If the Company shall at any time act as its own Paying Agent with respect
to any series of any Securities and any related coupons, it will, on or before
each due date of the principal of (and premium or Make-Whole Amount, if any), or
interest on any of the Securities of that series, segregate and hold in trust
for the benefit of the Persons entitled thereto a sum in the currency or
currencies, currency unit or units or composite currency or currencies in which
the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series) sufficient to pay the
principal (and premium or Make-Whole Amount, if any) or


                                       65



interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided, and will promptly notify the
Trustee of its action or failure so to act.

                  Whenever the Company shall have one or more Paying Agents for
any series of Securities and any related coupons, it will, on or before each due
date of the principal of (and premium or Make-Whole Amount, if any), or interest
on any Securities of that series, deposit with a Paying Agent a sum (in the
currency or currencies, currency unit or units or composite currency or
currencies described in the preceding paragraph) sufficient to pay the principal
(and premium or Make-Whole Amount, 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 Make-Whole Amount, if any, 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.

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

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

                  (2) give the Trustee notice of any default by the Company (or
                  any other obligor upon the Securities) in the making of any
                  such payment of principal (and premium or Make-Whole Amount,
                  if any) or interest on the Securities of that series; and

                  (3) at any time during the continuance of any such default
                  upon the written request of the Trustee, forthwith pay to the
                  Trustee all sums so held in trust by such Paying Agent.

                  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
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.

                  Except as otherwise provided in the Securities of any series,
any money deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal of (and premium or Make-Whole
Amount, if any) or interest on any Security of any series and remaining
unclaimed for two years after such principal (and premium or Make-Whole Amount,
if any) or interest has become due and payable shall be paid to the Company upon
Company Request or (if then held by the Company) shall be discharged from such
trust; and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment of such principal of (and premium
or Make-Whole Amount, if any) or interest on any Security, without interest
thereon, and all liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Company as trustee thereof, shall


                                       66



thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in an Authorized Newspaper, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.

                    ARTICLE ELEVEN - REDEMPTION OF SECURITIES

                  SECTION 1101. Applicability of Article. Securities of any
series which are redeemable before their Stated Maturity shall be redeemable in
accordance with their terms and (except as otherwise specified as contemplated
by Section 301 for Securities of any series) in accordance with this Article.

                  SECTION 1102. Election to Redeem; Notice to Trustee. The
election of the Company to redeem any Securities shall be evidenced by or
pursuant to a Board Resolution. In case of any redemption at the election of the
Company of less than all of the Securities of any series, the Company shall, at
least 45 days prior to the giving of the notice of redemption in Section 1104
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such Redemption Date and of the principal amount of Securities of
such series to be redeemed. In the case of any redemption of Securities prior to
the expiration of any restriction on such redemption 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 such
restriction.

                  SECTION 1103. Selection by Trustee of Securities to Be
Redeemed. If less than all the Securities of any series issued on the same day
with the same terms are to be redeemed, the particular Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Trustee, from the Outstanding Securities of such series issued on such date with
the same terms not previously called for redemption, by such method as the
Trustee shall deem fair and appropriate and which may provide for the selection
for redemption of portions (equal to the minimum authorized denomination for
Securities of that series or any integral multiple thereof) of the principal
amount of Securities of such series of a denomination larger than the minimum
authorized denomination for Securities of that series.

                  The Trustee shall promptly notify the Company and the Security
Registrar (if other than itself) in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption,
the principal amount thereof to be redeemed.

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

                  SECTION 1104. Notice of Redemption. Notice of redemption shall
be given in the manner provided in Section 106, not less than 30 days nor more
than 60 days prior to the Redemption Date, unless a shorter period is specified
by the terms of such series established pursuant to Section 301, to each Holder
of Securities to be redeemed, but failure to give such notice in the manner
herein provided to the Holder of any Security designated for redemption as


                                       67



a whole or in part, or any defect in the notice to any such Holder, shall not
affect the validity of the proceedings for the redemption of any other such
Security or portion thereof.

                  Any notice that is mailed to the Holders of Registered
Securities in the manner herein provided shall be conclusively presumed to have
been duly given, whether or not the Holder receives the notice.

         All notices of redemption shall state:

                  (1) the Redemption Date,

                  (2) the Redemption Price, accrued interest to the Redemption
                  Date payable as provided in Section 1106, if any,

                  (3) if less than all Outstanding Securities of any series are
                  to be redeemed, the identification (and, in the case of
                  partial redemption, the principal amount) of the particular
                  Security or Securities to be redeemed,

                  (4) in case any Security is to be redeemed in part only, the
                  notice which relates to such Security shall state that on and
                  after the Redemption Date, upon surrender of such Security,
                  the holder will receive, without a charge, a new Security or
                  Securities of authorized denominations for the principal
                  amount thereof remaining unredeemed,

                  (5) that on the Redemption Date the Redemption Price and
                  accrued interest to the Redemption Date payable as provided in
                  Section 1106, if any, will become due and payable upon each
                  such Security, or the portion thereof, to be redeemed and, if
                  applicable, that interest thereon shall cease to accrue on and
                  after said date,

                  (6) the Place or Places of Payment where such Securities,
                  together in the case of Bearer Securities with all coupons
                  appertaining thereto, if any, maturing after the Redemption
                  Date, are to be surrendered for payment of the Redemption
                  Price and accrued interest, if any, or for conversion,

                  (7) that the redemption is for a sinking fund, if such is the
                  case,

                  (8) that, unless otherwise specified in such notice, Bearer
                  Securities of any series, if any, surrendered for redemption
                  must be accompanied by all coupons maturing subsequent to the
                  date fixed for redemption or the amount of any such missing
                  coupon or coupons will be deducted from the Redemption Price,
                  unless security or indemnity satisfactory to the Company, the
                  Trustee for such series and any Paying Agent is furnished,

                  (9) if Bearer Securities of any series are to be redeemed and
                  any Registered Securities of such series are not to be
                  redeemed, and if such Bearer Securities may be exchanged for
                  Registered Securities not subject to redemption on this
                  Redemption Date pursuant to Section 305 or otherwise, the last
                  date, as determined by the Company, on which such exchanges
                  may be made,


                                       68



                  (10) the CUSIP number of such Security, if any, and

                  (11) if applicable, that a Holder of Securities who desires to
                  convert Securities for redemption must satisfy the
                  requirements for conversion contained in such Securities, the
                  then existing conversion price or rate, the place or places
                  where such Securities may be surrendered for conversion, and
                  the date and time when the option to convert shall expire.

                  Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company.

                  SECTION 1105. Deposit of Redemption Price. On or prior to any
Redemption Date, the Company shall deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, which it may not do
in the case of a sinking fund payment under Article Twelve, segregate and hold
in trust as provided in Section 1003) an amount of money in the currency or
currencies, currency unit or units or composite currency or currencies in which
the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series) sufficient to pay on
the Redemption Date the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities or
portions thereof which are to be redeemed on that date.

                  If any Securities called for redemption are converted, any
money deposited with the Trustee or with any Paying Agent or so segregated and
held in trust for the redemption of such Security shall be paid to the Company
upon Company Request or, if then held by the Company, shall be discharged from
such trust.

                  SECTION 1106. Securities Payable on Redemption Date. Notice of
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 301 for the
Securities of such series) (together with accrued interest, if any, to the
Redemption Date), and from and after such date (unless the Company shall default
in the payment of the Redemption Price and accrued interest) such Securities
shall, if the same were interest-bearing, cease to bear interest and the coupons
for such interest appertaining to any Bearer Securities so to be redeemed,
except to the extent provided below, shall be void. Upon surrender of any such
Security for redemption in accordance with said notice, together with all
coupons, if any, appertaining thereto maturing after the Redemption Date, such
Security shall be paid by the Company at the Redemption Price, together with
accrued interest, if any, to the Redemption Date; provided, however, that
installments of interest on Bearer Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable only at an office or agency
located outside the United States (except as otherwise provided in Section 1002)
and, unless otherwise specified as contemplated by Section 301, only upon
presentation and surrender of coupons for such interest; and provided further
that, except as otherwise provided with respect to Securities convertible into
the Company's Common Stock or Preferred Stock, installments of interest on
Registered Securities whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of


                                       69



such Securities, or one or more Predecessor Securities, registered as such at
the close of business on the relevant Record Dates according to their terms
and the provisions of Section 307.

                  If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of such missing
coupon or coupons may be waived by the Company and the Trustee if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to the Trustee or any Paying Agent any such missing coupon in
respect of which a deduction shall have been made from the Redemption Price,
such Holder shall be entitled to receive the amount so deducted; provided,
however, that interest represented by coupons shall be payable only at an office
or agency located outside the United States (except as otherwise provided in
Section 1002) and, unless otherwise specified as contemplated by Section 301,
only upon presentation and surrender of those coupons.

                  If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal (and premium or Make-Whole
Amount, if any) shall, until paid, bear interest from the Redemption Date at the
rate borne by the Security.

                  SECTION 1107. Securities Redeemed in Part. Any Registered
Security which is to be redeemed only in part (pursuant to the provisions of
this Article or of Article Twelve) shall be surrendered at a Place of Payment
therefor (with, if the Company or the Trustee so requires, due endorsement by,
or a written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or his attorney duly authorized in
writing) and the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of such Security without service charge a new Security or
Securities of the same series, of any authorized denomination as requested by
such Holder in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered. If a Global
Security is so surrendered, the Company shall execute and the Trustee shall
authenticate and deliver to the depository, without service charge, a new Global
Security in a denomination equal to and in exchange for the unredeemed portion
of the principal of the Global Security so surrendered.

                         ARTICLE TWELVE - SINKING FUNDS

                  SECTION 1201. Applicability of Article. The provisions of this
Article shall be applicable to any sinking fund for the retirement of Securities
of a series except as otherwise specified as contemplated by Section 301 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 such Securities of any series is herein referred to as an
"optional sinking fund payment." If provided for by the terms of any Securities
of any series, the cash amount of any mandatory sinking fund payment may be
subject to reduction as provided in Section 1202. Each sinking fund payment
shall be applied to the redemption of Securities of any series as provided for
by the terms of Securities of such series.


                                       70



                  SECTION 1202. Satisfaction of Sinking Fund Payments with
Securities. The Company may, in satisfaction of all or any part of any mandatory
sinking fund payment with respect to the Securities of a series, (1) deliver
Outstanding Securities of such series (other than any previously called for
redemption) together in the case of any Bearer Securities of such series with
all unmatured coupons appertaining thereto and (2) apply as a credit Securities
of such 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, as
provided for by the terms of such Securities, or which have otherwise been
acquired by the Company; provided that such Securities so delivered or applied
as a credit have not been previously so credited. Such Securities shall be
received and credited for such purpose by the Trustee at the applicable
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such mandatory sinking fund payment shall
be reduced accordingly.

                  SECTION 1203. Redemption of Securities for Sinking Fund. Not
less than 60 days prior to each sinking fund payment date for Securities of any
series, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing mandatory sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash in the currency or currencies,
currency unit or units or composite currency or currencies in which the
Securities of such series are payable (except as otherwise specified pursuant to
Section 301 for the Securities of such series) and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 1202, and the optional amount, if any, to be added in cash
to the next ensuing mandatory sinking fund payment, and will also deliver to the
Trustee any Securities to be so delivered and credited. If such Officers'
Certificate shall specify an optional amount to be added in cash to the next
ensuing mandatory sinking fund payment, the Company shall thereupon be obligated
to pay the amount therein specified. 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 1103 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 1104. Such notice
having been duly given, the redemption of such Securities shall be made upon the
terms and in the manner stated in Sections 1106 and 1107.

              ARTICLE THIRTEEN - REPAYMENT AT THE OPTION OF HOLDERS

                  SECTION 1301. Applicability of Article. Repayment of
Securities of any series before their Stated Maturity at the option of Holders
thereof shall be made in accordance with the terms of such Securities, if any,
and (except as otherwise specified by the terms of such series established
pursuant to Section 301) in accordance with this Article.

                  SECTION 1302. Repayment of Securities. Securities of any
series subject to repayment in whole or in part at the option of the Holders
thereof will, unless otherwise provided in the terms of such Securities, be
repaid at a price equal to the principal amount thereof, together with interest,
if any, thereon accrued to the Repayment Date specified in or pursuant to the
terms of such Securities. The Company covenants that on or prior to the
Repayment Date it will deposit with the Trustee or with a Paying Agent (or, if
the Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) an amount of money in


                                   71


the currency or currencies, currency unit or units or composite currency or
currencies in which the Securities of such series are payable (except as
otherwise specified pursuant to Section 301 for the Securities of such
series) sufficient to pay the principal (or, if so provided by the terms of
the Securities of any series, a percentage of the principal) of, and (except
if the Repayment Date shall be an Interest Payment Date) accrued interest on,
all the Securities or portions thereof, as the case may be, to be repaid on
such date.

                  SECTION 1303. Exercise of Option. Securities of any series
subject to repayment at the option of the Holders thereof will contain an
"Option to Elect Repayment" form on the reverse of such Securities. In order for
any Security to be repaid at the option of the Holder, the Trustee must receive
at the Place of Payment therefor specified in the terms of such Security (or at
such other place or places of which the Company shall from time to time notify
the Holders of such Securities) not earlier than 60 days nor later than 30 days
prior to the Repayment Date (1) the Security so providing for such repayment
together with the "Option to Elect Repayment" form on the reverse thereof duly
completed by the Holder (or by the Holder's attorney duly authorized in writing)
or (2) a telegram, telex, facsimile transmission or a letter from a member of a
national securities exchange, or the National Association of Securities Dealers,
Inc. ("NASD"), or a commercial bank or trust company in the United States
setting forth the name of the Holder of the Security, the principal amount of
the Security, the principal amount of the Security to be repaid, the CUSIP
number, if any, or a description of the tenor and terms of the Security, a
statement that the option to elect repayment is being exercised thereby and a
guarantee that the Security to be repaid, together with the duly completed form
entitled "Option to Elect Repayment" on the reverse of the Security, will be
received by the Trustee not later than the fifth Business Day after the date of
such telegram, telex, facsimile transmission or letter; provided, however, that
such telegram, telex, facsimile transmission or letter shall only be effective
if such Security and form duly completed are received by the Trustee by such
fifth Business Day. If less than the entire principal amount of such Security is
to be repaid in accordance with the terms of such Security, the principal amount
of such Security to be repaid, in increments of the minimum denomination for
Securities of such series, and the denomination or denominations of the Security
or Securities to be issued to the Holder for the portion of the principal amount
of such Security surrendered that is not to be repaid, must be specified. The
principal amount of any Security providing for repayment at the option of the
Holder thereof may not be repaid in part if, following such repayment, the
unpaid principal amount of such Security would be less than the minimum
authorized denomination of Securities of the series of which such Security to be
repaid is a part. Except as otherwise may be provided by the terms of any
Security providing for repayment at the option of the Holder thereof, exercise
of the repayment option by the Holder shall be irrevocable unless waived by the
Company.

                  SECTION 1304. When Securities Presented for Repayment Become
Due and Payable. If Securities of any series providing for repayment at the
option of the Holders thereof shall have been surrendered as provided in this
Article and as provided by or pursuant to the terms of such Securities, such
Securities or the portions thereof, as the case may be, to be repaid shall
become due and payable and shall be paid by the Company on the Repayment Date
therein specified, and on and after such Repayment Date (unless the Company
shall default in the payment of such Securities on such Repayment Date) such
Securities shall, if the same were interest-bearing, cease to bear interest and
the coupons for such interest appertaining to any Bearer Securities so to be
repaid, except to the extent provided below, shall be void. Upon surrender of
any such Security for repayment in accordance with such provisions, together
with


                                   72


all coupons, if any, appertaining thereto maturing after the Repayment Date,
the principal amount of such Security so to be repaid shall be paid by the
Company, together with accrued interest, if any, to the Repayment Date;
provided, however, that coupons whose Stated Maturity is on or prior to the
Repayment Date shall be payable only at an office or agency located outside
the United States (except as otherwise provided in Section 1002) and, unless
otherwise specified pursuant to Section 301, only upon presentation and
surrender of such coupons; and provided further that, in the case of
Registered Securities, installments of interest, if any, whose Stated
Maturity is on or prior to the Repayment Date shall be payable (but without
interest thereon, unless the Company shall default in the payment thereof) to
the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 307.

                  If any Bearer Security surrendered for repayment shall not be
accompanied by all appurtenant coupons maturing after the Repayment Date, such
Security may be paid after deducting from the amount payable therefor as
provided in Section 1302 an amount equal to the face amount of all such missing
coupons, or the surrender of such missing coupon or coupons may be waived by the
Company and the Trustee if there be furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Security shall surrender to the Trustee or any
Paying Agent any such missing coupon in respect of which a deduction shall have
been made as provided in the preceding sentence, such Holder shall be entitled
to receive the amount so deducted; provided, however, that interest represented
by coupons shall be payable only at an office or agency located outside the
United States (except as otherwise provided in Section 1002) and, unless
otherwise specified as contemplated by Section 301, only upon presentation and
surrender of those coupons.

                  If the principal amount of any Security surrendered for
repayment shall not be so repaid upon surrender thereof, such principal amount
(together with interest, if any, thereon accrued to such Repayment Date) shall,
until paid, bear interest from the Repayment Date at the rate of interest or
Yield to Maturity (in the case of Original Issue Discount Securities) set forth
in such Security.

                  SECTION 1305. Securities Repaid in Part. Upon surrender of any
Registered Security which is to be repaid in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder of such
Security, without service charge and at the expense of the Company, a new
Registered Security or Securities of the same series, of any authorized
denomination specified by the Holder, in an aggregate principal amount equal to
and in exchange for the portion of the principal of such Security so surrendered
which is not to be repaid.

              ARTICLE FOURTEEN - DEFEASANCE AND COVENANT DEFEASANCE

                  SECTION 1401. Applicability of Article: Company's Option to
Effect Defeasance or Covenant Defeasance. If, pursuant to Section 301, provision
is made for either or both of (a) defeasance of the Securities of or within a
series under Section 1402 or (b) covenant defeasance of the Securities of or
within a series under Section 1403, then the provisions of such Section or
Sections, as the case may be, together with the other provisions of this Article
(with such modifications thereto as may be specified pursuant to Section 301
with respect to any Securities), shall be applicable to such Securities and any
coupons appertaining thereto, and the Company may at its option by Board
Resolution, at any time, with respect to such Securities and


                                   73


any coupons appertaining thereto, elect to have Section 1402 (if applicable)
or Section 1403 (if applicable) be applied to such Outstanding Securities and
any coupons appertaining thereto upon compliance with the conditions set
forth below in this Article.

                  SECTION 1402. Defeasance and Discharge. Upon the Company's
exercise of the above option applicable to this Section with respect to any
Securities of or within a series, the Company shall be deemed to have been
discharged from its obligations with respect to such Outstanding Securities and
any coupons appertaining thereto on the date the conditions set forth in Section
1404 are satisfied (hereinafter, "defeasance"). For this purpose, such
defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by such Outstanding Securities and any
coupons appertaining thereto, which shall thereafter be deemed to be
"Outstanding" only for the purposes of Section 1405 and the other Sections of
this Indenture referred to in clauses (A) and (B) below, and to have satisfied
all of its other obligations under such Securities and any coupons appertaining
thereto and this Indenture insofar as such Securities and any coupons
appertaining thereto are concerned (and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging the same), except for
the following which shall survive until otherwise terminated or discharged
hereunder: (A) the rights of Holders of such Outstanding Securities and any
coupons appertaining thereto to receive, solely from the trust fund described in
Section 1404 and as more fully set forth in such Section, payments in respect of
the principal of (and premium or Make-Whole Amount, if any) and interest, if
any, on such Securities and any coupons appertaining thereto when such payments
are due, (B) the Company's obligations with respect to such Securities under
Sections 305, 306, 1002 and 1003, (C) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and (D) this Article. Subject to compliance
with this Article Fourteen, the Company may exercise its option under this
Section notwithstanding the prior exercise of its option under Section 1403 with
respect to such Securities and any coupons appertaining thereto.

                  SECTION 1403. Covenant Defeasance. Upon the Company's exercise
of the above option applicable to this Section with respect to any Securities of
or within a series, the Company shall be released from its obligations under
Sections 1004 to 1009, inclusive, and, if specified pursuant to Section 301, its
obligations under any other covenant contained herein or in any indenture
supplemental hereto, with respect to such Outstanding Securities and any coupons
appertaining thereto on and after the date the conditions set forth in Section
1404 are satisfied (hereinafter, "covenant defeasance"), and such Securities and
any coupons appertaining thereto shall thereafter be deemed to be not
"Outstanding" for the purposes of any direction, waiver, consent or declaration
or Act of Holders (and the consequences of any thereof) in connection with
Sections 1004 to 1009, inclusive, or such other covenant, but shall continue to
be deemed "Outstanding" for all other purposes hereunder. For this purpose, such
covenant defeasance means that, with respect to such Outstanding Securities and
any coupons appertaining thereto, the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such Section or such other covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such Section or such other
covenant or by reason of reference in any such Section or such other covenant to
any other provision herein or in any other document and such omission to comply
shall not constitute a default or an Event of Default under Section 501(4) or
501(8) or otherwise, as the case may be, but, except as specified above, the
remainder of this Indenture and such Securities and any coupons appertaining
thereto shall be unaffected thereby.


                                   74


                  SECTION 1404. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of Section 1402 or Section
1403 to any Outstanding Securities of or within a series and any coupons
appertaining thereto:

                  (a) The Company shall irrevocably have deposited or caused to
                  be deposited with the Trustee (or another trustee satisfying
                  the requirements of Section 607 who shall agree to comply with
                  the provisions of this Article Fourteen applicable to it) as
                  trust funds in trust for the purpose of making the following
                  payments, specifically pledged as security for, and dedicated
                  solely to, the benefit of the Holders of such Securities and
                  any coupons appertaining thereto, (1) an amount in such
                  currency, currencies or currency unit in which such Securities
                  and any coupons appertaining thereto are then specified as
                  payable at Stated Maturity, or (2) Government Obligations
                  applicable to such Securities and coupons appertaining thereto
                  (determined on the basis of the currency, currencies or
                  currency unit in which such Securities and coupons
                  appertaining thereto are then specified as payable at Stated
                  Maturity) which through the scheduled payment of principal and
                  interest in respect thereof in accordance with their terms
                  will provide, not later than the due date of any payment of
                  principal of (and premium or Make-Whole Amount, if any) and
                  interest, if any, on such Securities and any coupons
                  appertaining thereto, money in an amount, or (3) a combination
                  thereof, in any case, in an amount, sufficient, without
                  consideration of any reinvestment of such principal and
                  interest, in the opinion of a nationally recognized firm of
                  independent public accountants expressed in a written
                  certification thereof delivered to the Trustee, to pay and
                  discharge, and which shall be applied by the Trustee (or other
                  qualifying trustee) to pay and discharge, (i) the principal of
                  (and premium or Make-Whole Amount, if any) and interest, if
                  any, on such Outstanding Securities and any coupons
                  appertaining thereto on the Stated Maturity of such principal
                  or installment of principal or interest and (ii) any mandatory
                  sinking fund payments or analogous payments applicable to such
                  Outstanding Securities and any coupons appertaining thereto on
                  the day on which such payments are due and payable in
                  accordance with the terms of this Indenture and of such
                  Securities and any coupons appertaining thereto.

                  (b) Such defeasance or covenant defeasance shall not result in
                  a breach or violation of, or constitute a default under, this
                  Indenture or any other material agreement or instrument to
                  which the Company is a party or by which it is bound.

                  (c) No Event of Default or event which with notice or lapse of
                  time or both would become an Event of Default with respect to
                  such Securities and any coupons appertaining thereto shall
                  have occurred and be continuing on the date of such deposit
                  or, insofar as Sections 501(6) and 501(7) are concerned, at
                  any time during the period ending on the 91st day after the
                  date of such deposit (it being understood that this condition
                  shall not be deemed satisfied until the expiration of such
                  period).

                  (d) In the case of an election under Section 1402, the Company
                  shall have delivered to the Trustee an Opinion of Counsel
                  stating that (i) the Company has received from, or there has
                  been published by, the Internal Revenue Service a


                                   75


                  ruling, or (ii) since the date of execution of this
                  Indenture, there has been a change in the applicable
                  Federal income tax law, in either case to the effect that,
                  and based thereon such opinion shall confirm that, the
                  Holders of such Outstanding Securities and any coupons
                  appertaining thereto will not recognize income, gain or
                  loss for Federal income tax purposes as a result of such
                  defeasance and will be subject to Federal income tax on the
                  same amounts, in the same manner and at the same times as
                  would have been the case if such defeasance had not
                  occurred.

                  (e) In the case of an election under Section 1403, the Company
                  shall have delivered to the Trustee an Opinion of Counsel to
                  the effect that the Holders of such Outstanding Securities and
                  any coupons appertaining thereto will not recognize income,
                  gain or loss for Federal income tax purposes as a result of
                  such covenant defeasance and will be subject to Federal income
                  tax on the same amounts, in the same manner and at the same
                  times as would have been the case if such covenant defeasance
                  had not occurred.

                  (f) The Company shall have delivered to the Trustee an
                  Officers' Certificate and an Opinion of Counsel, each stating
                  that all conditions precedent to the defeasance under Section
                  1402 or the covenant defeasance under Section 1403 (as the
                  case may be) have been complied with and an Opinion of Counsel
                  to the effect that either (i) as a result of a deposit
                  pursuant to subsection (a) above and the related exercise of
                  the Company's option under Section 1402 or Section 1403 (as
                  the case may be), registration is not required under the
                  Investment Company Act of 1940, as amended, by the Company,
                  with respect to the trust funds representing such deposit or
                  by the Trustee for such trust funds or (ii) all necessary
                  registrations under said Act have been effected.

                  (g) Notwithstanding any other provisions of this Section, such
                  defeasance or covenant defeasance shall be effected in
                  compliance with any additional or substitute terms, conditions
                  or limitations which may be imposed on the Company in
                  connection therewith pursuant to Section 301.

                  SECTION 1405. Deposited Money and Government Obligations to Be
Held in Trust; Other Miscellaneous Provisions. Subject to the provisions of the
last paragraph of Section 1003, all money and Government Obligations (or other
property as may be provided pursuant to Section 301) (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee, collectively
for purposes of this Section 1405, the "Trustee") pursuant to Section 1404 in
respect of any Outstanding Securities of any series and any coupons appertaining
thereto shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and any coupons appertaining thereto and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities and any coupons appertaining
thereto of all sums due and to become due thereon in respect of principal (and
premium or Make-Whole Amount, if any) and interest, but such money need not be
segregated from other funds except to the extent required by law.

                  Unless otherwise specified with respect to any Security
pursuant to Section 301, if, after a deposit referred to in Section 1404(a) has
been made, (a) the Holder of a Security in


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respect of which such deposit was made is entitled to, and does, elect
pursuant to Section 301 or the terms of such Security to receive payment in a
currency or currency unit other than that in which the deposit pursuant to
Section 1404(a) has been made in respect of such Security, or (b) a
Conversion Event occurs in respect of the currency or currency unit in which
the deposit pursuant to Section 1404(a) has been made, the indebtedness
represented by such Security and any coupons appertaining thereto shall be
deemed to have been, and will be, fully discharged and satisfied through the
payment of the principal of (and premium or Make-Whole Amount, if any), and
interest, if any, on such Security as the same becomes due out of the
proceeds yielded by converting (from time to time as specified below in the
case of any such election) the amount or other property deposited in respect
of such Security into the currency or currency unit in which such Security
becomes payable as a result of such election or Conversion Event based on the
applicable market exchange rate for such currency or currency unit in effect
on the second Business Day prior to each payment date, except, with respect
to a Conversion Event, for such currency or currency unit in effect (as
nearly as feasible) at the time of the Conversion Event.

                  The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the Government
Obligations deposited pursuant to Section 1404 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of such Outstanding Securities and any
coupons appertaining thereto.

                  Anything in this Article to the contrary notwithstanding,
subject to Section 606, the Trustee shall deliver or pay to the Company from
time to time upon Company Request any money or Government Obligations (or other
property and any proceeds therefrom) held by it as provided in Section 1404
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect a defeasance or covenant defeasance, as applicable, in
accordance with this Article.

               ARTICLE FIFTEEN - MEETINGS OF HOLDERS OF SECURITIES

                  SECTION 1501. Purposes for Which Meetings May Be Called. A
meeting of Holders of Securities of any series may be called at any time and
from time to time pursuant to this Article to make, give or take any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be made, given or taken by Holders of Securities
of such series.

         SECTION 1502.  Call, Notice and Place of Meetings.

                  (a) The Trustee may at any time call a meeting of Holders of
                  Securities of any series for any purpose specified in Section
                  1501, to be held at such time and at such place as the Trustee
                  shall determine. Notice of every meeting of Holders of
                  Securities of any series, setting forth the time and the place
                  of such meeting and in general terms the action proposed to be
                  taken at such meeting, shall be given, in the manner provided
                  in Section 106, not less than 20 nor more than 180 days prior
                  to the date fixed for the meeting.


                                   77


                  (b) In case at any time the Company, pursuant to a Board
                  Resolution, or the Holders of at least 25% in principal amount
                  of the Outstanding Securities of any series shall have
                  requested the Trustee to call a meeting of the Holders of
                  Securities of such series for any purpose specified in Section
                  1501, by written request setting forth in reasonable detail
                  the action proposed to be taken at the meeting, and the
                  Trustee shall not have made the first publication of the
                  notice of such meeting within 20 days after receipt of such
                  request or shall not thereafter proceed to cause the meeting
                  to be held as provided herein, then the Company or the Holders
                  of Securities of such series in the amount above specified, as
                  the case may be, may determine the time and the place for such
                  meeting and may call such meeting for such purposes by giving
                  notice thereof as provided in subsection (a) of this Section.

                  SECTION 1503. Persons Entitled to Vote at Meetings. To be
entitled to vote at any meeting of Holders of Securities of any series, a Person
shall be (1) a Holder of one or more Outstanding Securities of such series, or
(2) a Person appointed by an instrument in writing as proxy for a Holder or
Holders of one or more Outstanding Securities of such series by such Holder or
Holders. The only Persons who shall be entitled to be present or to speak at any
meeting of Holders of Securities of any series shall be the Persons entitled to
vote at such meeting and their counsel, any representatives of the Trustee and
its counsel and any representatives of the Company and its counsel.

                  SECTION 1504. Quorum; Action. The Persons entitled to vote a
majority in principal amount of the Outstanding Securities of a series shall
constitute a quorum for a meeting of Holders of Securities of such series;
provided, however, that if any action is to be taken at such meeting with
respect to a consent or waiver which this Indenture expressly provides may be
given by the Holders of not less than a specified percentage in principal amount
of the Outstanding Securities of a series, the Persons entitled to vote such
specified percentage in principal amount of the Outstanding Securities of such
series shall constitute a quorum. In the absence of a quorum within 30 minutes
after the time appointed for any such meeting, the meeting shall, if convened at
the request of Holders of Securities of such series, be dissolved. In any other
case the meeting may be adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at the reconvening of any such adjourned
meeting, such adjourned meeting may be further adjourned for a period of not
less than 10 days; at the reconvening of any meeting adjourned or further
adjourned for lack of a quorum, the persons entitled to vote 25% in aggregate
principal amount of the then Outstanding Securities shall constitute a quorum
for the taking of any action set forth in the notice of the original meeting.
Notice of the reconvening of any adjourned meeting shall be given as provided in
Section 1502(a), except that such notice need be given only once not less than
five days prior to the date on which the meeting is scheduled to be reconvened.

                  Except as limited by the proviso to Section 902, any
resolution presented to a meeting or adjourned meeting duly reconvened at which
a quorum is present as aforesaid may be adopted by the affirmative vote of the
persons entitled to vote a majority in aggregate principal amount of the
Outstanding Securities represented at such meeting; provided, however, that,
except as limited by the proviso to Section 902, any resolution with respect to
any request, demand, authorization, direction, notice, consent, waiver or other
action which this Indenture


                                   78


expressly provides may be made, given or taken by the Holders of a specified
percentage, which is less than a majority, in principal amount of the
Outstanding Securities of a series may be adopted at a meeting or an
adjourned meeting duly reconvened and at which a quorum is present as
aforesaid by the affirmative vote of the Holders of such specified percentage
in principal amount of the Outstanding Securities of that series.

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

                  Notwithstanding the foregoing provisions of this Section 1504,
if any action is to be taken at a meeting of Holders of Securities of any series
with respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that this Indenture expressly provides may be made, given
or taken by the Holders of a specified percentage in principal amount of all
Outstanding Securities affected thereby, or of the Holders of such series and
one or more additional series:

                  (i) there shall be no minimum quorum requirement for such
                  meeting; and

                  (ii) the principal amount of the Outstanding Securities of
                  such series that vote in favor of such request, demand,
                  authorization, direction, notice, consent, waiver or other
                  action shall be taken into account in determining whether such
                  request, demand, authorization, direction, notice, consent,
                  waiver or other action has been made, given or taken under
                  this Indenture.

         SECTION 1505. Determination of Voting Rights; Conduct and Adjournment
of Meetings.

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

                  (b) The Trustee shall, by an instrument in writing appoint a
                  temporary chairman of the meeting, unless the meeting shall
                  have been called by the Company or by Holders of Securities as
                  provided in Section 1502(b), in which


                                   79


                  case the Company or the Holders of Securities of the series
                  calling the meeting, as the case may be, shall in like
                  manner appoint a temporary chairman. A permanent chairman
                  and a permanent secretary of the meeting shall be elected
                  by vote of the Persons entitled to vote a majority in
                  principal amount of the Outstanding Securities of such
                  series represented at the meeting.

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

                  (d) Any meeting of Holders of Securities of any series duly
                  called pursuant to Section 1502 at which a quorum is present
                  may be adjourned from time to time by Persons entitled to vote
                  a majority in principal amount of the Outstanding Securities
                  of such series represented at the meeting, and the meeting may
                  be held as so adjourned without further notice.

                  SECTION 1506. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of Securities
of any series shall be by written ballots on which shall be subscribed the
signatures of the Holders of Securities of such series or of their
representatives by proxy and the principal amounts and serial numbers of the
Outstanding Securities of such series held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record, at least in duplicate, of
the proceedings of each meeting of Holders of Securities of any Series shall be
prepared by the secretary of the meeting and there shall be attached to said
record the original reports of the inspectors of votes on any vote by ballot
taken thereat and affidavits by one or more persons having knowledge of the
fact, setting forth a copy of the notice of the meeting and showing that said
notice was given as provided in Section 1502 and, if applicable, Section 1504.
Each copy shall be signed and verified by the affidavits of the permanent
chairman and secretary of the meeting and one such copy shall be delivered to
the Company and another to the Trustee to be preserved by the Trustee, the
latter to have attached thereto the ballots voted at the meeting. Any record so
signed and verified shall be conclusive evidence of the matters therein stated.

                  ARTICLE SIXTEEN - SUBORDINATION OF SECURITIES

                  SECTION 1601. Agreement to Subordinate. Notwithstanding
anything in this Indenture to the contrary (other than Article Four of this
Indenture), the Company covenants and agrees, and each Holder of a Security, by
his acceptance thereof, likewise covenants and agrees, that, to the extent and
in the manner hereinafter set forth in this Article, the Indebtedness
represented by the Securities and the payment of any Obligations with respect to
each and all of the Securities are hereby expressly made subordinate and subject
in right of payment to the prior payment in full of all Senior Debt.


                                   80


                  SECTION 1602. Payment Over of Proceeds upon Dissolution, Etc.
In the event of (a) any insolvency or bankruptcy case or Proceeding, or any
receivership, liquidation, reorganization or other similar case or Proceeding in
connection therewith, relative to the Company or to its creditors, as such, or
to its assets, or (b) any liquidation, dissolution or other winding up of the
Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshaling of assets and liabilities of the Company, then and in any
such event specified in (a), (b) or (c) above (each such event, if any, herein
sometimes referred to as a "Proceeding") (1) the holders of Senior Debt shall
first be entitled to receive payment in full of all Obligations due or to become
due on or in respect of all Senior Debt, or provision shall be made for such
payment in cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Senior Debt, before the Holders of the Securities are entitled to
receive any payment or distribution on account of principal of or premium, if
any, or interest on or other Obligations in respect of the Securities or on
account of any purchase, redemption or other acquisition of Securities by the
Company or any Subsidiary (individually and collectively, a "Securities
Payment"), and (2) any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities (other than Capital
Stock or securities of the Company as reorganized or readjusted, or securities
of the Company or any other corporation provided for by a plan of reorganization
or readjustment, the payment of which is subordinate, at least to the extent
provided in this Article Sixteen with respect to the Securities, to the payment
in full, without diminution or modification by such plan, of all Senior Debt),
to which the Holders would be entitled except for the provisions of this Article
Sixteen, shall be paid by the liquidating trustee or agent or other person
making such a payment or distribution, directly to the holders of Senior Debt)
(or their representative(s) or trustee(s) acting on their behalf), ratably
according to the aggregate amounts remaining unpaid on account of the principal
of or interest on and other amounts due on the Senior Debt held or represented
by each, to the extent necessary to make payment in full of all Senior Debt
remaining unpaid, after giving effect to any concurrent payment or distribution
to the holders of such Senior Debt.

                  In the event that, notwithstanding the foregoing provisions of
this Section 1601, the Trustee or the Holder of any Security shall have received
any payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (other than Capital Stock or securities
of the Company as reorganized or readjusted, or securities of the Company or any
other corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinate, at least to the extent provided in this Article
with respect to the Securities, to the payment in full, without diminution or
modification by such plan, of Senior Debt), before all Senior Debt is paid in
full or payment thereof provided for in cash or cash equivalents or otherwise in
a manner satisfactory to the holders of Senior Debt, such payment or
distribution shall be held in trust for the benefit of, and be paid over to, the
holders of the Senior Debt remaining unpaid (or their representative(s) or
trustee(s) acting on their behalf), ratably as aforesaid, for application to the
payment of such Senior Debt until such Senior Debt shall have been paid in full,
after giving effect to any concurrent payment or distribution to the holders of
such Senior Debt.

                  The consolidation of the Company with, or the merger of the
Company into, another Person or the liquidation or dissolution of the Company
following the conveyance or transfer of all or substantially all of its
properties and assets as an entirety to another Person upon the terms and
conditions set forth in Article Eight shall not be deemed a Proceeding for the

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purposes of this Section 1602 if the Person formed by such consolidation or
into which the Company is merged or the Person which acquires by conveyance
or transfer such properties and assets as an entirety, as the case may be,
shall, as a part of such consolidation, merger, conveyance or transfer,
comply with the conditions set forth in Article Eight.

                  SECTION 1603. No Payment When Senior Debt in Default. Anything
in this Indenture to the contrary notwithstanding, no payment on account of
principal of or redemption of, interest on or other amounts due on the
Securities, and no redemption, purchase, or other acquisition of the Securities,
shall be made by or on behalf of the Company (i) unless full payment of amounts
then due for principal and interest and of all other obligations then due on all
Senior Debt been made or duly provided for pursuant to the terms of the
instrument governing such Senior Debt, (ii) if, at the time of such payment,
redemption, purchase or other acquisition, or immediately after giving effect
thereto, there shall exist under any Senior Debt, or any agreement pursuant to
which any Senior Debt is issued, any default, which default shall not have been
cured or waived and which default shall have resulted in the full amount of such
Senior Debt being declared due and payable or (iii) if, at the time of such
payment, redemption, purchase or other acquisition, the Trustee shall have
received written notice from the holder or holders of any Senior Debt or their
representative or representatives (a "Payment Blockage Notice") that there
exists under such Senior Debt, or any agreement pursuant to which such Senior
Debt is issued, any default, which default shall not have been cured or waived,
permitting the holders thereof to declare the full amount of such Senior Debt
due and payable, but only for the period (the "Payment Blockage Period")
commencing on the date of receipt of the Payment Blockage Notice and ending
(unless earlier terminated by notice given to the Trustee by the Holders of such
Senior Debt) on the earlier of (A) the date on which such event of default shall
have been cured or waived or (B) 180 days from the receipt of the Payment
Blockage Notice. Upon termination of a Payment Blockage Period, payments on
account of principal of or interest on the Securities and redemptions, purchases
or other acquisitions may be made by or on behalf of the Company.
Notwithstanding anything herein to the contrary, (A) only one Payment Blockage
Notice may be given during any period of 360 consecutive days with respect to
the same event of default and any other events of default on the same issue of
Senior Debt existing and known to the person giving such notice at the time of
such notice and (B) no new Payment Blockage Period may be commenced by the
holder or holders of the same issue of Senior Debt or their representative or
representatives during any period of 360 consecutive days unless all events of
default which were the object of the immediately preceding Payment Blockage
Notice, and any other event of default on the same issue of Senior Debt existing
and known to the person giving such notice at the time of such notice, have been
cured or waived.

                  In the event that, notwithstanding the provisions of this
Section 1603, payments are made by or on behalf of the Company in contravention
of the provisions of this Section 1603, such payments shall be held by the
Trustee, any Paying Agent or the Holders, as applicable, in trust for the
benefit of, and shall be paid over to and delivered to, the holders of Senior
Debt or their representative or the trustee under the indenture or other
agreement (if any), pursuant to which any instruments evidencing any Senior Debt
may have been issued, as their respective interests may appear, for application
to the payment of all Senior Debt remaining unpaid to the extent necessary to
pay all Senior Debt in full in accordance with the terms of such Senior Debt,
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Debt.


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                  The provisions of this Section shall not apply to any payment
with respect to which Section 1602 would be applicable.

                  SECTION 1604. Reliance by Senior Debt on Subordination
Provisions. Each Holder of any Security by his acceptance thereof acknowledges
and agrees that the foregoing subordination provisions are, and are intended to
be, an inducement and a consideration for each holder of any Senior Debt,
whether such Senior Debt was created or acquired before or after the issuance of
the Securities, to acquire and continue to hold, or to continue to hold, such
Senior Debt, and such holder of Senior Debt shall be deemed conclusively to have
relied on such subordination provisions in acquiring and continuing to hold or
in continuing to hold such Senior Debt.

                  SECTION 1605. Subrogation to Rights of Holders of Senior Debt.
Subject to the payment in full of all Obligations due or to become due on or in
respect of Senior Debt, or the provision for such payment in cash or cash
equivalents or otherwise in a manner satisfactory to the holders of Senior Debt,
the Holders of the Securities shall be subrogated to the extent of the payments
or distributions made to the holders of such Senior Debt pursuant to the
provisions of this Article Sixteen to the rights of the holders of such Senior
Debt to receive payments and distributions of cash, property and securities
applicable to the Senior Debt until the principal of and premium, if any, and
interest on the Securities shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of the Senior Debt of
any cash, property or securities to which the Holders of the Securities or the
Trustee would be entitled except for the provisions of this Article Sixteen, and
no payments over pursuant to the provisions of this Article Sixteen to the
holders of Senior Debt by Holders of the Securities or the Trustee, shall, as
among the Company, its creditors other than holders of Senior Debt and the
Holders of the Securities, be deemed to be a payment or distribution by the
Company to or on account of the Senior Debt.

                  SECTION 1606. Provisions Solely to Define Relative Rights. The
provisions of this Article Sixteen are and are intended solely for the purpose
of defining the relative rights of the Holders of the Securities on the one hand
and the holders of Senior Debt on the other hand. Nothing contained in this
Article or elsewhere in this Indenture or in the Securities is intended to or
shall (a) impair, as among the Company, its creditors other than holders of
Senior Debt and the Holders of the Securities, the obligation of the Company,
which is absolute and unconditional (and which, subject to the rights under this
Article Sixteen of the holders of Senior Debt, is intended to rank equally with
all other general obligations of the Company), to pay to the Holders of the
Securities the principal of and premium, if any, and interest on the Securities
as and when the same shall become due and payable in accordance with their
terms; or (b) affect the relative rights against the Company of the Holders of
the Securities and creditors of the Company other than the holders of Senior
Debt; or (c) prevent the Trustee or the Holder of any Security from exercising
all remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article of the holders of
Senior Debt to receive cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder.

                  SECTION 1607. Trustee to Effectuate Subordination. Each Holder
of a Security by his acceptance thereof authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to effectuate,
as between the Holders of the Securities and the holders of Senior Debt, the
subordination provided in this Article Sixteen and appoints the


                                       83


Trustee his attorney-in-fact for any and all such purposes, including, in the
event of any dissolution, winding up or liquidation or reorganization under
any applicable bankruptcy law of the Company (whether in bankruptcy,
insolvency or receivership Proceedings or otherwise), the timely filing of a
claim for the unpaid balance of such Holder's Securities in the form required
in such Proceedings and the causing of such claim to be approved. If the
Trustee does not file a claim or proof of debt in the form required in such
Proceedings prior to 30 days before the expiration of the time to file such
claims or proofs, then the holders of Senior Debt, jointly, or their
representatives shall have the right to file an appropriate claim for and on
behalf of the Holders and to demand, sue for, collect, receive and receipt
for the payments and distributions in respect of the Securities which are
required to be paid or delivered to the holders of Senior Debt as provided in
this Article Sixteen and to take all such other action in the name of the
Holders or otherwise, as such holder of Senior Debt or representative thereof
may determine to be necessary or appropriate for the enforcement of the
provisions of this Article Sixteen.

                  SECTION 1608. No Waiver of Subordination Provisions. No right
of any present or future holder of any Senior Debt to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder or any representative or trustee
therefor, or by any non-compliance by the Company with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof any such holder
may have or be otherwise charged with.

                  Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Debt may, at any time from time to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article
Sixteen or the obligations hereunder of the Holders of the Securities to the
holders of Senior Debt, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, Senior Debt, or otherwise amend or supplement in any manner Senior Debt
or any instrument evidencing the same or any agreement under which Senior Debt
is outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Debt; (iii) release any Person
liable in any manner for the collection of Senior Debt and settle or compromise
Senior Debt (which, to the extent so settled and compromised, shall be deemed to
have been paid in full for all purposes hereof); (iv) apply any amounts received
to any liability of the Company owing to holders of Senior Debt; and (v)
exercise or refrain from exercising any rights against the Company and any other
Person.

                  SECTION 1609. Notice to Trustee. The Company shall give prompt
written notice to the Trustee of any default or event of default with respect to
any Senior Debt or of any fact known to the Company which would prohibit the
making of any payment to or by the Trustee in respect of the Securities pursuant
to the provisions of this Article Sixteen. Notwithstanding the provisions of
this Article Sixteen or any other provision of this Indenture, the Trustee shall
not be charged with knowledge of the existence of any facts which would prohibit
the making of any payment to or by the Trustee in respect of the Securities,
unless and until the Trustee shall have received written notice thereof from the
Company or a holder of Senior Debt or from any representative or trustee acting
on their behalf; and, prior to the receipt of any such written notice, the
Trustee, subject to the provisions of Section 612, shall be entitled


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in all respects to assume that no such facts exist; provided, however, that
if the Trustee shall not have received the notice provided for in this
Section at least three Business Days prior to the date upon which by the
terms hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of and premium, if any, or interest
on any Security), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive
such money and to apply the same to the purpose for which such money was
received and shall not be affected by any notice to the contrary which may be
received by it within three Business Days prior to such date. Nothing
contained in this Article Sixteen or any other Article of this Indenture or
in any of the Securities shall prevent (a) the Company, at any time except
during the pendency of any Proceeding, or under the conditions described in
Section 1603, from making payments at any time in respect of the Securities,
or (b) the application by the Trustee of any money deposited with it
hereunder to the payment of or on account of the Securities, or the retention
thereof by any Holder, if the Trustee did not have notice, as provided in
this Section 1609, that such payment would have been prohibited by the
provisions of this Article Sixteen.

                  Subject to the provisions of Section 612, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Debt (or a representative or
trustee therefor) to establish that such notice has been given by a holder of
Senior Debt (or a trustee therefor). In the event that the Trustee determines in
good faith that further evidence is required with respect to the right of any
Person as a holder of Senior Debt to participate in any payment or distribution
pursuant to this Article Sixteen, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Debt held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article Sixteen, and if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.

                  SECTION 1610. Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets of the Company
referred to in this Article Sixteen, the Trustee, subject to the provisions of
Section 612, and the Holders of the Securities shall be entitled to rely upon
any order or decree entered by any court of competent jurisdiction in which any
Proceeding is pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of creditors, agent or
other Person making such payment or distribution, delivered to the Trustee or to
the Holders of Securities, for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of the Senior Debt
and other indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article.

                  SECTION 1611. Trustee Not Fiduciary for Holders of Senior
Debt. The Trustee shall not be deemed to owe any fiduciary duty to the holders
of Senior Debt. Nothing contained in this Article Sixteen or elsewhere in this
Indenture, or in any of the Securities, shall prevent the application by the
Trustee of any moneys which were deposited with it hereunder, prior to its
receipt of written notice of facts which would prohibit such application, for
the purpose of the payment of or on account of the principal of or interest on,
the Securities unless, prior to the date


                                       85


on which such application is made by the Trustee, the Trustee shall be
charged with notice under Section 1609 hereof of the facts which would
prohibit the making of such application.

                  SECTION 1612. Rights of Trustee as Holder of Senior Debt;
Preservation of Trustee's Rights. The Trustee in its individual capacity shall
be entitled to all the rights set forth in this Article Sixteen with respect to
any Senior Debt which may at any time be held by it, to the same extent as any
other holder of Senior Debt, and nothing in this Indenture shall deprive the
Trustee of any of its rights as such holder. Nothing in this Article shall apply
to claims of, or payments to, the Trustee under or pursuant to Section 606.

                  SECTION 1613. Article Applicable to Paying Agents. In case at
any time any Paying Agent other than the Trustee shall have been appointed by
the Company and be then acting hereunder, the term "Trustee" as used in this
Article Sixteen shall in such case (unless the context otherwise requires) be
construed as extending to and including such Paying Agent within its meaning as
fully for all intents and purposes as if such Paying Agent were named in this
Article in addition to or in place of the Trustee; provided, however, that
Section 1612 shall not apply to the Company or any Affiliate of the Company if
it or such Affiliate acts as Paying Agent.

                  ARTICLE SEVENTEEN - CONVERSION OF SECURITIES

                  SECTION 1701. Applicability of Article; Conversion Privilege
and Conversion Price. Securities of any series which are convertible shall be
convertible in accordance with their terms and (except as otherwise specified as
contemplated by Section 301 for Securities of any series) in accordance with
this Article Seventeen. Subject to and upon compliance with the provisions of
this Article Seventeen, at any time during the period specified in the
Securities, at the option of the Holder thereof, any Security or any portion of
the principal amount thereof which is $1,000 or an integral multiple of $1,000
may be converted at the principal amount thereof, or of such portion thereof,
into fully paid and nonassessable shares (calculated as to each conversion to
the nearest 1/100 of a share) of Common Stock of the Company, at the Conversion
Price, determined as hereinafter provided, in effect at the time of conversion.
In case a Security or portion thereof is called for redemption, such conversion
right in respect of the Security or portion so called shall expire at the close
of business on the Business Day immediately preceding the Redemption Date,
unless the Company defaults in making the payment due upon redemption, in which
case such conversion right shall terminate on the date such default is cured.

                  The price at which shares of Common Stock shall be delivered
upon conversion (herein called the "Conversion Price") of Securities of any
series shall be specified in such Securities. The Conversion Price shall be
adjusted in certain instances as provided in Section 1704.

                  In case the Company shall, by dividend or otherwise, declare
or make a distribution on its Common Stock referred to in paragraph (4) of
Section 1704, the Holder of each Security, upon the conversion thereof pursuant
to this Article Seventeen subsequent to the close of business on the date fixed
for the determination of stockholders entitled to receive such distribution and
prior to the effectiveness of the Conversion Price adjustment in respect of such
distribution pursuant to paragraph (4) of Section 1704, shall be entitled to
receive for each share of Common Stock into which such Security is converted,
the portion of the evidence of


                                       86


indebtedness, shares of Capital Stock or assets so distributed applicable to
one share of Common Stock; provided, however, that, at the election of the
Company (whose election shall be evidenced by a Board Resolution filed with
the Trustee) with respect to all Holders so converting, the Company may, in
lieu of distributing to such Holder any portion of such distribution not
consisting of cash or securities of the Company, pay such Holder an amount in
cash equal to the fair market value thereof (as determined in good faith by
the Board of Directors, whose determination shall be conclusive and described
in a Board Resolution filed with the Trustee). If any conversion of a
Security entitled to the benefits described in the immediately preceding
sentence occurs prior to the payment date for a distribution to holders of
Common Stock which the Holder of the Security so converted is entitled to
receive in accordance with the immediately preceding sentence, the Company
may elect (such election to be evidenced by a Board Resolution filed with the
Trustee) to distribute to such Holder a due bill for the evidences of
indebtedness, shares of Capital Stock or assets to which such Holder is so
entitled, provided that such due bill (i) meets any applicable requirements
of the principal national securities exchange or other market on which the
Common Stock is then traded, and (ii) requires payment or delivery of such
evidences of indebtedness or assets no later than the date of payment or
delivery thereof to holders of Common Stock receiving such distribution.

                  SECTION 1702. Exercise of Conversion Privilege. In order to
exercise the conversion privilege, the Holder of any Security to be converted
shall surrender such Security, duly endorsed or assigned to the Company or in
blank, at any office or agency maintained by the Company pursuant to Section
1002, accompanied by written notice to the Company at such office or agency that
the Holder elects to convert such Security or, if less than the entire principal
amount thereof is to be converted, the portion thereof to be converted and shall
comply with any additional requirements set forth in such Security. Securities
surrendered for conversion during the period from the close of business on any
Regular Record Date next preceding any Interest Payment Date to the opening of
business on such Interest Payment Date shall (except for Securities the Maturity
of which is prior to such Interest Payment Date) be accompanied by payment in
New York Clearing House funds or other funds acceptable to the Company of an
amount equal to the interest payable on such Interest Payment Date on the
principal amount of Securities being surrendered for conversion and such
interest shall be paid on such Interest Payment Date as provided in Section 307.
Except as provided in the preceding sentence, no payment or adjustment shall be
made upon any conversion on account of any interest accrued on the Securities
surrendered for conversion or on account of any dividends on the Common Stock
issued upon conversion.

                  The Company's delivery to the Holder of the fixed number of
shares of the Common Stock of the Company (and any cash in lieu of any
fractional share of Common Stock) into which the Security is convertible shall
be deemed to satisfy the Company's obligation to pay the principal amount of the
Security and all accrued interest and original issue discount that has not
previously been paid. The shares of Common Stock of the Company so delivered
shall be treated as issued first in payment of accrued interest and original
issue discount and then in payment of principal. Thus, accrued interest and
original issue discount shall be treated as paid, rather than canceled,
extinguished or forfeited.

                  Securities shall be deemed to have been converted immediately
prior to the close of business on the day of surrender of such Securities for
conversion in accordance with the foregoing provisions, and at such time the
rights of the Holders of such Securities as Holders


                                       87


shall cease, and the Person or Persons entitled to receive the Common Stock
issuable upon conversion shall be treated for all purposes as the record
holder or holders of such Common Stock at such time. As promptly as
practicable on or after the conversion date, the Company shall issue and
shall deliver at such office or agency a certificate or certificates for the
number of full shares of Common Stock issuable upon conversion, together with
payment in lieu of any fraction of a share, as provided in Section 1703.

                  In the case of any Security which is converted in part only,
as promptly as practicable on or after the conversion date the Company shall
execute and the Trustee shall authenticate and make available for delivery to
the Holder thereof (or the Depositary in the case of a Global Security), at the
expense of the Company, a new Security or Securities, of authorized
denominations in aggregate principal amount equal to the unconverted portion of
the principal amount of such Security.

                  SECTION 1703. Fractions of Shares. No fractional shares of
Common Stock shall be issued upon conversion of Securities. If more than one
Security shall be surrendered for conversion at one time by the same Holder, the
number of full shares of Common Stock which shall be issuable upon conversion
thereof shall be computed on the basis of the aggregate principal amount of the
Securities (or specified portions thereof) so surrendered. Instead of any
fractional share of Common Stock which would otherwise be issuable upon
conversion of any Security or Securities (or specified portions thereof), the
Company shall pay a cash adjustment (rounded to the nearest cent) in respect of
such fraction in an amount equal to the same fraction of the Closing Price per
share of the Common Stock on the day of conversion (or, if such day is not a
Trading Day, on the Trading Day immediately preceding such day).

                  SECTION 1704. Adjustment of Conversion Price. The Conversion
Price shall be subject to adjustment from time to time as follows:

                  (1) If the Company pays or makes a dividend or other
                  distribution (a) on its Common Stock exclusively in Common
                  Stock or (b) on any other class of Capital Stock of the
                  Company, which dividend or distribution includes Common Stock
                  of the Company, the Conversion Price in effect at the opening
                  of business on the day following the date fixed for the
                  determination of stockholders entitled to receive such
                  dividend or other distribution (the "Dividend Record Date")
                  shall be reduced by multiplying such Conversion Price by a
                  fraction of which the numerator shall be the number of shares
                  of Common Stock of the Company outstanding at the close of
                  business on the Dividend Record Date and the denominator shall
                  be the sum of such number of shares and the total number of
                  shares constituting such dividend or other distribution. Such
                  reduction shall become effective immediately after the opening
                  of business on the day following the date fixed for such
                  determination. For the purposes of this paragraph (1), the
                  number of shares of Common Stock of the Company at any time
                  outstanding shall not include shares held in the treasury of
                  the Company, but shall include shares issuable in respect of
                  scrip certificates issued in lieu of fractions of shares of
                  Common Stock. The Company shall not pay any dividend or make
                  any distribution on shares of Common Stock held in the
                  treasury of the Company.


                                       88


                  (2) Subject to paragraph (6) of this Section, if the Company
                  pays or makes a dividend or other distribution on its Common
                  Stock consisting exclusively of Short Term Rights (as defined
                  below), or otherwise issues Short Term Rights to all holders
                  of its Common Stock, the Conversion Price in effect at the
                  opening of business on the day following the record date for
                  the determination of holders of Common Stock entitled to
                  receive such Short Term Rights (the "Rights Record Date")
                  shall be reduced by multiplying such Conversion Price by a
                  fraction of which the numerator shall be the number of shares
                  of Common Stock of the Company outstanding at the close of
                  business on the Rights Record Date plus the number of shares
                  of Common Stock of the Company which the aggregate of the
                  offering price of the total number of shares of Common Stock
                  so offered for subscription or purchase would purchase at such
                  current market price and the denominator shall be the number
                  of shares of Common Stock of the Company outstanding at the
                  close of business on the Rights Record Date plus the number of
                  shares of Common Stock so offered for subscription or
                  purchase. Such reduction shall become effective immediately
                  after the opening of business on the day following the Rights
                  Record Date. For the purposes of this paragraph (2), the
                  number of shares of Common Stock of the Company at any time
                  outstanding shall not include shares held in the treasury of
                  the Company, but shall include shares issuable in respect of
                  scrip certificates issued in lieu of fractions of shares of
                  Common Stock of the Company. The Company shall not issue any
                  rights, options or warrants in respect of shares of its Common
                  Stock held in the treasury of the Company. When used in this
                  Section 1704, the term "Short Term Rights" shall mean rights,
                  warrants or options entitling the holders thereof (for a
                  period commencing no earlier than the Rights Record Date and
                  expiring not more than 45 days after the Rights Record Date)
                  to subscribe for or purchase shares of Common Stock of the
                  Company at a price per share less than the current market
                  price per share (determined as provided in paragraph (7) of
                  this Section 1704) of the Common Stock of the Company on the
                  Rights Record Date.

                  (3) In case outstanding shares of Common Stock of the Company
                  shall be subdivided into a greater number of shares of Common
                  Stock, the Conversion Price in effect at the opening of
                  business on the day following the day upon which such
                  subdivision becomes effective shall be proportionately
                  reduced, and, conversely, in case outstanding shares of Common
                  Stock of the Company shall be combined into a smaller number
                  of shares of Common Stock, the Conversion Price in effect at
                  the opening of business on the day following the day upon
                  which such combination becomes effective shall be
                  proportionately increased, such reduction or increase, as the
                  case may be, to become effective immediately after the opening
                  of business on the day following the day upon which such
                  subdivision or combination becomes effective.

                  (4) Subject to the last sentence of this paragraph (4) of this
                  Section, if the Company, by dividend or otherwise, (a)
                  distributes to all holders of its Common Stock evidences of
                  its indebtedness, shares of any class of Capital Stock of the
                  Company or other assets (other than cash dividends out of
                  current or retained earnings), or (b) distributes to
                  substantially all holders of Common Stock rights or warrants
                  to subscribe for securities (other than Short Term Rights to
                  which


                                       89


                  paragraph (2) of this Section 1704 applies), the Conversion
                  Price shall be reduced by multiplying such Conversion Price
                  by a fraction of which the numerator shall be the current
                  market price per share determined as provided in paragraph
                  (7) of this Section 1704) of the Common Stock of the
                  Company on the Reference Date (as defined below) less the
                  fair market value (as determined in good faith by the Board
                  of Directors, whose determination shall be conclusive and
                  described in a Board Resolution filed with the Trustee), on
                  the Reference Date, of the portion of the evidences of
                  indebtedness and other assets so distributed or of such
                  subscription rights or warrants applicable to one share of
                  Common Stock (collectively, the "Market Value of the
                  Distribution") and the denominator shall be such current
                  market price per share of the Common Stock of the Company.
                  Such reduction shall become effective immediately prior to
                  the opening of business on the day (the "Reference Date")
                  following the later of (a) the date fixed for the payment
                  of such distribution and (b) the date 20 days after notice
                  relating to such distribution is required to be given
                  pursuant to Section 1706(a). If the Board of Directors
                  determines the fair market value of any distribution for
                  purposes of this paragraph (4) by reference to the actual
                  or when issued trading market for any securities comprising
                  such distribution, it must in doing so consider the prices
                  in such market over the same period used in computing the
                  current market price per share pursuant to paragraph (7) of
                  this Section 1704. In the event that, with respect to any
                  distribution to which this paragraph (4) of Section 1704
                  would otherwise apply, the Market Value of the Distribution
                  is greater than the current market price per share of the
                  Common Stock (such distribution being referred to herein as
                  an "Unadjusted Distribution"), then the adjustment provided
                  by this paragraph (4) shall not be made and in lieu thereof
                  the provisions of Section 1711 shall apply with respect to
                  such Unadjusted Distribution.

                  (5) The Company may, but shall not be required to, make such
                  reductions in the Conversion Price, in addition to those
                  required by paragraphs (1), (2), (3), and (4) of this Section
                  1704, as it considers to be advisable in order that any event
                  treated for Federal income tax purposes as a dividend of stock
                  or stock rights shall not be taxable to the recipients. In
                  addition, the Company, from time to time, may decrease the
                  Conversion Price by any amount and for any reason, temporarily
                  or otherwise, including situations where the Board of
                  Directors determines such decrease to be fair and appropriate
                  with respect to transactions in which holders of Common Stock
                  have the right to participate.

                  (6) Rights or warrants issued or distributed by the Company to
                  all holders of its Common Stock entitling the holders thereof
                  to subscribe for or purchase shares of Common Stock or
                  Preferred Stock, which rights or warrants (i) are deemed to be
                  transferred with such shares of Common Stock, (ii) are not
                  exercisable and (iii) are also issued or distributed in
                  respect of future issuances of Common Stock, in each case in
                  clauses (i) through (iii) until the occurrence of a specified
                  event or events ("Trigger Events"), shall for purposes of this
                  Section 1704 not be deemed issued or distributed until the
                  occurrence of the earliest Trigger Event. Each share of Common
                  Stock issued upon conversion of Securities pursuant to this
                  Article Seventeen shall be entitled to receive the appropriate
                  number of Common Stock


                                       90



                  purchase rights (the "Rights"), if any, and the certificates
                  representing the Common Stock issued upon conversion shall
                  bear such legends, if any[, in each case as provided by and
                  subject to the terms of the [Stockholders Rights Plan] adopted
                  by the Board of Directors on ______________ (the "Rights
                  Plan") as in effect at the time of such conversion].
                  Notwithstanding anything to the contrary in this Article
                  Seventeen, there shall not be any adjustment to the Conversion
                  Price as a result of (i) the distribution of separate
                  certificates representing the Rights; (ii) the occurrence of
                  certain events entitling holders of Rights to receive, upon
                  exercise thereof, Common Stock or other securities of the
                  Company or other securities of another corporation; or (iii)
                  the exercise of such Rights, all in accordance with the Rights
                  Plan. No adjustment in the Conversion Price need be made for
                  rights to purchase or the sale of Common Stock pursuant to a
                  company plan providing for reinvestment of dividends or
                  interest.

                  (7) For the purpose of any computation under paragraph (2),
                  (4) or (5) of this Section 1704, the "current market price"
                  per share of Common Stock of the Company on any date shall be
                  deemed to be the average of the daily Closing Prices for the
                  15 consecutive Trading Days selected by the Company commencing
                  not more than 30 Trading Days before, and ending not later
                  than, the date in question.

                  (8) No adjustment in the Conversion Price shall be required
                  unless such adjustment would require an increase or decrease
                  of at least 1% in the Conversion Price; provided, however,
                  that any adjustments which by reason of this paragraph (8) are
                  not required to be made shall be carried forward and taken
                  into account in any subsequent adjustment. All calculations
                  under this Article Seventeen shall be made to the nearest cent
                  or to the nearest one-hundredth of a share of Common Stock, as
                  the case may be.

                  (9) Anything herein to the contrary notwithstanding, in the
                  event the Company shall declare any dividend or distribution
                  requiring an adjustment in the Conversion Price hereunder and
                  shall, thereafter and before the payment of such dividend or
                  distribution to stockholders, legally abandon its plan to pay
                  such dividend or distribution, the Conversion Price then in
                  effect hereunder, if changed to reflect such dividend or
                  distribution, shall upon the legal abandonment of such plan be
                  changed to the Conversion Price which would have been in
                  effect at the time of such abandonment (after giving effect to
                  all other adjustments not so legally abandoned pursuant to the
                  provisions of this Article Seventeen) had such dividend or
                  distribution never been declared.

                  (10) Notwithstanding any other provision of this Section 1704,
                  no adjustment to the Conversion Price shall reduce the
                  Conversion Price below the then par value per share of the
                  Common Stock of the Company, and any such purported adjustment
                  shall instead reduce the Conversion Price to such par value.
                  Notwithstanding the foregoing sentence, the Company hereby
                  covenants that it will from time to time take all such action
                  as may be required to assure that the par value per share of
                  the Common Stock is at all times equal to or less than the
                  Conversion Price.


                                      91



                  (11) In the event that this Article Seventeen requires
                  adjustments to the Conversion Price under more than one of
                  paragraphs (1), (2), (3) or (4) of this Section 1704, and the
                  record or effective dates for the transaction giving rise to
                  such adjustments shall occur on the same date, then such
                  adjustments shall be made by applying (to the extent they are
                  applicable), first, the provisions of paragraph (3) of this
                  Section 1704, second, the provisions of paragraph (1) of this
                  Section 1704, third, the provisions of paragraph (4) of this
                  Section 1704 and, fourth, the provisions of paragraph (2) of
                  this Section 1704. Anything herein to the contrary
                  notwithstanding, no single event shall require or result in
                  duplicative adjustments in the Conversion Price pursuant to
                  this Section 1704. After an adjustment to the Conversion Price
                  under this Article Seventeen, any subsequent event requiring
                  an adjustment under this Article Seventeen shall cause an
                  adjustment to the Conversion Price as so adjusted. If, after
                  an adjustment, a Holder of a Security upon conversion of such
                  Security receives shares of two or more classes of Capital
                  Stock of the Company, the Conversion Price shall thereafter be
                  subject to adjustment upon the occurrence of an action taken
                  with respect to any such class of Capital Stock as is
                  contemplated by this Article Seventeen with respect to the
                  Common Stock in this Article Seventeen.

                  SECTION 1705. Notice of Adjustments of Conversion Price.
Whenever the Conversion Price is adjusted as herein provided:

                  (1) the Company shall compute the adjusted Conversion Price in
                  accordance with Section 1704 or Section 1711 and shall prepare
                  an Officer's Certificate setting forth the adjusted Conversion
                  Price and showing in reasonable detail the facts upon which
                  such adjustment is based, and such certificate shall forthwith
                  be filed (with a copy to the Trustee) at each office or agency
                  maintained for the purpose of conversion of any Securities
                  pursuant to Section 1002; and

                  (2) a notice stating that the Conversion Price has been
                  adjusted and setting forth the adjusted Conversion Price shall
                  forthwith be required, and as soon as practicable after it is
                  required, such notice shall be mailed by the Company to all
                  Holders at their last addresses as they shall appear in the
                  Security Register.

         SECTION 1706.  Notice of Certain Corporate Action.  In case:

                  (1) the Company shall take any action that would require a
                  Conversion Price adjustment pursuant to Section 1704 or
                  Section 1711; or

                  (2) there shall occur any reclassification of the Common Stock
                  of the Company (other than a subdivision or combination of its
                  outstanding shares of Common Stock), or any consolidation or
                  merger to which the Company is a party, or the sale, transfer
                  or lease of all or substantially all of the assets of the
                  Company and for which approval of any stockholders of the
                  Company is required; or

                  (3) there shall occur the voluntary or involuntary
                  dissolution, liquidation or winding up of the Company, then
                  the Company shall cause to be filed at each office or agency
                  maintained for the purpose of conversion of Securities
                  pursuant


                                      92



                  to Section 1002, and shall cause to be mailed to all Holders
                  at their last addresses as they shall appear in the Security
                  Register, at least 10 days prior to the applicable record,
                  effective or expiration date hereinafter specified, a notice
                  stating (x) the date on which a record is to be taken for the
                  purpose of any dividend, distribution or granting of rights,
                  warrants or options, or, if a record is not to be taken, the
                  date as of which the holders of Common Stock of record to be
                  entitled to such dividend, distribution, rights, options or
                  warrants are to be determined, or (y) the date on which such
                  reclassification, consolidation, merger, sale, transfer,
                  dissolution, liquidation or winding up is expected to become
                  effective, and, if applicable, the date as of which it is
                  expected that holders of Common Stock of record shall be
                  entitled to exchange their shares of Common Stock for
                  securities, cash or other property deliverable upon such
                  reclassification, consolidation, merger, sale, transfer,
                  dissolution, liquidation or winding up.

                  SECTION 1707. Company to Reserve Common Stock. The Company
shall at all times reserve and keep available, free from preemptive rights, out
of its authorized but unissued Common Stock, for the purpose of effecting the
conversion of Securities, a number of shares of Common Stock for the conversion
of all outstanding Securities of any series which is convertible into Common
Stock.

                  SECTION 1708. Taxes on Conversion. The Company will pay any
and all taxes that may be payable in respect of the issue or delivery of shares
of Common Stock on conversion of Securities pursuant hereto. The Company shall
not, however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of shares of Common Stock in a name
other than that of the Holder of the Security or Securities to be converted, and
no such issue or delivery shall be made unless and until the Person requesting
such issue has paid to the Company the amount of any such tax, or has
established to the satisfaction of the Company that such tax has been paid.

                  SECTION 1709. Covenants as to Common Stock. The Company
covenants that all shares of Common Stock which may be issued upon conversion of
Securities will upon issue be duly and validly issued, fully paid and
nonassessable, free of preemptive or any similar rights, and, except as provided
in Section 1708, the Company will pay all taxes, liens and charges with respect
to the issue thereof.

                  The Company will endeavor promptly to comply with all Federal
and state securities laws regulating the offer and delivery of shares of Common
Stock upon conversion of Securities, if any, and will list or cause to have
quoted such shares of Common Stock on each national securities exchange or in
the over-the-counter market or such other market on which the Common Stock is
then listed or quoted.

                  SECTION 1710. Cancellation of Converted Securities. All
Securities delivered for conversion shall be delivered to the Trustee to be
cancelled by or at the direction of the Trustee, which shall dispose of the same
as provided in Section 309.

                  SECTION 1711. Provisions in Case of Consolidation, Merger or
Sale of Assets; Special Distributions. If any of the following shall occur,
namely: (i) any reclassification or change of outstanding shares of Common Stock
issuable upon conversion of Securities (other


                                      93



than a change in par value, or from par value to no par value, or from no par
value to par value, or as a result of a subdivision or combination), (ii) any
consolidation or merger to which the Company is a party other than a merger in
which the Company is the continuing corporation and which does not result in any
reclassification of, or change (other than a change in name, or par value, or
from par value to no par value, or from no par value to par value or as a result
of a subdivision or combination) in, outstanding shares of Common Stock or (iii)
any sale or conveyance of all or substantially all of the property or business
of the Company as an entirety, then the Person formed by such consolidation or
resulting from such merger or which acquires such properties or assets, as the
case may be, shall as a condition precedent to such transaction execute and
deliver to the Trustee a supplemental indenture providing that the Holder of
each Security then outstanding shall have the right thereafter, during the
period such Security shall be convertible as specified in Section 1701, to
convert such Security only into the kind and amount of securities, cash and
other property receivable, if any, upon such consolidation, merger, sale,
transfer or lease by a holder of the number of shares of Common Stock of the
Company into which such Security might have been converted immediately prior to
such consolidation, merger, sale, transfer or lease; provided that the kind and
amount of securities, cash and other property so receivable shall be determined
on the basis of the following assumptions. The holder of Common Stock referred
to in the foregoing sentence:

                  (1) is not (a) a Person with which the Company consolidated,
                  (b) a Person into which the Company merged or which merged
                  into the Company, or (c) a Person to which such sale, transfer
                  or lease was made (any Person described in the foregoing
                  clauses (a), (b), or (c), hereinafter referred to as a
                  "Constituent Person"), or (d) an Affiliate of a Constituent
                  Person; and

                  (2) failed to exercise his rights of election, if any, as to
                  the kind or amount of securities, cash and other property
                  receivable upon such consolidation, merger, sale, transfer or
                  lease (provided that if the kind or amount of securities, cash
                  and other property receivable upon such consolidation, merger,
                  sale transfer or lease is not the same for each share of
                  Common Stock of the Company in respect of which such rights of
                  election shall not have been exercised, then for the purpose
                  of this Section 1711 the kind and amount of securities, cash
                  and other property receivable upon such consolidation, merger,
                  sale, transfer or lease shall be deemed to be the kind and
                  amount so receivable per share by a plurality of such shares
                  of Common Stock).

                  Such supplemental indenture shall provide for adjustments
which, for events subsequent to the effective date of such supplemental
indenture, shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article Seventeen. If, in the case of any such
consolidation, merger, sale transfer or lease the stock or other securities and
property (including cash) receivable thereupon by a holder of Common Stock
includes shares of stock or other securities and property of a corporation other
than the successor or purchasing corporation, as the case may be, in such
consolidation, merger, sale, transfer or lease then such supplemental indenture
shall also be executed by such other corporation and shall contain such
additional provisions to protect the interests of the Holders of the Securities
as the Board of Directors of the Company shall reasonably consider necessary by
reason of the foregoing. The above provisions of this Section 1711 shall
similarly apply to successive consolidations, mergers, sales, transfers or
leases.


                                      94



                  In the event the Company shall execute a supplemental
indenture pursuant to this Section 1711, the Company shall promptly file with
the Trustee an Officers' Certificate briefly stating the reasons therefor, the
kind or amount of shares of stock or securities or property (including cash)
receivable by Holders of the Securities upon the conversion of their Securities
after any such reclassification, change, consolidation, merger, sale, transfer
or lease and any adjustment to be made with respect thereto.

                  If the Company makes a distribution to all holders of its
Common Stock that constitutes an Unadjusted Distribution pursuant to the last
sentence of paragraph (4) of Section 1704, then, from and after the record date
for determining the holders of Common Stock entitled to receive such
distribution (the "Distribution Record Date"), a Holder of a Security who
converts such Security in accordance with the provisions of this Indenture
shall, upon conversion, be entitled to receive, in addition to the shares of
Common Stock into which the Security is convertible, the kind and amount of
evidences of indebtedness, shares of Capital Stock, or other assets or
subscription rights or warrants, as the case may be, comprising the distribution
that such Holder would have received if such Holder had converted the Security
immediately prior to the Distribution Record Date.

                  SECTION 1712. Trustee Adjustment Disclaimer; Company
Determination Final. The Trustee has no duty to determine when an adjustment
under this Article Seventeen should be made, how it should be made or what it
should be. The Trustee has no duty to determine whether a supplemental indenture
under Section 1711 need be entered into or whether any provisions of any
supplemental indenture are correct. The Trustee shall not be accountable for and
makes no representation as to the validity or value of any securities or assets
issued upon conversion of Securities. The Trustee shall not be responsible for
the Company's failure to comply with this Article Seventeen. Any determination
that the Company or the Board of Directors must make pursuant to this Article
Seventeen is conclusive, absent manifest error.

         SECTION 1713.  When No Adjustment Required.

                  (a) Except as expressly set forth in Section 1704, no
                  adjustment in the Conversion Price shall be made because the
                  Company issues, in exchange for cash, property or services,
                  shares of its Common Stock, or any securities convertible into
                  or exchangeable for shares of its Common Stock, or securities
                  (including warrants, rights and options) carrying the right to
                  subscribe for or purchase shares of its Common Stock or such
                  convertible or exchangeable securities.

                  (b) Notwithstanding anything herein to the contrary, no
                  adjustment in the Conversion Price shall be made pursuant to
                  Section 1704 in respect of any dividend or distribution if the
                  Holders may participate therein (on a basis to be determined
                  in good faith by the Board of Directors) and receive the same
                  consideration they would have received if they had converted
                  the Securities immediately prior to the record date with
                  respect to such dividend or distribution.

                  SECTION 1714. Equivalent Adjustments. In the event that, as a
result of an adjustment made pursuant to Section 1704 above, the holder of any
Security thereafter surrendered for conversion shall become entitled to receive
any shares of Capital Stock of the


                                      95



Company other than shares of its Common Stock, thereafter the Conversion Price
of such other shares so receivable upon conversion of any Securities shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to Common Stock
contained in this Article Seventeen.












                                      96



                              SIGNATURES AND SEALS

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

                                     APEX MORTGAGE CAPITAL, INC.

                                     By:_____________________________________
                                     [________________]
                                     [________________]
                                     Attest:____________________________
                                     Title:


                                     [                 ],
                                     as Trustee

                                     By:______________________________________
                                     Title:


                                     Attest:____________________________
                                     Title:


                                     97





                                 ACKNOWLEDGMENT

STATE OF [____________________])
                                                     ) ss:
COUNTY OF                      )



On the [_______________________] 200__, before me personally came
[_________________], to me known, who, being by me duly sworn, did depose and
say that he is the [__________________] of APEX MORTGAGE CAPITAL, INC., one of
the parties described in and which executed the foregoing instrument, and that
he signed his name thereto by authority of the Board of Directors.

[Notarial Seal]


- --------------------------------
Notary Public
Commission Expires



STATE OF [____________________])
                                                     ) ss:
COUNTY OF                      )



On the [____________________________] 200__, before me personally came
[_________________], to me known, who, being by me duly sworn, did depose and
say that he/she is a [______________] of [ ], one of the parties described in
and which executed the foregoing instrument, and that he/she signed his/her name
thereto by authority of the Board of Directors.

[Notarial Seal]

- --------------------------------
Notary Public
Commission Expires


                                       98



                                    EXHIBIT A

           FORM OF REDEEMABLE OR NON-REDEEMABLE SUBORDINATED SECURITY
                               [Face of Security]


                  [If the Holder of this Security (as indicated below) is The
Depository Trust Company ("DTC") or a nominee of DTC, this Security is a Global
Security and the following two legends apply:

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

                  UNLESS AND UNTIL THIS SECURITY IS EXCHANGED IN WHOLE OR IN
PART FOR SECURITIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY DTC TO A NOMINEE THEREOF OR BY A NOMINEE THEREOF TO DTC OR
ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A
NOMINEE OF SUCH SUCCESSOR.]

                  [If this Security is an Original Issue Discount Security,
insert -- FOR PURPOSES OF SECTION 1273 and 1275 OF THE UNITED STATES INTERNAL
REVENUE CODE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THIS SECURITY IS % OF ITS
PRINCIPAL AMOUNT, THE ISSUE DATE IS , 200_ [AND] THE YIELD TO MATURITY IS %.
[THE METHOD USED TO DETERMINE THE AMOUNT OF ORIGINAL ISSUE DISCOUNT APPLICABLE
TO THE SHORT ACCRUAL PERIOD OF _______, 20__ TO _________, 20__, IS ___% OF THE
PRINCIPAL AMOUNT OF THIS SECURITY.]

                           APEX MORTGAGE CAPITAL, INC.
                             [Designation of Series]

No. _______                                                             $_______

                  APEX MORTGAGE CAPITAL, INC., a Maryland corporation (herein
referred to as the "Company," which term includes any successor corporation
under the Indenture referred to on the reverse hereof), for value received,
hereby promises to pay to ______________________________ or registered assigns
the principal sum of _______ Dollars on _____________________ (the "Stated
Maturity Date") [or insert date fixed for earlier redemption (the "Redemption
Date," and together with the Stated Maturity Date with respect to principal
repayable on such date, the "Maturity Date.")]

                  [If the Security is to bear interest prior to Maturity, insert
- -- and to pay interest thereon from ______________ or from the most recent
Interest Payment Date to which interest


                                      99


has been paid or duly provided for, semi-annually on __________ and _________ in
each year (each, an "Interest Payment Date"), commencing __________, at the rate
of __% per annum, until the principal hereof is paid or duly provided for. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to the Holder in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, which shall be
the ________ or ______ (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date [at the office or agency of the Company
maintained for such purpose; provided, however, that such interest may be paid,
at the Company's option, by mailing a check to such Holder at its registered
address or by transfer of funds to an account maintained by such Holder within
the United States]. Any such interest not so punctually paid or duly provided
for shall forthwith cease to be payable to the Holder on such Regular Record
Date, and may be paid to the Holder in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or may be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in the Indenture. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.]

                  [If the Security is not to bear interest prior to Maturity,
insert -- The principal of this Security shall not bear interest except in the
case of a default in payment of principal upon acceleration, upon redemption or
at the [Stated] Maturity Date and in such case the overdue principal of this
Security shall bear interest at the rate of % per annum (to the extent that the
payment of such interest shall be legally enforceable), which shall accrue from
the date of such default in payment to the date payment of such principal has
been made or duly provided for. Interest on any overdue principal shall be
payable on demand. Any such interest on any overdue principal that is not so
paid on demand shall bear interest at the rate of % per annum (to the extent
that the payment of such interest shall be legally enforceable), which shall
accrue from the date of such demand for payment to the date payment of such
interest has been made or duly provided for, and such interest shall also be
payable on demand.]

                  The principal of this Security payable on the Stated Maturity
Date [or the principal of, premium or Make-Whole Amount, if any, and, if the
Redemption Date is not an Interest Payment Date, interest on this Security
payable on the Redemption Date] will be paid against presentation of this
Security at the office or agency of the Company maintained for that purpose in
___________________, in such coin or currency of the United States of America as
at the time of payment is legal tender for the payment of public and private
debts.

Interest payable on this Security on any Interest Payment Date and on the
[Stated] Maturity Date [or Redemption Date, as the case may be,] will include
interest accrued from and including the next preceding Interest Payment Date in
respect of which interest has been paid or duly provided for (or from and
including ____________, if no interest has been paid on this Security) to but
excluding such Interest Payment Date or the [Stated] Maturity Date [or
Redemption Date, as the case may be.] If any Interest Payment Date or the
[Stated] Maturity Date or [Redemption Date] falls on a day that is not a
Business Day, as defined below, principal, premium or Make-Whole


                                      100


Amount, if any, and/or interest payable with respect to such Interest Payment
Date or [Stated] Maturity Date [or Redemption Date, as the case may be,] will be
paid on the next succeeding Business Day with the same force and effect as if it
were paid on the date such payment was due, and no interest shall accrue on the
amount so payable for the period from and after such Interest Payment Date or
[Stated] Maturity Date [or Redemption Date, as the case may be.] "Business Day"
means any day, other than a Saturday or Sunday, on which banks in
__________________ are not required or authorized by law or executive order to
close.

                  [If this Security is a Global Security, insert -- All payments
of principal, premium or Make-Whole Amount, if any, and interest in respect of
this Security will be made by the Company in immediately available funds.]


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

                  Unless the Certificate of Authentication hereon has been
executed by the Trustee by manual signature of one of its authorized
signatories, this Security shall not be entitled to any benefit under the
Indenture, or be valid or obligatory for any purpose.

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

Dated:                              APEX MORTGAGE CAPITAL, INC.
      ------------------------
                                             By:
                                                --------------------------------
Attest:


- -------------------------------
Secretary




                                      101




                              [Reverse of Security]

                           APEX MORTGAGE CAPITAL, INC.


                  This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in one
or more series under an Indenture, dated as of _____________, 200_ (herein
called the "Indenture") between the Company and _________________, as Trustee
(herein called the "Trustee," which term includes any successor trustee under
the Indenture with respect to the series of which this Security is a part), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the duly authorized series
of Securities designated on the face hereof (collectively, the "Securities"),
[if applicable, insert -- and the aggregate principal amount of the Securities
to be issued under such series is limited to $______ (except for Securities
authenticated and delivered upon transfer of, or in exchange for, or in lieu of
other Securities).] All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.

                  If an Event of Default, as defined in the Indenture, shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.

         [If applicable, insert -- The Securities may not be redeemed prior to
the Stated Maturity Date.]

                  [If applicable, insert -- The Securities are subject to
redemption [ (l) (If applicable, insert -- on _________ in any year commencing
with the year ____ and ending with the year ____ through operation of the
sinking fund for this series at a Redemption Price equal to 100% of the
principal amount, and (2) ] [If applicable, insert -- at any time [on or after
___________], as a whole or in part, at the election of the Company, at the
following Redemption Prices (expressed as percentages of the principal amount):

                  If redeemed on or before _______, __% and if redeemed during
the 12-month period beginning _______ of the years indicated at the Redemption
Prices indicated below.


    Year            Redemption Price           Year          Redemption Price


and thereafter at a Redemption Price equal to __% of the principal amount,
together in the case of any such redemption [If applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date; provided, however, that installments of interest on this
Security whose Stated Maturity is on or prior to such Redemption Date will be
payable to the Holder of this Security, or one or more Predecessor Securities,
of record at the close of business on the relevant Record Dates referred to on
the face hereof, all as provided in the Indenture.]


                                      102


                  [If applicable, insert -- The Securities are subject to
redemption (1) on _______ in any year commencing with the year ____ and ending
with the year ____ through operation of the sinking fund for this series at the
Redemption Prices for redemption through operation of the sinking fund
(expressed as percentages of the principal amount) set forth in the table below,
and (2) at any time [on or after _______], as a whole or in part, at the
election of the Company, at the Redemption Prices for redemption otherwise than
through operation of the sinking fund (expressed as percentages of the principal
amount) set forth in the table below: If redeemed during the 12-month period
beginning ________ of the years indicated,


               Redemption Price for             Redemption Price for
                Redemption Through           Redemption Otherwise Than
             Operation of the Sinking          Through Operation of
Year                   Fund                      the Sinking Fund


and thereafter at a Redemption Price equal to ____% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date;
provided, however, that installments of interest on this Security whose Stated
Maturity is on or prior to such Redemption Date will be payable to the Holder of
this Security, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.]

                  [If applicable, insert -- Notwithstanding the foregoing, the
Company may not, prior to _______, redeem any Securities as contemplated by
[Clause (2) of] the preceding paragraph as a part of, or in anticipation of, any
refunding operation by the application, directly or indirectly, of moneys
borrowed having an interest cost to the Company (calculated in accordance with
generally accepted financial practice) of less than __% per annum.]

                  [If applicable, insert -- The sinking fund for the Securities
provides for the redemption on _______ in each year, beginning with the year
____ and ending with the year ____, of [not less than] $_______] [("mandatory
sinking fund") and not more than $_______] aggregate principal amount of the
Securities. [The Securities acquired or redeemed by the Company otherwise than
through [mandatory] sinking fund payments may be credited against subsequent
[mandatory] sinking fund payments otherwise required to be made in the [describe
order] order in which they become due.]]

                  Notice of redemption will be given by mail to Holders of
Securities, not less than 30 nor more than 60 days prior to the Redemption Date,
all as provided in the Indenture.

                  In the event of redemption of this Security in part only, a
new Security or Securities for the unredeemed portion hereof shall be issued in
the name of the Holder hereof upon the cancellation hereof.

                  [If applicable, insert conversion provisions set forth in any
Board Resolution or indenture supplemental to the Indenture.]


                                      103


                  The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities under
the Indenture at any time by the Company and the Trustee with the consent of the
Holders of not less than a majority of the aggregate principal amount of all
Securities issued under the Indenture at the time Outstanding and affected
thereby. The Indenture also contains provisions permitting the Holders of not
less than a majority of the aggregate principal amount of the Outstanding
Securities, on behalf of the Holders of all such Securities, to waive compliance
by the Company with certain provisions of the Indenture. Furthermore, provisions
in the Indenture permit the Holders of not less than a majority of the aggregate
principal amount, in certain instances, of the Outstanding Securities of any
series to waive, on behalf of all of the Holders of Securities of such series,
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and other
Securities issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.

                  No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium or Make-Whole Amount, if any) and interest on this Security at the
times, places and rate, and in the coin or currency, herein prescribed.

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

                  As provided in the Indenture and subject to certain
limitations therein [and herein] set forth, this Security is exchangeable for a
like aggregate principal amount of Securities of different authorized
denominations but otherwise having the same terms and conditions, as requested
by the Holder hereof surrendering the same.

                  This Security is subordinated to the prior payment in full in
cash of Senior Debt to the extent set forth in Article Sixteen of the Indenture.

                  The Securities of this series are issuable only in registered
form [without coupons] in denominations of $_______ and any integral multiple
thereof.

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

                  Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name


                                      104



this Security is registered as the owner hereof for all purposes, whether or not
this Security be overdue, and neither the Company, the Trustee nor any such
agent shall be affected by notice to the contrary.

                  No recourse shall be had for the payment of the principal of
or premium or Make-Whole Amount, if any, or the interest on this Security, or
for any claim based hereon, or otherwise in respect hereof, or based on or in
respect of the Indenture or any indenture supplemental thereto, against any
past, present or future stockholder, employee, officer or director, as such, of
the Company or of any successor, either directly or through the Company or any
successor, whether by virtue of any constitution, statute or rule of law or by
the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.

                  The Indenture and the Securities shall be governed by and
construed in accordance with the laws of [___________] applicable to agreements
made and to be performed entirely in such State.


                                      105

EX-8.1

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Exhibit 8.1

February 5, 2002

Apex Mortgage Capital, Inc.
865 South Figueroa Street
Los Angeles, California 90017

Re:

Certain Federal Income Tax Matters

Ladies and Gentlemen:

        We have acted as special tax counsel to Apex Mortgage Capital, Inc., a Maryland corporation (the "Company"), in connection with the preparation of the Company's Form S-3 registration statement (SEC File No. 333-81440) (including the documents incorporated therein by reference, the "Registration Statement") filed with the Securities and Exchange Commission on January 25, 2002 under the Securities Act of 1933, as amended (the "Securities Act").

        In formulating our opinions herein we have reviewed the Registration Statement and such certificates, including the officer's certificate dated as of the date of this opinion (the "Officer's Certificate"), records, and other documents, and statutes, rules, and regulations as we have deemed necessary or appropriate as a basis for the opinions set forth below. In conducting such review for purposes of rendering our opinions we have not conducted an independent investigation of any of the facts set forth in the Registration Statement, Officer's Certificate, or any other documents, records, or certificates, and have relied upon the Company's representations that the information presented in such documents, records, or certificates or otherwise furnished to us accurately represent and completely describe all material facts relevant to our opinions herein, and upon the authenticity of documents submitted to us as originals or certified copies, the accuracy of copies, the genuineness of all signatures and the legal capacity of all natural persons. No facts have come to our attention, however, that would cause us to question the accuracy and completeness of such facts or documents in a material way. We have also relied upon the opinion of Ballard Spahr Andrews & Ingersoll, Baltimore, Maryland, dated January 25, 2002, with respect to all matters of Maryland law.

        In rendering these opinions we have assumed that (i) the transactions described in or contemplated by any of the aforementioned documents have been or will be consummated in accordance with the operative documents, (ii) the Company has been and will continue to be organized and operated in the manner described in the Officer's Certificate, the Registration Statement, and the other relevant documents referred to above, and (iii) there have been no changes in the applicable laws of the State of Maryland, the Internal Revenue Code of 1986, as amended (the "Code"), the regulations promulgated thereunder by the Treasury Department (the "Treasury Regulations"), and the interpretations of the Code and Treasury Regulations by the courts and the Internal Revenue Service ("IRS"), all as they exist on the date of this letter. Any material change that is made after the date hereof in any of the foregoing bases for our opinions could affect our conclusions.

        Based upon and subject to the foregoing, we are of the opinion that:

        The Company has been organized and operated in conformity with the requirements for qualification as a real estate investment trust ("REIT") under the Code for its taxable years ended December 31, 1997 through December 31, 2000, and the Company's contemplated method of operations, as described in the Registration Statement, will enable it to satisfy the requirements for such qualification for its taxable year ending December 31, 2001, and each taxable year thereafter.

        The Company's qualification as a REIT under the Code will depend upon the Company's ability to meet, through actual operating results, distribution levels, diversity of stock ownership, and the various income and asset qualification tests imposed under the Code. Such operating results may not be reviewed by us, and accordingly, no assurance can be given that the actual results of the Company's operations for any one taxable year will satisfy the requirements for REIT qualification. Moreover, certain aspects of the Company's method of operations have not

been considered by the courts or the IRS. There can be no assurance that the courts or the IRS will agree with this opinion.

        We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. We also consent to the references to O'Melveny & Myers LLP under the caption "Legal Matters" in the Registration Statement. In giving this consent, we do not admit that we are in the category of persons whose consent is required by Section 7 of the Securities Act or the rules and regulations promulgated thereunder by the Securities and Exchange Commission.

        Other than as expressly stated above, we express no opinion on any issue relating to the Company or to any investment therein, or under any other law.

Respectfully submitted,

/s/ O'MELVENY & MYERS LLP

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Exhibit 8.1

EX-23.1

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Exhibit 23.1

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this Amendment No. 1 to Registration Statement No. 333-81440 of Apex Mortgage Capital, Inc. on Form S-3 of our report dated February 9, 2001, appearing in the Annual Report on Form 10-K of Apex Mortgage Capital, Inc. for the year ended December 31, 2000 and to the reference to us under the heading "Experts" in the related Prospectus.

/s/ DELOITTE & TOUCHE LLP

Los Angeles, California
February 5, 2002

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Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT