10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

|X| Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 2006   or   |_ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934  

Commission File Number: 001-31369

CIT GROUP INC.
(Exact name of Registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	65-1051192 (IRS Employer Identification Number)
505 Fifth Avenue, New York, New York (Address of Registrant’s principal executive offices)	10017 (Zip Code)
(212) 771-0505 (Registrant’s telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes |X| No |_ |

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. Large accelerated filer |X| Accelerated filer |_ | Non-accelerated filer |_ |.

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 under the Securities Exchange Act of 1934. Yes |_ | No |X|

As of July 28, 2006, there were 198,836,437 shares of the Registrant’s common stock outstanding.

CONTENTS

Part One—Financial Information:
ITEM 1. Consolidated Financial Statements	2
Consolidated Balance Sheets (Unaudited)	2
Consolidated Statements of Income (Unaudited)	3
Consolidated Statement of Stockholders’ Equity (Unaudited)	4
Consolidated Statements of Cash Flows (Unaudited)	5
Notes to Consolidated Financial Statements (Unaudited)	6-21
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk	22-57
Part Two—Other Information:
ITEM 1. Legal Proceedings	58
ITEM 1A. Risk Factors	58
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds	59
ITEM 3. Defaults Upon Senior Securities	59
ITEM 4. Submission of Matters to a Vote of Security Holders	59
ITEM 5. Other Information	60
ITEM 6. Exhibits	60
Signatures	61

 

TABLE OF CONTENTS 1

Part One—Financial Information

ITEM 1. Consolidated Financial Statements

CIT GROUP INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) – Assets (dollars in millions – except share data)

	June 30, 2006		December 31, 2005
Financing and leasing assets:
Finance receivables, including student lending receivables    pledged of $3,265.7 and $3,963.8	$ 49,306.1		$ 44,294.5
Reserve for credit losses	(638.0	)	(621.7	)
Net finance receivables	48,668.1		43,672.8
Operating lease equipment, net	10,583.6		9,635.7
Financing and leasing assets held for sale	1,340.6		1,620.3
Cash and cash equivalents, including $94.2 and $311.1 restricted	2,453.3		3,658.6
Retained interest in securitizations and other investments	1,128.1		1,152.7
Goodwill and intangible assets, net	1,033.6		1,011.5
Other assets	2,540.1		2,635.0
Total Assets	$ 67,747.4		$ 63,386.6

CONSOLIDATED BALANCE SHEETS (Unaudited) – Liabilities and Stockholders’ Equity

Debt:
Commercial paper	$   5,113.1		$   5,225.0
Deposits	1,395.1		261.9
Variable-rate senior unsecured notes	17,809.7		15,485.1
Fixed-rate senior unsecured notes	24,360.9		22,591.7
Non-recourse, secured borrowings – student lending	3,305.4		4,048.8
Preferred capital securities	251.2		252.0
Total debt	52,235.4		47,864.5
Credit balances of factoring clients	3,702.8		4,187.8
Accrued liabilities and payables	4,359.6		4,321.8
Total Liabilities	60,297.8		56,374.1
Commitments and Contingencies (Note 11)
Minority interest	38.7		49.8
Stockholders’ Equity:
Preferred stock: $0.01 par value, 100,000,000 authorized, Issued and outstanding:
Series A 14,000,000 with a liquidation preference of $25 per share	350.0		350.0
Series B 1,500,000 with a liquidation preference of $100 per share	150.0		150.0
Common stock: $0.01 par value, 600,000,000 authorized,
Issued: 212,484,564 and 212,315,498	2.1		2.1
Outstanding: 198,559,085 and 199,110,141
Paid-in capital, net of deferred compensation of $90.3 and $49.5	10,647.2		10,632.9
Accumulated deficit	(3,307.5	)	(3,691.4	)
Accumulated other comprehensive income	222.9		115.2
Less: treasury stock, 13,925,479 and 13,205,357 shares, at cost	(653.8	)	(596.1	)
Total Common Stockholders’ Equity	6,910.9		6,462.7
Total Stockholders’ Equity	7,410.9		6,962.7
Total Liabilities and Stockholders’ Equity	$ 67,747.4		$ 63,386.6

See Notes to Consolidated Financial Statements.

 

2 CIT GROUP INC

CIT GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (dollars in millions – except per share data)

	Quarters Ended June 30,				Six Months Ended June 30,
	2006		2005		2006		2005
Finance revenue	$       1,379.3		$       1,100.7		$       2,673.9		$       2,128.7
Interest expense	677.7		467.8		1,276.0		859.3
Net finance revenue	701.6		632.9		1,397.9		1,269.4
Depreciation on operating lease equipment	256.2		241.2		505.6		478.8
Net finance revenue after depreciation on operating lease equipment	445.4		391.7		892.3		790.6
Provision for credit losses	48.2		47.2		81.5		92.5
Finance revenue, net of interest expense, depreciation and credit provision	397.2		344.5		810.8		698.1
Other revenue	303.5		332.6		563.6		609.1
Total revenue, net of interest expense, depreciation and credit provision	700.7		677.1		1,374.4		1,307.2
Salaries and general operating expenses	344.8		268.8		667.9		532.8
Provision for restructuring	–		25.2		11.1		25.2
Income before provision for income taxes	355.9		383.1		695.4		749.2
Provision for income taxes	(111.9	)	(132.9	)	(213.2	)	(270.5	)
Minority interest, after tax	(0.5	)	(1.1	)	(1.3	)	(2.0	)
Net income before preferred stock dividends	243.5		249.1		480.9		476.7
Preferred stock dividends	(7.5	)	–		(15.2	)	–
Net income available to common stockholders	$          236.0		$          249.1		$          465.7		$          476.7
Per common share data
Basic earnings per share	$            1.18		$            1.18		$            2.34		$            2.26
Diluted earnings per share	$            1.16		$            1.16		$            2.28		$            2.22
Number of shares – basic (thousands)	199,189		210,506		199,308		210,581
Number of shares – diluted (thousands)	203,923		214,699		204,172		214,894
Dividends per share	$            0.20		$            0.16		$            0.40		$            0.29

See Notes to Consolidated Financial Statements.

 

ITEM 1: CONSOLIDATED FINANCIAL STATEMENTS 3

CIT GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (Unaudited) (dollars in millions)

	Preferred Stock	Common Stock	Paid-in Capital		Accumulated (Deficit) / Earnings		Accumulated Other Comprehensive Income / (Loss)		Treasury Stock		Total Stockholders’ Equity
December 31, 2005	$500.0	$2.1	$ 10,632.9		$(3,691.4	)	$115.2		$(596.1	)	$ 6,962.7
Net income before preferred stock dividends					480.9						480.9
Foreign currency translation adjustments							40.7				40.7
Change in fair values of derivatives
qualifying as cash flow hedges							72.3				72.3
Unrealized gain on equity and
securitization investments, net							(5.3	)			(5.3	)
Total comprehensive income											588.6
Cash dividends – common					(81.8	)					(81.8	)
Cash dividends – preferred					(15.2	)					(15.2	)
Restricted stock expense			22.3								22.3
Stock option expense			16.9								16.9
Treasury stock purchased, at cost									(180.4	)	(180.4	)
Exercise of stock option awards,
including tax benefits			(24.9	)					120.8		95.9
Employee stock purchase plan participation									1.9		1.9
June 30, 2006	$500.0	$2.1	$ 10,647.2		$(3,307.5	)	$222.9		$(653.8	)	$ 7,410.9

See Notes to Consolidated Financial Statements.

 

4 CIT GROUP INC

CIT GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (dollars in millions)

	Six Months Ended June 30,
	2006		2005
Cash Flows From Operations
Net income before preferred stock dividends	$      480.9		$      476.7
Adjustments to reconcile net income to net cash flows from operations:
Depreciation and amortization	522.8		499.9
Share-based compensation amortization	39.2		23.1
Provision for deferred federal income taxes	65.3		216.8
Provision for credit losses	81.5		92.5
Gains on equipment, receivable and investment sales	(151.5	)	(164.3	)
Decrease/(increase) in other assets	90.9		(41.6	)
Decrease/(increase) in finance receivables held for sale	180.3		278.8
(Decrease)/increase in accrued liabilities and payables	(401.5	)	194.8
Other	(71.5	)	(78.3	)
Net cash flows provided by operations	836.4		1,498.4
Cash Flows From Investing Activities
Finance receivables extended and purchased	(38,331.4	)	(29,313.6	)
Principal collections of finance receivables	30,272.5		25,024.9
Proceeds from asset and receivable sales	3,313.1		3,056.5
Purchases of assets to be leased	(1,369.3	)	(985.1	)
Acquisitions, net of cash acquired	(122.3	)	(152.6	)
Goodwill and intangible assets acquired	(31.5	)	(60.0	)
Net increase in short-term factoring receivables	(103.9	)	(165.9	)
Other	(22.2	)	167.2
Net cash flows (used for) investing activities	(6,395.0	)	(2,428.6	)
Cash Flows From Financing Activities
Proceeds from the issuance of unsecured notes, deposits and non-recourse student lending borrowings	11,397.6		7,656.4
Repayments of unsecured notes, deposits and non-recourse student lending borrowings	(6,547.5	)	(5,626.4	)
Net decrease in commercial paper	(111.9	)	(957.6	)
Net repayments of non-recourse leveraged lease debt	(72.8	)	16.2
Cash dividends paid	(97.0	)	(61.9	)
Excess tax benefit related to share-based compensation	17.1		–
Other	(15.3	)	(75.0	)
Net cash flows provided by financing activities	4,570.2		951.7
Net (decrease) increase in cash and cash equivalents	(988.4	)	21.5
Unrestricted cash and cash equivalents, beginning of period	3,347.5		2,210.2
Unrestricted cash and cash equivalents, end of period	$   2,359.1		$   2,231.7
Supplementary Cash Flow Disclosure
Interest paid	$   1,082.0		$      759.4
Federal, foreign, state and local income taxes paid, net	$        90.8		$        48.3

See Notes to Consolidated Financial Statements.

 

ITEM 1: CONSOLIDATED FINANCIAL STATEMENTS 5

CIT GROUP INC. AND SUBSIDIARIES – NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CIT Group Inc., a Delaware corporation (“we,” “CIT” or the “Company”), is a global commercial and consumer finance company that was founded in 1908. CIT provides financing and leasing capital for consumers and companies in a wide variety of industries, offering vendor, equipment, commercial, factoring, home lending, student lending and structured financing products, as well as management advisory services. CIT operates primarily in North America, with locations in Europe, Latin America, Australia and the Asia-Pacific region.

These financial statements have been prepared in accordance with the instructions to Form 10-Q, do not include all of the information and note disclosures required by accounting principles generally accepted in the United States (“GAAP”) and should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2005 as updated on Form 8-K on May 31, 2006 for certain changes in segment reporting. Financial statements in this Form 10-Q have not been audited by the independent registered public accounting firm in accordance with the standards of the Public Company Accounting Oversight Board (U.S.), but in the opinion of management include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of CIT’s financial position and results of operations.

In the Consolidated Statements of Cash Flows commencing in the second quarter of 2006, the Company includes the extension, purchase, principal collection and sales cash flows related to student loans in “Finance receivables extended and purchased,” “Principal collections of finance receivables” and “Proceeds from asset and receivable sales” in “Cash flows from Investing Activities”. The presentation of the corresponding 2005 amounts, “Net Loans extended — pledged in conjuction with secured borrowings”, which was previously presented in “Cash Flows from Financing Activities”, ($0.4 billion of loans extended and purchased, reduced by $0.1 billion of principal collections) has been conformed to the 2006 presentation.

In July 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position (“FSP”) No. FAS 13-2, “Accounting for a Change or Projected Change in the Timing of Cash Flows Relating to Income Taxes Generated by a Leveraged Lease Transaction”. FSP 13-2 is effective as of the first fiscal year that begins after December 15, 2006. The adoption of FAS 13-2 is not expected to have a material impact on the Company’s financial statements.

In June 2006, the FASB issued FASB Interpretation No. 48 (“FIN 48”) “Accounting for Uncertainty in Income Taxes.” FIN 48, which defines criterion for recognition and measurement of income tax benefits in a Company’s financial statements, is effective for fiscal years beginning after December 15, 2006. The Company is evaluating the impact of the standard.

In March 2006, the FASB issued SFAS No. 156, “Accounting for Servicing of Financial Assets”. SFAS 156 is effective as of the first fiscal year that begins after September 15, 2006. The adoption of SFAS 156 is not expected to have a material impact on the Company’s financial statements.

In February 2006, the FASB issued SFAS No. 155, “Accounting for Certain Hybrid Financial Instruments”. SFAS 155 is effective for all financial instruments acquired or issued after the beginning of the first fiscal year that begins after September 15, 2006. The implementation of SFAS 155 is not expected to have a material impact on the Company’s financial statements.

In February 2006, the FASB issued FSP No. FAS 123(R)-4, “Classification of Options and Similar Instruments Issued as Employee Compensation That Allow for Cash Settlement upon the Occurrence of a Contingent Event” (“FSP 123 (R)-4”). The implementation of FSP 123 (R)-4 did not have a material financial statement impact on the Company, as there are no present plans to allow cash settlement on stock options.

NOTE 2 – STOCK-BASED COMPENSATION

Stock-based compensation is awarded to CIT employees and directors under the “Long-Term Equity Compensation Plan” as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005.

On January 1, 2006, the Company adopted the revision to SFAS No. 123, “Share-Based Payment” (“FAS 123R”), which requires the recognition of compensation expense for all stock-based compensation plans. As a result, salaries and general operating expenses for the quarter ended June 30, 2006 include $6.6 million of compensation expense related to employee stock option plans and employee stock purchase plans ($4.0 million after tax, $0.02 diluted EPS). Salaries and general operating expenses for the six months ended June 30, 2006 include $16.9 million of compensation expense related to employee stock option plans and employee stock purchase plans ($10.4 million after tax, $0.05 diluted EPS). Compensation expense is recognized over the vesting period (requisite service period), generally three years, under the graded vesting method, whereby each vesting tranche of the award is amortized separately as if each were a separate award. The compensation expense assumes a 2% forfeiture rate.

The Company utilized the modified prospective transition method in the adoption of FAS 123R and therefore: (1) the current quarter expense applies to 2006 awards and the unvested awards as of December 31, 2005, and (2) the comparable compensation expense for the quarter and six months ended June 30, 2005 is presented on a proforma basis in the table below as if CIT had accounted for employee stock option plans and employee stock purchase plans under the fair value method of FAS 123R:

(dollars in millions except per share data)

	Quarter Ended June 30, 2005		Six Months Ended June 30, 2005
Net income available for common
shareholders as reported	$   249.1		$   476.7
Stock-based compensation expense –
fair value method, after tax	(4.8	)	(9.9	)
Proforma net income (loss)	$   244.3		$   466.8
Basic earnings per share as reported	$     1.18		$     2.26
Basic earnings per share proforma	$     1.16		$     2.22
Diluted earnings per share as reported	$     1.16		$     2.22
Diluted earnings per share proforma	$     1.14		$     2.17

 

6 CIT GROUP INC

CIT GROUP INC. AND SUBSIDIARIES – NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The estimated fair value for the 872,874 options awarded in 2006 was $9.7 million ($11.47 per option), based on the Black Scholes valuation model. The assumptions underlying these awards are presented in the following table on a weighted-average basis:

	Quarter Ended June 30, 2006		Six Months Ended June 30, 2006
Share price	$55.15		$51.88
Exercise price	$55.15		$51.88
Expected term (years)	4.11		4.17
Volatility	23.56	%	23.10	%
Dividend yield	1.45	%	1.54	%
Risk-free interest rate	4.92	%	4.36	%

For employees other than 16(b) officers (selected senior executives), the expected term is equal to the vesting period of the options plus two years. For 16(b) officers, the expected life calculation is calculated using the safe harbor methodology. For each tranche, the expected life is equal to the average of the vesting period and the full term. The volatility assumption is equal to the median volatility of a peer group using weekly closing prices for the historical period commensurate with the expected term, averaged with the implied volatility for CIT’s publicly traded options. The dividend yield reflects the Company’s current dividend yield. The risk free interest rate reflects the implied yield available on US Treasury zero-coupon issues (as of the grant date for each grant) with a remaining term equal to the expected term of the options.

Additional information regarding employee stock options as of, and for the six months ended June 30, 2006 is presented in the table that follows:

All Options (dollars in millions, except per option data)

	Options		Weighted Average Price Per Option	Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Outstanding at beginning of period	17,470,879		$37.80	6.99
Granted	872,874		$51.88	6.58
Exercised	(2,662,526	)	$27.35
Forfeited	(78,136	)	$44.71
Outstanding at end of period	15,603,091		$40.34	6.49	$186.5
Options exercisable at end of period	8,608,400		$40.98	5.31	$97.4

The unrecognized pretax compensation cost related to employee stock options was $22.7 million at June 30, 2006, which is expected to be recognized in earnings over a weighted-average period of 1.6 years. The total intrinsic value (in-the-money value to employees), before taxes, related to options exercised during the six months ended June 30, 2006 was $68.6 million and the related cash received by the Company was $72.2 million. The Company’s tax benefit related to these employee gains was $17.1 million.

Net income for the quarters ended June 30, 2006 and 2005 as reported also included $7.4 million and $6.3 million of after-tax compensation cost related to restricted stock and performance share awards, while the costs for the six month periods were $13.9 million and $14.1 million respectively. Additional information regarding restricted stock and performance share programs as of, and for the six months ended June 30, 2006 is presented in the table that follows:

Restricted Stock/Performance Shares

	Shares		Weighted Average Grant Date Fair Value Per Share
Outstanding at beginning of period	3,154,292		$35.05
Granted	888,533		$53.84
Vested	(176,670	)	$30.60
Forfeited	(189,575	)	$39.94
Outstanding at end of period	3,676,580		$39.79

 

ITEM 1: CONSOLIDATED FINANCIAL STATEMENTS 7

CIT GROUP INC. AND SUBSIDIARIES – NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – EARNINGS PER COMMON SHARE

Basic earnings per common share (“EPS”) is computed by dividing net income by the weighted-average number of common shares outstanding for the period. The diluted EPS computation includes the potential impact of dilutive securities, including stock options and restricted stock grants. The dilutive effect of stock options is computed using the treasury stock method, which assumes the repurchase of common shares by CIT at the average market price for the period. Options that do not have a dilutive effect are not included in the denominator and averaged approximately 13.4 million shares and 16.1 million shares for the quarters ended June 30, 2006 and 2005 and 13.8 million shares and 16.5 million shares for the six months ended June 30, 2006 and 2005, respectively.

The reconciliation of the numerator and denominator of basic EPS with that of diluted EPS is presented below:

(dollars in millions, except per common share amounts, which are in whole dollars; weighted-average common share balances are in thousands)

	Quarter Ended June 30, 2006			Quarter Ended June 30, 2005
	Income (Numerator)	Shares (Denominator)	Per Share Amount	Income (Numerator)	Shares (Denominator)	Per Share Amount
Basic EPS:
Income available to common stockholders	$236.0	199,189	$1.18	$249.1	210,506	$1.18
Effect of Dilutive Securities:
Restricted shares		1,130			890
Performance Shares		1,156			644
Stock options		2,448			2,659
Diluted EPS	$236.0	203,923	$1.16	$249.1	214,699	$1.16
	Six Months Ended June 30, 2006			Six Months Ended June 30, 2005
	Income (Numerator)	Shares (Denominator)	Per Share Amount	Income (Numerator)	Shares (Denominator)	Per Share Amount
Basic EPS:
Income available to common stockholders	$465.7	199,308	$2.34	$476.7	210,581	$2.26
Effect of Dilutive Securities:
Restricted shares		1,102			883
Performance Shares		1,144			537
Stock options		2,618			2,893
Diluted EPS	$465.7	204,172	$2.28	$476.7	214,894	$2.22

NOTE 4 – BUSINESS SEGMENT INFORMATION

Effective January 1, 2006, segment reporting was modified in conjunction with certain business realignment initiatives. We have made name changes to clarify the market focus of our segments: (a) Specialty Finance – Commercial has been renamed Vendor Finance, (b) Specialty Finance – Consumer has been renamed Consumer & Small Business Lending, (c) Commercial Services has been renamed Trade Finance, and (d) Capital Finance has been renamed Transportation Finance. The Small Business Lending unit was transferred from Vendor Finance to Consumer & Small Business Lending, reflecting commonalities with our home lending and student loan businesses. Consistent with our strategic focus on industry alignment, the former Equipment Finance segment has been consolidated into our Corporate Finance segment, and a $350 million diversified industry portfolio within the former Equipment Finance segment was transferred to Vendor Finance. This combination will allow us to provide corporate clients access to the full complement of CIT’s products and services.

Prior periods have been conformed to the current format, except for the above-mentioned diversified industry portfolio transfer, as it was determined to be impracticable to do so in accordance with SFAS 131.

 

8 CIT GROUP INC

CIT GROUP INC. AND SUBSIDIARIES – NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in millions)

	Vendor Finance		Consumer & Small Business Lending		Trade Finance		Corporate Finance		Transportation Finance		Total Segments		Corporate and Other		Consolidated
For the Quarter Ended June 30, 2006
Net finance revenue	$      264.5		$        84.7		$      37.2		$      143.6		$      174.2		$      704.2		$  (2.6	)	$      701.6
Depreciation on operating lease equipment	137.4		–		–		7.9		110.9		256.2		–		256.2
Provision for credit losses	15.7		17.4		5.1		(3.6	)	1.4		36.0		12.2		48.2
Other revenue	98.8		42.4		69.7		58.4		33.2		302.5		1.0		303.5
Provision for income taxes	(42.9	)	(18.7	)	(25.9	)	(42.1	)	(6.0	)	(135.6	)	23.7		(111.9	)
Net income (loss) available (attributable)
to common stockholders	81.2		31.7		42.8		80.0		66.7		302.4		(66.4	)	236.0
For the Quarter Ended June 30, 2005
Net finance revenue	$      282.9		$        57.3		$      33.4		$      117.2		$      136.1		$      626.9		$     6.0		$      632.9
Depreciation on operating lease equipment	142.6		–		–		13.2		85.4		241.2		–		241.2
Provision for credit losses	19.2		15.8		5.5		8.9		–		49.4		(2.2	)	47.2
Other revenue	73.0		43.2		69.4		78.1		8.7		272.4		60.2		332.6
Provision for income taxes	(42.8	)	(16.5	)	(26.2	)	(47.0	)	(3.6	)	(136.1	)	3.2		(132.9	)
Net income (loss) available (attributable)
to common stockholders	67.1		25.1		42.6		77.6		38.9		251.3		(2.2	)	249.1
At and for the Six Months Ended June 30, 2006
Net finance revenue	$      530.8		$      165.4		$      74.2		$      268.8		$      359.1		$   1,398.3		$  (0.4	)	$   1,397.9
Depreciation on operating lease equipment	273.9		–		–		16.5		215.2		505.6		–		505.6
Provision for credit losses	28.6		32.9		11.7		(5.3	)	1.4		69.3		12.2		81.5
Other revenue	183.6		81.6		139.4		118.4		39.3		562.3		1.3		563.6
Provision for income taxes	(87.1	)	(37.3	)	(52.0	)	(83.3	)	(10.8	)	(270.5	)	57.3		(213.2	)
Net income (loss) available (attributable)
to common stockholders	155.7		62.1		86.1		147.2		124.6		575.7		(110.0	)	465.7
Total financing and leasing assets	8,887.9		18,396.3		6,468.5		16,557.7		10,947.7		61,258.1		–		61,258.1
Total managed assets	12,728.7		19,120.1		6,468.5		18,679.0		10,947.7		67,944.0		–		67,944.0
At and for the Six Months Ended June 30, 2005
Net finance revenue	$      556.1		$      112.4		$      61.7		$      239.2		$      269.0		$   1,238.4		$   31.0		$   1,269.4
Depreciation on operating lease equipment	283.5		–		–		27.5		167.9		478.9		(0.1	)	478.8
Provision for credit losses	32.1		29.5		12.1		21.0		0.4		95.1		(2.6	)	92.5
Other revenue	144.0		71.9		136.4		133.6		13.9		499.8		109.3		609.1
Provision for income taxes	(82.3	)	(31.8	)	(48.4	)	(85.4	)	(14.3	)	(262.2	)	(8.3	)	(270.5	)
Net income available to
common stockholders	134.2		47.8		79.9		140.6		65.5		468.0		8.7		476.7
Total financing and leasing assets	9,459.4		12,166.1		6,417.2		12,740.4		9,835.2		50,618.3		–		50,618.3
Total managed assets	13,256.6		13,193.7		6,417.2		15,375.5		9,835.2		58,078.2		–		58,078.2

 

ITEM 1: CONSOLIDATED FINANCIAL STATEMENTS 9

CIT GROUP INC. AND SUBSIDIARIES – NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 – CONCENTRATIONS

The following table summarizes the geographic and industry compositions (by obligor) of financing and leasing portfolio assets.

(dollars in millions)

	June 30, 2006			December 31, 2005
Geographic	Amount	Percent		Amount	Percent
Northeast	$11,569.0	18.9	%	$10,544.8	19.0	%
West	11,243.4	18.4	%	10,445.8	18.8	%
Midwest	10,378.9	16.9	%	9,479.7	17.0	%
Southeast	8,841.2	14.4	%	7,749.5	13.9	%
Southwest	5,755.0	9.4	%	5,604.4	10.1	%
Total US	47,787.5	78.0	%	43,824.2	78.8	%
Canada	3,682.5	6.0	%	3,384.7	6.1	%
Other international	9,788.1	16.0	%	8,371.8	15.1	%
Total	$61,258.1	100.0	%	$55,580.7	100.0	%
	June 30, 2006			December 31, 2005
Industry	Amount	Percent		Amount	Percent
Consumer based lending – home mortgage	$  9,503.2	15.5	%	$  8,335.7	15.0	%
Manufacturing(1)(5)	7,551.4	12.3	%	7,185.3	12.9	%
Consumer based lending – student lending	7,120.5	11.6	%	5,267.8	9.5	%
Commercial airlines (including regional airlines)	6,714.8	11.0	%	6,322.3	11.4	%
Retail(2)	6,560.9	10.7	%	6,426.9	11.6	%
Service industries	3,612.9	5.9	%	3,096.5	5.6	%
Transportation(3)	2,731.0	4.5	%	2,543.6	4.6	%
Healthcare	2,691.3	4.4	%	2,123.7	3.8	%
Wholesaling	2,407.2	3.9	%	1,878.7	3.4	%
Consumer based lending – non-real estate(4)	1,676.9	2.7	%	1,834.4	3.3	%
Communications	1,320.7	2.2	%	1,244.0	2.2	%
Other (no industry greater than 2.5%)(5)	9,367.3	15.3	%	9,321.8	16.7	%
Total	$61,258.1	100.0	%	$55,580.7	100.0	%

(1) Includes manufacturers of apparel (1.8%), followed by food and kindred products, chemical and allied products, rubber and plastics, industrial machinery and equipment, textiles, transportation equipment, and other industries.

(2) Includes retailers of apparel (4.3%) and general merchandise (3.6%).

(3) Includes rail, bus, over-the-road trucking industries and business aircraft.

(4) Includes receivables from consumers for products in various industries such as manufactured housing, recreational vehicles, marine and computers and related equipment.

(5) Total exposure to manufacturers of automobile and related suppliers included in Manufacturing and Other was less than 1% of total financing and leasing assets at June 30, 2006.

 

10 CIT GROUP INC

CIT GROUP INC. AND SUBSIDIARIES – NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 – RETAINED INTERESTS IN SECURITIZATIONS AND OTHER INVESTMENTS

The following table details the components of retained interests in securitizations and other investments.

(Dollars in millions)

	June 30, 2006	December 31, 2005
Retained interests in commercial loans:
Retained subordinated securities	$   375.4	$   426.8
Interest-only strips	386.0	387.2
Cash reserve accounts	326.1	276.8
Total retained interests in commercial loans	1,087.5	1,090.8
Retained interests in consumer loans:
Retained subordinated securities	38.5	45.6
Interest-only strips	2.1	–
Total retained interests in consumer loans	40.6	45.6
Total retained interests in securitizations	1,128.1	1,136.4
Aerospace equipment trust certificates and other	–	16.3
Total	$1,128.1	$1,152.7

NOTE 7 – ACCUMULATED OTHER COMPREHENSIVE INCOME

The following table details the components of accumulated other comprehensive income, net of tax.

(Dollars in millions)

	June 30, 2006		December 31, 2005
Changes in fair values of derivatives qualifying as cash flow hedges	$   99.9		$   27.6
Foreign currency translation adjustments	114.2		73.5
Minimum pension liability adjustments	(3.2	)	(3.2	)
Unrealized gain on equity investments and securitization interests	12.0		17.3
Total accumulated other comprehensive income	$ 222.9		$ 115.2

The changes in fair values of derivatives qualifying as cash flow hedges related to variations in market interest rates during the six months, as these derivatives hedge the interest rate variability associated with an equivalent amount of variable-rate debt, including commercial paper. See Note 8 for additional information. The change in foreign currency translation adjustments during the six months reflects the strengthening of various foreign currencies during the period, particularly the Euro, the Canadian Dollar, and the British Pound, partially offset by corresponding hedging activity on an after tax basis.

Total comprehensive income for the quarters ended June 30, 2006 and 2005 was $315.3 million and $188.3 million and for the six months ended June 30, 2006 and 2005 was $588.6 million and $505.5 million, respectively.

The Company executes derivative transactions to hedge economic exposures. The majority of these transactions qualify for hedge accounting and are summarized in the tables immediately following.

 

ITEM 1: CONSOLIDATED FINANCIAL STATEMENTS 11

CIT GROUP INC. AND SUBSIDIARIES – NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 – DERIVATIVE FINANCIAL INSTRUMENTS

The following table presents the notional principal amounts of interest rate swaps by class and the corresponding hedged positions.

(Dollars in millions)

June 30, 2006	December 31, 2005	Hedged Item	Hedge Classification
Variable-rate to fixed-rate swaps(1)
$1,950.4	$3,260.2	Cash flow variability related to forecasted commercial paper issuances	Cash flow
8,044.8	4,935.2	Cash flow variability associated with specific variable-rate debt	Cash flow
$9,995.2	$8,195.4	Total
Fixed-rate to variable-rate swaps(2)
$12,205.7	$10,320.1	Specific fixed-rate debt	Fair value

(1)	CIT pays a fixed rate of interest and receives a variable rate of interest. These swaps hedge the cash flow variability associated with forecasted commercial paper issuances and specific variable-rate debt.
(2)	CIT pays a variable rate of interest and receives a fixed rate of interest. These swaps hedge specific fixed-rate debt instruments.

In addition to the swaps in the table above, CIT had $1.5 billion in notional amount of interest rate swaps outstanding with securitization trusts at June 30, 2006 to protect the trusts against interest rate risk. CIT entered into offsetting swap transactions with third parties totaling $1.5 billion in notional amount at June 30, 2006 to insulate the Company from the related interest rate risk.

The following table presents the notional principal amounts of cross-currency swaps by class and the corresponding hedged positions.

(Dollars in millions)

June 30, 2006	December 31, 2005	Hedged Item	Hedge Classification	Description
$3,066.2	$2,623.0	Foreign denominated debt	Foreign currency fair value	CIT pays a US variable rate of interest and receives a foreign variable rate of interest. These swaps hedge the fair value changes in foreign currency associated with specific foreign denominated debt and are designated as foreign currency fair value hedges.
249.5	249.5	Foreign denominated fixed-rate debt	Foreign currency cash flow	CIT pays a US fixed rate of interest and receives a foreign fixed rate of interest. These swaps hedge the currency cash flow variability associated with payments on specific foreign denominated fixed-rate debt and are designated as foreign currency cash flow hedges.
153.8	100.0	Foreign currency loans to subsidiaries	Foreign currency cash flow	CIT receives a US fixed rate of interest and pays a foreign fixed rate of interest. These swaps hedge the currency cash flow variability associated with payments on specific fixed-rate foreign denominated inter-company receivables and are designated as foreign currency cash flow hedges.
5.5	5.3	Foreign currency loans to subsidiaries	Foreign currency fair value	CIT receives a US variable rate of interest and pays a foreign variable rate of interest. These swaps hedge the fair value currency changes associated with specific foreign denominated variable-rate inter-company receivables and are designated as foreign currency fair value hedges.
$3,475.0	$2,977.8	Total

 

12 CIT GROUP INC

CIT GROUP INC. AND SUBSIDIARIES – NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

CIT sells various foreign currencies forward. These contracts are designated as either cash flow hedges of specific foreign denominated inter-company receivables or as net investment hedges of foreign denominated investments in subsidiaries. The following table presents the notional principal amounts of foreign currency forward exchange contracts and the corresponding hedged positions.

(Dollars in millions)

June 30, 2006	December 31, 2005	Hedged Item	Hedge Classification
$1,096.1	$1,579.6	Foreign currency loans to subsidiaries	Foreign currency cash flow
4,248.8	2,844.9	Foreign currency equity investments in subsidiaries	Foreign currency net investment
$5,344.9	$4,424.5	Total

CIT uses both the “short-cut” method and the “long-haul” method to assess hedge effectiveness. The short-cut method is typically applied to certain interest rate swaps used for fair value and cash flow hedges of term debt. This method allows for the assumption of no hedge ineffectiveness if a set of strict criteria are met at the inception of the derivative, including matching of the critical terms of the debt instrument and the derivative. As permitted under the short-cut method, no further assessment of hedge effectiveness is performed for these transactions.

The long-haul method is typically applied to other interest rate swaps, non-compound cross-currency swaps and foreign currency forward exchange contracts. For those hedging relationships in which the critical terms of the entire debt instrument and the derivative are identical, and the creditworthiness of the counterparty to the hedging instrument remains sound, there is an expectation of no hedge ineffectiveness so long as those conditions continue to be met. For hedges where we use the long-haul method to assess hedge effectiveness, we document, both at inception and over the life of the hedge, at least quarterly, our analysis of actual and expected hedge effectiveness. For hedges of forecasted commercial paper transactions, more extensive analysis using techniques such as regression analysis are used to demonstrate that the hedge has been, and is expected to be, highly effective in off-setting corresponding changes in the cash flows of the hedged item. For hedges of foreign currency net investment positions we apply the “forward” method whereby effectiveness is assessed and measured based on the amounts and currencies of the individual hedged net investments and notional amounts and underlying currencies of the derivative contract.

During the fourth quarter of 2005, CIT executed a natural gas commodity swap whereby CIT receives based on a fixed rate and pays based on an index. This swap hedges forecasted index-based revenues from a specific energy generation facility for 24 months and is accounted for as a cash flow hedge. The fair value of the swap at June 30, 2006 totaled $5.1 million up from ($2.6) million at December 31, 2005. Approximately $0.1 million (pretax decrease to earnings) of ineffectiveness was recorded during the quarter. The remaining change in fair value (effective portion) was recorded in Other Comprehensive Income.

The table that follows summarizes the notional amount of economic hedges that do not qualify for hedge accounting under SFAS 133.

(Dollars in millions)

June 30, 2006	December 31, 2005	Type of Swaps / Caps
$   118.0	$   118.0	Credit default swaps
294.8	246.5	Compound cross-currency swaps
1,049.4	936.4	US dollar interest rate swaps
6.8	6.8	Interest rate caps
$1,469.0	$1,307.7	Total

During 2005 and 2004, CIT entered into credit default swaps, with terms of 5 years, to economically hedge certain CIT credit exposures. The change in the fair value adjustment for the quarter and six months ended June 30, 2006 amounted to a $0.1 million pretax gain and $1.7 million pretax loss, respectively. CIT also has certain cross-currency swaps, certain US dollar interest rate swaps, and interest rate caps that are economic hedges of certain interest rate and foreign currency exposures. The mark-to-market adjustment relating to these derivatives for the quarter and six months ended June 30, 2006 amounted to a $0.3 million pretax increase and $0.9 million pretax decrease to earnings.

The components of the adjustment to Accumulated Other Comprehensive Income for derivatives qualifying as hedges of future cash flows are presented in the following table.

(Dollars in millions)

	Fair Value of Derivatives	Income Tax Effects		Total Unrealized Gain
Balance at December 31, 2005 – unrealized gain	$  48.4	$(20.8	)	$27.6
Changes in values of derivatives qualifying as cash flow hedges	118.5	(46.2	)	72.3
Balance at June 30, 2006 – unrealized gain	$166.9	$(67.0	)	$99.9

 

ITEM 1: CONSOLIDATED FINANCIAL STATEMENTS 13

CIT GROUP INC. AND SUBSIDIARIES – NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The unrealized gain as of and for the six months ended June 30, 2006 reflects higher market interest rates since the inception of the hedges. The Accumulated Other Comprehensive Income (along with the corresponding swap asset or liability) will be adjusted as market interest rates change over the remaining lives of the swaps. Assuming no change in interest rates, approximately $24.4 million, net of tax, of the Accumulated Other Comprehensive Income as of June 30, 2006 is expected to be reclassified to earnings over the next twelve months as contractual cash settlements are made.

Hedge ineffectiveness occurs in certain cash flow hedges, and was recorded as an adjustment to interest expense, as presented in the following table.

(Dollars in millions)

	Ineffectiveness	Increase/ Decrease to Interest Expense
For the quarter ended June 30, 2006	$0.1	Increase
For the quarter ended June 30, 2005	$1.7	Increase
For the six months ended June 30, 2006	–	–
For the six months ended June 30, 2005	$0.6	Decrease

NOTE 9 – CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

CIT is a partner with Dell Inc. (“Dell”) in Dell Financial Services L.P. (“DFS”), a joint venture that offers financing to Dell’s customers. The joint venture provides Dell with financing and leasing capabilities that are complementary to its product offerings and provides CIT with a source of new financings. The joint venture agreement provides Dell with the option to purchase CIT’s 30% equity interest in DFS in February 2008 based on a formula tied to DFS profitability, within a range of $100 million to $345 million. CIT has the right to purchase a minimum percentage of DFS’s finance receivables on a declining scale through January 2010.

CIT regularly purchases finance receivables from DFS at a premium, portions of which are typically securitized within 90 days of purchase from DFS. CIT has limited recourse to DFS on defaulted contracts. In accordance with the joint venture agreement, net income and losses generated by DFS as determined under GAAP are allocated 70% to Dell and 30% to CIT. The DFS board of directors voting representation is equally weighted between designees of CIT and Dell, with one independent director. DFS is not consolidated in CIT’s financial statements and is accounted for under the equity method. At June 30, 2006 and December 31, 2005, financing and leasing assets related to the DFS program included in the CIT Consolidated Balance Sheet (but excluding certain related international receivables originated directly by CIT) were approximately $1.4 billion and $2.0 billion, and securitized assets included in managed assets were approximately $2.4 billion and $2.5 billion, respectively. CIT’s total investment, including loans to and equity in the joint venture, was approximately $194 million and $214 million at June 30, 2006 and December 31, 2005.

CIT also has a joint venture arrangement with Snap-on Incorporated (“Snap-On”) that has a similar business purpose and model to the DFS arrangement described above, including limited credit recourse on defaulted receivables. The agreement with Snap-On was extended until January 2009. CIT and Snap-On each have 50% ownership interests, 50% board of directors’ representation, and share income and losses equally. The Snap-On joint venture is accounted for under the equity method and is not consolidated in CIT’s financial statements. Financing and leasing assets were approximately $1.0 billion and securitized assets included in managed assets were $0.1 billion at both June 30, 2006 and December 31, 2005. In addition to the owned and securitized assets purchased from the Snap-On joint venture, CIT’s equity investment in and loans to the joint venture were approximately $7 million and $14 million at June 30, 2006 and December 31, 2005.

Since December 2000, CIT has been a joint venture partner with Canadian Imperial Bank of Commerce (“CIBC”) in an entity that is engaged in asset-based lending in Canada. Both CIT and CIBC have a 50% ownership interest in the joint venture, and share income and losses equally. This entity is not consolidated in CIT’s financial statements and is accounted for under the equity method. CIT’s investment in and loans to the joint venture were approximately $311 million and $280 million at June 30, 2006 and December 31, 2005.

CIT invests in various trusts, partnerships, and limited liability corporations established in conjunction with structured financing transactions of power and infrastructure and other equipment projects. CIT’s interests in certain of these entities were acquired by CIT in a 1999 acquisition, and others were subsequently entered into in the normal course of business. Other assets included approximately $16 million and $19 million of investments in non-consolidated entities relating to such transactions that are accounted for under the equity or cost methods at June 30, 2006 and December 31, 2005.

Certain shareholders of CIT provide investment management, banking and investment banking services to CIT in the normal course of business.

 

14 CIT GROUP INC

CIT GROUP INC. AND SUBSIDIARIES – NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 – POSTRETIREMENT AND OTHER BENEFIT PLANS

The following table discloses various components of pension expense.

	For the Quarters Ended June 30,				For the Six Months Ended June 30,
Retirement Plans	2006		2005		2006		2005
Service cost	$ 5.2		$ 4.9		$ 10.4		$   9.9
Interest cost	4.6		4.3		9.1		8.6
Expected return on plan assets	(5.2	)	(4.8	)	(10.4	)	(9.6	)
Amortization of net (gain) loss	0.6		0.7		1.2		1.4
Net periodic benefit cost	5.2		5.1		10.3		10.3
Loss due to settlements and curtailments	–		0.5		–		0.5
Cost for special termination benefits(1)	–		2.3		0.6		2.3
Net amount recognized	$ 5.2		$ 7.9		$ 10.9		$ 13.1
Postretirement Plans
Service cost	$ 0.5		$ 0.5		$   1.1		$   1.1
Interest cost	0.9		0.8		1.7		1.6
Amortization of net (gain) loss	0.3		0.3		0.5		0.5
Net periodic benefit cost	$ 1.7		$ 1.6		$   3.3		$   3.2

(1) Included in Provision for Restructuring of $11.1 million.

CIT previously disclosed in the notes to consolidated financial statements for the year ended December 31, 2005 that it expected to contribute $3.5 million to its retirement plans in 2006. CIT contributed $1.9 million to the retirement plans for the six months ended June 30, 2006, and currently expects to fund approximately an additional $2.1 million in 2006 for a total of $4.0 million.

CIT previously disclosed in its financial statements for the year ended December 31, 2005 that it expected to contribute $4.7 million to its other postretirement benefit plans in 2006. As of June 30, 2006, $1.6 million of contributions have been made.

NOTE 11 – COMMITMENTS AND CONTINGENCIES

Financing and leasing asset commitments, referred to as loan commitments or lines of credit, are agreements to lend to customers subject to the customers’ compliance with contractual obligations. The accompanying table summarizes these and other credit-related commitments, as well as purchase and funding commitments.

(Dollars in millions)

	June 30, 2006			December 31, 2005
	Due to Expire
	Within One Year	After One Year	Total Outstanding	Total Outstanding
Financing Commitments
Financing and leasing assets	$1,286.8	$8,489.1	$9,775.9	$10,432.0
Letters of Credit and Acceptances:
Standby letters of credit	527.4	70.1	597.5	570.3
Other letters of credit	559.1	0.8	559.9	477.3
Guarantees and acceptances	160.4	14.5	174.9	226.6
Purchase and Funding Commitments
Aerospace purchase commitments	967.0	2,368.0	3,335.0	3,316.5
Other manufacturer purchase commitments	516.2	28.0	544.2	696.2
Sale-leaseback payments	53.1	600.8	653.9	590.7

 

ITEM 1: CONSOLIDATED FINANCIAL STATEMENTS 15

CIT GROUP INC. AND SUBSIDIARIES – NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In addition to the amounts shown in the table above, unused, cancelable lines of credit to consumers in connection with a third-party vendor program, which may be used to finance additional technology product purchases, amounted to approximately $22.6 billion and $18.4 billion at June 30, 2006 and December 31, 2005. These uncommitted vendor-related lines of credit can be reduced or canceled by CIT at any time without notice. Our experience indicates that customers typically will not exercise their entire available line of credit at any point in time.

In the normal course of meeting the needs of its customers, CIT also enters into commitments to provide financing, letters of credit and guarantees. Standby letters of credit obligate CIT to pay the beneficiary of the letter of credit in the event that a CIT client to whom the letter of credit was issued does not meet its related obligation to the beneficiary. These financial instruments generate fees and involve, to varying degrees, elements of credit risk in excess of the amounts recognized in the consolidated balance sheets. To minimize potential credit risk, CIT generally requires collateral and other forms of credit support from the customer.

Guarantees are issued primarily in conjunction with CIT’s factoring product, whereby CIT provides the client with credit protection for its trade receivables without actually purchasing the receivables. The trade terms are generally sixty days or less. If the customer is unable to pay according to the contractual terms, then CIT purchases the receivables from the client. As of June 30, 2006, CIT had no outstanding liabilities relating to these credit-related commitments or guarantees, as amounts are generally billed and collected on a monthly basis.

CIT’s firm purchase commitments relate predominantly to purchases of commercial aircraft and rail equipment. The commitments to purchase commercial aircraft are with both Airbus Industrie and The Boeing Company. These purchase commitments are fixed price, but are subject to customary price increases for future changes in inflation and manufacturing components. The aerospace equipment purchases are contracted for a specific model aircraft, using a baseline aircraft specification at fixed prices, which reflect discounts from fair market purchase prices prevailing at the time of commitment. The delivery price of an aircraft may also change depending on the final specifications of the aircraft, including engine thrust, aircraft weight and seating configuration. Equipment purchases are recorded at delivery date at the final purchase price paid, which includes purchase price discounts, price changes relating to specification changes and price increases relating to inflation and manufacturing components. Accordingly, the commitment amounts detailed in the preceding table are based on estimated values. Pursuant to existing contractual commitments, 60 aircraft remain to be purchased (20 within the next twelve months). Lease commitments are in place for fifteen of the aircraft to be delivered over the next twelve months. The order amount excludes CIT’s options to purchase additional aircraft. In July 2006, the Company exercised options to purchase an additional four Airbus single-aisle aircraft.

Outstanding commitments to purchase equipment to be leased to customers, other than aircraft, relates primarily to rail equipment. Rail equipment purchase commitments are at fixed prices subject to price increases for inflation and manufacturing components. The time period between commitment and purchase for rail equipment is generally less than 18 months. Additionally, CIT is party to railcar sale-leaseback transactions under which it is obligated to pay a remaining total of $653.9 million, or approximately $48 million per year for 2007 through 2010 and declining thereafter through 2030. These lease payments are expected to be more than offset by rental income associated with re-leasing the assets, subject to actual railcar utilization and rentals. In conjunction with this sale-leaseback transaction, CIT has guaranteed all obligations of the related consolidated lessee entity.

CIT has guaranteed the public and private debt securities of a number of its wholly-owned, consolidated subsidiaries, including those disclosed in Note 15 – Summarized Financial Information of Subsidiaries. In the normal course of business, various consolidated CIT subsidiaries have entered into other credit agreements and certain derivative transactions with financial institutions that are guaranteed by CIT. These transactions are generally used by CIT’s subsidiaries outside of the US to allow the local subsidiary to borrow funds in local currencies.

NOTE 12 – LEGAL PROCEEDINGS

On September 9, 2004, Exquisite Caterers Inc., et al. v. Popular Leasing Inc., et al. (“Exquisite Caterers”), a putative national class action, was filed in the Superior Court of New Jersey against 13 financial institutions, including CIT, which had acquired equipment leases (“NorVergence Leases”) from NorVergence, Inc., a reseller of telecommunications and Internet services to businesses. The complaint alleged that NorVergence misrepresented the capabilities of the equipment leased to its customers and overcharged for the equipment, and that the NorVergence Leases are unenforceable. Plaintiffs sought rescission, punitive damages, treble damages and attorneys’ fees. In addition, putative class action suits in Illinois and Texas, based upon the same core allegations and seeking the same relief, were filed by NorVergence customers against CIT and other financial institutions. The parties in Exquisite Caterers reached a settlement, which was approved by the Court on June 30, 2006 (the “Class Settlement”). Pursuant to the Class Settlement, the Court certified a national class, and class members will receive the same settlement that CIT made with the Attorney General in their state, as referenced below, plus an extra 2% discount if the settling plaintiff makes all payments due under the Class Settlement. Only 22, or approximately 5%, of the national class plaintiffs opted out of the Class Settlement. The putative class action commenced in Texas will be dismissed as part of the Class Settlement. The putative class action in Illinois will not be dismissed in connection with the Class Settlement, but has only 2 plaintiffs remaining.

 

16 CIT GROUP INC

CIT GROUP INC. AND SUBSIDIARIES – NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Beginning in August 2004, the Attorneys General of several states commenced investigations of NorVergence and the financial institutions that purchased NorVergence Leases, including CIT. CIT has entered into settlement agreements with the Attorneys General in each of these states, except for Texas. Under those settlements, lessees in those states have had an opportunity to resolve all claims by and against CIT by paying a percentage of the remaining balance on their leases. CIT also has produced documents for transactions related to NorVergence at the request of the Federal Trade Commission (“FTC”) and pursuant to a subpoena in a grand jury proceeding being conducted by the US Attorney for the Southern District of New York in connection with an investigation of transactions related to NorVergence.

On July 14, 2004, the US Bankruptcy Court ordered the liquidation of NorVergence under Chapter 7 of the Bankruptcy Code. On July 14, 2006, the trustee appointed in NorVergence’s bankruptcy case filed a complaint against 44 defendants, including insiders of NorVergence and financing companies, including CIT. Pursuant to the complaint, among other things, the trustee alleges that the defendants committed fraud or aided and abetted NorVergence in the commission of fraud. CIT denies the allegations contained in the complaint and this litigation is not expected to have a material adverse financial effect on the Company’s financial statements.

In addition, there are various legal proceedings that have been brought against CIT in the ordinary course of business. While the outcomes of the NorVergence related litigation and the ordinary course legal proceedings, and the related activities, are not certain, based on present assessments, management does not believe that they will have a material adverse financial effect on the Company’s financial statements.

NOTE 13 – SEVERANCE AND FACILITY RESTRUCTURING RESERVES

The following table summarizes previously established purchase accounting liabilities (pre-tax) related to severance of employees and closing of facilities, as well as restructuring activities during 2006:

(dollars in millions)

	Severance				Facilities
	Number of Employees		Reserve		Number of Facilities		Reserve		Total Reserves
Balance at December 31, 2005	23		$   8.1		9		$ 5.1		$ 13.2
2006 additions	107		10.6		–		–		10.6
2006 utilization	(45	)	(6.4	)	(4	)	(0.5	)	(6.9	)
Balance at June 30, 2006	85		$ 12.3		5		$ 4.6		$ 16.9

The additions during 2006 relate to employee termination benefits incurred in conjunction with the business unit and segment realignments. These additions, as well as charges related to accelerated restricted stock vesting and other benefits, are recorded as part of the $11.1 million first quarter 2006 restructuring provision (and in salaries and general operating expenses). The employee termination payments will largely be paid during 2006. The facilities reserves relate primarily to shortfalls in sublease transactions and will be utilized over the remaining terms, generally 6 years.

 

ITEM 1: CONSOLIDATED FINANCIAL STATEMENTS 17

CIT GROUP INC. AND SUBSIDIARIES – NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14 – GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill and intangible assets, which totaled $1,033.6 million at June 30, 2006, and consisted of $811.7 million of goodwill and $221.9 million of intangible assets, are presented by segment in the table below:

(dollars in millions)

	Vendor Finance		Consumer & Small Business Lending		Trade Finance		Corporate Finance		Total
Goodwill
Balance at December 31, 2005	$ 54.3		$ 270.7		$ 261.5		$ 208.6		$ 795.1
Additions, foreign currency translation, other	(17.7	)	15.8		8.3		10.2		16.6
Balance at June 30, 2006	$ 36.6		$ 286.5		$ 269.8		$ 218.8		$ 811.7
Intangible Assets
Balance at December 31, 2005	$ 45.5		$   28.9		$ 115.5		$   26.5		$ 216.4
Additions, foreign currency translation, other	13.1		–		4.0		–		17.1
Amortization	(4.0	)	(0.6	)	(5.6	)	(1.4	)	(11.6	)
Balance at June 30, 2006	$ 54.6		$   28.3		$ 113.9		$   25.1		$ 221.9

The 2006 additions to goodwill were predominantly related to a European factoring acquisition in Trade Finance during the second quarter and the refinement of acquisition-related deferred tax liabilities during the first quarter in the other three segments.

In accordance with SFAS No. 142, “Goodwill and Other Intangible Assets”, goodwill is no longer amortized but instead is assessed periodically for impairment. The Company periodically reviews and evaluates its goodwill and intangible assets for potential impairment, at a minimum annually or more frequently if circumstances indicate that impairment is possible. The most recent goodwill and intangible asset impairment analyses indicated that the fair values of each were in excess of the carrying values.

Other intangible assets, net, are comprised primarily of acquired customer relationships. Other intangible assets are being amortized over their corresponding lives ranging from five to twenty years in relation to the related cash flows, where applicable. Amortization expense totaled $5.8 million and $11.6 million for the quarter and six months ended June 30, 2006 versus $5.5 million and $10.2 million for the respective prior year periods. Accumulated amortization totaled $56.5 million and $44.9 million at June 30, 2006 and December 31, 2005. The projected amortization for the years ended December 31, 2006 through December 31, 2010 is: $22.4 million for 2006; $19.8 million for 2007; $20.1 million for 2008; $20.5 million for 2009; and $20.6 million for 2010.

NOTE 15 – SUMMARIZED FINANCIAL INFORMATION OF SUBSIDIARIES

The following presents condensed consolidating financial information for CIT Holdings LLC. CIT has guaranteed on a full and unconditional basis the existing debt securities that were registered under the Securities Act of 1933 and certain other indebtedness of this subsidiary. CIT has not presented related financial statements or other information for this subsidiary on a stand-alone basis. Included under “Other Subsidiaries” is a 100%-owned finance subsidiary of CIT Group Inc., CIT Group Funding Company of Canada, for which CIT has fully and unconditionally guaranteed the debt securities.

 

18 CIT GROUP INC

CIT GROUP INC. AND SUBSIDIARIES – NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATING BALANCE SHEETS

	CIT Group Inc.		CIT Holdings LLC		Other Subsidiaries		Eliminations		Total
June 30, 2006
ASSETS
Net finance receivables	$      987.8		$2,728.4		$ 44,951.9		$           –		$48,668.1
Operating lease equipment, net	–		194.2		10,389.4		–		10,583.6
Finance receivables held for sale	–		–		1,340.6		–		1,340.6
Cash and cash equivalents	1,239.0		477.5		736.8		–		2,453.3
Other assets	10,768.0		3,987.5		(2,642.8	)	(7,410.9	)	4,701.8
Total Assets	$ 12,994.8		$7,387.6		$ 54,775.9		$(7,410.9	)	$67,747.4
LIABILITIES AND STOCKHOLDERS’ EQUITY
Debt	$ 39,609.1		$4,195.3		$   8,431.0		$           –		$52,235.4
Credit balances of factoring clients	–		–		3,702.8		–		3,702.8
Accrued liabilities and payables	(34,025.2	)	834.9		37,549.9		–		4,359.6
Total Liabilities	5,583.9		5,030.2		49,683.7		–		60,297.8
Minority interest	–		–		38.7		–		38.7
Total Stockholders’ Equity	7,410.9		2,357.4		5,053.5		(7,410.9	)	7,410.9
Total Liabilities and Stockholders’ Equity	$ 12,994.8		$7,387.6		$ 54,775.9		$(7,410.9	)	$67,747.4
December 31, 2005
ASSETS
Net finance receivables	$   1,041.7		$ 2,360.3		$40,270.8		$           –		$ 43,672.8
Operating lease equipment, net	–		175.4		9,460.3		–		9,635.7
Finance receivables held for sale	–		75.3		1,545.0		–		1,620.3
Cash and cash equivalents	2,502.9		129.6		1,026.1		–		3,658.6
Other assets	10,293.1		272.1		1,196.7		(6,962.7	)	4,799.2
Total Assets	$ 13,837.7		$ 3,012.7		$53,498.9		$(6,962.7	)	$ 63,386.6
LIABILITIES AND STOCKHOLDERS’ EQUITY
Debt	$ 35,701.2		$ 4,336.4		$  7,826.9		$           –		$ 47,864.5
Credit balances of factoring clients	–		–		4,187.8		–		4,187.8
Accrued liabilities and payables	(28,826.2	)	(1,773.5	)	34,921.5		–		4,321.8
Total Liabilities	6,875.0		2,562.9		46,936.2		–		56,374.1
Minority interest	–		–		49.8		–		49.8
Total Stockholders’ Equity	6,962.7		449.8		6,512.9		(6,962.7	)	6,962.7
Total Liabilities and Stockholders’ Equity	$ 13,837.7		$ 3,012.7		$53,498.9		$(6,962.7	)	$ 63,386.6

 

ITEM 1: CONSOLIDATED FINANCIAL STATEMENTS 19

CIT GROUP INC. AND SUBSIDIARIES – NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATING STATEMENTS OF INCOME

	CIT Group Inc.		CIT Holdings LLC		Other Subsidiaries		Eliminations		Total
Six Months Ended June 30, 2006
Finance income	$   24.0		$ 168.1		$ 2,481.8		$       –		$ 2,673.9
Interest expense	(5.7	)	59.3		1,222.4		–		1,276.0
Net finance revenue	29.7		108.8		1,259.4		–		1,397.9
Depreciation on operating lease equipment	–		30.2		475.4		–		505.6
Net finance revenue after depreciation
on operating lease equipment	29.7		78.6		784.0		–		892.3
Provision for credit losses	14.2		9.5		57.8		–		81.5
Finance revenue, net of interest expense,
depreciation and credit provision	15.5		69.1		726.2		–		810.8
Equity in net income of subsidiaries	530.4		–		–		(530.4	)	–
Other revenue	19.5		44.0		500.1		–		563.6
Total revenue, net of interest expense,
depreciation and credit provision	565.4		113.1		1,226.3		(530.4	)	1,374.4
Operating expenses	111.2		48.5		508.2		–		667.9
Provision for restructuring	–		–		11.1		–		11.1
Income (loss) before provision for income taxes	454.2		64.6		707.0		(530.4	)	695.4
Benefit (provision) for income taxes	26.7		(23.8	)	(216.1	)	–		(213.2	)
Minority interest, after tax	–		–		(1.3	)	–		(1.3	)
Dividends on preferred capital	(15.2	)	–		–		–		(15.2	)
Net income (loss) available (attributable)
to common stockholders	$ 465.7		$   40.8		$    489.6		$(530.4	)	$    465.7
Six Months Ended June 30, 2005
Finance income	$   23.2		$ 112.7		$ 1,992.8		$        –		$ 2,128.7
Interest expense	(32.8	)	40.4		851.7		–		859.3
Net finance revenue	56.0		72.3		1,141.1		–		1,269.4
Depreciation on operating lease equipment	–		22.0		456.8		–		478.8
Net finance revenue after depreciation
on operating lease equipment	56.0		50.3		684.3		–		790.6
Provision for credit losses	(4.8	)	5.8		91.5		–		92.5
Finance revenue, net of interest expense,
depreciation and credit provision	60.8		44.5		592.8		–		698.1
Equity in net income of subsidiaries	453.2		–		–		(453.2	)	–
Other revenue	70.6		82.9		455.6		–		609.1
Total revenue, net of interest expense,
depreciation and credit provision	584.6		127.4		1,048.4		(453.2	)	1,307.2
Operating expenses	84.9		51.6		396.3		–		532.8
Provision for restructuring	–		–		25.2		–		25.2
Income (loss) before provision for income taxes	499.7		75.8		626.9		(453.2	)	749.2
Provision for income taxes	(23.0	)	(27.9	)	(219.6	)	–		(270.5	)
Minority interest, after tax	–		–		(2.0	)	–		(2.0	)
Net income (loss) available (attributable)
to common stockholders	$ 476.7		$   47.9		$    405.3		$(453.2	)	$    476.7

 

20 CIT GROUP INC

CIT GROUP INC. AND SUBSIDIARIES – NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATING STATEMENT OF CASH FLOWS

	CIT Group Inc.		CIT Holdings LLC		Other Subsidiaries		Eliminations		Total
Six Months Ended June 30, 2006
Cash Flows From Operating Activities:
Net cash flows provided by (used for) operations	$     47.9		$(3,350.2	)	$  4,138.7		$         –		$    836.4
Cash Flows From Investing Activities:
Net increase (decrease) in financing and leasing assets	39.1		(340.0	)	(6,071.9	)	–		(6,372.8	)
Decrease in inter-company loans and investments	(5,146.4	)	–		–		5,146.4		–
Other	–		–		(22.2	)	–		(22.2	)
Net cash flows (used for) provided by investing activities	(5,107.3	)	(340.0	)	(6,094.1	)	5,146.4		(6,395.0	)
Cash Flows From Financing Activities:
Net increase (decrease) in debt	3,907.9		(141.1	)	898.6		–		4,665.4
Inter-company financing	–		4,179.2		967.2		(5,146.4	)	–
Cash dividends paid	(97.0	)	–		–		–		(97.0	)
Other	(15.4	)	–		17.2		–		1.8
Net cash flows provided by (used for) financing activities	3,795.5		4,038.1		1,883.0		(5,146.4	)	4,570.2
Net (decrease) increase in cash and cash equivalents	(1,263.9	)	347.9		(72.4	)	–		(988.4	)
Unrestricted cash and cash equivalents, beginning of period	2,502.9		129.6		715.0		–		3,347.5
Unrestricted cash and cash equivalents, end of period	$ 1,239.0		$    477.5		$    642.6		$         –		$ 2,359.1
Six Months Ended June 30, 2005
Cash Flows From Operating Activities:
Net cash flows provided by (used for) operations	$ 6,180.5		$    633.9		$(5,316.0	)	$         –		$ 1,498.4
Cash Flows From Investing Activities:
Net increase (decrease) in financing and leasing assets	74.7		(205.7	)	(2,464.8	)	–		(2,595.8	)
Decrease in inter-company loans and investments	(5,327.7	)	–		–		5,327.7		–
Other	–		–		167.2		–		167.2
Net cash flows (used for) provided by investing activities	(5,253.0	)	(205.7	)	(2,297.6	)	5,327.7		(2,428.6	)
Cash Flows From Financing Activities:
Net increase (decrease) in debt	(1,300.3	)	2,489.6		(100.7	)	–		1,088.6
Inter-company financing	–		(2,778.1	)	8,105.8		(5,327.7	)	–
Cash dividends paid	(61.9	)	–		–		–		(61.9	)
Other	–		–		(75.0	)	–		(75.0	)
Net cash flows provided by (used for) financing activities	(1,362.2	)	(288.5	)	7,930.1		(5,327.7	)	951.7
Net (decrease) increase in cash and cash equivalents	(434.7	)	139.7		316.5		–		21.5
Unrestricted cash and cash equivalents, beginning of period	1,311.4		127.5		771.3		–		2,210.2
Unrestricted cash and cash equivalents, end of period	$    876.7		$    267.2		$ 1,087.8		$          –		$ 2,231.7

 

ITEM 1: CONSOLIDATED FINANCIAL STATEMENTS 21

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

and

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

CIT Group Inc., a Delaware corporation, is a global commercial and consumer finance company that was founded in 1908. CIT provides financing and leasing capital for consumers and companies in a wide variety of industries, as well as offering management advisory services.

A glossary of key terms used throughout the Form 10-Q for the quarter ended June 30, 2006 follows.

Average Earning Assets (AEA) is the average during the reporting period of finance receivables, operating lease equipment, financing and leasing assets held for sale, and some investments, less the credit balances of factoring clients. We use this average for certain key profitability ratios, including return on AEA and net finance revenue as a percentage of AEA.

Average Finance Receivables (AFR) is the average during the reporting period of finance receivables and includes loans and finance leases. It excludes operating lease equipment. We use this average to measure the rate of net charge-offs on an owned basis for the period.

Average Managed Assets (AMA) is the average earning assets plus the average of finance receivables previously securitized and still managed by us. We use this average to measure the rate of net charge-offs on a managed basis for the period, to monitor overall credit performance, and to monitor expense control.

Capital is the sum of common equity, preferred stock, and preferred capital securities.

Derivative Contract is a contract whose value is derived from a specified asset or an index, such as interest rates or foreign currency exchange rates. As the value of that asset or index changes, so does the value of the derivative contract. We use derivatives to reduce interest rate, foreign currency or credit risks. The derivative contracts we use include interest-rate swaps, cross-currency swaps, foreign exchange forward contracts, and credit default swaps.

Efficiency Ratio is the percentage of salaries and general operating expenses (including provision for restructuring) to total revenue, net of interest expense and depreciation. We use the efficiency ratio to measure the level of expenses in relation to revenue earned.

Finance Revenue includes both interest income on finance receivables and rental income on operating leases.

Finance Revenue, net of Interest Expense, Depreciation and Credit Provision – reflects finance revenue after interest expense, depreciation on operating lease equipment, which is a direct cost of equipment ownership, and credit costs. This subtotal, also called “Risk Adjusted Revenue” by management, is a key measure in the evaluation of our business.

Financing and Leasing Assets include loans, capital and finance leases, leveraged leases, operating leases, assets held for sale, and other investments.

Lease – capital and finance is an agreement in which the party who owns the property (lessor) permits another party (lessee) to use the property with substantially all of the economic benefits and risks of ownership passed to the lessee.

Lease – leveraged is a lease in which a third party, a long-term creditor, provides non-recourse debt financing. We are party to these lease types as creditor or as lessor.

Lease – tax-optimized leveraged lease is a lease in which we are the lessor and a third-party creditor has a priority claim to the leased equipment. We have an increased risk of loss in the event of default in comparison to other leveraged leases, because they typically feature higher leverage to increase tax benefits.

Lease – operating is a lease in which we retain beneficial ownership of the asset, collect rental payments, recognize depreciation on the asset, and retain the risks of ownership, including obsolescence.

Managed Assets are comprised of finance receivables, operating lease equipment, finance and leasing assets held for sale, some investments, and receivables securitized and still managed by us. The change in managed assets during a reporting period is one of our measurements of asset growth.

Net Finance Revenue after Depreciation on Operating Lease Equipment – reflects finance revenue after interest expense and depreciation on operating lease equipment, which is a direct cost of equipment ownership. This subtotal, also called “Net Finance Revenue” by management, is a key measure in the evaluation of our business.

Net Income Available to Common Shareholders (a.k.a “net income”) reflects net income after preferred dividends and is utilized to calculate return on common equity and other performance measurements.

Non-GAAP Financial Measures are balances, amounts or ratios that do not readily agree to balances disclosed in financial statements

 

22 CIT GROUP INC

presented in accordance with accounting principles generally accepted in the U.S. We use non-GAAP measures to provide additional information and insight into how current operating results and financial position of the business compare to historical operating results and the financial position of the business and trends, as well as adjusting for certain nonrecurring, or unusual, transactions.

Non-performing Assets include loans placed on non-accrual status, due to doubt of collectibility of principal and interest, and repossessed assets.

Other Revenue includes syndication fees, gains from dispositions of receivables and equipment, factoring commissions, loan servicing and other fees (also known as “non-spread revenue”).

Retained Interest is the portion of the interest in assets we retain when we sell assets in a securitization transaction.

Residual Values represent the estimated value of equipment at the end of the lease term. For operating leases, it is the value to which the asset is depreciated at the end of its useful economic life (i.e., “salvage” or “scrap value”).

Return on Common Equity or Tangible Common Equity is net income available to common stockholders expressed as a percentage of average common equity or average common tangible equity. These are key measurements of profitability.

Special Purpose Entity (SPE) is a distinct legal entity created for a specific purpose in order to isolate the risks and rewards of owning its assets and incurring its liabilities. We typically use SPEs in securitization transactions, joint venture relationships, and certain structured leasing transactions.

Tangible Metrics exclude goodwill, other intangible assets, and some comprehensive income items. We use tangible metrics in measuring capitalization and returns.

Total Revenue, Net of Interest Expense, Depreciation and Credit Provision is the total of finance revenue, net of interest expense, depreciation and credit provision (risk adjusted revenue) and other revenue.

Yield-related Fees In addition to interest income, in certain transactions we collect yield-related fees in connection with our assumption of underwriting risk. We report yield-related fees, which include prepayment fees and certain origination fees and are recognized over the life of the lending transaction, in Finance Revenue.

This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Quantitative and Qualitative Disclosures about Market Risk” contain certain non-GAAP financial measures. See page 55, “Non-GAAP Financial Measurements” for additional information.

PROFITABILITY AND KEY BUSINESS TRENDS Income Metrics

 

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS AND ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 23

As displayed in the charts on the previous page and below, the comparisons with 2005 were impacted by three items: (1) the prior year results for the quarter and six months included $52.4 and $80.1 million in pretax gains relating to certain derivative contracts that did not qualify for hedge accounting treatment and were terminated in, or had matured by, the fourth quarter of 2005; (2) the first quarter 2006 adoption of new accounting rules related to expensing employee stock options (SFAS 123R) resulted in increased compensation expense of $6.6 million and $16.9 million for the second quarter and the six months of 2006 (we continue to report 2005 amounts for option expense only as proforma footnote disclosure); and (3) other minor operating revenue and expense adjustments, reflecting recognition of timing adjustments relating to certain revenue and expense items between the first and second quarters of 2005. Excluding these items, net income increased 8.7% and 10.4% for the quarter and the six months and diluted earnings per share increased 14.6% and 15.9% for the quarter and the six months from 2005 amounts.

On this basis, the improvements from the prior year reflected strong origination volume, resulting in broad-based asset growth, coupled with increased other revenue, continued low net charge-offs and a lower effective tax rate. These positive factors were partially offset by higher funding costs, increased expenses tied to growth initiatives and a higher provision to build credit reserves in response to asset growth and credit quality trends.

The earnings per share growth rate exceeded the net income growth rate primarily due to a reduction in share count resulting from capital initiatives in the second half of 2005, comprised of common share repurchases and the issuance of preferred stock.

Return Metrics

Return on average earning assets was 1.68% and 1.71% for the quarter and the six months of 2006, versus 2.10% and 2.08% for the prior year. Return on average common equity was 14.1% for both the quarter and the first half of 2006, versus 15.7% and 15.2% for 2005. Return on assets and equity comparisons were impacted by the 2005 derivative gains and the expensing of options in 2006 previously discussed. Return on average common equity was 14.3% and 14.4% for the quarter and six months in 2006 before option expense, compared to 13.9% and 13.8% for the quarter and six months in 2005 (excluding the derivative gains and minor revenue and expense items). On the same basis, return on asset comparisons were 1.71% and 1.74% for the quarter and six months in 2006 versus 1.86% and 1.88% in 2005. The contrast between these return on equity and return on asset comparisons is due to the 2005 capital initiatives (including stock repurchases and preferred stock issuance) and the higher proportion of lower-risk student and home lending assets in 2006.

Average earning assets grew 5.8% during the quarter and 18.6% over last year, while ending managed assets grew 3.7% and 17.0% during the quarter and the first six months of 2006. Our focus remains on prudent growth, as we continued to supplement organic growth with strategic acquisitions, offset by the liquidation of non-strategic portfolios. Volume was strong in most of our Commercial Finance businesses, including healthcare, communications, media & entertainment, rail, and aerospace, as well as in our Specialty Finance home lending and student lending businesses.

See Non GAAP Reconciliation table on page 56 for additional information.

 

24 CIT GROUP INC

REVENUE Revenue (dollars in millions)
For the Quarters Ended June 30,

For the Six Months Ended June 30,

Total net revenues increased 3.4% and 4.0% for the 2006 quarter and the half, reflecting both higher asset levels and our continued focus on other (non-spread) revenue growth. Excluding gains last year on derivative contracts that had matured by, or were terminated in, the fourth quarter of 2005, total net revenue increased 11.5% and 10.3% for the 2006 quarter and the six months. Non-spread revenues accounted for 39% of first half net revenue in 2006, versus 44% in 2005 (40% excluding the derivative gains). See Non GAAP Reconciliation table on page 56 for additional information.

  NET FINANCE REVENUE Net Finance Revenue (dollars in millions)

	Quarters Ended June 30,				Six Months Ended June 30,
	2006		2005		2006		2005
Finance income – loans and capital leases	$       953.3		$       730.2		$    1,836.5		$    1,400.2
Rental income on operating leases	426.0		370.5		837.4		728.5
Interest expense	677.7		467.8		1,276.0		859.3
Net finance revenue	701.6		632.9		1,397.9		1,269.4
Depreciation on operating lease equipment	256.2		241.2		505.6		478.8
Net finance revenue after depreciation on operating lease equipment	$       445.4		$       391.7		$       892.3		$       790.6
Average Earning Assets (“AEA”)	$  56,296.3		$  47,482.4		$  54,616.9		$  45,869.5
As a % of AEA:
Finance income – loans and capital leases	6.77	%	6.15	%	6.72	%	6.10	%
Rental income on operating leases	3.03	%	3.12	%	3.07	%	3.18	%
Interest expense	4.82	%	3.94	%	4.67	%	3.74	%
Net finance revenue	4.98	%	5.33	%	5.12	%	5.54	%
Depreciation on operating lease equipment	1.82	%	2.03	%	1.85	%	2.09	%
Net finance revenue after depreciation on operating lease equipment	3.16	%	3.30	%	3.27	%	3.45	%
As a % of AOL:
Rental income on operating leases	16.26	%	17.42	%	16.43	%	17.32	%
Depreciation on operating lease equipment	9.78	%	11.34	%	9.92	%	11.38	%
Net operating lease revenue	6.48	%	6.08	%	6.51	%	5.94	%
Average Operating Lease Equipment (“AOL”)	$  10,481.9		$    8,508.7		$  10,195.3		$    8,413.7

 

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS AND ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 25

Net finance revenue after depreciation for the six months increased 13%, reflecting the 19% increase in average earning assets. As a percentage of average earning assets, net finance revenue after depreciation for the six-month periods declined to 3.27% from 3.45% due to: 1) the blending of the lower rate, US government guaranteed student lending portfolio (net finance revenue as a percentage of AEA excluding student lending was 5.67% in 2006 and 5.91% in 2005); 2) rising borrowing costs, coupled with pricing pressure, reflecting liquidity in many of our lending businesses; and 3) an increasingly conservative liquidity profile in comparison to 2005, the continued maturity extension of the debt portfolio and increased alternative liquidity facilities.

The 20 basis point drop in the net finance revenue after depreciation percentage from 3.36% in the 2006 first quarter was comprised of the following: (1) reduced lease and loan income due to the first quarter collection of past due rental settlements from bankrupt US hub carriers (7 basis points); (2) lower yield-related fees due to higher first quarter prepayments, particularly in Aerospace (5 basis points); (3) business mix including a higher proportion of student lending assets in particular (3 basis points); and (4) increased short-term interest rates, debt maturity lengthening and other factors (5 basis points).

The increases for the 2006 second quarter and first half from 2005 in net operating lease revenue as a percentage of average operating lease assets reflected strengthening rental rates in both aerospace and rail, including the impact of higher interest rates. The improvement for the half exceeded the improvement for the quarter due to the above-mentioned collections in aerospace of past due rentals in the 2006 first quarter. The rail fleet was virtually fully utilized during 2006. See “Concentrations – Operating Leases” for additional information regarding our operating lease assets.

NET FINANCE REVENUE AFTER PROVISION FOR CREDIT LOSSES (RISK ADJUSTED REVENUE) Net Finance Revenue after Provision for Credit Losses (Risk-Adjusted Revenue) (dollars in millions)

	Quarters Ended June 30,				Six Months Ended June 30,
	2006		2005		2006		2005
Net finance revenue after depreciation on operating lease equipment	$       445.4		$       391.7		$       892.3		$       790.6
Provision for credit losses	48.2		47.2		81.5		92.5
Finance revenue, net of interest expense, depreciation, and credit provision	$       397.2		$       344.5		$       810.8		$       698.1
As a % of AEA:
Net finance revenue after depreciation on operating lease equipment	3.16	%	3.30	%	3.27	%	3.45	%
Provision for credit losses	0.34	%	0.40	%	0.30	%	0.40	%
Finance revenue, net of interest expense, depreciation, and credit provision	2.82	%	2.90	%	2.97	%	3.05	%
Average Earning Assets (“AEA”)	$  56,296.3		$  47,482.4		$  54,616.9		$  45,869.5

The 15.2% and 16.1% increase in risk-adjusted revenue from 2005 for the 2006 second quarter and six months largely reflects the variances in net finance revenue discussed previously, as well as a benefit from lower charge-offs, which totalled $42.6 million and $53.9 million for the second quarters of 2006 and 2005 and $84.9 million and $103.0 million for the six months of 2006 and 2005, respectively. The current quarter provision for credit losses reflects portfolio growth coupled with rising delinquency and non-performing loans. See Credit Metrics for additional discussion.

 

26 CIT GROUP INC

OTHER REVENUE Other Revenue (dollars in millions)

	Quarters Ended June 30,				Six Months Ended June 30,
	2006		2005		2006		2005
Fees and other income	$  144.6		$  124.1		$  272.8		$  226.3
Factoring commissions	55.9		56.3		111.7		111.1
Gains on receivable sales and syndication fees	63.1		44.5		103.7		91.1
Gains on sales of leasing equipment	33.2		20.9		54.6		43.5
Gains on securitizations	6.5		11.1		20.1		22.9
Gains on derivatives	–		52.4		–		80.1
Gain on sale of business aircraft portfolio	–		22.0		–		22.0
Gains on venture capital investments	0.2		1.3		0.7		12.1
Total other revenue	$  303.5		$  332.6		$  563.6		$  609.1
Other revenue as a percentage of AEA	2.16	%	2.79	%	2.06	%	2.65	%
Other revenue as a percentage of net revenue	40.5	%	45.9	%	38.7	%	43.5	%

Fees and other income includes securitization-related servicing fees and accretion, other servicing fees and miscellaneous fees. Corporate Finance continued to record strong fees during the 2006 second quarter and six months, as did the international unit of Vendor Finance. Securitization-related fees (net of impairment charges) were up compared to 2005, on reduced impairment charges, while the average securitized asset balance declined by approximately 9% from the prior year. The 2006 periods also benefited from a second quarter $16.4 million gain relating to insurance proceeds on an aircraft lost in an on-the-ground casualty event within the Transportation Finance segment.

Factoring commissions reflect strong volumes, including incremental volume from prior year acquisitions, and relatively flat commission rates.

Gains on receivable sales and syndication fees were up 42% and 14% for the second quarter and six months from last year. Syndication fees were up predominantly in Commercial Finance (Corporate Finance and Transportation Finance), where we syndicated approximately $1.7 billion during the first half of 2006. Gains on receivable sales were lower for the 2006 second quarter but up year to date, and were driven by the Consumer and Small Business segment. In the home lending business, we both purchased and syndicated about $800 million in loans during the second quarter, as we manage our portfolio to targeted demographics and credit criteria.

Gains on sales of leasing equipment increased 59% in the 2006 second quarter over the prior year quarter (26% over last year six months) reflecting strong end of lease activity, particularly in the international businesses of Vendor Finance and the Transportation Finance rail business.

Gains on Securitization decreased on lower volume securitized and the mix of lower-yielding Vendor Finance receivables securitized.

Gains on derivatives relate to the 2005 mark-to-market of certain compound cross-currency swaps that did not qualify for hedge accounting treatment. All of these swaps were either terminated or had matured as of December 31, 2005.

Gain on sale of business aircraft portfolio resulted from the strategic sale of the majority, approximately $900 million, of that portfolio last year, following our decision to exit this business.

See Non GAAP Reconciliation table on page 56 for additional information.

 

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS AND ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 27

RESERVE FOR CREDIT LOSSES Reserve for Credit Losses (dollars in millions)

	Quarters Ended June 30,			Six Months Ended June 30,
	2006		2005	2006		2005
Balance beginning of period	$ 620.3		$620.4	$   621.7		$  617.2
Provision for credit losses – finance receivables	48.2		47.2	81.5		92.5
Reserves relating to acquisitions, other	12.1		8.6	19.7		15.6
Additions to reserve for credit losses, net	60.3		55.8	101.2		108.1
Net charge-offs
Vendor Finance	16.7		20.0	30.5		33.4
Consumer and Small Business Lending	24.1		19.6	45.7		36.6
Trade Finance	5.8		5.5	12.5		12.1
Corporate Finance	(5.4	)	8.8	(5.2	)	20.5
Transportation Finance	1.4		–	1.4		0.4
Total net charge-offs	42.6		53.9	84.9		103.0
Balance end of period	$ 638.0		$622.3	$   638.0		$  622.3
Reserve for credit losses as a percentage of finance receivables				1.29	%	1.54	%
Reserve for credit losses as a percentage of finance receivables,
excluding student loans				1.51	%	1.71	%
Reserve for credit losses as a percentage of past due receivables
(60 days or more)				64.9	%	91.0	%
Reserve for credit losses as a percentage of past due receivables
(60 days or more), excluding student loans				84.6	%	109.3	%
Reserve for credit losses as a percentage of non-performing assets				93.1	%	131.6	%

We present the metrics excluding student loans, as virtually all of the portfolio (other than private loans, which are not guaranteed) is covered by U.S. government guarantees for at least 98% of the balance. The percentages of reserves to finance receivables and reserves to past due receivables declined from 2005, reflecting two factors: (1) the continued improving trend in credit metrics through last quarter, which in turn lowered estimated inherent loss reserve requirements and (2) the growth of student lending receivables, which are guaranteed by the U.S. government. In addition to the above factors, the decline in the percentage of reserves to non-performing assets from June 2005 reflects improved collateralization (a lower proportion of SFAS 114 reserves) on non-performing accounts. Due to second quarter increases in delinquency and non-performing loans and the expectation for possible further deterioration in credit matrics, we increased our reserve for credit losses by recording a provision in excess of charge-offs of $5.6 million during the quarter.

The reserve includes amounts relating to impaired loans, in accordance with SFAS 114, of $108.1 million, $76.5 million and $113.9 million at June 30, 2006, December 31, 2005, and June 30, 2005. The June 2006 reserve amount includes $62 million related to a power generation facility (financed with a leveraged lease), which was placed on non-performing status in the fourth quarter of 2005 and is subject to bankruptcy proceedings, as well as reserves ($19 million) relating to three other collateralized non-performing accounts in the Trade Finance and Corporate Finance segments. The remainder of the SFAS 114 reserve ($27 million) relates to various other smaller accounts in Trade Finance and Corporate Finance.

Charges of $1.7 million and $4.7 million for the quarter and six months ended June 30, 2006, were taken against the hurricane reserve. During the quarter, management re-assessed the projections with respect to losses from Hurricanes Katrina and Rita. As a result, approximately $23 million of this reserve was released from the specific reserve and provisioned into other components of the reserve for credit losses. At June 30, 2006, the remaining hurricane reserve balance totaled $7.0 million and relates primarily to consumer-related exposures. This amount reflects management’s best estimate of remaining loss based on available and relevant information. Our current expectation is for the majority of related charge-offs to be realized in the latter part of 2006 and into 2007.

We determine the reserve for credit losses using three key components: (1) specific reserves for collateral and cash flow dependent loans that are impaired under SFAS 114, (2) reserves for estimated losses inherent in the portfolio based upon historical and projected credit risk, and (3) reserves for economic environment risk and other factors. The portion of the reserve related to inherent estimated losses and estimation risk reflects our evaluation of trends in our key credit metrics, as well as our assessment of risk in specific industry sectors.

 

28 CIT GROUP INC

The consolidated reserve for credit losses is intended to provide for losses inherent in the portfolio. Therefore, we estimate the ultimate outcome of collection efforts and realization of collateral values, among other things, and we may make additions or reductions to the consolidated reserve for credit losses depending on changes in economic conditions or credit metrics, including past due and non-performing accounts, or other events affecting specific obligors or industries. We continue to believe that the credit risk characteristics of the portfolio are well diversified by geography, industry, borrower, and collateral type.

Based on currently available information and our portfolio assessment, we believe that our total reserve for credit losses is adequate.

See Credit Metrics and Concentrations for more information.

  CREDIT METRICS Net Charge-offs (net of recoveries) (dollars in millions,% as a percentage of average finance receivables)

	Quarters Ended							Six Months Ended
	June 30, 2006				June 30, 2005			June 30, 2006				June 30, 2005
Owned
Vendor Finance	$ 16.7		0.89	%	$20.0	1.02	%	$   30.5		0.82	%	$  33.4	0.86	%
Consumer and Small Business Lending	24.1		0.56	%	19.6	0.70	%	45.7		0.55	%	36.6	0.73	%
Total Specialty Finance Group	40.8		0.66	%	39.6	0.83	%	76.2		0.64	%	70.0	0.79	%
Trade Finance	5.8		0.35	%	5.5	0.33	%	12.5		0.39	%	12.1	0.38	%
Corporate Finance	(5.4	)	(0.14	)%	8.8	0.26	%	(5.2	)	(0.07	)%	20.5	0.31	%
Transportation Finance	1.4		0.36	%	–	–		1.4		0.17	%	0.4	0.04	%
Total Commercial Finance Group	1.8		0.03	%	14.3	0.26	%	8.7		0.08	%	33.0	0.30	%
Total	$ 42.6		0.35	%	$53.9	0.52	%	$   84.9		0.36	%	$103.0	0.52	%
Total, excluding student loans	$ 42.6		0.41	%	$53.9	0.58	%	$   84.9		0.42	%	$103.0	0.57	%
Managed
Vendor Finance	$ 25.6		0.91	%	$29.5	1.02	%	$   47.3		0.84	%	$  53.2	0.92	%
Consumer and Small Business Lending	31.1		0.70	%	26.2	0.85	%	59.3		0.69	%	48.7	0.88	%
Total Specialty Finance Group	56.7		0.78	%	55.7	0.93	%	106.6		0.75	%	101.9	0.90	%
Trade Finance	5.8		0.35	%	5.5	0.33	%	12.5		0.38	%	12.1	0.38	%
Corporate Finance	(2.9	)	(0.06	)%	12.2	0.30	%	(1.6	)	(0.02	)%	29.4	0.37	%
Transportation Finance	1.4		0.36	%	–	–		1.4		0.17	%	0.4	0.04	%
Total Commercial Finance Group	4.3		0.07	%	17.7	0.29	%	12.3		0.10	%	41.9	0.35	%
Total	$ 61.0		0.44	%	$73.4	0.60	%	$ 118.9		0.44	%	$143.8	0.61	%
Total, excluding student loans	$ 61.0		0.50	%	$73.4	0.66	%	$ 118.9		0.50	%	$143.8	0.66	%

 

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS AND ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 29

Owned Charge-Offs (as a percentage of average finance receivables)

Managed Charge-Offs (as a percentage of average managed receivables)

 

The trends in the tables above are positive, as charge-offs on an owned and managed basis, both in amount and as a percentage of assets, declined in the 2006 quarter and year-to-date compared to 2005 and remain below historic averages. We expect charge-offs to increase from current levels.

Consumer and Small Business Lending owned charge-offs were up in 2006 in amount from last year, but were down as a percentage of average finance receivables, reflecting portfolio growth, improved credit performance and the addition of the student lending assets. Excluding student loans, the charge-off rates were 0.91% and 1.12% for the quarter ended June 30, 2006 and 2005 and 0.88% and 1.09% for the six months ended June 30, 2006 and 2005.

Corporate Finance charge-offs declined from last year mainly due to cash recoveries on transactions previously charged off in the energy & infrastructure and business capital businesses.

The previously discussed trends in owned portfolio charge-offs were the primary cause of fluctuations in charge-offs on a managed basis.

See Non GAAP Reconciliation table on page 56 for additional information.

 

30 CIT GROUP INC

PAST DUE LOANS AND NON-PERFORMING ASSETS Past Due Loans (60 days or more) (dollars in millions, % as a percentage of finance receivables)

	June 30, 2006			December 31, 2005
Owned Past Due
Vendor Finance	$   213.3	2.91	%	$251.8	3.47	%
Consumer and Small Business Lending	546.2	3.05	%	363.2	2.46	%
Total Specialty Finance Group	759.5	3.01	%	615.0	2.79	%
Trade Finance	117.5	1.82	%	39.3	0.59	%
Corporate Finance	87.0	0.54	%	86.9	0.64	%
Transportation Finance	18.7	1.27	%	17.0	0.90	%
Total Commercial Finance Group	223.2	0.93	%	143.2	0.64	%
Total	$   982.7	1.99	%	$758.2	1.71	%
Total, excluding student loans	$   754.0	1.78	%	$625.5	1.59	%
Managed Past Due
Vendor Finance	$   309.1	2.64	%	$357.6	3.00	%
Consumer and Small Business Lending	611.3	3.20	%	446.0	2.77	%
Total Specialty Finance Group	920.4	2.99	%	803.6	2.87	%
Trade Finance	117.5	1.82	%	39.3	0.59	%
Corporate Finance	90.6	0.49	%	105.5	0.64	%
Transportation Finance	18.7	1.21	%	17.0	0.83	%
Total Commercial Finance Group	226.8	0.86	%	161.8	0.64	%
Total	$1,147.2	2.00	%	$965.4	1.81	%
Total, excluding student loans	$   918.5	1.82	%	$832.7	1.74	%

(1) See “Concentrations” for additional delinquency information on Consumer and Small Business Lending.

Vendor Finance delinquency decreased in 2006, reflecting lower delinquency levels in the US vendor finance operations.

Consumer and Small Business Lending delinquency increased in 2006, primarily due to the student lending and home lending portfolio growth. Consumer delinquencies were $269.9 million (2.78%) at June 30, 2006, up from $185.5 million (2.18%) at December 31, 2005, reflecting both the effect of normal seasoning and portfolio growth. Student lending delinquencies were $228.7 million (3.30%) at June 30, 2006, up from $132.7 million (2.63%) at December 31, 2005.

Trade Finance delinquency increased in 2006, primarily due to two large accounts, which have specific corporate reserves allocated.

Corporate Finance delinquency level was essentially unchanged from the year end 2005, as improvements in communication, media & entertainment, and in diversified industries, were largely offset by an increase in our asset-based lending unit.

 

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS AND ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 31

Non-performing Assets (dollars in millions, % as a percentage of finance receivables)

	June 30, 2006			December 31, 2005
Vendor Finance	$101.2	1.38	%	$112.1	1.54	%
Consumer and Small Business Lending	297.5	1.66	%	216.1	1.46	%
Total Specialty Finance Group	398.7	1.58	%	328.2	1.49	%
Trade Finance	79.5	1.23	%	5.3	0.08	%
Corporate Finance	196.9	1.22	%	165.4	1.21	%
Transportation Finance	10.5	0.71	%	22.3	1.18	%
Total Commercial Finance Group	286.9	1.19	%	193.0	0.87	%
Total	$685.6	1.39	%	$521.2	1.18	%
Total, excluding student loans	$685.6	1.62	%	$521.2	1.33	%
Non-accrual loans	$611.3			$460.7
Repossessed assets	74.3			60.5
Total non-performing accounts	$685.6			$521.2

The trends in the non-performing assets largely reflect the previously discussed fluctuations in the owned portfolios.

SALARIES AND GENERAL OPERATING EXPENSES Salaries and General Operating Expenses (dollars in millions)

	Quarters Ended June 30,		Quarter Ended June 30, 2006				Quarter Ended June 30, 2005
	2006	2005	Efficiency ratio(1)		% of AMA(2)		Efficiency ratio(1)		% of AMA(2)
Salaries and employee benefits	$210.0	$161.7
Other general operating expenses	128.2	107.1
Subtotal	338.2	268.8	45.2	%	2.15	%	37.1	%	1.96	%
Stock options expense	6.6	–
Salaries and general operating expenses	344.8	268.8	46.0	%	2.19	%	37.1	%	1.96	%
Provision for restructuring	–	25.2
Total	$344.8	$294.0	46.0	%	2.19	%	40.6	%	2.14	%

	Six Months Ended June 30,		Six Months Ended June 30, 2006				Six Months Ended June 30, 2005
	2006	2005	Efficiency ratio(1)		% of AMA(2)		Efficiency ratio(1)		% of AMA(2)
Salaries and employee benefits	$409.6	$331.0
Other general operating expenses	241.4	201.8
Subtotal	651.0	532.8	44.7	%	2.12	%	38.1	%	1.99	%
Stock options expense	16.9	–
Salaries and general operating expenses	667.9	532.8	45.9	%	2.17	%	38.1	%	1.99	%
Provision for restructuring	11.1	25.2
Total	$679.0	$558.0	46.6	%	2.21	%	39.9	%	2.09	%

(1) Efficiency ratio is the ratio of salaries and general operating expenses to total revenue, net of interest and depreciation, excluding the provision for credit losses. Excluding the gains on derivatives, business aircraft portfolio sale and venture capital investments, the efficiency ratios were 45.3% and 43.4% for the quarter and six months ended June 30, 2005. See Non GAAP Reconciliation table on page 56 for additional information.

(2) “AMA” means average managed assets, which is average earning assets plus the average of finance receivables previously securitized and still managed by CIT. See “Non-GAAP Financial Measurements” for details of managed assets.

 

32 CIT GROUP INC

Second quarter operating expenses, excluding the impact of expensing stock options, increased $69.4 million (26%) from 2005. Nearly 70% of the increase relates to personnel, as we added over 900 employees from June 2005, bringing headcount at June 30, 2006 to 7,015. The majority of the hires relate to growing our sales force in existing lines and establishing new businesses, such as investment banking services. Other drivers of the increase include acquisitions (European factoring and healthcare), marketing initiatives (particularly in student lending), technology investments and other back office expenses in support of the growth initiatives.

The 2006 year-to-date expense includes a restructuring charge of $11.1 million and expense of $16.9 million relating to the adoption of SFAS 123R, “Share-Based Payment”, which mandates the expensing of stock options. The expected annual savings from the restructuring activities is approximately $12 million. Salaries and general operating expenses increased in 2006, reflecting higher salaries and other investments made in sales and marketing, including incentive based compensation. The efficiency ratio for the second quarter was 46.0%, up from 41.4% last year (excluding the restructuring charges, gains on derivatives and gain on sale of the business aircraft portfolio). The higher ratio in the current quarter was partially due to the adoption of SFAS 123R (0.8% impact) as well as the continued build out of our sales force, as incremental revenues typically lag the initial expense outlays.

Management is focusing on improving the efficiency ratio prospectively by achieving increased revenue generation associated with new business initiatives and the build-out of our sales force, and by continuing to raise overall operating efficiency through consolidation of certain back office functions along with other expense saving initiatives.

See Note 13 – Severance and Facility Restructuring Reserves for additional information.

INCOME TAXES Provision for Income Taxes (dollars in millions)

	Quarters Ended June 30,				Six Months Ended June 30,
	2006		2005		2006		2005
Provision for income taxes	$111.9		$132.9		$213.2		$270.5
Effective tax rate	31.4	%	34.7	%	30.7	%	36.1	%

The effective tax rate differs from the US federal tax rate of 35% primarily due to state and local income taxes, the domestic and international geographic distribution of taxable income and corresponding foreign income taxes, as well as permanent differences between book and tax treatment of certain items. The 2005 effective tax rate exceeds the US federal rate primarily due to state and local income taxes.

The reduction from the 2005 second quarter reflects the continued relocation and funding of certain aerospace assets offshore and improved international earnings. Partially offsetting these benefits is $4.5 million in additional tax amounts, primarily relating to the enactment of a tax law change during the second quarter of 2006 that reduced benefits relating to certain leveraged lease transactions. For the six months, the 2006 effective tax rate benefited from $6.5 million in first quarter provision adjustments, including a $10.0 million reversal of previously established state NOL valuation allowances, reflecting management’s assessment with respect to higher expected loss utilization. Excluding these items, the effective tax rate was approximately 31% for the first six months of 2006.

We have US federal net operating losses (NOL’s) of approximately $850 million as of December 31, 2005, which expire in various years beginning in 2011. In addition, we have various state NOL’s that will expire in various years beginning in 2006. Federal and state operating losses may be subject to annual use limitations under section 382 of the Internal Revenue Code of 1986, as amended, and other limitations under certain state laws. Management believes that CIT will have sufficient taxable income in future years and can avail itself of tax planning strategies in order to fully utilize these federal loss carryforwards. Accordingly, we do not believe a valuation allowance is required with respect to these federal NOL’s. Based on management’s assessment as to realizability, the net deferred tax liability includes a valuation allowance of approximately $9.0 million as of June 30, 2006 relating to state NOL’s.

We have open tax years in the US, Canada and other jurisdictions that are currently under examination by the applicable taxing authorities, and certain tax years that may in the future become subject to examination. Management periodically evaluates the adequacy of our related tax reserves, taking into account our open tax return positions, tax assessments received, tax law changes and third-party indemnifications. We believe that our tax reserves are appropriate. The final determination of tax audits could affect our tax reserves.

 

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS AND ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 33

RESULTS BY BUSINESS SEGMENT

The presentation of segment results that follows reflects the allocation of most operating expenses, consistent with our internal management reporting. However, certain expenses are not allocated to the operating segments. These non-allocated expenses, which are reported in Corporate and Other, consist primarily of the following: (1) provisions for credit losses relating to overall reserve changes, as the segment results include provision amounts representing the corresponding segment charge-offs; (2) equity-based compensation, including expenses relating to restricted stock awards, performance-based restricted stock awards and stock options; and (3) certain funding costs, as the segment results reflect debt transfer pricing that matches assets and liabilities from an interest rate and maturity perspective at the segment level, with interest rate and maturity characteristic differences between the segment funds transfer pricing and the actual debt portfolio remaining in Corporate and Other. The individual segment results are based on different leverage ratios as described below and do not include the unallocated corporate expenses. Therefore, the segment operating results and returns should be evaluated in this context.

We measure segment performance using risk-adjusted capital, applying different leverage ratios to each business to allocate capital based on market criteria and inherent differences in risk levels. The capital allocations reflect the relative risk of individual asset classes within the segments and range from approximately 2% of managed assets for US government guaranteed education loans to approximately 15% of managed assets for longer-term assets such as aerospace. The targeted risk-adjusted capital allocations by segment (as a percentage of average managed assets) are as follows: Vendor Finance, 9%, Consumer and Small Business Lending, 5%, Trade Finance and Corporate Finance, 10%, and Transportation Finance, 14%.

Results by Business Segment (dollars in millions)

Quarters Ended June 30,	2006								2005
	Net Income		Return on AEA		Return on AMA		Return on Risk-Adjusted Capital		Net Income		Return on AEA		Return on AMA		Return on Risk-Adjusted Capital
Vendor Finance	$   81.2		3.56	%	2.52	%	28.3	%	$   67.1		2.73	%	1.97	%	23.3	%
Consumer and Small Business Lending	31.7		0.71	%	0.69	%	11.6	%	25.1		0.85	%	0.78	%	12.0	%
Total Specialty Finance	112.9		1.68	%	1.44	%	19.9	%	92.2		1.70	%	1.39	%	18.5	%
Trade Finance	42.8		6.69	%	6.70	%	26.5	%	42.6		6.43	%	6.43	%	25.5	%
Corporate Finance	80.0		1.99	%	1.75	%	16.2	%	77.6		2.20	%	1.86	%	18.0	%
Transportation Finance	66.7		2.47	%	2.47	%	18.1	%	38.9		1.72	%	1.72	%	12.4	%
Total Commercial Finance	189.5		2.58	%	2.40	%	18.5	%	159.1		2.47	%	2.24	%	17.5	%
Corporate, including certain charges	(66.4	)	(0.47	)%	(0.42	)%	–		(2.2	)	(0.02	)%	(0.02	)%	–
Total	$ 236.0		1.68	%	1.50	%	14.1	%	$ 249.1		2.10	%	1.81	%	15.7	%
Six Months Ended June 30,
Vendor Finance	$ 155.7		3.38	%	2.39	%	26.9	%	$ 134.2		2.71	%	1.97	%	22.4	%
Consumer and Small Business Lending	62.1		0.73	%	0.70	%	11.7	%	47.8		0.92	%	0.83	%	12.7	%
Total Specialty Finance	217.8		1.66	%	1.41	%	19.3	%	182.0		1.79	%	1.44	%	18.8	%
Trade Finance	86.1		6.94	%	6.94	%	26.9	%	79.9		6.23	%	6.23	%	25.0	%
Corporate Finance	147.2		1.94	%	1.69	%	15.5	%	140.6		2.01	%	1.69	%	16.4	%
Transportation Finance	124.6		2.34	%	2.34	%	17.2	%	65.5		1.48	%	1.48	%	10.7	%
Total Commercial Finance	357.9		2.53	%	2.34	%	17.9	%	286.0		2.25	%	2.04	%	16.0	%
Corporate, including certain charges	(110.0	)	(0.40	)%	(0.35	)%	–		8.7		0.04	%	0.03	%	–
Total	$ 465.7		1.71	%	1.51	%	14.1	%	$ 476.7		2.08	%	1.78	%	15.2	%

The comparisons with 2005 were generally favorable, as all segments reported improved net income from 2005. With the exception of Consumer and Small Business Lending (due to student lending growth) and Corporate Finance (due to gain on strategic sale of business aircraft assets in prior year net income), all segments reported improved returns for the quarter and the six months. These stronger segment performances were offset by higher unallocated corporate expenses in 2006 and the inclusion of derivative gains in the 2005 results. See page 37 for additional discussion of Corporate expenses.

 

34 CIT GROUP INC

Results by segment are summarized below. Net operating revenue is total revenue net of interest expense, depreciation expense on operating lease equipment, and provision for credit losses.

Vendor Finance (dollars in millions)

	Quarters Ended June 30,				Six Months Ended June 30,
	2006		2005		2006		2005
Net finance revenue	$    264.5		$    282.9		$    530.8		$    556.1
Depreciation on operating lease equipment	137.4		142.6		273.9		283.5
Provision for credit losses	15.7		19.2		28.6		32.1
Other revenue	98.8		73.0		183.6		144.0
Net operating revenue	210.2		194.1		411.9		384.5
Provision for income taxes	(42.9	)	(42.8	)	(87.1	)	(82.3	)
Net income	81.2		67.1		155.7		134.2
New business volume	$ 2,063.9		$ 2,451.3		$ 4,012.9		$ 4,602.1
Return on risk-adjusted capital	28.3	%	23.3	%	26.9	%	22.4	%

• Net income improved 21% and 16% for the 2006 second quarter and six months from the prior year periods on continued strong other revenue of the international operations.

• Credit metrics remained stable. Net charge-offs improved from last year in the US, offset by higher credit costs in the international operations, primarily Asia. Both delinquencies and non-performing metrics were relatively flat with last quarter and down from last year.

• Salaries and general operating expenses were up 3% and 1% for the 2006 second quarter and six months over last year, reflecting increased personnel related to sales force expansion.

• Return on risk-adjusted capital, at approximately 28% and 27% for the second quarter and six months, improved from both 2005 periods, reflecting the net income improvement and improved operating leverage.

Consumer and Small Business Lending (dollars in millions)

	Quarters Ended June 30,				Six Months Ended June 30,
	2006		2005		2006		2005
Net finance revenue	$      84.7		$      57.3		$    165.4		$    112.4
Provision for credit losses	17.4		15.8		32.9		29.5
Other revenue	42.4		43.2		81.6		71.9
Net operating revenue	109.7		84.7		214.1		154.8
Provision for income taxes	(18.7	)	(16.5	)	(37.3	)	(31.8	)
Net income	31.7		25.1		62.1		47.8
New business volume	$ 3,486.7		$ 2,540.2		$ 7,318.2		$ 4,089.4
Return on risk-adjusted capital	11.6	%	12.0	%	11.7	%	12.7	%

• Net income increased 26% and 30% for the 2006 quarter and six months from the prior year periods, primarily reflecting stronger results in Home Lending.

• We grew the deposit funding at CIT Bank by $700 million during the quarter to $1.4 billion, on track with our plans. These deposits are primarily fixed rate and broker-originated.

• Net operating revenue increased 30% and 38% for the 2006 second quarter and six months from last year due primarily to asset growth. In relation to the prior year, other revenue was flat for the quarter and up 13% for the six months.

• Net charge-offs were down 14 and 18 basis points from last year for the 2006 second quarter and six months, primarily due to improvements in Small Business Lending.

• Salaries and general operating expenses grew 41% and 52% for the 2006 second quarter and the six months over last year, mainly from the expansion of our sales force in our businesses and the acquisition of Student Loan Xpress in the first quarter of 2005. As a percentage of average earning assets, expenses were comparable to 2005.

• Return on risk-adjusted capital approximated 12% for both the second quarter and six months of 2006, as returns were dampened by the cost of Student Loan Xpress goodwill and acquired intangibles.

 

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS AND ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 35

Trade Finance (dollars in millions)

	Quarters Ended June 30,				Six Months Ended June 30,
	2006		2005		2006		2005
Net finance revenue	$   37.2		$ 33.4		$   74.2		$   61.7
Provision for credit losses	5.1		5.5		11.7		12.1
Other revenue	69.7		69.4		139.4		136.4
Net operating revenue	101.8		97.3		201.9		186.0
Provision for income taxes	(25.9	)	(26.2	)	(52.0	)	(48.4	)
Net income	42.8		42.6		86.1		79.9
New business volume	$ 127.5		$ 76.1		$ 257.1		$ 108.3
Return on risk-adjusted capital	26.5	%	25.5	%	26.9	%	25.0	%

• Net income was essentially flat with 2005 for the 2006 second quarter, but up 8% for the six months as the full benefit of a 2005 acquisition was not realized until the second quarter of last year. Average earning asset levels for both the quarter and six months were modestly below 2005.

• Net operating revenue improved from last year on stronger interest income and higher volume levels. Aided by an acquisition during the 2006 second quarter, the proportion of international factoring volume was up from the prior year.

• Net charge-offs remained flat with last year’s low levels. Delinquency and non-performing accounts increased during the second quarter. This trend is discussed in Credit Metrics.

• Salaries and general operating expenses were up 16% and 11% for the 2006 second quarter and six months from last year, largely due to the international acquisition completed during the second quarter of this year.

• Return on risk adjusted capital approximated 26% for both the second quarter and six months of 2006.

Corporate Finance (dollars in millions)

	Quarters Ended June 30,				Six Months Ended June 30,
	2006		2005		2006		2005
Net finance revenue	$    143.6		$    117.2		$    268.8		$    239.2
Depreciation on operating lease equipment	7.9		13.2		16.5		27.5
Provision for credit losses	(3.6	)	8.9		(5.3	)	21.0
Other revenue	58.4		78.1		118.4		133.6
Net operating revenue	197.7		173.2		376.0		324.3
Provision for income taxes	(42.1	)	(47.0	)	(83.3	)	(85.4	)
Net income	80.0		77.6		147.2		140.6
New business volume	$ 3,654.7		$ 2,369.2		$ 6,092.7		$ 4,118.8
Return on risk-adjusted capital	16.2	%	18.0	%	15.5	%	16.4	%

• Net income improved 3% and 5% from 2005 for the 2006 second quarter and six months, as the prior year second quarter results included a $22 million pretax gain from the strategic sale of business aircraft assets. Excluding this prior year gain, net income increased 24% and 16% for the quarter and the six months, reflecting improved net revenues and recoveries.

• Net operating revenue improved from last year for both the 2006 second quarter and six months on strong performances in Communications, Media & Entertainment (CM&E) and Healthcare, as lending spreads widened on an increased asset base and other revenue remained strong.

• Both the 2006 second quarter and six month provision for credit losses reflected net recoveries due to the continuation of CM&E recoveries and a recovery related to a co-generation plant during the current quarter. See Credit Metrics for discussion of delinquency and non-performing assets trends.

• Salaries and general operating expenses for the 2006 second quarter and six months increased 56% and 48% over last year, reflecting the build-out of our sales force and expansion of our product offerings, as well as acquisitions.

• Return on risk-adjusted capital, at approximately 16% for the 2006 second quarter and six months, was below last year due to the gain on business aircraft sale mentioned above.

 

36 CIT GROUP INC

Transportation Finance (dollars in millions)

	Quarters Ended June 30,				Six Months Ended June 30,
	2006		2005		2006		2005
Net finance revenue	$ 174.2		$ 136.1		$    359.1		$ 269.0
Depreciation on operating lease equipment	110.9		85.4		215.2		167.9
Provision for credit losses	1.4		–		1.4		0.4
Other revenue	33.2		8.7		39.3		13.9
Net operating revenue	95.1		59.4		181.8		114.6
Provision for income taxes	(6.0	)	(3.6	)	(10.8	)	(14.3	)
Net income	66.7		38.9		124.6		65.5
New business volume	$ 785.7		$ 641.7		$ 1,282.8		$ 892.9
Return on risk-adjusted capital	18.1	%	12.4	%	17.2	%	10.7	%

• Net income improved 71% and 90% from 2005 for the 2006 second quarter and six months, reflecting: (1) an increase in operating lease net revenues (operating lease rental income less the related equipment depreciation expense), including strong aerospace rental prepayment fees and recoveries of past due rents from US commercial airlines in the first quarter; (2) increased other revenue; and (3) a significant reduction in the effective tax rate due to the continued relocation of aircraft to Ireland.

• Other revenue increased $24.5 million and $25.4 million from 2005 for the 2006 second quarter and six months, reflecting a $16.4 million second quarter gain relating to insurance proceeds on an aircraft lost in an on-the-ground casualty event.

• Credit metrics remained strong. Charge-offs remained minimal and delinquency and non-performing assets declined from 2005.

• Salaries and general operating expenses were up 32% and 33% over last year for the 2006 second quarter and the six months due to the establishment of our international aerospace platform as we continue to grow these businesses.

• Return on risk-adjusted capital for both the 2006 second quarter (18%) and six months (17%) was well above 2005, reflecting the above factors.

Corporate included after tax amounts as shown in the table below:

Corporate (dollars in millions)

	Quarters Ended June 30,				Six Months Ended June 30,
	2006		2005		2006		2005
Unallocated expenses	$(55.0	)	$(16.6	)	$(77.6	)	$(27.0	)
Restructuring charges	–		(15.4	)	(6.9	)	(15.4	)
Stock option expenses	(4.0	)	–		(10.4	)	–
Preferred stock dividends	(7.5	)	–		(15.2	)	–
Gain on non-hedge derivatives	–		29.7		–		45.4
Venture capital operating income / (losses)(1)	0.1		0.1		0.1		5.7
Total	$(66.4	)	$(2.2	)	$(110. 0	)	$   8.7

(1) Venture capital operating income / (losses) include realized and unrealized losses related to venture capital investments, as well as interest costs and other operating expenses associated with these portfolios.

The increase in unallocated corporate operating expense from 2005 was due primarily to higher unallocated funding costs and to increased equity-based compensation. The higher corporate funding expense reflects the longer term of our liabilities, as we extended the debt maturities in 2005. Consistent with our internal management reporting, this incremental expense was not charged to the segments. The increased unallocated expense in relation to last quarter also includes provisions to increase the credit loss reserve. The prior year results for the quarter and six months included gains relating to certain derivative contracts that were terminated in, or had matured by, the fourth quarter of 2005.

Effective January 1, 2006, we realigned selected business operations to better serve our clients, as summarized below. Prior periods have been conformed to the current period format, except for the diversified portfolio transfer noted below, as we determined that it was impracticable to do so in accordance with SFAS 131.
 

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS AND ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 37

• The Small Business Lending unit ($1.3 billion in finance receivables at June 30, 2006 and $1.2 billion at transfer) was transferred from Specialty Finance’s Vendor Finance to Consumer and Small Business Lending, reflecting commonalities with our home lending and student loan businesses.

• Consistent with our strategic focus on industry alignment, a majority of the former Equipment Finance segment was consolidated into our Corporate Finance segment, and a $350 million diversified industry portfolio within the former Equipment Finance segment was transferred to Vendor Finance. This combination will allow us to provide corporate clients access to the full complement of CIT’s products and services.

• We have also made name changes to clarify the market focus of our segments.

• Specialty Finance – Commercial has been renamed Vendor Finance

• Specialty Finance – Consumer has been renamed Consumer and Small Business Lending

• Commercial Services has been renamed Trade Finance and is comprised primarily of our factoring operation

• Capital Finance has been renamed Transportation Finance

Our Report on Form 10-K for the period ended December 31, 2005 was updated for these segment reporting changes on Form 8-K dated May 31, 2006.

FINANCING AND LEASING ASSETS

Financing and Leasing Assets by Segment (dollars in millions)

	June 30, 2006	December 31, 2005	Percentage Change
Vendor Finance
Finance receivables	$  7,322.3	$  7,264.4	0.8	%
Operating lease equipment, net	1,038.4	1,049.5	(1.1	)%
Financing and leasing assets held for sale	527.2	720.3	(26.8	)%
Owned assets	8,887.9	9,034.2	(1.6	)%
Finance receivables securitized and managed by CIT	3,840.8	3,921.6	(2.1	)%
Managed assets	12,728.7	12,955.8	(1.8	)%
Consumer and Small Business Lending
Finance receivables – home lending	9,263.2	8,199.7	13.0	%
Finance receivables – student lending	6,929.3	5,051.0	37.2	%
Finance receivables – small business lending	1,262.4	1,238.6	1.9	%
Finance receivables – other	436.4	302.9	44.1	%
Financing and leasing assets held for sale	505.0	496.2	1.8	%
Owned assets	18,396.3	15,288.4	20.3	%
Home lending finance receivables securitized and managed by CIT	723.8	838.8	(13.7	)%
Managed assets	19,120.1	16,127.2	18.6	%
Trade Finance
Finance receivables	6,439.5	6,690.0	(3.7	)%
Financing and leasing assets held for sale	29.0	–	N/A
Owned assets	6,468.5	6,690.0	(3.3	)%
Corporate Finance
Finance receivables	16,178.6	13,652.5	18.5	%
Operating lease equipment, net	167.3	177.7	(5.9	)%
Finance receivables held for sale	211.8	253.5	(16.4	)%
Owned assets	16,557.7	14,083.7	17.6	%
Finance receivables securitized and managed by CIT	2,121.3	2,525.3	(16.0	)%
Managed assets	18,679.0	16,609.0	12.5	%
Transportation Finance
Finance receivables	1,474.4	1,895.4	(22.2	)%
Operating lease equipment, net	9,377.9	8,408.5	11.5	%
Financing and leasing assets held for sale	67.6	150.3	(55.0	)%
Owned assets	10,919.9	10,454.2	4.5	%
Other – Equity Investments	27.8	30.2	(7.9	)%
Managed assets	$67,944.0	$62,866.4	8.1	%

 

38 CIT GROUP INC

Total Managed Assets (dollars in billions)

Managed assets were $67.9 billion at June 30, 2006 up 8.1% from year-end. We launched several initiatives in 2005 to grow our business through expanding our sales force, broadening our market reach via industry vertical alignment, improving our access to certain higher growth industries such as healthcare and student lending, and improving our syndication and capital markets capabilities. We continued to allocate capital to businesses with higher risk-adjusted returns by liquidating non-strategic portfolios. A summary of the 2006 activity follows:

Vendor Finance – managed assets were down slightly from last year-end on lower US vendor receivables, partially offset by continued international growth. Managed assets related to the US Dell program declined approximately 14% to $3.9 billion from June 2005, due to the combination of a decline from 2005 in the overall Dell financed sales volume and the fact that Dell has been exercising its right to purchase a portion of the receivables originated by the DFS joint venture.

Consumer and Small Business Lending – the growth for the six months of 2006 included $1.9 billion from Student Loan Xpress and $1.2 billion from home lending. Student Loan Xpress assets have increased 66% from last June.

Trade Finance – owned assets declined from year-end, as seasonal runoff offset a $165 million European acquisition.

Corporate Finance – managed assets grew $2.1 billion or 12.5% to $18.7 billion from last year-end, with strength in healthcare and communications, media & entertainment. The majority of syndication activity for the period was in this segment, dampening growth somewhat.

Transportation Finance – during the six months, we took delivery and placed eleven new aircraft from our order book. We had one off-lease aircraft, down from ten at year-end. Rail demand remains strong, with our fleet virtually fully utilized.

See Non-GAAP Financial Measurements for reconciliation of Managed Assets.

BUSINESS VOLUMES

Total Business Volumes (dollars in millions)
For the Quarters and Six Months Ended June 30,

Business Volumes (excluding factoring, dollars in millions)

	Quarters Ended June 30,		Six Months Ended June 30,
	2006	2005	2006	2005
Vendor Finance	$2,063.9	$2,451.3	$  4,012.9	$  4,602.1
Consumer and Small Business Lending	3,486.7	2,540.2	7,318.2	4,089.4
Corporate Finance	3,654.7	2,369.2	6,092.7	4,118.8
Transportation Finance	785.7	641.7	1,282.8	892.9
Total new business volume	$9,991.0	$8,002.4	$18,706.6	$13,703.2

Origination volume for the quarter and six months ended, excluding factoring volume, increased 24.8% to $10.0 billion and 36.5% to $18.7 billion from the prior year’s periods due to strong originations across our businesses as a result of our investment in growing our sales force. We achieved record quarterly new business volume in our healthcare, home lending and student loan businesses, a direct result of recent sales initiatives.

 

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS AND ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 39

Vendor Finance – excluding Dell US, vendor volume increased 27% over 2005 however, new business volume in total for the second quarter was down from last year. In the US excluding Dell, volume increased 25% over 2005. These increases are a result of additional new vendors and increased penetration of existing relationships around the world. Dell volume in the US declined 45% and 38% for the quarter and six months (to $0.8 billion and $1.6 billion) as explained on the preceding page in the managed assets analysis.

Consumer and Small Business Lending – new business volume increased $0.9 billion (37%) over last year quarter on strong consolidation loan originations at Student Loan Xpress. Student Loan Xpress is the preferred lender to over 1,200 schools, up 46% from last year.

Corporate Finance – volume was strong across all of the businesses and up 54% from last year. Growth included a number of long-term care, syndication, global sponsor, sports and entertainment transactions.

Transportation Finance – year-over-year volume increase reflected additional aircraft funding as well as strong rail volume.

CONCENTRATIONS

Ten Largest Accounts

Our ten largest financing and leasing asset accounts in the aggregate represented 4.1% of our total financing and leasing assets at June 30, 2006 (the largest account being less than 1.0%) and 4.5% at year-end. The largest accounts primarily consist of companies in the transportation, retail and energy industries. The total of our top ten account balances increased slightly from December 2005 in amount, but declined as a percentage of the total portfolio primarily due to growth during the six months in our consumer portfolios.

In July 2006, non-recourse debt associated with leveraged leases on two collateralized power generation facilities was refinanced. In connection with the transaction, the lessee affirmed the related leases and cured existing defaults. See Reserve for Credit Losses for discussion of another transaction with the same lessee.

OPERATING LEASES

Operating Leases Portfolio (dollars in millions)

	June 30, 2006	December 31, 2005
Transportation Finance – Aerospace	$  5,968.0	$5,327.1
Transportation Finance – Rail and Other	3,409.9	3,081.4
Vendor Finance	1,038.4	1,049.5
Corporate Finance	167.3	177.7
Total	$10,583.6	$9,635.7

We strive to maximize the profitability of the lease equipment portfolio by balancing equipment utilization levels with market rental rates and lease terms.

The increases during the quarter in the Transportation Finance – Aerospace portfolio reflect deliveries of seven (11 for the six months) new commercial aircraft from our order book, as well as the purchase of three other similar, new aircraft. The increase in rail and other was due to the reclassification of railcars formerly under leveraged leases coupled with strong first quarter rail volume. Railcar utilization remains high with approximately 97% of our fleet in use.

See Risk Management for additional information regarding commercial aircraft purchase commitments.

LEVERAGED LEASES

Leveraged Lease Portfolio (dollars in millions)

	June 30, 2006		December 31, 2005
Project finance	$369.3		$   360.1
Commercial aerospace –
non-tax optimized	148.5		232.1
Commercial aerospace – tax optimized	90.2		135.2
Rail	124.0		260.8
Other	50.4		32.5
Total leveraged lease transactions	$782.4		$1,020.7
As a percentage of finance receivables	1.6	%	2.3	%
As a percentage of finance receivables
(ex student loans)	1.8	%	2.6	%

The major components of net investments in leveraged leases include: 1) project finance transactions, primarily in the power and utility sectors; 2) commercial aerospace transactions, including tax-optimized leveraged leases, which generally have increased risk of loss in default for lessors in relation to conventional lease structures due to additional leverage and the recourse of the third-party lender to the equipment in these transactions; and 3) rail transactions. The decline in the aerospace balances generally reflects the reclassification to operating leases in conjunction with our initiative to relocate and fund assets overseas. The decline of the tax-optimized balance reflects a sale of two aircraft during the period. The decline in the rail balance is due to the remarketing of the equipment under operating lease agreements at the expiration of the original lease transactions.

JOINT VENTURE RELATIONSHIPS

Our strategic relationships with industry-leading equipment vendors are a significant origination channel for our financing and leasing activities. These vendor alliances include traditional vendor finance programs, joint ventures and profit sharing structures. Our vendor programs with Dell, Snap-On and Avaya are among our largest alliances. We have multiple program agreements with Dell, the largest of which is Dell Financial Services

 

40 CIT GROUP INC

(DFS), covering originations in the U.S. The agreements provide Dell with the option to purchase CIT’s 30% interest in DFS in February 2008 and extends CIT’s right to purchase a percentage of DFS finance receivables through January 2010. The joint venture agreement with Snap-On runs through until January 2009. The Avaya agreement, which relates to profit-sharing on a CIT direct origination program, was extended during the second quarter of 2006, until September 2009, pursuant to a renewal provision in the agreement.

Our financing and leasing assets include amounts related to the Dell, Snap-On, and Avaya joint venture programs. These amounts include receivables originated directly by CIT as well as receivables purchased from joint venture entities.

Returns relating to the joint venture relationships (i.e., net income as a percentage of average managed assets) for the 2006 quarter were comparable to the Vendor Finance segment returns. A significant reduction in origination volumes from any of these alliances could have a material impact on our asset and net income levels. For additional information regarding certain of our joint venture activities, see Note 9 – Certain Relationships and Related Transactions.

Joint Venture Relationships (dollars in millions)

	June 30, 2006	December 31, 2005
Owned Financing and Leasing Assets
Dell US	$1,426.1	$1,986.3
Dell – International	1,669.7	1,528.3
Snap-On	1,013.6	1,035.7
Avaya Inc.	470.1	563.0
Securitized Financing and Leasing Assets
Dell US	$2,443.8	$2,526.1
Dell – International	44.0	34.2
Snap-On	47.9	55.4
Avaya Inc.	486.7	460.5

GEOGRAPHIC COMPOSITION

Geographic Concentrations by Obligor

	June 30, 2006		December 31, 2005
State
California	9.7	%	9.8	%
Texas	7.0	%	7.5	%
New York	6.7	%	6.7	%
All other states	54.6	%	54.9	%
Total US	78.0	%	78.9	%
Country
Canada	6.0	%	6.1	%
England	3.4	%	3.5	%
Australia	1.1	%	1.0	%
Mexico	1.1	%	0.9	%
Germany	1.1	%	0.8	%
France	1.0	%	1.1	%
China	1.0	%	1.0	%
All other countries	7.3	%	6.7	%
Total International	22.0	%	21.1	%

 

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS AND ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 41

The table summarizes significant state concentrations greater than 5.0% and international concentrations in excess of 1.0% of our owned financing and leasing portfolio assets. For each period presented, our managed asset geographic composition did not differ significantly from our owned asset geographic composition.

INDUSTRY COMPOSITION

Our industry composition is detailed in Note 5 – Concentrations. We believe the following discussions, covering certain industries, are of interest to investors.

Aerospace

Aerospace (dollars in millions)

	June 30, 2006		December 31, 2005
	Net Investment	Number	Net Investment	Number
By Region:
Europe	$2,708.8	86	$2,348.4	75
US and Canada	905.5	41	1,243.6	62
Asia Pacific	1,509.0	50	1,569.0	52
Latin America	859.6	28	533.7	20
Africa / Middle East	367.1	9	257.2	6
Total	$6,350.0	214	$5,951.9	215
By Manufacturer:
Airbus	$3,571.7	94	$3,269.0	84
Boeing	2,750.0	114	2,644.6	124
Other	28.3	6	38.3	7
Total	$6,350.0	214	$5,951.9	215
By Body Type (1):
Narrow body	$4,896.9	172	$4,331.0	165
Intermediate	1,244.2	26	1,347.2	27
Wide body	180.6	10	235.4	16
Other	28.3	6	38.3	7
Total	$6,350.0	214	$5,951.9	215
By Product:
Operating lease	$5,968.0	190	$5,327.1	182
Leverage lease (other)	148.5	5	232.1	10
Leverage lease (tax optimized)	90.2	5	135.2	7
Capital lease	69.3	3	67.7	3
Loan	74.0	11	189.8	13
Total	$6,350.0	214	$5,951.9	215
Other Data:
Off-lease aircraft	1		10
Number of accounts	97		93
Weighted average age of fleet (years)	6		6
Largest customer net investment	$   294.7		$   277.3

(1) Narrow body are single aisle design and consist primarily of Boeing 737 and 757 series and Airbus A320 series aircraft. Intermediate body are smaller twin aisle design and consist primarily of Boeing 767 series and Airbus A330 series aircraft. Wide body are large twin aisle design and consist primarily of Boeing 747 and 777 series and McDonnell Douglas DC10 series aircraft.

 

42 CIT GROUP INC

Our commercial and regional aerospace portfolios are in the Transportation Finance segment. The commercial aircraft all comply with Stage III noise regulations. Generally, we write leases for terms between three and five years. The increase in the portfolio balance was due to new aircraft deliveries.

Our top five commercial aerospace exposures totaled $1,135.5 million at June 30, 2006. Four of the top five exposures are to carriers outside of the US The largest exposure to a US carrier at June 30, 2006 was $199.9 million.

The regional aircraft portfolio at June 30, 2006 consisted of 72 planes with a net investment of $178.3 million. The carriers are primarily located in North America and Europe. Loans make up approximately 49% of the portfolio, operating leases account for about 39% of the portfolio, and the remaining are capital leases. At December 31, 2005 the portfolio consisted of 104 planes with a net investment of $275.3 million.

At June 30, 2006, one commercial aircraft was off-lease due to a bankruptcy repossession, for which we have a letter of intent for lease with another airline. Within the regional aircraft portfolio at June 30, 2006, there was no aircraft off-lease.

The following is a list of our exposure to aerospace carriers that have filed for bankruptcy protection and the current status of our aircraft at June 30, 2006:

• Delta Air Lines – On September 14, 2005, Delta Air Lines announced that it had filed for reorganization under Chapter 11 of the US Bankruptcy Code. During the fourth quarter of 2005, we charged off $13.2 million. Currently, we have three loans totaling $27.6 million and one operating lease for $24.2 million secured by four Boeing aircraft.

• Northwest Airlines – On September 14, 2005, Northwest Airlines announced that it had filed for reorganization under Chapter 11 of the US Bankruptcy Code. During the fourth quarter of 2005, we charged off $35.3 million. Currently, our Northwest Airlines exposure includes one operating lease for $8.9 million on a Boeing aircraft.

Our aerospace assets include both operating leases and capital leases. Management considers current lease rentals as well as relevant and available market information (including third-party sales for similar equipment, published appraisal data and other marketplace information) both in determining undiscounted future cash flows when testing for the existence of impairment and in determining estimated fair value in measuring impairment. We adjust the depreciation schedules of commercial aerospace equipment on operating leases or residual values underlying capital leases when projected fair value at the end of the lease term is less than the projected book value at the end of the lease term. We review aerospace assets for impairment annually, or more often should events or circumstances warrant. Aerospace equipment is defined as impaired when the expected undiscounted cash flow over its expected remaining life is less than its book value. We factor historical information, current economic trends and independent appraisal data into the assumptions and analyses we use when determining the expected undiscounted cash flow. Included among these assumptions are the following:

• Lease terms

• Remaining life of the asset

• Lease rates

• Remarketing prospects

• Maintenance costs

See Note 11 – Commitments and Contingencies for additional information regarding commitments to purchase additional aircraft and Note 5 –Concentrations for further discussion on geographic and industry concentrations.

 

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS AND ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 43

Home Lending

Managed Home Lending Portfolio Statistics (dollars in millions)

	June 30, 2006		December 31, 2005		June 30, 2005
Portfolio assets	$    9,503.2		$  8,335.7		$  6,285.0
Managed assets	$  10,227.0		$  9,174.5		$  7,312.6
% of first mortgages	90	%	92	%	93	%
Average loan size	$       119.8		$     118.3		$     108.7
Top state concentrations	California, Florida, Illinois, New York, Texas		California, Florida, Illinois, New York, Texas		California, Florida, Ohio, Pennsylvania, Texas
Top 5 state concentrations as a % of managed portfolio	44	%	42	%	43	%
Fixed-rate mortgage %	44	%	43	%	47	%
Average loan-to-value	81	%	81	%	81	%
Average FICO score	636		633		633
Delinquencies (sixty days or more)	3.24	%	2.89	%	3.17	%
Net charge-offs	1.03	%	0.82	%	1.05	%

The Consumer Finance home lending business is largely originated through a broker network. As part of originating business through this core channel, we employ an active portfolio management approach, whereby we target desired portfolio mix / risk attributes in terms of product type, lien position, and geographic concentrations, among other factors, resulting in sales of a portion of our originations from time to time to manage our exposure to risk. We supplement business with opportunistic purchases in the secondary market when market conditions are favorable from a credit and price perspective. The trends in the credit metrics for our home lending business reflect normal seasoning of the portfolio during the quarter and growth year over year.

Student Lending (Student Loan Xpress)

The Consumer Finance student lending portfolio, which is marketed as Student Loan Xpress, totaled $6.9 billion at June 30, 2006, representing 11.3% of owned and 10.2% of managed assets. Loan origination volumes were $1.3 billion and $0.4 billion for the quarters ended June 30, 2006 and 2005. Student Loan Xpress has arrangements with certain financial institutions to sell selected loans and works jointly with these financial institutions to promote these relationships.

Finance receivables by product type for our student lending portfolio are as follows:

Student Lending Finance Receivables by Product Type (dollars in millions)

Finance receivables by product type	June 30, 2006	December 31, 2005	June 30, 2005
Consolidation loans	$6,323.1	$4,668.7	$3,954.8
Other US Government guaranteed loans	688.7	568.7	322.6
Private (non-guaranteed) loans and other	108.7	30.4	14.1
Total	$7,120.5	$5,267.8	$4,291.5

Delinquencies (sixty days or more) were $228.7 million, 3.30% of finance receivables at June 30, 2006 and $114.3 million, 2.66% at June 30, 2005.

Top 5 state concentrations (California, New York, Texas, Pennsylvania, and Ohio) represented an aggregate 36% of the portfolio.

 

44 CIT GROUP INC

RISK MANAGEMENT

Our business activities involve various elements of risk. We consider the principal types of risk to be credit risk (including credit, collateral and equipment risk) and market risk (including interest rate, foreign currency and liquidity risk). Managing risks is essential to conducting our businesses and to our profitability. Accordingly, our risk management systems and procedures are designed to identify and analyze key business risks, to set appropriate policies and limits, and to continually monitor these risks and limits by means of reliable administrative and information systems, along with other policies and programs. Within the Office of the Chairman, the Vice Chairman and Chief Lending Officer oversees credit risk management across the businesses while the Vice Chairman and Chief Financial Officer oversees market risk management.

CREDIT RISK MANAGEMENT

We have formal underwriting policies and procedures to evaluate financing and leasing assets for credit and collateral risk during the credit granting process and periodically after the advancement of funds. These guidelines set forth our underwriting parameters based on: (1) Target Market Definitions, which delineate the markets, industries, geographies and products that our businesses are permitted to target, and (2) Risk Acceptance Criteria, which details acceptable transaction structures, credit profiles and required risk-adjusted returns.

We have enhanced our credit risk management process by implementing a two-tier risk metrics system to capture and analyze credit risk based on probability of obligor default and loss given default. Probability of default is determined by evaluating the borrower creditworthiness including analyzing credit history, financial condition, cash flow adequacy, financial performance and management quality. Loss given default ratings, which estimate the loss if an account goes into default, are predicated on deal structure, collateral valuation and related guarantees (including recourse from manufacturers, dealers or governments).

We are implementing processes and systems to drive risk-based pricing models to the individual transaction level based on the aforementioned credit metrics to ensure that transactions meet acceptable risk-adjusted return criteria. Each of our business units has developed and implemented a formal credit management process customized to the products/services they offer, the clients they serve and the industries in which they operate.

Commercial Lending/Leasing:

The commercial credit management process begins with the initial evaluation of credit risk and underlying collateral at the time of origination and continues over the life of the finance receivable or operating lease, including collecting past due balances and liquidating underlying collateral. Credit personnel review a potential borrower’s financial condition, results of operations, management, industry, customer base, operations, collateral and other data, such as third party credit reports, to thoroughly evaluate the customer’s borrowing and repayment ability. Transactions are graded according to the two-tier risk metrics system described above. Credit facilities are subject to approval within our overall credit approval and underwriting guidelines and are issued commensurate with the credit evaluation performed on each borrower.

Consumer and Small Ticket Lending/Leasing:

For consumer transactions and certain small-ticket leasing/lending transactions, we employ proprietary automated credit scoring models by loan type. The complex statistical models and algorithms are developed, tested and maintained in-house by our credit risk management sciences group. The models emphasize, among other things, occupancy status, length of residence, employment, debt to income ratio (ratio of total installment debt and housing expenses to gross monthly income), bank account references, credit bureau information and combined loan to value ratio for consumers, while small business models encompass financial performance metrics, length of time in business, industry category and geographic location. The models are used to assess a potential borrower’s credit standing and repayment ability considering the value or adequacy of property offered as collateral. We also utilize external credit bureau scoring, behavioral models and judgment in the credit adjudication and collection processes.

We regularly evaluate the consumer loan portfolio and the small ticket leasing portfolio using past due, vintage curve and other statistical tools to analyze trends and credit performance by loan type, including analysis of specific credit characteristics and other selected subsets of the portfolios. Adjustments to credit scorecards and lending programs are made when deemed appropriate. Individual underwriters are assigned credit authority based upon their experience, performance and understanding of the underwriting policies and procedures of our consumer and small-ticket leasing operations. A credit approval hierarchy also exists to ensure that an underwriter with the appropriate level of authority reviews all applications.

Equipment/Residual Risk Management

We have developed systems, processes and expertise to manage the equipment and residual risk in our leasing businesses. Our process consists of the following: 1) setting residual value at transaction inception; 2) systematic residual reviews; and 3) monitoring of residual realizations. Reviews for impairment are performed at least annually. Residual realizations, by business unit and product, are reviewed as part of our ongoing financial and asset quality review, both within the business units and by senior management.

We have maintained a standard practice of reviewing our aerospace portfolio regularly and, in accordance with SFAS No. 13 and SFAS No. 144, we test for asset impairment based upon projected cash flows and relevant market data, with any impairment in value charged to earnings.

 

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS AND ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 45

Portfolio Analytics

We monitor concentrations by borrower, industry, geographic region and equipment type, and we set or modify exposure limits as conditions warrant, to minimize credit concentrations and the risk of substantial credit loss. Owned and managed credit exposures are reviewed on an ongoing basis to identify sectors of the economy that may be experiencing declining creditworthiness or financial difficulty as soon as possible and underwriting criteria and risk tolerances are adjusted accordingly.

We continue to advance our capital allocation disciplines through the implementation of processes and systems which drive risk-based equity allocations down to the transaction level and stress test loss scenarios. We expanded our proactive portfolio management activities to place greater emphasis on whole loan sales and syndications and broadened our risk mitigation techniques to include risk-sharing arrangements, credit insurance and credit derivatives. Additionally we are migrating our credit data files to a centralized credit manager system which will further our portfolio analytical capabilities and allow us to look at cross industry and cross border performance correlations.

Supervision and Oversight

The Corporate Credit Risk Management group, which reports to the Vice Chairman and Chief Lending Officer, oversees and manages credit risk throughout CIT. This group includes senior credit executives in each of the business units. Our Executive Credit Committee includes the Chief Executive Officer, the Chief Lending Officer and members of the Corporate Credit Risk Management group. The committee approves transactions which are outside of established target market definitions and risk acceptance criteria, corporate exceptions as delineated within the individual business unit credit authority and transactions that exceed the strategic business units’ credit authority.

The Corporate Credit Risk Management group also includes an independent credit audit function. The credit audit group reviews the credit management processes at each business unit and monitors compliance with established corporate policies. The credit audit group examines adherence with established credit policies and procedures and tests for inappropriate credit practices, including whether potential problem accounts are being detected and reported on a timely basis.

CIT also maintains a standing Asset Quality Review Committee, which is charged with reviewing aggregate portfolio performance, including the status of individual financing and leasing assets, owned and managed, to obligors with higher risk profiles. The committee is comprised of members of senior management, including the Vice Chairman and Chief Lending Officer, the Vice Chairman and Chief Financial Officer, the Chief Credit Officer, the Controller and the Director of Credit Audit and meets with senior business unit executives to understand portfolio performance dynamics. This committee also periodically meets with the Chief Executive Officer of CIT to review overall credit risk, including geographic, industry and customer concentrations, and the reserve for credit losses.

MARKET RISK MANAGEMENT

Market risk is the risk of loss arising from changes in values of financial instruments, and includes interest rate risk, foreign exchange risk, derivative counterparty credit risk and liquidity risk. We engage in transactions in the normal course of business that expose us to market risks. We conduct what we believe are appropriate management practices and maintain policies designed to effectively mitigate such risks. The objectives of our market risk management efforts are to preserve the economic and accounting returns of our assets by matching the repricing and maturity characteristics of our assets with that of our liabilities. Strategies for managing market risks associated with changes in interest rates and foreign exchange rates are an integral part of the process, because those strategies affect our future expected cash flows as well as our cost of capital.

Our Capital Committee sets policies, oversees and guides the interest rate and currency risk management process, including the establishment and monitoring of risk metrics, and ensures the implementation of those policies. Other risks monitored by the Capital Committee include derivative counterparty credit risk and liquidity risk. The Capital Committee meets periodically and includes the Chief Executive Officer, Vice Chairman and Chief Financial Officer, Vice Chairman and Chief Lending Officer, Vice Chairman – Specialty Finance, Vice Chairman – Commercial Finance, Treasurer, and Controller.

INTEREST RATE AND FOREIGN EXCHANGE
RISK MANAGEMENT

Interest Rate Risk Management – We monitor our interest rate sensitivity on a regular basis by analyzing the impact of interest rate changes upon the financial performance of the business. We also consider factors such as the strength of the economy, customer prepayment behavior and re-pricing characteristics of our assets and liabilities.

We evaluate and monitor risk through two primary metrics:

• Margin at Risk (MAR), which measures the impact of changing interest rates upon interest income over the subsequent twelve months.

• Value at Risk (VAR), which measures the net economic value of assets by assessing the market value of assets, liabilities and derivatives.

We regularly monitor and simulate our degree of interest rate sensitivity by measuring the characteristics of interest-sensitive assets, liabilities, and derivatives. The Capital Committee reviews the results of this modeling periodically.

The first interest rate sensitivity modeling technique (MAR) that we employ includes the creation of prospective twelve-month baseline and rate shocked net interest income simulations. At the date that we model interest rate sensitivity, we derive the baseline net interest income considering the current level of interest-sensitive assets, the current level of interest-sensitive liabilities, and the

 

46 CIT GROUP INC

current level of derivatives. Our baseline simulation assumes that, over the next successive twelve months, market interest rates (as of the date of our simulation) are held constant and that no new loans or leases are extended. Once we calculate the baseline net interest income, we instantaneously raise market interest rates, which we previously held constant, 100 basis points across the entire yield curve, and a rate shocked simulation is run in which all interest rate sensitive assets, liabilities and derivatives are immediately reset. We then measure interest rate sensitivity as the difference between the calculated baseline and the rate shocked net interest income.

An immediate hypothetical 100 basis point increase in the yield curve on July 1, 2006 would reduce our net income by an estimated $15 million after-tax over the next twelve months. A corresponding decrease in the yield curve would cause an increase in our net income of a like amount. A 100 basis point increase in the yield curve on July 1, 2005 would have reduced our net income by an estimated $16 million after tax, while a corresponding decrease in the yield curve would have increased our net income by a like amount.

The second interest rate modeling technique (VAR) we employ is focused on the net economic value of the firm by modeling the current market value of assets, liabilities and derivatives, to determine our market value baseline. Once the baseline market value is calculated, we raise market interest rates 100 basis points across the entire yield curve, and new market values are estimated. By modeling the economic value of the portfolio we are able to understand how the economic value of the balance sheet would change under specific interest rate scenarios.

An immediate hypothetical 100 basis point increase in the yield curve on July 1, 2006 would increase our economic value by $238 million before income taxes. A 100 basis point increase in the yield curve on July 1, 2005 would have increased our economic value by $114 million before income taxes.

Although we believe that these measurements provide an estimate of our interest rate sensitivity, they do not account for potential changes in the credit quality, size, composition, and prepayment characteristics of our balance sheet, nor do they account for other business developments that could affect our net income or for management actions that could be taken. Accordingly, we can give no assurance that actual results would not differ materially from the estimated outcomes of our simulations. Further, such simulations do not represent our current view of future market interest rate movements.

A comparative analysis of the weighted average principal outstanding and interest rates on our debt before and after the effect of interest rate swaps is shown on the following table.

	Before Swaps			After Swaps
Quarter Ended June 30, 2006
Commercial paper, variable-rate senior notes and bank credit facilities	$25,600.7	5.07	%	$29,868.3	5.18	%
Fixed-rate senior and subordinated notes and deposits	25,124.9	5.56	%	20,857.3	5.58	%
Composite	$50,725.6	5.32	%	$50,725.6	5.34	%
Quarter Ended June 30, 2005
Commercial paper, variable-rate senior notes and bank credit facilities	$20,966.9	3.33	%	$24,514.3	3.67	%
Fixed-rate senior and subordinated notes and deposits	22,343.1	5.38	%	18,795.7	5.17	%
Composite	$43,310.0	4.40	%	$43,310.0	4.33	%
Six Months Ended June 30, 2006
Commercial paper, variable-rate senior notes and bank credit facilities	$24,970.9	4.86	%	$28,549.4	4.98	%
Fixed-rate senior and subordinated notes and deposits	24,363.9	5.48	%	20,785.4	5.44	%
Composite	$49,334.8	5.16	%	$49,334.8	5.17	%
Six Months Ended June 30, 2005
Commercial paper, variable-rate senior notes and bank credit facilities	$19,307.3	3.10	%	$23,221.6	3.45	%
Fixed-rate senior and subordinated notes and deposits	22,155.9	5.26	%	18,241.6	5.04	%
Composite	$41,463.2	4.25	%	$41,463.2	4.14	%

The weighted average interest rates before swaps do not necessarily reflect the interest expense that we would have incurred over the life of the borrowings had we managed the interest rate risk without the use of such swaps.

We offer a variety of financing products to our customers, including fixed and floating-rate loans of various maturities and currency denominations, and a variety of leases, including operating leases. Changes in market interest rates, relationships

 

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS AND ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 47

between short-term and long-term market interest rates, or relationships between different interest rate indices (i.e., basis risk) can affect the interest rates charged on interest-earning assets differently than the interest rates paid on interest-bearing liabilities, and can result in an increase in interest expense relative to finance income. We measure our asset/liability position in economic terms through duration measures and sensitivity analysis, and we measure the effect on earnings using maturity gap analysis. Our asset portfolio is generally comprised of loans and leases of short to intermediate term. As such, the duration of our asset portfolio is generally less than three years. We target to closely match the duration of our liability portfolio with that of our asset portfolio. As of June 30, 2006, our liability portfolio duration was slightly longer than our asset portfolio duration.

A matched asset/liability position is generally achieved through a combination of financial instruments, including commercial paper, deposits, medium-term notes, long-term debt, interest rate and currency swaps, foreign exchange contracts, and through securitization. We do not speculate on interest rates or foreign exchange rates, but rather seek to mitigate the possible impact of such rate fluctuations encountered in the normal course of business. This process is ongoing due to prepayments, refinancings and actual payments varying from contractual terms, as well as other portfolio dynamics.

We periodically enter into structured financings (involving the issuance of both debt and an interest rate swap with corresponding notional principal amount and maturity) to manage liquidity and reduce interest rate risk at a lower overall funding cost than could be achieved by solely issuing debt.

As part of managing exposure to interest rate, foreign currency, and, in limited instances, credit risk, CIT, as an end-user, enters into various derivative transactions, all of which are transacted in over-the-counter markets with other financial institutions acting as principal counterparties. Derivatives are utilized to eliminate or mitigate economic risk, and our policy prohibits entering into derivative financial instruments for trading or speculative purposes. To ensure both appropriate use as a hedge and to achieve hedge accounting treatment, whenever possible, substantially all derivatives entered into are designated according to a hedge objective against a specific or forecasted liability or, in limited instances, assets. The notional amounts, rates, indices, and maturities of our derivatives closely match the related terms of the underlying hedged items.

CIT utilizes interest rate swaps to exchange variable-rate interest underlying forecasted issuances of commercial paper, specific variable-rate debt instruments, and, in limited instances, variable-rate assets for fixed-rate amounts. These interest rate swaps are designated as cash flow hedges and changes in fair value of these swaps, to the extent they are effective as a hedge, are recorded in other comprehensive income. Ineffective amounts are recorded in interest expense. Interest rate swaps are also utilized to convert fixed-rate interest on specific debt instruments to variable-rate amounts. These interest rate swaps are designated as fair value hedges and changes in fair value of these swaps are effectively recorded as an adjustment to the carrying value of the hedged item, as the offsetting changes in fair value of the swaps and the hedged items are recorded in earnings.

The following table summarizes the composition of our interest rate sensitive assets and liabilities before and after swaps:

	Before Swaps				After Swaps
	Fixed rate		Floating rate		Fixed rate		Floating rate
June 30, 2006
Assets	50	%	50	%	50	%	50	%
Liabilities	50	%	50	%	46	%	54	%
December 31, 2005
Assets	49	%	51	%	49	%	51	%
Liabilities	50	%	50	%	44	%	56	%

Total interest sensitive assets were $58.0 billion and $51.9 billion at June 30, 2006 and December 31, 2005. Total interest sensitive liabilities were $51.4 billion and $45.6 billion at June 30, 2006 and December 31, 2005.

Foreign Exchange Risk Management – To the extent local foreign currency borrowings are not raised, CIT utilizes foreign currency exchange forward contracts to hedge or mitigate currency risk underlying foreign currency loans to subsidiaries and the net investments in foreign operations. These contracts are designated as foreign currency cash flow hedges or net investment hedges and changes in fair value of these contracts are recorded in other comprehensive income along with the translation gains and losses on the underlying hedged items. Translation gains and losses of the underlying foreign net investment, as well as offsetting derivative gains and losses on designated hedges, are reflected in other comprehensive income in the Consolidated Balance Sheet.

CIT also utilizes cross-currency swaps to hedge currency risk underlying foreign currency debt and selected foreign currency assets. The swaps that meet hedge accounting criteria are designated as foreign currency cash flow hedges or foreign currency fair value hedges and changes in fair value of these contracts are recorded in other comprehensive income (for cash flow hedges), or effectively as a basis adjustment (including the impact of the offsetting adjustment to the carrying value of the hedged item) to the hedged item (for fair value hedges) along with the transaction

 

48 CIT GROUP INC

gains and losses on the underlying hedged items. CIT also has certain cross-currency swaps that economically hedge exposures, but do not qualify for hedge accounting treatment.

Other Market Risk Management – CIT has entered into credit default swaps to economically hedge certain CIT credit exposures. These swaps do not meet the requirements for hedge accounting treatment and therefore are recorded at fair value, with both realized and unrealized gains or losses recorded in other revenue in the consolidated statement of income. See Note 8 – Derivative Financial Instruments for further discussion, including notional principal balances of interest rate swaps, foreign currency exchange forward contracts, cross-currency swaps, credit default swaps and other derivative contracts.

DERIVATIVE RISK MANAGEMENT

We enter into interest rate and currency swaps, foreign exchange forward contracts, and in limited instances, credit default swaps and commodity swaps as part of our overall risk management practices. We assess and manage the external and internal risks associated with these derivative instruments in accordance with the overall operating goals established by our Capital Committee. External risk is defined as those risks outside of our direct control, including counterparty credit risk, liquidity risk, systemic risk, legal risk and market risk. Internal risk relates to those operational risks within the management oversight structure and includes actions taken in contravention of CIT policy.

The primary external risk of derivative instruments is counterparty credit exposure, which is defined as the ability of a counterparty to perform its financial obligations under a derivative contract. We control the credit risk of our derivative agreements through counterparty credit approvals, pre-established exposure limits and monitoring procedures.

The Capital Committee, in conjunction with Corporate Risk Management, approves each counterparty and establishes exposure limits based on credit analysis and market value. All derivative agreements are entered into with major money center financial institutions rated investment grade by nationally recognized rating agencies, with the majority of our counterparties rated “AA” or better. Credit exposures are measured based on the current market value and potential future exposure of outstanding derivative instruments. Exposures are calculated for each derivative contract and are aggregated by counterparty to monitor credit exposure.

LIQUIDITY RISK MANAGEMENT

Liquidity risk refers to the risk of being unable to meet potential cash outflows promptly and cost-effectively. Factors that could cause such a risk to arise might be a disruption of a securities market or other source of funds. We actively manage and mitigate liquidity risk by maintaining diversified sources of funding and committed alternate sources of funding, and we maintain and periodically review a contingency funding plan to be implemented in the event of any form of market disruption. Additionally, we target our debt issuance strategy to achieve a maturity pattern designed to reduce refinancing risk. The primary funding sources are commercial paper (US, Canada and Australia), long-term debt (US and International) and asset-backed securities (US and Canada). Additional sources of liquidity are loan and lease payments from customers, whole-loan asset sales and loan syndications.

Outstanding commercial paper totaled $5.1 billion at June 30, 2006, compared with $5.2 billion at December 31, 2005. Our targeted US program size remains at $5.0 billion in addition to programs targeted to aggregate $500 million in Canada and Australia. Our goal is to maintain committed bank lines in excess of aggregate outstanding commercial paper. We have aggregate bank facilities of $6.3 billion in multi-year facilities. We also maintain committed bank lines of credit to provide backstop support of commercial paper borrowings and local bank lines to support our international operations.

During the current quarter, we grew deposits at CIT Bank, a Utah industrial bank, by approximately $700 million to almost $1.4 billion. This action represents further execution on our liquidity risk management plan to broaden our funding sources and decrease our reliance on capital markets. Our plan is to fund a portion of the Bank’s assets, which include a portion of the home lending and student lending portfolios, with Bank deposits, with a targeted outstanding deposit base of $2.0 billion by the end of 2006. Our longer-term goal is to have 10% of our total funding base from Bank deposits.

We maintain registration statements with the Securities and Exchange Commission (SEC) covering debt securities that we may sell in the future. During the quarter, we filed a new shelf registration statement for up to Euros 3 billion of debt funding that became effective. At June 30, 2006, we had $10.5 billion and Euros 2.5 billion of registered, but unissued, debt securities available under existing shelf registration statements, under which we may issue debt securities and other capital market securities. Term-debt issued during second quarter 2006 totaled $4.8 billion: $3.5 billion in variable-rate medium-term notes and $1.3 billion in fixed-rate notes. Consistent with our strategy of managing debt refinancing risk, the weighted average maturity of term-debt issued in 2006 was approximately five years. Included with the fixed rate notes are issuances under a retail note program in which we offer fixed-rate senior, unsecured notes utilizing numerous broker-dealers for placement to retail accounts. During the quarter, we issued $92 million under this program having maturities of between 2 and 10 years. As part of our strategy to further diversify our funding sources, $0.6 billion of foreign currency denominated debt was issued during the June 2006 quarter. We plan on continuing to utilize diversified sources of debt funding to meet our strategic global growth initiatives.

To further strengthen our funding capabilities, we maintain committed asset-backed facilities and shelf registration statements, which cover a range of assets from equipment to consumer home lending receivables and trade accounts receivable. While these are predominately in the US, we also maintain facilities for

 

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS AND ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 49

Canadian domiciled assets. As of June 30, 2006, we had approximately $5.7 billion of availability in our committed asset-backed facilities and $4.0 billion of registered, but unissued, securities available under public shelf registration statements relating to our asset-backed securitization program.

We also target and monitor certain liquidity metrics to ensure both a balanced liability profile and adequate alternate liquidity availability as outlined in the following table:

Liquidity Measurement	Current Target	June 30, 2006		December 31, 2005
Commercial paper to total debt	Maximum of 15%	10	%	11	%
Short-term debt to total debt	Maximum of 35%	23	%	29	%
Bank lines to commercial paper	Minimum of 100%	134	%	131	%
Aggregate alternate liquidity* to short-term debt	Minimum of 100%	132	%	110	%

* Aggregate alternate liquidity includes available bank facilities, asset-backed facilities and cash.

Our credit ratings are an important factor in meeting our earnings and net finance revenue targets as better ratings generally correlate to lower cost of funds (see Net Finance Revenue, interest expense discussion). The following credit ratings have been in place since September 30, 2002 with the exception of the “positive” outlooks which were upgraded from “stable” in 2006:

	Short-Term	Long-term	Outlook
Moody’s	P-1	A2	Stable
Standard & Poor’s	A-1	A	Positive
Fitch	F1	A	Stable
DBRS	R-1L	A	Positive

The credit ratings stated above are not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal by the assigning rating organization. Each rating should be evaluated independently of any other rating.

We have certain covenants contained in our legal documents that govern our funding structures. The most significant covenant in CIT’s indentures and credit agreements is a negative pledge provision, which limits granting or permitting liens on our assets, but provides for exceptions for certain ordinary course liens needed to operate our business. In addition, our credit agreements also contain a minimum net worth requirement of $4.0 billion.

 

50 CIT GROUP INC

The following tables summarize significant contractual payments and projected cash collections, and contractual commitments at June 30, 2006:

Payments and Collections by Twelve Month Period Ending June 30, (dollars in millions)(3)

	Total	2007	2008		2009		2010	2011+
Commercial Paper	$  5,113.1	$  5,113.1	$         –		$         –		$         –	$          –
Deposits	1,395.1	393.6	621.7		240.1		73.1	66.6
Variable-rate senior unsecured notes	17,809.7	3,860.8	7,450.7		3,962.0		142.6	2,393.6
Fixed-rate senior unsecured notes	24,360.9	2,227.7	3,052.8		2,489.4		1,613.7	14,977.3
Non-recourse, secured borrowings	3,305.4	–	–		–		–	3,305.4
Preferred capital security	251.2	–	–		–		–	251.2
Lease rental expense	392.6	52.4	48.4		38.8		26.8	226.2
Total contractual payments	52,628.0	11,647.6	11,173.6		6,730.3		1,856.2	21,220.3
Finance receivables (1)	49,306.1	12,252.4	5,315.9		3,848.1		2,887.8	25,001.9
Operating lease rental income	4,696.7	1,285.5	1,157.2		853.4		580.2	820.4
Finance receivables held for sale (2)	1,340.6	1,340.6	–		–		–	–
Cash – current balance	2,453.3	2,453.3	–		–		–	–
Retained interest in securitizations and other investments	1,128.1	625.3	231.3		126.9		38.3	106.3
Total projected cash collections	58,924.8	17,957.1	6,704.4		4,828.4		3,506.3	25,928.6
Net projected cash collections (payments)	$  6,296.8	$  6,309.5	$(4,469.2	)	$(1,901.9	)	$1,650.1	$  4,708.3

(1) Projected proceeds from the sale of operating lease equipment, interest revenue from finance receivables, debt interest expense and other items are excluded. Obligations relating to postretirement programs are also excluded.

(2) Based upon contractual cash flows; amount could differ due to prepayments, extensions of credit, charge-offs and other factors.

(3) Based upon management’s intent to sell rather than contractual maturities of underlying assets.

 

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS AND ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 51

Commitment Expiration by June 30,

	Total	2007	2008	2009	2010	2011+
Credit extensions	$    9,775.9	$1,286.8	$1,193.4	$1,156.3	$1,361.0	$4,778.4
Aircraft purchases	3,335.0	967.0	1,501.0	307.0	–	560.0
Letters of credit	1,157.4	1,086.5	14.4	14.0	0.3	42.2
Sale-leaseback payments	653.9	53.1	48.3	48.3	48.2	456.0
Manufacturer purchase commitments	544.2	516.2	28.0	–	–	–
Guarantees and acceptances	174.9	160.4	13.2	1.3	–	–
Total contractual commitments	$15,641.3	$4,070.0	$2,798.3	$1,526.9	$1,409.5	$5,836.6

During the quarter ended June 30, 2006, we ordered five A330 aircraft, at an estimated purchase price of approximately $0.5 billion, from Airbus Industrie for delivery in 2007 and 2008. In July 2006, we also exercised options under existing agreements to purchase an additional four A320 family single-aisle aircraft. We are evaluating further additional orders of commercial aircraft, as returns and demand continue to improve in this sector. During the quarter we also completed a 25 year sale-leaseback transaction related to 896 rail cars to improve our return and under which CIT is obligated to make total payments of approximately $92 million.

INTERNAL CONTROLS

The Internal Controls Committee is responsible for monitoring and improving internal controls and overseeing the internal controls attestation mandated by Section 404 of the Sarbanes-Oxley Act of 2002 (“SARBOX”). The committee, which is chaired by the Controller, includes the Vice Chairman and Chief Financial Officer, the Director of Internal Audit and other senior executives in finance, legal, risk management and information technology.

OFF-BALANCE SHEET ARRANGEMENTS

SECURITIZATION PROGRAM

We fund asset originations on our balance sheet by accessing various sectors of the capital markets, including the term debt and commercial paper markets. In an effort to broaden funding sources and provide an additional source of liquidity, we use an array of securitization programs, including both asset-backed commercial paper and term structures, to access both the public and private asset-backed securitization markets. Current products in these programs include receivables and leases secured by equipment as well as consumer loans secured by residential real estate. The following table summarizes data relating to our securitization programs.

Securitized Assets (dollars in millions)

	June 30, 2006		December 31, 2005
Securitized Assets:
Vendor Finance	$3,840.8		$3,921.6
Consumer (Home Lending)	723.8		838.8
Corporate Finance	2,121.3		2,525.3
Total securitized assets	$6,685.9		$7,285.7
Securitized assets as a %
of managed assets	9.8	%	11.6	%

	Quarters Ended June 30,		Six Months Ended June 30,
Volume Securitized:	2006	2005	2006	2005
Vendor Finance	$774.2	$   787.2	$1,640.2	$1,462.3
Corporate Finance	82.6	265.5	163.2	519.4
Total volume securitized	$856.8	$1,052.7	$1,803.4	$1,981.7

 

52 CIT GROUP INC

Under our typical asset-backed securitization, we sell a “pool” of secured loans or leases to a special-purpose entity (SPE), typically a trust. SPEs are used to achieve “true sale” requirements for these transactions in accordance with SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities.” The SPE, in turn, issues certificates and/or notes that are collateralized by the pool and entitle the holders thereof to participate in certain pool cash flows.

Accordingly, CIT has no legal obligations to repay the securities in the event of a default by the SPE. CIT retains the servicing rights of the securitized contracts, for which we earn a servicing fee. We also participate in certain “residual” cash flows (cash flows after payment of principal and interest to certificate and/or note holders, servicing fees and other credit-related disbursements). At the date of securitization, we estimate the “residual” cash flows to be received over the life of the securitization, record the present value of these cash flows as a retained interest in the securitization (retained interests can include bonds issued by the SPE, cash reserve accounts on deposit in the SPE or interest only receivables) and typically recognize a gain. Assets securitized are shown in our managed assets and our capitalization ratios on a managed basis.

In estimating residual cash flows and the value of the retained interests, we make a variety of financial assumptions, including pool credit losses, prepayment speeds and discount rates. These assumptions are supported by both our historical experience and anticipated trends relative to the particular products securitized. Subsequent to recording the retained interests, we review them quarterly for impairment based on estimated fair value. These reviews are performed on a disaggregated basis. Fair values of retained interests are estimated utilizing current pool demographics, actual note/certificate outstandings, current and anticipated credit losses, prepayment speeds and discount rates.

Our retained interests had a carrying value at June 30, 2006 of $1.0 billion. Retained interests are subject to credit and prepayment risk. As of June 30, 2006, approximately 50% of our outstanding securitization pool balances are in conduit structures. Securitized assets are subject to the same credit granting and monitoring processes which are described in the “Credit Risk Management” section.

The key assumptions used in measuring the retained interests at the date of securitization for transactions completed during 2006 were as follows:

	Commercial Equipment
	Vendor Finance		Corporate Finance
Weighted average prepayment speed	28.93	%	9.61	%
Weighted average expected credit losses	0.27	%	0.55	%
Weighted average discount rate	8.63	%	9.00	%
Weighted average life (in years)	1.31		2.31

The key assumptions used in measuring the fair value of retained interests in securitized assets at June 30, 2006 were as follows:

	Commercial Equipment				Home Lending and Manufactured Housing		Recreational Vehicles and Boats
	Vendor Finance		Corporate Finance
Weighted average prepayment speed	31.67	%	11.54	%	28.70	%	21.53	%
Weighted average expected credit losses	0.70	%	1.23	%	1.63	%	0.63	%
Weighted average discount rate	8.24	%	9.22	%	13.00	%	15.00	%
Weighted average life (in years)	1.15		1.49		2.75		2.55

 

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS AND ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 53

Joint Venture Activities

We utilize joint ventures organized through distinct legal entities to conduct financing activities with certain strategic vendor partners. Receivables are originated by the joint venture and purchased by CIT. The vendor partner and CIT jointly own these distinct legal entities, and there is no third-party debt involved. These arrangements are accounted for using the equity method, with profits and losses distributed according to the joint venture agreement. See disclosure in Note 9 – Certain Relationships and Related Transactions.

CAPITALIZATION Capital Structure (dollars in millions)

	June 30, 2006		December 31, 2005
Commercial paper, deposits, term debt and secured borrowings	$   51,984.2		$   47,612.5
Total common stockholders’ equity(1)	6,799.0		6,418.1
Preferred stock	500.0		500.0
Stockholders’ equity (1)	7,299.0		6,918.1
Preferred capital securities	251.2		252.0
Total capital	7,550.2		7,170.1
Goodwill and other intangible assets	(1,033.6	)	(1,011.5	)
Total tangible stockholders’ equity and preferred capital securities	6,516.6		6,158.6
Total tangible capitalization	$   58,500.8		$   53,771.1
Tangible stockholders’ equity (1) and Preferred Capital Securities to managed assets	9.59	%	9.80	%

(1) Stockholders’ equity excludes the impact of the changes in fair values of derivatives qualifying as cash flow hedges and certain unrealized gains or losses on retained interests and investments, as these amounts are not necessarily indicative of amounts that will be realized. See “Non-GAAP Financial Measurements.”

See “Liquidity Risk Management” for discussion of risks impacting our liquidity and capitalization.

CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to use judgment in making estimates and assumptions that affect reported amounts of assets and liabilities, the reported amounts of income and expense during the reporting period and the disclosure of contingent assets and liabilities at the date of the financial statements. We consider accounting estimates relating to the following to be critical in applying our accounting policies:

• Charge-off of Finance Receivables

• Impaired Loans

• Reserve for Credit Losses

• Retained Interests in Securitizations

• Lease Residual Values

• Goodwill and Intangible Assets

• Income Tax Reserves and Deferred Income Taxes

There have been no significant changes to the methodologies and processes used in developing estimates relating to these items from what was described in our 2005 Annual Report on Form 10-K.

 

54 CIT GROUP INC

STATISTICAL DATA

The following table presents components of net income as a percentage of AEA, along with other selected financial data:

(dollars in millions)

	Six Months Ended June 30,
	2006		2005
Finance revenue	9.79	%	9.28	%
Interest expense	4.67	%	3.74	%
Net finance revenue	5.12	%	5.54	%
Depreciation on operating lease equipment	1.85	%	2.09	%
Net finance revenue after depreciation on operating lease equipment	3.27	%	3.45	%
Provision for credit losses	0.30	%	0.40	%
Finance revenue, net of interest expense, depreciation and credit provision	2.97	%	3.05	%
Other revenue	2.06	%	2.65	%
Total revenue, net of interest expense, depreciation and credit provision	5.03	%	5.70	%
Salaries and general operating expenses	2.45	%	2.32	%
Restructuring charges	0.04	%	0.11	%
Income before provision for income taxes	2.54	%	3.27	%
Provision for income taxes	(0.78	)%	(1.18	)%
Minority interest, after tax	–		(0.01	)%
Net income before preferred stock dividends	1.76	%	2.08	%
Preferred stock dividends	(0.05	)%	–
Net income available to common stockholders	1.71	%	2.08	%
Average Earning Assets	$   54,616.9		$   45,869.5

NON-GAAP FINANCIAL MEASUREMENTS

The SEC adopted regulations that apply to any public disclosure or release of material information that includes a non-GAAP financial measure. The accompanying Management’s Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosure about Market Risk contain certain non-GAAP financial measures. The SEC defines a non-GAAP financial measure as a numerical measure of a company’s historical or future financial performance, financial position, or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the financial statements or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented.

Non-GAAP financial measures disclosed in this report are meant to provide additional information and insight regarding the historical operating results and financial position of the business and in certain cases to provide financial information that is presented to rating agencies and other users of financial information. These measures are not in accordance with, or a substitute for, GAAP and may be different from or inconsistent with non-GAAP financial measures used by other companies.

 

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS AND ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 55

Non-GAAP Reconciliations (dollars in millions)

	June 30, 2006		December 31, 2005
Managed assets(1):
Finance receivables	$ 49,306.1		$ 44,294.5
Operating lease equipment, net	10,583.6		9,635.7
Finance receivables held for sale	1,340.6		1,620.3
Equity and venture capital investments (included in other assets)	27.8		30.2
Total financing and leasing portfolio assets	61,258.1		55,580.7
Securitized assets	6,685.9		7,285.7
Managed assets	$ 67,944.0		$ 62,866.4
Earning assets(2):
Total financing and leasing portfolio assets	$ 61,258.1		$ 55,580.7
Credit balances of factoring clients	(3,702.8	)	(4,187.8	)
Earning assets	$ 57,555.3		$ 51,392.9
Tangible equity(3):
Total equity	$   6,910.9		$   6,462.7
Other comprehensive income relating to derivative financial instruments	(99.9	)	(27.6	)
Unrealized gain on securitization investments	(12.0	)	(17.0	)
Goodwill and intangible assets	(1,033.6	)	(1,011.5	)
Tangible common equity	5,765.4		5,406.6
Preferred stock	500.0		500.0
Preferred capital securities	251.2		252.0
Tangible equity	$   6,516.6		$   6,158.6
Debt, net of overnight deposits(4):
Total debt	$ 52,235.4		$ 47,864.5
Overnight deposits	(1,439.2	)	(2,703.1	)
Preferred capital securities	(251.2	)	(252.0	)
Debt, net of overnight deposits	$ 50,545.0		$ 44,909.4
Net income, excluding certain items(5):
Six Months Ended June 30,	2006		2005
Net income	$465.7		$476.7
Gains related to certain derivative contracts	–		(45.4	)
Employee stock option expense	10.4		–
Net income - adjusted	$476.1		$431.3

(1) Managed assets are utilized in certain credit and expense ratios. Securitized assets are included in managed assets because CIT retains certain credit risk and the servicing related to assets that are funded through securitizations.

(2) Earning assets are utilized in certain revenue and earnings ratios. Earning assets are net of credit balances of factoring clients. This net amount, which corresponds to amounts funded, is a basis for revenues earned.

(3) Total tangible stockholders’ equity is utilized in leverage ratios, and is consistent with certain rating agency measurements. Other comprehensive income/losses and unrealized gains on securitization investments (both included in the separate component of equity) are excluded from the calculation, as these amounts are not necessarily indicative of amounts which will be realized.

(4) Debt, net of overnight deposits is utilized in certain leverage ratios. Overnight deposits are excluded from these calculations, as these amounts are retained by the Company to repay debt. Overnight deposits are reflected in both debt and cash and cash equivalents.

(5) Net Income as adjusted is developed to present results on a comparable basis to enable analysis of past performance.

 

56 CIT GROUP INC

FORWARD-LOOKING STATEMENTS

Certain statements contained in this document are “forward-looking statements” within the meaning of the US Private Securities Litigation Reform Act of 1995. All statements contained herein that are not clearly historical in nature are forward-looking and the words “anticipate,” “believe,” “expect,” “estimate,” “plan,” “target” and similar expressions are generally intended to identify forward-looking statements. Any forward-looking statements contained herein, in press releases, written statements or other documents filed with the Securities and Exchange Commission or in communications and discussions with investors and analysts in the normal course of business through meetings, webcasts, phone calls and conference calls, concerning our operations, economic performance and financial condition are subject to known and unknown risks, uncertainties and contingencies. Forward-looking statements are included, for example, in the discussions about:

• our liquidity risk management,

• our credit risk management,

• our asset/liability risk management,

• our funding, borrowing costs and net finance revenue,

• our capital, leverage and credit ratings,

• our operational risks, including success of build-out initiatives

• legal risks,

• our growth rates,

• our commitments to extend credit or purchase equipment, and

• how we may be affected by legal proceedings.

All forward-looking statements involve risks and uncertainties, many of which are beyond our control, which may cause actual results, performance or achievements to differ materially from anticipated results, performance or achievements. Also, forward-looking statements are based upon management’s estimates of fair values and of future costs, using currently available information. Therefore, actual results may differ materially from those expressed or implied in those statements. Factors, in addition to those disclosed in “Risk Factors”, that could cause such differences include, but are not limited to:

• risks of economic slowdown, downturn or recession,

• industry cycles and trends,

• demographic trends,

• risks inherent in changes in market interest rates and quality spreads,

• funding opportunities and borrowing costs,

• changes in funding markets, including commercial paper, term debt and the asset-backed securitization markets,

• uncertainties associated with risk management, including credit, prepayment, asset/liability, interest rate and currency risks,

• adequacy of reserves for credit losses,

• risks associated with the value and recoverability of leased equipment and lease residual values,

• changes in laws or regulations governing our business and operations,

• changes in competitive factors, and

• future acquisitions and dispositions of businesses or asset portfolios.

 

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS AND ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 57

Part II. Other Information

ITEM 1. Legal Proceedings

NorVergence Related Litigation

On September 9, 2004, Exquisite Caterers Inc., et al. v. Popular Leasing Inc., et al. (“Exquisite Caterers”), a putative national class action, was filed in the Superior Court of New Jersey against 13 financial institutions, including CIT, which had acquired equipment leases (“NorVergence Leases”) from NorVergence, Inc., a reseller of telecommunications and Internet services to businesses. The complaint alleged that NorVergence misrepresented the capabilities of the equipment leased to its customers and overcharged for the equipment, and that the NorVergence Leases are unenforceable. Plaintiffs sought rescission, punitive damages, treble damages and attorneys’ fees. In addition, putative class action suits in Illinois and Texas, based upon the same core allegations and seeking the same relief, were filed by NorVergence customers against CIT and other financial institutions. The parties in Exquisite Caterers reached a settlement, which was approved by the Court on June 30, 2006 (the “Class Settlement”). Pursuant to the Class Settlement, the Court certified a national class, and class members will receive the same settlement that CIT made with the Attorney General in their state, as referenced below, plus an extra 2% discount if the settling plaintiff makes all payments due under the Class Settlement. Only 22, or approximately 5%, of the national class plaintiffs opted out of the Class Settlement. The putative class action commenced in Texas will be dismissed as part of the Class Settlement. The putative class action in Illinois will not be dismissed in connection with the Class Settlement, but has only 2 plaintiffs remaining.

Beginning in August 2004, the Attorneys General of several states commenced investigations of NorVergence and the financial institutions that purchased NorVergence Leases, including CIT. CIT has entered into settlement agreements with the Attorneys General in each of these states, except for Texas. Under those settlements, lessees in those states have had an opportunity to resolve all claims by and against CIT by paying a percentage of the remaining balance on their leases. CIT also has produced documents for transactions related to NorVergence at the request of the Federal Trade Commission (“FTC”) and pursuant to a subpoena in a grand jury proceeding being conducted by the US Attorney for the Southern District of New York in connection with an investigation of transactions related to NorVergence.

On July 14, 2004, the US Bankruptcy Court ordered the liquidation of NorVergence under Chapter 7 of the Bankruptcy Code. On July 14, 2006, the trustee appointed in NorVergence’s bankruptcy case filed a complaint against 44 defendants, including insiders of NorVergence and financing companies, including CIT. Pursuant to the complaint, among other things, the trustee alleges that the defendants committed fraud or aided and abetted NorVergence in the commission of fraud. CIT denies the allegations contained in the complaint and this litigation is not expected to have a material adverse financial effect on the Company’s financial statements.

Other Litigation

In addition, there are various legal proceedings that have been brought against CIT in the ordinary course of business. While the outcomes of the NorVergence related litigation and the ordinary course legal proceedings, and the related activities, are not certain, based on present assessments, management does not believe that they will have a material adverse financial effect on the Company’s financial statements.

ITEM 1A. Risk Factors

RISK FACTORS

Our business activities involve various elements of risk. We consider the following issues to be the most critical risks to the success of our business:

• General deterioration in economic conditions

• Limitation on our liquidity / ability to raise capital

• Significant changes in interest rates

• Inability to realize our entire investment in the equipment that we lease

• Potential inadequacy in our reserve for credit losses

• Adverse effects from the regulated environment in which we operate

• Competition from a variety of financing sources for our customers

• Adverse effects from the acquisition or disposition of a business or portfolio

• Risks associated with transactions in foreign currencies

• Potential execution risk associated with our business initiatives

There have been no significant changes to the risk elements from what is described in our 2005 Annual Report on Form 10-K. See “Item 1A. Risk Factors” in Form 10-K filed by CIT on March 6, 2006.

 

58 CIT GROUP INC

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table details the repurchase activity of CIT common stock under existing, approved share repurchase programs during the June 30, 2006 quarter:

	Total Number of Shares Purchased		Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs
Balance at March 31, 2006	12,685,330		$46.08		4,406,997
April 1 - 30, 2006	542,200		$54.26	542,200	3,864,797
May 1 - 31, 2006	638,400		$53.38	638,400	3,226,397
June 1 - 30, 2006	609,300		$51.44	609,300	2,617,097
Total Purchases	1,789,900
Reissuances(1)	(549,751	)
Balance at June 30, 2006	13,925,479

(1) Includes the issuance of shares of our common stock upon exercise of stock options and the vesting of restricted stock.

ITEM 3. Defaults Upon Senior Securities

None

ITEM 4. Submission of Matters to a Vote of Security Holders

The annual meeting of stockholders was held on May 9, 2006. The following table sets forth the names of the individuals, comprising all of the directors of CIT, who were elected to the Board of Directors, to serve until the next annual meeting of stockholders, or until a successor is duly elected and qualified, together with the number of votes cast for each director. Also set forth are descriptions of and votes cast for each of the other proposals presented to stockholders at the annual meeting.

Proposal No.	Description	Votes For	Votes Withheld	Votes Abstain	Broker Non-Votes
1	Election of Directors:
	GARY C. BUTLER	176,806,700	1,367,546	–	–
	WILLIAM M. FREEMAN	175,347,004	2,827,242	–	–
	HON. THOMAS H. KEAN	171,558,697	6,615,549	–	–
	MARIANNE MILLER PARRS	169,057,657	9,116,589	–	–
	JEFFREY M. PEEK	171,146,048	7,028,198	–	–
	TIMOTHY M. RING	175,380,422	2,793,824	–	–
	JOHN R. RYAN	176,801,020	1,373,226	–	–
	SEYMOUR STERNBERG	175,543,580	2,630,666	–	–
	PETER J. TOBIN	168,008,105	10,166,141	–	–
	LOIS M. VAN DEUSEN	176,804,169	1,370,077	–	–
2	Ratification of Independent Accountants	167,870,923	8,909,002	1,394,321	–
3	Approval of Long-term Incentive Plan	135,384,044	29,898,924	2,169,508	10,721,770
4	Approval of Executive Incentive Plan	160,746,294	15,231,179	2,196,773	–

 

59

ITEM 5. Other Information

None

ITEM 6. Exhibits

(a) Exhibits

3.1 Second Restated Certificate of Incorporation of the Company (incorporated by reference to Form 10-Q filed by CIT on August 12, 2003).

3.2 Amended and Restated By-laws of the Company (incorporated by reference to Form 10-Q filed by CIT on August 12, 2003).

3.3 Certificate of Designations relating to the Company’s 6.350% Non-Cumulative Preferred Stock, Series A (incorporated by reference to Exhibit 3 to Form 8-A filed by CIT on July 29, 2005).

3.4 Certificate of Designations relating to the Company’s Non-Cumulative Preferred Stock, Series B (incorporated by reference to Exhibit 3 to Form 8-A filed by CIT on July 29, 2005).

4.1 Indenture dated as of August 26, 2002 by and among CIT Group Inc., Bank One Trust Company, N.A., as Trustee and Bank One NA, London Branch, as London Paying Agent and London Calculation Agent, for the issuance of unsecured and unsubordinated debt securities (incorporated by reference to Exhibit 4.18 to Form 10-K filed by CIT on February 26, 2003).

4.2 Indenture dated as of October 29, 2004 between CIT Group Inc. and J.P. Morgan Trust Company, National Association for the issuance of senior debt securities (incorporated by reference to Exhibit 4.4 to Form S-3/A filed by CIT on October 28, 2004).

4.3 Indenture dated as of January 20, 2006 between CIT Group Inc. and JPMorgan Chase Bank, NA for the issuance of senior debt securities (incorporated by reference to Exhibit 4.3 to Form S-3 filed by CIT on January 20, 2006).

4.4 Indenture dated as of January 20, 2006 between CIT Group Inc. and JPMorgan Chase Bank, NA for the issuance of subordinated debt securities (incorporated by reference to Exhibit 4.4 to Form S-3 filed by CIT on January 20, 2006).

4.5 Indenture dated as of June 2, 2006 between CIT Group Inc., JPMorgan Chase Bank, NA and JPMorgan Chase Bank, NA, London branch for the issuance of senior notes.

4.6 Indenture dated as of June 2, 2006 between CIT Group Inc., JPMorgan Chase Bank, NA and JPMorgan Chase Bank, NA, London branch for the issuance of subordinated notes.

4.7 Certain instruments defining the rights of holders of CIT’s long-term debt, none of which authorize a total amount of indebtedness in excess of 10% of the total amounts outstanding of CIT and its subsidiaries on a consolidated basis have not been filed as exhibits. CIT agrees to furnish a copy of these agreements to the Commission upon request.

12.1 CIT Group Inc. and Subsidiaries Computation of Earnings to Fixed Charges.

31.1 Certification of Jeffrey M. Peek pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certification of Joseph M. Leone pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Certification of Jeffrey M. Peek pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 Certification of Joseph M. Leone pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

60 CIT GROUP INC

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CIT GROUP INC.

By: /s/ Joseph M. Leone
Joseph M. Leone
Vice Chairman and Chief Financial Officer

By: /s/ William J. Taylor
William J. Taylor
Executive Vice President, Controller
and Principal Accounting Officer

August 7, 2006

 

61

EX-4.3

                                                                     Exhibit 4.3

                                 CIT GROUP INC.,
                                     Issuer

                                       And

                           JPMORGAN CHASE BANK, N.A.,
                                     Trustee

                                   ----------

                                    INDENTURE

                                   ----------

                          Dated as of January 20, 2006

                             Senior Debt Securities



                         Reconciliation and tie between
             Trust Indenture Act of 1939 (the "Trust Indenture Act")
                                  and Indenture

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

ss.310(a)(1) .....................................................          6.7
(a)(2) ...........................................................          6.7
(b) ..............................................................          6.8
ss.311 ...........................................................          6.4
ss.312(a) ........................................................          7.1
(b) ..............................................................          7.2
(c) ..............................................................          7.2
ss.313(a) ........................................................          7.3
(c) ..............................................................          7.3
(d) ..............................................................          7.3
ss.314(a) ........................................................          7.4
(c)(l) ...........................................................          1.2
(c)(2) ...........................................................          1.2
(e) ..............................................................     1.1, 1.2
(f) ..............................................................          1.2
ss.315(a)-(d) ....................................................          3.3
(b) ..............................................................          6.2
(c) ..............................................................        6.1(9)
(d) ..............................................................        6.1(8)
(e) ..............................................................          5.15
ss.316(a) (last sentence) ........................................           1.1
(a)(l)(A) ........................................................          5.12
(a)(1)(B) ........................................................          5.13
(b) ..............................................................           5.8
ss.317(a)(1) .....................................................           5.3
(a)(2) ...........................................................           5.4
(b) ..............................................................          10.3
ss.318(a) ........................................................           1.8

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



                                                 Table of Contents

                                                                            Page

                                    ARTICLE 1
             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 1.1 Definition1
         Act .........................................................         2
         Affiliate ...................................................         2
         Authenticating Agent ........................................         2
         Authorized Newspaper ........................................         2
         Authorized Officer ..........................................         2
         Bankruptcy Law ..............................................         2
         Bearer Security .............................................         2
         Board of Directors ..........................................         2
         Board Resolution ............................................         3
         Business Day ................................................         3
         Capital Stock ...............................................         3
         Capitalized Lease Obligation ................................         3
         Commission ..................................................         3
         Common Stock ................................................         3
         Company .....................................................         3
         Company Request and Company Order ...........................         3
         Conversion Event ............................................         3
         Corporate Trust Office ......................................         3
         Corporation .................................................         4
         Coupon ......................................................         4
         Currency ....................................................         4
         CUSIP number ................................................         4
         Custodian ...................................................         4
         Defaulted Interest ..........................................         4
         Dollars or $ ................................................         4
         Event of Default ............................................         4
         Foreign Currency ............................................         4
         Government Obligations ......................................         4
         Holder ......................................................         5
         Indebtedness ................................................         5
         Indenture ...................................................         5
         Independent Public Accountants ..............................         6
         Indexed Security ............................................         6
         Interest ....................................................         6
         Interest Payment Date .......................................         6
         Judgment Currency ...........................................         6
         Lien ........................................................         6
         Maturity ....................................................         6
         New York Banking Day ........................................         6


                                       i



         Office or Agency.............................................         6
         Officers' Certificate........................................         6
         Opinion of Counsel...........................................         6
         Original Issue Discount Security.............................         7
         Outstanding..................................................         7
         Paying Agent.................................................         8
         Person.......................................................         8
         Place of Payment.............................................         8
         Predecessor Security.........................................         8
         Preferred Stock..............................................         8
         Redemption Date..............................................         8
         Redemption Price.............................................         9
         Registered Security..........................................         9
         Regular Record Date..........................................         9
         Required Currency............................................         9
         Responsible Officer..........................................         9
         Security.....................................................         9
         Security Register............................................         9
         Special Record Date..........................................         9
         Stated Maturity..............................................         9
         Subsidiary...................................................         9
         Trust Indenture Act..........................................        10
         Trustee......................................................        10
         United States................................................        10
         U.S. Depository  or Depository...............................        10
         Vice President...............................................        10
Section 1.2       Compliance Certificates and Opinions................        10
Section 1.3       Form of Documents Delivered to Trustee..............        11
Section 1.4       Acts of Holders.....................................        11
Section 1.5       Notices, etc. to Trustee and Company................        13
Section 1.6       Notice to Holders of Securities; Waiver.............        14
Section 1.7       Language of Notices.................................        15
Section 1.8       Conflict with Trust Indenture Act...................        15
Section 1.9       Effect of Headings and Table of Contents............        15
Section 1.10      Successors and Assigns..............................        16
Section 1.11      Separability Clause.................................        16
Section 1.12      Benefits of Indenture...............................        16
Section 1.13      Governing Law.......................................        16
Section 1.14      Legal Holidays......................................        16
Section 1.15      Counterparts........................................        16
Section 1.16      Judgment Currency...................................        17
Section 1.17      No Security Interest Created........................        17
Section 1.18      Limitation on Individual Liability..................        17


                                       ii



                                    ARTICLE 2
                                SECURITIES FORMS

Section 2.1       Forms Generally.....................................        18
Section 2.2       Form of Trustee's Certificate of Authentication.....        18
Section 2.3       Securities in Global Form...........................        19

                                    ARTICLE 3
                                 THE SECURITIES

Section 3.1       Amount Unlimited; Issuable in Series................        19
Section 3.2       Currency; Denominations.............................        23
Section 3.3       Execution, Authentication, Delivery and Dating......        23
Section 3.4       Temporary Securities................................        25
Section 3.5       Registration, Transfer and Exchange.................        25
Section 3.6       Mutilated, Destroyed, Lost and Stolen Securities....        29
Section 3.7       Payment of Interest; Rights to Interest Preserved...        30
Section 3.8       Persons Deemed Owners...............................        32
Section 3.9       Cancellation........................................        33
Section 3.10      Computation of Interest.............................        33

                                    ARTICLE 4
   SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE AND COVENANT DEFEASANCE

Section 4.1       Satisfaction and Discharge..........................        33
Section 4.2       Defeasance and Covenant Defeasance..................        34
Section 4.3       Application of Trust Money..........................        38
Section 4.4       Reinstatement.......................................        39

                                    ARTICLE 5
                                    REMEDIES

Section 5.1       Events of Default...................................        39
Section 5.2       Acceleration of Maturity; Rescission
                    and Annulment.....................................        41
Section 5.3       Collection of Indebtedness and Suits for Enforcement
                    by Trustee........................................        42
Section 5.4       Trustee May File Proofs of Claim....................        43
Section 5.5       Trustee May Enforce Claims without Possession
                    of Securities or Coupons..........................        44
Section 5.6       Application of Money Collected......................        44
Section 5.7       Limitations on Suits................................        44
Section 5.8       Unconditional Right of Holders to Receive
                    Principal and any Premium and Interest............        45
Section 5.9       Restoration of Rights and Remedies..................        45
Section 5.10      Rights and Remedies Cumulative......................        45
Section 5.11      Delay or Omission Not Waiver........................        46
Section 5.12      Control by Holders of Securities....................        46
Section 5.13      Waiver of Past Defaults.............................        46


                                      iii



Section 5.14   Waiver of Usury, Stay or Extension Laws................        46
Section 5.15   Undertaking for Costs..................................        47

                                    ARTICLE 6
                                   THE TRUSTEE

Section 6.1       Certain Rights of Trustee...........................        47
Section 6.2       Notice of Defaults..................................        49
Section 6.3       Not Responsible for Recitals or Issuance
                    of Securities.....................................        49
Section 6.4       May Hold Securities.................................        49
Section 6.5       Money Held in Trust.................................        49
Section 6.6       Compensation and Reimbursement......................        50
Section 6.7       Corporate Trustee Required; Eligibility.............        50
Section 6.8       Resignation and Removal; Appointment of Successor...        51
Section 6.9       Acceptance of Appointment by Successor..............        52
Section 6.10      Merger, Conversion, Consolidation or Succession
                    to Business.......................................        54
Section 6.11      Appointment of Authenticating Agent.................        54
Section 6.12      Appointment of Attorney-in-Fact.....................        56

                                    ARTICLE 7
                HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY

Section 7.1       Company to Furnish Trustee Names and Addresses
                    of Holders........................................        56
Section 7.2       Preservation of Information; Communications
                    to Holders........................................        57
Section 7.3       Reports by Trustee..................................        57
Section 7.4       Reports by Company..................................        57

                                    ARTICLE 8
                 CONSOLIDATION, AMALGAMATIONS, MERGER AND SALES

Section 8.1       Company May Consolidate, Etc., Only on
                    Certain Terms.....................................        58
Section 8.2       Successor Person Substituted for Company............        59

                                    ARTICLE 9
                             SUPPLEMENTAL INDENTURES

Section 9.1       Supplemental Indentures without Consent of Holders..        59
Section 9.2       Supplemental Indentures with Consent of Holders.....        60
Section 9.3       Execution of Supplemental Indentures................        62
Section 9.4       Effect of Supplemental Indentures...................        62
Section 9.5       Reference in Securities to Supplemental Indentures..        62
Section 9.6       Conformity with Trust Indenture Act.................        62
Section 9.7       Notice of Supplemental Indenture....................        62

                                   ARTICLE 10
                                    COVENANTS

Section 10.1      Payment of Principal, any Premium, Interest.........        63


                                       iv



Section 10.2      Maintenance of Office or Agency.....................        63
Section 10.3      Money for Securities Payments to Be Held in Trust...        64
Section 10.4      Limitations on Pledges and Liens....................        66
Section 10.5      Corporate Existence.................................        68
Section 10.6      Waiver of Certain Covenants.........................        68
Section 10.7      Company Statement as to Compliance; Notice
                    of Certain Defaults...............................        69

                                   ARTICLE 11
                            REDEMPTION OF SECURITIES

Section 11.1      Applicability of Article............................        69
Section 11.2      Election to Redeem; Notice to Trustee...............        70
Section 11.3      Selection by Trustee of Securities to be Redeemed...        70
Section 11.4      Notice of Redemption................................        70
Section 11.5      Deposit of Redemption Price.........................        72
Section 11.6      Securities Payable on Redemption Date...............        72
Section 11.7      Securities Redeemed in Part.........................        73
Section 11.8      Cancellation and Destruction of Securities..........        73

                                   ARTICLE 12
                                  SINKING FUNDS

Section 12.1      Applicability of Article............................        73
Section 12.2      Satisfaction of Sinking Fund Payments
                    with Securities...................................        74
Section 12.3      Redemption of Securities for Sinking Fund...........        74

                                   ARTICLE 13
                       REPAYMENT AT THE OPTION OF HOLDERS

Section 13.1      Applicability of Article............................        75

                                   ARTICLE 14
                        SECURITIES IN FOREIGN CURRENCIES

Section 14.1      Applicability of Article............................        75

                                   ARTICLE 15
                        MEETINGS OF HOLDERS OF SECURITIES

Section 15.1      Purposes for Which Meetings May Be Called...........        76
Section 15.2      Call, Notice and Place of Meetings..................        76
Section 15.3      Persons Entitled to Vote at Meetings................        76
Section 15.4      Quorum; Action......................................        77
Section 15.5      Determination of Voting Rights; Conduct and
                    Adjournment of Meetings...........................        77
Section 15.6      Counting Votes and Recording Action of Meetings.....        78
Section 15.7      Preservation of Rights of Trustee and Holders.......        79


                                       v



      INDENTURE, dated as of January 20, 2006 (the "Indenture"), between CIT
Group Inc., a corporation duly organized and existing under the laws of the
State of Delaware (the "Company") and JPMorgan Chase Bank, N.A., as trustee (the
"Trustee").

                                    RECITALS

      The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its senior unsecured
debentures, notes or other evidences of indebtedness (the "Securities"),
unlimited as to principal amount, to bear such rates of interest, to mature at
such time or times, to be issued in one or more series and to have such other
provisions as shall be fixed as hereinafter provided.

      The Company has duly authorized the execution and delivery of this
Indenture. All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.

      This Indenture is subject to the provisions of the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder that are required to be part of this Indenture
and, to the extent applicable, shall be governed by such provisions.

      NOW, THEREFORE, THIS INDENTURE WITNESSETH:

      For and in consideration of the premises and the purchase of the
Securities by the Holders (as herein defined) thereof, it is mutually
covenanted, declared and agreed by and between the parties hereto, for the equal
and proportionate benefit of all Holders of the Securities or of any series
thereof and any Coupons (as herein defined) as follows:

                                   ARTICLE 1

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

      Section 1.1 Definitions.

      Except as otherwise specified with respect to any Securities issued
pursuant to Section 3.1, and except as otherwise expressly provided in or
pursuant to this Indenture, or unless the context otherwise requires, for all
purposes of this Indenture:

            (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 Trust
      Indenture Act, either directly or by reference therein, have the meanings
      assigned to them therein;

            (3) all accounting terms not otherwise defined herein have the
      meanings assigned to them in accordance with generally accepted accounting
      principles in the United States of America and, except as otherwise herein
      expressly provided, the terms "generally accepted accounting principles"
      or "GAAP" with respect to any computation required or


                                       1


      permitted hereunder shall mean such accounting principles as are generally
      accepted in the United States of America at the date or time of such
      computation;

            (4) the words "herein," "hereof," "hereto" 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; and

            (5) the word "or" is always used inclusively (for example, the
      phrase "A or B" means "A or B or both," not "either A or B but not both").

      Certain terms used principally in certain Articles hereof are defined in
those Articles.

      "Act," when used with respect to any Holders, has the meaning specified in
Section 1.4.

      "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 the meanings correlative to
the foregoing.

      "Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 6.11 to act on behalf of the Trustee to authenticate Securities of
one or more series.

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

      "Authorized Officer" means, when used with respect to the Company, the
Chairman of the Board of Directors, a Vice Chairman, the President, the Chief
Executive Officer, the Chief Financial Officer, any Vice President, the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of
the Company.

      "Bankruptcy Law" has the meaning specified in Section 5.1(6).

      "Bearer Security" means any Security in the form established pursuant to
Section 2.1 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 generally or in any particular
respect for the Company hereunder.


                                       2


      "Board Resolution" means a copy of one or more resolutions, 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, delivered to the Trustee.

      "Business Day," with respect to any Place of Payment or other location,
means any day other than a Saturday, Sunday or other day on which banking
institutions in such Place of Payment or other location are authorized or
obligated by law, regulation or executive order to close.

      "Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including Preferred
Stock, but excluding any debt securities convertible into such equity.

      "Capitalized Lease Obligation" means an obligation under a lease that is
required to be capitalized for financial reporting purposes in accordance with
generally accepted accounting principles, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with such principles.

      "Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended,
or, if at any time after the execution of this Indenture such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.

      "Common Stock" in respect of any Corporation means Capital Stock of any
class or classes (however designated) which has no preference as to the payment
of dividends, or as to the distribution of assets upon any voluntary or
involuntary liquidation or dissolution of such Corporation, and which is not
subject to redemption by such Corporation.

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

      "Company Request and Company Order" mean, respectively, a written request
or order, as the case may be, signed in the name of the Company by an Authorized
Officer, and delivered to the Trustee.

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

      "Corporate Trust Office" means the principal corporate trust office of the
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the


                                       3


date of original execution of this Indenture is located at One First National
Plaza, Suite 0126, Chicago, Illinois 60670-0126.

      "Corporation" means corporations and limited liability companies and,
except for purposes of Article 8, associations, companies and business trusts.

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

      "Currency," with respect to any payment, deposit or other transfer in
respect of the principal of or any premium or interest on any Security, means
Dollars or the Foreign Currency, as the case may be, in which such payment,
deposit or other transfer is required to be made by or pursuant to the terms
hereof or such Security and, with respect to any other payment, deposit or
transfer pursuant to or contemplated by the terms hereof or such Security, means
Dollars.

      "CUSIP number" means the alphanumeric designation assigned to a Security
by Standard & Poor's Ratings Service, CUSIP Service Bureau.

      "Custodian" has the meaning specified in Section 5.1(6).

      "Defaulted Interest" has the meaning specified in Section 3.7.

      "Dollars or $" means a dollar or other equivalent unit of legal tender for
payment of public or private debts in the United States of America.

      "Event of Default" has the meaning specified in Section 5.1.

      "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.

      "Government Obligations" means securities which are (i) direct obligations
of the United States of America or the other government or governments which
issued the Foreign Currency in which the principal of or any premium or interest
on such Security shall be payable, in each case where the payment or payments
thereunder are supported by the full faith and credit of such government or
governments 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
other government or governments, in each case where the timely payment or
payments thereunder are unconditionally guaranteed as a full faith and credit
obligation by the United States of America or such other government or
governments, and which, in the case of (i) or (ii), are not callable or
redeemable at the option of the issuer or issuers 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 or other amount with respect to 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


                                       4


principal of or other amount with respect to the Government Obligation evidenced
by such depository receipt.

      "Holder," in the case of any Registered Security, means the Person in
whose name such Security is registered in the Security Register and, in the case
of any Bearer Security, means the bearer thereof and, in the case of any Coupon,
means the bearer thereof.

      "Indebtedness" means, with respect to any Person, such Person's (i)
obligations for borrowed money, (ii) obligations representing the deferred
purchase price of property or services other than accounts payable arising in
the ordinary course of such Person's business, (iii) obligations, whether or not
assumed, secured by Liens on property now or hereafter owned or acquired by such
Person (other than carriers', warehousemen's, mechanics', repairmen's or other
like nonconsensual statutory Liens arising in the ordinary course of business),
(iv) obligations which are evidenced by notes, acceptances, or other similar
instruments, (v) capitalized lease obligations, (vi) contingent obligations with
respect to the Indebtedness of another Person, including but not limited to the
obligation or liability of another which such Person assumes, guarantees,
endorses, contingently agrees to purchase or provide funds for the payment of,
or otherwise becomes contingently liable upon; provided that any Indebtedness
owing by the Company to any of its Subsidiaries or by any Subsidiary of the
Company to the Company or by any Subsidiary of the Company to any other
Subsidiary of the Company or any contingent obligation in respect thereof shall
not constitute Indebtedness for purposes of this Agreement, and (vii)
obligations for which such Person is obligated in respect of a letter of credit.
For purposes of this Indenture, Indebtedness shall not include (A) any
indebtedness of such Person to the extent (I) such indebtedness does not appear
on the financial statement of such Person, (II) such indebtedness is recourse
only to certain assets of such Person, and (III) the assets to which such
indebtedness is recourse only appear on the financial statements of such Person
net of such indebtedness, or (B) any indebtedness or other obligations issued by
any Person (or by a trust or other entity established by such Person or any of
its affiliates) which are primarily serviced by the cash flows of a discrete
pool of receivables, leases or other financial assets which have been sold or
transferred by the Company or any Subsidiary in securitization transactions
which, in accordance with GAAP, are accounted for as sales for financial
reporting purposes. It is understood and agreed that (1) the amount of any
Indebtedness described in clause (iii) for which recourse is limited to certain
property of such Person shall be the lower of (x) the amount of the obligation
and (y) the fair market value of the property of such Person securing such
obligation, and (2) the amount of any obligation described in clause (vi) shall
be the lower of (x) the stated or determinable amount of the primary obligation
in respect of which such contingent obligation is made, and (y) the maximum
amount for which such Person may be liable pursuant to the terms of the
agreement embodying such contingent obligation unless such primary obligation
and the maximum amount for which such Person may be liable are not stated or
determinable, in which case the amount of such contingent obligation shall be
such Person's maximum, reasonably anticipated liability in respect thereof as
determined by such Person in good faith.

      "Indenture" means this instrument as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof, including, for all purposes
of this instrument and any such supplemental indenture, the provisions of the
Trust Indenture Act that are deemed to be a part of and govern this instrument,
and, with respect to any Security, by the terms and provisions of such Security


                                       5


and any Coupon appertaining thereto established pursuant to Section 3.1 (as such
terms and provisions may be amended pursuant to the applicable provisions
hereof).

      "Independent Public Accountants" means accountants or a firm of
accountants that, with respect to the Company and any other obligor under the
Securities or the Coupons, are independent public accountants within the meaning
of the Securities Act of 1933, as amended, and the rules and regulations
promulgated by the Commission thereunder, who may be the independent public
accountants regularly retained by the Company or who may be other independent
public accountants. Such accountants or firm shall be entitled to rely upon any
Opinion of Counsel as to the interpretation of any legal matters relating to
this Indenture or certificates required to be provided hereunder.

      "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" means interest payable after Maturity with respect to any
Original Issue Discount Security which, by its terms, bears interest only after
Maturity.

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

      "Judgment Currency" has the meaning specified in Section 1.16.

      "Lien" has the meaning specified in Section 10.4.

      "Maturity," 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 provided in or pursuant to this Indenture, whether at the Stated
Maturity or by declaration of acceleration, notice of redemption or repurchase,
notice of option to elect repayment or otherwise, and includes the Redemption
Date.

      "New York Banking Day" has the meaning specified in Section 1.16.

      "Office or Agency" with respect to any Securities, means an office or
agency of the Company maintained or designated in a Place of Payment for such
Securities pursuant to Section 10.2 or any other office or agency of the Company
maintained or designated for such Securities pursuant to Section 10.2 or, to the
extent designated or required by Section 10.2 in lieu of such office or agency,
the Corporate Trust Office of the Trustee.

      "Officers' Certificate" means a certificate signed by the Chairman, Vice
Chairman, President, Chief Executive Officer or a Vice President and by the
Chief Financial Officer, Treasurer, an Assistant Treasurer, the Secretary, or an
Assistant Secretary of the Corporation, and delivered to the Trustee.

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


                                       6


that, if required by the Trust Indenture Act, complies with the requirements of
Section 314(e) of the Trust Indenture Act.

      "Original Issue Discount Security" means a Security issued pursuant to
this Indenture which provides for declaration of an amount less than the
principal face amount thereof to be due and payable upon acceleration pursuant
to Section 5.2.

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

      (a)   any such Security theretofore cancelled by the Trustee or the
            Security Registrar or delivered to the Trustee or the Security
            Registrar for cancellation;

      (b)   any such Security for whose payment at the Maturity thereof money in
            the necessary amount has been theretofore deposited pursuant hereto
            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 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;

      (c)   any such Security with respect to which the Company has effected
            defeasance and/or covenant defeasance pursuant to the terms hereof,
            except to the extent provided in Section 4.2;

      (d)   any such Security which has been paid pursuant to Section 3.6 or in
            exchange for or in lieu of which other Securities have been
            authenticated and delivered pursuant to this Indenture, unless there
            shall have been presented to the Trustee proof satisfactory to it
            that such Security is held by a bona fide purchaser in whose hands
            such Security is a valid obligation of the Company; and

      (e)   any such Security converted or exchanged as contemplated by this
            Indenture into other securities of the Company or another issuer, if
            the terms of such Security provide for such conversion or exchange
            pursuant to Section 3.1;

provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders of Securities for quorum purposes, (i) the principal amount
of an Original Issue Discount Security that may be counted in making such
determination and that shall be deemed to be Outstanding for such purposes shall
be equal to the amount of the principal thereof that pursuant to the terms of
such Original Issue Discount Security would be declared (or shall have been
declared to be) due and payable upon a declaration of acceleration thereof
pursuant to Section 5.2 at the time of such determination, and


                                       7


(ii) the principal amount of any Indexed Security that may be counted in making
such determination and that shall be deemed Outstanding for such purposes shall
be equal to the principal face amount of such Indexed Security at original
issuance, unless otherwise provided in or pursuant to this Indenture, and (iii)
the principal amount of a Security denominated in a Foreign Currency shall be
the Dollar equivalent, determined on the date of original issuance of such
Security, of the principal amount (or, in the case of an Original Issue Discount
Security, the Dollar equivalent on the date of original issuance of such
Security of the amount determined as provided in (i) above) of such Security,
and (iv) Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor, shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in making any such determination or
relying upon any such request, demand, authorization, direction, notice, consent
or waiver, only Securities which a Responsible Officer of the Trustee actually
knows to be so owned shall be so disregarded. Securities so owned which shall
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee (A) the pledgee's right so to act
with respect to such Securities and (B) that the pledgee is not the Company or
any other obligor upon the Securities or any Coupons appertaining thereto or an
Affiliate of the Company or such other obligor.

      "Paying Agent" means any Person authorized by the Company to pay the
principal of, or any premium or interest on, any Security or any Coupon on
behalf of the Company.

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

      "Place of Payment," with respect to any Security, means the place or
places where the principal of, or any premium or interest on, such Security is
payable as provided in or pursuant to this Indenture or such Security.

      "Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same Indebtedness as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 3.6 in exchange for or in
lieu of a lost, destroyed, mutilated or stolen Security or any Security to which
a mutilated, destroyed, lost or stolen Coupon appertains shall be deemed to
evidence the same Indebtedness as the lost, destroyed, mutilated or stolen
Security or the Security to which a mutilated, destroyed, lost or stolen Coupon
appertains.

      "Preferred Stock" in respect of any Corporation means Capital Stock of any
class or classes (however designated) which is preferred as to the payment of
dividends, or as to the distribution of assets upon any voluntary or involuntary
liquidation or dissolution of such Corporation, over shares of Capital Stock of
any other class of such Corporation.

      "Redemption Date" with respect to any Security or portion thereof to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture or such Security.


                                       8


      "Redemption Price" with respect to any Security or portion thereof to be
redeemed, means the price at which it is to be redeemed as determined by or
pursuant to this Indenture or such Security.

      "Registered Security" means any Security in the form established pursuant
to Section 2.1 which is registered in a Security Register.

      "Regular Record Date" for the interest payable on any Registered Security
on any Interest Payment Date therefor means the date, if any, specified in or
pursuant to this Indenture or such Security as the "Regular Record Date".

      "Required Currency" has the meaning specified in Section 1.16.

      "Responsible Officer" means any officer within the corporate trust office
of the Trustee, which may include the chairman and vice chairman of the board of
directors, the president, the chairman of the executive committee of the board
of directors, the chairman of the trust committee, every vice president or
officer senior thereto, every assistant vice president, the secretary, every
assistant secretary, the treasurer, every assistant treasurer, every trust
officer, every assistant trust officer, and every other officer and assistant
officer of the Trustee customarily performing functions similar to those
performed by the persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred because of his knowledge of,
and familiarity with, a particular subject.

      "Security" or "Securities" means any note or notes, bond or bonds,
debenture or debentures, or any other evidences of Indebtedness, as the case may
be, 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 any such Person, shall 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 3.5.

      "Special Record Date" for the payment of any Defaulted Interest on any
Registered Security means a date fixed by the Company pursuant to Section 3.7.

      "Stated Maturity," with respect to any Security or any installment of
principal thereof or interest thereon, means the date established by or pursuant
to this Indenture or such Security 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 the Company, such Person which, at the
time of determination, more than 50% of the voting power of the shares of its
Capital Stock or other interests (including partnership interests) entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is owned or controlled, directly or
indirectly, by (i) the Company and/or (ii) one or more Subsidiaries of the
Company; provided, however, that the term Subsidiary shall not include any
Person, if the


                                       9


earnings of such Person are not consolidated with the financial statements of
the Company in accordance with the requirements of GAAP.

      "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended,
and any reference herein to the Trust Indenture Act or a particular provision
thereof shall mean such Act or provision, as the case may be, as amended or
replaced from time to time or as supplemented from time to time by rules or
regulations adopted by the Commission under or in furtherance of the purposes of
such Act or provision, as the case may be.

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

      "United States," except as otherwise provided in or pursuant to this
Indenture or any Security, means the United States of America (including the
states thereof and the District of Columbia), its territories and possessions
and other areas subject to its jurisdiction.

      "U.S. Depository or Depository" means, with respect to any Security
issuable or issued in the form of one or more global Securities, the Person
designated as U.S. Depository or Depository by the Company in or pursuant to
this Indenture, which Person must be, to the extent required by applicable law
or regulation, a clearing agency registered under the Securities Exchange Act of
1934, as amended, and, if so provided with respect to any Security, any
successor to such Person. If at any time there is more than one such Person,
"U.S. Depository" or "Depository" shall mean, with respect to any Securities,
the qualifying entity that has been appointed with respect to such Securities.

      "Vice President" when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "Vice President".

      Section 1.2 Compliance Certificates and Opinions.

      Except as otherwise expressly provided in this Indenture, 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
or any of them 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 shall include:


                                       10


            (1) a statement that the 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 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 such individual,
      such condition or covenant has been complied with.

      Section 1.3 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, provided
that such officer, after reasonable inquiry, has no reason to believe and does
not believe that the Opinion of Counsel with respect to the matters upon which
his certificate or opinion is based is erroneous. Any such Opinion of Counsel
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 with respect to such factual matters is in the
possession of the Company, provided that such counsel, after reasonable inquiry,
has no reason to believe and does not believe 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 or any Security, they may, but need not, be
consolidated and form one instrument.

      Section 1.4 Acts of Holders.

            (1) Any request, demand, authorization, direction, notice, consent,
      waiver or other action provided by or pursuant to this Indenture to be
      given or taken by Holders may be embodied in and evidenced by one or more
      instruments of substantially similar tenor signed by such Holders in
      person or by an agent duly appointed in writing. If, but only if,
      Securities of a series are issuable as Bearer Securities, any request,
      demand, authorization, direction, notice, consent, waiver or other action
      provided in or pursuant to 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


                                       11


      accordance with the provisions of Article 15, 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 (subject to
      Section 315 of the Trust Indenture Act) conclusive in favor of the
      Trustee, 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
      15.6.

      Without limiting the generality of this Section 1.4, unless otherwise
provided in or pursuant to this Indenture, a Holder, including a U.S. Depository
that is a Holder of a global Security, may make, give or take, by a proxy or
proxies, duly appointed in writing, any request, demand, authorization,
direction, notice, consent, waiver or other Act provided in or pursuant to this
Indenture to be made, given or taken by Holders, and a U.S. Depository that is a
Holder of a global Security may provide its proxy or proxies to the beneficial
owners of interests in any such global Security through such U.S. Depository's
standing instructions and customary practices.

      The Company shall fix a record date for the purpose of determining the
Persons who are beneficial owners of interest in any permanent global Security
held by a U.S. Depository entitled under the procedures of such U.S. Depository
to make, give or take, by a proxy or proxies duly appointed in writing, any
request, demand, authorization, direction, notice, consent, waiver or other Act
provided in or pursuant to this Indenture to be made, given or taken by Holders.
If such a record date is fixed, the Holders on such record date or their duly
appointed proxy or proxies, and only such Persons, shall be entitled to make,
give or take such request, demand, authorization, direction, notice, consent,
waiver or other Act, whether or not such Holders remain Holders after such
record date. No such request, demand, authorization, direction, notice, consent,
waiver or other Act shall be valid or effective if made, given or taken more
than 90 days after such record date.

            (2) The fact and date of the execution by any Person of any such
      instrument or writing referred to in this Section 1.4 may be proved in any
      reasonable manner; and the Trustee may in any instance require further
      proof with respect to any of the matters referred to in this Section.

            (3) The ownership, principal amount and serial numbers of Registered
      Securities held by any Person, and the date of the commencement and the
      date of the termination of holding the same, shall be proved by the
      Security Register.

            (4) The ownership, principal amount and serial numbers of Bearer
      Securities held by any Person, and the date of the commencement and the
      date of the termination of


                                       12


      holding the same, may be proved by the production of such Bearer
      Securities or by a certificate executed, as depositary, by any trust
      company, bank, banker or other depositary reasonably acceptable to the
      Company, wherever situated, if such certificate shall be deemed by the
      Company and the Trustee to be satisfactory, showing that at the date
      therein mentioned such Person had on deposit with such depositary, 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 (i) another
      certificate or affidavit bearing a later date issued in respect of the
      same Bearer Security is produced, or (ii) such Bearer Security is produced
      to the Trustee by some other Person, or (iii) such Bearer Security is
      surrendered in exchange for a Registered Security, or (iv) such Bearer
      Security is no longer Outstanding. The ownership, principal amount and
      serial numbers of Bearer Securities held by the Person so executing such
      instrument or writing and the date of the commencement and the date of the
      termination of holding the same may also be proved in any other manner,
      which the Company and the Trustee deem sufficient.

            (5) If the Company shall solicit from the Holders of any Registered
      Securities any request, demand, authorization, direction, notice, consent,
      waiver or other Act, the Company may at its option (but is not obligated
      to), by Board Resolution, fix in advance a record date for the
      determination of Holders of Registered Securities entitled to give such
      request, demand, authorization, direction, notice, consent, waiver or
      other Act. 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 Registered
      Securities of record at the close of business on such record date shall be
      deemed to be Holders for the purpose 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 of Registered
      Securities shall be deemed effective unless it shall become effective
      pursuant to the provisions of this Indenture not later than six months
      after the record date.

            (6) Any request, demand, authorization, direction, notice, consent,
      waiver or other Act by 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 or suffered to be done by the Trustee,
      any Security Registrar, any Paying Agent or the Company in reliance
      thereon, whether or not notation of such Act is made upon such Security.

      Section 1.5 Notices, etc. to Trustee and Company.

      Any request, demand, authorization, direction, notice, consent, waiver or
other Act of Holders or other document provided or permitted by this Indenture
to be made upon, given or furnished to, or filed with,


                                       13


            (1) the Trustee by any Holder or the Company shall be sufficient for
      every purpose hereunder if made, given, furnished or filed in writing to
      or with the Trustee at its Corporate Trust Office, or

            (2) the Company, by the Trustee or 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 the attention of its Treasurer, with a copy to the attention
      of its General Counsel, at the address of its principal office specified
      herein or at any other address previously furnished in writing to the
      Trustee by the Company.

      Section 1.6 Notice to Holders of Securities; Waiver.

      Except as otherwise expressly provided in or pursuant to this Indenture,
where this Indenture provides for notice to Holders of Securities of any event,

            (1) such notice shall be sufficiently given to Holders of Registered
      Securities if in writing and mailed, first-class postage prepaid, to each
      Holder of a Registered Security affected by such event, at his address as
      it appears in the Security Register, not later than the latest date, and
      not earlier than the earliest date, prescribed for the giving of such
      notice; and

            (2) such notice shall be sufficiently given to Holders of Bearer
      Securities, if any, if published in an Authorized Newspaper in The City of
      New York and, if such Securities are then listed on any stock exchange
      outside the United States, in an Authorized Newspaper in such city as the
      Company shall advise the Trustee that such stock exchange so requires, on
      a Business Day at least twice, the first such publication to be not
      earlier than the earliest date and the second such publication not later
      than the latest date 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 of a Registered Security 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 that is mailed in the manner herein
provided, shall be conclusively presumed to have been duly given or provided. In
the case by reason of the suspension of regular mail service or by reason of any
other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.

      In case 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 Bearers 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 failure to give notice by
publication to Holders of Bearer Securities as provided above, nor any defect in
any notice so published,


                                       14


shall affect the sufficiency of any notice mailed to Holders of Registered
Securities as provided above.

      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 of Securities 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.

      All communications hereunder will be in writing and will be mailed,
delivered or telegraphed and confirmed to the party receiving such communication
at its address indicated below:

      If to the Company:

                  CIT Group Inc.
                  1 CIT Drive
                  Livingston, New Jersey  07039
                  Attention:  Treasurer and General Counsel

      If to the Trustee:

                  JPMorgan Chase Bank, N.A.
                  4 New York Plaza, 15th Floor
                  New York, New York 10004
                  Attention: Worldwide Securities Services

      Section 1.7 Language of Notices.

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

      Section 1.8 Conflict with Trust Indenture Act.

      If any provision hereof limits, qualifies or conflicts with any duties
under any required provision of the Trust Indenture Act imposed hereon by
Section 318(c) thereof, such required provision shall control.

      Section 1.9 Effect of Headings and Table of Contents.

      The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.


                                       15


      Section 1.10 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 1.11 Separability Clause.

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

      Section 1.12 Benefits of Indenture.

      Nothing in this Indenture, any Security or any Coupon, 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 of Securities or Coupons, any benefit or any legal or equitable
right, remedy or claim under this Indenture.

      Section 1.13 Governing Law.

      This Indenture, the Securities and any Coupons shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made or instruments entered into and, in each case, performed in said
state.

      Section 1.14 Legal Holidays.

      Unless otherwise specified in or pursuant to this Indenture or any
Securities, in any case where any Interest Payment Date, Stated Maturity or
Maturity of any Security, or the last date on which a Holder has the right to
convert or exchange Securities of a series that are convertible or exchangeable,
shall not be a Business Day at any Place of Payment, then (notwithstanding any
other provision of this Indenture, any Security or any Coupon other than a
provision in any Security or Coupon that specifically states that such provision
shall apply in lieu hereof) payment need not be made at such Place of Payment on
such date, and such Securities need not be converted or exchanged on such date,
but such payment may be made, and such Securities may be converted or exchanged,
on the next succeeding day that is a Business Day at such Place of Payment, and
no interest shall accrue on the amount payable on such date or at such time for
the period from and after such Interest Payment Date, Stated Maturity, Maturity
or last day for conversion or exchange, as the case may be, to such next
succeeding Business Day, except that if such next succeeding Business Day is in
the next succeeding calendar year, such payment may be made, and such Securities
may be converted or exchanged, on the immediately preceding Business Day (in the
case of each of the foregoing, with the same force and effect as if made on such
Interest Payment Date or at such Stated Maturity or Maturity or on such last day
for conversion or exchange, as the case may be).

      Section 1.15 Counterparts.

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


                                       16


      Section 1.16 Judgment Currency.

      The Company agrees, to the fullest extent that it may effectively do so
under applicable law, that (a) if for the purpose of obtaining judgment in any
court it is necessary to convert the sum due in respect of the principal of, or
premium or interest, if any, (the "Required Currency") into a currency in which
a judgment will be rendered (the "Judgment Currency"), the rate of exchange used
shall be the rate at which in accordance with normal banking procedures the
Trustee could purchase in The City of New York the requisite amount of the
Required Currency with the Judgment Currency on the New York Banking Day
preceding the day on which a final unappealable judgment is given and (b) its
obligations under this Indenture to make payments in the Required Currency (i)
shall not be discharged or satisfied by any tender, or any recovery pursuant to
any judgment (whether or not entered in accordance with clause (a)), in any
currency other than the Required Currency, except to the extent that such tender
or recovery shall result in the actual receipt, by the payee, of the full amount
of the Required Currency expressed to be payable in respect of such payments,
(ii) shall be enforceable as an alternative or additional cause of action for
the purpose of recovering in the Required Currency the amount, if any, by which
such actual receipt shall fall short of the full amount of the Required Currency
so expressed to be payable and (iii) shall not be affected by judgment being
obtained for any other sum due under this Indenture. For purposes of the
foregoing, "New York Banking Day" means any day except a Saturday, Sunday or a
legal holiday in The City of New York or a day on which banking institutions in
The City of New York are authorized or obligated by law, regulation or executive
order to be closed.

      Section 1.17 No Security Interest Created.

      Subject to the provisions of Section 10.4, nothing in this Indenture or in
any Securities, express or implied, shall be construed to constitute a security
interest under the Uniform Commercial Code or similar legislation, as now or
hereafter enacted and in effect in any jurisdiction where property of the
Company or its Subsidiaries is or may be located.

      Section 1.18 Limitation on Individual Liability.

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


                                       17


expressly waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issuance of such Security.

                                   ARTICLE 2

                                SECURITIES FORMS

      Section 2.1 Forms Generally

      Each Registered Security, Bearer Security, Coupon and temporary or
permanent global Security issued pursuant to this Indenture shall be in the form
established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, shall have such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by or pursuant
to this Indenture or any indenture supplemental hereto and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by the
officers executing such Security or Coupon as evidenced by their execution of
such Security or Coupon, 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.

      Unless otherwise provided in or pursuant to this Indenture or any
Securities, the Securities shall be issuable in registered form without Coupons
and shall not be issuable upon the exercise of warrants.

      Definitive Securities and definitive 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 may be produced in any other
manner, all as determined by the officers of the Company executing such
Securities or Coupons, as evidenced by their execution of such Securities or
Coupons.

      Section 2.2 Form of Trustee's Certificate of Authentication.

      Subject to Section 6.11, 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.

                                                     JPMORGAN CHASE BANK, N.A.,
                                                              as Trustee

                                                     By_________________________
                                                           Authorized Officer


                                       18


      Section 2.3 Securities in Global Form.

      Unless otherwise provided in or pursuant to this Indenture or any
Securities, the Securities shall not be issuable in temporary or permanent
global form. If Securities of a series shall be issuable in global form, as
specified and contemplated by Section 3.1, any such Security may provide that it
or any number of such Securities 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 represented thereby may from time
to time be increased or reduced to reflect exchanges. Any endorsement of any
Security in global form to reflect the amount, or any increase or decrease in
the amount, or changes in the rights of Holders, of Outstanding Securities
represented thereby shall be made in such manner and by such Person or Persons
as shall be specified therein or in the Company Order to be delivered pursuant
to Section 3.3 or 3.4 with respect thereto. Subject to the provisions of Section
3.3 and, if applicable, Section 3.4, the Trustee shall deliver and redeliver, in
each case at the Company's expense, any 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 3.3 or
3.4 has been, or simultaneously is, delivered, any instructions by the Company
with respect to a Security in global form shall be in writing but need not be
accompanied by or contained in an Officers' Certificate and need not be
accompanied by an Opinion of Counsel.

      Notwithstanding the provisions of Section 3.7, unless otherwise specified
in or pursuant to this Indenture or any Securities, payment of principal of, any
premium and interest on, any Security (i) in temporary form shall be made to the
Person or Persons specified therein, and (ii) in global form and registered in
the name of a Depository or its nominee shall be made to the Depository or its
nominee as the Holder of such global Security. Neither the Company nor the
Trustee shall 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 beneficial ownership interests, and each of the Company and the
Trustee may act or refrain from acting without liability on any information
provided by the Depository.

      Notwithstanding the provisions of Section 3.8 and except as provided in
the preceding paragraph, the Company, the Trustee and any agent of the Company
or the Trustee shall treat as the Holder of such principal amount of Outstanding
Securities represented by a global Security (i) in the case of a global Security
in registered form, the Holder of such global Security in registered form, or
(ii) in the case of a global Security in bearer form, the Person or Persons
specified pursuant to Section 3.1.

                                   ARTICLE 3

                                 THE SECURITIES

      Section 3.1 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.


                                       19


      With respect to any Securities to be authenticated and delivered
hereunder, there shall be established in or pursuant to a Board Resolution and
set forth in an Officers' Certificate, or established in one or more indentures
supplemental hereto,

            (1) the title and series of such Securities, which may include
      medium-term notes;

            (2) the total principal amount of the series of such Securities and
      whether there shall be any limit upon the aggregate principal amount of
      such Securities that may be authenticated and delivered under this
      Indenture (except for Securities authenticated and delivered upon
      registration or transfer of, or in exchange for, or in lieu of, other
      Securities of such series pursuant to Section 3.4, 3.5, 3.6, 9.5 or 11.7);

            (3) if such Securities are to be issuable as Registered Securities,
      as Bearer Securities or alternatively as Bearer Securities and Registered
      Securities, and whether the Bearer Securities are to be issuable with
      Coupons, without Coupons or both, and any restrictions applicable to the
      offer, sale or delivery of the Bearer Securities and the terms, if any,
      upon which Bearer Securities may be exchanged for Registered Securities
      and vice versa;

            (4) if any of such Securities are to be issuable in global form,
      when any of such Securities are to be issuable in global form and (i)
      whether such Securities are to be issued in temporary or permanent global
      form or both, (ii) whether beneficial owners of interests in any such
      global Security may exchange such interests for Securities of the same
      series and of like tenor and of any authorized form and denomination, and
      the circumstances under which any such exchanges may occur, if other than
      in the manner specified in Section 3.5, and (iii) the name of the
      Depository or the U.S. Depository, as the case may be, with respect to any
      such global Security;

            (5) if any of such Securities are to be issuable as Bearer
      Securities or in global form, the date as of which any such Bearer
      Security or global Security shall be dated (if other than the date of
      original issuance of the first of such Securities to be issued);

            (6) if any of such Securities are to be issuable as Bearer
      Securities, whether interest in respect of any portion of a temporary
      Bearer Security in global form payable in respect of an Interest Payment
      Date therefor prior to the exchange, if any, of such temporary Bearer
      Security for definitive Securities shall be paid to any clearing
      organization with respect to the portion of such temporary Bearer Security
      held for its account and, in such event, the terms and conditions
      (including any certification requirements) upon which any such interest
      payment received by a clearing organization will be credited to the
      Persons entitled to interest payable on such Interest Payment Date;

            (7) the date or dates, or the method or methods, if any, by which
      such date or dates shall be determined, on which the principal of and
      premium, if any, on the Securities shall be payable;

            (8) the Person to whom any interest on a Security shall be payable,
      if other than the Person in whose name that Security is registered at the
      close of business on the Regular Record Date for such interest; the rate
      or rates at which such Securities shall bear


                                       20


      interest, if any, which rate may be zero in the case of certain Securities
      issued at an issue price representing a discount from the principal amount
      payable at Maturity, or the method by which such rate or rates will be
      determined (including, if applicable, any remarketing option or similar
      method), and the date or dates from which such interest, if any, will
      accrue or the method by which such date or dates will be determined, and
      the basis upon which interest shall be calculated if other than that of a
      360 day year of twelve 30-day months;

            (9) the date or dates on which interest, if any, on such Securities
      shall be payable and any Regular Record Dates applicable to the date or
      dates on which interest will be so payable;

            (10) if in addition to or other than the Borough of Manhattan, The
      City of New York, the place or places where the principal of or any
      premium or interest on such Securities shall be payable, where any of such
      Securities that are issued in registered form may be surrendered for
      registration of, transfer or exchange, and where any such Securities may
      be surrendered for conversion or exchange and notices of demands to or
      upon the Company in respect of such Securities and this Indenture may be
      served, the extent to which, the manner in which, any interest payment on
      a global Security on an Interest Payment Date, will be paid and the manner
      in which any principal of or premium, if any, on any global Security will
      be paid;

            (11) if such Securities are to be redeemable at the Company's
      option, the date or dates on which, the period or periods within which,
      the price or prices at which and the other terms and conditions upon which
      such Securities may be redeemed, in whole or in part, at the Company's
      option pursuant to any sinking fund or otherwise;

            (12) provisions specifying whether the Company shall be obligated to
      redeem, purchase or repay any of such Securities pursuant to any sinking
      fund or analogous provision or at the option of any Holder of such
      Securities and, if so, the date or dates on which, the period or periods
      within which, the price or prices at which and the other terms and
      conditions upon which such Securities shall be redeemed, purchased or
      repaid, in whole or in part, pursuant to such obligation, and any
      provisions for the remarketing of such Securities so redeemed or
      purchased;

            (13) if other than denominations of $1,000, and any integral
      multiple thereof, the denominations in which any Securities to be issued
      in registered form will be issuable and, if other than a denomination of
      $5,000, the denominations in which any Securities to be issued in bearer
      form will be issuable;

            (14) provisions specifying whether the Securities will be
      convertible into other securities of the Company and/or exchangeable for
      Securities of the Company or other obligors and, if so, the terms and
      conditions upon which such Securities shall be so convertible or
      exchangeable;

            (15) if other than the principal amount, the portion of the
      principal amount (or the method by which such portion will be determined)
      of such Securities that will be


                                       21


      payable upon declaration of acceleration of the Maturity thereof pursuant
      to the terms of this Indenture;

            (16) if other than Dollars, the Currency of payment, including
      composite Currencies and Foreign Currencies, of the principal of, any
      premium or interest on any of such Securities;

            (17) if other than as provided in Section 4.2, the manner in which
      the Securities of the series are to be defeased;

            (18) provisions specifying whether the principal of, or any premium
      or interest on such Securities shall be payable, at the election of the
      Company or a Holder of Securities, in a Currency other than that in which
      such Securities are stated to be payable and the date or dates on which,
      the period or periods within which, and the other terms and conditions
      upon which, such election may be made, and the time and manner of
      determining the exchange rate;

            (19) any index, formula or other method used to determine the amount
      of payments of principal of, or any premium or interest on such
      Securities;

            (20) provisions specifying whether such Securities are to be issued
      in the form of one or more global Securities and, if so, the identity of
      the Depositary for such global Security or Securities;

            (21) any deletions from, modifications of or additions to the Events
      of Default or covenants of the Company that are contained herein with
      respect to such Securities;

            (22) terms specifying whether the provisions described below under
      Section 4.2 shall be applicable to such Securities;

            (23) terms specifying whether any of such Securities are to be
      issued upon the exercise of warrants, and the time, manner and place for
      such Securities to be authenticated and delivered; and

            (24) any other terms of such Securities and any other deletions from
      or modifications or additions to this Indenture in respect of such
      Securities.

      All Securities of any one series and all Coupons, if any, appertaining to
Bearer Securities of such series shall be substantially identical except as to
Currency of payments due thereunder, denomination and the rate of interest
thereon, or method of determining the rate of interest, if any, Maturity, and
the date from which interest, if any, shall accrue and except as may otherwise
be provided by the Company in or pursuant to the Board Resolution and set forth
in the Officers' Certificate or in any indenture or indentures supplemental
hereto pertaining to such series of Securities. The terms of the Securities of
any series may provide, without limitation, that the Securities shall be
authenticated and delivered by the Trustee on original issue from time to time
upon written order of persons designated in the Officers' Certificate or
supplemental indenture and that such persons are authorized to determine,
consistent with such Officers' Certificate or any applicable supplemental
indenture, such terms and conditions of the Securities of such series


                                       22


as are specified in such Officers' Certificate or supplemental indenture. All
Securities of any one series need not be issued at the same time and, unless
otherwise so provided, a series may be reopened for issuances of additional
Securities of such series or to establish additional terms of such series of
Securities. The Company also may issue, and the Trustee may authenticate,
Securities with the same terms as previously issued Securities.

      If any of the terms of the Securities of any series shall be established
by action taken by or pursuant to a Board Resolution, the Board Resolution shall
be delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of such series.

      Section 3.2 Currency; Denominations.

      Unless otherwise provided in or pursuant to this Indenture, the principal
of, and any premium and interest, if any, on, the Securities shall be payable in
Dollars. Unless otherwise provided in or pursuant to this Indenture, Registered
Securities denominated in Dollars shall be issuable in registered form without
Coupons in denominations of $1,000, and any integral multiple thereof, and the
Bearer Securities denominated in Dollars shall be issuable in denominations of
$5,000. Securities not denominated in Dollars shall be issuable in such
denominations as are established with respect to such Securities in or pursuant
to this Indenture.

      Section 3.3 Execution, Authentication, Delivery and Dating.

      Securities shall be executed on behalf of the Company by its Chairman of
the Board, a Vice Chairman, its President, its Chief Executive Officer, its
Chief Financial Officer, its Treasurer or a Vice President under its corporate
seal reproduced thereon and attested by its Secretary or one of its Assistant
Secretaries. Coupons shall be executed on behalf of the Company by the Treasurer
or any Assistant Treasurer of the Company. The signature of any of these
officers on the Securities or any Coupons appertaining thereto may be manual or
facsimile.

      Securities and any Coupons appertaining thereto 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 and Coupons or did not hold such offices at the date
of original issuance 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, together with any Coupons
appertaining thereto, executed by the Company, to the Trustee for authentication
and, provided that the Board Resolution and Officers' Certificate or
supplemental indenture or indentures with respect to such Securities referred to
in Section 3.1 and a Company Order for the authentication and delivery of such
Securities have been delivered to the Trustee, the Trustee in accordance with
the Company Order and subject to the provisions hereof and of such Securities
shall authenticate and deliver such Securities. In authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities and any Coupons appertaining thereto, the Trustee
shall be entitled to receive, and (subject to Sections 315(a) through 315(d) of
the Trust Indenture Act) shall be fully protected in relying upon,

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


                                       23


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

                  (b) 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 binding
            obligations of the Company, enforceable in accordance with their
            terms, subject to applicable bankruptcy, insolvency, reorganization
            and other similar laws of general applicability relating to or
            affecting the enforcement of creditors' rights, to general equitable
            principles and to such other qualifications as such counsel shall
            conclude do not materially affect the rights of Holders of such
            Securities and any Coupons; and

            (2) an Officers' Certificate stating that, to the best knowledge of
      the Persons executing such certificate, all conditions precedent to the
      execution, authentication and delivery of such Securities and Coupons, if
      any, appertaining thereto, have been complied with, and no event which is,
      or after notice or lapse of time would become, an Event of Default with
      respect to any of the Securities shall have occurred and be continuing.

      If all the Securities of any series are not to be issued at one time, it
shall not be necessary to deliver an Opinion of Counsel and an Officers'
Certificate at the time of issuance of each Security, but such Opinion of
Counsel and Officers' Certificate, with appropriate modifications, shall be
delivered at or before the time of issuance of the first Security of such
series. After any such first delivery, any separate written request by an
Authorized Officer of the Company or any person designated in writing by an
Authorized Officer that the Trustee authenticate and deliver Securities of such
series for original issue will be deemed to be a certification by the Company
that all conditions precedent provided for in this Indenture relating to
authentication and delivery of such Securities continue to have been complied
with and that no Event of Default with respect to any of the Securities has
occurred or is continuing.

      The Trustee shall not be required to authenticate or to cause an
Authenticating Agent to authenticate any Securities if the issue of such
Securities pursuant to this Indenture will affect the Trustee's own rights,
duties or immunities under the Securities and this Indenture or otherwise in a
manner which is not reasonably acceptable to the Trustee or if the Trustee,
being advised by counsel, determines that such action may not lawfully be taken.

      Each Registered Security shall be dated the date of its authentication.
Each Bearer Security and any Bearer Security in global form shall be dated as of
the date specified in or pursuant to this Indenture.

      No Security or Coupon appertaining thereto shall be entitled to any
benefit under this Indenture or be valid or obligatory for any purpose, unless
there appears on such Security a certificate of authentication substantially in
the form provided for in Section 2.2 or 6.11 executed


                                       24


by or on behalf of the Trustee or by the Authenticating Agent by the manual
signature of one of its authorized officers. Such certificate upon any Security
shall be conclusive evidence, and the only evidence, that such Security has been
duly authenticated and delivered hereunder. Except as permitted by Section 3.6,
the Trustee shall not authenticate and deliver any Bearer Security unless all
Coupons appertaining thereto then matured have been detached and cancelled.

      Section 3.4 Temporary Securities.

      Pending the preparation of definitive Securities, the Company may execute
and deliver to the Trustee and, upon Company Order, the Trustee shall
authenticate and deliver, in the manner provided in Section 3.3, temporary
Securities in lieu thereof 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 or pursuant to this
Indenture, in bearer form with one or more Coupons or without Coupons and with
such appropriate insertions, omissions, substitutions and other variations as
the officers of the Company executing such Securities may determine, as
conclusively evidenced by their execution of such Securities. Such temporary
Securities may be in global form.

      Except in the case of temporary Securities in global form, which shall be
exchanged in accordance with the provisions thereof, if temporary Securities are
issued, the Company shall cause definitive Securities to be prepared without
unreasonable delay. After the preparation of definitive Securities of the same
series and containing terms and provisions that are identical to those of any
temporary Securities, such temporary Securities shall be exchangeable for such
definitive Securities upon surrender of such temporary Securities at an Office
or Agency for such Securities, without charge to any Holder thereof. Upon
surrender for cancellation of any one or more temporary Securities (accompanied
by any unmatured Coupons appertaining thereto), the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor an equal
aggregate principal amount of definitive Securities of authorized denominations
of the same series and containing identical terms and provisions; provided,
however, that no definitive Bearer Security, except as provided in or pursuant
to this Indenture, 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 or pursuant to this Indenture. Unless otherwise
provided in or pursuant to this Indenture with respect to a temporary global
Security, 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.

      Section 3.5 Registration, Transfer and Exchange.

      With respect to the Registered Securities of each series, if any, the
Company shall cause to be kept a register (each such register being herein
sometimes referred to as the "Security Register") at an Office or Agency for
such series in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of the Registered
Securities of such series and of transfers of the Registered Securities of such
series. Such Office or Agency shall be the "Security Registrar" for that series
of Securities. Unless otherwise specified in or pursuant to this Indenture or
the Securities, the Trustee shall be the initial Security Registrar for each
series of Securities. The Company shall have the right to remove and replace
from time to


                                       25


time the Security Registrar for any series of Securities; provided that no such
removal or replacement shall be effective until a successor Security Registrar
with respect to such series of Securities shall have been appointed by the
Company and shall have accepted such appointment by the Company. In the event
that the Trustee shall not be or shall cease to be Security Registrar with
respect to a series of Securities, it shall have the right to examine the
Security Register for such series at all reasonable times. The Company shall be
required to maintain a Security Registrar in each place where the principal of
and premium or interest on any Security is payable. There shall be only one
Security Register for each series of Securities.

      Upon surrender for registration of transfer of any Registered Security of
any series at any Office or Agency for such 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 denominated as authorized in or pursuant to this Indenture, of a like
aggregate principal amount bearing a number not contemporaneously outstanding
and containing identical terms and provisions.

      At the option of the Holder, certificated Securities (including Bearer
Securities) and the right to receive the principal, premium and interest, if
any, on any certificated Security may be transferred by a Holder by surrendering
such certificate representing the certificated Securities at the Corporate Trust
Office of the Trustee. Such certificate representing the certificated Securities
may be reissued by the Company or the Trustee to a new Holder or a new
certificate representing the certificated Securities may be issued by the
Company or the Trustee to a new Holder.

      At the option of the Holder, Registered Securities of any series may be
exchanged for other Registered Securities of the same series containing
identical terms and provisions, in any authorized denominations, and of a like
aggregate principal amount, upon surrender of the Securities to be exchanged at
any Office or Agency for such series. Whenever any Registered Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Registered Securities that the Holder making the
exchange is entitled to receive.

      If provided in or pursuant to this Indenture, with respect to Securities
of any series, at the option of the Holder, Bearer Securities of such series may
be exchanged for Registered Securities of such series containing identical
terms, denominated as authorized in or pursuant to this Indenture and in the
same aggregate principal amount, upon surrender of the Bearer Securities to be
exchanged at any Office or Agency for such series, 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, such exchange may be effected if the
Bearer Securities are accompanied by payment in funds acceptable to the Company
and the Trustee 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 Bearer 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


                                       26


10.2, interest represented by Coupons shall be payable only upon presentation
and surrender of those Coupons at an Office or Agency for such series located
outside the United States. Notwithstanding the foregoing, in case a Bearer
Security of any series is surrendered at any such Office or Agency for such
series in exchange for a Registered Security of such 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 next
succeeding Interest Payment Date, or (ii) any Special Record Date and before the
opening of business at such Office or Agency on the related date for payment of
Defaulted Interest, such Bearer Security shall be surrendered without the Coupon
relating to such Interest Payment Date or proposed date of payment, as the case
may be (or, if such Coupon is so surrendered with such Bearer Security, such
Coupon shall be returned to the Person so surrendering the Bearer Security), and
interest or Defaulted Interest, as the case may be, shall 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 shall be payable only to the Holder of such Coupon when due in accordance
with the provisions of this Indenture.

      If provided in or pursuant to this Indenture with respect to Securities of
any series, at the option of the Holder, Registered Securities of such series
may be exchanged for Bearer Securities upon such terms and conditions as may be
provided in or pursuant to this Indenture with respect to such series.

      Whenever any Securities are surrendered for exchange as contemplated by
the immediately preceding two paragraphs, the Company shall execute, and the
Trustee shall authenticate and deliver, the Securities that the Holder making
the exchange is entitled to receive.

      Notwithstanding the foregoing, except as otherwise provided in or pursuant
to this Indenture, any global Security shall be exchangeable for certificated
Securities only if (i) the Depository 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 of the date the Company is so informed in writing,
(ii) the Company, in its discretion, determines not to require all of the
Securities of a series to be represented by a global Security and notifies the
Trustee of its decision by executing and delivering to the Trustee a Company
Order to the effect that such global Security shall be so exchangeable or (iii)
an Event of Default has occurred and is continuing, the Company, the Trustee,
the Registrar and the Paying Agent shall have notified the Depository that the
global Security shall be exchangeable for certificated Securities. If the
beneficial owners of interests in a global Security are entitled to exchange
such interests for definitive Securities as the result of an event described in
clause (i), (ii) or (iii) of the preceding sentence, then without unnecessary
delay but in any event not later than the earliest date on which such interests
may be so exchanged, the Company shall deliver to the Trustee definitive
Securities in such form and denominations as are required by or pursuant to this
Indenture, and of the same series, containing identical terms and in aggregate
principal amount equal to the principal amount of such global Security, executed
by the Company. On or after the earliest date on which such interests may be so
exchanged, such global Security shall be surrendered from time to time by the
U.S. Depository or such other Depository as shall be specified in the Company
Order with respect thereto, and in accordance with instructions given to the
Trustee and the U.S. Depository or such other Depository, as the case may be
(which instructions shall


                                       27


be in writing but need not be contained in or accompanied by an Officers'
Certificate or be accompanied by an Opinion of Counsel), as shall be specified
in the Company Order with respect thereto to the Trustee, as the Company's agent
for such purpose, to be exchanged, in whole or in part, for definitive
Securities as described above without charge. The Trustee shall authenticate and
make available for delivery, in exchange for each portion of such surrendered
global Security, a like aggregate principal amount of definitive Securities of
the same series of authorized denominations and of like tenor as the portion of
such global Security to be exchanged, which (unless such Securities are not
issuable both as Bearer Securities and as Registered Securities, in which case
the definitive Securities exchanged for the global Security shall be issuable
only in the form in which the Securities are issuable, as provided in or
pursuant to this Indenture) shall be in the form of Bearer Securities or
Registered Securities, or any combination thereof, as shall be specified by the
beneficial owner thereof, but subject to the satisfaction of any certification
or other requirements to the issuance of Bearer Securities; provided, however,
that (unless otherwise provided in or pursuant to this Indenture) no Bearer
Security delivered in exchange for a portion of a global Security shall be
mailed or otherwise delivered to any location in the United States. Promptly
following any such exchange in part, such global Security shall be returned by
the Trustee to such Depository or the U.S. Depository, as the case may be, or
such other Depository or U.S. Depository referred to above in accordance with
the instructions of the Company referred to above. If a Registered Security is
issued in exchange for any portion of a global Security after the close of
business at the Office or Agency for such Security where such exchange occurs on
or after (i) any Regular Record Date for such Security and before the opening of
business at such Office or Agency on the next succeeding Interest Payment Date,
or (ii) any Special Record Date for such Security and before the opening of
business at such Office or Agency on the related proposed date for payment of
interest or Defaulted Interest, as the case may be, interest shall 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 shall 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 global Security
shall be 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 entitling the Holders thereof 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 for such Security) be duly endorsed, or be accompanied by
a written instrument of transfer in a form satisfactory to the Company and the
Security Registrar for such Security 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, or redemption of Securities, but the Company may require payment of a
sum sufficient to cover any stamp tax or other governmental charge and any other
reasonable expenses (including fees and expenses of the Trustee) that may be
imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 3.4, 3.6, 9.5 or 11.7 not
involving any transfer.


                                       28


      Except as otherwise provided in or pursuant to this Indenture, the Company
shall not be required (i) to register the transfer of or exchange Securities of
any series during a period beginning at the opening of business 15 days before
the day the Company transmits a notice of redemption of Securities of the series
selected for redemption and ending at the close of business on the day of the
transmission, or (ii) to register the transfer of or exchange any Security
selected for redemption in whole or in part, except in the case of any Security
to be redeemed in part, the portion thereof not to be redeemed, or (iii) to
exchange any Bearer Security selected for redemption except, to the extent
provided with respect to such Bearer Security, that such Bearer Security may be
exchanged for a Registered Security of like tenor and the same series, provided
that such Registered Security shall be immediately surrendered for redemption
with written instruction for payment consistent with the provisions of this
Indenture or (iv) to issue, register the transfer of or exchange any Security
which, in accordance with its terms, 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 3.6 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, subject to the provisions of
this Section 3.6, the Company shall execute and the Trustee shall authenticate
and deliver in exchange therefor a new Security of the same series containing
identical terms and of like principal amount and bearing a number not
contemporaneously outstanding, with Coupons appertaining thereto corresponding
to the Coupons, if any, appertaining to the surrendered Security.

      If there be delivered to the Company and 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 the Company's request the
Trustee shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, 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 containing
identical terms and of like principal amount and bearing a number not
contemporaneously outstanding, with Coupons appertaining thereto 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 foregoing provisions of this Section 3.6, in case any
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, pay such Security or Coupon; provided, however, that payment of
principal of, and any premium or interest, if any, on any Bearer Securities
shall, except as otherwise provided in Section 10.2, be payable only at an
Office or Agency for such Securities located outside the United States.

      Upon the issuance of any new Security under this Section 3.6, the Company
may require the payment of a sum sufficient to cover any stamp tax or other
governmental charge that may be


                                       29


imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith.

      Every new Security, with any Coupons appertaining thereto issued pursuant
to this Section 3.6 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 a separate obligation of the Company, whether or not the
destroyed, lost or stolen Security and Coupons appertaining thereto 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 such series and any
Coupons, if any, duly issued hereunder.

      The provisions of this Section 3.6, as amended or supplemented pursuant to
this Indenture with respect to particular Securities or generally, shall be
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 3.7 Payment of Interest; Rights to Interest Preserved.

      Unless otherwise provided in or pursuant to this Indenture, any interest
on any Registered Security which shall be payable, and are punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name such Security (or one or more Predecessor Securities) is registered
as of the close of business on the Regular Record Date for such interest.

      Unless otherwise provided in or pursuant to this Indenture, any interest
on any Registered Security which shall be payable, but shall not be punctually
paid or duly provided for, on any Interest Payment Date for such Registered
Security (herein called "Defaulted Interest") shall forthwith cease to be
payable to the 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
as provided in clause (1) or (2) below:

            (1) The Company may elect to make payment of any Defaulted Interest
      to the Person in whose name such Registered Security (or a Predecessor
      Security thereof) shall be registered at the close of business on a
      Special Record Date for the payment of such Defaulted Interest, which
      shall be fixed by the Company in the following manner. The Company shall
      notify the Trustee in writing of the amount of Defaulted Interest proposed
      to be paid on such Registered Security, the Special Record Date therefor
      and the date of the proposed payment, and at the same time the Company
      shall deposit with the Trustee an amount of money equal to the aggregate
      amount proposed to be paid in respect of such Defaulted Interest or shall
      make arrangements satisfactory to the Trustee for such deposit on or prior
      to the date of the proposed payment, such money when so deposited to be
      held in trust for the benefit of the Person entitled to such Defaulted
      Interest as in this clause provided. The Special Record Date for the
      payment of such Defaulted Interest 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 notification to the Trustee of the proposed payment.
      The Trustee shall, in the name and at the expense of the Company cause
      notice of the proposed payment of such Defaulted Interest and the Special
      Record Date therefor to be


                                       30


      mailed, first-class postage prepaid, to the Holder of such Registered
      Security (or a Predecessor Security thereof) 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 of general circulation in the Borough of
      Manhattan, The City of New York, but such publication 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 Person in whose name such Registered
      Security (or a Predecessor Security thereof) shall be registered at the
      close of business on such Special Record Date and shall no longer be
      payable pursuant to the following clause (2).

            (2) The Company may make payment of any Defaulted Interest in any
      other lawful manner not inconsistent with the requirements of any
      securities exchange on which such Security 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 payment shall be deemed practicable by the Trustee.

      Unless otherwise provided in or pursuant to this Indenture or the
Securities of any particular series pursuant to the provisions of this
Indenture, at the option of the Company, interest on Registered Securities that
bear interest may be paid at the office or agency of the Company maintained for
such purposes in the Borough of Manhattan, City of New York, or by mailing a
check to the address of the Person entitled thereto as such address shall appear
in the Security Register or by transfer to an account maintained by the payee
with a bank located in the United States.

      Notwithstanding the foregoing, a holder of $1,000,000 or more in aggregate
principal amount of Securities of any series of global Securities (or its
equivalent in a Foreign Currency, if the currency unit is a Foreign Currency),
whether having identical or different terms and provisions, having the same
interest payment dates will be entitled to receive interest payments, other than
at Maturity, by wire transfer of immediately available funds if appropriate wire
transfer instructions have been received in writing by the Trustee for the
Securities of such series at least 15 days prior to the applicable Interest
Payment Date. In addition to the foregoing, a holder of $1,000,000 or more in
aggregate principal amount of Securities of any series of global Securities (or
its equivalent in a Foreign Currency, if the currency unit is a Foreign
Currency), whether having identical or different terms and provisions, having
the same Maturity will be entitled to receive payment at Maturity by wire
transfer of immediately available funds if appropriate wire transfer
instructions have been received in writing by the Trustee for the Securities of
such series at least 15 days prior to Maturity; provided; however, that such
payments shall be made subject to applicable laws and regulations and only after
surrender of the global Securities to the Company, the corporate trust office or
the Paying Agent, for such global Securities not later than one Business Day
prior to Maturity. Any wire instructions received by the Trustee for the
Securities of such series shall remain in effect until revoked by the Holder.

      Subject to the foregoing provisions of this Section and Section 3.5, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any


                                       31


other Security shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Security.

      In the case of any Registered Security of any series that is convertible
into other securities of the Company or exchangeable for securities of another
issuer, which Registered Security is converted or exchanged after any Regular
Record Date and on or prior to the next succeeding Interest Payment Date (other
than any Registered Security with respect to which the Stated Maturity is prior
to such Interest Payment Date), interest with respect to which the Stated
Maturity is on such Interest Payment Date shall be payable on such Interest
Payment Date notwithstanding such conversion or exchange, and such interest
(whether or not punctually paid or duly provided for) shall be paid to the
Person in whose name that Registered Security (or one or more predecessor
Registered Securities) is registered at the close of business on such Regular
Record Date. Except as otherwise expressly provided in the immediately preceding
sentence, in the case of any Registered Security which is converted or
exchanged, interest with respect to which the Stated Maturity is after the date
of conversion or exchange of such Registered Security shall not be payable.

      Section 3.8 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 in the
Security Register as the owner of such Registered Security for the purpose of
receiving payment of principal of, and any premium or (subject to Sections 3.5
and 3.7) interest, if any, on such Registered Security and for all other
purposes whatsoever, whether or not any payment with respect to such Registered
Security shall be overdue, and none of the Company, the Trustee or any agent of
the Company or the Trustee shall be affected by notice to the contrary.

      The Company, the Trustee and any agent of the Company or the Trustee may
treat the bearer of any Bearer Security or the bearer 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 any payment with respect to such Security or Coupon shall be overdue, and
none of the Company, the Trustee or 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 may 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.


                                       32


      Section 3.9 Cancellation.

      All Securities and Coupons surrendered for payment, redemption,
registration of transfer, exchange or conversion 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, as well as
Securities and Coupons surrendered directly to the Trustee for any such purpose,
shall be cancelled promptly by the Trustee. 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 all Securities so delivered shall be cancelled promptly by the
Trustee. 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 or pursuant to this Indenture. All cancelled Securities and Coupons held by
the Trustee shall be destroyed by the Trustee, unless by a Company Order, the
Company directs their return to it.

      Section 3.10 Computation of Interest.

      Except as otherwise provided in or pursuant to this Indenture or in any
Security, interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.

                                   ARTICLE 4

   SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE AND COVENANT DEFEASANCE

      Section 4.1 Satisfaction and Discharge.

      Upon the direction of the Company by a Company Order, this Indenture shall
cease to be of further effect with respect to any series of Securities specified
in such Company Order and any Coupons appertaining thereto (except as to any
surviving rights of Securities of such series expressly provided for herein or
pursuant thereto), and the Trustee, on receipt of a Company Order, at the
expense of the Company, shall execute proper instruments 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 appertaining thereto (other than (i)
            Coupons appertaining to Bearer Securities of such series surrendered
            in exchange for Registered Securities of such series and maturing
            after such exchange whose surrender is not required or has been
            waived as provided in Section 3.5, (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 3.6, (iii) Coupons
            appertaining to Securities of such series called for redemption and
            maturing after the relevant Redemption Date whose surrender has been
            waived as provided in Section 11.7, and (iv) Securities and Coupons
            of such series for whose payment money has theretofore been


                                       33


            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 10.3) have been delivered to the Trustee for
            cancellation; or

                  (b) all Securities of such series and, in the case of (i) or
            (ii) of this subclause (b) 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 subclause (b)(i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds in trust for
such purpose, money in the Currency in which such Securities are payable in an
amount sufficient to pay and discharge the entire indebtedness on such
Securities and any Coupons appertaining thereto not theretofore delivered to the
Trustee for cancellation, including the principal of, and any premium or
interest, if any, on such Securities and any Coupons appertaining thereto, to
the date of such deposit (in the case of Securities which have become due and
payable) or to the Maturity thereof, as the case may be;

            (2) the Company has paid or caused to be paid all other sums payable
      hereunder by the Company with respect to the Outstanding Securities of
      such series and any Coupons appertaining thereto; and

            (3) the Company has delivered to the Trustee an Opinion of Counsel
      and an Officers' Certificate, 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.

      In the event there are Securities of two or more series hereunder, the
Trustee shall be required to execute an instrument acknowledging satisfaction
and discharge of this Indenture only if requested to do so with respect to
Securities of such series as to which it is Trustee and if the other conditions
thereto are met.

      Notwithstanding the satisfaction and discharge of this Indenture with
respect to any series of Securities, the obligations of the Company to the
Trustee under Section 6.6 and, if money shall have been deposited with the
Trustee pursuant to subclause (b) of clause (1) of this Section, the obligations
of the Company and the Trustee with respect to the Securities of each series
under Sections 3.5, 3.6, 4.3, 10.2 and 10.3, and with respect to any rights to
convert or exchange such Securities into securities of the Company or another
issuer, shall survive.

      Section 4.2 Defeasance and Covenant Defeasance.

            (1) Unless pursuant to Section 3.1, either or both of (i) defeasance
      of the Securities of or within a series under clause (2) of this Section
      4.2 shall not be applicable with respect to the Securities of such series
      or (ii) covenant defeasance of the Securities of or within a series under
      clause (3) of this Section 4.2 shall not be applicable with respect to the
      Securities of such series, then such provisions, together with the other


                                       34


      provisions of this Section 4.2 (with such modifications thereto as may be
      specified pursuant to Section 3.1 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 4.2(2) or Section 4.2(3) be applied to such Outstanding
      Securities and any Coupons appertaining thereto upon compliance with the
      conditions set forth below in this Section 4.2.

            (2) Upon the Company's exercise of the above option applicable to
      this Section 4.2(2) 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 clause (4) of this Section
      4.2 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 clause (5) of this
      Section 4.2 and the other Sections of this Indenture referred to in
      clauses (i) and (ii) 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: (i) the rights of Holders of such Outstanding Securities and
      any Coupons appertaining thereto to receive, solely from the trust fund
      described in clause (4) of this Section 4.2 and as more fully set forth in
      such clause, payments in respect of the principal of (and premium, if any)
      and interest, if any, on such Securities and any Coupons appertaining
      thereto when such payments are due, and any rights of such Holder to
      convert such Securities into other securities of the Company or exchange
      such Securities for securities another issuer, (ii) the obligations of the
      Company and the Trustee with respect to such Securities under Sections
      3.5, 3.6, 10.2 and 10.3, and with respect to any rights to convert such
      Securities into other securities of the Company or exchange such
      Securities for securities of another issuer, (iii) the rights, powers,
      trusts, duties and immunities of the Trustee hereunder and (iv) this
      Section 4.2. The Company may exercise its option under this Section 4.2(2)
      notwithstanding the prior exercise of its option under clause (3) of this
      Section 4.2 with respect to such Securities and any Coupons appertaining
      thereto.

            (3) Upon the Company's exercise of the option to have this Section
      4.2(3) apply with respect to any Securities of or within a series, the
      Company shall be released from its obligations under Sections 10.5 and
      10.6, and, to the extent specified pursuant to Section 3.1(21), any other
      covenant applicable to such Securities, with respect to such Outstanding
      Securities and any Coupons appertaining thereto, on and after the date the
      conditions set forth in clause (4) of this Section 4.2 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 any
      such covenant, but shall continue to be deemed "Outstanding" for all other
      purposes


                                       35


      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 5.1(4) or 5.1(8) or otherwise, as the case may be, but,
      except as specified above, the remainder of this Indenture and such
      Securities and Coupons appertaining thereto shall be unaffected thereby.

            (4) The following shall be the conditions to application of clause
      (2) or (3) of this Section 4.2 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 6.7 who shall agree to comply with the
            provisions of this Section 4.2 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 Dollars or in such Foreign Currency 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 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 one day before the due date of any payment
            of principal of (and premium, 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, (y) the principal of (and premium, if any) and
            interest, if any, on such Outstanding Securities and any Coupons
            appertaining thereto at the Stated Maturity of such principal or
            installment of principal or premium or interest and (z) any
            mandatory sinking fund payments or analogous payments applicable to
            such Outstanding Securities and any Coupons appertaining thereto on
            the days 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. Provided, that notwithstanding the
            foregoing, with respect to any Securities which shall at the time be
            listed for trading on the New York Stock Exchange, there shall be no
            deposit of funds in cash and/or in Government Obligations with the
            Trustee to pay the principal amount, the redemption price or any
            installment of interest in order to discharge the Company's
            obligations in


                                       36


            respect of such payment if, at such time, the rules of the New York
            Stock Exchange prohibit such deposit with the Trustee.

                  (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.

                  (d) In the case of an election under clause (2) of this
            Section 4.2, the Company shall have delivered to the Trustee an
            Opinion of Counsel stating that (i) the Company has received from
            the U.S. Internal Revenue Service a letter ruling, or there has been
            published by the U.S. Internal Revenue Service a Revenue 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 clause (3) of this
            Section 4.2, 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 or covenant defeasance
            under clause (2) or (3) of this Section 4.2 (as the case may be)
            have been complied with.

                  (g) Notwithstanding any other provisions of this Section
            4.2(4), 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 3.1.

            (5) Unless otherwise specified in or pursuant to this Indenture or
      any Security, if, after a deposit referred to in Section 4.2(4)(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 3.1 or the
      terms of such Security to receive payment in a Currency other than that


                                       37


      in which the deposit pursuant to Section 4.2(4)(a) has been made in
      respect of such Security, or (b) a Conversion Event occurs in respect of
      the Foreign Currency in which the deposit pursuant to Section 4.2(4)(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, 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 in which
      such Security becomes payable as a result of such election or Conversion
      Event based on (x) in the case of payments made pursuant to clause (a)
      above, the applicable market exchange rate for such Currency in effect on
      the second Business Day prior to each payment date, or (y) with respect to
      a Conversion Event, the applicable market exchange rate for such Foreign
      Currency in effect (as nearly as feasible) at the time of the Conversion
      Event.

      The Company shall pay and indemnify the Trustee (or other qualifying
trustee, collectively for purposes of this Section 4.2(5) and Section 4.3, the
"Trustee") against any tax, fee or other charge, imposed on or assessed against
the Government Obligations deposited pursuant to this Section 4.2 or the
principal or 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 Section 4.2 to the contrary notwithstanding, 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 clause (4) of this Section 4.2 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
Section 4.2.

      Section 4.3 Application of Trust Money.

      Subject to the provisions of the last paragraph of Section 10.3, all money
and Government Obligations (or other property as may be provided pursuant to
Section 3.1) (including the proceeds thereof) deposited with the Trustee
pursuant to Section 4.1 or 4.2 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, if any) and interest; but such money and
Government Obligations need not be segregated from other funds except to the
extent required by law.


                                       38


      Section 4.4 Reinstatement

      (1) If the Trustee or Paying Agent is unable to apply any money or
Government Obligations in accordance with Section 4.2(4) by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Securities of the applicable
series issued hereunder shall be revived and reinstated as though no deposit has
occurred pursuant to Section 4.2(4) until such time as the Trustee or Paying
Agent is permitted to apply all such money or Government Obligations in
accordance with and as contemplated by Section 4.2(4).

      (2) If the Company's obligations under this Indenture and the Securities
of the applicable series issued hereunder shall be revived and reinstated in
accordance with this Section 4.4, the Company shall be permitted, at its
discretion to withdraw all or a portion of the deposits made by the Company
pursuant to Section 4.2(4).

      (3) If the Company elects not to withdraw any of the deposits made by the
Company pursuant to Section 4.2(4), if and when the Trustee or Paying Agent is
later permitted to apply all such money or Government Obligations in accordance
with and as contemplated by Section 4.2(4), the rights of the Company shall be
subrogated to the rights of the Holders of the Securities of the applicable
series to receive payments from the money or Government Obligations deposited by
the Company pursuant to Section 4.2(4) and held by the Trustee or Paying Agent;
provided that if the Company shall have made any payment of principal or
interest on the Securities of any series because of the revival and
reinstatement of its obligations, which payment is not sourced from any amounts
deposited by the Company pursuant to Section 4.2(4) (such amount, in the
aggregate, being referred to as the "Company Paid Amount"), the Company shall be
permitted, at its discretion, to withdraw all or a portion of the deposits made
by the Company pursuant to Section 4.2(4) up to the Company Paid Amount.

                                   ARTICLE 5

                                    REMEDIES

      Section 5.1 Events of Default.

      "Event of Default," wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether 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),
unless such event is specifically deleted or modified in or pursuant to the
supplemental indenture, Board Resolution or Officers' Certificate establishing
the terms of such Series pursuant to this Indenture:

            (1) default in the payment of any interest on any Security of such
      series when such interest becomes due and payable, and continuance of such
      default for a period of 30 days; or


                                       39


            (2) default in the payment of the principal of or any premium on any
      Security of such series when such principal or premium becomes due and
      payable at their Maturity; or

            (3) default in the deposit of any sinking fund or analogous payment
      when and as due by the terms of a Security of such series; or

            (4) default in the performance, or breach, of any covenant or
      agreement of the Company in this Indenture with respect to any Security of
      that series (other than a covenant or agreement a default in whose
      performance or whose breach is elsewhere in this Section specifically
      dealt with and other than a covenant or agreement included in this
      Indenture solely for the benefit of another series of Securities), and
      continuance of such default or breach for a period of 30 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) any event of default, as defined in any mortgage, indenture
      (including this Indenture), trust agreement or other instrument securing,
      evidencing or providing for any evidence of any Indebtedness of the
      Company (including guaranteed Indebtedness but excluding any Indebtedness
      that is subordinated in right of payment to the Securities of such
      series), as a result of which an aggregate principal amount exceeding
      $25,000,000 of such Indebtedness shall have been declared due and payable
      prior to the date on which it would otherwise become due and payable, and
      such acceleration shall not have been rescinded or annulled within a
      period of 30 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 25% in principal amount of the
      Outstanding Securities of such series, a written notice specifying such
      failure to pay and requiring the Company to cause such acceleration to be
      rescinded or annulled or to cause such Indebtedness to be discharged and
      stating that such notice is a "Notice of Default" hereunder; or

            (6) a court of competent jurisdiction enters an order or decree
      under any applicable Bankruptcy Law that:

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

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

                  (c) orders the liquidation of the Company;

      and the order or decree remains unstayed and in effect for 60 consecutive
      days. The term "Bankruptcy Law" means title 11, U.S. Code or any similar
      federal or state law for the relief of debtors. The term "Custodian" means
      any receiver, trustee, assignee, liquidator or other similar official
      under any Bankruptcy Law.


                                       40


            (7) the commencement by the Company of a voluntary proceeding under
      any applicable bankruptcy, insolvency, reorganization (other than a
      reorganization under a foreign law that does not relate to insolvency) or
      other similar law or of a voluntary proceeding seeking to be adjudicated
      insolvent or the consent by the Company to the entry of a decree or order
      for relief in an involuntary proceeding under any applicable bankruptcy,
      insolvency, reorganization or other similar law or to the commencement of
      any insolvency proceedings against it, or the filing by the Company of a
      petition or answer or consent seeking reorganization, arrangement,
      adjustment or composition of the Company or relief under any applicable
      law, or the consent by the Company to the filing of such petition or to
      the appointment of or taking possession by a custodian, receiver,
      liquidator, assignee, trustee or similar official of the Company or any
      substantial part of the property of the Company or the making by the
      Company of an assignment for the benefit of creditors, or the taking of
      corporate action by the Company in furtherance of any such action or the
      admitting in writing by the Company of its inability to pay its debts
      generally as they become due; or

            (8) any other Event of Default provided in or pursuant to this
      Indenture with respect to Securities of such series.

      Section 5.2 Acceleration of Maturity; Rescission and Annulment.

      If an Event of Default with respect to Securities of any series at the
time Outstanding (other than an Event of Default specified in clause (6) or (7)
of Section 5.1) occurs and is continuing, then the Trustee or the Holders of not
less than 25% in principal amount of the Outstanding Securities of such series
may declare the principal of all the Securities of such series, or such lesser
amount as may be provided for in the Securities of such 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 such
lesser amount shall become immediately due and payable.

      If an Event of Default specified in clause (6) or (7) of Section 5.1
occurs, all unpaid principal of and accrued interest on the Outstanding
Securities of that series (or such lesser amount as may be provided for in the
Securities of such series) shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder of any Security of that series.

      At any time after a declaration of acceleration with respect to the
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 not less than a majority in principal amount of
the Outstanding Securities of such series, by written notice to the Company and
the Trustee, may rescind and annul such declaration and its consequences if

            (1) the Company has paid or deposited with the Trustee a sum
      sufficient to pay :

                  (a) all overdue installments of any interest on all Securities
            of such series and any Coupon appertaining thereto,


                                       41


                  (b) the principal of and any premium on any Securities of such
            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 any 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 all other amounts due the
            Trustee under Section 6.6; and

            (2) all Events of Default with respect to Securities of such series,
      other than the non-payment of the principal of, or any premium and
      interest, if any, on Securities of such series which shall have become due
      solely by such declaration of acceleration, shall have been cured or
      waived as provided in Section 5.13.

      No such rescission shall affect any subsequent default or impair any right
consequent thereon.

      Section 5.3 Collection of Indebtedness and Suits for Enforcement by
Trustee.

      The Company covenants that if a

            (1) default is made in the payment of any installment of interest on
      any Security or any Coupon appertaining thereto when such interest shall
      have become 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 any
      premium on any Security at its Maturity,

the Company shall, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities and any Coupons appertaining thereto,
the whole amount of money then due and payable with respect to such Securities
and any Coupons appertaining thereto, with interest upon the overdue principal,
any premium and, to the extent that payment of such interest shall be legally
enforceable, upon any overdue installments of interest, and in addition thereto,
such further amount of money 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 and all other
amounts due to the Trustee under Section 6.6.

      If the Company shall fail to pay the money it is required to pay the
Trustee pursuant to the preceding paragraph forthwith upon the demand of the
Trustee, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the money 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
and any Coupons appertaining thereto and collect the monies 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


                                       42


Securities and any Coupons appertaining thereto, wherever situated. Every
recovery of judgment in any such action or other proceeding subject to the
payment of the expenses, disbursements and compensation of the Trustee, its
agents and attorneys, shall be for the ratable benefit of the Holders of such
Securities that shall be the subject of such action or proceeding.

      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
Coupons appertaining thereto 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 such Securities or in aid of the exercise of any power granted
herein or therein, or to enforce any other proper remedy.

      Section 5.4 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 of any series or the property of the Company or such other obligor or
their creditors, the Trustee (irrespective of whether the principal of the
Securities 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 any overdue principal, premium or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,

            (1) to file and prove a claim for the whole amount, or such lesser
      amount as may be provided for in the Securities of any applicable series,
      of the principal and any premium and interest in respect of the Securities
      and any Coupons appertaining thereto 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 or
      counsel) and of the Holders of Securities or any Coupons appertaining
      thereto allowed in such judicial proceeding, and

            (2) to collect and receive any monies 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 or any 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 of Securities or any Coupons, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel and any other amounts due the
Trustee under Section 6.6.

      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 any Coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or Coupons or


                                       43


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 any Coupon in any such proceeding.

      Section 5.5 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 or judgment, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, shall be for the ratable benefit of each and every Holder of the
Securities or Coupons in respect of which such judgment has been recovered.

      Section 5.6 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 any premium
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:

            (1) To the payment of all amounts due the Trustee and any
      predecessor Trustee under Section 6.6;

            (2) To the payment of the amounts then due and unpaid upon the
      Securities and any Coupons for principal and any premium and interest,
      ratably, without preference or priority of any kind, according to the
      aggregate amounts due and payable on such Securities and Coupons for
      principal and any premium and interest, respectively;

            (3) The balance, if any, to the Person or Persons entitled thereto.

      Section 5.7 Limitations on Suits.

      No Holder of any Security of any series or any Coupons appertaining
thereto 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 such
      series;

            (2) the Holders of a majority in principal amount outstanding of the
      Outstanding Securities of such 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 such
      indemnity as is reasonably satisfactory to it against the costs, expenses
      and liabilities to be incurred in compliance with such request;


                                       44


            (4) the Trustee for 30 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 30-day period by the Holders of a
      majority in principal amount of the Outstanding Securities of such 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 or any Security to affect, disturb or prejudice the rights of
any other such Holders or Holders of Securities of any other series, or to
obtain or to seek to obtain priority or preference over any other 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 5.8 Unconditional Right of Holders to Receive Principal and any
Premium 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, any premium and (subject to Sections 3.7
and 3.10) interest on such Security or payment of such Coupon, as the case may
be, on the respective Stated Maturity or Maturities therefor specified in such
Security or Coupon (or, in the case of redemption, on the Redemption Date or, in
the case of repayment at the option of such Holder if provided in or pursuant to
this Indenture, on the date such repayment is due) and to institute suit for the
enforcement of any such payment, and such right shall not be impaired without
the consent of such Holder.

      Section 5.9 Restoration of Rights and Remedies.

      If the Trustee or any Holder of a Security or a 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 each such Holder 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 each such Holder shall continue as though no such proceeding had
been instituted.

      Section 5.10 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 3.6, no right or remedy herein conferred upon or reserved to the
Trustee or to each and every Holder of a Security or a Coupon is intended to be
exclusive of any other right or remedy, and every right and remedy, to the
extent permitted by law, shall 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, to the extent permitted by law, prevent the
concurrent assertion or employment of any other appropriate right or remedy.


                                       45


      Section 5.11 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 any Holder of a Security or a Coupon may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by such Holder, as the case may be.

      Section 5.12 Control by Holders of Securities.

      The Holders of 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 and any Coupons appertaining thereto, provided that

            (1) such direction shall not be in conflict with any rule of law or
      with this Indenture or with the Securities of such series,

            (2) the Trustee may take any other action deemed proper by the
      Trustee which is not inconsistent with such direction, and

            (3) such direction is not unduly prejudicial to the rights of the
      other Holders of Securities of such series not joining in such action.

      Section 5.13 Waiver of Past Defaults.

      The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series on behalf of the Holders of all the
Securities of such series and any Coupons appertaining thereto may waive any
past default hereunder with respect to such series and its consequences, except
a default

            (1) in the payment of the principal of, any premium or interest on,
      any Security of such series or any Coupons appertaining thereto, or

            (2) in respect of a covenant or provision hereof which under Article
      9 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 impair any right consequent thereon.

      Section 5.14 Waiver of Usury, Stay or Extension Laws.

      The Company covenants that (to the extent that it may lawfully do so) 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


                                       46


may affect the covenants or the performance of this Indenture; and the Company
expressly waives (to the extent that it may lawfully do so) 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 5.15 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 any
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 5.15 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 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, if any) or interest, if any, 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, and, in the case of
repayment, on or after the date for repayment) or for the enforcement of the
right, if any, to convert or exchange any Security into other securities in
accordance with its terms.

                                   ARTICLE 6

                                   THE TRUSTEE

      Section 6.1 Certain Rights of Trustee.

      Subject to Sections 315(a) through 315(d) of the Trust Indenture Act:

            (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 3.3 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


                                       47


      action hereunder, the Trustee (unless other evidence shall be herein
      specifically prescribed) may, in the absence of bad faith on its part,
      rely upon a Board Resolution, an Opinion of Counsel or an Officers'
      Certificate.

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

            (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 reasonable security or indemnity 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, but 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,
      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.

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

            (9) The Trustee shall not be charged with knowledge of any default
      or Event of Default with respect to the Securities of any series unless
      either (1) such default or Event of Default is known, or ought reasonably
      to have been known, by a Responsible Officer of the Trustee or (2) written
      notice of such default or Event of Default shall have been given to the
      Trustee by the Company or any other obligor on the Securities of any
      series or by any Holder of the Securities of any series.

            (10) 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.


                                       48


      Section 6.2 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 by mail to all
Holders of Securities of such series entitled to receive reports pursuant to
Section 7.3(3), notice of such default hereunder actually known to a Responsible
Officer of 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, if any), or interest, if any, on, or any sinking fund
or purchase fund installment with respect to, any Security 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 best interest of the Holders of Securities
and Coupons of such series; and provided, further, that in the case of any
default of the character specified in Sections 5.1(4) and 5.1(5) with respect to
Securities of such series, no such notice to Holders shall be given until such
default shall have become an Event of Default with respect to Securities of such
series. For the purpose of Sections 6.1 and 6.2, the term "default" means any
event that is, or after notice or lapse of time or both would become, an Event
of Default with respect to Securities of such series.

      Section 6.3 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 and that the statements made by it in a
Statement of Eligibility on Form T-1 supplied to the Company are true and
accurate, subject to the qualifications set forth therein. 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 6.4 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 Trust
Indenture Act 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 6.5 Money Held in Trust.

      Except as provided in Section 4.3 and Section 10.3, money held by the
Trustee in trust hereunder need not be segregated from other funds except to the
extent required by law and shall be held uninvested. The Trustee shall be under
no liability for interest on any money received by it hereunder except as
otherwise agreed to in writing with the Company.


                                       49


      Section 6.6 Compensation and Reimbursement.

            The Company agrees:

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

            (2) except as otherwise expressly provided herein, to reimburse the
      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 reasonable compensation and the expenses,
      advances and disbursements of its agents and counsel), except any such
      expense, disbursement or advance as may be attributable to its negligence
      or bad faith.

            (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 own 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, except to the extent
      that any such loss, liability or expense was due to the Trustee's
      negligence or bad faith.

      As security for the performance of the obligations of the Company under
this Section, the Trustee for the Securities of any series shall have a claim
prior to the Securities of such series 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, if any) or interest, if any, on Securities or any
Coupons of such series.

      To the extent permitted by law, any compensation or expense incurred by
the Trustee after a default specified in or pursuant to Section 5.1 is intended
to constitute an expense of administration under any then applicable bankruptcy
or insolvency law. "Trustee" for purposes of this Section 6.6 shall include any
predecessor Trustee but the negligence or bad faith of any Trustee shall not
affect the rights of any other Trustee under this Section 6.6.

      The provisions of this Section 6.6 shall survive the satisfaction and
discharge of this Indenture or the earlier resignation or removal of the Trustee
and shall apply with equal force and effect to the Trustee in its capacity as
Authenticating Agent, Paying Agent or Security Registrar.

      Section 6.7 Corporate Trustee Required; Eligibility.

      There shall at all times be a Trustee hereunder that is a Corporation
organized and doing business under the laws of the United States of America, any
state thereof or the District of Columbia, that is eligible under Section
310(a)(1) of the Trust Indenture Act to act as trustee under an indenture
qualified under the Trust Indenture Act and that has a combined capital and
surplus (computed in accordance with Section 310(a)(2) of the Trust Indenture
Act) of at least


                                       50


$50,000,000, and that is subject to supervision or examination by Federal or
state authority. 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.

      Section 6.8 Resignation and Removal; Appointment of Successor.

            (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 pursuant to Section
      6.9.

            (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 the instrument of acceptance by a successor Trustee required
      by Section 6.9 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 with respect to such series.

            (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 the Company.

            (4) If at any time:

                  (a) the Trustee shall fail to comply with the obligations
            imposed upon it under Section 310(b) of the Trust Indenture Act with
            respect to Securities of any series after written request therefor
            by the Company or any Holder of a Security of such series who has
            been a bona fide Holder of a Security of such series for at least
            six months, or

                  (b) the Trustee shall cease to be eligible under Section 6.7
            and shall fail to resign after written request therefor by the
            Company or any such Holder, 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 with respect to all Securities or
            the Securities of such series, or (ii) subject to Section 315(e) of
            the Trust Indenture Act, 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 removal of the
            Trustee with respect to all Securities of such series 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 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 such series (it


                                       51


      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) and shall comply with the applicable requirements
      of Section 6.9. If, within one year after such resignation, removal or
      incapacity, 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 in accordance with the applicable requirements of Section
      6.9, 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 within three months after such
      appointment might have been made hereunder by the Company or the Holders
      of Securities and accepted appointment in the manner required by Section
      6.9, 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
      the 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 by mailing written notice of such event by first-class mail,
      postage prepaid, to the Holders of Registered Securities, if any, of such
      series as their names and addresses appear in the Security Register and,
      if Securities of such series are issued as Bearer Securities, by
      publishing notice of such event once in an Authorized Newspaper in each
      Place of Payment located outside the United States. 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.

            (7) In no event shall any retiring Trustee be liable for the acts or
      omissions of any successor Trustee hereunder.

      Section 6.9 Acceptance of Appointment by Successor.

            (1) Upon the appointment hereunder of any successor Trustee with
      respect to all Securities, such successor Trustee so appointed shall
      execute, acknowledge and deliver to the Company and 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 hereunder of the retiring
      Trustee; but, on the request of the Company or such successor Trustee or
      the Holders of at least 10% in principal amount of the applicable series
      of Securities then Outstanding, such retiring Trustee, upon payment of its
      charges, shall execute and deliver an instrument transferring to such
      successor Trustee all the rights, powers and trusts of the retiring
      Trustee and, subject to Section 10.3, 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.


                                       52


            (2) Upon the appointment hereunder of any successor Trustee with
      respect to the Securities of one or more (but not all) series, the
      Company, the retiring Trustee and such successor Trustee shall execute and
      deliver an indenture supplemental hereto wherein each successor Trustee
      shall accept such appointment and which (1) shall contain such provisions
      as shall be necessary or desirable to transfer and confirm to, and to vest
      in, such 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, that each such
      Trustee shall be trustee of a trust or trusts hereunder separate and apart
      from any trust or trusts hereunder administered by any other such Trustee
      and that no Trustee shall be responsible for any notice given to, or
      received by, or any act or failure to act on the part of any other Trustee
      hereunder, and, upon the execution and delivery of such supplemental
      indenture, the resignation or removal of the retiring Trustee shall become
      effective to the extent provided therein, such retiring Trustee shall have
      no further responsibility for the exercise of rights and powers or for the
      performance of the duties and obligations vested in the Trustee under this
      Indenture with respect to the Securities of that or those series to which
      the appointment of such successor Trustee relates other than as
      hereinafter expressly set forth, 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 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 such
      successor Trustee, such retiring Trustee, upon payment of its charges with
      respect to the Securities of that or those series to which the appointment
      of such successor Trustee relates and subject to Section 10.3 shall duly
      assign, transfer and deliver to such successor Trustee, to the extent
      contemplated by such supplemental indenture, the property and money held
      by such retiring Trustee hereunder with respect to the Securities of that
      or those series to which the appointment of such successor Trustee
      relates, subject to its claim, if any, provided for in Section 6.6.

            (3) Upon request of any Person appointed hereunder as a 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 (1) or (2) of this
      Section, as the case may be.

            (4) No Person shall accept its appointment hereunder as a successor
      Trustee unless at the time of such acceptance such successor Person shall
      be qualified and eligible under this Article.


                                       53


      Section 6.10 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, shall be the
successor of the Trustee hereunder, without the execution or filing of any paper
or any further act on the part of any of the parties hereto, provided, that such
Corporation shall be otherwise qualified and eligible under this Section. In
case any Securities shall have been authenticated but not delivered by the
Trustee then in office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such authentication and deliver the
Securities so authenticated with the same effect as if such successor Trustee
had itself authenticated such Securities.

      Section 6.11 Appointment of Authenticating Agent.

      The Trustee may appoint one or more Authenticating Agents acceptable to
the Company with respect to one or more series of Securities, and which shall be
authorized to act on behalf of the Trustee to authenticate Securities of that or
those series issued upon original issue, exchange, registration of transfer,
partial redemption or partial repayment or pursuant to Section 3.6, 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. 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 must be acceptable to the Company and, except as
provided in or pursuant to this Indenture, shall at all times be a corporation
that would be permitted by the Trust Indenture Act to act as trustee under an
indenture qualified under the Trust Indenture Act, is authorized under
applicable law and by its charter to act as an Authenticating Agent and has a
combined capital and surplus (computed in accordance with Section 310(a)(2) of
the Trust Indenture Act) of at least $50,000,000. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, it 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 all or substantially all of
the corporate agency or corporate trust business of an Authenticating Agent,
shall be the successor of such Authenticating Agent hereunder, provided such
Corporation shall be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.

      An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and 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


                                       54


of this Section, the Trustee may appoint a successor Authenticating Agent which
shall be acceptable to the Company and shall (i) mail written notice of such
appointment by first-class mail, postage prepaid, to all Holders of Registered
Securities, if any, of the series with respect to which such Authenticating
Agent shall serve, as their names and addresses appear in the Security Register,
and (ii) if Securities of the series are issued as Bearer Securities, publish
notice of such appointment at least once in an Authorized Newspaper in the place
where such successor Authenticating Agent has its principal office if such
office is located outside the United States. 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. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section.

      The Company agrees to pay each Authenticating Agent from time to time
reasonable compensation for its services under this Section. If the Trustee
makes such payments, it shall be entitled to be reimbursed for such payments,
subject to the provisions of Section 6.6.

      If an Authenticating Agent is appointed with respect to one or more series
of Securities 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 in substantially the
following form:

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

                                                     JPMORGAN CHASE BANK, N.A.
                                                     as Trustee

                                                     By_________________________
                                                         as Authenticating Agent

                                                     By_________________________
                                                         Authorized Officer

      If all of the Securities of any series may not be originally issued at one
time, and if the Trustee does not have an office capable of authenticating
Securities upon original issuance located in a Place of Payment where the
Company wishes to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested in writing (which writing need not be
accompanied by or contained in an Officers' Certificate by the Company), shall
appoint in accordance with this Section an Authenticating Agent having an office
in a Place of Payment designated by the Company with respect to such series of
Securities.


                                       55


      Section 6.12 Appointment of Attorney-in-Fact

      The Trustee for each series of Securities is hereby appointed, and each
and every Holder of Securities of such series, by receiving and holding the
same, shall be conclusively deemed to have appointed such Trustee, the true and
lawful attorney-in-fact of such Holder, with authority to make or file (whether
or not the Company shall be in default in respect of the payment of the
principal of, or premium or interest, if any, on any of the Securities of such
series), in its own name as trustee of an express trust or otherwise as it shall
deem advisable, in any receivership, insolvency, liquidation, bankruptcy,
reorganization, or other judicial proceedings relative to the Company or any
other obligor upon such Securities or to their respective creditors or property,
any and all claims, proofs of claim, proofs of debt, petitions, consents, other
papers and documents, and amendments of any thereof, as may be necessary or
advisable in order to have the claims of the Trustee and of the Holders of such
Securities allowed in any such proceeding and to collect and receive any moneys
or other property payable or deliverable on any such claim, and to execute and
deliver any and all other papers and documents and to do and perform any and all
other acts and things, as it may deem necessary or advisable in order to enforce
in any such proceedings any of the claims of such Trustee and of any of such
holders in respect of any of the Securities of such series; and any receiver,
assignee, custodian, trustee, or debtor in any such proceedings is hereby
authorized, and each and every Holder of the Securities of such series, by
receiving and holding the same, shall be conclusively deemed to have authorized
any such receiver, assignee, custodian, trustee, or debtor, to make any such
payment or delivery to or on the order of such Trustee, and, in the event that
such Trustee shall consent to the making of such payments or deliveries directly
to the Holders of the Securities of such series, to pay to such Trustee any
amount due it for compensation and expenses, including counsel fees and
expenses, incurred by it down to the date of such payment or delivery; provided,
however, that nothing herein contained shall be deemed to authorize or empower
such Trustee to consent to or accept or adopt, on behalf of any Holder of
Securities of such series, any plan of reorganization or readjustment of the
Company affecting the Securities of such series or the rights of any Holder
thereof, or to authorize or empower such Trustee to vote in respect of the claim
of any Holder of any Securities of such series in any such proceedings.

                                   ARTICLE 7

                HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY

      Section 7.1 Company to Furnish Trustee Names and Addresses of Holders.

      In accordance with Section 312(a) of the Trust Indenture Act, the Company
shall furnish or cause to be furnished to the Trustee

            (1) semi-annually with respect to Securities of each series not
      later than May 1 and November 1 of the year or upon such other dates as
      are set forth in or pursuant to the Board Resolution or indenture
      supplemental hereto authorizing such series, a list, in each case in such
      form as the Trustee may reasonably require, of the names and addresses of
      Holders as of the applicable date, and


                                       56


            (2) 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.

      Section 7.2 Preservation of Information; Communications to Holders.

      The Trustee shall comply with the obligations imposed upon it pursuant to
Section 312 of the Trust Indenture Act.

      Every Holder of Securities or Coupons, by receiving and holding the same,
agrees with the Company and the Trustee that none of the Company, the Trustee,
any Paying Agent or any Security Registrar shall be held accountable by reason
of the disclosure of any such information as to the names and addresses of the
Holders of Securities in accordance with Section 312(c) of the Trust Indenture
Act, 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 Section 312(b) of the Trust Indenture Act.

      Section 7.3 Reports by Trustee.

            (1) Within 60 days after September 15 of each year commencing with
      the first September 15 following the first issuance of Securities pursuant
      to Section 3.1, if required by Section 313(a) of the Trust Indenture Act,
      the Trustee shall transmit, pursuant to Section 313(c) of the Trust
      Indenture Act, a brief report dated as of such September 15 with respect
      to any of the events specified in said Section 313(a) which may have
      occurred since the later of the immediately preceding September 15 and the
      date of this Indenture.

            (2) The Trustee shall transmit the reports required by Section
      313(a) of the Trust Indenture Act at the times specified therein.

            (3) Reports pursuant to this Section shall be transmitted in the
      manner and to the Persons required by Sections 313(c) and 313(d) of the
      Trust Indenture Act.

      Section 7.4 Reports by Company

      The Company, pursuant to Section 314(a) of the Trust Indenture Act, shall:

            (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, as amended; or, if the Company is not
      required to file information, documents or reports pursuant to either of
      said Sections, then it shall file with the Trustee and the Commission, in
      accordance with rules and


                                       57


      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, as
      amended, 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 to the Holders of Securities within 30 days after the
      filing thereof with the Trustee, in the manner and to the extent provided
      in Section 313(c) of the Trust Indenture Act, 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.

                                   ARTICLE 8

                 CONSOLIDATION, AMALGAMATIONS, MERGER AND SALES

      Section 8.1 Company May Consolidate, Etc., Only on Certain Terms.

      The Company shall not consolidate or amalgamate with or merge into any
other Person (whether or not affiliated with the Company), or convey, transfer
or lease its properties and assets as an entirety or substantially as an
entirety to any other Person (whether or not affiliated with the Company), and
the Company shall not permit any other Person (whether or not affiliated with
the Company) to consolidate or amalgamate with or merge into the Company or
convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to the Company; unless:

            (1) either the Company shall be the continuing corporation, or the
      Person (if other than the Company) formed by such consolidation or into
      which the Company is merged or the Person which acquires by conveyance or
      transfer the properties and assets of the Company substantially as an
      entirety shall expressly assume, by an indenture supplemental hereto,
      executed and delivered to the Trustee, in form satisfactory to the
      Trustee, the due and punctual payment of the principal of (and premium, if
      any) and interest, if any, on all the Securities and the performance of
      every covenant of this Indenture on the part of the Company to be
      performed or observed;

            (2) immediately after giving effect to such transaction, no default
      or Event of Default shall have happened and be continuing; and

            (3) the Company and the successor Person have delivered to the
      Trustee an Officers' Certificate and an Opinion of Counsel each stating
      that such consolidation, merger, conveyance or transfer and such
      supplemental indenture comply with this Article


                                       58


      and that all conditions precedent herein provided for relating to such
      transaction have been complied with.

      For the purpose of this Section 8.1, the term "default" means any event
that is, or after notice or lapse of time or both would become, an Event of
Default with respect to Securities of such series.

      Section 8.2 Successor Person Substituted for Company.

      Upon any consolidation or amalgamation by the Company with or merger of
the Company into any other Person or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety to any Person
in accordance with Section 8.1, the successor Person formed by such
consolidation or amalgamation or into which the Company is merged or to which
such conveyance, transfer or lease is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this Indenture
with the same effect as if such successor Person had been named as the Company
herein; and thereafter, except in the case of a lease, the predecessor Person
shall be released from all obligations and covenants under this Indenture, the
Securities and the Coupons.

                                   ARTICLE 9

                             SUPPLEMENTAL INDENTURES

      Section 9.1 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, 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

            (2) to add to the covenants and agreements of the Company for the
      benefit of the Holders of all or any series of Securities (as shall be
      specified in such supplemental indenture or indentures) or to surrender
      any right or power herein conferred upon the Company; or

            (3) 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, any
      premium or interest on, Securities, to permit Bearer Securities to be
      issued in exchange for Registered Securities, to permit Bearer Securities
      to be exchanged for Bearer Securities of other authorized denominations or
      to permit or facilitate the issuance of Securities in uncertificated form,
      provided any such action shall not adversely affect the interests of the
      Holders of Outstanding Securities of any series or any Coupons
      appertaining thereto in any material respect; or


                                       59


            (4) 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, pursuant
      to the requirements of Section 6.9; or

            (5) to cure any ambiguity or 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 adversely affect
      the interests of the Holders of Securities of any series then Outstanding
      or any Coupons appertaining thereto in any material respect; or

            (6) to establish the form or terms of Securities of any series and
      any related Coupons as permitted by Sections 2.1 and 3.1, including the
      provisions and procedures relating to Securities convertible into or
      exchangeable for any securities of any Person (including the Company); or

            (7) to add any additional Events of Default with respect to all or
      any series of Securities (as shall be specified in such supplemental
      indenture); or

            (8) 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 Article 4, provided that
      any such action shall not adversely affect the interests of any Holder of
      an Outstanding Security of such series and any Coupons appertaining
      thereto or any other Outstanding Security or Coupon in any material
      respect; or

            (9) to secure payment on the Securities pursuant to Section 10.4 or
      otherwise; or

            (10) to amend or supplement any provision contained herein or in any
      supplemental indenture, provided that no such amendment or supplement
      shall materially adversely affect the interests of the Holders of any
      Securities then Outstanding.

      Section 9.2 Supplemental Indentures with Consent of Holders

      With the consent of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities of each series 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 Company's 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 of such series
under this Indenture or of the Securities of such series; provided, however,
that no such supplemental indenture, without the consent of each Holder of each
Outstanding Security affected thereby, shall:

            (1) change the Stated Maturity of the principal of, or any premium
      or installment of interest on, any Security, or reduce the principal
      amount thereof or the rate (or modify the calculation of such rate) of
      interest thereon, or any premium payable upon the redemption thereof or
      otherwise, or reduce the amount of the principal of an Original


                                       60


      Issue Discount Security that would be due and payable upon a declaration
      of acceleration of the Maturity thereof pursuant to Section 5.2 or the
      amount thereof provable in bankruptcy pursuant to Section 5.4, change the
      redemption provisions or adversely affect the right of repayment at the
      option of any Holder as contemplated by Article 13, or change the Place of
      Payment, Currency in which the principal of, any premium or interest on,
      any Security 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, on or after the Redemption Date or, in the
      case of repayment at the option of the Holder, on or after the date for
      repayment), or

            (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 (of 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 15.4 for quorum or
      voting, or

            (3) modify any of the provisions of this Section, Section 5.13 or
      Section 10.6, except to increase any such percentage 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, or

            (4) make any change that adversely affects the right to convert or
      exchange any Security into or for securities of the Company or other
      securities, (whether or not issued by the Company) cash or property in
      accordance with its terms.

      In computing whether the Holders of the requisite principal amount of
Outstanding Securities have taken action under this Indenture or under a
supplemental indenture hereto, the Company shall use: (i) for an Original Issue
Discount security, the amount of the principal that would be due and payable as
of that date, as if the Maturity of such Security had been accelerated due to a
default; and (ii) for a Security denominated in a Foreign Currency or
Currencies, the Dollar equivalent of the outstanding principal amount as of that
date, using the exchange rate in effect on the date of original issuance of such
Security.

      A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture, which shall have been included expressly and 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.

      It shall not be necessary for any Act of Holders of Securities under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.

      Any consent given by any Holder of a Security under this Section 9.2 shall
be irrevocable for a period of six months after the day of execution thereof,
but may be revoked at any time thereafter by such Holder or by his successor in
title by filing written notice of such revocation


                                       61


with the Trustee at its corporate trust office; provided, however, that such
consent shall not be revocable after the holders of not less than a majority in
aggregate principal amount of the Securities of the series of which such
Security is a part at the time Outstanding shall have consented to such
supplemental indenture. No notation on any Security of the fact of such consent
shall be necessary, but any such written consent by the Holder of any Security
shall be conclusive and binding on all future Holders and owners of the same
Security and of all Securities delivered in exchange therefor, unless revoked in
the manner and during the period provided in this Section 9.2.

      Section 9.3 Execution of Supplemental Indentures.

      As a condition to executing, or accepting the additional trusts created
by, any supplemental indenture permitted by this Article or the modifications
thereby of the trust created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 315 of the Trust Indenture Act) 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 and an
Officers' Certificate stating that all conditions precedent to the execution of
such supplemental indenture have been fulfilled. 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 is
not reasonably acceptable to the Trustee.

      Section 9.4 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 a Security theretofore or thereafter authenticated and delivered hereunder
and of any Coupon appertaining thereto shall be bound thereby.

      Section 9.5 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 in equal aggregate
principal amounts, and such exchange shall be made without cost to the Holders.

      Section 9.6 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 9.7 Notice of Supplemental Indenture.

      Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to Section 9.2, the Company shall transmit to
the Holders of Outstanding


                                       62


Securities of any series affected thereby a notice setting forth in general
terms the substance of such supplemental indenture. Failure to send such notice
will not impair the validity of such supplemental indenture.

                                   ARTICLE 10

                                    COVENANTS

      Section 10.1 Payment of Principal, any Premium, Interest.

      The Company covenants and agrees for the benefit of the Holders of the
Securities of each series that it will duly and punctually pay the principal of,
and any premium or interest, if any, on the Securities of such series in
accordance with the terms thereof, any Coupons appertaining thereto and this
Indenture. Any interest due on any Bearer Security on or before the Maturity
thereof, shall be payable only upon presentation and surrender of the Coupons
appertaining thereto for such interest as they severally mature. When and as
paid, all Securities of such series shall be cancelled and destroyed in
accordance with the Section 3.9 hereof.

      Section 10.2 Maintenance of Office or Agency.

      The Company shall maintain in each Place of Payment for any series of
Securities an Office or Agency where Securities of such series (but not Bearer
Securities, except as otherwise provided below, unless such Place of Payment is
located outside the United States) may be presented or surrendered for payment,
where Securities of such series may be surrendered for registration of transfer
or exchange, where Securities of such series that are convertible or
exchangeable may be surrendered for conversion or exchange, and where notices
and demands to or upon the Company in respect of the Securities of such series
relating thereto and this Indenture may be served. If Securities of a series are
issuable as Bearer Securities, the Company shall maintain, subject to any laws
or regulations applicable thereto, an Office or Agency in a Place of Payment for
such series which is located outside the United States where Securities of such
series and any Coupons appertaining thereto may be presented and surrendered for
payment; provided, however, that if the Securities of such series are listed on
The Stock Exchange of the United Kingdom and the Republic of Ireland or the
Luxembourg Stock Exchange or any other stock exchange located outside the United
States and such stock exchange shall so require, the Company shall maintain a
Paying Agent in London, Luxembourg or any other required city located outside
the United States, as the case may be, so long as the Securities of such series
are listed on such exchange. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of 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 such
series and any Coupons appertaining thereto may be presented and surrendered for
payment at the place specified for the purpose with respect to such Securities
as provided in or pursuant to this Indenture, and the Company hereby appoints
the Trustee as its agent to receive all such presentations, surrenders, notices
and demands.


                                       63


      Except as otherwise provided in or pursuant to this Indenture, no payment
of principal, premium or interest with respect to Bearer Securities shall be
made at any Office or Agency 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, if amounts owing with respect
to any Bearer Securities shall be payable in Dollars, payment of principal of,
any premium or interest on, any such Security may be made at the Corporate Trust
Office of the Trustee or any Office or Agency designated by the Company in the
Borough of Manhattan, The City of New York, if (but only if) payment of the full
amount of such principal, premium or interest at all offices outside the United
States maintained for such purpose by the Company in accordance with this
Indenture is illegal or effectively precluded by exchange controls or other
similar restrictions, and the Company has delivered to the Trustee an opinion of
counsel to that effect.

      The Company may also 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 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 each Place of Payment for Securities of any series for such purposes. The
Company shall 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 provided in or pursuant to this Indenture, the Company
hereby designates as the Place of Payment for each series of Securities the
Borough of Manhattan, The City of New York, and initially appoint the Corporate
Trust Office of the Trustee as the Office or Agency of the Company in the
Borough of Manhattan, The City of New York for such purpose. The Company may
subsequently appoint a different Office or Agency in the Borough of Manhattan,
The City of New York for the Securities of any series.

      Unless otherwise specified with respect to any Securities pursuant to
Section 3.1, 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 this 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 10.3 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 Securities, it shall, on or before each due date of the
principal of, any premium or interest on, any of the Securities of such 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 3.1 for the Securities of such series)
sufficient to pay the principal or any premium or interest so becoming due until
such sums shall be paid to such Persons or otherwise disposed of as herein
provided, and shall 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, it shall, no later than 11:00 am on or prior to each due date of
the principal of, any


                                       64


premium or interest on, any Securities of such series, deposit with any 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 or any premium or interest so becoming due, such sum to be held in
trust for the benefit of the Persons entitled thereto, 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 shall 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 shall:

            (1) hold all sums held by it for the payment of the principal of,
      any premium or interest on, Securities of such series in trust for the
      benefit of the Persons entitled thereto until such sums shall be paid to
      such Persons or otherwise disposed of as provided in or pursuant to this
      Indenture;

            (2) give the Trustee notice of any default by the Company (or any
      other obligor upon the Securities of such series) in the making of any
      payment of principal, any premium or interest on, Securities of such
      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 terms 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 herein or pursuant hereto, 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, any premium or interest on, any
Security of any series or any Coupon appertaining thereto and remaining
unclaimed for two years after such principal or any such premium or interest
shall have become due and payable shall be paid to the Company on Company
Request, or (if then held by the Company), unless otherwise required by
mandatory provisions of applicable escheat or abandoned or unclaimed property
laws, shall be discharged from such trust; and the Holder of such Security or
any Coupon appertaining thereto shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, 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 in each Place of Payment for such series or to be mailed to
Holders of Registered Securities of such series, or both, 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 or mailing nor shall it be
later than two years after such


                                       65


principal and any premium or interest shall have become due and payable, any
unclaimed balance of such money then remaining will be repaid to the Company.

      Section 10.4 Limitations on Pledges and Liens.

            (1) After the date of the execution and delivery of this Indenture
      and so long as any Securities shall be Outstanding, the Company will not
      pledge or otherwise subject to any lien (any such pledge or lien being
      hereinafter referred to as a "Lien") any of its property or assets to
      secure Indebtedness for money borrowed, incurred, issued, assumed or
      guaranteed by the Company without thereby expressly securing the due and
      punctual payment of the principal of and interest on the Securities
      equally and ratably with any and all other obligations and Indebtedness
      secured by such Lien, so long as any such other obligations and
      Indebtedness shall be so secured; provided, however, that this restriction
      shall not prohibit or otherwise restrict:

                  (a) the Company from creating, incurring or suffering to exist
            upon any of its property or assets any Lien in favor of any
            Subsidiary of the Company;

                  (b) the Company (i) from creating, incurring or suffering to
            exist a purchase money Lien upon any such property, assets, capital
            stock or Indebtedness acquired by the Company prior to, at the time
            of, or within one year after (1) in the case of physical property or
            assets, the later of the acquisition, completion of construction
            (including any improvements on existing property) or commencement of
            commercial operation of such property or (2) in the case of shares
            of Capital Stock, Indebtedness or other property or assets, the
            acquisition of such shares of Capital Stock, Indebtedness, property
            or assets, (ii) from acquiring property or assets subject to Liens
            existing thereon at the date of acquisition thereof, whether or not
            the Indebtedness secured by any such Lien is assumed or guaranteed
            by the Company, or (iii) from creating, incurring or suffering to
            exist Liens upon any property of any Person, which Liens exist at
            the time any such Person is merged with or into or consolidated with
            the Company (or becomes a subsidiary of the Company) or which Liens
            exist at the time of a sale or transfer of the properties of any
            such Person as an entirety or substantially as an entirety to the
            Company;

                  (c) the Company from creating, incurring or suffering to exist
            upon any of its property or assets Liens in favor of the United
            States or any state thereof or the District of Colombia, or any
            agency, department or other instrumentality thereof, to secure
            progress, advance or other payments pursuant to any contract or
            provision of any statute (including maintaining self-insurance or
            participating in any fund in connection with worker's compensation,
            disability benefits, unemployment insurance, old age pensions or
            other types of social benefits, or joining in any other provisions
            or benefits available to companies participating in any such
            arrangements);

                  (d) the Company from creating, incurring or suffering to exist
            upon any of its property or assets Liens securing the performance of
            letters of credit,


                                       66


            bids, tenders, sales contracts, purchase agreements, repurchase
            agreements, reverse repurchase agreements, bankers' acceptances,
            leases, surety and performance bonds, and other similar obligations
            incurred in the ordinary course of business;

                  (e) the Company from creating, incurring or suffering to exist
            Liens upon any real property acquired or constructed by the Company
            primarily for use in the conduct of its business;

                  (f) the Company from entering into any arrangement with any
            Person providing for the leasing by the Company of any property or
            assets, which property or assets have been or will be sold or
            transferred by the Company to such Person with the intention that
            such property or assets will be leased back to the Company, if the
            obligations in respect of such lease would not be included as
            liabilities on a consolidated balance sheet of the Company;

                  (g) the Company from creating, incurring or suffering to exist
            upon any of its property or assets Liens to secure non-recourse debt
            in connection with the Company engaging in any leveraged or
            single-investor or other lease transactions, whether (in the case of
            Liens on or relating to leases or groups of leases or the particular
            properties subject thereto) such Liens are on the particular
            properties subject to any leases involved in any of such
            transactions and/or the rental or other payments or rights under
            such leases or, in the case of any group of related or unrelated
            leases, on the properties subject to the leases comprising such
            group and/or on the rental or other payments or rights under such
            leases, or on any direct or indirect interest therein, and whether
            (in any case) (A) such Liens are created prior to, at the time of,
            or at any time after the entering into of such lease transactions
            and/or (B) such leases are in existence prior to, or be entered into
            by the Company at the time of or at any time after, the purchase or
            other acquisition by the Company of the properties subject to such
            leases;

                  (h) the Company from creating, incurring or suffering to exist
            (A) other consensual Liens in the ordinary course of business of the
            Corporation that secure Indebtedness that, in accordance with
            generally accepted accounting principles, would not be included in
            total liabilities as shown on the Company's consolidated balance
            sheet, or (B) Liens created by the Company in connection with any
            transaction intended by the Company to be a sale of property or
            assets of the Company, provided that such Liens are upon any or all
            of the property or assets intended to be sold, the income from such
            property or assets and/or the proceeds of such property or assets;

                  (i) the Company from creating, incurring or suffering to exist
            Liens on property or assets financed through tax-exempt municipal
            obligations, provided that such Liens are only on the property or
            assets so financed;

                  (j) any extension, renewal or replacement (or successive
            extensions, renewals or replacements), in whole or in part, of any
            of the foregoing; provided,


                                       67


            however, that any such extension, renewal or replacement shall be
            limited to all or a part of the property or assets (or substitutions
            therefor) which secured the Lien so extended, renewed or replaced
            (plus improvements on such property); and

                  (k) the Company from creating, incurring or suffering to exist
            any other Lien not otherwise permitted by any of the foregoing
            clauses (a) through (j) above if the aggregate amount of all secured
            debt of the Company secured by such Liens would not exceed 10% of
            the excess of the Company's consolidated assets over the
            consolidated liabilities as shown on the Company's most recent
            audited consolidated financial statements in accordance with
            generally accepted accounting principles.

            (2) For the purposes of this Section 10.4, any contract by which
      title is retained as security (whether by lease, purchase, title retention
      agreement or otherwise) for the payment of a purchase price shall be
      deemed to be a purchase money Lien. Nothing in this Section 10.4 shall
      apply to any Lien of any kind upon any of the properties of any character
      of the Company existing on the date of execution and delivery of this
      Indenture.

            (3) Nothing contained in this Section 10.4 or elsewhere in this
      Indenture shall prevent or be deemed to prohibit the creation, assumption
      or guaranty by the Company of any Indebtedness not secured by a Lien or
      the issuance by the Company of any debentures, notes or other evidences of
      Indebtedness not secured by a Lien, whether in the ordinary course of
      business or otherwise.

            (4) The entry by the Company into any contract, document, agreement
      or instrument (which shall include bank credit facilities and loan
      agreements), in the ordinary course of business or otherwise, which
      contract, document agreement or instrument may provide for or contain a
      right of set-off between the Company and such other party to the contract,
      document agreement or instrument shall not result in, or be deemed to
      constitute, the creation or incurrence of a "Lien" as such term is used in
      this Indenture.

      Section 10.5 Corporate Existence.

      Subject to Article 8, the Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existences
and that of each of its Subsidiaries and its rights (charter and statutory) and
franchises; provided, however, that the foregoing shall not obligate the Company
or any of its Subsidiaries to preserve any such right or franchise if the
Company or any such Subsidiary shall determine that the preservation thereof is
no longer desirable in the conduct of its business or the business of such
Subsidiary and that the loss thereof is not disadvantageous in any material
respect to any Holder.

      Section 10.6 Waiver of Certain Covenants.

      The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Section 10.4 of this Indenture with respect
to the Securities of any series if, before the time for such compliance, the
Holders of at least a majority in principal amount of the Outstanding Securities
of such series, by Act of such Holders, either shall waive such


                                       68


compliance in such instance or generally shall have waived compliance with such
term, provision or condition, but no such waiver shall extend to or affect such
term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect. The Company shall obtain and file with the
Trustee, before or after the time for such compliance, evidence of the consent
of such Holders.

      Section 10.7 Company Statement as to Compliance; Notice of Certain
Defaults.

            (1) The Company shall deliver to the Trustee, within 120 days after
      the end of each fiscal year, a written statement (which need not be
      contained in or accompanied by an Officers' Certificate) signed by the
      principal executive officer, the principal financial officer or the
      principal accounting officer of the Company, stating that

                  (a) a review of the activities of the Company during such year
            and of its performance under this Indenture has been made under his
            or her supervision, and

                  (b) to the best of his or her knowledge, based on such review,
            (a) the Company has complied with all the conditions and covenants
            imposed on it under this Indenture throughout such year, or, if
            there has been a default in the fulfillment of any such condition or
            covenant or agreement, specifying each such default known to him or
            her and the nature and status thereof, and (b) no event has occurred
            and is continuing which is, or after notice or lapse of time or both
            would become, an Event of Default, or, if such an event has occurred
            and is continuing, specifying each such event known to him and the
            nature and status thereof.

            (2) The Company shall deliver to the Trustee, within five days after
      the occurrence thereof, written notice of any Event of Default or any
      event which after notice or lapse of time or both would become an Event of
      Default pursuant to clause (4) of Section 5.1.

            (3) The Trustee shall have no duty to monitor the Company's
      compliance with the covenants contained in this Article 10 other than as
      specifically set forth in this Section 10.7.

                                   ARTICLE 11

                            REDEMPTION OF SECURITIES

      Section 11.1 Applicability of Article.

      Redemption of Securities of any series at the option of the Company as
permitted or required by the terms of such Securities shall be made in
accordance with the terms of such Securities and (except as otherwise provided
herein or pursuant hereto) this Article.


                                       69


      Section 11.2 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 (a) less than all of the Securities of any series or (b) all of
the Securities of any series, with the same issue date, interest rate or
formula, Stated Maturity and other terms, the Company shall, at least 60 days
prior to the Redemption Date fixed by the Company (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.

      Section 11.3 Selection by Trustee of Securities to be Redeemed.

      If less than all of the Securities of any series with the same issue date,
interest rate or formula, Stated Maturity and other 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 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 of the principal amount of Registered Securities of such
series; provided, however, that no such partial redemption shall reduce the
portion of the principal amount of a Registered Security of such series not
redeemed to less than the minimum denomination for a Security of such series
established herein or pursuant hereto.

      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 Securities redeemed or to be redeemed only in part, to the portion
of the principal of such Securities which has been or is to be redeemed.

      Unless otherwise specified in or pursuant to this Indenture or the
Securities of any series, if any Security selected for partial redemption is
converted into other securities of the Company or exchanged for securities of
another issuer in part before termination of the conversion or exchange right
with respect to the portion of the Security so selected, the converted portion
of such Security shall be deemed (so far as may be) to be the portion selected
for redemption. Securities which have been converted or exchanged during a
selection of Securities to be redeemed shall be treated by the Trustee as
Outstanding for the purpose of such selection.

      Section 11.4 Notice of Redemption.

      Notice of redemption shall be given in the manner provided in Section 1.6,
not less than 30 nor more than 60 days prior to the Redemption Date, unless a
shorter period is specified in the Securities to be redeemed, to the Holders of
Securities to be redeemed. Failure to give notice by mailing in the manner
herein provided to the Holder of any Registered Securities 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 far the redemption of
any other Securities or portion thereof.


                                       70


      Any notice that is mailed to the Holder of any Registered Securities in
the manner herein provided shall be conclusively presumed to have been duly
given, whether or not such Holder receives the notice.

      All notices of redemption shall state:

            (1) the Redemption Date,

            (2) the Redemption Price,

            (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 of such
      Security will receive, without 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 shall become
      due and payable upon each such Security or 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 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 any accrued interest,

            (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 and any Paying Agent is
      furnished,

            (9) if Bearer Securities of any series are to be redeemed and no
      Registered Securities of such series are to be redeemed, and if such
      Bearer Securities may be exchanged for Registered Securities not subject
      to redemption on the Redemption Date pursuant to Section 3.5 or otherwise,
      the last date, as determined by the Company, on which such exchanges may
      be made,

            (10) in the case of Securities of any series that are convertible
      into Common Stock of the Company or exchangeable for other securities, the
      conversion or exchange price or rate, the date or dates on which the right
      to convert or exchange the principal of the Securities of such series to
      be redeemed will commence or terminate and the place or places where such
      Securities may be surrendered for conversion or exchange, and


                                       71


            (11) the CUSIP number or the Euroclear or Cedel reference numbers of
      such Securities, if any (or any other numbers used by a Depository to
      identify such Securities).

      A notice of redemption published as contemplated by Section 1.6 need not
identify particular Registered Securities to be redeemed.

      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 11.5 Deposit of Redemption Price.

      On or prior to any Redemption Date, the Company shall deposit, with
respect to the Securities of any series called for redemption pursuant to
Section 11.4, 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 10.3) an amount of money in the applicable Currency sufficient to pay
the Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date, unless otherwise specified pursuant to Section 3.1 or in the
Securities of such series) any accrued interest on, all such Securities or
portions thereof which are to be redeemed on that date.

      Section 11.6 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, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall 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 any accrued interest
to the Redemption Date; provided, however, that, except as otherwise provided in
or pursuant to this Indenture or the Bearer Securities of such series,
installments of interest on Bearer Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable only upon presentation and
surrender of Coupons for such interest (at an Office or Agency located outside
the United States except as otherwise provided in Section 10.2), and provided,
further, that, except as otherwise specified in or pursuant to this Indenture or
the Registered Securities of such series, 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 Regular Record
Dates therefor according to their terms and the provisions of Section 3.7.

      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


                                       72


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 any interest represented by Coupons shall be
payable only upon presentation and surrender of those Coupons at an Office or
Agency for such Security located outside of the United States except as
otherwise provided in Section 10.2.

      If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium until paid, shall bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.

      Section 11.7 Securities Redeemed in Part.

      Any Registered Security which is to be redeemed only in part shall be
surrendered at any Office or Agency for such Security (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 Registered Security or Securities of the
same series, containing identical terms and provisions, 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 Security in global form is so surrendered, the Company shall
execute, and the Trustee shall authenticate and deliver to the U.S. Depository
or other Depository for such Security in global form as shall be specified in
the Company Order with respect thereto to the Trustee, without service charge, a
new Security in global form in a denomination equal to and in exchange for the
unredeemed portion of the principal of the Security in global form so
surrendered.

      Section 11.8 Cancellation and Destruction of Securities

      All Securities redeemed and paid pursuant to the provisions of this
Article 11 shall be cancelled and destroyed, as provided in Section 3.9, and,
except in the case of partial redemption of any Security, no Security shall be
issued under this Indenture in lieu thereof.

                                   ARTICLE 12

                                  SINKING FUNDS

      Section 12.1 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 permitted or
required in or pursuant to this Indenture or any Security of such series issued
pursuant to this Indenture.

      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


                                       73


payment in excess of such minimum amount provided for by the terms of Securities
of such series is herein referred to as an "optional sinking fund payment". If
provided for by the terms of Securities of any series, the cash amount of any
sinking fund payment may be subject to reduction as provided in Section 12.2.
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 and this
Indenture.

      Section 12.2 Satisfaction of Sinking Fund Payments with Securities.

      The Company may, in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of any series to be made pursuant to the
terms of such Securities (1) deliver Outstanding Securities of such series
(other than any of such Securities previously called for redemption or any of
such Securities in respect of which cash shall have been released to the
Company), 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 series of Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, provided that such series of Securities have not been previously so
credited. Such Securities shall be received and credited for such purpose by the
Trustee at the Redemption Price specified in such Securities for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly. If, as a result of the delivery or credit
of Securities of any series in lieu of cash payments pursuant to this Section
12.2, the principal amount of Securities of such series to be redeemed in order
to satisfy the remaining sinking fund payment shall be less than $100,000, the
Trustee need not call Securities of such series for redemption, except upon
Company Request, and such cash payment shall be held by the Trustee or a Paying
Agent and applied to the next succeeding sinking fund payment, provided,
however, that the Trustee or such Paying Agent shall at the request of the
Company from time to time pay over and deliver to the Company any cash payment
so being held by the Trustee or such Paying Agent upon delivery by the Company
to the Trustee of Securities of that series purchased by the Company having an
unpaid principal amount equal to the cash payment requested to be released to
the Company.

      Section 12.3 Redemption of Securities for Sinking Fund.

      Not less than 75 days prior to each sinking fund payment date for any
series of Securities, the Company shall 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 and the portion
thereof, if any, which is to be satisfied by delivering and crediting of
Securities of that series pursuant to Section 12.2, 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 credited and not
theretofore delivered. 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 60 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 11.3 and cause notice of the redemption
thereof to be given in the name of and at the expense of the Company in the
manner


                                       74


provided in Section 11.4. Such notice having been duly given, the redemption of
such Securities shall be made upon the terms and in the manner stated in
Sections 11.6 and 11.7.

                                   ARTICLE 13

                       REPAYMENT AT THE OPTION OF HOLDERS

      Section 13.1 Applicability of Article.

      Securities of any series which are repayable at the option of the Holders
thereof before their Stated Maturity shall be repaid in accordance with the
terms of the Securities of such series. The repayment of any principal amount of
Securities pursuant to such option of the Holder to require repayment of
Securities before their Stated Maturity, for purposes of Section 3.9, shall not
operate as a payment, redemption or satisfaction of the Indebtedness represented
by such Securities unless and until the Company, at its option, shall deliver or
surrender the same to the Trustee with a directive that such Securities be
cancelled. Notwithstanding anything to the contrary contained in this Section
13.1, in connection with any repayment of Securities, the Company may arrange
for the purchase of any Securities by an agreement with one or more investment
bankers or other purchasers to purchase such Securities by paying to the Holders
of such Securities on or before the close of business on the repayment date an
amount not less than the repayment price payable by the Company on repayment of
such Securities, and the obligation of the Company to pay the repayment price of
such Securities shall be satisfied and discharged to the extent such payment is
so paid by such purchasers.

                                   ARTICLE 14

                        SECURITIES IN FOREIGN CURRENCIES

      Section 14.1 Applicability of Article.

      Whenever this Indenture provides for (1) any action by, or the
determination of any of the rights of, Holders of Securities of any series in
which not all of such Securities are denominated in the same Currency, or (ii)
any distribution to Holders of Securities, in the absence of any provision to
the contrary in the form of Security of any particular series or pursuant to
this Indenture or the Securities, any amount in respect of any Security
denominated in a Currency other than Dollars shall be treated for any such
action or distribution as that amount of Dollars that could be obtained for such
amount on such reasonable basis of exchange and as of the record date with
respect to Registered Securities of such series (if any) for such action,
determination of rights or distribution (or, if there shall be no applicable
record date, such other date reasonably proximate to the date of such action,
determination of rights or distribution) as the Company may specify in a written
notice to the Trustee.


                                       75


                                   ARTICLE 15

                        MEETINGS OF HOLDERS OF SECURITIES

      Section 15.1 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 Act
provided by this Indenture or under applicable law, to be made, given or taken
by Holders of Securities of such series.

      Section 15.2 Call, Notice and Place of Meetings.

            (1) The Trustee may at any time call a meeting of Holders of
      Securities of any series for any purpose specified in Section 15.1, to be
      held at such time and at such place in the Borough of Manhattan, The City
      of New York, or, if Securities of such series have been issued in whole or
      in part as Bearer Securities, in London or in such place outside the
      United States 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 1.6, not
      less than 21 nor more than 180 days prior to the date fixed for the
      meeting.

            (2) In case at any time the Company (by or pursuant to a Board
      Resolution) or the Holders of at least 10% in principal amount of the
      Outstanding Securities of any series or all series shall have requested
      the Trustee to call a meeting of the Holders of Securities of such series
      or all series, respectively, for any purpose specified in Section 15.1, by
      written request setting forth in reasonable detail the action proposed to
      be taken at the meeting, and the Trustee shall not have mailed notice of
      or made the first publication of the notice of such meeting within 21 days
      after receipt of such request (whichever shall be required pursuant to
      Section 1.6) 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 in the Borough of Manhattan, The City of
      New York, or, if Securities of such series are to be issued as Bearer
      Securities, in London for such meeting and may call such meeting for such
      purposes by giving notice thereof as provided in clause (1) of this
      Section.

      Section 15.3 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.


                                       76


      Section 15.4 Quorum; Action.

      The Persons entitled to vote a majority in aggregate principal amount of
the Outstanding Securities of the relevant series shall constitute a quorum for
any meeting of Holders of Securities of such series. 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 any reconvened
meeting, such reconvened meeting may be further adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such reconvened meeting. Notice of the reconvening of any
adjourned meeting shall be given as provided in Section 15.2(1), 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. Notice of the reconvening of an
adjourned meeting shall state expressly the percentage, as provided above, of
the principal amount of the Outstanding Securities of such series which shall
constitute a quorum.

      Except as limited by the proviso to Section 9.2, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted only by the affirmative vote of the Holders of a
majority in principal amount of the Outstanding Securities of that series;
provided, however, that, except as limited by the proviso to Section 9.2, any
resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other Act 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 such
series.

      Except as limited by the proviso to Section 9.2, 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 Coupons appertaining thereto, whether or not
such Holders were present or represented at the meeting.

      Section 15.5 Determination of Voting Rights; Conduct and Adjournment of
Meetings.

            (1) Notwithstanding any other provisions of this Indenture, the
      Trustee may make such reasonable regulations as it may deem advisable for
      any meeting of Holders of Securities of such 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 1.4 and the appointment of any
      proxy shall be proved in the manner specified in Section 1.4 or by having
      the signature of the person executing the proxy witnessed or guaranteed by
      any trust company, bank or banker authorized by Section 1.4 to certify to
      the holding of Bearer Securities. Such regulations may provide that
      written instruments appointing


                                       77


      proxies, regular on their face, may be presumed valid and genuine without
      the proof specified in Section 1.4 or other proof.

            (2) 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
      15.2(2), 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 a majority in principal amount of the Outstanding Securities of
      such series represented at the meeting.

            (3) 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
      Securities of such series held or represented by him or such other amount
      established pursuant to Section 3.1; 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.

            (4) Any meeting of Holders of Securities of any series duly called
      pursuant to Section 15.2 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 15.6 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 triplicate of all votes cast at the meeting. A record, at least in
triplicate, 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 facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 15.2 and, if
applicable, Section 15.4. 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.


                                       78


      Section 15.7 Preservation of Rights of Trustee and Holders

      Nothing contained in this Article 15 shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Holders of any or all
series or any rights expressly or impliedly conferred hereunder to make such
call, any hindrance or delay in the exercise of any right or rights conferred
upon or reserved to the Trustee or to the Holders of any or all series under any
of the provisions of this Indenture or of such series of Securities.


                                       79


      IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, as of the date first above written.

                                                     CIT GROUP INC.

                                                     By_________________________
                                                     Name:
                                                     Title:

                                                     JPMORGAN CHASE BANK, N.A.,
                                                     as Trustee

                                                     By_________________________
                                                     Name:
                                                     Title:

EX-4.4

                                                                     Exhibit 4.4




                                 CIT GROUP INC.,
                                     Issuer

                                       And



                           JPMORGAN CHASE BANK, N.A.,
                                     Trustee


                               ------------------
                                    INDENTURE
                               ------------------


                          Dated as of January 20, 2006

                          Subordinated Debt Securities




                         Reconciliation and tie between
             Trust Indenture Act of 1939 (the "Trust Indenture Act")
                                  and Indenture

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

ss.310(a)(1) .........................................................      6.7
(a)(2) ...............................................................      6.7
(b) ..................................................................      6.8
ss.311 ...............................................................      6.4
ss.312(a) ............................................................      7.1
(b) ..................................................................      7.2
(c) ..................................................................      7.2
ss.313(a) ............................................................      7.3
(c) ..................................................................      7.3
(d) ..................................................................      7.3
ss.314(a) ............................................................      7.4
(c)(l) ...............................................................      1.2
(c)(2) ...............................................................      1.2
(e) .................................................................. 1.1, 1.2
(f) ..................................................................      1.2
ss.315(a)-(d) ........................................................      3.3
(b) ..................................................................      6.2
(c) ..................................................................   6.1(9)
(d) ..................................................................   6.1(8)
(e) ..................................................................     5.15
ss.316(a) (last sentence) ............................................      1.1
(a)(l)(A) ............................................................     5.12
(a)(1)(B) ............................................................     5.13
(b) ..................................................................      5.8
ss.317(a)(1) .........................................................      5.3
(a)(2) ...............................................................      5.4
(b) ..................................................................     10.3
ss.318(a) ............................................................      1.8

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





                                Table of Contents

                                                                            Page
                                    ARTICLE 1
             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 1.1    Definitions.................................................  1
               Act.........................................................  2
               Additional Provisions.......................................  2
               Affiliate...................................................  2
               Authenticating Agent........................................  2
               Authorized Newspaper........................................  2
               Authorized Officer..........................................  2
               Bankruptcy Law..............................................  2
               Bearer Security.............................................  2
               Board of Directors..........................................  2
               Board Resolution............................................  3
               Business Day................................................  3
               Capital Stock...............................................  3
               Capitalized Lease Obligation................................  3
               Commission..................................................  3
               Common Stock................................................  3
               Company.....................................................  3
               Company Request and Company Order...........................  3
               Conversion Event............................................  3
               Corporate Trust Office......................................  3
               Corporation.................................................  4
               Coupon......................................................  4
               Currency....................................................  4
               CUSIP number................................................  4
               Custodian...................................................  4
               Defaulted Interest..........................................  4
               Dollars or $................................................  4
               Event of Default............................................  4
               Foreign Currency............................................  4
               Government Obligations......................................  4
               Holder......................................................  5
               Indebtedness................................................  5
               Indenture...................................................  6
               Independent Public Accountants..............................  6
               Indexed Security............................................  6
               Interest....................................................  6
               Interest Payment Date.......................................  6
               Judgment Currency...........................................  6
               Junior Subordinated Indebtedness............................  6
               Lien........................................................  6


                                       i


               Maturity....................................................  6
               New York Banking Day........................................  6
               Office or Agency............................................  6
               Officers' Certificate.......................................  7
               Opinion of Counsel..........................................  7
               Original Issue Discount Security............................  7
               Outstanding.................................................  7
               Paying Agent................................................  8
               Person......................................................  8
               Place of Payment............................................  8
               Predecessor Security........................................  8
               Preferred Stock.............................................  8
               Redemption Date.............................................  9
               Redemption Price............................................  9
               Registered Security.........................................  9
               Regular Record Date.........................................  9
               Required Currency...........................................  9
               Responsible Officer.........................................  9
               Security....................................................  9
               Security Register...........................................  9
               Senior Subordinated Indebtedness............................ 10
               Special Record Date......................................... 10
               Stated Maturity............................................. 10
               Subsidiary.................................................. 10
               Senior Indebtedness.........................................  9
               Trust Indenture Act......................................... 10
               Trustee..................................................... 10
               United States............................................... 10
               U.S. Depository or Depository............................... 10
               Vice President.............................................. 11
Section 1.2    Compliance Certificates and Opinions........................ 11
Section 1.3    Form of Documents Delivered to Trustee...................... 11
Section 1.4    Acts of Holders............................................. 12
Section 1.5    Notices, etc. to Trustee and Company........................ 14
Section 1.6    Notice to Holders of Securities; Waiver..................... 14
Section 1.7    Language of Notices......................................... 16
Section 1.8    Conflict with Trust Indenture Act........................... 16
Section 1.9    Effect of Headings and Table of Contents.................... 16
Section 1.10   Successors and Assigns...................................... 16
Section 1.11   Separability Clause......................................... 16
Section 1.12   Benefits of Indenture....................................... 16
Section 1.13   Governing Law............................................... 16
Section 1.14   Legal Holidays.............................................. 16
Section 1.15   Counterparts................................................ 17
Section 1.16   Judgment Currency........................................... 17
Section 1.17   No Security Interest Created................................ 17


                                       ii


Section 1.18   Limitation on Individual Liability.......................... 18

                                    ARTICLE 2
                                SECURITIES FORMS

Section 2.1    Forms Generally............................................. 18
Section 2.2    Form of Trustee's Certificate of Authentication............. 19
Section 2.3    Securities in Global Form................................... 19

                                 ARTICLE 3
                              THE SECURITIES

Section 3.1    Amount Unlimited; Issuable in Series........................ 20
Section 3.2    Currency; Denominations..................................... 23
Section 3.3    Execution, Authentication, Delivery and Dating.............. 24
Section 3.4    Temporary Securities........................................ 25
Section 3.5    Registration, Transfer and Exchange......................... 26
Section 3.6    Mutilated, Destroyed, Lost and Stolen Securities............ 30
Section 3.7    Payment of Interest; Rights to Interest Preserved........... 31
Section 3.8    Persons Deemed Owners....................................... 33
Section 3.9    Cancellation................................................ 33
Section 3.10   Computation of Interest..................................... 34

                                 ARTICLE 4
                    SATISFACTION AND DISCHARGE OF INDENTURE;
                       DEFEASANCE AND COVENANT DEFEASANCE

Section 4.1    Satisfaction and Discharge.................................. 34
Section 4.2    Defeasance and Covenant Defeasance.......................... 35
Section 4.3    Application of Trust Money.................................. 39
Section 4.4    Reinstatement............................................... 39

                                    ARTICLE 5
                                    REMEDIES

Section 5.1    Events of Default........................................... 40
Section 5.2    Acceleration of Maturity; Rescission and Annulment.......... 42
Section 5.3    Collection of Indebtedness and Suits for Enforcement by
                 Trustee................................................... 43
Section 5.4    Trustee May File Proofs of Claim............................ 44
Section 5.5    Trustee May Enforce Claims without Possession of
                 Securities or Coupons..................................... 44
Section 5.6    Application of Money Collected.............................. 45
Section 5.7    Limitations on Suits........................................ 45
Section 5.8    Unconditional Right of Holders to Receive Principal and any
                 Premium and Interest...................................... 46
Section 5.9    Restoration of Rights and Remedies.......................... 46
Section 5.10   Rights and Remedies Cumulative.............................. 46
Section 5.11   Delay or Omission Not Waiver................................ 46
Section 5.12   Control by Holders of Securities............................ 47


                                      iii


Section 5.13   Waiver of Past Defaults..................................... 47
Section 5.14   Waiver of Usury, Stay or Extension Laws..................... 47
Section 5.15   Undertaking for Costs....................................... 48

                                    ARTICLE 6
                                   THE TRUSTEE

Section 6.1    Certain Rights of Trustee................................... 48
Section 6.2    Notice of Defaults.......................................... 49
Section 6.3    Not Responsible for Recitals or Issuance of Securities...... 50
Section 6.4    May Hold Securities......................................... 50
Section 6.5    Money Held in Trust......................................... 50
Section 6.6    Compensation and Reimbursement.............................. 50
Section 6.7    Corporate Trustee Required; Eligibility..................... 51
Section 6.8    Resignation and Removal; Appointment of Successor........... 51
Section 6.9    Acceptance of Appointment by Successor...................... 53
Section 6.10   Merger, Conversion, Consolidation or Succession to
                 Business.................................................. 54
Section 6.11   Appointment of Authenticating Agent......................... 55
Section 6.12   Appointment of Attorney-in-Fact............................. 56

                                    ARTICLE 7
                HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY

Section 7.1    Company to Furnish Trustee Names and Addresses of Holders... 57
Section 7.2    Preservation of Information; Communications to Holders...... 57
Section 7.3    Reports by Trustee.......................................... 58
Section 7.4    Reports by Company.......................................... 58

                                    ARTICLE 8
                 CONSOLIDATION, AMALGAMATIONS, MERGER AND SALES

Section 8.1    Company May Consolidate, Etc., Only on Certain Terms........ 59
Section 8.2    Successor Person Substituted for Company.................... 59

                                    ARTICLE 9
                             SUPPLEMENTAL INDENTURES

Section 9.1    Supplemental Indentures without Consent of Holders.......... 60
Section 9.2    Supplemental Indentures with Consent of Holders............. 61
Section 9.3    Execution of Supplemental Indentures........................ 63
Section 9.4    Effect of Supplemental Indentures........................... 63
Section 9.5    Reference in Securities to Supplemental Indentures.......... 63
Section 9.6    Conformity with Trust Indenture Act......................... 63
Section 9.7    Effect on Senior Indebtedness............................... 63
Section 9.8    Notice of Supplemental Indenture............................ 64


                                       iv


                                   ARTICLE 10
                                    COVENANTS

Section 10.1   Payment of Principal, any Premium, Interest................. 64
Section 10.2   Maintenance of Office or Agency............................. 64
Section 10.3   Money for Securities Payments to Be Held in Trust........... 65
Section 10.4   Limitations on Pledges and Liens............................ 67
Section 10.5   Corporate Existence......................................... 69
Section 10.6   Waiver of Certain Covenants................................. 70
Section 10.7   Company Statement as to Compliance; Notice of Certain
                 Defaults.................................................. 70
Section 10.8   Limitation on Indebtedness.................................. 70

                                   ARTICLE 11
                            REDEMPTION OF SECURITIES

Section 11.1   Applicability of Article.................................... 71
Section 11.2   Election to Redeem; Notice to Trustee....................... 71
Section 11.3   Selection by Trustee of Securities to be Redeemed........... 71
Section 11.4   Notice of Redemption........................................ 72
Section 11.5   Deposit of Redemption Price................................. 73
Section 11.6   Securities Payable on Redemption Date....................... 73
Section 11.7   Securities Redeemed in Part.................................74
Section 11.8   Cancellation and Destruction of Securities..................75

                                   ARTICLE 12
                                  SINKING FUNDS

Section 12.1   Applicability of Article.................................... 75
Section 12.2   Satisfaction of Sinking Fund Payments with Securities....... 75
Section 12.3   Redemption of Securities for Sinking Fund................... 76

                                   ARTICLE 13
                       REPAYMENT AT THE OPTION OF HOLDERS

Section 13.1   Applicability of Article.................................... 76

                                   ARTICLE 14
                        SECURITIES IN FOREIGN CURRENCIES

Section 14.1   Applicability of Article.................................... 77

                                   ARTICLE 15
                        MEETINGS OF HOLDERS OF SECURITIES

Section 15.1   Purposes for Which Meetings May Be Called................... 77
Section 15.2   Call, Notice and Place of Meetings.......................... 77
Section 15.3   Persons Entitled to Vote at Meetings........................ 78
Section 15.4   Quorum; Action.............................................. 78


                                       v


Section 15.5   Determination of Voting Rights; Conduct and Adjournment
                 of Meetings............................................... 79
Section 15.6   Counting Votes and Recording Action of Meetings............. 80
Section 15.7   Preservation of Rights of Trustee and Holders............... 80

                                   ARTICLE 16
                           SUBORDINATION OF SECURITIES

Section 16.1   Agreement to Subordinate.................................... 80
Section 16.2   Default on Senior Indebtedness.............................. 81
Section 16.3   Liquidation; Dissolution; Bankruptcy........................ 81
Section 16.4   Subrogation................................................. 82
Section 16.5   Trustee to Effectuate Subordination......................... 83
Section 16.6   Notice by the Company....................................... 83
Section 16.7   Rights of the Trustee; Holders of Senior Indebtedness....... 84
Section 16.8   Subordination May Not Be Impaired........................... 85


                                       vi



      INDENTURE, dated as of January 20, 2006 (the "Indenture"), between CIT
Group Inc., a corporation duly organized and existing under the laws of the
State of Delaware (the "Company") and JPMorgan Chase Bank, N.A., as trustee (the
"Trustee").

                                    RECITALS

      The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its subordinated
unsecured debentures, notes or other evidences of indebtedness (the
"Securities"), unlimited as to principal amount, to bear such rates of interest,
to mature at such time or times, to be issued in one or more series and to have
such other provisions as shall be fixed as hereinafter provided.

      The Company has duly authorized the execution and delivery of this
Indenture. All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.

      This Indenture is subject to the provisions of the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder that are required to be part of this Indenture
and, to the extent applicable, shall be governed by such provisions.

      NOW, THEREFORE, THIS INDENTURE WITNESSETH:

      For and in consideration of the premises and the purchase of the
Securities by the Holders (as herein defined) thereof, it is mutually
covenanted, declared and agreed by and between the parties hereto, for the equal
and proportionate benefit of all Holders of the Securities or of any series
thereof and any Coupons (as herein defined) as follows:

                                   ARTICLE 1

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

      Section 1.1 Definitions.

      Except as otherwise specified with respect to any Securities issued
pursuant to Section 3.1, and except as otherwise expressly provided in or
pursuant to this Indenture, or unless the context otherwise requires, for all
purposes of this Indenture:

            (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 Trust
      Indenture Act, either directly or by reference therein, have the meanings
      assigned to them therein;

            (3) all accounting terms not otherwise defined herein have the
      meanings assigned to them in accordance with generally accepted accounting
      principles in the United States of America and, except as otherwise herein
      expressly provided, the terms "generally accepted accounting principles"
      or "GAAP" with respect to any computation


                                       1


      required or permitted hereunder shall mean such accounting principles as
      are generally accepted in the United States of America at the date or time
      of such computation;

            (4) the words "herein," "hereof," "hereto" 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; and

            (5) the word "or" is always used inclusively (for example, the
      phrase "A or B" means "A or B or both," not "either A or B but not both").

      Certain terms used principally in certain Articles hereof are defined in
those Articles.

      "Act," when used with respect to any Holders, has the meaning specified in
Section 1.4.

      "Additional Provisions" has the meaning specified in Section 16.1.

      "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 the meanings correlative to
the foregoing.

      "Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 6.11 to act on behalf of the Trustee to authenticate Securities of
one or more series.

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

      "Authorized Officer" means, when used with respect to the Company, the
Chairman of the Board of Directors, a Vice Chairman, the President, the Chief
Executive Officer, the Chief Financial Officer, any Vice President, the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of
the Company.

      "Bankruptcy Law" has the meaning specified in Section 5.1(6).

      "Bearer Security" means any Security in the form established pursuant to
Section 2.1 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 generally or in any particular
respect for the Company hereunder.


                                       2


      "Board Resolution" means a copy of one or more resolutions, 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, delivered to the Trustee.

      "Business Day," with respect to any Place of Payment or other location,
means any day other than a Saturday, Sunday or other day on which banking
institutions in such Place of Payment or other location are authorized or
obligated by law, regulation or executive order to close.

      "Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including Preferred
Stock, but excluding any debt securities convertible into such equity.

      "Capitalized Lease Obligation" means an obligation under a lease that is
required to be capitalized for financial reporting purposes in accordance with
generally accepted accounting principles, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with such principles.

      "Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended,
or, if at any time after the execution of this Indenture such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.

      "Common Stock" in respect of any Corporation means Capital Stock of any
class or classes (however designated) which has no preference as to the payment
of dividends, or as to the distribution of assets upon any voluntary or
involuntary liquidation or dissolution of such Corporation, and which is not
subject to redemption by such Corporation.

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

      "Company Request and Company Order" mean, respectively, a written request
or order, as the case may be, signed in the name of the Company by an Authorized
Officer, and delivered to the Trustee.

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

      "Corporate Trust Office" means the principal corporate trust office of the
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the


                                       3


date of original execution of this Indenture is located at 4 New York Plaza,
15th Floor, New York, New York 10004, Attention: Worldwide Securities Services.

      "Corporation" means corporations and limited liability companies and,
except for purposes of Article 8, associations, companies and business trusts.

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

      "Currency," with respect to any payment, deposit or other transfer in
respect of the principal of or any premium or interest on any Security, means
Dollars or the Foreign Currency, as the case may be, in which such payment,
deposit or other transfer is required to be made by or pursuant to the terms
hereof or such Security and, with respect to any other payment, deposit or
transfer pursuant to or contemplated by the terms hereof or such Security, means
Dollars.

      "CUSIP number" means the alphanumeric designation assigned to a Security
by Standard & Poor's Ratings Service, CUSIP Service Bureau.

      "Custodian" has the meaning specified in Section 5.1(6).

      "Defaulted Interest" has the meaning specified in Section 3.7.

      "Dollars or $" means a dollar or other equivalent unit of legal tender for
payment of public or private debts in the United States of America.

      "Event of Default" has the meaning specified in Section 5.1.

      "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.

      "Government Obligations" means securities which are (i) direct obligations
of the United States of America or the other government or governments which
issued the Foreign Currency in which the principal of or any premium or interest
on such Security shall be payable, in each case where the payment or payments
thereunder are supported by the full faith and credit of such government or
governments 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
other government or governments, in each case where the timely payment or
payments thereunder are unconditionally guaranteed as a full faith and credit
obligation by the United States of America or such other government or
governments, and which, in the case of (i) or (ii), are not callable or
redeemable at the option of the issuer or issuers 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 or other amount with respect to 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



                                       4


principal of or other amount with respect to the Government Obligation evidenced
by such depository receipt.

      "Holder," in the case of any Registered Security, means the Person in
whose name such Security is registered in the Security Register and, in the case
of any Bearer Security, means the bearer thereof and, in the case of any Coupon,
means the bearer thereof.

      "Indebtedness" means, with respect to any Person, such Person's (i)
obligations for borrowed money, (ii) obligations representing the deferred
purchase price of property or services other than accounts payable arising in
the ordinary course of such Person's business, (iii) obligations, whether or not
assumed, secured by Liens on property now or hereafter owned or acquired by such
Person (other than carriers', warehousemen's, mechanics', repairmen's or other
like nonconsensual statutory Liens arising in the ordinary course of business),
(iv) obligations which are evidenced by notes, acceptances, or other similar
instruments, (v) capitalized lease obligations, (vi) contingent obligations with
respect to the Indebtedness of another Person, including but not limited to the
obligation or liability of another which such Person assumes, guarantees,
endorses, contingently agrees to purchase or provide funds for the payment of,
or otherwise becomes contingently liable upon; provided that any Indebtedness
owing by the Company to any of its Subsidiaries or by any Subsidiary of the
Company to the Company or by any Subsidiary of the Company to any other
Subsidiary of the Company or any contingent obligation in respect thereof shall
not constitute Indebtedness for purposes of this Agreement, and (vii)
obligations for which such Person is obligated in respect of a letter of credit.
For purposes of this Indenture, Indebtedness shall not include (A) any
indebtedness of such Person to the extent (I) such indebtedness does not appear
on the financial statement of such Person, (II) such indebtedness is recourse
only to certain assets of such Person, and (III) the assets to which such
indebtedness is recourse only appear on the financial statements of such Person
net of such indebtedness, or (B) any indebtedness or other obligations issued by
any Person (or by a trust or other entity established by such Person or any of
its affiliates) which are primarily serviced by the cash flows of a discrete
pool of receivables, leases or other financial assets which have been sold or
transferred by the Company or any Subsidiary in securitization transactions
which, in accordance with GAAP, are accounted for as sales for financial
reporting purposes. It is understood and agreed that (1) the amount of any
Indebtedness described in clause (iii) for which recourse is limited to certain
property of such Person shall be the lower of (x) the amount of the obligation
and (y) the fair market value of the property of such Person securing such
obligation, and (2) the amount of any obligation described in clause (vi) shall
be the lower of (x) the stated or determinable amount of the primary obligation
in respect of which such contingent obligation is made, and (y) the maximum
amount for which such Person may be liable pursuant to the terms of the
agreement embodying such contingent obligation unless such primary obligation
and the maximum amount for which such Person may be liable are not stated or
determinable, in which case the amount of such contingent obligation shall be
such Person's maximum, reasonably anticipated liability in respect thereof as
determined by such Person in good faith. The term "Indebtedness," when used in
the definition of the terms "Junior Subordinated Indebtedness," "Senior
Subordinated Indebtedness" and "Senior Indebtedness," means all obligations
which, in accordance with GAAP, should be classified as liabilities on a balance
sheet and, in any event, shall include all debt and other similar monetary
obligations, whether direct or guaranteed.


                                       5


      "Indenture" means this instrument as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof, including, for all purposes
of this instrument and any such supplemental indenture, the provisions of the
Trust Indenture Act that are deemed to be a part of and govern this instrument,
and, with respect to any Security, by the terms and provisions of such Security
and any Coupon appertaining thereto established pursuant to Section 3.1 (as such
terms and provisions may be amended pursuant to the applicable provisions
hereof).

      "Independent Public Accountants" means accountants or a firm of
accountants that, with respect to the Company and any other obligor under the
Securities or the Coupons, are independent public accountants within the meaning
of the Securities Act of 1933, as amended, and the rules and regulations
promulgated by the Commission thereunder, who may be the independent public
accountants regularly retained by the Company or who may be other independent
public accountants. Such accountants or firm shall be entitled to rely upon any
Opinion of Counsel as to the interpretation of any legal matters relating to
this Indenture or certificates required to be provided hereunder.

      "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" means interest payable after Maturity with respect to any
Original Issue Discount Security which, by its terms, bears interest only after
Maturity.

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

      "Judgment Currency" has the meaning specified in Section 1.16.

      "Junior Subordinated Indebtedness" means the Indebtedness of the Company,
whether outstanding at the date hereof or incurred hereafter, which is
subordinated to Senior Indebtedness and Senior Subordinated Indebtedness of the
Company.

      "Lien" has the meaning specified in Section 10.4.

      "Maturity," 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 provided in or pursuant to this Indenture, whether at the Stated
Maturity or by declaration of acceleration, notice of redemption or repurchase,
notice of option to elect repayment or otherwise, and includes the Redemption
Date.

      "New York Banking Day" has the meaning specified in Section 1.16.

      "Office or Agency" with respect to any Securities, means an office or
agency of the Company maintained or designated in a Place of Payment for such
Securities pursuant to Section 10.2 or any other office or agency of the Company
maintained or designated for such Securities pursuant to Section 10.2 or, to the
extent designated or required by Section 10.2 in lieu of such office or agency,
the Corporate Trust Office of the Trustee.


                                       6


      "Officers' Certificate" means a certificate signed by the Chairman, Vice
Chairman, President, Chief Executive Officer or a Vice President and by the
Chief Financial Officer, Treasurer, an Assistant Treasurer, the Secretary, or an
Assistant Secretary of the Corporation, and delivered to the Trustee.

      "Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Company or other counsel who shall be reasonably
acceptable to the Trustee, that, if required by the Trust Indenture Act,
complies with the requirements of Section 314(e) of the Trust Indenture Act.

      "Original Issue Discount Security" means a Security issued pursuant to
this Indenture which provides for declaration of an amount less than the
principal face amount thereof to be due and payable upon acceleration pursuant
to Section 5.2.

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

            (a)   any such Security theretofore cancelled by the Trustee or the
                  Security Registrar or delivered to the Trustee or the Security
                  Registrar for cancellation;

            (b)   any such Security for whose payment at the Maturity thereof
                  money in the necessary amount has been theretofore deposited
                  pursuant hereto 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 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;

            (c)   any such Security with respect to which the Company has
                  effected defeasance and/or covenant defeasance pursuant to the
                  terms hereof, except to the extent provided in Section 4.2;

            (d)   any such Security which has been paid pursuant to Section 3.6
                  or in exchange for or in lieu of which other Securities have
                  been authenticated and delivered pursuant to this Indenture,
                  unless there shall have been presented to the Trustee proof
                  satisfactory to it that such Security is held by a bona fide
                  purchaser in whose hands such Security is a valid obligation
                  of the Company; and

            (e)   any such Security converted or exchanged as contemplated by
                  this Indenture into other securities of the Company or another
                  issuer, if the terms of such Security provide for such
                  conversion or exchange pursuant to Section 3.1;


                                       7


provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders of Securities for quorum purposes, (i) the principal amount
of an Original Issue Discount Security that may be counted in making such
determination and that shall be deemed to be Outstanding for such purposes shall
be equal to the amount of the principal thereof that pursuant to the terms of
such Original Issue Discount Security would be declared (or shall have been
declared to be) due and payable upon a declaration of acceleration thereof
pursuant to Section 5.2 at the time of such determination, and (ii) the
principal amount of any Indexed Security that may be counted in making such
determination and that shall be deemed Outstanding for such purposes shall be
equal to the principal face amount of such Indexed Security at original
issuance, unless otherwise provided in or pursuant to this Indenture, and (iii)
the principal amount of a Security denominated in a Foreign Currency shall be
the Dollar equivalent, determined on the date of original issuance of such
Security, of the principal amount (or, in the case of an Original Issue Discount
Security, the Dollar equivalent on the date of original issuance of such
Security of the amount determined as provided in (i) above) of such Security,
and (iv) Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor, shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in making any such determination or
relying upon any such request, demand, authorization, direction, notice, consent
or waiver, only Securities which a Responsible Officer of the Trustee actually
knows to be so owned shall be so disregarded. Securities so owned which shall
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee (A) the pledgee's right so to act
with respect to such Securities and (B) that the pledgee is not the Company or
any other obligor upon the Securities or any Coupons appertaining thereto or an
Affiliate of the Company or such other obligor.

      "Paying Agent" means any Person authorized by the Company to pay the
principal of, or any premium or interest on, any Security or any Coupon on
behalf of the Company.

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

      "Place of Payment," with respect to any Security, means the place or
places where the principal of, or any premium or interest on, such Security is
payable as provided in or pursuant to this Indenture or such Security.

      "Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same Indebtedness as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 3.6 in exchange for or in
lieu of a lost, destroyed, mutilated or stolen Security or any Security to which
a mutilated, destroyed, lost or stolen Coupon appertains shall be deemed to
evidence the same Indebtedness as the lost, destroyed, mutilated or stolen
Security or the Security to which a mutilated, destroyed, lost or stolen Coupon
appertains.

      "Preferred Stock" in respect of any Corporation means Capital Stock of any
class or classes (however designated) which is preferred as to the payment of
dividends, or as to the


                                       8


distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Corporation, over shares of Capital Stock of any other class
of such Corporation.

      "Redemption Date," with respect to any Security or portion thereof to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture or such Security.

      "Redemption Price," with respect to any Security or portion thereof to be
redeemed, means the price at which it is to be redeemed as determined by or
pursuant to this Indenture or such Security.

      "Registered Security" means any Security in the form established pursuant
to Section 2.1 which is registered in a Security Register.

      "Regular Record Date" for the interest payable on any Registered Security
on any Interest Payment Date therefor means the date, if any, specified in or
pursuant to this Indenture or such Security as the "Regular Record Date".

      "Required Currency" has the meaning specified in Section 1.16.

      "Responsible Officer" means any officer within the corporate trust office
of the Trustee, which may include the chairman and vice chairman of the board of
directors, the president, the chairman of the executive committee of the board
of directors, the chairman of the trust committee, every vice president or
officer senior thereto, every assistant vice president, the secretary, every
assistant secretary, the treasurer, every assistant treasurer, every trust
officer, every assistant trust officer, and every other officer and assistant
officer of the Trustee customarily performing functions similar to those
performed by the persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred because of his knowledge of,
and familiarity with, a particular subject.

      "Security" or "Securities" means any note or notes, bond or bonds,
debenture or debentures, or any other evidences of Indebtedness, as the case may
be, 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 any such Person, shall 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 3.5.

      "Senior Indebtedness" means, with respect to the Securities of any
particular series issued and authenticated pursuant to the terms of this
Indenture, all Indebtedness of the Company outstanding at any time, except (a)
the Securities of such series, (b) Indebtedness as to which, by the terms of the
instrument creating or evidencing the same, it is provided that such
Indebtedness is subordinated to the Securities of such series, or ranks pari
passu with Securities that are subordinated to Securities of such series, (c)
Indebtedness of the Company to an Affiliate of the Company, (d) interest
accruing after the filing of a petition initiating any proceeding relating to
the Company referred to in Section 5.1(6) and 5.1(7) unless such interest is an
allowed claim enforceable against the Company in a proceeding under federal or
state bankruptcy laws,


                                       9


(e) trade accounts payable, (f) any Indebtedness issued in violation of the
instrument creating the same and (g) any guarantee of any Indebtedness.

      "Senior Subordinated Indebtedness" means the Indebtedness represented by
the Securities and all other Indebtedness of the Company, whether outstanding at
the date hereof or incurred hereafter, which is subordinate only to Senior
Indebtedness.

      "Special Record Date" for the payment of any Defaulted Interest on any
Registered Security means a date fixed by the Company pursuant to Section 3.7.

      "Stated Maturity," with respect to any Security or any installment of
principal thereof or interest thereon, means the date established by or pursuant
to this Indenture or such Security 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 the Company, such Person which, at the
time of determination, more than 50% of the voting power of the shares of its
Capital Stock or other interests (including partnership interests) entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is owned or controlled, directly or
indirectly, by (i) the Company and/or (ii) one or more Subsidiaries of the
Company; provided, however, that the term Subsidiary shall not include any
Person, if the earnings of such Person are not consolidated with the financial
statements of the Company in accordance with the requirements of GAAP.

      "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended,
and any reference herein to the Trust Indenture Act or a particular provision
thereof shall mean such Act or provision, as the case may be, as amended or
replaced from time to time or as supplemented from time to time by rules or
regulations adopted by the Commission under or in furtherance of the purposes of
such Act or provision, as the case may be.

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

      "United States," except as otherwise provided in or pursuant to this
Indenture or any Security, means the United States of America (including the
states thereof and the District of Columbia), its territories and possessions
and other areas subject to its jurisdiction.

      "U.S. Depository or Depository" means, with respect to any Security
issuable or issued in the form of one or more global Securities, the Person
designated as U.S. Depository or Depository by the Company in or pursuant to
this Indenture, which Person must be, to the extent required by applicable law
or regulation, a clearing agency registered under the Securities Exchange Act of
1934, as amended, and, if so provided with respect to any Security, any
successor to such Person. If at any time there is more than one such Person,
"U.S. Depository"


                                       10


or "Depository" shall mean, with respect to any Securities, the qualifying
entity that has been appointed with respect to such Securities.

      "Vice President" when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "Vice President".

      Section 1.2 Compliance Certificates and Opinions.

      Except as otherwise expressly provided in this Indenture, 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
or any of them 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 shall include:

            (1) a statement that the 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 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 such individual,
      such condition or covenant has been complied with.

      Section 1.3 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, provided
that such officer, after reasonable inquiry, has no reason to believe and does
not believe that the Opinion of Counsel with respect to


                                       11


the matters upon which his certificate or opinion is based is erroneous. Any
such Opinion of Counsel 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 with respect to such factual
matters is in the possession of the Company, provided that such counsel, after
reasonable inquiry, has no reason to believe and does not believe 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 or any Security, they may, but need not, be
consolidated and form one instrument.

      Section 1.4 Acts of Holders.

            (1) Any request, demand, authorization, direction, notice, consent,
      waiver or other action provided by or pursuant to this Indenture to be
      given or taken by Holders may be embodied in and evidenced by one or more
      instruments of substantially similar tenor signed by such Holders in
      person or by an agent duly appointed in writing. If, but only if,
      Securities of a series are issuable as Bearer Securities, any request,
      demand, authorization, direction, notice, consent, waiver or other action
      provided in or pursuant to 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 15, 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 (subject to
      Section 315 of the Trust Indenture Act) conclusive in favor of the
      Trustee, 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
      15.6.

            Without limiting the generality of this Section 1.4, unless
      otherwise provided in or pursuant to this Indenture, a Holder, including a
      U.S. Depository that is a Holder of a global Security, may make, give or
      take, by a proxy or proxies, duly appointed in writing, any request,
      demand, authorization, direction, notice, consent, waiver or other Act
      provided in or pursuant to this Indenture to be made, given or taken by
      Holders, and a U.S. Depository that is a Holder of a global Security may
      provide its proxy or proxies to the beneficial owners of interests in any
      such global Security through such U.S. Depository's standing instructions
      and customary practices.


                                       12


            The Company shall fix a record date for the purpose of determining
      the Persons who are beneficial owners of interest in any permanent global
      Security held by a U.S. Depository entitled under the procedures of such
      U.S. Depository to make, give or take, by a proxy or proxies duly
      appointed in writing, any request, demand, authorization, direction,
      notice, consent, waiver or other Act provided in or pursuant to this
      Indenture to be made, given or taken by Holders. If such a record date is
      fixed, the Holders on such record date or their duly appointed proxy or
      proxies, and only such Persons, shall be entitled to make, give or take
      such request, demand, authorization, direction, notice, consent, waiver or
      other Act, whether or not such Holders remain Holders after such record
      date. No such request, demand, authorization, direction, notice, consent,
      waiver or other Act shall be valid or effective if made, given or taken
      more than 90 days after such record date.

            (2) The fact and date of the execution by any Person of any such
      instrument or writing referred to in this Section 1.4 may be proved in any
      reasonable manner; and the Trustee may in any instance require further
      proof with respect to any of the matters referred to in this Section.

            (3) The ownership, principal amount and serial numbers of Registered
      Securities held by any Person, and the date of the commencement and the
      date of the termination of holding the same, shall be proved by the
      Security Register.

            (4) The ownership, principal amount and serial numbers of Bearer
      Securities held by any Person, and the date of the commencement and the
      date of the termination of holding the same, may be proved by the
      production of such Bearer Securities or by a certificate executed, as
      depositary, by any trust company, bank, banker or other depositary
      reasonably acceptable to the Company, wherever situated, if such
      certificate shall be deemed by the Company and the Trustee to be
      satisfactory, showing that at the date therein mentioned such Person had
      on deposit with such depositary, 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 (i) another certificate or affidavit bearing a
      later date issued in respect of the same Bearer Security is produced, or
      (ii) such Bearer Security is produced to the Trustee by some other Person,
      or (iii) such Bearer Security is surrendered in exchange for a Registered
      Security, or (iv) such Bearer Security is no longer Outstanding. The
      ownership, principal amount and serial numbers of Bearer Securities held
      by the Person so executing such instrument or writing and the date of the
      commencement and the date of the termination of holding the same may also
      be proved in any other manner, which the Company and the Trustee deem
      sufficient.

            (5) If the Company shall solicit from the Holders of any Registered
      Securities any request, demand, authorization, direction, notice, consent,
      waiver or other Act, the Company may at its option (but is not obligated
      to), by Board Resolution, fix in advance a record date for the
      determination of Holders of Registered Securities entitled to give such
      request, demand, authorization, direction, notice, consent, waiver or
      other Act. If such a record date is fixed, such request, demand,
      authorization, direction, notice,


                                       13


      consent, waiver or other Act may be given before or after such record
      date, but only the Holders of Registered Securities of record at the close
      of business on such record date shall be deemed to be Holders for the
      purpose 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 of Registered Securities shall be
      deemed effective unless it shall become effective pursuant to the
      provisions of this Indenture not later than six months after the record
      date.

            (6) Any request, demand, authorization, direction, notice, consent,
      waiver or other Act by 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 or suffered to be done by the Trustee,
      any Security Registrar, any Paying Agent or the Company in reliance
      thereon, whether or not notation of such Act is made upon such Security.

      Section 1.5 Notices, etc. to Trustee and Company.

      Any request, demand, authorization, direction, notice, consent, waiver or
other 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 the Company shall be sufficient for
      every purpose hereunder if made, given, furnished or filed in writing to
      or with the Trustee at its Corporate Trust Office, or

            (2) the Company, by the Trustee or 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 the attention of its Treasurer, with a copy to the attention
      of its General Counsel, at the address of its principal office specified
      herein or at any other address previously furnished in writing to the
      Trustee by the Company.

      Section 1.6 Notice to Holders of Securities; Waiver.

      Except as otherwise expressly provided in or pursuant to this Indenture,
where this Indenture provides for notice to Holders of Securities of any event,

            (1) such notice shall be sufficiently given to Holders of Registered
      Securities if in writing and mailed, first-class postage prepaid, to each
      Holder of a Registered Security affected by such event, at his address as
      it appears in the Security Register, not later than the latest date, and
      not earlier than the earliest date, prescribed for the giving of such
      notice; and

            (2) such notice shall be sufficiently given to Holders of Bearer
      Securities, if any, if published in an Authorized Newspaper in The City of
      New York and, if such Securities are then listed on any stock exchange
      outside the United States, in an


                                       14


      Authorized Newspaper in such city as the Company shall advise the Trustee
      that such stock exchange so requires, on a Business Day at least twice,
      the first such publication to be not earlier than the earliest date and
      the second such publication not later than the latest date 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 of a Registered Security 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 that is mailed in the manner herein
provided, shall be conclusively presumed to have been duly given or provided. In
the case by reason of the suspension of regular mail service or by reason of any
other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.

      In case 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 Bearers 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 failure to give notice by
publication to Holders of Bearer Securities as provided above, nor any defect in
any notice so published, shall affect the sufficiency of any notice mailed to
Holders of Registered Securities as provided above.

      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 of Securities 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.

      All communications hereunder will be in writing and will be mailed,
delivered or telegraphed and confirmed to the party receiving such communication
at its address indicated below:

      If to the Company:

             CIT Group Inc.
             1 CIT Drive
             Livingston, New Jersey  07039
             Attention:  Treasurer and General Counsel

      If to the Trustee:

             JPMorgan Chase Bank, N.A.
             4 New York Plaza, 15th Floor
             New York, New York 10004
             Attention: Worldwide Securities Services


                                       15


      Section 1.7 Language of Notices.

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

      Section 1.8 Conflict with Trust Indenture Act.

      If any provision hereof limits, qualifies or conflicts with any duties
under any required provision of the Trust Indenture Act imposed hereon by
Section 318(c) thereof, such required provision shall control.

      Section 1.9 Effect of Headings and Table of Contents.

      The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.

      Section 1.10 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 1.11 Separability Clause.

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

      Section 1.12 Benefits of Indenture.

      Nothing in this Indenture, any Security or any Coupon, 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 of Securities or Coupons, any benefit or any legal or equitable
right, remedy or claim under this Indenture.

      Section 1.13 Governing Law.

      This Indenture, the Securities and any Coupons shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made or instruments entered into and, in each case, performed in said
state.

      Section 1.14 Legal Holidays.

      Unless otherwise specified in or pursuant to this Indenture or any
Securities, in any case where any Interest Payment Date, Stated Maturity or
Maturity of any Security, or the last date on which a Holder has the right to
convert or exchange Securities of a series that are convertible or exchangeable,
shall not be a Business Day at any Place of Payment, then (notwithstanding any


                                       16


other provision of this Indenture, any Security or any Coupon other than a
provision in any Security or Coupon that specifically states that such provision
shall apply in lieu hereof) payment need not be made at such Place of Payment on
such date, and such Securities need not be converted or exchanged on such date,
but such payment may be made, and such Securities may be converted or exchanged,
on the next succeeding day that is a Business Day at such Place of Payment, and
no interest shall accrue on the amount payable on such date or at such time for
the period from and after such Interest Payment Date, Stated Maturity, Maturity
or last day for conversion or exchange, as the case may be, to such next
succeeding Business Day, except that if such next succeeding Business Day is in
the next succeeding calendar year, such payment may be made, and such Securities
may be converted or exchanged, on the immediately preceding Business Day (in the
case of each of the foregoing, with the same force and effect as if made on such
Interest Payment Date or at such Stated Maturity or Maturity or on such last day
for conversion or exchange, as the case may be).

      Section 1.15 Counterparts.

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

      Section 1.16 Judgment Currency.

      The Company agrees, to the fullest extent that it may effectively do so
under applicable law, that (a) if for the purpose of obtaining judgment in any
court it is necessary to convert the sum due in respect of the principal of, or
premium or interest, if any, (the "Required Currency") into a currency in which
a judgment will be rendered (the "Judgment Currency"), the rate of exchange used
shall be the rate at which in accordance with normal banking procedures the
Trustee could purchase in The City of New York the requisite amount of the
Required Currency with the Judgment Currency on the New York Banking Day
preceding the day on which a final unappealable judgment is given and (b) its
obligations under this Indenture to make payments in the Required Currency (i)
shall not be discharged or satisfied by any tender, or any recovery pursuant to
any judgment (whether or not entered in accordance with clause (a)), in any
currency other than the Required Currency, except to the extent that such tender
or recovery shall result in the actual receipt, by the payee, of the full amount
of the Required Currency expressed to be payable in respect of such payments,
(ii) shall be enforceable as an alternative or additional cause of action for
the purpose of recovering in the Required Currency the amount, if any, by which
such actual receipt shall fall short of the full amount of the Required Currency
so expressed to be payable and (iii) shall not be affected by judgment being
obtained for any other sum due under this Indenture. For purposes of the
foregoing, "New York Banking Day" means any day except a Saturday, Sunday or a
legal holiday in The City of New York or a day on which banking institutions in
The City of New York are authorized or obligated by law, regulation or executive
order to be closed.

      Section 1.17 No Security Interest Created.

      Subject to the provisions of Section 10.4, nothing in this Indenture or in
any Securities, express or implied, shall be construed to constitute a security
interest under the Uniform


                                       17


Commercial Code or similar legislation, as now or hereafter enacted and in
effect in any jurisdiction where property of the Company or its Subsidiaries is
or may be located.

      Section 1.18 Limitation on Individual Liability.

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

                                   ARTICLE 2

                                SECURITIES FORMS

      Section 2.1 Forms Generally

      Each Registered Security, Bearer Security, Coupon and temporary or
permanent global Security issued pursuant to this Indenture shall be in the form
established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, shall have such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by or pursuant
to this Indenture or any indenture supplemental hereto and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by the
officers executing such Security or Coupon as evidenced by their execution of
such Security or Coupon, 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.

      Unless otherwise provided in or pursuant to this Indenture or any
Securities, the Securities shall be issuable in registered form without Coupons
and shall not be issuable upon the exercise of warrants.

      Definitive Securities and definitive 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 may be produced in any other
manner, all as determined by the officers of the


                                       18


Company executing such Securities or Coupons, as evidenced by their execution of
such Securities or Coupons.

      Section 2.2 Form of Trustee's Certificate of Authentication.

      Subject to Section 6.11, 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.

                                        JPMORGAN CHASE BANK, N.A.,
                                                 as Trustee

                                        By
                                          --------------------------------------
                                                    Authorized Officer

      Section 2.3 Securities in Global Form.

      Unless otherwise provided in or pursuant to this Indenture or any
Securities, the Securities shall not be issuable in temporary or permanent
global form. If Securities of a series shall be issuable in global form, as
specified and contemplated by Section 3.1, any such Security may provide that it
or any number of such Securities 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 represented thereby may from time
to time be increased or reduced to reflect exchanges. Any endorsement of any
Security in global form to reflect the amount, or any increase or decrease in
the amount, or changes in the rights of Holders, of Outstanding Securities
represented thereby shall be made in such manner and by such Person or Persons
as shall be specified therein or in the Company Order to be delivered pursuant
to Section 3.3 or 3.4 with respect thereto. Subject to the provisions of Section
3.3 and, if applicable, Section 3.4, the Trustee shall deliver and redeliver, in
each case at the Company's expense, any 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 3.3 or
3.4 has been, or simultaneously is, delivered, any instructions by the Company
with respect to a Security in global form shall be in writing but need not be
accompanied by or contained in an Officers' Certificate and need not be
accompanied by an Opinion of Counsel.

      Notwithstanding the provisions of Section 3.7, unless otherwise specified
in or pursuant to this Indenture or any Securities, payment of principal of, any
premium and interest on, any Security (i) in temporary form shall be made to the
Person or Persons specified therein, and (ii) in global form and registered in
the name of a Depository or its nominee shall be made to the Depository or its
nominee as the Holder of such global Security. Neither the Company nor the
Trustee shall 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 beneficial ownership interests, and


                                       19


each of the Company and the Trustee may act or refrain from acting without
liability on any information provided by the Depository.

      Notwithstanding the provisions of Section 3.8 and except as provided in
the preceding paragraph, the Company, the Trustee and any agent of the Company
or the Trustee shall treat as the Holder of such principal amount of Outstanding
Securities represented by a global Security (i) in the case of a global Security
in registered form, the Holder of such global Security in registered form, or
(ii) in the case of a global Security in bearer form, the Person or Persons
specified pursuant to Section 3.1.

                                   ARTICLE 3

                                 THE SECURITIES

      Section 3.1 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. The Securities of each series issued and authenticated
pursuant to the terms of this Indenture shall be subordinated in right of
payment to all Senior Indebtedness, as provided in Article 16 of this Indenture.

      With respect to any Securities to be authenticated and delivered
hereunder, there shall be established in or pursuant to a Board Resolution and
set forth in an Officers' Certificate, or established in one or more indentures
supplemental hereto,

            (1) the title and series of such Securities, which may include
      medium-term notes;

            (2) the total principal amount of the series of such Securities and
      whether there shall be any limit upon the aggregate principal amount of
      such Securities that may be authenticated and delivered under this
      Indenture (except for Securities authenticated and delivered upon
      registration or transfer of, or in exchange for, or in lieu of, other
      Securities of such series pursuant to Section 3.4, 3.5, 3.6, 9.5 or 11.7);

            (3) if such Securities are to be issuable as Registered Securities,
      as Bearer Securities or alternatively as Bearer Securities and Registered
      Securities, and whether the Bearer Securities are to be issuable with
      Coupons, without Coupons or both, and any restrictions applicable to the
      offer, sale or delivery of the Bearer Securities and the terms, if any,
      upon which Bearer Securities may be exchanged for Registered Securities
      and vice versa;

            (4) if any of such Securities are to be issuable in global form,
      when any of such Securities are to be issuable in global form and (i)
      whether such Securities are to be issued in temporary or permanent global
      form or both, (ii) whether beneficial owners of interests in any such
      global Security may exchange such interests for Securities of the same
      series and of like tenor and of any authorized form and denomination, and
      the circumstances under which any such exchanges may occur, if other than
      in the manner


                                       20


      specified in Section 3.5, and (iii) the name of the Depository or the U.S.
      Depository, as the case may be, with respect to any such global Security;

            (5) if any of such Securities are to be issuable as Bearer
      Securities or in global form, the date as of which any such Bearer
      Security or global Security shall be dated (if other than the date of
      original issuance of the first of such Securities to be issued);

            (6) if any of such Securities are to be issuable as Bearer
      Securities, whether interest in respect of any portion of a temporary
      Bearer Security in global form payable in respect of an Interest Payment
      Date therefor prior to the exchange, if any, of such temporary Bearer
      Security for definitive Securities shall be paid to any clearing
      organization with respect to the portion of such temporary Bearer Security
      held for its account and, in such event, the terms and conditions
      (including any certification requirements) upon which any such interest
      payment received by a clearing organization will be credited to the
      Persons entitled to interest payable on such Interest Payment Date;

            (7) the date or dates, or the method or methods, if any, by which
      such date or dates shall be determined, on which the principal of and
      premium, if any, on the Securities shall be payable;

            (8) the Person to whom any interest on a Security shall be payable,
      if other than the Person in whose name that Security is registered at the
      close of business on the Regular Record Date for such interest; the rate
      or rates at which such Securities shall bear interest, if any, which rate
      may be zero in the case of certain Securities issued at an issue price
      representing a discount from the principal amount payable at Maturity, or
      the method by which such rate or rates will be determined (including, if
      applicable, any remarketing option or similar method), and the date or
      dates from which such interest, if any, will accrue or the method by which
      such date or dates will be determined, and the basis upon which interest
      shall be calculated if other than that of a 360 day year of twelve 30-day
      months;

            (9) the date or dates on which interest, if any, on such Securities
      shall be payable and any Regular Record Dates applicable to the date or
      dates on which interest will be so payable;

            (10) if in addition to or other than the Borough of Manhattan, The
      City of New York, the place or places where the principal of or any
      premium or interest on such Securities shall be payable, where any of such
      Securities that are issued in registered form may be surrendered for
      registration of, transfer or exchange, and where any such Securities may
      be surrendered for conversion or exchange and notices of demands to or
      upon the Company in respect of such Securities and this Indenture may be
      served, the extent to which, the manner in which, any interest payment on
      a global Security on an Interest Payment Date, will be paid and the manner
      in which any principal of or premium, if any, on any global Security will
      be paid;

            (11) if such Securities are to be redeemable at the Company's
      option, the date or dates on which, the period or periods within which,
      the price or prices at which and the


                                       21


      other terms and conditions upon which such Securities may be redeemed, in
      whole or in part, at the Company's option pursuant to any sinking fund or
      otherwise;

            (12) provisions specifying whether the Company shall be obligated to
      redeem, purchase or repay any of such Securities pursuant to any sinking
      fund or analogous provision or at the option of any Holder of such
      Securities and, if so, the date or dates on which, the period or periods
      within which, the price or prices at which and the other terms and
      conditions upon which such Securities shall be redeemed purchased or
      repaid, in whole or in part, pursuant to such obligation, and any
      provisions for the remarketing of such Securities so redeemed or
      purchased;

            (13) if other than denominations of $1,000 and any integral multiple
      thereof, the denominations in which any Securities to be issued in
      registered form will be issuable and, if other than a denomination of
      $5,000, the denominations in which any Securities to be issued in bearer
      form will be issuable;

            (14) provisions specifying whether the Securities will be
      convertible into other securities of the Company and/or exchangeable for
      Securities of the Company or other obligors and, if so, the terms and
      conditions upon which such Securities shall be so convertible or
      exchangeable;

            (15) if other than the principal amount, the portion of the
      principal amount (or the method by which such portion will be determined)
      of such Securities that will be payable upon declaration of acceleration
      of the Maturity thereof pursuant to the terms of this Indenture;

            (16) if other than Dollars, the Currency of payment, including
      composite Currencies and Foreign Currencies, of the principal of, any
      premium or interest on any of such Securities;

            (17) if other than as provided in Section 4.2, the manner in which
      the Securities of the series are to be defeased;

            (18) provisions specifying whether the principal of, or any premium
      or interest on such Securities shall be payable, at the election of the
      Company or a Holder of Securities, in a Currency other than that in which
      such Securities are stated to be payable and the date or dates on which,
      the period or periods within which, and the other terms and conditions
      upon which, such election may be made, and the time and manner of
      determining the exchange rate;

            (19) any index, formula or other method used to determine the amount
      of payments of principal of, or any premium or interest on such
      Securities;

            (20) provisions specifying whether such Securities are to be issued
      in the form of one or more global Securities and, if so, the identity of
      the Depositary for such global Security or Securities;


                                       22


            (21) provisions specifying the relative degree, if any, to which
      such Securities of the series issued and authenticated pursuant to the
      terms of this Indenture will be senior to or be subordinated in right of
      payment to other series of Securities or other Indebtedness of the
      Company, as the case may be, whether such other series of Securities or
      other Indebtedness is Outstanding or not;

            (22) any deletions from, modifications of or additions to the Events
      of Default or covenants of the Company that are contained herein with
      respect to such Securities;

            (23) terms specifying whether the provisions described below under
      Section 4.2 shall be applicable to such Securities;

            (24) terms specifying whether any of such Securities are to be
      issued upon the exercise of warrants, and the time, manner and place for
      such Securities to be authenticated and delivered; and

            (25) any other terms of such Securities and any other deletions from
      or modifications or additions to this Indenture in respect of such
      Securities.

      All Securities of any one series and all Coupons, if any, appertaining to
Bearer Securities of such series shall be substantially identical except as to
Currency of payments due thereunder, denomination and the rate of interest
thereon, or method of determining the rate of interest, if any, Maturity, and
the date from which interest, if any, shall accrue and except as may otherwise
be provided by the Company in or pursuant to the Board Resolution and set forth
in the Officers' Certificate or in any indenture or indentures supplemental
hereto pertaining to such series of Securities. The terms of the Securities of
any series may provide, without limitation, that the Securities shall be
authenticated and delivered by the Trustee on original issue from time to time
upon written order of persons designated in the Officers' Certificate or
supplemental indenture and that such persons are authorized to determine,
consistent with such Officers' Certificate or any applicable supplemental
indenture, such terms and conditions of the Securities of such series as are
specified in such Officers' Certificate or supplemental indenture. All
Securities of any one series need not be issued at the same time and, unless
otherwise so provided, a series may be reopened for issuances of additional
Securities of such series or to establish additional terms of such series of
Securities. The Company also may issue, and the Trustee may authenticate,
Securities with the same terms as previously issued Securities.

      If any of the terms of the Securities of any series shall be established
by action taken by or pursuant to a Board Resolution, the Board Resolution shall
be delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of such series.

      Section 3.2 Currency; Denominations.

      Unless otherwise provided in or pursuant to this Indenture, the principal
of, and any premium and interest, if any, on, the Securities shall be payable in
Dollars. Unless otherwise provided in or pursuant to this Indenture, Registered
Securities denominated in Dollars shall be issuable in registered form without
Coupons in denominations of $1,000, and any integral multiple thereof, and the
Bearer Securities denominated in Dollars shall be issuable in


                                       23


denominations of $5,000. Securities not denominated in Dollars shall be issuable
in such denominations as are established with respect to such Securities in or
pursuant to this Indenture.

      Section 3.3 Execution, Authentication, Delivery and Dating.

      Securities shall be executed on behalf of the Company by its Chairman of
the Board, a Vice Chairman, its President, its Chief Executive Officer, its
Chief Financial Officer, its Treasurer or a Vice President under its corporate
seal reproduced thereon and attested by its Secretary or one of its Assistant
Secretaries. Coupons shall be executed on behalf of the Company by the Treasurer
or any Assistant Treasurer of the Company. The signature of any of these
officers on the Securities or any Coupons appertaining thereto may be manual or
facsimile.

      Securities and any Coupons appertaining thereto 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 and Coupons or did not hold such offices at the date
of original issuance 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, together with any Coupons
appertaining thereto, executed by the Company, to the Trustee for authentication
and, provided that the Board Resolution and Officers' Certificate or
supplemental indenture or indentures with respect to such Securities referred to
in Section 3.1 and a Company Order for the authentication and delivery of such
Securities have been delivered to the Trustee, the Trustee in accordance with
the Company Order and subject to the provisions hereof and of such Securities
shall authenticate and deliver such Securities. In authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities and any Coupons appertaining thereto, the Trustee
shall be entitled to receive, and (subject to Sections 315(a) through 315(d) of
the Trust Indenture Act) shall be fully protected in relying upon,

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

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

                  (b) 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 binding
            obligations of the Company, enforceable in accordance with their
            terms, subject to applicable bankruptcy, insolvency, reorganization
            and other similar laws of general applicability relating to or
            affecting the enforcement of creditors' rights, to general equitable
            principles and to such other qualifications as such counsel shall


                                       24


            conclude do not materially affect the rights of Holders of such
            Securities and any Coupons; and

            (2) an Officers' Certificate stating that, to the best knowledge of
      the Persons executing such certificate, all conditions precedent to the
      execution, authentication and delivery of such Securities and Coupons, if
      any, appertaining thereto, have been complied with, and no event which is,
      or after notice or lapse of time would become, an Event of Default with
      respect to any of the Securities shall have occurred and be continuing.

      If all the Securities of any series are not to be issued at one time, it
shall not be necessary to deliver an Opinion of Counsel and an Officers'
Certificate at the time of issuance of each Security, but such Opinion of
Counsel and Officers' Certificate, with appropriate modifications, shall be
delivered at or before the time of issuance of the first Security of such
series. After any such first delivery, any separate written request by an
Authorized Officer of the Company or any person designated in writing by an
Authorized Officer that the Trustee authenticate and deliver Securities of such
series for original issue will be deemed to be a certification by the Company
that all conditions precedent provided for in this Indenture relating to
authentication and delivery of such Securities continue to have been complied
with and that no Event of Default with respect to any of the Securities has
occurred or is continuing.

      The Trustee shall not be required to authenticate or to cause an
Authenticating Agent to authenticate any Securities if the issue of such
Securities pursuant to this Indenture will affect the Trustee's own rights,
duties or immunities under the Securities and this Indenture or otherwise in a
manner which is not reasonably acceptable to the Trustee or if the Trustee,
being advised by counsel, determines that such action may not lawfully be taken.

      Each Registered Security shall be dated the date of its authentication.
Each Bearer Security and any Bearer Security in global form shall be dated as of
the date specified in or pursuant to this Indenture.

      No Security or Coupon appertaining thereto shall be entitled to any
benefit under this Indenture or be valid or obligatory for any purpose, unless
there appears on such Security a certificate of authentication substantially in
the form provided for in Section 2.2 or 6.11 executed by or on behalf of the
Trustee or by the Authenticating Agent by the manual signature of one of its
authorized officers. Such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly authenticated
and delivered hereunder. Except as permitted by Section 3.6, the Trustee shall
not authenticate and deliver any Bearer Security unless all Coupons appertaining
thereto then matured have been detached and cancelled.

      Section 3.4 Temporary Securities.

      Pending the preparation of definitive Securities, the Company may execute
and deliver to the Trustee and, upon Company Order, the Trustee shall
authenticate and deliver, in the manner provided in Section 3.3, temporary
Securities in lieu thereof 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 or pursuant to this
Indenture, in bearer form with one or more Coupons or without


                                       25


Coupons and with such appropriate insertions, omissions, substitutions and other
variations as the officers of the Company executing such Securities may
determine, as conclusively evidenced by their execution of such Securities. Such
temporary Securities may be in global form.

      Except in the case of temporary Securities in global form, which shall be
exchanged in accordance with the provisions thereof, if temporary Securities are
issued, the Company shall cause definitive Securities to be prepared without
unreasonable delay. After the preparation of definitive Securities of the same
series and containing terms and provisions that are identical to those of any
temporary Securities, such temporary Securities shall be exchangeable for such
definitive Securities upon surrender of such temporary Securities at an Office
or Agency for such Securities, without charge to any Holder thereof. Upon
surrender for cancellation of any one or more temporary Securities (accompanied
by any unmatured Coupons appertaining thereto), the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor an equal
aggregate principal amount of definitive Securities of authorized denominations
of the same series and containing identical terms and provisions; provided,
however, that no definitive Bearer Security, except as provided in or pursuant
to this Indenture, 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 or pursuant to this Indenture. Unless otherwise
provided in or pursuant to this Indenture with respect to a temporary global
Security, 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.

      Section 3.5 Registration, Transfer and Exchange.

      With respect to the Registered Securities of each series, if any, the
Company shall cause to be kept a register (each such register being herein
sometimes referred to as the "Security Register") at an Office or Agency for
such series in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of the Registered
Securities of such series and of transfers of the Registered Securities of such
series. Such Office or Agency shall be the "Security Registrar" for that series
of Securities. Unless otherwise specified in or pursuant to this Indenture or
the Securities, the Trustee shall be the initial Security Registrar for each
series of Securities. The Company shall have the right to remove and replace
from time to time the Security Registrar for any series of Securities; provided
that no such removal or replacement shall be effective until a successor
Security Registrar with respect to such series of Securities shall have been
appointed by the Company and shall have accepted such appointment by the
Company. In the event that the Trustee shall not be or shall cease to be
Security Registrar with respect to a series of Securities, it shall have the
right to examine the Security Register for such series at all reasonable times.
The Company shall be required to maintain a Security Registrar in each place
where the principal of and premium or interest on any Security is payable. There
shall be only one Security Register for each series of Securities.

      Upon surrender for registration of transfer of any Registered Security of
any series at any Office or Agency for such 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 denominated as authorized in or pursuant to this Indenture, of a like


                                       26


aggregate principal amount bearing a number not contemporaneously outstanding
and containing identical terms and provisions.

      At the option of the Holder, certificated Securities (including Bearer
Securities) and the right to receive the principal, premium and interest, if
any, on any certificated Security may be transferred by a Holder by surrendering
such certificate representing the certificated Securities at the Corporate Trust
Office of the Trustee. Such certificate representing the certificated Securities
may be reissued by the Company or the Trustee to a new Holder or a new
certificate representing the certificated Securities may be issued by the
Company or the Trustee to a new Holder.

      At the option of the Holder, Registered Securities of any series may be
exchanged for other Registered Securities of the same series containing
identical terms and provisions, in any authorized denominations, and of a like
aggregate principal amount, upon surrender of the Securities to be exchanged at
any Office or Agency for such series. Whenever any Registered Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Registered Securities that the Holder making the
exchange is entitled to receive.

      If provided in or pursuant to this Indenture, with respect to Securities
of any series, at the option of the Holder, Bearer Securities of such series may
be exchanged for Registered Securities of such series containing identical
terms, denominated as authorized in or pursuant to this Indenture and in the
same aggregate principal amount, upon surrender of the Bearer Securities to be
exchanged at any Office or Agency for such series, 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, such exchange may be effected if the
Bearer Securities are accompanied by payment in funds acceptable to the Company
and the Trustee 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 Bearer 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 10.2, interest
represented by Coupons shall be payable only upon presentation and surrender of
those Coupons at an Office or Agency for such series located outside the United
States. Notwithstanding the foregoing, in case a Bearer Security of any series
is surrendered at any such Office or Agency for such series in exchange for a
Registered Security of such 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 next succeeding Interest Payment Date,
or (ii) any Special Record Date and before the opening of business at such
Office or Agency on the related date for payment of Defaulted Interest, such
Bearer Security shall be surrendered without the Coupon relating to such
Interest Payment Date or proposed date of payment, as the case may be (or, if
such Coupon is so surrendered with such Bearer Security, such Coupon shall be
returned to the Person so surrendering the Bearer Security), and interest or
Defaulted Interest, as the case may be, shall 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


                                       27


exchange for such Bearer Security, but shall be payable only to the Holder of
such Coupon when due in accordance with the provisions of this Indenture.

      If provided in or pursuant to this Indenture with respect to Securities of
any series, at the option of the Holder, Registered Securities of such series
may be exchanged for Bearer Securities upon such terms and conditions as may be
provided in or pursuant to this Indenture with respect to such series.

      Whenever any Securities are surrendered for exchange as contemplated by
the immediately preceding two paragraphs, the Company shall execute, and the
Trustee shall authenticate and deliver, the Securities that the Holder making
the exchange is entitled to receive.

      Notwithstanding the foregoing, except as otherwise provided in or pursuant
to this Indenture, any global Security shall be exchangeable for certificated
Securities only if (i) the Depository 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 of the date the Company is so informed in writing,
(ii) the Company, in its discretion, determines not to require all of the
Securities of a series to be represented by a global Security and notifies the
Trustee of its decision by executing and delivering to the Trustee a Company
Order to the effect that such global Security shall be so exchangeable or (iii)
an Event of Default has occurred and is continuing, the Company, the Trustee,
the Registrar and the Paying Agent shall have notified the Depository that the
global Security shall be exchangeable for certificated Securities. If the
beneficial owners of interests in a global Security are entitled to exchange
such interests for definitive Securities as the result of an event described in
clause (i), (ii) or (iii) of the preceding sentence, then without unnecessary
delay but in any event not later than the earliest date on which such interests
may be so exchanged, the Company shall deliver to the Trustee definitive
Securities in such form and denominations as are required by or pursuant to this
Indenture, and of the same series, containing identical terms and in aggregate
principal amount equal to the principal amount of such global Security, executed
by the Company. On or after the earliest date on which such interests may be so
exchanged, such global Security shall be surrendered from time to time by the
U.S. Depository or such other Depository as shall be specified in the Company
Order with respect thereto, and in accordance with instructions given to the
Trustee and the U.S. Depository or such other Depository, as the case may be
(which instructions shall be in writing but need not be contained in or
accompanied by an Officers' Certificate or be accompanied by an Opinion of
Counsel), as shall be specified in the Company Order with respect thereto to the
Trustee, as the Company's agent for such purpose, to be exchanged, in whole or
in part, for definitive Securities as described above without charge. The
Trustee shall authenticate and make available for delivery, in exchange for each
portion of such surrendered global Security, a like aggregate principal amount
of definitive Securities of the same series of authorized denominations and of
like tenor as the portion of such global Security to be exchanged, which (unless
such Securities are not issuable both as Bearer Securities and as Registered
Securities, in which case the definitive Securities exchanged for the global
Security shall be issuable only in the form in which the Securities are
issuable, as provided in or pursuant to this Indenture) shall be in the form of
Bearer Securities or Registered Securities, or any combination thereof, as shall
be specified by the beneficial owner thereof, but subject to the satisfaction of
any certification or other requirements to the issuance of Bearer Securities;


                                       28


provided, however, that (unless otherwise provided in or pursuant to this
Indenture) no Bearer Security delivered in exchange for a portion of a global
Security shall be mailed or otherwise delivered to any location in the United
States. Promptly following any such exchange in part, such global Security shall
be returned by the Trustee to such Depository or the U.S. Depository, as the
case may be, or such other Depository or U.S. Depository referred to above in
accordance with the instructions of the Company referred to above. If a
Registered Security is issued in exchange for any portion of a global Security
after the close of business at the Office or Agency for such Security where such
exchange occurs on or after (i) any Regular Record Date for such Security and
before the opening of business at such Office or Agency on the next succeeding
Interest Payment Date, or (ii) any Special Record Date for such Security and
before the opening of business at such Office or Agency on the related proposed
date for payment of interest or Defaulted Interest, as the case may be, interest
shall 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 shall 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 global
Security shall be 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 entitling the Holders thereof 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 for such Security) be duly endorsed, or be accompanied by
a written instrument of transfer in form satisfactory to the Company and the
Security Registrar for such Security 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, or redemption of Securities, but the Company may require payment of a
sum sufficient to cover any stamp tax or other governmental charge and any other
reasonable expenses (including fees and expenses of the Trustee) that may be
imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 3.4, 3.6, 9.5 or 11.7 not
involving any transfer.

      Except as otherwise provided in or pursuant to this Indenture, the Company
shall not be required (i) to register the transfer of or exchange Securities of
any series during a period beginning at the opening of business 15 days before
the day the Company transmits a notice of redemption of Securities of the series
selected for redemption and ending at the close of business on the day of the
transmission, or (ii) to register the transfer of or exchange any Security
selected for redemption in whole or in part, except in the case of any Security
to be redeemed in part, the portion thereof not to be redeemed, or (iii) to
exchange any Bearer Security selected for redemption except, to the extent
provided with respect to such Bearer Security, that such Bearer Security may be
exchanged for a Registered Security of like tenor and the same series, provided
that such Registered Security shall be immediately surrendered for redemption
with written instruction for payment consistent with the provisions of this
Indenture or (iv) to issue, register the transfer of or exchange any Security
which, in accordance with its terms, has been


                                       29


surrendered for repayment at the option of the Holder, except the portion, if
any, of such Security not to be so repaid.

      Section 3.6 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, subject to the provisions of
this Section 3.6, the Company shall execute and the Trustee shall authenticate
and deliver in exchange therefor a new Security of the same series containing
identical terms and of like principal amount and bearing a number not
contemporaneously outstanding, with Coupons appertaining thereto corresponding
to the Coupons, if any, appertaining to the surrendered Security.

      If there be delivered to the Company and 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 the Company's request the
Trustee shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, 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 containing
identical terms and of like principal amount and bearing a number not
contemporaneously outstanding, with Coupons appertaining thereto 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 foregoing provisions of this Section 3.6, in case any
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, pay such Security or Coupon; provided, however, that payment of
principal of, and any premium or interest, if any, on any Bearer Securities
shall, except as otherwise provided in Section 10.2, be payable only at an
Office or Agency for such Securities located outside the United States.

      Upon the issuance of any new Security under this Section 3.6, the Company
may require the payment of a sum sufficient to cover any stamp 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, with any Coupons appertaining thereto issued pursuant
to this Section 3.6 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 a separate obligation of the Company, whether or not the
destroyed, lost or stolen Security and Coupons appertaining thereto 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 such series and any
Coupons, if any, duly issued hereunder.

      The provisions of this Section 3.6, as amended or supplemented pursuant to
this Indenture with respect to particular Securities or generally, shall be
exclusive and shall preclude


                                       30


(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 3.7 Payment of Interest; Rights to Interest Preserved.

      Unless otherwise provided in or pursuant to this Indenture, any interest
on any Registered Security which shall be payable, and are punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name such Security (or one or more Predecessor Securities) is registered
as of the close of business on the Regular Record Date for such interest.

      Unless otherwise provided in or pursuant to this Indenture, any interest
on any Registered Security which shall be payable, but shall not be punctually
paid or duly provided for, on any Interest Payment Date for such Registered
Security (herein called "Defaulted Interest") shall forthwith cease to be
payable to the 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
as provided in clause (1) or (2) below:

            (1) The Company may elect to make payment of any Defaulted Interest
      to the Person in whose name such Registered Security (or a Predecessor
      Security thereof) shall be registered at the close of business on a
      Special Record Date for the payment of such Defaulted Interest, which
      shall be fixed by the Company in the following manner. The Company shall
      notify the Trustee in writing of the amount of Defaulted Interest proposed
      to be paid on such Registered Security, the Special Record Date therefor
      and the date of the proposed payment, and at the same time the Company
      shall deposit with the Trustee an amount of money equal to the aggregate
      amount proposed to be paid in respect of such Defaulted Interest or shall
      make arrangements satisfactory to the Trustee for such deposit on or prior
      to the date of the proposed payment, such money when so deposited to be
      held in trust for the benefit of the Person entitled to such Defaulted
      Interest as in this clause provided. The Special Record Date for the
      payment of such Defaulted Interest 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 notification to the Trustee of the proposed payment.
      The Trustee shall, in the name and at the expense of the Company cause
      notice of the proposed payment of such Defaulted Interest and the Special
      Record Date therefor to be mailed, first-class postage prepaid, to the
      Holder of such Registered Security (or a Predecessor Security thereof) 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 of general circulation
      in the Borough of Manhattan, The City of New York, but such publication
      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 Person in whose name such
      Registered Security (or a Predecessor Security thereof) shall be
      registered at the close of business on such Special Record Date and shall
      no longer be payable pursuant to the following clause (2).



                                       31


            (2) The Company may make payment of any Defaulted Interest in any
      other lawful manner not inconsistent with the requirements of any
      securities exchange on which such Security 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 payment shall be deemed practicable by the Trustee.

      Unless otherwise provided in or pursuant to this Indenture or the
Securities of any particular series pursuant to the provisions of this
Indenture, at the option of the Company, interest on Registered Securities that
bear interest may be paid at the office or agency of the Company maintained for
such purposes in the Borough of Manhattan, City of New York, or by mailing a
check to the address of the Person entitled thereto as such address shall appear
in the Security Register or by transfer to an account maintained by the payee
with a bank located in the United States.

      Notwithstanding the foregoing, a holder of $1,000,000 or more in aggregate
principal amount of Securities of any series of global Securities (or its
equivalent in a Foreign Currency, if the currency unit is a Foreign Currency),
whether having identical or different terms and provisions, having the same
interest payment dates will be entitled to receive interest payments, other than
at Maturity, by wire transfer of immediately available funds if appropriate wire
transfer instructions have been received in writing by the Trustee for the
Securities of such series at least 15 days prior to the applicable Interest
Payment Date. In addition to the foregoing, a holder of $1,000,000 or more in
aggregate principal amount of Securities of any series of global Securities (or
its equivalent in a Foreign Currency, if the currency unit is a Foreign
Currency), whether having identical or different terms and provisions, having
the same Maturity will be entitled to receive payment at Maturity by wire
transfer of immediately available funds if appropriate wire transfer
instructions have been received in writing by the Trustee for the Securities of
such series at least 15 days prior to Maturity; provided; however, that such
payments shall be made subject to applicable laws and regulations and only after
surrender of the global Securities to the Company, the corporate trust office or
the Paying Agent, for such global Securities not later than one Business Day
prior to Maturity. Any wire instructions received by the Trustee for the
Securities of such series shall remain in effect until revoked by the Holder.

      Subject to the foregoing provisions of this Section and Section 3.5, 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.

      In the case of any Registered Security of any series that is convertible
into other securities of the Company or exchangeable for securities of another
issuer, which Registered Security is converted or exchanged after any Regular
Record Date and on or prior to the next succeeding Interest Payment Date (other
than any Registered Security with respect to which the Stated Maturity is prior
to such Interest Payment Date), interest with respect to which the Stated
Maturity is on such Interest Payment Date shall be payable on such Interest
Payment Date notwithstanding such conversion or exchange, and such interest
(whether or not punctually paid or duly provided for) shall be paid to the
Person in whose name that Registered Security (or one or more predecessor
Registered Securities) is registered at the close of business on such Regular
Record Date. Except as otherwise expressly provided in the immediately preceding
sentence, in


                                       32


the case of any Registered Security which is converted or exchanged, interest
with respect to which the Stated Maturity is after the date of conversion or
exchange of such Registered Security shall not be payable.

      Section 3.8 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 in the
Security Register as the owner of such Registered Security for the purpose of
receiving payment of principal of, and any premium or (subject to Sections 3.5
and 3.7) interest, if any, on such Registered Security and for all other
purposes whatsoever, whether or not any payment with respect to such Registered
Security shall be overdue, and none of the Company, the Trustee or any agent of
the Company or the Trustee shall be affected by notice to the contrary.

      The Company, the Trustee and any agent of the Company or the Trustee may
treat the bearer of any Bearer Security or the bearer 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 any payment with respect to such Security or Coupon shall be overdue, and
none of the Company, the Trustee or 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 may 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.

      Section 3.9 Cancellation.

      All Securities and Coupons surrendered for payment, redemption,
registration of transfer, exchange or conversion 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, as well as
Securities and Coupons surrendered directly to the Trustee for any such purpose,
shall be cancelled promptly by the Trustee. 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 all Securities so delivered shall be cancelled promptly by the
Trustee. 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 or pursuant to this Indenture. All cancelled Securities and Coupons held by
the Trustee shall be destroyed by the Trustee, unless by a Company Order, the
Company directs their return to it.


                                       33


      Section 3.10 Computation of Interest.

      Except as otherwise provided in or pursuant to this Indenture or in any
Security, interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.

                                   ARTICLE 4

             SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE AND

                              COVENANT DEFEASANCE

      Section 4.1 Satisfaction and Discharge.

      Upon the direction of the Company by a Company Order, this Indenture shall
cease to be of further effect with respect to any series of Securities specified
in such Company Order and any Coupons appertaining thereto (except as to any
surviving rights of Securities of such series expressly provided for herein or
pursuant thereto), and the Trustee, on receipt of a Company Order, at the
expense of the Company, shall execute proper instruments 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 appertaining thereto (other than (i)
            Coupons appertaining to Bearer Securities of such series surrendered
            in exchange for Registered Securities of such series and maturing
            after such exchange whose surrender is not required or has been
            waived as provided in Section 3.5, (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 3.6, (iii) Coupons
            appertaining to Securities of such series called for redemption and
            maturing after the relevant Redemption Date whose surrender has been
            waived as provided in Section 11.7, 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 10.3) have been delivered to the Trustee for
            cancellation; or

                  (b) all Securities of such series and, in the case of (i) or
            (ii) of this subclause (b) 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 subclause (b)(i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds in trust for
such purpose, money in the Currency in which such Securities are payable in an
amount sufficient to pay and discharge the entire


                                       34


indebtedness on such Securities and any Coupons appertaining thereto not
theretofore delivered to the Trustee for cancellation, including the principal
of, and any premium or interest, if any, on such Securities and any Coupons
appertaining thereto, to the date of such deposit (in the case of Securities
which have become due and payable) or to the Maturity thereof, as the case may
be;

            (2) the Company has paid or caused to be paid all other sums payable
      hereunder by the Company with respect to the Outstanding Securities of
      such series and any Coupons appertaining thereto; and

            (3) the Company has delivered to the Trustee an Opinion of Counsel
      and an Officers' Certificate, 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.

      In the event there are Securities of two or more series hereunder, the
Trustee shall be required to execute an instrument acknowledging satisfaction
and discharge of this Indenture only if requested to do so with respect to
Securities of such series as to which it is Trustee and if the other conditions
thereto are met.

      Notwithstanding the satisfaction and discharge of this Indenture with
respect to any series of Securities, the obligations of the Company to the
Trustee under Section 6.6 and, if money shall have been deposited with the
Trustee pursuant to subclause (b) of clause (1) of this Section, the obligations
of the Company and the Trustee with respect to the Securities of each series
under Sections 3.5, 3.6, 4.3, 10.2 and 10.3, and with respect to any rights to
convert or exchange such Securities into securities of the Company or another
issuer, shall survive.

      Section 4.2 Defeasance and Covenant Defeasance.

            (1) Unless pursuant to Section 3.1, either or both of (i) defeasance
      of the Securities of or within a series under clause (2) of this Section
      4.2 shall not be applicable with respect to the Securities of such series
      or (ii) covenant defeasance of the Securities of or within a series under
      clause (3) of this Section 4.2 shall not be applicable with respect to the
      Securities of such series, then such provisions, together with the other
      provisions of this Section 4.2 (with such modifications thereto as may be
      specified pursuant to Section 3.1 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 4.2(2) or Section 4.2(3) be applied to such Outstanding
      Securities and any Coupons appertaining thereto upon compliance with the
      conditions set forth below in this Section 4.2.

            (2) Upon the Company's exercise of the above option applicable to
      this Section 4.2(2) 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 clause (4) of this Section
      4.2 are satisfied (hereinafter, "defeasance"). For this purpose, such
      defeasance means that the Company shall be deemed to have paid and
      discharged


                                       35


      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 clause (5) of this Section 4.2 and
      the other Sections of this Indenture referred to in clauses (i) and (ii)
      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: (i) the
      rights of Holders of such Outstanding Securities and any Coupons
      appertaining thereto to receive, solely from the trust fund described in
      clause (4) of this Section 4.2 and as more fully set forth in such clause,
      payments in respect of the principal of (and premium, if any) and
      interest, if any, on such Securities and any Coupons appertaining thereto
      when such payments are due, and any rights of such Holder to convert such
      Securities into other securities of the Company or exchange such
      Securities for securities another issuer, (ii) the obligations of the
      Company and the Trustee with respect to such Securities under Sections
      3.5, 3.6, 10.2 and 10.3, and with respect to any rights to convert such
      Securities into other securities of the Company or exchange such
      Securities for securities of another issuer, (iii) the rights, powers,
      trusts, duties and immunities of the Trustee hereunder and (iv) this
      Section 4.2. The Company may exercise its option under this Section 4.2(2)
      notwithstanding the prior exercise of its option under clause (3) of this
      Section 4.2 with respect to such Securities and any Coupons appertaining
      thereto.

            (3) Upon the Company's exercise of the option to have this Section
      4.2(3) apply with respect to any Securities of or within a series, the
      Company shall be released from its obligations under Sections 10.5 and
      10.6, and, to the extent specified pursuant to Section 3.1(21), any other
      covenant applicable to such Securities, with respect to such Outstanding
      Securities and any Coupons appertaining thereto, on and after the date the
      conditions set forth in clause (4) of this Section 4.2 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 any
      such 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 5.1(4) or 5.1(8) or otherwise, as the case may be, but,
      except as specified above, the remainder of this Indenture and such
      Securities and Coupons appertaining thereto shall be unaffected thereby.

            (4) The following shall be the conditions to application of clause
      (2) or (3) of this Section 4.2 to any Outstanding Securities of or within
      a series and any Coupons appertaining thereto:


                                       36


                  (a) The Company shall irrevocably have deposited or caused to
            be deposited with the Trustee (or another trustee satisfying the
            requirements of Section 6.7 who shall agree to comply with the
            provisions of this Section 4.2 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 Dollars or in such Foreign Currency 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 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 one day before the due date of any payment
            of principal of (and premium, 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, (y) the principal of (and premium, if any) and
            interest, if any, on such Outstanding Securities and any Coupons
            appertaining thereto at the Stated Maturity of such principal or
            installment of principal or premium or interest and (z) any
            mandatory sinking fund payments or analogous payments applicable to
            such Outstanding Securities and any Coupons appertaining thereto on
            the days 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. Provided, that notwithstanding the
            foregoing, with respect to any Securities which shall at the time be
            listed for trading on the New York Stock Exchange, there shall be no
            deposit of funds in cash and/or in Government Obligations with the
            Trustee to pay the principal amount, the redemption price or any
            installment of interest in order to discharge the Company's
            obligations in respect of such payment if, at such time, the rules
            of the New York Stock Exchange prohibit such deposit with the
            Trustee.

                  (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.

                  (d) In the case of an election under clause (2) of this
            Section 4.2, the Company shall have delivered to the Trustee an
            Opinion of Counsel stating that (i) the Company has received from
            the U.S. Internal Revenue Service a letter


                                       37


            ruling, or there has been published by the U.S. Internal Revenue
            Service a Revenue 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 clause (3) of this
            Section 4.2, 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 or covenant defeasance
            under clause (2) or (3) of this Section 4.2 (as the case may be)
            have been complied with.

                  (g) Notwithstanding any other provisions of this Section
            4.2(4), 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 3.1.

            (5) Unless otherwise specified in or pursuant to this Indenture or
      any Security, if, after a deposit referred to in Section 4.2(4)(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 3.1 or the
      terms of such Security to receive payment in a Currency other than that in
      which the deposit pursuant to Section 4.2(4)(a) has been made in respect
      of such Security, or (b) a Conversion Event occurs in respect of the
      Foreign Currency in which the deposit pursuant to Section 4.2(4)(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, 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 in which
      such Security becomes payable as a result of such election or Conversion
      Event based on (x) in the case of payments made pursuant to clause (a)
      above, the applicable market exchange rate for such Currency in effect on
      the second Business Day prior to each payment date, or (y) with respect to
      a Conversion Event, the applicable market exchange rate for such Foreign
      Currency in effect (as nearly as feasible) at the time of the Conversion
      Event.


                                       38


      The Company shall pay and indemnify the Trustee (or other qualifying
trustee, collectively for purposes of this Section 4.2(5) and Section 4.3, the
"Trustee") against any tax, fee or other charge, imposed on or assessed against
the Government Obligations deposited pursuant to this Section 4.2 or the
principal or 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 Section 4.2 to the contrary notwithstanding, 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 clause (4) of this Section 4.2 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
Section 4.2.

      Section 4.3 Application of Trust Money.

      Subject to the provisions of the last paragraph of Section 10.3, all money
and Government Obligations (or other property as may be provided pursuant to
Section 3.1) (including the proceeds thereof) deposited with the Trustee
pursuant to Section 4.1 or 4.2 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, if any) and interest; but such money and
Government Obligations need not be segregated from other funds except to the
extent required by law.

      Section 4.4 Reinstatement

            (1) If the Trustee or Paying Agent is unable to apply any money or
      Government Obligations in accordance with Section 4.2(4) by reason of any
      legal proceeding or by reason of any order or judgment of any court or
      governmental authority enjoining, restraining or otherwise prohibiting
      such application, the Company's obligations under this Indenture and the
      Securities of the applicable series issued hereunder shall be revived and
      reinstated as though no deposit has occurred pursuant to Section 4.2(4)
      until such time as the Trustee or Paying Agent is permitted to apply all
      such money or Government Obligations in accordance with and as
      contemplated by Section 4.2(4).

            (2) If the Company's obligations under this Indenture and the
      Securities of the applicable series issued hereunder shall be revived and
      reinstated in accordance with this Section 4.4, the Company shall be
      permitted, at its discretion to withdraw all or a portion of the deposits
      made by the Company pursuant to Section 4.2(4).


                                       39


                  (3) If the Company elects not to withdraw any of the deposits
            made by the Company pursuant to Section 4.2(4), if and when the
            Trustee or Paying Agent is later permitted to apply all such money
            or Government Obligations in accordance with and as contemplated by
            Section 4.2(4), the rights of the Company shall be subrogated to the
            rights of the Holders of the Securities of the applicable series to
            receive payments from the money or Government Obligations deposited
            by the Company pursuant to Section 4.2(4) and held by the Trustee or
            Paying Agent; provided that if the Company shall have made any
            payment of principal or interest on the Securities of any series
            because of the revival and reinstatement of its obligations, which
            payment is not sourced from any amounts deposited by the Company
            pursuant to Section 4.2(4) (such amount, in the aggregate, being
            referred to as the "Company Paid Amount"), the Company shall be
            permitted, at its discretion, to withdraw all or a portion of the
            deposits made by the Company pursuant to Section 4.2(4) up to the
            Company Paid Amount.

                                   ARTICLE 5

                                    REMEDIES

      Section 5.1 Events of Default.

      "Event of Default," wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether 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),
unless such event is specifically deleted or modified in or pursuant to the
supplemental indenture, Board Resolution or Officers' Certificate establishing
the terms of such Series pursuant to this Indenture:

            (1) default in the payment of any interest on any Security of such
      series when such interest 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 any premium on any
      Security of such series when such principal or premium becomes due and
      payable at their Maturity; or

            (3) default in the deposit of any sinking fund or analogous payment
      when and as due by the terms of a Security of such series; or

            (4) default in the performance, or breach, of any covenant or
      agreement of the Company in this Indenture with respect to any Security of
      that series (other than a covenant or agreement a default in whose
      performance or whose breach is elsewhere in this Section specifically
      dealt with and other than a covenant or agreement included in this
      Indenture solely for the benefit of another series of Securities), and
      continuance of such default or breach for a period of 30 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


                                       40


      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) any event of default, as defined in any mortgage, indenture
      (including this Indenture), trust agreement or other instrument securing,
      evidencing or providing for any evidence of any Indebtedness of the
      Company (including guaranteed Indebtedness but excluding any Indebtedness
      that is subordinated in right of payment to the Securities of such
      series), as a result of which an aggregate principal amount exceeding
      $25,000,000 of such Indebtedness shall have been declared due and payable
      prior to the date on which it would otherwise become due and payable, and
      such acceleration shall not have been rescinded or annulled within a
      period of 30 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 25% in principal amount of the
      Outstanding Securities of such series, a written notice specifying such
      failure to pay and requiring the Company to cause such acceleration to be
      rescinded or annulled or to cause such Indebtedness to be discharged and
      stating that such notice is a "Notice of Default" hereunder; or

            (6) a court of competent jurisdiction enters an order or decree
      under any applicable Bankruptcy Law that:

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

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

                  (c) orders the liquidation of the Company;

      and the order or decree remains unstayed and in effect for 60 consecutive
      days. The term "Bankruptcy Law" means title 11, U.S. Code or any similar
      federal or state law for the relief of debtors. The term "Custodian" means
      any receiver, trustee, assignee, liquidator or other similar official
      under any Bankruptcy Law.

            (7) the commencement by the Company of a voluntary proceeding under
      any applicable bankruptcy, insolvency, reorganization (other than a
      reorganization under a foreign law that does not relate to insolvency) or
      other similar law or of a voluntary proceeding seeking to be adjudicated
      insolvent or the consent by the Company to the entry of a decree or order
      for relief in an involuntary proceeding under any applicable bankruptcy,
      insolvency, reorganization or other similar law or to the commencement of
      any insolvency proceedings against it, or the filing by the Company of a
      petition or answer or consent seeking reorganization, arrangement,
      adjustment or composition of the Company or relief under any applicable
      law, or the consent by the Company to the filing of such petition or to
      the appointment of or taking possession by a custodian, receiver,
      liquidator, assignee, trustee or similar official of the Company or any
      substantial part of the property of the Company or the making by the
      Company of an assignment for the benefit of creditors, or the taking of
      corporate action by the Company in furtherance of any such action or the
      admitting in writing by the Company of its inability to pay its debts
      generally as they become due; or


                                       41


            (8) any other Event of Default provided in or pursuant to this
      Indenture with respect to Securities of such series.

      Section 5.2 Acceleration of Maturity; Rescission and Annulment.

      If an Event of Default with respect to Securities of any series at the
time Outstanding (other than an Event of Default specified in clause (6) or (7)
of Section 5.1) occurs and is continuing, then the Trustee or the Holders of not
less than 25% in principal amount of the Outstanding Securities of such series
may declare the principal of all the Securities of such series, or such lesser
amount as may be provided for in the Securities of such 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 such
lesser amount shall become immediately due and payable.

      If an Event of Default specified in clause (6) or (7) of Section 5.1
occurs, all unpaid principal of and accrued interest on the Outstanding
Securities of that series (or such lesser amount as may be provided for in the
Securities of such series) shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder of any Security of that series.

      At any time after a declaration of acceleration with respect to the
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 not less than a majority in principal amount of
the Outstanding Securities of such series, by written notice to the Company and
the Trustee, may rescind and annul such declaration and its consequences if

            (1) the Company has paid or deposited with the Trustee a sum
      sufficient to pay :

                  (a) all overdue installments of any interest on all Securities
            of such series and any Coupon appertaining thereto,

                  (b) the principal of and any premium on any Securities of such
            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 any 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 all other amounts due the
            Trustee under Section 6.6; and

            (2) all Events of Default with respect to Securities of such series,
      other than the non-payment of the principal of, or any premium and
      interest, if any, on, Securities of


                                       42


      such series which shall have become due solely by such declaration of
      acceleration, shall have been cured or waived as provided in Section 5.13.

      No such rescission shall affect any subsequent default or impair any right
consequent thereon.

      Section 5.3 Collection of Indebtedness and Suits for Enforcement by
Trustee.

      The Company covenants that if a

            (1) default is made in the payment of any installment of interest on
      any Security or any Coupon appertaining thereto when such interest shall
      have become 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 any
      premium on any Security at its Maturity,

   the Company shall, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities and any Coupons appertaining thereto,
the whole amount of money then due and payable with respect to such Securities
and any Coupons appertaining thereto, with interest upon the overdue principal,
any premium and, to the extent that payment of such interest shall be legally
enforceable, upon any overdue installments of interest, and in addition thereto,
such further amount of money 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 and all other
amounts due to the Trustee under Section 6.6.

      If the Company shall fail to pay the money it is required to pay the
Trustee pursuant to the preceding paragraph forthwith upon the demand of the
Trustee, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the money 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
and any Coupons appertaining thereto and collect the monies 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 and any Coupons appertaining thereto,
wherever situated. Every recovery of judgment in any such action or other
proceeding subject to the payment of the expenses, disbursements and
compensation of the Trustee, its agents and attorneys, shall be for the ratable
benefit of the Holders of such Securities that shall be the subject of such
action or proceeding.

      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
Coupons appertaining thereto 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 such Securities or in aid of the exercise of any power granted
herein or therein, or to enforce any other proper remedy.


                                       43


      Section 5.4 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 of any series or the property of the Company or such other obligor or
their creditors, the Trustee (irrespective of whether the principal of the
Securities 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 any overdue principal, premium or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,

            (1) to file and prove a claim for the whole amount, or such lesser
      amount as may be provided for in the Securities of any applicable series,
      of the principal and any premium and interest in respect of the Securities
      and any Coupons appertaining thereto 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 or
      counsel) and of the Holders of Securities or any Coupons appertaining
      thereto allowed in such judicial proceeding, and

            (2) to collect and receive any monies 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 or any 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 of Securities or any Coupons, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel and any other amounts due the
Trustee under Section 6.6.

      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 any 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 any Coupon in any such proceeding.

      Section 5.5 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 or judgment, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, shall be for the ratable benefit of each and every Holder of the
Securities or Coupons in respect of which such judgment has been recovered.


                                       44


      Section 5.6 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 any premium
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:

            (1) To the payment of all amounts due the Trustee and any
      predecessor Trustee under Section 6.6;

            (2) To the payment of the amounts then due and unpaid upon the
      Securities and any Coupons for principal and any premium and interest,
      ratably, without preference or priority of any kind, according to the
      aggregate amounts due and payable on such Securities and Coupons for
      principal and any premium and interest, respectively;

            (3) The balance, if any, to the Person or Persons entitled thereto.

      Section 5.7 Limitations on Suits.

      No Holder of any Security of any series or any Coupons appertaining
thereto 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 such
      series;

            (2) the Holders of a majority in principal amount outstanding of the
      Outstanding Securities of such 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 such
      indemnity as is reasonably satisfactory to it against the costs, expenses
      and liabilities to be incurred in compliance with such request;

            (4) the Trustee for 30 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 30-day period by the Holders of a
      majority in principal amount of the Outstanding Securities of such 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 or any Security to affect, disturb or prejudice the rights of
any other such Holders or Holders of Securities of any other series, or to
obtain or to seek to obtain priority or preference over any other Holders or to


                                       45


enforce any right under this Indenture, except in the manner herein provided and
for the equal and ratable benefit of all such Holders.

      Section 5.8 Unconditional Right of Holders to Receive Principal and any
Premium 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, any premium and (subject to Sections 3.7
and 3.10) interest on such Security or payment of such Coupon, as the case may
be, on the respective Stated Maturity or Maturities therefor specified in such
Security or Coupon (or, in the case of redemption, on the Redemption Date or, in
the case of repayment at the option of such Holder if provided in or pursuant to
this Indenture, on the date such repayment is due) and to institute suit for the
enforcement of any such payment, and such right shall not be impaired without
the consent of such Holder.

      Section 5.9 Restoration of Rights and Remedies.

      If the Trustee or any Holder of a Security or a 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 each such Holder 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 each such Holder shall continue as though no such proceeding had
been instituted.

      Section 5.10 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 3.6, no right or remedy herein conferred upon or reserved to the
Trustee or to each and every Holder of a Security or a Coupon is intended to be
exclusive of any other right or remedy, and every right and remedy, to the
extent permitted by law, shall 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, to the extent permitted by law, prevent the
concurrent assertion or employment of any other appropriate right or remedy.

      Section 5.11 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 any Holder of a Security or a Coupon may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by such Holder, as the case may be.


                                       46


      Section 5.12 Control by Holders of Securities.

      The Holders of 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 and any Coupons appertaining thereto, provided that

            (1) such direction shall not be in conflict with any rule of law or
      with this Indenture or with the Securities of such series,

            (2) the Trustee may take any other action deemed proper by the
      Trustee which is not inconsistent with such direction, and

            (3) such direction is not unduly prejudicial to the rights of the
      other Holders of Securities of such series not joining in such action.

      Section 5.13 Waiver of Past Defaults.

      The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series on behalf of the Holders of all the
Securities of such series and any Coupons appertaining thereto may waive any
past default hereunder with respect to such series and its consequences, except
a default

            (1) in the payment of the principal of, any premium or interest on,
      any Security of such series or any Coupons appertaining thereto, or

            (2) in respect of a covenant or provision hereof which under Article
      9 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 impair any right consequent thereon.

      Section 5.14 Waiver of Usury, Stay or Extension Laws.

      The Company covenants that (to the extent that it may lawfully do so) 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 expressly waives (to the
extent that it may lawfully do so) 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.


                                       47


      Section 5.15 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 any
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 5.15 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 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, if any) or interest, if any, 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, and, in the case of
repayment, on or after the date for repayment) or for the enforcement of the
right, if any, to convert or exchange any Security into other securities in
accordance with its terms.

                                    ARTICLE 6

                                   THE TRUSTEE

      Section 6.1 Certain Rights of Trustee.

            Subject to Sections 315(a) through 315(d) of the Trust Indenture
      Act:

            (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 3.3 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 shall be herein specifically prescribed) may, in the
      absence of bad faith on its part, rely upon a Board Resolution, an Opinion
      of Counsel or an Officers' Certificate.

            (4) The Trustee may consult with counsel and the advice of such
      counsel or any Opinion of Counsel shall be full and complete authorization
      and protection in respect


                                       48


      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 reasonable security or indemnity 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, but 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,
      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.

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

            (9) The Trustee shall not be charged with knowledge of any default
      or Event of Default with respect to the Securities of any series unless
      either (1) such default or Event of Default is known, or ought reasonably
      to have been known, by a Responsible Officer of the Trustee or (2) written
      notice of such default or Event of Default shall have been given to the
      Trustee by the Company or any other obligor on the Securities of any
      series or by any Holder of the Securities of any series.

            (10) 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.

      Section 6.2 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 by mail to all
Holders of Securities of such series entitled to receive reports pursuant to
Section 7.3(3), notice of such default hereunder actually known to a Responsible
Officer of 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, if any), or interest, if any, on, or any sinking fund
or purchase fund installment


                                       49


with respect to, any Security 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
best interest of the Holders of Securities and Coupons of such series; and
provided, further, that in the case of any default of the character specified in
Sections 5.1(4) and 5.1(5) with respect to Securities of such series, no such
notice to Holders shall be given until such default shall have become an Event
of Default with respect to Securities of such series. For the purpose of
Sections 6.1 and 6.2, the term "default" means any event that is, or after
notice or lapse of time or both would become, an Event of Default with respect
to Securities of such series.

      Section 6.3 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 and that the statements made by it in a
Statement of Eligibility on Form T-1 supplied to the Company are true and
accurate, subject to the qualifications set forth therein. 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 6.4 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 Trust
Indenture Act 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 6.5 Money Held in Trust.

      Except as provided in Section 4.3 and Section 10.3, money held by the
Trustee in trust hereunder need not be segregated from other funds except to the
extent required by law and shall be held uninvested. The Trustee shall be under
no liability for interest on any money received by it hereunder except as
otherwise agreed to in writing with the Company.

      Section 6.6 Compensation and Reimbursement.

            The Company agrees:

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


                                       50


            (2) except as otherwise expressly provided herein, to reimburse the
      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 reasonable compensation and the expenses,
      advances and disbursements of its agents and counsel), except any such
      expense, disbursement or advance as may be attributable to its negligence
      or bad faith.

            (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 own 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, except to the extent
      that any such loss, liability or expense was due to the Trustee's
      negligence or bad faith.

      As security for the performance of the obligations of the Company under
this Section, the Trustee for the Securities of any series shall have a claim
prior to the Securities of such series 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, if any) or interest, if any, on Securities or any
Coupons of such series.

      To the extent permitted by law, any compensation or expense incurred by
the Trustee after a default specified in or pursuant to Section 5.1 is intended
to constitute an expense of administration under any then applicable bankruptcy
or insolvency law. "Trustee" for purposes of this Section 6.6 shall include any
predecessor Trustee but the negligence or bad faith of any Trustee shall not
affect the rights of any other Trustee under this Section 6.6.

      The provisions of this Section 6.6 shall survive the satisfaction and
discharge of this Indenture or the earlier resignation or removal of the Trustee
and shall apply with equal force and effect to the Trustee in its capacity as
Authenticating Agent, Paying Agent or Security Registrar.

      Section 6.7 Corporate Trustee Required; Eligibility.

      There shall at all times be a Trustee hereunder that is a Corporation
organized and doing business under the laws of the United States of America, any
state thereof or the District of Columbia, that is eligible under Section
310(a)(1) of the Trust Indenture Act to act as trustee under an indenture
qualified under the Trust Indenture Act and that has a combined capital and
surplus (computed in accordance with Section 310(a)(2) of the Trust Indenture
Act) of at least $50,000,000, and that is subject to supervision or examination
by Federal or state authority. 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.

      Section 6.8 Resignation and Removal; Appointment of Successor.

            (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 pursuant to Section
      6.9.


                                       51


            (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 the instrument of acceptance by a successor Trustee required
      by Section 6.9 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 with respect to such series.

            (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 the Company.

            (4) If at any time:

                  (a) the Trustee shall fail to comply with the obligations
            imposed upon it under Section 310(b) of the Trust Indenture Act with
            respect to Securities of any series after written request therefor
            by the Company or any Holder of a Security of such series who has
            been a bona fide Holder of a Security of such series for at least
            six months, or

                  (b) the Trustee shall cease to be eligible under Section 6.7
            and shall fail to resign after written request therefor by the
            Company or any such Holder, 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 with respect to all Securities or
            the Securities of such series, or (ii) subject to Section 315(e) of
            the Trust Indenture Act, 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 removal of the
            Trustee with respect to all Securities of such series 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 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 such 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) and shall comply with the applicable requirements


                                       52


      of Section 6.9. If, within one year after such resignation, removal or
      incapacity, 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 in accordance with the applicable requirements of Section
      6.9, 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 within three months after such
      appointment might have been made hereunder by the Company or the Holders
      of Securities and accepted appointment in the manner required by Section
      6.9, 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
      the 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 by mailing written notice of such event by first-class mail,
      postage prepaid, to the Holders of Registered Securities, if any, of such
      series as their names and addresses appear in the Security Register and,
      if Securities of such series are issued as Bearer Securities, by
      publishing notice of such event once in an Authorized Newspaper in each
      Place of Payment located outside the United States. 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.

            (7) In no event shall any retiring Trustee be liable for the acts or
      omissions of any successor Trustee hereunder.

      Section 6.9 Acceptance of Appointment by Successor.

            (1) Upon the appointment hereunder of any successor Trustee with
      respect to all Securities, such successor Trustee so appointed shall
      execute, acknowledge and deliver to the Company and 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 hereunder of the retiring
      Trustee; but, on the request of the Company or such successor Trustee or
      the Holders of at least 10% in principal amount of the applicable series
      of Securities then Outstanding, such retiring Trustee, upon payment of its
      charges, shall execute and deliver an instrument transferring to such
      successor Trustee all the rights, powers and trusts of the retiring
      Trustee and, subject to Section 10.3, 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.

            (2) Upon the appointment hereunder of any successor Trustee with
      respect to the Securities of one or more (but not all) series, the
      Company, the retiring Trustee and such successor Trustee shall execute and
      deliver an indenture supplemental hereto wherein each successor Trustee
      shall accept such appointment and which (1) shall contain such provisions
      as shall be necessary or desirable to transfer and confirm to, and to vest
      in, such 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


                                       53


      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,
      that each such Trustee shall be trustee of a trust or trusts hereunder
      separate and apart from any trust or trusts hereunder administered by any
      other such Trustee and that no Trustee shall be responsible for any notice
      given to, or received by, or any act or failure to act on the part of any
      other Trustee hereunder, and, upon the execution and delivery of such
      supplemental indenture, the resignation or removal of the retiring Trustee
      shall become effective to the extent provided therein, such retiring
      Trustee shall have no further responsibility for the exercise of rights
      and powers or for the performance of the duties and obligations vested in
      the Trustee under this Indenture with respect to the Securities of that or
      those series to which the appointment of such successor Trustee relates
      other than as hereinafter expressly set forth, 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 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 such
      successor Trustee, such retiring Trustee, upon payment of its charges with
      respect to the Securities of that or those series to which the appointment
      of such successor Trustee relates and subject to Section 10.3 shall duly
      assign, transfer and deliver to such successor Trustee, to the extent
      contemplated by such supplemental indenture, the property and money held
      by such retiring Trustee hereunder with respect to the Securities of that
      or those series to which the appointment of such successor Trustee
      relates, subject to its claim, if any, provided for in Section 6.6.

            (3) Upon request of any Person appointed hereunder as a 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 (1) or (2) of this
      Section, as the case may be.

            (4) No Person shall accept its appointment hereunder as a successor
      Trustee unless at the time of such acceptance such successor Person shall
      be qualified and eligible under this Article.

      Section 6.10 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, shall be the
successor of the Trustee hereunder, without the execution or filing of any paper
or any further act on the part of any of the parties hereto, provided, that such
Corporation shall be otherwise qualified and eligible under this Section. In
case any Securities shall have been authenticated but not delivered by the
Trustee then in office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt


                                       54


such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.

      Section 6.11 Appointment of Authenticating Agent.

      The Trustee may appoint one or more Authenticating Agents acceptable to
the Company with respect to one or more series of Securities, and which shall be
authorized to act on behalf of the Trustee to authenticate Securities of that or
those series issued upon original issue, exchange, registration of transfer,
partial redemption or partial repayment or pursuant to Section 3.6, 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. 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 must be acceptable to the Company and, except as
provided in or pursuant to this Indenture, shall at all times be a corporation
that would be permitted by the Trust Indenture Act to act as trustee under an
indenture qualified under the Trust Indenture Act, is authorized under
applicable law and by its charter to act as an Authenticating Agent and has a
combined capital and surplus (computed in accordance with Section 310(a)(2) of
the Trust Indenture Act) of at least $50,000,000. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, it 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 all or substantially all of
the corporate agency or corporate trust business of an Authenticating Agent,
shall be the successor of such Authenticating Agent hereunder, provided such
Corporation shall be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.

      An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and 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 may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall (i) mail written notice
of such appointment by first-class mail, postage prepaid, to all Holders of
Registered Securities, if any, of the series with respect to which such
Authenticating Agent shall serve, as their names and addresses appear in the
Security Register, and (ii) if Securities of the series are issued as Bearer
Securities, publish notice of such appointment at least once in an Authorized
Newspaper in the place where such successor Authenticating Agent has its
principal office if such office is located outside the United States. 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


                                       55


as if originally named as an Authenticating Agent. No successor Authenticating
Agent shall be appointed unless eligible under the provisions of this Section.

      The Company agrees to pay each Authenticating Agent from time to time
reasonable compensation for its services under this Section. If the Trustee
makes such payments, it shall be entitled to be reimbursed for such payments,
subject to the provisions of Section 6.6.

      If an Authenticating Agent is appointed with respect to one or more series
of Securities 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 in substantially the
following form:

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

                                        JPMORGAN CHASE BANK, N.A.,
                                        as Trustee

                                        By
                                          --------------------------------------
                                                 as Authenticating Agent

                                        By
                                          --------------------------------------
                                                 Authorized Officer

      If all of the Securities of any series may not be originally issued at one
time, and if the Trustee does not have an office capable of authenticating
Securities upon original issuance located in a Place of Payment where the
Company wishes to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested in writing (which writing need not be
accompanied by or contained in an Officers' Certificate by the Company), shall
appoint in accordance with this Section an Authenticating Agent having an office
in a Place of Payment designated by the Company with respect to such series of
Securities.

      Section 6.12 Appointment of Attorney-in-Fact

      The Trustee for each series of Securities is hereby appointed, and each
and every Holder of Securities of such series, by receiving and holding the
same, shall be conclusively deemed to have appointed such Trustee, the true and
lawful attorney-in-fact of such Holder, with authority to make or file (whether
or not the Company shall be in default in respect of the payment of the
principal of, or premium or interest, if any, on any of the Securities of such
series), in its own name as trustee of an express trust or otherwise as it shall
deem advisable, in any receivership, insolvency, liquidation, bankruptcy,
reorganization, or other judicial proceedings relative to the Company or any
other obligor upon such Securities or to their respective creditors or property,


                                       56


any and all claims, proofs of claim, proofs of debt, petitions, consents, other
papers and documents, and amendments of any thereof, as may be necessary or
advisable in order to have the claims of the Trustee and of the Holders of such
Securities allowed in any such proceeding and to collect and receive any moneys
or other property payable or deliverable on any such claim, and to execute and
deliver any and all other papers and documents and to do and perform any and all
other acts and things, as it may deem necessary or advisable in order to enforce
in any such proceedings any of the claims of such Trustee and of any of such
holders in respect of any of the Securities of such series; and any receiver,
assignee, custodian, trustee, or debtor in any such proceedings is hereby
authorized, and each and every Holder of the Securities of such series, by
receiving and holding the same, shall be conclusively deemed to have authorized
any such receiver, assignee, custodian, trustee, or debtor, to make any such
payment or delivery to or on the order of such Trustee, and, in the event that
such Trustee shall consent to the making of such payments or deliveries directly
to the Holders of the Securities of such series, to pay to such Trustee any
amount due it for compensation and expenses, including counsel fees and
expenses, incurred by it down to the date of such payment or delivery; provided,
however, that nothing herein contained shall be deemed to authorize or empower
such Trustee to consent to or accept or adopt, on behalf of any Holder of
Securities of such series, any plan of reorganization or readjustment of the
Company affecting the Securities of such series or the rights of any Holder
thereof, or to authorize or empower such Trustee to vote in respect of the claim
of any Holder of any Securities of such series in any such proceedings.

                                   ARTICLE 7

                HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY

      Section 7.1 Company to Furnish Trustee Names and Addresses of Holders.

      In accordance with Section 312(a) of the Trust Indenture Act, the Company
shall furnish or cause to be furnished to the Trustee

            (1) semi-annually with respect to Securities of each series not
      later than May 1 and November 1 of the year or upon such other dates as
      are set forth in or pursuant to the Board Resolution or indenture
      supplemental hereto authorizing such series, a list, in each case in such
      form as the Trustee may reasonably require, of the names and addresses of
      Holders as of the applicable date, and

            (2) 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.

      Section 7.2 Preservation of Information; Communications to Holders.

      The Trustee shall comply with the obligations imposed upon it pursuant to
Section 312 of the Trust Indenture Act.


                                       57


      Every Holder of Securities or Coupons, by receiving and holding the same,
agrees with the Company and the Trustee that none of the Company, the Trustee,
any Paying Agent or any Security Registrar shall be held accountable by reason
of the disclosure of any such information as to the names and addresses of the
Holders of Securities in accordance with Section 312(c) of the Trust Indenture
Act, 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 Section 312(b) of the Trust Indenture Act.

      Section 7.3 Reports by Trustee.

            (1) Within 60 days after September 15 of each year commencing with
      the first September 15 following the first issuance of Securities pursuant
      to Section 3.1, if required by Section 313(a) of the Trust Indenture Act,
      the Trustee shall transmit, pursuant to Section 313(c) of the Trust
      Indenture Act, a brief report dated as of such September 15 with respect
      to any of the events specified in said Section 313(a) which may have
      occurred since the later of the immediately preceding September 15 and the
      date of this Indenture.

            (2) The Trustee shall transmit the reports required by Section
      313(a) of the Trust Indenture Act at the times specified therein.

            (3) Reports pursuant to this Section shall be transmitted in the
      manner and to the Persons required by Sections 313(c) and 313(d) of the
      Trust Indenture Act.

      Section 7.4 Reports by Company

      The Company, pursuant to Section 314(a) of the Trust Indenture Act, shall:

            (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, as amended; or, if the Company is not
      required to file information, documents or reports pursuant to either of
      said Sections, then it shall 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, as amended, 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


                                       58


            (3) transmit to the Holders of Securities within 30 days after the
      filing thereof with the Trustee, in the manner and to the extent provided
      in Section 313(c) of the Trust Indenture Act, 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.

                                   ARTICLE 8

                 CONSOLIDATION, AMALGAMATIONS, MERGER AND SALES

      Section 8.1 Company May Consolidate, Etc., Only on Certain Terms.

      The Company shall not consolidate or amalgamate with or merge into any
other Person (whether or not affiliated with the Company), or convey, transfer
or lease its properties and assets as an entirety or substantially as an
entirety to any other Person (whether or not affiliated with the Company), and
the Company shall not permit any other Person (whether or not affiliated with
the Company) to consolidate or amalgamate with or merge into the Company or
convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to the Company; unless:

            (1) either the Company shall be the continuing corporation, or the
      Person (if other than the Company) formed by such consolidation or into
      which the Company is merged or the Person which acquires by conveyance or
      transfer the properties and assets of the Company substantially as an
      entirety shall expressly assume, by an indenture supplemental hereto,
      executed and delivered to the Trustee, in form satisfactory to the
      Trustee, the due and punctual payment of the principal of (and premium, if
      any) and interest, if any, on all the Securities and the performance of
      every covenant of this Indenture on the part of the Company to be
      performed or observed;

            (2) immediately after giving effect to such transaction, no default
      or Event of Default shall have happened and be continuing; and

            (3) the Company and the successor Person have delivered to the
      Trustee an Officers' Certificate and an Opinion of Counsel each stating
      that such consolidation, merger, conveyance or transfer and such
      supplemental indenture comply with this Article and that all conditions
      precedent herein provided for relating to such transaction have been
      complied with.

      For the purpose of this Section 8.1, the term "default" means any event
that is, or after notice or lapse of time or both would become, an Event of
Default with respect to Securities of such series.

      Section 8.2 Successor Person Substituted for Company.

      Upon any consolidation or amalgamation by the Company with or merger of
the Company into any other Person or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety to any Person
in accordance with Section 8.1, the successor Person formed by such
consolidation or amalgamation or into which the Company is


                                       59


merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such successor Person had been
named as the Company herein; and thereafter, except in the case of a lease, the
predecessor Person shall be released from all obligations and covenants under
this Indenture, the Securities and the Coupons.

                                   ARTICLE 9

                             SUPPLEMENTAL INDENTURES

      Section 9.1 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, 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

            (2) to add to the covenants and agreements of the Company for the
      benefit of the Holders of all or any series of Securities (as shall be
      specified in such supplemental indenture or indentures) or to surrender
      any right or power herein conferred upon the Company; or

            (3) 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, any
      premium or interest on, Securities, to permit Bearer Securities to be
      issued in exchange for Registered Securities, to permit Bearer Securities
      to be exchanged for Bearer Securities of other authorized denominations or
      to permit or facilitate the issuance of Securities in uncertificated form,
      provided any such action shall not adversely affect the interests of the
      Holders of Outstanding Securities of any series or any Coupons
      appertaining thereto in any material respect; or

            (4) 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, pursuant
      to the requirements of Section 6.9; or

            (5) to cure any ambiguity or 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 adversely affect
      the interests of the Holders of Securities of any series then Outstanding
      or any Coupons appertaining thereto in any material respect; or


                                       60


            (6) to establish the form or terms of Securities of any series and
      any related Coupons as permitted by Sections 2.1 and 3.1, including the
      provisions and procedures relating to Securities convertible into or
      exchangeable for any securities of any Person (including the Company); or

            (7) to add any additional Events of Default with respect to all or
      any series of Securities (as shall be specified in such supplemental
      indenture); or

            (8) 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 Article 4, provided that
      any such action shall not adversely affect the interests of any Holder of
      an Outstanding Security of such series and any Coupons appertaining
      thereto or any other Outstanding Security or Coupon in any material
      respect; or

            (9) to secure payment on the Securities pursuant to Section 10.4 or
      otherwise; or

            (10) to amend or supplement any provision contained herein or in any
      supplemental indenture, provided that no such amendment or supplement
      shall materially adversely affect the interests of the Holders of any
      Securities then Outstanding.

      Section 9.2 Supplemental Indentures with Consent of Holders

      With the consent of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities of each series 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 Company's 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 of such series
under this Indenture or of the Securities of such series; provided, however,
that no such supplemental indenture, without the consent of each Holder of each
Outstanding Security affected thereby, shall:

            (1) change the Stated Maturity of the principal of, or any premium
      or installment of interest on, any Security, or reduce the principal
      amount thereof or the rate (or modify the calculation of such rate) of
      interest thereon, or any premium payable upon the redemption thereof or
      otherwise, 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 5.2 or the amount
      thereof provable in bankruptcy pursuant to Section 5.4, change the
      redemption provisions or adversely affect the right of repayment at the
      option of any Holder as contemplated by Article 13, or change the Place of
      Payment, Currency in which the principal of, any premium or interest on,
      any Security 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, on or after the Redemption Date or, in the
      case of repayment at the option of the Holder, on or after the date for
      repayment), or


                                       61


            (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 (of 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 15.4 for quorum or
      voting, or

            (3) modify any of the provisions of this Section, Section 5.13 or
      Section 10.6, except to increase any such percentage 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, or

            (4) modify any of the provisions of this Indenture relating to the
      subordination of the Securities in a manner adverse to Holders of
      Securities; or

            (5) make any change that adversely affects the right to convert or
      exchange any Security into or for securities of the Company or other
      securities, (whether or not issued by the Company) cash or property in
      accordance with its terms.

      In computing whether the Holders of the requisite principal amount of
Outstanding Securities have taken action under this Indenture or under a
supplemental indenture hereto, the Company shall use: (i) for an Original Issue
Discount security, the amount of the principal that would be due and payable as
of that date, as if the Maturity of such Security had been accelerated due to a
default; and (ii) for a Security denominated in a Foreign Currency or
Currencies, the Dollar equivalent of the outstanding principal amount as of that
date, using the exchange rate in effect on the date of original issuance of such
Security.

      A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture, which shall have been included expressly and 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.

      It shall not be necessary for any Act of Holders of Securities under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.

      Any consent given by any Holder of a Security under this Section 9.2 shall
be irrevocable for a period of six months after the day of execution thereof,
but may be revoked at any time thereafter by such Holder or by his successor in
title by filing written notice of such revocation with the Trustee at its
corporate trust office; provided, however, that such consent shall not be
revocable after the holders of not less than a majority in aggregate principal
amount of the Securities of the series of which such Security is a part at the
time Outstanding shall have consented to such supplemental indenture. No
notation on any Security of the fact of such consent shall be necessary, but any
such written consent by the Holder of any Security shall be conclusive and
binding on all future Holders and owners of the same Security and of all


                                       62


Securities delivered in exchange therefor, unless revoked in the manner and
during the period provided in this Section 9.2.

      Section 9.3 Execution of Supplemental Indentures.

      As a condition to executing, or accepting the additional trusts created
by, any supplemental indenture permitted by this Article or the modifications
thereby of the trust created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 315 of the Trust Indenture Act) 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 and an
Officers' Certificate stating that all conditions precedent to the execution of
such supplemental indenture have been fulfilled. 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 is
not reasonably acceptable to the Trustee.

      Section 9.4 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 a Security theretofore or thereafter authenticated and delivered hereunder
and of any Coupon appertaining thereto shall be bound thereby.

      Section 9.5 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 in equal aggregate principal
amounts, and such exchange shall be made without cost to the Holders.

      Section 9.6 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 9.7 Effect on Senior Indebtedness.

      No supplemental indenture shall directly or indirectly modify or eliminate
the provisions of Article 16 in any manner, which might terminate or impair the
subordination of the Securities of any series to any Senior Indebtedness, or
adversely affect the rights of any holder of Senior Indebtedness, without the
prior written consent of the holders of such Senior Indebtedness.


                                       63


      Section 9.8 Notice of Supplemental Indenture.

      Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to Section 9.2, the Company shall transmit to
the Holders of Outstanding Securities of any series affected thereby a notice
setting forth in general terms the substance of such supplemental indenture.
Failure to send such notice will not impair the validity of such supplemental
indenture.

                                   ARTICLE 10

                                    COVENANTS

      Section 10.1 Payment of Principal, any Premium, Interest.

      The Company covenants and agrees for the benefit of the Holders of the
Securities of each series that it will duly and punctually pay the principal of,
and any premium or interest, if any, on the Securities of such series in
accordance with the terms thereof, any Coupons appertaining thereto and this
Indenture. Any interest due on any Bearer Security on or before the Maturity
thereof, shall be payable only upon presentation and surrender of the Coupons
appertaining thereto for such interest as they severally mature. When and as
paid, all Securities of such series shall be cancelled and destroyed in
accordance with Section 3.9 hereof.

      Section 10.2 Maintenance of Office or Agency.

      The Company shall maintain in each Place of Payment for any series of
Securities an Office or Agency where Securities of such series (but not Bearer
Securities, except as otherwise provided below, unless such Place of Payment is
located outside the United States) may be presented or surrendered for payment,
where Securities of such series may be surrendered for registration of transfer
or exchange, where Securities of such series that are convertible or
exchangeable may be surrendered for conversion or exchange, and where notices
and demands to or upon the Company in respect of the Securities of such series
relating thereto and this Indenture may be served. If Securities of a series are
issuable as Bearer Securities, the Company shall maintain, subject to any laws
or regulations applicable thereto, an Office or Agency in a Place of Payment for
such series which is located outside the United States where Securities of such
series and any Coupons appertaining thereto may be presented and surrendered for
payment; provided, however, that if the Securities of such series are listed on
The Stock Exchange of the United Kingdom and the Republic of Ireland or the
Luxembourg Stock Exchange or any other stock exchange located outside the United
States and such stock exchange shall so require, the Company shall maintain a
Paying Agent in London, Luxembourg or any other required city located outside
the United States, as the case may be, so long as the Securities of such series
are listed on such exchange. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of 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 such
series and any Coupons appertaining thereto may be presented and surrendered for
payment at the place specified for the purpose with respect to such Securities
as provided in or pursuant to


                                       64


this Indenture, and the Company hereby appoints the Trustee as its agent to
receive all such presentations, surrenders, notices and demands.

      Except as otherwise provided in or pursuant to this Indenture, no payment
of principal, premium or interest with respect to Bearer Securities shall be
made at any Office or Agency 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, if amounts owing with respect
to any Bearer Securities shall be payable in Dollars, payment of principal of,
any premium or interest on, any such Security may be made at the Corporate Trust
Office of the Trustee or any Office or Agency designated by the Company in the
Borough of Manhattan, The City of New York, if (but only if) payment of the full
amount of such principal, premium or interest at all offices outside the United
States maintained for such purpose by the Company in accordance with this
Indenture is illegal or effectively precluded by exchange controls or other
similar restrictions, and the Company has delivered to the Trustee an opinion of
counsel to that effect.

      The Company may also 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 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 each Place of Payment for Securities of any series for such purposes. The
Company shall 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 provided in or pursuant to this Indenture, the Company
hereby designates as the Place of Payment for each series of Securities the
Borough of Manhattan, The City of New York, and initially appoint the Corporate
Trust Office of the Trustee as the Office or Agency of the Company in the
Borough of Manhattan, The City of New York for such purpose. The Company may
subsequently appoint a different Office or Agency in the Borough of Manhattan,
The City of New York for the Securities of any series.

      Unless otherwise specified with respect to any Securities pursuant to
Section 3.1, 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 this 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 10.3 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 Securities, it shall, on or before each due date of the
principal of, any premium or interest on, any of the Securities of such 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 3.1 for the Securities of such series)
sufficient to pay the principal or any premium or interest so becoming due until
such sums shall be paid to such Persons or otherwise disposed of as herein
provided, and shall promptly notify the Trustee of its action or failure so to
act.


                                       65


      Whenever the Company shall have one or more Paying Agents for any series
of Securities, it shall, no later than 11:00 am on or prior to each due date of
the principal of, any premium or interest on, any Securities of such series,
deposit with any 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 or any premium or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled thereto, 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 shall 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 shall:

            (1) hold all sums held by it for the payment of the principal of,
      any premium or interest on, Securities of such series in trust for the
      benefit of the Persons entitled thereto until such sums shall be paid to
      such Persons or otherwise disposed of as provided in or pursuant to this
      Indenture;

            (2) give the Trustee notice of any default by the Company (or any
      other obligor upon the Securities of such series) in the making of any
      payment of principal, any premium or interest on, Securities of such
      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 terms 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 herein or pursuant hereto, 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, any premium or interest on, any
Security of any series or any Coupon appertaining thereto and remaining
unclaimed for two years after such principal or any such premium or interest
shall have become due and payable shall be paid to the Company on Company
Request, or (if then held by the Company), unless otherwise required by
mandatory provisions of applicable escheat or abandoned or unclaimed property
laws, shall be discharged from such trust; and the Holder of such Security or
any Coupon appertaining thereto shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, 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 in each Place of Payment for such series or to be mailed to
Holders of Registered Securities of such series, or both, notice that such


                                       66


money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication or mailing nor shall
it be later than two years after such principal and any premium or interest
shall have become due and payable, any unclaimed balance of such money then
remaining will be repaid to the Company.

      Section 10.4 Limitations on Pledges and Liens.

            (1) After the date of the execution and delivery of this Indenture
      and so long as any Securities shall be Outstanding, the Company will not
      pledge or otherwise subject to any lien (any such pledge or lien being
      hereinafter referred to as a "Lien") any of its property or assets to
      secure Indebtedness for money borrowed, incurred, issued, assumed or
      guaranteed by the Company without thereby expressly securing the due and
      punctual payment of the principal of and interest on the Securities
      equally and ratably with any and all other obligations and Indebtedness
      secured by such Lien, so long as any such other obligations and
      Indebtedness shall be so secured; provided, however, that this restriction
      shall not prohibit or otherwise restrict:

                  (a) the Company from creating, incurring or suffering to exist
            upon any of its property or assets any Lien in favor of any
            Subsidiary of the Company;

                  (b) the Company (i) from creating, incurring or suffering to
            exist a purchase money Lien upon any such property, assets, capital
            stock or Indebtedness acquired by the Company prior to, at the time
            of, or within one year after (1) in the case of physical property or
            assets, the later of the acquisition, completion of construction
            (including any improvements on existing property) or commencement of
            commercial operation of such property or (2) in the case of shares
            of Capital Stock, Indebtedness or other property or assets, the
            acquisition of such shares of Capital Stock, Indebtedness, property
            or assets, (ii) from acquiring property or assets subject to Liens
            existing thereon at the date of acquisition thereof, whether or not
            the Indebtedness secured by any such Lien is assumed or guaranteed
            by the Company, or (iii) from creating, incurring or suffering to
            exist Liens upon any property of any Person, which Liens exist at
            the time any such Person is merged with or into or consolidated with
            the Company (or becomes a subsidiary of the Company) or which Liens
            exist at the time of a sale or transfer of the properties of any
            such Person as an entirety or substantially as an entirety to the
            Company;

                  (c) the Company from creating, incurring or suffering to exist
            upon any of its property or assets Liens in favor of the United
            States or any state thereof or the District of Colombia, or any
            agency, department or other instrumentality thereof, to secure
            progress, advance or other payments pursuant to any contract or
            provision of any statute (including maintaining self-insurance or
            participating in any fund in connection with worker's compensation,
            disability benefits, unemployment insurance, old age pensions or
            other types of social benefits, or joining in any other provisions
            or benefits available to companies participating in any such
            arrangements);


                                       67


                  (d) the Company from creating, incurring or suffering to exist
            upon any of its property or assets Liens securing the performance of
            letters of credit, bids, tenders, sales contracts, purchase
            agreements, repurchase agreements, reverse repurchase agreements,
            bankers' acceptances, leases, surety and performance bonds, and
            other similar obligations incurred in the ordinary course of
            business;

                  (e) the Company from creating, incurring or suffering to exist
            Liens upon any real property acquired or constructed by the Company
            primarily for use in the conduct of its business;

                  (f) the Company from entering into any arrangement with any
            Person providing for the leasing by the Company of any property or
            assets, which property or assets have been or will be sold or
            transferred by the Company to such Person with the intention that
            such property or assets will be leased back to the Company, if the
            obligations in respect of such lease would not be included as
            liabilities on a consolidated balance sheet of the Company;

                  (g) the Company from creating, incurring or suffering to exist
            upon any of its property or assets Liens to secure non-recourse debt
            in connection with the Company engaging in any leveraged or
            single-investor or other lease transactions, whether (in the case of
            Liens on or relating to leases or groups of leases or the particular
            properties subject thereto) such Liens are on the particular
            properties subject to any leases involved in any of such
            transactions and/or the rental or other payments or rights under
            such leases or, in the case of any group of related or unrelated
            leases, on the properties subject to the leases comprising such
            group and/or on the rental or other payments or rights under such
            leases, or on any direct or indirect interest therein, and whether
            (in any case) (A) such Liens are created prior to, at the time of,
            or at any time after the entering into of such lease transactions
            and/or (B) such leases are in existence prior to, or be entered into
            by the Company at the time of or at any time after, the purchase or
            other acquisition by the Company of the properties subject to such
            leases;

                  (h) the Company from creating, incurring or suffering to exist
            (A) other consensual Liens in the ordinary course of business of the
            Corporation that secure Indebtedness that, in accordance with
            generally accepted accounting principles, would not be included in
            total liabilities as shown on the Company's consolidated balance
            sheet, or (B) Liens created by the Company in connection with any
            transaction intended by the Company to be a sale of property or
            assets of the Company, provided that such Liens are upon any or all
            of the property or assets intended to be sold, the income from such
            property or assets and/or the proceeds of such property or assets;

                  (i) the Company from creating, incurring or suffering to exist
            Liens on property or assets financed through tax-exempt municipal
            obligations, provided that such Liens are only on the property or
            assets so financed;


                                       68


                  (j) any extension, renewal or replacement (or successive
            extensions, renewals or replacements), in whole or in part, of any
            of the foregoing; provided, however, that any such extension,
            renewal or replacement shall be limited to all or a part of the
            property or assets (or substitutions therefor) which secured the
            Lien so extended, renewed or replaced (plus improvements on such
            property); and

                  (k) the Company from creating, incurring or suffering to exist
            any other Lien not otherwise permitted by any of the foregoing
            clauses (a) through (j) above if the aggregate amount of all secured
            debt of the Company secured by such Liens would not exceed 10% of
            the excess of the Company's consolidated assets over the
            consolidated liabilities as shown on the Company's most recent
            audited consolidated financial statements in accordance with
            generally accepted accounting principles.

            (2) For the purposes of this Section 10.4, any contract by which
      title is retained as security (whether by lease, purchase, title retention
      agreement or otherwise) for the payment of a purchase price shall be
      deemed to be a purchase money Lien. Nothing in this Section 10.4 shall
      apply to any Lien of any kind upon any of the properties of any character
      of the Company existing on the date of execution and delivery of this
      Indenture.

            (3) Nothing contained in this Section 10.4 or elsewhere in this
      Indenture shall prevent or be deemed to prohibit the creation, assumption
      or guaranty by the Company of any Indebtedness not secured by a Lien or
      the issuance by the Company of any debentures, notes or other evidences of
      Indebtedness not secured by a Lien, whether in the ordinary course of
      business or otherwise.

            (4) The entry by the Company into any contract, document, agreement
      or instrument (which shall include bank credit facilities and loan
      agreements), in the ordinary course of business or otherwise, which
      contract, document agreement or instrument may provide for or contain a
      right of set-off between the Company and such other party to the contract,
      document agreement or instrument shall not result in, or be deemed to
      constitute, the creation or incurrence of a "Lien" as such term is used in
      this Indenture.

      Section 10.5 Corporate Existence.

      Subject to Article 8, the Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existences
and that of each of its Subsidiaries and its rights (charter and statutory) and
franchises; provided, however, that the foregoing shall not obligate the Company
or any of its Subsidiaries to preserve any such right or franchise if the
Company or any such Subsidiary shall determine that the preservation thereof is
no longer desirable in the conduct of its business or the business of such
Subsidiary and that the loss thereof is not disadvantageous in any material
respect to any Holder.


                                       69


      Section 10.6 Waiver of Certain Covenants.

      The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Section 10.4 of this Indenture with respect
to the Securities of any series if, before the time for such compliance, the
Holders of at least a majority in principal amount of the Outstanding Securities
of such series, by Act of such Holders, either shall waive such compliance in
such instance or generally shall have waived compliance with such term,
provision or condition, but no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such term, provision or condition shall remain in
full force and effect. The Company shall obtain and file with the Trustee,
before or after the time for such compliance, evidence of the consent of such
Holders.

      Section 10.7 Company Statement as to Compliance; Notice of Certain
Defaults.

            (1) The Company shall deliver to the Trustee, within 120 days after
      the end of each fiscal year, a written statement (which need not be
      contained in or accompanied by an Officers' Certificate) signed by the
      principal executive officer, the principal financial officer or the
      principal accounting officer of the Company, stating that

                  (a) a review of the activities of the Company during such year
            and of its performance under this Indenture has been made under his
            or her supervision, and

                  (b) to the best of his or her knowledge, based on such review,
            (a) the Company has complied with all the conditions and covenants
            imposed on it under this Indenture throughout such year, or, if
            there has been a default in the fulfillment of any such condition or
            covenant or agreement, specifying each such default known to him or
            her and the nature and status thereof, and (b) no event has occurred
            and is continuing which is, or after notice or lapse of time or both
            would become, an Event of Default, or, if such an event has occurred
            and is continuing, specifying each such event known to him and the
            nature and status thereof.

            (2) The Company shall deliver to the Trustee, within five days after
      the occurrence thereof, written notice of any Event of Default or any
      event which after notice or lapse of time or both would become an Event of
      Default pursuant to clause (4) of Section 5.1.

            (3) The Trustee shall have no duty to monitor the Company's
      compliance with the covenants contained in this Article 10 other than as
      specifically set forth in this Section 10.7.

      Section 10.8 Limitation on Indebtedness.

      The company shall not permit (1) the aggregate amount of Senior
Subordinated Indebtedness Outstanding at any time to exceed an amount equal to
100% of the aggregate


                                       70


amount of the par or stated value of all classes of Capital Stock plus the
surplus (including retained earnings) of the Company and its consolidated
Subsidiaries (determined in accordance with GAAP) at such time or (2) the
aggregate amount of Senior Subordinated Indebtedness and Junior Subordinated
Indebtedness Outstanding any time to exceed an amount equal to 150% of the
aggregate amount of the par or stated value of all classes of Capital Stock plus
the surplus (including retained earnings) of the Company and its consolidated
Subsidiaries (determined in accordance with GAAP) at such time.

                                   ARTICLE 11

                            REDEMPTION OF SECURITIES

      Section 11.1 Applicability of Article.

      Redemption of Securities of any series at the option of the Company as
permitted or required by the terms of such Securities shall be made in
accordance with the terms of such Securities and (except as otherwise provided
herein or pursuant hereto) this Article.

      Section 11.2 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 (a) less than all of the Securities of any series or (b) all of
the Securities of any series, with the same issue date, interest rate or
formula, Stated Maturity and other terms, the Company shall, at least 60 days
prior to the Redemption Date fixed by the Company (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.

      Section 11.3 Selection by Trustee of Securities to be Redeemed.

      If less than all of the Securities of any series with the same issue date,
interest rate or formula, Stated Maturity and other 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 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 of the principal amount of Registered Securities of such
series; provided, however, that no such partial redemption shall reduce the
portion of the principal amount of a Registered Security of such series not
redeemed to less than the minimum denomination for a Security of such series
established herein or pursuant hereto.

      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 Securities redeemed or to be redeemed only in part, to the portion
of the principal of such Securities which has been or is to be redeemed.


                                       71


      Unless otherwise specified in or pursuant to this Indenture or the
Securities of any series, if any Security selected for partial redemption is
converted into other securities of the Company or exchanged for securities of
another issuer in part before termination of the conversion or exchange right
with respect to the portion of the Security so selected, the converted portion
of such Security shall be deemed (so far as may be) to be the portion selected
for redemption. Securities which have been converted or exchanged during a
selection of Securities to be redeemed shall be treated by the Trustee as
Outstanding for the purpose of such selection.

      Section 11.4 Notice of Redemption.

      Notice of redemption shall be given in the manner provided in Section 1.6,
not less than 30 nor more than 60 days prior to the Redemption Date, unless a
shorter period is specified in the Securities to be redeemed, to the Holders of
Securities to be redeemed. Failure to give notice by mailing in the manner
herein provided to the Holder of any Registered Securities 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 far the redemption of
any other Securities or portion thereof.

      Any notice that is mailed to the Holder of any Registered Securities in
the manner herein provided shall be conclusively presumed to have been duly
given, whether or not such Holder receives the notice.

      All notices of redemption shall state:

            (1) the Redemption Date,

            (2) the Redemption Price,

            (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 of such
      Security will receive, without 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 shall become
      due and payable upon each such Security or 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 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 any accrued interest,

            (7) that the redemption is for a sinking fund, if such is the case,


                                       72


            (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 and any Paying Agent is
      furnished,

            (9) if Bearer Securities of any series are to be redeemed and no
      Registered Securities of such series are to be redeemed, and if such
      Bearer Securities may be exchanged for Registered Securities not subject
      to redemption on the Redemption Date pursuant to Section 3.5 or otherwise,
      the last date, as determined by the Company, on which such exchanges may
      be made,

            (10) in the case of Securities of any series that are convertible
      into Common Stock of the Company or exchangeable for other securities, the
      conversion or exchange price or rate, the date or dates on which the right
      to convert or exchange the principal of the Securities of such series to
      be redeemed will commence or terminate and the place or places where such
      Securities may be surrendered for conversion or exchange, and

            (11) the CUSIP number or the Euroclear or Cedel reference numbers of
      such Securities, if any (or any other numbers used by a Depository to
      identify such Securities).

      A notice of redemption published as contemplated by Section 1.6 need not
identify particular Registered Securities to be redeemed.

      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 11.5 Deposit of Redemption Price.

      On or prior to any Redemption Date, the Company shall deposit, with
respect to the Securities of any series called for redemption pursuant to
Section 11.4, 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 10.3) an amount of money in the applicable Currency sufficient to pay
the Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date, unless otherwise specified pursuant to Section 3.1 or in the
Securities of such series) any accrued interest on, all such Securities or
portions thereof which are to be redeemed on that date.

      Section 11.6 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, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall 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,


                                       73


together with any accrued interest to the Redemption Date; provided, however,
that, except as otherwise provided in or pursuant to this Indenture or the
Bearer Securities of such series, installments of interest on Bearer Securities
whose Stated Maturity is on or prior to the Redemption Date shall be payable
only upon presentation and surrender of Coupons for such interest (at an Office
or Agency located outside the United States except as otherwise provided in
Section 10.2), and provided, further, that, except as otherwise specified in or
pursuant to this Indenture or the Registered Securities of such series,
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 Regular Record Dates therefor according to their terms and the
provisions of Section 3.7.

      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 any interest
represented by Coupons shall be payable only upon presentation and surrender of
those Coupons at an Office or Agency for such Security located outside of the
United States except as otherwise provided in Section 10.2.

      If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium until paid, shall bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.

      Section 11.7 Securities Redeemed in Part.

      Any Registered Security which is to be redeemed only in part shall be
surrendered at any Office or Agency for such Security (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 Registered Security or Securities of the
same series, containing identical terms and provisions, 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 Security in global form is so surrendered, the Company shall
execute, and the Trustee shall authenticate and deliver to the U.S. Depository
or other Depository for such Security in global form as shall be specified in
the Company Order with respect thereto to the Trustee, without service charge, a
new Security in global form in a denomination equal to and in exchange for the
unredeemed portion of the principal of the Security in global form so
surrendered.


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      Section 11.8 Cancellation and Destruction of Securities

      All Securities redeemed and paid pursuant to the provisions of this
Article 11 shall be cancelled and destroyed, as provided in Section 3.9, and,
except in the case of partial redemption of any Security, no Security shall be
issued under this Indenture in lieu thereof.

                                   ARTICLE 12

                                  SINKING FUNDS

      Section 12.1 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 permitted or
required in or pursuant to this Indenture or any Security of such series issued
pursuant to this Indenture.

      The minimum amount of any sinking fund payment provided for by the terms
of Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of Securities of such series is herein referred to as an "optional sinking
fund payment". If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 12.2. 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 and this Indenture.

      Section 12.2 Satisfaction of Sinking Fund Payments with Securities.

      The Company may, in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of any series to be made pursuant to the
terms of such Securities (1) deliver Outstanding Securities of such series
(other than any of such Securities previously called for redemption or any of
such Securities in respect of which cash shall have been released to the
Company), 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 series of Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, provided that such series of Securities have not been previously so
credited. Such Securities shall be received and credited for such purpose by the
Trustee at the Redemption Price specified in such Securities for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly. If, as a result of the delivery or credit
of Securities of any series in lieu of cash payments pursuant to this Section
12.2, the principal amount of Securities of such series to be redeemed in order
to satisfy the remaining sinking fund payment shall be less than $100,000, the
Trustee need not call Securities of such series for redemption, except upon
Company Request, and such cash payment shall be held by the Trustee or a Paying
Agent and applied to the next succeeding sinking fund payment, provided,
however, that the Trustee or such Paying Agent shall at the request of the
Company from time to time pay over and deliver to the Company any cash payment
so being held by the Trustee or such Paying Agent upon delivery by the Company
to the Trustee of Securities of that


                                       75


series purchased by the Company having an unpaid principal amount equal to the
cash payment requested to be released to the Company.

      Section 12.3 Redemption of Securities for Sinking Fund.

      Not less than 75 days prior to each sinking fund payment date for any
series of Securities, the Company shall 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 and the portion
thereof, if any, which is to be satisfied by delivering and crediting of
Securities of that series pursuant to Section 12.2, 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 credited and not
theretofore delivered. 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 60 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 11.3 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 11.4. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 11.6 and 11.7.

                                   ARTICLE 13

                       REPAYMENT AT THE OPTION OF HOLDERS

      Section 13.1 Applicability of Article.

      Securities of any series which are repayable at the option of the Holders
thereof before their Stated Maturity shall be repaid in accordance with the
terms of the Securities of such series. The repayment of any principal amount of
Securities pursuant to such option of the Holder to require repayment of
Securities before their Stated Maturity, for purposes of Section 3.9, shall not
operate as a payment, redemption or satisfaction of the Indebtedness represented
by such Securities unless and until the Company, at its option, shall deliver or
surrender the same to the Trustee with a directive that such Securities be
cancelled. Notwithstanding anything to the contrary contained in this Section
13.1, in connection with any repayment of Securities, the Company may arrange
for the purchase of any Securities by an agreement with one or more investment
bankers or other purchasers to purchase such Securities by paying to the Holders
of such Securities on or before the close of business on the repayment date an
amount not less than the repayment price payable by the Company on repayment of
such Securities, and the obligation of the Company to pay the repayment price of
such Securities shall be satisfied and discharged to the extent such payment is
so paid by such purchasers.


                                       76


                                   ARTICLE 14

                        SECURITIES IN FOREIGN CURRENCIES

      Section 14.1 Applicability of Article.

      Whenever this Indenture provides for (1) any action by, or the
determination of any of the rights of, Holders of Securities of any series in
which not all of such Securities are denominated in the same Currency, or (ii)
any distribution to Holders of Securities, in the absence of any provision to
the contrary in the form of Security of any particular series or pursuant to
this Indenture or the Securities, any amount in respect of any Security
denominated in a Currency other than Dollars shall be treated for any such
action or distribution as that amount of Dollars that could be obtained for such
amount on such reasonable basis of exchange and as of the record date with
respect to Registered Securities of such series (if any) for such action,
determination of rights or distribution (or, if there shall be no applicable
record date, such other date reasonably proximate to the date of such action,
determination of rights or distribution) as the Company may specify in a written
notice to the Trustee.

                                   ARTICLE 15

                        MEETINGS OF HOLDERS OF SECURITIES

      Section 15.1 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 Act
provided by this Indenture or under applicable law, to be made, given or taken
by Holders of Securities of such series.

      Section 15.2 Call, Notice and Place of Meetings.

            (1) The Trustee may at any time call a meeting of Holders of
      Securities of any series for any purpose specified in Section 15.1, to be
      held at such time and at such place in the Borough of Manhattan, The City
      of New York, or, if Securities of such series have been issued in whole or
      in part as Bearer Securities, in London or in such place outside the
      United States 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 1.6, not
      less than 21 nor more than 180 days prior to the date fixed for the
      meeting.

            (2) In case at any time the Company (by or pursuant to a Board
      Resolution) or the Holders of at least 10% in principal amount of the
      Outstanding Securities of any series or all series shall have requested
      the Trustee to call a meeting of the Holders of Securities of such series
      or all series, respectively, for any purpose specified in Section 15.1, by
      written request setting forth in reasonable detail the action proposed to
      be taken at the meeting, and the Trustee shall not have mailed notice of
      or made the first


                                       77


      publication of the notice of such meeting within 21 days after receipt of
      such request (whichever shall be required pursuant to Section 1.6) 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 in the Borough of Manhattan, The City of New York, or, if
      Securities of such series are to be issued as Bearer Securities, in London
      for such meeting and may call such meeting for such purposes by giving
      notice thereof as provided in clause (1) of this Section.

      Section 15.3 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 15.4 Quorum; Action.

      The Persons entitled to vote a majority in aggregate principal amount of
the Outstanding Securities of the relevant series shall constitute a quorum for
any meeting of Holders of Securities of such series. 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 any reconvened
meeting, such reconvened meeting may be further adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such reconvened meeting. Notice of the reconvening of any
adjourned meeting shall be given as provided in Section 15.2(1), 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. Notice of the reconvening of an
adjourned meeting shall state expressly the percentage, as provided above, of
the principal amount of the Outstanding Securities of such series which shall
constitute a quorum.

      Except as limited by the proviso to Section 9.2, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted only by the affirmative vote of the Holders of a
majority in principal amount of the Outstanding Securities of that series;
provided, however, that, except as limited by the proviso to Section 9.2, any
resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other Act 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 such
series.


                                       78


      Except as limited by the proviso to Section 9.2, 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 Coupons appertaining thereto, whether or not
such Holders were present or represented at the meeting.

      Section 15.5 Determination of Voting Rights; Conduct and Adjournment of
Meetings.

            (1) Notwithstanding any other provisions of this Indenture, the
      Trustee may make such reasonable regulations as it may deem advisable for
      any meeting of Holders of Securities of such 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 1.4 and the appointment of any
      proxy shall be proved in the manner specified in Section 1.4 or by having
      the signature of the person executing the proxy witnessed or guaranteed by
      any trust company, bank or banker authorized by Section 1.4 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 1.4 or
      other proof.

            (2) 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
      15.2(2), 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 a majority in principal amount of the Outstanding Securities of
      such series represented at the meeting.

            (3) 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
      Securities of such series held or represented by him or such other amount
      established pursuant to Section 3.1; 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.

            (4) Any meeting of Holders of Securities of any series duly called
      pursuant to Section 15.2 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.


                                       79


      Section 15.6 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 triplicate of all votes cast at the meeting. A record, at least in
triplicate, 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 facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 15.2 and, if
applicable, Section 15.4. 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.

      Section 15.7 Preservation of Rights of Trustee and Holders

      Nothing contained in this Article 15 shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Holders of any or all
series or any rights expressly or impliedly conferred hereunder to make such
call, any hindrance or delay in the exercise of any right or rights conferred
upon or reserved to the Trustee or to the Holders of any or all series under any
of the provisions of this Indenture or of such series of Securities.

                                   ARTICLE 16

                           SUBORDINATION OF SECURITIES

      Section 16.1 Agreement to Subordinate.

      The Company, for itself, its successors and assigns, covenants and agrees,
and each Holder of Securities issued hereunder and under any indenture
supplemental hereto or pursuant to a Board Resolution and Officers' Certificate
("Additional Provisions") by such Holder's acceptance thereof likewise covenants
and agrees, that all Securities issued pursuant to this Indenture shall be
subject to the provisions of this Article 16; and each Holder of a Security,
whether upon original issue or upon transfer or assignment thereof, accepts and
agrees to be bound by such provisions.

      The payment by the Company of the principal of, and any premium and
interest, if any, on, all Securities of each series issued hereunder and under
any Additional Provisions shall, to the extent and in the manner hereinafter set
forth, be subordinate in right of payment to the prior payment in full of all
Senior Indebtedness with respect to such series, whether outstanding at the date
of this Indenture or thereafter incurred.


                                       80


      The Indebtedness represented by the Securities (1) shall not be deemed to
constitute "Senior Indebtedness," as such term is defined herein, and (2) shall
constitute "Senior Subordinated Indebtedness" as that term is defined herein.

      Section 16.2 Default on Senior Indebtedness.

      In the event and during the continuation of any default by the Company in
the payment of principal, premium, interest or any other amount due on any
Senior Indebtedness with respect to the Securities of any series, or in the
event that the maturity of any Senior Indebtedness with respect to the
Securities of any series has been accelerated because of a default, then, in
either case, no payment shall be made by the Company with respect to the
principal (including redemption and sinking fund payments) of, or any premium or
interest on, the Securities of such series.

      In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section 16.2, such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of such Senior
Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Indebtedness may have
been issued, as their respective interests may appear, but only to the extent
that the holders of such Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee in writing within 90 days of
such payment of the amounts then due and owing on such Senior Indebtedness and
only the amounts specified in such notice to the Trustee shall be paid to the
holders of such Senior Indebtedness.

      Section 16.3 Liquidation; Dissolution; Bankruptcy.

      Upon any payment by the Company or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, to creditors
upon any dissolution, winding-up, liquidation or reorganization of the Company,
whether voluntary or involuntary, or in bankruptcy, insolvency, receivership or
other proceedings, all amounts due upon all Senior Indebtedness with respect to
the Securities of any series shall first be paid in full, or payment thereof
provided for in money in accordance with its terms, before any payment is made
by the Company on account of the principal of, and premium or interest, if any,
on, the Securities of such series; and upon any such dissolution, winding-up,
liquidation or reorganization, or in any such bankruptcy, insolvency,
receivership or other proceeding, any payment by the Company, or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities, which the Holders or the Trustee would be entitled to receive from
the Company, except for the provisions of this Article 16, shall be paid by the
Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other Person making such payment or distribution, or by the Holders or by the
Trustee under this Indenture if received by them or it, directly to the holders
of such Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of such Senior Indebtedness held by such holders, as
calculated by the Company) or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay such Senior Indebtedness in
full, in money or money's worth, after giving effect to any concurrent payment


                                       81


or distribution to or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the Holders of the Securities of such series
or to the Trustee.

      In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing shall be received by the
Trustee before all such Senior Indebtedness is paid in full, or provision is
made for such payment in money in accordance with its terms, such payment or
distribution shall be held in trust for the benefit of and shall be paid over or
delivered to the holders of such Senior Indebtedness or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior Indebtedness may have been issued,
as their respective interests may appear, as calculated by the Company, for
application to the payment of all such Senior Indebtedness remaining unpaid to
the extent necessary to pay such Senior Indebtedness in full in money in
accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the benefit of the holders of such Senior Indebtedness.

      For purposes of this Article 16, the words "cash, property or securities"
shall not be deemed to include shares of stock 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
subordinated at least to the extent provided in this Article 16 with respect to
the Securities of the relevant series to the payment of all Senior Indebtedness
with respect to the Securities of such series that may at the time be
outstanding, provided that (i) such Senior Indebtedness is assumed by the new
corporation, if any, resulting from any such reorganization or readjustment, and
(ii) the rights of the holders of such Senior Indebtedness are not, without the
consent of such holders, altered by such reorganization or readjustment. 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, transfer or lease of its property as an entirety, or substantially
as an entirety, to another Person upon the terms and conditions provided for in
Sections 8.1 and 8.2 of this Indenture shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 16.3
if such other Person shall, as a part of such consolidation, merger, conveyance
or transfer, comply with the conditions stated in Sections 8.1 and 8.2 of this
Indenture. Nothing in Section 16.2 or in this Section 16.3 shall apply to claims
of, or payments to, the Trustee under or pursuant to Section 6.6 of this
Indenture.

      Section 16.4 Subrogation.

      Subject to the payment in full of all Senior Indebtedness with respect to
the Securities of any series, the rights of the Holders of the Securities of
such series shall be subrogated to the rights of the holders of such Senior
Indebtedness to receive payments or distributions of cash, property or
securities of the Company applicable to such Senior Indebtedness until the
principal of, and any premium and interest, if any, on, the Securities of such
series shall be paid in full; and, for the purposes of such subrogation, no
payments or distributions to the holders of such Senior Indebtedness of any
cash, property or securities to which the Holders or the Trustee would be
entitled except for the provisions of this Article 16, and no payment over
pursuant to the provisions of this Article 16 to or for the benefit of the
holders of such Senior Indebtedness by Holders of the Securities of such series
or the Trustee, shall, as between the Company, its


                                       82


creditors other than holders of such Senior Indebtedness, and the Holders of the
Securities of such series, be deemed to be a payment by the Company to or on
account of such Senior Indebtedness. It is understood that the provisions of
this Article 16 are and are intended solely for the purposes of defining the
relative rights of the Holders of the Securities of each series, on the one
hand, and the holders of the Senior Indebtedness with respect to the Securities
of such series on the other hand.

      Nothing contained in this Article 16 or elsewhere in this Indenture, any
Additional Provisions or in the Securities of any series is intended to or shall
impair, as between the Company, its creditors other than the holders of Senior
Indebtedness with respect to the Securities of such series, and the Holders of
the Securities of such series, the obligation of the Company, which is absolute
and unconditional, to pay to the Holders of the Securities of such series the
principal of, and any premium and interest, if any, on, the Securities of such
series as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
Holders of the Securities of such series and creditors of the Company, other
than the holders of such Senior Indebtedness, nor shall anything herein or
therein prevent the Trustee or the Holder of any Security of such series from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article 16 of the
holders of such Senior Indebtedness in respect of cash, property or securities
of the Company, as the case may be, received upon the exercise of any such
remedy.

      Upon any payment or distribution of assets of the Company referred to in
this Article 16, the Trustee, subject to the provisions of Article 6 of this
Indenture, and the Holders shall be entitled to conclusively rely upon any order
or decree made by any court of competent jurisdiction in which such dissolution,
winding-up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidation trustee, agent
or other Person making such payment or distribution, delivered to the Trustee or
to the Holders of the Securities of any series, for the purposes of ascertaining
the Persons entitled to participate in such distribution, the holders of Senior
Indebtedness with respect to the Securities of such series and other
indebtedness of the Company, as the case may be, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 16.

      Section 16.5 Trustee to Effectuate Subordination.

      Each Holder of Securities by such Holder's acceptance thereof authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article 16 and appoints the Trustee such Holder's attorney-in-fact for any and
all such purposes.

      Section 16.6 Notice by the Company.

      The Company shall give prompt written notice to a Responsible Officer of
the Trustee of any fact known to the Company that would prohibit the making of
any payment of monies to or by the Trustee in respect of the Securities of any
series pursuant to the provisions of this Article 16. Notwithstanding the
provisions of this Article 16 or any other provision of this


                                       83


Indenture or any Additional Provisions, the Trustee shall not be charged with
knowledge of the existence of any facts that would prohibit the making of any
payment of monies to or by the Trustee in respect of the Securities of any
series pursuant to the provisions of this Article 16, unless and until a
Responsible Officer of the Trustee shall have received written notice thereof
from the Company or a holder or holders of Senior Indebtedness with respect to
the Securities of such series or from any trustee therefor; and before the
receipt of any such written notice, the Trustee, subject to the provisions of
Article 6 of this Indenture, shall be entitled 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 16.6 at least two 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, any
premium or interest on, any Security of such series), 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 purposes for which
they were received, and shall not be affected by any notice to the contrary that
may be received by it within two Business Days prior to such date.

      The Trustee, subject to the provisions of Article 6 of this Indenture,
shall be entitled to conclusively rely on the delivery to it of a written notice
by a Person representing himself to be a holder of Senior Indebtedness with
respect to the Securities of any series (or a trustee on behalf of such holder),
to establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee on behalf of any such holder or holders. 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 such Senior Indebtedness to
participate in any payment or distribution pursuant to this Article 16, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior Indebtedness 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 16, 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.

      Upon any payment or distribution of assets of the Company referred to in
this Article 16, the Trustee and the Holders shall be entitled to rely upon any
order or decree entered by any court of competent jurisdiction in which such
insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution,
winding-up or similar case or proceeding is pending, or a certificate of the
trustee in bankruptcy, liquidating trustee, custodian, receiver, assignee for
the benefit of creditors, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Holders of the Securities of
any series, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of Senior Indebtedness with respect
to the Securities of such series 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 16.

      Section 16.7 Rights of the Trustee; Holders of Senior Indebtedness.

      The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article 16 in respect of any Senior Indebtedness with respect
to the Securities of any series at any time held by it, to the same extent as
any other holder of such Senior Indebtedness, and


                                       84


nothing in this Indenture or any Additional Provisions shall deprive the Trustee
of any of its rights as such holder.

      With respect to the holders of Senior Indebtedness with respect to the
Securities of any series, the Trustee undertakes to perform or to observe only
such of its covenants and obligations as are specifically set forth in this
Article 16, and no implied covenants or obligations with respect to the holders
of such Senior Indebtedness shall be read into this Indenture or any Additional
Provisions against the Trustee. By virtue of this Article 16, the Trustee shall
not be deemed to owe any fiduciary duty to the holders of such Senior
Indebtedness and, subject to the provisions of Article 6 of this Indenture, the
Trustee shall not be liable to any holder of such Senior Indebtedness if it
shall pay over or deliver to Holders of the Securities of such series, the
Company or any other Person money or assets to which any holder of such Senior
Indebtedness shall be entitled.

      Nothing in this Article 16 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.6.

      Section 16.8 Subordination May Not Be Impaired.

      No right of any present or future holder of any Senior Indebtedness 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 by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof that any such holder may have or
otherwise be charged with.

      Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness with respect to the Securities of any series may,
at any time and from time to time, without the consent of or notice to the
Trustee or the Holders of Securities of such series, without incurring
responsibility to such Holders and without impairing or releasing the
subordination provided in this Article 16 or the obligations hereunder of the
Holders of the Securities of such series to the holders of such Senior
Indebtedness, 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, such
Senior Indebtedness, or otherwise amend or supplement in any manner such Senior
Indebtedness or any instrument evidencing the same or any agreement under which
such Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing such
Senior Indebtedness; (iii) release any Person liable in any manner for the
collection of such Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company and any other Person.


                                       85


         IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, as of the date first above written.

                                        CIT GROUP INC.



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



                                        JPMORGAN CHASE BANK, N.A.,
                                        as Trustee



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

EX-4.5

                                                                     Exhibit 4.5

                                 CIT GROUP INC.,
                                   the Company

                                       and

                           JPMORGAN CHASE BANK, N.A.,
                                     Trustee

                                       and

          JPMORGAN CHASE BANK, N.A., acting through its London branch,
      Issuing and Paying Agent, Calculation Agent and Authenticating Agent

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

                                SENIOR INDENTURE

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


                            Dated as of June 2, 2006

                                  Senior Notes




                                Table of Contents

                                                                            Page
                                                                            ----
                                    ARTICLE 1
             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 1.1 Definitions....................................................  1
Section 1.2 Compliance Certificates and Opinions........................... 10
Section 1.3 Form of Documents Delivered to Trustee......................... 11
Section 1.4 Acts of Holders................................................ 11
Section 1.5 Notices, etc. to Trustee and Company........................... 13
Section 1.6 Notice to Holders of Notes; Waiver............................. 13
Section 1.7 Language of Notices............................................ 14
Section 1.8 Effect of Headings and Table of Contents....................... 15
Section 1.9 Successors and Assigns......................................... 15
Section 1.10 Separability Clause........................................... 15
Section 1.11 Benefits of Indenture......................................... 15
Section 1.12 Governing Law................................................. 15
Section 1.13 Legal Holidays................................................ 15
Section 1.14 Counterparts.................................................. 16
Section 1.15 Judgment Currency............................................. 16
Section 1.16 No Security Interest Created.................................. 16
Section 1.17 Limitation on Individual Liability............................ 16

                                    ARTICLE 2
                                   NOTES FORMS

Section 2.1 Forms Generally................................................ 17
Section 2.2 Temporary Global Note; Permanent Global Note; Definitive Note.. 17
Section 2.3 Form of Trustee's Certificate of Authentication................ 20
Section 2.4 Notes in Global Form........................................... 21
Section 2.5 Transfer of Notes.............................................. 21

                                    ARTICLE 3
                                    THE NOTES

Section 3.1 Amount Unlimited; Issuable in Series........................... 21
Section 3.2 Currency; Denominations........................................ 24
Section 3.3 Execution, Authentication, Delivery and Dating................. 25
Section 3.4 Exchange 26

Section 3.5 Mutilated, Destroyed, Lost and Stolen Notes.................... 27
Section 3.6 Payment of Interest and Principal; Rights to Interest
              Preserved.................................................... 28
Section 3.7 Payment of Additional Amounts.................................. 29
Section 3.8 Persons Deemed Owners.......................................... 32
Section 3.9 Cancellation................................................... 32
Section 3.10 Computation of Interest....................................... 33


                                       i


                                    ARTICLE 4
                    SATISFACTION AND DISCHARGE OF INDENTURE;
                       DEFEASANCE AND COVENANT DEFEASANCE

Section 4.1 Satisfaction and Discharge..................................... 33
Section 4.2 Defeasance and Covenant Defeasance............................. 34
Section 4.3 Application of Trust Money..................................... 38
Section 4.4 Reinstatement.................................................. 38
Section 4.5 Qualifying Trustee............................................. 39

                                    ARTICLE 5
                                    REMEDIES

Section 5.1 Events of Default.............................................. 39
Section 5.2 Acceleration of Maturity; Rescission and Annulment............. 41
Section 5.3 Collection of Indebtedness and Suits for Enforcement by
              Trustee...................................................... 42
Section 5.4 Trustee May File Proofs of Claim............................... 43
Section 5.5 Trustee May Enforce Claims without Possession of Notes or
              Coupons...................................................... 43
Section 5.6 Application of Money Collected................................. 44
Section 5.7 Limitations on Suits........................................... 44
Section 5.8 Unconditional Right of Holders to Receive Principal and any
              Premium and Interest......................................... 45
Section 5.9 Restoration of Rights and Remedies............................. 45
Section 5.10 Rights and Remedies Cumulative................................ 45
Section 5.11 Delay or Omission Not Waiver.................................. 45
Section 5.12 Control by Holders of Notes................................... 46
Section 5.13 Waiver of Past Defaults....................................... 46
Section 5.14 Waiver of Usury, Stay or Extension Laws....................... 46
Section 5.15 Undertaking for Costs......................................... 47

                                    ARTICLE 6
                                   THE TRUSTEE

Section 6.1 Certain Rights of Trustee...................................... 47
Section 6.2 Notice of Defaults............................................. 49
Section 6.3 Not Responsible for Recitals or Issuance of Notes.............. 50
Section 6.4 May Hold Notes................................................. 50
Section 6.5 Money Held in Trust............................................ 50
Section 6.6 Compensation and Reimbursement................................. 50
Section 6.7 Corporate Trustee Required; Eligibility........................ 51
Section 6.8 Resignation and Removal; Appointment of Successor.............. 51
Section 6.9 Acceptance of Appointment by Successor......................... 53
Section 6.10 Merger, Conversion, Consolidation or Succession to Business... 54
Section 6.11 Appointment of Authenticating Agent........................... 54


                                       ii


                                    ARTICLE 7
                         REPORTS BY TRUSTEE AND COMPANY

Section 7.1 Reports by Trustee............................................. 56
Section 7.2 Reports by Company............................................. 57

                                    ARTICLE 8
                         CONSOLIDATION, MERGER AND SALES

Section 8.1 Company May Consolidate, Etc., Only on Certain Terms........... 58
Section 8.2 Successor Person Substituted for Company....................... 59

                                    ARTICLE 9
                             SUPPLEMENTAL INDENTURES

Section 9.1 Supplemental Indentures without Consent of Holders............. 59
Section 9.2 Supplemental Indentures with Consent of Holders................ 60
Section 9.3 Execution of Supplemental Indentures........................... 62
Section 9.4 Effect of Supplemental Indentures.............................. 62
Section 9.5 Reference in Notes to Supplemental Indentures.................. 62
Section 9.6 Notice of Supplemental Indenture............................... 62

                                   ARTICLE 10
                                    COVENANTS

Section 10.1 Payment of Principal, any Premium, Interest................... 62
Section 10.2 Maintenance of Office or Agency............................... 63
Section 10.3 Money for Notes Payments to Be Held in Trust.................. 64
Section 10.4 Limitations on Pledges and Liens.............................. 65
Section 10.5 Corporate Existence........................................... 68
Section 10.6 Waiver of Certain Covenants................................... 68
Section 10.7 Company Statement as to Compliance; Notice of
               Certain Defaults............................................ 68

                                   ARTICLE 11
                               REDEMPTION OF NOTES

Section 11.1 Applicability of Article...................................... 69
Section 11.2 Election to Redeem; Notice to Trustee......................... 69
Section 11.3 Selection by Trustee of Notes to be Redeemed.................. 69
Section 11.4 Notice of Redemption.......................................... 70
Section 11.5 Deposit of Redemption Price................................... 71
Section 11.6 Notes Payable on Redemption Date.............................. 71
Section 11.7 Notes Redeemed in Part........................................ 72
Section 11.8 Cancellation and Destruction of Notes......................... 72
Section 11.9 Optional Redemption in the Event of Change in Tax Treatment... 72
Section 11.10 Special Redemption........................................... 73


                                      iii


                                   ARTICLE 12
                                  SINKING FUNDS

Section 12.1 Applicability of Article...................................... 74

                                   ARTICLE 13
                       REDEMPTION AT THE OPTION OF HOLDERS

Section 13.1 Applicability of Article...................................... 75

                                   ARTICLE 14
                           NOTES IN FOREIGN CURRENCIES

Section 14.1 Applicability of Article...................................... 75

                                   ARTICLE 15
                          MEETINGS OF HOLDERS OF NOTES

Section 15.1 Purposes for Which Meetings May Be Called..................... 75
Section 15.2 Call, Notice and Place of Meetings............................ 75
Section 15.3 Persons Entitled to Vote at Meetings.......................... 76
Section 15.4 Quorum; Action................................................ 76
Section 15.5 Determination of Voting Rights; Conduct and Adjournment
               of Meetings................................................. 77
Section 15.6 Counting Votes and Recording Action of Meetings............... 78
Section 15.7 Preservation of Rights of Trustee and Holders................. 78

EXHIBIT A1--Form of Fixed Rate Global Notes and Definitive Notes
EXHIBIT A2--Form of Floating Rate Global Notes and Definitive Notes
EXHIBIT B--Form of Certificate of Instructions from Euroclear/Clearstream
EXHIBIT C--Form of Certificate for Instruction from Beneficial Holder to
Euroclear/Clearstream


                                       iv


      SENIOR INDENTURE, dated as of June 2, 2006 (the "Indenture"), among CIT
Group Inc., a corporation duly organized and existing under the laws of the
State of Delaware (the "Company"), JPMorgan Chase Bank, N.A., as trustee (the
"Trustee"), and JPMorgan Chase Bank, N.A., acting through its London branch, as
issuing and paying agent (the "Issuing and Paying Agent"), calculation agent
(the "Calculation Agent") and authenticating agent (the "Authenticating Agent").

                                    RECITALS

      The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its senior unsecured
debentures, notes or other evidences of indebtedness (the "Notes"), unlimited as
to principal amount, to bear such rates of interest, to mature at such time or
times, to be issued in one or more series and to have such other provisions as
shall be fixed as hereinafter provided.

      The Company has duly authorized the execution and delivery of this
Indenture. 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 Notes by
the Holders (as herein defined) thereof, it is mutually covenanted, declared and
agreed by and between the parties hereto, for the equal and proportionate
benefit of all Holders of the Notes or of any series thereof and any Coupons (as
herein defined) as follows:

                                   ARTICLE 1

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

      Section 1.1 Definitions.

      Except as otherwise specified with respect to any Notes issued pursuant to
Section 3.1, and except as otherwise expressly provided in or pursuant to this
Indenture, or unless the context otherwise requires, for all purposes of this
Indenture:

            (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 accounting terms not otherwise defined herein have the
      meanings assigned to them in accordance with generally accepted accounting
      principles in the United States of America and, except as otherwise herein
      expressly provided, the terms "generally accepted accounting principles"
      or "GAAP" with respect to any computation required or permitted hereunder
      shall mean such accounting principles as are generally accepted in the
      United States of America at the date or time of such computation;


                                       1


            (3) the words "herein," "hereof," "hereto" 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; and

            (4) the word "or" is always used inclusively (for example, the
      phrase "A or B" means "A or B or both," not "either A or B but not both").

      Certain terms used principally in certain Articles hereof are defined in
those Articles.

      "Act," when used with respect to any Holders, has the meaning specified in
Section 1.4.

      "Additional Amounts" has the meaning specified in Section 3.7.

      "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 the meanings correlative to
the foregoing.

      "Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 6.11 to act on behalf of the Trustee to authenticate Notes of one or
more series.

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

      "Authorized Officer" means, when used with respect to the Company, the
Chairman of the Board of Directors, a Vice Chairman, the President, the Chief
Executive Officer, the Chief Financial Officer, any Vice President, the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of
the Company.

      "Bankruptcy Law" has the meaning specified in Section 5.1(6).

      "Board of Directors" means the board of directors of the Company or any
committee of that board duly authorized to act generally or in any particular
respect for the Company hereunder.

      "Board Resolution" means a copy of one or more resolutions, 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, delivered to the Trustee.


                                       2


      "Business Day," with respect to any Place of Payment or other location,
means a day other than a Saturday or Sunday and means: (a) with respect to Notes
denominated in a currency other than Euro, any day that is neither a legal
holiday nor a day on which banking institutions are authorized or required by
law or regulation (including any executive order) to close in either the City of
New York (in the case of Notes denominated in Dollars) or the principal
financial centre of the country of such currency; (b) with respect to Notes
denominated in Euro and EURIBOR Notes, any day that is a TARGET Settlement Day
and any day when banking institutions are not authorized or required by law or
regulation (including any executive order) to close in the City of New York; and
(c) with respect to LIBOR Notes, any day that is neither a legal holiday nor a
day on which banking institutions are authorized or required by law or
regulation (including any executive order) to close in either The City of New
York or London.

      "Calculation Agent" means any Person (which may be the Trustee) authorized
by the Company pursuant to a Calculation Agent Agreement to determine, in
respect of floating rate Notes, the interest payable on such floating rate
Notes, and shall initially be JPMorgan Chase Bank, N.A., acting through its
London branch, and any of its successors, unless a replacement Calculation
Agent, if any, is appointed pursuant to the applicable Calculation Agent
Agreement, and thereafter Calculation Agent shall mean or include each Person
who is then a Calculation Agent hereunder.

      "Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including Preferred
Stock, but excluding any debt securities convertible into such equity.

      "Capitalized Lease Obligation" means an obligation under a lease that is
required to be capitalized for financial reporting purposes in accordance with
generally accepted accounting principles, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with such principles.

      "Clearstream" means Clearstream Banking, societe anonyme, Luxembourg.

      "Common Depositary" means a depositary common to Euroclear and
Clearstream, being initially JPMorgan Chase Bank, N.A., acting through its
London branch, and any of its successors, unless a replacement Common
Depositary, if any, is appointed pursuant to this Indenture, and thereafter
Common Depositary shall mean or include each Person who is then a Common
Depositary hereunder.

      "Common Stock" in respect of any Corporation means Capital Stock of any
class or classes (however designated) which has no preference as to the payment
of dividends, or as to the distribution of assets upon any voluntary or
involuntary liquidation or dissolution of such Corporation, and which is not
subject to redemption by such Corporation.

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


                                       3


      "Company Request" and "Company Order" mean, respectively, a written
request or order, as the case may be, signed in the name of the Company by an
Authorized Officer, and delivered to the Trustee.

      "Conversion Event" means the cessation of use of (i) a Foreign Currency
both by the government of the country or the confederation which issued such
Foreign Currency and for the settlement of transactions by a central bank or
other public institutions of or within the international banking community or
(ii) any currency unit or composite currency 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 of original execution of this Indenture is located at 4
New York Plaza, 15th Floor, New York, New York 10004.

      "Corporation" means corporations and limited liability companies and,
except for purposes of Article 8, associations, companies (other than limited
liability companies) and business trusts.

      "Coupon" means any interest coupon appertaining to a Note.

      "Currency," with respect to any payment, deposit or other transfer in
respect of the principal of or any premium or interest on any Note, means Euro
or the Foreign Currency, as the case may be, in which such payment, deposit or
other transfer is required to be made by or pursuant to the terms hereof or such
Note and, with respect to any other payment, deposit or transfer pursuant to or
contemplated by the terms hereof or such Note, means Euro.

      "Custodian" has the meaning specified in Section 5.1(6).

      "Dealer" means each of UBS Limited, ABN AMRO Bank N.V., Banc of America
Securities Limited, Barclays Bank PLC, BNP Paribas, Citigroup Global Markets
Limited, Credit Suisse Securities (Europe) Limited, Deutsche Bank AG, Goldman
Sachs International, HSBC Bank plc, J.P. Morgan Securities Ltd., Lehman Brothers
International (Europe), Merrill Lynch International, Morgan Stanley & Co.
International Limited, Royal Bank of Canada Europe Limited, The Royal Bank of
Scotland plc and Societe Generale.

      "Definitive Notes" has the meaning specified in Section 2.2.

      "Dollars" or "$" means a dollar or other equivalent unit of legal tender
for payment of public or private debts in the United States of America.

      "Early Tax Redemption" has the meaning set forth in Section 11.9.

      "Euro" means the currency introduced on 1 January, 1999 pursuant to the
Treaty establishing the European Community.

      "Euroclear" means Euroclear Bank S.A./N.V.


                                       4


      "Event of Default" has the meaning specified in Section 5.1.

      "Fixed Interest Market" means the LSE's regulated Gilt Edged and Fixed
Interest Market.

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

      "Global Notes" has the meaning specified in Section 2.2.

      "Government Obligations" means securities which are (i) direct obligations
of the United States of America or the other government or governments which
issued the Foreign Currency in which the principal of or any premium or interest
on such Note shall be payable, in each case where the payment or payments
thereunder are supported by the full faith and credit of such government or
governments 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
other government or governments, in each case where the timely payment or
payments thereunder are unconditionally guaranteed as a full faith and credit
obligation by the United States of America or such other government or
governments, and which, in the case of (i) or (ii), are not callable or
redeemable at the option of the issuer or issuers 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 or other amount with respect to 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 or other
amount with respect to the Government Obligation evidenced by such depository
receipt.

      "Holder" means with respect to Notes and Coupons issued hereunder, the
bearer thereof.

      "Indebtedness" means, with respect to any Person, such Person's (i)
obligations for borrowed money, (ii) obligations representing the deferred
purchase price of property or services other than accounts payable arising in
the ordinary course of such Person's business, (iii) obligations, whether or not
assumed, secured by Liens on property now or hereafter owned or acquired by such
Person (other than carriers', warehousemen's, mechanics', repairmen's or other
like nonconsensual statutory Liens arising in the ordinary course of business),
(iv) obligations which are evidenced by notes, acceptances, or other similar
instruments, (v) Capitalized Lease Obligations, (vi) contingent obligations with
respect to the Indebtedness of another Person, including but not limited to the
obligation or liability of another which such Person assumes, guarantees,
endorses, contingently agrees to purchase or provide funds for the payment of,
or otherwise becomes contingently liable upon; provided that any Indebtedness
owing by the Company to any of its Subsidiaries or by any Subsidiary of the
Company to the Company or by any Subsidiary of the Company to any other
Subsidiary of the Company or any contingent obligation in respect thereof shall
not constitute Indebtedness for purposes of this Agreement, and (vii)
obligations for which such Person is obligated in respect of a letter of credit.
For


                                       5


purposes of this Indenture, Indebtedness shall not include (A) any indebtedness
of such Person to the extent (I) such indebtedness does not appear on the
financial statement of such Person, (II) such indebtedness is recourse only to
certain assets of such Person, and (III) the assets to which such indebtedness
is recourse only appear on the financial statements of such Person net of such
indebtedness, or (B) any indebtedness or other obligations issued by any Person
(or by a trust or other entity established by such Person or any of its
affiliates) which are primarily serviced by the cash flows of a discrete pool of
receivables, leases or other financial assets which have been sold or
transferred by the Company or any Subsidiary in securitization transactions
which, in accordance with GAAP, are accounted for as sales for financial
reporting purposes. It is understood and agreed that (1) the amount of any
Indebtedness described in clause (iii) for which recourse is limited to certain
property of such Person shall be the lower of (x) the amount of the obligation
and (y) the fair market value of the property of such Person securing such
obligation, and (2) the amount of any obligation described in clause (vi) shall
be the lower of (x) the stated or determinable amount of the primary obligation
in respect of which such contingent obligation is made, and (y) the maximum
amount for which such Person may be liable pursuant to the terms of the
agreement embodying such contingent obligation unless such primary obligation
and the maximum amount for which such Person may be liable are not stated or
determinable, in which case the amount of such contingent obligation shall be
such Person's maximum, reasonably anticipated liability in respect thereof as
determined by such Person in good faith.

      "Indenture" means this instrument as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof, including, with respect to
any Note, by terms and provisions of such Note and any Coupon appertaining
thereto established pursuant to Section 3.1 (as such terms and provisions may be
amended pursuant to the applicable provisions hereof).

      "Independent Public Accountants" means accountants or a firm of
accountants that, with respect to the Company and any other obligor under the
Notes or the Coupons, are independent public accountants within the meaning of
the Securities Act of 1933, as amended, and the rules and regulations
promulgated by the Commission thereunder, who may be the independent public
accountants regularly retained by the Company or who may be other independent
public accountants. Such accountants or firm shall be entitled to rely upon any
Opinion of Counsel as to the interpretation of any legal matters relating to
this Indenture or certificates required to be provided hereunder.

      "Indexed Note" means a Note 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 Payment Date," with respect to any Note, means the Stated
Maturity of an installment of interest on such Note.

      "Issuing and Paying Agent" means any Person authorized by the Company to
pay the principal of, or any premium or interest on, any Note or any Coupon on
behalf of the Company, and shall initially be JPMorgan Chase Bank, N.A., acting
through its London branch, and any of its successors, unless a replacement
Issuing and Paying Agent, if any, is appointed pursuant to


                                       6


this Indenture, and thereafter Issuing and Paying Agent shall mean or include
each Person who is then an Issuing and Paying Agent hereunder.

      "Judgment Currency" has the meaning specified in Section 1.15.

      "Lien" has the meaning specified in Section 10.4.

      "London Business Day" means any day on which dealings in deposits in U.S.
dollars, euros or the applicable Foreign Currency of any Note are transacted in
the London interbank market.

      "LSE" means the London Stock Exchange plc.

      "Maturity," with respect to any Note, means the date on which the
principal of such Note or an installment of principal becomes due and payable as
provided in or pursuant to this Indenture, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption or repurchase, notice of
option to elect repayment or otherwise, and includes the Redemption Date.

      "New York Banking Day" has the meaning specified in Section 1.15.

      "Notes" has the meaning specified in the recitals of this Indenture.

      "Office or Agency" with respect to any Notes, means an office or agency of
the Company maintained or designated in a Place of Payment for such Notes
pursuant to Section 10.2 or any other office or agency of the Company maintained
or designated for such Notes pursuant to Section 10.2 or, to the extent
designated or required by Section 10.2 in lieu of such office or agency, the
Corporate Trust Office of the Trustee.

      "Officers' Certificate" means a certificate signed by the Chairman, Vice
Chairman, President, Chief Executive Officer or a Vice President and by the
Chief Financial Officer, Treasurer, an Assistant Treasurer, the Secretary, or an
Assistant Secretary of the Corporation, and delivered to the Trustee.

      "Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Company or other counsel who shall be reasonably
acceptable to the Trustee, or with respect to an Early Tax Redemption or special
redemption, an "independent" counsel who shall be reasonably acceptable to the
Trustee.

      "Original Issue Discount Note" means a Note issued pursuant to this
Indenture which provides for declaration of an amount less than the principal
face amount thereof to be due and payable upon acceleration pursuant to Section
5.2.

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


                                       7


            (a) any such Note theretofore cancelled by the Trustee or delivered
      to the Trustee for cancellation;

            (b) any such Note for whose payment at the Maturity thereof money in
      the necessary amount has been theretofore deposited pursuant hereto with
      the Trustee or any Issuing and 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 Issuing and Paying Agent) for the Holders of such
      Notes and any Coupons appertaining thereto, provided that, if such Notes
      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;

            (c) any such Note with respect to which the Company has effected
      defeasance and/or covenant defeasance pursuant to the terms hereof, except
      to the extent provided in Section 4.2;

            (d) any such Note which has been paid pursuant to Section 3.5 or in
      exchange for or in lieu of which other Notes have been authenticated and
      delivered pursuant to this Indenture, unless there shall have been
      presented to the Trustee or the Issuing and Paying Agent, proof
      satisfactory to it that such Note is held by a bona fide purchaser in
      whose hands such Note is a valid obligation of the Company; and

            (e) any such Note converted or exchanged as contemplated by this
      Indenture into other securities of the Company or another issuer, if the
      terms of such Note provide for such conversion or exchange pursuant to
      Section 3.1;

provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders of Notes for quorum purposes, (i) the principal amount of
an Original Issue Discount Note that may be counted in making such determination
and that shall be deemed to be Outstanding for such purposes shall be equal to
the amount of the principal thereof that pursuant to the terms of such Original
Issue Discount Note would be declared (or shall have been declared to be) due
and payable upon a declaration of acceleration thereof pursuant to Section 5.2
at the time of such determination or that could be or shall have been
accelerated in the case of an ipso facto acceleration pursuant to the second
paragraph of Section 5.2, and (ii) the principal amount of any Indexed Note that
may be counted in making such determination and that shall be deemed Outstanding
for such purposes shall be equal to the principal face amount of such Indexed
Note at original issuance, unless otherwise provided in or pursuant to this
Indenture, and (iii) the principal amount of a Note denominated in a Foreign
Currency shall be the Dollar equivalent, determined on the date of original
issuance of such Note, of the principal amount (or, in the case of an Original
Issue Discount Note, the Dollar equivalent on the date of original issuance of
such Note of the amount determined as provided in (i) above) of such Note, and
(iv) Notes owned by the Company or any other obligor upon the Notes or any
Affiliate of the Company or such other obligor, shall be disregarded and deemed
not to be Outstanding, except that, in determining whether the Trustee shall be
protected in making any such determination or relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Notes which a
Responsible Officer actually knows to be so owned shall be so disregarded. Notes
so owned which shall have been pledged in good


                                       8


faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee (A) the pledgee's right so to act with respect to
such Notes and (B) that the pledgee is not the Company or any other obligor upon
the Notes or any Coupons appertaining thereto or an Affiliate of the Company or
such other obligor.

      "Permanent Global Note" has the meaning specified in Section 2.2.

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

      "Place of Payment," with respect to any Note, means the place or places
where the principal of, or any premium or interest on, such Note is payable as
provided in or pursuant to this Indenture or such Note.

      "Predecessor Note" of any particular Note means every previous Note
evidencing all or a portion of the same Indebtedness as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 3.5 in exchange for or in lieu of a
lost, destroyed, mutilated or stolen Note or any Note to which a mutilated,
destroyed, lost or stolen Coupon appertains shall be deemed to evidence the same
Indebtedness as the lost, destroyed, mutilated or stolen Note or the Note to
which a mutilated, destroyed, lost or stolen Coupon appertains.

      "Preferred Stock" in respect of any Corporation means Capital Stock of any
class or classes (however designated) which is preferred as to the payment of
dividends, or as to the distribution of assets upon any voluntary or involuntary
liquidation or dissolution of such Corporation, over shares of Capital Stock of
any other class of such Corporation.

      "Redemption Date" with respect to any Note or portion thereof to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture or such Note.

      "Redemption Price" with respect to any Note or portion thereof to be
redeemed, means the price at which it is to be redeemed as determined by or
pursuant to this Indenture or such Note.

      "Required Currency" has the meaning specified in Section 1.15.

      "Responsible Officer" means any officer of the Trustee in its Corporate
Trust Office with direct responsibility for the administration of this
Indenture, and also, with respect to a particular corporate trust matter, any
other officer of the Trustee to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.

      "Stated Maturity," with respect to any Note or any installment of
principal thereof or interest thereon, means the date established by or pursuant
to this Indenture or such Note as the fixed date on which the principal of such
Note or such installment of principal or interest is, due and payable.


                                       9


      "Subsidiary" means with respect to the Company, such Person which, at the
time of determination, more than 50% of the voting power of the shares of its
Capital Stock or other interests (including partnership interests) entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is owned or controlled, directly or
indirectly, by (i) the Company and/or (ii) one or more Subsidiaries of the
Company; provided, however, that the term Subsidiary shall not include any
Person, if the earnings of such Person are not consolidated with the financial
statements of the Company in accordance with the requirements of GAAP.

      "TARGET Settlement Day" means any day on which the Trans-European
Automated Real-Time Gross Settlement Express Transfer (TARGET) System is open.

      "Temporary Global Note" has the meaning specified in Section 2.2.

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

      "United States" and "United States of America" means the United States of
America, the States thereof and the District of Columbia (and for the avoidance
of doubt, excludes any possessions thereof.

      "United States person" means any individual who is a citizen or resident
of the United States, any corporation or partnership (or other entity treated as
a corporation or partnership for United States federal income tax purposes)
created or organized in or under the laws of the United States, any estate the
income of which is subject to United States federal income taxation regardless
of its source, or any trust if (i) a court within the United States is able to
exercise primary supervision over the administration of the trust, and one or
more United States persons have the authority to control all substantial
decisions of the trust, or (ii) the trust has a valid election in effect under
applicable United States Treasury regulations to be treated as a United States
person.

      "Vice President" when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "Vice President".

      Section 1.2 Compliance Certificates and Opinions.

      Except as otherwise expressly provided in this Indenture, 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
or any of them is specifically


                                       10


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 (other than a certificate delivered
pursuant to Section 10.7) shall include:

            (1) a statement that the 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 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 such individual,
      such condition or covenant has been complied with.

      Section 1.3 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, provided
that such officer, after reasonable inquiry, has no reason to believe and does
not believe that the Opinion of Counsel with respect to the matters upon which
his certificate or opinion is based is erroneous. Any such Opinion of Counsel
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 with respect to such factual matters is in the
possession of the Company, provided that such counsel, after reasonable inquiry,
has no reason to believe and does not believe 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 or any Note, they may, but need not, be
consolidated and form one instrument.

            Section 1.4 Acts of Holders.

                  (1) Any request, demand, authorization, direction, notice,
            consent, waiver or other action provided by or pursuant to this
            Indenture to be given or taken by Holders


                                       11


            may be embodied in and evidenced by one or more instruments of
            substantially similar tenor signed by such Holders in person or by
            an agent duly appointed in writing. Any request, demand,
            authorization, direction, notice, consent, waiver or other action
            provided in or pursuant to this Indenture to be given or taken by
            Holders of Notes of a series may, alternatively, be embodied in and
            evidenced by the record of Holders of Notes of such series voting in
            favor thereof, either in person or by proxies duly appointed in
            writing, at any meeting of Holders of Notes of such series duly
            called and held in accordance with the provisions of Article 15, 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 Note, shall be
            sufficient for any purpose of this Indenture and conclusive in favor
            of the Trustee, 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 Notes shall be proved in the manner
            provided in Section 15.6.

            Without limiting the generality of this Section 1.4, unless
      otherwise provided in or pursuant to this Indenture, a Holder, including a
      Common Depositary that is a Holder of a Global Note, may make, give or
      take, by a proxy or proxies, duly appointed in writing, any request,
      demand, authorization, direction, notice, consent, waiver or other Act
      provided in or pursuant to this Indenture to be made, given or taken by
      Holders, and a Common Depositary that is a Holder of a Global Note may
      provide its proxy or proxies to the beneficial owners of interests in any
      such Global Note through such Common Depositary's standing instructions
      and customary practices.

            (2) The fact and date of the execution by any Person of any such
      instrument or writing referred to in this Section 1.4 may be proved in any
      reasonable manner; and the Trustee may in any instance require further
      proof with respect to any of the matters referred to in this Section.

            (3) The ownership, principal amount and serial numbers of Notes held
      by any Person, and the date of the commencement and the date of the
      termination of holding the same, may be proved by the production of such
      Notes or by a certificate executed, as depositary, by any trust company,
      bank, banker or other depositary reasonably acceptable to the Company,
      wherever situated, if such certificate shall be deemed by the Company and
      the Trustee to be satisfactory, showing that at the date therein mentioned
      such Person had on deposit with such depositary, or exhibited to it, the
      Notes therein described; or such facts may be proved by the certificate or
      affidavit of the Person holding such Notes, 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 Note continues until (i)
      another certificate or affidavit bearing a later date issued in respect of
      the same Note is produced, or (ii) such Note is produced to the Trustee by
      some other Person, or (iii) such Note is no longer Outstanding. The
      ownership, principal amount and serial numbers of


                                       12


      Notes held by the Person so executing such instrument or writing and the
      date of the commencement and the date of the termination of holding the
      same may also be proved in any other manner, which the Company and the
      Trustee deem sufficient.

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

      Section 1.5 Notices, etc. to Trustee and Company.

      Any request, demand, authorization, direction, notice, consent, waiver or
other 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 the Company shall be sufficient for
      every purpose hereunder if made, given, furnished or filed in writing to
      or with the Trustee at its Corporate Trust Office, Attention: Worldwide
      Securities Services; or

            (2) the Company, by the Trustee or 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 the attention of its Treasurer, with a copy to the attention
      of its General Counsel, at the address of its principal office specified
      in Section 1.6 hereof or at any other address previously furnished in
      writing to the Trustee by the Company.

      Section 1.6 Notice to Holders of Notes; Waiver.

      Except as otherwise expressly provided in or pursuant to this Indenture,
where this Indenture provides for notice to Holders of any event:

            (1) such notice shall be deemed to be validly given if published in
      a leading English language daily newspaper with general circulation in
      London (which is expected to be the Financial Times) or, if such
      publication is not possible, in one other leading English language daily
      newspaper with general circulation in Europe;

            (2) notwithstanding (1) above, such notice shall be sufficiently
      given to Holders of Notes held through Euroclear and Clearstream if sent
      to Euroclear and Clearstream, as appropriate, for communication to Holders
      in accordance with their standard procedures; and

            (3) for so long as the Notes are then listed on the LSE and the
      rules of the LSE so require, such notice shall be published in a leading
      English language daily newspaper with general circulation in London (which
      is expected to be the Financial Times).


                                       13


      In case 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 as provided above, then such
notification to Holders of Notes as shall be given with the approval of the
Trustee shall constitute sufficient notice to such Holders for every purpose
hereunder. Neither failure to give notice by publication to Holders of Notes of
a particular series as provided above, nor any defect in any notice so
published, shall affect the sufficiency of any notice with respect to Notes of
another series.

      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 of Notes 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.

      All communications hereunder will be in writing and will be mailed,
delivered or telegraphed and confirmed to the party receiving such communication
at its address indicated below:

      If to the Company:

               CIT Group Inc.
               1 CIT Drive
               Livingston, New Jersey  07039
               Attention:  Treasurer and General Counsel

      If to the Trustee:

               JPMorgan Chase Bank, N.A.
               4 New York Plaza, 15th Floor
               New York, New York  10004
               Attention:  Worldwide Securities Services

      If to the Issuing and Paying Agent, Calculation Agent or Authenticating
Agent:

               JPMorgan Chase Bank, N.A., acting through its London branch
               9 Trinity Tower
               Thomas More Street
               London E1W 1 YT, England
               Attention:  Worldwide Securities Services

      Section 1.7 Language of Notices.

      Any request, demand, authorization, direction, notice, consent, election
or waiver required or permitted under this Indenture shall be in the English
language, except that, if the Company so elects, any published notice may be in
an official language of the country of publication (with a copy in English to be
provided to the Trustee.)


                                       14


      Section 1.8 Effect of Headings and Table of Contents.

      The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.

      Section 1.9 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 1.10 Separability Clause.

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

      Section 1.11 Benefits of Indenture.

      Nothing in this Indenture, any Note or any Coupon, express or implied,
shall give to any Person, other than the parties hereto, any Issuing and Paying
Agent, any Authenticating Agent and their successors hereunder and the Holders
of Notes or Coupons, any benefit or any legal or equitable right, remedy or
claim under this Indenture.

      Section 1.12 Governing Law.

      This Indenture, the Notes and any Coupons shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made or instruments entered into and, in each case, performed in said
state.

      Section 1.13 Legal Holidays.

      Unless otherwise specified in or pursuant to this Indenture or any Notes,
in any case where any Interest Payment Date, Stated Maturity or Maturity of any
Note, or the last date on which a Holder has the right to convert or exchange
Notes of a series that are convertible or exchangeable, shall not be a Business
Day at any Place of Payment, then (notwithstanding any other provision of this
Indenture, any Note or any Coupon other than a provision in any Note or Coupon
that specifically states that such provision shall apply in lieu hereof) payment
need not be made at such Place of Payment on such date, and such Notes need not
be converted or exchanged on such date, but such payment may be made, and such
Notes may be converted or exchanged, on the next succeeding day that is a
Business Day at such Place of Payment, and no interest shall accrue on the
amount payable on such date or at such time for the period from and after such
Interest Payment Date, Stated Maturity, Maturity or last day for conversion or
exchange, as the case may be, to such next succeeding Business Day, except that
if such next succeeding Business Day is in the next succeeding calendar month,
such payment may be made, and such Notes may be converted or exchanged, on the
immediately preceding Business Day (in the case of each of the foregoing, with
the same force and effect as if made on such Interest Payment Date or at such
Stated Maturity or Maturity or on such last day for conversion or exchange, as
the case may be).


                                       15


      Section 1.14 Counterparts.

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

      Section 1.15 Judgment Currency.

      The Company agrees, to the fullest extent that it may effectively do so
under applicable law, that (a) if for the purpose of obtaining judgment in any
court it is necessary to convert the sum due in respect of the principal of, or
premium or interest, if any, (the "Required Currency") into a currency in which
a judgment will be rendered (the "Judgment Currency"), the rate of exchange used
shall be the rate at which in accordance with normal banking procedures the
Trustee could purchase in The City of New York the requisite amount of the
Required Currency with the Judgment Currency on the New York Banking Day
preceding the day on which a final unappealable judgment is given and (b) its
obligations under this Indenture to make payments in the Required Currency (i)
shall not be discharged or satisfied by any tender, or any recovery pursuant to
any judgment (whether or not entered in accordance with clause (a)), in any
currency other than the Required Currency, except to the extent that such tender
or recovery shall result in the actual receipt, by the payee, of the full amount
of the Required Currency expressed to be payable in respect of such payments,
(ii) shall be enforceable as an alternative or additional cause of action for
the purpose of recovering in the Required Currency the amount, if any, by which
such actual receipt shall fall short of the full amount of the Required Currency
so expressed to be payable and (iii) shall not be affected by judgment being
obtained for any other sum due under this Indenture. For purposes of the
foregoing, "New York Banking Day" means any day except a Saturday, Sunday or a
legal holiday in The City of New York or a day on which banking institutions in
The City of New York are authorized or obligated by law, regulation or executive
order to be closed.

      Section 1.16 No Security Interest Created.

      Subject to the provisions of Section 10.4, nothing in this Indenture or in
any Notes, express or implied, shall be construed to constitute a security
interest under the Uniform Commercial Code or similar legislation, as now or
hereafter enacted and in effect in any jurisdiction where property of the
Company or its Subsidiaries is or may be located.

      Section 1.17 Limitation on Individual Liability.

      No recourse under or upon any obligation, covenant or agreement contained
in this Indenture or in any Note, or for any claim based thereon or otherwise in
respect thereof, shall be had against any incorporator, shareholder, officer or
director, as such, past, present or future, of the Company, either directly or
through the Company, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that this Indenture and the obligations issued hereunder
are solely corporate obligations, and that no such personal liability whatever
shall attach to, or is or shall be incurred by, the incorporators, shareholders,
officers or directors, as such, of the Company, or any of them, because of the
creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any Note
or implied


                                       16


therefrom; and that any and all such personal liability of every name and
nature, either at common law or in equity or by constitution or statute, of, and
any and all such rights and claims against, every such incorporator,
shareholder, officer or director, as such, because of the creation of the
indebtedness hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in any Note or implied
therefrom, are hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issuance of such
Note.

                                   ARTICLE 2

                                   NOTES FORMS

      Section 2.1 Forms Generally

      Each Note issued pursuant to this Indenture shall be in bearer form,
substantially in the forms included as Exhibit A1 or Exhibit A2, as applicable,
to this Indenture or in such other form as shall be established in or pursuant
to a Board Resolution and set forth in an Officers' Certificate, or established
in one or more indentures supplemental hereto, in each case, with terms
established in or pursuant to a Board Resolution and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto, and
shall have such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by or pursuant to this Indenture or any
indenture supplemental hereto and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the officers executing such Note or
Coupon as evidenced by their execution of such Note or Coupon, 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 Notes
may be listed. Definitive Notes and definitive 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 may be produced in any other
manner, all as determined by the officers of the Company executing such Notes or
Coupons, as evidenced by their execution of such Notes or Coupons.

      Section 2.2 Temporary Global Note; Permanent Global Note; Definitive Note

            (a) The Notes shall be issued from time to time initially in the
      form of a temporary global note (a "Temporary Global Note"). As provided
      herein, interests in a Temporary Global Note will be exchangeable for
      interests in the relevant permanent global note (a "Permanent Global Note"
      and, together with the Temporary Global Note, collectively referred to as
      "Global Notes") or, if specified with respect to any series Notes pursuant
      to Section 3.1, directly for Definitive Notes (as hereinafter defined), on
      or after the applicable Exchange Date (as hereinafter defined). As
      provided herein, interests in a Permanent Global Note will be exchanged,
      upon 45 days' notice by a holder of an interest in such Permanent Global
      Note for Notes in definitive bearer form with, where applicable, interest
      Coupons attached, representing the interest payable thereon ("Definitive
      Notes"). The forms of Global Notes and Definitive Notes are attached
      hereto as Exhibit A1 and Exhibit A2. Each Global Note shall be deposited
      with the Common Depositary, which shall hold such Global Note in safe
      custody for the account


                                       17


      of Euroclear and/or Clearstream and instruct Euroclear or Clearstream or
      both of them, as the case may be, to credit the principal amounts of the
      Notes represented by such Global Note to the Issuing and Paying Agent's
      distribution account with Euroclear or Clearstream.

            (b) (i) On or after the applicable Exchange Date, each relevant
      Temporary Global Note shall be exchangeable in whole or from time to time
      in part for an interest, equal to the principal amount of the part of such
      Temporary Global Note being exchanged, in a single Permanent Global Note
      or, if applicable, for Definitive Notes in the same principal amount, upon
      request of Euroclear or Clearstream to the Issuing and Paying Agent, but
      only upon delivery by Euroclear or Clearstream, acting on behalf of the
      beneficial owners of such interests, to the Issuing and Paying Agent at
      its principal office in London, of certificates substantially in the form
      of Exhibit B hereto. A beneficial owner of Notes desiring to exchange his
      beneficial interest in the relevant Temporary Global Note for an interest
      in the relevant Permanent Global Note shall instruct Euroclear or
      Clearstream to request such exchange on his behalf and shall deliver to
      Euroclear or Clearstream a certificate, appropriately completed and
      signed, substantially in the form set forth in Exhibit C hereto, copies of
      which shall be available from the offices of Euroclear or Clearstream, the
      Trustee, the Issuing and Paying Agent and each other paying agency as may
      be appointed by the Company. The delivery to the Issuing and Paying Agent
      by Euroclear or Clearstream of any certificate in the form referred to
      above may be relied upon by the Company, the Trustee and the Issuing and
      Paying Agent as conclusive evidence that related certificates have been
      delivered to Euroclear or Clearstream as contemplated by the terms of this
      Section 2.2.

            (ii) Subject to Section 2.2(b)(i) above, when a Temporary Global
      Note is to be exchanged in whole or in part for interests in a Permanent
      Global Note of the same series, the Trustee or the Issuing and Paying
      Agent, upon receipt of such Permanent Global Note from the Company, which
      shall be executed by and delivered by the Company to the Trustee or the
      Issuing and Paying Agent, is authorized and it shall (A) authenticate such
      Permanent Global Note in accordance with the terms of this Indenture and
      (B) deliver such Permanent Global Note to the Common Depositary which is
      holding the Temporary Global Note applicable to such series on behalf of
      Euroclear and Clearstream either in exchange for such Temporary Global
      Note or, in the case of a partial exchange, a corresponding reduction in
      the principal amount of the Temporary Global Note which reduction shall be
      endorsed on such Temporary Global Note.

            (iii) The term "Exchange Date" shall mean the first Business Day
      occurring no earlier than the date that is 40 days after (A) in the case
      of a series of Notes in respect of which there is only one Dealer, the
      date certified by the relevant Dealer to the Trustee and the Issuing and
      Paying Agent as being the date as of which distribution of the Notes of
      that series was completed, (B) in the case of a series of Notes in respect
      of which there is more than one Dealer but is not issued on a syndicated
      basis, the latest of the dates certified by all of the relevant Dealers to
      the Trustee and the Issuing and Paying Agent as being the respective date
      as of which distribution of the Notes of that series purchased by each
      such Dealer was completed, (C) in the case of a series of Notes issued on
      a syndicated basis, the date certified by the lead manager to the Trustee
      and the Issuing and Paying Agent as being


                                       18


      the date as of which distribution of the Notes of that series was
      completed, (D) in the case of a series of Notes in respect of which a
      Person other than a Dealer has purchased with a view to distribution, the
      date certified by such Person to the Trustee and the Issuing and Paying
      Agent as being the date as of which the distribution was completed or (E)
      in the case of a series of Notes sold directly to investors, the date
      certified by the Company to the Trustee and the Issuing and Paying Agent
      as being the date as of which the distribution was completed. Upon
      determining the Exchange Date, the Issuing and Paying Agent shall notify
      the Company, Euroclear, Clearstream and the relevant Dealers or persons of
      such determination.

            (c) In accordance with the terms of a Permanent Global Note and this
      Indenture, the Issuing and Paying Agent shall deliver at the cost of the
      Company, upon not less than 45 days' notice to the Issuing and Paying
      Agent by Euroclear or Clearstream, the relevant Definitive Notes in
      exchange for interests in such Permanent Global Note. If so specified with
      respect to a particular series of Notes, the Issuing and Paying Agent
      shall deliver, upon not less than 45 days' notice to the Issuing and
      Paying Agent by Euroclear or Clearstream, the relevant Definitive Notes in
      exchange for interests in a Temporary Global Note, in accordance with the
      terms of the Temporary Global Note and this Indenture. For this purpose,
      the Issuing and Paying Agent is authorized and it shall (A) authenticate
      each such Definitive Note and (B) deliver each such Definitive Note, with
      Coupons attached, to or to the order of Euroclear or Clearstream, in
      exchange for interests in such Permanent Global Note or interests in such
      Temporary Global Note, as the case may be. The Issuing and Paying Agent
      shall promptly notify the Company upon receipt of a request for issue of
      Definitive Notes the aggregate principal amount of the relevant Permanent
      Global Note or interests in a Temporary Global Note to be exchanged in
      connection therewith. The Company undertakes to deliver to, or to the
      order of, the Issuing and Paying Agent sufficient numbers of duly executed
      Definitive Notes, with Coupons attached to enable the Issuing and Paying
      Agent to comply with its obligations under this Section 2.2(c). Such
      exchange shall be made free of charge to the holder and the beneficial
      owners of the relevant Permanent Global Note or Temporary Global Note, as
      the case may be, and to the holders of the Definitive Notes issued in
      exchange as provided above, except that a Person receiving Definitive
      Notes must bear the cost of insurance, postage, transportation and the
      like in the event that such Person does not receive such Definitive Notes
      in person at the offices of an Issuing and Paying Agent. Notwithstanding
      the above, interests in a Permanent Global Note shall be exchangeable in
      whole (but not in part) at the cost of the Company for Definitive Notes if
      either Euroclear or Clearstream or any other relevant clearing system
      should cease to operate as a clearing system (other than by reason of
      public holiday) or should announce an intention to permanently cease
      business and it shall not be practicable to transfer the relevant Notes to
      another clearing system within 90 days.

            (d) Upon any exchange of all or a portion of an interest in a
      Temporary Global Note for an interest in a Permanent Global Note or for
      Definitive Notes, or upon any exchange of an interest in a Permanent
      Global Note for Definitive Notes, the relevant Global Note shall be
      endorsed by the Trustee or the Issuing and Paying Agent to reflect the
      reduction of its principal amount by the aggregate principal amount so
      exchanged


                                       19


      and, where an interest in a Temporary Global Note is exchanged for an
      interest in the Permanent Global Note, the Permanent Global Note shall be
      endorsed by the Trustee or the Issuing and Paying Agent, or on its behalf,
      to reflect the increase in its principal amount as a result of such
      exchange. Until exchanged in full, the holder of any interest in any
      Global Note shall in all respects be entitled to the same benefits under
      this Indenture as Definitive Notes authenticated and delivered hereunder
      except that, as provided below, neither the holder nor the beneficial
      owners of a Temporary Global Note shall be entitled to receive payment of
      interest thereon. Once exchanged in full, a Global Note shall be canceled
      and disposed of by the Trustee in accordance with its customary procedures
      and a certificate of disposition will be sent to the Company.

            (e) The Trustee or the Issuing and Paying Agent shall cause all
      Temporary Global Notes, Permanent Global Notes and Definitive Notes
      delivered to it and held by it hereunder to be maintained in safe custody
      in accordance with this Section 2.2, and shall ensure that such Notes are
      issued only in accordance with the provisions of this Indenture.

            (f) The Trustee and the Issuing and Paying Agent shall be entitled
      to treat a telephone, telex or facsimile communication from a person
      purporting to be (and who the Trustee or the Issuing and Paying Agent
      believe in good faith to be) the authorized representative of the Company,
      named in a list furnished to the Trustee and the Issuing and Paying Agent
      from time to time, as sufficient instructions and authority of the Company
      for the Trustee and the Issuing and Paying Agent to act in accordance with
      this Section 2.2.

            (g) Interest payable in respect of a beneficial interest in a
      Temporary Global Note on an Interest Payment Date occurring prior to the
      applicable Exchange Date shall be paid only upon delivery by Euroclear or
      Clearstream, as the case may be, acting on behalf of the owner of such
      beneficial interest in such Temporary Global Note to the Issuing and
      Paying Agent on such Interest Payment Date, of a certificate substantially
      in the form set forth in Exhibit B hereto. In order to receive such
      interest payment, a beneficial owner of Notes shall deliver to Euroclear
      or Clearstream, as the case may be, a certificate, appropriately completed
      and signed, substantially in the form set forth in Exhibit C hereto.

      Section 2.3 Form of Trustee's Certificate of Authentication.

      Subject to Section 6.11, the Trustee's certificate of authentication shall
be in substantially the following form:


                                       20


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

                                          JPMORGAN CHASE BANK, N.A.,
                                                   as Trustee

                                          By:
                                              ----------------------------------
                                                   Authorized Officer

      Section 2.4 Notes in Global Form.

      Notes issued in global form shall provide that it or any number of such
Notes shall represent the aggregate amount of all Outstanding Notes 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 Notes represented thereby may from time to time be increased or
reduced to reflect exchanges. Any endorsement of any Note in global form to
reflect the amount, or any increase or decrease in the amount, or changes in the
rights of Holders, of Outstanding Notes represented thereby shall be made in
such manner and by such Person or Persons as shall be specified therein or in
the Company Order to be delivered pursuant to Section 3.3 with respect thereto.
Subject to the provisions of Section 3.3, the Trustee or the Issuing and Paying
Agent shall deliver and redeliver, in each case at the Company's expense, any
Note 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 3.3 has been, or simultaneously is, delivered,
any instructions by the Company with respect to a Note in global form shall be
in writing but need not be accompanied by or contained in an Officers'
Certificate and need not be accompanied by an Opinion of Counsel.

      Section 2.5 Transfer of Notes.

      Title to the Notes and Coupons, if any, shall pass by delivery. However,
title to Notes issued in the form of Global Notes held through Euroclear and
Clearstream shall be transferable only in accordance with the rules and
procedures of Euroclear and Clearstream, as appropriate.

                                   ARTICLE 3

                                    THE NOTES

      Section 3.1 Amount Unlimited; Issuable in Series.

      The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is unlimited. The Notes may be issued in one or
more series. Notes may be issued with the same terms (including maturity and
interest payment terms) as previously issued Notes, except for the issue date,
issue price and the first payment of interest. Except as provided in the second
succeeding paragraph, all Notes issued on the same date, being denominated in
the same currency and having the same interest rate (or, in the case of floating
rate Notes, the same interest rate formula) and Maturity will be deemed to
constitute a single series of Notes.


                                       21


      With respect to any Notes to be authenticated and delivered hereunder,
there shall be established in or pursuant to a Board Resolution and set forth in
an Officers' Certificate, or established in one or more indentures supplemental
hereto,

            (1) the title and series of such Notes;

            (2) the total principal amount of the series of such Notes and
      whether there shall be any limit upon the aggregate principal amount of
      such Notes that may be authenticated and delivered under this Indenture
      (except for Notes authenticated and delivered upon exchange of, or in lieu
      of, other Notes of such series pursuant to Section 3.4, 3.5, 9.5 or 11.7);

            (3) if such Notes are to be issuable with Coupons, without Coupons
      or both, and any restrictions applicable to the offer, sale or delivery of
      the Notes;

            (4) if any of such Notes are to be issuable in global form, when any
      of such Notes are to be issuable in global form and (i) whether such Notes
      are to be issued in temporary or permanent global form or both, (ii)
      whether beneficial owners of interests in any such Global Note may
      exchange such interests for Notes of the same series and of like tenor and
      of any authorized form and denomination, and the circumstances under which
      any such exchanges may occur, and (iii) the name of the Common Depositary
      with respect to any such Global Note;

            (5) if any of such Notes are to be issuable as Definitive Notes or
      in global form, the date as of which any such Definitive Note or Global
      Note shall be dated (if other than the date of original issuance of the
      first of such Notes to be issued);

            (6) whether interest in respect of any portion of a Temporary Global
      Note payable in respect of an Interest Payment Date therefor prior to the
      exchange, if any, of such Temporary Global Note for Definitive Notes or a
      Permanent Global Note shall be paid to any clearing organization with
      respect to the portion of such Temporary Global Note held for its account
      and, in such event, the terms and conditions (including any certification
      requirements) upon which any such interest payment received by a clearing
      organization will be credited to the Persons entitled to interest payable
      on such Interest Payment Date;

            (7) the date or dates, or the method or methods, if any, by which
      such date or dates shall be determined, on which the principal of and
      premium, if any, on the Notes shall be payable;

            (8) the Person to whom any interest on a Note shall be payable, the
      rate or rates at which such Notes shall bear interest, if any, which rate
      may be zero in the case of certain Notes issued at an issue price
      representing a discount from the principal amount payable at Maturity, or
      the method by which such rate or rates will be determined (including, if
      applicable, any remarketing option or similar method), and the date or
      dates from which such interest, if any, will accrue or the method by which
      such date or dates will be determined, and the basis upon which interest
      shall be calculated if other than that of a 360 day year of twelve 30-day
      months;


                                       22


            (9) the date or dates on which interest, if any, on a Note shall be
      payable;

            (10) if in addition to or other than London, the place or places
      where the principal of or any premium or interest on such Notes shall be
      payable, where any of such Notes may be surrendered for exchange, and
      where any such Notes may be surrendered for conversion or exchange and
      notices of demands to or upon the Company in respect of such Notes and
      this Indenture may be served, the extent to which and the manner in which,
      any interest payment on a Global Note on an Interest Payment Date, will be
      paid and the manner in which any principal of or premium, if any, on any
      Global Note will be paid;

            (11) if such Notes are to be redeemable at the Company's option, the
      date or dates on which, the period or periods within which, the price or
      prices at which and the other terms and conditions upon which such Notes
      may be redeemed, in whole or in part, at the Company's option pursuant to
      any sinking fund or otherwise;

            (12) provisions specifying whether the Company shall be obligated to
      redeem, purchase or repay any of such Notes pursuant to any sinking fund
      or analogous provision or at the option of any Holder of such Notes and,
      if so, the date or dates on which, the period or periods within which, the
      price or prices at which and the other terms and conditions upon which
      such Notes shall be redeemed, purchased or repaid, in whole or in part,
      pursuant to such obligation, and any provisions for the remarketing of
      such Notes so redeemed or purchased;

            (13) if other than a minimum denomination of Euro 50,000, the
      denominations in which any Notes will be issuable;

            (14) provisions specifying whether the Notes will be convertible
      into other securities of the Company and/or exchangeable for Notes of the
      Company or other obligors and, if so, the terms and conditions upon which
      such Notes shall be so convertible or exchangeable;

            (15) if other than the principal amount, the portion of the
      principal amount (or the method by which such portion will be determined)
      of such Notes that will be payable upon acceleration or declaration of
      acceleration of the Maturity thereof pursuant to the terms of this
      Indenture;

            (16) if other than Euro, the Currency of payment, including
      composite Currencies and Foreign Currencies, of the principal of, any
      premium or interest on any of such Notes;

            (17) if other than as provided in Section 4.2, the manner in which
      the Notes of the series are to be defeased;

            (18) any index, formula or other method used to determine the amount
      of payments of principal of, or any premium or interest on such Notes;


                                       23


            (19) any deletions from, modifications of or additions to the Events
      of Default or covenants of the Company that are contained herein with
      respect to such Notes;

            (20) terms specifying whether the provisions described below under
      Section 4.2 shall be applicable to such Notes and any covenants in
      addition to those specified in Section 4.2(3) relating to the Notes of
      such series which shall be subject to covenant defeasance;

            (21) terms specifying whether any of such Notes are to be issued
      upon the exercise of warrants, and the time, manner and place for such
      Notes to be authenticated and delivered; and

            (22) any other terms of such Notes and any other deletions from or
      modifications or additions to this Indenture in respect of such Notes.

      All Notes of any one series and all Coupons, if any, appertaining to Notes
of such series shall be substantially identical except as to Currency of
payments due thereunder, denomination and the rate of interest thereon, or
method of determining the rate of interest, if any, Maturity, and the date from
which interest, if any, shall accrue and except as may otherwise be provided by
the Company in or pursuant to the Board Resolution and set forth in the
Officers' Certificate or in any indenture or indentures supplemental hereto
pertaining to such series of Notes. The terms of the Notes of any series may
provide, without limitation, that the Notes of such series shall be
authenticated and delivered by the Trustee on original issue from time to time
in accordance with such procedures as are acceptable to the Trustee (including
authentication and delivery by the Trustee on original issue from time to time
upon written order of persons designated in the Officers' Certificate or
supplemental indenture and that such persons are authorized to determine,
consistent with such Officers' Certificate or any applicable supplemental
indenture, such terms and conditions of the Notes of such series as are
specified in such Officers' Certificate or supplemental indenture). All Notes of
any one series need not be issued at the same time and, unless otherwise so
provided, a series may be reopened for issuances of additional Notes of such
series or to establish additional terms of such series of Notes. The Company
also may issue, and the Trustee may authenticate, Notes with the same terms as
previously issued Notes.

      If any of the terms of the Notes of any series shall be established by
action taken by or pursuant to a Board Resolution, the Board Resolution shall be
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of such series.

      Section 3.2 Currency; Denominations.

      Unless otherwise provided in or pursuant to this Indenture, the principal
of, and any premium and interest, if any, on, the Notes shall be payable in
Euro. Unless otherwise provided in or pursuant to this Indenture, Notes shall be
issuable in minimum denominations of Euro 50,000. Notes not denominated in Euro
shall be issuable in such denominations as are established with respect to such
Notes in or pursuant to this Indenture.

      Notes having a maturity of less than one year and in respect of which the
issue proceeds are to be accepted by the Company in the United Kingdom will: (a)
have a minimum redemption


                                       24


value of (pound)100,000 (or its equivalent in other currencies) and be issued
only to Persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the purposes of
their businesses, or who it is reasonable to expect will acquire, hold, manage
or dispose of investments (as principal or agent) for the purposes of their
businesses; or (b) be otherwise issued without contravention of Section 19 of
the Financial Services and Markets Act 2000.

      Section 3.3 Execution, Authentication, Delivery and Dating.

      Notes shall be executed on behalf of the Company by its Chairman of the
Board, a Vice Chairman, its President, its Chief Executive Officer, its Chief
Financial Officer, its Treasurer or a Vice President under its corporate seal
reproduced thereon and attested by its Secretary or one of its Assistant
Secretaries. Coupons shall be executed on behalf of the Company by the Treasurer
or any Assistant Treasurer of the Company. The signature of any of these
officers on the Notes or any Coupons appertaining thereto may be manual or
facsimile.

      Notes and any Coupons appertaining thereto 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 Notes and Coupons or did not hold such offices at the date of original
issuance of such Notes or Coupons.

      At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Notes, together with any Coupons appertaining
thereto, executed by the Company, to the Trustee for authentication and,
provided that the Board Resolution and Officers' Certificate or supplemental
indenture or indentures with respect to such Notes referred to in Section 3.1
and a Company Order for the authentication and delivery of such Notes have been
delivered to the Trustee, the Trustee in accordance with the Company Order and
subject to the provisions hereof and of such Notes shall authenticate and
deliver such Notes. In authenticating such Notes, and accepting the additional
responsibilities under this Indenture in relation to such Notes and any Coupons
appertaining thereto, the Trustee shall be entitled to receive, and shall be
fully protected in relying upon,

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

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

                  (b) such Notes, 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 binding
            obligations of the Company, enforceable in accordance with their
            terms, subject to applicable bankruptcy, insolvency, reorganization
            and other similar laws of general applicability relating to or
            affecting the enforcement of creditors' rights, to general equitable
            principles


                                       25


            and to such other qualifications as such counsel shall conclude do
            not materially affect the rights of Holders of such Notes and any
            Coupons; and

            (2) an Officers' Certificate stating that, to the best knowledge of
      the Persons executing such certificate, all conditions precedent to the
      execution, authentication and delivery of such Notes and Coupons, if any,
      appertaining thereto, have been complied with, and no event which is, or
      after notice or lapse of time would become, an Event of Default with
      respect to any of the Notes shall have occurred and be continuing.

      If all the Notes of any series are not to be issued at one time, except in
connection with the reopening of a series of Notes pursuant to the third
paragraph of Section 3.1, it shall not be necessary to deliver an Opinion of
Counsel and an Officers' Certificate at the time of issuance of each Note, but
such Opinion of Counsel and Officers' Certificate, with appropriate
modifications, shall be delivered at or before the time of issuance of the first
Note of such series. After any such first delivery, any separate written request
by an Authorized Officer of the Company or any person designated in writing by
an Authorized Officer that the Trustee authenticate and deliver Notes of such
series for original issue will be deemed to be a certification by the Company
that all conditions precedent provided for in this Indenture relating to
authentication and delivery of such Notes continue to have been complied with
and that no Event of Default or event which is, or after notice or lapse of time
would become, an Event of Default with respect to any of the Notes has occurred
or is continuing.

      The Trustee shall not be required to authenticate or to cause an
Authenticating Agent to authenticate any Notes if the issue of such Notes
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Notes and this Indenture or otherwise in a manner which is
not reasonably acceptable to the Trustee or if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken.

      Each Note shall be dated the date of its authentication.

      No Note or Coupon appertaining thereto shall be entitled to any benefit
under this Indenture or be valid or obligatory for any purpose, unless there
appears on such Note a certificate of authentication substantially in the form
provided for in Section 2.2 or 6.11 executed by or on behalf of the Trustee or
by the Authenticating Agent by the manual signature of one of its authorized
officers. Such certificate upon any Note shall be conclusive evidence, and the
only evidence, that such Note has been duly authenticated and delivered
hereunder. Except as permitted by Section 3.5, the Trustee shall not
authenticate and deliver any Note unless all Coupons appertaining thereto then
matured have been detached and cancelled.

      Section 3.4 Exchange.

      No service charge shall be made for any exchange or redemption of Notes,
but the Company may require payment of a sum sufficient to cover any stamp tax
or other governmental charge and any other reasonable expenses (including fees
and expenses of the Trustee) that may be imposed in connection with any exchange
of Notes, other than exchanges pursuant to Section 3.5, 9.5 or 11.7.


                                       26


      Except as otherwise provided in or pursuant to this Indenture, the Company
shall not be required (i) to exchange Notes of any series during a period
beginning at the opening of business 15 days before the day the Company
transmits a notice of redemption of Notes of the series selected for redemption
and ending at the close of business on the day of the transmission, or (ii) to
exchange any Note selected for redemption in whole or in part, except in the
case of any Note to be redeemed in part, the portion thereof not to be redeemed,
or (iii) to exchange any Note selected for redemption or (iv) to issue or
exchange any Note which, in accordance with its terms, has been surrendered for
repayment at the option of the Holder, except the portion, if any, of such Note
not to be so repaid.

      Section 3.5 Mutilated, Destroyed, Lost and Stolen Notes.

      If any mutilated Note or a Note with a mutilated Coupon appertaining to it
is surrendered to the Trustee, subject to the provisions of this Section 3.5,
the Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a new Note of the same series containing identical terms and
of like principal amount and bearing a number not contemporaneously outstanding,
with Coupons appertaining thereto corresponding to the Coupons, if any,
appertaining to the surrendered Note.

      If there be delivered to the Company and the Trustee (i) evidence to their
satisfaction of the destruction, loss or theft of any Note 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 Note or Coupon has been acquired by a bona fide
purchaser, the Company shall execute and, upon the Company's request the Trustee
shall authenticate and deliver, in lieu of any such destroyed, lost or stolen
Note or in exchange for the Note to which a destroyed, lost or stolen Coupon
appertains with all appurtenant Coupons not destroyed, lost or stolen, a new
Note of the same series containing identical terms and of like principal amount
and bearing a number not contemporaneously outstanding, with Coupons
appertaining thereto corresponding to the Coupons, if any, appertaining to such
destroyed, lost or stolen Note or to the Note to which such destroyed, lost or
stolen Coupon appertains.

      Notwithstanding the foregoing provisions of this Section 3.5, in case any
mutilated, destroyed, lost or stolen Note or Coupon has become or is about to
become due and payable, the Company in its discretion may, instead of issuing a
new Note, pay such Note or Coupon; provided, however, that payment of principal
of, and any premium or interest, if any, on any Notes shall, except as otherwise
provided in Section 10.2, be payable only at an Office or Agency for such Notes
located outside the United States and its possessions.

      Upon the issuance of any new Note under this Section 3.5, the Company may
require the payment of a sum sufficient to cover any stamp tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee and counsel) connected
therewith.

      Every new Note, with any Coupons appertaining thereto issued pursuant to
this Section 3.5 in lieu of any destroyed, lost or stolen Note, or in exchange
for a Note to which a destroyed, lost or stolen Coupon appertains shall
constitute a separate obligation of the Company, whether or not the destroyed,
lost or stolen Note and Coupons appertaining thereto or


                                       27


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 Notes of such series and any Coupons, if
any, duly issued hereunder.

      The provisions of this Section 3.5, as amended or supplemented pursuant to
this Indenture with respect to particular Notes or generally, shall be 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
Notes or Coupons.

      Section 3.6 Payment of Interest and Principal; Rights to Interest
Preserved.

      The Company hereby acknowledges and confirms that it is and at all times
shall remain absolutely and unconditionally obligated to pay all amounts due and
owing by it under this Indenture. So long as any of the Notes remain
Outstanding, the Company will maintain one or more paying agents in London to
whom (i) the Notes may be presented for payment and (ii) the Notes may be
presented for exchange or redemption as provided in this Indenture. The Company
may have one or more additional paying agents. Further, the Company undertakes
to ensure that it maintains an Issuing and Paying Agent in a European Union
member state that will not be obliged to withhold or deduct amounts for or on
account of tax pursuant to European Union Council Directive 2003/48/EC of June
3, 2003 on the taxation of savings income or any law implementing or complying
with, or introduced in order to conform to, such Directive. Unless otherwise
specified, the Company hereby initially appoints JPMorgan Chase Bank, N.A.,
acting through its London branch, as the Issuing and Paying Agent.

      Unless otherwise specified in respect of any series of Notes issued
pursuant to Section 3.1, all payments of principal and interest required to be
made by the Company under this Indenture (including any Additional Amounts)
shall be made, pursuant to the terms hereof, in Euro. As provided in the
applicable Calculation Agent Agreement, the Calculation Agent shall exercise due
care in determining the rate of interest payable on the Notes and shall
communicate the same to the Company, the Trustee, Euroclear, Clearstream and any
Issuing and Paying Agent in writing as soon as practicable after such
determination. The Company hereby initially appoints JPMorgan Chase Bank, N.A.,
acting through its London branch, as the Calculation Agent (the "Calculation
Agent"), with respect to the Notes issued pursuant to this Indenture.

      Unless otherwise specified in or pursuant to this Indenture or any Notes,
payment of principal of, any premium and interest on, any Note shall be made
only at the offices of the Issuing and Paying Agent located outside the United
States and its possessions, upon presentation and surrender of the Notes or
appropriate Coupons, if any, as the case may be. Such Issuing and Paying Agent
shall credit such payments to Euroclear and Clearstream with respect to that
portion of any such Note held for their respective accounts. None of the
Company, the Trustee or the Issuing and Paying Agent shall 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 Note, or
for maintaining, supervising or reviewing any records relating to beneficial
ownership interests, and each of the Company, the Trustee or the Issuing and
Paying Agent may act or refrain from acting without liability on any information
provided by Euroclear or Clearstream.


                                       28


      At the direction of the holder of any Definitive Note or Coupon, and
subject to applicable laws and regulations, payment on such Definitive Note or
Coupon will be made (against surrender thereof to the Issuing and Paying Agent)
by check drawn on a bank in a city in the country issuing the currency in which
such Definitive Note is denominated or, with respect to a holder of
(euro)1,000,000 or more in aggregate principal amount of Notes of any series (or
its equivalent in a Foreign Currency, if the currency unit is a Foreign
Currency), by wire transfer to an account denominated in such currency
maintained by such holder with a bank located outside the United States and its
possessions; provided, however, that any such wire transfer direction shall be
given to the Issuing and Paying Agent at least 15 days prior to the applicable
payment date. Any wire instructions received by the Issuing and Paying Agent for
the Notes of such series shall remain in effect until revoked by the holder.

      With respect to Notes denominated in U.S. dollars, if any, if payment in
U.S. dollars at the offices of all paying agents outside the United States and
its possessions becomes illegal or is effectively precluded because of the
imposition of exchange controls or similar restrictions on the full payment or
receipt of such amounts in U.S. dollars, the Company will appoint an office or
agent in the United States or its possessions at which such payment may be made.
Except as described in the preceding sentence, no payment on any Notes will be
made by mail to an address in the United States or its possessions or by
transfer to an account maintained by the holder in the United States or its
possessions.

      On the London Business Day prior to each date on which any payment in
respect of any Note becomes due, the Company shall transfer or cause to be
transferred, not later than 10:00 a.m. (local time in the relevant financial
center in the jurisdiction in which the payment in respect of such Notes is to
be paid), to an account specified by the Issuing and Paying Agent such amount in
the relevant currency as shall be sufficient for the purposes of such payment in
funds settled through such payment system as the Issuing and Paying Agent and
the Company may agree.

      Subject to the foregoing provisions of this Section and Section 3.4, each
Note delivered under this Indenture upon exchange for or in lieu of any other
Note shall carry the rights to interest accrued and unpaid, and to accrue, which
were carried by such other Note.

      Section 3.7 Payment of Additional Amounts.

      The Company shall, in the case of a payment to a Holder who is not a
United States person and subject to the exceptions and limitations set out
below, pay as additional interest on the Notes, such additional amounts
("Additional Amounts") as are necessary in order that the net payment by the
Company or an Issuing and Paying Agent of the principal of and interest on the
Notes or the Coupons, if any, appertaining thereto, after deduction for any
present or future tax, assessment or governmental charge of the United States
imposed with respect to the payment, will not be less than the amount provided
in the relevant series of Notes or any Coupons to be then due and payable;
provided, however, that the foregoing obligation to pay Additional Amounts shall
not apply:

            (1) to a tax, assessment or governmental charge that is imposed or
      withheld by reason of the holder, or a fiduciary, settlor, beneficiary,
      member or shareholder of the


                                       29


      holder if the holder is an estate, trust, partnership or corporation, or a
      person holding a power over an estate or trust administered by a fiduciary
      holder, being considered as:

                  (a) being or having been present or engaged in trade or
            business in the United States or having or having had a permanent
            establishment in the United States;

                  (b) having a current or former relationship with the United
            States, including a relationship as a citizen or resident;

                  (c) being or having been a personal holding company, a passive
            foreign investment company or a controlled foreign corporation with
            respect to the United States or a corporation that has accumulated
            earnings to avoid United States federal income tax; or

                  (d) being or having been a "ten-percent shareholder" of the
            obligor under the Notes as defined in section 871(h)(3) of the
            United States Internal Revenue Code or any successor provisions, or
            being a bank receiving interest described in section 881(c)(3)(A) of
            the United States Internal Revenue Code or any successor provisions;

            (2) to a holder that is not the sole beneficial owner of the Notes
      or any Coupon appertaining thereto, or a portion of either, or that is a
      fiduciary or partnership, but only to the extent that a beneficial owner
      or a beneficiary or settlor with respect to the fiduciary, or a member of
      the partnership would not have been entitled to the payment of an
      Additional Amount had the beneficial owner, beneficiary, settlor, or
      member received directly its beneficial or distributive share of the
      payment;

            (3) to a tax, assessment or governmental charge that is imposed or
      withheld by reason of the failure to comply with certification,
      identification or information reporting requirements concerning the
      nationality, residence, identity or connection with the United States of
      the holder or beneficial owner of such Notes or any Coupon appertaining
      thereto, if compliance is required by statute or by regulation of the
      United States Treasury Department as a precondition to exemption from such
      tax, assessment or governmental charge;

            (4) to a tax, assessment or governmental charge that is imposed
      otherwise than by withholding by the Company or an Issuing and Paying
      Agent from the payment;

            (5) to a tax, assessment or governmental charge that is imposed or
      withheld by reason of a change in law, regulation, or administrative or
      judicial interpretation that becomes effective more than 15 days after the
      payment becomes due or is duly provided for, whichever occurs later;

            (6) to an estate, inheritance, gift, sales, excise, State, local,
      transfer, wealth or personal property tax or any similar tax, assessment
      or governmental charge;


                                       30


            (7) to any tax, assessment or governmental charge required to be
      withheld by any Issuing and Paying Agent from any payment of principal of
      or interest on any Notes or any Coupon appertaining thereto, if such
      payment can be made without such withholding by any other Issuing and
      Paying Agent;

            (8) to any tax, assessment or governmental charge that is imposed or
      levied by reason of the presentation (where presentation is required in
      order to receive payment) of the Notes for payment on a date more than 30
      days after the date on which such payment is first made available to the
      holder or beneficial owner, except to the extent that the holder or
      beneficial owner thereof would have been entitled to the payment of an
      additional amounts hereunder had the Notes been presented for payment on
      any date during such 30-day period;

            (9) to any tax, assessment or governmental charge that would not
      have been imposed or withheld but for the treatment of the interest paid
      by the obligor as contingent interest described in section 871(h)(4) of
      the United States Internal Revenue Code or any successor provisions; or

            (10) in the case of any combination of items (1) through (9) above.

      The Notes and any Coupons appertaining thereto are subject in all cases to
any tax, fiscal or other law or regulation or administrative or judicial
interpretation applicable thereto. Except as specifically provided under this
Section 3.7 and under Section 11.10, the Company shall not be required to make
any payment with respect to any tax, assessment or governmental charge imposed
by any government or a political subdivision or taxing authority thereof or
therein

      The Company shall use commercially reasonable efforts to provide the
Trustee, upon written request, with a certificate from an internal accountant of
the Company, stamped by the relevant tax authority, evidencing any payment of
taxes in respect of which the Company has withheld or deducted, or paid any
Additional Amounts. Copies of such documentation shall be made available to the
holders of the Notes or the Issuing and Paying Agents, as applicable, upon
request therefor.

      All references in this Indenture to principal, interest and other amounts
payable hereunder shall be deemed to include references to any Additional
Amounts payable under this Section with respect to such principal, interest or
other amounts. The foregoing obligations shall survive any termination or
discharge of the Notes and this Indenture.

      At least 10 days prior to the first Interest Payment Date with respect to
a series of Notes (or if the Notes of such series shall not bear interest prior
to Maturity, the first day on which a payment of principal is made), and at
least 10 days prior to each date of payment of principal or interest if there
has been any change with respect to the matters set forth in the below-mentioned
Officers' Certificate, the Company shall furnish to the Trustee and the Issuing
and Paying Agents an Officers' Certificate instructing the Trustee and such
Issuing and Paying Agent or Issuing and Paying Agents whether such payment of
principal of and premium, if any, or interest on the Notes of such series shall
be made to Holders of Notes of such series who are not United States persons
without withholding for or on account of any tax, assessment or other


                                       31


governmental charge described above. If any such withholding shall be required,
then such Officers' Certificate shall specify by country the amount, if any,
required to be withheld on such payments to such Holders of Notes, and the
Company agrees to pay to the Trustee or such Issuing and Paying Agent the
Additional Amounts required by this Section. The Company covenants to indemnify
the Trustee and any Issuing and Paying Agent for, and to hold them harmless
against, any loss, liability or expense reasonably incurred without negligence
or bad faith on their part arising out of or in connection with actions taken or
omitted by any of them in reliance on any Officers' Certificate furnished
pursuant to this Section.

      Section 3.8 Persons Deemed Owners.

      The Company, the Trustee and any agent of the Company or the Trustee may
treat the bearer of any Note or the bearer of any Coupon as the absolute owner
of such Note or Coupon for the purpose of receiving payment thereof or on
account thereof and for all other purposes whatsoever, whether or not any
payment with respect to such Note or Coupon shall be overdue, and none of the
Company, the Trustee or 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 Note held on its behalf
by the Common Depositary shall have any rights under this Indenture with respect
to such Global Note, and such Common Depositary may be treated by the Company,
the Trustee, and any agent of the Company or the Trustee as the owner of such
Global Note for all purposes whatsoever. None of the Company, the Trustee or any
Issuing and Paying Agent 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 Note or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.

      Section 3.9 Cancellation.

      All Notes and Coupons surrendered for payment, redemption, exchange or
conversion 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
Notes and Coupons, as well as Notes and Coupons surrendered directly to the
Trustee for any such purpose, shall be cancelled promptly by the Trustee. The
Company may at any time deliver to the Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Notes so delivered shall be cancelled
promptly by the Trustee. No Notes shall be authenticated in lieu of or in
exchange for any Notes cancelled as provided in this Section, except as
expressly permitted by or pursuant to this Indenture. All cancelled Notes and
Coupons held by the Trustee shall be disposed of by the Trustee in accordance
with its customary procedures, unless by a Company Order, the Company directs
their return to it.

      All references herein to the cancellation of Notes by the Trustee or to
the delivery of Notes to the Trustee for cancellation, shall include references
to the cancellation of Notes by the Issuing and Paying Agent or to the delivery
of Notes to the Issuing and Paying Agent for cancellation.


                                       32


      Section 3.10 Computation of Interest.

      Except as otherwise provided in or pursuant to this Indenture or in any
Note, interest on the Notes shall be computed on the basis of a 360-day year of
twelve 30-day months, and percentages resulting from any calculation of the rate
of interest on floating rate Notes shall be rounded, if necessary, to the
nearest one hundred thousandth of a percentage point, with five one-millionths
of a percentage point rounded upward (for example, 9.876545% (or .09876545)
being rounded to 9.87655% (or .0987655)). In the case of floating rate Notes
denominated in currency or currency units other than Euro, all amounts used in
or resulting from that calculation shall be rounded to the smallest whole unit
of that other currency or currency unit. All Dollar amounts used in or resulting
from any calculation shall be rounded to the nearest cent (with one-half cent
being rounded upward).

                                   ARTICLE 4

                    SATISFACTION AND DISCHARGE OF INDENTURE;
                       DEFEASANCE AND COVENANT DEFEASANCE

      Section 4.1 Satisfaction and Discharge.

      Upon the direction of the Company by a Company Order, this Indenture shall
cease to be of further effect with respect to any series of Notes specified in
such Company Order and any Coupons appertaining thereto (except as to any
surviving rights of Notes of such series expressly provided for herein or
pursuant thereto), and the Trustee, on receipt of a Company Order, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture as to such series, when

            (1) either

                  (a) all Notes of such series theretofore authenticated and
            delivered and all Coupons appertaining thereto (other than (i) Notes
            and Coupons of such series which have been destroyed, lost or stolen
            and which have been replaced or paid as provided in Section 3.5,
            (ii) Coupons appertaining to Notes of such series called for
            redemption and maturing after the relevant Redemption Date whose
            surrender has been waived as provided in Section 11.6, and (iii)
            Notes 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 10.3) have been delivered to
            the Trustee for cancellation; or

                  (b) all Notes of such series and, in the case of (i) or (ii)
            of this subclause (b) 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


                                       33


            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 subclause (b)(i), (ii) or (iii) above, has
      deposited or caused to be deposited with the Trustee as trust funds in
      trust for such purpose, money in the Currency in which such Notes are
      payable in an amount sufficient to pay and discharge the entire
      indebtedness on such Notes and any Coupons appertaining thereto not
      theretofore delivered to the Trustee for cancellation, including the
      principal of, and any premium or interest, if any, on such Notes and any
      Coupons appertaining thereto, to the date of such deposit (in the case of
      Notes which have become due and payable) or to the Maturity thereof, as
      the case may be;

            (2) the Company has paid or caused to be paid all other sums payable
      hereunder by the Company with respect to the Outstanding Notes of such
      series and any Coupons appertaining thereto; and

            (3) the Company has delivered to the Trustee an Opinion of Counsel
      and an Officers' Certificate, 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.

      In the event there are Notes of two or more series hereunder, the Trustee
shall be required to execute an instrument acknowledging satisfaction and
discharge of this Indenture only if requested to do so with respect to Notes of
such series as to which it is Trustee and if the other conditions thereto are
met.

      Notwithstanding the satisfaction and discharge of this Indenture with
respect to any series of Notes, the obligations of the Company to the Trustee
(including in its capacity as Authenticating Agent, Calculation Agent and
Issuing and Paying Agent) under Section 6.6 and, if money shall have been
deposited with the Trustee pursuant to subclause (b) of clause (1) of this
Section, the obligations of the Company and the Trustee with respect to the
Notes of each series under Sections 3.5, 3.7, 4.3, 10.2 and 10.3, and with
respect to any rights to convert or exchange such Notes into securities of the
Company or another issuer, shall survive.

      Section 4.2 Defeasance and Covenant Defeasance.

            (1) Unless pursuant to Section 3.1, either or both of (i) defeasance
      of the Notes of or within a series under clause (2) of this Section 4.2
      shall not be applicable with respect to the Notes of such series or (ii)
      covenant defeasance of the Notes of or within a series under clause (3) of
      this Section 4.2 shall not be applicable with respect to the Notes of such
      series, then such provisions, together with the other provisions of this
      Section 4.2 (with such modifications thereto as may be specified pursuant
      to Section 3.1 with respect to any Notes), shall be applicable to such
      Notes and any Coupons appertaining thereto, and the Company may at its
      option by Board Resolution, at any time, with respect to such Notes and
      any Coupons appertaining thereto, elect to have Section 4.2(2) or Section
      4.2(3) be applied to such Outstanding Notes and any Coupons appertaining
      thereto upon compliance with the conditions set forth below in this
      Section 4.2.


                                       34


            (2) Upon the Company's exercise of the above option applicable to
      this Section 4.2(2) with respect to any Notes of or within a series, the
      Company shall be deemed to have been discharged from its obligations with
      respect to such Outstanding Notes and any Coupons appertaining thereto on
      the date the conditions set forth in clause (4) of this Section 4.2 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 Notes and any Coupons
      appertaining thereto, which shall thereafter be deemed to be "Outstanding"
      only for the purposes of clause (5) of this Section 4.2 and the other
      Sections of this Indenture referred to in clauses (i) and (ii) below, and
      to have satisfied all of its other obligations under such Notes and any
      Coupons appertaining thereto, and this Indenture insofar as such Notes 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: (i) the rights of Holders of such
      Outstanding Notes and any Coupons appertaining thereto to receive, solely
      from the trust fund described in clause (4) of this Section 4.2 and as
      more fully set forth in such clause, payments in respect of the principal
      of (and premium, if any) and interest, if any, on such Notes and any
      Coupons appertaining thereto when such payments are due, and any rights of
      such Holder to convert such Notes into other securities of the Company or
      exchange such Notes for securities another issuer, (ii) the obligations of
      the Company and the Trustee with respect to such Notes under Sections 3.5,
      3.7, 10.2 and 10.3, and with respect to any rights to convert such Notes
      into other securities of the Company or exchange such Notes for securities
      of another issuer, (iii) the rights, powers, trusts, duties and immunities
      of the Trustee (including in its capacity as Authenticating Agent,
      Calculation Agent and Issuing and Paying Agent) hereunder and (iv) this
      Section 4.2. The Company may exercise its option under this Section 4.2(2)
      notwithstanding the prior exercise of its option under clause (3) of this
      Section 4.2 with respect to such Notes and any Coupons appertaining
      thereto.

            (3) Upon the Company's exercise of the option to have this Section
      4.2(3) apply with respect to any Notes of or within a series, the Company
      shall be released from its obligations under Sections 10.4 and 10.5, and,
      to the extent specified pursuant to Section 3.1, any other covenant
      applicable to such Notes, with respect to such Outstanding Notes and any
      Coupons appertaining thereto, on and after the date the conditions set
      forth in clause (4) of this Section 4.2 are satisfied (hereinafter,
      "covenant defeasance"), and such Notes 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 any such
      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 Notes 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 5.1(4) or 5.1(8) or otherwise, as the case


                                       35


      may be, but, except as specified above, the remainder of this Indenture
      and such Notes and Coupons appertaining thereto shall be unaffected
      thereby.

            (4) The following shall be the conditions to application of clause
      (2) or (3) of this Section 4.2 to any Outstanding Notes 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 6.7 who shall agree to comply with the provisions of this
      Section 4.2 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 Notes and any
      Coupons appertaining thereto, (1) an amount in Dollars or in such Foreign
      Currency in which such Notes and any Coupons appertaining thereto are then
      specified as payable at Stated Maturity, or (2) Government Obligations
      applicable to such Notes and Coupons appertaining thereto (determined on
      the basis of the Currency in which such Notes 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 one day before
      the due date of any payment of principal of (and premium, if any) and
      interest, if any, on such Notes 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,
      (y) the principal of (and premium, if any) and interest, if any, on such
      Outstanding Notes and any Coupons appertaining thereto at the Maturity of
      such principal or installment of principal or premium or interest and (z)
      any mandatory sinking fund payments or analogous payments applicable to
      such Outstanding Notes and any Coupons appertaining thereto on the days on
      which such payments are due and payable in accordance with the terms of
      this Indenture and of such Notes 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 Notes and
      any Coupons appertaining thereto shall have occurred and be continuing on
      the date of such deposit.

            (d) In the case of an election under clause (2) of this Section 4.2,
      the Company shall have delivered to the Trustee an Opinion of Counsel
      stating that (i) the Company has received from the U.S. Internal Revenue
      Service a letter ruling, or there has been published by the U.S. Internal
      Revenue Service a Revenue 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


                                       36


      confirm that, the Holders of such Outstanding Notes 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 clause (3) of this Section 4.2,
      the Company shall have delivered to the Trustee an Opinion of Counsel to
      the effect that the Holders of such Outstanding Notes 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 or covenant defeasance under clause (2) or (3)
      of this Section 4.2 (as the case may be) have been complied with.

            (g) If the Notes are to be redeemed prior to the Stated Maturity
      (other than from mandatory sinking fund payments or analogous payments),
      notice of such redemption shall have been duly given pursuant to this
      Indenture or provision therefor satisfactory to the Trustee shall have
      been made.

            (h) Notwithstanding any other provisions of this Section 4.2(4),
      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
      3.1.

            (5) Unless otherwise specified in or pursuant to this Indenture or
      any Note, if, after a deposit referred to in Section 4.2(4)(a) has been
      made, a Conversion Event occurs in respect of euros or the Foreign
      Currency in which the deposit pursuant to Section 4.2(4)(a) has been made,
      the indebtedness represented by such Note 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, if any),
      and interest, if any, on, such Note as the same becomes due out of the
      proceeds yielded by converting the amount or other property deposited in
      respect of such Note into the Currency in which such Note becomes payable
      as a result of such Conversion Event based on the applicable market
      exchange rate for such Foreign Currency in effect (as nearly as feasible)
      at the time of the Conversion Event.

      The Company shall pay and indemnify the Trustee (or other qualifying
trustee, collectively for purposes of this Section 4.2(5) and Section 4.3, the
"Trustee") against any tax, fee or other charge, imposed on or assessed against
the Government Obligations deposited pursuant to this Section 4.2 or the
principal or 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 Notes and any Coupons appertaining thereto.


                                       37


      Anything in this Section 4.2 to the contrary notwithstanding, 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 clause (4) of this Section 4.2 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
Section 4.2.

      Section 4.3 Application of Trust Money.

      Subject to the provisions of the last paragraph of Section 10.3, all money
and Government Obligations (or other property as may be provided pursuant to
Section 3.1) (including the proceeds thereof) deposited with the Trustee
pursuant to Section 4.1 or 4.2 in respect of any Outstanding Notes 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 Notes and any Coupons
appertaining thereto and this Indenture, to the payment, either directly or
through any Issuing and Paying Agent (including the Company acting as its own
Issuing and Paying Agent) as the Trustee may determine, to the Holders of such
Notes and any Coupons appertaining thereto of all sums due and to become due
thereon in respect of principal (and premium, if any) and interest; but such
money and Government Obligations need not be segregated from other funds except
to the extent required by law.

      Section 4.4 Reinstatement.

            (1) If the Trustee or Issuing and Paying Agent is unable to apply
      any money or Government Obligations in accordance with Section 4.2(4) by
      reason of any legal proceeding or by reason of any order or judgment of
      any court or governmental authority enjoining, restraining or otherwise
      prohibiting such application, the Company's obligations under this
      Indenture and the Notes of the applicable series and any Coupons
      appertaining thereto issued hereunder shall be revived and reinstated as
      though no deposit has occurred pursuant to Section 4.2(4) until such time
      as the Trustee or Issuing and Paying Agent is permitted to apply all such
      money or Government Obligations in accordance with and as contemplated by
      Section 4.2(4).

            (2) If the Company's obligations under this Indenture and the Notes
      of the applicable series and any Coupons appertaining thereto issued
      hereunder shall be revived and reinstated in accordance with this Section
      4.4, the Company shall be permitted, at its discretion to withdraw all or
      a portion of the deposits made by the Company pursuant to Section 4.2(4).

            (3) If the Company elects not to withdraw any of the deposits made
      by the Company pursuant to Section 4.2(4), if and when the Trustee or
      Issuing and Paying Agent is later permitted to apply all such money or
      Government Obligations in accordance with and as contemplated by Section
      4.2(4), the rights of the Company shall be subrogated to the rights of the
      Holders of the Notes of the applicable series to receive payments from the
      money or Government Obligations deposited by the Company pursuant to
      Section 4.2(4) and held by the Trustee or Issuing and Paying Agent;
      provided


                                       38


      that if the Company shall have made any payment of principal or interest
      on the Notes of any series and any Coupons appertaining thereto because of
      the revival and reinstatement of its obligations, which payment is not
      sourced from any amounts deposited by the Company pursuant to Section
      4.2(4) (such amount, in the aggregate, being referred to as the "Company
      Paid Amount"), the Company shall be permitted, at its discretion, to
      withdraw all or a portion of the deposits made by the Company pursuant to
      Section 4.2(4) up to the Company Paid Amount.

      Section 4.5 Qualifying Trustee.

      Any trustee appointed pursuant to Section 4.2 for the purpose of holding
trust funds deposited pursuant to that Section shall be appointed under an
agreement in form acceptable to the Trustee and shall provide to the Trustee a
certificate, upon which certificate the Trustee shall be entitled to
conclusively rely, that all conditions precedent provided for herein to the
related defeasance or covenant defeasance have been complied with. In no event
shall the Trustee be liable for any acts or omissions of said trustee.

                                   ARTICLE 5

                                    REMEDIES

      Section 5.1 Events of Default.

      "Event of Default," wherever used herein with respect to Notes of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether 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),
unless such event is specifically deleted or modified in or pursuant to the
supplemental indenture, Board Resolution or Officers' Certificate establishing
the terms of such Series pursuant to this Indenture:

            (1) default in the payment of any interest on any Note of such
      series when such interest 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 any premium on any
      Note of such series when such principal or premium becomes due and payable
      at their Maturity; or

            (3) default in the deposit of any sinking fund or analogous payment
      when and as due by the terms of a Note of such series; or

            (4) default in the performance, or breach, of any covenant or
      agreement of the Company in this Indenture with respect to any Note of
      that series (other than a covenant or agreement a default in whose
      performance or whose breach is elsewhere in this Section specifically
      dealt with and other than a covenant or agreement included in this
      Indenture solely for the benefit of another series of Notes), and
      continuance of such default or breach for a period of 30 days after there
      has been given, by registered or


                                       39


      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 Notes 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) any event of default, as defined in any mortgage, indenture
      (including this Indenture), trust agreement or other instrument securing,
      evidencing or providing for any evidence of any Indebtedness of the
      Company (including guaranteed Indebtedness but excluding any Indebtedness
      that is subordinated in right of payment to the Notes of such series), as
      a result of which an aggregate principal amount exceeding $25,000,000 of
      such Indebtedness shall have been declared due and payable prior to the
      date on which it would otherwise become due and payable, and such
      acceleration shall not have been rescinded or annulled within a period of
      30 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 25% in principal amount of the Outstanding Notes
      of such series, a written notice specifying such failure to pay and
      requiring the Company to cause such acceleration to be rescinded or
      annulled or to cause such Indebtedness to be discharged and stating that
      such notice is a "Notice of Default" hereunder; or

            (6) a court of competent jurisdiction enters an order or decree
      under any applicable Bankruptcy Law that:

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

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

                  (c) orders the liquidation of the Company;

      and the order or decree remains unstayed and in effect for 60 consecutive
      days. The term "Bankruptcy Law" means title 11, U.S. Code or any similar
      federal or state law for the relief of debtors. The term "Custodian" means
      any receiver, trustee, assignee, liquidator or other similar official
      under any Bankruptcy Law.

            (7) the commencement by the Company of a voluntary proceeding under
      any applicable bankruptcy, insolvency, reorganization (other than a
      reorganization under a foreign law that does not relate to insolvency) or
      other similar law or of a voluntary proceeding seeking to be adjudicated
      insolvent or the consent by the Company to the entry of a decree or order
      for relief in an involuntary proceeding under any applicable bankruptcy,
      insolvency, reorganization or other similar law or to the commencement of
      any insolvency proceedings against it, or the filing by the Company of a
      petition or answer or consent seeking reorganization, arrangement,
      adjustment or composition of the Company or relief under any applicable
      law, or the consent by the Company to the filing of such petition or to
      the appointment of or taking possession by a custodian, receiver,
      liquidator, assignee, trustee or similar official of the Company or any
      substantial part of the property of the Company or the making by the
      Company of an assignment for the benefit of creditors, or the taking of
      corporate action by the Company in furtherance of


                                       40


      any such action or the admitting in writing by the Company of its
      inability to pay its debts generally as they become due; or

            (8) any other Event of Default provided in or pursuant to this
      Indenture with respect to Notes of such series.

      Section 5.2 Acceleration of Maturity; Rescission and Annulment.

      If an Event of Default with respect to Notes of any series at the time
Outstanding (other than an Event of Default specified in clause (6) or (7) of
Section 5.1) occurs and is continuing, then the Trustee or the Holders of not
less than 25% in principal amount of the Outstanding Notes of such series may
declare the principal of all the Notes of such series, or such lesser amount as
may be provided for in the Notes of such 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 such lesser
amount shall become immediately due and payable.

      If an Event of Default specified in clause (6) or (7) of Section 5.1
occurs, all unpaid principal of and accrued interest on the Outstanding Notes of
that series (or such lesser amount as may be provided for in the Notes of such
series) shall ipso facto become and be immediately due and payable (an "ipso
facto acceleration") without any declaration or other act on the part of the
Trustee or any Holder of any Note of that series.

      At any time after a declaration of acceleration with respect to the Notes
of any series has been made or an ipso facto acceleration has occurred 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 not less
than a majority in principal amount of the Outstanding Notes of such series, by
written notice to the Company and the Trustee, may rescind and annul such
declaration or ipso facto acceleration and its consequences if

            (1) the Company has paid or deposited with the Trustee a sum
      sufficient to pay:

                  (a) all overdue installments of any interest on all Notes of
            such series and any Coupon appertaining thereto,

                  (b) the principal of and any premium on any Notes of such
            series which have become due otherwise than by such declaration of
            acceleration or an ipso facto acceleration and interest thereon at
            the rate or rates borne by or provided for in such Notes,

                  (c) to the extent that payment of such interest is lawful,
            interest upon overdue installments of any interest at the rate or
            rates borne by or provided for in such Notes, and

                  (d) all sums paid or advanced by the Trustee hereunder and the
            reasonable compensation, expenses, disbursements and advances of the
            Trustee,


                                       41


            its agents and counsel and all other amounts due the Trustee under
            Section 6.6; and

            (2) all Events of Default with respect to Notes of such series,
      other than the non-payment of the principal of, or any premium and
      interest, if any, on Notes of such series which shall have become due
      solely by such declaration of acceleration or an ipso facto acceleration,
      shall have been cured or waived as provided in Section 5.13.

      No such rescission shall affect any subsequent default or impair any right
consequent thereon.

      Section 5.3 Collection of Indebtedness and Suits for Enforcement by
Trustee.

      The Company covenants that if a

            (1) default is made in the payment of any installment of interest on
      any Note or any Coupon appertaining thereto when such interest shall have
      become 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 any
      premium on any Note at its Maturity,

the Company shall, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Notes and any Coupons appertaining thereto, the
whole amount of money then due and payable with respect to such Notes and any
Coupons appertaining thereto, with interest upon the overdue principal, any
premium 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 Notes, and in addition thereto, such further
amount of money 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 and all other amounts due to the
Trustee under Section 6.6.

      If the Company shall fail to pay the money it is required to pay the
Trustee pursuant to the preceding paragraph forthwith upon the demand of the
Trustee, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the money 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 Notes and
any Coupons appertaining thereto and collect the monies 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 Notes and any Coupons appertaining thereto, wherever
situated. Every recovery of judgment in any such action or other proceeding
subject to the payment of the amounts due the Trustee, its agents and attorneys
under Section 6.6, shall be for the ratable benefit of the Holders of such Notes
that shall be the subject of such action or proceeding.

      If an Event of Default with respect to Notes 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 Notes of such series and any Coupons
appertaining thereto by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such


                                       42


rights, whether for the specific enforcement of any covenant or agreement in
this Indenture or such Notes or in aid of the exercise of any power granted
herein or therein, or to enforce any other proper remedy.

      Section 5.4 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 Notes
of any series or the property of the Company or such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Notes 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 any overdue principal, premium or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,

            (1) to file and prove a claim for the whole amount, or such lesser
      amount as may be provided for in the Notes of any applicable series, of
      the principal and any premium and interest in respect of the Notes and any
      Coupons appertaining thereto 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 or counsel) and of
      the Holders of Notes or any Coupons appertaining thereto allowed in such
      judicial proceeding, and

            (2) to collect and receive any monies 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 Notes or any 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 of Notes or any Coupons, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and any other amounts due the Trustee under
Section 6.6.

      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 Note or
any Coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Notes 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 Note or
any Coupon in any such proceeding.

      Section 5.5 Trustee May Enforce Claims without Possession of Notes or
Coupons.

      All rights of action and claims under this Indenture or any of the Notes
or Coupons may be prosecuted and enforced by the Trustee without the possession
of any of the Notes 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 or
judgment, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
shall be for the ratable benefit


                                       43


of each and every Holder of the Notes or Coupons in respect of which such
judgment has been recovered.

      Section 5.6 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 any premium
or interest, upon presentation of the Notes 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:

            (1) To the payment of all amounts due the Trustee and any
      predecessor Trustee under Section 6.6;

            (2) To the payment of the amounts then due and unpaid upon the Notes
      and any Coupons for principal and any premium and interest, ratably,
      without preference or priority of any kind, according to the aggregate
      amounts due and payable on such Notes and Coupons for principal and any
      premium and interest, respectively; and

            (3) The balance, if any, to the Company.

      Section 5.7 Limitations on Suits.

      No Holder of any Note of any series or any Coupons appertaining thereto
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 Notes of such series;

            (2) the Holders of a majority in principal amount outstanding of the
      Outstanding Notes of such 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 such
      indemnity as is reasonably satisfactory to it against the costs, expenses
      and liabilities to be incurred in compliance with such request;

            (4) the Trustee for 30 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 30-day period by the Holders of a
      majority in principal amount of the Outstanding Notes of such 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 or any Note to


                                       44


affect, disturb or prejudice the rights of any other such Holders or Holders of
Notes of any other series, or to obtain or to seek to obtain priority or
preference over any other 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 5.8 Unconditional Right of Holders to Receive Principal and any
Premium and Interest.

      Notwithstanding any other provision in this Indenture, the Holder of any
Note or Coupon shall have the right, which is absolute and unconditional, to
receive payment of the principal of, any premium and (subject to Sections 3.6
and 3.10) interest on such Note or payment of such Coupon, as the case may be,
on the respective Stated Maturity or Maturities therefor specified in such Note
or Coupon (or, in the case of redemption, on the Redemption Date or, in the case
of repayment at the option of such Holder if provided in or pursuant to this
Indenture, on the date such repayment is due) and to institute suit for the
enforcement of any such payment, and such right shall not be impaired without
the consent of such Holder.

      Section 5.9 Restoration of Rights and Remedies.

      If the Trustee or any Holder of a Note or a 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 each such Holder 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 each such Holder shall continue as though no such proceeding had
been instituted.

      Section 5.10 Rights and Remedies Cumulative.

      Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Notes or Coupons in the last paragraph of
Section 3.5, no right or remedy herein conferred upon or reserved to the Trustee
or to each and every Holder of a Note or a Coupon is intended to be exclusive of
any other right or remedy, and every right and remedy, to the extent permitted
by law, shall 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, to the extent permitted by law, prevent the concurrent assertion or
employment of any other appropriate right or remedy.

      Section 5.11 Delay or Omission Not Waiver.

      No delay or omission of the Trustee or of any Holder of any Note 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 any Holder of a Note or a Coupon may be exercised from time
to time, and as often as may be deemed expedient, by the Trustee or by such
Holder, as the case may be.


                                       45


      Section 5.12 Control by Holders of Notes.

      The Holders of a majority in principal amount of the Outstanding Notes 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 Notes of such
series and any Coupons appertaining thereto, provided that

            (1) such direction shall not be in conflict with any rule of law or
      with this Indenture or with the Notes of such series and would not involve
      the Trustee in personal liability,

            (2) the Trustee may take any other action deemed proper by the
      Trustee which is not inconsistent with such direction, and

            (3) such direction is not unduly prejudicial to the rights of the
      other Holders of Notes of such series not joining in such action.

      Section 5.13 Waiver of Past Defaults.

      The Holders of not less than a majority in principal amount of the
Outstanding Notes of any series on behalf of the Holders of all the Notes of
such series and any Coupons appertaining thereto may waive any past default
hereunder with respect to such series and its consequences, except a default

            (1) in the payment of the principal of, any premium or interest on,
      any Note of such series or any Coupons appertaining thereto, or

            (2) in respect of a covenant or provision hereof which under Article
      9 cannot be modified or amended without the consent of the Holder of each
      Outstanding Note 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 impair any right consequent thereon.

      Section 5.14 Waiver of Usury, Stay or Extension Laws.

      The Company covenants that (to the extent that it may lawfully do so) 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 expressly waives (to the
extent that it may lawfully do so) 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.


                                       46


      Section 5.15 Undertaking for Costs.

      All parties to this Indenture agree, and each Holder of any Note 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 any
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 5.15 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 Outstanding Notes of any series, or to any
suit instituted by any Holder for the enforcement of the payment of the
principal of (or premium, if any) or interest, if any, on any Note on or after
the respective Stated Maturities expressed in such Note (or, in the case of
redemption, on or after the Redemption Date, and, in the case of repayment, on
or after the date for repayment) or for the enforcement of the right, if any, to
convert or exchange any Note into other securities in accordance with its terms.

                                   ARTICLE 6

                                   THE TRUSTEE

      Section 6.1 Certain Rights of Trustee.

            (1) The Trustee need perform only those duties that are specifically
      set forth in this Indenture and no others, and the Trustee shall not be
      liable except for the performance of such duties and obligations as are
      specifically set forth in this Indenture, and no implied covenants or
      obligations shall be read into this Indenture against the Trustee.

            (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 case of any such certificates or opinions which by any provision hereof
      are specifically required to be furnished to the Trustee, the Trustee
      shall examine the certificates and opinions to determine whether or not
      they conform to the requirements of this Indenture, but need not confirm
      or investigate the accuracy of mathematical calculations or other facts
      stated therein.

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

                  (a) this paragraph (3) does not limit the effect of paragraphs
            (1) and (2) of this Section 6.1;


                                       47


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

                  (c) the Trustee shall not be liable with respect to any action
            it takes or omits to take in good faith in accordance with a
            direction received by it pursuant to Section 5.12; and

                  (d) 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.

            Every provision of this Indenture that in any way relates to the
      Trustee is subject to paragraphs (1), (2) and (3) of this Section 6.1.

            (4) 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.

            (5) 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 Note, together with any coupons appertaining thereto,
      to the Trustee for authentication and delivery pursuant to Section 3.3
      which shall be sufficiently evidenced as provided therein) and any
      resolution of the Board of Directors may be sufficiently evidenced by a
      Board Resolution.

            (6) 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 shall be herein specifically prescribed) may, in the
      absence of bad faith on its part, rely upon a Board Resolution, an Opinion
      of Counsel or an Officers' Certificate.

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

            (8) 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 Notes of any series or any related
      Coupons pursuant to this Indenture, unless such Holders shall have offered
      to the Trustee reasonable security or indemnity against the costs,
      expenses and liabilities which might be incurred by it in compliance with
      such request or direction.


                                       48


            (9) 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, but 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,
      personally or by agent or attorney.

            (10) 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.

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

            (12) The Trustee shall not be charged with knowledge of any default
      or Event of Default with respect to the Notes of any series unless either
      (1) such default or Event of Default is known by a Responsible Officer or
      (2) written notice of such default or Event of Default shall have been
      given to the Trustee by the Company or any other obligor on the Notes of
      any series or by any Holder of the Notes of any series, which notice shall
      refer to this Indenture and such Notes.

            (13) The Calculation Agent, the Authenticating Agent and the Issuing
      and Paying Agent shall have the same immunities, protections and
      exculpations as the Trustee set forth hereunder.

      Section 6.2 Notice of Defaults.

      Within 90 days after the occurrence of any default hereunder with respect
to the Notes of any series, the Trustee shall transmit by mail to all Holders of
Notes of such series entitled to receive reports pursuant to Section 7.3(3),
notice of such default hereunder actually known to a Responsible Officer, 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, if any),
or interest, if any, on, or any sinking fund or purchase fund installment with
respect to, any Note 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 in good
faith determine that the withholding of such notice is in the best interest of
the Holders of Notes and Coupons of such series; and provided, further, that in
the case of any default of the character specified in Sections 5.1(4) and 5.1(5)
with respect to Notes of such series, no such notice to Holders shall be given
until such default shall have become an Event of Default with respect to Notes
of such series. For the purpose of this Section 6.2, the term "default" means
any event that is, or after notice or lapse of time or both would become, an
Event of Default with respect to Notes of such series.


                                       49


      Section 6.3 Not Responsible for Recitals or Issuance of Notes.

      The recitals contained herein and in the Notes, 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
Notes or Coupons, except that the Trustee represents that it is duly authorized
to execute and deliver this Indenture, authenticate the Notes and perform its
obligations hereunder. Neither the Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Company of Notes or the proceeds
thereof.

      Section 6.4 May Hold Notes.

      The Trustee, any Issuing and Paying Agent, any Authenticating Agent or any
other agent of the Company, in its individual or any other capacity, may become
the owner or pledgee of Notes and Coupons and may otherwise deal with the
Company with the same rights it would have if it were not Trustee, Issuing and
Paying Agent, Authenticating Agent or such other agent.

      Section 6.5 Money Held in Trust.

      Except as provided in Section 4.3 and Section 10.3, money held by the
Trustee in trust hereunder need not be segregated from other funds except to the
extent required by law and shall be held uninvested. The Trustee shall be under
no liability for interest on any money received by it hereunder except as
otherwise agreed to in writing with the Company.

      Section 6.6 Compensation and Reimbursement.

      The Company agrees:

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

            (2) except as otherwise expressly provided herein, to reimburse the
      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 reasonable compensation and the expenses,
      advances and disbursements of its agents and counsel), except any such
      expense, disbursement or advance as may be attributable to its negligence
      or bad faith.

            (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 own 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, except to the extent
      that any such loss, liability or expense was due to the Trustee's
      negligence or bad faith.


                                       50


      As security for the performance of the obligations of the Company under
this Section, the Trustee for the Notes of any series shall have a claim prior
to the Notes of such series 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, if any) or interest, if any, on particular Notes or any Coupons of such
series.

      To the extent permitted by law and without prejudice to any other rights
available to the Trustee under applicable law, any compensation or expense
incurred by the Trustee after a default specified in or pursuant to Section 5.1
is intended to constitute an expense of administration under any then applicable
bankruptcy or insolvency law. "Trustee" for purposes of this Section 6.6 shall
include any predecessor Trustee but the negligence or bad faith of any Trustee
shall not affect the rights of any other Trustee under this Section 6.6.

      The provisions of this Section 6.6 shall survive the satisfaction and
discharge of this Indenture or the earlier resignation or removal of the Trustee
and shall apply with equal force and effect to the Trustee in its capacity as
Authenticating Agent, Issuing and Paying Agent and Calculation Agent.

      Section 6.7 Corporate Trustee Required; Eligibility.

      There shall at all times be a Trustee hereunder that is a Corporation
organized and doing business under the laws of the United States of America that
has a combined capital and surplus of at least $50,000,000, and that is subject
to supervision or examination by Federal or state authority. 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.

      Section 6.8 Resignation and Removal; Appointment of Successor.

            (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 pursuant to Section
      6.9.

            (2) The Trustee may resign at any time with respect to the Notes of
      one or more series by giving written notice thereof to the Company. If the
      instrument of acceptance by a successor Trustee required by Section 6.9
      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 with respect to such series.

            (3) The Trustee may be removed at any time with respect to the Notes
      of any series by Act of the Holders of a majority in principal amount of
      the Outstanding Notes of such series, delivered to the Trustee and the
      Company.

            (4) If at any time:


                                       51


            (a) the Trustee shall cease to be eligible under Section 6.7 and
      shall fail to resign after written request therefor by the Company or any
      such Holder of a Note of any series who has been a bona fide Holder of a
      Note of such series for at least six months, or

            (b) 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
      with respect to all Notes or the Notes of such series, or (ii) any Holder
      of a Note who has been a bona fide Holder of a Note 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 removal of
      the Trustee with respect to all Notes of such series 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 the Notes 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 Notes of such series (it being understood
      that any such successor Trustee may be appointed with respect to the Notes
      of one or more or all of such series and that at any time there shall be
      only one Trustee with respect to the Notes of any particular series) and
      shall comply with the applicable requirements of Section 6.9. If, within
      one year after such resignation, removal or incapacity, or the occurrence
      of such vacancy, a successor Trustee with respect to the Notes of any
      series shall be appointed by Act of the Holders of a majority in principal
      amount of the Outstanding Notes of such series delivered to the Company
      and the retiring Trustee, the successor Trustee so appointed shall,
      forthwith upon its acceptance of such appointment in accordance with the
      applicable requirements of Section 6.9, become the successor Trustee with
      respect to the Notes of such series and to that extent supersede the
      successor Trustee appointed by the Company. If no successor Trustee with
      respect to the Notes of any series shall have been so appointed within
      three months after such appointment might have been made hereunder by the
      Company or the Holders of Notes and accepted appointment in the manner
      required by Section 6.9, any Holder of a Note who has been a bona fide
      Holder of a Note 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
      the Notes of such series.

            (6) The Company shall give notice of each resignation and each
      removal of the Trustee with respect to the Notes of any series and each
      appointment of a successor Trustee with respect to the Notes of any series
      by publishing notice of such event once in an Authorized Newspaper in each
      Place of Payment for such series located outside the United States and its
      possessions. Each notice shall include the name of the successor Trustee
      with respect to the Notes of such series and the address of its Corporate
      Trust Office.


                                       52


            (7) In no event shall any retiring Trustee be liable for the acts or
      omissions of any successor Trustee hereunder.

      Section 6.9 Acceptance of Appointment by Successor.

            (1) Upon the appointment hereunder of any successor Trustee with
      respect to all Notes, such successor Trustee so appointed shall execute,
      acknowledge and deliver to the Company and 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 hereunder of the retiring
      Trustee; but, on the request of the Company or such successor Trustee or
      the Holders of at least 10% in principal amount of the applicable series
      of Notes then Outstanding, such retiring Trustee, upon payment of its
      charges, shall execute and deliver an instrument transferring to such
      successor Trustee all the rights, powers and trusts of the retiring
      Trustee and, subject to Section 10.3, 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.

            (2) Upon the appointment hereunder of any successor Trustee with
      respect to the Notes of one or more (but not all) series, the Company, the
      retiring Trustee and such successor Trustee shall execute and deliver an
      indenture supplemental hereto wherein each successor Trustee shall accept
      such appointment and which (1) shall contain such provisions as shall be
      necessary or desirable to transfer and confirm to, and to vest in, such
      successor Trustee all the rights, powers, trusts and duties of the
      retiring Trustee with respect to the Notes 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 Notes, 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 Notes of that or those series as to which the retiring
      Trustee is not retiring shall continue to be vested in the retiring
      Trustee, and (3) shall add to or change any of the provisions of this
      Indenture as shall be necessary to provide for or facilitate the
      administration of the trusts hereunder by more than one Trustee, it being
      understood that nothing herein or in such supplemental indenture shall
      constitute such Trustees co-trustees of the same trust, that each such
      Trustee shall be trustee of a trust or trusts hereunder separate and apart
      from any trust or trusts hereunder administered by any other such Trustee
      and that no Trustee shall be responsible for any notice given to, or
      received by, or any act or failure to act on the part of any other Trustee
      hereunder, and, upon the execution and delivery of such supplemental
      indenture, the resignation or removal of the retiring Trustee shall become
      effective to the extent provided therein, such retiring Trustee shall have
      no further responsibility for the exercise of rights and powers or for the
      performance of the duties and obligations vested in the Trustee under this
      Indenture with respect to the Notes of that or those series to which the
      appointment of such successor Trustee relates other than as hereinafter
      expressly set forth, 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 with respect to the Notes of
      that or those series to which the appointment of such successor Trustee
      relates; but, on request of the Company or such


                                       53


      successor Trustee, such retiring Trustee, upon payment of its charges with
      respect to the Notes of that or those series to which the appointment of
      such successor Trustee relates and subject to Section 10.3 shall duly
      assign, transfer and deliver to such successor Trustee, to the extent
      contemplated by such supplemental indenture, the property and money held
      by such retiring Trustee hereunder with respect to the Notes of that or
      those series to which the appointment of such successor Trustee relates,
      subject to its claim, if any, provided for in Section 6.6.

            (3) Upon request of any Person appointed hereunder as a 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 (1) or (2) of this
      Section, as the case may be.

            (4) No Person shall accept its appointment hereunder as a successor
      Trustee unless at the time of such acceptance such successor Person shall
      be eligible under this Article.

      Section 6.10 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 to which the Trustee shall sell or otherwise transfer all or
substantially all of its corporate trust business, shall be the successor of the
Trustee hereunder, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, provided, that such Corporation
shall be otherwise eligible under this Section. In case any Notes 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 Notes so authenticated with the
same effect as if such successor Trustee had itself authenticated such Notes.

      Section 6.11 Appointment of Authenticating Agent.

      The Trustee may appoint one or more Authenticating Agents acceptable to
the Company with respect to one or more series of Notes, and which shall be
authorized to act on behalf of the Trustee to authenticate Notes of that or
those series issued upon original issue, exchange, partial redemption or partial
repayment or pursuant to Section 3.5, and Notes 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. Wherever reference is
made in this Indenture to the authentication and delivery of Notes 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 must be acceptable to the Company and, except as
provided in or pursuant to this Indenture, shall at all times be a Corporation
that is authorized under applicable law and by its charter to act as an
Authenticating Agent and has a combined capital and surplus of at least
$50,000,000. If at any time an Authenticating Agent shall cease to be


                                       54


eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect specified in this Section.

      The Trustee hereby appoints JPMorgan Chase Bank, N.A., acting through its
London branch, as Authenticating Agent, and the Company hereby confirms that
such Authenticating Agent is acceptable to it.

      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 to which the Authenticating Agent shall
sell or otherwise transfer all or substantially all of its corporate trust
business, shall be the successor of such Authenticating Agent hereunder,
provided such Corporation shall be otherwise eligible under this Section,
without the execution or filing of any paper or any further act on the part of
the Trustee or the Authenticating Agent.

      An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and 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 may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall publish notice of such
appointment at least once in an Authorized Newspaper in the place where such
successor Authenticating Agent has its principal office if such office is
located outside the United States. 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. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section.

      The Company agrees to pay each Authenticating Agent from time to time
reasonable compensation for its services under this Section. If the Trustee
makes such payments, it shall be entitled to be reimbursed for such payments,
subject to the provisions of Section 6.6.

      If an Authenticating Agent is appointed with respect to one or more series
of Notes pursuant to this Section, the Notes 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 in substantially the
following form:

      This is one of the Notes of the series designated herein referred to in
the within-mentioned Indenture.


                                       55


                                          JPMORGAN CHASE BANK, N.A.
                                          as Trustee

                                          By
                                             -----------------------------------
                                                   as Authenticating Agent

                                          By
                                             -----------------------------------
                                                   Authorized Officer

      If all of the Notes of any series may not be originally issued at one
time, and if the Trustee does not have an office capable of authenticating Notes
upon original issuance located in a Place of Payment where the Company wishes to
have Notes of such series authenticated upon original issuance, the Trustee, if
so requested by Company Request (which writing need not be accompanied by or
contained in an Officers' Certificate by the Company), shall appoint in
accordance with this Section (and subject to such procedures as shall be
acceptable to the Trustee) an Authenticating Agent having an office in a Place
of Payment designated by the Company with respect to such series of Notes.

                                   ARTICLE 7

                         REPORTS BY TRUSTEE AND COMPANY

      Section 7.1 Reports by Trustee.

            (1) Within 60 days after September 15 of each year commencing with
      the first September 15 following the first issuance of Notes pursuant to
      Section 3.1, the Trustee shall transmit, a brief report dated as of such
      September 15 with respect to any of the events specified below in this
      Section 7.1(1), which may have occurred since the later of the immediately
      preceding September 15 and the date of this Indenture:

            (a) any change to the eligibility of the Trustee;

            (b) the character and amount of any advances made by it, as Trustee,
      which remain unpaid on the date of such report, and for the reimbursement
      of which it claims or may claim a lien or charge, prior to that of the
      Notes, on the trust estate or on property or funds held or collected by it
      as Trustee, if such advances so remaining unpaid aggregate more than
      one-half of 1 per centum of the principal amount of Notes issued pursuant
      to this Indenture that are Outstanding on such date;

            (c) any change to the amount, interest rate, and maturity date of
      all other indebtedness owing to the Trustee in its individual capacity, on
      the date of such report, by the Company, with a brief description of any
      property held as collateral security therefor;


                                       56


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

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

            (f) any additional issue of a series of Notes issued pursuant to
      this Indenture which it has not previously reported; and

            (g) any action taken by the Trustee in the performance of its duties
      under this Indenture which it has not previously reported and which in its
      opinion materially affects the Notes, except action in respect of a
      default, notice of which has been or is to be withheld by it in accordance
      with Section 6.2.

            (2) The Trustee shall transmit the reports required by Section
      7.1(1) at stated intervals of not more than 12 months, with respect to any
      of the events specified in Section 7.1(1) which may have occurred within
      the previous 12 months (but if no such event has occurred within such
      period no report need be transmitted).

            (3) Notwithstanding anything herein to the contrary, reports
      pursuant to this Section shall be transmitted by mail to all Holders of
      Notes then Outstanding as have, within the two years preceding such
      transmission, filed their names and addresses with the Trustee for that
      purpose. A copy of each such report shall, at the time of such
      transmission to Holders, be filed with each stock exchange upon which the
      Notes are then listed. The Company will notify the Trustee when the Notes
      are listed on any stock exchange.

      Section 7.2 Reports by Company

      The Company shall:

            (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
      Notes Exchange Act of 1934, as amended; or, if the Company is not required
      to file information, documents or reports pursuant to either of said
      Sections, then it shall 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 Notes
      Exchange Act of 1934, as amended, 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,


                                       57


      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, in accordance with Section 1.6(1) of this Indenture,
      to the Holders, within 30 days after the filing thereof with the Trustee,
      such summaries of any information, documents and reports required to be
      filed by the Company, pursuant to paragraphs (1) and (2) of this Section
      as may be required by rules and regulations prescribed from time to time
      by the Commission.

                                   ARTICLE 8

                         CONSOLIDATION, MERGER AND SALES

      Section 8.1 Company May Consolidate, Etc., Only on Certain Terms.

      The Company shall not consolidate with or merge into any other Person
(whether or not affiliated with the Company), or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to any
other Person (whether or not affiliated with the Company), and the Company shall
not permit any other Person (whether or not affiliated with the Company) to
consolidate with or merge into the Company or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to the
Company; unless:

            (1) either the Company shall be the continuing corporation, or the
      Person (if other than the Company) formed by such consolidation or into
      which the Company is merged or the Person which acquires by conveyance or
      transfer or by lease the properties and assets of the Company
      substantially as an entirety shall expressly assume, by an indenture
      supplemental hereto, executed and delivered to the Trustee, in form
      satisfactory to the Trustee, the due and punctual payment of the principal
      of (and premium, if any) and interest, if any, on all the Notes and any
      Coupons appertaining thereto and the performance of every covenant of this
      Indenture on the part of the Company to be performed or observed;

            (2) immediately after giving effect to such transaction, no default
      or Event of Default shall have happened and be continuing; and

            (3) the Company and the successor Person have delivered to the
      Trustee an Officers' Certificate and an Opinion of Counsel each stating
      that such consolidation, merger, conveyance or transfer or lease and such
      supplemental indenture comply with this Article and that all conditions
      precedent herein provided for relating to such transaction have been
      complied with.

      For the purpose of this Section 8.1, the term "default" means any event
that is, or after notice or lapse of time or both would become, an Event of
Default with respect to Notes of such series.


                                       58


      Section 8.2 Successor Person Substituted for Company.

      Upon any consolidation by the Company with or merger of the Company into
any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety to any Person in accordance
with Section 8.1, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; and thereafter, except in
the case of a lease, the predecessor Person shall be released from all
obligations and covenants under this Indenture, the Notes and the Coupons.

                                   ARTICLE 9

                             SUPPLEMENTAL INDENTURES

      Section 9.1 Supplemental Indentures without Consent of Holders.

      Without the consent of any Holders of Notes 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, 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 Notes; or

            (2) to add to the covenants and agreements of the Company for the
      benefit of the Holders of all or any series of Notes (as shall be
      specified in such supplemental indenture or indentures) or to surrender
      any right or power herein conferred upon the Company; or

            (3) to add to or change any of the provisions of this Indenture to
      provide that Notes may be registrable as to principal, to change or
      eliminate any restrictions on the payment of principal of, any premium or
      interest on, Notes, to permit Notes to be exchanged for Notes of other
      authorized denominations or to permit or facilitate the issuance of Notes
      in uncertificated form, provided any such action shall not adversely
      affect the interests of the Holders of Outstanding Notes of any series or
      any Coupons appertaining thereto in any material respect; or

            (4) to evidence and provide for the acceptance of appointment
      hereunder by a successor Trustee with respect to the Notes of one or more
      series and to add to or change any of the provisions of this Indenture as
      shall be necessary to provide for or facilitate the administration of the
      trusts hereunder by more than one Trustee, pursuant to the requirements of
      Section 6.9; or

            (5) to cure any ambiguity or 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,


                                       59


      provided that no such action pursuant to this clause (5) shall adversely
      affect the interests of the Holders of Notes of any series then
      Outstanding or any Coupons appertaining thereto in any material respect;
      or

            (6) to establish the form or terms of Notes of any series and any
      related Coupons as permitted by Sections 2.1 and 3.1, including the
      provisions and procedures relating to Notes convertible into or
      exchangeable for any securities of any Person (including the Company); or

            (7) to add any additional Events of Default with respect to all or
      any series of Notes (as shall be specified in such supplemental
      indenture); or

            (8) 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 Notes pursuant to Article 4, provided that any
      such action shall not adversely affect the interests of any Holder of an
      Outstanding Note of such series and any Coupons appertaining thereto or
      any other Outstanding Note or Coupon in any material respect; or

            (9) to secure payment on the Notes pursuant to Section 10.4 or
      otherwise; or

            (10) to amend or supplement any provision contained herein or in any
      supplemental indenture, provided that no such amendment or supplement
      shall materially adversely affect the interests of the Holders of any
      Notes then Outstanding and any Coupons appertaining thereto; or

            (11) to comply with the clearing system requirements of Euroclear
      and Clearstream, as appropriate, with respect to Notes that are issued in
      the form of Global Notes.

      Section 9.2 Supplemental Indentures with Consent of Holders

      With the consent of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Notes of each series 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 Company's 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 Notes of such series under
this Indenture or the Notes of such series; provided, however, that no such
supplemental indenture, without the consent of each Holder of each Outstanding
Note affected thereby, shall:

            (1) change the Stated Maturity of the principal of, or any premium
      or installment of interest on, any Note, or reduce the principal amount
      thereof or the rate (or modify the calculation of such rate) of interest
      thereon, or any premium payable upon the redemption thereof or otherwise,
      or reduce the amount of the principal of an Original Issue Discount Note
      that would be due and payable upon a declaration of acceleration of the
      Maturity thereof pursuant to Section 5.2 or the amount thereof provable in
      bankruptcy pursuant to Section 5.4, change the redemption provisions or
      adversely affect the right of


                                       60


      repayment at the option of any Holder as contemplated by Article 13, or
      change the Place of Payment, Currency in which the principal of, any
      premium or interest on, any Note 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, on or after the
      Redemption Date or, in the case of repayment at the option of the Holder,
      on or after the date for repayment), or modify any of the provisions of
      Section 3.7 in a manner that adversely affect the rights of the Holders of
      any Notes then Outstanding and any Coupons appertaining thereto; or

            (2) reduce the percentage in principal amount of the Outstanding
      Notes 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 (of 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 15.4 for quorum or
      voting; or

            (3) modify any of the provisions of this Section, Section 5.13 or
      Section 10.6, except to increase any such percentage or to provide that
      certain other provisions of this Indenture cannot be modified or waived
      without the consent of the Holder of each Outstanding Note affected
      thereby; or

            (4) make any change that adversely affects the right to convert or
      exchange any Note into or for securities of the Company or other
      securities, (whether or not issued by the Company) cash or property in
      accordance with its terms.

      A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture, which shall have been included expressly and solely
for the benefit of one or more particular series of Notes, or which modifies the
rights of the Holders of Notes 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 Notes of any other series.

      It shall not be necessary for any Act of Holders of Notes under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.

      Any consent given by any Holder of a Note under this Section 9.2 shall be
irrevocable for a period of six months after the day of execution thereof, but
may be revoked at any time thereafter by such Holder or by his successor in
title by filing written notice of such revocation with the Trustee at its
Corporate Trust Office; provided, however, that such consent shall not be
revocable after the holders of not less than a majority in aggregate principal
amount of the Notes of the series of which such Note is a part at the time
Outstanding shall have consented to such supplemental indenture. No notation on
any Note of the fact of such consent shall be necessary, but any such written
consent by the Holder of any Note shall be conclusive and binding on all future
Holders and owners of the same Note and of all Notes delivered in exchange
therefor, unless revoked in the manner and during the period provided in this
Section 9.2.


                                       61


      Section 9.3 Execution of Supplemental Indentures.

      As a condition to executing, or accepting the additional trusts created
by, any supplemental indenture permitted by this Article or the modifications
thereby of the trust 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 and an Officers' Certificate stating that all
conditions precedent provided for herein to the execution of such supplemental
indenture have been complied with. 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, or is otherwise
not reasonably acceptable to the Trustee.

      Section 9.4 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 a Note theretofore or thereafter authenticated and delivered hereunder and of
any Coupon appertaining thereto shall be bound thereby.

      Section 9.5 Reference in Notes to Supplemental Indentures.

      Notes 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 Notes 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 Notes of such series in equal aggregate principal amounts, and such
exchange shall be made without cost to the Holders.

      Section 9.6 Notice of Supplemental Indenture.

      Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to Section 9.2, the Company shall transmit to
the Holders of Outstanding Notes of any series affected thereby a notice setting
forth in general terms the substance of such supplemental indenture. Failure to
send such notice will not impair the validity of such supplemental indenture.

                                   ARTICLE 10

                                    COVENANTS

      Section 10.1 Payment of Principal, any Premium, Interest.

      The Company covenants and agrees for the benefit of the Holders of the
Notes of each series that it will duly and punctually pay the principal of, and
any premium or interest, if any, on the Notes of such series in accordance with
the terms thereof, any Coupons appertaining thereto and this Indenture. Any
interest due on any Note on or before the Maturity thereof, shall be


                                       62


payable only upon presentation and surrender of the Coupons appertaining thereto
for such interest as they severally mature. When and as paid, all Notes of such
series shall be cancelled and disposed of in accordance with the Section 3.9
hereof.

      Section 10.2 Maintenance of Office or Agency.

      The Company shall maintain in each Place of Payment for any series of
Notes an Office or Agency where Notes of such series may be presented or
surrendered for payment (subject to the following sentence), where Notes of such
series may be surrendered for exchange, where Notes of such series that are
convertible or exchangeable may be surrendered for conversion or exchange, and
where notices and demands to or upon the Company in respect of the Notes of such
series relating thereto and this Indenture may be served. The Company shall
maintain, subject to any laws or regulations applicable thereto, an Office or
Agency in a Place of Payment for each series of Notes which is located outside
the United States and its possessions where Notes of such series and any Coupons
appertaining thereto may be presented and surrendered for payment; provided,
however, that if the Notes of such series are listed on The London Stock
Exchange plc or the Luxembourg Stock Exchange or any other stock exchange
located outside the United States and its possessions and such stock exchange
shall so require, the Company shall maintain an Issuing and Paying Agent in
London, Luxembourg or any other required city located outside the United States
and its possessions, as the case may be, so long as the Notes of such series are
listed on such exchange. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of 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, exchanges, conversions, notices and demands may
be made or served at the Corporate Trust Office of the Trustee, except that
Notes of such series and any Coupons appertaining thereto may be presented and
surrendered for payment at the place specified for the purpose with respect to
such Notes as provided in or pursuant to this Indenture, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.

      Except as otherwise provided in or pursuant to this Indenture, no payment
of principal, premium or interest with respect to Notes shall be made at any
Office or Agency in the United States or its possessions or by check mailed to
any address in the United States or its possessions or by transfer to an account
maintained with a bank located in the United States or its possessions;
provided, however, if amounts owing with respect to any Notes shall be payable
in Dollars, payment of principal of, any premium or interest on, any such Note
may be made at the Corporate Trust Office of the Trustee or any Office or Agency
designated by the Company in the Borough of Manhattan, The City of New York, if
(but only if) payment of the full amount of such principal, premium or interest
at all offices outside the United States and its possessions maintained for such
purpose by the Company in accordance with this Indenture is illegal or
effectively precluded by exchange controls or other similar restrictions, and
the Company has delivered to the Trustee an opinion of counsel to that effect.

      The Company may also from time to time designate one or more other Offices
or Agencies where the Notes of one or more series may be exchanged, presented or
surrendered for any or all 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


                                       63


obligation to maintain an Office or Agency in each Place of Payment for Notes of
any series for such purposes. The Company shall 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 provided in or
pursuant to this Indenture, the Company hereby designates London as the Place of
Payment for each series of Notes and initially appoints JPMorgan Chase Bank,
N.A., acting through its London branch, as the Issuing and Paying Agent of the
Company in London for all of the foregoing purposes. The Company may
subsequently appoint a different Office or Agency in the London for the Notes of
any series.

      Section 10.3 Money for Notes Payments to Be Held in Trust.

      If the Company shall at any time act as its own Issuing and Paying Agent,
with respect to any series of Notes, it shall, on or before each due date of the
principal of, any premium or interest on, any of the Notes of such 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 Notes of such series are payable (except as otherwise
specified pursuant to Section 3.1 for the Notes of such series) sufficient to
pay the principal or any premium or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided, and
shall promptly notify the Trustee of its action or failure so to act.

      Whenever the Company shall have one or more Issuing and Paying Agents for
any series of Notes, it shall, no later than 10:00 A.M. (London time) on the
London Business Day prior to each due date of the principal of, any premium or
interest on, any Notes of such series, deposit with any Issuing and 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 or any premium or interest so becoming due, such sum to be held in
trust for the benefit of the Persons entitled thereto, and (unless such Issuing
and Paying Agent is the Trustee) the Company will promptly notify the Trustee of
its action or failure so to act.

      The Company shall cause each Issuing and Paying Agent for any series of
Notes other than the Trustee to execute and deliver to the Trustee an instrument
in which such Issuing and Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Issuing and Paying Agent shall:

            (1) hold all sums held by it for the payment of the principal of,
      any premium or interest on, Notes of such series in trust for the benefit
      of the Persons entitled thereto until such sums shall be paid to such
      Persons or otherwise disposed of as provided in or pursuant to this
      Indenture;

            (2) give the Trustee notice of any default by the Company (or any
      other obligor upon the Notes of such series) in the making of any payment
      of principal, any premium or interest on, Notes of such 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 Issuing and Paying Agent.


                                       64


      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 Issuing and Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Issuing and Paying Agent, such sums to be held
by the Trustee upon the same terms as those upon which such sums were held by
the Company or such Issuing and Paying Agent; and, upon such payment by any
Issuing and Paying Agent to the Trustee, such Issuing and Paying Agent shall be
released from all further liability with respect to such sums.

      Except as otherwise provided herein or pursuant hereto, any money
deposited with the Trustee or any Issuing and Paying Agent, or then held by the
Company, in trust for the payment of the principal of, any premium or interest
on, any Note of any series or any Coupon appertaining thereto and remaining
unclaimed for two years after such principal or any such premium or interest
shall have become due and payable shall be paid to the Company on Company
Request, or (if then held by the Company), unless otherwise required by
mandatory provisions of applicable escheat or abandoned or unclaimed property
laws, shall be discharged from such trust; and the Holder of such Note or any
Coupon appertaining thereto shall thereafter, as an unsecured general creditor,
look only to the Company for payment thereof, and all liability of the Trustee
or such Issuing and 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 Issuing and 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 in each Place of Payment for such
series, 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 nor shall it be later than two years after such principal and any
premium or interest shall have become due and payable, any unclaimed balance of
such money then remaining will be repaid to the Company.

      Section 10.4 Limitations on Pledges and Liens.

            (1) After the date of the execution and delivery of this Indenture
      and so long as any Notes shall be Outstanding, the Company will not pledge
      or otherwise subject to any lien (any such pledge or lien being
      hereinafter referred to as a "Lien") any of its property or assets to
      secure Indebtedness for money borrowed, incurred, issued, assumed or
      guaranteed by the Company without thereby expressly securing the due and
      punctual payment of the principal of and interest on the Notes equally and
      ratably with any and all other obligations and Indebtedness secured by
      such Lien, so long as any such other obligations and Indebtedness shall be
      so secured; provided, however, that this restriction shall not prohibit or
      otherwise restrict:

            (a) the Company from creating, incurring or suffering to exist upon
      any of its property or assets any Lien in favor of any Subsidiary of the
      Company;

            (b) the Company (i) from creating, incurring or suffering to exist a
      purchase money Lien upon any such property, assets, Capital Stock or
      Indebtedness acquired by the Company prior to, at the time of, or within
      one year after (1) in the case of physical property or assets, the later
      of the acquisition, completion of construction (including any improvements
      on existing property) or commencement of commercial operation of such


                                       65


      property or (2) in the case of shares of Capital Stock, Indebtedness or
      other property or assets, the acquisition of such shares of Capital Stock,
      Indebtedness, property or assets, (ii) from acquiring property or assets
      subject to Liens existing thereon at the date of acquisition thereof,
      whether or not the Indebtedness secured by any such Lien is assumed or
      guaranteed by the Company, or (iii) from creating, incurring or suffering
      to exist Liens upon any property of any Person, which Liens exist at the
      time any such Person is merged with or into or consolidated with the
      Company (or becomes a Subsidiary of the Company) or which Liens exist at
      the time of a sale or transfer of the properties of any such Person as an
      entirety or substantially as an entirety to the Company;

            (c) the Company from creating, incurring or suffering to exist upon
      any of its property or assets Liens in favor of the United States, or any
      agency, department or other instrumentality thereof, to secure progress,
      advance or other payments pursuant to any contract or provision of any
      statute (including maintaining self-insurance or participating in any fund
      in connection with worker's compensation, disability benefits,
      unemployment insurance, old age pensions or other types of social
      benefits, or joining in any other provisions or benefits available to
      companies participating in any such arrangements);

            (d) the Company from creating, incurring or suffering to exist upon
      any of its property or assets Liens securing the performance of letters of
      credit, bids, tenders, sales contracts, purchase agreements, repurchase
      agreements, reverse repurchase agreements, bankers' acceptances, leases,
      surety and performance bonds, and other similar obligations incurred in
      the ordinary course of business;

            (e) the Company from creating, incurring or suffering to exist Liens
      upon any real property acquired or constructed by the Company primarily
      for use in the conduct of its business;

            (f) the Company from entering into any arrangement with any Person
      providing for the leasing by the Company of any property or assets, which
      property or assets have been or will be sold or transferred by the Company
      to such Person with the intention that such property or assets will be
      leased back to the Company, if the obligations in respect of such lease
      would not be included as liabilities on a consolidated balance sheet of
      the Company;

            (g) the Company from creating, incurring or suffering to exist upon
      any of its property or assets Liens to secure non-recourse debt in
      connection with the Company engaging in any leveraged or single-investor
      or other lease transactions, whether (in the case of Liens on or relating
      to leases or groups of leases or the particular properties subject
      thereto) such Liens are on the particular properties subject to any leases
      involved in any of such transactions and/or the rental or other payments
      or rights under such leases or, in the case of any group of related or
      unrelated leases, on the properties subject to the leases comprising such
      group and/or on the rental or other payments or rights under such leases,
      or on any direct or indirect interest therein, and whether (in any case)
      (A) such Liens are created prior to, at the time of, or at any time after
      the entering into of such lease transactions and/or (B) such leases are in
      existence prior to, or be entered into by


                                       66


      the Company at the time of or at any time after, the purchase or other
      acquisition by the Company of the properties subject to such leases;

            (h) the Company from creating, incurring or suffering to exist (A)
      other consensual Liens in the ordinary course of business of the
      Corporation that secure Indebtedness that, in accordance with generally
      accepted accounting principles, would not be included in total liabilities
      as shown on the Company's consolidated balance sheet, or (B) Liens created
      by the Company in connection with any transaction intended by the Company
      to be a sale of property or assets of the Company, provided that such
      Liens are upon any or all of the property or assets intended to be sold,
      the income from such property or assets and/or the proceeds of such
      property or assets;

            (i) the Company from creating, incurring or suffering to exist Liens
      on property or assets financed through tax-exempt municipal obligations,
      provided that such Liens are only on the property or assets so financed;

            (j) any extension, renewal or replacement (or successive extensions,
      renewals or replacements), in whole or in part, of any of the foregoing;
      provided, however, that any such extension, renewal or replacement shall
      be limited to all or a part of the property or assets (or substitutions
      therefor) which secured the Lien so extended, renewed or replaced (plus
      improvements on such property); and

            (k) the Company from creating, incurring or suffering to exist any
      other Lien not otherwise permitted by any of the foregoing clauses (a)
      through (j) above if the aggregate amount of all secured debt of the
      Company secured by such Liens would not exceed 10% of the excess of the
      Company's consolidated assets over the consolidated liabilities as shown
      on the Company's most recent audited consolidated financial statements in
      accordance with generally accepted accounting principles.

            (2) For the purposes of this Section 10.4, any contract by which
      title is retained as security (whether by lease, purchase, title retention
      agreement or otherwise) for the payment of a purchase price shall be
      deemed to be a purchase money Lien. Nothing in this Section 10.4 shall
      apply to any Lien of any kind upon any of the properties of any character
      of the Company existing on the date of execution and delivery of this
      Indenture.

            (3) Nothing contained in this Section 10.4 or elsewhere in this
      Indenture shall prevent or be deemed to prohibit the creation, assumption
      or guaranty by the Company of any Indebtedness not secured by a Lien or
      the issuance by the Company of any debentures, notes or other evidences of
      Indebtedness not secured by a Lien, whether in the ordinary course of
      business or otherwise.

            (4) The entry by the Company into any contract, document, agreement
      or instrument (which shall include bank credit facilities and loan
      agreements), in the ordinary course of business or otherwise, which
      contract, document agreement or instrument may provide for or contain a
      right of set-off between the Company and such other party to the contract,
      document agreement or instrument shall not result in, or be


                                       67


      deemed to constitute, the creation or incurrence of a "Lien" as such term
      is used in this Indenture.

      Section 10.5 Corporate Existence.

      Subject to Article 8, the Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existences
and that of each of its Subsidiaries and its rights (charter and statutory) and
franchises; provided, however, that the foregoing shall not obligate the Company
or any of its Subsidiaries to preserve any such right or franchise if the
Company or any such Subsidiary shall determine that the preservation thereof is
no longer desirable in the conduct of its business or the business of such
Subsidiary and that the loss thereof is not disadvantageous in any material
respect to any Holder.

      Section 10.6 Waiver of Certain Covenants.

      The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Section 10.4 of this Indenture with respect
to the Notes of any series if, before the time for such compliance, the Holders
of at least a majority in principal amount of the Outstanding Notes of such
series, by Act of such Holders, either shall waive such compliance in such
instance or generally shall have waived compliance with such term, provision or
condition, but no such waiver shall extend to or affect such term, provision or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such term, provision or condition shall remain in full force
and effect. The Company shall obtain and file with the Trustee, before or after
the time for such compliance, evidence of the consent of such Holders.

      Section 10.7 Company Statement as to Compliance; Notice of Certain
Defaults.

            (1) The Company shall deliver to the Trustee, within 120 days after
      the end of each fiscal year, a written statement (which need not be
      contained in or accompanied by an Officers' Certificate) signed by the
      principal executive officer, the principal financial officer or the
      principal accounting officer of the Company, stating that

            (a) a review of the activities of the Company during such year and
      of its performance under this Indenture has been made under his or her
      supervision, and

            (b) to the best of his or her knowledge, based on such review, (a)
      the Company has complied with all the conditions and covenants imposed on
      it under this Indenture throughout such year, or, if there has been a
      default in the fulfillment of any such condition or covenant or agreement,
      specifying each such default known to him or her and the nature and status
      thereof, and (b) no event has occurred and is continuing which is, or
      after notice or lapse of time or both would become, an Event of Default,
      or, if such an event has occurred and is continuing, specifying each such
      event known to him and the nature and status thereof.

            (2) The Company shall deliver to the Trustee, within five days after
      the occurrence thereof, written notice of any Event of Default or any
      event which after notice


                                       68


      or lapse of time or both would become an Event of Default pursuant to
      clause (4) or (5) of Section 5.1.

            (3) The Trustee shall have no duty to monitor the Company's
      compliance with the covenants contained in this Article 10 other than as
      specifically set forth in this Section 10.7.

                                   ARTICLE 11

                               REDEMPTION OF NOTES

      Section 11.1 Applicability of Article.

      Except as set forth in this Article 11, or unless specified pursuant to
Section 3.1 with respect to a particular series of Notes, Notes shall not be
redeemable prior to Maturity.

      Section 11.2 Election to Redeem; Notice to Trustee.

      The election of the Company to redeem any Notes shall be evidenced by or
pursuant to a Board Resolution. In case of any redemption of Notes at the
election of the Company, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee and the Issuing and Paying
Agent of such Redemption Date and of the principal amount of Notes of such
series to be redeemed and of the provision of this Indenture or of the Notes
pursuant to which such redemption is authorized. In the case of any redemption
of Notes (a) prior to the expiration of any restriction on such redemption
provided in the terms of such Notes or elsewhere in this Indenture, or (b)
pursuant to an election of the Company which is subject to a condition specified
in the terms of such Notes or elsewhere in this Indenture, the Company shall
furnish the Trustee with an Officers' Certificate evidencing compliance with
such restriction or condition.

      Section 11.3 Selection by Trustee of Notes to be Redeemed.

      If less than all of the Notes of any series with the same issue date,
interest rate or formula, Stated Maturity and other terms are to be redeemed,
the particular Notes to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee from the Outstanding Notes of such
series not previously called for redemption, by such method as the Trustee shall
deem fair and appropriate.

      The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Notes 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 Notes shall relate, in the case of
any Notes redeemed or to be redeemed only in part, to the portion of the
principal of such Notes which has been or is to be redeemed.


                                       69


      Unless otherwise specified in or pursuant to this Indenture or the Notes
of any series, if any Note selected for partial redemption is converted into
other securities of the Company or exchanged for securities of another issuer in
part before termination of the conversion or exchange right with respect to the
portion of the Note so selected, the converted portion of such Note shall be
deemed (so far as may be) to be the portion selected for redemption. Notes which
have been converted or exchanged during a selection of Notes to be redeemed
shall be treated by the Trustee as Outstanding for the purpose of such
selection.

      Section 11.4 Notice of Redemption.

      Notice of redemption shall be given in the manner provided in Section 1.6,
not less than 30 nor more than 60 days prior to the Redemption Date, unless a
shorter period is specified in the Notes to be redeemed, to the Holders of Notes
to be redeemed. In addition, for so long as the Notes to be redeemed are listed
on the LSE and the rules of the LSE (or the U.K. Listing Authority) so require,
any notice of redemption and all other communications to the Holders of the
Notes designated for redemption shall be published in a leading daily newspaper
with general circulation in London (which is expected to be the Financial
Times).

      All notices of redemption shall state:

            (1) the Redemption Date,

            (2) the Redemption Price or, if not then ascertainable, the manner
      of calculation thereof,

            (3) if less than all Outstanding Notes of any series are to be
      redeemed, the identification (and, in the case of partial redemption, the
      principal amount) of the particular Note or Notes to be redeemed,

            (4) in case any Note is to be redeemed in part only, the notice
      which relates to such Note shall state that on and after the Redemption
      Date, upon surrender of such Note, the Holder of such Note will receive,
      without charge, a new Note or Notes of authorized denominations for the
      principal amount thereof remaining unredeemed,

            (5) that, on the Redemption Date, the Redemption Price shall become
      due and payable upon each such Note or 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 where such Notes, together (in the case of
      Notes) with all Coupons appertaining thereto, if any, maturing after the
      Redemption Date, are to be surrendered for payment of the Redemption Price
      and any accrued interest,

            (7) that the redemption is for a sinking fund, if such is the case,

            (8) that, unless otherwise specified in such notice, Notes 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


                                       70


      be deducted from the Redemption Price, unless security or indemnity
      satisfactory to the Company, the Trustee and any Issuing and Paying Agent
      is furnished,

            (9) in the case of Notes of any series that are convertible into
      Common Stock of the Company or exchangeable for other securities, the
      conversion or exchange price or rate, the date or dates on which the right
      to convert or exchange the principal of the Notes of such series to be
      redeemed will commence or terminate and the place or places where such
      Notes may be surrendered for conversion or exchange, and

            (10) Common Code and ISIN reference numbers of such Notes, if any
      (or any other numbers used by a Depository to identify such Notes).

      Notice of redemption of Notes 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 11.5 Deposit of Redemption Price.

      By no later than 10:00 AM (London time) on the London Business Day prior
to any Redemption Date, the Company shall deposit, with respect to the Notes of
any series called for redemption pursuant to Section 11.4, with the Trustee or
with an Issuing and Paying Agent (or, if the Company is acting as its own
Issuing and Paying Agent, segregate and hold in trust as provided in Section
10.3) an amount of money in the applicable Currency sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date, unless otherwise specified pursuant to Section 3.1 or in the Notes
of such series) any accrued interest on, all such Notes or portions thereof
which are to be redeemed on that date.

      Section 11.6 Notes Payable on Redemption Date.

      Notice of redemption having been given as aforesaid, the Notes so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such Notes
shall cease to bear interest and the Coupons for such interest appertaining to
any Notes so to be redeemed, except to the extent provided below, shall be void.
Upon surrender of any such Note for redemption in accordance with said notice,
together with all Coupons, if any, appertaining thereto maturing after the
Redemption Date, such Note shall be paid by the Company at the Redemption Price,
together with any accrued interest to the Redemption Date; provided, however,
that, except as otherwise provided in or pursuant to this Indenture or the Notes
of such series, installments of interest on Notes whose Stated Maturity is on or
prior to the Redemption Date shall be payable only upon presentation and
surrender of Coupons for such interest (at an Office or Agency located outside
the United States and its possessions except as otherwise provided in Section
10.2).

      If any Note surrendered for redemption shall not be accompanied by all
appurtenant Coupons maturing after the Redemption Date, such Note 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


                                       71


and any Issuing and Paying Agent harmless. If thereafter the Holder of such Note
shall surrender to the Trustee or any Issuing and 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 any interest represented by Coupons shall be payable
only upon presentation and surrender of those Coupons at an Office or Agency for
such Note located outside of the United States and its possessions except as
otherwise provided in Section 10.2.

      If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium until paid, shall bear
interest from the Redemption Date at the rate prescribed therefor in the Note.

      Section 11.7 Notes Redeemed in Part.

      Upon surrender of any Note in global form which is to be redeemed only in
part, the Company shall execute, and the Trustee shall authenticate and deliver
to the Common Depositary for such Note in global form as shall be specified in
the Company Order with respect thereto to the Trustee, without service charge, a
new Note in global form in a denomination equal to and in exchange for the
unredeemed portion of the principal of the Note in global form so surrendered.

      Section 11.8 Cancellation and Destruction of Notes

      All Notes redeemed and paid pursuant to the provisions of this Article 11
shall be cancelled and disposed of, as provided in Section 3.9, and, except in
the case of partial redemption of any Note, no Note shall be issued under this
Indenture in lieu thereof.

      Section 11.9 Optional Redemption in the Event of Change in Tax Treatment.

      All or any portion of any series of Notes may be redeemed at the election
of the Company at any time upon the giving of a notice of redemption as provided
in Section 11.4 and Section 1.6 (the "Early Tax Redemption"), solely if (i) as a
result of any change in, or amendment to, the laws (or any regulations or
rulings promulgated thereunder) of the United States, or any change in, or
amendment to, an official position regarding the application or interpretation
of such laws, regulations or rulings, which change or amendment is announced or
becomes effective on or after the date of this Indenture, the Company becomes or
will become obligated to pay Additional Amounts as set forth in Section 3.7 or
(ii) any act is taken by a taxing authority of the United States on or after the
date of this Indenture, whether or not such act is taken with respect to the
Company or any of its Affiliates, that results in a substantial probability that
the Company will or may be required to pay such Additional Amounts on such all
or any portion of one or more series of Notes, and the Company determines, in
its business judgment, that the obligation to pay such Additional Amounts cannot
be avoided by the use of reasonable measures available to the Company, not
including substitution of the obligor under such Notes; provided that,
notwithstanding Section 11.4, no such notice of redemption shall be given less
than 35 days nor more than 60 days prior to the Redemption Date. Notes redeemed
pursuant to this Section 11.9 shall be redeemed at 100% of their principal
amount, together with interest accrued thereon to the date fixed for redemption
(or, in the case of Original Issue Discount


                                       72


Notes, at their accreted value); and provided further that no Early Tax
Redemption pursuant to Section 11.9(ii) above may be made unless the Company
shall have received an Opinion of Counsel to the effect that an act taken by a
taxing authority of the United States results in a substantial probability that
it will or may be required to pay the Additional Amounts set forth in Section
3.7 and the Company shall have delivered to the Trustee an Officers'
Certificate, stating that based on such Opinion of Counsel, the Company shall be
entitled to redeem such Notes pursuant to their terms.

      Section 11.10 Special Redemption.

      If the determination is made, based on an Opinion of Counsel, in
accordance with the relevant provision of the Notes that any certification,
identification or information reporting requirements of United States law or
regulation with regard to the nationality, residence or identity of a beneficial
owner of such Notes or Coupons appertaining thereto would be applicable to a
payment of principal of or interest on such Notes or Coupons appertaining
thereto made outside the United States by the Company or a paying agent
appointed by the Company (other than a requirement that would not be applicable
to a payment made to a custodian, nominee or other agent of the beneficial
owner, or which could be satisfied by the holder, custodian, nominee or other
agent certifying that the beneficial owner is not a United States person;
provided, however, in each case that payment by a holder, custodian, nominee or
agent to the beneficial owner is not otherwise subject to any certification,
identification or information reporting requirement referred to in this
sentence), the following provisions shall be applicable:

            (1) The Company shall, promptly after it has made such
      determination, give notice to the Trustee of such determination and shall
      redeem all or the applicable portion of such series of Notes, in whole but
      not in part, at 100% of their principal amount, together with interest
      accrued to the Redemption Date (or, in the case of Original Issue Discount
      Notes, at their accreted value), as soon as practicable after such
      determination.

            (2) As soon as practicable after it has received such notice from
      the Company, the Trustee shall give prompt notice of such determination in
      accordance with the provisions of Section 11.4 and Section 1.6, stating in
      the notice the effective date of such certification, identification or
      information reporting requirements (as advised to it in writing by the
      Company) and the dates within which the redemption by the Company shall
      occur, which dates will be the dates falling on the 60th day and the 365th
      day (or the 366th day in the case of a leap year) following the date such
      notice of determination is first given. The Trustee shall send a copy of
      such notice of determination to the Company and the paying agent appointed
      by the Company.

            (3) If the Company is required to redeem all or the applicable
      portion of a series of Notes, the Company shall give notice to the Trustee
      of such redemption at least 75 days before the date fixed for redemption
      (notwithstanding Section 11.2), unless notice within a shorter period of
      time is acceptable to the Trustee.

            (4) The Company shall not so redeem any portion of such series of
      Notes, however, if it shall, based on a subsequent event, determine, based
      on an Opinion of Counsel, not less than 30 days prior to the Redemption
      Date, that no payment would be


                                       73


      subject to any requirement described above, in which case the Trustee
      shall give prompt notice of that determination in accordance with the
      provisions of Section 11.4 and Section 1.6 and any earlier redemption
      notice shall be deemed revoked and of no further effect.

            (5) In case the Company shall give notice of redemption to the
      Trustee, the Trustee shall cause to be delivered on behalf of the Company,
      at the expense of the Company, a notice of redemption, in accordance with
      the provisions of Section 11.4 and Section 1.6. The Trustee shall send a
      copy of such notice of redemption to the Company and the paying agent
      appointed by the Company.

            (6) Notwithstanding Section 11.4, any notice of redemption provided
      for in this Section 11.10 shall be given on behalf of the Company, at the
      expense of the Company not less than 60 days nor more than 90 days prior
      to Redemption Date.

            (7) Notwithstanding the above provisions of this Section 11.10, if
      and so long as the certification, identification or information reporting
      requirements referred to above in this Section 11.10 would be fully
      satisfied by payment of United States withholding, backup withholding or a
      similar tax (but without any requirement that the nationality, residence
      or identity of such Holder be disclosed to the Company or the paying agent
      appointed by the Company or any governmental authority), the Company may
      elect, prior to publication of the notice of redemption contemplated in
      this Section to pay as additional interest such Additional Amounts as are
      necessary in order that, following the effective date of such
      requirements, every net payment made outside the United States by the
      Company or a paying agent appointed by the Company of the principal of and
      interest on the applicable portion of such series of Notes or on any
      Coupon appertaining thereto eligible to be redeemed, to a Holder who is
      not a United States person, after deduction for such United States
      withholding, backup withholding or similar tax (other than a withholding,
      backup withholding or similar tax which (i) would not be applicable in the
      circumstances referred to in the parenthetical clause of the first
      sentence of this Section 11.10 pertaining to payments to a custodian,
      nominee or other agent or (ii) is described in any of the clauses (1)
      through (10) of Section 3.7 (except for Section 3.7(3), or to the extent
      involving Section 3.7(3), Section 3.7(10)), will not be less than the
      amount provided in the Notes or such Coupons to be then due and payable.

                                   ARTICLE 12

                                  SINKING FUNDS

      Section 12.1 Applicability of Article.

      Unless specified pursuant to Section 3.1 with respect to a particular
series of Notes, Notes shall not be entitled to any sinking funds.


                                       74


                                   ARTICLE 13

                       REDEMPTION AT THE OPTION OF HOLDERS

      Section 13.1 Applicability of Article.

      Unless specified pursuant to Section 3.1 with respect to a particular
series of Notes, Holders shall not have the option to require redemption of any
Notes prior to their Stated Maturity and, if the terms of a particular series of
Notes provide that they shall be redeemable at the option of the Holders of
Notes, notice of redemption shall be given by the Holders of Notes not less than
15 days prior to the date specified as the Redemption Date in such notice.

                                   ARTICLE 14

                           NOTES IN FOREIGN CURRENCIES

      Section 14.1 Applicability of Article.

      Whenever this Indenture provides for (1) any action by, or the
determination of any of the rights of, Holders of Notes of any series in which
not all of such Notes are denominated in the same Currency, or (ii) any
distribution to Holders of Notes, in the absence of any provision to the
contrary in the form of Note of any particular series or pursuant to this
Indenture or the Notes, any amount in respect of any Note denominated in a
Currency other than Dollars shall be treated for any such action or distribution
as that amount of Dollars that could be obtained for such amount on such
reasonable basis of exchange as the Company may specify in a written notice to
the Trustee.

                                   ARTICLE 15

                          MEETINGS OF HOLDERS OF NOTES

      Section 15.1 Purposes for Which Meetings May Be Called.

      A meeting of Holders of Notes 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 Act provided
by this Indenture or under applicable law, to be made, given or taken by Holders
of Notes of such series.

      Section 15.2 Call, Notice and Place of Meetings.

            (1) The Trustee may at any time call a meeting of Holders of Notes
      of any series for any purpose specified in Section 15.1, to be held at
      such time and at such place in the Borough of Manhattan, The City of New
      York, or in London or in such other place outside the United States and
      its possessions as the Trustee shall determine. Notice of every meeting of
      Holders of Notes 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


                                       75


      be given, in the manner provided in Section 1.6, not less than 21 nor more
      than 180 days prior to the date fixed for the meeting.

            (2) In case at any time the Company (by or pursuant to a Board
      Resolution) or the Holders of at least 10% in principal amount of the
      Outstanding Notes of any series or all series shall have requested the
      Trustee to call a meeting of the Holders of Notes of such series or all
      series, respectively, for any purpose specified in Section 15.1, by
      written request setting forth in reasonable detail the action proposed to
      be taken at the meeting, and the Trustee shall not have given notice in
      the manner provided in Section 1.6 of such meeting within 21 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
      Notes of such series in the amount above specified, as the case may be,
      may determine the time and the place in the Borough of Manhattan, The City
      of New York, or in London for such meeting and may call such meeting for
      such purposes by giving notice thereof as provided in clause (1) of this
      Section.

      Section 15.3 Persons Entitled to Vote at Meetings.

      To be entitled to vote at any meeting of Holders of Notes of any series, a
Person shall be (1) a Holder of one or more Outstanding Notes 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 Notes 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 Notes 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 15.4 Quorum; Action.

      The Persons entitled to vote a majority in aggregate principal amount of
the Outstanding Notes of the relevant series shall constitute a quorum for any
meeting of Holders of Notes of such series. 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 Notes 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 any reconvened meeting, such reconvened
meeting may be further adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
reconvened meeting. Notice of the reconvening of any adjourned meeting shall be
given as provided in Section 15.2(1), 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. Notice of the reconvening of an adjourned meeting shall state
expressly the percentage, as provided above, of the principal amount of the
Outstanding Notes of such series which shall constitute a quorum.

      Except as limited by the proviso to Section 9.2, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted only by the affirmative vote of the Holders of a
majority in principal amount of the Outstanding Notes of that series; provided,
however, that, except as limited by the proviso to Section 9.2, any


                                       76


resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other Act 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 Notes 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 Notes of such
series.

      Except as limited by the proviso to Section 9.2, any resolution passed or
decision taken at any meeting of Holders of Notes of any series duly held in
accordance with this Section shall be binding on all the Holders of Notes of
such series and the Coupons appertaining thereto, whether or not such Holders
were present or represented at the meeting.

      Section 15.5 Determination of Voting Rights; Conduct and Adjournment of
Meetings.

            (1) Notwithstanding any other provisions of this Indenture, the
      Trustee may make such reasonable regulations as it may deem advisable for
      any meeting of Holders of Notes of such series in regard to proof of the
      holding of Notes 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 Notes shall be proved in
      the manner specified in Section 1.4 and the appointment of any proxy shall
      be proved in the manner specified in Section 1.4 or by having the
      signature of the person executing the proxy witnessed or guaranteed by any
      trust company, bank or banker authorized by Section 1.4 to certify to the
      holding of Notes. 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 1.4 or other proof.

            (2) 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 Notes as provided in Section
      15.2(2), in which case the Company or the Holders of Notes 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 Notes of such series
      represented at the meeting.

            (3) At any meeting, each Holder of a Note of such series or proxy
      shall be entitled to one vote for each $1,000 principal amount of Notes of
      such series held or represented by him or such other amount established
      pursuant to Section 3.1; provided, however, that no vote shall be cast or
      counted at any meeting in respect of any Note 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 Note of such series or proxy.

            (4) Any meeting of Holders of Notes of any series duly called
      pursuant to Section 15.2 at which a quorum is present may be adjourned
      from time to time by


                                       77


      Persons entitled to vote a majority in principal amount of the Outstanding
      Notes of such series represented at the meeting; and the meeting may be
      held as so adjourned without further notice.

      Section 15.6 Counting Votes and Recording Action of Meetings.

      The vote upon any resolution submitted to any meeting of Holders of Notes
of any series shall be by written ballots on which shall be subscribed the
signatures of the Holders of Notes of such series or of their representatives by
proxy and the principal amounts and serial numbers of the Outstanding Notes 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 triplicate of all
votes cast at the meeting. A record, at least in triplicate, of the proceedings
of each meeting of Holders of Notes 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 facts setting forth a
copy of the notice of the meeting and showing that said notice was given as
provided in Section 15.2 and, if applicable, Section 15.4. 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.

      Section 15.7 Preservation of Rights of Trustee and Holders

      Nothing contained in this Article 15 shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Holders of any or all
series or any rights expressly or impliedly conferred hereunder to make such
call, any hindrance or delay in the exercise of any right or rights conferred
upon or reserved to the Trustee or to the Holders of any or all series under any
of the provisions of this Indenture or of such series of Notes.



                                       78


      IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, as of the date first above written.

                                          CIT GROUP INC.

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

                                          JPMORGAN CHASE BANK, N.A.,
                                                   as Trustee

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

                                          JPMorgan Chase Bank, N.A., acting
                                            through its London branch
                                               as Issuing and Paying Agent,
                                               Calculation Agent and
                                               Authenticating Agent

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

EX-4.6

                                                                     Exhibit 4.6

                                 CIT GROUP INC.,
                                   the Company

                                       and

                           JPMORGAN CHASE BANK, N.A.,

                                     Trustee

                                       and

          JPMORGAN CHASE BANK, N.A., acting through its London branch,
      Issuing and Paying Agent, Calculation Agent and Authenticating Agent

                                   ----------

                             SUBORDINATED INDENTURE

                                   ----------

                            Dated as of June 2, 2006

                               Subordinated Notes




                                Table of Contents

                                                                            Page

                                    ARTICLE 1
             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 1.1 Definitions ...................................................    1
Section 1.2 Compliance Certificates and Opinions ..........................   11
Section 1.3 Form of Documents Delivered to Trustee ........................   12
Section 1.4 Acts of Holders ...............................................   12
Section 1.5 Notices, etc. to Trustee and Company ..........................   13
Section 1.6 Notice to Holders of Notes; Waiver ............................   14
Section 1.7 Language of Notices ...........................................   15
Section 1.8 Effect of Headings and Table of Contents ......................   15
Section 1.9 Successors and Assigns ........................................   15
Section 1.10 Separability Clause ..........................................   15
Section 1.11 Benefits of Indenture ........................................   16
Section 1.12 Governing Law ................................................   16
Section 1.13 Legal Holidays ...............................................   16
Section 1.14 Counterparts .................................................   16
Section 1.15 Judgment Currency ............................................   16
Section 1.16 No Security Interest Created .................................   17
Section 1.17 Limitation on Individual Liability ...........................   17

                                    ARTICLE 2
                                   NOTES FORMS

Section 2.1 Forms Generally ...............................................   18
Section 2.2 Temporary Global Note; Permanent Global Note;
              Definitive Note .............................................   18
Section 2.3 Form of Trustee's Certificate of Authentication ...............   21
Section 2.4 Notes in Global Form ..........................................   21
Section 2.5 Transfer of Notes .............................................   22

                                    ARTICLE 3
                                    THE NOTES

Section 3.1 Amount Unlimited; Issuable in Series ..........................   22
Section 3.2 Currency; Denominations .......................................   25
Section 3.3 Execution, Authentication, Delivery and Dating ................   26
Section 3.4 Exchange 27

Section 3.5 Mutilated, Destroyed, Lost and Stolen Notes ...................   28
Section 3.6 Payment of Interest and Principal; Rights to
              Interest Preserved ..........................................   29
Section 3.7 Payment of Additional Amounts .................................   30
Section 3.8 Persons Deemed Owners .........................................   33
Section 3.9 Cancellation ..................................................   33
Section 3.10 Computation of Interest ......................................   34


                                       i



                                    ARTICLE 4
   SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE AND COVENANT DEFEASANCE

Section 4.1 Satisfaction and Discharge ....................................   34
Section 4.2 Defeasance and Covenant Defeasance ............................   35
Section 4.3 Application of Trust Money ....................................   39
Section 4.4 Reinstatement .................................................   39
Section 4.5 Qualifying Trustee ............................................   40

                                    ARTICLE 5
                                    REMEDIES

Section 5.1 Events of Default .............................................   40
Section 5.2 Acceleration of Maturity; Rescission and Annulment ............   42
Section 5.3 Collection of Indebtedness and Suits for Enforcement
            by Trustee ....................................................   43
Section 5.4 Trustee May File Proofs of Claim ..............................   44
Section 5.5 Trustee May Enforce Claims without Possession of
              Notes or Coupons ............................................   44
Section 5.6 Application of Money Collected ................................   45
Section 5.7 Limitations on Suits ..........................................   45
Section 5.8 Unconditional Right of Holders to Receive Principal and any
              Premium and Interest ........................................   46
Section 5.9 Restoration of Rights and Remedies ............................   46
Section 5.10 Rights and Remedies Cumulative ...............................   46
Section 5.11 Delay or Omission Not Waiver .................................   46
Section 5.12 Control by Holders of Notes ..................................   47
Section 5.13 Waiver of Past Defaults ......................................   47
Section 5.14 Waiver of Usury, Stay or Extension Laws ......................   47
Section 5.15 Undertaking for Costs ........................................   48

                                    ARTICLE 6
                                   THE TRUSTEE

Section 6.1 Certain Rights of Trustee .....................................   48
Section 6.2 Notice of Defaults ............................................   50
Section 6.3 Not Responsible for Recitals or Issuance of Notes .............   51
Section 6.4 May Hold Notes ................................................   51
Section 6.5 Money Held in Trust ...........................................   51
Section 6.6 Compensation and Reimbursement ................................   51
Section 6.7 Corporate Trustee Required; Eligibility .......................   52
Section 6.8 Resignation and Removal; Appointment of Successor .............   52
Section 6.9 Acceptance of Appointment by Successor ........................   54
Section 6.10 Merger, Conversion, Consolidation or Succession to Business ..   55
Section 6.11 Appointment of Authenticating Agent ..........................   55


                                       ii



                                    ARTICLE 7
                         REPORTS BY TRUSTEE AND COMPANY

Section 7.1 Reports by Trustee ............................................   57
Section 7.2 Reports by Company ............................................   58

                                    ARTICLE 8
                         CONSOLIDATION, MERGER AND SALES

Section 8.1 Company May Consolidate, Etc., Only on Certain Terms ..........   59
Section 8.2 Successor Person Substituted for Company ......................   60

                                    ARTICLE 9
                             SUPPLEMENTAL INDENTURES

Section 9.1 Supplemental Indentures without Consent of Holders ............   60
Section 9.2 Supplemental Indentures with Consent of Holders ...............   61
Section 9.3 Execution of Supplemental Indentures ..........................   63
Section 9.4 Effect of Supplemental Indentures .............................   63
Section 9.5 Reference in Notes to Supplemental Indentures .................   63
Section 9.6 Effect on Senior Indebtedness .................................   63
Section 9.7 Notice of Supplemental Indenture ..............................   63

                                   ARTICLE 10
                                    COVENANTS

Section 10.1 Payment of Principal, any Premium, Interest ..................   64
Section 10.2 Maintenance of Office or Agency ..............................   64
Section 10.3 Money for Notes Payments to Be Held in Trust .................   65
Section 10.4 Limitations on Pledges and Liens .............................   66
Section 10.5 Corporate Existence ..........................................   69
Section 10.6 Waiver of Certain Covenants ..................................   69
Section 10.7 Company Statement as to Compliance; Notice of Certain Defaults   69
Section 10.8 Limitation on Indebtedness ...................................   70

                                   ARTICLE 11
                               REDEMPTION OF NOTES

Section 11.1 Applicability of Article .....................................   70
Section 11.2 Election to Redeem; Notice to Trustee ........................   70
Section 11.3 Selection by Trustee of Notes to be Redeemed .................   71
Section 11.4 Notice of Redemption .........................................   71
Section 11.5 Deposit of Redemption Price ..................................   72
Section 11.6 Notes Payable on Redemption Date .............................   73
Section 11.7 Notes Redeemed in Part .......................................   73
Section 11.8 Cancellation and Destruction of Notes ........................   73
Section 11.9 Optional Redemption in the Event of Change in Tax Treatment ..   74
Section 11.10 Special Redemption ..........................................   74


                                      iii



                                   ARTICLE 12
                                  SINKING FUNDS

Section 12.1 Applicability of Article .....................................   76

                                   ARTICLE 13
                       REDEMPTION AT THE OPTION OF HOLDERS

Section 13.1 Applicability of Article .....................................   76

                                   ARTICLE 14
                           NOTES IN FOREIGN CURRENCIES

Section 14.1 Applicability of Article .....................................   76

                                   ARTICLE 15
                          MEETINGS OF HOLDERS OF NOTES

Section 15.1 Purposes for Which Meetings May Be Called ....................   77
Section 15.2 Call, Notice and Place of Meetings ...........................   77
Section 15.3 Persons Entitled to Vote at Meetings .........................   77
Section 15.4 Quorum; Action ...............................................   78
Section 15.5 Determination of Voting Rights; Conduct and Adjournment
               of Meetings ................................................   78
Section 15.6 Counting Votes and Recording Action of Meetings ..............   79
Section 15.7 Preservation of Rights of Trustee and Holders ................   80

                                   ARTICLE 16
                           SUBORDINATION OF SECURITIES

Section 16.1 Agreement to Subordinate .....................................   80
Section 16.2 Default on Senior Indebtedness ...............................   80
Section 16.3 Liquidation; Dissolution; Bankruptcy .........................   81
Section 16.4 Subrogation ..................................................   82
Section 16.5 Trustee to Effectuate Subordination ..........................   83
Section 16.6 Notice by the Company ........................................   83
Section 16.7 Rights of the Trustee; Holders of Senior Indebtedness ........   84
Section 16.8 Subordination May Not Be Impaired ............................   85

EXHIBIT A1--Form of Fixed Rate Global Notes and Definitive Notes
EXHIBIT A2--Form of Floating Rate Global Notes and Definitive Notes
EXHIBIT B--Form of Certificate of Instructions from Euroclear/Clearstream
EXHIBIT C--Form of Certificate for Instruction from Beneficial Holder to
Euroclear/Clearstream


                                       iv



      SUBORDINATED INDENTURE, dated as of June 2, 2006 (the "Indenture"), among
CIT Group Inc., a corporation duly organized and existing under the laws of the
State of Delaware (the "Company"), JPMorgan Chase Bank, N.A., as trustee (the
"Trustee"), and JPMorgan Chase Bank, N.A., acting through its London branch, as
issuing and paying agent (the "Issuing and Paying Agent"), calculation agent
(the "Calculation Agent") and authenticating agent (the "Authenticating Agent").

                                    RECITALS

      The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its subordinated
unsecured debentures, notes or other evidences of indebtedness (the "Notes"),
unlimited as to principal amount, to bear such rates of interest, to mature at
such time or times, to be issued in one or more series and to have such other
provisions as shall be fixed as hereinafter provided.

      The Company has duly authorized the execution and delivery of this
Indenture. 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 Notes by
the Holders (as herein defined) thereof, it is mutually covenanted, declared and
agreed by and between the parties hereto, for the equal and proportionate
benefit of all Holders of the Notes or of any series thereof and any Coupons (as
herein defined) as follows:

                                   ARTICLE 1

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

      Section 1.1 Definitions.

      Except as otherwise specified with respect to any Notes issued pursuant to
Section 3.1, and except as otherwise expressly provided in or pursuant to this
Indenture, or unless the context otherwise requires, for all purposes of this
Indenture:

            (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 accounting terms not otherwise defined herein have the
      meanings assigned to them in accordance with generally accepted accounting
      principles in the United States of America and, except as otherwise herein
      expressly provided, the terms "generally accepted accounting principles"
      or "GAAP" with respect to any computation required or permitted hereunder
      shall mean such accounting principles as are generally accepted in the
      United States of America at the date or time of such computation;


                                       1


            (3) the words "herein," "hereof," "hereto" 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; and

            (4) the word "or" is always used inclusively (for example, the
      phrase "A or B" means "A or B or both," not "either A or B but not both").

      Certain terms used principally in certain Articles hereof are defined in
those Articles.

      "Act," when used with respect to any Holders, has the meaning specified in
Section 1.4.

      "Additional Amounts" has the meaning specified in Section 3.7.

      "Additional Provisions" has the meaning specified in Section 16.1.

      "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 the meanings correlative to
the foregoing.

      "Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 6.11 to act on behalf of the Trustee to authenticate Notes of one or
more series.

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

      "Authorized Officer" means, when used with respect to the Company, the
Chairman of the Board of Directors, a Vice Chairman, the President, the Chief
Executive Officer, the Chief Financial Officer, any Vice President, the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of
the Company.

      "Bankruptcy Law" has the meaning specified in Section 5.1(6).

      "Board of Directors" means the board of directors of the Company or any
committee of that board duly authorized to act generally or in any particular
respect for the Company hereunder.

      "Board Resolution" means a copy of one or more resolutions, 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, delivered to the Trustee.


                                       2


      "Business Day," with respect to any Place of Payment or other location,
means a day other than a Saturday or Sunday and means: (a) with respect to Notes
denominated in a currency other than Euro, any day that is neither a legal
holiday nor a day on which banking institutions are authorized or required by
law or regulation (including any executive order) to close in either the City of
New York (in the case of Notes denominated in Dollars) or the principal
financial centre of the country of such currency; (b) with respect to Notes
denominated in Euro and EURIBOR Notes, any day that is a TARGET Settlement Day
and any day when banking institutions are not authorized or required by law or
regulation (including any executive order) to close in the City of New York; and
(c) with respect to LIBOR Notes, any day that is neither a legal holiday nor a
day on which banking institutions are authorized or required by law or
regulation (including any executive order) to close in either The City of New
York or London.

      "Calculation Agent" means any Person (which may be the Trustee) authorized
by the Company pursuant to a Calculation Agent Agreement to determine, in
respect of floating rate Notes, the interest payable on such floating rate
Notes, and shall initially be JPMorgan Chase Bank, N.A., acting through its
London branch, and any of its successors, unless a replacement Calculation
Agent, if any, is appointed pursuant to the applicable Calculation Agent
Agreement, and thereafter Calculation Agent shall mean or include each Person
who is then a Calculation Agent hereunder.

      "Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including Prefeirred
Stock, but excluding any debt securities convertible into such equity.

      "Capitalized Lease Obligation" means an obligation under a lease that is
required to be capitalized for financial reporting purposes in accordance with
generally accepted accounting principles, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with such principles.

      "Clearstream" means Clearstream Banking, societe anonyme, Luxembourg.

      "Common Depositary" means a depositary common to Euroclear and
Clearstream, being initially JPMorgan Chase Bank, N.A., acting through its
London branch, and any of its successors, unless a replacement Common
Depositary, if any, is appointed pursuant to this Indenture, and thereafter
Common Depositary shall mean or include each Person who is then a Common
Depositary hereunder.

      "Common Stock" in respect of any Corporation means Capital Stock of any
class or classes (however designated) which has no preference as to the payment
of dividends, or as to the distribution of assets upon any voluntary or
involuntary liquidation or dissolution of such Corporation, and which is not
subject to redemption by such Corporation.

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


                                       3


      "Company Request" and "Company Order" mean, respectively, a written
request or order, as the case may be, signed in the name of the Company by an
Authorized Officer, and delivered to the Trustee.

      "Conversion Event" means the cessation of use of (i) a Foreign Currency
both by the government of the country or the confederation which issued such
Foreign Currency and for the settlement of transactions by a central bank or
other public institutions of or within the international banking community or
(ii) any currency unit or composite currency 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 of original execution of this Indenture is located at 4
New York Plaza, 15th Floor, New York, New York 10004.

      "Corporation" means corporations and limited liability companies and,
except for purposes of Article 8, associations, companies (other than limited
liability companies) and business trusts.

      "Coupon" means any interest coupon appertaining to a Note.

      "Currency," with respect to any payment, deposit or other transfer in
respect of the principal of or any premium or interest on any Note, means Euro
or the Foreign Currency, as the case may be, in which such payment, deposit or
other transfer is required to be made by or pursuant to the terms hereof or such
Note and, with respect to any other payment, deposit or transfer pursuant to or
contemplated by the terms hereof or such Note, means Euro.

      "Custodian" has the meaning specified in Section 5.1(6).

      "Dealer" means each of UBS Limited, ABN AMRO Bank N.V., Banc of America
Securities Limited, Barclays Bank PLC, BNP Paribas, Citigroup Global Markets
Limited, Credit Suisse Securities (Europe) Limited, Deutsche Bank AG, Goldman
Sachs International, HSBC Bank plc, J.P. Morgan Securities Ltd., Lehman Brothers
International (Europe), Merrill Lynch International, Morgan Stanley & Co.
International Limited, Royal Bank of Canada Europe Limited, The Royal Bank of
Scotland plc and Societe Generale.

      "Definitive Notes" has the meaning specified in Section 2.2.

      "Dollars" or "$" means a dollar or other equivalent unit of legal tender
for payment of public or private debts in the United States of America.

      "Early Tax Redemption" has the meaning set forth in Section 11.9.

      "Euro" means the currency introduced on 1 January, 1999 pursuant to the
Treaty establishing the European Community.

      "Euroclear" means Euroclear Bank S.A./N.V.


                                       4


      "Event of Default" has the meaning specified in Section 5.1.

      "Fixed Interest Market" means the LSE's regulated Gilt Edged and Fixed
Interest Market.

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

      "Global Notes" has the meaning specified in Section 2.2.

      "Government Obligations" means securities which are (i) direct obligations
of the United States of America or the other government or governments which
issued the Foreign Currency in which the principal of or any premium or interest
on such Note shall be payable, in each case where the payment or payments
thereunder are supported by the full faith and credit of such government or
governments 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
other government or governments, in each case where the timely payment or
payments thereunder are unconditionally guaranteed as a full faith and credit
obligation by the United States of America or such other government or
governments, and which, in the case of (i) or (ii), are not callable or
redeemable at the option of the issuer or issuers 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 or other amount with respect to 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 or other
amount with respect to the Government Obligation evidenced by such depository
receipt.

      "Holder" means with respect to Notes and Coupons issued hereunder, the
bearer thereof.

      "Indebtedness" means, with respect to any Person, such Person's (i)
obligations for borrowed money, (ii) obligations representing the deferred
purchase price of property or services other than accounts payable arising in
the ordinary course of such Person's business, (iii) obligations, whether or not
assumed, secured by Liens on property now or hereafter owned or acquired by such
Person (other than carriers', warehousemen's, mechanics', repairmen's or other
like nonconsensual statutory Liens arising in the ordinary course of business),
(iv) obligations which are evidenced by notes, acceptances, or other similar
instruments, (v) Capitalized Lease Obligations, (vi) contingent obligations with
respect to the Indebtedness of another Person, including but not limited to the
obligation or liability of another which such Person assumes, guarantees,
endorses, contingently agrees to purchase or provide funds for the payment of,
or otherwise becomes contingently liable upon; provided that any Indebtedness
owing by the Company to any of its Subsidiaries or by any Subsidiary of the
Company to the Company or by any Subsidiary of the Company to any other
Subsidiary of the Company or any contingent obligation in respect thereof shall
not constitute Indebtedness for purposes of this Agreement, and (vii)
obligations for which such Person is obligated in respect of a letter of credit.
For


                                       5


purposes of this Indenture, Indebtedness shall not include (A) any indebtedness
of such Person to the extent (I) such indebtedness does not appear on the
financial statement of such Person, (II) such indebtedness is recourse only to
certain assets of such Person, and (III) the assets to which such indebtedness
is recourse only appear on the financial statements of such Person net of such
indebtedness, or (B) any indebtedness or other obligations issued by any Person
(or by a trust or other entity established by such Person or any of its
affiliates) which are primarily serviced by the cash flows of a discrete pool of
receivables, leases or other financial assets which have been sold or
transferred by the Company or any Subsidiary in securitization transactions
which, in accordance with GAAP, are accounted for as sales for financial
reporting purposes. It is understood and agreed that (1) the amount of any
Indebtedness described in clause (iii) for which recourse is limited to certain
property of such Person shall be the lower of (x) the amount of the obligation
and (y) the fair market value of the property of such Person securing such
obligation, and (2) the amount of any obligation described in clause (vi) shall
be the lower of (x) the stated or determinable amount of the primary obligation
in respect of which such contingent obligation is made, and (y) the maximum
amount for which such Person may be liable pursuant to the terms of the
agreement embodying such contingent obligation unless such primary obligation
and the maximum amount for which such Person may be liable are not stated or
determinable, in which case the amount of such contingent obligation shall be
such Person's maximum, reasonably anticipated liability in respect thereof as
determined by such Person in good faith. The term "Indebtedness," when used in
the definition of the terms "Junior Subordinated Indebtedness," "Senior
Subordinated Indebtedness" and "Senior Indebtedness," means all obligations
which, in accordance with GAAP, should be classified as liabilities on a balance
sheet and, in any event, shall include all debt and other similar monetary
obligations, whether direct or guaranteed.

      "Indenture" means this instrument as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof, including, with respect to
any Note, by terms and provisions of such Note and any Coupon appertaining
thereto established pursuant to Section 3.1 (as such terms and provisions may be
amended pursuant to the applicable provisions hereof).

      "Independent Public Accountants" means accountants or a firm of
accountants that, with respect to the Company and any other obligor under the
Notes or the Coupons, are independent public accountants within the meaning of
the Securities Act of 1933, as amended, and the rules and regulations
promulgated by the Commission thereunder, who may be the independent public
accountants regularly retained by the Company or who may be other independent
public accountants. Such accountants or firm shall be entitled to rely upon any
Opinion of Counsel as to the interpretation of any legal matters relating to
this Indenture or certificates required to be provided hereunder.

      "Indexed Note" means a Note 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 Payment Date," with respect to any Note, means the Stated
Maturity of an installment of interest on such Note.


                                       6


      "Issuing and Paying Agent" means any Person authorized by the Company to
pay the principal of, or any premium or interest on, any Note or any Coupon on
behalf of the Company, and shall initially be JPMorgan Chase Bank, N.A., acting
through its London branch, and any of its successors, unless a replacement
Issuing and Paying Agent, if any, is appointed pursuant to this Indenture, and
thereafter Issuing and Paying Agent shall mean or include each Person who is
then an Issuing and Paying Agent hereunder.

      "Judgment Currency" has the meaning specified in Section 1.15.

      "Junior Subordinated Indebtedness" means the Indebtedness of the Company,
whether outstanding at the date hereof or incurred hereafter, which is
subordinated to Senior Indebtedness and Senior Subordinated Indebtedness of the
Company.

      "Lien" has the meaning specified in Section 10.4.

      "London Business Day" means any day on which dealings in deposits in U.S.
dollars, euros or the applicable Foreign Currency of any Note are transacted in
the London interbank market.

      "LSE" means the London Stock Exchange plc.

      "Maturity," with respect to any Note, means the date on which the
principal of such Note or an installment of principal becomes due and payable as
provided in or pursuant to this Indenture, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption or repurchase, notice of
option to elect repayment or otherwise, and includes the Redemption Date.

      "New York Banking Day" has the meaning specified in Section 1.15.

      "Notes" has the meaning specified in the recitals of this Indenture.

      "Office or Agency" with respect to any Notes, means an office or agency of
the Company maintained or designated in a Place of Payment for such Notes
pursuant to Section 10.2 or any other office or agency of the Company maintained
or designated for such Notes pursuant to Section 10.2 or, to the extent
designated or required by Section 10.2 in lieu of such office or agency, the
Corporate Trust Office of the Trustee.

      "Officers' Certificate" means a certificate signed by the Chairman, Vice
Chairman, President, Chief Executive Officer or a Vice President and by the
Chief Financial Officer, Treasurer, an Assistant Treasurer, the Secretary, or an
Assistant Secretary of the Corporation, and delivered to the Trustee.

      "Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Company or other counsel who shall be reasonably
acceptable to the Trustee, or with respect to an Early Tax Redemption or special
redemption, an "independent" counsel who shall be reasonably acceptable to the
Trustee.


                                       7


      "Original Issue Discount Note" means a Note issued pursuant to this
Indenture which provides for declaration of an amount less than the principal
face amount thereof to be due and payable upon acceleration pursuant to Section
5.2.

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

            (a) any such Note theretofore cancelled by the Trustee or delivered
      to the Trustee for cancellation;

            (b) any such Note for whose payment at the Maturity thereof money in
      the necessary amount has been theretofore deposited pursuant hereto with
      the Trustee or any Issuing and 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 Issuing and Paying Agent) for the Holders of such
      Notes and any Coupons appertaining thereto, provided that, if such Notes
      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;

            (c) any such Note with respect to which the Company has effected
      defeasance and/or covenant defeasance pursuant to the terms hereof, except
      to the extent provided in Section 4.2;

            (d) any such Note which has been paid pursuant to Section 3.5 or in
      exchange for or in lieu of which other Notes have been authenticated and
      delivered pursuant to this Indenture, unless there shall have been
      presented to the Trustee or the Issuing and Paying Agent, proof
      satisfactory to it that such Note is held by a bona fide purchaser in
      whose hands such Note is a valid obligation of the Company; and

            (e) any such Note converted or exchanged as contemplated by this
      Indenture into other securities of the Company or another issuer, if the
      terms of such Note provide for such conversion or exchange pursuant to
      Section 3.1;

provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders of Notes for quorum purposes, (i) the principal amount of
an Original Issue Discount Note that may be counted in making such determination
and that shall be deemed to be Outstanding for such purposes shall be equal to
the amount of the principal thereof that pursuant to the terms of such Original
Issue Discount Note would be declared (or shall have been declared to be) due
and payable upon a declaration of acceleration thereof pursuant to Section 5.2
at the time of such determination or that could be or shall have been
accelerated in the case of an ipso facto acceleration pursuant to the second
paragraph of Section 5.2, and (ii) the principal amount of any Indexed Note that
may be counted in making such determination and that shall be deemed Outstanding
for such purposes shall be equal to the principal face amount of such Indexed
Note at original issuance, unless otherwise provided in or pursuant to this
Indenture, and (iii) the principal amount of a Note denominated in a Foreign
Currency shall be the Dollar equivalent, determined on the date of original
issuance of


                                       8


such Note, of the principal amount (or, in the case of an Original Issue
Discount Note, the Dollar equivalent on the date of original issuance of such
Note of the amount determined as provided in (i) above) of such Note, and (iv)
Notes owned by the Company or any other obligor upon the Notes or any Affiliate
of the Company or such other obligor, shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in making any such determination or relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes which a
Responsible Officer actually knows to be so owned shall be so disregarded. Notes
so owned which shall have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee (A)
the pledgee's right so to act with respect to such Notes and (B) that the
pledgee is not the Company or any other obligor upon the Notes or any Coupons
appertaining thereto or an Affiliate of the Company or such other obligor.

      "Permanent Global Note" has the meaning specified in Section 2.2.

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

      "Place of Payment," with respect to any Note, means the place or places
where the principal of, or any premium or interest on, such Note is payable as
provided in or pursuant to this Indenture or such Note.

      "Predecessor Note" of any particular Note means every previous Note
evidencing all or a portion of the same Indebtedness as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 3.5 in exchange for or in lieu of a
lost, destroyed, mutilated or stolen Note or any Note to which a mutilated,
destroyed, lost or stolen Coupon appertains shall be deemed to evidence the same
Indebtedness as the lost, destroyed, mutilated or stolen Note or the Note to
which a mutilated, destroyed, lost or stolen Coupon appertains.

      "Preferred Stock" in respect of any Corporation means Capital Stock of any
class or classes (however designated) which is preferred as to the payment of
dividends, or as to the distribution of assets upon any voluntary or involuntary
liquidation or dissolution of such Corporation, over shares of Capital Stock of
any other class of such Corporation.

      "Redemption Date" with respect to any Note or portion thereof to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture or such Note.

      "Redemption Price" with respect to any Note or portion thereof to be
redeemed, means the price at which it is to be redeemed as determined by or
pursuant to this Indenture or such Note.

      "Required Currency" has the meaning specified in Section 1.15.

      "Responsible Officer" means any officer of the Trustee in its Corporate
Trust Office with direct responsibility for the administration of this
Indenture, and also, with respect to a particular


                                       9


corporate trust matter, any other officer of the Trustee to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.

      "Senior Indebtedness" means, with respect to the Notes of any particular
series issued and authenticated pursuant to the terms of this Indenture and
except as otherwise provided pursuant to Section 3.1, all Indebtedness of the
Company outstanding at any time, except (a) the Notes, (b) Indebtedness as to
which, by the terms of the instrument creating or evidencing the same, it is
provided that such Indebtedness is subordinated to the Notes of such series, or
ranks pari passu with the Notes or with securities that are subordinated to
Notes of such series, (c) Indebtedness of the Company to an Affiliate of the
Company, (d) interest accruing after the filing of a petition initiating any
proceeding relating to the Company referred to in Section 5.1(6) and 5.1(7)
unless such interest is an allowed claim enforceable against the Company in a
proceeding under federal or state bankruptcy laws, (e) trade accounts payable,
(f) any Indebtedness issued in violation of the instrument creating the same,
(g) any guarantee of any Indebtedness, and (h) any securities outstanding or to
be outstanding under the Subordinated Indenture, dated January 20, 2006 (the
"USMTN Subordinated Indenture"), between the Company and JPMorgan Chase Bank,
N.A., as trustee.

      "Senior Subordinated Indebtedness" means the Indebtedness represented by
the Notes and all other Indebtedness of the Company, whether outstanding at the
date hereof or incurred hereafter, which is subordinate only to Senior
Indebtedness.

      "Stated Maturity," with respect to any Note or any installment of
principal thereof or interest thereon, means the date established by or pursuant
to this Indenture or such Note as the fixed date on which the principal of such
Note or such installment of principal or interest is, due and payable.

      "Subsidiary" means with respect to the Company, such Person which, at the
time of determination, more than 50% of the voting power of the shares of its
Capital Stock or other interests (including partnership interests) entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is owned or controlled, directly or
indirectly, by (i) the Company and/or (ii) one or more Subsidiaries of the
Company; provided, however, that the term Subsidiary shall not include any
Person, if the earnings of such Person are not consolidated with the financial
statements of the Company in accordance with the requirements of GAAP.

      "TARGET Settlement Day" means any day on which the Trans-European
Automated Real-Time Gross Settlement Express Transfer (TARGET) System is open.

      "Temporary Global Note" has the meaning specified in Section 2.2.

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


                                       10


      "United States" and "United States of America" means the United States of
America, the States thereof and the District of Columbia (and for the avoidance
of doubt, excludes any possessions thereof.

      "United States person" means any individual who is a citizen or resident
of the United States, any corporation or partnership (or other entity treated as
a corporation or partnership for United States federal income tax purposes)
created or organized in or under the laws of the United States, any estate the
income of which is subject to United States federal income taxation regardless
of its source, or any trust if (i) a court within the United States is able to
exercise primary supervision over the administration of the trust, and one or
more United States persons have the authority to control all substantial
decisions of the trust, or (ii) the trust has a valid election in effect under
applicable United States Treasury regulations to be treated as a United States
person.

      "Vice President" when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "Vice President".

      Section 1.2 Compliance Certificates and Opinions.

      Except as otherwise expressly provided in this Indenture, 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
or any of them 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 (other than a certificate delivered
pursuant to Section 10.7) shall include:

            (1) a statement that the 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 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 such individual,
      such condition or covenant has been complied with.


                                       11


      Section 1.3 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, provided
that such officer, after reasonable inquiry, has no reason to believe and does
not believe that the Opinion of Counsel with respect to the matters upon which
his certificate or opinion is based is erroneous. Any such Opinion of Counsel
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 with respect to such factual matters is in the
possession of the Company, provided that such counsel, after reasonable inquiry,
has no reason to believe and does not believe 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 or any Note, they may, but need not, be
consolidated and form one instrument.

      Section 1.4 Acts of Holders.

            (1) Any request, demand, authorization, direction, notice, consent,
      waiver or other action provided by or pursuant to this Indenture to be
      given or taken by Holders may be embodied in and evidenced by one or more
      instruments of substantially similar tenor signed by such Holders in
      person or by an agent duly appointed in writing. Any request, demand,
      authorization, direction, notice, consent, waiver or other action provided
      in or pursuant to this Indenture to be given or taken by Holders of Notes
      of a series may, alternatively, be embodied in and evidenced by the record
      of Holders of Notes of such series voting in favor thereof, either in
      person or by proxies duly appointed in writing, at any meeting of Holders
      of Notes of such series duly called and held in accordance with the
      provisions of Article 15, 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 Note, shall be sufficient for any purpose of
      this Indenture and conclusive in favor of the Trustee, 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 Notes shall be
      proved in the manner provided in Section 15.6.


                                       12


      Without limiting the generality of this Section 1.4, unless otherwise
provided in or pursuant to this Indenture, a Holder, including a Common
Depositary that is a Holder of a Global Note, may make, give or take, by a proxy
or proxies, duly appointed in writing, any request, demand, authorization,
direction, notice, consent, waiver or other Act provided in or pursuant to this
Indenture to be made, given or taken by Holders, and a Common Depositary that is
a Holder of a Global Note may provide its proxy or proxies to the beneficial
owners of interests in any such Global Note through such Common Depositary's
standing instructions and customary practices.

            (2) The fact and date of the execution by any Person of any such
      instrument or writing referred to in this Section 1.4 may be proved in any
      reasonable manner; and the Trustee may in any instance require further
      proof with respect to any of the matters referred to in this Section.

            (3) The ownership, principal amount and serial numbers of Notes held
      by any Person, and the date of the commencement and the date of the
      termination of holding the same, may be proved by the production of such
      Notes or by a certificate executed, as depositary, by any trust company,
      bank, banker or other depositary reasonably acceptable to the Company,
      wherever situated, if such certificate shall be deemed by the Company and
      the Trustee to be satisfactory, showing that at the date therein mentioned
      such Person had on deposit with such depositary, or exhibited to it, the
      Notes therein described; or such facts may be proved by the certificate or
      affidavit of the Person holding such Notes, 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 Note continues until (i)
      another certificate or affidavit bearing a later date issued in respect of
      the same Note is produced, or (ii) such Note is produced to the Trustee by
      some other Person, or (iii) such Note is no longer Outstanding. The
      ownership, principal amount and serial numbers of Notes held by the Person
      so executing such instrument or writing and the date of the commencement
      and the date of the termination of holding the same may also be proved in
      any other manner, which the Company and the Trustee deem sufficient.

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

      Section 1.5 Notices, etc. to Trustee and Company.

      Any request, demand, authorization, direction, notice, consent, waiver or
other 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 the Company shall be sufficient for
      every purpose hereunder if made, given, furnished or filed in writing to
      or with the Trustee at its Corporate Trust Office, Attention: Worldwide
      Securities Services; or


                                       13


            (2) the Company, by the Trustee or 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 the attention of its Treasurer, with a copy to the attention
      of its General Counsel, at the address of its principal office specified
      in Section 1.6 hereof or at any other address previously furnished in
      writing to the Trustee by the Company.

      Section 1.6 Notice to Holders of Notes; Waiver.

      Except as otherwise expressly provided in or pursuant to this Indenture,
where this Indenture provides for notice to Holders of any event:

            (1) such notice shall be deemed to be validly given if published in
      a leading English language daily newspaper with general circulation in
      London (which is expected to be the Financial Times) or, if such
      publication is not possible, in one other leading English language daily
      newspaper with general circulation in Europe;

            (2) notwithstanding (1) above, such notice shall be sufficiently
      given to Holders of Notes held through Euroclear and Clearstream if sent
      to Euroclear and Clearstream, as appropriate, for communication to Holders
      in accordance with their standard procedures; and

            (3) for so long as the Notes are then listed on the LSE and the
      rules of the LSE so require, such notice shall be published in a leading
      English language daily newspaper with general circulation in London (which
      is expected to be the Financial Times).

      In case 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 as provided above, then such
notification to Holders of Notes as shall be given with the approval of the
Trustee shall constitute sufficient notice to such Holders for every purpose
hereunder. Neither failure to give notice by publication to Holders of Notes of
a particular series as provided above, nor any defect in any notice so
published, shall affect the sufficiency of any notice with respect to Notes of
another series.

      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 of Notes 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.

      All communications hereunder will be in writing and will be mailed,
delivered or telegraphed and confirmed to the party receiving such communication
at its address indicated below:


                                       14


      If to the Company:

                  CIT Group Inc.
                  1 CIT Drive
                  Livingston, New Jersey  07039
                  Attention:  Treasurer and General Counsel

      If to the Trustee:

                  JPMorgan Chase Bank, N.A.
                  4 New York Plaza, 15th Floor
                  New York, New York  10004
                  Attention:  Worldwide Securities Services

      If to the Issuing and Paying Agent, Calculation Agent or Authenticating
Agent:

                  JPMorgan Chase Bank, N.A., acting through its London branch
                  9 Trinity Tower
                  Thomas More Street
                  London E1W 1 YT, England
                  Attention:  Worldwide Securities Services

      Section 1.7 Language of Notices.

      Any request, demand, authorization, direction, notice, consent, election
or waiver required or permitted under this Indenture shall be in the English
language, except that, if the Company so elects, any published notice may be in
an official language of the country of publication (with a copy in English to be
provided to the Trustee.)

      Section 1.8 Effect of Headings and Table of Contents.

      The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.

      Section 1.9 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 1.10 Separability Clause.

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


                                       15


      Section 1.11 Benefits of Indenture.

      Nothing in this Indenture, any Note or any Coupon, express or implied,
shall give to any Person, other than the parties hereto, any Issuing and Paying
Agent, any Authenticating Agent and their successors hereunder and the Holders
of Notes or Coupons, any benefit or any legal or equitable right, remedy or
claim under this Indenture.

      Section 1.12 Governing Law.

      This Indenture, the Notes and any Coupons shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made or instruments entered into and, in each case, performed in said
state.

      Section 1.13 Legal Holidays.

      Unless otherwise specified in or pursuant to this Indenture or any Notes,
in any case where any Interest Payment Date, Stated Maturity or Maturity of any
Note, or the last date on which a Holder has the right to convert or exchange
Notes of a series that are convertible or exchangeable, shall not be a Business
Day at any Place of Payment, then (notwithstanding any other provision of this
Indenture, any Note or any Coupon other than a provision in any Note or Coupon
that specifically states that such provision shall apply in lieu hereof) payment
need not be made at such Place of Payment on such date, and such Notes need not
be converted or exchanged on such date, but such payment may be made, and such
Notes may be converted or exchanged, on the next succeeding day that is a
Business Day at such Place of Payment, and no interest shall accrue on the
amount payable on such date or at such time for the period from and after such
Interest Payment Date, Stated Maturity, Maturity or last day for conversion or
exchange, as the case may be, to such next succeeding Business Day, except that
if such next succeeding Business Day is in the next succeeding calendar month,
such payment may be made, and such Notes may be converted or exchanged, on the
immediately preceding Business Day (in the case of each of the foregoing, with
the same force and effect as if made on such Interest Payment Date or at such
Stated Maturity or Maturity or on such last day for conversion or exchange, as
the case may be).

      Section 1.14 Counterparts.

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

      Section 1.15 Judgment Currency.

      The Company agrees, to the fullest extent that it may effectively do so
under applicable law, that (a) if for the purpose of obtaining judgment in any
court it is necessary to convert the sum due in respect of the principal of, or
premium or interest, if any, (the "Required Currency") into a currency in which
a judgment will be rendered (the "Judgment Currency"), the rate of exchange used
shall be the rate at which in accordance with normal banking procedures the
Trustee could purchase in The City of New York the requisite amount of the
Required Currency with the Judgment Currency on the New York Banking Day
preceding the day on which a final unappealable judgment is given and (b) its
obligations under this Indenture to make payments in


                                       16


the Required Currency (i) shall not be discharged or satisfied by any tender, or
any recovery pursuant to any judgment (whether or not entered in accordance with
clause (a)), in any currency other than the Required Currency, except to the
extent that such tender or recovery shall result in the actual receipt, by the
payee, of the full amount of the Required Currency expressed to be payable in
respect of such payments, (ii) shall be enforceable as an alternative or
additional cause of action for the purpose of recovering in the Required
Currency the amount, if any, by which such actual receipt shall fall short of
the full amount of the Required Currency so expressed to be payable and (iii)
shall not be affected by judgment being obtained for any other sum due under
this Indenture. For purposes of the foregoing, "New York Banking Day" means any
day except a Saturday, Sunday or a legal holiday in The City of New York or a
day on which banking institutions in The City of New York are authorized or
obligated by law, regulation or executive order to be closed.

      Section 1.16 No Security Interest Created.

      Subject to the provisions of Section 10.4, nothing in this Indenture or in
any Notes, express or implied, shall be construed to constitute a security
interest under the Uniform Commercial Code or similar legislation, as now or
hereafter enacted and in effect in any jurisdiction where property of the
Company or its Subsidiaries is or may be located.

      Section 1.17 Limitation on Individual Liability.

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


                                       17


                                   ARTICLE 2

                                   NOTES FORMS

      Section 2.1 Forms Generally

      Each Note issued pursuant to this Indenture shall be in bearer form,
substantially in the forms included as Exhibit A1 or Exhibit A2, as applicable,
to this Indenture or in such other form as shall be established in or pursuant
to a Board Resolution and set forth in an Officers' Certificate, or established
in one or more indentures supplemental hereto, in each case, with terms
established in or pursuant to a Board Resolution and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto, and
shall have such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by or pursuant to this Indenture or any
indenture supplemental hereto and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the officers executing such Note or
Coupon as evidenced by their execution of such Note or Coupon, 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 Notes
may be listed. Definitive Notes and definitive 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 may be produced in any other
manner, all as determined by the officers of the Company executing such Notes or
Coupons, as evidenced by their execution of such Notes or Coupons.

      Section 2.2 Temporary Global Note; Permanent Global Note; Definitive Note

            (a) The Notes shall be issued from time to time initially in the
      form of a temporary global note (a "Temporary Global Note"). As provided
      herein, interests in a Temporary Global Note will be exchangeable for
      interests in the relevant permanent global note (a "Permanent Global Note"
      and, together with the Temporary Global Note, collectively referred to as
      "Global Notes") or, if specified with respect to any series Notes pursuant
      to Section 3.1, directly for Definitive Notes (as hereinafter defined), on
      or after the applicable Exchange Date (as hereinafter defined). As
      provided herein, interests in a Permanent Global Note will be exchanged,
      upon 45 days' notice by a holder of an interest in such Permanent Global
      Note for Notes in definitive bearer form with, where applicable, interest
      Coupons attached, representing the interest payable thereon ("Definitive
      Notes"). The forms of Global Notes and Definitive Notes are attached
      hereto as Exhibit A1 and Exhibit A2. Each Global Note shall be deposited
      with the Common Depositary, which shall hold such Global Note in safe
      custody for the account of Euroclear and/or Clearstream and instruct
      Euroclear or Clearstream or both of them, as the case may be, to credit
      the principal amounts of the Notes represented by such Global Note to the
      Issuing and Paying Agent's distribution account with Euroclear or
      Clearstream.

            (b) (i) On or after the applicable Exchange Date, each relevant
      Temporary Global Note shall be exchangeable in whole or from time to time
      in part for an interest, equal to the principal amount of the part of such
      Temporary Global Note being


                                       18


      exchanged, in a single Permanent Global Note or, if applicable, for
      Definitive Notes in the same principal amount, upon request of Euroclear
      or Clearstream to the Issuing and Paying Agent, but only upon delivery by
      Euroclear or Clearstream, acting on behalf of the beneficial owners of
      such interests, to the Issuing and Paying Agent at its principal office in
      London, of certificates substantially in the form of Exhibit B hereto. A
      beneficial owner of Notes desiring to exchange his beneficial interest in
      the relevant Temporary Global Note for an interest in the relevant
      Permanent Global Note shall instruct Euroclear or Clearstream to request
      such exchange on his behalf and shall deliver to Euroclear or Clearstream
      a certificate, appropriately completed and signed, substantially in the
      form set forth in Exhibit C hereto, copies of which shall be available
      from the offices of Euroclear or Clearstream, the Trustee, the Issuing and
      Paying Agent and each other paying agency as may be appointed by the
      Company. The delivery to the Issuing and Paying Agent by Euroclear or
      Clearstream of any certificate in the form referred to above may be relied
      upon by the Company, the Trustee and the Issuing and Paying Agent as
      conclusive evidence that related certificates have been delivered to
      Euroclear or Clearstream as contemplated by the terms of this Section 2.2.

            (ii) Subject to Section 2.2(b)(i) above, when a Temporary Global
      Note is to be exchanged in whole or in part for interests in a Permanent
      Global Note of the same series, the Trustee or the Issuing and Paying
      Agent, upon receipt of such Permanent Global Note from the Company, which
      shall be executed by and delivered by the Company to the Trustee or the
      Issuing and Paying Agent, is authorized and it shall (A) authenticate such
      Permanent Global Note in accordance with the terms of this Indenture and
      (B) deliver such Permanent Global Note to the Common Depositary which is
      holding the Temporary Global Note applicable to such series on behalf of
      Euroclear and Clearstream either in exchange for such Temporary Global
      Note or, in the case of a partial exchange, a corresponding reduction in
      the principal amount of the Temporary Global Note which reduction shall be
      endorsed on such Temporary Global Note.

            (iii) The term "Exchange Date" shall mean the first Business Day
      occurring no earlier than the date that is 40 days after (A) in the case
      of a series of Notes in respect of which there is only one Dealer, the
      date certified by the relevant Dealer to the Trustee and the Issuing and
      Paying Agent as being the date as of which distribution of the Notes of
      that series was completed, (B) in the case of a series of Notes in respect
      of which there is more than one Dealer but is not issued on a syndicated
      basis, the latest of the dates certified by all of the relevant Dealers to
      the Trustee and the Issuing and Paying Agent as being the respective date
      as of which distribution of the Notes of that series purchased by each
      such Dealer was completed, (C) in the case of a series of Notes issued on
      a syndicated basis, the date certified by the lead manager to the Trustee
      and the Issuing and Paying Agent as being the date as of which
      distribution of the Notes of that series was completed, (D) in the case of
      a series of Notes in respect of which a Person other than a Dealer has
      purchased with a view to distribution, the date certified by such Person
      to the Trustee and the Issuing and Paying Agent as being the date as of
      which the distribution was completed or (E) in the case of a series of
      Notes sold directly to investors, the date certified by the Company to the
      Trustee and the Issuing and Paying Agent as being the date as of which the
      distribution was completed. Upon determining the Exchange Date, the
      Issuing and Paying Agent shall


                                       19


      notify the Company, Euroclear, Clearstream and the relevant Dealers or
      persons of such determination.

            (c) In accordance with the terms of a Permanent Global Note and this
      Indenture, the Issuing and Paying Agent shall deliver at the cost of the
      Company, upon not less than 45 days' notice to the Issuing and Paying
      Agent by Euroclear or Clearstream, the relevant Definitive Notes in
      exchange for interests in such Permanent Global Note. If so specified with
      respect to a particular series of Notes, the Issuing and Paying Agent
      shall deliver, upon not less than 45 days' notice to the Issuing and
      Paying Agent by Euroclear or Clearstream, the relevant Definitive Notes in
      exchange for interests in a Temporary Global Note, in accordance with the
      terms of the Temporary Global Note and this Indenture. For this purpose,
      the Issuing and Paying Agent is authorized and it shall (A) authenticate
      each such Definitive Note and (B) deliver each such Definitive Note, with
      Coupons attached, to or to the order of Euroclear or Clearstream, in
      exchange for interests in such Permanent Global Note or interests in such
      Temporary Global Note, as the case may be. The Issuing and Paying Agent
      shall promptly notify the Company upon receipt of a request for issue of
      Definitive Notes the aggregate principal amount of the relevant Permanent
      Global Note or interests in a Temporary Global Note to be exchanged in
      connection therewith. The Company undertakes to deliver to, or to the
      order of, the Issuing and Paying Agent sufficient numbers of duly executed
      Definitive Notes, with Coupons attached to enable the Issuing and Paying
      Agent to comply with its obligations under this Section 2.2(c). Such
      exchange shall be made free of charge to the holder and the beneficial
      owners of the relevant Permanent Global Note or Temporary Global Note, as
      the case may be, and to the holders of the Definitive Notes issued in
      exchange as provided above, except that a Person receiving Definitive
      Notes must bear the cost of insurance, postage, transportation and the
      like in the event that such Person does not receive such Definitive Notes
      in person at the offices of an Issuing and Paying Agent. Notwithstanding
      the above, interests in a Permanent Global Note shall be exchangeable in
      whole (but not in part) at the cost of the Company for Definitive Notes if
      either Euroclear or Clearstream or any other relevant clearing system
      should cease to operate as a clearing system (other than by reason of
      public holiday) or should announce an intention to permanently cease
      business and it shall not be practicable to transfer the relevant Notes to
      another clearing system within 90 days.

            (d) Upon any exchange of all or a portion of an interest in a
      Temporary Global Note for an interest in a Permanent Global Note or for
      Definitive Notes, or upon any exchange of an interest in a Permanent
      Global Note for Definitive Notes, the relevant Global Note shall be
      endorsed by the Trustee or the Issuing and Paying Agent to reflect the
      reduction of its principal amount by the aggregate principal amount so
      exchanged and, where an interest in a Temporary Global Note is exchanged
      for an interest in the Permanent Global Note, the Permanent Global Note
      shall be endorsed by the Trustee or the Issuing and Paying Agent, or on
      its behalf, to reflect the increase in its principal amount as a result of
      such exchange. Until exchanged in full, the holder of any interest in any
      Global Note shall in all respects be entitled to the same benefits under
      this Indenture as Definitive Notes authenticated and delivered hereunder
      except that, as provided below, neither the holder nor the beneficial
      owners of a Temporary Global Note shall be entitled


                                       20


      to receive payment of interest thereon. Once exchanged in full, a Global
      Note shall be canceled and disposed of by the Trustee in accordance with
      its customary procedures and a certificate of disposition will be sent to
      the Company.

            (e) The Trustee or the Issuing and Paying Agent shall cause all
      Temporary Global Notes, Permanent Global Notes and Definitive Notes
      delivered to it and held by it hereunder to be maintained in safe custody
      in accordance with this Section 2.2, and shall ensure that such Notes are
      issued only in accordance with the provisions of this Indenture.

            (f) The Trustee and the Issuing and Paying Agent shall be entitled
      to treat a telephone, telex or facsimile communication from a person
      purporting to be (and who the Trustee or the Issuing and Paying Agent
      believe in good faith to be) the authorized representative of the Company,
      named in a list furnished to the Trustee and the Issuing and Paying Agent
      from time to time, as sufficient instructions and authority of the Company
      for the Trustee and the Issuing and Paying Agent to act in accordance with
      this Section 2.2.

            (g) Interest payable in respect of a beneficial interest in a
      Temporary Global Note on an Interest Payment Date occurring prior to the
      applicable Exchange Date shall be paid only upon delivery by Euroclear or
      Clearstream, as the case may be, acting on behalf of the owner of such
      beneficial interest in such Temporary Global Note to the Issuing and
      Paying Agent on such Interest Payment Date, of a certificate substantially
      in the form set forth in Exhibit B hereto. In order to receive such
      interest payment, a beneficial owner of Notes shall deliver to Euroclear
      or Clearstream, as the case may be, a certificate, appropriately completed
      and signed, substantially in the form set forth in Exhibit C hereto.

      Section 2.3 Form of Trustee's Certificate of Authentication.

      Subject to Section 6.11, the Trustee's certificate of authentication shall
be in substantially the following form:

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

                                                     JPMORGAN CHASE BANK, N.A.,
                                                              as Trustee

                                                     By: _______________________
                                                           Authorized Officer

      Section 2.4 Notes in Global Form.

      Notes issued in global form shall provide that it or any number of such
Notes shall represent the aggregate amount of all Outstanding Notes of such
series (or such lesser amount as


                                       21


is permitted by the terms thereof) from time to time endorsed thereon and may
also provide that the aggregate amount of Outstanding Notes represented thereby
may from time to time be increased or reduced to reflect exchanges. Any
endorsement of any Note in global form to reflect the amount, or any increase or
decrease in the amount, or changes in the rights of Holders, of Outstanding
Notes represented thereby shall be made in such manner and by such Person or
Persons as shall be specified therein or in the Company Order to be delivered
pursuant to Section 3.3 with respect thereto. Subject to the provisions of
Section 3.3, the Trustee or the Issuing and Paying Agent shall deliver and
redeliver, in each case at the Company's expense, any Note 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 3.3 has been, or simultaneously is, delivered, any
instructions by the Company with respect to a Note in global form shall be in
writing but need not be accompanied by or contained in an Officers' Certificate
and need not be accompanied by an Opinion of Counsel.

      Section 2.5 Transfer of Notes.

      Title to the Notes and Coupons, if any, shall pass by delivery. However,
title to Notes issued in the form of Global Notes held through Euroclear and
Clearstream shall be transferable only in accordance with the rules and
procedures of Euroclear and Clearstream, as appropriate.

                                   ARTICLE 3

                                    THE NOTES

      Section 3.1 Amount Unlimited; Issuable in Series.

      The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is unlimited. The Notes may be issued in one or
more series. Notes may be issued with the same terms (including maturity and
interest payment terms) as previously issued Notes, except for the issue date,
issue price and the first payment of interest. Except as provided in the second
succeeding paragraph, all Notes issued on the same date, being denominated in
the same currency and having the same interest rate (or, in the case of floating
rate Notes, the same interest rate formula) and Maturity will be deemed to
constitute a single series of Notes. The Notes of each series issued and
authenticated pursuant to the terms of this Indenture shall be subordinated in
right of payment to all Senior Indebtedness, as provided in Article 16 of this
Indenture.

      With respect to any Notes to be authenticated and delivered hereunder,
there shall be established in or pursuant to a Board Resolution and set forth in
an Officers' Certificate, or established in one or more indentures supplemental
hereto,

            (1) the title and series of such Notes;

            (2) the total principal amount of the series of such Notes and
      whether there shall be any limit upon the aggregate principal amount of
      such Notes that may be authenticated and delivered under this Indenture
      (except for Notes authenticated and


                                       22


      delivered upon exchange of, or in lieu of, other Notes of such series
      pursuant to Section 3.4, 3.5, 9.5 or 11.7);

            (3) if such Notes are to be issuable with Coupons, without Coupons
      or both, and any restrictions applicable to the offer, sale or delivery of
      the Notes;

            (4) if any of such Notes are to be issuable in global form, when any
      of such Notes are to be issuable in global form and (i) whether such Notes
      are to be issued in temporary or permanent global form or both, (ii)
      whether beneficial owners of interests in any such Global Note may
      exchange such interests for Notes of the same series and of like tenor and
      of any authorized form and denomination, and the circumstances under which
      any such exchanges may occur, and (iii) the name of the Common Depositary
      with respect to any such Global Note;

            (5) if any of such Notes are to be issuable as Definitive Notes or
      in global form, the date as of which any such Definitive Note or Global
      Note shall be dated (if other than the date of original issuance of the
      first of such Notes to be issued);

            (6) whether interest in respect of any portion of a Temporary Global
      Note payable in respect of an Interest Payment Date therefor prior to the
      exchange, if any, of such Temporary Global Note for Definitive Notes or a
      Permanent Global Note shall be paid to any clearing organization with
      respect to the portion of such Temporary Global Note held for its account
      and, in such event, the terms and conditions (including any certification
      requirements) upon which any such interest payment received by a clearing
      organization will be credited to the Persons entitled to interest payable
      on such Interest Payment Date;

            (7) the date or dates, or the method or methods, if any, by which
      such date or dates shall be determined, on which the principal of and
      premium, if any, on the Notes shall be payable;

            (8) the Person to whom any interest on a Note shall be payable, the
      rate or rates at which such Notes shall bear interest, if any, which rate
      may be zero in the case of certain Notes issued at an issue price
      representing a discount from the principal amount payable at Maturity, or
      the method by which such rate or rates will be determined (including, if
      applicable, any remarketing option or similar method), and the date or
      dates from which such interest, if any, will accrue or the method by which
      such date or dates will be determined, and the basis upon which interest
      shall be calculated if other than that of a 360 day year of twelve 30-day
      months;

            (9) the date or dates on which interest, if any, on a Note shall be
      payable;

            (10) if in addition to or other than London, the place or places
      where the principal of or any premium or interest on such Notes shall be
      payable, where any of such Notes may be surrendered for exchange, and
      where any such Notes may be surrendered for conversion or exchange and
      notices of demands to or upon the Company in respect of such Notes and
      this Indenture may be served, the extent to which and the manner in which,
      any interest payment on a Global Note on an Interest Payment Date, will be
      paid


                                       23


      and the manner in which any principal of or premium, if any, on any Global
      Note will be paid;

            (11) if such Notes are to be redeemable at the Company's option, the
      date or dates on which, the period or periods within which, the price or
      prices at which and the other terms and conditions upon which such Notes
      may be redeemed, in whole or in part, at the Company's option pursuant to
      any sinking fund or otherwise;

            (12) provisions specifying whether the Company shall be obligated to
      redeem, purchase or repay any of such Notes pursuant to any sinking fund
      or analogous provision or at the option of any Holder of such Notes and,
      if so, the date or dates on which, the period or periods within which, the
      price or prices at which and the other terms and conditions upon which
      such Notes shall be redeemed, purchased or repaid, in whole or in part,
      pursuant to such obligation, and any provisions for the remarketing of
      such Notes so redeemed or purchased;

            (13) if other than a minimum denomination of Euro 50,000, the
      denominations in which any Notes will be issuable;

            (14) provisions specifying whether the Notes will be convertible
      into other securities of the Company and/or exchangeable for Notes of the
      Company or other obligors and, if so, the terms and conditions upon which
      such Notes shall be so convertible or exchangeable;

            (15) if other than the principal amount, the portion of the
      principal amount (or the method by which such portion will be determined)
      of such Notes that will be payable upon acceleration or declaration of
      acceleration of the Maturity thereof pursuant to the terms of this
      Indenture;

            (16) if other than Euro, the Currency of payment, including
      composite Currencies and Foreign Currencies, of the principal of, any
      premium or interest on any of such Notes;

            (17) if other than as provided in Section 4.2, the manner in which
      the Notes of the series are to be defeased;

            (18) any index, formula or other method used to determine the amount
      of payments of principal of, or any premium or interest on such Notes;

            (19) any deletions from, modifications of or additions to the Events
      of Default or covenants of the Company that are contained herein with
      respect to such Notes;

            (20) terms specifying whether the provisions described below under
      Section 4.2 shall be applicable to such Notes and any covenants in
      addition to those specified in Section 4.2(3) relating to the Notes of
      such series which shall be subject to covenant defeasance;


                                       24


            (21) terms specifying whether any of such Notes are to be issued
      upon the exercise of warrants, and the time, manner and place for such
      Notes to be authenticated and delivered;

            (22) provisions specifying the relative degree, if any, to which
      such Notes will be senior to or be subordinated in right of payment to
      other series of Notes or other Indebtedness of the Company, as the case
      may be, whether such other series of Notes or other Indebtedness is
      outstanding or not, and provisions defining the term "Senior Indebtedness"
      with respect to such series of Notes or other Indebtedness if such
      definition is to be other than the definition of such term contained in
      Section 1.1; and

            (23) any other terms of such Notes and any other deletions from or
      modifications or additions to this Indenture in respect of such Notes.

      All Notes of any one series and all Coupons, if any, appertaining to Notes
of such series shall be substantially identical except as to Currency of
payments due thereunder, denomination and the rate of interest thereon, or
method of determining the rate of interest, if any, Maturity, and the date from
which interest, if any, shall accrue and except as may otherwise be provided by
the Company in or pursuant to the Board Resolution and set forth in the
Officers' Certificate or in any indenture or indentures supplemental hereto
pertaining to such series of Notes. The terms of the Notes of any series may
provide, without limitation, that the Notes of such series shall be
authenticated and delivered by the Trustee on original issue from time to time
in accordance with such procedures as are acceptable to the Trustee (including
authentication and delivery by the Trustee on original issue from time to time
upon written order of persons designated in the Officers' Certificate or
supplemental indenture and that such persons are authorized to determine,
consistent with such Officers' Certificate or any applicable supplemental
indenture, such terms and conditions of the Notes of such series as are
specified in such Officers' Certificate or supplemental indenture). All Notes of
any one series need not be issued at the same time and, unless otherwise so
provided, a series may be reopened for issuances of additional Notes of such
series or to establish additional terms of such series of Notes. The Company
also may issue, and the Trustee may authenticate, Notes with the same terms as
previously issued Notes.

      If any of the terms of the Notes of any series shall be established by
action taken by or pursuant to a Board Resolution, the Board Resolution shall be
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of such series.

      Section 3.2 Currency; Denominations.

      Unless otherwise provided in or pursuant to this Indenture, the principal
of, and any premium and interest, if any, on, the Notes shall be payable in
Euro. Unless otherwise provided in or pursuant to this Indenture, Notes shall be
issuable in minimum denominations of Euro 50,000. Notes not denominated in Euro
shall be issuable in such denominations as are established with respect to such
Notes in or pursuant to this Indenture.

      Notes having a maturity of less than one year and in respect of which the
issue proceeds are to be accepted by the Company in the United Kingdom will: (a)
have a minimum redemption


                                       25


value of (pound)100,000 (or its equivalent in other currencies) and be issued
only to Persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the purposes of
their businesses, or who it is reasonable to expect will acquire, hold, manage
or dispose of investments (as principal or agent) for the purposes of their
businesses; or (b) be otherwise issued without contravention of Section 19 of
the Financial Services and Markets Act 2000.

      Section 3.3 Execution, Authentication, Delivery and Dating.

      Notes shall be executed on behalf of the Company by its Chairman of the
Board, a Vice Chairman, its President, its Chief Executive Officer, its Chief
Financial Officer, its Treasurer or a Vice President under its corporate seal
reproduced thereon and attested by its Secretary or one of its Assistant
Secretaries. Coupons shall be executed on behalf of the Company by the Treasurer
or any Assistant Treasurer of the Company. The signature of any of these
officers on the Notes or any Coupons appertaining thereto may be manual or
facsimile.

      Notes and any Coupons appertaining thereto 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 Notes and Coupons or did not hold such offices at the date of original
issuance of such Notes or Coupons.

      At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Notes, together with any Coupons appertaining
thereto, executed by the Company, to the Trustee for authentication and,
provided that the Board Resolution and Officers' Certificate or supplemental
indenture or indentures with respect to such Notes referred to in Section 3.1
and a Company Order for the authentication and delivery of such Notes have been
delivered to the Trustee, the Trustee in accordance with the Company Order and
subject to the provisions hereof and of such Notes shall authenticate and
deliver such Notes. In authenticating such Notes, and accepting the additional
responsibilities under this Indenture in relation to such Notes and any Coupons
appertaining thereto, the Trustee shall be entitled to receive, and shall be
fully protected in relying upon,

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

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

                  (b) such Notes, 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 binding
            obligations of the Company, enforceable in accordance with their
            terms, subject to applicable bankruptcy, insolvency, reorganization
            and other similar laws of general applicability relating to or
            affecting the enforcement of creditors' rights, to general equitable
            principles


                                       26


            and to such other qualifications as such counsel shall conclude do
            not materially affect the rights of Holders of such Notes and any
            Coupons; and

            (2) an Officers' Certificate stating that, to the best knowledge of
      the Persons executing such certificate, all conditions precedent to the
      execution, authentication and delivery of such Notes and Coupons, if any,
      appertaining thereto, have been complied with, and no event which is, or
      after notice or lapse of time would become, an Event of Default with
      respect to any of the Notes shall have occurred and be continuing.

      If all the Notes of any series are not to be issued at one time, except in
connection with the reopening of a series of Notes pursuant to the third
paragraph of Section 3.1, it shall not be necessary to deliver an Opinion of
Counsel and an Officers' Certificate at the time of issuance of each Note, but
such Opinion of Counsel and Officers' Certificate, with appropriate
modifications, shall be delivered at or before the time of issuance of the first
Note of such series. After any such first delivery, any separate written request
by an Authorized Officer of the Company or any person designated in writing by
an Authorized Officer that the Trustee authenticate and deliver Notes of such
series for original issue will be deemed to be a certification by the Company
that all conditions precedent provided for in this Indenture relating to
authentication and delivery of such Notes continue to have been complied with
and that no Event of Default or event which is, or after notice or lapse of time
would become, an Event of Default with respect to any of the Notes has occurred
or is continuing.

      The Trustee shall not be required to authenticate or to cause an
Authenticating Agent to authenticate any Notes if the issue of such Notes
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Notes and this Indenture or otherwise in a manner which is
not reasonably acceptable to the Trustee or if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken.

      Each Note shall be dated the date of its authentication.

      No Note or Coupon appertaining thereto shall be entitled to any benefit
under this Indenture or be valid or obligatory for any purpose, unless there
appears on such Note a certificate of authentication substantially in the form
provided for in Section 2.2 or 6.11 executed by or on behalf of the Trustee or
by the Authenticating Agent by the manual signature of one of its authorized
officers. Such certificate upon any Note shall be conclusive evidence, and the
only evidence, that such Note has been duly authenticated and delivered
hereunder. Except as permitted by Section 3.5, the Trustee shall not
authenticate and deliver any Note unless all Coupons appertaining thereto then
matured have been detached and cancelled.

      Section 3.4 Exchange.

      No service charge shall be made for any exchange or redemption of Notes,
but the Company may require payment of a sum sufficient to cover any stamp tax
or other governmental charge and any other reasonable expenses (including fees
and expenses of the Trustee) that may be imposed in connection with any exchange
of Notes, other than exchanges pursuant to Section 3.5, 9.5 or 11.7.


                                       27


      Except as otherwise provided in or pursuant to this Indenture, the Company
shall not be required (i) to exchange Notes of any series during a period
beginning at the opening of business 15 days before the day the Company
transmits a notice of redemption of Notes of the series selected for redemption
and ending at the close of business on the day of the transmission, or (ii) to
exchange any Note selected for redemption in whole or in part, except in the
case of any Note to be redeemed in part, the portion thereof not to be redeemed,
or (iii) to exchange any Note selected for redemption or (iv) to issue or
exchange any Note which, in accordance with its terms, has been surrendered for
repayment at the option of the Holder, except the portion, if any, of such Note
not to be so repaid.

      Section 3.5 Mutilated, Destroyed, Lost and Stolen Notes.

      If any mutilated Note or a Note with a mutilated Coupon appertaining to it
is surrendered to the Trustee, subject to the provisions of this Section 3.5,
the Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a new Note of the same series containing identical terms and
of like principal amount and bearing a number not contemporaneously outstanding,
with Coupons appertaining thereto corresponding to the Coupons, if any,
appertaining to the surrendered Note.

      If there be delivered to the Company and the Trustee (i) evidence to their
satisfaction of the destruction, loss or theft of any Note 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 Note or Coupon has been acquired by a bona fide
purchaser, the Company shall execute and, upon the Company's request the Trustee
shall authenticate and deliver, in lieu of any such destroyed, lost or stolen
Note or in exchange for the Note to which a destroyed, lost or stolen Coupon
appertains with all appurtenant Coupons not destroyed, lost or stolen, a new
Note of the same series containing identical terms and of like principal amount
and bearing a number not contemporaneously outstanding, with Coupons
appertaining thereto corresponding to the Coupons, if any, appertaining to such
destroyed, lost or stolen Note or to the Note to which such destroyed, lost or
stolen Coupon appertains.

      Notwithstanding the foregoing provisions of this Section 3.5, in case any
mutilated, destroyed, lost or stolen Note or Coupon has become or is about to
become due and payable, the Company in its discretion may, instead of issuing a
new Note, pay such Note or Coupon; provided, however, that payment of principal
of, and any premium or interest, if any, on any Notes shall, except as otherwise
provided in Section 10.2, be payable only at an Office or Agency for such Notes
located outside the United States and its possessions.

      Upon the issuance of any new Note under this Section 3.5, the Company may
require the payment of a sum sufficient to cover any stamp tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee and counsel) connected
therewith.

      Every new Note, with any Coupons appertaining thereto issued pursuant to
this Section 3.5 in lieu of any destroyed, lost or stolen Note, or in exchange
for a Note to which a destroyed, lost or stolen Coupon appertains shall
constitute a separate obligation of the Company, whether or not the destroyed,
lost or stolen Note and Coupons appertaining thereto or


                                       28


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 Notes of such series and any Coupons, if
any, duly issued hereunder.

      The provisions of this Section 3.5, as amended or supplemented pursuant to
this Indenture with respect to particular Notes or generally, shall be 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
Notes or Coupons.

      Section 3.6 Payment of Interest and Principal; Rights to Interest
Preserved.

      The Company hereby acknowledges and confirms that it is and at all times
shall remain absolutely and unconditionally obligated to pay all amounts due and
owing by it under this Indenture. So long as any of the Notes remain
Outstanding, the Company will maintain one or more paying agents in London to
whom (i) the Notes may be presented for payment and (ii) the Notes may be
presented for exchange or redemption as provided in this Indenture. The Company
may have one or more additional paying agents. Further, the Company undertakes
to ensure that it maintains an Issuing and Paying Agent in a European Union
member state that will not be obliged to withhold or deduct amounts for or on
account of tax pursuant to European Union Council Directive 2003/48/EC of June
3, 2003 on the taxation of savings income or any law implementing or complying
with, or introduced in order to conform to, such Directive. Unless otherwise
specified, the Company hereby initially appoints JPMorgan Chase Bank, N.A.,
acting through its London branch, as the Issuing and Paying Agent.

      Unless otherwise specified in respect of any series of Notes issued
pursuant to Section 3.1, all payments of principal and interest required to be
made by the Company under this Indenture (including any Additional Amounts)
shall be made, pursuant to the terms hereof, in Euro. As provided in the
applicable Calculation Agent Agreement, the Calculation Agent shall exercise due
care in determining the rate of interest payable on the Notes and shall
communicate the same to the Company, the Trustee, Euroclear, Clearstream and any
Issuing and Paying Agent in writing as soon as practicable after such
determination. The Company hereby initially appoints JPMorgan Chase Bank, N.A.,
acting through its London branch, as the Calculation Agent (the "Calculation
Agent"), with respect to the Notes issued pursuant to this Indenture.

      Unless otherwise specified in or pursuant to this Indenture or any Notes,
payment of principal of, any premium and interest on, any Note shall be made
only at the offices of the Issuing and Paying Agent located outside the United
States and its possessions, upon presentation and surrender of the Notes or
appropriate Coupons, if any, as the case may be. Such Issuing and Paying Agent
shall credit such payments to Euroclear and Clearstream with respect to that
portion of any such Note held for their respective accounts. None of the
Company, the Trustee or the Issuing and Paying Agent shall 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 Note, or
for maintaining, supervising or reviewing any records relating to beneficial
ownership interests, and each of the Company, the Trustee or the Issuing and
Paying Agent may act or refrain from acting without liability on any information
provided by Euroclear or Clearstream.


                                       29


      At the direction of the holder of any Definitive Note or Coupon, and
subject to applicable laws and regulations, payment on such Definitive Note or
Coupon will be made (against surrender thereof to the Issuing and Paying Agent)
by check drawn on a bank in a city in the country issuing the currency in which
such Definitive Note is denominated or, with respect to a holder of
(euro)1,000,000 or more in aggregate principal amount of Notes of any series (or
its equivalent in a Foreign Currency, if the currency unit is a Foreign
Currency), by wire transfer to an account denominated in such currency
maintained by such holder with a bank located outside the United States and its
possessions; provided, however, that any such wire transfer direction shall be
given to the Issuing and Paying Agent at least 15 days prior to the applicable
payment date. Any wire instructions received by the Issuing and Paying Agent for
the Notes of such series shall remain in effect until revoked by the holder.

      With respect to Notes denominated in U.S. dollars, if any, if payment in
U.S. dollars at the offices of all paying agents outside the United States and
its possessions becomes illegal or is effectively precluded because of the
imposition of exchange controls or similar restrictions on the full payment or
receipt of such amounts in U.S. dollars, the Company will appoint an office or
agent in the United States or its possessions at which such payment may be made.
Except as described in the preceding sentence, no payment on any Notes will be
made by mail to an address in the United States or its possessions or by
transfer to an account maintained by the holder in the United States or its
possessions.

      On the London Business Day prior to each date on which any payment in
respect of any Note becomes due, the Company shall transfer or cause to be
transferred, not later than 10:00 a.m. (local time in the relevant financial
center in the jurisdiction in which the payment in respect of such Notes is to
be paid), to an account specified by the Issuing and Paying Agent such amount in
the relevant currency as shall be sufficient for the purposes of such payment in
funds settled through such payment system as the Issuing and Paying Agent and
the Company may agree.

      Subject to the foregoing provisions of this Section and Section 3.4, each
Note delivered under this Indenture upon exchange for or in lieu of any other
Note shall carry the rights to interest accrued and unpaid, and to accrue, which
were carried by such other Note.

      Section 3.7 Payment of Additional Amounts.

      The Company shall, in the case of a payment to a Holder who is not a
United States person and subject to the exceptions and limitations set out
below, pay as additional interest on the Notes, such additional amounts
("Additional Amounts") as are necessary in order that the net payment by the
Company or an Issuing and Paying Agent of the principal of and interest on the
Notes or the Coupons, if any, appertaining thereto, after deduction for any
present or future tax, assessment or governmental charge of the United States
imposed with respect to the payment, will not be less than the amount provided
in the relevant series of Notes or any Coupons to be then due and payable;
provided, however, that the foregoing obligation to pay Additional Amounts shall
not apply:

            (1) to a tax, assessment or governmental charge that is imposed or
      withheld by reason of the holder, or a fiduciary, settlor, beneficiary,
      member or shareholder of the


                                       30


      holder if the holder is an estate, trust, partnership or corporation, or a
      person holding a power over an estate or trust administered by a fiduciary
      holder, being considered as:

                  (a) being or having been present or engaged in trade or
            business in the United States or having or having had a permanent
            establishment in the United States;

                  (b) having a current or former relationship with the United
            States, including a relationship as a citizen or resident;

                  (c) being or having been a personal holding company, a passive
            foreign investment company or a controlled foreign corporation with
            respect to the United States or a corporation that has accumulated
            earnings to avoid United States federal income tax; or

                  (d) being or having been a "ten-percent shareholder" of the
            obligor under the Notes as defined in section 871(h)(3) of the
            United States Internal Revenue Code or any successor provisions, or
            being a bank receiving interest described in section 881(c)(3)(A) of
            the United States Internal Revenue Code or any successor provisions;

            (2) to a holder that is not the sole beneficial owner of the Notes
      or any Coupon appertaining thereto, or a portion of either, or that is a
      fiduciary or partnership, but only to the extent that a beneficial owner
      or a beneficiary or settlor with respect to the fiduciary, or a member of
      the partnership would not have been entitled to the payment of an
      Additional Amount had the beneficial owner, beneficiary, settlor, or
      member received directly its beneficial or distributive share of the
      payment;

            (3) to a tax, assessment or governmental charge that is imposed or
      withheld by reason of the failure to comply with certification,
      identification or information reporting requirements concerning the
      nationality, residence, identity or connection with the United States of
      the holder or beneficial owner of such Notes or any Coupon appertaining
      thereto, if compliance is required by statute or by regulation of the
      United States Treasury Department as a precondition to exemption from such
      tax, assessment or governmental charge;

            (4) to a tax, assessment or governmental charge that is imposed
      otherwise than by withholding by the Company or an Issuing and Paying
      Agent from the payment;

            (5) to a tax, assessment or governmental charge that is imposed or
      withheld by reason of a change in law, regulation, or administrative or
      judicial interpretation that becomes effective more than 15 days after the
      payment becomes due or is duly provided for, whichever occurs later;

            (6) to an estate, inheritance, gift, sales, excise, State, local,
      transfer, wealth or personal property tax or any similar tax, assessment
      or governmental charge;


                                       31


            (7) to any tax, assessment or governmental charge required to be
      withheld by any Issuing and Paying Agent from any payment of principal of
      or interest on any Notes or any Coupon appertaining thereto, if such
      payment can be made without such withholding by any other Issuing and
      Paying Agent;

            (8) to any tax, assessment or governmental charge that is imposed or
      levied by reason of the presentation (where presentation is required in
      order to receive payment) of the Notes for payment on a date more than 30
      days after the date on which such payment is first made available to the
      holder or beneficial owner, except to the extent that the holder or
      beneficial owner thereof would have been entitled to the payment of an
      additional amounts hereunder had the Notes been presented for payment on
      any date during such 30-day period;

            (9) to any tax, assessment or governmental charge that would not
      have been imposed or withheld but for the treatment of the interest paid
      by the obligor as contingent interest described in section 871(h)(4) of
      the United States Internal Revenue Code or any successor provisions; or

            (10) in the case of any combination of items (1) through (9) above.

      The Notes and any Coupons appertaining thereto are subject in all cases to
any tax, fiscal or other law or regulation or administrative or judicial
interpretation applicable thereto. Except as specifically provided under this
Section 3.7 and under Section 11.10, the Company shall not be required to make
any payment with respect to any tax, assessment or governmental charge imposed
by any government or a political subdivision or taxing authority thereof or
therein

      The Company shall use commercially reasonable efforts to provide the
Trustee, upon written request, with a certificate from an internal accountant of
the Company, stamped by the relevant tax authority, evidencing any payment of
taxes in respect of which the Company has withheld or deducted, or paid any
Additional Amounts. Copies of such documentation shall be made available to the
holders of the Notes or the Issuing and Paying Agents, as applicable, upon
request therefor.

      All references in this Indenture to principal, interest and other amounts
payable hereunder shall be deemed to include references to any Additional
Amounts payable under this Section with respect to such principal, interest or
other amounts. The foregoing obligations shall survive any termination or
discharge of the Notes and this Indenture.

      At least 10 days prior to the first Interest Payment Date with respect to
a series of Notes (or if the Notes of such series shall not bear interest prior
to Maturity, the first day on which a payment of principal is made), and at
least 10 days prior to each date of payment of principal or interest if there
has been any change with respect to the matters set forth in the below-mentioned
Officers' Certificate, the Company shall furnish to the Trustee and the Issuing
and Paying Agents an Officers' Certificate instructing the Trustee and such
Issuing and Paying Agent or Issuing and Paying Agents whether such payment of
principal of and premium, if any, or interest on the Notes of such series shall
be made to Holders of Notes of such series who are not United States persons
without withholding for or on account of any tax, assessment or other


                                       32


governmental charge described above. If any such withholding shall be required,
then such Officers' Certificate shall specify by country the amount, if any,
required to be withheld on such payments to such Holders of Notes, and the
Company agrees to pay to the Trustee or such Issuing and Paying Agent the
Additional Amounts required by this Section. The Company covenants to indemnify
the Trustee and any Issuing and Paying Agent for, and to hold them harmless
against, any loss, liability or expense reasonably incurred without negligence
or bad faith on their part arising out of or in connection with actions taken or
omitted by any of them in reliance on any Officers' Certificate furnished
pursuant to this Section.

      Section 3.8 Persons Deemed Owners.

      The Company, the Trustee and any agent of the Company or the Trustee may
treat the bearer of any Note or the bearer of any Coupon as the absolute owner
of such Note or Coupon for the purpose of receiving payment thereof or on
account thereof and for all other purposes whatsoever, whether or not any
payment with respect to such Note or Coupon shall be overdue, and none of the
Company, the Trustee or 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 Note held on its behalf
by the Common Depositary shall have any rights under this Indenture with respect
to such Global Note, and such Common Depositary may be treated by the Company,
the Trustee, and any agent of the Company or the Trustee as the owner of such
Global Note for all purposes whatsoever. None of the Company, the Trustee or any
Issuing and Paying Agent 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 Note or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.

      Section 3.9 Cancellation.

      All Notes and Coupons surrendered for payment, redemption, exchange or
conversion 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
Notes and Coupons, as well as Notes and Coupons surrendered directly to the
Trustee for any such purpose, shall be cancelled promptly by the Trustee. The
Company may at any time deliver to the Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Notes so delivered shall be cancelled
promptly by the Trustee. No Notes shall be authenticated in lieu of or in
exchange for any Notes cancelled as provided in this Section, except as
expressly permitted by or pursuant to this Indenture. All cancelled Notes and
Coupons held by the Trustee shall be disposed of by the Trustee in accordance
with its customary procedures, unless by a Company Order, the Company directs
their return to it.

      All references herein to the cancellation of Notes by the Trustee or to
the delivery of Notes to the Trustee for cancellation, shall include references
to the cancellation of Notes by the Issuing and Paying Agent or to the delivery
of Notes to the Issuing and Paying Agent for cancellation.


                                       33


      Section 3.10 Computation of Interest.

      Except as otherwise provided in or pursuant to this Indenture or in any
Note, interest on the Notes shall be computed on the basis of a 360-day year of
twelve 30-day months, and percentages resulting from any calculation of the rate
of interest on floating rate Notes shall be rounded, if necessary, to the
nearest one hundred thousandth of a percentage point, with five one-millionths
of a percentage point rounded upward (for example, 9.876545% (or .09876545)
being rounded to 9.87655% (or .0987655)). In the case of floating rate Notes
denominated in currency or currency units other than Euro, all amounts used in
or resulting from that calculation shall be rounded to the smallest whole unit
of that other currency or currency unit. All Dollar amounts used in or resulting
from any calculation shall be rounded to the nearest cent (with one-half cent
being rounded upward).

                                   ARTICLE 4

   SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE AND COVENANT DEFEASANCE

                    Section 4.1 Satisfaction and Discharge.

      Upon the direction of the Company by a Company Order, this Indenture shall
cease to be of further effect with respect to any series of Notes specified in
such Company Order and any Coupons appertaining thereto (except as to any
surviving rights of Notes of such series expressly provided for herein or
pursuant thereto), and the Trustee, on receipt of a Company Order, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture as to such series, when

            (1) either

                  (a) all Notes of such series theretofore authenticated and
            delivered and all Coupons appertaining thereto (other than (i) Notes
            and Coupons of such series which have been destroyed, lost or stolen
            and which have been replaced or paid as provided in Section 3.5,
            (ii) Coupons appertaining to Notes of such series called for
            redemption and maturing after the relevant Redemption Date whose
            surrender has been waived as provided in Section 11.6, and (iii)
            Notes 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 10.3) have been delivered to
            the Trustee for cancellation; or

                  (b) all Notes of such series and, in the case of (i) or (ii)
            of this subclause (b) 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


                                       34


            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 subclause (b)(i), (ii) or (iii) above, has
      deposited or caused to be deposited with the Trustee as trust funds in
      trust for such purpose, money in the Currency in which such Notes are
      payable in an amount sufficient to pay and discharge the entire
      indebtedness on such Notes and any Coupons appertaining thereto not
      theretofore delivered to the Trustee for cancellation, including the
      principal of, and any premium or interest, if any, on such Notes and any
      Coupons appertaining thereto, to the date of such deposit (in the case of
      Notes which have become due and payable) or to the Maturity thereof, as
      the case may be;

            (2) the Company has paid or caused to be paid all other sums payable
      hereunder by the Company with respect to the Outstanding Notes of such
      series and any Coupons appertaining thereto; and

            (3) the Company has delivered to the Trustee an Opinion of Counsel
      and an Officers' Certificate, 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.

      In the event there are Notes of two or more series hereunder, the Trustee
shall be required to execute an instrument acknowledging satisfaction and
discharge of this Indenture only if requested to do so with respect to Notes of
such series as to which it is Trustee and if the other conditions thereto are
met.

      Notwithstanding the satisfaction and discharge of this Indenture with
respect to any series of Notes, the obligations of the Company to the Trustee
(including in its capacity as Authenticating Agent, Calculation Agent and
Issuing and Paying Agent) under Section 6.6 and, if money shall have been
deposited with the Trustee pursuant to subclause (b) of clause (1) of this
Section, the obligations of the Company and the Trustee with respect to the
Notes of each series under Sections 3.5, 3.7, 4.3, 10.2 and 10.3, and with
respect to any rights to convert or exchange such Notes into securities of the
Company or another issuer, shall survive.

      Section 4.2 Defeasance and Covenant Defeasance.

            (1) Unless pursuant to Section 3.1, either or both of (i) defeasance
      of the Notes of or within a series under clause (2) of this Section 4.2
      shall not be applicable with respect to the Notes of such series or (ii)
      covenant defeasance of the Notes of or within a series under clause (3) of
      this Section 4.2 shall not be applicable with respect to the Notes of such
      series, then such provisions, together with the other provisions of this
      Section 4.2 (with such modifications thereto as may be specified pursuant
      to Section 3.1 with respect to any Notes), shall be applicable to such
      Notes and any Coupons appertaining thereto, and the Company may at its
      option by Board Resolution, at any time, with respect to such Notes and
      any Coupons appertaining thereto, elect to have Section 4.2(2) or Section
      4.2(3) be applied to such Outstanding Notes and any Coupons appertaining
      thereto upon compliance with the conditions set forth below in this
      Section 4.2.


                                       35


            (2) Upon the Company's exercise of the above option applicable to
      this Section 4.2(2) with respect to any Notes of or within a series, the
      Company shall be deemed to have been discharged from its obligations with
      respect to such Outstanding Notes and any Coupons appertaining thereto on
      the date the conditions set forth in clause (4) of this Section 4.2 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 Notes and any Coupons
      appertaining thereto, which shall thereafter be deemed to be "Outstanding"
      only for the purposes of clause (5) of this Section 4.2 and the other
      Sections of this Indenture referred to in clauses (i) and (ii) below, and
      to have satisfied all of its other obligations under such Notes and any
      Coupons appertaining thereto, and this Indenture insofar as such Notes 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: (i) the rights of Holders of such
      Outstanding Notes and any Coupons appertaining thereto to receive, solely
      from the trust fund described in clause (4) of this Section 4.2 and as
      more fully set forth in such clause, payments in respect of the principal
      of (and premium, if any) and interest, if any, on such Notes and any
      Coupons appertaining thereto when such payments are due, and any rights of
      such Holder to convert such Notes into other securities of the Company or
      exchange such Notes for securities another issuer, (ii) the obligations of
      the Company and the Trustee with respect to such Notes under Sections 3.5,
      3.7, 10.2 and 10.3, and with respect to any rights to convert such Notes
      into other securities of the Company or exchange such Notes for securities
      of another issuer, (iii) the rights, powers, trusts, duties and immunities
      of the Trustee (including in its capacity as Authenticating Agent,
      Calculation Agent and Issuing and Paying Agent) hereunder and (iv) this
      Section 4.2. The Company may exercise its option under this Section 4.2(2)
      notwithstanding the prior exercise of its option under clause (3) of this
      Section 4.2 with respect to such Notes and any Coupons appertaining
      thereto.

            (3) Upon the Company's exercise of the option to have this Section
      4.2(3) apply with respect to any Notes of or within a series, the Company
      shall be released from its obligations under Sections 10.4 and 10.5, and,
      to the extent specified pursuant to Section 3.1, any other covenant
      applicable to such Notes, with respect to such Outstanding Notes and any
      Coupons appertaining thereto, on and after the date the conditions set
      forth in clause (4) of this Section 4.2 are satisfied (hereinafter,
      "covenant defeasance"), and such Notes 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 any such
      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 Notes 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 5.1(4) or 5.1(8) or otherwise, as the case


                                       36


      may be, but, except as specified above, the remainder of this Indenture
      and such Notes and Coupons appertaining thereto shall be unaffected
      thereby.

            (4) The following shall be the conditions to application of clause
      (2) or (3) of this Section 4.2 to any Outstanding Notes 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 6.7 who shall agree to comply with the
            provisions of this Section 4.2 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 Notes and any Coupons appertaining thereto, (1) an
            amount in Dollars or in such Foreign Currency in which such Notes
            and any Coupons appertaining thereto are then specified as payable
            at Stated Maturity, or (2) Government Obligations applicable to such
            Notes and Coupons appertaining thereto (determined on the basis of
            the Currency in which such Notes 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 one day
            before the due date of any payment of principal of (and premium, if
            any) and interest, if any, on such Notes 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, (y)
            the principal of (and premium, if any) and interest, if any, on such
            Outstanding Notes and any Coupons appertaining thereto at the
            Maturity of such principal or installment of principal or premium or
            interest and (z) any mandatory sinking fund payments or analogous
            payments applicable to such Outstanding Notes and any Coupons
            appertaining thereto on the days on which such payments are due and
            payable in accordance with the terms of this Indenture and of such
            Notes 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
            Notes and any Coupons appertaining thereto shall have occurred and
            be continuing on the date of such deposit.

                  (d) In the case of an election under clause (2) of this
            Section 4.2, the Company shall have delivered to the Trustee an
            Opinion of Counsel stating that (i) the Company has received from
            the U.S. Internal Revenue Service a letter ruling, or there has been
            published by the U.S. Internal Revenue Service a Revenue 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


                                       37


            confirm that, the Holders of such Outstanding Notes 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 clause (3) of this
            Section 4.2, the Company shall have delivered to the Trustee an
            Opinion of Counsel to the effect that the Holders of such
            Outstanding Notes 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 or covenant defeasance
            under clause (2) or (3) of this Section 4.2 (as the case may be)
            have been complied with.

                  (g) If the Notes are to be redeemed prior to the Stated
            Maturity (other than from mandatory sinking fund payments or
            analogous payments), notice of such redemption shall have been duly
            given pursuant to this Indenture or provision therefor satisfactory
            to the Trustee shall have been made.

                  (h) Notwithstanding any other provisions of this Section
            4.2(4), 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 3.1.

            (5) Unless otherwise specified in or pursuant to this Indenture or
      any Note, if, after a deposit referred to in Section 4.2(4)(a) has been
      made, a Conversion Event occurs in respect of euros or the Foreign
      Currency in which the deposit pursuant to Section 4.2(4)(a) has been made,
      the indebtedness represented by such Note 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, if any),
      and interest, if any, on, such Note as the same becomes due out of the
      proceeds yielded by converting the amount or other property deposited in
      respect of such Note into the Currency in which such Note becomes payable
      as a result of such Conversion Event based on the applicable market
      exchange rate for such Foreign Currency in effect (as nearly as feasible)
      at the time of the Conversion Event.

      The Company shall pay and indemnify the Trustee (or other qualifying
trustee, collectively for purposes of this Section 4.2(5) and Section 4.3, the
"Trustee") against any tax, fee or other charge, imposed on or assessed against
the Government Obligations deposited pursuant to this Section 4.2 or the
principal or 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 Notes and any Coupons appertaining thereto.


                                       38


      Anything in this Section 4.2 to the contrary notwithstanding, 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 clause (4) of this Section 4.2 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
Section 4.2.

      Section 4.3 Application of Trust Money.

      Subject to the provisions of the last paragraph of Section 10.3, all money
and Government Obligations (or other property as may be provided pursuant to
Section 3.1) (including the proceeds thereof) deposited with the Trustee
pursuant to Section 4.1 or 4.2 in respect of any Outstanding Notes of any series
and any Coupons appertaining thereto shall be held in trust, shall not be
subject to the claims of holders of Senior Indebtedness under Section 16 and
shall be applied by the Trustee, in accordance with the provisions of such Notes
and any Coupons appertaining thereto and this Indenture, to the payment, either
directly or through any Issuing and Paying Agent (including the Company acting
as its own Issuing and Paying Agent) as the Trustee may determine, to the
Holders of such Notes and any Coupons appertaining thereto of all sums due and
to become due thereon in respect of principal (and premium, if any) and
interest; but such money and Government Obligations need not be segregated from
other funds except to the extent required by law.

      Section 4.4 Reinstatement.

            (1) If the Trustee or Issuing and Paying Agent is unable to apply
      any money or Government Obligations in accordance with Section 4.2(4) by
      reason of any legal proceeding or by reason of any order or judgment of
      any court or governmental authority enjoining, restraining or otherwise
      prohibiting such application, the Company's obligations under this
      Indenture and the Notes of the applicable series and any Coupons
      appertaining thereto issued hereunder shall be revived and reinstated as
      though no deposit has occurred pursuant to Section 4.2(4) until such time
      as the Trustee or Issuing and Paying Agent is permitted to apply all such
      money or Government Obligations in accordance with and as contemplated by
      Section 4.2(4).

            (2) If the Company's obligations under this Indenture and the Notes
      of the applicable series and any Coupons appertaining thereto issued
      hereunder shall be revived and reinstated in accordance with this Section
      4.4, the Company shall be permitted, at its discretion to withdraw all or
      a portion of the deposits made by the Company pursuant to Section 4.2(4).

            (3) If the Company elects not to withdraw any of the deposits made
      by the Company pursuant to Section 4.2(4), if and when the Trustee or
      Issuing and Paying Agent is later permitted to apply all such money or
      Government Obligations in accordance with and as contemplated by Section
      4.2(4), the rights of the Company shall be subrogated to the rights of the
      Holders of the Notes of the applicable series to receive payments from the
      money or Government Obligations deposited by the Company


                                       39


      pursuant to Section 4.2(4) and held by the Trustee or Issuing and Paying
      Agent; provided that if the Company shall have made any payment of
      principal or interest on the Notes of any series and any Coupons
      appertaining thereto because of the revival and reinstatement of its
      obligations, which payment is not sourced from any amounts deposited by
      the Company pursuant to Section 4.2(4) (such amount, in the aggregate,
      being referred to as the "Company Paid Amount"), the Company shall be
      permitted, at its discretion, to withdraw all or a portion of the deposits
      made by the Company pursuant to Section 4.2(4) up to the Company Paid
      Amount.

      Section 4.5 Qualifying Trustee.

      Any trustee appointed pursuant to Section 4.2 for the purpose of holding
trust funds deposited pursuant to that Section shall be appointed under an
agreement in form acceptable to the Trustee and shall provide to the Trustee a
certificate, upon which certificate the Trustee shall be entitled to
conclusively rely, that all conditions precedent provided for herein to the
related defeasance or covenant defeasance have been complied with. In no event
shall the Trustee be liable for any acts or omissions of said trustee.

                                   ARTICLE 5

                                    REMEDIES

      Section 5.1 Events of Default.

      "Event of Default," wherever used herein with respect to Notes of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether 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 or
occasioned by the provisions of Article 16), unless such event is specifically
deleted or modified in or pursuant to the supplemental indenture, Board
Resolution or Officers' Certificate establishing the terms of such Series
pursuant to this Indenture:

            (1) default in the payment of any interest on any Note of such
      series when such interest 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 any premium on any
      Note of such series when such principal or premium becomes due and payable
      at their Maturity; or

            (3) default in the deposit of any sinking fund or analogous payment
      when and as due by the terms of a Note of such series; or

            (4) default in the performance, or breach, of any covenant or
      agreement of the Company in this Indenture with respect to any Note of
      that series (other than a covenant or agreement a default in whose
      performance or whose breach is elsewhere in this Section specifically
      dealt with and other than a covenant or agreement included in this
      Indenture solely for the benefit of another series of Notes), and
      continuance of such


                                       40


      default or breach for a period of 30 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 Notes 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) any event of default, as defined in any mortgage, indenture
      (including this Indenture), trust agreement or other instrument securing,
      evidencing or providing for any evidence of any Indebtedness of the
      Company (including guaranteed Indebtedness but excluding any Indebtedness
      that is subordinated in right of payment to the Notes of such series), as
      a result of which an aggregate principal amount exceeding $25,000,000 of
      such Indebtedness shall have been declared due and payable prior to the
      date on which it would otherwise become due and payable, and such
      acceleration shall not have been rescinded or annulled within a period of
      30 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 25% in principal amount of the Outstanding Notes
      of such series, a written notice specifying such failure to pay and
      requiring the Company to cause such acceleration to be rescinded or
      annulled or to cause such Indebtedness to be discharged and stating that
      such notice is a "Notice of Default" hereunder; or

            (6) a court of competent jurisdiction enters an order or decree
      under any applicable Bankruptcy Law that:

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

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

                  (c) orders the liquidation of the Company;

      and the order or decree remains unstayed and in effect for 60 consecutive
      days. The term "Bankruptcy Law" means title 11, U.S. Code or any similar
      federal or state law for the relief of debtors. The term "Custodian" means
      any receiver, trustee, assignee, liquidator or other similar official
      under any Bankruptcy Law.

            (7) the commencement by the Company of a voluntary proceeding under
      any applicable bankruptcy, insolvency, reorganization (other than a
      reorganization under a foreign law that does not relate to insolvency) or
      other similar law or of a voluntary proceeding seeking to be adjudicated
      insolvent or the consent by the Company to the entry of a decree or order
      for relief in an involuntary proceeding under any applicable bankruptcy,
      insolvency, reorganization or other similar law or to the commencement of
      any insolvency proceedings against it, or the filing by the Company of a
      petition or answer or consent seeking reorganization, arrangement,
      adjustment or composition of the Company or relief under any applicable
      law, or the consent by the Company to the filing of such petition or to
      the appointment of or taking possession by a custodian, receiver,
      liquidator, assignee, trustee or similar official of the Company or any
      substantial part of the property of the Company or the making by the
      Company of an assignment for the


                                       41


      benefit of creditors, or the taking of corporate action by the Company in
      furtherance of any such action or the admitting in writing by the Company
      of its inability to pay its debts generally as they become due; or

            (8) any other Event of Default provided in or pursuant to this
      Indenture with respect to Notes of such series.

      Section 5.2 Acceleration of Maturity; Rescission and Annulment.

      If an Event of Default with respect to Notes of any series at the time
Outstanding (other than an Event of Default specified in clause (6) or (7) of
Section 5.1) occurs and is continuing, then the Trustee or the Holders of not
less than 25% in principal amount of the Outstanding Notes of such series may
declare the principal of all the Notes of such series, or such lesser amount as
may be provided for in the Notes of such 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 such lesser
amount shall become immediately due and payable.

      If an Event of Default specified in clause (6) or (7) of Section 5.1
occurs, all unpaid principal of and accrued interest on the Outstanding Notes of
that series (or such lesser amount as may be provided for in the Notes of such
series) shall ipso facto become and be immediately due and payable (an "ipso
facto acceleration") without any declaration or other act on the part of the
Trustee or any Holder of any Note of that series.

      At any time after a declaration of acceleration with respect to the Notes
of any series has been made or an ipso facto acceleration has occurred 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 not less
than a majority in principal amount of the Outstanding Notes of such series, by
written notice to the Company and the Trustee, may rescind and annul such
declaration or ipso facto acceleration and its consequences if

            (1) the Company has paid or deposited with the Trustee a sum
      sufficient to pay :

                  (a) all overdue installments of any interest on all Notes of
            such series and any Coupon appertaining thereto,

                  (b) the principal of and any premium on any Notes of such
            series which have become due otherwise than by such declaration of
            acceleration or an ipso facto acceleration and interest thereon at
            the rate or rates borne by or provided for in such Notes,

                  (c) to the extent that payment of such interest is lawful,
            interest upon overdue installments of any interest at the rate or
            rates borne by or provided for in such Notes, and

                  (d) all sums paid or advanced by the Trustee hereunder and the
            reasonable compensation, expenses, disbursements and advances of the
            Trustee,


                                       42


            its agents and counsel and all other amounts due the Trustee under
            Section 6.6; and

            (2) all Events of Default with respect to Notes of such series,
      other than the non-payment of the principal of, or any premium and
      interest, if any, on Notes of such series which shall have become due
      solely by such declaration of acceleration or an ipso facto acceleration,
      shall have been cured or waived as provided in Section 5.13.

      No such rescission shall affect any subsequent default or impair any right
consequent thereon.

      Section 5.3 Collection of Indebtedness and Suits for Enforcement by
Trustee.

      The Company covenants that if a

            (1) default is made in the payment of any installment of interest on
      any Note or any Coupon appertaining thereto when such interest shall have
      become 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 any
      premium on any Note at its Maturity,

the Company shall, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Notes and any Coupons appertaining thereto, the
whole amount of money then due and payable with respect to such Notes and any
Coupons appertaining thereto, with interest upon the overdue principal, any
premium 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 Notes, and in addition thereto, such further
amount of money 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 and all other amounts due to the
Trustee under Section 6.6.

      If the Company shall fail to pay the money it is required to pay the
Trustee pursuant to the preceding paragraph forthwith upon the demand of the
Trustee, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the money 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 Notes and
any Coupons appertaining thereto and collect the monies 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 Notes and any Coupons appertaining thereto, wherever
situated. Every recovery of judgment in any such action or other proceeding
subject to the payment of the amounts due the Trustee, its agents and attorneys
under Section 6.6, shall be for the ratable benefit of the Holders of such Notes
that shall be the subject of such action or proceeding.

      If an Event of Default with respect to Notes 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 Notes of such series and any Coupons
appertaining thereto by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such


                                       43


rights, whether for the specific enforcement of any covenant or agreement in
this Indenture or such Notes or in aid of the exercise of any power granted
herein or therein, or to enforce any other proper remedy.

      Section 5.4 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 Notes
of any series or the property of the Company or such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Notes 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 any overdue principal, premium or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,

            (1) to file and prove a claim for the whole amount, or such lesser
      amount as may be provided for in the Notes of any applicable series, of
      the principal and any premium and interest in respect of the Notes and any
      Coupons appertaining thereto 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 or counsel) and of
      the Holders of Notes or any Coupons appertaining thereto allowed in such
      judicial proceeding, and

            (2) to collect and receive any monies 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 Notes or any 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 of Notes or any Coupons, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and any other amounts due the Trustee under
Section 6.6.

      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 Note or
any Coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Notes 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 Note or
any Coupon in any such proceeding.

      Section 5.5 Trustee May Enforce Claims without Possession of Notes or
Coupons.

      All rights of action and claims under this Indenture or any of the Notes
or Coupons may be prosecuted and enforced by the Trustee without the possession
of any of the Notes 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 or
judgment, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
shall be for the ratable benefit


                                       44


of each and every Holder of the Notes or Coupons in respect of which such
judgment has been recovered.

      Section 5.6 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 any premium
or interest, upon presentation of the Notes 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:

            (1) To the payment of all amounts due the Trustee and any
      predecessor Trustee under Section 6.6;

            (2) Subject to the provisions of Article 16, to the payment of the
      amounts then due and unpaid upon the Notes and any Coupons for principal
      and any premium and interest, ratably, without preference or priority of
      any kind, according to the aggregate amounts due and payable on such Notes
      and Coupons for principal and any premium and interest, respectively; and

            (3) The balance, if any, to the Company.

      Section 5.7 Limitations on Suits.

      No Holder of any Note of any series or any Coupons appertaining thereto
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 Notes of such series;

            (2) the Holders of a majority in principal amount outstanding of the
      Outstanding Notes of such 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 such
      indemnity as is reasonably satisfactory to it against the costs, expenses
      and liabilities to be incurred in compliance with such request;

            (4) the Trustee for 30 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 30-day period by the Holders of a
      majority in principal amount of the Outstanding Notes of such series;


                                       45


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 or any Note to affect, disturb or prejudice the rights of any
other such Holders or Holders of Notes of any other series, or to obtain or to
seek to obtain priority or preference over any other 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 5.8 Unconditional Right of Holders to Receive Principal and any
Premium and Interest.

      Notwithstanding any other provision in this Indenture, the Holder of any
Note or Coupon shall have the right, which is absolute and unconditional, to
receive payment of the principal of, any premium and (subject to Sections 3.6
and 3.10) interest on such Note or payment of such Coupon, as the case may be,
on the respective Stated Maturity or Maturities therefor specified in such Note
or Coupon (or, in the case of redemption, on the Redemption Date or, in the case
of repayment at the option of such Holder if provided in or pursuant to this
Indenture, on the date such repayment is due) and to institute suit for the
enforcement of any such payment, and such right shall not be impaired without
the consent of such Holder.

      Section 5.9 Restoration of Rights and Remedies.

      If the Trustee or any Holder of a Note or a 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 each such Holder 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 each such Holder shall continue as though no such proceeding had
been instituted.

      Section 5.10 Rights and Remedies Cumulative.

      Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Notes or Coupons in the last paragraph of
Section 3.5, no right or remedy herein conferred upon or reserved to the Trustee
or to each and every Holder of a Note or a Coupon is intended to be exclusive of
any other right or remedy, and every right and remedy, to the extent permitted
by law, shall 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, to the extent permitted by law, prevent the concurrent assertion or
employment of any other appropriate right or remedy.

      Section 5.11 Delay or Omission Not Waiver.

      No delay or omission of the Trustee or of any Holder of any Note 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 any Holder of a Note or a Coupon


                                       46


may be exercised from time to time, and as often as may be deemed expedient, by
the Trustee or by such Holder, as the case may be.

      Section 5.12 Control by Holders of Notes.

      The Holders of a majority in principal amount of the Outstanding Notes 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 Notes of such
series and any Coupons appertaining thereto, provided that

            (1) such direction shall not be in conflict with any rule of law or
      with this Indenture or with the Notes of such series and would not involve
      the Trustee in personal liability,

            (2) the Trustee may take any other action deemed proper by the
      Trustee which is not inconsistent with such direction, and

            (3) such direction is not unduly prejudicial to the rights of the
      other Holders of Notes of such series not joining in such action.

      Section 5.13 Waiver of Past Defaults.

      The Holders of not less than a majority in principal amount of the
Outstanding Notes of any series on behalf of the Holders of all the Notes of
such series and any Coupons appertaining thereto may waive any past default
hereunder with respect to such series and its consequences, except a default

            (1) in the payment of the principal of, any premium or interest on,
      any Note of such series or any Coupons appertaining thereto, or

            (2) in respect of a covenant or provision hereof which under Article
      9 cannot be modified or amended without the consent of the Holder of each
      Outstanding Note 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 impair any right consequent thereon.

      Section 5.14 Waiver of Usury, Stay or Extension Laws.

      The Company covenants that (to the extent that it may lawfully do so) 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 expressly waives (to the
extent that it may lawfully do so) 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.


                                       47


      Section 5.15 Undertaking for Costs.

      All parties to this Indenture agree, and each Holder of any Note 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 any
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 5.15 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 Outstanding Notes of any series, or to any
suit instituted by any Holder for the enforcement of the payment of the
principal of (or premium, if any) or interest, if any, on any Note on or after
the respective Stated Maturities expressed in such Note (or, in the case of
redemption, on or after the Redemption Date, and, in the case of repayment, on
or after the date for repayment) or for the enforcement of the right, if any, to
convert or exchange any Note into other securities in accordance with its terms.

                                   ARTICLE 6

                                   THE TRUSTEE

      Section 6.1 Certain Rights of Trustee.

            (1) The Trustee need perform only those duties that are specifically
      set forth in this Indenture and no others, and the Trustee shall not be
      liable except for the performance of such duties and obligations as are
      specifically set forth in this Indenture, and no implied covenants or
      obligations shall be read into this Indenture against the Trustee.

            (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 case of any such certificates or opinions which by any provision hereof
      are specifically required to be furnished to the Trustee, the Trustee
      shall examine the certificates and opinions to determine whether or not
      they conform to the requirements of this Indenture, but need not confirm
      or investigate the accuracy of mathematical calculations or other facts
      stated therein.

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

                  (a) this paragraph (3) does not limit the effect of paragraphs
            (1) and (2) of this Section 6.1;


                                       48


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

                  (c) the Trustee shall not be liable with respect to any action
            it takes or omits to take in good faith in accordance with a
            direction received by it pursuant to Section 5.12; and

                  (d) 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.

      Every provision of this Indenture that in any way relates to the Trustee
is subject to paragraphs (1), (2) and (3) of this Section 6.1.

            (4) 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.

            (5) 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 Note, together with any coupons appertaining thereto,
      to the Trustee for authentication and delivery pursuant to Section 3.3
      which shall be sufficiently evidenced as provided therein) and any
      resolution of the Board of Directors may be sufficiently evidenced by a
      Board Resolution.

            (6) 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 shall be herein specifically prescribed) may, in the
      absence of bad faith on its part, rely upon a Board Resolution, an Opinion
      of Counsel or an Officers' Certificate.

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

            (8) 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 Notes of any series or any related
      Coupons pursuant to this Indenture, unless such Holders shall have offered
      to the Trustee reasonable security or indemnity against the costs,
      expenses and liabilities which might be incurred by it in compliance with
      such request or direction.


                                       49


            (9) 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, but 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,
      personally or by agent or attorney.

            (10) 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.

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

            (12) The Trustee shall not be charged with knowledge of any default
      or Event of Default with respect to the Notes of any series unless either
      (1) such default or Event of Default is known by a Responsible Officer or
      (2) written notice of such default or Event of Default shall have been
      given to the Trustee by the Company or any other obligor on the Notes of
      any series or by any Holder of the Notes of any series, which notice shall
      refer to this Indenture and such Notes.

            (13) The Calculation Agent, the Authenticating Agent and the Issuing
      and Paying Agent shall have the same immunities, protections and
      exculpations as the Trustee set forth hereunder.

      Section 6.2 Notice of Defaults.

      Within 90 days after the occurrence of any default hereunder with respect
to the Notes of any series, the Trustee shall transmit by mail to all Holders of
Notes of such series entitled to receive reports pursuant to Section 7.3(3),
notice of such default hereunder actually known to a Responsible Officer, 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, if any),
or interest, if any, on, or any sinking fund or purchase fund installment with
respect to, any Note 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 in good
faith determine that the withholding of such notice is in the best interest of
the Holders of Notes and Coupons of such series; and provided, further, that in
the case of any default of the character specified in Sections 5.1(4) and 5.1(5)
with respect to Notes of such series, no such notice to Holders shall be given
until such default shall have become an Event of Default with respect to Notes
of such series. For the purpose of this Section 6.2, the term "default" means
any event that is, or after notice or lapse of time or both would become, an
Event of Default with respect to Notes of such series.


                                       50


      Section 6.3 Not Responsible for Recitals or Issuance of Notes.

      The recitals contained herein and in the Notes, 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
Notes or Coupons, except that the Trustee represents that it is duly authorized
to execute and deliver this Indenture, authenticate the Notes and perform its
obligations hereunder. Neither the Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Company of Notes or the proceeds
thereof.

      Section 6.4 May Hold Notes.

      The Trustee, any Issuing and Paying Agent, any Authenticating Agent or any
other agent of the Company, in its individual or any other capacity, may become
the owner or pledgee of Notes and Coupons and may otherwise deal with the
Company with the same rights it would have if it were not Trustee, Issuing and
Paying Agent, Authenticating Agent or such other agent.

      Section 6.5 Money Held in Trust.

      Except as provided in Section 4.3 and Section 10.3, money held by the
Trustee in trust hereunder need not be segregated from other funds except to the
extent required by law and shall be held uninvested. The Trustee shall be under
no liability for interest on any money received by it hereunder except as
otherwise agreed to in writing with the Company.

      Section 6.6 Compensation and Reimbursement.

      The Company agrees:

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

            (2) except as otherwise expressly provided herein, to reimburse the
      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 reasonable compensation and the expenses,
      advances and disbursements of its agents and counsel), except any such
      expense, disbursement or advance as may be attributable to its negligence
      or bad faith.

            (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 own 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, except to the extent
      that any such loss, liability or expense was due to the Trustee's
      negligence or bad faith.


                                       51


      As security for the performance of the obligations of the Company under
this Section, the Trustee for the Notes of any series shall have a claim prior
to the Notes of such series 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, if any) or interest, if any, on particular Notes or any Coupons of such
series.

      To the extent permitted by law and without prejudice to any other rights
available to the Trustee under applicable law, any compensation or expense
incurred by the Trustee after a default specified in or pursuant to Section 5.1
is intended to constitute an expense of administration under any then applicable
bankruptcy or insolvency law. "Trustee" for purposes of this Section 6.6 shall
include any predecessor Trustee but the negligence or bad faith of any Trustee
shall not affect the rights of any other Trustee under this Section 6.6.

      The provisions of this Section 6.6 shall survive the satisfaction and
discharge of this Indenture or the earlier resignation or removal of the Trustee
and shall apply with equal force and effect to the Trustee in its capacity as
Authenticating Agent, Issuing and Paying Agent and Calculation Agent.

      Section 6.7 Corporate Trustee Required; Eligibility.

      There shall at all times be a Trustee hereunder that is a Corporation
organized and doing business under the laws of the United States of America that
has a combined capital and surplus of at least $50,000,000, and that is subject
to supervision or examination by Federal or state authority. 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.

      Section 6.8 Resignation and Removal; Appointment of Successor.

            (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 pursuant to Section
      6.9.

            (2) The Trustee may resign at any time with respect to the Notes of
      one or more series by giving written notice thereof to the Company. If the
      instrument of acceptance by a successor Trustee required by Section 6.9
      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 with respect to such series.

            (3) The Trustee may be removed at any time with respect to the Notes
      of any series by Act of the Holders of a majority in principal amount of
      the Outstanding Notes of such series, delivered to the Trustee and the
      Company.

            (4) If at any time:


                                       52


                  (a) the Trustee shall cease to be eligible under Section 6.7
            and shall fail to resign after written request therefor by the
            Company or any such Holder of a Note of any series who has been a
            bona fide Holder of a Note of such series for at least six months,
            or

                  (b) 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 with respect to all Notes or the
            Notes of such series, or (ii) any Holder of a Note who has been a
            bona fide Holder of a Note 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 removal of the
            Trustee with respect to all Notes of such series 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 the Notes 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 Notes of such series (it being understood
      that any such successor Trustee may be appointed with respect to the Notes
      of one or more or all of such series and that at any time there shall be
      only one Trustee with respect to the Notes of any particular series) and
      shall comply with the applicable requirements of Section 6.9. If, within
      one year after such resignation, removal or incapacity, or the occurrence
      of such vacancy, a successor Trustee with respect to the Notes of any
      series shall be appointed by Act of the Holders of a majority in principal
      amount of the Outstanding Notes of such series delivered to the Company
      and the retiring Trustee, the successor Trustee so appointed shall,
      forthwith upon its acceptance of such appointment in accordance with the
      applicable requirements of Section 6.9, become the successor Trustee with
      respect to the Notes of such series and to that extent supersede the
      successor Trustee appointed by the Company. If no successor Trustee with
      respect to the Notes of any series shall have been so appointed within
      three months after such appointment might have been made hereunder by the
      Company or the Holders of Notes and accepted appointment in the manner
      required by Section 6.9, any Holder of a Note who has been a bona fide
      Holder of a Note 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
      the Notes of such series.

            (6) The Company shall give notice of each resignation and each
      removal of the Trustee with respect to the Notes of any series and each
      appointment of a successor Trustee with respect to the Notes of any series
      by publishing notice of such event once in an Authorized Newspaper in each
      Place of Payment for such series located outside the United States and its
      possessions. Each notice shall include the name of the successor Trustee
      with respect to the Notes of such series and the address of its Corporate
      Trust Office.


                                       53


            (7) In no event shall any retiring Trustee be liable for the acts or
      omissions of any successor Trustee hereunder.

      Section 6.9 Acceptance of Appointment by Successor.

            (1) Upon the appointment hereunder of any successor Trustee with
      respect to all Notes, such successor Trustee so appointed shall execute,
      acknowledge and deliver to the Company and 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 hereunder of the retiring
      Trustee; but, on the request of the Company or such successor Trustee or
      the Holders of at least 10% in principal amount of the applicable series
      of Notes then Outstanding, such retiring Trustee, upon payment of its
      charges, shall execute and deliver an instrument transferring to such
      successor Trustee all the rights, powers and trusts of the retiring
      Trustee and, subject to Section 10.3, 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.

            (2) Upon the appointment hereunder of any successor Trustee with
      respect to the Notes of one or more (but not all) series, the Company, the
      retiring Trustee and such successor Trustee shall execute and deliver an
      indenture supplemental hereto wherein each successor Trustee shall accept
      such appointment and which (1) shall contain such provisions as shall be
      necessary or desirable to transfer and confirm to, and to vest in, such
      successor Trustee all the rights, powers, trusts and duties of the
      retiring Trustee with respect to the Notes 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 Notes, 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 Notes of that or those series as to which the retiring
      Trustee is not retiring shall continue to be vested in the retiring
      Trustee, and (3) shall add to or change any of the provisions of this
      Indenture as shall be necessary to provide for or facilitate the
      administration of the trusts hereunder by more than one Trustee, it being
      understood that nothing herein or in such supplemental indenture shall
      constitute such Trustees co-trustees of the same trust, that each such
      Trustee shall be trustee of a trust or trusts hereunder separate and apart
      from any trust or trusts hereunder administered by any other such Trustee
      and that no Trustee shall be responsible for any notice given to, or
      received by, or any act or failure to act on the part of any other Trustee
      hereunder, and, upon the execution and delivery of such supplemental
      indenture, the resignation or removal of the retiring Trustee shall become
      effective to the extent provided therein, such retiring Trustee shall have
      no further responsibility for the exercise of rights and powers or for the
      performance of the duties and obligations vested in the Trustee under this
      Indenture with respect to the Notes of that or those series to which the
      appointment of such successor Trustee relates other than as hereinafter
      expressly set forth, 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 with respect to the Notes of
      that or those series to which the appointment of such successor Trustee
      relates; but, on request of the Company or such


                                       54


      successor Trustee, such retiring Trustee, upon payment of its charges with
      respect to the Notes of that or those series to which the appointment of
      such successor Trustee relates and subject to Section 10.3 shall duly
      assign, transfer and deliver to such successor Trustee, to the extent
      contemplated by such supplemental indenture, the property and money held
      by such retiring Trustee hereunder with respect to the Notes of that or
      those series to which the appointment of such successor Trustee relates,
      subject to its claim, if any, provided for in Section 6.6.

            (3) Upon request of any Person appointed hereunder as a 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 (1) or (2) of this
      Section, as the case may be.

            (4) No Person shall accept its appointment hereunder as a successor
      Trustee unless at the time of such acceptance such successor Person shall
      be eligible under this Article.

      Section 6.10 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 to which the Trustee shall sell or otherwise transfer all or
substantially all of its corporate trust business, shall be the successor of the
Trustee hereunder, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, provided, that such Corporation
shall be otherwise eligible under this Section. In case any Notes 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 Notes so authenticated with the
same effect as if such successor Trustee had itself authenticated such Notes.

      Section 6.11 Appointment of Authenticating Agent.

      The Trustee may appoint one or more Authenticating Agents acceptable to
the Company with respect to one or more series of Notes, and which shall be
authorized to act on behalf of the Trustee to authenticate Notes of that or
those series issued upon original issue, exchange, partial redemption or partial
repayment or pursuant to Section 3.5, and Notes 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. Wherever reference is
made in this Indenture to the authentication and delivery of Notes 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 must be acceptable to the Company and, except as
provided in or pursuant to this Indenture, shall at all times be a Corporation
that is authorized under applicable law and by its charter to act as an
Authenticating Agent and has a combined capital and surplus of at least
$50,000,000. If at any time an Authenticating Agent shall cease to be


                                       55


eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect specified in this Section.

      The Trustee hereby appoints JPMorgan Chase Bank, N.A., acting through its
London branch, as Authenticating Agent, and the Company hereby confirms that
such Authenticating Agent is acceptable to it.

      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 to which the Authenticating Agent shall
sell or otherwise transfer all or substantially all of its corporate trust
business, shall be the successor of such Authenticating Agent hereunder,
provided such Corporation shall be otherwise eligible under this Section,
without the execution or filing of any paper or any further act on the part of
the Trustee or the Authenticating Agent.

      An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and 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 may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall publish notice of such
appointment at least once in an Authorized Newspaper in the place where such
successor Authenticating Agent has its principal office if such office is
located outside the United States. 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. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section.

      The Company agrees to pay each Authenticating Agent from time to time
reasonable compensation for its services under this Section. If the Trustee
makes such payments, it shall be entitled to be reimbursed for such payments,
subject to the provisions of Section 6.6.

      If an Authenticating Agent is appointed with respect to one or more series
of Notes pursuant to this Section, the Notes 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 in substantially the
following form:

      This is one of the Notes of the series designated herein referred to in
the within-mentioned Indenture.


                                       56


                                                JPMORGAN CHASE BANK, N.A.
                                                as Trustee

                                                By______________________________
                                                      as Authenticating Agent

                                                By______________________________
                                                        Authorized Officer

      If all of the Notes of any series may not be originally issued at one
time, and if the Trustee does not have an office capable of authenticating Notes
upon original issuance located in a Place of Payment where the Company wishes to
have Notes of such series authenticated upon original issuance, the Trustee, if
so requested by Company Request (which writing need not be accompanied by or
contained in an Officers' Certificate by the Company), shall appoint in
accordance with this Section (and subject to such procedures as shall be
acceptable to the Trustee) an Authenticating Agent having an office in a Place
of Payment designated by the Company with respect to such series of Notes.

                                   ARTICLE 7

                         REPORTS BY TRUSTEE AND COMPANY

      Section 7.1 Reports by Trustee.

            (1) Within 60 days after September 15 of each year commencing with
      the first September 15 following the first issuance of Notes pursuant to
      Section 3.1, the Trustee shall transmit, a brief report dated as of such
      September 15 with respect to any of the events specified below in this
      Section 7.1(1), which may have occurred since the later of the immediately
      preceding September 15 and the date of this Indenture:

                  (a) any change to the eligibility of the Trustee;

                  (b) the character and amount of any advances made by it, as
            Trustee, which remain unpaid on the date of such report, and for the
            reimbursement of which it claims or may claim a lien or charge,
            prior to that of the Notes, on the trust estate or on property or
            funds held or collected by it as Trustee, if such advances so
            remaining unpaid aggregate more than one-half of 1 per centum of the
            principal amount of Notes issued pursuant to this Indenture that are
            Outstanding on such date;

                  (c) any change to the amount, interest rate, and maturity date
            of all other indebtedness owing to the Trustee in its individual
            capacity, on the date of such report, by the Company, with a brief
            description of any property held as collateral security therefor;


                                       57


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

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

                  (f) any additional issue of a series of Notes issued pursuant
            to this Indenture which it has not previously reported; and

                  (g) any action taken by the Trustee in the performance of its
            duties under this Indenture which it has not previously reported and
            which in its opinion materially affects the Notes, except action in
            respect of a default, notice of which has been or is to be withheld
            by it in accordance with Section 6.2.

            (2) The Trustee shall transmit the reports required by Section
      7.1(1) at stated intervals of not more than 12 months, with respect to any
      of the events specified in Section 7.1(1) which may have occurred within
      the previous 12 months (but if no such event has occurred within such
      period no report need be transmitted).

            (3) Notwithstanding anything herein to the contrary, reports
      pursuant to this Section shall be transmitted by mail to all Holders of
      Notes then Outstanding as have, within the two years preceding such
      transmission, filed their names and addresses with the Trustee for that
      purpose. A copy of each such report shall, at the time of such
      transmission to Holders, be filed with each stock exchange upon which the
      Notes are then listed. The Company will notify the Trustee when the Notes
      are listed on any stock exchange.

      Section 7.2 Reports by Company

      The Company shall:

            (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
      Notes Exchange Act of 1934, as amended; or, if the Company is not required
      to file information, documents or reports pursuant to either of said
      Sections, then it shall 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 Notes
      Exchange Act of 1934, as amended, 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,


                                       58


      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, in accordance with Section 1.6(1) of this Indenture,
      to the Holders, within 30 days after the filing thereof with the Trustee,
      such summaries of any information, documents and reports required to be
      filed by the Company, pursuant to paragraphs (1) and (2) of this Section
      as may be required by rules and regulations prescribed from time to time
      by the Commission.

                                   ARTICLE 8

                         CONSOLIDATION, MERGER AND SALES

      Section 8.1 Company May Consolidate, Etc., Only on Certain Terms.

      The Company shall not consolidate with or merge into any other Person
(whether or not affiliated with the Company), or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to any
other Person (whether or not affiliated with the Company), and the Company shall
not permit any other Person (whether or not affiliated with the Company) to
consolidate with or merge into the Company or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to the
Company; unless:

            (1) either the Company shall be the continuing corporation, or the
      Person (if other than the Company) formed by such consolidation or into
      which the Company is merged or the Person which acquires by conveyance or
      transfer or by lease the properties and assets of the Company
      substantially as an entirety shall expressly assume, by an indenture
      supplemental hereto, executed and delivered to the Trustee, in form
      satisfactory to the Trustee, the due and punctual payment of the principal
      of (and premium, if any) and interest, if any, on all the Notes and any
      Coupons appertaining thereto and the performance of every covenant of this
      Indenture on the part of the Company to be performed or observed;

            (2) immediately after giving effect to such transaction, no default
      or Event of Default shall have happened and be continuing; and

            (3) the Company and the successor Person have delivered to the
      Trustee an Officers' Certificate and an Opinion of Counsel each stating
      that such consolidation, merger, conveyance or transfer or lease and such
      supplemental indenture comply with this Article and that all conditions
      precedent herein provided for relating to such transaction have been
      complied with.

      For the purpose of this Section 8.1, the term "default" means any event
that is, or after notice or lapse of time or both would become, an Event of
Default with respect to Notes of such series.


                                       59


      Section 8.2 Successor Person Substituted for Company.

      Upon any consolidation by the Company with or merger of the Company into
any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety to any Person in accordance
with Section 8.1, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; and thereafter, except in
the case of a lease, the predecessor Person shall be released from all
obligations and covenants under this Indenture, the Notes and the Coupons.

                                   ARTICLE 9

                             SUPPLEMENTAL INDENTURES

      Section 9.1 Supplemental Indentures without Consent of Holders.

      Without the consent of any Holders of Notes 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, 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 Notes; or

            (2) to add to the covenants and agreements of the Company for the
      benefit of the Holders of all or any series of Notes (as shall be
      specified in such supplemental indenture or indentures) or to surrender
      any right or power herein conferred upon the Company; or

            (3) to add to or change any of the provisions of this Indenture to
      provide that Notes may be registrable as to principal, to change or
      eliminate any restrictions on the payment of principal of, any premium or
      interest on, Notes, to permit Notes to be exchanged for Notes of other
      authorized denominations or to permit or facilitate the issuance of Notes
      in uncertificated form, provided any such action shall not adversely
      affect the interests of the Holders of Outstanding Notes of any series or
      any Coupons appertaining thereto in any material respect; or

            (4) to evidence and provide for the acceptance of appointment
      hereunder by a successor Trustee with respect to the Notes of one or more
      series and to add to or change any of the provisions of this Indenture as
      shall be necessary to provide for or facilitate the administration of the
      trusts hereunder by more than one Trustee, pursuant to the requirements of
      Section 6.9; or

            (5) to cure any ambiguity or 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,


                                       60


      provided that no such action pursuant to this clause (5) shall adversely
      affect the interests of the Holders of Notes of any series then
      Outstanding or any Coupons appertaining thereto in any material respect;
      or

            (6) to establish the form or terms of Notes of any series and any
      related Coupons as permitted by Sections 2.1 and 3.1, including the
      provisions and procedures relating to Notes convertible into or
      exchangeable for any securities of any Person (including the Company); or

            (7) to add any additional Events of Default with respect to all or
      any series of Notes (as shall be specified in such supplemental
      indenture); or

            (8) 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 Notes pursuant to Article 4, provided that any
      such action shall not adversely affect the interests of any Holder of an
      Outstanding Note of such series and any Coupons appertaining thereto or
      any other Outstanding Note or Coupon in any material respect; or

            (9) to secure payment on the Notes pursuant to Section 10.4 or
      otherwise; or

            (10) to amend or supplement any provision contained herein or in any
      supplemental indenture, provided that no such amendment or supplement
      shall materially adversely affect the interests of the Holders of any
      Notes then Outstanding and any Coupons appertaining thereto; or

            (11) to comply with the clearing system requirements of Euroclear
      and Clearstream, as appropriate, with respect to Notes that are issued in
      the form of Global Notes.

      Section 9.2 Supplemental Indentures with Consent of Holders

      With the consent of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Notes of each series 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 Company's 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 Notes of such series under
this Indenture or the Notes of such series; provided, however, that no such
supplemental indenture, without the consent of each Holder of each Outstanding
Note affected thereby, shall:

            (1) change the Stated Maturity of the principal of, or any premium
      or installment of interest on, any Note, or reduce the principal amount
      thereof or the rate (or modify the calculation of such rate) of interest
      thereon, or any premium payable upon the redemption thereof or otherwise,
      or reduce the amount of the principal of an Original Issue Discount Note
      that would be due and payable upon a declaration of acceleration of the
      Maturity thereof pursuant to Section 5.2 or the amount thereof provable in
      bankruptcy pursuant to Section 5.4, change the redemption provisions or
      adversely affect the right of


                                       61


      repayment at the option of any Holder as contemplated by Article 13, or
      change the Place of Payment, Currency in which the principal of, any
      premium or interest on, any Note 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, on or after the
      Redemption Date or, in the case of repayment at the option of the Holder,
      on or after the date for repayment), or modify any of the provisions of
      Section 3.7 in a manner that adversely affect the rights of the Holders of
      any Notes then Outstanding and any Coupons appertaining thereto; or

            (2) reduce the percentage in principal amount of the Outstanding
      Notes 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 (of 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 15.4 for quorum or
      voting; or

            (3) modify any of the provisions of this Section, Section 5.13 or
      Section 10.6, except to increase any such percentage or to provide that
      certain other provisions of this Indenture cannot be modified or waived
      without the consent of the Holder of each Outstanding Note affected
      thereby; or

            (4) modify any of the provisions of this Indenture relating to the
      subordination of the Notes in a manner adverse to Holders of Notes; or

            (5) make any change that adversely affects the right to convert or
      exchange any Note into or for securities of the Company or other
      securities, (whether or not issued by the Company) cash or property in
      accordance with its terms.

      A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture, which shall have been included expressly and solely
for the benefit of one or more particular series of Notes, or which modifies the
rights of the Holders of Notes 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 Notes of any other series.

      It shall not be necessary for any Act of Holders of Notes under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.

      Any consent given by any Holder of a Note under this Section 9.2 shall be
irrevocable for a period of six months after the day of execution thereof, but
may be revoked at any time thereafter by such Holder or by his successor in
title by filing written notice of such revocation with the Trustee at its
Corporate Trust Office; provided, however, that such consent shall not be
revocable after the holders of not less than a majority in aggregate principal
amount of the Notes of the series of which such Note is a part at the time
Outstanding shall have consented to such supplemental indenture. No notation on
any Note of the fact of such consent shall be necessary, but any such written
consent by the Holder of any Note shall be conclusive and binding on all


                                       62


future Holders and owners of the same Note and of all Notes delivered in
exchange therefor, unless revoked in the manner and during the period provided
in this Section 9.2.

      Section 9.3 Execution of Supplemental Indentures.

      As a condition to executing, or accepting the additional trusts created
by, any supplemental indenture permitted by this Article or the modifications
thereby of the trust 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 and an Officers' Certificate stating that all
conditions precedent provided for herein to the execution of such supplemental
indenture have been complied with. 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, or is otherwise
not reasonably acceptable to the Trustee.

      Section 9.4 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 a Note theretofore or thereafter authenticated and delivered hereunder and of
any Coupon appertaining thereto shall be bound thereby.

      Section 9.5 Reference in Notes to Supplemental Indentures.

      Notes 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 Notes 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 Notes of such series in equal aggregate principal amounts, and such
exchange shall be made without cost to the Holders.

      Section 9.6 Effect on Senior Indebtedness.

      No supplemental indenture shall directly or indirectly modify or eliminate
the provisions of Article 16 in any manner, which might terminate or impair the
subordination of the Notes of any series to any Senior Indebtedness, or
adversely affect the rights of any holder of Senior Indebtedness, without the
prior written consent of the holders of such Senior Indebtedness.

      Section 9.7 Notice of Supplemental Indenture.

      Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to Section 9.2, the Company shall transmit to
the Holders of Outstanding Notes of any series affected thereby a notice setting
forth in general terms the substance of such supplemental indenture. Failure to
send such notice will not impair the validity of such supplemental indenture.


                                       63


                                   ARTICLE 10

                                    COVENANTS

      Section 10.1 Payment of Principal, any Premium, Interest.

      The Company covenants and agrees for the benefit of the Holders of the
Notes of each series that it will duly and punctually pay the principal of, and
any premium or interest, if any, on the Notes of such series in accordance with
the terms thereof, any Coupons appertaining thereto and this Indenture. Any
interest due on any Note on or before the Maturity thereof, shall be payable
only upon presentation and surrender of the Coupons appertaining thereto for
such interest as they severally mature. When and as paid, all Notes of such
series shall be cancelled and disposed of in accordance with the Section 3.9
hereof.

      Section 10.2 Maintenance of Office or Agency.

      The Company shall maintain in each Place of Payment for any series of
Notes an Office or Agency where Notes of such series may be presented or
surrendered for payment (subject to the following sentence), where Notes of such
series may be surrendered for exchange, where Notes of such series that are
convertible or exchangeable may be surrendered for conversion or exchange, and
where notices and demands to or upon the Company in respect of the Notes of such
series relating thereto and this Indenture may be served. The Company shall
maintain, subject to any laws or regulations applicable thereto, an Office or
Agency in a Place of Payment for each series of Notes which is located outside
the United States and its possessions where Notes of such series and any Coupons
appertaining thereto may be presented and surrendered for payment; provided,
however, that if the Notes of such series are listed on The London Stock
Exchange plc or the Luxembourg Stock Exchange or any other stock exchange
located outside the United States and its possessions and such stock exchange
shall so require, the Company shall maintain an Issuing and Paying Agent in
London, Luxembourg or any other required city located outside the United States
and its possessions, as the case may be, so long as the Notes of such series are
listed on such exchange. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of 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, exchanges, conversions, notices and demands may
be made or served at the Corporate Trust Office of the Trustee, except that
Notes of such series and any Coupons appertaining thereto may be presented and
surrendered for payment at the place specified for the purpose with respect to
such Notes as provided in or pursuant to this Indenture, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.

      Except as otherwise provided in or pursuant to this Indenture, no payment
of principal, premium or interest with respect to Notes shall be made at any
Office or Agency in the United States or its possessions or by check mailed to
any address in the United States or its possessions or by transfer to an account
maintained with a bank located in the United States or its possessions;
provided, however, if amounts owing with respect to any Notes shall be payable
in Dollars, payment of principal of, any premium or interest on, any such Note
may be made at the Corporate Trust Office of the Trustee or any Office or Agency
designated by the Company in the


                                       64


Borough of Manhattan, The City of New York, if (but only if) payment of the full
amount of such principal, premium or interest at all offices outside the United
States and its possessions maintained for such purpose by the Company in
accordance with this Indenture is illegal or effectively precluded by exchange
controls or other similar restrictions, and the Company has delivered to the
Trustee an opinion of counsel to that effect.

      The Company may also from time to time designate one or more other Offices
or Agencies where the Notes of one or more series may be exchanged, presented or
surrendered for any or all 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 each Place of Payment for Notes of any series for such purposes. The Company
shall 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 provided in or pursuant to this Indenture, the Company hereby
designates London as the Place of Payment for each series of Notes and initially
appoints JPMorgan Chase Bank, N.A., acting through its London branch, as the
Issuing and Paying Agent of the Company in London for all of the foregoing
purposes. The Company may subsequently appoint a different Office or Agency in
the London for the Notes of any series.

      Section 10.3 Money for Notes Payments to Be Held in Trust.

      If the Company shall at any time act as its own Issuing and Paying Agent,
with respect to any series of Notes, it shall, on or before each due date of the
principal of, any premium or interest on, any of the Notes of such 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 Notes of such series are payable (except as otherwise
specified pursuant to Section 3.1 for the Notes of such series) sufficient to
pay the principal or any premium or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided, and
shall promptly notify the Trustee of its action or failure so to act.

      Whenever the Company shall have one or more Issuing and Paying Agents for
any series of Notes, it shall, no later than 10:00 A.M. (London time) on the
London Business Day prior to each due date of the principal of, any premium or
interest on, any Notes of such series, deposit with any Issuing and 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 or any premium or interest so becoming due, such sum to be held in
trust for the benefit of the Persons entitled thereto, and (unless such Issuing
and Paying Agent is the Trustee) the Company will promptly notify the Trustee of
its action or failure so to act.

      The Company shall cause each Issuing and Paying Agent for any series of
Notes other than the Trustee to execute and deliver to the Trustee an instrument
in which such Issuing and Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Issuing and Paying Agent shall:

            (1) hold all sums held by it for the payment of the principal of,
      any premium or interest on, Notes of such series in trust for the benefit
      of the Persons entitled thereto


                                       65


      until such sums shall be paid to such Persons or otherwise disposed of as
      provided in or pursuant to this Indenture;

            (2) give the Trustee notice of any default by the Company (or any
      other obligor upon the Notes of such series) in the making of any payment
      of principal, any premium or interest on, Notes of such 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 Issuing and 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 Issuing and Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Issuing and Paying Agent, such sums to be held
by the Trustee upon the same terms as those upon which such sums were held by
the Company or such Issuing and Paying Agent; and, upon such payment by any
Issuing and Paying Agent to the Trustee, such Issuing and Paying Agent shall be
released from all further liability with respect to such sums.

      Except as otherwise provided herein or pursuant hereto, any money
deposited with the Trustee or any Issuing and Paying Agent, or then held by the
Company, in trust for the payment of the principal of, any premium or interest
on, any Note of any series or any Coupon appertaining thereto and remaining
unclaimed for two years after such principal or any such premium or interest
shall have become due and payable shall be paid to the Company on Company
Request, or (if then held by the Company), unless otherwise required by
mandatory provisions of applicable escheat or abandoned or unclaimed property
laws, shall be discharged from such trust; and the Holder of such Note or any
Coupon appertaining thereto shall thereafter, as an unsecured general creditor,
look only to the Company for payment thereof, and all liability of the Trustee
or such Issuing and 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 Issuing and 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 in each Place of Payment for such
series, 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 nor shall it be later than two years after such principal and any
premium or interest shall have become due and payable, any unclaimed balance of
such money then remaining will be repaid to the Company.

      Section 10.4 Limitations on Pledges and Liens.

            (1) After the date of the execution and delivery of this Indenture
      and so long as any Notes shall be Outstanding, the Company will not pledge
      or otherwise subject to any lien (any such pledge or lien being
      hereinafter referred to as a "Lien") any of its property or assets to
      secure Indebtedness for money borrowed, incurred, issued, assumed or
      guaranteed by the Company without thereby expressly securing the due and
      punctual payment of the principal of and interest on the Notes equally and
      ratably with any and all other obligations and Indebtedness secured by
      such Lien, so long as any such other


                                       66


      obligations and Indebtedness shall be so secured; provided, however, that
      this restriction shall not prohibit or otherwise restrict:

                  (a) the Company from creating, incurring or suffering to exist
            upon any of its property or assets any Lien in favor of any
            Subsidiary of the Company;

                  (b) the Company (i) from creating, incurring or suffering to
            exist a purchase money Lien upon any such property, assets, Capital
            Stock or Indebtedness acquired by the Company prior to, at the time
            of, or within one year after (1) in the case of physical property or
            assets, the later of the acquisition, completion of construction
            (including any improvements on existing property) or commencement of
            commercial operation of such property or (2) in the case of shares
            of Capital Stock, Indebtedness or other property or assets, the
            acquisition of such shares of Capital Stock, Indebtedness, property
            or assets, (ii) from acquiring property or assets subject to Liens
            existing thereon at the date of acquisition thereof, whether or not
            the Indebtedness secured by any such Lien is assumed or guaranteed
            by the Company, or (iii) from creating, incurring or suffering to
            exist Liens upon any property of any Person, which Liens exist at
            the time any such Person is merged with or into or consolidated with
            the Company (or becomes a Subsidiary of the Company) or which Liens
            exist at the time of a sale or transfer of the properties of any
            such Person as an entirety or substantially as an entirety to the
            Company;

                  (c) the Company from creating, incurring or suffering to exist
            upon any of its property or assets Liens in favor of the United
            States, or any agency, department or other instrumentality thereof,
            to secure progress, advance or other payments pursuant to any
            contract or provision of any statute (including maintaining
            self-insurance or participating in any fund in connection with
            worker's compensation, disability benefits, unemployment insurance,
            old age pensions or other types of social benefits, or joining in
            any other provisions or benefits available to companies
            participating in any such arrangements);

                  (d) the Company from creating, incurring or suffering to exist
            upon any of its property or assets Liens securing the performance of
            letters of credit, bids, tenders, sales contracts, purchase
            agreements, repurchase agreements, reverse repurchase agreements,
            bankers' acceptances, leases, surety and performance bonds, and
            other similar obligations incurred in the ordinary course of
            business;

                  (e) the Company from creating, incurring or suffering to exist
            Liens upon any real property acquired or constructed by the Company
            primarily for use in the conduct of its business;

                  (f) the Company from entering into any arrangement with any
            Person providing for the leasing by the Company of any property or
            assets, which property or assets have been or will be sold or
            transferred by the Company to such Person with the intention that
            such property or assets will be leased back to the Company, if the
            obligations in respect of such lease would not be included as
            liabilities on a consolidated balance sheet of the Company;


                                       67


                  (g) the Company from creating, incurring or suffering to exist
            upon any of its property or assets Liens to secure non-recourse debt
            in connection with the Company engaging in any leveraged or
            single-investor or other lease transactions, whether (in the case of
            Liens on or relating to leases or groups of leases or the particular
            properties subject thereto) such Liens are on the particular
            properties subject to any leases involved in any of such
            transactions and/or the rental or other payments or rights under
            such leases or, in the case of any group of related or unrelated
            leases, on the properties subject to the leases comprising such
            group and/or on the rental or other payments or rights under such
            leases, or on any direct or indirect interest therein, and whether
            (in any case) (A) such Liens are created prior to, at the time of,
            or at any time after the entering into of such lease transactions
            and/or (B) such leases are in existence prior to, or be entered into
            by the Company at the time of or at any time after, the purchase or
            other acquisition by the Company of the properties subject to such
            leases;

                  (h) the Company from creating, incurring or suffering to exist
            (A) other consensual Liens in the ordinary course of business of the
            Corporation that secure Indebtedness that, in accordance with
            generally accepted accounting principles, would not be included in
            total liabilities as shown on the Company's consolidated balance
            sheet, or (B) Liens created by the Company in connection with any
            transaction intended by the Company to be a sale of property or
            assets of the Company, provided that such Liens are upon any or all
            of the property or assets intended to be sold, the income from such
            property or assets and/or the proceeds of such property or assets;

                  (i) the Company from creating, incurring or suffering to exist
            Liens on property or assets financed through tax-exempt municipal
            obligations, provided that such Liens are only on the property or
            assets so financed;

                  (j) any extension, renewal or replacement (or successive
            extensions, renewals or replacements), in whole or in part, of any
            of the foregoing; provided, however, that any such extension,
            renewal or replacement shall be limited to all or a part of the
            property or assets (or substitutions therefor) which secured the
            Lien so extended, renewed or replaced (plus improvements on such
            property); and

                  (k) the Company from creating, incurring or suffering to exist
            any other Lien not otherwise permitted by any of the foregoing
            clauses (a) through (j) above if the aggregate amount of all secured
            debt of the Company secured by such Liens would not exceed 10% of
            the excess of the Company's consolidated assets over the
            consolidated liabilities as shown on the Company's most recent
            audited consolidated financial statements in accordance with
            generally accepted accounting principles.

            (2) For the purposes of this Section 10.4, any contract by which
      title is retained as security (whether by lease, purchase, title retention
      agreement or otherwise) for the payment of a purchase price shall be
      deemed to be a purchase money Lien. Nothing in this Section 10.4 shall
      apply to any Lien of any kind upon any of the properties of any character
      of the Company existing on the date of execution and delivery of this
      Indenture.


                                       68


            (3) Nothing contained in this Section 10.4 or elsewhere in this
      Indenture shall prevent or be deemed to prohibit the creation, assumption
      or guaranty by the Company of any Indebtedness not secured by a Lien or
      the issuance by the Company of any debentures, notes or other evidences of
      Indebtedness not secured by a Lien, whether in the ordinary course of
      business or otherwise.

            (4) The entry by the Company into any contract, document, agreement
      or instrument (which shall include bank credit facilities and loan
      agreements), in the ordinary course of business or otherwise, which
      contract, document agreement or instrument may provide for or contain a
      right of set-off between the Company and such other party to the contract,
      document agreement or instrument shall not result in, or be deemed to
      constitute, the creation or incurrence of a "Lien" as such term is used in
      this Indenture.

      Section 10.5 Corporate Existence.

      Subject to Article 8, the Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existences
and that of each of its Subsidiaries and its rights (charter and statutory) and
franchises; provided, however, that the foregoing shall not obligate the Company
or any of its Subsidiaries to preserve any such right or franchise if the
Company or any such Subsidiary shall determine that the preservation thereof is
no longer desirable in the conduct of its business or the business of such
Subsidiary and that the loss thereof is not disadvantageous in any material
respect to any Holder.

      Section 10.6 Waiver of Certain Covenants.

      The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Section 10.4 of this Indenture with respect
to the Notes of any series if, before the time for such compliance, the Holders
of at least a majority in principal amount of the Outstanding Notes of such
series, by Act of such Holders, either shall waive such compliance in such
instance or generally shall have waived compliance with such term, provision or
condition, but no such waiver shall extend to or affect such term, provision or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such term, provision or condition shall remain in full force
and effect. The Company shall obtain and file with the Trustee, before or after
the time for such compliance, evidence of the consent of such Holders.

      Section 10.7 Company Statement as to Compliance; Notice of Certain
Defaults.

            (1) The Company shall deliver to the Trustee, within 120 days after
      the end of each fiscal year, a written statement (which need not be
      contained in or accompanied by an Officers' Certificate) signed by the
      principal executive officer, the principal financial officer or the
      principal accounting officer of the Company, stating that

                  (a) a review of the activities of the Company during such year
            and of its performance under this Indenture has been made under his
            or her supervision, and


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                  (b) to the best of his or her knowledge, based on such review,
            (a) the Company has complied with all the conditions and covenants
            imposed on it under this Indenture throughout such year, or, if
            there has been a default in the fulfillment of any such condition or
            covenant or agreement, specifying each such default known to him or
            her and the nature and status thereof, and (b) no event has occurred
            and is continuing which is, or after notice or lapse of time or both
            would become, an Event of Default, or, if such an event has occurred
            and is continuing, specifying each such event known to him and the
            nature and status thereof.

            (2) The Company shall deliver to the Trustee, within five days after
      the occurrence thereof, written notice of any Event of Default or any
      event which after notice or lapse of time or both would become an Event of
      Default pursuant to clause (4) or (5) of Section 5.1.

            (3) The Trustee shall have no duty to monitor the Company's
      compliance with the covenants contained in this Article 10 other than as
      specifically set forth in this Section 10.7.

      Section 10.8 Limitation on Indebtedness.

      The Company shall not permit (1) the aggregate amount of Senior
Subordinated Indebtedness Outstanding at any time to exceed an amount equal to
100% of the aggregate amount of the par or stated value of all classes of
Capital Stock plus the surplus (including retained earnings) of the Company and
its consolidated Subsidiaries (determined in accordance with GAAP) at such time
or (2) the aggregate amount of Senior Subordinated Indebtedness and Junior
Subordinated Indebtedness Outstanding any time to exceed an amount equal to 150%
of the aggregate amount of the par or stated value of all classes of Capital
Stock plus the surplus (including retained earnings) of the Company and its
consolidated Subsidiaries (determined in accordance with GAAP) at such time.

                                   ARTICLE 11

                               REDEMPTION OF NOTES

      Section 11.1 Applicability of Article.

      Except as set forth in this Article 11, or unless specified pursuant to
Section 3.1 with respect to a particular series of Notes, Notes shall not be
redeemable prior to Maturity.

      Section 11.2 Election to Redeem; Notice to Trustee.

      The election of the Company to redeem any Notes shall be evidenced by or
pursuant to a Board Resolution. In case of any redemption of Notes at the
election of the Company, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee and the Issuing and Paying
Agent of such Redemption Date and of the principal amount of Notes of such
series to be redeemed and of the provision of this Indenture or of the Notes
pursuant to which such redemption is authorized. In the case of any redemption
of Notes (a) prior to the expiration of


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any restriction on such redemption provided in the terms of such Notes or
elsewhere in this Indenture, or (b) pursuant to an election of the Company which
is subject to a condition specified in the terms of such Notes or elsewhere in
this Indenture, the Company shall furnish the Trustee with an Officers'
Certificate evidencing compliance with such restriction or condition.

      Section 11.3 Selection by Trustee of Notes to be Redeemed.

      If less than all of the Notes of any series with the same issue date,
interest rate or formula, Stated Maturity and other terms are to be redeemed,
the particular Notes to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee from the Outstanding Notes of such
series not previously called for redemption, by such method as the Trustee shall
deem fair and appropriate.

      The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Notes 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 Notes shall relate, in the case of
any Notes redeemed or to be redeemed only in part, to the portion of the
principal of such Notes which has been or is to be redeemed.

      Unless otherwise specified in or pursuant to this Indenture or the Notes
of any series, if any Note selected for partial redemption is converted into
other securities of the Company or exchanged for securities of another issuer in
part before termination of the conversion or exchange right with respect to the
portion of the Note so selected, the converted portion of such Note shall be
deemed (so far as may be) to be the portion selected for redemption. Notes which
have been converted or exchanged during a selection of Notes to be redeemed
shall be treated by the Trustee as Outstanding for the purpose of such
selection.

      Section 11.4 Notice of Redemption.

      Notice of redemption shall be given in the manner provided in Section 1.6,
not less than 30 nor more than 60 days prior to the Redemption Date, unless a
shorter period is specified in the Notes to be redeemed, to the Holders of Notes
to be redeemed. In addition, for so long as the Notes to be redeemed are listed
on the LSE and the rules of the LSE (or the U.K. Listing Authority) so require,
any notice of redemption and all other communications to the Holders of the
Notes designated for redemption shall be published in a leading daily newspaper
with general circulation in London (which is expected to be the Financial
Times).

      All notices of redemption shall state:

            (1) the Redemption Date,

            (2) the Redemption Price or, if not then ascertainable, the manner
      of calculation thereof,


                                       71


            (3) if less than all Outstanding Notes of any series are to be
      redeemed, the identification (and, in the case of partial redemption, the
      principal amount) of the particular Note or Notes to be redeemed,

            (4) in case any Note is to be redeemed in part only, the notice
      which relates to such Note shall state that on and after the Redemption
      Date, upon surrender of such Note, the Holder of such Note will receive,
      without charge, a new Note or Notes of authorized denominations for the
      principal amount thereof remaining unredeemed,

            (5) that, on the Redemption Date, the Redemption Price shall become
      due and payable upon each such Note or 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 where such Notes, together (in the case of
      Notes) with all Coupons appertaining thereto, if any, maturing after the
      Redemption Date, are to be surrendered for payment of the Redemption Price
      and any accrued interest,

            (7) that the redemption is for a sinking fund, if such is the case,

            (8) that, unless otherwise specified in such notice, Notes 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 and any Issuing and Paying Agent is furnished,

            (9) in the case of Notes of any series that are convertible into
      Common Stock of the Company or exchangeable for other securities, the
      conversion or exchange price or rate, the date or dates on which the right
      to convert or exchange the principal of the Notes of such series to be
      redeemed will commence or terminate and the place or places where such
      Notes may be surrendered for conversion or exchange, and

            (10) Common Code and ISIN reference numbers of such Notes, if any
      (or any other numbers used by a Depository to identify such Notes).

      Notice of redemption of Notes 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 11.5 Deposit of Redemption Price.

      By no later than 10:00 AM (London time) on the London Business Day prior
to any Redemption Date, the Company shall deposit, with respect to the Notes of
any series called for redemption pursuant to Section 11.4, with the Trustee or
with an Issuing and Paying Agent (or, if the Company is acting as its own
Issuing and Paying Agent, segregate and hold in trust as provided in Section
10.3) an amount of money in the applicable Currency sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date, unless otherwise specified pursuant to Section 3.1 or in the Notes
of such series) any accrued interest on, all such Notes or portions thereof
which are to be redeemed on that date.


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      Section 11.6 Notes Payable on Redemption Date.

      Notice of redemption having been given as aforesaid, the Notes so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such Notes
shall cease to bear interest and the Coupons for such interest appertaining to
any Notes so to be redeemed, except to the extent provided below, shall be void.
Upon surrender of any such Note for redemption in accordance with said notice,
together with all Coupons, if any, appertaining thereto maturing after the
Redemption Date, such Note shall be paid by the Company at the Redemption Price,
together with any accrued interest to the Redemption Date; provided, however,
that, except as otherwise provided in or pursuant to this Indenture or the Notes
of such series, installments of interest on Notes whose Stated Maturity is on or
prior to the Redemption Date shall be payable only upon presentation and
surrender of Coupons for such interest (at an Office or Agency located outside
the United States and its possessions except as otherwise provided in Section
10.2).

      If any Note surrendered for redemption shall not be accompanied by all
appurtenant Coupons maturing after the Redemption Date, such Note 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 Issuing
and Paying Agent harmless. If thereafter the Holder of such Note shall surrender
to the Trustee or any Issuing and 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 any interest represented by Coupons shall be payable only upon
presentation and surrender of those Coupons at an Office or Agency for such Note
located outside of the United States and its possessions except as otherwise
provided in Section 10.2.

      If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium until paid, shall bear
interest from the Redemption Date at the rate prescribed therefor in the Note.

      Section 11.7 Notes Redeemed in Part.

      Upon surrender of any Note in global form which is to be redeemed only in
part, the Company shall execute, and the Trustee shall authenticate and deliver
to the Common Depositary for such Note in global form as shall be specified in
the Company Order with respect thereto to the Trustee, without service charge, a
new Note in global form in a denomination equal to and in exchange for the
unredeemed portion of the principal of the Note in global form so surrendered.

      Section 11.8 Cancellation and Destruction of Notes

      All Notes redeemed and paid pursuant to the provisions of this Article 11
shall be cancelled and disposed of, as provided in Section 3.9, and, except in
the case of partial redemption of any Note, no Note shall be issued under this
Indenture in lieu thereof.


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      Section 11.9 Optional Redemption in the Event of Change in Tax Treatment.

      All or any portion of any series of Notes may be redeemed at the election
of the Company any time upon the giving of a notice of redemption as provided in
Section 11.4 and Section 1.6 (the "Early Tax Redemption"), solely if (i) as a
result of any change in, or amendment to, the laws (or any regulations or
rulings promulgated thereunder) of the United States, or any change in, or
amendment to, an official position regarding the application or interpretation
of such laws, regulations or rulings, which change or amendment is announced or
becomes effective on or after the date of this Indenture, the Company becomes or
will become obligated to pay Additional Amounts as set forth in Section 3.7 or
(ii) any act is taken by a taxing authority of the United States on or after the
date of this Indenture, whether or not such act is taken with respect to the
Company or any of its Affiliates, that results in a substantial probability that
the Company will or may be required to pay such Additional Amounts on all or any
portion of one or more series of Notes, and the Company determines, in its
business judgment, that the obligation to pay such Additional Amounts cannot be
avoided by the use of reasonable measures available to the Company, not
including substitution of the obligor under such Notes; provided that,
notwithstanding Section 11.4, no such notice of redemption shall be given less
than 35 days nor more than 60 days prior to the Redemption Date. Notes redeemed
pursuant to this Section 11.9 shall be redeemed at 100% of their principal
amount, together with interest accrued thereon to the date fixed for redemption
(or, in the case of Original Issue Discount Notes, at their accreted value); and
provided further that no Early Tax Redemption pursuant to Section 11.9(ii) above
may be made unless the Company shall have received an Opinion of Counsel to the
effect that an act taken by a taxing authority of the United States results in a
substantial probability that it will or may be required to pay the Additional
Amounts set forth in Section 3.7 and the Company shall have delivered to the
Trustee an Officers' Certificate, stating that based on such Opinion of Counsel,
the Company shall be entitled to redeem such Notes pursuant to their terms.

      Section 11.10 Special Redemption.

      If the determination is made, based on an Opinion of Counsel, in
accordance with the relevant provision of the Notes that any certification,
identification or information reporting requirements of United States law or
regulation with regard to the nationality, residence or identity of a beneficial
owner of such Notes or Coupons appertaining thereto would be applicable to a
payment of principal of or interest on such Notes or Coupons appertaining
thereto made outside the United States by the Company or a paying agent
appointed by the Company (other than a requirement that would not be applicable
to a payment made to a custodian, nominee or other agent of the beneficial
owner, or which could be satisfied by the holder, custodian, nominee or other
agent certifying that the beneficial owner is not a United States person;
provided, however, in each case that payment by a holder, custodian, nominee or
agent to the beneficial owner is not otherwise subject to any certification,
identification or information reporting requirement referred to in this
sentence), the following provisions shall be applicable:

            (1) The Company shall, promptly after it has made such
      determination, give notice to the Trustee of such determination and shall
      redeem all or the applicable portion of such series of Notes, in whole but
      not in part, at 100% of their principal amount, together with interest
      accrued to the Redemption Date (or, in the case of Original Issue Discount
      Notes, at their accreted value), as soon as practicable after such
      determination.


                                       74


            (2) As soon as practicable after it has received such notice from
      the Company, the Trustee shall give prompt notice of such determination in
      accordance with the provisions of Section 11.4 and Section 1.6, stating in
      the notice the effective date of such certification, identification or
      information reporting requirements (as advised to it in writing by the
      Company) and the dates within which the redemption by the Company shall
      occur, which dates will be the dates falling on the 60th day and the 365th
      day (or the 366th day in the case of a leap year) following the date such
      notice of determination is first given. The Trustee shall send a copy of
      such notice of determination to the Company and the paying agent appointed
      by the Company.

            (3) If the Company is required to redeem all or the applicable
      portion of a series of Notes, the Company shall give notice to the Trustee
      of such redemption at least 75 days before the date fixed for redemption
      (notwithstanding Section 11.2), unless notice within a shorter period of
      time is acceptable to the Trustee.

            (4) The Company shall not so redeem any portion of such series of
      Notes, however, if it shall, based on a subsequent event, determine, based
      on an Opinion of Counsel, not less than 30 days prior to the Redemption
      Date, that no payment would be subject to any requirement described above,
      in which case the Trustee shall give prompt notice of that determination
      in accordance with the provisions of Section 11.4 and Section 1.6 and any
      earlier redemption notice shall be deemed revoked and of no further
      effect.

            (5) In case the Company shall give notice of redemption to the
      Trustee, the Trustee shall cause to be delivered on behalf of the Company,
      at the expense of the Company, a notice of redemption, in accordance with
      the provisions of Section 11.4 and Section 1.6. The Trustee shall send a
      copy of such notice of redemption to the Company and the paying agent
      appointed by the Company.

            (6) Notwithstanding Section 11.4, any notice of redemption provided
      for in this Section 11.10 shall be given on behalf of the Company, at the
      expense of the Company not less than 60 days nor more than 90 days prior
      to Redemption Date.

            (7) Notwithstanding the above provisions of this Section 11.10, if
      and so long as the certification, identification or information reporting
      requirements referred to above in this Section 11.10 would be fully
      satisfied by payment of United States withholding, backup withholding or a
      similar tax (but without any requirement that the nationality, residence
      or identity of such Holder be disclosed to the Company or the paying agent
      appointed by the Company or any governmental authority), the Company may
      elect, prior to publication of the notice of redemption contemplated in
      this Section to pay as additional interest such Additional Amounts as are
      necessary in order that, following the effective date of such
      requirements, every net payment made outside the United States by the
      Company or a paying agent appointed by the Company of the principal of and
      interest on the applicable portion of such series of Notes or on any
      Coupon appertaining thereto eligible to be redeemed, to a Holder who is
      not a United States person, after deduction for such United States
      withholding, backup withholding or similar tax (other than a withholding,
      backup withholding or similar tax which (i) would not be applicable in the


                                       75


      circumstances referred to in the parenthetical clause of the first
      sentence of this Section 11.10 pertaining to payments to a custodian,
      nominee or other agent or (ii) is described in any of the clauses (1)
      through (10) of Section 3.7 (except for Section 3.7(3), or to the extent
      involving Section 3.7(3), Section 3.7(10)), will not be less than the
      amount provided in the Notes or such Coupons to be then due and payable.

                                   ARTICLE 12

                                  SINKING FUNDS

      Section 12.1 Applicability of Article.

      Unless specified pursuant to Section 3.1 with respect to a particular
series of Notes, Notes shall not be entitled to any sinking funds.

                                   ARTICLE 13

                       REDEMPTION AT THE OPTION OF HOLDERS

      Section 13.1 Applicability of Article.

      Unless specified pursuant to Section 3.1 with respect to a particular
series of Notes, Holders shall not have the option to require redemption of any
Notes prior to their Stated Maturity and, if the terms of a particular series of
Notes provide that they shall be redeemable at the option of the Holders of
Notes, notice of redemption shall be given by the Holders of Notes not less than
15 days prior to the date specified as the Redemption Date in such notice.

                                   ARTICLE 14

                           NOTES IN FOREIGN CURRENCIES

      Section 14.1 Applicability of Article.

      Whenever this Indenture provides for (1) any action by, or the
determination of any of the rights of, Holders of Notes of any series in which
not all of such Notes are denominated in the same Currency, or (ii) any
distribution to Holders of Notes, in the absence of any provision to the
contrary in the form of Note of any particular series or pursuant to this
Indenture or the Notes, any amount in respect of any Note denominated in a
Currency other than Dollars shall be treated for any such action or distribution
as that amount of Dollars that could be obtained for such amount on such
reasonable basis of exchange as the Company may specify in a written notice to
the Trustee.


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                                   ARTICLE 15

                          MEETINGS OF HOLDERS OF NOTES

      Section 15.1 Purposes for Which Meetings May Be Called.

      A meeting of Holders of Notes 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 Act provided
by this Indenture or under applicable law, to be made, given or taken by Holders
of Notes of such series.

      Section 15.2 Call, Notice and Place of Meetings.

            (1) The Trustee may at any time call a meeting of Holders of Notes
      of any series for any purpose specified in Section 15.1, to be held at
      such time and at such place in the Borough of Manhattan, The City of New
      York, or in London or in such other place outside the United States and
      its possessions as the Trustee shall determine. Notice of every meeting of
      Holders of Notes 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 1.6, not less
      than 21 nor more than 180 days prior to the date fixed for the meeting.

            (2) In case at any time the Company (by or pursuant to a Board
      Resolution) or the Holders of at least 10% in principal amount of the
      Outstanding Notes of any series or all series shall have requested the
      Trustee to call a meeting of the Holders of Notes of such series or all
      series, respectively, for any purpose specified in Section 15.1, by
      written request setting forth in reasonable detail the action proposed to
      be taken at the meeting, and the Trustee shall not have given notice in
      the manner provided in Section 1.6 of such meeting within 21 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
      Notes of such series in the amount above specified, as the case may be,
      may determine the time and the place in the Borough of Manhattan, The City
      of New York, or in London for such meeting and may call such meeting for
      such purposes by giving notice thereof as provided in clause (1) of this
      Section.

      Section 15.3 Persons Entitled to Vote at Meetings.

      To be entitled to vote at any meeting of Holders of Notes of any series, a
Person shall be (1) a Holder of one or more Outstanding Notes 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 Notes 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 Notes 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.


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      Section 15.4 Quorum; Action.

      The Persons entitled to vote a majority in aggregate principal amount of
the Outstanding Notes of the relevant series shall constitute a quorum for any
meeting of Holders of Notes of such series. 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 Notes 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 any reconvened meeting, such reconvened
meeting may be further adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
reconvened meeting. Notice of the reconvening of any adjourned meeting shall be
given as provided in Section 15.2(1), 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. Notice of the reconvening of an adjourned meeting shall state
expressly the percentage, as provided above, of the principal amount of the
Outstanding Notes of such series which shall constitute a quorum.

      Except as limited by the proviso to Section 9.2, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted only by the affirmative vote of the Holders of a
majority in principal amount of the Outstanding Notes of that series; provided,
however, that, except as limited by the proviso to Section 9.2, any resolution
with respect to any request, demand, authorization, direction, notice, consent,
waiver or other Act 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 Notes 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 Notes of such
series.

      Except as limited by the proviso to Section 9.2, any resolution passed or
decision taken at any meeting of Holders of Notes of any series duly held in
accordance with this Section shall be binding on all the Holders of Notes of
such series and the Coupons appertaining thereto, whether or not such Holders
were present or represented at the meeting.

      Section 15.5 Determination of Voting Rights; Conduct and Adjournment of
Meetings.

            (1) Notwithstanding any other provisions of this Indenture, the
      Trustee may make such reasonable regulations as it may deem advisable for
      any meeting of Holders of Notes of such series in regard to proof of the
      holding of Notes 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 Notes shall be proved in
      the manner specified in Section 1.4 and the appointment of any proxy shall
      be proved in the manner specified in Section 1.4 or by having the
      signature of the person executing the proxy witnessed or guaranteed by any
      trust company, bank or banker authorized by Section 1.4 to certify to the
      holding of Notes. Such regulations may provide that written instruments
      appointing proxies, regular


                                       78


      on their face, may be presumed valid and genuine without the proof
      specified in Section 1.4 or other proof.

            (2) 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 Notes as provided in Section
      15.2(2), in which case the Company or the Holders of Notes 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 Notes of such series
      represented at the meeting.

            (3) At any meeting, each Holder of a Note of such series or proxy
      shall be entitled to one vote for each $1,000 principal amount of Notes of
      such series held or represented by him or such other amount established
      pursuant to Section 3.1; provided, however, that no vote shall be cast or
      counted at any meeting in respect of any Note 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 Note of such series or proxy.

            (4) Any meeting of Holders of Notes of any series duly called
      pursuant to Section 15.2 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 Notes of such series represented at the meeting;
      and the meeting may be held as so adjourned without further notice.

      Section 15.6 Counting Votes and Recording Action of Meetings.

      The vote upon any resolution submitted to any meeting of Holders of Notes
of any series shall be by written ballots on which shall be subscribed the
signatures of the Holders of Notes of such series or of their representatives by
proxy and the principal amounts and serial numbers of the Outstanding Notes 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 triplicate of all
votes cast at the meeting. A record, at least in triplicate, of the proceedings
of each meeting of Holders of Notes 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 facts setting forth a
copy of the notice of the meeting and showing that said notice was given as
provided in Section 15.2 and, if applicable, Section 15.4. 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.


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      Section 15.7 Preservation of Rights of Trustee and Holders

      Nothing contained in this Article 15 shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Holders of any or all
series or any rights expressly or impliedly conferred hereunder to make such
call, any hindrance or delay in the exercise of any right or rights conferred
upon or reserved to the Trustee or to the Holders of any or all series under any
of the provisions of this Indenture or of such series of Notes.

                                   ARTICLE 16

                           SUBORDINATION OF SECURITIES

      Section 16.1 Agreement to Subordinate.

      The Company, for itself, its successors and assigns, covenants and agrees,
and each Holder of Notes issued hereunder and under any indenture supplemental
hereto or pursuant to a Board Resolution and Officers' Certificate ("Additional
Provisions") by such Holder's acceptance thereof likewise covenants and agrees,
that all Notes issued pursuant to this Indenture shall be subject to the
provisions of this Article 16; and each Holder of a Note, whether upon original
issue or upon transfer or assignment thereof, accepts and agrees to be bound by
such provisions.

      The payment by the Company of the principal of, and any premium and
interest, if any, on, all Notes of each series issued hereunder and under any
Additional Provisions shall, to the extent and in the manner hereinafter set
forth, be subordinate in right of payment to the prior payment in full of all
Senior Indebtedness with respect to such series, whether outstanding at the date
of this Indenture or thereafter incurred.

      The Indebtedness represented by the Notes (1) shall not be deemed to
constitute "Senior Indebtedness," as such term is defined herein, (2) shall
constitute "Senior Subordinated Indebtedness" as that term is defined herein,
and (3) shall rank pari passu with the Indebtedness evidenced by the securities
outstanding and to be outstanding under the USMTN Subordinated Indenture.

      Section 16.2 Default on Senior Indebtedness.

      In the event and during the continuation of any default by the Company in
the payment of principal, premium, interest or any other amount due on any
Senior Indebtedness with respect to the Notes of any series, or in the event
that the maturity of any Senior Indebtedness with respect to the Notes of any
series has been accelerated because of a default, then, in either case, no
payment shall be made by the Company with respect to the principal (including
redemption and sinking fund payments) of, or any premium or interest on, the
Notes of such series.

      In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section 16.2, such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the


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holders of such Senior Indebtedness or their respective representatives, or to
the trustee or trustees under any indenture pursuant to which any of such Senior
Indebtedness may have been issued, as their respective interests may appear, but
only to the extent that the holders of such Senior Indebtedness (or their
representative or representatives or a trustee) notify the Trustee in writing
within 90 days of such payment of the amounts then due and owing on such Senior
Indebtedness and only the amounts specified in such notice to the Trustee shall
be paid to the holders of such Senior Indebtedness.

      Section 16.3 Liquidation; Dissolution; Bankruptcy.

      Upon any payment by the Company or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, to creditors
upon any dissolution, winding-up, liquidation or reorganization of the Company,
whether voluntary or involuntary, or in bankruptcy, insolvency, receivership or
other proceedings, all amounts due upon all Senior Indebtedness with respect to
the Notes of any series shall first be paid in full, or payment thereof provided
for in money in accordance with its terms, before any payment is made by the
Company on account of the principal of, and premium or interest, if any, on, the
Notes of such series; and upon any such dissolution, winding-up, liquidation or
reorganization, or in any such bankruptcy, insolvency, receivership or other
proceeding, any payment by the Company, or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, which the
Holders or the Trustee would be entitled to receive from the Company, except for
the provisions of this Article 16, shall be paid by the Company or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the Holders or by the Trustee under
this Indenture if received by them or it, directly to the holders of such Senior
Indebtedness (pro rata to such holders on the basis of the respective amounts of
such Senior Indebtedness held by such holders, as calculated by the Company) or
their representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, as their respective interests may appear, to the extent
necessary to pay such Senior Indebtedness in full, in money or money's worth,
after giving effect to any concurrent payment or distribution to or for the
holders of such Senior Indebtedness, before any payment or distribution is made
to the Holders of the Notes of such series or to the Trustee.

      In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing shall be received by the
Trustee before all such Senior Indebtedness is paid in full, or provision is
made for such payment in money in accordance with its terms, such payment or
distribution shall be held in trust for the benefit of and shall be paid over or
delivered to the holders of such Senior Indebtedness or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior Indebtedness may have been issued,
as their respective interests may appear, as calculated by the Company, for
application to the payment of all such Senior Indebtedness remaining unpaid to
the extent necessary to pay such Senior Indebtedness in full in money in
accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the benefit of the holders of such Senior Indebtedness.


                                       81


      For purposes of this Article 16, the words "cash, property or securities"
shall not be deemed to include shares of stock 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
subordinated at least to the extent provided in this Article 16 with respect to
the Notes of the relevant series to the payment of all Senior Indebtedness with
respect to the Notes of such series that may at the time be outstanding,
provided that (i) such Senior Indebtedness is assumed by the new corporation, if
any, resulting from any such reorganization or readjustment, and (ii) the rights
of the holders of such Senior Indebtedness are not, without the consent of such
holders, altered by such reorganization or readjustment. 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, transfer or
lease of its property as an entirety, or substantially as an entirety, to
another Person upon the terms and conditions provided for in Sections 8.1 and
8.2 of this Indenture shall not be deemed a dissolution, winding-up, liquidation
or reorganization for the purposes of this Section 16.3 if such other Person
shall, as a part of such consolidation, merger, conveyance or transfer, comply
with the conditions stated in Sections 8.1 and 8.2 of this Indenture. Nothing in
Section 16.2 or in this Section 16.3 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 6.6 of this Indenture.

      Section 16.4 Subrogation.

      Subject to the payment in full of all Senior Indebtedness with respect to
the Notes of any series, the rights of the Holders of the Notes of such series
shall be subrogated to the rights of the holders of such Senior Indebtedness to
receive payments or distributions of cash, property or securities of the Company
applicable to such Senior Indebtedness until the principal of, and any premium
and interest, if any, on, the Notes of such series shall be paid in full; and,
for the purposes of such subrogation, no payments or distributions to the
holders of such Senior Indebtedness of any cash, property or securities to which
the Holders or the Trustee would be entitled except for the provisions of this
Article 16, and no payment over pursuant to the provisions of this Article 16 to
or for the benefit of the holders of such Senior Indebtedness by Holders of the
Notes of such series or the Trustee, shall, as between the Company, its
creditors other than holders of such Senior Indebtedness, and the Holders of the
Notes of such series, be deemed to be a payment by the Company to or on account
of such Senior Indebtedness. It is understood that the provisions of this
Article 16 are and are intended solely for the purposes of defining the relative
rights of the Holders of the Notes of each series, on the one hand, and the
holders of the Senior Indebtedness with respect to the Notes of such series on
the other hand.

      Nothing contained in this Article 16 or elsewhere in this Indenture, any
Additional Provisions or in the Notes of any series is intended to or shall
impair, as between the Company, its creditors other than the holders of Senior
Indebtedness with respect to the Notes of such series, and the Holders of the
Notes of such series, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Notes of such series the principal
of, and any premium and interest, if any, on, the Notes of such series as and
when the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders of the Notes of
such series and creditors of the Company, other than the holders of such Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or the
Holder of any Note of such series from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article 16 of the holders


                                       82


of such Senior Indebtedness in respect of cash, property or securities of the
Company, as the case may be, received upon the exercise of any such remedy.

      Upon any payment or distribution of assets of the Company referred to in
this Article 16, the Trustee, subject to the provisions of Article 6 of this
Indenture, and the Holders shall be entitled to conclusively rely upon any order
or decree made by any court of competent jurisdiction in which such dissolution,
winding-up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidation trustee, agent
or other Person making such payment or distribution, delivered to the Trustee or
to the Holders of the Notes of any series, for the purposes of ascertaining the
Persons entitled to participate in such distribution, the holders of Senior
Indebtedness with respect to the Notes of such series and other indebtedness of
the Company, as the case may be, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 16.

      Section 16.5 Trustee to Effectuate Subordination.

      Each Holder of Notes by such Holder's acceptance thereof authorizes and
directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article 16 and appoints the Trustee such Holder's attorney-in-fact for any and
all such purposes.

      Section 16.6 Notice by the Company.

      The Company shall give prompt written notice to a Responsible Officer of
any fact known to the Company that would prohibit the making of any payment of
monies to or by the Trustee in respect of the Notes of any series pursuant to
the provisions of this Article 16. Notwithstanding the provisions of this
Article 16 or any other provision of this Indenture or any Additional
Provisions, the Trustee shall not be charged with knowledge of the existence of
any facts that would prohibit the making of any payment of monies to or by the
Trustee in respect of the Notes of any series pursuant to the provisions of this
Article 16, unless and until a Responsible Officer shall have received written
notice thereof from the Company or a holder or holders of Senior Indebtedness
with respect to the Notes of such series or from any trustee therefor; and
before the receipt of any such written notice, the Trustee, subject to the
provisions of Article 6 of this Indenture, shall be entitled 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 16.6 at least two
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, any premium or interest on, any Note of such series), 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
purposes for which they were received, and shall not be affected by any notice
to the contrary that may be received by it within two Business Days prior to
such date.

      The Trustee, subject to the provisions of Article 6 of this Indenture,
shall be entitled to conclusively rely on the delivery to it of a written notice
by a Person representing himself to be a holder of Senior Indebtedness with
respect to the Notes of any series (or a trustee on behalf of


                                       83


such holder), to establish that such notice has been given by a holder of such
Senior Indebtedness or a trustee on behalf of any such holder or holders. 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 such Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article 16, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior
Indebtedness 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 16, 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.

      Upon any payment or distribution of assets of the Company referred to in
this Article 16, the Trustee and the Holders shall be entitled to rely upon any
order or decree entered by any court of competent jurisdiction in which such
insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution,
winding-up or similar case or proceeding is pending, or a certificate of the
trustee in bankruptcy, liquidating trustee, custodian, receiver, assignee for
the benefit of creditors, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Holders of the Notes of any
series, for the purpose of ascertaining the Persons entitled to participate in
such payment or distribution, the holders of Senior Indebtedness with respect to
the Notes of such series 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 16.

      Section 16.7 Rights of the Trustee; Holders of Senior Indebtedness.

      The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article 16 in respect of any Senior Indebtedness with respect
to the Notes of any series at any time held by it, to the same extent as any
other holder of such Senior Indebtedness, and nothing in this Indenture or any
Additional Provisions shall deprive the Trustee of any of its rights as such
holder.

      With respect to the holders of Senior Indebtedness with respect to the
Notes of any series, the Trustee undertakes to perform or to observe only such
of its covenants and obligations as are specifically set forth in this Article
16, and no implied covenants or obligations with respect to the holders of such
Senior Indebtedness shall be read into this Indenture or any Additional
Provisions against the Trustee. By virtue of this Article 16, the Trustee shall
not be deemed to owe any fiduciary duty to the holders of such Senior
Indebtedness and, subject to the provisions of Article 6 of this Indenture, the
Trustee shall not be liable to any holder of such Senior Indebtedness if it
shall pay over or deliver to Holders of the Notes of such series, the Company or
any other Person money or assets to which any holder of such Senior Indebtedness
shall be entitled.

      Nothing in this Article 16 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.6.


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      Section 16.8 Subordination May Not Be Impaired.

      No right of any present or future holder of any Senior Indebtedness 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 by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof that any such holder may have or
otherwise be charged with.


                                       85


      Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness with respect to the Notes of any series may, at
any time and from time to time, without the consent of or notice to the Trustee
or the Holders of Notes of such series, without incurring responsibility to such
Holders and without impairing or releasing the subordination provided in this
Article 16 or the obligations hereunder of the Holders of the Notes of such
series to the holders of such Senior Indebtedness, 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, such Senior Indebtedness, or otherwise amend
or supplement in any manner such Senior Indebtedness or any instrument
evidencing the same or any agreement under which such Senior Indebtedness is
outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing such Senior Indebtedness; (iii) release
any Person liable in any manner for the collection of such Senior Indebtedness;
and (iv) exercise or refrain from exercising any rights against the Company and
any other Person.


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      IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, as of the date first above written.

                                  CIT GROUP INC.

                                  By:  _________________________________________
                                       Name:
                                       Title:

                                  JPMORGAN CHASE BANK, N.A.,
                                           as Trustee

                                  By: __________________________________________
                                      Name:
                                      Title:

                                  JPMorgan Chase Bank, N.A., acting through
                                    its London branch
                                      as Issuing and Paying Agent,
                                      Calculation Agent and Authenticating Agent

                                  By: __________________________________________
                                      Name:
                                      Title:

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Jeffrey M. Peek, certify that:

        1. I have reviewed this quarterly report on Form 10-Q of CIT Group Inc.;

        2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

        3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

        4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

        (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

        (b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

        (c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

        (d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

        5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

        a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

        b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 7, 2006

/s/ Jeffrey M. Peek

Jeffrey M. Peek
Chairman and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Joseph M. Leone, certify that:

        1. I have reviewed this quarterly report on Form 10-Q of CIT Group Inc.;

        2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

        3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

        4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

        (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

        (b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

        (c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

        (d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

        5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

        a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

        b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 7, 2006

/s/ Joseph M. Leone

Joseph M. Leone
Vice Chairman and Chief Financial Officer

EX-32.1

EXHIBIT 32.1 Certification Pursuant to Section 18 U.S.C. Section 1350,
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

        In connection with the Quarterly Report of CIT Group Inc. (“CIT”) on Form 10-Q for the quarter ended June 30, 2006, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeffrey M. Peek, the Chief Executive Officer of CIT, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that;

        (i) The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

        (ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of CIT.

/s/ Jeffrey M. Peek

Jeffrey M. Peek
Chairman and
Chief Executive Officer
CIT Group Inc.

Dated: August 7, 2006

 

EX-32.2

EXHIBIT 32.2 Certification Pursuant to Section 18 U.S.C. Section 1350,
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

        In connection with the Quarterly Report of CIT Group Inc. (“CIT”) on Form 10-Q for the quarter ended June 30, 2006, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joseph M. Leone, the Chief Financial Officer of CIT, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that;

        (i) The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

        (ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of CIT.

/s/ Joseph M. Leone

Joseph M. Leone
Vice Chairman and Chief Financial Officer
CIT Group Inc.

Dated: August 7, 2006