WILLIAMS COMPANIES INC, S-4, 1995-06-20

WILLIAMS COMPANIES INC
S-4, 1995-06-20
NATURAL GAS TRANSMISSION

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 20, 1995

REGISTRATION NO. 33-

================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

FORM S-4

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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

THE WILLIAMS COMPANIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C>
DELAWARE 73-0569878
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
------------------------
ONE WILLIAMS CENTER
TULSA, OKLAHOMA 74172
(918) 588-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICE)
------------------------
J. FURMAN LEWIS, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
THE WILLIAMS COMPANIES, INC.
ONE WILLIAMS CENTER
TULSA, OKLAHOMA 74172
(918) 588-2000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPY TO:
KEITH L. KEARNEY, ESQ.
DAVIS POLK & WARDWELL
450 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(212) 450-4000
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.

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

If any of the securities being registered on this form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box: / /

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

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
==================================================================================================
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
% Quarterly Income Capital
Securities (Subordinated $90,752,500
Deferrable Interest Debentures Principal
due 2025) (Debentures)........... Amount (1) $93,475,075(2) $32,232.79
==================================================================================================
</TABLE>

(1) For each share of The Williams Companies, Inc. $2.21 Cumulative Preferred
Stock (the "Preferred Stock") tendered prior to the Expiration Time (as
defined herein) the exchanging holder will receive $25 principal amount of
Debentures.

(2) Calculated in accordance with Rule 457(f)(1) of the Securities Act of 1933,
as amended, based on the product of $25.75 (the average of the high and low
prices for the Preferred Stock on June 15, 1995) and the aggregate
outstanding shares of the Preferred Stock.

<PAGE> 2

CROSS REFERENCE SHEET

<TABLE>
<CAPTION>
S-4 ITEM NUMBER AND CAPTION PROSPECTUS
--------------------------- ----------
<S> <C> <C>
1. Forepart of Registration Statement and
Outside Front Cover Page of Prospectus..... Facing Page; Cross Reference Sheet; Outside
Front Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages
of Prospectus.............................. Available Information; Incorporation of
Certain Documents by Reference; Table of
Contents
3. Risk Factors, Ratio of Earnings to Fixed
Charges and Other Information.............. Prospectus Summary; Certain Considerations;
Special Factors; Ratio of Earnings to Fixed
Charges
4. Terms of the Transaction................... Prospectus Summary; Certain Considerations;
Special Factors; The Exchange Offer;
Description of Debentures; Description of
the Preferred Stock; Certain United States
Federal Income Tax Consequences
5. Pro Forma Financial Information............ Capitalization
6. Material Contacts with the Company Being
Acquired................................... *
7. Additional Information Required for
Reoffering by Persons and Parties Deemed to
be Underwriters............................ *
8. Interests of Named Experts and Counsel..... Legal Opinions; Experts
9. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities................................ *
10. Information with Respect to S-3
Registrants................................ Incorporation of Certain Documents by
Reference; The Company; Capitalization;
Market and Trading Information; Description
of Debentures; Description of the Preferred
Stock
11. Incorporation of Certain Information by
Reference.................................. Incorporation of Certain Documents by
Reference
12. Information with Respect to S-2 or S-3
Registrants................................ *
13. Incorporation of Certain Information by
Reference.................................. *
14. Information with Respect to Registrants
Other Than S-3 or S-2 Registrants.......... *
15. Information with Respect to S-3
Companies.................................. *
16. Information with Respect to S-2 or S-3
Companies.................................. *
17. Information with Respect to Companies Other
Than S-3 or S-2 Companies.................. *
18. Information if Proxies, Consents or
Authorizations are to be Solicited......... *
19. Information if Proxies, Consents or
Authorizations are not to be Solicited or
in an Exchange Offer....................... *
</TABLE>

- ---------------
* Item is omitted because answer is negative or item is inapplicable.
<PAGE> 3

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED JUNE , 1995

PROSPECTUS

THE WILLIAMS COMPANIES, INC.
OFFER TO EXCHANGE
% QUARTERLY INCOME CAPITAL SECURITIES (QUICS(SM)
(SUBORDINATED DEFERRABLE INTEREST DEBENTURES, DUE 2025)
FOR
$2.21 CUMULATIVE PREFERRED STOCK
------------------------
THE EXCHANGE OFFER AND THE WITHDRAWAL RIGHTS WILL
EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 1995, UNLESS EXTENDED.
------------------------

The Williams Companies, Inc. (the "Company") hereby offers, upon the terms
and subject to the conditions set forth in this Prospectus (the "Prospectus")
and in the accompanying Letter of Transmittal (the "Letter of Transmittal",
which together with the Prospectus, constitute the "Exchange Offer"), to
exchange up to $90,752,500 aggregate principal amount of its % Quarterly
Income Capital Securities (the "Debentures") (equivalent to $ per $25
principal amount of Debentures) for up to 3,630,100 shares of its $2.21
Cumulative Preferred Stock, $1.00 par value (the "Preferred Stock"), which
constitute all outstanding shares of the Preferred Stock as of the date of this
Prospectus.

The Debentures are offered in minimum denominations of $25 and integral
multiples thereof, and the shares of the Preferred Stock have a liquidation
preference of $25 per share. Consequently, the Exchange Offer will be effected
on the basis of $25 principal amount of Debentures for each share of Preferred
Stock validly tendered and accepted for exchange. As part of the Exchange Offer,
holders of shares of the Preferred Stock accepted for exchange in the Exchange
Offer will be entitled to receive cash equal to the accrued and unpaid dividends
on such shares accumulating after June 1, 1995 (the most recent dividend payment
date) to the Issuance Date (as herein defined) in lieu of such dividends (such
amount, without interest, the "Payment in Lieu of Accumulated Dividends"),
payable on the Issuance Date to such holders.

Pursuant to the terms and subject to the conditions of the Exchange Offer,
the Company will accept for exchange any and all shares of the Preferred Stock
validly tendered and not properly withdrawn prior to 5:00 p.m., New York City
time, on , 1995 or if the Exchange Offer is extended by the Company,
in its sole discretion, the latest time and date to which it is extended (the
"Expiration Time"). Tenders of shares of the Preferred Stock pursuant to the
Exchange Offer are irrevocable, except that shares of the Preferred Stock
tendered pursuant to the Exchange Offer may be withdrawn at any time prior to
the Expiration Time and, unless theretofore accepted for exchange pursuant to
the Exchange Offer, may be withdrawn at any time after 40 business days from the
date of this Prospectus. A holder of shares of the Preferred Stock who desires
to tender such shares and whose certificates for such shares are not immediately
available, or who cannot comply in a timely manner with the procedure for
book-entry transfer, may tender such shares of the Preferred Stock by following
the procedures for guaranteed delivery set forth in "The Exchange
Offer -- Guaranteed Delivery Procedures". For a description of the other terms
of the Exchange Offer, see "The Exchange Offer".

See "Prospectus Summary -- Comparison of Debentures and Preferred Stock",
"Certain Considerations" and "Special Factors" for a description of the
principal terms of and certain significant considerations relating to the
Exchange Offer, the Preferred Stock and the Debentures.

THE COMPANY, ITS BOARD OF DIRECTORS AND ITS EXECUTIVE OFFICERS MAKE NO
RECOMMENDATION AS TO WHETHER ANY SHAREHOLDER SHOULD EXCHANGE ANY OR ALL OF SUCH
SHAREHOLDER'S SHARES OF THE PREFERRED STOCK PURSUANT TO THE EXCHANGE OFFER.
SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO EXCHANGE THEIR SHARES OF
THE PREFERRED STOCK AND, IF SO, HOW MANY SHARES TO EXCHANGE.

NEITHER THIS TRANSACTION NOR THESE SECURITIES HAVE BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE FAIRNESS OR
MERITS OF THIS TRANSACTION NOR UPON
THE ACCURACY OR ADEQUACY OF THE
INFORMATION CONTAINED IN THIS
PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL.

- ---------------
(SM) LEHMAN BROTHERS HAS APPLIED FOR A SERVICE MARK FOR QUICS.
------------------------

THE DEALER MANAGERS FOR THE EXCHANGE OFFER ARE:
LEHMAN BROTHERS MORGAN STANLEY & CO.
INCORPORATED
------------------------

The date of this Prospectus is , 1995.
<PAGE> 4

The Debentures will mature on , 2025 and will bear interest
at an annual rate of % from the first day following the Expiration Time
(the "Issuance Date"). In addition, as part of the Exchange Offer, holders of
shares of the Preferred Stock which are accepted for exchange will receive cash
in the amount of the Payment in Lieu of Accumulated Dividends, payable on the
Issuance Date. Interest on the Debentures will be payable quarterly in arrears
on March 31, June 30, September 30 and December 31, commencing September 30,
1995 (each an "Interest Payment Date"); provided that, so long as an Event of
Default (as hereinafter defined) has not occurred and is not continuing with
respect to the Debentures, the Company will have the right to extend the
interest payment period at any time and from time to time on the Debentures for
a period not to exceed 20 consecutive quarterly interest payment periods and, as
a consequence, the quarterly interest payments on the Debentures would be
deferred (but would continue to accrue with interest thereon compounded
quarterly at the rate of interest on the Debentures) during any such extended
interest payment period (each a "Deferral Period"). In the event that the
Company exercises its right, the Company may not declare or pay dividends on, or
redeem, purchase or acquire, any of its Capital Stock (as herein defined) during
such Deferral Period. Therefore, the Company believes that the extension of a
quarterly interest payment period on the Debentures is unlikely. However, if the
Company were to extend a quarterly interest payment period on the Debentures,
the market price of the Debentures would likely be adversely affected. During
any such Deferral Period, the Company may continue to extend the interest
payment period, provided that the aggregate interest payment period, as
extended, must end on an Interest Payment Date and must not exceed 20
consecutive quarterly interest payment periods or extend beyond the maturity of
the Debentures or any date on which any Debentures are fixed for redemption.
Upon the termination of any Deferral Period and the payment of all amounts then
due, the Company may extend the quarterly payment periods anew, subject to the
above requirements. See "Description of Debentures -- Quarterly Payments" and
" -- Payment Deferrals".

The Debentures are unsecured obligations of the Company and will be
subordinate to all existing and future Senior Indebtedness (as hereinafter
defined) of the Company, but senior to all Capital Stock of the Company,
including the Preferred Stock. On May 2, 1995, approximately $1.5 billion of
such Senior Indebtedness was outstanding. In addition, the Debentures will also
be effectively subordinate to all existing and future obligations of the
Company's subsidiaries. On May 2, 1995 approximately $1.5 billion of
indebtedness of the Company's subsidiaries not included in Senior Indebtedness
was outstanding. See "Description of Debentures -- Subordination" and
"Capitalization".

Because the Company is a holding company that conducts business through its
subsidiaries, the ability of the Company to pay principal of and interest on the
Debentures is, to a large extent, dependent upon the Company's receipt of
dividends or other payments from its subsidiaries.

The Debentures will be redeemable at the option of the Company, in whole or
in part, at any time on or after September 1, 1997 (which is the same date after
which the shares of the Preferred Stock are first redeemable at the option of
the Company), at a redemption price equal to 100% of the principal amount
redeemed ($25 for each $25 principal amount of Debentures) plus accrued and
unpaid interest to the date fixed for redemption. See "Description of
Debentures -- Optional Redemption".

For federal income tax purposes, the exchange of the shares of the
Preferred Stock for Debentures will be a taxable transaction, and the Debentures
will be treated as having been issued with original issue discount. The original
issue discount rules may accelerate the timing of a holder's recognition of
income. For a discussion of these and other United States federal income tax
considerations relevant to the Exchange Offer, see "Certain
Considerations -- Original Issue Discount" and "-- Certain United States Federal
Income Tax Consequences".

The shares of the Preferred Stock are listed and principally traded on the
New York Stock Exchange (the "NYSE"). On , 1995, the last full
day of trading prior to the commencement of the Exchange Offer, the closing
sales price of the shares of the Preferred Stock on the NYSE as reported on the
Composite Tape was $ per share. Holders of shares of the Preferred Stock are
urged to obtain current market quotations therefor.

The Debentures constitute a new issue of debt securities with no
established trading market. While the Company intends to apply for listing of
the Debentures on the NYSE, there can be no assurance that an active

i
<PAGE> 5

market for the Debentures will develop or be sustained in the future on the
NYSE. Moreover, to the extent that shares of the Preferred Stock are tendered
and accepted in the Exchange Offer, the liquidity and trading market for the
Preferred Stock could be adversely affected.

Lehman Brothers and Morgan Stanley & Co. Incorporated (the "Dealer
Managers") are acting as Dealer Managers for the Exchange Offer. The Dealer
Managers have agreed to use their best efforts to solicit the exchange of the
shares of the Preferred Stock pursuant to the Exchange Offer. First Chicago
Trust Company of New York (the "Exchange Agent") is acting as Exchange Agent in
connection with the Exchange Offer and Morrow & Co., Inc. (the "Information
Agent") is acting as Information Agent in connection with the Exchange Offer.

Questions and requests for assistance may be directed to the Dealer
Managers or the Information Agent, as set forth on the back cover of this
Prospectus. Requests for or additional copies of this Prospectus, the Letter of
Transmittal and the Notice of Guaranteed Delivery may be directed to the
Information Agent.
------------------------

NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
COMPANY AS TO WHETHER SHAREHOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING THE
SHARES OF THE PREFERRED STOCK PURSUANT TO THE EXCHANGE OFFER. NO PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THE EXCHANGE OFFER, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN THE
LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MAY
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.

THE COMPANY IS NOT AWARE OF ANY JURISDICTION IN WHICH THE MAKING OF THE
EXCHANGE OFFER IS NOT IN COMPLIANCE WITH APPLICABLE LAW. IF THE COMPANY BECOMES
AWARE OF ANY JURISDICTION IN WHICH THE MAKING OF THE EXCHANGE OFFER WOULD NOT BE
IN COMPLIANCE WITH APPLICABLE LAW, THE COMPANY WILL MAKE A GOOD FAITH EFFORT TO
COMPLY WITH SUCH LAW. IF, AFTER SUCH GOOD FAITH EFFORT, THE COMPANY CANNOT
COMPLY WITH ANY SUCH LAW, THE EXCHANGE OFFER WILL NOT BE MADE TO (NOR WILL
TENDERS BE ACCEPTED FROM OR ON BEHALF OF) HOLDERS RESIDING IN SUCH
JURISDICTIONS. IN ANY JURISDICTION WHERE THE SECURITIES, BLUE SKY OR OTHER LAWS
REQUIRE THE EXCHANGE OFFER TO BE MADE BY A LICENSED BROKER OR DEALER, THE
EXCHANGE OFFER WILL BE DEEMED TO BE MADE ON BEHALF OF THE COMPANY BY THE DEALER
MANAGERS OR ONE OR MORE REGISTERED BROKERS OR DEALERS LICENSED UNDER THE LAWS OF
SUCH JURISDICTION.

NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY EXCHANGE MADE HEREUNDER
SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT
THERE HAS BEEN NO CHANGE IN THE INFORMATION SET FORTH HEREIN OR IN THE AFFAIRS
OF THE COMPANY SINCE THE DATE HEREOF.

AVAILABLE INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-4 (the "Registration
Statement", which term shall encompass all amendments, exhibits, annexes and
schedules thereto) pursuant to the Securities Act of 1933, as amended (the
"Securities Act"). The Company has filed an Issuer Tender Offer Statement on
Schedule 13E-4 (the "Schedule 13E-4", which term shall encompass all amendments
exhibits, annexes and schedules thereto) and a Transaction Statement on Schedule
13E-3 (the "Schedule 13E-3", which term shall encompass all amendments exhibits,
annexes and schedules thereto) with the Commission under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), which include certain additional
information relating to the Exchange Offer, and the rules and regulations
promulgated thereunder, covering the Debentures being offered hereby. This
Prospectus does not contain all the information set forth in the Registration
Statement, the Schedule 13E-4 and the Schedule 13E-3, certain parts of which are
omitted in accordance with the rules and regulations of the Commission, and to
which reference is hereby made. Statements made in this Prospectus as to the
contents of any contract, agreement or other document referred to are not
necessarily complete. With respect to each such contract, agreement or other
document filed as an exhibit to the Registration Statement, reference is made to
the exhibit for a more complete description of the matter involved, and each
such statement shall be deemed qualified in its entirety by such reference.

ii
<PAGE> 6

The Company is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith files periodic reports and other
information with the Commission. The Registration Statement, as well as such
reports and other information filed by the Company with the Commission, may be
inspected at the public reference facilities maintained by the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
should also be available for inspection and copying at the regional offices of
the Commission located at 7 World Trade Center, Suite 1300, New York, New York
10048 and at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511.
Copies of such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. Certain of the securities of the Company are listed on the NYSE and the
Pacific Stock Exchange Inc. Reports and other information concerning the Company
can also be inspected at the offices of the NYSE, 20 Broad Street, New York, New
York 10005 and the Pacific Stock Exchange, Inc., 301 Pine Street, San Francisco,
California 90014.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

This prospectus incorporates documents by reference which are not presented
herein or delivered herewith. These documents are available from The Williams
Companies, Inc., One Williams Center, Tulsa, Oklahoma 74172, (918) 588-2000,
Attention: Corporate Secretary. In order to ensure timely delivery of the
documents, any request should be made not later than five business days prior to
the Expiration Time.

The following documents, heretofore filed by the Company with the
Commission pursuant to the Exchange Act, are hereby incorporated by reference in
this Prospectus:

1. the Company's Annual Report on Form 10-K for the year ended
December 31, 1994;

2. the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995;

3. the Company's Current Reports on Form 8-K dated January 11, 1995,
January 31, 1995 and May 4, 1995;

4. the Company's Current Report on Form 8-K/A dated March 29, 1995,
excluding item 8 of Transco Energy Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1994, which 10-K is incorporated by
reference in the Form 8-K/A; and

5. the Proxy Statement of the Company dated March 18, 1995.

Each document filed by the Company pursuant to Section 13, 14 or 15(d) of
the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the Exchange Offer pursuant hereto shall be deemed to be
incorporated by reference in this Prospectus and to be a part of this Prospectus
from the date of filing of such document. Any statement contained in this
Prospectus or in a document incorporated or deemed to be incorporated by
reference in this Prospectus shall be deemed to be modified or superseded for
purposes of the Registration Statement and this Prospectus to the extent that a
statement contained in this Prospectus, or in any subsequently filed document
that also is or is deemed to be incorporated by reference in this Prospectus,
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to

constitute a part of the Registration Statement or this Prospectus.

iii
<PAGE> 7

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................................................................. ii
Incorporation of Certain Documents by Reference....................................... iii
Prospectus Summary.................................................................... 1
Comparison of Debentures and the Preferred Stock...................................... 7
Certain Considerations................................................................ 9
Special Factors....................................................................... 11
The Company........................................................................... 13
Ratio of Earnings to Fixed Charges.................................................... 14
Capitalization........................................................................ 14
The Exchange Offer.................................................................... 15
Market and Trading Information........................................................ 23
Transactions and Arrangements Concerning the Shares of the Preferred Stock............ 24
Certain United States Federal Income Tax Consequences................................. 24
Description of Debentures............................................................. 28
Description of the Preferred Stock.................................................... 34
Legal Opinions........................................................................ 35
Experts............................................................................... 35
</TABLE>

iv
<PAGE> 8

PROSPECTUS SUMMARY

The following summary does not purport to be complete and is qualified in
its entirety by the detailed information appearing elsewhere in this Prospectus
or by documents incorporated by reference into the Prospectus. Capitalized terms
used herein have the respective meanings ascribed to them elsewhere in this
Prospectus.

THE COMPANY

The Company, through subsidiaries, is engaged in the transportation and
sale of natural gas and related activities, natural gas gathering and processing
operations, the transportation of petroleum products, the telecommunications
business and provides a variety of other products and services to the energy
industry and financial institutions. In January of 1995 the Company sold a major
portion of its telecommunications assets and in May of 1995 the Company
completed the acquisition of Transco Energy Company which, through its
subsidiaries, transports natural gas to markets in the eastern half of the
United States. The Company's subsidiaries currently own and operate: (i) four
interstate natural gas pipeline systems and have a fifty percent interest in a
fifth; (ii) a common carrier petroleum products pipeline system; and (iii)
natural gas gathering and processing facilities and production properties. The
Company also markets natural gas and natural gas liquids. The Company's
telecommunications subsidiaries offer data, voice and video-related products and
services and customer premises equipment nationwide. The Company also has
investments in the equity of certain other companies.

CERTAIN INVESTOR CONSIDERATIONS

Prospective investors should carefully review the information contained
elsewhere in this Prospectus prior to making a decision regarding the Exchange
Offer and should particularly consider the following matters:

POTENTIAL BENEFITS TO EXCHANGING HOLDERS

- The annual interest rate on the Debentures will be %, (equivalent to
$ per $25 principal amount of Debentures) as compared with the
indicated annual dividend rate of $2.21 on the Preferred Stock. See
"Comparison of Debentures and Preferred Stock".

- The Debentures will rank senior to the shares of the Preferred Stock as
to payment in respect thereof and as to the distribution of assets upon
liquidation. However, the Debentures are unsecured obligations of the
Company and will be, and the shares of the Preferred Stock are,
subordinate in right to payment to all existing and future Senior
Indebtedness of the Company and effectively subordinated to all
obligations of the Company's subsidiaries. See "Certain
Considerations -- Subordination of Debentures".

- While dividends on the shares of the Preferred Stock may be deferred
indefinitely, the interest payment period on the Debentures can only be
extended for a maximum of 20 consecutive quarterly interest payment
periods. In each case, however, the Company believes that such deferral
is unlikely. See "Certain Considerations -- Right of Company to Defer
Payment of Interest".

- In order to benefit from the higher annual interest rate on the
Debentures, holders of the shares of the Preferred Stock need not pay any
additional cash. Holders of shares of the Preferred Stock wishing to
participate in the Exchange Offer must tender their shares of the
Preferred Stock in accordance with the instructions contained in "The
Exchange Offer -- Procedure for Tendering Preferred Stock" and in the
Letter of Transmittal prior to the Expiration Time.

POTENTIAL RISKS TO EXCHANGING HOLDERS

- The interest payment period on the Debentures may be extended for a
maximum of 20 consecutive quarterly interest payment periods. While the
Company believes that such an extension is unlikely, if

1
<PAGE> 9

the Company were to extend an interest payment period, the market price
of the Debentures would likely be adversely affected.

- Participation in the Exchange Offer will be a taxable event. In addition,
in the event the interest payment period on the Debentures is extended as
described above, holders may be required to pay taxes on an accrual basis
even though they would not receive the interest payments until a later
time. See "Certain Considerations -- Certain United States Federal Income
Tax Consequences".

- While dividends on the shares of the Preferred Stock are eligible for the
dividends received deduction for corporate holders, interest on the
Debentures will not be eligible for the dividends received deduction for
corporate holders. The dividends received deduction is not applicable for
individual, non-corporate holders. See "Comparison of Debentures and
Preferred Stock".

- There has not been any public market for the Debentures. While the
Company intends to make an application for listing of the Debentures on
the NYSE, there can be no assurance that an active market for the
Debentures will develop or be sustained in the future on such exchange.
See "Certain Considerations -- Listing and Trading of Debentures and
Preferred Stock".

OTHER CONSIDERATIONS

- Depending upon the number of shares of the Preferred Stock exchanged
pursuant to the Exchange Offer, the Preferred Stock may no longer meet
the requirements of the NYSE for continued listing and may no longer
continue to be registered under the Exchange Act. As a result the
liquidity and trading market for the Preferred Stock could be adversely
affected. See "Special Factors -- Certain Effects of the Exchange Offer;
Plans of the Company after the Exchange Offer" and "Certain
Considerations -- Listing and Trading of Debentures and Preferred Stock".

- Tendering holders will not be obligated to pay brokerage commissions or
fees to the Dealer Managers, the Exchange Agent, the Information Agent or
the Company or, subject to the instructions in the Letter of Transmittal
with respect to special issuance instructions, transfer taxes with
respect to the exchange of shares of the Preferred Stock pursuant to the
Exchange Offer. Tendering holders whose shares are held by a broker,
dealer, bank or trust company may, however, be charged a fee for services
rendered in connection with the Exchange Offer.

2
<PAGE> 10

THE EXCHANGE OFFER

PURPOSE OF THE EXCHANGE OFFER

The principal purpose of the Exchange Offer is to improve the Company's
after-tax cash flow by replacing shares of the Preferred Stock with Debentures.
The potential cash flow benefit to the Company arises because interest payable
on the Debentures will be deductible by the Company (as it accrues) for United
States federal income tax purposes, while dividends payable with respect to the
shares of the Preferred Stock are not deductible. See "Special Factors --
Purpose of the Exchange Offer".

TERMS OF THE EXCHANGE OFFER

Upon the terms and subject to the conditions of the Exchange Offer, the
Company is offering to exchange up to $90,752,500 aggregate principal amount of
its Debentures for up to 3,630,100 shares of the Preferred Stock, which
constitute all outstanding shares of the Preferred Stock as of the date of this
Prospectus. Exchanges will be made on the basis of $25 principal amount of
Debentures for each share of the Preferred Stock validly tendered and accepted
for exchange. See "The Exchange Offer -- General".

The Exchange Offer is subject to certain conditions. See "The Exchange
Offer -- Expiration; Extension; Termination; Amendment".

SECURITIES OFFERED

The Debentures will mature on , 2025 and will bear interest
at an annual rate of % from the Issuance Date. In addition, holders of
shares of the Preferred Stock accepted for exchange will receive cash in the
amount of the Payment in Lieu of Accumulated Dividends, payable on the Issuance
Date. Interest on the Debentures will be payable quarterly in arrears on March
31, June 30, September 30 and December 31, commencing September 30, 1995;
provided that, so long as an Event of Default has not occurred and is not
continuing with respect to the Debentures, the Company will have the right, upon
prior notice by public announcement given in accordance with NYSE rules at any
time, to extend the interest payment period at any time and from time to time on
the Debentures for a period not to exceed 20 consecutive quarterly interest
payment periods at any one time and, as a consequence, quarterly interest
payments on the Debentures would be deferred (but would continue to accrue with
interest thereon compounded quarterly at the rate of interest on the Debentures)
during any Deferral Period. In the event that the Company exercises this right,
the Company may not declare or pay dividends on, or redeem, purchase or acquire,
any of its Capital Stock during such Deferral Period. All series of the
Company's preferred stock, common stock and any other equity securities of the
Company are referred to herein as "Capital Stock". Therefore, the Company
believes that the extension of a quarterly interest payment period on the
Debentures is unlikely. However, should the Company determine to extend such
right in the future, the market price of the Debentures is likely to be
adversely affected. During any such Deferral Period, the Company may continue to
extend the interest payment period, provided that the aggregate interest payment
period, as extended, must end on an Interest Payment Date and must not exceed 20
consecutive quarterly interest payment periods or extend beyond the maturity of
the Debentures or any date on which any Debentures are fixed for redemption.
Upon the termination of any Deferral Period and the payment of all amounts then
due, the Company may extend the quarterly interest payment periods anew, subject
to the above requirements. See "Description of Debentures -- Quarterly Payments"
and " -- Payment Deferrals".

The Debentures are unsecured obligations of the Company and will be
subordinate to all existing and future Senior Indebtedness of the Company, but
senior to all Capital Stock of the Company, including the Preferred Stock. On
May 2, 1995, approximately $1.5 billion of such Senior Indebtedness was
outstanding. As the Debentures will be issued by the Company, the Debentures
will also be effectively subordinate to all obligations of the Company's
subsidiaries. On May 2, 1995, approximately $1.5 billion in indebtedness of the

3
<PAGE> 11

Company's subsidiaries not included in Senior Indebtedness was outstanding. See
"Description of Debentures -- Subordination". The Debentures will be redeemable
at the option of the Company, in whole or in part, at any time on or after
September 1, 1997 (which is the same date after which the shares of the
Preferred Stock are first redeemable at the option of the Company), at a
redemption price equal to 100% of the principal amount redeemed plus accrued and
unpaid interest to the date fixed for redemption. If fewer than all the
Debentures are redeemed, the Trustee under the Indenture shall select an
appropriate and fair manner pursuant to which the Debentures shall be redeemed.
See "Description of Debentures -- Optional Redemption".

For federal income tax purposes, the exchange of shares of the Preferred
Stock for Debentures will be a taxable transaction, and the Debentures will be
treated as having been issued with original issue discount. The original issue
discount rules may accelerate the timing of a holder's recognition of income.
For a discussion of these and other United States federal income tax
considerations relevant to the Exchange Offer, see "Certain
Considerations -- Original Issue Discount" and "-- Certain United States Federal
Income Tax Consequences".

EXPIRATION; EXTENSION; AMENDMENTS; TERMINATION; AND WITHDRAWAL RIGHTS

The Exchange Offer will expire at 5:00 p.m., New York City time on
, 1995, unless the Company, in its sole discretion, shall have
extended the period during which the Exchange Offer is open, in which event the
Exchange Offer will expire at the latest time and date as so extended by the
Company. See "The Exchange Offer -- Expiration; Extension; Termination;
Amendment". Tenders of shares of the Preferred Stock pursuant to the Exchange
Offer are irrevocable, except that shares of the Preferred Stock tendered
pursuant to the Exchange Offer may be withdrawn at any time prior to the
Expiration Time and, unless theretofore accepted for exchange pursuant to the
Exchange Offer, may also be withdrawn at any time after 40 business days from
the date of this Prospectus. See "The Exchange Offer -- Withdrawal Rights".

The Company expressly reserves the right, in its sole discretion, to (i)
extend, amend or modify the terms of the Exchange Offer in any manner and (ii)
withdraw or terminate the Exchange Offer and not accept for exchange any
Preferred Stock, at any time for any reason. See "The Exchange Offer --
Expiration; Extension; Termination; Amendment".

PROCEDURE FOR TENDERING

For shares of the Preferred Stock to be validly tendered pursuant to the
Exchange Offer, (i) the Letter of Transmittal or a facsimile thereof (all
references in this Prospectus to the Letter of Transmittal shall be deemed to
include a facsimile thereof) properly completed and duly executed in accordance
with the instructions contained herein and therein, together with any required
signature guarantees, or an Agent's Message (as hereinafter defined) in
connection with a book-entry transfer of shares of the Preferred Stock, must be
received by the Exchange Agent, at either of its addresses set forth on the back
cover page of this Prospectus and either (a) certificates for the shares of the
Preferred Stock must be received by the Exchange Agent at either address or (b)
such shares of the Preferred Stock must be transferred pursuant to the
procedures for book-entry transfer described herein and a confirmation of such
book-entry transfer must be received by the Exchange Agent, in each case prior
to the Expiration Time or (ii) the guaranteed delivery procedures described
herein must be complied with. See "The Exchange Offer -- General" and
"-- Procedure for Tendering Preferred Stock".

NO LETTERS OF TRANSMITTAL AND NO CERTIFICATES REPRESENTING SHARES OF THE
PREFERRED STOCK SHOULD BE SENT TO THE COMPANY, THE DEALER MANAGERS OR THE
INFORMATION AGENT. SUCH DOCUMENTS SHOULD ONLY BE SENT TO THE EXCHANGE AGENT.

SPECIAL PROCEDURE FOR BENEFICIAL OWNERS

4
<PAGE> 12

holder promptly and instruct such registered holder to tender on such beneficial
owner's behalf. If such beneficial owner wishes to tender on its own behalf,
such owner must, prior to completing and executing a Letter of Transmittal and
delivery of its shares of Preferred Stock, either make appropriate arrangements
to register ownership of the Preferred Stock in such owner's name or obtain a
properly completed stock power from the registered holder. The transfer of
registered ownership may take considerable time and may not be able to be
completed prior to the Expiration Date. See "The Exchange Offer -- Procedure for
Tendering Preferred Stock".

GUARANTEED DELIVERY PROCEDURES

If a holder desires to accept the Exchange Offer and time will not permit a
Letter of Transmittal or shares of the Preferred Stock to reach the Exchange
Agent before the Expiration Time or the procedure for book-entry transfer cannot
be completed on a timely basis, a tender may be effected in accordance with the
guaranteed delivery procedures set forth in "The Exchange Offer -- Guaranteed
Delivery Procedures".

ACCRUED DIVIDENDS

Holders of shares of the Preferred Stock accepted for exchange pursuant to
the Exchange Offer will receive cash in the amount of the Payment in Lieu of
Accumulated Dividends, payable on the Issuance Date. See "The Exchange
Offer -- Accrued Dividends".

Dividends on shares of the Preferred Stock not exchanged in the Exchange
Offer will continue to accrue and be payable when, as and if declared in
accordance with their terms.

ACCEPTANCE OF SHARES AND DELIVERY OF DEBENTURES

Subject to the terms and conditions of the Exchange Offer, including the
reservation by the Company of the right to withdraw, amend or terminate the
Exchange Offer and certain other rights, the Company will accept for exchange
shares of the Preferred Stock that are properly tendered in the Exchange Offer
and not withdrawn prior to the Expiration Time. Subject to such terms and
conditions, the Debentures issued pursuant to the Exchange Offer will be issued
as of the Issuance Date and will be delivered as promptly as practicable
following the Expiration Time. See "The Exchange Offer -- General",
"-- Expiration; Extension; Termination; Amendment".

UNTENDERED SHARES OF THE PREFERRED STOCK

Holders of shares of the Preferred Stock who do not tender their shares in
the Exchange Offer will continue to hold such shares and will be entitled to all
of the rights and preferences, and will be subject to all of the limitations,
applicable thereto. Depending upon the number of shares of the Preferred Stock
exchanged pursuant to the Exchange Offer, the Preferred Stock may no longer meet
the requirements of the NYSE for continued listing and may no longer continue to
be registered under the Exchange Act. If, as a result of the exchange of shares
of the Preferred Stock pursuant to the Exchange Offer or otherwise, the shares
of the Preferred Stock no longer meet the requirements of the NYSE for continued
listing and the listing of the shares of the Preferred Stock is discontinued, or
if the shares no longer are registered under the Exchange Act, the market for
the Preferred Stock could be adversely affected. See "Special Factors -- Certain
Effects of the Exchange Offer; Plans of the Company after the Exchange Offer".

EXCHANGE AGENT AND INFORMATION AGENT

First Chicago Trust Company of New York has been appointed as Exchange
Agent in connection with the Exchange Offer and Morrow & Co., Inc. has been
appointed as Information Agent in connection with the Exchange Offer. Questions
and requests for assistance, requests for additional copies of this Prospectus
or of the Letter of Transmittal and requests for Notices of Guaranteed Delivery
should be directed to the Information Agent. The addresses and telephone numbers
of the Exchange Agent and the Information Agent are set forth on the back cover
page of this Prospectus.

5
<PAGE> 13

DEALER MANAGERS

Lehman Brothers and Morgan Stanley & Co. Incorporated have been retained as
Dealer Managers to solicit exchanges of shares of the Preferred Stock for
Debentures. Questions with respect to the Exchange Offer may be directed to
David B. Parsons, Lehman Brothers -- Liability Management Group, at
1-800-438-3242 (toll-free) or 1-212-528-7581 (collect) or to Steven C. Sahara,
Morgan Stanley & Co. Incorporated -- Preferred Stock Group, at 1-800-422-6464
ext. 6620 (toll-free).

FEES AND EXPENSES

The expense of soliciting tenders of shares of the Preferred Stock will be
borne by the Company. Subject to the receipt of a Letter of Transmittal with the
part thereof entitled "Notice of Solicited Tenders" properly completed and duly
executed as described herein, the Company will pay to any Soliciting Dealer (as
hereinafter defined) a solicitation fee of $.50 per share of the Preferred Stock
tendered and accepted for exchange pursuant to the Exchange Offer. The Company
will pay all transfer taxes, if any, applicable to the exchange of shares of the
Preferred Stock pursuant to the Exchange Offer. See "The Exchange Offer -- Fees
and Expenses; Transfer Taxes".

6
<PAGE> 14

COMPARISON OF DEBENTURES AND THE PREFERRED STOCK

The following is a brief summary comparison of certain of the principal
terms of the Debentures and the Preferred Stock.

<TABLE>
<CAPTION>
DEBENTURES PREFERRED STOCK
-------------------------------- --------------------------------
<S> <C> <C>
Interest/Dividend Rate... % annual interest (equivalent to $2.21 annual dividend, payable
$ per $25 principal quarterly out of funds legally
amount of Debentures) payable in available therefor on December
arrears on December 31, March 1, March 1, June 1 and September
31, June 30 and September 30 of 1 of each year, when, as and if
each year, commencing September declared by the Company's Board
30, 1995, subject to the of Directors.
Company's right to defer the
interest payment period at any
time and from time to time;
provided that the aggregate
interest payment period, as
extended, must end on an
Interest Payment Date and must
not exceed 20 consecutive
quarterly interest payment
periods or extend beyond the
maturity of the Debentures or
any date on which the Debentures
are fixed for redemption as
described herein. At the end of
each Deferral Period, the
Company shall pay all interest
then accrued and unpaid
(compounded quarterly at the
rate of interest on the
Debentures). During any Deferral
Period the Company may not
declare or pay any dividend on,
or redeem, purchase or acquire,
any of its Capital Stock.
Therefore, the Company believes
that the extension of a
quarterly interest payment
period on the Debentures is
unlikely.
Maturity................. , 2025 Not applicable. There is no
mandatory redemption or sinking
fund for the Preferred Stock.

Optional Redemption...... Redeemable at the option of the Redeemable at the option of the
Company at any time on or after Company at any time on or after
September 1, 1997, in whole or September 1, 1997, in whole or
in part, at a redemption price in part, at a redemption price
equal to 100% of the principal equal to $25 per share of
amount redeemed ($25 for each Preferred Stock plus accrued and
$25 principal amount of accumulated but unpaid dividends
Debentures) plus accrued and to the date fixed for
unpaid interest to the date redemption.
fixed for redemption.
</TABLE>

7
<PAGE> 15

<TABLE>
<CAPTION>
DEBENTURES PREFERRED STOCK
-------------------------------- --------------------------------
<S> <C> <C>
Subordination............ Unsecured obligations of the Subordinate to claims of
Company and subordinated to all creditors, including holders of
existing and future Senior the Company's outstanding debt
Indebtedness of the Company, but securities, including the
senior to all Capital Stock of Debentures, but senior to the
the Company, including the common stock of the Company.
Preferred Stock. Effectively Effectively subordinated to all
subordinated to all obligations obligations of the Company's
of the Company's subsidiaries. subsidiaries.

Voting Rights............ None. Non-voting, except that if
dividends are in arrears on any
series of preferred stock of the
Company for six quarters, the
holders of all series of the
Company's preferred stock,
voting separately as a class,
are entitled to elect two
additional members of the Board
of Directors of the Company.

New York Stock Exchange Application will be made to list The shares of the Preferred
Listing................ the Debentures on the NYSE. Stock are listed on the NYSE.

Dividends Received Interest on the Debentures will Dividends on the Preferred Stock
Deduction.............. not be eligible for the are eligible for the dividends
dividends received deduction for received deduction for corporate
corporate holders. The dividends holders. The dividends received
received deduction is not deduction is not applicable for
applicable for individual, individual, non- corporate
non-corporate holders. holders.

Original Issue The Debentures will be treated The shares of the Preferred
Discount............... as having been issued with Stock were not issued with
original issue discount. original issue discount.
</TABLE>

8
<PAGE> 16

CERTAIN CONSIDERATIONS

Prospective exchanging shareholders should carefully consider, in addition
to the other information set forth elsewhere in this Prospectus, the following
risk factors:

RIGHT OF COMPANY TO DEFER PAYMENT OF INTEREST

So long as no Event of Default with respect to the Debentures has occurred
and is continuing, the Company shall have the right, upon prior notice by public
announcement given in accordance with NYSE rules at any time, to extend the
interest payment period at any time and from time to time on the Debentures for
a period not to exceed 20 consecutive quarterly interest payment periods. No
interest shall be due and payable during a Deferral Period, but on the Interest
Payment Date occurring at the end of each Deferral Period the Company shall pay
to the holders of record on the record date for such Interest Payment Date
(regardless of who the holders of record may have been on other dates during the
Deferral Period) all accrued and unpaid interest on the Debentures, together
with interest thereon compounded quarterly at the rate of interest on the
Debentures. In the event that the Company exercises its right to extend, the
Company may not declare or pay dividends on, or redeem, purchase or acquire, any
shares of its Capital Stock until deferred interest on the Debentures is paid in
full. Therefore, the Company believes that the extension of a quarterly interest
payment period on the Debentures is unlikely.

Upon the termination of any Deferral Period and the payment of all interest
then due, the Company may commence a new Deferral Period. Consequently, there
could be multiple Deferral Periods of varying lengths throughout the term of the
Debentures. See "Description of Debentures -- Payment Deferral".

ORIGINAL ISSUE DISCOUNT

For federal income tax purposes, the Debentures will be treated as having
original issue discount. The amount of the original issue discount includible in
income by a holder of Debentures for any quarter could in some circumstances
exceed the interest payment on the Debentures for such holder. In addition, in
the event a Deferral Period occurs, holders of the Debentures would continue,
under the original issue discount rules, to accrue income on the Debentures for
United States federal income tax purposes. As a result, a holder ordinarily
would include such amounts in gross income in advance of the receipt of cash. A
holder that disposes of its Debentures prior to the record date for payment of
interest at the end of a Deferral Period will not receive cash from the Company
related to such interest because such interest will be paid to the holder of
record on such record date, regardless of who the holders of record may have
been on other dates during the Deferral Period. The extent to which such a
holder will receive a return on the Debentures for the period it held such
Debentures will depend on the market for the Debentures at the time of such
disposition. See "Certain United States Federal Income Tax
Consequences -- United States Holders".

The Company has no current intention of exercising its right to extend an
interest payment period.

POTENTIAL MARKET VOLATILITY DURING DEFERRAL PERIOD

As described above, the Company has the right to extend an interest payment
period from time to time for a period not exceeding 20 consecutive quarterly
interest payment periods. In the event the Company determines to extend an
interest payment period, or in the event the Company thereafter extends a
Deferral Period, the market price of the Debentures is likely to be adversely
affected. A holder that disposes of its Debentures during a Deferral Period,
therefore, may not receive the same return on its investment as a holder that
continues to hold its Debentures. In addition, as a result of such rights, the
market price of the Debentures may be more volatile than other debt instruments
that do not have such rights.

SUBORDINATION OF DEBENTURES

9
<PAGE> 17

Indebtedness was outstanding. There are no terms in the Debentures that limit
the Company's ability to incur additional indebtedness, including indebtedness
that would rank senior to the Debentures. With respect to the Debentures, the
Indenture (as hereinafter defined) does not contain any cross-defaults to any
other indebtedness of the Company, and therefore, a default with respect to, or
the acceleration of, any such indebtedness will not constitute an "Event of
Default" with respect to the Debentures. An "Event of Default" with respect to
the Debentures would constitute an "Event of Default" under certain outstanding
debt agreements of the Company (a deferral of the interest payment during a
Deferral Period will not constitute an Event of Default). As the Debentures will
be issued by the Company, the Debentures will also be effectively subordinate to
all obligations of the Company's subsidiaries. On May 2, 1995, approximately
$1.5 billion of indebtedness of the Company's subsidiaries not included in
Senior Indebtedness was outstanding. See "Description of Debentures" and
"Capitalization".

CERTAIN LEGAL MATTERS; REGULATORY AND FOREIGN APPROVALS; NO APPRAISAL RIGHTS

The Company is not aware of any license or regulatory permit that appears
to be material to its business that might be adversely affected by its exchange
of shares of the Preferred Stock for Debentures as contemplated in the Exchange
Offer or of any approval or other action by any government or governmental,
administrative or regulatory authority or agency, domestic or foreign, that
would be required for the Company's exchange for or ownership of shares of the
Preferred Stock pursuant to the Exchange Offer. Should any such approval or
other action be required, the Company currently contemplates that it will seek
such approval or other action. The Company cannot predict whether it may
determine that it is required to delay the acceptance for exchange of, or
exchange for, shares of the Preferred Stock tendered pursuant to the Exchange
Offer pending the outcome of any such matter. There can be no assurance that any
such approval or other action, if needed, would be obtained or would be obtained
without substantial conditions or that the failure to obtain any such approval
or other action might not result in adverse consequences to the Company's
business. The Company intends to make all required filings under the Exchange
Act.

There is no shareholder vote required in connection with the Exchange
Offer.

No appraisal rights are available to holders of shares of the Preferred
Stock in connection with the Exchange Offer.

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

For federal income tax purposes, the exchange of the shares of the
Preferred Stock for Debentures will be a taxable transaction, and as described
above under "Original Issue Discount" the Debentures will be treated as having
been issued with original issue discount. The original issue discount rules may
accelerate the timing of a holder's recognition of income. In addition, while
dividends on the shares of the Preferred Stock are eligible for the dividends
received deduction for corporate holders, interest on the Debentures will not be
eligible for the dividends received deduction for corporate holders. The
dividends received deduction is not applicable for individual, non-corporate
holders. For a discussion of these and other United States federal income tax
considerations relevant to the Exchange Offer, see "Certain United States
Federal Income Tax Consequences".

LISTING AND TRADING OF DEBENTURES AND PREFERRED STOCK

The exchange of shares of the Preferred Stock pursuant to the Exchange
Offer will reduce the number of shares of the Preferred Stock that might
otherwise trade publicly and the number of holders of such shares, and depending
on the number of shares exchanged, could adversely affect the liquidity and
market value of remaining shares held by the public.

Depending upon the number of shares of the Preferred Stock exchanged
pursuant to the Exchange Offer, the Preferred Stock may no longer meet the
requirements of the NYSE for continued listing. As of May 4, 1995, there were
3,630,100 issued and outstanding shares of the Preferred Stock and 714 record
holders of the shares of the Preferred Stock. According to the NYSE's published
guidelines, the NYSE would consider delisting the Preferred Stock if, among
other things, the number of publicly held shares of the Preferred Stock

10
<PAGE> 18

should fall below 100,000 or the aggregate market value of publicly held shares
of the Preferred Stock should fall below $2,000,000. If, as a result of the
exchange of shares of the Preferred Stock pursuant to the Exchange Offer or
otherwise, the shares of the Preferred Stock no longer meet the requirements
of the NYSE for continued listing and the listing of the shares of the
Preferred Stock is discontinued, the market for the Preferred Stock could be
adversely affected.

In the event of the delisting of the Preferred Stock by the NYSE, it is
possible that the Preferred Stock would continue to trade on another securities
exchange or in the over-the-counter market and that price quotations would be
reported by such exchange, by the NASD through the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") or by other sources.
The extent of the public market for such Preferred Stock and the availability of
such quotations would, however, depend upon such factors as the number of
shareholders remaining at such time, the interest in maintaining a market in
such Preferred Stock on the part of securities firms, the possible termination
of registration under the Exchange Act, as described below, and other factors.

There has not been any public market for the Debentures. While the Company
intends to list the Debentures on the NYSE, there can be no assurance that an
active market for the Debentures will develop or be sustained in the future on
such exchange. Listing will depend upon the satisfaction of the NYSE's listing
requirements with respect to the Debentures, including requirements as to the
principal amount and distribution of the Debentures. Although the Dealer
Managers have indicated to the Company that they intend to make a market in the
Debentures as permitted by applicable laws and regulations, they are not
obligated to do so and may discontinue any such market-making at any time
without notice. Accordingly, no assurance can be given as to the liquidity of,
or trading for, the Debentures.

SPECIAL FACTORS

PURPOSE OF THE EXCHANGE OFFER

The Company is making the Exchange Offer because it believes that the Offer
will improve the Company's after-tax cash flow by replacing shares of the
Preferred Stock with Debentures. The potential cash flow benefit to the Company
arises because interest payable on the Debentures will be deductible by the
Company (as it accrues) for United States federal income tax purposes, while
dividends payable on the shares of the Preferred Stock are not deductible.
Because of the current interest rate environment and the tax deductible nature
of the Debentures, the Company has decided to pursue the exchange at this time.
The Company's Board of Directors (the "Board of Directors") has authorized the
Exchange Offer by a unanimous vote.

FAIRNESS OF THE EXCHANGE OFFER

The Company believes the Exchange Offer is fair to holders of shares of the
Preferred Stock. In particular, the Exchange Offer will result in the holders
obtaining a security that is senior to the Preferred Stock, that provides for a
higher interest rate than the equivalent dividend on the Preferred Stock and
that provides for a definitive maturity date.

Neither the Company nor the Board of Directors received any report, opinion
(other than certain opinions of counsel) or appraisal which is materially
related to the Exchange Offer, including, but not limited to, any such report,
opinion or appraisal relating to the consideration or the fairness of the
consideration to be offered to the holders of the shares of the Preferred Stock
or the fairness of such transaction to the Company. A majority of the directors
who are not employees of the Company have not retained any unaffiliated
representative to act solely on behalf of unaffiliated shareholders for the
purposes of reviewing the terms of the Exchange Offer. The determination of the
interest rate paid on the Debentures was based on the fact that the Debentures
would have a structurally senior position to the Preferred Stock and on current
market conditions, in light of the dividend rate on the shares of the Preferred
Stock and dividend rates for debt issued by similarly rated companies.

11
<PAGE> 19

CERTAIN EFFECTS OF THE EXCHANGE OFFER;
PLANS OF THE COMPANY AFTER THE EXCHANGE OFFER

Following the consummation of the Exchange Offer, the business and
operations of the Company will be continued by the Company substantially as they
are currently being conducted. Except as disclosed in this Prospectus, the
Company has no present plans or proposals that would result in (i) the
acquisition by any person of any material amount of additional securities of the
Company, or the disposition of any material amount of securities of the Company,
(ii) an extraordinary corporate transaction, such as a merger, reorganization,
liquidation or sale or transfer of a material amount of assets (other than the
sale or transfer of certain non-core assets acquired by the Company through the
acquisition of Transco Energy Company) involving the Company or any of its
subsidiaries, (iii) any change in the present Board of Directors or management
of the Company, including, but not limited to, a plan or proposal to change the
number or term of the directors, to fill any existing vacancy on the Board of
Directors or to change any material term of the employment contract of any
executive officer, except in each case in connection with the Company's 1995
Annual Meeting of shareholders held on May 18, 1995, (iv) any material change in
the present dividend rate or policy or indebtedness or capitalization of the
Company (except that it is anticipated that subsidiaries of the Company may
incur additional obligations to which the Debentures will be effectively
subordinated), (v) any other material change in the Company's corporate
structure or business or (vi) any changes in the Company's charter, bylaws or
instruments corresponding thereto or any other actions which may impede the
acquisition or control of the Company by any person.

Following the expiration of the Exchange Offer, the Company may, in its
sole discretion, determine to purchase any remaining shares of the Preferred
Stock or of Debentures through privately negotiated transactions, open market
purchases or another exchange or tender offer or otherwise, on such terms and at
such prices as the Company may determine from time to time, the terms of which
purchases or offers could differ from those of the Exchange Offer, except that
the Company will not make any such purchases of shares of the Preferred Stock or
of Debentures until the expiration of ten business days after the termination of
the Exchange Offer. Any possible future purchases of shares of the Preferred
Stock or of Debentures by the Company will depend on many factors, including the
market prices of the shares of Preferred Stock and Debentures, the Company's
business and financial position, alternative investment opportunities available
to the Company, the results of the Exchange Offer and general economic and
market conditions.

Depending upon the number of shares of the Preferred Stock exchanged
pursuant to the Exchange Offer, the Preferred Stock may no longer meet the
requirements of the NYSE for continued listing, which could adversely affect the
liquidity and market value of the Preferred Stock. See "Certain
Considerations -- Listing and Trading of Debentures and Preferred Stock".

The Preferred Stock is currently registered under the Exchange Act.
Registration of the Preferred Stock may be terminated upon application of the
Company to the Securities and Exchange Commission (the "Commission") pursuant to
Section 12(g)(4) of the Exchange Act if the shares of the Preferred Stock are
neither held by 300 or more holders of record nor listed on a national
securities exchange. Termination of registration of the Preferred Stock under
the Exchange Act would substantially reduce the information required to be
furnished by the Company to the holders of shares of Preferred Stock (although
the Company would, among other things, remain subject to the reporting
obligations under the Exchange Act as a result of its other outstanding
securities) and would make certain provisions of the Exchange Act, such as the
requirements of Rule 13e-3 thereunder with respect to "going private"
transactions, no longer applicable in respect of the Preferred Stock.

All shares of the Preferred Stock exchanged by the Company pursuant to the
Exchange Offer will be retired, canceled and thereafter returned to the status
of authorized but unissued shares of the Company's preferred stock. Any shares
of the Preferred Stock remaining outstanding after the Exchange Offer will
continue to be redeemable at the option of the Company after September 1, 1997.
See "Description of the Preferred Stock -- Optional Redemption". Upon
liquidation or dissolution of the Company, holders of shares

12
<PAGE> 20

of the Preferred Stock are entitled to receive a liquidation preference in the
amount of $25 per share plus dividends accrued and accumulated but unpaid to the
redemption date, on a parity with holders of other Company preferred stock and
prior to payment of any amounts to the holders of the Common Stock. The only
other preferred stock of the Company currently outstanding is 2.5 million shares
of its series of $3.50 convertible preferred stock.

THE COMPANY

13
<PAGE> 21

RATIO OF EARNINGS TO FIXED CHARGES

The Company's consolidated ratios of earnings to fixed charges* were as
follows for the respective periods indicated:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
THREE MONTHS ENDED ----------------------------------------
MARCH 31, 1995 1994 1993 1992 1991 1990
- ------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
2.48 2.30 2.53 1.75 1.57 1.30
</TABLE>

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

* For the purpose of this ratio (i) earnings consist of income from continuing
operations before fixed charges and income taxes for the Company, its
majority-owned subsidiaries and its proportionate share of 50 percent-owned
companies, less undistributed earnings of less than 50 percent-owned
companies; and (ii) fixed charges consist of interest and debt expense on all
indebtedness (without reduction for interest capitalized), that portion of
rental payments on operating leases estimated to represent an interest factor,
plus the pretax effect of preferred stock dividends of its subsidiaries.

CAPITALIZATION

The following table sets forth the consolidated debt and stockholders'
equity of the Company at March 31, 1995 and adjusted to give effect to the
issuance of Debentures in exchange for shares of the Preferred Stock. The "As
Adjusted" column below assumes that holders of 3,630,100 shares of the Preferred
Stock (which constitute all outstanding shares of the Preferred Stock) elect to
participate in the Exchange Offer. The financial data at March 31, 1995 in the
following table are derived from the Company's financial statements included in
the Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1995, which is incorporated herein by reference. See "Incorporation by
Reference."

<TABLE>
<CAPTION>
MARCH 31, 1995
------------------------
ACTUAL AS ADJUSTED
------ -----------
(IN MILLIONS)
<S> <C> <C>
Long-term debt due within one year............................ $ 187 $ 187
====== =========
Long-term debt................................................ $2,848 $ 2,948

Stockholders' equity Preferred stock.......................... 100 --
Common stock................................................ 105 105
Capital in excess of par value.............................. 994 994
Retained earnings........................................... 1,779 1,779
Unamortized deferred compensation........................... (2) (2)
------ -----------
2,976 2,876
Less treasury stock......................................... (408) (408)
------ -----------
Total stockholders' equity.................................. 2,568 2,468
------ -----------
Total capitalization**.............................. $5,416 $ 5,416
====== =========
</TABLE>

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

** Excludes minority interest in common stock and preferred stock of a
subsidiary.

14
<PAGE> 22

THE EXCHANGE OFFER

GENERAL

The Company hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus and in the accompanying Letter of Transmittal, to
exchange up to $90,752,500 aggregate principal amount of its Debentures for up
to 3,630,100 shares of the Preferred Stock, which constitutes all outstanding
shares of the Preferred Stock as of the date of this Prospectus. Pursuant to the
terms and subject to the conditions of the Exchange Offer, the Company will
accept for exchange any and all shares of the Preferred Stock validly tendered
and not properly withdrawn prior to the Expiration Time.

Tendering holders will not be obligated to pay brokerage commissions or
fees to the Dealer Managers, the Exchange Agent, the Information Agent or the
Company or, subject to the instructions in the Letter of Transmittal with
respect to special issuance instructions, transfer taxes with respect to the
exchange of shares of the Preferred Stock pursuant to the Exchange Offer. The
Company will pay all reasonable charges and expenses in connection with the
Exchange Offer, other than any applicable income taxes or any charges that
individual brokerage firms charge their clients for other services rendered in
connection with tendering their shares.

EXPIRATION; EXTENSION; TERMINATION; AMENDMENT

The Exchange Offer will expire at the Expiration Time, unless the Company,
in its sole discretion, shall have extended the period during which the Exchange
Offer is open, in which case the term "Expiration Time" means the latest time
and date at which the Exchange Offer, as so extended by the Company, shall
expire.

The Company expressly reserves the right, in its sole discretion, at any
time or from time to time, to extend the period of time during which the
Exchange Offer is open by giving oral or written notice of such extension to the
Exchange Agent and making a public announcement thereof. There can be no
assurance that the Company will exercise its right to extend the Exchange Offer.
During any extension of the Exchange Offer, all shares of the Preferred Stock
previously tendered pursuant thereto and not exchanged or withdrawn will remain
subject to the Exchange Offer and may be accepted for exchange by the Company at
the expiration of the Exchange Offer subject to the right of a tendering holder
to withdraw its shares of the Preferred Stock. See "Withdrawal Rights" below.

The Company expressly reserves the right to terminate the Exchange Offer
and not accept for exchange any shares of the Preferred Stock and promptly
return all shares to the remaining tendering holders thereof, at any time prior
to the Expiration Date for any reason.

The Company also expressly reserves the right, subject to applicable law,
(i) to delay acceptance for exchange of any shares of the Preferred Stock to
comply in whole or in part with applicable law, by giving oral or written notice
of such delay to the Exchange Agent, (ii) to waive any condition to the Exchange
Offer and accept all shares of the Preferred Stock previously tendered pursuant
thereto, (iii) to extend the Expiration Time and retain all shares of the
Preferred Stock tendered pursuant thereto until the expiration of the Exchange
Offer as extended, (iv) to amend the Exchange Offer in any respect or (v) to
modify the form or amount of the consideration to be paid pursuant to the
Exchange Offer. If the Exchange Offer is so amended, the term "Exchange Offer"
shall mean the Exchange Offer as so amended. The reservation by the Company of
the right to delay acceptance for exchange of shares of the Preferred Stock is
subject to the provisions of Rule 13e-4 and Rule 14e-1(c) under the Exchange
Act, which require that the Company pay the consideration offered or return the
shares of the Preferred Stock deposited by or on behalf of holders thereof
promptly after the termination or withdrawal of the Exchange Offer.

Any extension, delay, termination or amendment of the Exchange Offer will
be followed as promptly as practicable by a public announcement thereof. Without
limiting the manner in which the Company may choose to make a public
announcement of any extension, delay, termination or amendment of the Exchange
Offer, the Company shall have no obligation to publish, advertise or otherwise
communicate any such public announcement, other than by issuing a release to the
Dow Jones News Service, except in the case of an

15
<PAGE> 23

announcement of an extension of the Exchange Offer, in which case the Company
shall have no obligation to publish, advertise or otherwise communicate such
announcement other than by issuing a notice of such extension by press release
or other public announcement, which notice shall be issued no later than 9:00
A.M., New York City time, on the next business day after the previously
scheduled expiration date of the Exchange Offer.

If the Company shall decide, in its sole discretion, to decrease the number
of shares of the Preferred Stock being sought in the Exchange Offer or to
increase or decrease the consideration offered to holders of shares of the
Preferred Stock to be paid in the Exchange Offer and if, at the time that notice
of such increase or decrease is first published, sent or given to holders of
shares of the Preferred Stock in the manner specified above, the Exchange Offer
is scheduled to expire at any time earlier than the expiration of a period
ending on the tenth business day from and including the date that such notice is
first so published, sent or given, the Exchange Offer will be extended until the
expiration of such period of ten business days. As used in this paragraph,
"business day" has the meaning set forth in Rule 14d-1 (and applicable to
Regulation 14E) under the Exchange Act.

If the Company makes a material change in the terms of the Exchange Offer
or the information concerning the Exchange Offer, or waives any condition of the
Exchange Offer that results in a material change to the circumstances of the
Exchange Offer, the Company will disseminate additional exchange offer materials
to the extent required under the Exchange Act, and will extend the Exchange
Offer to the extent required in order to permit holders of the shares of the
Preferred Stock adequate time to consider such materials. The minimum period
during which the Exchange Offer must remain open following material changes in
the terms of the Exchange Offer or information concerning the Exchange Offer,
other than a change in price or percentage of securities sought, will depend
upon the facts and circumstances, including the relative materiality of the
terms or information.

PROCEDURE FOR TENDERING PREFERRED STOCK

The acceptance by a holder of shares of the Preferred Stock of the Exchange
Offer pursuant to one of the procedures set forth below will constitute an
agreement between the holder of such shares and the Company in accordance with
the terms and subject to the conditions set forth in this Prospectus and in the
Letter of Transmittal.

For shares of the Preferred Stock to be validly tendered pursuant to the
Exchange Offer, the Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees, or an
Agent's Message (as hereinafter defined) in connection with a book-entry
transfer of shares of the Preferred Stock, and any other required documents,
must be received by the Exchange Agent at one of its addresses set forth on the
back cover page of this Prospectus prior to the Expiration Time. In addition,
either (i) the certificates representing tendered shares of the Preferred Stock
must be received by the Exchange Agent or such shares of the Preferred Stock
must be tendered pursuant to the procedure for book-entry transfer described
below and a confirmation of receipt of such tendered shares of the Preferred
Stock must be received by the Exchange Agent, in each case prior to the
Expiration Time, or (ii) the tendering holder must comply with the guaranteed
delivery procedures described below.

THE METHOD OF DELIVERY OF SHARES OF THE PREFERRED STOCK, THE LETTER OF
TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE
ELECTION AND RISK OF THE HOLDER TENDERING SUCH SHARES AND, EXCEPT AS OTHERWISE
PROVIDED HEREIN, THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY
THE EXCHANGE AGENT. IF SENT BY MAIL, IT IS RECOMMENDED THAT THE HOLDER USE
PROPERLY INSURED REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, AND THAT THE
MAILING BE MADE SUFFICIENTLY IN ADVANCE OF THE EXPIRATION TIME TO PERMIT
DELIVERY TO THE EXCHANGE AGENT ON OR BEFORE THE EXPIRATION TIME.

If a holder desires to tender shares of the Preferred Stock pursuant to the
Exchange Offer but is unable to locate the certificates representing such shares
to be tendered, such holder should write to or telephone First Chicago Trust
Company of New York, telephone number 201-324-0137, about procedures for
obtaining a replacement certificate for shares of the Preferred Stock and
arranging for indemnification.

16
<PAGE> 24

NO LETTERS OF TRANSMITTAL AND NO CERTIFICATES REPRESENTING PREFERRED STOCK
SHOULD BE SENT TO THE COMPANY, THE DEALER MANAGERS OR THE INFORMATION AGENT.
SUCH DOCUMENTS SHOULD ONLY BE SENT TO THE EXCHANGE AGENT.

Any beneficial owner whose shares of the Preferred Stock are registered in
the name of a broker, dealer, commercial bank, trust company or other nominee
and who wishes to tender should contact such registered holder promptly and
instruct such registered holder to tender on such beneficial owner's behalf.

Book-Entry Transfer. The Company understands that the Exchange Agent will
make a request promptly after the date of this Prospectus to establish accounts
with respect to the shares of the Preferred Stock at DTC for the purpose of
facilitating the Exchange Offer, and, subject to the establishment thereof, any
financial institution that is a participant in DTC's system may make book-entry
delivery of shares of the Preferred Stock by causing DTC to transfer such shares
into the Exchange Agent's account with respect to the shares of the Preferred
Stock in accordance with DTC's procedures for such transfer. Although delivery
of shares of the Preferred Stock may be effected through book-entry transfer
into the Exchange Agent's accounts at DTC pursuant to DTC's Automated Tender
Offer Program ("ATOP") procedures, a Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or an Agent's Message in connection with a book-entry transfer, and
other required documents, must in each case be received by the Exchange Agent at
one of its addresses set forth on the back cover page of this Prospectus prior
to the Expiration Time, or, if the guaranteed delivery procedures described
below are complied with, within the time period provided under such procedures.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH ITS PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.

The term "Agent's Message" means a message, transmitted by DTC to, and
received by, the Exchange Agent and forming a part of a book-entry confirmation,
which states that DTC has received an express acknowledgment from the
participant in DTC tendering the shares of the Preferred Stock which are the
subject of such book-entry confirmation, that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Company may enforce such agreement against such participant.

Signature Guarantees. All signatures on a Letter of Transmittal must be
guaranteed by an Eligible Institution, unless the shares of the Preferred Stock
which are the subject of such Letter of Transmittal are tendered or executed,
respectively, (i) by a registered holder (which term, for the purposes described
above, shall include any participant in DTC whose name appears on a security
position listing as the owner of shares of the Preferred Stock) of such shares
who has not completed the box entitled "Special Issuance Instructions" or
"Special Delivery Instructions" on the Letter of Transmittal or (ii) for the
account of an Eligible Institution. If shares of the Preferred Stock are
registered in the name of a person other than the signer of a Letter of
Transmittal or if Debentures and/or certificates for untendered or unexchanged
shares of the Preferred Stock are to be issued or returned to a person other
than the registered holder, then the shares of the Preferred Stock must be
endorsed by the registered holder or be accompanied by a stock power in form
satisfactory to the Company duly executed by the registered holder with such
signatures guaranteed by an Eligible Institution. If signatures on a Letter of
Transmittal are required to be guaranteed, such guarantees must be by a member
firm of a registered national securities exchange, a member of the NASD or by a
commercial bank or trust company having an office in the Untied States that is a
participant in the Security Transfer Agents Medallion Program or the Stock
Exchange Medallion Program (each of the foregoing being referred to as an
"Eligible Institution").

Miscellaneous. Issuance of Debentures in exchange for shares of the
Preferred Stock will be made only against deposit of the tendered shares of the
Preferred Stock. If less than the total number of shares of the Preferred Stock
evidenced by a submitted certificate for shares of the Preferred Stock is
tendered, the tendering holder of shares of the Preferred Stock should fill in
the number of shares tendered in the appropriate boxes on the Letter of
Transmittal. The Exchange Agent will then reissue and return to the tendering
holder (unless otherwise requested by the holder under "Special Issuance
Instructions" and "Special Delivery Instructions" in the Letter of Transmittal),
as promptly as practicable following the

17
<PAGE> 25

Expiration Time, shares of the Preferred Stock equal to the number of such
delivered shares of the Preferred Stock not tendered, together with any tendered
shares of the Preferred Stock that were not accepted for exchange for any
reason. The total number of shares of the Preferred Stock deposited with the
Exchange Agent will be deemed to have been tendered unless otherwise indicated.

All questions as to the form of all documents and the validity (including
the time of receipt), eligibility, acceptance and withdrawal of tendered shares
of the Preferred Stock will be determined by the Company, in its sole
discretion, which determination shall be final and binding. The Company
expressly reserves the absolute right to reject any and all tenders not in
proper form and to determine whether the acceptance of or exchange by it for
such tenders would be unlawful. The Company also reserves the absolute right,
subject to applicable law, to waive or amend any of the conditions of the
Exchange Offer or to waive any defect or irregularity in the tender of any
particular shares of the Preferred Stock. None of the Company, the Exchange
Agent, the Information Agent, the Dealer Managers or any other person will be
under any duty to give notification of any defects or irregularities in tenders
or will incur any liability for failure to give any such notification. No tender
of shares of the Preferred Stock will be deemed to have been validly made until
all defects and irregularities with respect to such shares have been cured or
waived. Any shares of the Preferred Stock received by the Exchange Agent that
are not properly tendered and as to which irregularities have not been cured or
waived will be returned by the Exchange Agent to the appropriate tendering
holder as soon as practicable. The Company's interpretation of the terms and
conditions of the Exchange Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding on all parties.

GUARANTEED DELIVERY PROCEDURES

If a holder desires to tender shares of the Preferred Stock and the
holder's shares are not immediately available or time will not permit the
holder's shares of the Preferred Stock, Letter of Transmittal or other required
documents to reach the Exchange Agent prior to the Expiration Time or the
procedure for book-entry transfer cannot be completed on a timely basis, a
tender may be effected if:

(a) the tender is made by or through an Eligible Institution; and

(b) prior to the Expiration Time, the Exchange Agent receives from
such Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
substantially in the form provided by the Company which contains a
signature guaranteed by an Eligible Institution in the form set forth in
such Notice of Guaranteed Delivery (unless such tender is for the account
of an Eligible Institution) which sets forth the name and address of the
holder of the shares of the Preferred Stock and the number of shares of the
Preferred Stock tendered, states that the tender is being made thereby and
guarantees that within five NYSE trading days after the Expiration Time,
the Letter of Transmittal (or facsimile thereof), properly completed and
duly executed, with any required signature guarantees, or an Agent's
Message in connection with a book-entry transfer of shares of the Preferred
Stock, and any other documents required by the Letter of Transmittal,
together with the shares of the Preferred Stock will be deposited by the
Eligible Institution with the Exchange Agent; and

(c) all tendered shares of the Preferred Stock (or a confirmation of
book-entry transfer of such shares into the Exchange Agent's account at
DTC) as well as the Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees, or an
Agent's Message in connection with a book-entry transfer of shares of the
Preferred Stock, and any other documents required by the Letter of
Transmittal, are received by the Exchange Agent within five NYSE trading
days after the Expiration Time.

A Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile transmission or mail to the Exchange Agent and must include a
signature guarantee by an Eligible Institution in the form set forth in such
Notice of Guaranteed Delivery.

Notwithstanding any other provision hereof, in all cases Debentures will
only be issued in exchange for shares of the Preferred Stock accepted for
exchange pursuant to the Exchange Offer after timely receipt by the Exchange
Agent of certificates for such shares (or a confirmation of book-entry transfer
of such shares into

18
<PAGE> 26

the Exchange Agent's account at DTC as described above), the Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or an Agent's Message in connection with a
book-entry transfer, and any other required documents.

LETTER OF TRANSMITTAL

The Letter of Transmittal contains, among other things, the following terms
and conditions, which are part of the Exchange Offer.

The party tendering shares of the Preferred Stock for exchange (the
"Transferor") exchanges, assigns and transfers such shares of the Preferred
Stock to the Company and irrevocably constitutes and appoints the Exchange Agent
as the Transferor's agent and attorney-in-fact to cause the shares of the
Preferred Stock to be assigned, transferred and exchanged. The Transferor
represents and warrants that it has the full power and authority to tender,
exchange, assign and transfer the shares of the Preferred Stock and to acquire
the Debentures issuable upon the exchange of such tendered shares of the
Preferred Stock in accordance with the terms of the Exchange Offer, and that,
when the same are accepted for exchange, the Company will acquire good and
unencumbered title to the shares of the Preferred Stock free and clear of all
liens, restrictions, charges and encumbrances and not subject to any adverse
claim. The Transferor also warrants that it will, upon request, execute and
deliver any additional documents deemed by the Company to be necessary or
desirable to complete the exchange, assignment and transfer of shares of the
Preferred Stock or transfer ownership of such shares of the Preferred Stock on
the account books maintained by DTC. All authority conferred by the Transferor
will survive the death, bankruptcy or incapacity of the Transferor and every
obligation of the Transferor shall be binding upon the heirs, legal
representatives, successors, assigns, executors and administrators of such
Transferor.

WITHDRAWAL RIGHTS

Tenders of shares of the Preferred Stock pursuant to the Exchange Offer are
irrevocable, except that shares of the Preferred Stock tendered pursuant to the
Exchange Offer may be withdrawn at any time prior to the Expiration Time and,
unless theretofore accepted for exchange pursuant to the Exchange Offer, may
also be withdrawn at any time after 40 business days from the date of this
Prospectus.

To be effective, a written notice of withdrawal delivered by mail, hand
delivery or facsimile transmission must be timely received by the Exchange Agent
at the addresses set forth in the Letter of Transmittal. The method of
notification is at the risk and election of the holder. Any such notice of
withdrawal must specify (i) the holder named in the Letter of Transmittal as
having tendered shares of the Preferred Stock to be withdrawn, (ii) if the
shares of the Preferred Stock are held in certificated form, the certificate
numbers of the shares of the Preferred Stock to be withdrawn, (iii) that such
holder is withdrawing its election to have such shares of the Preferred Stock
exchanged, and the name of the registered holder of such shares of the Preferred
Stock, and such notice of withdrawal must be signed by the holder in the same
manner as the original signature on the Letter of Transmittal (including any
required signature guarantees) or be accompanied by evidence satisfactory to the
Company that the person withdrawing the tender has succeeded to the beneficial
ownership of the shares of the Preferred Stock being withdrawn.

The Exchange Agent will return the properly withdrawn shares of the
Preferred Stock promptly following receipt of notice of withdrawal. If shares of
the Preferred Stock have been tendered pursuant to the procedure for book-entry
transfer, any notice of withdrawal must specify the name and number of the
account at DTC to be credited with the withdrawn shares of the Preferred Stock
and otherwise comply with DTC's procedures. All questions as to the validity of
a notice of withdrawal, including the time of receipt, will be determined by the
Company, and such determination will be final and binding on all parties.
Withdrawal of tenders of shares of the Preferred Stock may not be rescinded and
any shares of the Preferred Stock withdrawn will not thereafter be deemed to be
validly tendered for the purposes of the Exchange Offer. Properly withdrawn
shares of the Preferred Stock, however, may be retendered by following the
procedures therefor described elsewhere herein at any time prior to the
Expiration Time. See "Procedure for Tendering Preferred Stock" above.

19
<PAGE> 27

ACCEPTANCE OF PREFERRED STOCK; ISSUANCE OF DEBENTURES

The acceptance for exchange of shares of the Preferred Stock validly
tendered and not properly withdrawn will be made as promptly as practicable
after the Expiration Time. The Company expressly reserves the right to terminate
the Exchange Offer and not accept for exchange any of the shares of the
Preferred Stock at any time prior to the Expiration Date for any reason. In
addition, subject to the rules promulgated pursuant to the Exchange Act, the
Company expressly reserves the right to delay acceptance of any of the shares of
the Preferred Stock for exchange, to comply, in whole or in part, with any
applicable law. For purposes of the Exchange Offer, the Company will be deemed
to have accepted for exchange validly tendered and not properly withdrawn shares
of the Preferred Stock if, as and when the Company gives oral or written notice
thereof to the Exchange Agent. Subject to the terms and conditions of the
Exchange Offer, issuance of Debentures for shares of the Preferred Stock
accepted pursuant to the Exchange Offer will be made by the Exchange Agent on
the Issuance Date. The Exchange Agent will act as agent for the tendering
holders of shares of the Preferred Stock for the purposes of receiving
Debentures from the Company. Tendered shares of the Preferred Stock not accepted
for exchange by the Company, if any, will be returned without expense to the
tendering holder of such shares of the Preferred Stock (or, in the case of
shares of the Preferred Stock tendered by book-entry transfer into the Exchange
Agent's account at DTC, such shares will be credited to an account maintained at
DTC) as promptly as practicable following the Expiration Time.

If the Company extends the Exchange Offer, or for any reason whatsoever,
acceptance for exchange or issuance of Debentures in exchange for any shares of
the Preferred Stock tendered pursuant to the Exchange Offer is delayed, or the
Company is unable to accept for exchange or exchange shares of the Preferred
Stock tendered pursuant to the Exchange Offer, then, without prejudice to the
Company's rights set forth herein, the Exchange Agent may nevertheless, on
behalf of the Company and subject to rules promulgated pursuant to the Exchange
Act, retain tendered shares of the Preferred Stock and such shares may not be
withdrawn except to the extent that the tendering holder of such shares of the
Preferred Stock is entitled to withdrawal rights as described above.

No alternative, conditional or contingent tenders will be accepted. All
tendering holders, by execution of a Letter of Transmittal, waive any right to
receive notice of acceptance of their shares of the Preferred Stock for
exchange.

ACCRUED DIVIDENDS

Holders of shares of the Preferred Stock accepted for exchange in the
Exchange Offer will receive cash in the amount of the Payment in Lieu of
Accumulated Dividends, payable on the Issuance Date to such holders.

Dividends on shares of the Preferred Stock not exchanged in the Exchange
Offer will continue to accrue and be payable when, as and if declared in
accordance with the terms of the shares of the Preferred Stock.

DEALER MANAGERS

Lehman Brothers and Morgan Stanley & Co. Incorporated are acting as Dealer
Managers for the Exchange Offer under a Dealer Managers Agreement dated
, 1995 (the "Dealer Managers Agreement"). The Company has agreed to
pay the Dealer Managers predetermined compensation for their services in
connection with the Exchange Offer and to reimburse the Dealer Managers for all
of their reasonable out-of-pocket expenses, including the reasonable fees and
expenses of their legal counsel.

The Dealer Managers have agreed to use their best efforts to solicit the
exchange of shares of the Preferred Stock pursuant to the Exchange Offer.

The Company has agreed to indemnify the Dealer Managers against certain
liabilities, including certain liabilities under the federal securities laws.

FEES AND EXPENSES; TRANSFER TAXES

The expenses of soliciting tenders of the shares of the Preferred Stock
will be borne by the Company. For compensation to be paid to the Dealer
Managers, see "Exchange Offer -- Dealer Managers".

The Company will pay to a Soliciting Dealer (as hereinafter defined) a
solicitation fee of $.50 per share of the Preferred Stock for any share of the
Preferred Stock tendered and accepted for exchange pursuant to the Exchange
Offer if such Soliciting Dealer has solicited and obtained such tender.
"Soliciting Dealer"

20
<PAGE> 28

includes (i) any broker or dealer in securities, including the Dealer Managers
in their capacity as a broker or dealer, which is a member of any national
securities exchange or of the National Association of Securities Dealers, Inc.
(the "NASD"), (ii) any foreign broker or dealer not eligible for membership in
the NASD which agrees to conform to the NASD's Rules of Fair Practice in
soliciting tenders outside the United States to the same extent as though it
were an NASD member or (iii) any bank or trust company. In order for a
Soliciting Dealer to receive a solicitation fee with respect to the tender of
shares of the Preferred Stock, the Exchange Agent must have received a Letter of
Transmittal with the portion thereof entitled "Notice of Solicited Tenders"
properly completed and duly executed.

No such fee shall be payable to a Soliciting Dealer if such Soliciting
Dealer is required for any reason to transfer the amount of such fee to a
tendering holder (other than itself). The Dealer Managers may not, until the
Expiration Time, buy, sell, deal or trade in the shares of the Preferred Stock
for their own account. No broker, dealer, bank, trust company or fiduciary shall
be deemed to be the agent of the Company, the Exchange Agent, the Dealer
Managers or the Information Agent for purposes of the Exchange Offer.

The Company will pay any transfer taxes with respect to transfer and
exchange of shares pursuant to the Exchange Offer. If, however, the Debentures
due in respect of the shares of the Preferred Stock accepted for exchange are to
be issued to, or (in the circumstances permitted hereby) if certificates for
shares of the Preferred Stock not tendered or not exchanged and paid for are to
be registered in the name of, any person other than the person signing the
Letter of Transmittal, the amount of any transfer taxes (whether imposed on the
registered holder or such person) payable on account of the transfer to such
person will be deducted from the Debentures due in respect of the shares of the
Preferred Stock accepted for exchange if satisfactory evidence of the payment of
such taxes, or exemption therefrom, is not submitted.

Assuming all outstanding shares of the Preferred Stock are exchanged
pursuant to the Exchange Offer, it is estimated that the expenses incurred by
the Company in connection with the Offers (other than the solicitation fee of
$.50 per share of the Preferred Stock described above) will aggregate
approximately $ . The Company will be responsible for paying all such
expenses and anticipates that they will be paid from available cash of the
Company.

EXCHANGE AGENT AND INFORMATION AGENT

First Chicago Trust Company of New York will act as exchange agent for the
Exchange Offer. All correspondence in connection with the Exchange Offer, the
Letter of Transmittal and the Notice of Guaranteed Delivery should be addressed
to the Exchange Agent as follows:

FIRST CHICAGO TRUST COMPANY OF NEW YORK

<TABLE>
<S> <C>
BY HAND/OVERNIGHT COURIER BY MAIL
Tenders & Exchanges Tenders & Exchanges
Suite 4680-WC P.O. Box 2559
14 Wall Street, 8th Floor Mail Suite 4660-WCI
New York, NY 10005 Jersey City, NJ 07303
</TABLE>

Facsimile Transmission
(For Eligible Institutions Only)
(201) 222-4720
(201) 222-4721

Confirm by Telephone:
(201) 222-4707

Shareholder Inquiries Regarding Lost Certificates:
1-201-324-0137

The Exchange Agent is also the transfer agent for the Preferred Stock and
the common stock of the Company, a lender under the Credit Agreement dated as of
February 23, 1995 among the Company and

21
<PAGE> 29

certain of its subsidiaries and the banks named therein, and provides cash
management services to the Company and its subsidiaries.

Morrow & Co., Inc. will act as Information Agent for the Exchange Offer. In
such capacity, the Information Agent will assist with the mailing of the
Prospectus and related materials to holders of shares of the Preferred Stock,
respond to inquiries of and provide information to holders of shares of the
Preferred Stock in connection with the Exchange Offer and provide other similar
advisory services as the Company may request from time to time. All inquiries
relating to the Exchange Offer should be directed to the Information Agent as
follows:

MORROW & CO., INC.

<TABLE>
<S> <C>
909 Third Avenue 14755 Preston Road, Suite 725
New York, New York 10022 Dallas, Texas 75240

Banks and Brokers call toll-free:
1-800-662-5200
All others call toll-free:
1-800-566-9058
</TABLE>

The Company will pay the Information Agent and the Exchange Agent their
reasonable and customary compensation for their services in connection with the
Exchange Offer. In addition, the Company will reimburse the Exchange Agent and
the Information Agent for their reasonable out-of-pocket expenses, and will
indemnify the Exchange Agent and the Information Agent against certain
liabilities and expenses in connection with their services, including certain
liabilities under the federal securities laws. The Company will also pay
brokerage houses and other custodians, nominees and fiduciaries the reasonable
out-of-pocket expenses incurred by them in forwarding copies of this Prospectus
and related documents to beneficial holders of shares of the Preferred Stock,
and in handling or forwarding tenders or consents for their customers.

Directors, officers and regular employees of the Company, none of whom will
be specifically compensated for such services, may contact holders of shares of
the Preferred Stock by mail, telephone, facsimile transmission, telex, telegraph
and personal interviews regarding the Exchange Offer, and may request brokers,
dealers, commercial banks, trust companies and other nominees to forward this
Prospectus (and all related materials) to beneficial owners of shares of the
Preferred Stock.

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<PAGE> 30

MARKET AND TRADING INFORMATION

The shares of the Preferred Stock are listed and traded on the NYSE. The
following table sets forth for the calendar periods indicated the high and low
closing sales prices for the shares of the Preferred Stock per share as reported
in published financial sources and the dividends paid on such shares:

<TABLE>
<CAPTION>
DIVIDENDS
PAID
HIGH LOW PER SHARE(1)
--- --- ------------
<S> <C> <C> <C>
1993:
First Quarter........................................ 26 3/4 24 5/8 .5525
Second Quarter....................................... 27 7/8 25 7/8 .5525
Third Quarter........................................ 27 3/8 26 3/8 .5525
Fourth Quarter....................................... 27 1/2 25 7/8 .5525

1994:
First Quarter........................................ 26 7/8 24 7/8 .5525
Second Quarter....................................... 26 1/8 24 1/2 .5525
Third Quarter........................................ 26 1/4 25 .5525
Fourth Quarter....................................... 25 3/8 24 1/8 .5525

1995:
First Quarter........................................ 26 1/8 24 1/8 .5525
Second Quarter (through )................ .5525
</TABLE>

- ---------------
(1) An annual cash dividend of $2.21 per share is payable in quarterly
installments on March 1, June 1, September 1 and December 1 when and if
declared by the Board of Directors.

On , 1995, the last full day the shares of the Preferred Stock
traded prior to the commencement of the Exchange Offer, the closing sales price
of the shares of the Preferred Stock on the NYSE as reported on the Composite
Tape was $ per share. There can be no assurance concerning the prices at
which the shares of the Preferred Stock might be traded following the Exchange
Offer. The exchange of shares of the Preferred Stock pursuant to the Exchange
Offer will reduce the number of shares of the Preferred Stock that might
otherwise trade publicly and the number of holders of such shares, and depending
on the number of shares of the Preferred Stock exchanged, could adversely affect
the liquidity and market value of the remaining shares of the Preferred Stock
held by the public. Depending upon the number of shares of the Preferred Stock
exchanged pursuant to the Exchange Offer, the Preferred Stock may no longer meet
the requirements of the NYSE for continued listing and may no longer continue to
be registered under the Exchange Act, either of which could adversely affect the
market for the Preferred Stock. See "Special Factors -- Certain Effects of the
Exchange Offer; Plans of the Company after the Exchange Offer".

HOLDERS OF SHARES OF THE PREFERRED STOCK ARE URGED TO OBTAIN CURRENT
INFORMATION WITH RESPECT TO THE SALES PRICES OF SHARES OF THE PREFERRED STOCK.

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<PAGE> 31

TRANSACTIONS AND ARRANGEMENTS CONCERNING
THE SHARES OF THE PREFERRED STOCK

The shares of the Preferred Stock were issued by the Company in an
underwritten public offering for cash which was registered under the Securities
Act. The offering, which closed on September 3, 1992, was for 4,000,000 shares
of the Preferred Stock at a price to the public of $25.00 per share and the
Company received aggregate proceeds of $96,500,000 after deducting the aggregate
underwriting discount of $3,500,000, but before expenses.

Based upon the Company's records and upon information provided to the
Company by its directors, executive officers and affiliates, neither the Company
nor any of its subsidiaries nor, to the best of the Company's knowledge, any of
the directors or executive officers of the Company or any of its subsidiaries,
nor any associates of any of the foregoing, has effected any transactions in the
Preferred Stock since the issuance of the Preferred Stock in 1992, except that
the Company has effected open-market purchases of 369,900 shares of Preferred
Stock for an aggregate price (not including commissions) of $9,274,368 (average
per share price of $25.15) and except that the spouse of a former director
purchased 2,000 shares of the Preferred Stock on the open market in 1992 (at a
price of $25 7/8 per share) and 500 shares of the Preferred Stock on the open
market in 1994 (at a price of $25 per share).

Except as set forth in this Exchange Offer, neither the Company nor, to the
best of the Company's knowledge, any of its affiliates, directors or executive
officers or any of the executive officers or directors of its subsidiaries, is a
party to any contract, arrangement, understanding or relationship with any other
person relating, directly or indirectly, to the Exchange Offer with respect to
any securities of the Company (including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer of the voting
of any such securities, joint ventures, loan or option arrangements, puts or
calls, guarantees of loans, guarantees against loss or the giving or withholding
of proxies, consents or authorizations). As of , 1995, neither
the Company nor any subsidiary or affiliate nor, to the Company's knowledge, any
of their respective directors or executive officers, owns any of the shares of
the Preferred Stock, except for 780 shares of the Preferred Stock owned by Keith
E. Bailey, Chairman of the Board, Chief Executive Officer, President and
Director of the Company, 4,000 shares of the Preferred Stock owned by the spouse
of Robert J. LaFortune, Director of the Company, and 2,000 shares of the
Preferred Stock owned by a trust of which Robert J. LaFortune is a beneficiary.
Mr. Bailey and Mr. LaFortune presently intend to exchange their securities in
the Exchange Offer.

CERTAIN UNITED STATES FEDERAL
INCOME TAX CONSEQUENCES

The following summary, which is based on the opinion by the Company's tax
counsel, Miller & Chevalier, Chartered, addresses the material federal tax
consequences of the exchange of the Preferred Shares and the ownership of
Debentures. It deals only with Debentures held as capital assets and acquired
pursuant to the Exchange Offer and does not deal with special situations, such
as those of dealers in securities or currencies, financial institutions, life
insurance companies, persons holding Debentures as a part of a hedging or
conversion transaction or a straddle, United States Holders (as defined below)
whose "functional currency" is not the U.S. dollar, or Non-United States Holders
(as defined below) who own (actually or constructively) ten percent or more of
the combined voting power of all classes of voting stock of the Company or whose
ownership of Debentures is effectively connected with the conduct of a trade or
business in the United States. Furthermore, the discussion below is based upon
the provisions of the Internal Revenue Code of 1986, as amended (the "Code") and
regulations, rulings and judicial decisions thereunder as of the date hereof,
and such authorities may be repealed, revoked or modified so as to result in
federal income tax consequences different from those discussed below. PERSONS
CONSIDERING THE PURCHASE, OWNERSHIP OR DISPOSITION OF DEBENTURES SHOULD CONSULT
THEIR OWN TAX ADVISORS CONCERNING THE FEDERAL INCOME TAX CONSEQUENCES IN LIGHT
OF THEIR PARTICULAR SITUATIONS AS WELL AS ANY CONSEQUENCES ARISING UNDER THE
LAWS OF ANY OTHER TAXING JURISDICTION.

UNITED STATES HOLDERS. As used herein, a "United States Holder" means a
beneficial owner of Debentures that is a citizen or resident of the United
States, a corporation, partnership or other entity created

24
<PAGE> 32

or organized in or under the laws of the United States or any political
subdivision thereof, or an estate or trust the income of which is subject to
United States federal income taxation regardless of its source. A "Non-United
States Holder" means a beneficial owner of Debentures that is not a United
States Holder.

Exchange of Preferred Stock for Debentures. The exchange of Preferred
Stock for Debentures pursuant to the Exchange Offer will be a taxable
transaction. In the case of a United States Holder who owns (actually or
constructively) solely shares of the Preferred Stock, or not more than one
percent of the Preferred Stock and not more than one percent of any other class
of the Company's stock, gain or loss will be recognized in an amount equal to
the difference between (i) the fair market value of the Debentures on the
Issuance Date (if the Debentures are traded on an established market) or the
fair market value on the Issuance Date of the Preferred Stock exchanged for the
Debentures (if the Debentures are not traded on an established market) and (ii)
the exchanging holder's tax basis in the Preferred Stock exchanged therefor and
will be long-term capital gain or loss if the Preferred Stock has been held for
more than one year as of such date. Section 302 of the Code. A United States
Holder's aggregate tax basis in the Debentures will be equal to the fair market
value on the Issuance Date of either the Debentures or the Preferred Stock,
depending on whether the Debentures are traded on an established market.

United States Holders of Preferred Stock owning (actually or
constructively) more than one percent of any other class of the Company's stock
may be treated either as recognizing gain or loss on the exchange of Preferred
Stock for Debentures or as receiving a dividend distribution from the Company,
depending on such Holders' particular circumstances. Such United States Holders
are advised to consult their own tax advisers as to the income tax consequences
of exchanging Preferred Stock for Debentures.

In determining whether a United States Holder of Preferred Stock owns
solely shares of the Preferred Stock, or not more than one percent of the
Preferred Stock and not more than one percent of any other class of the
Company's stock, the United States Holder must take into account not only the
Preferred Stock and other stock of the Company that such Holder actually owns,
but also Preferred Stock and other stock of the Company that such Holder
constructively owns under Section 318 of the Code. Under Section 318, a United
States Holder may constructively own Preferred Stock and other stock of the
Company actually owned, and in some cases constructively owned, by certain
related individuals or entities, and Preferred Stock and other stock of the
Company that the Holder has the right to acquire by exercise of an option.
United States Holders should consult their own tax advisors about the
application of the constructive ownership rules of Section 318 to their
particular situations.

Original Issue Discount. Under the terms of the Debentures, the Company
has the option to defer payments of interest for up to 20 consecutive quarterly
interest payment periods and to pay as a lump sum at the end of such period all
of the interest that has accrued during such period. Because of this option to
extend the interest payment periods, the Debentures will be issued with
"original issue discount" ("OID"). A debt instrument bears OID if its "stated
redemption price at maturity" exceeds its "issue price" by more than a de
minimis amount. Section 1273 of the Code; Treasury Regulation Section 1.1273-1.
The issue price of the Debentures will be their fair market value on the
Issuance Date (if the Debentures are traded on an established market) or the
fair market value on the Issuance Date of the Preferred Stock exchanged for the
Debentures (if the Debentures are not traded on an established market). The
stated redemption price at maturity of a debt instrument generally includes all
amounts payable other than "qualified stated interest," which is defined as
payments that are unconditionally payable at least annually during the entire
term of the debt obligation at a single fixed rate of interest. Because of the
Company's option to defer payments of interest with respect to the Debentures,
none of the payments of stated interest on the Debentures will constitute
qualified stated interest. Thus, the Debentures will have OID in an amount equal
to the excess of all payments required to be made with respect to the Debentures
over their issue price.

A United States Holder will be required to include OID in income on a
current basis, in accordance with a constant yield method based on a compounding
of interest, even if such United States Holder is on the cash method of
accounting. Consequently, in the event that an interest payment period is
extended, a United States Holder will be required to include OID in income
notwithstanding that the Company will not make any interest payments on the
Debentures. A United States Holder will not recognize any income on the receipt
of

25
<PAGE> 33

stated interest with respect to the Debentures. A United States Holder's tax
basis in the Debentures will be increased by the amount of OID includible in
income and reduced by all payments received with respect to the Debentures.

As stated above, the issue price of the Debentures will be either their
fair market value on the Issuance Date or the fair market value on the Issuance
Date of the Preferred Stock exchanged for the Debentures, depending on whether
the Debentures are traded on an established market. Because the issue price of
the Debentures may not equal their principal amount, the yield on the Debentures
as computed for purposes of applying the OID rules may differ from the stated
interest rate on the Debentures. On the basis of current market prices and the
advice of the Dealer Managers, the Company expects that the issue price of the
Debentures will exceed their principal amount. If this expectation proves to be
correct, the amount of OID includible in income by a United States Holder for
any quarter will be less than the interest payment on the Debentures for that
quarter. If, on the other hand, the issue price of the Debentures is less than
their principal amount, the amount of OID includible in income by a United
States Holder for any quarter will exceed the interest payment on the Debentures
for that quarter.

Under applicable Treasury Regulations, for purposes of computing a debt
instrument's yield to maturity, the issuer is deemed to elect to exercise any
unconditional option available to it under the instrument if doing so would
minimize the yield on the instrument. If the issuer does not exercise such an
option, then, solely for purposes of determining the accrual of OID, the yield
and maturity of the instrument are redetermined by treating the instrument as
reissued for an amount equal to its adjusted issue price. The Company's
calculations of OID on the Debentures will reflect the Company's assumption, as
of the Issuance Date and solely for purposes of calculating OID on the
Debentures, as to whether the Company will exercise its right to redeem the
Debentures in 1997.

Sale, Exchange or Retirement of the Debentures. Upon the sale, exchange or
retirement of Debentures, a United States Holder will recognize gain or loss
equal to the difference between the amount realized upon the sale, exchange or
retirement and the adjusted tax basis of the Debentures. A United States
Holder's adjusted tax basis in the Debentures will, in general, be the United
States Holder's initial basis therefor, increased by OID previously included in
income by the United States Holder and reduced by any cash payments on the
Debentures. Such gain or loss will be capital gain or loss and will be long-term
capital gain or loss if at the time of sale, exchange or retirement, the
Debentures have been held for more than one year. Under current law, net capital
gains of individuals are, under certain circumstances, taxed at lower rates than
items of ordinary income. The deductibility of capital losses is subject to
limitations.

NON-UNITED STATES HOLDERS. The following summary of the United States
federal income tax consequences of ownership of Debentures by Non-United States
Holders does not address (i) a Non-United States Holder who owns (actually or
constructively) ten percent or more of the combined voting power of all classes
of voting stock of the Company or (ii) a Non-United States Holder whose
ownership of Debentures is effectively connected with such Holder's conduct of a
trade or business in the United States. NON-UNITED STATES HOLDERS WHO OWN
(ACTUALLY OR CONSTRUCTIVELY) TEN PERCENT OR MORE OF THE COMPANY'S VOTING POWER
OR WHOSE OWNERSHIP OF DEBENTURES IS EFFECTIVELY CONNECTED WITH A CONDUCT OF A
TRADE OR BUSINESS IN THE UNITED STATES ARE URGED TO CONSULT THEIR OWN TAX
ADVISORS WITH RESPECT TO THE UNITED STATES FEDERAL TAX CONSEQUENCES, AS WELL AS
OTHER TAX CONSEQUENCES, OF OWNERSHIP OF DEBENTURES.

Exchange of Preferred Stock for Debentures. Subject to the discussion
below concerning backup withholding, if a Non-United States Holder certifies to
the Company that such Holder owns (actually or constructively) solely shares of
the Preferred Stock, or not more than one percent of the shares of the Preferred
Stock and not more than one percent of any other class of the Company's stock,
the Company will not withhold United States federal income tax on the issuance
of Debentures to such Holder in exchange for Preferred Stock. In determining
whether it can make this certification, a Non-United States Holder must take
into account not only the Preferred Stock and other stock of the Company that
such Holder actually owns, but also Preferred Stock and other stock of the
Company that such Holder constructively owns under Section 318 of the Code. See
"United States Holders -- Exchange of Preferred Stock for Debentures" above.
Non-United

26
<PAGE> 34

States Holders should consult their own United States tax advisors with respect
to the application of the constructive ownership rules of Section 318 to their
particular situations.

If a Non-United States Holder makes the certification described above, any
gain recognized by such Holder on the exchange of Preferred Stock for Debentures
will generally not be subject to United States federal income tax unless (i)
such Holder is an individual who is present in the United States for 183 days or
more in the taxable year of the exchange and certain other conditions are met or
(ii) the Company is, or has been at any time during the five-year period ending
on the Issuance Date, a "United States real property holding corporation and, at
any time during such five-year period, such Holder owned (actually or
constructively) more than five percent of the Preferred Stock. The Company has
not determined whether it is, or has been, a United States real property holding
corporation. Non-United States Holders who have owned (actually or
constructively) more than five percent of the Preferred Stock at any time during
the past five years should consult their own United States tax advisors.

If a Non-United States Holder does not provide the certification described
above, the Company will treat the fair market value of the Debentures (or, if
the Debentures are not traded on an established market, the fair market value of
the Preferred Stock exchanged for the Debentures) on the Issuance Date as a
dividend and will withhold federal income tax at a rate of 30% of this amount
unless such Non-United States Holder is entitled to a reduced rate of
withholding tax under the provisions of an income tax treaty, in which case the
tax will be withheld at the reduced rate. If the Company collects United States
withholding tax on the exchange of Preferred Stock for Debentures, a Non-United
States Holder may be eligible to obtain a refund of such tax from the Internal
Revenue Service if it establishes that the exchange does not give rise to
dividend income, as described above under "United States Holders -- Exchange of
Preferred Stock for Debentures" or otherwise establishes a complete or partial
exemption from such withholding tax.

Payments on Debentures. Subject to the discussion of backup withholding
below, no withholding of United States federal income tax will be imposed with
respect to the payment by the Company or its paying agent of principal or
interest (which for purposes of this discussion includes OID) on Debentures to a
Non-United States Holder, provided that (i) such Non-United States Holder is not
a controlled foreign corporation that is related to the Company through stock
ownership, (ii) such Non-United States Holder is not a bank whose receipt of
interest on the Debentures is described in Section 881(c)(3)(A) of the Code and
(iii) either (y) such Non-United States Holder certifies to the Company or its
agent, under the penalties of perjury, that it is not a United States person and
provides its name and address on Form W-8 or its equivalent or (z) a financial
institution holding the Debentures on behalf of such Non-United States Holder
certifies to the Company or its agent, under penalties of perjury, that such
statement has been received by it and furnishes the Company or its agent with a
copy thereof.

Sale, Exchange or Retirement of the Debentures. Subject to the discussion
of backup withholding below, no United States federal income tax, including
withholding tax, will be imposed with respect to any gain realized by a
Non-United States Holder upon the sale, exchange or retirement of Debentures
unless such Holder is an individual who is present in the United States for 183
days or more in the taxable year of such sale, exchange or retirement and
certain other conditions are met.

Federal Estate Taxes. Debentures beneficially owned by an individual who
at the time of death is a Non-United States Holder will not be subject to United
States federal estate tax as a result of such individual's death, provided that
the income on such Debentures would not have been, if received at the time of
such individual's death, effectively connected with the conduct of a trade or
business by such individual in the United States.

BACKUP WITHHOLDING AND INFORMATION REPORTING. In general, information
reporting may apply to (i) the Debentures issued in exchange for Preferred Stock
pursuant to the Exchange Offer, (ii) principal and interest (including OID) on
the Debentures, and (iii) the proceeds of sale of the Debentures if any such
payments are made to United States Holders other than certain exempt recipients
(such as corporations). A 31 percent backup withholding tax will apply to
payments described in the preceding sentence unless the United States Holder
provides a taxpayer identification number and otherwise complies with applicable
backup withholding rules.

27
<PAGE> 35

No information reporting on IRS Form 1099 OID or backup withholding will be
required with respect to payments of principal and interest (including OID) on
the Debentures made by the Company or any paying agent to a Non-United States
Holder if the statement described in (iii) under "Non-United States Holders --
Payments on Debentures" has been received and the payor does not have actual
knowledge that the beneficial owner is a United States person. However, interest
(including OID) on Debentures owned by Non-United States Holder will be required
to be reported annually on IRS Form 1042S.

Payments of the proceeds of the sale by a Non-United States Holder of
Debentures, and the exchange of Preferred Stock for Debentures pursuant to the
Exchange Offer, made to or through a foreign office of a broker will not be
subject to information reporting or backup withholding, except that if the
broker is, for federal income tax purposes, a United States person, a controlled
foreign corporation or a foreign person that derives 50% or more of its gross
income for a specified three-year period from the conduct of a trade or business
in the United States, such payments will not be subject to backup withholding
but may be subject to information reporting. Any such payments made to or
through the United States office of a broker will be subject to information
reporting and backup withholding unless the Non-United States Holder or the
beneficial owner certifies as to its non-United States status or otherwise
establishes an exemption.

Any amounts withheld under the backup withholding rules will be allowed as
a refund or a credit against the Holder's U.S. federal income tax liability
provided the required information is furnished to the IRS.

DESCRIPTION OF DEBENTURES

The Debentures will constitute a series of notes issued under the
Subordinated Debt Indenture, dated as of , 1995 (the "Indenture"),
between the Company and Chemical Bank, as trustee (the "Trustee"). The following
statements with respect to the Debentures are summaries and are subject to the
detailed provisions of the Trust Indenture Act and the Indenture, a copy of the
form of which has been filed as an exhibit to the Registration Statement. The
following summarizes the material provisions of the Indenture. The summaries do
not purport to be complete and are subject to, and are qualified in their
entirety by reference to, all the provisions of the Debentures and the
Indenture, including the definitions therein of certain terms capitalized and
not otherwise defined in this Prospectus. Wherever references are made to
particular provisions of the Indenture or terms defined therein, such provisions
or definitions are incorporated by reference as part of the statements made and
such statements are qualified in their entirety by such references.

The Indenture does not limit the amount of debt securities, debentures,
notes or other evidences of indebtedness that may be issued by the Company or
any of its Subsidiaries. The Indenture defines "Subsidiary" to mean any
corporation at least a majority of the outstanding securities of which having
ordinary voting power shall be owned by the Company and/or another Subsidiary or
Subsidiaries. All of the operating assets of the Company and its Subsidiaries
are owned by its Subsidiaries. Therefore, the Company's rights and the rights of
its creditors, including holders of Debentures, to participate in the assets of
any Subsidiary upon the latter's liquidation or recapitalization will be subject
to the prior claims of the Subsidiary's creditors, except to the extent that the
Company may itself be a creditor with recognized claims against the Subsidiary.
The ability of the Company to pay principal of and interest on the Debentures
is, to a large extent, dependent upon the receipt by it of dividends or other
payments from its Subsidiaries.

The Indenture provides that additional debt securities may be issued from
time to time thereunder in one or more series without limitation as to aggregate
principal amount. The Indenture does not contain any covenant or other provision
which would afford holders of the Debentures protection in the event of a highly
leveraged transaction involving the Company or any Subsidiary.

GENERAL

The Debentures will constitute a series of unsecured, subordinated debt
securities, will be subordinated to Senior Indebtedness of the Company, as
described herein, will be limited in aggregate principal amount to the aggregate
principal amount of Debentures issued in the Exchange Offer and will mature on
,

28
<PAGE> 36

2025 (the "Stated Maturity"). The annual interest requirement on the Debentures
(assuming shares of the Preferred Stock are exchanged) will be $ .

QUARTERLY PAYMENTS

Interest on the Debentures will accrue from the Issuance Date at a rate of
% per annum and will be payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year commencing September 30, 1995, to the
persons in whose names the Debentures are registered on the relevant record
dates, which will be March 15, June 15, September 15 and December 15,
respectively (each a "Record Date").

The amount of interest payable for any period will be computed on the basis
of twelve 30-day months and a 360-day year and, for any period shorter than a
full quarterly interest period, will be computed on the basis of the actual
number of days elapsed in such period. In the event that any date on which
interest is payable on the Debentures is not a Business Day, then payment of the
amount payable on such date will be made on the next succeeding day which is a
Business Day (and without interest or other payment in respect of any such
delay) with the same force and effect as if made on such date, subject to
certain rights of deferral described below. A "Business Day" shall mean any day
other than a day on which banking institutions in the State of New York are
authorized or obligated pursuant to law or executive order to close.

PAYMENT DEFERRAL

The Company shall have the right at any time, on one or more occasions, so
long as an Event of Default (as hereinafter defined) has not occurred and is not
continuing under the Indenture with respect to the Debentures, to extend any
interest payment period on the Debentures to a period not to exceed 20
consecutive quarterly interest payment periods and, as a consequence, the
quarterly interest payments on the Debentures would be deferred (but would
continue to accrue with interest thereon at the rate of interest on the
Debentures) during any such Deferral Period. At the end of each Deferral Period,
the Company shall pay all interest then accrued and unpaid (compounded
quarterly). In the event the Company exercises this right, the Company shall not
declare or pay any dividend on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its Capital Stock or make any
guarantee payments with respect to the foregoing during such Deferral Period.
Therefore, the Company believes that the extension of a quarterly interest
payment period on the Debentures is unlikely. During any Deferral Period, the
Company may continue to extend the interest payment period by extending the
Deferral Period; provided that the aggregate Deferral Period, as extended, must
end on an Interest Payment Date and must not exceed 20 consecutive quarterly
interest payment periods or extend beyond the maturity of the Debentures or any
date on which the Debentures are fixed for redemption. The Company shall give
the holders of Debentures notice of its election to defer payments or to extend
the Deferral Period ten Business Days prior to the earlier of (i) the next
scheduled quarterly payment date and (ii) the date the Company is required to
give notice of the record date of such related interest payment to the NYSE or
other applicable self-regulatory organization or to the holders of the
Debentures, but in any event not less than two Business Days prior to such
record date.

OPTIONAL REDEMPTION

The Debentures will be redeemable at the option of the Company, in whole or
in part, at any time on or after September 1, 1997 and prior to maturity, upon
not less than 30 nor more than 60 days' notice, at a redemption price equal to
100% of the principal amount redeemed plus accrued and unpaid interest to the
date fixed for redemption. If fewer than all the Debentures are redeemed, the
Trustee under the Indenture shall select an appropriate and fair manner pursuant
to which the Debentures shall be redeemed.

DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE

The Company can discharge or defease its obligations under the Indenture as
set forth below.

Upon satisfaction of certain terms of the Indenture, the Company may
discharge certain obligations to holders of the Debentures which have not
already been delivered to the Trustee for cancellation and which have either
become due and payable or are by their terms due and payable within one year (or
scheduled for

29
<PAGE> 37

redemption within one year) by irrevocably depositing with the Trustee cash or
U.S. Government Obligations (as defined in the Indenture) as trust funds in an
amount certified to be sufficient to pay at maturity (or upon redemption) the
principal of and interest on the Debentures.

The Company may also, upon satisfaction of the conditions listed below,
discharge certain obligations to holders of Debentures at any time
("defeasance"). Upon satisfaction of certain terms of the Indenture, the Company
may instead be released with respect to the Debentures from the obligations
imposed by Section 9.1 of the Indenture (which contains the covenant described
below limiting consolidations, mergers and conveyances of assets), and omit to
comply with such Section without creating an Event of Default ("covenant
defeasance"). Defeasance or covenant defeasance may be effected only if, among
other things: (i) the Company irrevocably deposits with the Trustee cash or U.S.
Government Obligations, as trust funds in an amount certified to be sufficient
to pay at maturity (or upon redemption) the principal of and interest on all
outstanding Debentures; (ii) the Company delivers to the Trustee an opinion of
counsel to the effect that the holders of the Debentures will not recognize
income, gain or loss for United States federal income tax purposes as a result
of such defeasance or covenant defeasance and will be subject to United States
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if defeasance or covenant defeasance had not
occurred (in the case of a defeasance, such opinion must be based on a ruling of
the Internal Revenue Service or a change in United States federal income tax law
occurring after the date of the Indenture, since such a result would not occur
under current tax law); and (iii) (a) no event or condition shall exist that,
pursuant to certain provisions described under "Subordination" below, would
prevent the Company from making payments of principal of or interest on the
Debentures at the date of the irrevocable deposit referred to above or at any
time during the period ending on the 91st day after such deposit date and (b)
the Company delivers to the Trustee an opinion of counsel to the effect (1) the
trust funds will not be subject to any rights of holders of Senior Indebtedness
and (2) after the 91st day following the deposit, the trust funds will not be
subject to the effect of any applicable bankruptcy, insolvency, reorganization
or similar laws affecting creditors' rights generally, except that if a court
were to rule under any such law in any case or proceeding that the trust funds
remained property of the Company, then the Trustee and the holders of the
Debentures would be entitled to certain rights as secured creditors in such
trust funds.

EVENTS OF DEFAULT

An Event of Default is defined under the Indenture with respect to
Debentures as being: (a) default in payment of any principal of the Debentures,
either at maturity, upon any redemption, by declaration or otherwise; (b)
default for 30 days in payment of any interest on the Debentures; (c) default
for 90 days after written notice in the observance or performance of any
covenant or warranty in the Debentures or the Indenture other than (i) a
covenant or default in the performance of which, or breach of which, is dealt
with otherwise below or, (ii) if the default described in this clause (c) is the
result of changes in generally accepted accounting principles; or (d) certain
events of bankruptcy, insolvency or reorganization of the Company.

The Indenture provides that, (a) if an Event of Default described in
clauses (a), (b) or (c) above (if the Event of Default under clause (c) is with
respect to less than all series of debt securities then outstanding under the
Indenture) occurs, the Trustee or the holders of not less than 25 percent in
principal amount of the outstanding Debentures may then declare the entire
principal of all outstanding Debentures and interest accrued thereon to be due
and payable immediately and (b) if an Event of Default due to a default
described in clause (c) above which is applicable to all series of debt
securities then outstanding under the Indenture or due to certain events of
bankruptcy, insolvency and reorganization of the Company, shall have occurred
and be continuing, the Trustee or the holders of not less than 25 percent in
principal amount of all securities then outstanding under the Indenture (treated
as one class) may declare the entire principal of all outstanding Debentures and
interest accrued thereon to be due and payable immediately, but upon certain
conditions such declarations may be annulled and past defaults may be waived
[(except a continuing default in payment of principal of, premium, if any, or
interest on such debt securities)] by the holders of a majority in aggregate
principal amount of the outstanding Debentures or by the holders of a majority
in aggregate principal amount of all securities then outstanding (treated as one
class), as applicable.

30
<PAGE> 38

The Indenture contains a provision entitling the Trustee, subject to the
duty of the Trustee during a default to act with the required standard of care,
to be indemnified by the holders of Debentures issued under the Indenture before
proceeding to exercise any right or power under the Indenture at the request of
such holders. Subject to such provisions in the Indenture for the
indemnification of the Trustee and certain other limitations, the holders of a
majority in aggregate principal amount of the outstanding Debentures issued
under the Indenture may 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.

The Indenture provides that no holder of Debentures issued under the
Indenture may institute any action against the Company under the Indenture
(except actions for payment of overdue principal or interest) unless such holder
previously shall have given to the Trustee written notice of default and
continuance thereof and unless the holders of not less than 25 percent in
principal amount of the outstanding Debentures issued under the Indenture shall
have requested the Trustee to institute such action and shall have offered the
Trustee reasonable indemnity and the Trustee shall not have instituted such
action within 60 days of such request and the Trustee shall not have received
direction inconsistent with such written request by the holders of a majority in
principal amount of the outstanding Debentures issued under the Indenture.

The Indenture contains a covenant that the Company will file annually with
the Trustee a certificate of no default or a certificate specifying any default
that exists.

MODIFICATION AND WAIVER

The Indenture provides that the Company and the Trustee may enter into
supplemental indentures (which conform to the provisions of the Trust Indenture
Act) without the consent of the holders to: (a) secure any debt securities
issued thereunder (including the Debentures); (b) evidence the assumption by a
successor of the obligations of the Company; (c) add further covenants for the
protection of the holders; (d) cure any ambiguity or correct any inconsistency
in the Indenture, so long as such action will not adversely affect the interests
of the holders; (e) establish the form or terms of debt securities of any
series; or (f) evidence the acceptance of appointment by a successor trustee.

The Indenture also contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than the majority in
principal amount of debt securities of each series issued under the Indenture
then outstanding and affected (voting as one class) to add any provisions to, or
change in any manner or eliminate any of the provisions of, the Indenture or
modify in any manner the rights of the holders of the debt securities of each
series so affected; provided that such changes conform to provisions of the
Trust Indenture Act and provided that the Company and the Trustee may not,
without the consent of each holder of outstanding debt securities affected
thereby, (a) extend the final maturity or the principal of any debt securities,
or reduce the principal amount thereof or reduce the rate or extend the time of
payment of interest thereon, or reduce any amount payable on redemption thereof
or change the currency in which the principal thereof (including any amount in
respect of original issue discount) or interest thereon is payable, or reduce
the amount of any original issue discount security payable upon acceleration or
provable in bankruptcy or alter certain provisions of the Indenture relating to
debt securities not denominated in U.S. dollars or for which conversion to
another currency is required to satisfy the judgment of any court, or impair the
right to institute suit for the enforcement of any payment on any debt
securities when due or (b) reduce the aforesaid percentage in principal amount
of debt securities of any series issued under the Indenture, the consent of the
holders of which is required for any such modification.

The Indenture may not be amended to alter the subordination of any
outstanding subordinated debt securities issued thereunder (including the
Debentures) without the consent of each holder of Senior Indebtedness then
outstanding that would be adversely affected thereby.

CONSOLIDATION, MERGER AND CONVEYANCE OF ASSETS

The Indenture provides that the Company will not consolidate with or merge
into any other corporation or convey, transfer or lease its properties and
assets substantially as an entirety to any person, unless the corporation formed
by such consolidation or into which the Company is merged or the person which
acquires

31
<PAGE> 39

such assets shall expressly assume the Company's obligations under the Indenture
and the debt securities issued thereunder (including the Debentures) and
immediately after giving effect to such transaction, no Event of Default, and no
event which, after notice or lapse of time or both, would become an Event of
Default, shall have happened and be continuing.

SUBORDINATION

The Debentures will be expressly subordinate and junior in right of
payment, to the extent and in the manner set forth in the Indenture, to all
"Senior Indebtedness" of the Company. The Indenture defines "Senior
Indebtedness" as obligations (other than nonrecourse obligations, the debt
securities issued under the Indenture (including the Debentures) or any other
obligations specifically designated as being subordinate in right of payment to
Senior Indebtedness) of, or guaranteed or assumed by, the Company for borrowed
money or evidenced by bonds, debentures, notes or other similar instruments, and
amendments, renewals, extensions, modifications and refundings of any such
indebtedness or obligation.

In the event (a) of any insolvency or bankruptcy proceedings, or any
receivership, liquidation, reorganization or other similar proceedings in
respect of the Company or a substantial part of its property or (b) that (i) a
default shall have occurred with respect to the payment of principal, premium,
if any, or interest on or other monetary amounts due and payable on any Senior
Indebtedness or (ii) there shall have occurred an Event of Default (other than a
default in the payment of principal, premium, if any, or interest, or other
monetary amounts due and payable) with respect to any Senior Indebtedness, as
defined therein or in the instrument under which the same is outstanding,
permitting the holder or holders thereof to accelerate the maturity thereof
(with notice or lapse of time, or both), and such Event of Default shall have
continued beyond the period of grace, if any, in respect thereof, and such
default or Event of Default shall not have been cured or waived or shall not
have ceased to exist, or (c) that the principal of and accrued interest on the
subordinated debt securities (including the Debentures) shall have been declared
due and payable upon an Event of Default pursuant to Section 5.1 of the
Indenture and such declaration shall not have been rescinded and annulled as
provided therein, then the holders of all Senior Indebtedness shall first be
entitled to receive payment of the full amount unpaid thereon, or provision
shall be made for such payment in money or money's worth, before the holders of
any of the subordinated debt securities (including the Debentures) are entitled
to receive a payment on account of the principal, premium, if any, or interest
on the indebtedness evidenced by such subordinated debt securities.

On May 2, 1995, approximately $1.5 billion of Senior Indebtedness was
outstanding. The Indenture does not restrict the amount of Senior Indebtedness
that the Company may incur. In addition, the Debentures will also be effectively
subordinate to all existing and future obligations of the Company's
subsidiaries. On May 2, 1995, approximately $1.5 billion of indebtedness of the
Company's subsidiaries not included in Senior Indebtedness was outstanding.

FORM OF DEBENTURES

The Debentures will be issued in fully registered form, without coupons.
Investors may elect to hold Debentures directly or, subject to the rules and
procedures of DTC described below, hold interests in a global certificate (the
"Global Certificate") registered in the name of DTC or its nominee.

Certain of the following information concerning the procedures and record
keeping with respect to ownership interests in the Debentures, payment of
interest and other payments on the Debentures to DTC Participants or Beneficial
Owners (as hereafter defined), confirmation and transfer of ownership interests
in the Debentures and other related transactions by and between DTC, the DTC
Participants and Beneficial Owners is based solely on information contained in a
published report of DTC.

DTC, an automated clearinghouse for securities transactions, will act as
securities depository for the Debentures. DTC is a limited-purpose trust company
organized under the laws of the State of New York, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code, and a "clearing agency" registered pursuant to the provisions
of Section 17A of the 1934 Act, as amended. DTC was

32
<PAGE> 40

created to hold securities of DTC Participants and facilitate the clearance and
settlement of securities transactions among DTC Participants in such securities
through electronic book-entry changes in accounts of DTC Participants, thereby
eliminating the need for physical movement of security certificates. DTC
Participants include securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations, some of which (and/or
their representatives) own DTC. Access to the DTC system is also available to
others such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a DTC Participant, either directly or
indirectly.

Upon the issuance of a Global Certificate, DTC will credit on its
book-entry registration and transfer system, the principal amount of the
Debentures represented by such Global Certificate to the accounts of
institutions that have accounts with DTC. The accounts to be credited shall be
designated by the holders that sold such Debentures to such DTC Participants.
Ownership of beneficial interests in a Global Certificate will be limited to DTC
Participants or persons that may hold interests through DTC Participants.
Ownership of beneficial interests in a Global Certificate will be shown on, and
the transfer of that ownership will be effected only through, records maintained
by DTC for such Global Certificate and on the records of DTC Participants (with
respect to the interest of persons holding through DTC Participants). So long as
DTC, or its nominee, is the owner of a Global Certificate, DTC or such nominee,
as the case may be, will be considered the sole owner or holder of the
Debentures represented by such Global Certificate for all purposes under the
Indenture.

Each person owning a beneficial interest in a Global Certificate must rely
on the procedures of DTC and, if such person is not a DTC Participant, on the
procedures of the DTC Participant through which such person owns its interest,
to exercise any rights of a holder under the Indenture. The Company understands
that under existing industry practices, if it requests any action of holders or
if an owner of a beneficial interest in a Global Certificate desires to give or
take any action which a holder is entitled to give or take under the Indenture,
DTC would authorize DTC Participants holding the relevant beneficial interests
to give or take such action, and such DTC Participants would authorize
beneficial owners owning through such DTC Participants to give or take such
action or would otherwise act upon the instructions of beneficial owners holding
through them.

Principal and interest payments on the Debentures represented by a Global
Certificate registered in the name of DTC or its nominee will be made to DTC or
its nominee, as the case may be, as the registered owner of such Global
Certificate. The Company understands that it is DTC's practice to credit any DTC
Participant's accounts with payments in amounts proportionate to their
respective beneficial interests in the Debentures represented by the Global
Certificate as shown on the records of DTC on the date payment is scheduled to
be made, unless DTC has reason to believe that it will not receive payment on
such date. The Company expects that payments by DTC Participants to owners of
beneficial interests in such Global Certificate held through such DTC
Participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers in bearer
form or registered in "street name," and will be the responsibility of such DTC
Participants. Accordingly, although owners who hold Debentures through DTC
Participants will not possess Debentures in certificated form, the DTC
Participants will provide a mechanism by which holders of Debentures will
receive payments and will be able to transfer their interests.

None of the Company, the Trustee or any other agent of the Company will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interest in such Global
Certificate or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.

If DTC or a successor depository is at any time unwilling or unable to
continue as depository of the Global Certificates and a successor depository is
not appointed by the Company within ninety days, the Company will issue
certificated Debentures in exchange for the Global Certificates. In addition,
the Company may at any time determine not to have Debentures represented by a
Global Certificate and, in such event, will issue certificated Debentures equal
in principal amount to such beneficial interest registered in its name and will
be entitled to physical delivery of such certificated Debentures.

33
<PAGE> 41

SAME-DAY SETTLEMENT AND PAYMENT

Settlement for the Debentures will be made by a purchaser in immediately
available funds. While the Debentures are in the book-entry system described
above, all payments of principal and interest will be made by the Trustee on
behalf of the Company to DTC in immediately available funds.

Debentures represented by Global Certificates registered in the name of DTC
or its nominee will trade in DTC's Same-Day Fund Settlement System until
maturity. During such period, secondary market trading activity in the
Debentures will settle in immediately available funds. No assurance can be given
as to the effect, if any, of settlement in immediately available funds on the
trading activity in the Debentures.

GOVERNING LAW

The Indenture and the Debentures are governed by and construed in
accordance with the laws of the State of New York.

CONCERNING THE TRUSTEE

Chemical Bank is one of a number of banks with which the Company and its
subsidiaries maintain ordinary banking relationships and with which the Company
and its subsidiaries maintain credit facilities. Chemical Bank is also Trustee
under that certain Senior Debt Indenture dated as of July 19, 1990 relating to
certain Senior Indebtedness of the Company.

DESCRIPTION OF THE PREFERRED STOCK

GENERAL

The following description relating to the Preferred Stock set forth herein
does not purport to be complete and is subject to, and qualified in its entirety
by, the provisions of the Company's Restated Certificate of Incorporation
("Certificate"). Copies of the Certificate are available from the Company upon
request.

The Preferred Stock ranks equally with all other series of preferred stock
of the Company (the only other preferred stock of the Company currently
outstanding is 2.5 million shares of its series of $3.50 convertible preferred
stock) and senior to the Company's Junior Preferred Stock (none of which is
currently outstanding) and common stock upon liquidation and as to dividends and
redemption. If dividends or amounts payable on liquidation are not paid in full
on the preferred stock of all series, then all series share ratably in the
amount available therefor.

DIVIDENDS

Holders of the shares of the Preferred Stock are entitled to receive, when
and if declared by the Board of Directors, an annual cash dividend of $2.21 per
share, payable in quarterly installments on March 1, June 1, September 1 and
December 1. Dividends on the Preferred Stock are cumulative. Dividends are
payable to holders of record as they appear on the stock books of the Company on
such record dates not more than 60 nor less than 10 days preceding the payment
dates as shall be fixed by the Board of Directors.

LIQUIDATION RIGHTS

In the event of any liquidation, dissolution or winding up of the Company,
the holders of shares of the Preferred Stock are entitled to receive out of
assets of the Company available for distribution to shareholders, before any
distribution of assets is made to holders of common stock, liquidating
distributions in the amount of $25 per share plus dividends accrued and
accumulated but unpaid to the redemption date. If upon any liquidation,
dissolution or winding up of the Company, the amounts payable with respect to
the Preferred Stock and any other Preferred Stock ranking as to any such
distribution on a parity with the Preferred Stock are not paid in full, the
holders of the Preferred Stock and of any other preferred stock of the Company
will share ratably in any such distribution of assets in proportion to the full
respective preferential amounts to

34
<PAGE> 42

which they are entitled. After payment of the full amount of the liquidating
distribution to which they are entitled, the holders of shares of the Preferred
Stock will not be entitled to any further participation in any distribution of
assets by the Company. Neither a consolidation or merger of the Company with
another corporation nor a sale or transfer of all or part of the Company's
assets for cash or securities shall be considered a liquidation, dissolution or
winding up of the Company.

OPTIONAL REDEMPTION

The Preferred Stock is not subject to any mandatory redemption or sinking
fund provision. The Preferred Stock is redeemable on at least 30 but not more
than 60 days' notice, at the option of the Company, as a whole or in part, at
any time on and after September 1, 1997 at a redemption price equal to $25 per
share plus dividends accrued and accumulated but unpaid to the redemption date.

If full cumulative dividends on the Preferred Stock have not been paid, the
Preferred Stock may not be redeemed in part and the Company may not purchase or
acquire any shares of the Preferred Stock otherwise than pursuant to a purchase
or exchange offer made on the same terms to all holders of the Preferred Stock.
If less than all the outstanding shares of the Preferred Stock are to be
redeemed, the Company will select those to be redeemed by lot or a substantially
equivalent method.

VOTING RIGHTS

Except as indicated below, the holders of shares of the Preferred Stock
have no voting rights. If the equivalent of six quarterly dividends payable on
the Preferred Stock or on any other preferred stock is in arrears, the number of
directors of the Company will be increased by two and the holders of all
outstanding shares of the Preferred Stock, voting as a single class without
regard to series, will be entitled to elect the additional two directors until
all dividends in arrears have been paid or declared and set apart for payment.

MISCELLANEOUS

The Preferred Stock is not convertible into, or exchangeable for, shares of
common stock of the Company. The Preferred Stock has no preemptive rights. All
of the Preferred Stock is fully paid and nonassessable. The Preferred Stock may
not be called, retired or in any way redeemed, except pursuant to the redemption
provisions set out above.

LEGAL OPINIONS

The validity of the Debentures will be passed upon for the Company by J.
Furman Lewis, Esq., Senior Vice President and General Counsel of the Company,
and for the Dealer Managers by Davis Polk & Wardwell. Miller & Chevalier,
Chartered, special tax counsel to the Company, has passed upon certain United
States federal income tax considerations with respect to the Debentures.

EXPERTS

The consolidated financial statements and schedules included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1994,
incorporated by reference in this Prospectus and Registration Statement, have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon appearing therein and incorporated herein by reference. The
financial statements and schedules referred to above are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.

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<PAGE> 43

Facsimile copies of the Letter of Transmittal will be accepted. Letters of
Transmittal, certificates representing shares of the Preferred Stock, Notices of
Guaranteed Delivery and any other required documents should be sent by each
stockholder or his broker, dealer, commercial bank, trust company or other
nominee to the Exchange Agent at one of the addresses as set forth below:

The Exchange Agent is:

FIRST CHICAGO TRUST COMPANY OF NEW YORK

<TABLE>
<S> <C>
BY HAND/OVERNIGHT COURIER BY MAIL
Tenders & Exchanges Tenders & Exchanges
Suite 4680-WCI P.O. Box 2559
14 Wall Street, 8th Floor Mail Suite 4660-WCI
New York, NY 10005 Jersey City, NJ 07303
</TABLE>

Facsimile Transmission
(For Eligible Institutions Only)
(201) 222-4720
(201) 222-4721

Confirm by Telephone:
(201) 222-4707

Shareholder Inquiries Regarding Lost Certificates:
1-201-324-0137

Any questions or requests for assistance or additional copies of this
Prospectus, the Letter of Transmittal and the Notice of Guaranteed Delivery may
be directed to the Information Agent or the Dealer Managers at their respective
telephone numbers and locations set forth below. You may also contact your
broker, dealer, commercial bank or trust company or other nominee for assistance
concerning the Exchange Offer.

The Information Agent is:

MORROW & CO., INC.

<TABLE>
<S> <C>
909 Third Avenue 14755 Preston Road, Suite 725
New York, New York 10022 Dallas, Texas 75240
</TABLE>

Banks and Brokers call toll-free:
1-800-662-5200

All others call toll-free:
1-800-566-9058

The Dealer Managers for the Exchange Offer are:

Lehman Brothers
Liability Management Group
Three World Financial Center
200 Vesey Street
New York, NY 10285
Contact: David B. Parsons
1-800-438-3242 (toll free)
1-212-528-7581 (collect)

Morgan Stanley & Co. Incorporated
1221 Avenue of the Americas
New York, New York
1-800-422-6464 ext. 6905 (toll free)

36
<PAGE> 44

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Company, a Delaware corporation, is empowered by Section 145 of the
General Corporation Law of the State of Delaware, subject to the procedures and
limitations stated therein, to indemnify any person against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by them in connection with any threatened, pending or
completed action, suit or proceeding in which such person is made party by
reason of their being or having been a director, officer, employee or agent of
the Company. The statute provides that indemnification pursuant to its
provisions is not exclusive of other rights of indemnification to which a person
may be entitled under any by-law, agreement, vote of stockholders or
disinterested directors, or otherwise. The By-laws of the Company provide for
indemnification by the Company of its directors and officers to the fullest
extent permitted by the General Corporation Law of the State of Delaware. In
addition, the Company has entered into indemnity agreements with its directors
and certain officers providing for, among other things, the indemnification of
and the advancing of expenses to such individuals to the fullest extent
permitted by law, and to the extent insurance is maintained, for the continued
coverage of such individuals.

Policies of insurance are maintained by the Company under which the
directors and officers of the Company are insured, within the limits and subject
to the limitations of the policies, against certain expenses in connection with
the defense of actions, suits or proceedings, and certain liabilities which
might be imposed as a result of such actions, suits or proceedings, to which
they are parties by reason of being or having been such directors or officers.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------------------------------------------------------------------------------
<C> <S>
**1.1 Form of Dealer Managers Agreement between the Company and Lehman Brothers and
Morgan Stanley & Co. Incorporated.

*2.1 Agreement and Plan of Merger, dated as of December 12, 1994, among Williams, WC
Acquisition Corp. and Transco (filed as Exhibit (c)(1) to Schedule 14D-1, dated
December 16, 1994).

*2.2 Amendment to Agreement and Plan of Merger, dated as of February 17, 1995 (filed as
Exhibit 6 to Amendment No. 8 to Schedule 13D, dated February 23, 1995).

*4.1 Form of Senior Debt Indenture (filed as Exhibit 4.1 to the Form S-3 Registration
Statement No. 33-33294 filed February 2, 1990).

4.2 Form of Subordinated Debt Indenture.

*4.3 Form of Floating Rate Senior Note (filed as Exhibit 4.3 to the Form S-3
Registration Statement No. 33-33294 filed February 2, 1990).

*4.4 Form of Fixed Rate Senior Note (filed as Exhibit 4.4 to the Form S-3 Registration
Statement No. 33-33294 filed February 2, 1990).

*4.5 Form of Floating Rate Subordinated Note (filed as Exhibit 4.5 to the Form S-3
Registration Statement No. 33-33294 filed February 2, 1990).

*4.6 Form of Fixed Rate Subordinated Note (filed as Exhibit 4.6 to the Form S-3
Registration Statement No. 33-33294 filed February 2, 1990).

*4.7 Form of Debt Warrant Agreement (filed as Exhibit 4.7 to the Form S-3 Registration
Statement No. 33-33294 filed February 2, 1990).

*4.8 Form of Stock Warrant Agreement (filed as Exhibit 4.8 to the Form S-3 Registration
Statement No. 33-49835 filed July 27, 1993).

</TABLE>

II-1
<PAGE> 45

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------------------------------------------------------------------------------
<C> <S>
*4.9 Restated Certificate of Incorporation of the Company (filed as Exhibit 4(a) to Form
8-B Registration Statement filed August 20, 1987).

*4.10 Certificate of Amendment of Restated Certificate of Incorporation of the Company,
dated May 20, 1994 (filed as Exhibit 3(d) to Form 10-K for the year ended December
31, 1994).

*4.11 Certificate of designation with respect to the $2.21 Cumulative Preferred Stock
(filed as Exhibit 4.3 to the Registration Statement on Form S-3 filed August 19,
1992).

*4.12 Certificate of Increase of Authorized Number of Shares of Series A Junior
Participating Preferred Stock (filed as Exhibit 3(c) to Form 10-K for the year
ended December 31, 1988).

*4.13 Form of Certificate of Designation Preferences and Rights with respect to the $3.50
Cumulative Convertible Preferred Stock (filed as Exhibit 4.1 to Amendment No. 2 to
Form S-4 Registration Statement No. 33-57639, filed March 30, 1995).

*4.14 Amended and Restated Rights Agreement, dated as of July 12, 1988, between the
Company and First Chicago Trust Company of New York (filed as Exhibit 4(c) to Form
8, dated July 28, 1988).

*4.15 By-laws of the Company (filed as Exhibit 3 to Form 10-Q for the quarter ended
September 30, 1993).

*4.16 U.S. $800,000,000 Credit Agreement, dated as of February 23, 1995, among the
Company and certain of its subsidiaries and the banks named therein and Citibank,
N.A., as agent (filed as Exhibit 4(b) to Form 10-K for the year ended December 31,
1994).

*4.17 6% Convertible Subordinated Debenture Due 2005 and Warrant to Purchase Common Stock
issued to Williams Holdings of Delaware on April 15, 1995 (filed as Exhibit 4.10 to
Form S-8 Registration Statement No. 33-58969, filed May 1, 1995).

*4.18 Form of Senior Debt Indenture between the Company and Chemical Bank, Trustee,
relating to the 10 1/4% Debentures, due 2020; the 9 3/8% Debentures, due 2021; the
8 1/4% Notes, due 1998; and Medium-Term Notes (8.50%-9.31%), due 1996 through 2001;
the 7 1/2% Notes, due 1999, and the 8 7/8% Debentures, due 2012 (filed as Exhibit
4.1 to Form S-3 Registration Statement No. 33-33294, filed February 2, 1990).

**5.1 Opinion and Consent of J. Furman Lewis, Esq., Senior Vice President and General
Counsel of the Company.

**8.1 Tax Opinion of Miller & Chevalier, Chartered.

12.1 Computation of Ratio of Earnings to Fixed Charges.

23.1 Consent of Ernst & Young LLP.

**23.2 Consent of J. Furman Lewis, Esq. (contained in Exhibit 5.1).

**24.1 Directors' Powers of Attorney.

25.1 Statement of Eligibility of Trustee.

**99.1 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and other
Nominees.

**99.2 Form of Letter from Brokers, Dealers, Commercial Banks, Trust Companies and other
nominees to their clients.

**99.3 Form of Letter to holders of shares of Preferred Stock dated , 1995.

**99.4 Form of Letter of Transmittal.

</TABLE>

II-2
<PAGE> 46

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------------------------------------------------------------------------------
<C> <S>
**99.5 Form of Notice of Guaranteed Delivery.

**99.6 Form of Questions and Answers Sheet to be sent to holders of shares of the
Preferred Stock and to be used by Brokers, Dealers, Commercial Banks, Trust
Companies and other nominees in responding to inquiries from their clients.

</TABLE>

- ---------------
* Each such exhibit has heretofore been filed with the Securities and Exchange
Commission as part of the filing indicated and is incorporated herein by
reference.

** Previously filed.

ITEM 22. UNDERTAKINGS

(a) The undersigned registrant hereby undertakes:

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

(2) To respond to requests for information incorporated by reference
into the Prospectus pursuant to Items 4, 10(b), 11 or 13 of this form,
within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the Registration Statement through the date of responding
to the request.

(3) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the Registration Statement when
it became effective.

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

II-3
<PAGE> 47

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Tulsa, State of Oklahoma,
on June 20, 1995.

THE WILLIAMS COMPANIES, INC.
(Registrant)

By: /s/ David M. Higbee

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

David M. Higbee

Corporate Secretary

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

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ------------------------------- --------------

<S> <C> <C>
Chairman of the Board, Chief June 20, 1995
- --------------------------------------------- Executive Officer, President
Keith E. Bailey* and Director (principal
executive officer)

Senior Vice President Finance June 20, 1995
- --------------------------------------------- and Chief Financial Officer
Jack D. McCarthy* (principal financial officer)
Controller (principal June 20, 1995
- --------------------------------------------- accounting officer)
Gary R. Belitz*

Director June 20, 1995
- ---------------------------------------------
Harold W. Andersen*

Director June 20, 1995
- ---------------------------------------------
Ralph E. Bailey*

Director June 20, 1995
- ---------------------------------------------
Glenn A. Cox*

Director June 20, 1995
- ---------------------------------------------
Thomas H. Cruikshank*

Director June 20, 1995
- ---------------------------------------------
Ervin S. Duggan

Director June 20, 1995
- ---------------------------------------------
Robert J. LaFortune
</TABLE>

II-4
<PAGE> 48

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----

<S> <C> <C>
Director June 20, 1995
- ---------------------------------------------
James C. Lewis*

Director June 20, 1995
- ---------------------------------------------
Jack A. MacAllister*

Director June 20, 1995
- ---------------------------------------------
James A. McClure*

Director June 20, 1995
- ---------------------------------------------
Peter C. Meinig

Director June 20, 1995
- ---------------------------------------------
Kay A. Orr*

Director June 20, 1995
- ---------------------------------------------
Gordon R. Parker*

Director June 20, 1995
- ---------------------------------------------
Joseph H. Williams*
</TABLE>

*By: /s/ David M. Higbee

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

David M. Higbee

Attorney-in-fact

II-5
<PAGE> 49
EXHIBIT INDEX

*2.1 Agreement and Plan of Merger, dated as of December 12, 1994, among Williams, WC
Acquisition Corp. and Transco (filed as Exhibit (c)(1) to Schedule 14D-1, dated
December 16, 1994).

*2.2 Amendment to Agreement and Plan of Merger, dated as of February 17, 1995 (filed as
Exhibit 6 to Amendment No. 8 to Schedule 13D, dated February 23, 1995).

*4.1 Form of Senior Debt Indenture (filed as Exhibit 4.1 to the Form S-3 Registration
Statement No. 33-33294 filed February 2, 1990).

4.2 Form of Subordinated Debt Indenture.

*4.3 Form of Floating Rate Senior Note (filed as Exhibit 4.3 to the Form S-3
Registration Statement No. 33-33294 filed February 2, 1990).

*4.4 Form of Fixed Rate Senior Note (filed as Exhibit 4.4 to the Form S-3 Registration
Statement No. 33-33294 filed February 2, 1990).

*4.5 Form of Floating Rate Subordinated Note (filed as Exhibit 4.5 to the Form S-3
Registration Statement No. 33-33294 filed February 2, 1990).

*4.6 Form of Fixed Rate Subordinated Note (filed as Exhibit 4.6 to the Form S-3
Registration Statement No. 33-33294 filed February 2, 1990).

*4.7 Form of Debt Warrant Agreement (filed as Exhibit 4.7 to the Form S-3 Registration
Statement No. 33-33294 filed February 2, 1990).

*4.8 Form of Stock Warrant Agreement (filed as Exhibit 4.8 to the Form S-3 Registration
Statement No. 33-49835 filed July 27, 1993).

*4.9 Restated Certificate of Incorporation of the Company (filed as Exhibit 4(a) to Form
8-B Registration Statement filed August 20, 1987).

*4.10 Certificate of Amendment of Restated Certificate of Incorporation of the Company,
dated May 20, 1994 (filed as Exhibit 3(d) to Form 10-K for the year ended December
31, 1994).

*4.11 Certificate of designation with respect to the $2.21 Cumulative Preferred Stock
(filed as Exhibit 4.3 to the Registration Statement on Form S-3 filed August 19,
1992).

*4.12 Certificate of Increase of Authorized Number of Shares of Series A Junior
Participating Preferred Stock (filed as Exhibit 3(c) to Form 10-K for the year
ended December 31, 1988).

*4.14 Amended and Restated Rights Agreement, dated as of July 12, 1988, between the
Company and First Chicago Trust Company of New York (filed as Exhibit 4(c) to Form
8, dated July 28, 1988).

*4.15 By-laws of the Company (filed as Exhibit 3 to Form 10-Q for the quarter ended
September 30, 1993).

</TABLE>

<PAGE> 50

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------------------------------------------------------------------------------
<C> <S>
*4.18 Form of Senior Debt Indenture between the Company and Chemical Bank, Trustee,
relating to the 10 1/4% Debentures, due 2020; the 9 3/8% Debentures, due 2021; the
8 1/4% Notes, due 1998; and Medium-Term Notes (8.50%-9.31%), due 1996 through 2001;
the 7 1/2% Notes, due 1999, and the 8 7/8% Debentures, due 2012 (filed as Exhibit
4.1 to Form S-3 Registration Statement No. 33-33294, filed February 2, 1990).

**5.1 Opinion and Consent of J. Furman Lewis, Esq., Senior Vice President and General
Counsel of the Company.

**8.1 Tax Opinion of Miller & Chevalier, Chartered.

12.1 Computation of Ratio of Earnings to Fixed Charges.

23.1 Consent of Ernst & Young LLP.

**23.2 Consent of J. Furman Lewis, Esq. (contained in Exhibit 5.1).

**24.1 Directors' Powers of Attorney.

25.1 Statement of Eligibility of Trustee.

**99.1 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and other
Nominees.

**99.2 Form of Letter from Brokers, Dealers, Commercial Banks, Trust Companies and other
nominees to their clients.

**99.3 Form of Letter to holders of shares of Preferred Stock dated , 1995.

**99.4 Form of Letter of Transmittal.

**99.5 Form of Notice of Guaranteed Delivery.

</TABLE>

- ---------------
* Each such exhibit has heretofore been filed with the Securities and Exchange
Commission as part of the filing indicated and is incorporated herein by
reference.

** Previously filed.

<PAGE> 1
Exhibit 4.2
===============================================================================

THE WILLIAMS COMPANIES, INC.

AND

CHEMICAL BANK, Trustee

Subordinated Indenture

Dated as of _____________, 1995

__________

===============================================================================
<PAGE> 2

TABLE OF CONTENTS

__________

<TABLE>
<CAPTION>
Page
<S> <C>
PARTIES . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

RECITALS

Authorization of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Compliance with Legal Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Purpose of and Consideration for Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE ONE

DEFINITIONS

SECTION 1.1 Certain Terms Defined . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Additional Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authorized Newspaper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Coupon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
covenant defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Dollar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ECU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Foreign Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Holder of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Securityholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Issuer Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Judgment Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
original issue date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Original Issue Discount Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Periodic Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
</TABLE>

i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
record date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Registered Global Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Registered Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Required Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Trust Indenture Act of 1939 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Unregistered Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
U.S. Government Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Yield to Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

ARTICLE TWO

SECURITIES

SECTION 2.1 Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.2 Form of Trustee's Certificate of Authentication . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.3 Amount Unlimited; Issuable in Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.4 Authentication and Delivery of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.5 Execution of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.6 Certificate of Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.7 Denomination and Date of Securities; Payments of Interest . . . . . . . . . . . . . . . . . . 17
SECTION 2.8 Registration, Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen Securities . . . . . . . . . . . . . . . . . . 22
SECTION 2.10 Cancellation of Securities; Destruction Thereof . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.11 Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

ARTICLE THREE

COVENANTS OF THE ISSUER

SECTION 3.1 Payment of Principal and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.2 Offices for Payments, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.3 Appointment to Fill a Vacancy in Office of Trustee . . . . . . . . . . . . . . . . . . . . . 27
SECTION 3.4 Paying Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 3.5 Written Statement to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.6 Luxembourg Publications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.7 Additional Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
</TABLE>

ii
<PAGE> 4
<TABLE>
<CAPTION>
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----
<S> <C>
ARTICLE FOUR

SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE

SECTION 4.1 Issuer to Furnish Trustee Information as to Names and Addresses of Securityholders . . . . . 30
SECTION 4.2 Preservation and Disclosure of Securityholders Lists . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.3 Reports by the Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.4 Reports by the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

ARTICLE FIVE

REMEDIES OF THE TRUSTEE AND
SECURITYHOLDERS ON EVENT OF DEFAULT

SECTION 5.1 Event of Default Defined; Acceleration of Maturity; Waiver of Default . . . . . . . . . . . . 33
SECTION 5.2 Collection of Indebtedness by Trustee; Trustee May Prove Debt . . . . . . . . . . . . . . . . 37
SECTION 5.3 Application of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 5.4 Suits for Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 5.5 Restoration of Rights on Abandonment of Proceedings . . . . . . . . . . . . . . . . . . . . . 41
SECTION 5.6 Limitations on Suits by Securityholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 5.7 Unconditional Right of Securityholders to Institute Certain Suits . . . . . . . . . . . . . . 42
SECTION 5.8 Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default . . . . . . . . . . . 42
SECTION 5.9 Control by Holders of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 5.10 Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 5.11 Trustee to Give Notice of Default, But May Withhold in Certain Circumstances . . . . . . . . 44
SECTION 5.12 Right of Court to Require Filing of Undertaking to Pay Costs . . . . . . . . . . . . . . . . 45

ARTICLE SIX

CONCERNING THE TRUSTEE

SECTION 6.1 Duties and Responsibilities of the Trustee; During Default; Prior to Default . . . . . . . . 46
SECTION 6.2 Certain Rights of the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of Securities or Application of Proceeds
Thereof . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
</TABLE>

iii
<PAGE> 5
<TABLE>
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----
<S> <C>
SECTION 6.4 Trustee and Agents May Hold Securities or Coupons; Collections, etc . . . . . . . . . . . . . 49
SECTION 6.5 Moneys Held by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 6.6 Compensation and Indemnification of Trustee and Its Prior Claim . . . . . . . . . . . . . . . 49
SECTION 6.7 Right of Trustee to Rely on Officers' Certificate, etc . . . . . . . . . . . . . . . . . . . 50
SECTION 6.8 Qualification of Trustee; Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 6.9 Persons Eligible for Appointment as Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 6.10 Resignation and Removal; Appointment of Successor Trustee . . . . . . . . . . . . . . . . . . 51
SECTION 6.11 Acceptance of Appointment by Successor Trustee . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 6.12 Merger, Conversion, Consolidation or Succession to Business of Trustee . . . . . . . . . . . 54
SECTION 6.13 Preferential Collection of Claims Against the Issuer . . . . . . . . . . . . . . . . . . . . 55
SECTION 6.14 Appointment of Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

ARTICLE SEVEN

CONCERNING THE SECURITYHOLDERS

SECTION 7.1 Evidence of Action Taken by Securityholders . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 7.2 Proof of Execution of Instruments and of Holding of Securities . . . . . . . . . . . . . . . 58
SECTION 7.3 Holders to be Treated as Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 7.4 Securities Owned by Issuer Deemed Not Outstanding . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 7.5 Right of Revocation of Action Taken . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

ARTICLE EIGHT

SUPPLEMENTAL INDENTURES

SECTION 8.1 Supplemental Indentures Without Consent of Securityholders . . . . . . . . . . . . . . . . . 61
SECTION 8.2 Supplemental Indentures With Consent of Securityholders . . . . . . . . . . . . . . . . . . . 62
SECTION 8.3 Effect of Supplemental Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 8.4 Documents to Be Given to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 8.5 Notation on Securities in Respect of Supplemental Indentures . . . . . . . . . . . . . . . . 65
SECTION 8.6 Subordination Unimpaired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
</TABLE>

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ARTICLE NINE

CONSOLIDATION, MERGER, SALE OR CONVEYANCE

SECTION 9.1 Issuer May Consolidate, etc., Only on Certain Terms . . . . . . . . . . . . . . . . . . . . . 66
SECTION 9.2 Successor Corporation Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

ARTICLE TEN

SATISFACTION AND DISCHARGE OF
INDENTURE; UNCLAIMED MONEYS

SECTION 10.1 Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 10.2 Application by Trustee of Funds Deposited for Payment of Securities . . . . . . . . . . . . . 75
SECTION 10.3 Repayment of Moneys Held by Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 10.4 Return of Moneys Held by Trustee and Paying Agent Unclaimed for Two Years . . . . . . . . . . 75
SECTION 10.5 Indemnity for U.S. Government Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 10.6 Excess Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

ARTICLE ELEVEN

MISCELLANEOUS PROVISIONS

SECTION 11.1 Incorporators, Stockholders, Officers and Directors of Issuer Exempt from Individual
Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 11.2 Provisions of Indenture for the Sole Benefit of Parties and Holders of Securities and
Coupons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 11.3 Successors and Assigns of Issuer Bound by Indenture . . . . . . . . . . . . . . . . . . . . . 77
SECTION 11.4 Notices and Demands on Issuer, Trustee and Holders of Securities and Coupons . . . . . . . . 77
SECTION 11.5 Officers' Certificates and Opinions of Counsel; Statements to Be Contained Therein . . . . . 78
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 11.7 Conflict of Any Provision of Indenture with Trust Indenture Act of 1939 . . . . . . . . . . . 79
SECTION 11.8 New York Law to Govern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 11.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 11.10 Effect of Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
</TABLE>

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SECTION 11.11 Securities in a Foreign Currency or in ECU . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 11.12 Judgment Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

ARTICLE TWELVE

REDEMPTION OF SECURITIES AND SINKING FUNDS

SECTION 12.1 Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 12.2 Notice of Redemption; Partial Redemptions . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 12.3 Payment of Securities Called for Redemption . . . . . . . . . . . . . . . . . . . . . . . . . 84
SECTION 12.4 Exclusion of Certain Securities from Eligibility for Selection for Redemption . . . . . . . . 85
SECTION 12.5 Mandatory and Optional Sinking Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

ARTICLE THIRTEEN

SUBORDINATION

SECTION 13.1 Securities and Coupons Subordinated to Senior Indebtedness . . . . . . . . . . . . . . . . . 89
SECTION 13.2 Disputes with Holders of Certain Senior Indebtedness . . . . . . . . . . . . . . . . . . . . 91
SECTION 13.3 Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
SECTION 13.4 Obligation of Issuer Unconditional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
SECTION 13.5 Payments on Securities and Coupons Permitted . . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 13.6 Effectuation of Subordination by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 13.7 Knowledge of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 13.8 Trustee May Hold Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 13.9 Rights of Holders of Senior Indebtedness Not Impaired . . . . . . . . . . . . . . . . . . . . 94
SECTION 13.10 Article Applicable to Paying Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 13.11 Trustee; Compensation Not Prejudiced . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
</TABLE>

vi
<PAGE> 8

THIS INDENTURE, dated as of _____________, 1995 between THE
WILLIAMS COMPANIES, INC., a Delaware corporation (the "Issuer"), and CHEMICAL
BANK, as trustee (the "Trustee"),

W I T N E S S E T H :

WHEREAS, the Issuer has duly authorized the issue from time to
time of its unsecured debentures, notes or other evidences of indebtedness to
be issued in one or more series (the "Securities") up to such principal amount
or amounts as may from time to time be authorized in accordance with the terms
of this Indenture;

WHEREAS, the Issuer has duly authorized the execution and delivery
of this Indenture to provide, among other things, for the authentication,
delivery and administration of the Securities; and

WHEREAS, all things necessary to make this Indenture a valid
indenture and agreement according to its terms have been done;

NOW, THEREFORE:

In consideration of the premises and the purchases of the
Securities by the holders thereof, the Issuer and the Trustee mutually covenant
and agree for the equal and proportionate benefit of the respective holders
from time to time of the Securities and of the Coupons, if any, appertaining
thereto as follows:

ARTICLE ONE

DEFINITIONS

SECTION 1.1 Certain Terms Defined. The following terms (except
as otherwise expressly provided or unless the context otherwise clearly
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Article. All other
terms used in this Indenture that are defined in the Trust Indenture Act of
1939 or the definitions of which in the Securities Act of 1933 are referred to
in the Trust Indenture Act of 1939, including terms defined therein by
reference to the Securities Act of 1933 (except as herein

<PAGE> 9
otherwise expressly provided or unless the context otherwise requires), shall
have the meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of this Indenture. All accounting terms
used herein and not expressly defined shall have the meanings assigned to such
terms in accordance with generally accepted accounting principles, and the term
"generally accepted accounting principles" means such accounting principles as
are generally accepted at the time of any computation. The words "herein",
"hereof" and "hereunder" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision. The terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular.

"Additional Amounts" shall have the meaning set forth in
Section 2.3(15).

"Authenticating Agent" shall have the meaning set forth in
Section 6.14.

"Authorized Newspaper" means a newspaper (which, in the case of
The City of New York, will, if practicable, be The Wall Street Journal (Eastern
Edition), in the case of the United Kingdom, will, if practicable, be the
Financial Times (London Edition) and, in the case of Luxembourg, will, if
practicable, be the Luxemburger Wort) published in an official language of the
country of publication customarily published at least once a day for at least
five days in each calendar week and of general circulation in The City of New
York, the United Kingdom or in Luxembourg, as applicable. If it shall be
impractical in the opinion of the Trustee to make any publication of any notice
required hereby in an Authorized Newspaper, any publication or other notice in
lieu thereof which is made or given with the approval of the Trustee shall
constitute a sufficient publication of such notice.

"Board of Directors" means either the Board of Directors of the
Issuer or any committee of such Board duly authorized to act on its behalf.

"Board Resolution" means a copy of one or more resolutions,
certified by the secretary or an assistant secretary of the Issuer to have been
duly adopted or consented to by the Board of Directors and to be in full force
and effect, and delivered to the Trustee.

"Business Day" means, with respect to any Security, a day that in
the city (or in any of the cities,

2
<PAGE> 10
if more than one) in which amounts are payable, as specified in the form of
such Security, is not a day on which banking institutions are authorized or
required by law or regulation to close.

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

"Corporate Trust Office" means the office of the Trustee at which
the corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date as of which this
Indenture is dated, located in New York, New York.

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

"covenant defeasance" shall have the meaning set forth in
Section 10.1(C).

"Depositary" means, with respect to the Securities of any series
issuable or issued in the form of one or more Registered Global Securities, the
Person designated as Depositary by the Issuer pursuant to Section 2.3 until a
successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" shall mean or include
each Person who is then a Depositary hereunder, and if at any time there is
more than one such Person, "Depositary" as used with respect to the Securities
of any such series shall mean the Depositary with respect to the Registered
Global Securities of that series.

"Dollar" means the coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public and
private debts.

"ECU" means the European Currency Unit as defined and revised from
time to time by the Council of European Communities.

"Event of Default" means any event or condition specified as such
in Section 5.1.

"Foreign Currency" means a currency issued by the government of a
country other than the United States.

3
<PAGE> 11
"Holder", "Holder of Securities", "Securityholder" or other
similar terms mean (a) in the case of any Registered Security, the Person in
whose name such Security is registered in the security register kept by the
Issuer for that purpose in accordance with the terms hereof, and (b) in the
case of any Unregistered Security, the bearer of such Security, or any Coupon
appertaining thereto, as the case may be.

"Indenture" means this instrument as originally executed and
delivered or, if amended or supplemented as herein provided, as so amended or
supplemented or both, and shall include the forms and terms of particular
series of Securities established as contemplated hereunder.

"Interest" means, when used with respect to non-interest bearing
Securities, interest payable after maturity.

"Issuer" means The Williams Companies, Inc., a Delaware
corporation and, subject to Article Nine, its successors and assigns.

"Issuer Order" means a written statement, request or order of the
Issuer signed in its name by the Chairman of the Board, the President, or a
Vice President, a Secretary or a Treasurer of the Issuer.

"Judgment Currency" shall have the meaning set forth in
Section 11.12.

"Officers' Certificate" means a certificate signed by the Chairman
of the Board, the President or a Vice President, and by the Controller,
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Issuer and delivered to the Trustee. Each such certificate shall include
the statements provided for in Section 11.5, if applicable.

"Opinion of Counsel" means an opinion in writing signed by legal
counsel who may be an employee of or counsel to the Issuer and who shall be
satisfactory to the Trustee. Each such opinion shall include the statements
provided for in Section 11.5, if applicable.

"original issue date" of any Security (or portion thereof) means
the earlier of (a) the date of such Security or (b) the date of any Security
(or portion thereof) for which such Security was issued (directly or
indirectly) on registration of transfer, exchange or substitution.

4
<PAGE> 12
"Original Issue Discount Security" means any Security that
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the maturity thereof pursuant to
Section 5.1.

"Outstanding", when used with reference to Securities, shall,
subject to the provisions of Section 7.4, mean, as of any particular time, all
Securities authenticated and delivered by the Trustee under this Indenture,
except

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

(b) Securities, or portions thereof, for the payment or
redemption of which moneys or U.S. Government Obligations (as provided for
in Section 10.1) in the necessary amount shall have been deposited in trust
with the Trustee or with any paying agent (other than the Issuer) or shall
have been set aside, segregated and held in trust by the Issuer for the
Holders of such Securities (if the Issuer shall act as its own paying
agent), provided that if such Securities, or portions thereof, are to be
redeemed prior to the maturity thereof, notice of such redemption shall
have been given as herein provided, or provision satisfactory to the
Trustee shall have been made for giving such notice; and

(c) Securities which shall have been paid or in substitution for
which other Securities shall have been authenticated and delivered pursuant
to the terms of Section 2.9 (except with respect to any such Security as to
which proof satisfactory to the Trustee is presented that such Security is
held by a Person in whose hands such Security is a legal, valid and binding
obligation of the Issuer).

In determining whether the Holders of the requisite principal
amount of Outstanding Securities of any or all series have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, the
principal amount of an Original Issue Discount Security that shall be deemed to
be Outstanding for such purposes shall be the amount of the principal thereof
that would be due and payable as of the date of such determination upon a
declaration of acceleration of the maturity thereof pursuant to Section 5.1.

5
<PAGE> 13
"Periodic Offering" means an offering of Securities of a series
from time to time, the specific terms of which Securities, including, without
limitation, the rate or rates of interest, if any, thereon, the stated maturity
or maturities thereof and the redemption provisions, if any, with respect
thereto, are to be determined by the Issuer or its agents upon the issuance of
such Securities.

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

"principal" whenever used with reference to the Securities or any
Security or any portion thereof, shall be deemed to include "and premium, if
any".

"record date" shall have the meaning set forth in Section 2.7.

"Registered Global Security", means a Security evidencing all or a
part of a series of Registered Securities, issued to the Depositary for such
series in accordance with Section 2.4, and bearing the legend prescribed in
Section 2.4.

"Registered Security" means any Security registered on the
Security register of the Issuer.

"Required Currency" shall have the meaning set forth in
Section 11.12.

"Responsible Officer" when used with respect to the Trustee means
the chairman of the board of directors, any vice chairman of the board of
directors, the chairman of the trust committee, the chairman of the executive
committee, any vice chairman of the executive committee, the president, any
vice president, (whether or not designated by numbers or words added before or
after the title "vice president") the cashier, the secretary, the treasurer,
any Senior Trust Officer, any trust officer, any assistant trust officer, any
assistant vice president, any assistant cashier, any assistant secretary, any
assistant treasurer, or any other officer or assistant officer of the Trustee
customarily performing functions similar to those performed by the persons who
at the time shall be such officers, respectively, or to whom any corporate
trust matter is referred because of his knowledge of and familiarity with the
particular subject.

<PAGE> 14
"Security" or "Securities" has the meaning stated in the first
recital of this Indenture, or, as the case may be, Securities that have been
authenticated and delivered under this Indenture.

"Senior Indebtedness" means obligations (other than non-recourse
obligations, the Securities or any other obligations specifically designated as
being subordinate in right of payment to Senior Indebtedness) of, or guaranteed
or assumed by, the Issuer for borrowed money or evidenced by bonds, debentures,
notes or other similar instruments, and amendments, renewals, extensions,
modifications and refundings of any such indebtedness or obligation.

"Trust Indenture Act of 1939" means the Trust Indenture Act of
1939, as amended.

"Trustee" means the Person identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article Six, shall also
include any successor trustee. "Trustee" shall also mean or include each
Person who is then a trustee hereunder and if at any time there is more than
one such Person, "Trustee" as used with respect to the Securities of any series
shall mean the trustee with respect to the Securities of such series.

"Unregistered Security" means any Security other than a Registered
Security.

"U.S. Government Obligations" shall have the meaning set forth in
Section 10.1(A).

"Yield to Maturity" means the yield to maturity on a series of
Securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series, and
calculated in accordance with accepted financial practice.

ARTICLE TWO

SECURITIES

SECTION 2.1 Forms Generally. The Securities of each series and
the Coupons, if any, to be attached thereto shall be substantially in such form
(not inconsistent with this Indenture) as shall be established by or pursuant
to one or more Board Resolutions (as set forth in a Board Resolution or, to the
extent established pursuant to rather than set forth in a Board Resolution, an
Officers' Certificate detailing such establishment) or in one or more

7
<PAGE> 15
indentures supplemental hereto, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture and may have imprinted or otherwise reproduced thereon such
legend or legends or endorsements, not inconsistent with the provisions of this
Indenture, as may be required to comply with any law or with any rules or
regulations pursuant thereto, or with any rules of any securities exchange or
to conform to general usage, all as may be determined by the officers executing
such Securities and Coupons, if any, as evidenced by their execution of such
Securities and Coupons.

The definitive Securities and Coupons, if any, shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Securities and
Coupons, if any, as evidenced by their execution of such Securities and
Coupons, if any.

SECTION 2.2 Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication on all Securities shall be in
substantially the following form:

"This is one of the Securities referred to in the within-mentioned
Subordinated Indenture.

________________________,
as Trustee

By_______________________
Authorized Officer"

If at any time there shall be an Authenticating Agent appointed
with respect to any series of Securities, then the Securities of such series
may have endorsed thereon, in addition to or in lieu of the Trustee's
certificate of authentication to be borne by the Securities of each such
series, an alternative certificate of authentication substantially as follows:

8
<PAGE> 16

"This is one of the Securities referred to in the within-mentioned
Subordinated Indenture.

__________________________,
as Authenticating Agent

By_________________________
Authorized Officer"

SECTION 2.3 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, and the
Securities of each such series shall rank equally and pari passu with the
Securities of each other series, but all Securities issued hereunder shall be
subordinate and junior in right of payment, to the extent and in the manner set
forth in Article Thirteen, to all Senior Indebtedness of the Issuer. There
shall be established in or pursuant to one or more Board Resolutions (and, to
the extent established pursuant to rather than set forth in a Board Resolution,
in an Officers' Certificate detailing such establishment) or established in one
or more indentures supplemental hereto, prior to the initial issuance of
Securities of any series,

(1) the designation of the Securities of the series, which shall
distinguish the Securities of the series from the Securities of all other
series;

(2) any limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 2.8, 2.9, 2.11, 8.5 or 12.3);

(3) if other than Dollars, the coin or currency in which the
Securities of that series are denominated (including, but not limited to,
any Foreign Currency or ECU);

9
<PAGE> 17
(4) the date or dates on which the principal of the Securities of
the series is payable;

(5) the rate or rates at which the Securities of the series shall
bear interest, if any, the date or dates from which such interest shall
accrue, on which such interest shall be payable and (in the case of
Registered Securities) on which a record shall be taken for the
determination of Holders to whom interest is payable and/or the method by
which such rate or rates or date or dates shall be determined and the
right, if any, of the Issuer to extend the interest payment periods of the
Securities of the series, the maximum duration, if any, of any such
extension or extensions, the additional interest, if any, payable on such
Securities if any interest payment period is extended and any notice (which
in every case shall include notice to the Trustee) which must be given upon
the exercise of such rights;

(6) the place or places where the principal of and any interest
on Securities of the series shall be payable (if other than as provided in
Section 3.2);

(7) the right, if any, of the Issuer to redeem Securities, in
whole or in part, at its option and the period or periods within which, the
price or prices at which and any terms and conditions upon which Securities
of the series may be so redeemed, pursuant to any sinking fund or
otherwise;

(8) the obligation, if any, of the Issuer to redeem, repurchase
or repay Securities of the series pursuant to any mandatory redemption,
sinking fund or analogous provisions or at the option of a Holder thereof
and the price or prices at which and the period or periods within which and
any terms and conditions upon which Securities of the series shall be
redeemed, repurchased or repaid, in whole or in part, pursuant to such
obligation;

(9) if other than denominations of $1,000 and any integral
multiple thereof in the case of Registered Securities, or $1,000 and $5,000
in the case of Unregistered Securities, the denominations in which
Securities of the series shall be issuable;

(10) if other than the principal amount thereof, the portion of
the principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the maturity thereof;

10
<PAGE> 18

(11) if other than the coin or currency in which the Securities of
that series are denominated, the coin or currency in which payment of the
principal of or interest on the Securities of such series shall be payable;

(12) if the principal of or interest on the Securities of such
series are to be payable, at the election of the Issuer or a Holder thereof,
in a coin or currency other than that in which the Securities are
denominated, the period or periods within which, and the terms and
conditions upon which, such election may be made;

(13) if the amount of payments of principal of and interest on the
Securities of the series may be determined with reference to an index based
on a coin or currency other than that in which the Securities of the series
are denominated, the manner in which such amounts shall be determined;

(14) whether the Securities of the series will be issuable as
Registered Securities (and if so, whether such Securities will be issuable
as Registered Global Securities) or Unregistered Securities (with or
without Coupons), or any combination of the foregoing, any restrictions
applicable to the offer, sale or delivery of Unregistered Securities or the
payment of interest thereon and, if other than as provided in Section 2.8,
the terms upon which Unregistered Securities of any series may be exchanged
for Registered Securities of such series and vice versa;

(15) whether and under what circumstances the Issuer will pay
additional amounts on the Securities of the series in respect of any tax,
assessment or governmental charge withheld or deducted ("Additional
Amounts") and, if so, whether the Issuer will have the option to redeem
such Securities rather than pay such Additional Amounts;

(16) if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions, the
form and terms of such certificates, documents or conditions;

(17) any trustees, depositaries, authenticating or paying agents,
transfer agents or registrars or any

11
<PAGE> 19

other agents with respect to the Securities of such series;

(18) any other Events of Default or covenants with respect to the
Securities of such series; and

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

All Securities of any one series and Coupons, if any, appertaining
thereto, shall be substantially identical, except in the case of Registered
Securities as to denomination and except as may otherwise be provided by or
pursuant to the Board Resolution or Officers' Certificate referred to above or
as set forth in any such indenture supplemental hereto. All Securities of any
one series need not be issued at the same time and may be issued from time to
time, consistent with the terms of this Indenture, if so provided by or
pursuant to such Board Resolution, such Officers' Certificate or in any such
indenture supplemental hereto.

SECTION 2.4 Authentication and Delivery of Securities. The
Issuer may deliver Securities of any series having attached thereto appropriate
Coupons, if any, executed by the Issuer to the Trustee for authentication
together with the applicable documents referred to below in this Section, and
the Trustee shall thereupon authenticate and deliver such Securities to or upon
the order of the Issuer (contained in the Issuer Order referred to below in
this Section) or pursuant to such procedures acceptable to the Trustee and to
such recipients as may be specified from time to time by an Issuer Order. The
maturity date, original issue date, interest rate and any other terms of the
Securities of such series and Coupons, if any, appertaining thereto shall be
specified in or pursuant to such Issuer Order and procedures. If provided for
in such procedures, such Issuer Order may authorize authentication and delivery
pursuant to oral instructions from the Issuer or its duly authorized agent,
which instructions shall be promptly confirmed in writing. In authenticating
such Securities and accepting the additional responsibilities under this
Indenture in relation to such Securities, the Trustee shall be entitled to
receive (in the case of subparagraphs 2, 3 and 4 below only at or before the
time of the first request of the Issuer to the Trustee to authenticate
Securities of such series) and (subject to Section 6.1) shall be fully
protected in relying upon, unless and until such documents have been superseded
or revoked:

12
<PAGE> 20

(1) an Issuer Order requesting such authentication and setting
forth delivery instructions if the Securities and Coupons, if any, are not
to be delivered to the Issuer, provided that, with respect to Securities of
a series subject to a Periodic Offering, (a) such Issuer Order may be
delivered by the Issuer to the Trustee prior to the delivery to the Trustee
of such Securities for authentication and delivery, (b) the Trustee shall
authenticate and deliver Securities of such series for original issue from
time to time, in an aggregate principal amount not exceeding the aggregate
principal amount established for such series, pursuant to an Issuer Order
or pursuant to procedures acceptable to the Trustee as may be specified
from time to time by an Issuer Order, (c) the maturity date or dates,
original issue date or dates, interest rate or rates and any other terms of
Securities of such series shall be determined by an Issuer Order or
pursuant to such procedures and (d) if provided for in such procedures,
such Issuer Order may authorize authentication and delivery pursuant to
oral or electronic instructions from the Issuer or its duly authorized
agent or agents, which oral instructions shall be promptly confirmed in
writing;

(2) any Board Resolution, Officers' Certificate and/or executed
supplemental indenture referred to in Sections 2.1 and 2.3 by or pursuant
to which the forms and terms of the Securities and Coupons, if any, were
established;

(3) an Officers' Certificate setting forth the form or forms and
terms of the Securities and Coupons, if any, stating that the form or forms
and terms of the Securities and Coupons, if any, have been established
pursuant to Sections 2.1 and 2.3 and comply with this Indenture, and
covering such other matters as the Trustee may reasonably request; and

(4) at the option of the Issuer, either an Opinion of Counsel, or
a letter addressed to the Trustee permitting it to rely on an Opinion of
Counsel, substantially to the effect that:

(a) the forms of the Securities and Coupons, if any, have
been duly authorized and established in conformity with the
provisions of this Indenture;

(b) in the case of an underwritten offering, the terms of
the Securities have been duly

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<PAGE> 21
authorized and established in conformity with the provisions of
this Indenture, and, in the case of a Periodic Offering, certain
terms of the Securities have been established pursuant to a Board
Resolution, an Officers' Certificate or a supplemental indenture in
accordance with this Indenture, and when such other terms as are to
be established pursuant to procedures set forth in an Issuer Order
shall have been established, all such terms will have been duly
authorized by the Issuer and will have been established in
conformity with the provisions of this Indenture;

(c) when the Securities and Coupons, if any, have been
executed by the Issuer and authenticated by the Trustee in
accordance with the provisions of this Indenture and delivered to
and duly paid for by the purchasers thereof, they will have been
duly issued under this Indenture and will be valid and legally
binding obligations of the Issuer, enforceable in accordance with
their respective terms, and will be entitled to the benefits of
this Indenture; and

(d) the execution and delivery by the Issuer of, and the
performance by the Issuer of its obligations under, the Securities
and Coupons, if any, will not contravene any provision of
applicable law or the certificate of incorporation or by-laws of
the Issuer or any agreement or other instrument binding upon the
Issuer or any of its subsidiaries that is material to the Issuer
and its subsidiaries, considered as one enterprise, or, to the
best of such counsel's knowledge, any judgment, order or decree of
any governmental body, agency or court having jurisdiction over
the Issuer or any subsidiary, and no consent, approval or
authorization of any governmental body or agency is required for
the performance by the Issuer of its obligations under the
Securities and Coupons, if any, except such as are specified and
have been obtained and such as may be required by the securities
or blue sky laws of the various states in connection with the
offer and sale of the Securities.

In rendering such opinions, such counsel may qualify any opinions
as to enforceability by stating that such enforceability may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium and other
similar laws affecting the rights and remedies of

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<PAGE> 22
creditors and is subject to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law). Such
counsel may rely, as to all matters governed by the laws of jurisdictions other
than the State of New York and the federal law of the United States, upon
opinions of other counsel (copies of which shall be delivered to the Trustee),
in which case the opinion shall state that such counsel believes he and the
Trustee are entitled so to rely. Such counsel may also state that, insofar as
such opinion involves factual matters, he has relied, to the extent he deems
proper, upon certificates of officers of the Issuer and its subsidiaries and
certificates of public officials.

The Trustee shall have the right to decline to authenticate and
deliver any Securities under this Section if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken by the Issuer or
if the Trustee in good faith by its board of directors or board of trustees,
executive committee, or a trust committee of directors or trustees or
Responsible Officers shall determine that such action would expose the Trustee
to personal liability to existing Holders or would affect the Trustee's own
rights, duties or immunities under the Securities, this Indenture or otherwise.

If the Issuer shall establish pursuant to Section 2.3 that the
Securities of a series are to be issued in the form of one or more Registered
Global Securities, then the Issuer shall execute and the Trustee shall, in
accordance with this Section and the Issuer Order with respect to such series,
authenticate and deliver one or more Registered Global Securities that (i)
shall represent and shall be denominated in an amount equal to the aggregate
principal amount of all of the Securities of such series issued and not yet
canceled, (ii) shall be registered in the name of the Depositary for such
Registered Global Security or Securities or the nominee of such Depositary,
(iii) shall be delivered by the Trustee to such Depositary or pursuant to such
Depositary's instructions and (iv) shall bear a legend substantially to the
following effect: "Unless and until it is exchanged in whole or in part for
Securities in definitive registered form, this Security may not be transferred
except as a whole by the Depositary to the nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary."

Each Depositary must, at the time of its designation and at all
times while it serves as Depositary,

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<PAGE> 23
be a clearing agency registered under the Securities Exchange Act of 1934 and
any other applicable statute or regulation.

SECTION 2.5 Execution of Securities. The Securities and, if
applicable, each Coupon appertaining thereto shall be signed on behalf of the
Issuer by its Chairman of the Board, its President or one of its Vice
Presidents, under its corporate seal (except in the case of Coupons) which may,
but need not, be attested. Such signatures may be the manual or facsimile
signatures of the present or any future such officers. The seal of the Issuer
may be in the form of a facsimile thereof and may be impressed, affixed,
imprinted or otherwise reproduced on the Securities. Typographical and other
minor errors or defects in any such reproduction of the seal or any such
signature shall not affect the validity or enforceability of any Security that
has been duly authenticated and delivered by the Trustee.

In case any officer of the Issuer who shall have signed any of the
Securities or Coupons, if any, shall cease to be such officer before the
Security or Coupon so signed (or the Security to which the Coupon so signed
appertains) shall be authenticated and delivered by the Trustee or disposed of
by the Issuer, such Security or Coupon nevertheless may be authenticated and
delivered or disposed of as though the person who signed such Security or
Coupon had not ceased to be such officer of the Issuer; and any Security or
Coupon may be signed on behalf of the Issuer by such persons as, at the actual
date of the execution of such Security or Coupon, shall be the proper officers
of the Issuer, although at the date of the execution and delivery of this
Indenture any such person was not such an officer.

SECTION 2.6 Certificate of Authentication. Only such Securities
as shall bear thereon a certificate of authentication substantially in the form
hereinbefore recited, executed by the Trustee by the manual signature of one of
its authorized officers, shall be entitled to the benefits of this Indenture or
be valid or obligatory for any purpose. No Coupon shall be entitled to the
benefits of this Indenture or shall be valid and obligatory for any purpose
until the certificate of authentication on the Security to which such Coupon
appertains shall have been duly executed by the Trustee. The execution of such
certificate by the Trustee upon any Security executed by the Issuer shall be
conclusive evidence that the Security so authenticated has been duly
authenticated and delivered hereunder and that the Holder is entitled to the
benefits of this Indenture.

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<PAGE> 24

SECTION 2.7 Denomination and Date of Securities; Payments of
Interest. The Securities of each series shall be issuable as Registered
Securities or Unregistered Securities in denominations established as
contemplated by Section 2.3 or, with respect to the Registered Securities of
any series, if not so established, in denominations of $1,000 and any integral
multiple thereof. If denominations of Unregistered Securities of any series
are not so established, such Securities shall be issuable in denominations of
$1,000 and $5,000. The Securities of each series shall be numbered, lettered
or otherwise distinguished in such manner or in accordance with such plan as
the officers of the Issuer executing the same may determine with the approval
of the Trustee, as evidenced by the execution and authentication thereof.

Each Registered Security shall be dated the date of its
authentication. Each Unregistered Security shall be dated as provided in or
pursuant to the Board Resolution referred to in Section 2.3. The Securities of
each series shall bear interest, if any, from the date, and such interest shall
be payable on the dates, established as contemplated by Section 2.3.

The Person in whose name any Registered Security of any series is
registered at the close of business on any record date applicable to a
particular series with respect to any interest payment date for such series
shall be entitled to receive the interest, if any, payable on such interest
payment date notwithstanding any transfer or exchange of such Registered
Security subsequent to the record date and prior to such interest payment date,
except if and to the extent the Issuer shall default in the payment of the
interest due on such interest payment date for such series, in which case such
defaulted interest shall be paid to the Persons in whose names Outstanding
Registered Securities for such series are registered at the close of business
on a subsequent record date (which shall be not less than five Business Days
prior to the date of payment of such defaulted interest) established by notice
given by mail by or on behalf of the Issuer to the Holders of Registered
Securities not less than 15 days preceding such subsequent record date. The
term "record date" as used with respect to any interest payment date (except a
date for payment of defaulted interest) for the Securities of any series shall
mean the date specified as such in the terms of the Registered Securities of
such series established as contemplated by Section 2.3, or, if no such date is
so established, if such interest payment date is the first day of a calendar
month, the fifteenth day of the next preceding calendar month or, if such
interest payment date is the

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<PAGE> 25
fifteenth day of a calendar month, the first day of such calendar month,
whether or not such record date is a Business Day.

SECTION 2.8 Registration, Transfer and Exchange. The Issuer will
keep at each office or agency to be maintained for the purpose as provided in
Section 3.2 for each series of Securities a register in which, subject to such
reasonable regulations as it may prescribe, it will provide for the
registration of Registered Securities of such series and the registration of
transfer of Registered Securities of such series. Such register shall be in
written form in the English language or in any other form capable of being
converted into such form within a reasonable time. At all reasonable times
such register or registers shall be open for inspection by the Trustee.

Upon due presentation for registration of transfer of any
Registered Security of any series at any such office or agency to be maintained
for the purpose as provided in Section 3.2, the Issuer shall execute and the
Trustee shall authenticate and deliver in the name of the transferee or
transferees a new Registered Security or Registered Securities of the same
series and of like terms and tenor, in authorized denominations for a like
aggregate principal amount.

Unregistered Securities (except for any temporary global
Unregistered Securities) and Coupons (except for Coupons attached to any
temporary global Unregistered Securities) shall be transferable by delivery.

At the option of the Holder thereof, Registered Securities of any
series (other than a Registered Global Security, except as set forth below) may
be exchanged for a Registered Security or Registered Securities of such series
having authorized denominations and an equal aggregate principal amount, upon
surrender of such Registered Securities to be exchanged at the agency of the
Issuer that shall be maintained for such purpose in accordance with Section 3.2
and upon payment, if the Issuer shall so require, of the charges hereinafter
provided. If the Securities of any series are issued in both registered and
unregistered form, except as otherwise specified pursuant to Section 2.3, at
the option of the Holder thereof, Unregistered Securities of any series may be
exchanged for Registered Securities of such series having authorized
denominations and an equal aggregate principal amount and of like terms and
tenor, upon surrender of such Unregistered Securities to be exchanged at the
agency of the Issuer that shall be maintained for such purpose in accordance
with

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<PAGE> 26
Section 3.2, with, in the case of Unregistered Securities that have Coupons
attached, all unmatured Coupons and all matured Coupons in default thereto
appertaining, and upon payment, if the Issuer shall so require, of the charges
hereinafter provided. At the option of the Holder thereof, if Unregistered
Securities of any series, maturity date, interest rate and original issue date
are issued in more than one authorized denomination, except as otherwise
specified pursuant to Section 2.3, such Unregistered Securities may be
exchanged for Unregistered Securities of such series and of like terms and
tenor having authorized denominations and an equal aggregate principal amount,
upon surrender of such Unregistered Securities to be exchanged at the agency of
the Issuer that shall be maintained for such purpose in accordance with Section
3.2 or as specified pursuant to Section 2.3, with, in the case of Unregistered
Securities that have Coupons attached, all unmatured Coupons and all matured
Coupons in default thereto appertaining, and upon payment, if the Issuer shall
so require, of the charges hereinafter provided. Unless otherwise specified
pursuant to Section 2.3, Registered Securities of any series may not be
exchanged for Unregistered Securities of such series. Whenever any Securities
are so surrendered for exchange, the Issuer shall execute, and the Trustee
shall authenticate and deliver, the Securities which the Holder making the
exchange is entitled to receive. All Securities and Coupons surrendered upon
any exchange or transfer provided for in this Indenture shall be promptly
canceled and disposed of by the Trustee and the Trustee will deliver a
certificate of disposition thereof to the Issuer.

All Registered Securities presented for registration of transfer,
exchange, redemption or payment shall (if so required by the Issuer or the
Trustee) be duly endorsed by, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Issuer and the Trustee duly
executed by the Holder or his attorney duly authorized in writing.

The Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
exchange or registration of transfer of Securities. No service charge shall be
made for any such transaction.

The Issuer shall not be required to exchange or register a
transfer of (a) any Securities of any series for a period of 15 days next
preceding the first mailing of notice of redemption of Securities of such
series to be redeemed or (b) any Securities selected, called or being called
for redemption, in whole or in part, except, in the

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<PAGE> 27
case of any Security to be redeemed in part, the portion thereof not so to be
redeemed.

Notwithstanding any other provision of this Section 2.8, unless
and until it is exchanged in whole or in part for Securities in definitive
registered form, a Registered Global Security representing all or a portion of
the Securities of a series may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or by
such Depositary or any such nominee to a successor Depositary for such series
or a nominee of such successor Depositary.

If at any time the Depositary for any Registered Securities of a
series represented by one or more Registered Global Securities notifies the
Issuer that it is unwilling or unable to continue as Depositary for such
Registered Securities or if at any time the Depositary for such Registered
Securities shall no longer be eligible under Section 2.4, the Issuer shall
appoint a successor Depositary with respect to such Registered Securities. If
a successor Depositary for such Registered Securities is not appointed by the
Issuer within 90 days after the Issuer receives such notice or becomes aware of
such ineligibility, the Issuer's election pursuant to Section 2.3 that such
Registered Securities be represented by one or more Registered Global
Securities shall no longer be effective and the Issuer will execute, and the
Trustee, upon receipt of an Officers' Certificate for the authentication and
delivery of definitive Securities of such series, will authenticate and
deliver, Securities of such series in definitive registered form without
Coupons and of like terms and tenor, in any authorized denominations, in an
aggregate principal amount equal to the principal amount of the Registered
Global Security or Securities representing such Registered Securities in
exchange for such Registered Global Security or Securities.

The Issuer may at any time and in its sole discretion determine
that the Registered Securities of any series issued in the form of one or more
Registered Global Securities shall no longer be represented by a Registered
Global Security or Securities. In such event the Issuer will execute, and the
Trustee, upon receipt of an Officers' Certificate for the authentication and
delivery of definitive Securities of such series, will authenticate and
deliver, Securities of such series in definitive registered form without
Coupons and of like terms and tenor, in any authorized denominations, in an
aggregate principal amount equal to the principal amount of the Registered
Global

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<PAGE> 28
Security or Securities representing such Registered Securities, in exchange for
such Registered Global Security or Securities.

If specified by the Issuer pursuant to Section 2.3 with respect to
Securities represented by a Registered Global Security, the Depositary for such
Registered Global Security may surrender such Registered Global Security in
exchange in whole or in part for Securities of the same series and of like
terms and tenor in definitive registered form on such terms as are acceptable
to the Issuer and such Depositary. Thereupon, the Issuer shall execute, and
the Trustee shall authenticate and deliver, without service charge,

(i) to the Person specified by such Depositary a new Registered
Security or Securities of the same series and of like terms and tenor, of
any authorized denominations as requested by such Person, in an aggregate
principal amount equal to and in exchange for such Person's beneficial
interest in the Registered Global Security; and

(ii) to such Depositary a new Registered Global Security in a
denomination equal to the difference, if any, between the principal amount
of the surrendered Registered Global Security and the aggregate principal
amount of Registered Securities authenticated and delivered pursuant to
clause (i) above.

Upon the exchange of a Registered Global Security for Securities
in definitive registered form without Coupons, in authorized denominations,
such Registered Global Security shall be canceled by the Trustee or its agent.
Securities in definitive registered form without Coupons issued in exchange for
a Registered Global Security pursuant to this Section 2.8 shall be registered
in such names and in such authorized denominations as the Depositary for such
Registered Global Security, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee or an agent of
the Issuer or the Trustee. The Trustee or such agent shall deliver such
Securities to or as directed by the Persons in whose names such Securities are
so registered.

All Securities issued upon any transfer or exchange of Securities
shall be valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.

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<PAGE> 29
Notwithstanding anything herein or in the terms of any series of
Securities to the contrary, none of the Issuer, the Trustee or any agent of the
Issuer or the Trustee (any of which, other than the Issuer, shall rely on an
Officers' Certificate and an Opinion of Counsel) shall be required to exchange
any Unregistered Security for a Registered Security if such exchange would
result in adverse Federal income tax consequences to the Issuer (such as, for
example, the inability of the Issuer to deduct from its income, as computed for
Federal income tax purposes, the interest payable on the Unregistered
Securities) under then applicable United States Federal income tax laws.

SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. In case any temporary or definitive Security or any Coupon
appertaining to any Security shall become mutilated, defaced or be destroyed,
lost or stolen, the Issuer in its discretion may execute, and upon the written
request of any officer of the Issuer, the Trustee shall authenticate and
deliver a new Security of like terms and tenor bearing a number or other
distinguishing symbol not contemporaneously outstanding, in exchange and
substitution for the mutilated or defaced Security, or in lieu of and in
substitution for the Security so destroyed, lost or stolen with Coupons
corresponding to the Coupons appertaining to the Securities so mutilated,
defaced, destroyed, lost or stolen, or in exchange or substitution for the
Security to which such mutilated, defaced, destroyed, lost or stolen Coupon
appertained, with Coupons appertaining thereto corresponding to the Coupons so
mutilated, defaced, destroyed, lost or stolen. In every case the applicant for
a substitute Security or Coupon shall furnish to the Issuer and to the Trustee
and any agent of the Issuer or the Trustee such security or indemnity as may be
required by them to indemnify and defend and to save each of them harmless and,
in every case of destruction, loss or theft, evidence to their satisfaction of
the destruction, loss or theft of such Security or Coupon and of the ownership
thereof and in the case of mutilation or defacement shall surrender the
Security and related Coupons to the Trustee or such agent.

Upon the issuance of any substitute Security or Coupon, the Issuer
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee or its agent)
connected therewith. In case any Security or Coupon which has matured or is
about to mature or has been called for redemption in full shall become
mutilated or defaced or be destroyed, lost or stolen, the Issuer may

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<PAGE> 30
instead of issuing a substitute Security, pay or authorize the payment of the
same or the relevant Coupon (without surrender thereof except in the case of a
mutilated or defaced Security or Coupon), if the applicant for such payment
shall furnish to the Issuer and to the Trustee and any agent of the Issuer or
the Trustee such security or indemnity as any of them may require to save each
of them harmless, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Issuer and the Trustee and any agent of the
Issuer or the Trustee evidence to their satisfaction of the destruction, loss
or theft of such Security or Coupon and of the ownership thereof.

Every substitute Security or Coupon of any series issued pursuant
to the provisions of this Section by virtue of the fact that any such Security
or Coupon is destroyed, lost or stolen shall constitute an additional
contractual obligation of the Issuer, whether or not the destroyed, lost or
stolen Security or Coupon shall be at any time enforceable by anyone and shall
be entitled to all the benefits of (but shall be subject to all the limitations
of rights set forth in) this Indenture equally and proportionately with any and
all other Securities or Coupons of such series duly authenticated and delivered
hereunder. All Securities and Coupons shall be held and owned upon the express
condition that, to the extent permitted by law, the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated, defaced or
destroyed, lost or stolen Securities and Coupons and shall preclude any and all
other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.

SECTION 2.10 Cancellation of Securities; Destruction Thereof.
All Securities and Coupons surrendered for payment, redemption, registration of
transfer or exchange, or for credit against any payment in respect of a sinking
or analogous fund, if surrendered to the Issuer or any agent of the Issuer or
the Trustee or any agent of the Trustee, shall be delivered to the Trustee or
its agent for cancellation or, if surrendered to the Trustee, shall be canceled
by it; and no Securities or Coupons shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture. The Trustee or
its agent shall dispose of canceled Securities and Coupons held by it and
deliver a certificate of disposition to the Issuer. If the Issuer or its agent
shall acquire any of the Securities or Coupons, such acquisition shall not
operate as a redemption or satisfaction of the indebtedness represented

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<PAGE> 31
by such Securities or Coupons unless and until the same are delivered to the
Trustee or its agent for cancellation.

SECTION 2.11 Temporary Securities. Pending the preparation of
definitive Securities for any series, the Issuer may execute and the Trustee
shall authenticate and deliver temporary Securities for such series (printed,
lithographed, typewritten or otherwise reproduced, in each case in form
satisfactory to the Trustee). Temporary Securities of any series shall be
issuable as Registered Securities without Coupons, or as Unregistered
Securities with or without Coupons attached thereto, of any authorized
denomination, and substantially in the form of the definitive Securities of
such series but with such omissions, insertions and variations as may be
appropriate for temporary Securities, all as may be determined by the Issuer
with the concurrence of the Trustee as evidenced by the execution and
authentication thereof. Temporary Securities may contain such references to
any provisions of this Indenture as may be appropriate. Every temporary
Security shall be executed by the Issuer and be authenticated by the Trustee
upon the same conditions and in substantially the same manner, and with like
effect, as the definitive Securities. Without unreasonable delay the Issuer
shall execute and shall furnish definitive Securities of such series and
thereupon temporary Registered Securities of such series may be surrendered in
exchange therefor without charge at each office or agency to be maintained by
the Issuer for that purpose pursuant to Section 3.2 and, in the case of
Unregistered Securities, at any agency maintained by the Issuer for such
purpose as specified pursuant to Section 2.3, and the Trustee shall
authenticate and deliver in exchange for such temporary Securities of such
series an equal aggregate principal amount of definitive Securities of the same
series and of like terms and tenor having authorized denominations and, in the
case of Unregistered Securities, having attached thereto any appropriate
Coupons. Until so exchanged, the temporary Securities of any series shall be
entitled to the same benefits under this Indenture as definitive Securities of
such series, unless otherwise established pursuant to Section 2.3. The
provisions of this Section are subject to any restrictions or limitations on
the issue and delivery of temporary Unregistered Securities of any series that
may be established pursuant to Section 2.3 (including any provision that
Unregistered Securities of such series initially be issued in the form of a
single global Unregistered Security to be delivered to a depositary or agency
located outside the United States and the procedures pursuant to which
definitive or global Unregistered Securities of such series

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<PAGE> 32
would be issued in exchange for such temporary global Unregistered Security).

ARTICLE THREE

COVENANTS OF THE ISSUER

SECTION 3.1 Payment of Principal and Interest. The Issuer
covenants and agrees for the benefit of each series of Securities that it will
duly and punctually pay or cause to be paid the principal of, and interest on,
each of the Securities of such series (together with any Additional Amounts
payable pursuant to the terms of such Securities) at the place or places, at
the respective times and in the manner provided in such Securities and in the
Coupons, if any, appertaining thereto and in this Indenture. The interest on
Securities with Coupons attached (together with any Additional Amounts payable
pursuant to the terms of such Securities) shall be payable only upon
presentation and surrender of the several Coupons for such interest
installments as are evidenced thereby as they severally mature. If any
temporary Unregistered Security provides that interest thereon may be paid
while such Security is in temporary form, the interest on any such temporary
Unregistered Security (together with any Additional Amounts payable pursuant to
the terms of such Security) shall be paid, as to the installments of interest
evidenced by Coupons attached thereto, if any, only upon presentation and
surrender thereof, and, as to the other installments of interest, if any, only
upon presentation of such Securities for notation thereon of the payment of
such interest, in each case subject to any restrictions that may be established
pursuant to Section 2.3. The interest on Registered Securities (together with
any Additional Amounts payable pursuant to the terms of such Securities) shall
be payable only to or upon the written order of the Holders thereof and, at the
option of the Issuer, may be paid by wire transfer (subject to the procedures
of the paying agent) or by mailing checks for such interest payable to or upon
the written order of such Holders at their last addresses as they appear on the
registry books of the Issuer.

SECTION 3.2 Offices for Payments, etc. So long as any Registered
Securities are authorized for issuance pursuant to this Indenture or are
outstanding hereunder, the Issuer will maintain in the Borough of Manhattan,
The City of New York, an office or agency where the Registered Securities of
each series may be presented for payment, where the Securities of each series
may be presented for

25
<PAGE> 33
exchange as is provided in this Indenture and, if applicable, pursuant to
Section 2.3 and where the Registered Securities of each series may be presented
for registration of transfer as in this Indenture provided.

The Issuer will maintain one or more offices or agencies in a city
or cities located outside the United States (including any city in which such
an agency is required to be maintained under the rules of any stock exchange on
which the Securities of such series are listed) where the Unregistered
Securities, if any, of each series and Coupons, if any, appertaining thereto
may be presented for payment. No payment on any Unregistered Security or
Coupon will be made upon presentation of such Unregistered Security or Coupon
at an agency of the Issuer within the United States nor will any payment be
made by transfer to an account in, or by mail to an address in, the United
States unless pursuant to applicable United States laws and regulations then in
effect such payment can be made without adverse tax consequences to the Issuer.
Notwithstanding the foregoing, payments in Dollars of Unregistered Securities
of any series and Coupons appertaining thereto which are payable in Dollars may
be made at an agency of the Issuer maintained in the Borough of Manhattan, The
City of New York if such payment in Dollars at each agency maintained by the
Issuer outside the United States for payment on such Unregistered Securities is
illegal or effectively precluded by exchange controls or other similar
restrictions.

The Issuer will maintain in the Borough of Manhattan, The City of
New York, an office or agency where notices and demands to or upon the Issuer
in respect of the Securities of any series, the Coupons appertaining thereto or
this Indenture may be served.

The Issuer will give to the Trustee written notice of the location
of each such office or agency and of any change of location thereof. In case
the Issuer shall fail to maintain any agency required by this Section to be
located in the Borough of Manhattan, The City of New York, or shall fail to
give such notice of the location or of any change in the location of any of the
above agencies, presentations and demands may be made and notices may be served
at the Corporate Trust Office of the Trustee.

The Issuer may from time to time designate one or more additional
offices or agencies where the Securities of a series and any Coupons
appertaining thereto may be presented for payment, where the Securities of that
series may be presented for exchange as provided in this Indenture and pursuant
to Section 2.3 and where the Registered

26
<PAGE> 34
Securities of that series may be presented for registration of transfer as in
this Indenture provided, and the Issuer may from time to time rescind any such
designation, as the Issuer may deem desirable or expedient; provided, however,
that no such designation or rescission shall in any manner relieve the Issuer
of its obligation to maintain the agencies provided for in this Section. The
Issuer will give to the Trustee prompt written notice of any such designation
or rescission thereof.

SECTION 3.3 Appointment to Fill a Vacancy in Office of Trustee.
The Issuer, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 6.10, a Trustee, so
that there shall at all times be a Trustee with respect to each series of
Securities hereunder.

SECTION 3.4 Paying Agents. Whenever the Issuer shall appoint a
paying agent other than the Trustee with respect to the Securities of any
series, it will cause such paying agent to execute and deliver to the Trustee
an instrument in which such agent shall agree with the Trustee, subject to the
provisions of this Section,

(a) that it will hold all sums received by it as such agent for
the payment of the principal of or interest on the Securities of such
series (whether such sums have been paid to it by the Issuer or by any
other obligor on the Securities of such series) in trust for the benefit of
the Holders of the Securities of such series, or Coupons appertaining
thereto, if any, or of the Trustee,

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

(c) that it will at any time during the continuance of any
such failure, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such paying agent.

The Issuer will, on or prior to each due date of the principal of
or interest on the Securities of such series, deposit with the paying agent a
sum sufficient to pay such principal or interest so becoming due, and (unless
such paying agent is the Trustee) the Issuer will promptly notify the Trustee
of any failure to take such action.

27
<PAGE> 35
If the Issuer shall act as its own paying agent with respect to
the Securities of any series, it will, on or before each due date of the
principal of or interest on the Securities of such series, set aside, segregate
and hold in trust for the benefit of the Holders of the Securities of such
series or the Coupons appertaining thereto a sum sufficient to pay such
principal or interest so becoming due. The Issuer will promptly notify the
Trustee of any failure to take such action.

Anything in this Section to the contrary notwithstanding, but
subject to Section 10.1, the Issuer may at any time, for the purpose of
obtaining a satisfaction and discharge with respect to one or more or all
series of Securities hereunder, or for any other reason, pay or cause to be
paid to the Trustee all sums held in trust for any such series by the Issuer or
any paying agent hereunder, as required by this Section, such sums to be held
by the Trustee upon the trusts herein contained.

Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Sections 10.3 and 10.4.

SECTION 3.5 Written Statement to Trustee. The Issuer will
deliver to the Trustee on or before May 31 in each year (beginning with 1996)
an Officers' Certificate (which need not comply with Section 11.5) as to
whether or not to the knowledge of the signers thereof the Issuer is in
compliance with all covenants and conditions of this Indenture (without regard
to any period of grace or requirements of notice provided hereunder) and, if
the Issuer shall not be in such compliance, specifying all defaults and the
nature and status thereof of which the signers may have knowledge. At least
one signatory to such Officers' Certificate shall be the principal executive
officer, principal financial officer or principal accounting officer of the
Issuer.

SECTION 3.6 Luxembourg Publications. In the event of the
publication of any notice pursuant to Section 5.11, 6.10(a), 6.11, 8.2, 10.4,
12.2 or 12.5 or Section 310(b) of the Trust Indenture Act of 1939, the party
making such publication in the Borough of Manhattan, The City of New York and
London shall also, to the extent that notice is required to be given to Holders
of Securities of any series by applicable Luxembourg law or stock exchange
regulation, as evidenced by an Officers' Certificate delivered to such party,
make a similar publication in Luxembourg.

28
<PAGE> 36

SECTION 3.7 Additional Amounts. If the Securities of a series
provide for the payment of Additional Amounts to the Holders of such
Securities, then the Issuer shall pay to each Holder of such Securities or any
Coupon appertaining thereto the Additional Amounts as provided therein.

If the Securities of a series provide for the payment of
Additional Amounts, at least 10 days prior to the first interest payment date
with respect to such series of Securities (or if the Securities of such series
shall not bear interest, 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 a change with respect to the matters set forth in the
below-mentioned Officers' Certificate, the Issuer will furnish the Trustee and
the principal paying agent for such Securities, if other than the Trustee, with
an Officers' Certificate instructing the Trustee and such paying agent whether
such payment of principal or interest shall be made to Holders of Securities of
such series or related Coupons who are United States Aliens (as such term is
defined with respect to such Securities) without withholding for or on account
of any tax, assessment or other governmental charge described in the Securities
of such series. 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 Securities or Coupons and the
Issuer will pay or cause to be paid to the Trustee or such paying agent the
Additional Amounts required by the terms of such Securities. The Issuer
covenants to indemnify the Trustee and any 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.

Whenever in this Indenture there is mentioned, in any context, the
payment of the principal of or interest on, or in respect of, any Security,
such mention shall be deemed to include mention of the payment of Additional
Amounts provided for in the terms of such Security to the extent that, in such
context, Additional Amounts are, were or would be payable in respect thereof
pursuant to the provisions of such Securities and express mention of the
payment of Additional Amounts (if applicable) in any provisions hereof shall
not be construed as excluding Additional Amounts in those provisions hereof
where such express mention is not made.

29
<PAGE> 37

ARTICLE FOUR

SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE

SECTION 4.1 Issuer to Furnish Trustee Information as to Names and
Addresses of Securityholders. The Issuer and any other obligor on the
Securities covenant and agree that they will furnish or cause to be furnished
to the Trustee a list in such form as the Trustee may reasonably require of the
names and addresses of the Holders of the Registered Securities of each series:

(a) semiannually and not more than 15 days after each record date
for the payment of interest on such Registered Securities, as hereinabove
specified, as of such record date and on dates to be determined pursuant to
Section 2.3 for non-interest bearing Registered Securities in each year,
and

(b) at such other times as the Trustee may request in writing,
within 30 days after receipt by the Issuer of any such request as of a date
not more than 15 days prior to the time such information is furnished,

provided that if and so long as the Trustee shall be the Security registrar for
such series and all of the Securities of any series are Registered Securities,
such list shall not be required to be furnished.

SECTION 4.2 Preservation and Disclosure of Securityholders Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the Holders of
each series of Registered Securities (i) contained in the most recent list
furnished to it as provided in Section 4.1, (ii) received by it in the capacity
of Security registrar for such series, if so acting, and (iii) filed with it
within two preceding years pursuant to 4.4(c)(ii). The Trustee may destroy any
list furnished to it as provided in Section 4.1 upon receipt of a new list so
furnished.

(b) In case three or more Holders of Securities (hereinafter
referred to as "applicants") apply in writing to the Trustee and furnish to the
Trustee reasonable proof that each such applicant has owned a Security for a
period of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other Holders
of Securities of a

30
<PAGE> 38
particular series (in which case the applicants must all hold Securities of
such series) or with Holders of all Securities with respect to their rights
under this Indenture or under such Securities and such application is
accompanied by a copy of the form of proxy or other communication which such
applicants propose to transmit, then the Trustee shall, within five Business
Days after the receipt of such application, at its election, either

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

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

If the Trustee shall elect not to afford to such applicants access
to such information, the Trustee shall, upon the written request of such
applicants, mail to each Securityholder of such series or all Holders of
Registered Securities, as the case may be, whose name and address appears in
the information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section a copy of the form of proxy or
other communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender, the Trustee shall mail to such
applicants and file with the Commission together with a copy of the material to
be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the Holders of
Registered Securities of such series or of all Registered Securities, as the
case may be, or would be in violation of applicable law. Such written
statement shall specify the basis of such opinion. If the Commission, after
opportunity for a hearing upon the objections specified in the written
statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met,

31
<PAGE> 39
and shall enter an order so declaring, the Trustee shall mail copies of such
material to all such Securityholders with reasonable promptness after the entry
of such order and the renewal of such tender; otherwise the Trustee shall be
relieved of any obligation or duty to such applicants respecting their
application.

(c) Each and every Holder of Securities and Coupons, by receiving
and holding the same, agrees with the Issuer and the Trustee that neither the
Issuer nor the Trustee nor any agent of the Issuer or the Trustee shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Holders of Securities in accordance with the provisions of
subsection (b) of this Section, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under such subsection
(b).

SECTION 4.3 Reports by the Issuer. The Issuer covenants:

(a) to file with the Trustee, within 30 days after the Issuer 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 Issuer may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934; or if the Issuer is not required to file
information, documents, or reports pursuant to either of such Sections,
then to file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents, and reports which may be
required pursuant to Section 13 of the Securities Exchange Act of 1934 in
respect of a debt security listed and registered on a national securities
exchange as may be prescribed from time to time in such rules and
regulations;

(b) to 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 Issuer with the conditions and covenants provided for in
this Indenture as may be required from time to time by such rules and
regulations; and

32
<PAGE> 40

(c) to transmit by mail to the Holders of Securities within 30
days after the filing thereof with the Trustee, in the manner and to the
extent provided in Section 4.4(c), such summaries of any information,
documents and reports required to be filed by the Issuer pursuant to
subsections (a) and (b) of this Section as may be required to be
transmitted to such Holders by rules and regulations prescribed from time
to time by the Commission.

SECTION 4.4 Reports by the Trustee. The Trustee shall transmit
to the Securityholders such reports concerning the Trustee and its actions
under this Indenture as may be required pursuant to the Trust Indenture Act of
1939 at the times and in the manner provided pursuant thereto.

A copy of each such report shall, at the time of such transmission
to Securityholders, be furnished to the Issuer and be filed by the Trustee with
each stock exchange upon which the Securities of any applicable series are
listed and also with the Commission. The Issuer agrees to notify the Trustee
with respect to any series when and as the Securities of such series become
admitted to trading on any national securities exchange.

Reports so required to be transmitted at stated intervals of not
more than 12 months shall be transmitted no later than July 15 in each calendar
year, commencing in 1996, and shall be dated as of a date no earlier than
May 15.

ARTICLE FIVE

REMEDIES OF THE TRUSTEE AND
SECURITYHOLDERS ON EVENT OF DEFAULT

SECTION 5.1 Event of Default Defined; Acceleration of Maturity;
Waiver of Default. "Event of Default" with respect to Securities of any series
wherever used herein, means each one of the following events which shall have
occurred and be continuing (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of
law, pursuant to Article Thirteen or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body):

(a) default in the payment of any installment of interest upon
any of the Securities of such series as

33
<PAGE> 41

and when the same shall become due and payable, and continuance of such
default for a period of 30 days; or

(b) default in the payment of all or any part of the principal on
any of the Securities of such series as and when the same shall become due
and payable either at maturity, upon any redemption, by declaration or
otherwise; or

(c) default in the performance, or breach, of any covenant or
warranty of the Issuer in the Securities of such series (other than a
covenant or warranty in respect of the Securities of such series a default
in whose performance or whose breach is elsewhere in this Section
specifically dealt with) and continuance of such default or breach for a
period of 90 days after there has been given, by registered or certified
mail, to the Issuer by the Trustee or to the Issuer and the Trustee by the
Holders of at least 25% in aggregate principal amount of the Outstanding
Securities of all series affected thereby, 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

(d) the entry of a decree or order by a court having jurisdiction
in the premises adjudging the Issuer a bankrupt or insolvent, or approving
as properly filed a petition seeking reorganization arrangement, adjustment
or composition of or in respect of the Issuer under the Federal bankruptcy
law or any other applicable Federal or state law, or appointing a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of
the Issuer or of any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 consecutive days;
or

(e) the institution by the Issuer of proceedings to be adjudicated
a bankrupt or insolvent or the consent by it to the institution of
bankruptcy or insolvency proceedings against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under the
Federal bankruptcy law or any other applicable Federal or state law, or the
consent by it to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Issuer or of any substantial part of its property,

<PAGE> 42

or the making by it of a general assignment for the benefit of creditors; or

(f) any other Event of Default provided in the supplemental
indenture under which such series of Securities is issued or in the form of
Security for such series;

provided, however, that the occurrence of any of the events described in the
foregoing clause (c) or (f) shall not constitute an Event of Default if such
occurrence is the result of changes in generally accepted accounting principles
as recognized by the American Institute of Certified Public Accountants at the
date as of which this Indenture is executed and a certificate to such effect is
delivered to the Trustee by the Issuer's independent public accountants.

If an Event of Default described in clauses (a), (b), (c) or (f)
(if the Event of Default under clause (c) or (f), as the case may be, is with
respect to less than all series of Securities then Outstanding) occurs and is
continuing, then, and in each and every such case, except for any series of
Securities the principal of which shall have already become due and payable,
either the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Securities of each such affected series then Outstanding hereunder
(voting as a single class) by notice in writing to the Issuer (and to the
Trustee if given by Securityholders), may declare the entire principal (or, if
the Securities of any such affected series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of such series) of all Securities of all such affected series, and the
interest accrued thereon, if any, to be due and payable immediately, and upon
any such declaration, the same shall become immediately due and payable. If an
Event of Default described in clause (c) or (f) (if the Event of Default under
clause (c) or (f), as the case may be, is with respect to all series of
Securities then Outstanding), (d) or (e) occurs and is continuing, then and in
each and every such case, unless the principal of all the Securities shall have
already become due and payable, either the Trustee or the Holders of not less
than 25% in aggregate principal amount of all the Securities then Outstanding
hereunder (treated as one class), by notice in writing to the Issuer (and to the
Trustee if given by Securityholders), may declare the entire principal (or, if
any Securities are Original Issue Discount Securities, such portion of the
principal as may be specified in the terms thereof) of all the Securities then
Outstanding, and interest accrued thereon, if any, to be due

<PAGE> 43

and payable immediately, and upon any such declaration the same shall become
immediately due and payable.

The foregoing provisions, however, are subject to the condition
that if, at any time after the principal (or, if the Securities are Original
Issue Discount Securities, such portion of the principal as may be specified in
the terms thereof) of the Securities of any series (or of all the Securities, as
the case may be) shall have been so declared due and payable, and before any
judgment or decree for the payment of the moneys due shall have been obtained or
entered as hereinafter provided, the Issuer shall pay or shall deposit with the
Trustee a sum sufficient to pay all matured installments of interest upon all
the Securities of each such series (or of all the Securities, as the case may
be) and the principal of any and all Securities of each such series (or of all
the Securities, as the case may be) which shall have become due otherwise than
by acceleration (with interest upon such principal and, to the extent that
payment of such interest is enforceable under applicable law, on overdue
installments of interest, at the same rate as the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) specified in the
Securities of each such series (or at the respective rates of interest or Yields
to Maturity of all the Securities, as the case may be) to the date of such
payment or deposit) and such amount as shall be sufficient to cover reasonable
compensation to the Trustee and each predecessor Trustee, its agents, attorneys
and counsel, and all other expenses and liabilities incurred, and all advances
made, by the Trustee and each predecessor Trustee except as a result of
negligence or bad faith, and if any and all Events of Default under the
Indenture, other than the non-payment of the principal of Securities which shall
have become due by acceleration, shall have been cured, waived or otherwise
remedied as provided herein--then and in every such case the Holders of a
majority in aggregate principal amount of all the Securities of each such
series, or of all the Securities, as the case may be, in each case voting as a
single class, then Outstanding, by written notice to the Issuer and to the
Trustee, may waive all defaults with respect to each such series (or with
respect to all the Securities, as the case may be) and rescind and annul such
declaration and its consequences, but no such waiver or rescission and annulment
shall extend to or shall affect any subsequent default or shall impair any right
consequent thereon.

For all purposes under this Indenture, if a portion of the
principal of any Original Issue Discount Securities shall have been accelerated
and declared due and

<PAGE> 44

payable pursuant to the provisions hereof, then, from and after such
declaration, unless such declaration has been rescinded and annulled, the
principal amount of such Original Issue Discount Securities shall be deemed, for
all purposes hereunder, to be such portion of the principal thereof as shall be
due and payable as a result of such acceleration, and payment of such portion of
the principal thereof as shall be due and payable as a result of such
acceleration, together with interest, if any, thereon and all other amounts
owing thereunder, shall constitute payment in full of such Original Issue
Discount Securities.

SECTION 5.2 Collection of Indebtedness by Trustee; Trustee May
Prove Debt. The Issuer covenants that (a) in case default shall be made in the
payment of any installment of interest on any of the Securities of any series
when such interest shall have become due and payable, and such default shall
have continued for a period of 30 days or (b) in case default shall be made in
the payment of all or any part of the principal of any of the Securities of any
series when the same shall have become due and payable, whether upon maturity of
the Securities of such series or upon any redemption or by declaration or
otherwise -- then upon demand of the Trustee, the Issuer will pay to the Trustee
for the benefit of the Holders of the Securities of such series the whole amount
that then shall have become due and payable on all Securities of such series,
and such Coupons, for principal or interest, as the case may be (with interest
to the date of such payment upon the overdue principal and, to the extent that
payment of such interest is enforceable under applicable law, on overdue
installments of interest at the same rate as the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) specified in the
Securities of such series); and in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
reasonable compensation to the Trustee and each predecessor Trustee, their
respective agents, attorneys and counsel, and any expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor Trustee
except as a result of its negligence or bad faith.

Until such demand is made by the Trustee, the Issuer may pay the
principal of and interest on the Securities of any series to the registered
Holders, whether or not the Securities of such series be overdue.

In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any action or proceedings at law or

<PAGE> 45

in equity for the collection of the sums so due and unpaid, and may prosecute
any such action or proceedings to judgment or final decree, and may enforce any
such judgment or final decree against the Issuer or other obligor upon the
Securities and collect in the manner provided by law out of the property of the
Issuer or other obligor upon the Securities, wherever situated the moneys
adjudged or decreed to be payable.

In case there shall be pending proceedings relative to the Issuer
or any other obligor upon the Securities under Title 11 of the United States
Code or any other applicable Federal or state bankruptcy, insolvency or other
similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor, or in case of any other comparable judicial proceedings relative to the
Issuer or other obligor upon the Securities, or to the creditors or property of
the Issuer or such other obligor, 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 pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such proceedings or otherwise:

(a) to file and prove a claim or claims for the whole amount of
principal and interest (or, if the Securities of any series are Original
Issue Discount Securities, such portion of the principal amount as may be
specified in the terms of such series) owing and unpaid in respect of the
Securities of any series, 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 reasonable compensation to the Trustee and each
predecessor Trustee, and their respective agents, attorneys and counsel, and
for reimbursement of all expenses and liabilities incurred, and all advances
made, by the Trustee and each predecessor Trustee, except as a result of
negligence or bad faith) and of the Securityholders allowed in any judicial
proceedings relative to the Issuer or other obligor upon the Securities, or
to the creditors or property of the Issuer or such other obligor,

(b) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders of the Securities of any series in any election of a
trustee

<PAGE> 46

or a standby trustee in arrangement, reorganization, liquidation or other
bankruptcy or insolvency proceedings or Person performing similar functions
in comparable proceedings, and

(c) to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Securityholders and of the Trustee on their
behalf; and any trustee, receiver, or liquidator, custodian or other similar
official is hereby authorized by each of the Securityholders to make
payments to the Trustee, and, in the event that the Trustee shall consent to
the making of payments directly to the Securityholders, to pay to the
Trustee such amounts as shall be sufficient to cover reasonable compensation
to the Trustee, each predecessor Trustee and their respective agents,
attorneys and counsel, and all other expenses and liabilities incurred, and
all advances made, by the Trustee and each predecessor Trustee except as a
result of negligence or bad faith.

Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or vote for or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities of any series or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar Person.

All rights of action and of asserting claims under this Indenture,
or under any of the Securities of any series or Coupons appertaining to such
Securities, may be enforced by the Trustee without the possession of any of the
Securities of such series or Coupons appertaining to such Securities or the
production thereof on any trial or other proceedings relative thereto, and any
such action or proceedings instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment, subject to
the payment of the expenses, disbursements and compensation of the Trustee, each
predecessor Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Securities or Coupons appertaining to such
Securities in respect of which such action was taken.

In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a

<PAGE> 47

party) the Trustee shall be held to represent all the Holders of the Securities
or Coupons appertaining to such Securities in respect to which such action was
taken, and it shall not be necessary to make any Holders of such Securities or
Coupons appertaining to such Securities parties to any such proceedings.

SECTION 5.3 Application of Proceeds. Any moneys collected by the
Trustee pursuant to this Article in respect of any series shall, subject (in the
case of clauses SECOND, THIRD and FOURTH below) to the subordination provisions
hereof, be applied in the following order at the date or dates fixed by the
Trustee and, in case of the distribution of such moneys on account of principal
or interest, upon presentation of the several Securities and Coupons
appertaining to such Securities in respect of which monies have been collected
and stamping (or otherwise noting) thereon the payment, or issuing Securities of
such series in reduced principal amounts in exchange for the presented
Securities of like series if only partially paid, or upon surrender thereof if
fully paid:

FIRST: To the payment of costs and expenses applicable to such
series in respect of which monies have been collected, including reasonable
compensation to the Trustee and each predecessor Trustee and their
respective agents and attorneys and of all expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor
Trustee, except as a result of negligence or bad faith, and all amounts
owing to the Trustee under Section 6.6;

SECOND: In case the principal of the Securities of such series in
respect of which moneys have been collected shall not have become and be
then due and payable, to the payment of interest on the Securities of such
series in default in the order of the maturity of the installments of such
interest, with interest (to the extent that such interest has been collected
by the Trustee) upon the overdue installments of interest at the same rate
as the rate of interest or Yield to Maturity (in the case of Original Issue
Discount Securities) specified in such Securities, such payments to be made
ratably to the Persons entitled thereto, without discrimination or
preference;

THIRD: In case the principal of the Securities of such series in
respect of which moneys have been collected shall have become and shall be
then due and payable, to the payment of the whole amount then owing and
unpaid upon all the Securities of such series for

<PAGE> 48

principal and interest, with interest upon the overdue principal, and (to
the extent that such interest has been collected by the Trustee) upon
overdue installments of interest at the same rate as the rate of interest or
Yield to Maturity (in the case of Original Issue Discount Securities)
specified in the Securities of such series; and in case such moneys shall be
insufficient to pay in full the whole amount so due and unpaid upon the
Securities of such series, then to the payment of such principal and
interest or Yield to Maturity, without preference or priority of principal
over interest or Yield to Maturity, or of interest or Yield to Maturity over
principal, or of any installment of interest over any other installment of
interest, or of any Security of such series over any other Security of such
series, ratably to the aggregate of such principal and accrued and unpaid
interest or Yield to Maturity; and

FOURTH: To the payment of the remainder, if any, to the Issuer or
any other Person lawfully entitled thereto.

SECTION 5.4 Suits for Enforcement. In case an Event of Default has
occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.

SECTION 5.5 Restoration of Rights on Abandonment of Proceedings. In
case the Trustee shall have proceeded to enforce any right under this Indenture
and such proceedings shall have been discontinued or abandoned for any reason,
or shall have been determined adversely to the Trustee, then and in every such
case the Issuer and the Trustee shall be restored respectively to their former
positions and rights hereunder, and all rights, remedies and powers of the
Issuer, the Trustee and the Securityholders shall continue as though no such
proceedings had been taken.

SECTION 5.6 Limitations on Suits by Securityholders. No Holder of
any Security of any series or of any Coupon appertaining thereto shall have any
right by virtue or by availing of any provision of this Indenture to

<PAGE> 49

institute any action or proceeding at law or in equity or in bankruptcy or
otherwise upon or under or with respect to this Indenture, or for the
appointment of a trustee, receiver, liquidator, custodian or other similar
official or for any other remedy hereunder, unless such Holder previously shall
have given to the Trustee written notice of default and of the continuance
thereof, as hereinbefore provided, and unless also the Holders of not less than
25% in aggregate principal amount of the Securities of each affected series then
Outstanding (treated as a single class) shall have made written request upon the
Trustee to institute such action or proceedings in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses and liabilities to be incurred therein
or thereby and the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity shall have failed to institute any such action or
proceeding and no direction inconsistent with such written request shall have
been given to the Trustee pursuant to Section 5.9; it being understood and
intended, and being expressly covenanted by the taker and Holder of every
Security or Coupon with every other taker and Holder and the Trustee, that no
one or more Holders of Securities of any series or Coupons appertaining to such
Securities shall have any right in any manner whatever by virtue or by availing
of any provision of this Indenture to affect, disturb or prejudice the rights of
any other such Holder of Securities or Coupons appertaining to such Securities,
or to obtain or seek to obtain priority over or preference to any other such
Holder or to enforce any right under this Indenture, except in the manner herein
provided and for the equal, ratable and common benefit of all Holders of
Securities of the applicable series and Coupons appertaining to such Securities.
For the protection and enforcement of the provisions of this Section, each and
every Securityholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.

SECTION 5.7 Unconditional Right of Securityholders to Institute
Certain Suits. Notwithstanding any other provision in this Indenture and any
provision of any Security, the right of any Holder of any Security or Coupon to
receive payment of the principal of and interest on such Security or Coupon on
or after the respective due dates expressed or provided for in such Security or
Coupon, or to institute suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
such Holder.

SECTION 5.8 Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default. Except as provided in

<PAGE> 50

Section 5.6 and the last paragraph of Section 2.9, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders of Securities or
Coupons is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

No delay or omission of the Trustee or of any Holder of Securities
or Coupons to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and, subject to Section 5.6, every power and remedy given
by this Indenture or by law to the Trustee or to the Holders of Securities or
Coupons may be exercised from time to time, and as often as shall be deemed
expedient, by the Trustee or by the Holders of Securities or Coupons.

SECTION 5.9 Control by Holders of Securities. The Holders of a
majority in aggregate principal amount of the Securities of each series affected
(with all such series voting as a single class) at the time Outstanding 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 by
this Indenture; provided that such direction shall not be otherwise than in
accordance with law and the provisions of this Indenture and provided further
that (subject to the provisions of Section 6.1) the Trustee shall have the right
to decline to follow any such direction if the Trustee, being advised by
counsel, shall determine that the action or proceeding so directed may not
lawfully be taken or if the Trustee in good faith by its board of directors, the
executive committee, or a trust committee of directors or Responsible Officers
of the Trustee shall determine that the action or proceedings so directed would
involve the Trustee in personal liability or if the Trustee in good faith shall
so determine that the actions or forebearances specified in or pursuant to such
direction would be unduly prejudicial to the interests of Holders of the
Securities of all series so affected not joining in the giving of said
direction, it being understood that (subject to Section 6.1) the Trustee shall
have no duty to ascertain whether or not such actions or forebearances are
unduly prejudicial to such Holders.

<PAGE> 51

Nothing in this Indenture shall impair the right of the Trustee in
its discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction or directions by Securityholders.

SECTION 5.10 Waiver of Past Defaults. Prior to the acceleration of
the maturity of any Securities as provided in Section 5.1, the Holders of a
majority in aggregate principal amount of the Securities of all series at the
time Outstanding with respect to which an Event of Default shall have occurred
and be continuing (voting as a single class) may on behalf of the Holders of all
such Securities waive any past default or Event of Default described in Section
5.1 and its consequences, except a default in the payment of the principal of or
interest on any Security of such series or in respect of a covenant or provision
hereof which cannot be modified or amended without the consent of the Holder of
each Security affected. In the case of any such waiver, the Issuer, the Trustee
and the Holders of all such Securities shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend to
any subsequent or other default or impair any right consequent thereon.

Upon any such waiver, such default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured, and not to have occurred
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.

SECTION 5.11 Trustee to Give Notice of Default, But May Withhold in
Certain Circumstances. The Trustee shall, within 90 days after the occurrence of
a default with respect to the Securities of any series, give notice of all
defaults with respect to that series known to the Trustee (i) if any
Unregistered Securities of that series are then Outstanding, to the Holders
thereof, by publication at least once in an Authorized Newspaper in the Borough
of Manhattan, The City of New York and at least once in an Authorized Newspaper
in London (and, if required by Section 3.6, at least once in an Authorized
Newspaper in Luxembourg) and (ii) to all Holders of Securities of such series in
the manner and to the extent provided in Section 313(c) of the Trust Indenture
Act of 1939, unless in each case such defaults shall have been cured before the
mailing or publication of such notice (the term "defaults" for the purpose of
this Section being hereby defined to mean any event or condition which is, or
with notice or lapse of time or both would become, an Event of Default);
provided that,

<PAGE> 52

except in the case of default in the payment of the principal of or interest on
any of the Securities of such series, or in the payment of any sinking fund
installment on 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 or trustees and/or Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
interests of the Securityholders of such series.

SECTION 5.12 Right of Court to Require Filing of Undertaking to Pay
Costs. All parties to this Indenture agree, and each Holder of any Security or
Coupon 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, suffered or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Securityholder or group of
Securityholders of any series holding in the aggregate more than 10% in
aggregate principal amount of the Securities of such series, or, in the case of
any suit relating to or arising under clause (c) or (f) of Section 5.1 (if the
suit relates to Securities of more than one but less than all series), 10% in
aggregate principal amount of Securities then Outstanding and affected thereby,
or in the case of any suit relating to or arising under clause (c) or (f) (if
the suit under clause (c) or (f) relates to all the Securities then
Outstanding), (d) or (e) of Section 5.1, 10% in aggregate principal amount of
all Securities then Outstanding, or to any suit instituted by any Securityholder
for the enforcement of the payment of the principal of or interest on any
Security on or after the due date expressed in such Security or any date fixed
for redemption.

<PAGE> 53

ARTICLE SIX

CONCERNING THE TRUSTEE

SECTION 6.1 Duties and Responsibilities of the Trustee; During
Default; Prior to Default. With respect to the Holders of any series of
Securities issued hereunder, the Trustee, prior to the occurrence of an Event of
Default with respect to the Securities of a particular series and after the
curing or waiving of all Events of Default which may have occurred with respect
to such series, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. In case an Event of Default with
respect to the Securities of a series has occurred (which has not been cured or
waived) the Trustee shall exercise with respect to such series of Securities
such of the rights and powers vested in it by this Indenture, and use the same
degree of care and skill in their exercise, as a prudent man would exercise or
use under the circumstances in the conduct of his own affairs.

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

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

(i) the duties and obligations of the Trustee with respect
to the Securities of any series shall be determined solely by the
express provisions of this Indenture, 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; and

(ii) in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein,
upon any statements, certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but
in the case of any such statements, certificates or opinions which
by any provision hereof are specifically

<PAGE> 54

required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture;

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

(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders pursuant to Section 5.9 relating to the time,
method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture.

None of the provisions contained in this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if there shall be reasonable ground for
believing that the repayment of such funds or adequate indemnity against such
liability is not reasonably assured to it.

SECTION 6.2 Certain Rights of the Trustee. Subject to Section 6.1:

(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, note, Coupon, Security or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;

(b) any request, direction, order or demand of the Issuer mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless
other evidence in respect thereof be herein specifically prescribed); and
any resolution of the Board of Directors may be evidenced to the Trustee by
a copy thereof certified by the secretary or an assistant secretary of the
Issuer;

<PAGE> 55

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

(d) the Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders pursuant to the provisions of this
Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which might be incurred therein or thereby;

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

(f) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default, the Trustee shall not
be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, appraisal, bond, debenture, note, Coupon,
Security, or other paper or document unless requested in writing so to do by
the Holders of not less than a majority in aggregate principal amount of the
Securities of all series affected then Outstanding; provided that, if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation
is, in the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Indenture, the Trustee may
require reasonable indemnity against such expenses or liabilities as a
condition to proceeding; the reasonable expenses of every such investigation
shall be paid by the Issuer or, if paid by the Trustee or any predecessor
Trustee, shall be repaid by the Issuer upon demand; and

(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys not regularly in its employ and the Trustee shall not be
responsible for any misconduct or negligence on the

<PAGE> 56

part of any such agent or attorney appointed with due care by it hereunder.

SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof. The recitals contained herein and
in the Securities, except the Trustee's certificates of authentication, shall be
taken as the statements of the Issuer, and the Trustee assumes no responsibility
for the correctness of the same. The Trustee makes no representation as to the
validity or sufficiency of this Indenture or of the Securities or Coupons. The
Trustee shall not be accountable for the use or application by the Issuer of any
of the Securities or of the proceeds thereof.

SECTION 6.4 Trustee and Agents May Hold Securities or Coupons;
Collections, etc. The Trustee or any agent of the Issuer or the Trustee, in its
individual or any other capacity, may become the owner or pledgee of Securities
or Coupons with the same rights it would have if it were not the Trustee or such
agent and, subject to Sections 6.8 and 6.13, may otherwise deal with the Issuer
and receive, collect, hold and retain collections from the Issuer with the same
rights it would have if it were not the Trustee or such agent.

SECTION 6.5 Moneys Held by Trustee. Subject to the provisions of
Section 10.4 hereof, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required by mandatory provisions of law. Neither the Trustee nor any agent of
the Issuer or the Trustee shall be under any liability for interest on any
moneys received by it hereunder.

SECTION 6.6 Compensation and Indemnification of Trustee and Its
Prior Claim. The Issuer covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) and the Issuer covenants and agrees to pay or
reimburse the Trustee and each predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by or on behalf
of it in accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all agents and other persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence or bad faith.
The Issuer

<PAGE> 57

also covenants to indemnify the Trustee and each predecessor Trustee for, and to
hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of this Indenture or the trusts hereunder and its
duties hereunder, including the costs and expenses of defending itself against
or investigating any claim of liability in the premises. The obligations of the
Issuer under this Section to compensate and indemnify the Trustee and each
predecessor Trustee and to pay or reimburse the Trustee and each predecessor
Trustee for expenses, disbursements and advances shall constitute additional
indebtedness hereunder and shall survive the satisfaction and discharge of this
Indenture. Such additional indebtedness shall be a senior claim to that of the
Securities upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the benefit of the Holders of particular
Securities or Coupons, and the Securities are hereby subordinated to such senior
claim.

SECTION 6.7 Right of Trustee to Rely on Officers' Certificate, etc.
Subject to Sections 6.1 and 6.2, whenever in the administration of the trusts of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee, and such certificate, in the
absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted by it under the
provisions of this Indenture upon the faith thereof.

SECTION 6.8 Qualification of Trustee; Conflicting Interests. If the
Trustee has or shall acquire a conflicting interest within the meaning of the
Trust Indenture Act of 1939, the Trustee shall either eliminate such interest or
resign, to the extent and in the manner provided by, and subject to the
provisions of, the Trust Indenture Act of 1939 and this Indenture. To the extent
permitted by such Act, the Trustee shall not be deemed to have a conflicting
interest by virtue of being a trustee under this Indenture with respect to
Securities of more than one series.

SECTION 6.9 Persons Eligible for Appointment as Trustee. The
Trustee for each series of Securities

<PAGE> 58

hereunder shall at all times be a corporation organized and doing business under
the laws of the United States of America or of any State or the District of
Columbia having a combined capital and surplus of at least $5,000,000, and which
is authorized under such laws to exercise corporate trust powers and is subject
to supervision or examination by Federal, State or District of Columbia
authority and which is otherwise eligible to act as Trustee under Section 310(a)
of the Trust Indenture Act of 1939. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 6.10.

SECTION 6.10 Resignation and Removal; Appointment of Successor
Trustee. (a) The Trustee, or any trustee or trustees hereafter appointed, may at
any time resign with respect to one or more or all series of Securities by
giving written notice of resignation to the Issuer and (i) if any Unregistered
Securities of a series affected are then Outstanding, by giving notice of such
resignation to the Holders thereof, by publication at least once in an
Authorized Newspaper in the Borough of Manhattan, The City of New York, and at
least once in an Authorized Newspaper in London (and, if required by Section
3.6, at least once in an Authorized Newspaper in Luxembourg), (ii) if any
Unregistered Securities of a series affected are then Outstanding, by mailing
notice of such resignation to the Holders thereof who have filed their names and
addresses with the Trustee pursuant to Section 313(c)(2) of the Trust Indenture
Act of 1939 at such addresses as were so furnished to the Trustee and (iii) by
mailing notice of such resignation to the Holders of then Outstanding Registered
Securities of each series affected at their addresses as they shall appear on
the registry books. Upon receiving such notice of resignation, the Issuer shall
promptly appoint a successor trustee or trustees with respect to the applicable
series by written instrument in duplicate, executed by authority of the Board of
Directors, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee or trustees. If no successor
trustee shall have been so appointed with respect to any series and have
accepted appointment within 30 days after the mailing of such notice of
resignation, the resigning trustee may petition any court of competent

<PAGE> 59

jurisdiction for the appointment of a successor trustee, or any Securityholder
who has been a bona fide Holder of a Security or Securities of the applicable
series for at least six months may, subject to the provisions of Section 5.12,
on behalf of himself and all others similarly situated, petition any such court
for the appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.

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

(i) the Trustee shall fail to comply with the provisions of Section 6.8
with respect to any series of Securities after written request therefor by
the Issuer or by any Securityholder who has been a bona fide Holder of a
Security or Securities of such series for at least six months; or

(ii) the Trustee shall cease to be eligible in accordance with the
provisions of Section 6.9 and shall fail to resign after written request
therefor by the Issuer or by any Securityholder; or

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

then, in any such case, the Issuer may remove the Trustee with respect to the
applicable series of Securities and appoint a successor trustee for such series
by written instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, subject to the provisions of
Section 5.12, any Securityholder who has been a bona fide Holder of a Security
or Securities 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 and the appointment of a successor trustee with
respect to such series. Such court may thereupon, after such notice, if any, as
it may deem proper and prescribe, remove the Trustee and appoint a successor
trustee.

<PAGE> 60

(c) The Holders of a majority in aggregate principal amount of the
Securities of each series at the time Outstanding may at any time remove the
Trustee with respect to Securities of such series and appoint a successor
trustee with respect to the Securities of such series by delivering to the
Trustee so removed, to the successor trustee so appointed and to the Issuer the
evidence provided for in Section 7.1 of the action in that regard taken by the
Securityholders.

(d) Any resignation or removal of the Trustee with respect to any
series and any appointment of a successor trustee with respect to such series
pursuant to any of the provisions of this Section 6.10 shall become effective
upon acceptance of appointment by the successor trustee as provided in Section
6.11.

SECTION 6.11 Acceptance of Appointment by Successor Trustee. Any
successor trustee appointed as provided in Section 6.10 shall execute and
deliver to the Issuer and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee with respect to all or any applicable series shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all rights, powers, duties and obligations
with respect to such series of its predecessor hereunder, with like effect as if
originally named as trustee for such series hereunder; but, nevertheless, on the
written request of the Issuer or of the successor trustee, upon payment of its
charges then unpaid, the trustee ceasing to act shall, subject to Section 10.4,
pay over to the successor trustee all moneys at the time held by it hereunder
and shall execute and deliver an instrument transferring to such successor
trustee all such rights, powers, duties and obligations. Upon request of any
such successor trustee, the Issuer shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a prior claim upon all property or funds held or collected
by such trustee to secure any amounts then due it pursuant to the provisions of
Section 6.6.

If a successor trustee is appointed with respect to the Securities
of one or more (but not all) series, the Issuer, the predecessor trustee and
each successor trustee with respect to the Securities of any applicable series
shall execute and deliver an indenture supplemental hereto which shall contain
such provisions as shall be deemed necessary or desirable to confirm that all
the rights,

<PAGE> 61

powers, trusts and duties of the predecessor trustee with respect to the
Securities of any series as to which the predecessor trustee is not retiring
shall continue to be vested in the predecessor trustee, and shall add to or
change any of the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by more than one
trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such trustees co-trustees of the same trust and that
each such trustee shall be trustee of a trust or trusts under separate
indentures.

No successor trustee with respect to any series of Securities shall
accept appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor trustee shall be qualified under the provisions of
Section 6.8 and Section 310(b) of the Trust Indenture Act of 1939 and eligible
under the provisions of Section 6.9.

Upon acceptance of appointment by any successor trustee as provided
in this Section 6.11, the Issuer shall give notice thereof (a) if any
Unregistered Securities of a series affected are then Outstanding, to the
Holders thereof, by publication of such notice at least once in an Authorized
Newspaper in the Borough of Manhattan, The City of New York and at least once in
an Authorized Newspaper in London (and, if required by Section 3.6, at least
once in an Authorized Newspaper in Luxembourg), (b) if any Unregistered
Securities of a series affected are then Outstanding, to the Holders thereof who
have filed their names and addresses with the Trustee pursuant to Section
313(c)(2) of the Trust Indenture Act of 1939, by mailing such notice to such
Holders at such addresses as were so furnished to the Trustee (and the Trustee
shall make such information available to the Issuer for such purpose) and (c) to
the Holders of Registered Securities of each series affected, by mailing such
notice to such Holders at their addresses as they shall appear on the registry
books. If the acceptance of appointment is substantially contemporaneous with
the resignation, then the notice called for by the preceding sentence may be
combined with the notice called for by Section 6.10. If the Issuer fails to give
such notice within ten days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be given at the
expense of the Issuer.

SECTION 6.12 Merger, Conversion, Consolidation or Succession to
Business of Trustee. 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

<PAGE> 62

shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided that such corporation shall be qualified under the
provisions of Section 6.8 and Section 310(b) of the Trust Indenture Act of 1939
and eligible under the provisions of Section 6.9, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.

In case at the time such successor to the Trustee shall succeed to
the trusts created by this Indenture any of the Securities of any series shall
have been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor trustee and deliver
such Securities so authenticated; and, in case at that time any of the
Securities of any series shall not have been authenticated, any successor to the
Trustee may authenticate such Securities either in the name of any predecessor
hereunder or in the name of the successor Trustee; and in all such cases such
certificate shall have the full force which it is anywhere in the Securities of
such series or in this Indenture provided that the certificate of the Trustee
shall have; provided, that the right to adopt the certificate of authentication
of any predecessor trustee or to authenticate Securities of any series in the
name of any predecessor trustee shall apply only to its successor or successors
by merger, conversion or consolidation.

SECTION 6.13 Preferential Collection of Claims Against the Issuer.
If and when the Trustee shall be or become a creditor of the Issuer (or any
other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act of 1939 regarding the collection of claims
against the Issuer (or any such other obligor). For purposes of Section
311(b)(4) and (6) of the Trust Indenture Act of 1939:

(a) "cash transaction" means any transaction in which full payment
for goods or securities sold is made within seven days after delivery of the
goods or securities in currency or in checks or other orders drawn upon
banks or bankers and payable upon demand; and

(b) "self-liquidating paper" means any draft, bill of exchange,
acceptance or obligation which is made, drawn, negotiated or incurred by the
Issuer (or any such obligor) for the purpose of financing the purchase,
processing, manufacturing, shipment, storage

<PAGE> 63

or sale of goods, wares or merchandise and which is secured by documents
evidencing title to, possession of, or a lien upon, the goods, wares or
merchandise or the receivables or proceeds arising from the sale of the
goods, wares or merchandise previously constituting the security, provided
the security is received by the Trustee simultaneously with the creation of
the creditor relationship with the Issuer (or any such obligor) arising from
the making, drawing, negotiating or incurring of the draft, bill of
exchange, acceptance or obligation.

SECTION 6.14 Appointment of Authenticating Agent. As long as any
Securities of a series remain Outstanding, the Trustee may, by an instrument in
writing, appoint with the approval of the Issuer an authenticating agent (the
"Authenticating Agent") which shall be authorized to act on behalf of the
Trustee to authenticate Securities, including Securities issued upon exchange,
registration of transfer, partial redemption or pursuant to Section 2.9.
Securities of each such series authenticated by such Authenticating Agent shall
be entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee. Whenever reference is made
in this Indenture to the authentication and delivery of Securities of any series
by the Trustee or to 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 for such series and a certificate of authentication
executed on behalf of the Trustee by such Authenticating Agent. Such
Authenticating Agent shall at all times be a corporation organized and doing
business under the laws of the United States of America or of any State,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $5,000,000 (determined as provided in Section
6.9 with respect to the Trustee) and subject to supervision or examination by
Federal or State authority.

Any corporation into which any 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 any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency business
of any Authenticating Agent, shall continue to be the Authenticating Agent with
respect to all series of Securities for which it served as Authenticating Agent
without the execution or filing of any paper or any further act on the part of
the Trustee or such Authenticating Agent.

<PAGE> 64

Any Authenticating Agent may at any time, and if it shall cease to
be eligible shall, resign by giving written notice of resignation to the Trustee
and to the Issuer. The Trustee may at any time terminate the agency of an
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Issuer. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.14 with respect to one or more series of
Securities, the Trustee may upon receipt of an Issuer Order appoint a successor
Authenticating Agent and the Issuer shall provide notice of such appointment to
all Holders of Securities of such series in the manner and to the extent
provided in Section 11.4. Any successor Authenticating Agent upon acceptance of
its appointment hereunder shall become vested with all rights, powers, duties
and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. The Issuer agrees to pay to the
Authenticating Agent for such series from time to time reasonable compensation.
The Authenticating Agent for the Securities of any series shall have no
responsibility or liability for any action taken by it as such at the direction
of the Trustee.

Sections 6.2, 6.3, 6.4, 6.6, 6.9 and 7.3 shall be applicable to any
Authenticating Agent.

ARTICLE SEVEN

CONCERNING THE SECURITYHOLDERS

SECTION 7.1 Evidence of Action Taken by Securityholders. Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by a specified percentage
in principal amount of the Securityholders of any or all series may be embodied
in and evidenced by one or more instruments of substantially similar tenor
signed by such specified percentage of Securityholders in person or by agent
duly appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Trustee. Proof of execution of any instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Sections 6.1 and 6.2) conclusive in favor of the Trustee and the
Issuer, if made in the manner provided in this Article.

<PAGE> 65

SECTION 7.2 Proof of Execution of Instruments and of Holding of
Securities. Subject to Sections 6.1 and 6.2, the execution of any instrument by
a Securityholder or his agent or proxy may be proved in the following manner:

(a) The fact and date of the execution by any Holder of any instrument
may be proved by the certificate of any notary public or other officer of
any jurisdiction authorized to take acknowledgments of deeds or administer
oaths that the Person executing such instruments acknowledged to him the
execution thereof, or by an affidavit of a witness to such execution sworn
to before any such notary or other such officer. Where such execution is by
or on behalf of any legal entity other than an individual, such certificate
or affidavit shall also constitute sufficient proof of the authority of the
Person executing the same. The fact of the holding by any Holder of an
Unregistered Security of any series, and the identifying number of such
Security and the date of his holding the same, may be proved by the
production of such Security or by a certificate executed by any trust
company, bank, banker or recognized securities dealer wherever situated
satisfactory to the Trustee, if such certificate shall be deemed by the
Trustee to be satisfactory. Each such certificate shall be dated and shall
state that on the date thereof a Security of such series bearing a specified
identifying number was deposited with or exhibited to such trust company,
bank, banker or recognized securities dealer by the Person named in such
certificate. Any such certificate may be issued in respect of one or more
Unregistered Securities of one or more series specified therein. The holding
by the Person named in any such certificate of any Unregistered Securities
of any series specified therein shall be presumed to continue for a period
of one year from the date of such certificate unless at the time of any
determination of such holding (1) another certificate bearing a later date
issued in respect of the same Securities shall be produced, or (2) the
Security of such series specified in such certificate shall be produced by
some other Person, or (3) the Security of such series specified in such
certificate shall have ceased to be Outstanding. The fact and date of the
execution of any such instrument and the amount and numbers of Securities of
any series held by the Person so executing such instrument and the amount
and numbers of any Security or Securities for such series may also be proven
in accordance with such reasonable rules and regulations as may be
prescribed

<PAGE> 66

by the Trustee for such series or in any other manner which the Trustee for
such series may deem sufficient.

(b) In the case of Registered Securities, the ownership of such
Securities shall be proved by the Security register or by a certificate of
the Security registrar.

The Issuer may set a record date for purposes of determining the
identify of Holders of Registered Securities of any series entitled to vote or
consent to any action referred to in Section 7.1, which record date may be set
at any time or from time to time by notice to the Trustee, for any date or dates
(in the case of any adjournment or reconsideration) not more than 90 days nor
less than five days prior to the proposed date of such vote or consent, and
thereafter, notwithstanding any other provisions hereof, with respect to
Registered Securities of any series, only Holders of Registered Securities of
such series of record on such record date shall be entitled to so vote or give
such consent or revoke such vote or consent.

SECTION 7.3 Holders to be Treated as Owners. The Issuer, the
Trustee and any agent of the Issuer or the Trustee may deem and treat the Person
in whose name any Security shall be registered upon the Security register for
such series as the absolute owner of such Security (whether or not such Security
shall be overdue and notwithstanding any notation of ownership or other writing
thereon) for the purpose of receiving payment of or on account of the principal
of and, subject to the provisions of this Indenture, interest on such Security
and for all other purposes; and neither the Issuer nor the Trustee nor any agent
of the Issuer or the Trustee shall be affected by any notice to the contrary.
The Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Holder of any Unregistered Security and the Holder of any Coupon as the absolute
owner of such Unregistered Security or Coupon (whether or not such Unregistered
Security or Coupon shall be overdue) for the purpose of receiving payment
thereof or on account thereof and for all other purposes and neither the Issuer,
the Trustee, nor any agent of the Issuer or the Trustee shall be affected by any
notice to the contrary. All such payments so made to any such Person, or upon
his order, shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for moneys payable upon any
such Unregistered Security or Coupon.

SECTION 7.4 Securities Owned by Issuer Deemed Not Outstanding. In
determining whether the Holders of the

<PAGE> 67

requisite aggregate principal amount of Outstanding Securities of any or all
series have concurred in any direction, consent or waiver under this Indenture,
Securities which are owned by the Issuer or any other obligor on the Securities
with respect to which such determination is being made or by any Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with the Issuer or any other obligor on the Securities with respect to
which such determination is being made shall be disregarded and deemed not to be
Outstanding for the purpose of any such determination, except that for the
purpose of determining whether the Trustee shall be protected in relying on any
such direction, consent or waiver only Securities which the Trustee knows are so
owned shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Issuer or any other obligor upon the
Securities or any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Issuer or any other obligor on
the Securities. In case of a dispute as to such right, the advice of counsel
shall be full protection in respect of any decision made by the Trustee in
accordance with such advice. Upon request of the Trustee, the Issuer shall
furnish to the Trustee promptly an Officers' Certificate listing and identifying
all Securities, if any, known by the Issuer to be owned or held by or for the
account of any of the above-described Persons; and, subject to Sections 6.1 and
6.2, the Trustee shall be entitled to accept such Officers' Certificate as
conclusive evidence of the facts therein set forth and of the fact that all
Securities not listed therein are Outstanding for the purpose of any such
determination.

SECTION 7.5 Right of Revocation of Action Taken. At any time prior
to (but not after) the evidencing to the Trustee, as provided in Section 7.1, of
the taking of any action by the Holders of the percentage in aggregate principal
amount of the Securities of any or all series, as the case may be, specified in
this Indenture in connection with such action, any Holder of a Security the
serial number of which is shown by the evidence to be included among the serial
numbers of the Securities the Holders of which have consented to such action
may, by filing written notice at the Corporate Trust Office and upon proof of
holding as provided in this Article, revoke such action so far as concerns such
Security. Except as aforesaid any such action taken by the Holder of any
Security shall be conclusive and binding upon such Holder and upon all future
Holders and

<PAGE> 68

owners of such Security and of any Securities issued in exchange or substitution
therefor or on registration of transfer thereof, irrespective of whether or not
any notation in regard thereto is made upon any such Security. Any action taken
by the Holders of the percentage in aggregate principal amount of the Securities
of any or all series, as the case may be, specified in this Indenture in
connection with such action shall be conclusively binding upon the Issuer, the
Trustee and the Holders of all the Securities affected by such action.

ARTICLE EIGHT

SUPPLEMENTAL INDENTURES

SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders. The Issuer, when authorized by a resolution of its Board of
Directors (which resolution may provide general terms or parameters for such
action and may provide that the specific terms of such action may be determined
in accordance with or pursuant to an Issuer Order), and the Trustee may from
time to time and at any time enter into an indenture or indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act of 1939
as in force at the date of the execution thereof) for one or more of the
following purposes:

(a) to convey, transfer, assign, mortgage or pledge to the Trustee as
security for the Securities of one or more series any property or assets;

(b) to evidence the succession of another corporation to the Issuer, or
successive successions, and the assumption by the successor corporation of
the covenants, agreements and obligations of the Issuer pursuant to Article
Nine;

(c) to add to the covenants of the Issuer such further covenants,
restrictions, conditions or provisions as the Issuer and the Trustee shall
consider to be for the protection of the Holders of Securities or Coupons,
and to make the occurrence, or the occurrence and continuance, of a default
in any such additional covenants, restrictions, conditions or provisions an
Event of Default permitting the enforcement of all or any of the several
remedies provided in this Indenture as herein set forth; provided, that in
respect of any such additional covenant, restriction, condition or provision
such

<PAGE> 69

supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the case
of other defaults) or may provide for an immediate enforcement upon such an
Event of Default or may limit the remedies available to the Trustee upon
such an Event of Default or may limit the right of the Holders of a majority
in aggregate principal amount of the Securities of such series to waive such
an Event of Default;

(d) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any
supplemental indenture, or to make any other provisions as the Issuer may
deem necessary or desirable, provided that no such action shall adversely
affect the interests of the Holders of the Securities or Coupons;

(e) to establish the form or terms of Securities of any series or of
the Coupons appertaining to such Securities as permitted by Sections 2.1 and
2.3; and

(f) 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
6.11.

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

Any supplemental indenture authorized by the provisions of this
Section may be executed without the consent of the Holders of any of the
Securities at the time Outstanding, notwithstanding any of the provisions of
Section 8.2.

<PAGE> 70

SECTION 8.2 Supplemental Indentures With Consent of
Securityholders. With the consent (evidenced as provided in Article Seven) of
the Holders of not less than a majority in aggregate principal amount of the
Securities at the time Outstanding of all series affected by such supplemental
indenture (voting as one class), the Issuer, when authorized by a resolution of
its Board of Directors (which resolution may provide general terms or parameters
for such action and may provide that the specific terms of such action may be
determined in accordance with or pursuant to an Issuer Order), and the Trustee
may, from time to time and at any time, enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act of 1939 as in force at the date of execution thereof) for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Securities of each such
series or of the Coupons appertaining to such Securities; provided, that no such
supplemental indenture shall (a) extend the final maturity of any Security, or
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any amount payable on redemption thereof,
or make the principal thereof (including any amount in respect of original issue
discount) or interest thereon payable in any coin or currency other than that
provided in the Securities and Coupons or in accordance with the terms thereof,
or reduce the amount of the principal of an Original Issue Discount Security
that would be due and payable upon an acceleration of the maturity thereof
pursuant to Section 5.1 or the amount thereof provable in bankruptcy pursuant to
Section 5.2, or alter the provisions of Section 11.11 or 11.12 or impair or
affect the right of any Securityholder to institute suit for the payment thereof
or, if the Securities provide therefor, any right of repayment at the option of
the Securityholder, or modify any provisions of this Indenture relating to the
subordination of the Securities in a manner adverse to such Holder, in each case
without the consent of the Holder of each Security so affected, or (b) reduce
the aforesaid percentage of Securities of any series, the consent of the Holders
of which is required for any such supplemental indenture, without the consent of
the Holders of each Security so affected.

A supplemental indenture which changes or eliminates any covenant
or other provision of this Indenture which has expressly been included solely
for the benefit of one or more particular series of Securities, or which
modifies the rights of Holders of Securities of such series,

<PAGE> 71

or of Coupons appertaining to such Securities, with respect to such covenant or
provision, shall be deemed not to affect the rights under this Indenture of the
Holders of Securities of any other series or of the Coupons appertaining to such
Securities.

Upon the request of the Issuer, accompanied by a copy of a
resolution of the Board of Directors (which resolution may provide general terms
or parameters for such action and may provide that the specific terms of such
action may be determined in accordance with or pursuant to an Issuer Order)
certified by the secretary or an assistant secretary of the Issuer authorizing
the execution of any such supplemental indenture, and upon the filing with the
Trustee of evidence of the consent of the Holders of the Securities as aforesaid
and other documents, if any, required by Section 7.1, the Trustee shall join
with the Issuer in the execution of such supplemental indenture unless such
supplemental indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such supplemental
indenture.

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

Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall give notice thereof (i) to the Holders of then Outstanding Registered
Securities of each series affected thereby, by mailing a notice thereof by
first-class mail to such Holders at their addresses as they shall appear on the
Security register, (ii) if any Unregistered Securities of a series affected
thereby are then Outstanding, to the Holders thereof who have filed their names
and addresses with the Trustee pursuant to Section 313(c)(2) of the Trust
Indenture Act of 1939, by mailing a notice thereof by first-class mail to such
Holders at such addresses as were so furnished to the Trustee and (iii) if any
Unregistered Securities of a series affected thereby are then Outstanding, to
all Holders thereof, by publication of a notice thereof at least once in an
Authorized Newspaper in the Borough of Manhattan, The City of New York and at
least once in an Authorized Newspaper in London (and, if required by Section
3.6, at least once in an Authorized Newspaper in Luxembourg), and in each case
such notice shall set forth in general terms the

<PAGE> 72

substance of such supplemental indenture. Any failure of the Issuer to give such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.

SECTION 8.3 Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith and
the respective rights, limitations of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Issuer and the Holders of Securities of
each series affected thereby shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and amendments,
and all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Indenture for any and
all purposes.

SECTION 8.4 Documents to Be Given to Trustee. The Trustee, subject
to the provisions of Sections 6.1 and 6.2, may receive an Officers' Certificate
and an Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant to this Article Eight complies with the applicable provisions
of this Indenture.

SECTION 8.5 Notation on Securities in Respect of Supplemental
Indentures. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article may bear a notation in form approved by the Trustee for such series as
to any matter provided for by such supplemental indenture or as to any action
taken by Securityholders. If the Issuer or the Trustee shall so determine, new
Securities of any series so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Issuer,
authenticated by the Trustee and delivered in exchange for the Securities of
such series then Outstanding.

SECTION 8.6 Subordination Unimpaired. This Indenture may not be
amended to alter the subordination of any of the Outstanding Securities without
the written consent of each holder of Senior Indebtedness then outstanding that
would be adversely affected thereby.

<PAGE> 73

ARTICLE NINE

CONSOLIDATION, MERGER, SALE OR CONVEYANCE

SECTION 9.1 Issuer May Consolidate, etc., Only on Certain Terms.

The Issuer shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, unless:

(a) the corporation formed by such consolidation or into which the
Issuer is merged or the Person which acquires by conveyance, transfer or
lease the properties and assets of the Issuer substantially as an entirety
shall expressly assume, by a supplemental indenture hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of and interest on all the Securities and
Coupons, if any, according to their tenor, and the performance of every
covenant of this Indenture on the part of the Issuer to be performed or
observed;

(b) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have happened and be continuing;

(c) the Issuer has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that such consolidation, merger,
conveyance, 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; and

(d) the Issuer has delivered to the Trustee such other documents as the
Trustee may, in its discretion, reasonably require.

SECTION 9.2 Successor Corporation Substituted. In case of any such
consolidation, merger, sale, lease or conveyance, and following such an
assumption by the successor Person, such successor Person shall succeed to and
be substituted for the Issuer, with the same effect as if it had been named
herein. Such successor Person may cause to be signed, and may issue either in
its own name or in the name of the Issuer prior to such succession any or all of

<PAGE> 74

the Securities issuable hereunder which together with any Coupons appertaining
thereto theretofore shall not have been signed by the Issuer and delivered to
the Trustee; and, upon the order of such successor Person, instead of the
Issuer, and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall deliver any
Securities together with any Coupons appertaining thereto which previously shall
have been signed and delivered by the officers of the Issuer to the Trustee for
authentication, and any Securities which such successor Person thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All of the
Securities so issued together with any Coupons appertaining thereto shall in all
respects have the same legal rank and benefit under this Indenture as the
Securities theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Securities had been issued at the date of the
execution hereof.

In case of any such consolidation, merger, sale, lease or
conveyance such changes in phrasing and form (but not in substance) may be made
in the Securities and Coupons thereafter to be issued as may be appropriate.

In the event of any such sale or conveyance (other than a
conveyance by way of lease) the Issuer or any successor Person which shall
theretofore have become such in the manner described in this Article shall be
discharged from all obligations and covenants under this Indenture and the
Securities and may be liquidated and dissolved.

ARTICLE TEN

SATISFACTION AND DISCHARGE OF
INDENTURE; UNCLAIMED MONEYS

SECTION 10.1 Satisfaction and Discharge of Indenture. (A) If at any
time (a) the Issuer shall have paid or caused to be paid the principal of and
interest on all the Securities of any series Outstanding hereunder and all
unmatured Coupons appertaining thereto (other than Securities of such series and
Coupons appertaining thereto which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 2.9) as and when the same
shall have become due and payable, or (b) the Issuer shall have delivered to the
Trustee for cancellation all Securities of any series theretofore authenticated
and all unmatured Coupons appertaining thereto (other than any Securities of
such series and Coupons appertaining thereto which shall have been destroyed,
lost or stolen and which

<PAGE> 75

shall have been replaced or paid as provided in Section 2.9) or (c) in the case
of any series of Securities where the exact amount (including the currency of
payment) of principal of and interest due on which can be determined at the time
of making the deposit referred to in clause (ii) below, (i) all the Securities
of such series and all unmatured Coupons appertaining thereto not theretofore
delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to be called
for redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption, and (ii) the Issuer shall have
irrevocably deposited or caused to be deposited with the Trustee as trust funds
the entire amount in cash (other than moneys repaid by the Trustee or any paying
agent to the Issuer in accordance with Section 10.4) or, in the case of any
series of Securities the payments on which may only be made in Dollars, direct
obligations of the United States of America, backed by its full faith and credit
("U.S. Government Obligations"), maturing as to principal and interest at such
times and in such amounts as will insure the availability of cash, or a
combination thereof, sufficient in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay (A) the principal and interest on all
Securities of such series and Coupons appertaining thereto on each date that
such principal or interest is due and payable and (B) any mandatory sinking fund
payments on the dates on which such payments are due and payable in accordance
with the terms of the Indenture and the Securities of such series; and if, in
any such case, the Issuer shall also pay or cause to be paid all other sums
payable hereunder by the Issuer with respect to the Securities of such series,
then this Indenture with respect to the Securities of such series shall cease to
be of further effect (except as to (i) rights of registration of transfer and
exchange of Securities of such series and of Coupons appertaining thereto and
the Issuer's right of optional redemption, if any, (ii) substitution of
mutilated, defaced, destroyed, lost or stolen Securities or Coupons, (iii)
rights of Holders of Securities and Coupons appertaining thereto to receive
payments of principal thereof and interest thereon, upon the original stated due
dates therefor (but not upon acceleration), and remaining rights of the Holders
to receive mandatory sinking fund payments, if any, (iv) the rights,
obligations, duties and immunities of the Trustee hereunder, (v) the rights of
the Holders of Securities of such series and Coupons appertaining thereto as
beneficiaries hereof with respect to the property so deposited with the Trustee
payable to all or any of them,

<PAGE> 76

(vi) the obligations of the Issuer under Section 3.2 and (vii) any right to
receive Additional Amounts as provided in Section 3.7) and the Trustee, on
demand of the Issuer accompanied by an Officers' Certificate and an Opinion of
Counsel and at the cost and expense of the Issuer, shall execute proper
instruments acknowledging such satisfaction of and discharging this Indenture
with respect to the Securities of such series; provided, that the rights of
Holders of the Securities and Coupons to receive amounts in respect of principal
of and interest on the Securities and Coupons held by them shall not be delayed
longer than required by then-applicable mandatory rules or policies of any
securities exchange upon which the Securities are listed. The Issuer agrees to
reimburse the Trustee for any costs or expenses thereafter reasonably and
properly incurred and to compensate the Trustee for any services thereafter
reasonably and properly rendered by the Trustee in connection with this
Indenture or the Securities of such series.

(B) The following provisions shall apply to the Securities of each
series unless specifically otherwise provided in a Board Resolution, Officers'
Certificate or indenture supplemental hereto provided pursuant to Section 2.3.
In addition to discharge of the Indenture pursuant to the next preceding
paragraph, in the case of any series of Securities the exact or maximum amounts
(including the currency of payment) of principal of and interest due on which
can be determined at the time of making the deposit referred to in clause (a)
below, the Issuer shall be deemed to have paid and discharged the entire
indebtedness on all the Securities of such a series and the Coupons appertaining
thereto on the 91st day after the date of the deposit referred to in
subparagraph (a) below, and the provisions of this Indenture with respect to the
Securities of such series and Coupons appertaining thereto shall no longer be in
effect (except as to (i) rights of registration of transfer and exchange of
Securities of such series and of Coupons appertaining thereto and the Issuer's
right of optional redemption, if any, (ii) substitution of mutilated, defaced,
destroyed, lost or stolen Securities or Coupons, (iii) rights of Holders of
Securities and Coupons appertaining thereto to receive payments of principal
thereof and interest thereon, upon the original stated due dates therefor (but
not upon acceleration), and remaining rights of the Holders to receive mandatory
sinking fund payments, if any, (iv) the rights, obligations, duties and
immunities of the Trustee hereunder, (v) the rights of the Holders of Securities
of such series and Coupons appertaining thereto as beneficiaries hereof with
respect to the property so deposited with the Trustee payable to all or any of
them,

<PAGE> 77

(vi) the obligations of the Issuer under Section 3.2 and (vii) any right to
receive Additional Amounts as provided in Section 3.7) and the Trustee, at the
expense of the Issuer, shall at the Issuer's request, execute proper instruments
acknowledging the same, if

(a) with reference to this provision the Issuer has irrevocably
deposited or caused to be irrevocably deposited with the Trustee as trust
funds in trust, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of the Securities of such series and Coupons
appertaining thereto (i) cash in an amount, or (ii) in the case of any
series of Securities the payments on which may only be made in Dollars, U.S.
Government Obligations, maturing as to principal and interest at such times
and in such amounts as will insure the availability of cash or (iii) a
combination thereof, sufficient, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay (A) the principal and interest on
all Securities of such series and Coupons appertaining thereto on each date
that such principal or interest is due and payable through final maturity or
earlier redemption and (B) any mandatory sinking fund payments on the dates
on which such payments are due and payable in accordance with the terms of
the Indenture and the Securities of such series;

(b) such deposit will not result in a breach or violation of, or
constitute a default under, any agreement or instrument to which the Issuer
is a party or by which it is bound;

(c) the Issuer has delivered to the Trustee an Opinion of Counsel based
on the fact that (x) the Issuer has received from, or there has been
published by, the Internal Revenue Service a ruling or (y) since the date
hereof, there has been a change in the applicable Federal income tax law, in
either case to the effect that, and such opinion shall confirm that, the
Holders of the Securities of such series and Coupons appertaining thereto
will not recognize income, gain or loss for Federal income tax purposes as a
result of such deposit, defeasance and discharge and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
times, as would have been the case if such deposit, defeasance and discharge
had not occurred;

<PAGE> 78

(d) the Issuer has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
provided for relating to the defeasance contemplated by this provision have
been complied with;

(e) no event or condition shall exist that, pursuant to the provisions
of Section 13.1, would prevent the Issuer from making payments of the
principal of or interest on the Securities of such series and Coupons
appertaining thereto on the date of such deposit or at any time during the
period ending on the 91st day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until the
expiration of such period);

(f) the Issuer has delivered to the Trustee an Opinion of Counsel to
the effect that (x) the trust funds will not be subject to any rights of
holders of Senior Indebtedness, including without limitation those arising
under Article Thirteen of this Indenture, and (y) after the 91st day
following the deposit, the trust funds will not be subject to the effect of
any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally, except that if a court were to rule
under any such law in any case or proceeding that the trust funds remained
property of the Issuer, no opinion is given as to the effect of such laws on
the trust funds except the following: (A) assuming such trust funds remained
in the Trustee's possession prior to such court ruling to the extent not
paid to Holders of Securities of such series and Coupons appertaining
thereto, the Trustee will hold, for the benefit of such Holders, a valid and
perfected security interest in such trust funds that is not avoidable in
bankruptcy or otherwise, (B) such Holders will be entitled to receive
adequate protection of their interests in such trust funds if such trust
funds are used, and (C) no property, rights in property or other interests
granted to the Trustee or such Holders in exchange for or with respect to
any of such funds will be subject to any prior rights of holders of Senior
Indebtedness, including without limitation those arising under Article
Thirteen of this Indenture; and

(g) if the Securities of such series are to be redeemed, either
notice of such redemption shall have been given or the Issuer shall have
given the Trustee irrevocable directions to give notice of such redemption
in the name, and at the expense of the Issuer, under arrangements
satisfactory to the Trustee.

<PAGE> 79

(C) In the case of any series of Securities the exact or maximum
amounts (including the currency of payment) of principal of and interest due on
which can be determined at the time of making the deposit referred to in clause
(a) below, the Issuer shall be released from its obligations under Section 9.1
with respect to the Securities of any series, and any Coupons appertaining
thereto, Outstanding on and after the date the conditions set forth below are
satisfied (hereinafter, "covenant defeasance"). For this purpose, such covenant
defeasance means that, with respect to the Outstanding Securities of any series,
the Issuer may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in such Section, whether directly or
indirectly by reason of any reference elsewhere herein to such Section or by
reason of any reference in such Section to any other provision herein or in any
other document and such omission to comply shall not constitute an Event of
Default under Section 5.1, but the remainder of this Indenture and such
Securities and Coupons shall be unaffected thereby. The following shall be the
conditions to application of this subsection C of this Section 10.1:

(a) The Issuer has irrevocably deposited or caused to be deposited with
the Trustee 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 the Securities of such series and Coupons
appertaining thereto, (i) cash in an amount, or (ii) in the case of any
series of Securities the payments on which may only be made in Dollars, U.S.
Government Obligations maturing as to principal and interest at such times
and in such amounts as will insure the availability of cash or (iii) a
combination thereof, sufficient, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay (A) the principal and interest on
all Securities of such series and Coupons appertaining thereto on each date
that such principal or interest is due and payable through final maturity or
earlier redemption and (B) any mandatory sinking fund payments on the day on
which such payments are due and payable in accordance with the terms of the
Indenture and the Securities of such series.

(b) No Event of Default or event which with notice or lapse of time or
both would become an Event of Default with respect to the Securities shall
have occurred and be continuing on the date of such deposit or, insofar as
subsections 5.1(d) and (e) are

<PAGE> 80

concerned, at any time during the period ending on the 91st day after the
date of such deposit (it being understood that this condition shall not be
deemed satisfied until the expiration of such period).

(c) Such covenant defeasance shall not cause the Trustee to have a
conflicting interest as defined in Section 310(b) and for purposes of the
Trust Indenture Act of 1939 with respect to any securities of the Issuer.

(d) Such covenant defeasance shall not result in a breach or violation
of, or constitute a default under, this Indenture or any other agreement or
instrument to which the Issuer is a party or by which it is bound.

(e) Such covenant defeasance shall not cause any Securities then listed
on any registered national securities exchange under the Securities Exchange
Act of 1934, as amended, to be delisted.

(f) No event or condition shall exist that, pursuant to the provisions
of Section 13.1, would prevent the Issuer from making payments of the
principal of or interest on the Securities of such series and Coupons
appertaining thereto on the date of such deposit or at any time during the
period ending on the 91st day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until the
expiration of such period).

(g) The Issuer shall have delivered to the Trustee an Officers'
Certificate and Opinion of Counsel to the effect that the Holders of the
Securities of such series and 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.

(h) The Issuer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to the covenant defeasance contemplated by
this provision have been complied with.

(i) The Issuer has delivered to the Trustee an Opinion of Counsel to
the effect that (x) the trust

<PAGE> 81

funds will not be subject to any rights of holders of Senior Indebtedness,
including without limitation those arising under Article Thirteen of this
Indenture, and (y) after the 91st day following the deposit, the trust funds
will not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally, except
that if a court were to rule under any such law in any case or proceeding
that the trust funds remained property of the Issuer, no opinion is given as
to the effect of such laws on the trust funds except the following: (A)
assuming such trust funds remained in the Trustee's possession prior to such
court ruling to the extent not paid to Holders of Securities of such series
and Coupons appertaining thereto, the Trustee will hold, for the benefit of
such Holders, a valid and perfected security interest in such trust funds
that is not avoidable in bankruptcy or otherwise, (B) such Holders will be
entitled to receive adequate protection of their interests in such trust
funds if such trust funds are used, and (C) no property, rights in property
or other interests granted to the Trustee or such Holders in exchange for or
with respect to any of such funds will be subject to any prior rights of
holders of Senior Indebtedness, including without limitation those arising
under Article Thirteen of this Indenture.

(j) If the Securities of such series are to be redeemed, either
notice of such redemption shall have been given or the Issuer shall have
given the Trustee irrevocable directions to give notice of such redemption
in the name, and at the expense of the Issuer, under arrangements
satisfactory to the Trustee.

If subsequent to the date a discharge or covenant defeasance is
effected pursuant to this Section 10.1, Additional Amounts in excess of those
established as of the date such discharge or covenant defeasance is effected
become payable in respect of the series of Securities discharged or with respect
to which the Indenture is discharged or with respect to which a covenant
defeasance has been effected, in order to preserve the benefits of the discharge
or covenant defeasance established hereunder, the Issuer shall irrevocably
deposit or cause to be irrevocably deposited in accordance with the provisions
of this Section 10.1, within ten Business Days prior to the date the first
payment in respect of any portion of such excess Additional Amounts becomes due,
such additional funds as are necessary to satisfy the provisions of this Section
10.1 as if a discharge or covenant defeasance were being effected as of the date
of such subsequent deposit. Failure to comply with

<PAGE> 82

the requirements of this paragraph shall result in the termination of the
benefits of the discharge or covenant defeasance established by this Section
10.1.

SECTION 10.2 Application by Trustee of Funds Deposited for Payment
of Securities. Subject to Section 10.4, all moneys and U.S. Government
Obligations deposited with the Trustee pursuant to Section 10.1 and all moneys
received by the Trustee in respect of such U.S. Government Obligations shall be
held in trust and applied by it to the payment, either directly or through any
paying agent (including the Issuer acting as its own paying agent), to the
Holders of the particular Securities of such series and of Coupons appertaining
thereto for the payment or redemption of which such moneys and U.S. Government
Obligations have been deposited with or received by the Trustee, of all sums due
and to become due thereon for principal and interest; but such money and U.S.
Government Obligations need not be segregated from other funds except to the
extent required by law.

SECTION 10.3 Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect to
Securities of any series, all moneys then held by any paying agent under the
provisions of this Indenture with respect to such series of Securities shall,
upon demand of the Issuer, be repaid to it or paid to the Trustee and thereupon
such paying agent shall be released from all further liability with respect to
such moneys.

SECTION 10.4 Return of Moneys Held by Trustee and Paying Agent
Unclaimed for Two Years. Any moneys deposited with or paid to the Trustee or any
paying agent for the payment of the principal of or interest on any Security of
any series or Coupons attached thereto and not applied but remaining unclaimed
for two years after the date upon which such principal or interest shall have
become due and payable, shall, upon the written request of the Issuer and unless
otherwise required by mandatory provisions of applicable escheat or abandoned or
unclaimed property law, be repaid to the Issuer by the Trustee for such series
or such paying agent, and the Holder of the Securities of such series and of any
Coupons appertaining thereto shall, unless otherwise required by mandatory
provisions of applicable escheat or abandoned or unclaimed property laws,
thereafter look only to the Issuer for any payment which such Holder may be
entitled to collect, and all liability of the Trustee or any paying agent with
respect to such moneys shall thereupon cease; provided, however, that the
Trustee or such paying agent, before being required to make any such

<PAGE> 83

repayment with respect to moneys deposited with it for any payment (a) in
respect of Registered Securities of any series, shall at the expense of the
Issuer, mail by first-class mail to Holders of such Securities at their
addresses as they shall appear on the Security register, and (b) in respect of
Unregistered Securities of any series, shall at the expense of the Issuer cause
to be published once, in an Authorized Newspaper in the Borough of Manhattan,
The City of New York and once in an Authorized Newspaper in London (and if
required by Section 3.6, once in an Authorized Newspaper in Luxembourg), notice,
that such moneys remain and that, after a date specified therein, which shall
not be less than 30 days from the date of such mailing or publication, any
unclaimed balance of such money then remaining will be repaid to the Issuer.

SECTION 10.5 Indemnity for U.S. Government Obligations. The Issuer
shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the U.S. Government Obligations deposited pursuant to
Section 10.1 or the principal or interest received in respect of such
obligations.

SECTION 10.6 Excess Funds. The Trustee shall deliver to the Issuer
from time to time upon Issuer Order any U.S. Government Obligations or money
held by it as provided in Section 10.1 which, as expressed in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee (which may include the
applicable such opinion delivered to the Trustee pursuant to Section 10.1), are
then in excess of the amount thereof which then would have been required to be
deposited for the purpose for which such obligations or money were deposited or
received.

ARTICLE ELEVEN

MISCELLANEOUS PROVISIONS

SECTION 11.1 Incorporators, Stockholders, Officers and Directors of
Issuer Exempt from Individual Liability. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture, or in any
Security, or because of any indebtedness evidenced thereby, shall be had against
any incorporator, as such or against any past, present or future stockholder,
officer or director, as such, of the Issuer or of any successor, either directly
or through the Issuer or any successor, under any rule of law, statute or
constitutional provision or by the enforcement of any assessment or by any legal
or equitable

<PAGE> 84

proceeding or otherwise, all such liability being expressly waived and released
by the acceptance of the Securities and the Coupons appertaining thereto by the
Holders thereof and as part of the consideration for the issue of the Securities
and the Coupons appertaining thereto.

SECTION 11.2 Provisions of Indenture for the Sole Benefit of
Parties and Holders of Securities and Coupons. Nothing in this Indenture, in the
Securities or in the Coupons appertaining thereto, expressed or implied, shall
give or be construed to give to any Person, other than the parties hereto and
their successors and the holders of Senior Indebtedness and the Holders of the
Securities or Coupons, if any, any legal or equitable right, remedy or claim
under this Indenture or under any covenant or provision herein contained, all
such covenants and provisions being for the sole benefit of the parties hereto
and their successors, the holders of the Senior Indebtedness and the Holders of
the Securities or Coupons, if any.

SECTION 11.3 Successors and Assigns of Issuer Bound by Indenture.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or in behalf of the Issuer shall bind its successors and assigns,
whether so expressed or not.

SECTION 11.4 Notices and Demands on Issuer, Trustee and Holders of
Securities and Coupons. Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the Trustee or by
the Holders of Securities or Coupons to or on the Issuer may be given or served
by being deposited postage prepaid, first-class mail (except as otherwise
specifically provided herein) addressed (until another address of the Issuer is
filed by the Issuer with the Trustee) to The Williams Companies, Inc., One
Williams Center, Tulsa, Oklahoma 74172, Attention: Treasurer. Any notice,
direction, request or demand by the Issuer or any Holder of Securities or
Coupons to or upon the Trustee shall be deemed to have been sufficiently given
or served by being deposited postage prepaid, first-class mail (except as
otherwise specifically provided herein) addressed (until another address of the
Trustee is filed by the Trustee with the Issuer) to Chemical Bank, 450 West 33rd
Street, New York, New York 10001, Attention: Corporate Trustee Administration
Department.

Where this Indenture provides for notice to Holders of Registered
Securities, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage

<PAGE> 85

prepaid, to each Holder entitled thereto, at his last address as it appears in
the Security register. In any case where notice to such Holders is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.

In case, by reason of the suspension of or irregularities in
regular mail service, it shall be impracticable to mail notice to the Issuer
when such notice is required to be given pursuant to any provision of this
Indenture, then any manner of giving such notice as shall be reasonably
satisfactory to the Trustee shall be deemed to be a sufficient giving of such
notice.

SECTION 11.5 Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein. Upon any application or demand by the Issuer
to the Trustee to take any action under any of the provisions of this Indenture,
the Issuer shall furnish to the Trustee an Officers' Certificate stating that
all conditions precedent provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent have been complied with,
except that in the case of any such application or demand as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.

Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (a) a statement that the person
making such certificate or opinion has read such covenant or condition, (b) 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, (c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an opinion
as to whether or not such covenant or condition has been complied with and (d) a
statement as to whether or not, in the

<PAGE> 86

opinion of such person, such condition or covenant has been complied with.

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

Any certificate, statement or opinion of an officer of the Issuer
or of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.

Any certificate or opinion of any independent firm of public
accountants filed with and directed to the Trustee shall contain a statement
that such firm is independent.

SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays. If
the date of maturity of interest on or principal of the Securities of any series
or any Coupons appertaining thereto or the date fixed for redemption or
repayment of any such Security or Coupon shall not be a Business Day, then
payment of interest or principal need not be made on such date, but may be made
on the next succeeding Business Day with the same force and effect as if made on
the date of maturity or the date fixed for redemption, and no interest shall
accrue for the period after such date.

SECTION 11.7 Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939. If any provision hereof limits, qualifies or conflicts
with a

<PAGE> 87

provision of the Trust Indenture Act of 1939 which is required under such Act to
be a part of and govern this Indenture, the latter provision shall control. If
any provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act of 1939 which may be so modified or excluded, the latter provision
shall be deemed to apply to this Indenture as so modified or to be excluded, as
the case may be.

SECTION 11.8 New York Law to Govern. This Indenture and each
Security and Coupon shall be deemed to be a contract under the laws of the State
of New York, and for all purposes shall be construed in accordance with the laws
of such State, except as may otherwise be required by mandatory provisions of
law.

SECTION 11.9 Counterparts. This Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.

SECTION 11.10 Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.

SECTION 11.11 Securities in a Foreign Currency or in ECU. Unless
otherwise specified in an Officers' Certificate delivered pursuant to Section
2.3 of this Indenture with respect to a particular series of Securities,
whenever for purposes of this Indenture any action may be taken by the Holders
of a specified percentage in aggregate principal amount of Securities of all
series or all series affected by a particular action at the time Outstanding
and, at such time, there are Outstanding Securities of any series which are
denominated in a coin or currency other than Dollars (including ECUs), then the
principal amount of Securities of such series which shall be deemed to be
Outstanding for the purpose of taking such action shall be that amount of
Dollars that could be obtained for such amount at the Market Exchange Rate. For
purposes of this Section 11.11, Market Exchange Rate shall mean the noon Dollar
buying rate in New York City for cable transfers of that currency as published
by the Federal Reserve Bank of New York; provided, however, in the case of ECUs,
Market Exchange Rate shall mean the rate of exchange determined by the
Commission of the European Communities (or any successor thereto) as published
in the Official Journal of the European Communities (such publication or any
successor publication, the "Journal"). If such Market Exchange Rate is not
available for any reason with respect to such

<PAGE> 88

currency, the Trustee shall use, in its sole discretion and without liability on
its part, such quotation of the Federal Reserve Bank of New York or, in the case
of ECUs, the rate of exchange as published in the Journal, as of the most recent
available date, or quotations or, in the case of ECUs, rates of exchange from
one or more major banks in The City of New York or in the country of issue of
the currency in question, which for purposes of the ECU shall be Brussels,
Belgium, or such other quotations or, in the case of ECU, rates of exchange as
the Trustee shall deem appropriate. The provisions of this paragraph shall apply
in determining the equivalent principal amount in respect of Securities of a
series denominated in a currency other than Dollars in connection with any
action taken by Holders of Securities pursuant to the terms of this Indenture.

All decisions and determinations of the Trustee regarding the
Market Exchange Rate or any alternative determination provided for in the
preceding paragraph shall be in its sole discretion and shall, in the absence of
manifest error, be conclusive to the extent permitted by law for all purposes
and irrevocably binding upon the Issuer and all Holders.

SECTION 11.12 Judgment Currency. The Issuer 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 interest on the Securities of any series
(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 Required Currency with the Judgment Currency on the day on
which final unappealable judgment is entered, unless such day is not a New York
Banking Day, then, to the extent permitted by applicable law, 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 Required
Currency with the Judgment Currency on the New York Banking Day preceding the
day on which a final unappealable judgment is entered, 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 subsection (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

<PAGE> 89

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 required by law or
executive order to close.

ARTICLE TWELVE

REDEMPTION OF SECURITIES AND SINKING FUNDS

SECTION 12.1 Applicability of Article. The provisions of this
Article shall be applicable to the Securities of any series which are redeemable
before their maturity or to any sinking fund for the retirement of Securities of
a series except as otherwise specified as contemplated by Section 2.3 for
Securities of such series.

SECTION 12.2 Notice of Redemption; Partial Redemptions. Notice of
redemption to the Holders of Registered Securities of any series to be redeemed
as a whole or in part at the option of the Issuer shall be given by mailing
notice of such redemption by first class mail, postage prepaid, at least 30 days
and not more than 60 days prior to the date fixed for redemption to such Holders
of Securities of such series at their last addresses as they shall appear upon
the registry books. Notice of redemption to the Holders of Unregistered
Securities to be redeemed as a whole or in part, who have filed their names and
addresses with the Trustee pursuant to Section 313(c)(2) of the Trust Indenture
Act of 1939, shall be given by mailing notice of such redemption, by first class
mail, postage prepaid, at least 30 days and not more than 60 prior to the date
fixed for redemption, to such Holders at such addresses as were so furnished to
the Trustee (and, in the case of any such notice given by the Issuer, the
Trustee shall make such information available to the Issuer for such purpose).
Notice of redemption to all other Holders of Unregistered Securities shall be
published in an Authorized Newspaper in the Borough of Manhattan, The City of
New York and in an Authorized Newspaper in London (and, if required by Section
3.6, in an Authorized Newspaper in Luxembourg), in each case, once in each of
three successive calendar weeks, such publication to be not less than 30 nor
more than 60 days prior to the date fixed for redemption. Any notice which is

<PAGE> 90

mailed in the manner herein provided shall be conclusively presumed to have been
duly given, whether or not the Holder receives the notice. Failure to give
notice by mail, or any defect in the notice to the Holder of any Security of a
series designated for redemption as a whole or in part shall not affect the
validity of the proceedings for the redemption of any other Security of such
series.

The notice of redemption to each such Holder shall specify the
principal amount of each Security of such series held by such Holder to be
redeemed, the date fixed for redemption, the redemption price, the numbers of
the certificate for such Security being redeemed, the place or places of
payment, that payment will be made upon presentation and surrender of such
Securities and, in the case of Securities with Coupons attached thereto, of all
Coupons appertaining thereto maturing after the date fixed for redemption, that
such redemption is pursuant to the mandatory or optional sinking fund, or both,
if such be the case, that interest accrued to the date fixed for redemption will
be paid as specified in such notice and that on and after said date interest
thereon or on the portions thereof to be redeemed will cease to accrue. In case
any Security of a series is to be redeemed in part only the notice of redemption
shall state the portion of the principal amount thereof to be redeemed and shall
state that on and after the date fixed for redemption, upon surrender of such
Security, a new Security or Securities of such series in principal amount equal
to the unredeemed portion thereof will be issued.

The notice of redemption of Securities of any series to be redeemed
at the option of the Issuer shall be given by the Issuer or, at the Issuer's
request, by the Trustee in the name and at the expense of the Issuer.

On or before the redemption date specified in the notice of
redemption given as provided in this Section, the Issuer will deposit with the
Trustee or with one or more paying agents (or, if the Issuer is acting as its
own paying agent, set aside, segregate and hold in trust as provided in Section
3.4) an amount of money sufficient to redeem on the redemption date all the
Securities of such series so called for redemption at the appropriate redemption
price, together with accrued interest to the date fixed for redemption. The
Issuer will deliver to the Trustee at least 70 days prior to the date fixed for
redemption an Officers' Certificate stating the aggregate principal amount of
Securities to be redeemed. In case of a redemption at the election of the Issuer
prior to the expiration of any restriction on such redemption or which
redemption is subject to any condition,

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in each case as specified in the terms of the Securities to be redeemed, the
Issuer shall deliver to the Trustee, prior to the giving of any notice of
redemption to Holders pursuant to this Section, an Officers' Certificate stating
that such restriction or condition has been complied with.

If less than all the Securities of a series of like terms are to be
redeemed, the Trustee shall select, in such manner as it shall deem appropriate
and fair, Securities of such series to be redeemed in whole or in part.
Securities may be redeemed in part in multiples equal to the minimum authorized
denomination for Securities of such series or any multiple thereof. The Trustee
shall promptly notify the Issuer in writing of the Securities of such series
selected for redemption and, in the case of any Securities of such series
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 of any series shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.

SECTION 12.3 Payment of Securities Called for Redemption. If notice
of redemption has been given as above provided, the Securities or portions of
Securities specified in such notice shall become due and payable on the date and
at the place stated in such notice at the applicable redemption price, together
with interest accrued to the date fixed for redemption, and on and after said
date (unless the Issuer shall default in the payment of such Securities at the
redemption price, together with interest accrued to said date) interest on the
Securities or portions of Securities so called for redemption shall cease to
accrue, and the unmatured Coupons, if any, appertaining thereto shall be void,
and, except as provided in Sections 6.5 and 10.4, such Securities shall cease
from and after the date fixed for redemption to be entitled to any benefit or
security under this Indenture, and the Holders thereof shall have no right in
respect of such Securities except the right to receive the redemption price
thereof and unpaid interest to the date fixed for redemption. On presentation
and surrender of such Securities at a place of payment specified in said notice,
together with all Coupons, if any, appertaining thereto maturing after the date
fixed for redemption, said Securities or the specified portions thereof shall be
paid and redeemed by the Issuer at the applicable redemption price, together
with interest accrued thereon to the date fixed for redemption; provided that
payment of interest becoming due on or prior to the date fixed for redemption

<PAGE> 92

shall be payable in the case of Securities with Coupons attached thereto, to the
Holders of the Coupons for such interest upon surrender thereof, and in the case
of Registered Securities, to the Holders of such Registered Securities
registered as such on the relevant record date subject to the terms and
provisions of Sections 2.3 and 2.7 hereof.

If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate of
interest or Yield to Maturity (in the case of an Original Issue Discount
Security) borne by such Security.

If any Security with Coupons attached thereto is surrendered for
redemption and is not accompanied by all appurtenant Coupons maturing after the
date fixed for redemption, the surrender of such missing Coupon or Coupons may
be waived by the Issuer and the Trustee, if there be furnished to each of them
such security or indemnity as they may require to save each of them harmless.

Upon presentation of any Security redeemed in part only, the Issuer
shall execute and the Trustee shall authenticate and deliver to or on the order
of the Holder thereof, at the expense of the Issuer, a new Security or
Securities of such series, of authorized denominations, in principal amount
equal to the unredeemed portion of the Security so presented.

SECTION 12.4 Exclusion of Certain Securities from Eligibility for
Selection for Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in an Officers' Certificate delivered to the Trustee at least 40 days
prior to the last date on which notice of redemption may be given as being owned
of record and beneficially by, and not pledged or hypothecated by either (a) the
Issuer or (b) an entity specifically identified in such written statement as
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Issuer.

SECTION 12.5 Mandatory and Optional Sinking Funds. The minimum
amount of any sinking fund payment provided for by the terms of the 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 the
Securities of any series is herein referred to as an "optional sinking fund
payment". The date

<PAGE> 93

on which a sinking fund payment is to be made is herein referred to as the
"sinking fund payment date".

In lieu of making all or any part of any mandatory sinking fund
payment with respect to any series of Securities in cash, the Issuer may at its
option (a) deliver to the Trustee Securities of such series theretofore
purchased or otherwise acquired (except upon redemption pursuant to the
mandatory sinking fund) by the Issuer or receive credit for Securities of such
series (not previously so credited) theretofore purchased or otherwise acquired
(except as aforesaid) by the Issuer and delivered to the Trustee for
cancellation pursuant to Section 2.10, (b) receive credit for optional sinking
fund payments (not previously so credited) made pursuant to this Section, or (c)
receive credit for Securities of such series (not previously so credited)
redeemed by the Issuer through any optional redemption provision contained in
the terms of such series. Securities so delivered or credited shall be received
or credited by the Trustee at the sinking fund redemption price specified in
such Securities.

On or before the 60th day next preceding each sinking fund payment
date for any series, the Issuer will deliver to the Trustee an Officers'
Certificate (which need not contain the statements required by Section 11.5) (a)
specifying the portion of the mandatory sinking fund payment to be satisfied by
payment of cash and the portion to be satisfied by credit of Securities of such
series and the basis for such credit, (b) stating that none of the Securities of
such series has theretofore been so credited, (c) stating that no defaults in
the payment of interest or Events of Default with respect to such series have
occurred (which have not been waived or cured) and are continuing and (d)
stating whether or not the Issuer intends to exercise its right to make an
optional sinking fund payment with respect to such series and, if so, specifying
the amount of such optional sinking fund payment which the Issuer intends to pay
on or before the next succeeding sinking fund payment date. Any Securities of
such series to be credited and required to be delivered to the Trustee in order
for the Issuer to be entitled to credit therefor as aforesaid which have not
theretofore been delivered to the Trustee shall be delivered for cancellation
pursuant to Section 2.10 to the Trustee with such Officers' Certificate (or
reasonably promptly thereafter if acceptable to the Trustee). Such Officers'
Certificate shall be irrevocable and upon its receipt by the Trustee the Issuer
shall become unconditionally obligated to make all the cash payments or payments
therein referred to, if any, on or before the next succeeding sinking fund
payment date. Failure of the

<PAGE> 94

Issuer, on or before any such 60th day, to deliver such Officers' Certificate
and Securities specified in this paragraph, if any, shall not constitute a
default but shall constitute, on and as of such date, the irrevocable election
of the Issuer (i) that the mandatory sinking fund payment for such series due on
the next succeeding sinking fund payment date shall be paid entirely in cash
without the option to deliver or credit Securities of such series in respect
thereof and (ii) that the Issuer will make no optional sinking fund payment with
respect to such series as provided in this Section.

If the sinking fund payment or payments (mandatory or optional or
both) to be made in cash on the next succeeding sinking fund payment date plus
any unused balance of any preceding sinking fund payments made in cash shall
exceed $50,000 (or the equivalent thereof in any Foreign Currency or ECU) or a
lesser sum in Dollars (or the equivalent thereof in any Foreign Currency or ECU)
if the Issuer shall so request with respect to the Securities of any particular
series, such cash shall be applied on the next succeeding sinking fund payment
date to the redemption of Securities of such series at the sinking fund
redemption price together with accrued interest to the date fixed for
redemption. If such amount shall be $50,000 (or the equivalent thereof in any
Foreign Currency or ECU) or less and the Issuer makes no such request then it
shall be carried over until a sum in excess of $50,000 (or the equivalent
thereof in any Foreign Currency or ECU) is available. The Trustee shall select,
in the manner provided in Section 12.2, for redemption on such sinking fund
payment date a sufficient principal amount of Securities of such series to
absorb said cash, as nearly as may be, and shall (if requested in writing by the
Issuer) inform the Issuer of the serial numbers of the Securities of such series
(or portions thereof) so selected. Securities shall be excluded from eligibility
for redemption under this Section if they are identified by registration and
certificate number in an Officers' Certificate delivered to the Trustee at least
60 days prior to the sinking fund payment date as being owned of record and
beneficially by, and not pledged or hypothecated by either (a) the Issuer or (b)
an entity specifically identified in such Officers' Certificate as directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Issuer. The Trustee, in the name and at the expense of the
Issuer (or the Issuer, if it shall so request the Trustee in writing) shall
cause notice of redemption of the Securities of such series to be given in
substantially the manner provided in Section 12.2 (and with the effect provided
in Section 12.3) for the redemption of Securities of such series in part at

<PAGE> 95

the option of the Issuer. The amount of any sinking fund payments not so applied
or allocated to the redemption of Securities of such series shall be added to
the next cash sinking fund payment for such series and, together with such
payment, shall be applied in accordance with the provisions of this Section. Any
and all sinking fund moneys held on the stated maturity date of the Securities
of any particular series (or earlier, if such maturity is accelerated), which
are not held for the payment or redemption of particular Securities of such
series shall be applied, together with other moneys, if necessary, sufficient
for the purpose, to the payment of the principal of, and interest on, the
Securities of such series at maturity.

On or before each sinking fund payment date, the Issuer shall pay
to the Trustee in cash or shall otherwise provide for the payment of all
interest accrued to the date fixed for redemption on Securities to be redeemed
on such sinking fund payment date.

The Trustee shall not redeem or cause to be redeemed any Securities
of a series with sinking fund moneys or give any notice of redemption of
Securities for such series by operation of the sinking fund during the
continuance of a default in payment of interest on such Securities or of any
Event of Default except that, where the giving of notice of redemption of any
Securities shall theretofore have been made, the Trustee shall redeem or cause
to be redeemed such Securities, provided that it shall have received from the
Issuer a sum sufficient for such redemption. Except as aforesaid, any moneys in
the sinking fund for such series at the time when any such default or Event of
Default shall occur, and any moneys thereafter paid into the sinking fund,
shall, during the continuance of such default or Event of Default, be deemed to
have been collected under Article Five and held for the payment of all such
Securities. In case such Event of Default shall have been waived as provided in
Section 5.10 or the default cured on or before the sixtieth day preceding the
sinking fund payment date in any year, such moneys shall thereafter be applied
on the next succeeding sinking fund payment date in accordance with this Section
to the redemption of such Securities.

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ARTICLE THIRTEEN

SUBORDINATION

SECTION 13.1 Securities and Coupons Subordinated to Senior
Indebtedness. The Issuer covenants and agrees, and each Holder of a Security or
Coupon, by his acceptance thereof, likewise covenants and agrees, that the
indebtedness represented by the Securities and any Coupons and the payment of
the principal of and interest on each and all of the Securities and of any
Coupons is hereby expressly subordinated, to the extent and in the manner
hereinafter set forth, in right of payment to the prior payment in full of
Senior Indebtedness.

In the event (a) of any insolvency or bankruptcy proceedings or any
receivership, liquidation, reorganization or other similar proceedings in
respect of the Issuer or a substantial part of its property, or of any
proceedings for liquidation, dissolution or other winding up of the Issuer,
whether or not involving insolvency or bankruptcy, or (b) subject to the
provisions of Section 13.2 that (i) a default shall have occurred with respect
to the payment of principal of or interest on or other monetary amounts due and
payable on any Senior Indebtedness, or (ii) there shall have occurred an event
of default (other than a default in the payment of principal or interest or
other monetary amounts due and payable) in respect of any Senior Indebtedness,
as defined therein or in the instrument under which the same is outstanding,
permitting the holder or holders thereof to accelerate the maturity thereof
(with notice or lapse of time, or both), and such event of default shall have
continued beyond the period of grace, if any, in respect thereof, and, in the
cases of subclauses (i) and (ii) of this clause (b), such default or event of
default shall not have been cured or waived or shall not have ceased to exist,
or (c) that the principal of and accrued interest on the Securities of any
series shall have been declared due and payable pursuant to Section 5.1 and such
declaration shall not have been rescinded and annulled as provided in Section
5.1, then:

(1) the holders of all Senior Indebtedness shall first be entitled to
receive payment of the full amount due thereon, or provision shall be made
for such payment in money or money's worth, before the Holders of any of the
Securities or Coupons are entitled to receive a payment on account of the
principal of or interest on the indebtedness evidenced by the Securities or
of the Coupons, including, without

<PAGE> 97

limitation, any payments made pursuant to Article Twelve;

(2) any payment by, or distribution of assets of, the Issuer of any
kind or character, whether in cash, property or securities, to which the
Holders of any of the Securities or Coupons or the Trustee would be entitled
except for the provisions of this Article shall be paid or delivered by the
person making such payment or distribution, whether a trustee in bankruptcy,
a receiver or liquidating trustee or otherwise, directly to the holders of
such Senior Indebtedness or their representative or representatives or to
the trustee or trustees under any indenture under which any instruments
evidencing any of such Senior Indebtedness may have been issued, ratably
according to the aggregate amounts remaining unpaid on account of such
Senior Indebtedness held or represented by each, to the extent necessary to
make payment in full of all Senior Indebtedness remaining unpaid after
giving effect to any concurrent payment or distribution (or provision
therefor) to the holders of such Senior Indebtedness, before any payment or
distribution is made to the holders of the indebtedness evidenced by the
Securities or Coupons or to the Trustee under this instrument; and

(3) in the event that, notwithstanding the foregoing, any payment by,
or distribution of assets of, the Issuer of any kind or character, whether
in cash, property or securities, in respect of principal of or interest on
the Securities or in connection with any repurchase by the Issuer of the
Securities, shall be received by the Trustee or the Holders of any of the
Securities or Coupons before all Senior Indebtedness is paid in full, or
provision made for such payment in money or money's worth, such payment or
distribution in respect of principal of or interest on the Securities or in
connection with any repurchase by the Issuer of the Securities shall be paid
over to the holders of such Senior Indebtedness or their representative or
representatives or to the trustee or trustees under any indenture under
which any instruments evidencing any such Senior Indebtedness may have been
issued, ratably as aforesaid, for application to the payment of all Senior
Indebtedness remaining unpaid until all such Senior Indebtedness shall have
been paid in full, after giving effect to any concurrent payment or
distribution (or provision therefor) to the holders of such Senior
Indebtedness.

<PAGE> 98

Notwithstanding the foregoing, at any time after the 91st
day following the date of deposit of cash or, in the case of Securities
payable only in Dollars, U.S. Government Obligations pursuant to Section
10.1(B) or (C) (provided all other conditions set out in such Section shall
have been satisfied) the funds so deposited and any interest thereon will
not be subject to any rights of holders of Senior Indebtedness including,
without limitation, those arising under this Article Thirteen.

SECTION 13.2 Disputes with Holders of Certain Senior Indebtedness.
Any failure by the Issuer to make any payment on or perform any other obligation
under Senior Indebtedness, other than any indebtedness incurred by the Issuer or
assumed or guaranteed, directly or indirectly, by the Issuer for money borrowed
(or any deferral, renewal, extension or refunding thereof) or any indebtedness
or obligation as to which the provisions of this Section shall have been waived
by the Issuer in the instrument or instruments by which the Issuer incurred,
assumed, guaranteed or otherwise created such indebtedness or obligation, shall
not be deemed a default or event of default under Section 13.1(b) if (i) the
Issuer shall be disputing its obligation to make such payment or perform such
obligation and (ii) either (A) no final judgment relating to such dispute shall
have been issued against the Issuer which is in full force and effect and is not
subject to further review, including a judgment that has become final by reason
of the expiration of the time within which a party may seek further appeal or
review, and (B) in the event of a judgment that is subject to further review or
appeal has been issued, the Issuer shall in good faith be prosecuting an appeal
or other proceeding for review and a stay of execution shall have been obtained
pending such appeal or review.

SECTION 13.3 Subrogation. Subject to the payment in full of all
Senior Indebtedness, the Holders of the Securities and any Coupons shall be
subrogated (equally and ratably with the holders of all obligations of the
Issuer which by their express terms are subordinated to Senior Indebtedness of
the Issuer to the same extent as the Securities are subordinated and which are
entitled to like rights of subrogation) to the rights of the holders of Senior
Indebtedness to receive payments or distributions of cash, property or
securities of the Issuer applicable to the Senior Indebtedness until all amounts
owing on the Securities and any Coupons shall be paid in full, and as between
the Issuer, its creditors other than holders of such Senior Indebtedness and the
Holders, no such payment or

<PAGE> 99

distribution made to the holders of Senior Indebtedness by virtue of this
Article that otherwise would have been made to the Holders shall be deemed to be
a payment by the Issuer on account of such Senior Indebtedness, it being
understood that the provisions of this Article are and are intended solely for
the purpose of defining the relative rights of the Holders, on the one hand, and
the holders of Senior Indebtedness, on the other hand.

SECTION 13.4 Obligation of Issuer Unconditional. Nothing contained
in this Article or elsewhere in this Indenture or in the Securities or any
Coupons is intended to or shall impair, as among the Issuer, its creditors other
than the holders of Senior Indebtedness and the Holders, the obligation of the
Issuer, which is absolute and unconditional, to pay to the Holders the principal
of and interest on the Securities and the amounts owed pursuant to any Coupons
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 and
creditors of the Issuer other than the holders of Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee or any Holder from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article of the holders of
Senior Indebtedness in respect of cash, property or securities of the Issuer
received upon the exercise of any such remedy.

Upon payment or distribution of assets of the Issuer referred to in
this Article, the Trustee and the Holders shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which any such
dissolution, winding up, liquidation or reorganization proceeding affecting the
affairs of the Issuer is pending or upon a certificate of the trustee in
bankruptcy, receiver, assignee for the benefit of creditors, liquidating trustee
or agent or other person making any payment or distribution, delivered to the
Trustee or to the Holders, for the purpose of ascertaining the persons entitled
to participate in such payment or distribution, the holders of the Senior
Indebtedness and other indebtedness of the Issuer, the amount thereof or payable
thereon, the amount paid or distributed thereon and all other facts pertinent
thereto or to this Article.

The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior
Indebtedness (or a trustee or representative on behalf of such holder) to
establish that such notice has been given by a holder of Senior

<PAGE> 100

Indebtedness or a trustee or representative 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
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article Thirteen, the Trustee may request such Person to furnish evidence
to the reasonable satisfaction of the Trustee as to the amount of 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 Thirteen, and, if such evidence is not
furnished, the Trustee may defer payment to such Person pending judicial
determination as to the right of such Person to receive such payment.

SECTION 13.5 Payments on Securities and Coupons Permitted. Nothing
contained in this Article or elsewhere in this Indenture or in the Securities or
Coupons shall affect the obligations of the Issuer to make, or prevent the
Issuer from making, payment of the principal of or interest on the Securities
and of any Coupons in accordance with the provisions hereof and thereof, except
as otherwise provided in this Article.

SECTION 13.6 Effectuation of Subordination by Trustee. Each holder
of Securities or Coupons, by his acceptance thereof, authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article and appoints the Trustee
his attorney-in-fact for any and all such purposes.

SECTION 13.7 Knowledge of Trustee. Notwithstanding the provisions
of this Article or any other provisions of this Indenture, the Trustee shall not
be charged with knowledge of the existence of any facts that would prohibit the
making of any payment of moneys to or by the Trustee, or the taking of any other
action by the Trustee, unless and until the Trustee shall have received written
notice thereof mailed or delivered to the Trustee at its Corporate Trust Office
from the Issuer, any Holder, any paying agent or the holder or representative of
any class of Senior Indebtedness; provided that if at least three Business Days
prior to the date upon which by the terms hereof any such moneys may become
payable for any purpose (including, without limitation, the payment of the
principal or interest on any Security or interest on any Coupon) the Trustee
shall not have received with respect to such moneys the notice provided for in
this Section, then, anything herein contained to the contrary notwithstanding,
the

<PAGE> 101

Trustee shall have full power and authority to receive such moneys and to apply
the same to the purpose for which they were received and shall not be affected
by any notice to the contrary that may be received by it within three Business
Days prior to or on or after such date.

SECTION 13.8 Trustee May Hold Senior Indebtedness. The Trustee
shall be entitled to all the rights set forth in this Article with respect to
any Senior Indebtedness at the time held by it, to the same extent as any other
holder of Senior Indebtedness, and nothing in Section 6.13 or elsewhere in this
Indenture shall deprive the Trustee of any of its rights as such holder.

SECTION 13.9 Rights of Holders of Senior Indebtedness Not Impaired.
No right of any present or future holder of any Senior Indebtedness to enforce
the subordination herein shall at any time or in any way be prejudiced or
impaired by any act or failure to act on the part of the Issuer or by any
noncompliance by the Issuer with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.

With respect to the holders of Senior Indebtedness, (i) the duties
and obligations of the Trustee shall be determined solely by the express
provisions of this Indenture, (ii) the Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set forth in
this Indenture, (iii) no implied covenants or obligations shall be read into
this Indenture against the Trustee and (iv) the Trustee shall not be deemed to
be a fiduciary as to such holders.

SECTION 13.10 Article Applicable to Paying Agents. In case at any
time any paying agent other than the Trustee shall have been appointed by the
Issuer and be then acting hereunder, the term "Trustee" as used in this
Article shall in such case (unless the context shall require otherwise) be
construed as extending to and including such paying agent within its meaning
as fully for all intents and purposes as if such paying agent were named in
this Article in addition to or in place of the Trustee, provided, however,
that Sections 13.7 and 13.8 shall not apply to the Issuer if it acts as its
own paying agent.

SECTION 13.11 Trustee; Compensation Not Prejudiced. Nothing in this
Article shall apply to claims of, or payments to, the Trustee pursuant to
Section 6.6.

<PAGE> 102

IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of ____________, 1995.

THE WILLIAMS COMPANIES, INC.

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

[CORPORATE SEAL]

Attest:

By
---------------------------
Assistant Secretary

CHEMICAL BANK, TRUSTEE

By
---------------------------
Senior Trust Officer

[CORPORATE SEAL]

Attest:

By
---------------------------
Assistant Secretary

<PAGE> 103

STATE OF _______ )
) ss.:
COUNTY OF _______ )

On this ____ of ________, 1995 before me personally came
_______________, to me personally known, who, being by me duly sworn, did depose
and say that he resides at _____________________; that he is the ___________ of
The Williams Companies, Inc., one of the corporations described in and which
executed the above instrument; that he knows the corporate seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.

[NOTARIAL SEAL]

-----------------------------
Notary Public

<PAGE> 104

STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )

On this ____ of _________, 1995 before me personally came
_______________, to me personally known, who, being by me duly sworn, did depose
and say that he resides at _______________; that he is a Senior Trust Officer of
Chemical Bank, one of the corporations described in and which executed the above
instrument; that he knows the corporate seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation, and that he signed his
name thereto by like authority.

[NOTARIAL SEAL]

------------------------------
Notary Public

<PAGE> 1

EXHIBIT 12.1

THE WILLIAMS COMPANIES, INC. AND SUBSIDIARIES

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN MILLIONS)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
1ST QTR. ----------------------------------------------
1995 1994 1993* 1992* 1991* 1990*
-------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Income from continuing operations before
income taxes......................... $ 132.9 $246.6 $298.0 $145.5 $ 93.1 $ 39.6
Add:
Interest expense -- net.............. 67.3 139.8 140.8 136.5 134.2 108.5
Rental expense representative of
interest factor.................... 5.6 9.2 8.1 8.3 5.3 3.0
Preferred dividends of
subsidiaries....................... 3.7 -- -- .3 .8 1.6
Interest accrued -- 50% owned
company............................ 7.9 31.7 31.3 27.3 10.3 --
Other................................ .7 2.0 4.1 .4 .9 (.7)
------ ------ ------ ------ ------ ------
Total earnings as adjusted plus
fixed charges................. $ 218.1 $429.3 $482.3 $318.3 $244.6 $152.0
====== ====== ====== ====== ====== ======
Fixed charges and preferred stock dividend
requirements:
Interest expense -- net................. $ 67.3 $139.8 $140.8 $136.5 $134.2 $108.5
Capitalized interest.................... 1.3 6.0 10.4 8.9 4.7 2.8
Rental expense representative of
interest factor...................... 5.6 9.2 8.1 8.3 5.3 3.0
Pretax effect of preferred dividends of
subsidiaries......................... 5.9 -- -- .4 1.2 2.5
Interest accrued -- 50% owned company... 7.9 31.7 31.3 27.3 10.3 --
------ ------ ------ ------ ------ ------
Combined fixed charges and
preferred stock dividend
requirements.................. $ 88.0 $186.7 $190.6 $181.4 $155.7 $116.8
====== ====== ====== ====== ====== ======
Ratio of earnings to combined fixed
charges and preferred stock dividend
requirements............................ 2.48 2.30 2.53 1.75 1.57 1.30
====== ====== ====== ====== ====== ======
</TABLE>

- ---------------
* Restated as described in Note 2 of the Notes to Consolidated Financial
Statements, which is included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1994, which is incorporated herein by reference.

<PAGE> 1
Exhibit 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-4 and related Prospectus of The Williams
Companies, Inc. and to the incorporation by reference therein of our report
dated February 10, 1995, with respect to the consolidated financial statements
and schedules of The Williams Companies, Inc. included in its Annual Report
(Form 10-K) for the year ended December 31, 1994, filed with the Securities and
Exchange Commission.

/s/ Ernst & Young LLP
ERNST & YOUNG LLP

Tulsa, Oklahoma
June 20, 1995

<PAGE> 1
Exhibit 25.1

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

SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

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

FORM T-1

STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE

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

CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________

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

CHEMICAL BANK
(Exact name of trustee as specified in its charter)

NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)

270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)

William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)

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

THE WILLIAMS COMPANIES, INC.
(Exact name of obligor as specified in its charter)

DELAWARE 73-0569878
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)

ONE WILLIAMS CENTER
TULSA, OKLAHOMA 74172
(Address of principal executive offices) (Zip Code)

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

SUBORDINATED DEBT SECURITIES
(Title of the indenture securities)

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

<PAGE> 2

GENERAL

Item 1. General Information.

Furnish the following information as to the trustee:

(a) Name and address of each examining or supervising authority to
which it is subject.

New York State Banking Department, State House, Albany, New
York 12110.

Board of Governors of the Federal Reserve System, Washington,
D.C., 20551.

Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.

Federal Deposit Insurance Corporation, Washington, D.C., 20429.

(b) Whether it is authorized to exercise corporate trust powers.

Yes.

Item 2. Affiliations with the Obligor.

If the obligor is an affiliate of the trustee, describe each such
affiliation.

None

Item 16. List of Exhibits.

List below all exhibits filed as a part of this Statement of
Eligibility.

1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985 and December 2, 1991 (see Exhibit 1 to Form T-1 filed in
connection with Registration Statement No. 33-50010, which is incorporated by
reference).

2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference).

3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.

4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 33-84460, which is
incorporated by reference).

5. Not applicable.

6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference).

2
<PAGE> 3

7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.

8. Not applicable.

9. Not applicable.

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, Chemical Bank, a corporation organized and existing under the laws of
the State of New York, has duly caused this statement of eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of New York and State of New York, on the 15TH day of JUNE, 1995.

CHEMICAL BANK

By /s/ P. Kelly
--------------------------
P. Kelly
Assistant Vice President

<PAGE> 4

Exhibit 7 to Form T-1

Bank Call Notice

RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF

Chemical Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business March 31, 1995, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the
Federal Reserve Act.

DOLLAR AMOUNTS
ASSETS IN MILLIONS

<S> <C>
Cash and balances due from depository institutions:
Non-interest-bearing balances and
currency and coin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,797
Interest-bearing balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,523
Securities:
Held to maturity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,195
Available for sale securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,785
Federal Funds sold and securities purchased under agreements to resell in
domestic offices of the bank and of its Edge and Agreement
subsidiaries, and in IBF's:
Federal funds sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,493
Securities purchased under agreements to resell . . . . . . . . . . . . . . . . . . . . . . . . 50
Loans and lease financing receivables:
Loans and leases, net of unearned income $68,937
Less: allowance for loan and lease losses 1,898
Less: allocated transfer risk reserve 113
Loans and leases, net of unearned income, allowance, -------
and reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66,926
Trading Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,294
Premises and fixed assets (including capitalized leases) . . . . . . . . . . . . . . . . . . . . . . . 1,402
Other real estate owned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Investments in unconsolidated subsidiaries and associated companies . . . . . . . . . . . . . . . . . . . 148
Customer's liability to this bank on acceptances outstanding . . . . . . . . . . . . . . . . . . . . . 1,051
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 512
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,759
-----
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $149,034
========
</TABLE>

<PAGE> 5

LIABILITIES

<S> <C>
Deposits
In domestic offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $44,882
Non-interest-bearing $14,690
Interest-bearing 30,192
-------
In foreign offices, Edge and Agreement subsidiaries,
and IBF's . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,537
Non-interest-bearing $ 146
Interest-bearing 32,391
-------
Federal funds purchased and securities sold under agreements to repurchase in
domestic offices of the bank and of its Edge and Agreement
subsidiaries, and in IBF's
Federal funds purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,587
Securities sold under agreements to repurchase . . . . . . . . . . . . . . . . . . . . . . . 3,083
Demand notes issued to the U.S. Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 464
Trading liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,358
Other Borrowed money:
With original maturity of one year or less . . . . . . . . . . . . . . . . . . . . . . . . . 7,527
With original maturity of more than one year . . . . . . . . . . . . . . . . . . . . . . . . . 914
Mortgage indebtedness and obligations under capitalized leases . . . . . . . . . . . . . . . . . . . . 20
Bank's liability on acceptances executed and outstanding 1,054
Subordinated notes and debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,410
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,986
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141,822
-------
EQUITY CAPITAL

Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 620
Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,501
Undivided profits and capital reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,558
Net unrealized holding gains (Losses) on available-for-sale securities . . . . . . . . . . . . . . . (476)
Cumulative foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . 9

TOTAL EQUITY CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,212
-------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $149,034
========
</TABLE>

<PAGE> 6

I, Joseph L. Sclafani, S.V.P. & Controller of the above-named
bank, do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the appropriate Federal regulatory
authority and is true to the best of my knowledge and belief.

JOSEPH L. SCLAFANI

We, the undersigned directors, attest to the correctness of
this Report of Condition and declare that it has been examined by us, and to the
best of our knowledge and belief has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
and correct.

WALTER V. SHIPLEY )
EDWARD D. MILLER ) DIRECTORS
WILLIAM B. HARRISON )