AMERICAN GREETINGS CORP
S-3/A, 1998-06-05
GREETING CARDS
Previous: VAN KAMPEN AMERICAN CAPITAL CONVERTIBLE SECURITIES FUND, PRE 14A, 1998-06-05
Next: AMERICAN INTERNATIONAL GROUP INC, SC 13D/A, 1998-06-05



<PAGE>   1
 
   
      AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 5, 1998
    
 
   
                                                      REGISTRATION NO. 333-53197
    
================================================================================
 
                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D. C. 20549
 
                            ------------------------
 
   
                               AMENDMENT NO. 1 TO
    
 
                                    FORM S-3
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
 
                            ------------------------
 
                         AMERICAN GREETINGS CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
<TABLE>
<S>                                                 <C>
                       OHIO                                             34-0065325
           ---------------------------                             -------------------
         (STATE OR OTHER JURISDICTION OF                             (I.R.S. EMPLOYER
          INCORPORATION OR ORGANIZATION)                          IDENTIFICATION NUMBER)
</TABLE>
 
                  ONE AMERICAN ROAD, OHIO 44144 (216) 252-7300
           ----------------------------------------------------------
  (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
                   REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
 
                              JON GROETZINGER, JR.
              SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
                         AMERICAN GREETINGS CORPORATION
                               ONE AMERICAN ROAD
                             CLEVELAND, OHIO 44144
                                 (216) 252-7300
 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
                             OF AGENT FOR SERVICE)
 
   
                                   COPIES TO:
 
<TABLE>
<S>                                                 <C>
                STANLEY E. EVERETT                                    EARL D. WEINER
 
                BROUSE & MCDOWELL                                  SULLIVAN & CROMWELL
             500 FIRST NATIONAL TOWER                                125 BROAD STREET
                AKRON, OHIO 44114                                NEW YORK, NEW YORK 10004
                  (330) 535-5711                                      (212) 558-4000
</TABLE>
    
 
    APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of the Registration Statement and after
compliance with applicable state and federal laws.
 
    If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.  [ ]
 
    If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box.  [X]
 
    If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.  [ ]
 
    If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.  [ ]
 
    If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.  [ ]
   
    
 
   
     THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY
DETERMINE.
    
================================================================================
<PAGE>   2
 
   
                         AMERICAN GREETINGS CORPORATION
    
 
   
                          AMENDMENT NO. 1 TO FORM S-3
    
   
                  REGISTRATION STATEMENT (REG. NO. 333-53197)
    
 
                            ------------------------
 
   
  This Amendment No. 1 is being filed solely for the purpose of filing certain
                                   Exhibits.
    
<PAGE>   3
 
                PART II. INFORMATION NOT REQUIRED IN PROSPECTUS.
 
ITEM 14.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
 
     The following table sets forth the estimated expenses payable by the
Registrant in connection with the issuance and distribution of the Debt
Securities, other than underwriting discounts and commissions. All the amounts
shown are estimates, except for the Commission registration fee which is the
actual amount paid in connection with the registration of the $600,000,000
principal amount of Debt Securities being registered under this Registration
Statement.
 
   
<TABLE>
<S>                                                           <C>
Securities and Exchange Commission registration fee.........  $ 177,000
Blue Sky fees and expenses..................................      5,000
Accounting fees and expenses................................     10,000
Printing fees and expenses..................................     20,000
Legal fees and expenses.....................................     25,000
Trustee fees and expenses...................................     10,000
Miscellaneous...............................................      3,000
                                                              ---------
  Total.....................................................  $ 250,000
                                                              =========
</TABLE>
    
 
ITEM 15.  INDEMNIFICATION OF DIRECTORS AND OFFICERS.
 
     Section 1701.13(E) of the Ohio Revised Code authorizes the indemnification
of officers and directors in defense of any civil, criminal, administrative or
investigative proceeding. Article IV of the Regulations of the Company provides
for indemnification in terms consistent with the statutory authority, and the
Company maintains insurance covering certain liabilities of the directors and
the elected and appointed officers of the Company and its subsidiaries,
including liabilities under the Securities Act.
 
ITEM 16.  EXHIBITS.
 
     See the Exhibit Index at page E-1 of this Registration Statement.
 
ITEM 17. UNDERTAKINGS.
 
     The undersigned registrant hereby undertakes:
 
          (1) To file, during any period in which offers or sales are being
     made, a post-effective amendment to this Registration Statement:
 
             (i) to include any prospectus required by Section 10(a)(3) of the
        Securities Act of 1933;
 
             (ii) to reflect in the prospectus any facts or events arising after
        the effective date of the Registration Statement (or the most recent
        post-effective amendment thereof) which, individually or in the
        aggregate, represent a fundamental change in the information set forth
        in the Registration Statement; notwithstanding the foregoing, any
        increase or decrease in volume of securities offered (if the total
        dollar value of securities offered would not exceed that which was
        registered) and any deviation from the low or high end of the estimated
        maximum offering range may be reflected in the form of prospectus filed
        with the Commission pursuant to 424(b) if, in the aggregate, the changes
        in volume and price represent no more than 20 percent change in the
        maximum aggregate offering price set forth in the "Calculation of
        Registration Fee" table in the effective Registration Statement.
 
                                      II-1
<PAGE>   4
 
             (iii) to include any material information with respect to the plan
        of distribution not previously disclosed in the Registration Statement
        or any material change to such information in the Registration
        Statement;
 
     provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
     information required to be included in a post-effective amendment by those
     paragraphs is contained in periodic reports filed by the registrant
     pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
     1934 that are incorporated by reference in the Registration Statement.
 
          (2) That, for the purpose of determining any liability under the
     Securities Act of 1933, each such post-effective amendment shall be deemed
     to be a new registration statement relating to the securities offered
     therein, and the offering of such securities at that time shall be deemed
     to be the initial bona fide offering thereof.
 
          (3) To remove from registration by means of a post-effective amendment
     any of the securities being registered which remain unsold at the
     termination of the offering.
 
     The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the Security
Exchange Act of 1934) that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
 
     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 foregoing provisions, 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 of the registrant 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-2
<PAGE>   5
 
                                   SIGNATURES
 
   
     Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Cleveland and State of Ohio, as of the 5th day of
June, 1998.
    
 
                                            AMERICAN GREETINGS CORPORATION
 
                                            By: /s/ DALE A. CABLE
 
                                              ----------------------------------
                                              Dale A. Cable
                                              Vice President,
                                              Treasurer
 
     Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on May 20, 1998.
 
   
<TABLE>
<CAPTION>
                 SIGNATURE                                            TITLE
                 ---------                                            -----
<S>                                                <C>
 
/s/ IRVING I. STONE*                               Founder-Chairman; Chairman of the Executive
- --------------------------------------------       Committee; Director
Irving I. Stone
 
/s/ MORRY WEISS*                                   Chairman of the Board; Chief Executive
- --------------------------------------------       Officer; Director
Morry Weiss
 
/s/ EDWARD FRUCHTENBAUM*                           President; Chief Operating Officer; Director
- --------------------------------------------
Edward Fruchtenbaum
 
/s/ SCOTT S. COWEN*                                Director
- --------------------------------------------
Scott S. Cowen
 
/s/ HERBERT H. JACOBS*                             Director
- --------------------------------------------
Herbert H. Jacobs
 
/s/ ALBERT B. RATNER*                              Director
- --------------------------------------------
Albert B. Ratner
 
/s/ HARRY H. STONE*                                Director
- --------------------------------------------
Harry H. Stone
 
                                                   Director
- --------------------------------------------
Jeanette S. Wagner
 
/s/ MILTON A. WOLF*                                Director
- --------------------------------------------
Milton A. Wolf
 
/s/ WILLIAM S. MEYER                               Senior Vice President; Chief Financial
- --------------------------------------------       Officer (principal financial officer)
William S. Meyer
 
/s/ PATRICIA L. RIPPLE                             Vice President; Corporate Controller
- --------------------------------------------       (principal accounting officer)
Patricia L. Ripple
</TABLE>
    
 
* The undersigned, by signing his name hereto, does sign and execute this
  Registration Statement on behalf of each of the Officers and Directors of
  American Greetings Corporation indicated by an "*" above, pursuant to Powers
  of Attorney executed by each such Officer or Director and filed with the
  Securities and Exchange Commission as an exhibit to this Registration
  Statement.
 
/s/ JON GROETZINGER, JR.
- ------------------------------------
Jon Groetzinger, Jr., Esq.
Attorney-in-fact
 
   
June 5, 1998
    
 
                                      II-3
<PAGE>   6
 
                         AMERICAN GREETINGS CORPORATION
 
                                 EXHIBIT INDEX
 
   
<TABLE>
<CAPTION>
DOCUMENT
 NUMBER                          DOCUMENT NAME
- --------                         -------------
<C>       <S>
   1.1    Form of Underwriting Agreement
   4.1    Form of Trust Indenture by and between the Company and NBD
          Bank
   4.2    Form of Debt Securities (included in Exhibit 4.1)
   5.1    Opinion of Brouse & McDowell as to the validity of the Debt
          Securities
  12.1    Computation of Ratio of Earnings to Fixed Charges*
  23.1    Consent of Independent Auditors*
  23.2    Consent of Brouse & McDowell (included in Exhibit 5.1)
  24.1    Power of Attorney
  25.1    Form T-1 Statement of Eligibility and Qualification under
          the Trust Indenture Act of 1939 of NBD Bank*
</TABLE>
    
 
- ---------------
   
*Previously filed
    

<PAGE>   1
                                                                Exhibit 1.1

                         AMERICAN GREETINGS CORPORATION

                                 DEBT SECURITIES

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




                             UNDERWRITING AGREEMENT
                             ----------------------

                                                                _____ __, 1998




Goldman, Sachs & Co.,
[NAMES OF CO-REPRESENTATIVE(S),]
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.

Ladies and Gentlemen:

     From time to time American Greetings Corporation, an Ohio corporation (the
"Company"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, to issue and sell to the firms named in
Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain of its debt securities (the "Securities") specified
in Schedule II to such Pricing Agreement (with respect to such Pricing
Agreement, the "Designated Securities").

     The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto and in or
pursuant to the indenture (the "Indenture") identified in such Pricing
Agreement.

     1. Particular sales of Designated Securities may be made from time to time
to the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to an Underwriter or Underwriters who act without any firm
being designated as its or their representatives. This Underwriting Agreement
shall not be construed as an obligation of the Company to sell any of the
Securities or as an obligation of any of the Underwriters to purchase the
Securities. The obligation of the Company to issue and sell any of the
Securities and the obligation of any of the Underwriters to purchase any of the
Securities shall be evidenced by the Pricing Agreement with respect to the
Designated Securities specified therein. Each Pricing Agreement shall specify
the aggregate principal amount of such Designated Securities, the initial public
offering price of such Designated Securities, the purchase price to the
Underwriters of such Designated Securities, the names of the Underwriters of
such Designated Securities, the names of the Representatives of such
Underwriters and the principal amount of such Designated Securities to be
purchased by each Underwriter and shall set forth the date, time and manner of
delivery of such Designated Securities and payment therefor. The Pricing
Agreement shall also specify (to the extent not set forth in the Indenture and
the registration statement and prospectus with respect thereto) the terms of
such Designated Securities. A Pricing Agreement shall be in the form of an
executed writing (which may be in counterparts), and may be

                                        1



<PAGE>   2





evidenced by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of communications
transmitted. The obligations of the Underwriters under this Agreement and each
Pricing Agreement shall be several and not joint.

     2. The Company represents and warrants to, and agrees with, each of the
Underwriters that:

            (a) A registration statement on Form S-3 (File No. 333-....) (the
        "Initial Registration Statement") in respect of the Securities has been
        filed with the Securities and Exchange Commission (the "Commission");
        the Initial Registration Statement and any post-effective amendment
        thereto, each in the form heretofore delivered or to be delivered to the
        Representatives and, excluding exhibits to the Initial Registration
        Statement, but including all documents incorporated by reference in the
        prospectus contained therein, to the Representatives for each of the
        other Underwriters, have been declared effective by the Commission in
        such form; other than a registration statement, if any, increasing the
        size of the offering (a "Rule 462(b) Registration Statement"), filed
        pursuant to Rule 462(b) under the Securities Act of 1933, as amended
        (the "Act"), which became effective upon filing, no other document with
        respect to the Initial Registration Statement or document incorporated
        by reference therein has heretofore been filed or transmitted for filing
        with the Commission (other than prospectuses filed pursuant to Rule
        424(b) of the rules and regulations of the Commission under the Act,
        each in the form heretofore delivered to the Representatives); and no
        stop order suspending the effectiveness of the Initial Registration
        Statement, any post-effective amendment thereto or the Rule 462(b)
        Registration Statement, if any, has been issued and no proceeding for
        that purpose has been initiated or threatened by the Commission (any
        preliminary prospectus included in the Initial Registration Statement or
        filed with the Commission pursuant to Rule 424(a) under the Act, is
        hereinafter called a "Preliminary Prospectus"; the various parts of the
        Initial Registration Statement, any post-effective amendment thereto and
        the Rule 462(b) Registration Statement, if any, including all exhibits
        thereto and the documents incorporated by reference in the prospectus
        contained in the Initial Registration Statement at the time such part of
        the Initial Registration Statement became effective but excluding Form
        T-1, each as amended at the time such part of the Initial Registration
        Statement became effective or such part of the Rule 462(b) Registration
        Statement, if any, became or hereafter becomes effective, are
        hereinafter collectively called the "Registration Statement"; the
        prospectus relating to the Securities, in the form in which it has most
        recently been filed, or transmitted for filing, with the Commission on
        or prior to the date of this Agreement, being hereinafter called the
        "Prospectus"; any reference herein to any Preliminary Prospectus or the
        Prospectus shall be deemed to refer to and include the documents
        incorporated by reference therein pursuant to the applicable form under
        the Act, as of the date of such Preliminary Prospectus or Prospectus, as
        the case may be; any reference to any amendment or supplement to any
        Preliminary Prospectus or the Prospectus shall be deemed to refer to and
        include any documents filed after the date of such Preliminary
        Prospectus or Prospectus, as the case may be, under the Securities
        Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated
        by reference in such Preliminary Prospectus or Prospectus, as the case
        may be; any reference to any amendment to the Initial Registration
        Statement shall be deemed to refer to and include any annual report of
        the Company filed pursuant to Sections 13(a) or 15(d) of the Exchange
        Act after the effective date of the Initial Registration Statement that
        is incorporated by reference in the Registration Statement; and any
        reference to the Prospectus as amended or supplemented shall be deemed
        to refer to the Prospectus as amended or supplemented in relation to the
        applicable Designated

                                        2



<PAGE>   3





        Securities in the form in which it is filed with the Commission pursuant
        to Rule 424(b) under the Act in accordance with Section 5(a) hereof,
        including any documents incorporated by reference therein as of the date
        of such filing);

            (b) The documents incorporated by reference in the Prospectus, when
        they became effective or were filed with the Commission, as the case may
        be, conformed in all material respects to the requirements of the Act or
        the Exchange Act, as applicable, and the rules and regulations of the
        Commission thereunder, and none of such documents contained an untrue
        statement of a material fact or omitted to state a material fact
        required to be stated therein or necessary to make the statements
        therein not misleading; and any further documents so filed and
        incorporated by reference in the Prospectus or any further amendment or
        supplement thereto, when such documents become effective or are filed
        with the Commission, as the case may be, will conform in all material
        respects to the requirements of the Act or the Exchange Act, as
        applicable, and the rules and regulations of the Commission thereunder
        and will not contain an untrue statement of a material fact or omit to
        state a material fact required to be stated therein or necessary to make
        the statements therein not misleading; provided, however, that this
        representation and warranty shall not apply to any statements or
        omissions made in reliance upon and in conformity with information
        furnished in writing to the Company by an Underwriter of Designated
        Securities through the Representatives expressly for use in the
        Prospectus as amended or supplemented relating to such Securities;

            (c) The Registration Statement and the Prospectus conform, and any
        further amendments or supplements to the Registration Statement or the
        Prospectus will conform, in all material respects to the requirements of
        the Act and the Trust Indenture Act of 1939, as amended (the "Trust
        Indenture Act") and the rules and regulations of the Commission
        thereunder and do not and will not, as of the applicable effective date
        as to the Registration Statement and any amendment thereto and as of the
        applicable filing date as to the Prospectus and any amendment or
        supplement thereto, contain an untrue statement of a material fact or
        omit to state a material fact required to be stated therein or necessary
        to make the statements therein not misleading; provided, however, that
        this representation and warranty shall not apply to any statements or
        omissions made in reliance upon and in conformity with information
        furnished in writing to the Company by an Underwriter of Designated
        Securities through the Representatives expressly for use in the
        Prospectus as amended or supplemented relating to such Securities;

            (d) Neither the Company nor any of its subsidiaries has sustained
        since the date of the latest audited financial statements included or
        incorporated by reference in the Prospectus any material loss or
        interference with its business from fire, explosion, flood or other
        calamity, whether or not covered by insurance, or from any labor dispute
        or court or governmental action, order or decree, otherwise than as set
        forth or contemplated in the Prospectus; and, since the respective dates
        as of which information is given in the Registration Statement and the
        Prospectus, there has not been any change in the capital stock, short
        term or long-term debt of the Company or any of its subsidiaries or any
        material adverse change, or any development involving a prospective
        material adverse change, in or affecting the general affairs,
        management, financial position, shareholders' equity or results of
        operations of the Company and its subsidiaries, otherwise than as set
        forth or contemplated in the Prospectus;

            (e) The Company has been duly formed and is validly existing as a
        corporation in good standing under the laws of the State of Ohio; each
        of the Company's subsidiaries has been duly organized and is validly
        existing and in good standing under the laws of its

                                        3



<PAGE>   4





        jurisdiction of incorporation; and each of the Company and its
        subsidiaries has full power and authority (corporate and other) to own
        its properties and conduct its business as described in the Prospectus;

            (f) The Company has an authorized capitalization as set forth in the
        Prospectus, and all of the issued shares of capital stock of the Company
        have been duly and validly authorized and issued and are fully paid and
        non-assessable and all of the outstanding shares of capital stock of
        each subsidiary of the Company have been duly and validly authorized and
        issued, are fully paid and non-assessable and are owned beneficially by
        the Company subject to no security interest, other encumbrance or
        adverse claim;

            (g) The Securities have been duly authorized, and, when Designated
        Securities are issued and delivered pursuant to this Agreement and the
        Pricing Agreement with respect to such Designated Securities, such
        Designated Securities will have been duly executed, authenticated,
        issued and delivered and will constitute valid and legally binding
        obligations of the Company entitled to the benefits provided by the
        Indenture, which will be substantially in the form filed as an exhibit
        to the Registration Statement; the Indenture has been duly authorized
        and duly qualified under the Trust Indenture Act and, at the Time of
        Delivery for such Designated Securities (as defined in Section 4
        hereof), the Indenture will constitute a valid and legally binding
        instrument, enforceable in accordance with its terms, subject, as to
        enforcement, to bankruptcy, insolvency, reorganization and other laws of
        general applicability relating to or affecting creditors' rights and to
        general equity principles; and the Indenture conforms, and the
        Designated Securities will conform, to the descriptions thereof
        contained in the Prospectus as amended or supplemented with respect to
        such Designated Securities;

            (h) The issue and sale of the Securities and the compliance by the
        Company with all of the provisions of the Securities, the Indenture,
        this Agreement and any Pricing Agreement, and the consummation of the
        transactions herein and therein contemplated will not conflict with or
        result in a breach or violation of any of the terms or provisions of, or
        constitute a default under, any indenture, mortgage, deed of trust, loan
        agreement or other agreement or instrument to which the Company is a
        party or by which the Company is bound or to which any of the property
        or assets of the Company is subject, nor will such action result in any
        violation of the provisions of the Articles of Incorporation or
        Regulations of the Company or any statute or any order, rule or
        regulation of any court or governmental agency or body having
        jurisdiction over the Company or any of its properties; and no consent,
        approval, authorization, order, registration or qualification of or with
        any such court or governmental agency or body is required for the issue
        and sale of the Securities or the consummation by the Company of the
        transactions contemplated by this Agreement or any Pricing Agreement or
        the Indenture, except such as have been, or will have been prior to the
        Time of Delivery, obtained under the Act and the Trust Indenture Act and
        such consents, approvals, authorizations, registrations or
        qualifications as may be required under state securities or Blue Sky
        laws in connection with the purchase and distribution of the Securities
        by the Underwriters;

            (i) The statements set forth in the Prospects under the caption
        "Description of Debt Securities", insofar as it purports to constitute a
        summary of the terms of the Securities, and under the caption "Plan of
        Distribution", insofar as it purports to describe the provisions of the
        laws and documents referred to therein, are accurate, complete and fair;

            (j) Neither the Company nor any of its subsidiaries is in violation
        of its Articles of Incorporation, Certificate of Incorporation, By-laws
        or Regulations or in default in the

                                        4



<PAGE>   5





        performance or observance of any material obligation, agreement,
        covenant or condition contained in any indenture, mortgage, deed of
        trust, loan agreement, lease or other agreement or instrument to which
        it is a party or by which it or any of its properties may be bound;

            (k) Other than as set forth in the Prospectus, there are no legal or
        governmental proceedings pending to which the Company or any of its
        subsidiaries is a party or of which any property of the Company or any
        of its subsidiaries is the subject which, if determined adversely to the
        Company or any of its subsidiaries, would individually or in the
        aggregate have a material adverse effect on the current or future
        consolidated financial position, shareholders' equity or results of
        operations of the Company and its subsidiaries; and, to the best of the
        Company's knowledge, no such proceedings are threatened or contemplated
        by governmental authorities or threatened by others;

            (l) The Company is not and, after giving effect to the offering and
        sale of the Securities, will not be an "investment company" or an entity
        "controlled" by an "investment company", as such terms are defined in
        the Investment Company Act of 1940, as amended (the "Investment Company
        Act");

            (m) Neither the Company nor any of its affiliates does business with
        the government of Cuba or with any person or affiliate located in Cuba
        within the meaning of Section 517.075, Florida Statutes; and

            (n) Ernst & Young, who have certified certain financial statements
        of the Company and its subsidiaries, are independent public accountants
        as required by the Act and the rules and regulations of the Commission
        thereunder.

     3. Upon the execution of the Pricing Agreement applicable to any Designated
Securities and authorization by the Representatives of the release of such
Designated Securities, the several Underwriters propose to offer such Designated
Securities for sale upon the terms and conditions set forth in the Prospectus as
amended or supplemented.

     4. Designated Securities to be purchased by each Underwriter pursuant to
the Pricing Agreement relating thereto, in the form specified in such Pricing
Agreement, and in such authorized denominations and registered in such names as
the Representatives may request upon at least forty-eight hours' prior notice to
the Company, shall be delivered by or on behalf of the Company to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by wire transfer of
Federal (same-day) funds to the account specified by the Company to the
Representatives at least forty-eight hours in advance or at such other place and
time and date as the Representatives and the Company may agree upon in writing,
such time and date being herein called the "Time of Delivery" for such
Securities.

     5. The Company agrees with each of the Underwriters of any Designated
Securities:

            (a) To prepare the Prospectus as amended or supplemented in relation
        to the applicable Designated Securities in a form approved by the
        Representatives and to file such Prospectus pursuant to Rule 424(b)
        under the Act not later than the Commission's close of business on the
        second business day following the execution and delivery of the Pricing
        Agreement relating to the applicable Designated Securities or, if
        applicable, such earlier time as may be required by Rule 424(b); to make
        no further amendment or any supplement to the Registration Statement or
        Prospectus as amended or supplemented after the date of the Pricing
        Agreement relating to such Securities and prior to the Time of Delivery
        for such Securities which shall be disapproved by the Representatives
        for such Securities promptly after reasonable notice thereof; to advise
        the Representatives promptly of any

                                        5



<PAGE>   6





        such amendment or supplement after such Time of Delivery and furnish the
        Representatives with copies thereof; to file promptly all reports and
        any definitive proxy or information statements required to be filed by
        the Company with the Commission pursuant to Section 13(a), 13(c), 14 or
        15(d) of the Exchange Act for so long as the delivery of a prospectus is
        required in connection with the offering or sale of such Securities, and
        during such same period to advise the Representatives, promptly after it
        receives notice thereof, of the time when any amendment to the
        Registration Statement has been filed or becomes effective or any
        supplement to the Prospectus or any amended Prospectus has been filed
        with the Commission, of the issuance by the Commission of any stop order
        or of any order preventing or suspending the use of any prospectus
        relating to the Securities, of the suspension of the qualification of
        such Securities for offering or sale in any jurisdiction, of the
        initiation or threatening of any proceeding for any such purpose, or of
        any request by the Commission for the amending or supplementing of the
        Registration Statement or Prospectus or for additional information; and,
        in the event of the issuance of any such stop order or of any such order
        preventing or suspending the use of any prospectus relating to the
        Securities or suspending any such qualification, to promptly use its
        best efforts to obtain the withdrawal of such order;

            (b) Promptly from time to time to take such action as the
        Representatives may reasonably request to qualify such Securities for
        offering and sale under the securities laws of such jurisdictions as the
        Representatives may request and to comply with such laws so as to permit
        the continuance of sales and dealings therein in such jurisdictions for
        as long as may be necessary to complete the distribution of such
        Securities, provided that in connection therewith the Company shall not
        be required to qualify as a foreign corporation or to file a general
        consent to service of process in any jurisdiction;

            (c) Prior to 10:00 a.m., New York City time, on the New York
        Business Day next succeeding the date of this Agreement and from time to
        time, to furnish the Underwriters with copies of the Prospectus in New
        York City as amended or supplemented in such quantities as the
        Representatives may reasonably request, and, if the delivery of a
        prospectus is required at any time in connection with the offering or
        sale of the Securities and if at such time any event shall have occurred
        as a result of which the Prospectus as then amended or supplemented
        would include an untrue statement of a material fact or omit to state
        any material fact necessary in order to make the statements therein, in
        the light of the circumstances under which they were made when such
        Prospectus is delivered, not misleading, or, if for any other reason it
        shall be necessary during such same period to amend or supplement the
        Prospectus or to file under the Exchange Act any document incorporated
        by reference in the Prospectus in order to comply with the Act, the
        Exchange Act or the Trust Indenture Act, to notify the Representatives
        and upon their request to file such document and to prepare and furnish
        without charge to each Underwriter and to any dealer in securities as
        many copies as the Representatives may from time to time reasonably
        request of an amended Prospectus or a supplement to the Prospectus which
        will correct such statement or omission or effect such compliance;

            (d) To make generally available to its securityholders as soon as
        practicable, but in any event not later than eighteen months after the
        effective date of the Registration Statement (as defined in Rule 158(c)
        under the Act), an earnings statement of the Company and its
        subsidiaries (which need not be audited) complying with Section 11(a) of
        the Act and the rules and regulations of the Commission thereunder
        (including, at the option of the Company, Rule 158);

            (e) During the period beginning from the date of the Pricing
        Agreement for such

                                        6



<PAGE>   7





        Designated Securities and continuing to and including the later of (i)
        the termination of trading restrictions for such Designated Securities,
        as notified to the Company by the Representatives and (ii) the Time of
        Delivery for such Designated Securities, not to offer, sell, contract to
        sell or otherwise dispose of any debt securities of the Company which
        mature more than one year after such Time of Delivery and which are
        substantially similar to such Designated Securities, without the prior
        written consent of the Representatives; and

            (f) If the Company elects to rely upon Rule 462(b), the Company
        shall file a Rule 462(b) Registration Statement with the Commission in
        compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the
        date of this Agreement, and the Company shall at the time of filing
        either pay to the Commission the filing fee for the Rule 462(b)
        Registration Statement or give irrevocable instructions for the payment
        of such fee pursuant to Rule 111(b) under the Act.

     6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing any Agreement
among Underwriters, this Agreement, any Pricing Agreement, any Indenture, any
Blue Sky and Legal Investment Memoranda, closing documents (including any
compilations thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the Securities; (iii) all expenses in connection
with the qualification of the Securities for offering and sale under state
securities laws as provided in Section 5(b) hereof, including the fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky and Legal Investment Surveys;
(iv) any fees charged by securities rating services for rating the Securities;
(v) any filing fees incident to, and the fees and disbursements of counsel for
the Underwriters in connection with, any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
Securities; (vi) the cost of preparing the Securities; (vii) the fees and
expenses of any Trustee and any agent of any Trustee and the fees and
disbursements of counsel for any Trustee in connection with any Indenture and
the Securities; and (viii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, and Sections 8 and 11 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.

     7. The obligations of the Underwriters of any Designated Securities under
the Pricing Agreement relating to such Designated Securities shall be subject,
in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company in or
incorporated by reference in the Pricing Agreement relating to such Designated
Securities are, at and as of the Time of Delivery for such Designated
Securities, true and correct, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, and the
following additional conditions:

(a) The Prospectus as amended or supplemented in relation to the applicable
Designated Securities shall have been filed with the Commission pursuant to Rule
424(b) within the applicable time period prescribed for such filing by the rules
and regulations under the Act and in accordance with Section 5(a) hereof; if the
Company has elected to rely upon Rule 462(b), the Rule 462(b) Registration
Statement shall have become effective by 10:00 P.M., Washington, D.C. time, on
the

                                        7



<PAGE>   8





date of this Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; and all requests for additional information on the part of the
Commission shall have been complied with to the Representatives' reasonable
satisfaction;

        (b) Sullivan & Cromwell, counsel for the Underwriters, shall have
furnished to the Representatives such written opinion or opinions, dated the
Time of Delivery for such Designated Securities, with respect to the
incorporation of the Company, the validity of the Indenture, the Designated
Securities, the Registration Statement, the Prospectus as amended or
supplemented as well as such other related matters as the Representatives may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters (in rendering such opinion Sullivan & Cromwell may rely upon the opinion
of Jones, Day, Reavis & Pogue referred to below as to all matters governed by
Ohio law);

        (c) Brouse & McDowell, counsel for the Company satisfactory to the
Representatives shall have furnished to the Representatives their written
opinion (a draft of such opinion is attached as Annex II(b) hereto), dated the
Time of Delivery for such Designated Securities, in form and substance
satisfactory to the Representatives, to the effect that:

                  (i) The Company has been duly formed and is validly existing
              as a corporation in good standing under the laws of the State of
              Ohio, with power and authority (corporate and other) to own its
              properties and conduct its business as described in the Prospectus
              as amended or supplemented;

                  (ii) The Company has an authorized capitalization as set forth
              in the Prospectus as amended or supplemented and all of the issued
              shares of capital stock of the Company have been duly and validly
              authorized and issued and are fully paid and non-assessable;

                  (iii) To the best of such counsel's knowledge and other than
              as set forth in the Prospectus, there are no legal or governmental
              proceedings pending to which the Company or any of its
              subsidiaries is a party or of which any property of the Company or
              any of its subsidiaries is the subject which, if determined
              adversely to the Company or any of its subsidiaries, would
              individually or in the aggregate have a material adverse effect on
              the current or future consolidated financial position,
              shareholders' equity or results of operations of the Company and
              its subsidiaries; and, to the best of such counsel's knowledge, no
              such proceedings are threatened or contemplated by governmental
              authorities or threatened by others;

                  (iv) This Agreement and the Pricing Agreement with respect to
              the Designated Securities have been duly authorized, executed and
              delivered by the Company;

                  (v) The Designated Securities have been duly authorized,
              executed, authenticated, issued and delivered and constitute valid
              and legally binding obligations of the Company entitled to the
              benefits provided by the Indenture; and the Designated Securities
              and the Indenture conform to the descriptions thereof in the
              Prospectus as amended or supplemented;

                  (vi) The Indenture has been duly authorized, executed and
              delivered by the parties thereto and constitutes a valid and
              legally binding instrument, enforceable in accordance with its
              terms, subject, as to enforcement, to bankruptcy, insolvency,
              reorganization and other laws of general applicability relating to
              or affecting creditors' rights and to general equity principles;
              and the Indenture has been duly qualified under the Trust
              Indenture Act;

                                        8



<PAGE>   9





                  (vii) The issue and sale of the Designated Securities and the
              compliance by the Company with all of the provisions of the
              Designated Securities, the Indenture, this Agreement and the
              Pricing Agreement with respect to the Designated Securities and
              the consummation of the transactions herein and therein
              contemplated will not conflict with or result in a breach or
              violation of any of the terms or provisions of, or constitute a
              default under, any indenture, mortgage, deed of trust, loan
              agreement or other agreement or instrument known to such counsel
              to which the Company is a party or by which the Company is bound
              or to which any of the property or assets of the Company is
              subject, nor will such actions result in any violation of the
              provisions of the Articles of Incorporation or Regulations of the
              Company or any statute or any order, rule or regulation known to
              such counsel of any court or governmental agency or body having
              jurisdiction over the Company or any of its properties;

                  (viii) No consent, approval, authorization, order,
              registration or qualification of or with any such court or
              governmental agency or body is required for the issue and sale of
              the Designated Securities or the consummation by the Company of
              the transactions contemplated by this Agreement or such Pricing
              Agreement or the Indenture, except such as have been obtained
              under the Act and the Trust Indenture Act and such consents,
              approvals, authorizations, orders, registrations or qualifications
              as may be required under state securities or Blue Sky laws in
              connection with the purchase and distribution of the Designated
              Securities by the Underwriters;

                  (ix) The statements set forth in the Prospectus under the
              caption "Description of Securities" insofar as it purports to
              constitute a summary of the terms of the Securities[, UNDER THE
              CAPTION ["TAXATION"],] and under the caption "Plan of
              Distribution", insofar as it purports to describe the provisions
              of the laws and documents referred to therein, are accurate,
              complete and fair;

                  (x) The Company is not an "investment company" or an entity
              "controlled" by an "investment company", as such terms are defined
              in the Investment Company Act;

                  (xi) The documents incorporated by reference in the Prospectus
              as amended or supplemented (other than the financial statements
              and related schedules therein, as to which such counsel need
              express no opinion), when they became effective or were filed with
              the Commission, as the case may be, complied as to form in all
              material respects with the requirements of the Act or the Exchange
              Act, as applicable, and the rules and regulations of the
              Commission thereunder; and they have no reason to believe that any
              of such documents, when they became effective or were so filed, as
              the case may be, contained, in the case of a registration
              statement which became effective under the Act, an untrue
              statement of a material fact or omitted to state a material fact
              required to be stated therein or necessary to make the statements
              therein not misleading, or, in the case of other documents which
              were filed under the Act or the Exchange Act with the Commission,
              an untrue statement of a material fact or omitted to state a
              material fact necessary in order to make the statements therein,
              in the light of the circumstances under which they were made when
              such documents were so filed, not misleading; and

                  (xii) The Registration Statement and the Prospectus as amended
              or supplemented and any further amendments and supplements thereto
              made by the Company prior to the Time of Delivery for the
              Designated Securities (other than the financial statements and
              related schedules therein, as to which such counsel need

                                        9



<PAGE>   10





              express no opinion) comply as to form in all material respects
              with the requirements of the Act and the Trust Indenture Act and
              the rules and regulations thereunder; although they do not assume
              any responsibility for the accuracy, completeness or fairness of
              the statements contained in the Registration Statement or the
              Prospectus, except for those referred to in the opinion in
              subsection (ix) of this Section 7(c), they have no reason to
              believe that, as of its effective date, the Registration Statement
              or any further amendment thereto made by the Company prior to the
              Time of Delivery (other than the financial statements and related
              schedules therein, as to which such counsel need express no
              opinion) contained an untrue statement of a material fact or
              omitted to state a material fact required to be stated therein or
              necessary to make the statements therein not misleading or that,
              as of its date, the Prospectus as amended or supplemented or any
              further amendment or supplement thereto made by the Company prior
              to the Time of Delivery (other than the financial statements and
              related schedules therein, as to which such counsel need express
              no opinion) contained an untrue statement of a material fact or
              omitted to state a material fact necessary to make the statements
              therein, in the light of the circumstances under which they were
              made, not misleading or that, as of the Time of Delivery, either
              the Registration Statement or the Prospectus as amended or
              supplemented or any further amendment or supplement thereto made
              by the Company prior to the Time of Delivery (other than the
              financial statements and related schedules therein, as to which
              such counsel need express no opinion) contains an untrue statement
              of a material fact or omits to state a material fact necessary to
              make the statements therein, in the light of the circumstances
              under which they were made, not misleading; and they do not know
              of any amendment to the Registration Statement required to be
              filed or any contracts or other documents of a character required
              to be filed as an exhibit to the Registration Statement or
              required to be incorporated by reference into the Prospectus as
              amended or supplemented or required to be described in the
              Registration Statement or the Prospectus as amended or
              supplemented which are not filed or incorporated by reference or
              described as required;

              (d) You shall have received the opinion of Jon Groetzinger,
Jr.,Senior Vice President, General Counsel and Secretary of the Company, dated
the Time of Delivery for such Designated Securities, in form and substance
satisfactory to you, to the effect that the Company's subsidiaries have been
duly organized and are validly existing and in good standing under the laws of
their respective jurisdictions of incorporation; each of the Company and its
subsidiaries has full power and authority (corporate and other) to conduct its
business as described in the Prospectus as amended or supplemented; and each of
the Company and its subsidiaries is duly qualified to do business in each
jurisdiction in which it owns or leases real property, or in which the conduct
of its business requires such qualification; all of the outstanding shares of
capital stock of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and are owned
beneficially by the Company subject to no security interest, other encumbrance
or adverse claim; and neither the Company nor any of its subsidiaries is in
violation of its Regulations, By-laws, Articles of Incorporation or Certificate
of Incorporation or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to which it
is a party or by which it or any of its properties may be bound;

        (e) On the date of the Pricing Agreement for such Designated Securities
at a time prior to the execution of the Pricing Agreement with respect to such
Designated Securities and at the Time of Delivery for such Designated
Securities, the independent accountants of the Company who

                                       10



<PAGE>   11





have certified the financial statements of the Company and its subsidiaries
included or incorporated by reference in the Registration Statement shall have
furnished to the Representatives a letter, dated the effective date of the
Registration Statement or the date of the most recent report filed with the
Commission containing financial statements and incorporated by reference in the
Registration Statement, if the date of such report is later than such effective
date, and a letter dated such Time of Delivery, respectively, to the effect set
forth in Annex II hereto, and with respect to such letter dated such Time of
Delivery, as to such other matters as the Representatives may reasonably request
and in form and substance satisfactory to the Representatives (the executed copy
of the letter delivered prior to the execution of this Agreement is attached as
Annex I(a) hereto and a draft of the form of letter to be delivered on the
effective date of any post-effective amendment to the Registration Statement and
as of each Time of Delivery is attached as Annex I(b) hereto);

        (f) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus as amended prior to the date of the
Pricing Agreement relating to the Designated Securities any loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Prospectus
as amended prior to the date of the Pricing Agreement relating to the Designated
Securities, and (ii) since the respective dates as of which information is given
in the Prospectus as amended prior to the date of the Pricing Agreement relating
to the Designated Securities there shall not have been any change in the capital
stock, short term debt or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective change,
in or affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus as
amended prior to the date of the Pricing Agreement relating to the Designated
Securities, the effect of which, in any such case described in Clause (i) or
(ii), is in the judgment of the Representatives so material and adverse as to
make it impracticable or inadvisable to proceed with the public offering or the
delivery of the Designated Securities on the terms and in the manner
contemplated in the Prospectus as first amended or supplemented relating to the
Designated Securities;

        (g) On or after the date of the Pricing Agreement relating to the
Designated Securities (i) no downgrading shall have occurred in the rating
accorded the Company's debt securities or preferred stock by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
debt securities or preferred stock;

        (h) On or after the date of the Pricing Agreement relating to the
Designated Securities there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the New
York Stock Exchange or on NASDAQ; (ii) a suspension or material limitation in
trading in the Company's securities on NASDAQ; (iii) a general moratorium on
commercial banking activities declared by either Federal or New York State
authorities; or (iv) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national emergency or
war, if the effect of any such event specified in this Clause (iv) in the
judgment of the Representatives makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Designated Securities on the
terms and in the manner contemplated in the Prospectus as first amended or
supplemented relating to the Designated Securities;

        (i) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of prospectuses on the New York Business
Day next succeeding the date

                                       11



<PAGE>   12





of this Agreement; and

        (j) The Company shall have furnished or caused to be furnished to the
Representatives at the Time of Delivery for the Designated Securities a
certificate or certificates of officers of the Company satisfactory to the
Representatives as to the accuracy of the representations and warranties of the
Company herein at and as of such Time of Delivery, as to the performance by the
Company of all of its obligations hereunder to be performed at or prior to such
Time of Delivery, as to the matters set forth in subsections (a) and (e) of this
Section and as to such other matters as the Representatives may reasonably
request.

     8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the Securities, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
of Designated Securities through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Securities.

     (b) Each Underwriter will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Securities, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Company for
any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such expenses are
incurred.

     (c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under

                                       12



<PAGE>   13





such subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and, after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act, by or on behalf of any indemnified
party.

     (d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters of the Designated Securities
on the other from the offering of the Designated Securities to which such loss,
claim, damage or liability (or action in respect thereof) relates. If, however,
the allocation provided by the immediately preceding sentence is not permitted
by applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters of the Designated
Securities on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and such Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from such offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by such Underwriters.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or such Underwriters on the other and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Underwriter
shall be required to contribute any amount in

                                       13



<PAGE>   14





excess of the amount by which the total price at which the applicable Designated
Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Underwriters of Designated Securities
in this subsection (d) to contribute are several in proportion to their
respective underwriting obligations with respect to such Securities and not
joint.

     (e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.

     9. (a) If any Underwriter shall default in its obligation to purchase the
Designated Securities which it has agreed to purchase under the Pricing
Agreement relating to such Designated Securities, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Designated Securities on the terms contained herein. If within
thirty-six hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Designated Securities, then the Company
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to the Representatives to
purchase such Designated Securities on such terms. In the event that, within the
respective prescribed period, the Representatives notify the Company that they
have so arranged for the purchase of such Designated Securities, or the Company
notifies the Representatives that it has so arranged for the purchase of such
Designated Securities, the Representatives or the Company shall have the right
to postpone the Time of Delivery for such Designated Securities for a period of
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus as amended or
supplemented, or in any other documents or arrangements, and the Company agrees
to file promptly any amendments or supplements to the Registration Statement or
the Prospectus which in the opinion of the Representatives may thereby be made
necessary. The term "Underwriter" as used in this Agreement shall include any
person substituted under this Section with like effect as if such person had
originally been a party to the Pricing Agreement with respect to such Designated
Securities.

     (b) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
the Designated Securities, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the principal amount of Designated
Securities which such Underwriter agreed to purchase under the Pricing Agreement
relating to such Designated Securities and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the
principal amount of Designated Securities which such Underwriter agreed to
purchase under such Pricing Agreement) of the Designated Securities of such
defaulting Underwriter or Underwriters for which such arrangements have not been
made; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.

     (c) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company

                                       14



<PAGE>   15





as provided in subsection (a) above, the aggregate principal amount of
Designated Securities which remains unpurchased exceeds one-eleventh of the
aggregate principal amount of the Designated Securities, as referred to in
subsection (b) above, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Underwriters to purchase
Designated Securities of a defaulting Underwriter or Underwriters, then the
Pricing Agreement relating to such Designated Securities shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter or
the Company, except for the expenses to be borne by the Company and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.

     10. The respective indemnities, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Securities.

     11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
with respect to the Designated Securities covered by such Pricing Agreement
except as provided in Sections 6 and 8 hereof; but, if for any other reason
Designated Securities are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Underwriters through the
Representatives for all out-of-pocket expenses approved in writing by the
Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Securities, but the Company shall then be under no
further liability to any Underwriter with respect to such Designated Securities
except as provided in Sections 6 and 8 hereof.

     12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Securities shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.

     All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement: Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.

     13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Company and, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the Company
and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Securities
from any Underwriter shall be deemed a successor or assign by reason merely of
such purchase.

                                       15



<PAGE>   16





     14. Time shall be of the essence of each Pricing Agreement. As used herein,
"business day" shall mean any day when the Commission's office in Washington,
D.C. is open for business.

     15. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

     16. This Agreement and each Pricing Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.



                                         Very truly yours,


                                       American Greetings Corporation


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

Accepted as of the date hereof:


Goldman, Sachs & Co.
[NAME(S) OF CO-REPRESENTATIVE(S)]



BY:..............................................
              (Goldman, Sachs & Co.)




                                       16



<PAGE>   17





                                                                         ANNEX I


                                PRICING AGREEMENT



Goldman, Sachs & Co.,
[NAMES OF CO-REPRESENTATIVE(S)],
   As Representatives of the several
     Underwriters named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.


                                                          _____________, 19..


Ladies and Gentlemen:

     American Greetings Corporation, an Ohio corporation (the "Company"),
proposes, subject to the terms and conditions stated herein and in the
Underwriting Agreement, dated May __, 1998 (the "Underwriting Agreement"),
between the Company on the one hand and Goldman, Sachs & Co. [AND (NAMES OF
CO-REPRESENTATIVES NAMED THEREIN)] on the other hand, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") the Securities
specified in Schedule II hereto (the "Designated Securities"). Each of the
provisions of the Underwriting Agreement is incorporated herein by reference in
its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Securities which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated to
act on behalf of the Representatives and on behalf of each of the Underwriters
of the Designated Securities pursuant to Section 12 of the Underwriting
Agreement and the address of the Representatives referred to in such Section 12
are set forth at the end of Schedule II hereto.

     An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.

     Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the time and place
and at the purchase price to the Underwriters set forth in Schedule II hereto,
the principal amount of Designated Securities set forth opposite the name of
such Underwriter in Schedule I hereto.

     If the foregoing is in accordance with your understanding, please sign and
return to us [ONE FOR THE COMPANY AND EACH OF THE REPRESENTATIVES PLUS ONE FOR
EACH COUNSEL] counterparts

                                        1








<PAGE>   18




hereof, and upon acceptance hereof by you, on behalf of each of the
Underwriters, this letter and such acceptance hereof, including the provisions
of the Underwriting Agreement incorporated herein by reference, shall constitute
a binding agreement between each of the Underwriters and the Company. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is or will be pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Company for examination upon request, but without warranty on the part of the
Representatives as to the authority of the signers thereof.


                                               Very truly yours,


                                               American Greetings Corporation


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


Accepted as of the date hereof:


Goldman, Sachs & Co.
[NAME(S) OF CO-REPRESENTATIVE(S)]


By:..................................................
             (Goldman, Sachs & Co.)


        On behalf of each of the Underwriters

                                        2




<PAGE>   19





                                         SCHEDULE I
<TABLE>
<CAPTION>

                                                                                PRINCIPAL
                                                                                AMOUNT OF
                                                                                DESIGNATED
                                                                                SECURITIES
                                                                                 TO BE
                                  UNDERWRITER                                   Purchased
                                  -----------                                   ---------
<S>                                                                         <C>
Goldman, Sachs & Co.                                                        $

[NAME(S) OF CO-REPRESENTATIVE(S)]

[NAMES OF OTHER UNDERWRITERS]

               Total                                                         $

</TABLE>

                                        3




<PAGE>   20




                                           SCHEDULE II


TITLE OF DESIGNATED SECURITIES:

      [  %] [Notes] due                 ,

AGGREGATE PRINCIPAL AMOUNT:
      [$]

PRICE TO PUBLIC:

          % of the principal amount of the Designated Securities, plus accrued 
          interest[, if any,] from       to       [and accrued amortization
          [, if any,] from              to           ]


PURCHASE PRICE BY UNDERWRITERS:

              % of the principal amount of the Designated Securities, plus 
              accrued interest from

              to      [and accrued amortization[, if any,] from      to       ]


FORM OF DESIGNATED SECURITIES:

      [Definitive form to be made available for checking and packaging at least
      twenty-four hours prior to the Time of Delivery at the office of [The
      Depository Trust Company or its designated custodian] [the
      Representatives]]

      [Book-entry only form represented by one or more global securities
      deposited with The Depository Trust Company ("DTC") or its designated
      custodian, to be made available for checking by the Representatives at
      least twenty-four hours prior to the Time of Delivery at the office of
      DTC.]


SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:

      Federal (same day) funds

TIME OF DELIVERY:

        a.m. (New York City time),                      , 1998

INDENTURE:

      Indenture dated May __, 1998, between the Company and        , as Trustee

MATURITY:

INTEREST RATE:

      [   %]

INTEREST PAYMENT DATES:

      [months and dates, commencing ....................., 19..]

REDEMPTION PROVISIONS:

      [No provisions for redemption]

      [The Designated Securities may be redeemed, otherwise than through the
      sinking fund, in whole or in part at the option of the Company, in the
      amount of [$ ] or an integral multiple thereof,

                                               4




<PAGE>   21




      [on or after       ,     at the following redemption prices (expressed in
      percentages of principal amount).  If [redeemed on or before      ,    %,
      and if] redeemed during the 12-month period  beginning               ,




                                         REDEMPTION
            YEAR                            PRICE
            ----                            -----




      and thereafter at 100% of their principal amount, together in each case 
      with accrued interest to the redemption date.]

      [on any interest payment date falling on or after , , at the election of
      the Company, at a redemption price equal to the principal amount thereof,
      plus accrued interest to the date of redemption.]]

      [Other possible redemption provisions, such as mandatory redemption upon
      occurrence of certain events or redemption for changes in tax law]

      [Restriction on refunding]

SINKING FUND PROVISIONS:

      No sinking fund provisions

DEFEASANCE PROVISIONS:



CLOSING LOCATION FOR DELIVERY OF DESIGNATED SECURITIES:



ADDITIONAL CLOSING CONDITIONS:





NAMES AND ADDRESSES OF REPRESENTATIVES:

    Designated Representatives:

    Address for Notices, etc.:


[OTHER TERMS]:


                                        5




<PAGE>   22






                                                                        ANNEX II

     Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:

            (i) They are independent certified public accountants with respect
        to the Company and its subsidiaries within the meaning of the Act and
        the applicable published rules and regulations thereunder;

            (ii) In their opinion, the financial statements and any
        supplementary financial information and schedules audited (and, if
        applicable, financial forecasts and/or pro forma financial information)
        examined by them and included or incorporated by reference in the
        Registration Statement or the Prospectus comply as to form in all
        material respects with the applicable accounting requirements of the Act
        or the Exchange Act, as applicable, and the related published rules and
        regulations thereunder; and, if applicable, they have made a review in
        accordance with standards established by the American Institute of
        Certified Public Accountants of the consolidated interim financial
        statements, selected financial data, pro forma financial information,
        financial forecasts and/or condensed financial statements derived from
        audited financial statements of the Company for the periods specified in
        such letter, as indicated in their reports thereon, copies of which have
        been separately furnished to the representative or representatives of
        the Underwriters (the "Representatives") such term to include an
        Underwriter or Underwriters who act without any firm being designated as
        its or their representatives and are attached hereto;

            (iii) They have made a review in accordance with standards
        established by the American Institute of Certified Public Accountants of
        the unaudited condensed consolidated statements of income, consolidated
        balance sheets and consolidated statements of cash flows included in the
        Prospectus and/or included in the Company's quarterly report on Form
        10-Q incorporated by reference into the Prospectus as indicated in their
        reports thereon copies of which have been separately furnished to the
        Representatives; and on the basis of specified procedures including
        inquiries of officials of the Company who have responsibility for
        financial and accounting matters regarding whether the unaudited
        condensed consolidated financial statements referred to in paragraph
        (vi)(A)(i) below comply as to form in all material respects with the
        applicable accounting requirements of the Act and the Exchange Act and
        the related published rules and regulations, nothing came to their
        attention that caused them to believe that the unaudited condensed
        consolidated financial statements do not comply as to form in all
        material respects with the applicable accounting requirements of the Act
        and the Exchange Act and the related published rules and regulations;

            (iv) The unaudited selected financial information with respect to
        the consolidated results of operations and financial position of the
        Company for the five most recent fiscal years included in the Prospectus
        and included or incorporated by reference in Item 6 of the Company's
        Annual Report on Form 10-K for the most recent fiscal year agrees with
        the corresponding amounts (after restatement where applicable) in the
        audited consolidated financial statements for five such fiscal years
        which were included or incorporated by reference in the Company's Annual
        Reports on Form 10-K for such fiscal years;

            (v) They have compared the information in the Prospectus under
        selected captions with the disclosure requirements of Regulation S-K and
        on the basis of limited procedures specified in such letter nothing came
        to their attention as a result of the foregoing procedures that caused
        them to believe that this information does not conform in all

                                        1






<PAGE>   23




        material respects with the disclosure requirements of Items 301,
        302, 402 and 503(d), respectively, of Regulation S-K;

            (vi) On the basis of limited procedures, not constituting an
        examination in accordance with generally accepted auditing standards,
        consisting of a reading of the unaudited financial statements and other
        information referred to below, a reading of the latest available interim
        financial statements of the Company and its subsidiaries, inspection of
        the minute books of the Company and its subsidiaries since the date of
        the latest audited financial statements included or incorporated by
        reference in the Prospectus, inquiries of officials of the Company and
        its subsidiaries responsible for financial and accounting matters and
        such other inquiries and procedures as may be specified in such letter,
        nothing came to their attention that caused them to believe that:

                  (A) (i) the unaudited condensed consolidated statements of
              income, consolidated balance sheets and consolidated statements of
              cash flows included in the Prospectus and/or included or
              incorporated by reference in the Company's Quarterly Reports on
              Form 10-Q incorporated by reference in the Prospectus do not
              comply as to form in all material respects with the applicable
              accounting requirements of the Exchange Act and the related
              published rules and regulations, or (ii) any material
              modifications should be made to the unaudited condensed
              consolidated statements of income, consolidated balance sheets and
              consolidated statements of cash flows included in the Prospectus
              or included in the Company's Quarterly Reports on Form 10-Q
              incorporated by reference in the Prospectus for them to be in
              conformity with generally accepted accounting principles;

                  (B) any other unaudited income statement data and balance
              sheet items included in the Prospectus do not agree with the
              corresponding items in the unaudited consolidated financial
              statements from which such data and items were derived, and any
              such unaudited data and items were not determined on a basis
              substantially consistent with the basis for the corresponding
              amounts in the audited consolidated financial statements included
              or incorporated by reference in the Company's Annual Report on
              Form 10-K for the most recent fiscal year;

                  (C) the unaudited financial statements which were not included
              in the Prospectus but from which were derived the unaudited
              condensed financial statements referred to in clause (A) and any
              unaudited income statement data and balance sheet items included
              in the Prospectus and referred to in Clause (B) were not
              determined on a basis substantially consistent with the basis for
              the audited financial statements included or incorporated by
              reference in the Company's Annual Report on Form 10-K for the most
              recent fiscal year;

                  (D) any unaudited pro forma consolidated condensed financial
              statements included or incorporated by reference in the Prospectus
              do not comply as to form in all material respects with the
              applicable accounting requirements of the Act and the published
              rules and regulations thereunder or the pro forma adjustments have
              not been properly applied to the historical amounts in the
              compilation of those statements;

                  (E) as of a specified date not more than five days prior to
              the date of such letter, there have been any changes in the
              consolidated capital stock (other than issuances of capital stock
              upon exercise of options and stock appreciation rights, upon
              earn-outs of performance shares and upon conversions of
              convertible securities, in each case which were outstanding on the
              date of the latest balance

                                        2




<PAGE>   24




              sheet included or incorporated by reference in the Prospectus) or
              any increase in the consolidated long-term debt of the Company and
              its subsidiaries, or any decreases in consolidated net current
              assets or stockholders' equity or other items specified by the
              Representatives, or any increases in any items specified by the
              Representatives, in each case as compared with amounts shown in
              the latest balance sheet included or incorporated by reference in
              the Prospectus, except in each case for changes, increases or
              decreases which the Prospectus discloses have occurred or may
              occur or which are described in such letter; and

                  (F) for the period from the date of the latest financial
              statements included or incorporated by reference in the Prospectus
              to the specified date referred to in Clause (E) there were any
              decreases in consolidated net revenues or operating profit or the
              total or per share amounts of consolidated net income or other
              items specified by the Representatives, or any increases in any
              items specified by the Representatives, in each case as compared
              with the comparable period of the preceding year and with any
              other period of corresponding length specified by the
              Representatives, except in each case for increases or decreases
              which the Prospectus discloses have occurred or may occur or which
              are described in such letter; and

            (vii) In addition to the audit referred to in their report(s)
        included or incorporated by reference in the Prospectus and the limited
        procedures, inspection of minute books, inquiries and other procedures
        referred to in paragraphs (iii) and (vi) above, they have carried out
        certain specified procedures, not constituting an audit in accordance
        with generally accepted auditing standards, with respect to certain
        amounts, percentages and financial information specified by the
        Representatives which are derived from the general accounting records of
        the Company and its subsidiaries, which appear in the Prospectus
        (excluding documents incorporated by reference), or in Part II of, or in
        exhibits and schedules to, the Registration Statement specified by the
        Representatives or in documents incorporated by reference in the
        Prospectus specified by the Representatives, and have compared certain
        of such amounts, percentages and financial information with the
        accounting records of the Company and its subsidiaries and have found
        them to be in agreement.

     All references in this Annex II to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement for purposes of such letter and to the
Prospectus as amended or supplemented (including the documents incorporated by
reference therein) in relation to the applicable Designated Securities for
purposes of the letter delivered at the Time of Delivery for such Designated
Securities.








<PAGE>   1
                                                              Exhibit 4.1

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


















                         AMERICAN GREETINGS CORPORATION

                                       TO

                                    NBD BANK
                                           Trustee



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


                                    INDENTURE

                          Dated as of _____ ____, 1998




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






- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<PAGE>   2

               ..............................................................

         CERTAIN SECTIONS OF THIS INDENTURE RELATING TO SECTIONS 310    
         THROUGH 318, INCLUSIVE, OF THE TRUST INDENTURE ACT OF 1939:

<TABLE>
<CAPTION>
TRUST INDENTURE
  ACT SECTION                                                          INDENTURE SECTION

<S>                                                                    <C>
Section 310(a)(1)   .....................................................  609
     (a)(2)         .....................................................  609
     (a)(3)         .....................................................  Not Applicable
     (a)(4)         .....................................................  Not Applicable
     (b)            .....................................................  608
                                                                           610
Section 311(a)      .....................................................  613
     (b)            .....................................................  613
Section 312(a)      .....................................................  701
                                                                           702
     (b)            .....................................................  702
     (c)            .....................................................  702
Section 313(a)      .....................................................  703
     (b)            .....................................................  703
     (c)            .....................................................  703
     (d)            .....................................................  703
Section 314(a)      .....................................................  704
     (a)(4)         .....................................................  101
                                                                          1004
     (b)            .....................................................  Not Applicable
     (c)(1)         .....................................................  102
     (c)(2)         .....................................................  102
     (c)(3)         .....................................................  Not Applicable
     (d)            .....................................................  Not Applicable
     (e)            .....................................................  102
Section 315(a)      .....................................................  601
     (b)            .....................................................  602
     (c)            .....................................................  601
     (d)            .....................................................  601
     (e)            .....................................................  514
Section 316(a)      .....................................................  101
     (a)(1)(A)      .....................................................  502
                                                                           512
     (a)(1)(B)      .....................................................  513
     (a)(2)         .....................................................  Not Applicable
     (b)            .....................................................  508
     (c)            .....................................................  104
Section 317(a)(1)   .....................................................  503
     (a)(2)         .....................................................  504
     (b)            .....................................................  1003
Section 318(a)      .....................................................  107
- -------------------
</TABLE>

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




<PAGE>   3

<TABLE>
<CAPTION>
                                          TABLE OF CONTENTS
                                          -----------------

                                                                                                 PAGE
                                                                                                 ----

<S>                                                                                               <C>
PARTIES........................................................................................   1
RECITALS OF THE COMPANY........................................................................   1


                                             ARTICLE ONE

                       DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 101.        Definitions:
                    Act........................................................................   2
                    Affiliate; control.........................................................   2
                    Authenticating Agent.......................................................   2
                    Board of Directors.........................................................   2
                    Board Resolution...........................................................   2
                    Business Day...............................................................   2
                    Commission.................................................................   2
                    Company....................................................................   2
                    Company Request; Company Order.............................................   2
                    Consolidated Net Tangible Assets..........................................    3
                    Corporate Trust Office.....................................................   3
                    corporation................................................................   3
                    Covenant Defeasance........................................................   3
                    Defaulted Interest.........................................................   3
                    Defeasance.................................................................   3
                    Depositary.................................................................   3
                    Event of Default...........................................................   3
                    Exchange Act...............................................................   3
                    Expiration Date............................................................   3
                    Funded Debt...............................................................    3
                    Global Security............................................................   4
                    Holder.....................................................................   4
                    Indebtedness.............................................................     4
                    Indenture..................................................................   4
                    interest...................................................................   4
                    Interest Payment Date......................................................   4
                    Investment Company Act.....................................................   5
                    Investments................................................................   5
                    Maturity...................................................................   5
</TABLE>

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

      NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.




<PAGE>   4


<TABLE>
<CAPTION>
                                                                                                 PAGE
                                                                                                 ----

<S>                                                                                               <C>
                    Mortgage..................................................................    5
                    Notice of Default..........................................................   5
                    Officers' Certificate......................................................   5
                    Opinion of Counsel.........................................................   5
                    Original Issue Discount Security...........................................   5
                    Outstanding................................................................   5
                    Paying Agent...............................................................   6
                    Person.....................................................................   6
                    Place of Payment...........................................................   7
                    Predecessor Security.......................................................   7
                    Redemption Date............................................................   7
                    Redemption Price...........................................................   7
                    Regular Record Date........................................................   7
                    Repayment Date.............................................................   7
                    Repayment Price............................................................   7
                    Restricted Subsidiary....................................................     7
                    Sale and Leaseback Transaction............................................    7
                    Secured Debt..............................................................    7
                    Securities.................................................................   7
                    Securities Act.............................................................   7
                    Security Register and Security Registrar...................................   7
                    Special Record Date........................................................   8
                    Stated Maturity............................................................   8
                    Subsidiary.................................................................   8
                    Trust Indenture Act........................................................   8
                    Trustee....................................................................   8
                    U.S. Government Obligation.................................................   8
                    Unrestricted Subsidiary...................................................    8
                    Vice President.............................................................   9
                    Wholly-owned Restricted Subsidiary........................................    9
SECTION 102.        Compliance Certificates and Opinions.......................................   9
SECTION 103.        Form of Documents Delivered to Trustee.....................................   9
SECTION 104.        Acts of Holders; Record Dates..............................................  10
SECTION 105.        Notices, Etc., to Trustee and Company......................................  12
SECTION 106.        Notice to Holders; Waiver..................................................  12
SECTION 107.        Conflict with Trust Indenture Act..........................................  13
SECTION 108.        Effect of Headings and Table of Contents...................................  13
SECTION 109.        Successors and Assigns.....................................................  13
SECTION 110.        Separability Clause........................................................  13
SECTION 111.        Benefits of Indenture......................................................  14
SECTION 112.        Governing Law..............................................................  14
SECTION 113.        Legal Holidays.............................................................  14
</TABLE>


                                      -ii-


<PAGE>   5

<TABLE>
<CAPTION>
                                                                                                PAGE
                                                                                                ----

                                             ARTICLE TWO

                                           SECURITY FORMS

<S>                                                                                              <C>
SECTION 201.        Forms Generally............................................................  14
SECTION 202.        Form of Face of Security...................................................  15
SECTION 203.        Form of Reverse of Security................................................  17
SECTION 204.        Form of Legend for Global Securities.......................................  21
SECTION 205.        Form of Trustee's Certificate of Authentication............................  21


                                            ARTICLE THREE

                                           THE SECURITIES

SECTION 301.        Amount Unlimited; Issuable in Series.......................................  21
SECTION 302.        Denominations..............................................................  24
SECTION 303.        Execution, Authentication, Delivery and Dating.............................  24
SECTION 304.        Temporary Securities.......................................................  26
SECTION 305.        Registration, Registration of Transfer and Exchange........................  26
SECTION 306.        Mutilated, Destroyed, Lost and Stolen Securities...........................  28
SECTION 307.        Payment of Interest; Interest Rights Preserved.............................  29
SECTION 308.        Persons Deemed Owners......................................................  30
SECTION 309.        Cancellation...............................................................  30
SECTION 310.        Computation of Interest....................................................  30


                                            ARTICLE FOUR

                                     SATISFACTION AND DISCHARGE

SECTION 401.        Satisfaction and Discharge of Indenture....................................  31
SECTION 402.        Application of Trust Money.................................................  32


                                            ARTICLE FIVE

                                              REMEDIES

SECTION 501.        Events of Default..........................................................  32
SECTION 502.        Acceleration of Maturity; Rescission and Annulment.........................  34
</TABLE>


                                      -iii-


<PAGE>   6

<TABLE>
<CAPTION>
                                                                                                 PAGE
                                                                                                 ----

<S>                                                                                              <C>
SECTION 503.        Collection of Indebtedness and Suits for
                        Enforcement by Trustee.................................................  35
SECTION 504.        Trustee May File Proofs of Claim...........................................  35
SECTION 505.        Trustee May Enforce Claims Without Possession
                        of Securities..........................................................  36
SECTION 506.        Application of Money Collected.............................................  36
SECTION 507.        Limitation on Suits........................................................  36
SECTION 508.        Unconditional Right of Holders to Receive Principal,
                        Premium and Interest...................................................  37
SECTION 509.        Restoration of Rights and Remedies.........................................  37
SECTION 510.        Rights and Remedies Cumulative.............................................  38
SECTION 511.        Delay or Omission Not Waiver...............................................  38
SECTION 512.        Control by Holders.........................................................  38
SECTION 513.        Waiver of Past Defaults....................................................  38
SECTION 514.        Undertaking for Costs......................................................  39
SECTION 515.        Waiver of Usury, Stay or Extension Laws....................................  39


                                             ARTICLE SIX

                                             THE TRUSTEE

SECTION 601.        Certain Duties and Responsibilities........................................  39
SECTION 602.        Notice of Defaults.........................................................  40
SECTION 603.        Certain Rights of Trustee..................................................  40
SECTION 604.        Not Responsible for Recitals or Issuance of Securities.....................  41
SECTION 605.        May Hold Securities........................................................  41
SECTION 606.        Money Held in Trust........................................................  41
SECTION 607.        Compensation and Reimbursement.............................................  41
SECTION 608.        Conflicting Interests......................................................  42
SECTION 609.        Corporate Trustee Required; Eligibility....................................  42
SECTION 610.        Resignation and Removal; Appointment of Successor..........................  43
SECTION 611.        Acceptance of Appointment by Successor.....................................  44
SECTION 612.        Merger, Conversion, Consolidation or Succession
                        to Business............................................................  45
SECTION 613.        Preferential Collection of Claims Against Company..........................  45
SECTION 614.        Appointment of Authenticating Agent........................................  46
</TABLE>




                                           -iv-


<PAGE>   7

<TABLE>
<CAPTION>

                                                                                              PAGE
                                                                                              ----

                                            ARTICLE SEVEN

                          HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

<S>                                                                                           <C>
SECTION 701.        Company to Furnish Trustee Names and Addresses
                        of Holders.............................................................  47
SECTION 702.        Preservation of Information; Communications
                        to Holders.............................................................  48
SECTION 703.        Reports by Trustee.........................................................  48
SECTION 704.        Reports by Company.........................................................  48


                                            ARTICLE EIGHT

                        CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 801.        Company May Consolidate, Etc., Only on
                        Certain Terms..........................................................  49
SECTION 802.        Successor Substituted......................................................  50


                                            ARTICLE NINE

                                       SUPPLEMENTAL INDENTURES

SECTION 901.        Supplemental Indentures Without Consent of Holders.........................  50
SECTION 902.        Supplemental Indentures with Consent of Holders............................  51
SECTION 903.        Execution of Supplemental Indentures.......................................  52
SECTION 904.        Effect of Supplemental Indentures..........................................  52
SECTION 905.        Conformity with Trust Indenture Act........................................  53
SECTION 906.        Reference in Securities to Supplemental Indentures.........................  53


                                             ARTICLE TEN

                                              COVENANTS

SECTION 1001.       Payment of Principal, Premium and Interest.................................  53
SECTION 1002.       Maintenance of Office or Agency............................................  53
SECTION 1003.       Money for Securities Payments to Be Held in Trust..........................  54
SECTION 1004.       Statement by Officers as to Default; Notice of Certain Events..............  55
SECTION 1005.       Existence..................................................................  55
</TABLE>


                                       -v-


<PAGE>   8
<TABLE>
<CAPTION>
                                                                                               PAGE
                                                                                               ----

<S>                                                                                              <C>
SECTION 1006.       Maintenance of Properties..................................................  55
SECTION 1007.       Payment of Taxes and Other Claims..........................................  56
SECTION 1008.       Limitation on Secured Debt.................................................  56
SECTION 1009.       Limitation on Sales and Leasebacks.........................................  57
SECTION 1010.       Limitation on Unsecured Funded Debt of Restricted
                        Subsidiaries...........................................................  58
SECTION 1011.       Waiver of Certain Covenants................................................  59

                                           ARTICLE ELEVEN

                                      REDEMPTION OF SECURITIES

SECTION 1101.       Applicability of Article...................................................  59
SECTION 1102.       Election to Redeem; Notice to Trustee......................................  59
SECTION 1103.       Selection by Trustee of Securities to Be Redeemed..........................  60
SECTION 1104.       Notice of Redemption.......................................................  60
SECTION 1105.       Deposit of Redemption Price................................................  61
SECTION 1106.       Securities Payable on Redemption Date......................................  61
SECTION 1107.       Securities Redeemed in Part................................................  62

                                           ARTICLE TWELVE

                                            SINKING FUNDS

SECTION 1201.       Applicability of Article...................................................  62
SECTION 1202.       Satisfaction of Sinking Fund Payments with Securities......................  62
SECTION 1203.       Redemption of Securities for Sinking Fund..................................  63

                                          ARTICLE THIRTEEN

                                 DEFEASANCE AND COVENANT DEFEASANCE

SECTION 1301.       Company's Option to Effect Defeasance or Covenant
                         Defeasance............................................................  63
SECTION 1302.       Defeasance and Discharge...................................................  64
SECTION 1303.       Covenant Defeasance........................................................  64
SECTION 1304.       Conditions to Defeasance or Covenant Defeasance............................  65
SECTION 1305.       Deposited Money and U.S. Government Obligations to Be
                         Held in Trust; Miscellaneous Provisions...............................  66
SECTION 1306.       Reinstatement..............................................................  67
</TABLE>



                                      -vi-


<PAGE>   9

<TABLE>
<CAPTION>
                                                                                         PAGE


                                          ARTICLE FOURTEEN

                            REPAYMENT OF SECURITIES AT OPTION OF HOLDERS
<S>                                                                                              <C>
SECTION 1401.       Applicability of Article...................................................  67
SECTION 1402.       Notice of Repayment Date...................................................  68
SECTION 1403.       Deposit of Repayment Price.................................................  68
SECTION 1404.       Securities Payable on Repayment Date.......................................  68
SECTION 1405.       Securities Repaid in Part..................................................  69


TESTIMONIUM....................................................................................  70
SIGNATURES AND SEALS...........................................................................  70
ACKNOWLEDGMENTS................................................................................  71
</TABLE>




                                      -vii-

<PAGE>   10



       INDENTURE, dated as of May ____, 1998, between American Greetings
Corporation, a corporation duly organized and existing under the laws of the
State of Ohio (herein called the "Company"), having its principal office at One
American Road, Cleveland, Ohio, 44144, and NBD Bank, a corporation duly
organized and existing under the laws of Michigan, as Trustee (herein called the
"Trustee").


                             RECITALS OF THE COMPANY

       The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided.

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

       NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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


                                   ARTICLE ONE

                        DEFINITIONS AND OTHER PROVISIONS
                             OF GENERAL APPLICATION


SECTION 101.  Definitions.

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

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

          (2) all other terms used herein which are defined in the Trust
    Indenture Act, either directly or by reference therein, have the meanings
    assigned to them therein;

          (3) all accounting terms not otherwise defined herein have the
    meanings assigned to them in accordance with generally accepted accounting
    principles, and, except as otherwise herein expressly provided, the term
    "generally accepted accounting principles" with respect to any computation
    required or permitted hereunder shall mean such accounting principles as are
    generally accepted at the date of this instrument;



                                       -1-


<PAGE>   11



          (4) unless the context otherwise requires, any reference to an
    "Article" or a "Section" refers to an Article or a Section, as the case may
    be, of this Indenture; and

          (5) 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 sub-division.

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

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

       "Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.

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

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

       "Business Day", when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.

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

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

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


                                       -2-


<PAGE>   12



       "Consolidated Net Tangible Assets" means (a) the total amount of assets
(less applicable reserves and other properly deductible items) which under
generally accepted accounting principles would be included on a consolidated
balance sheet of the Company and its Restricted Subsidiaries after deducting
therefrom (i) all current liabilities (excluding therefrom any portion which is
extendible or renewable at the option of the obligor on such liability to a time
more than 12 months after the time of the computation of the amount thereof),
and (ii) all goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangibles, which in each case under
generally accepted accounting principles would be included on such consolidated
balance sheet, less (b) the amount which would be so included on such
consolidated balance sheet for Investments (less applicable reserves) in
Unrestricted Subsidiaries.

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

        "corporation"  means a corporation,  association,  company,  joint-stock
company or business trust.

       "Covenant Defeasance" has the meaning specified in Section 1303.

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

       "Defeasance" has the meaning specified in Section 1302.

       "Depositary" means, with respect to Securities of any series issuable in
whole or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as Depositary for
such Securities as contemplated by Section 301.

       "Event of Default" has the meaning specified in Section 501.

       "Exchange Act" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time.

       "Expiration Date" has the meaning specified in Section 104.

       "Funded Debt" means (i) all Indebtedness which by its terms matures more
than 12 months after the time of the computation of the amount thereof or which
is extendible or renewable at the option of the obligor on such Indebtedness to
a time more than 12 months after the time of the computation of the amount
thereof, (ii) all guarantees, direct or indirect, of any such Indebtedness or of
dividends, other than any guarantee in connection with the sale or discount by
the Company or any Restricted Subsidiary of accounts receivable, trade
acceptances and other paper arising in the ordinary course of business, and
(iii) in the case of any Subsidiary, all Preferred Stock of such Subsidiary,
taken at the greater of its voluntary or involuntary liquidation price at the
time of any calculation hereunder, but exclusive of accrued dividends, if any;
provided, however, that in determining the amount


                                       -3-


<PAGE>   13



of Funded Debt of the Company or any Subsidiary there shall not be included any
amount in respect of obligations under leases, or guarantees of obligations
under leases, whether or not such obligations or guarantees are shown on a
balance sheet as liability items. The Company or any Restricted Subsidiary shall
be deemed to have assumed Funded Debt secured by any Mortgage upon any of its
property or assets whether or not it has actually done so.

       "Global Security" means a Security that evidences all or part of the
Securities of any series and bears the legend set forth in Section 204 (or such
legend as may be specified as contemplated by Section 301 for such Securities).

        "Holder"  means a Person in whose name a Security is  registered  in the
Security Register.

       "Indebtedness" means (i) all items of indebtedness or liability (except
capital and retained earnings) which in accordance with generally accepted
accounting principles would be included in determining total liabilities as
shown on the liability side of a balance sheet as at the date as of which
Indebtedness is to be determined, (ii) obligations constituting Indebtedness
under the preceding clause (i) secured by any Mortgage existing on property
owned subject to such Mortgage, whether or not the obligations secured thereby
shall have been assumed, and (iii) guarantees, endorsements (other than for
purposes of collection) and other contingent obligations in respect of, or to
purchase or otherwise acquire, obligations of others constituting Indebtedness
under the preceding clause (i) or (ii); provided, however, that any obligations
or guarantees of obligations in respect of lease rentals, whether or not such
obligations or guarantees of obligations would be included as liabilities on a
consolidated balance sheet of the Company and its Restricted Subsidiaries, shall
not be included in Indebtedness.

       "Indenture" means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 301.

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

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

       "Investment Company Act" means the Investment Company Act of 1940 and any
statute successor thereto, in each case as amended from time to time.

       "Investments" mean and include all investments, whether by acquisition of
stock or Indebtedness, or by loan, advance, transfer of property, capital
contribution or otherwise,


                                       -4-


<PAGE>   14



made by the Company or by any Restricted Subsidiary, and shall include all
guarantees, direct or indirect, by the Company or any Restricted Subsidiary of
any Indebtedness of an Unrestricted Subsidiary which by its terms matures 12
months or less from the time of computation of the amount thereof to the extent
not included as a liability or liability item on the consolidated balance sheet
of the Company and its Restricted Subsidiaries, but shall not include accounts
receivable of the Company or of any Restricted Subsidiary arising from the sale
of merchandise in the ordinary course of business.

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

       "Mortgage" means and includes any mortgage, pledge, lien, security
interest, conditional sale or other title retention agreement or similar
encumbrance.

       "Notice of  Default"  means a written  notice of the kind  specified  in
Section 501(4) or 501(5).

       "Officers' Certificate" means a certificate signed by the Chairman of the
Board, a Vice Chairman of the Board, the President or a Vice President, and by
the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary,
of the Company, and delivered to the Trustee. One of the officers signing an
Officers' Certificate given pursuant to Section 1004 shall be the principal
executive, financial or accounting officer of the Company.

       "Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.

       "Original Issue Discount Security" means any Security which provides for
an amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.

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

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

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



                                       -5-


<PAGE>   15



          (3) Securities as to which Defeasance has been effected pursuant to
    Section 1302; and

          (4) Securities which have been paid pursuant to Section 306 or in
    exchange for or in lieu of which other Securities have been authenticated
    and delivered pursuant to this Indenture, other than any such Securities in
    respect of which there shall have been presented to the Trustee proof
    satisfactory to it that such Securities are held by a bona fide purchaser in
    whose hands such Securities are valid obligations of the Company;

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, (A) the principal amount of an Original Issue
Discount Security which shall be deemed to be Outstanding shall be the amount of
the principal thereof which would be due and payable as of such date upon
acceleration of the Maturity thereof to such date pursuant to Section 502, (B)
if, as of such date, the principal amount payable at the Stated Maturity of a
Security is not determinable, the principal amount of such Security which shall
be deemed to be Outstanding shall be the amount as specified or determined as
contemplated by Section 301, (C) the principal amount of a Security denominated
in one or more foreign currencies or currency units which shall be deemed to be
Outstanding shall be the U.S. dollar equivalent, determined as of such date in
the manner provided as contemplated by Section 301, of the principal amount of
such Security (or, in the case of a Security described in Clause (A) or (B)
above, of the amount determined as provided in such Clause), and (D) Securities
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or of such other obligor shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent, waiver or other action, only Securities which the Trustee knows
to be 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 Company or any other obligor
upon the Securities or any Affiliate of the Company or of such other obligor.

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

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

       "Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of and any premium and
interest on the Securities of that series are payable as specified as
contemplated by Section 301.

       "Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under


                                       -6-


<PAGE>   16



Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen
Security shall be deemed to evidence the same debt as the mutilated, destroyed,
lost or stolen Security.

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

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

       "Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 301.

       "Repayment Date", when used with respect to any Security of any series to
be repaid, means the date, if any, fixed for such repayment pursuant to Section
301.

       "Repayment Price", when used with respect to any Security of any series
to be repaid, means the price, if any, at which is it to be repaid pursuant to
Section 301.

       "Restricted Subsidiary" means any Subsidiary of the Company other than an
Unrestricted Subsidiary.

       "Sale and Leaseback Transaction" has the meaning specified in Section 
1009.

       "Secured Debt" means Indebtedness, if such Indebtedness is secured by a
Mortgage upon any assets of the Company or a Restricted Subsidiary, including in
such assets, without limitation, shares of stock or Indebtedness of any
Subsidiary owned by the Company or a Restricted Subsidiary.

       "Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.

       "Securities Act" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time.

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

       "Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.

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



                                       -7-


<PAGE>   17



       "Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For the purposes of this definition, "voting stock" means stock which ordinarily
has voting power for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.

       "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.

       "Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
or include each Person who is then a Trustee hereunder, 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 Securities of that series.

       "U.S. Government Obligation" has the meaning specified in Section 1304.

       "Unrestricted Subsidiary" means, unless otherwise designated a Restricted
Subsidiary by a Board Resolution, (i) any Subsidiary substantially all of the
physical properties of which are located, or substantially all of the business
of which is carried on, outside the United States of America ("United States of
America" shall not include the territories or possessions thereof), (ii) any
Subsidiary the primary business of which consists of financing operations in
connection with leasing and conditional sales transactions on behalf of the
Company and its Subsidiaries, and/or purchasing accounts receivable and/or
making loans secured by accounts receivable or inventory, or which is otherwise
primarily engaged in the business of a finance company, and (iii) any
Subsidiary, the primary business of which consists of owning or leasing real
estate. Any designation of an Unrestricted Subsidiary as a Restricted Subsidiary
by a Board Resolution may be terminated thereafter by a Board Resolution if, but
only if, immediately thereafter the Company could create additional Secured Debt
in accordance with Section 1008 without equally and ratably securing the Notes.

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

       "Wholly-owned Restricted Subsidiary" means any Restricted Subsidiary all
the outstanding Funded Debt and capital stock of which, other than directors'
qualifying shares, are owned by the Company or its other Wholly-owned Restricted
Subsidiaries.




                                       -8-


<PAGE>   18



SECTION 102.  Compliance Certificates and Opinions.

       Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.

       Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include,

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

          (2) a brief statement as to the nature and scope of the examination or
    investigation upon which the statements or opinions contained in such
    certificate or opinion are based;

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

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


SECTION 103.  Form of Documents Delivered to Trustee.

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

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



                                       -9-


<PAGE>   19



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


SECTION 104.  Acts of Holders; Record Dates.

       Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given, made or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by 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 and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.

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

       The ownership of Securities shall be proved by the Security Register.

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

       The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders of Securities of such series, provided that the
Company may not set a record date for, and the provisions of this paragraph
shall not apply with respect to, the giving or making of any notice,
declaration, request or direction referred to in the next paragraph. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of the relevant series on such record


                                      -10-


<PAGE>   20



date, and no other Holders, shall be entitled to take the relevant action,
whether or not such Holders remain Holders after such record date; provided that
no such action shall be effective hereunder unless taken on or prior to the
applicable Expiration Date by Holders of the requisite principal amount of
Outstanding Securities of such series on such record date. Nothing in this
paragraph shall be construed to prevent the Company from setting a new record
date for any action for which a record date has previously been set pursuant to
this paragraph (whereupon the record date previously set shall automatically and
with no action by any Person be canceled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Company, at its own expense, shall cause notice
of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Trustee in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 106.

       The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 502, (iii) any request to institute
proceedings referred to in Section 507(2) or (iv) any direction referred to in
Section 512, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be canceled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Company's expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Company in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 106.

       With respect to any record date set pursuant to this Section, the party
hereto which sets such record dates may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day; provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of Securities of the relevant series in the manner set forth in
Section 106, on or prior to the existing Expiration Date. If an Expiration Date
is not designated with respect to any record date set pursuant to this Section,
the party hereto which set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change


                                      -11-


<PAGE>   21



the Expiration Date as provided in this paragraph. Notwithstanding the
foregoing, no Expiration Date shall be later than the 180th day after the
applicable record date.

       Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Security may do so with regard to
all or any part of the principal amount of such Security or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.


SECTION 105.  Notices, Etc., to Trustee and Company.

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

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

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


SECTION 106.  Notice to Holders; Waiver.

       Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders 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 regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.



                                      -12-


<PAGE>   22



SECTION 107.  Conflict with Trust Indenture Act.

       If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act 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
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 108.  Effect of Headings and Table of Contents.

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


SECTION 109.  Successors and Assigns.

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


SECTION 110.  Separability Clause.

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


SECTION 111.  Benefits of Indenture.

       Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and the Holders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.


SECTION 112.  Governing Law.

       This Indenture and the Securities shall be governed by and construed in
accordance with the law of the State of New York.


SECTION 113.  Legal Holidays.

       In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of any Security


                                      -13-


<PAGE>   23



which specifically states that such provision shall apply in lieu of this
Section)) payment of interest or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity.


                                   ARTICLE TWO

                                 SECURITY FORMS


SECTION 201.  Forms Generally.

       The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to a Board Resolution or in one or more 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
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or Depositary therefor or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution thereof. If the form of Securities of any series is established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery of such
Securities.

       The definitive Securities 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, as evidenced by their execution of
such Securities.


SECTION 202.  Form of Face of Security.

                        [INSERT APPROPRIATE TAX LEGENDS]

           ..........................................................

   ..........................................................................

No. .........                                                       $ ........

       American Greetings Corporation, a corporation duly organized and existing
under the laws of Ohio (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to
 ..............................................., or registered assigns, the
principal sum of


                                      -14-


<PAGE>   24



 ......................................  Dollars  on  ...........................
[if the Security is to bear interest  prior to Maturity,  insert -- , and to pay
interest  thereon from  .............  or from the most recent Interest  Payment
Date to which  interest has been paid or duly  provided  for,  semi-annually  on
 ............ and ............ in each year, commencing ........., at the rate of
 ....% per  annum,  until the  principal  hereof  is paid or made  available  for
payment [if applicable, insert -- , provided that any principal and premium, and
any such  instalment  of interest,  which is overdue  shall bear interest at the
rate of ...% per annum (to the extent that the payment of such interest shall be
legally enforceable), from the dates such amounts are due until they are paid or
made available for payment,  and such interest shall be payable on demand].  The
interest so payable,  and punctually  paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to the Person in whose
name this Security (or one or more Predecessor  Securities) is registered at the
close of business on the Regular Record Date for such  interest,  which shall be
the ....... or ....... (whether or not a Business Day), as the case may be, next
preceding such Interest  Payment Date. Any such interest not so punctually  paid
or duly  provided for will  forthwith  cease to be payable to the Holder on such
Regular  Record  Date and may  either be paid to the  Person in whose  name this
Security (or one or more  Predecessor  Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted  Interest to
be fixed by the Trustee,  notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special  Record  Date,  or be
paid  at any  time  in  any  other  lawful  manner  not  inconsistent  with  the
requirements  of any securities  exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange,  all as
more fully provided in said Indenture].

[If the Security is not to bear interest prior to Maturity, insert -- The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption, upon
repayment at the option of the Holder or at Stated Maturity and in such case the
overdue principal and any overdue premium shall bear interest at the rate of
 ....% per annum (to the extent that the payment of such interest shall be
legally enforceable), from the dates such amounts are due until they are paid or
made available for payment. Interest on any overdue principal or premium shall
be payable on demand. Any such interest on overdue principal or premium which is
not paid on demand shall bear interest at the rate of ......% per annum (to the
extent that the payment of such interest on interest shall be legally
enforceable), from the date of such demand until the amount so demanded is paid
or made available for payment. Interest on any overdue interest shall be payable
on demand.]

       Payment of the principal of (and premium, if any) and [if applicable,
insert -- any such] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in ............, in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts [if applicable, insert -- ;
provided, however, that at the option of the Company payment of interest may be
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register].

       [Insert description of the right, if any, of Holders to elect repayment.]


                                      -15-


<PAGE>   25



       Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

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

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

Dated:


                                            American Greetings Corporation



                                            By................................
Attest:

 .........................................


SECTION 203.  Form of Reverse of Security.

        This  Security is one of a duly  authorized  issue of  securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series  under an  Indenture,  dated as of  ...............  (herein  called  the
"Indenture",  which  term  shall  have  the  meaning  assigned  to  it  in  such
instrument),  between the Company and  ...................,  as Trustee  (herein
called the  "Trustee",  which term  includes  any  successor  trustee  under the
Indenture), and reference is hereby made to the Indenture for a statement of the
respective rights,  limitations of rights,  duties and immunities  thereunder of
the Company, the Trustee and the Holders of the Securities and of the terms upon
which the  Securities  are, and are to be,  authenticated  and  delivered.  This
Security  is one of the series  designated  on the face  hereof [if  applicable,
insert -- , limited in aggregate principal amount to $...........].

        [If  applicable,  insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [if applicable, insert --
(1) on ...........  in any year commencing with the year ......  and ending with
the year  ......  through  operation  of the  sinking  fund for this series at a
Redemption Price equal to 100% of the principal amount, and (2)] at any time [if
applicable, insert -- on or after .........., 19..], as a whole or in part,


                                      -16-


<PAGE>   26



at the election of the Company, at the following Redemption Prices (expressed as
percentages of the principal amount): If redeemed [if applicable,  insert -- on
or before  ...............,  ...%, and if redeemed]  during the 12-month  period
beginning ............. of the years indicated,

<TABLE>
<CAPTION>
                          Redemption                          Redemption
Year                        Price            Year                Price
- ----                      ---------          ----             -----------
<S>                       <C>                <C>              <C>


</TABLE>


and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest instalments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]

        [If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on ............ in
any year commencing with the year .... and ending with the year .... through
operation of the sinking fund for this series at the Redemption Prices for
redemption th rough operation of the sinking fund (expressed as percentages of
the principal amount) set forth in the table below, and (2) at any time [if
applicable, insert -- on or after ............], as a whole or in part, at the
election of the Company, at the Redemption Prices for redemption otherwise than
through operation of the sinking fund (expressed as percentages of the principal
amount) set forth in the table below: If redeemed during the 12-month period
beginning ............ of the years indicated,

<TABLE>
<CAPTION>
                      Redemption Price
                       For Redemption               Redemption Price For
                     Through Operation              Redemption Otherwise
                           of the                  Than Through Operation
Year                    Sinking Fund                Of The Sinking Fund
- ----                    ------------                -------------------
<S>                  <C>                           <C>

</TABLE>





and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest instalments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such


                                      -17-


<PAGE>   27



Securities, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.]

      [If applicable, insert -- Notwithstanding the foregoing, the Company may
not, prior to ............., redeem any Securities of this series as
contemplated by [if applicable, insert -- Clause (2) of] the preceding paragraph
as a part of, or in anticipation of, any refunding operation by the application,
directly or indirectly, of moneys borrowed having an interest cost to the
Company (calculated in accordance with generally accepted financial practice) of
less than .....% per annum.]

        [If applicable, insert -- The sinking fund for this series provides for
the redemption on ............ in each year beginning with the year ....... and
ending with the year ...... of [if applicable, insert -- not less than
$.......... ("mandatory sinking fund") and not more than] $......... aggregate
principal amount of Securities of this series. Securities of this series
acquired or redeemed by the Company otherwise than through [if applicable,
insert -- mandatory] sinking fund payments may be credited against subsequent
[if applicable, insert -- mandatory] sinking fund payments otherwise required to
be made [if applicable, insert -- , in the inverse order in which they become
due].]

      [If the Security is subject to redemption of any kind, insert -- In the
event of redemption of this Security in part only, a new Security or Securities
of this series and of like tenor for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.]

      The Indenture contains provisions for defeasance at any time of the entire
indebtedness of this Security or certain restrictive covenants and Events of
Default with respect to this Security, in each case upon compliance with certain
conditions set forth in the Indenture.

      [If applicable, insert provisions detailing provisions with respect to
repayment at the option of the Holders and the issuance of Securities in lieu of
Securities redeemed or repaid at the option of Holders. [If applicable, insert
- -- The Indenture contains provisions for defeasance at any time of [the entire
indebtedness of this Security][or] [certain restrictive covenants and Events of
Default with respect to this Security][, in each case] upon compliance with
certain conditions set forth in the Indenture.]

      [If the Security is not an Original Issue Discount Security, insert -- If
an Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.]

      [If the Security is an Original Issue Discount Security, insert -- If an
Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal, premium and interest (in each
case to


                                      -18-


<PAGE>   28



the extent that the payment of such interest shall be legally enforceable), all
of the Company's obligations in respect of the payment of the principal of and
premium and interest, if any, on the Securities of this series shall terminate.]

      The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of 66 2/3% in principal amount of the Securities at the
time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.

      As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.

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

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


                                      -19-


<PAGE>   29



      The Securities of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.

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

      Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

      All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.

      [If applicable, insert form of option to elect repayment.]


SECTION 204.  Form of Legend for Global Securities.

      Unless otherwise specified as contemplated by Section 301 for the
Securities evidenced thereby, every Global Security authenticated and delivered
hereunder shall bear a legend in substantially the following form:

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.




                                      -20-


<PAGE>   30



SECTION 205.  Form of Trustee's Certificate of Authentication.

      The Trustee's certificates of authentication shall be in substantially the
following form:

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


                                   NBD BANK,
                                   As Trustee


                                   By.........................................
                                     Authorized Officer


                                  ARTICLE THREE

                                 THE SECURITIES


SECTION 301.  Amount Unlimited; Issuable in Series.

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

      The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 303,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series,

       (1) the title of the Securities of the series (which shall distinguish
   the Securities of the series from Securities of any other series);

       (2) any limit upon the aggregate principal amount of the Securities of
   the series which may be authenticated and delivered under this Indenture
   (except for Securities authenticated and delivered upon registration of
   transfer of, or in exchange for, or in lieu of, other Securities of the
   series pursuant to Section 304, 305, 306, 906, 1107 or 1405 and except for
   any Securities which, pursuant to Section 303, are deemed never to have been
   authenticated and delivered hereunder);

       (3) the Person to whom any interest on a Security of the series shall be
   payable, if other than the Person in whose name that Security (or one or more
   Predecessor Securities) is registered at the close of business on the
   Regular Record Date for such interest;

       (4) the date or dates on which the principal of any Securities of the
series is payable;



                                      -21-


<PAGE>   31



       (5) the rate or rates at which any Securities of the series shall bear
   interest, if any, the date or dates from which any such interest shall
   accrue, the Interest Payment Dates on which any such interest shall be
   payable and the Regular Record Date for any such interest payable on any
   Interest Payment Date;

       (6) the place or places where the principal of and any premium and
   interest on any Securities of the series shall be payable;

       (7) the period or periods within which, the price or prices at which and
   the terms and conditions upon which any Securities of the series may be
   redeemed, in whole or in part, at the option of the Company and, if other
   than by a Board Resolution, the manner in which any election by the Company
   to redeem the Securities shall be evidenced;

       (8) the obligation, if any, of the Company to redeem or purchase any
   Securities of the series pursuant to any sinking fund or analogous provisions
   or at the option of the Holder thereof and the period or periods within
   which, the price or prices at which and the terms and conditions upon which
   any Securities of the series shall be redeemed or purchased, in whole or in
   part, pursuant to such obligation;

       (9) the period or periods within which, the price or prices at which and
   the terms and conditions upon which Securities of the series may be repaid,
   in whole or in part, at the option of the Holders;

      (10) if other than denominations of $1,000 and any integral multiple
   thereof, the denominations in which any Securities of the series shall be
   issuable;

      (11) if the amount of principal of or any premium or interest on any
   Securities of the series may be determined with reference to an index or
   pursuant to a formula, the manner in which such amounts shall be determined;

      (12) if other than the currency of the United States of America, the
   currency, currencies or currency units in which the principal of or any
   premium or interest on any Securities of the series shall be payable and the
   manner of determining the equivalent thereof in the currency of the United
   States of America for any purpose, including for purposes of the definition
   of "Outstanding" in Section 101;

      (13) if the principal of or any premium or interest on any Securities of
   the series is to be payable, at the election of the Company or the Holder
   thereof, in one or more currencies or currency units other than that or those
   in which such Securities are stated to be payable, the currency, currencies
   or currency units in which the principal of or any premium or interest on
   such Securities as to which such election is made shall be payable, the
   periods within which and the terms and conditions upon which such election is
   to be made and the amount so payable (or the manner in which such amount
   shall be determined);



                                      -22-


<PAGE>   32



      (14) if other than the entire principal amount thereof, the portion of the
   principal amount of any Securities of the series which shall be payable upon
   declaration of acceleration of the Maturity thereof pursuant to Section 502;

      (15) if the principal amount payable at the Stated Maturity of any
   Securities of the series will not be determinable as of any one or more dates
   prior to the Stated Maturity, the amount which shall be deemed to be the
   principal amount of such Securities as of any such date for any purpose
   thereunder or hereunder, including the principal amount thereof which shall
   be due and payable upon any Maturity other than the Stated Maturity or which
   shall be deemed to be Outstanding as of any date prior to the Stated Maturity
   (or, in any such case, the manner in which such amount deemed to be the
   principal amount shall be determined);

      (16) if applicable, that the Securities of the series, in whole or any
   specified part, shall be defeasible pursuant to Section 1302 or Section 1303
   or both such Sections and, if other than by a Board Resolution, the manner in
   which any election by the Company to defease such Securities shall be
   evidenced;

      (17) if applicable, that any Securities of the series shall be issuable in
   whole or in part in the form of one or more Global Securities and, in such
   case, the respective Depositaries for such Global Securities, the form of any
   legend or legends which shall be borne by any such Global Security in
   addition to or in lieu of that set forth in Section 204 and any circumstances
   in addition to or in lieu of those set forth in Clause (2) of the last
   paragraph of Section 305 in which any such Global Security may be exchanged
   in whole or in part for Securities registered, and any transfer of such
   Global Security in whole or in part may be registered, in the name or names
   of Persons other than the Depositary for such Global Security or a nominee
   thereof;

      (18) any addition to or change in the Events of Default which applies to
   any Securities of the series and any change in the right of the Trustee or
   the requisite Holders of such Securities to declare the principal amount
   thereof due and payable pursuant to Section 502;

      (19) any addition to or change in the covenants set forth in Article Ten
   which applies to Securities of the series; and

      (20) any other terms of the series (which terms shall not be inconsistent
   with the provisions of this Indenture, except as permitted by Section
   901(5)).

      All Securities of any one series shall be substantially identical except
as to denomination and except as may otherwise be provided in or pursuant to the
Board Resolu tion referred to above and (subject to Section 303) set forth, or
determined in the manner provided, in the Officers' Certificate referred to
above or in any such indenture supplemental hereto.

      If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary


                                      -23-


<PAGE>   33



or an Assistant Secretary of the Company and delivered to the Trustee at or
prior to the delivery of the Officers' Certificate setting forth the terms of
the series.


SECTION 302.  Denominations.

      The Securities of each series shall be issuable only in registered form
without coupons and only in such denominations as shall be specified as
contemplated by Section 301. In the absence of any such specified denomination
with respect to the Securities of any series, the Securities of such series
shall be issuable in denominations of $1,000 and any integral multiple thereof.


SECTION 303.  Execution, Authentication, Delivery and Dating.

      The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its Vice Chairman of the Board, its President or one of its Vice
Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.

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

      At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities. If the
form or terms of the Securities of the series have been established by or
pursuant to one or more Board Resolutions as permitted by Sections 201 and 301,
in authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon, an Opinion of Counsel stating,

       (1) if the form of such Securities has been established by or pursuant to
   Board Resolution as permitted by Section 201, that such form has been
   established in conformity with the provisions of this Indenture;

       (2) if the terms of such Securities have been established by or pursuant
   to Board Resolution as permitted by Section 301, that such terms have been
   established in conformity with the provisions of this Indenture; and

       (3) that such Securities, when authenticated and delivered by the Trustee
   and issued by the Company in the manner and subject to any conditions
   specified in such Opinion


                                      -24-


<PAGE>   34



   of Counsel, will constitute valid and legally binding obligations of the
   Company enforceable in accordance with their terms, subject to bankruptcy,
   insolvency, fraudulent transfer, reorganization, moratorium and similar laws
   of general applicability relating to or affecting creditors' rights and to
   general equity principles.

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

      Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.

      Each Security shall be dated the date of its authentication.

      No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 309, for all
purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.


SECTION 304.  Temporary Securities.

      Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.

      If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company in a Place of Payment for


                                      -25-


<PAGE>   35



that series, without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Securities of any series, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor one or more
definitive Securities of the same series, of any authorized denominations and of
like tenor and aggregate principal amount. Until so exchanged, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of such series and tenor.


SECTION 305.  Registration, Registration of Transfer and Exchange.

      The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.

      Upon surrender for registration of transfer of any Security of a series at
the office or agency of the Company in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series, of any authorized denominations and of like tenor and aggregate
principal amount.

      At the option of the Holder, Securities of any series may be exchanged for
other Securities of the same series, of any authorized denominations and of like
tenor and aggregate principal amount, upon surrender of the Securities to be
exchanged at such office or agency. Whenever any Securities are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to
receive.

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

      Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.

      No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.



                                      -26-


<PAGE>   36



      If the Securities of any series (or of any series and specified tenor) are
to be redeemed in part, the Company shall not be required (A) to issue, register
the transfer of or exchange any Securities of that series (or of that series and
specified tenor, as the case may be) during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of any
such Securities selected for redemption under Section 1103 and ending at the
close of business on the day of such mailing, or (B) to register the transfer of
or exchange any Security so selected for redemption in whole or in part, except
the unredeemed portion of any Security being redeemed in part.

      The provisions of Clauses (1), (2), (3) and (4) below shall apply only to
Global Securities:

       (1) Each Global Security authenticated under this Indenture shall be
   registered in the name of the Depositary designated for such Global Security
   or a nominee thereof and delivered to such Depositary or a nominee thereof or
   custodian therefor, and each such Global Security shall constitute a single
   Security for all purposes of this Indenture.

       (2) Notwithstanding any other provision in this Indenture, no Global
   Security may be exchanged in whole or in part for Securities registered, and
   no transfer of a Global Security in whole or in part may be registered, in
   the name of any Person other than the Depositary for such Global Security or
   a nominee thereof unless (A) such Depositary (i) has notified the Company
   that it is unwilling or unable to continue as Depositary for such Global
   Security or (ii) has ceased to be a clearing agency registered under the
   Exchange Act, (B) there shall have occurred and be continuing an Event of
   Default with respect to such Global Security or (C) there shall exist such
   circumstances, if any, in addition to or in lieu of the foregoing as have
   been specified for this purpose as contemplated by Section 301.

       (3) Subject to Clause (2) above, any exchange of a Global Security for
   other Securities may be made in whole or in part, and all Securities issued
   in exchange for a Global Security or any portion thereof shall be registered
   in such names as the Depositary for such Global Security shall direct.

       (4) Every Security authenticated and delivered upon registration of
   transfer of, or in exchange for or in lieu of, a Global Security or any
   portion thereof, whether pursuant to this Section, Section 304, 306, 906 or
   1107 or otherwise, shall be authenticated and delivered in the form of, and
   shall be, a Global Security, unless such Security is registered in the name
   of a Person other than the Depositary for such Global Security or a nominee
   thereof.


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

      If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding.


                                      -27-


<PAGE>   37



      If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.

      In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.

      Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.

      Every new Security of any series issued pursuant to this Section in lieu
of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.

      The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.


SECTION 307.  Payment of Interest; Interest Rights Preserved.

      Except as otherwise provided as contemplated by Section 301 with respect
to any series of Securities, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.

      Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:

         (1) The Company may elect to make payment of any Defaulted Interest to
      the Persons in whose names the Securities of such series (or their
      respective Predecessor Securities) are registered at the close of business
      on a Special Record Date for the payment of such Defaulted Interest, which
      shall be fixed in the following manner. The


                                      -28-


<PAGE>   38



      Company shall notify the Trustee in writing of the amount of Defaulted
      Interest proposed to be paid on each Security of such series and the date
      of the proposed payment, and at the same time the Company shall deposit
      with the Trustee an amount of money equal to the aggregate amount proposed
      to be paid in respect of such Defaulted Interest or shall make
      arrangements satisfactory to the Trustee for such deposit prior to the
      date of the proposed payment, such money when deposited to be held in
      trust for the benefit of the Persons entitled to such Defaulted Interest
      as in this Clause provided. Thereupon the Trustee shall fix a Special
      Record Date for the payment of such Defaulted Interest which shall be not
      more than 15 days and not less than 10 days prior to the date of the
      proposed payment and not less than 10 days after the receipt by the
      Trustee of the notice of the proposed payment. The Trustee shall promptly
      notify the Company of such Special Record Date and, in the name and at the
      expense of the Company, shall cause notice of the proposed payment of such
      Defaulted Interest and the Special Record Date therefor to be given to
      each Holder of Securities of such series in the manner set forth in
      Section 106, not less than 10 days prior to such Special Record Date.
      Notice of the proposed payment of such Defaulted Interest and the Special
      Record Date therefor having been so mailed, such Defaulted Interest shall
      be paid to the Persons in whose names the Securities of such series (or
      their respective Predecessor Securities) are registered at the close of
      business on such Special Record Date and shall no longer be payable
      pursuant to the following Clause (2).

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

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


SECTION 308.  Persons Deemed Owners.

      Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Security is registered as the owner of such Security
for the purpose of receiving payment of principal of and any premium and
(subject to Section 307) any interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.




                                      -29-


<PAGE>   39



SECTION 309.  Cancellation.

      All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Company may at any time deliver to the
Trustee for cancellation any Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and may
deliver to the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder which the Company
has not issued and sold, and all Securities so delivered shall be promptly
canceled by the Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Securities held by the
Trustee shall be disposed of as directed by a Company Order.


SECTION 310.  Computation of Interest.

      Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.


                                  ARTICLE FOUR

                           SATISFACTION AND DISCHARGE


SECTION 401.  Satisfaction and Discharge of Indenture.

      This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when

      (1)   either

         (A) all Securities theretofore authenticated and delivered (other than
      (i) Securities which have been destroyed, lost or stolen and which have
      been replaced or paid as provided in Section 306 and (ii) Securities for
      whose payment money has theretofore been deposited in trust or segregated
      and held in trust by the Company and thereafter repaid to the Company or
      discharged from such trust, as provided in Section 1003) have been
      delivered to the Trustee for cancellation; or

         (B) all such Securities not theretofore delivered to the Trustee for
cancellation

            (i)  have become due and payable, or


                                      -30-


<PAGE>   40



            (ii) will become due and payable at their Stated Maturity within one
year, or

            (iii)are to be called for redemption within one year under
         arrangements satisfactory to the Trustee for the giving of notice of
         redemption by the Trustee in the name, and at the expense, of the
         Company,

      and the Company, in the case of (i), (ii) or (iii) above, has deposited or
      caused to be deposited with the Trustee as trust funds in trust for the
      purpose money in an amount sufficient to pay and discharge the entire
      indebtedness on such Securities not theretofore delivered to the Trustee
      for cancellation, for principal and any premium and interest to the date
      of such deposit (in the case of Securities which have become due and
      payable) or to the Stated Maturity or Redemption Date, as the case may be;

      (2) the Company has paid or caused to be paid all other sums payable
   hereunder by the Company; and

      (3) the Company has delivered to the Trustee an Officers' Certificate and
   an Opinion of Counsel, each stating that all conditions precedent herein
   provided for relating to the satisfaction and discharge of this Indenture
   have been complied with.

      Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.


SECTION 402.  Application of Trust Money.

      Subject to the provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.


                                  ARTICLE FIVE

                                    REMEDIES


SECTION 501.  Events of Default.

      "Event of Default", wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and


                                      -31-


<PAGE>   41



whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):

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

      (2) default in the payment of the principal of or any premium on any
   Security of that series at its Maturity; or

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

      (4) default in the performance, or breach, of any covenant or warranty of
   the Company in this Indenture (other than a covenant or warranty a default in
   whose performance or whose breach is elsewhere in this Section specifically
   dealt with or which has expressly been included in this Indenture solely for
   the benefit of series of Securities other than that series), and continuance
   of such default or breach for a period of 60 days after there has been given,
   by registered or certified mail, to the Company by the Trustee or to the
   Company and the Trustee by the Holders of at least 10% in principal amount of
   the Outstanding Securities of that series a written notice specifying such
   default or breach and requiring it to be remedied and stating that such
   notice is a "Notice of Default" hereunder; or

      (5) a default under any bond, debenture, note or other evidence of
   indebtedness in excess of $20,000,000 for money borrowed by the Company or
   under any mortgage, indenture or instrument (including this Indenture) under
   which there may be issued or by which there may be secured or evidenced any
   indebtedness in excess of $20,000,000 for money borrowed by the Company,
   whether such indebtedness now exists or shall hereafter be created, which
   default shall have resulted in such indebtedness becoming or being declared
   due and payable prior to the date on which it would otherwise have become due
   and payable, without such acceleration having been rescinded or annulled
   within a period of 10 days after there shall have been given, by registered
   or certified mail, to the Company by the Trustee or to the Company and the
   Trustee by the Holders of at least 25% in principal amount of the Outstanding
   Securities of that series a written notice specifying such default and
   requiring the Company to cause such acceleration to be rescinded or annulled
   and stating that such notice is a "Notice of Default" hereunder; or

      (6) the entry by a court having jurisdiction in the premises of (A) a
   decree or order for relief in respect of the Company in an involuntary case
   or proceeding under any applicable Federal or State bankruptcy, insolvency,
   reorganization or other similar law or (B) a decree or order adjudging the
   Company a bankrupt or insolvent, or approving as properly filed a petition
   seeking reorganization, arrangement, adjustment or composition of or in
   respect of the Company under any applicable Federal or State law, or
   appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator
   or other similar official of the Company or of any substantial part of its
   property, or ordering the winding up or


                                      -32-


<PAGE>   42



   liquidation of its affairs, and the continuance of any such decree or order
   for relief or any such other decree or order unstayed and in effect for a
   period of 60 consecutive days; or

      (7) the commencement by the Company of a voluntary case or proceeding
   under any applicable Federal or State bankruptcy, insolvency, reorganization
   or other similar law or of any other case or proceeding to be adjudicated a
   bankrupt or insolvent, or the consent by it to the entry of a decree or order
   for relief in respect of the Company in an involuntary case or proceeding
   under any applicable Federal or State bankruptcy, insolvency, reorganization
   or other similar law or to the commencement of any bankruptcy or insolvency
   case or proceeding against it, or the filing by it of a petition or answer or
   consent seeking reorganization or relief under any applicable Federal or
   State law, or the consent by it to the filing of such petition or to the
   appointment of or taking possession by a custodian, receiver, liquidator,
   assignee, trustee, sequestrator or other similar official of the Company or
   of any substantial part of its property, or the making by it of an assignment
   for the benefit of creditors, or the admission by it in writing of its
   inability to pay its debts generally as they become due, or the taking of
   corporate action by the Company in furtherance of any such action; or

      (8) any other Event of Default provided with respect to Securities of that
series.


SECTION 502.  Acceleration of Maturity; Rescission and Annulment.

      If an Event of Default (other than an Event of Default specified in
Section 501(6) or 501(7)) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of that series may declare the principal amount of all the Securities of that
series (or, if any Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such Securities as may be
specified by the terms thereof) to be due and payable immediately, by a notice
in writing to the Company (and to the Trustee if given by Holders), and upon any
such declaration such principal amount (or specified amount) shall become
immediately due and payable. If an Event of Default specified in Section 501(6)
or 501 (7) with respect to Securities of any series at the time Outstanding
occurs, the principal amount of all the Securities of that series (or, if any
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount of such Securities as may be specified by the terms
thereof) shall automatically, and without any declaration or other action on the
part of the Trustee or any Holder, become immediately due and payable.

      At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a major-


                                      -33-

<PAGE>   43

ity in principal amount of the Outstanding Securities of that series, by written
notice to the Company and the Trustee, may rescind and annul such declaration
and its consequences if

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

         (A)  all overdue interest on all Securities of that series,

         (B) the principal of (and premium, if any, on) any Securities of that
      series which have become due otherwise than by such declaration of
      acceleration and any interest thereon at the rate or rates prescribed
      therefor in such Securities,

         (C) to the extent that payment of such interest is lawful, interest
      upon overdue interest at the rate or rates prescribed therefor in such
      Securities, and

         (D) all sums paid or advanced by the Trustee hereunder and the
      reasonable compensation, expenses, disbursements and advances of the
      Trustee, its agents and counsel;

   and

      (2) all Events of Default with respect to Securities of that series, other
   than the non-payment of the principal of Securities of that series which have
   become due solely by such declaration of acceleration, have been cured or
   waived as provided in Section 513.

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


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

      The Company covenants that if

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

      (2) default is made in the payment of the principal of (or premium, if
   any, on) any Security at the Maturity thereof,

the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.



                                      -34-


<PAGE>   44



      If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.


SECTION 504.  Trustee May File Proofs of Claim.

      In case of any judicial proceeding relative to the Company (or any other
obligor upon the Securities), its property or its creditors, the Trustee shall
be entitled and empowered, by intervention in such proceeding or otherwise, to
take any and all actions authorized under the Trust Indenture Act in order to
have claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.

      No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors' or
other similar committee.


SECTION 505.  Trustee May Enforce Claims Without Possession of Securities.

      All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.


SECTION 506.  Application of Money Collected.

      Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of


                                      -35-


<PAGE>   45



such money on account of principal or any premium or interest, upon presentation
of the Securities and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:

      FIRST: To the payment of all amounts due the Trustee under Section 607;
and

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


SECTION 507.  Limitation on Suits.

      No Holder of any Security of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless

      (1) such Holder has previously given written notice to the Trustee of a
   continuing Event of Default with respect to the Securities of that series;

      (2) the Holders of not less than 25% in principal amount of the
   Outstanding Securities of that series shall have made written request to the
   Trustee to institute proceedings in respect of such Event of Default in its
   own name as Trustee hereunder;

      (3) such Holder or Holders have offered to the Trustee reasonable
   indemnity against the costs, expenses and liabilities to be incurred in
   compliance with such request;

      (4) the Trustee for 60 days after its receipt of such notice, request and
   offer of indemnity has failed to institute any such proceeding; and

      (5) no direction inconsistent with such written request has been given to
   the Trustee during such 60-day period by the Holders of a majority in
   principal amount of the Outstanding Securities of that series;

it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.




                                      -36-


<PAGE>   46



SECTION 508.  Unconditional Right of Holders to Receive Principal,
              Premium and Interest.

      Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium and (subject to Section 307)
interest on such Security on the respective Stated Maturities expressed in such
Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.


SECTION 509.  Restoration of Rights and Remedies.

      If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.


SECTION 510.  Rights and Remedies Cumulative.

      Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.


SECTION 511.  Delay or Omission Not Waiver.

      No delay or omission of the Trustee or of any Holder of any Securities to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.




                                      -37-


<PAGE>   47



SECTION 512.  Control by Holders.

      The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that

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

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


SECTION 513.  Waiver of Past Defaults.

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

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

      (2) in respect of a covenant or provision hereof which under Article Nine
   cannot be modified or amended without the consent of the Holder of each
   Outstanding Security of such series affected.

      Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.


SECTION 514.  Undertaking for Costs.

      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, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company.




                                      -38-


<PAGE>   48



SECTION 515.  Waiver of Usury, Stay or Extension Laws.

      The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.


                                   ARTICLE SIX

                                   THE TRUSTEE


SECTION 601.  Certain Duties and Responsibilities.

      The duties and responsibilities of the Trustee shall be as provided by the
Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.


SECTION 602.  Notice of Defaults.

      If a default occurs hereunder with respect to Securities of any series,
the Trustee shall give the Holders of Securities of such series notice of such
default as and to the extent provided by the Trust Indenture Act; provided,
however, that in the case of any default of the character specified in Section
501(4) with respect to Securities of such series, no such notice to Holders
shall be given until at least 30 days after the occurrence thereof. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to Securities of such series.




                                      -39-


<PAGE>   49



SECTION 603.  Certain Rights of Trustee.

      Subject to the provisions of Section 601:

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

      (2) any request or direction of the Company mentioned herein shall be
   sufficiently evidenced by a Company Request or Company Order, and any
   resolution of the Board of Directors shall be sufficiently evidenced by a
   Board Resolution;

      (3) whenever in the administration of this Indenture the Trustee shall
   deem it desirable that a matter be proved or established prior to taking,
   suffering or omitting any action hereunder, the Trustee (unless other
   evidence be herein specifically prescribed) may, in the absence of bad faith
   on its part, rely upon an Officers' Certificate;

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

      (5) the Trustee shall be under no obligation to exercise any of the rights
   or powers vested in it by this Indenture at the request or direction of any
   of the Holders pursuant to this Indenture, unless such Holders shall have
   offered to the Trustee reasonable security or indemnity against the costs,
   expenses and liabilities which might be incurred by it in compliance with
   such request or direction;

      (6) the Trustee shall not be bound to make any investigation into the
   facts or matters stated in any resolution, certificate, statement,
   instrument, opinion, report, notice, request, direction, consent, order,
   bond, debenture, note, other evidence of indebtedness or other paper or
   document, but the Trustee, in its discretion, may make such further inquiry
   or investigation into such facts or matters as it may see fit, and, if the
   Trustee shall determine to make such further inquiry or investigation, it
   shall be entitled to examine the books, records and premises of the Company,
   personally or by agent or attorney; and

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




                                      -40-


<PAGE>   50



SECTION 604.  Not Responsible for Recitals or Issuance of Securities.

      The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and neither the Trustee nor any Authenticating Agent assumes any responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities. Neither the Trustee nor
any Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.


SECTION 605.  May Hold Securities.

      The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.


SECTION 606.  Money Held in Trust.

      Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.


SECTION 607.  Compensation and Reimbursement.

      The Company agrees

      (1) to pay to the Trustee from time to time reasonable compensation for
   all services rendered by it hereunder (which compensation shall not be
   limited by any provision of law in regard to the compensation of a trustee of
   an express trust);

      (2) except as otherwise expressly provided herein, to reimburse the
   Trustee upon its request for all reasonable expenses, disbursements and
   advances incurred or made by the Trustee in accordance with any provision of
   this Indenture (including the reasonable compensation and the expenses and
   disbursements of its agents and counsel), except any such expense,
   disbursement or advance as may be attributable to its negligence or bad
   faith; and

      (3) to indemnify the Trustee for, and to hold it harmless against, any
   loss, liability or expense incurred without negligence or bad faith on its
   part, arising out of or in connection with the acceptance or administration
   of the trust or trusts hereunder, including the costs and expenses of
   defending itself against any claim or liability in connection with the
   exercise or performance of any of its powers or duties hereunder.



                                      -41-


<PAGE>   51



SECTION 608.  Conflicting Interests.

      If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture. 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 [or a trustee under -- list here any prior
indentures between the Company and the Trustee that have not been satisfied and
discharged and that may be excluded by the proviso to Section 310(b)(1) of the
Trust Indenture Act].


SECTION 609.  Corporate Trustee Required; Eligibility.

      There shall at all times be one (and only one) Trustee hereunder with
respect to the Securities of each series, which may be Trustee hereunder for
Securities of one or more other series. Each Trustee shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such has a combined
capital and surplus of at least $50,000,000. If any such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this Section
and to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee with respect to the Securities of any series shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.


SECTION 610.  Resignation and Removal; Appointment of Successor.

      No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 611.

      The Trustee may resign at any time with respect to the Securities of one
or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.

      The Trustee may be removed at any time with respect to the Securities of
any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.



                                      -42-


<PAGE>   52



      If at any time:

      (1) the Trustee shall fail to comply with Section 608 after written
   request therefor by the Company or by any Holder who has been a bona fide
   Holder of a Security for at least six months, or

      (2) the Trustee shall cease to be eligible under Section 609 and shall
   fail to resign after written request therefor by the Company or by any such
   Holder, or

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

then, in any such case, (A) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (B) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.

      If the Trustee shall resign, be removed or become incapable of acting, or
if a vacancy shall occur in the office of Trustee for any cause, with respect to
the Securities of one or more series, the Company, by a Board Resolution, shall
promptly appoint a successor Trustee or Trustees with respect to the Securities
of that or those series (it being understood that any such successor Trustee may
be appointed with respect to the Securities of one or more or all of such series
and that at any time there shall be only one Trustee with respect to the
Securities of any particular series) and shall comply with the applicable
requirements of Section 611. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the Holders
of a majority in principal amount of the Outstanding Securities of such series
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of Section 611, become the successor Trustee
with respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect
to the Securities of any series shall have been so appointed by the Company or
the Holders and accepted appointment in the manner required by Section 611, any
Holder who has been a bona fide Holder of a Security of such series for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.

      The Company shall give notice of each resignation and each removal of the
Trustee with respect to the Securities of any series and each appointment of a
successor Trustee with respect to the Securities of any series to all Holders of
Securities of such series in the manner provided in Section 106. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.



                                      -43-


<PAGE>   53



SECTION 611.  Acceptance of Appointment by Successor.

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

      In case of the appointment hereunder of a successor Trustee with respect
to the Securities of one or more (but not all) series, the Company, the retiring
Trustee and each successor Trustee with respect to the Securities of one or more
series shall execute and deliver an indenture supplemental hereto wherein each
successor Trustee shall accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.

      Upon request of any such successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such rights, powers and trusts referred to in the
first or second preceding paragraph, as the case may be.



                                      -44-


<PAGE>   54



      No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.


SECTION 612.  Merger, Conversion, Consolidation or Succession to Business.

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


SECTION 613.  Preferential Collection of Claims Against Company.

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


SECTION 614.  Appointment of Authenticating Agent.

      The Trustee may appoint an Authenticating Agent or Agents with respect to
one or more series of Securities which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series issued upon original issue
and upon exchange, registration of transfer or partial redemption thereof or
pursuant to Section 306, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to


                                      -45-


<PAGE>   55



be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, such Authenticating
Agent shall resign immediately in the manner and with the effect specified in
this Section.

      Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.

      An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 106 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.

      The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 607.

      If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:

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

                                                    NBD BANK,
                                                    As Trustee



                                                    By........................,
                                                      As Authenticating Agent






                                      -46-


<PAGE>   56



                                               By.............................
                                                    Authorized Officer


                                  ARTICLE SEVEN

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY


SECTION 701.  Company to Furnish Trustee Names and Addresses of Holders.

      The Company will furnish or cause to be furnished to the Trustee

      (1) semi-annually, not later than the 15th day after each Regular Record
   Date for each series of Securities at the time Outstanding, in such form as
   the Trustee may reasonably require, of the names and addresses of the Holders
   of Securities of each series as of the preceding Regular Record Date as the
   case may be, and

      (2) at such other times as the Trustee may request in writing, within 30
   days after the receipt by the Company of any such request, a list of similar
   form and content as of a date not more than 15 days prior to the time such
   list is furnished;

excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.


SECTION 702.  Preservation of Information; Communications to Holders.

      The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.

      The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the corresponding
rights and privileges of the Trustee, shall be as provided by the Trust
Indenture Act.

      Every Holder of Securities, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
agent of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of Holders made pursuant to the Trust
Indenture Act.




                                      -47-


<PAGE>   57



SECTION 703.  Reports by Trustee.

      The Trustee shall transmit to Holders such reports concerning the Trustee
and its actions under this Indenture as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto.

      A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.


SECTION 704.  Reports by Company.

      The Company shall file with the Trustee and the Commission, and transmit
to Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant to such Act; provided that any such information,
documents or reports required to be filed with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within
15 days after the same is so required to be filed with the Commission.


                                  ARTICLE EIGHT

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE


SECTION 801.  Company May Consolidate, Etc., Only on Certain Terms.

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

      (1) in case the Company shall consolidate with or merge into another
   Person or convey, transfer or lease its properties and assets substantially
   as an entirety to any Person, the Person formed by such consolidation or into
   which the Company is merged or the Person which acquires by conveyance or
   transfer, or which leases, the properties and assets of the Company
   substantially as an entirety shall be a corporation, partnership or trust,
   shall be organized and validly existing under the laws of the United States
   of America, any State thereof or the District of Columbia and shall expressly
   assume, by an indenture supplemental hereto, executed and delivered to the
   Trustee, in form satisfactory to the Trustee, the due and punctual payment of
   the principal of and any premium and interest on all the Securities and the
   performance or observance of every covenant of this Indenture on the part of
   the Company to be performed or observed;


                                      -48-


<PAGE>   58



      (2) immediately after giving effect to such transaction and treating any
   indebtedness which becomes an obligation of the Company or any Subsidiary as
   a result of such transaction as having been incurred by the Company or such
   Subsidiary at the time of such transaction, no Event of Default, and no event
   which, after notice or lapse of time or both, would become an Event of
   Default, shall have happened and be continuing;

      (3) if, as a result of any such consolidation or merger or such
   conveyance, transfer or lease, properties or assets of the Company would
   become subject to a mortgage, pledge, lien, security interest or other
   encumbrance which would not be permitted by this Indenture, the Company or
   such successor Person, as the case may be, shall take such steps as shall be
   necessary effectively to secure the Securities equally and ratably with (or
   prior to) all indebtedness secured thereby; and

      (4) the Company has delivered to the Trustee an Officers' Certificate and
   an Opinion of Counsel, each stating that such consolidation, merger,
   conveyance, transfer or lease and, if a supplemental indenture is required in
   connection with such transaction, such supplemental indenture comply with
   this Article and that all conditions precedent herein provided for relating
   to such transaction have been complied with.


SECTION 802.  Successor Substituted.

      Upon any consolidation of the Company with, or merger of the Company into,
any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety in accordance with Section
801, the successor Person formed by such consolidation or into which the Company
is merged or to which such conveyance, transfer or lease is made shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor Person
had been named as the Company herein, and thereafter, except in the case of a
lease, the predecessor Person shall be relieved of all obligations and covenants
under this Indenture and the Securities.


                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES


SECTION 901.  Supplemental Indentures Without Consent of Holders.

      Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:

      (1) to evidence the succession of another Person to the Company and the
   assumption by any such successor of the covenants of the Company herein and
   in the Securities; or


                                      -49-


<PAGE>   59



      (2) to add to the covenants of the Company for the benefit of the Holders
   of all or any series of Securities (and if such covenants are to be for the
   benefit of less than all series of Securities, stating that such covenants
   are expressly being included solely for the benefit of such series) or to
   surrender any right or power herein conferred upon the Company; or

      (3) to add any additional Events of Default for the benefit of the Holders
   of all or any series of Securities (and if such additional Events of Default
   are to be for the benefit of less than all series of Securities, stating that
   such additional Events of Default are expressly being included solely for the
   benefit of such series); or

      (4) to add to or change any of the provisions of this Indenture to such
   extent as shall be necessary to permit or facilitate the issuance of
   Securities in bearer form, registrable or not registrable as to principal,
   and with or without interest coupons, or to permit or facilitate the issuance
   of Securities in uncertificated form; or

      (5) to add to, change or eliminate any of the provisions of this Indenture
   in respect of one or more series of Securities, provided that any such
   addition, change or elimination (A) shall neither (i) apply to any Security
   of any series created prior to the execution of such supplemental indenture
   and entitled to the benefit of such provision nor (ii) modify the rights of
   the Holder of any such Security with respect to such provision or (B) shall
   become effective only when there is no such Security Outstanding; or

      (6) to secure the Securities pursuant to the requirements of Section 1008
   or other wise; or

      (7) to establish the form or terms of Securities of any series as
   permitted by Sections 201 and 301; or

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

      (9) to cure any ambiguity, to correct or supplement any provision herein
   which may be defective or inconsistent with any other provision herein, or to
   make any other provisions with respect to matters or questions arising under
   this Indenture, provided that such action pursuant to this Clause (9) shall
   not adversely affect the interests of the Holders of Securities of any series
   in any material respect.


SECTION 902.  Supplemental Indentures With Consent of Holders.

      With the consent of the Holders of not less than 662/3% in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by


                                      -50-


<PAGE>   60



a Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities of such series
under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Security affected
thereby,

      (1) change the Stated Maturity of the principal of, or any instalment of
   principal of or interest on, any Security, or reduce the principal amount
   thereof or the rate of interest thereon or any premium payable upon the
   redemption thereof, or reduce the amount of the principal of an Original
   Issue Discount Security or any other Security which would be due and payable
   upon a declaration of acceleration of the Maturity thereof pursuant to
   Section 502, or change any Place of Payment where, or the coin or currency in
   which, any Security or any premium or interest thereon is payable, or impair
   the right to institute suit for the enforcement of any such payment on or
   after the Stated Maturity thereof (or, in the case of redemption, on or after
   the Redemption Date or in the case of repayment at the option of a Holder, on
   or after the Repayment Date), or

      (2) reduce the percentage in principal amount of the Outstanding
   Securities of any series, the consent of whose Holders is required for any
   such supplemental indenture, or the consent of whose Holders is required for
   any waiver (of compliance with certain provisions of this Indenture or
   certain defaults hereunder and their consequences) provided for in this
   Indenture, or

      (3) modify any of the provisions of this Section, Section 513 or Section
   1011, except to increase any such percentage or to provide that certain other
   provisions of this Indenture cannot be modified or waived without the consent
   of the Holder of each Outstanding Security affected thereby; provided,
   however, that this clause shall not be deemed to require the consent of any
   Holder with respect to changes in the references to "the Trustee" and
   concomitant changes in this Section and Section 1011, or the deletion of this
   proviso, in accordance with the requirements of Sections 611 and 901(8).

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

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


SECTION 903.  Execution of Supplemental Indentures.

      In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture,


                                      -51-


<PAGE>   61



the Trustee shall be entitled to receive, and (subject to Section 601) shall be
fully protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.


SECTION 904.  Effect of Supplemental Indentures.

      Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.


SECTION 905.  Conformity with Trust Indenture Act.

      Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.


SECTION 906.  Reference in Securities to Supplemental Indentures.

      Securities of any series authenticated and delivered after the execution
of any supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.


                                   ARTICLE TEN

                                    COVENANTS


SECTION 1001.  Payment of Principal, Premium and Interest.

      The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of and any premium
and interest on the Securities of that series in accordance with the terms of
the Securities and this Indenture.




                                      -52-


<PAGE>   62



SECTION 1002.  Maintenance of Office or Agency.

      The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.

      The Company may also from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in each Place of Payment for Securities of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.


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

      If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of or any premium or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal and any premium and interest so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.

      Whenever the Company shall have one or more Paying Agents for any series
of Securities, it will, prior to each due date of the principal of or any
premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay such amount, such sum to be held as provided by
the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so to act.

      The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will (1) comply with the provisions of
the Trust Indenture Act applicable to it as a Paying Agent and (2) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in respect of the
Securities


                                      -53-


<PAGE>   63



of that series, upon the written request of the Trustee, forthwith pay to the
Trustee all sums held in trust by such Paying Agent for payment in respect of
the Securities of that series.

      The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.

      Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of or any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal, premium or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, The City of New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.


SECTION 1004.  Statement by Officers as to Default; Notice of Certain Events.

      The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.

      The Company will deliver to the Trustee within five days after the
occurrence thereof notice of any acceleration which with the giving of notice
and the lapse of time would be an Event of Default within the meaning of Section
501(5).


SECTION 1005.  Existence.

      Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and


                                      -54-


<PAGE>   64



franchises; provided, however, that the Company shall not be required to
preserve any such right or franchise if the Board of Directors shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and that the loss thereof is not disadvantageous in any
material respect to the Holders.


SECTION 1006.  Maintenance of Properties.

      The Company will cause all properties used or useful in the conduct of its
business or the business of any Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section shall prevent the Company from discontinuing the
operation or maintenance of any of such properties if such discontinuance is, in
the judgment of the Company, desirable in the conduct of its business or the
business of any Subsidiary and not disadvantageous in any material respect to
the Holders.


SECTION 1007.  Payment of Taxes and Other Claims.

      The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and (2)
all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a lien upon the property of the Company or any Subsidiary; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.


SECTION 1008.  Limitation on Secured Debt.

      The Company covenants and agrees that it will not itself, and will not
permit any Restricted Subsidiary to, issue, assume, guarantee or incur any
Secured Debt, without effectively providing that the Securities of any series
(together with, if the Company shall so determine, any other Indebtedness of the
Company or such Restricted Subsidiary then existing or thereafter created
ranking equally with the Securities, including guaranty of Indebtedness of
others) shall be secured equally and ratably with (or prior to) such Secured
Debt, so long as such Secured Debt shall be so secured, except that this Section
1008 shall not apply to Secured Debt Secured by:

         (1) Mortgages on property of any corporation existing at the time such
      corporation becomes a Subsidiary;



                                      -55-


<PAGE>   65



         (2) Mortgages on property existing at the time of acquisition thereof
      or to secure the payment of all or any part of the purchase price thereof
      or to secure any indebtedness incurred prior to, at the time of or within
      120 days after the acquisition of such property for the purpose of
      financing all or any part of the purchase price thereof;

         (3) Mortgages on property in favor of the United States of America or
      any state thereof, or any other country, or any political subdivision of
      any of the foregoing, to secure payments pursuant to any contract or
      statute or to secure any indebtedness incurred for the purpose of
      financing all or any part of the purchase price or the cost of
      construction of the property subject to such Mortgages;

         (4) Mortgages which secure Indebtedness owing to the Company or to a
      Wholly-owned Restricted Subsidiary by a Subsidiary;

         (5) Mortgages incurred or assumed in connection with the issuance of
      revenue bonds the interest on which is exempt from Federal income tax
      pursuant to Section 103(b) of the Internal Revenue Code of 1986, as
      amended (or any successor provision thereof); or

         (6) any extension, renewal or replacement (or successive extensions,
      renewals or replacements), in whole or in part, of any Mortgage referred
      to in the foregoing clauses (1) to (5), inclusive, or of any indebtedness
      secured thereby; provided that such extension, renewal or replacement
      Mortgage shall be limited to all or any part of the same property that
      secured the Mortgage extended, renewed or replaced (plus improvements on
      such property).

      Notwithstanding the foregoing provisions of this Section 1008, the Company
and any one or more Restricted Subsidiary may, without equally and ratably
securing the Securities of any series, issue, assume, guarantee or incur Secured
Debt which would otherwise be subject to the foregoing restrictions if, after
giving effect to the Secured Debt to be issued, assumed, guaranteed or incurred,
the sum of (a) the aggregate amount of all such Secured Debt of the Company and
its Restricted Subsidiaries (not including Secured Debt permitted under clauses
(1) through (6) above) in existence at such time, (b) the aggregate value of the
Sale and Leaseback Transactions (as defined in Section 1009) in existence at
such time (not including Sale and Leaseback Transactions permitted under clauses
(2) through (4) of Section 1009) and (c) the aggregate amount of all unsecured
Funded Debt of Restricted Subsidiaries (not including any unsecured Funded Debt
permitted under clauses (2) and (3) of Section 1010) in existence at such time,
does not exceed 5% of the Company's Consolidated Net Tangible Assets.


SECTION 1009.  Limitation on Sales and Leasebacks.

      The Company will not itself, and will not permit any Restricted Subsidiary
to, enter into any arrangement with any bank, insurance company or other lender
or investor, or to which any such lender or investor is a party, providing for
the leasing to the Company or a


                                      -56-


<PAGE>   66



Restricted Subsidiary of any real property (except a lease for a temporary
period not to exceed three years by the end of which it is intended that the use
of such real property by the lessee will be discontinued) which has been or is
to be sold or transferred by the Company or such Restricted Subsidiary more than
120 days after the date of acquisition thereof to such lender or investor or to
any person to whom funds have been or are to be advanced by such lender or
investor on the security of such real property (herein referred to as a "Sale
and Leaseback Transaction"), except that this Section 1009 shall not apply if:

         (1) the Company or such Restricted Subsidiary could create Secured Debt
      in accordance with Section 1008 in an amount equal to the value of such
      Sale and Leaseback Transaction, without equally and ratably securing the
      Securities of any series;

         (2) the Company (and in any such case the Company covenants that it
      will) within 120 days after the Sale and Leaseback Transaction, regardless
      of whether such Sale and Leaseback Transaction may have been made by the
      Company or by a Restricted Subsidiary, applies an amount equal to the
      greater of (i) the net proceeds of the sale of the real property leased
      pursuant to such Sale and Leaseback Transaction and (ii) the fair value of
      the real property so leased at the time of entering into such Sale and
      Leaseback Transaction (as determined by the Board of Directors) to the
      retirement (other than by payment at maturity or pursuant to any mandatory
      sinking fund payment or any mandatory prepayment provision) of Funded Debt
      of the Company, provided that the amount to be applied to the retirement
      of Funded Debt of the Company shall be reduced by the principal amount of
      any Securities delivered within 120 days after such sale to the Trustee
      for retirement and cancellation;

         (3) such Sale and Leaseback Transaction was effected in connection with
      the issuance of revenue bonds the interest on which is exempt from Federal
      income tax pursuant to Section 103(b) of the Internal Revenue Code of
      1986, as amended (or any successor provision thereof); or

         (4) the net proceeds of the sale of the real property leased pursuant
      to such Sale and Leaseback Transaction are applied to the purchase of
      properties, facilities or equipment to be used for general operating
      purposes.

      For purposes of this Section 1009 and Section 1008, the term "value" shall
mean, with respect to a Sale and Leaseback Transaction, as of any particular
time, the amount equal to the greater of (i) the net proceeds of the sale of the
real property leased pursuant to such Sale and Leaseback Transaction and (ii)
the fair value of the real property so leased at the time of entering into such
Sale and Leaseback Transaction (as determined by the Board of Directors),
divided first by the number of full years in the term of the lease and then
multiplied by the number of full years of such term remaining at the time of
determination, without regard to any renewal or extension options contained in
the lease.




                                      -57-


<PAGE>   67



SECTION 1010.  Limitation on Unsecured Funded Debt of Restricted Subsidiaries.

      The Company will not permit any Restricted Subsidiary to, directly or
indirectly, issue, assume, guarantee or incur any unsecured Funded Debt, except
that this Section 1010 shall not apply if:

         (1) the Company or such Restricted Subsidiary could create Secured Debt
      in accordance with Section 1008 in an amount equal to such unsecured
      Funded Debt, without equally and ratably securing the Securities of any
      series;

         (2) such unsecured Funded Debt is owed to the Company or any
      Wholly-owned Restricted Subsidiary;

         (3) such unsecured Funded Debt existed at the time such Restricted
      Subsidiary first became a Restricted Subsidiary;

         (4) such unsecured Funded Debt was unsecured Funded Debt of any
      corporation existing at the time of merger or consolidation with a
      Restricted Subsidiary; or

         (5) such unsecured Funded Debt was incurred for the purpose of renewing
      or refunding unsecured Funded Debt permitted in the foregoing clauses (3)
      and (4).


SECTION 1011.  Waiver of Certain Covenants.

      Except as otherwise specified as contemplated by Section 301 for
Securities of such series, the Company may, with respect to the Securities of
any series, omit in any particular instance to comply with any term, provision
or condition set forth in any covenant provided pursuant to Section 301(19),
901(2) or 901(7) for the benefit of the Holders of such series or in any of
Sections 1008 to 1010, inclusive, if before the time for such compliance the
Holders of at least 662/3% in principal amount of the Outstanding Securities of
such series shall, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such term, provision or condition,
but no such waiver shall extend to or affect such term, provision or condition
except to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.


                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES


SECTION 1101.  Applicability of Article.



                                      -58-


<PAGE>   68



      Securities of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 301 for such Securities) in accordance with
this Article.


SECTION 1102.  Election to Redeem; Notice to Trustee.

      The election of the Company to redeem any Securities shall be evidenced by
a Board Resolution or in another manner specified as contemplated by Section 301
for such Securities. In case of any redemption at the election of the Company of
less than all the Securities of any series (including any such redemption
affecting only a single Security), the Company shall, at least 60 days prior to
the Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the
principal amount of Securities of such series to be redeemed and, if applicable,
of the tenor of the Securities to be redeemed. In the case of any redemption of
Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, the
Company shall furnish the Trustee with an Officers' Certificate evidencing
compliance with such restriction.


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

      If less than all the Securities of any series are to be redeemed (unless
all the Securities of such series and of a specified tenor are to be redeemed or
unless such redemption affects only a single Security), the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities of such series
not previously called for redemption, by such method as the Trustee shall deem
fair and appropriate and which may provide for the selection for redemption of a
portion of the principal amount of any Security of such series, provided that
the unredeemed portion of the principal amount of any Security shall be in an
authorized denomination (which shall not be less than the minimum authorized
denomination) for such Security. If less than all the Securities of such series
and of a specified tenor are to be redeemed (unless such redemption affects only
a single Security), the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series and specified tenor not previously called
for redemption in accordance with the preceding sentence.

      The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption as aforesaid and, in case of any Securities selected for
partial redemption as aforesaid, the principal amount thereof to be redeemed.

      The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.



                                      -59-


<PAGE>   69



      For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.


SECTION 1104.  Notice of Redemption.

      Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, at his address appearing in the
Security Register.

      All notices of redemption shall state:

      (1)   the Redemption Date,

      (2)   the Redemption Price,

      (3) if less than all the Outstanding Securities of any series consisting
   of more than a single Security are to be redeemed, the identification (and,
   in the case of partial redemption of any such Securities, the principal
   amounts) of the particular Securities to be redeemed and, if less than all
   the Outstanding Securities of any series consisting of a single Security are
   to be redeemed, the principal amount of the particular Security to be
   redeemed,

      (4) that on the Redemption Date the Redemption Price will become due and
   payable upon each such Security to be redeemed and, if applicable, that
   interest thereon will cease to accrue on and after said date,

      (5) the place or places where each such Security is to be surrendered for
   payment of the Redemption Price, and

      (6) that the redemption is for a sinking fund, if such is the case.

      Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.


SECTION 1105.  Deposit of Redemption Price.

      On or prior to the Repayment Date (and if on, then before 10:00 a.m. (New
York City time)), the Company shall deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 1003) an amount of money sufficient (in
immediately available funds if payment is made on the Repayment Date) to pay the
Repayment Price of and (unless the Repayment


                                      -60-


<PAGE>   70



Date shall be an Interest Payment Date) accrued interest, if any, on all of the
Securities of such series which are to be repaid on that date.


SECTION 1106.  Securities Payable on Redemption Date.

      Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 301, instalments of interest whose Stated Maturity is on
or prior to the Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.

      If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.


SECTION 1107.  Securities Redeemed in Part.

      Any Security which is to be redeemed only in part shall be surrendered at
a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.


                                 ARTICLE TWELVE

                                  SINKING FUNDS


SECTION 1201.  Applicability of Article.

      The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of any series except as otherwise specified as
contemplated by Section 301 for such Securities.



                                      -61-


<PAGE>   71



      The minimum amount of any sinking fund payment provided for by the terms
of any Securities is herein referred to as a "mandatory sinking fund payment",
and any payment in excess of such minimum amount provided for by the terms of
such Securities is herein referred to as an "optional sinking fund payment". If
provided for by the terms of any Securities, the cash amount of any sinking fund
payment may be subject to reduction as provided in Section 1202. Each sinking
fund payment shall be applied to the redemption of Securities as provided for by
the terms of such Securities.


SECTION 1202.  Satisfaction of Sinking Fund Payments with Securities.

      The Company (1) may deliver Outstanding Securities of a series (other than
any previously called for redemption) and (2) may apply as a credit Securities
of a series which have been redeemed either at the election of the Company
pursuant to the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities, in each
case in satisfaction of all or any part of any sinking fund payment with respect
to any Securities of such series required to be made pursuant to the terms of
such Securities as and to the extent provided for by the terms of such
Securities; provided that the Securities to be so credited have not been
previously so credited. The Securities to be so credited shall be received and
credited for such purpose by the Trustee at the Redemption Price, as specified
in the Securities so to be redeemed, for redemption through operation of the
sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.


SECTION 1203.  Redemption of Securities for Sinking Fund.

      Not less than 30 days prior to each sinking fund payment date for any
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for such
Securities pursuant to the terms of such Securities, the portion thereof, if
any, which is to be satisfied by payment of cash and the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities pursuant to
Section 1202 and will also deliver to the Trustee any Securities to be so
delivered. Not less than 30 days prior to each such sinking fund payment date,
the Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 1103 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 1104. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 1106 and 1107.




                                      -62-


<PAGE>   72



                                ARTICLE THIRTEEN

                       DEFEASANCE AND COVENANT DEFEASANCE


SECTION 1301.  Company's Option to Effect Defeasance or Covenant Defeasance.

      The Company may elect, at its option at any time, to have Section 1302 or
Section 1303 applied to any Securities or any series of Securities, as the case
may be, designated pursuant to Section 301 as being defeasible pursuant to such
Section 1302 or 1303, in accordance with any applicable requirements provided
pursuant to Section 301 and upon compliance with the conditions set forth below
in this Article. Any such election shall be evidenced by a Board Resolution or
in another manner specified as contemplated by Section 301 for such Securities.


SECTION 1302.  Defeasance and Discharge.

      Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities or any series of Securities, as the case may be, the
Company shall be deemed to have been discharged from its obligations with
respect to such Securities as provided in this Section on and after the date the
conditions set forth in Section 1304 are satisfied (hereinafter called
"Defeasance"). For this purpose, such Defeasance means that the Company shall be
deemed to have paid and discharged the entire indebtedness represented by such
Securities and to have satisfied all its other obligations under such Securities
and this Indenture insofar as such Securities are concerned (and the Trustee, at
the expense of the Company, shall execute proper instruments acknowledging the
same), subject to the following which shall survive until otherwise terminated
or discharged hereunder: (1) the rights of Holders of such Securities to
receive, solely from the trust fund described in Section 1304 and as more fully
set forth in such Section, payments in respect of the principal of and any
premium and interest on such Securities when payments are due, (2) the Company's
obligations with respect to such Securities under Sections 304, 305, 306, 1002
and 1003, (3) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and (4) this Article. Subject to compliance with this Article, the
Company may exercise its option (if any) to have this Section applied to any
Securities notwithstanding the prior exercise of its option (if any) to have
Section 1303 applied to such Securities.


SECTION 1303.  Covenant Defeasance.

      Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities or any series of Securities, as the case may be, (1)
the Company shall be released from its obligations under Section 801(3),
Sections 1006 through 1010, inclusive, and any covenants provided pursuant to
Section 301(19), 901(2) or 901(7) for the benefit of the Holders of such
Securities, and (2) the occurrence of any event specified in Sections 501(4)
(with respect to any of Section 801(3), Sections 1006 through 1010, inclusive,
and any such covenants provided pursuant to Section 301(19), 901(2) or 901(7)),
501(5) and 501(8) shall


                                      -63-


<PAGE>   73



be deemed not to be or result in an Event of Default, in each case with respect
to such Securities as provided in this Section on and after the date the
conditions set forth in Section 1304 are satisfied (hereinafter called "Covenant
Defeasance"). For this purpose, such Covenant Defeasance means that, with
respect to such Securities, the Company may omit to comply with and shall have
no liability in respect of any term, condition or limitation set forth in any
such specified Section (to the extent so specified in the case of Section
501(4)), whether directly or indirectly by reason of any reference elsewhere
herein to any such Section or by reason of any reference in any such Section to
any other provision herein or in any other document, but the remainder of this
Indenture and such Securities shall be unaffected thereby.


SECTION 1304.  Conditions to Defeasance or Covenant Defeasance.

      The following shall be the conditions to the application of Section 1302
or Section 1303 to any Securities or any series of Securities, as the case may
be:

      (1) The Company shall irrevocably have deposited or caused to be deposited
   with the Trustee (or another trustee which satisfies the requirements
   contemplated by Section 609 and agrees to comply with the provisions of this
   Article applicable to it) as trust funds in trust for the purpose of making
   the following payments, specifically pledged as security for, and dedicated
   solely to, the benefits of the Holders of such Securities, (A) money in an
   amount, or (B) U.S. Government Obligations which through the scheduled
   payment of principal and interest in respect thereof in accordance with their
   terms will provide, not later than one day before the due date of any
   payment, money in an amount, or (C) a combination thereof, in each case
   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 and discharge, and which shall be applied by the Trustee
   (or any such other qualifying trustee) to pay and discharge, the principal of
   and any premium and interest on such Securities on the respective Stated
   Maturities, in accordance with the terms of this Indenture and such
   Securities. As used herein, "U.S. Government Obligation" means (x) any
   security which is (i) a direct obligation of the United States of America for
   the payment of which the full faith and credit of the United States of
   America is pledged or (ii) an obligation of a Person controlled or supervised
   by and acting as an agency or instrumentality of the United States of America
   the payment of which is unconditionally guaranteed as a full faith and credit
   obligation by the United States of America, which, in either case (i) or
   (ii), is not callable or redeemable at the option of the issuer thereof, and
   (y) any depositary receipt issued by a bank (as defined in Section 3(a)(2) of
   the Securities Act) as custodian with respect to any U.S. Government
   Obligation which is specified in Clause (x) above and held by such bank for
   the account of the holder of such depositary receipt, or with respect to any
   specific payment of principal of or interest on any U.S. Government
   Obligation which is so specified and held, provided that (except as required
   by law) such custodian is not authorized to make any deduction from the
   amount payable to the holder of such depositary receipt from any amount
   received by the custodian in respect of the U.S. Government Obligation or the
   specific payment of principal or interest evidenced by such depositary
   receipt.


                                      -64-


<PAGE>   74



      (2) In the event of an election to have Section 1302 apply to any
   Securities or any series of Securities, as the case may be, the Company shall
   have delivered to the Trustee an Opinion of Counsel stating that (A) the
   Company has received from, or there has been published by, the Internal
   Revenue Service a ruling or (B) since the date of this instrument, there has
   been a change in the applicable Federal income tax law, in either case (A) or
   (B) to the effect that, and based thereon such opinion shall confirm that,
   the Holders of such Securities will not recognize gain or loss for Federal
   income tax purposes as a result of the deposit, Defeasance and discharge to
   be effected with respect to such Securities and will be subject to Federal
   income tax on the same amount, in the same manner and at the same times as
   would be the case if such deposit, Defeasance and discharge were not to
   occur.

      (3) In the event of an election to have Section 1303 apply to any
   Securities or any series of Securities, as the case may be, the Company shall
   have delivered to the Trustee an Opinion of Counsel to the effect that the
   Holders of such Securities will not recognize gain or loss for Federal income
   tax purposes as a result of the deposit and Covenant Defeasance to be
   effected with respect to such Securities and will be subject to Federal
   income tax on the same amount, in the same manner and at the same times as
   would be the case if such deposit and Covenant Defeasance were not to occur.

      (4) The Company shall have delivered to the Trustee an Officer's
   Certificate to the effect that neither such Securities nor any other
   Securities of the same series, if then listed on any securities exchange,
   will be delisted as a result of such deposit.

      (5) No event which is, or after notice or lapse of time or both would
   become, an Event of Default with respect to such Securities or any other
   Securities shall have occurred and be continuing at the time of such deposit
   or, with regard to any such event specified in Sections 501(6) and (7), at
   any time on or prior to the 90th day after the date of such deposit (it being
   understood that this condition shall not be deemed satisfied until after such
   90th day).

      (6) Such Defeasance or Covenant Defeasance shall not cause the Trustee to
   have a conflicting interest within the meaning of the Trust Indenture Act
   (assuming all Securities are in default within the meaning of such Act).

      (7) Such Defeasance or Covenant Defeasance shall not result in a breach or
   violation of, or constitute a default under, any other agreement or
   instrument to which the Company is a party or by which it is bound.

      (8) Such Defeasance or Covenant Defeasance shall not result in the trust
   arising from such deposit constituting an investment company within the
   meaning of the Investment Company Act unless such trust shall be registered
   under such Act or exempt from registration thereunder.

      (9) The Company shall have delivered to the Trustee an Officer's
   Certificate and an Opinion of Counsel, each stating that all conditions
   precedent with respect to such Defeasance or Covenant Defeasance have been
   complied with.


                                      -65-


<PAGE>   75




SECTION 1305.  Deposited Money and U.S. Government Obligations to Be
   Held in Trust; Miscellaneous Provisions.

      Subject to the provisions of the last paragraph of Section 1003, all money
and U.S. Government Obligations (including the proceeds thereof) deposited with
the Trustee or other qualifying trustee (solely for purposes of this Section and
Section 1306, the Trustee and any such other trustee are referred to
collectively as the "Trustee") pursuant to Section 1304 in respect of any
Securities shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and this Indenture, to the payment, either
directly or through any such Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Holders of such
Securities, of all sums due and to become due thereon in respect of principal
and any premium and interest, but money so held in trust need not be segregated
from other funds except to the extent required by law.

      The Company 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 1304 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of Outstanding Securities.

      Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 1304 with
respect to any Securities which, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect the Defeasance or Covenant Defeasance, as
the case may be, with respect to such Securities.


SECTION 1306.  Reinstatement.

      If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the obligations under this
Indenture and such Securities from which the Company has been discharged or
released pursuant to Section 1302 or 1303 shall be revived and reinstated as
though no deposit had occurred pursuant to this Article with respect to such
Securities, until such time as the Trustee or Paying Agent is permitted to apply
all money held in trust pursuant to Section 1305 with respect to such Securities
in accordance with this Article; provided, however, that if the Company makes
any payment of principal of or any premium or interest on any such Security
following such reinstatement of its obligations, the Company shall be subrogated
to the rights (if any) of the Holders of such Securities to receive such payment
from the money so held in trust.


                                ARTICLE FOURTEEN


                                      -66-


<PAGE>   76



                  REPAYMENT OF SECURITIES AT OPTION OF HOLDERS


SECTION 1401.  Applicability of Article.

      Securities of any series which are repayable before their Stated Maturity
at the option of the Holders shall be repayable in accordance with their terms
and (except as otherwise specified as contemplated by Section 301 for Securities
of any series) in accordance with this Article.


SECTION 1402.  Notice of Repayment Date.

      Notice of any Repayment Date with respect to Securities of any series
shall be given by the Company not less than 45 nor more than 60 days prior to
such Repayment Date to each Holder of Securities of such series in accordance
with Section 106.

      The notice as to the Repayment Date shall state:

         (1)  the Repayment Date;

         (2)  the Repayment Price;

         (3) the place or places where such Securities are to be surrendered for
   payment of the Repayment Price and the date by which Securities must be so
   surrendered in order to be repaid; and

         (4) that exercise of the option to elect repayment is irrevocable.


SECTION 1403.  Deposit of Repayment Price.

      On or prior to the Repayment Date (and if on, then before 10:00 a.m. (New
York City time)), the Company shall deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 1003) an amount of money sufficient (in
immediately available funds if payment is made on the Repayment Date) to pay the
Repayment Price of and (unless the Repayment Date shall be an Interest Payment
Date) accrued interest, if any, on all of the Securities of such series which
are to be repaid on that date.


SECTION 1404.  Securities Payable on Repayment Date.

      The form of option to elect repayment having been delivered as specified
in the form of Security for such series as provided in Section 203, the
Securities of such series so to be repaid shall, on the Repayment Date, become
due and payable at the Repayment Price applicable thereto and from and after
such date (unless the Company shall default in the


                                      -67-


<PAGE>   77



payment of the Repayment Price and accrued interest) such Securities shall cease
to bear interest. Upon surrender of any such Security for repayment in
accordance with said notice, such Security shall be paid by the Company at the
Repayment Price together with accrued interest to the Repayment Date; provided,
however, that instalments of interest whose Stated Maturity is on or prior to
such Repayment Date shall be payable to the Holders of such Securities, or one
or more Predecessor Securities, registered as such at the close of business on
the relevant Record Dates according to their terms and the provisions of Section
307.

      If any Security shall not be paid upon surrender thereof for repayment,
the principal (and premium, if any) shall, until paid, bear interest from the
Repayment Date at the rate prescribed therefor in such Security.


SECTION 1405.  Securities Repaid in Part.

      Any Security which by its terms may be repaid in part at the option of the
Holder and which is to be repaid only in part shall be surrendered at any office
or agency of the Company designated for that purpose pursuant to Section 1002
(with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or his attorney duly authorized in
writing), and the Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Security without service charge, a new Security or
Securities of the same series, of any authorized denomination as requested by
such Holder, in aggregate principal amount equal to and in exchange for the
unrepaid portion of the principal of the Security so surrendered.

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




                                      -68-


<PAGE>   78



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

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


                                        American Greetings Corporation

                                        By....................................

Attest:


 ......................................


                                        NBD Bank

                                        By....................................

Attest:


 ......................................



                                      -69-


<PAGE>   79



STATE OF NEW YORK      )
                       )  ss.:
COUNTY OF NEW YORK     )


      On the .... day of ..........., 1998, before me personally came
 ..........................., to me known, who, being by me duly sworn, did
depose and say that he is .................... of
 ................................., one of the corporations described in and
which executed the foregoing instrument; that he knows the 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.



                               ...............................................


STATE OF NEW YORK      )
                       )  ss.:
COUNTY OF NEW YORK     )


      On the .... day of ..........., 1998, before me personally came
 ..........................., to me known, who, being by me duly sworn, did
depose and say that he is .................... of
 ................................., one of the corporations described in and
which executed the foregoing instrument; that he knows the 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.



                                ...............................................



                                      -70-



<PAGE>   1
                                                                 Exhibit 5.1





                                BROUSE & MCDOWELL
                            500 FIRST NATIONAL TOWER
                                AKRON, OHIO 44308
                             TELEPHONE 330/535-5711
                                FAX 330/253-8601
                            INTERNET: www.brouse.com


                                  June 5, 1998


American Greetings Corporation
One American Road
Cleveland, Ohio 44144


         In connection with the filing by American Greetings Corporation, an
Ohio corporation (the "Company"), with the Securities and Exchange Commission
under the provisions of the Securities Act of 1933, as amended, of a
Registration Statement on Form S-3 with respect to up to $600,000,000 of debt
securities of the Company (the "Debt Securities") to be sold by the Company from
time to time, we have examined the following:

                  (i)      the  Amended Articles of Incorporation and the Code 
                           of Regulations of the Company, each as currently in 
                           effect;

                  (ii)     the Registration Statement on Form S-3, Registration
                           No. 333-53197 (including Exhibits thereto), as
                           amended, filed with the Securities and Exchange
                           Commission (the "Registration Statement");

                  (iii)    the proposed form of Underwriting Agreement pursuant
                           to which the Debt Securities are to be purchased by
                           the Underwriters and resold to the public;

                  (iv)     the proposed form of Indenture under which the Debt
                           Securities are to be issued; and

                  (v)      such other documents as we deemed it necessary to
                           examine as a basis for the opinions hereinafter
                           expressed.

                  Based upon the foregoing, we are of the opinion that:

                  (i)      The Company is incorporated and validly existing
                           under the laws of the State of Ohio.

                  (ii)     The Debt Securities to be issued and sold by the
                           Company, when issued 


<PAGE>   2
                   and sold in the manner contemplated by the Registration
                   Statement, the Underwriting Agreement applicable thereto and
                   the Indenture, will be valid and binding obligations of      
                   the Company          


                  We are attorneys licensed to practice law in the State of
Ohio. The opinions expressed herein are limited solely to the laws of the State
of Ohio and we express no opinion under the laws of any other jurisdiction.

                  This opinion is delivered to you solely in connection with the
filing of the Registration Statement with respect to the Debt Securities and
this letter and the opinions stated herein may not be relied upon for any other
purpose.

                  We consent to the filing of this opinion with the Registration
Statement and to the use of our name therein under the caption "Validity of Debt
Securities."


                                                     Respectfully submitted,




                                                     Brouse & McDowell





<PAGE>   1
                                                             Exhibit 24.1

                        AMERICAN GREETINGS CORPORATION

                      REGISTRATION STATEMENT ON FORM S-3

                              Power of Attorney
                              -----------------

        KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers and
directors of American Greetings Corporation (the "Company") hereby constitute
and appoint Jon Groetzinger, Jr., Dale A. Cable, Phyllis Alden, Stanley E.
Everett and David A. Basinski, Jr., and each of them, with full power of
substitution and resubstitution, as attorneys or attorney of the undersigned,
to execute and file under the Securities Act of 1933 a Registration Statement
on Form S-3 relating to the registration of up to $600,000,000 of debt
securities of the Company and any and all amendments and exhibits thereto,
including post-effective amendments, and any and all applications or other
documents to be filed with the Securities and Exchange Commission pertaining
to such registration, with full power and authority to do and perform any and
all acts and things whatsoever necessary, appropriate or desirable to be done
in the premises, or in the name, place and stead of the said directors and
officers, hereby ratifying and approving the acts of said attorneys and any of
them and any such substitute.

        Executed at Cleveland, Ohio, this 15th day of May, 1998.

         Signature                                Title
         ---------                                -----

/s/ Irving Stone                  Founder-Chairman; Chairman of the Executive
- ----------------------            Committee; Director
Irving Stone

/s/ Morry Weiss                   Chairman of the Board; Chief Executive 
- ----------------------            Officer; Director
Morry Weiss

/s/ Edward Fruchtenbaum           President; Chief Operating Officer, Director
- ----------------------
Edward Fruchtenbaum

/s/ Scott S. Cowen                Director
- ----------------------
Scott S. Cowen

/s/ Herbert H. Jacobs             Director
- ----------------------
Herbert H. Jacobs

/s/ Albert B. Ratner              Director
- ----------------------
Albert B. Ratner

/s/ Harry H. Stone                Director
- ----------------------
Harry H. Stone
<PAGE>   2


- --------------------            Director
Jeanette S. Wagner                       


/s/ Milton A. Wolf              Director
- --------------------
Milton A. Wolf


/s/ William S. Meyer            Senior Vice President; Chief Financial Officer
- --------------------            (principal financial officer)
William S. Meyer


/s/ Patricia L. Ripple          Vice President; Corporate Controller 
- ----------------------          (principal accounting officer)
Patricia L. Ripple





© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission