BEAR STEARNS COMPANIES INC, S-4, 1997-02-05

BEAR STEARNS COMPANIES INC
S-4, 1997-02-05
SECURITY BROKERS, DEALERS & FLOTATION COMPANIES

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As filed with the Securities and Exchange Commission on February 5, 1997
Registration Nos. 333- and 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

------------------------------------
<TABLE>
<S> <C>
THE BEAR STEARNS BEAR STEARNS
COMPANIES INC. CAPITAL TRUST I
(Exact name of registrant as specified in its charter) (Exact name of registrant as specified in its Trust Agreement)
Delaware Delaware
(State or other jurisdiction of incorporation or organization)(State or other jurisdiction of incorporation or organization)

(Primary standard industrial classification code number) (Primary standard industrial classification code number)
13-3286161 13-7108741
(l.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
</TABLE>
<TABLE>
<S> <C>
245 Park Avenue c/o The Bear Stearns Companies Inc.
New York, New York 10167 245 Park Avenue
(212) 272-2000 New York, New York 10167
(Address, including zip code, and telephone number, (212) 272-2000
including area code, of registrant's (Address, including zip code, and telephone number,
principal executive offices) including area code, of registrant's
principal executive offices)

</TABLE>

William J. Montgoris
Chief Operating Officer
The Bear Stearns Companies Inc.
245 Park Avenue
New York, New York 10167
(212) 272-2000
(Name and Address, Including Zip Code,
and Telephone Number, Including Area Code, of Agent For Service)

Copies to:
Dennis J. Block, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
(212) 310-8000

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after the effective date of this Registration
Statement.

If the securities being registered on this Form are being offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, please check the following box. [__]

<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
================================================================================================================================
Proposed Maximum Proposed Maximum
Title of Each Class of Amount to be Offering Price Per Aggregate Offering Amount of
Securities to be Registered (1) Registered (1) Unit (2) Price (2) Registration Fee
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fixed/Adjustable Rate Capital
Securities of Bear Stearns
Capital Trust I.............. 200,000 $1,000 $200,000,000 $60,606
- --------------------------------------------------------------------------------------------------------------------------------
Fixed/Adjustable Rate Junior
Subordinated Deferrable N/A N/A N/A N/A
Interest Debentures of The Bear
Stearns Companies
Inc. (2) (3)
- --------------------------------------------------------------------------------------------------------------------------------
The Bear Stearns Companies
Inc. Guarantee with respect to N/A N/A N/A N/A
the Capital Securities (3)(4)
- --------------------------------------------------------------------------------------------------------------------------------
Total........................ 200,000 100% $200,000,000(5) $60,606
================================================================================================================================
<FN>

(1) Estimated solely for the purpose of computing the registration fee
pursuant to Rule 467(f)(2).
(2) The Fixed/Adjustable Rate Junior Subordinated Deferrable Interest
Debentures were purchased by Bear Stearns Capital Trust I with the
proceeds of the sale of the Capital Securities.
(3) This Registration Statement is deemed to cover the Fixed/Adjustable
Rate Junior Subordinated Deferrable Interest Debentures of The Bear
Stearns Companies Inc., the rights of holders of Fixed/Adjustable Rate
Junior Subordinated Deferrable Interest Debentures of The Bear Stearns
Companies Inc. under the Indenture, the rights of holders of Capital
Securities of Bear Stearns Capital Trust I, the rights of holders of
the Capital Securities under the Guarantee of The Bear Stearns
Companies Inc. and certain backup undertakings as described in this
Registration Statement. No separate consideration will be received from
purchasers of the Capital Securities for the Junior Subordinated
Debentures.
(4) No separate consideration will be received for The Bear Stearns
Companies Inc. Guarantee.
(5) Such amount represents the aggregate liquidation amount of the Capital
Securities to be issued and exchanged hereunder and the principal
amount of Junior Subordinated Debentures that may be distributed upon
any liquidation of Bear Stearns Capital Trust I.
</FN>
</TABLE>

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

THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE OR UNTIL THE
REGISTRANTS 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 SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

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

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

SUBJECT TO COMPLETION, DATED FEBRUARY 5, 1997

PROSPECTUS

$200,000,000
BEAR STEARNS CAPITAL TRUST I
OFFER TO EXCHANGE ITS FIXED/ADJUSTABLE RATE CAPITAL SECURITIES
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING FIXED/ADJUSTABLE
RATE CAPITAL SECURITIES

(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
GUARANTEED, TO THE EXTENT DESCRIBED HEREIN, BY
THE BEAR STEARNS COMPANIES INC.

The Exchange Offer and Withdrawal Rights will
expire at 5:00 p.m., New York City time, on
March __, 1997, unless extended.

Bear Stearns Capital Trust I, a statutory business trust
created under the laws of the State of Delaware (the "Issuer" or the "Trust"),
hereby offers, upon the terms and subject to the conditions set forth in this
Prospectus (as the same may be amended or supplemented from time to time, the
"Prospectus") and in the accompanying Letter of Transmittal (which together
constitute the "Exchange Offer"), to exchange up to $200,000,000 aggregate
Liquidation Amount (as defined herein) of its Fixed/Adjustable Rate Capital
Securities (Liquidation Amount $1,000 per Capital Security) (the "New Capital
Securities"), which have been registered under the Securities Act of 1933, as
amended (the "Securities Act"), pursuant to a Registration Statement (as defined
herein) of which this Prospectus constitutes a part, for a like Liquidation
Amount of its outstanding Fixed/Adjustable Rate Capital Securities (Liquidation
Amount $1,000 per Capital Security) (the "Old Capital Securities"), of which
$200,000,000 aggregate Liquidation Amount is outstanding. Pursuant to the
Exchange Offer, The Bear Stearns Companies Inc., a Delaware corporation (the
"Company"), is also exchanging (i) its guarantee with respect to the payment of
Distributions (as defined herein) and other payments on liquidation or
redemption of the Old Capital Securities (the "Old Guarantee") for a like
guarantee with respect to the New Capital Securities (the "New Guarantee"), and
(ii) all of its outstanding Fixed/Adjustable Rate Junior Subordinated Deferrable
Interest Debentures (the "Old Subordinated Debentures"), of which $206,186,000
aggregate principal amount is outstanding, for a like aggregate principal amount
of its Fixed/Adjustable Rate Junior Subordinated Deferrable Interest Debentures
(the "New Subordinated Debentures"), which New Guarantee and New Subordinated
Debentures also have been registered under the Securities Act. The Old Capital
Securities, the Old Guarantee and the Old Subordinated Debentures are
collectively referred to herein as the "Old Securities" and the New Capital
Securities, the New Guarantee and the New Subordinated Debentures are
collectively referred to herein as the "New Securities."

<PAGE>
(cover page continued)

The terms of the New Securities are identical in all material
respects to the respective terms of the Old Securities, except that (i) the New
Securities have been registered under the Securities Act and therefore will not
be subject to certain restrictions on transfer applicable to the Old Securities,
(ii) the New Capital Securities will not provide for any increase in the
Distribution rate thereon, and (iii) the New Subordinated Debentures will not
provide for any increase in the interest rate thereon. See "Description of New
Securities" and "Description of Old Securities." The New Capital Securities are
being offered for exchange in order to satisfy certain obligations of the
Company and the Issuer under the Registration Rights Agreement, dated as of
January 29, 1997 (the "Registration Rights Agreement"), among the Company, the
Issuer and the Initial Purchasers (as defined herein) of the Old Capital
Securities. In the event that the Exchange Offer is consummated, any Old Capital
Securities which remain outstanding after consummation of the Exchange Offer and
the New Capital Securities issued in the Exchange Offer will vote together as a
single class for purposes of determining whether holders of the requisite
percentage in outstanding Liquidation Amount thereof have taken certain actions
or exercised certain rights under the Trust Agreement (as defined herein).

SEE "RISK FACTORS" BEGINNING ON PAGE 19 FOR CERTAIN
INFORMATION RELEVANT TO AN INVESTMENT IN THE NEW CAPITAL SECURITIES, INCLUDING
THE PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH PAYMENT OF DISTRIBUTIONS ON
THE NEW CAPITAL SECURITIES MAY BE DEFERRED AND CERTAIN RELATED UNITED STATES
FEDERAL INCOME TAX CONSEQUENCES.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The date of this Prospectus is February __, 1997.

4
<PAGE>

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The New Capital Securities represent undivided beneficial
interests in the assets of the Issuer. The Company is the owner of all of the
beneficial interests represented by common securities of the Issuer (the "Common
Securities" and, collectively with the Capital Securities (as defined herein),
the "Trust Securities"). The Issuer exists for the sole purpose of issuing the
Trust Securities and investing the proceeds thereof in the Subordinated
Debentures (as defined herein). The Subordinated Debentures will mature on
January 15, 2027 (the "Stated Maturity"). The Capital Securities will have a
preference over the Common Securities under certain circumstances with respect
to Distributions (as defined herein) and amounts payable on liquidation,
redemption or otherwise over the Common Securities. See "Description of New
Securities--Description of Capital Securities" and "________ Subordination Of
Common Securities."

As used herein, (i) the "Indenture" means the Junior
Subordinated Indenture relating to the Subordinated Debentures, as amended and
supplemented from time to time, between the Company and The Chase Manhattan
Bank, as trustee (the "Debenture Trustee"), (ii) the "Trust Agreement" means the
Amended and Restated Trust Agreement relating to the Issuer among the Company,
as Depositor, The Chase Manhattan Bank, as Property Trustee (the "Property
Trustee"), and Chase Manhattan Bank Delaware, as Delaware Trustee (the "Delaware
Trustee") (the Property Trustee and Delaware Trustee collectively, the "Issuer
Trustees"), the Administrators named therein and the holders from time to time
of the Trust Securities and (iii) the "Guarantee Agreement" or the "Guarantee"
means the Guarantee Agreement between the Company and The Chase Manhattan Bank,
as trustee (the "Guarantee Trustee"), providing a guarantee, on the terms and
conditions described herein, for the benefit of holders of the Capital
Securities. In addition, as the context may require, unless expressly stated
otherwise, (i) the "Capital Securities" means the Old Capital Securities and the
New Capital Securities, (ii) the "Subordinated Debentures" means the Old
Subordinated Debentures and the New Subordinated Debentures, and (iii) the
"Guarantee" means the Old Guarantee and the New Guarantee.

Except as provided below, the Capital Securities will be
represented by a global certificate in fully registered form, deposited with a
custodian for and registered in the name of Cede & Co., as nominee for The
Depository Trust Company ("DTC"). Beneficial interests in the Capital Securities
will be shown on, and transfers thereof will be effected through, records
maintained by DTC and its participants. Beneficial interests in such Capital
Securities will trade in DTC's Same-Day Funds Settlement System and secondary
market trading activity in such interests will therefore settle in immediately
available funds. The Capital Securities will be issued, and may be transferred,
only in blocks having a Liquidation Amount of not less than $100,000 (100
Capital Securities). Accordingly, any holder must own at least 100 Capital
Securities. See "Description of New Securities-Restrictions on Transfer."

Holders of the Capital Securities will be entitled to receive
preferential cumulative cash distributions, and the holder of the Common
Securities will be entitled to receive cumulative cash distributions, arising
from the payment of interest on the Subordinated Debentures accumulating from
the date of original issuance and payable semi-annually in arrears on the
fifteenth day of January and July of each year, commencing July 15, 1997, at the
annual rate of 7.00% of the Liquidation Amount of $1,000 per Capital Security
(the "Liquidation Amount") and at the annual rate of 7.00% of the Liquidation
Amount of $1,000 per Common Security ("Distributions") through January 15, 2002.
Thereafter, holders of the Capital Securities will be entitled to receive
preferential cumulative cash distributions and the holder of the Common
Securities will be entitled to receive cumulative cash

<PAGE>
distributions arising from the payment of interest on the Subordinated
Debentures accumulating from January 15, 2002 and payable semi-annually in
arrears on the fifteenth day of January and July at the Applicable Rate from
time to time in effect. The Applicable Rate will be reset quarterly as described
herein based on the three-month London Interbank Offered Rate ("LIBOR"), plus a
margin of 1.75%. Subject to certain exceptions described herein, the Company has
the right to defer payments of interest on the Subordinated Debentures at any
time or from time to time for a period not exceeding ten consecutive semi-annual
periods with respect to each deferral period (each, an "Extension Period"),
provided that no Extension Period may extend beyond the Stated Maturity. Upon
the termination of any such Extension Period and the payment of all amounts then
due, the Company may elect to begin a new Extension Period subject to the
requirements set forth herein. If interest payments on the Subordinated
Debentures are so deferred, Distributions on the Capital Securities and on the
Common Securities will also be deferred and the Company will not be permitted,
subject to certain exceptions described herein, to declare or pay any cash
distributions with respect to the Company's capital stock (which includes common
and preferred stock) or to make any payment with respect to debt securities of
the Company that rank pari passu with or junior to the Subordinated Debentures.
During an Extension Period, interest on the Subordinated Debentures will
continue to accrue (and the amount of Distributions to which holders of the
Capital Securities are entitled will accumulate) at the rate of 7.00% per annum
until January 15, 2002, and at the Applicable Rate thereafter, compounded
semi-annually, and holders of Capital Securities will be required to accrue
interest income for United States Federal income tax purposes. See "Description
of Subordinated Debentures--Option to Defer Interest Payments" and "Certain
Federal Income Tax Consequences--Interest, Original Issue Discount, Premium and
Market Discount."

The Company has, through the Guarantee Agreement, the Trust
Agreement, the Subordinated Debentures and the Indenture (each as defined
herein), taken together, fully, irrevocably and unconditionally guaranteed on a
subordinated basis all of the Issuer's obligations under the Capital Securities.
See "Relationship Among the Capital Securities, the Subordinated Debentures and
the Guarantee--Full and Unconditional Guarantee." The Guarantee of the Company
guarantees the payment of Distributions and payments on liquidation or
redemption of the Capital Securities, but only in each case to the extent of
funds held by the Issuer, as described herein (the "Guarantee"). See
"Description of New Securities" and "Description of Guarantee." If the Company
does not make interest payments on the Subordinated Debentures held by the
Issuer, the Issuer will have insufficient funds to pay Distributions on the
Capital Securities. The Guarantee does not cover payment of Distributions when
the Issuer does not have sufficient funds to pay such Distributions. In such
event, a holder of Capital Securities may institute a legal proceeding directly
against the Company to enforce payment of such Distributions to such holder. See
"Description of Subordinated Debentures--Enforcement of Certain Rights by
Holders of Capital Securities." The obligations of the Company under the
Guarantee and the Subordinated Debentures are unsecured and are subordinate and
junior in right of payment to all Senior Indebtedness (as defined in
"Description of New Securities," "Description of Subordinated Debentures" and
"Subordination") of the Company.

The Capital Securities are subject to mandatory redemption (i)
at the Stated Maturity upon repayment of the Subordinated Debentures at a
redemption price equal to the principal amount of, plus accrued interest on, the
Subordinated Debentures (the "Maturity Redemption Price"), (ii) in whole but not
in part, contemporaneously with the prepayment of the Subordinated Debentures
upon the occurrence and continuation of a Tax Event (as defined herein) (a "Tax
Event Prepayment") at a

<PAGE>

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redemption price equal to the Tax Event Prepayment Price (as defined below) and
(iii) in whole or in part on or after January 15, 2002 contemporaneously with
the optional prepayment by the Company of the Subordinated Debentures at a
redemption price equal to the principal amount then outstanding plus accrued
interest thereon to the date of such prepayment (the "Optional Redemption
Price"). Any of the Maturity Redemption Price, the Tax Event Redemption Price
and the Optional Redemption Price may be referred to herein as the "Redemption
Price." See "Description of New Securities--Description of Capital
Securities--Redemption." The Subordinated Debentures are prepayable prior to the
Stated Maturity at the option of the Company (i) on or after January 15, 2002,
in whole or in part at the Optional Redemption Price or (ii) at any time, in
whole but not in part, upon the occurrence and continuation of a Tax Event, at a
prepayment price (the "Tax Event Prepayment Price") equal to (a) if the Tax
Event occurs before January 15, 2002, the greater of (x) 100% of the principal
amount thereof and (y) as determined by a Calculation Agent, the sum of the
present values of the principal amount that would be payable as part of the
Redemption Price with respect to an optional redemption of such Subordinated
Debentures on January 15, 2002, together with the present values of scheduled
payments of interest from the prepayment date to January 15, 2002, in each case
discounted to the prepayment date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Adjusted CMT Rate (as defined
herein), plus, in each case, accrued interest thereon to but excluding the date
of prepayment, or (b) if the Tax Event occurs on or after January 15, 2002, the
Optional Redemption Price that would be payable on optional redemption of the
Subordinated Debentures on the date of prepayment. Either of the Optional
Redemption Price or the Tax Event Prepayment Price may be referred to herein as
the "Prepayment Price." See "Description of Subordinated Debentures--Optional
Prepayment" and "--Tax Event Prepayment."

The Company, as the holder of the outstanding Common
Securities, will have the right at any time (including, without limitation upon
the occurrence of a Tax Event), to dissolve the Issuer and, after satisfaction
of liabilities to creditors of the Issuer as provided by applicable law, cause a
Like Amount (as defined herein) of the Subordinated Debentures to be distributed
to the holders of the Capital Securities upon liquidation of the Issuer. See
"Description of Capital Securities--Liquidation of the Issuer and Distribution
of Subordinated Debentures."

The Issuer is making the Exchange Offer of the New Capital
Securities in reliance on the position of the staff of the Division of
Corporation Finance of the Securities and Exchange Commission (the "Commission")
as set forth in certain no-action letters addressed to third parties in other
transactions. However, neither the Company nor the Issuer has sought its own
no-action letter, and there can be no assurance that the staff of the Division
of Corporation Finance of the Commission would make a similar determination with
respect to the Exchange Offer as it has in such no-action letters to third
parties. Based on these interpretations by the staff of the Division of
Corporation Finance, and subject to the two immediately following sentences, the
Company and the Issuer believe that New Capital Securities issued pursuant to
this Exchange Offer in exchange for Old Capital Securities may be offered for
resale, resold and otherwise transferred by a holder thereof (other than holders
who are broker-dealers) without further compliance with the registration and
prospectus delivery requirements of the Securities Act, provided that such New
Capital Securities are acquired in the ordinary course of such holder's business
and that such holder is not participating, and has no arrangement or
understanding with any person to participate, in a distribution (within the
meaning of the Securities Act) of such New Capital Securities. However, any
holder of Old Capital Securities who is an "affiliate" of the Company or the
Issuer within the meaning of Rule 405 under the Securities Act

<PAGE>

(cover page continued)

(an "Affiliate") or who intends to participate in the Exchange Offer for the
purpose of distributing New Capital Securities, or any broker-dealer who
purchased Old Capital Securities from the Issuer to resell pursuant to Rule 144A
under the Securities Act ("Rule 144A") or any other available exemption under
the Securities Act, (i) will not be able to rely on the interpretations of the
staff of the Division of Corporation Finance of the Commission set forth in the
above-mentioned no-action letters, (ii) will not be entitled to tender such Old
Capital Securities in the Exchange Offer and (iii) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any sale or other transfer of such Old Capital Securities unless
such sale is made pursuant to an exemption from such requirements. In addition,
as described below, if any broker-dealer (a "Participating Broker-Dealer") holds
Old Capital Securities acquired for its own account as a result of market-making
or other trading activities and exchanges such Old Capital Securities for New
Capital Securities, then such Participating Broker-Dealer must deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resales of such New Capital Securities. See "Plan of Distribution" and "The
Exchange Offer-Resales of New Capital Securities."

Prior to the Exchange Offer, there has been only a limited
secondary market and no public market for the Old Capital Securities. The New
Capital Securities will be a new issue of securities for which there currently
is no market. The Company has filed an application for listing of the New
Capital Securities on the New York Stock Exchange, Inc. ("NYSE"). However, there
can be no assurance as to the development or liquidity of any market for the New
Capital Securities.

Any Old Capital Securities not tendered and accepted in the
Exchange Offer will remain outstanding and will be entitled to all the same
rights and will be subject to the same limitations applicable thereto under the
Trust Agreement (except for those rights which terminate upon consummation of
the Exchange Offer). Following consummation of the Exchange Offer, the holders
of Old Capital Securities will continue to be subject to all of the existing
restrictions upon transfer thereof and neither the Company nor the Issuer will
have any further obligation to such holders (other than under certain limited
circumstances) to provide for registration under the Securities Act of the Old
Capital Securities held by them. To the extent that Old Capital Securities are
tendered and accepted in the Exchange Offer, a holder's ability to sell
untendered Old Capital Securities could be adversely affected. See "Risk
Factors-Consequences of Failure to Exchange Old Capital Securities."

THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION. HOLDERS OF OLD CAPITAL SECURITIES ARE URGED TO READ THIS
PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING
WHETHER TO TENDER THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER.

Old Capital Securities may be tendered for exchange on or
prior to 5:00 p.m., New York City time, on March __, 1997 (such time on such
date being hereinafter called the "Expiration Date"), unless the Exchange Offer
is extended by the Company and the Issuer (in which case the term "Expiration
Date" shall mean the latest date and time to which the Exchange Offer is
extended). Tenders of Old Capital Securities may be withdrawn at any time on or
prior to the Expiration Date. The Exchange Offer is not conditioned upon any
minimum Liquidation Amount of Old Capital Securities being tendered for
exchange. However, the Exchange Offer is subject to certain events and
conditions which may be waived by the Company or the Issuer and to the terms and
provisions of the

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Registration Rights Agreement. Old Capital Securities may be tendered in whole
or in part having a Liquidation Amount of not less than $100,000 (100 Capital
Securities) and or any integral multiple of $1,000 Liquidation Amount (one
Capital Security) in excess thereof. The Company has agreed to pay all expenses
of the Exchange Offer, except as otherwise specified herein. See "The Exchange
Offer-Fees and Expenses." Each New Capital Security will pay cumulative
Distributions from the most recent Distribution Date (as defined herein) on the
Old Capital Securities surrendered in exchange for such New Capital Securities
or, if no Distributions have been paid on such Old Capital Securities, from
January 29, 1997. Holders of the Old Capital Securities whose Old Capital
Securities are accepted for exchange will not receive accumulated Distributions
on such Old Capital Securities for any period from and after the last
Distribution Date on such Old Capital Securities prior to the original issue
date of the New Capital Securities or, if no such Distributions have been paid,
will not receive any accumulated Distributions on such Old Capital Securities,
and will be deemed to have waived the right to receive any Distributions on such
Old Capital Securities accumulated from and after such Distribution Date or, if
no such interest has been paid or duly provided for, from and after January 29,
1997. This Prospectus, together with the Letter of Transmittal, is being sent to
all registered holders of Old Capital Securities as of January 29, 1997.

Neither the Company nor the Issuer will receive any proceeds
from the issuance of the New Capital Securities offered hereby. No
dealer-manager is being used in connection with this Exchange Offer. See "Use of
Proceeds" and "Plan of Distribution."

This Prospectus may be used by Bear, Stearns & Co. Inc., an
affiliate of the Company, in connection with offers and sales related to
market-making transactions in New Securities effected from time to time after
the commencement of the offering to which this Prospectus relates. Bear, Stearns
& Co. Inc. may act as principal or agent in such transactions, including as
agent for the counterparty when acting as principal or as agent for both
counterparties, and may receive compensation in the form of discounts and
commissions, including from both counterparties when it acts as agent for both.
Such sales will be made at prevailing market prices at the time of sale, at
prices related thereto or at negotiated prices.

THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE
NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON
REQUEST FROM CORPORATE COMMUNICATIONS DEPARTMENT, THE BEAR STEARNS COMPANIES
INC., 245 PARK AVENUE, NEW YORK, NEW YORK 10167, TELEPHONE NUMBER (212)
272-2000. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS. ANY REQUEST
SHOULD BE MADE BY MARCH __ 1997.

THE NEW CAPITAL SECURITIES WILL BE ISSUED, AND CAPITAL
SECURITIES MAY BE TRANSFERRED, ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT
LESS THAN $100,000. ANY TRANSFER, SALE OR OTHER DISPOSITION OF CAPITAL
SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE
DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH TRANSFEREE SHALL
BE DEEMED NOT TO BE THE HOLDER OF SUCH CAPITAL SECURITIES FOR ANY PURPOSE,
INCLUDING BUT NOT LIMITED TO THE RECEIPT OF DISTRIBUTIONS ON SUCH CAPITAL
SECURITIES, AND SUCH TRANSFEREE

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SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH CAPITAL SECURITIES.

NO EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (EACH, A "PLAN"), NO ENTITY WHOSE
UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S INVESTMENT IN
THE ENTITY (A "PLAN ASSET ENTITY"), AND NO PERSON INVESTING "PLAN ASSETS" OF ANY
PLAN, MAY ACQUIRE OR HOLD THE CAPITAL SECURITIES OR ANY INTEREST THEREIN, UNLESS
SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER
U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 96-23,
95-60, 91-38, 90-1 OR 84-14 WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY
PURCHASER OR HOLDER OF THE CAPITAL SECURITIES OR ANY INTEREST THEREIN WILL BE
DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT IT EITHER
(A) IS NOT A PLAN OR A PLAN ASSET ENTITY AND IS NOT PURCHASING SUCH SECURITIES
ON BEHALF OF OR WITH "PLAN ASSETS" OF ANY PLAN OR (B) IS ELIGIBLE FOR THE
EXEMPTIVE RELIEF AVAILABLE UNDER PTCE 96-23, 95-60, 91-38, 90-1 OR 84-14 WITH
RESPECT TO SUCH PURCHASE OR HOLDING.

<PAGE>
AVAILABLE INFORMATION

The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549 and at the regional offices of the Commission located at 7 World
Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can
also be obtained at prescribed rates by writing to the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C, 20549. Such
material may also be accessed electronically by means of the Commission's home
page on the Internet at http://www.sec.gov. In addition, such reports, proxy
statements and other information can be inspected at the offices of the New York
Stock Exchange, 20 Broad Street, New York, New York 10005.

The Company and the Issuer have filed with the Commission a
Registration Statement on Form S-4 (together with all amendments and exhibits
thereto, the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act") with respect to the securities offered hereby.
This Prospectus does not contain all the information set forth in the
Registration Statement, certain portions of which have been omitted as permitted
by the rules and regulations of the Commission. For further information with
respect to the Company and the securities offered hereby, reference is made to
the Registration Statement and the exhibits and the financial statements, notes
and schedules filed as part thereof or incorporated by reference therein, which
may be inspected at the public reference facilities of the Commission, at the
addresses set forth above. Statements made in this Prospectus concerning the
contents of any documents referred to herein are not necessarily complete, and
in each instance are qualified in all respects by reference to the copy of such
document filed as an exhibit to the Registration Statement.

No separate financial statements of the Issuer have been included
herein. The Company and the Issuer do not consider that such financial
statements would be material to holders of the Capital Securities because the
Issuer is a newly formed special purpose entity, has no operating history or
independent operations and is not engaged in and does not propose to engage in
any activity other than holding as trust assets the Subordinated Debentures and
issuing the Trust Securities. See "The Bear Stearns Companies Inc.,"
"Description of New Securities--Description of Capital Securities," "Description
of Subordinated Debentures" and "Description of Guarantee." In addition, the
Company does not expect that the Issuer will file reports under the Exchange Act
with the Commission.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed by the Company with the Commission
pursuant to Section 13 of the Exchange Act (File No. 1-8989), are incorporated
herein by reference: (i) the Annual Report on Form 10-K (including the portions
of the Company's Annual Report to Stockholders and Proxy Statement incorporated
by reference therein) for the fiscal year ended June 30, 1996 (the "1996 Form
10-K"), (ii) the Quarterly Report on Form 10-Q for the quarter ended September
27, 1996, and (iii) the Current Reports on Form 8-K, dated July 30, 1996,
October 16, 1996, October 29, 1996, November 12, 1996, January 22, 1997 and
January 29, 1997. All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the offering of the Capital Securities shall be
deemed to be

11
<PAGE>

incorporated by reference into this Prospectus and to be a part hereof from the
date of filing of such documents.

Any statement contained herein or in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.

The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon the written or oral request of such
person, a copy of any or all documents incorporated by reference into this
Prospectus except the exhibits to such documents (unless such exhibits are
specifically incorporated by reference in such documents). Requests for such
copies should be directed to Corporate Communications Department, The Bear
Stearns Companies Inc., 245 Park Avenue, New York, New York 10167; telephone
number (212) 272- 2000.

As used herein, the terms "Prospectus" and "herein" mean this
Prospectus, including the documents incorporated or deemed to be incorporated
herein by reference, as the same may be amended, supplemented or otherwise
modified from time to time. Statements contained in this Prospectus as to the
contents of any contract or other document referred to herein do not purport to
be complete, and where reference is made to the particular provisions of such
contract or other document, such provisions are qualified in all respects by
reference to all of the provisions of such contract or other document.

SUMMARY

THE FOLLOWING IS A SUMMARY OF CERTAIN INFORMATION CONTAINED HEREIN AND
SHOULD BE READ IN CONJUNCTION WITH SUCH INFORMATION CONTAINED ELSEWHERE IN THIS
PROSPECTUS AND IS SUBJECT TO, AND QUALIFIED IN ITS ENTIRETY BY REFERENCE TO,
SUCH INFORMATION. CAPITALIZED TERMS USED HEREIN HAVE THE RESPECTIVE MEANINGS
ASCRIBED TO THEM ELSEWHERE IN THIS PROSPECTUS.

EXCHANGE OFFER

Up to $200,000,000 aggregate Liquidation Amount of New Capital
Securities are being offered in exchange for a like aggregate Liquidation Amount
of Old Capital Securities. Old Capital Securities may be tendered for exchange
in whole or in part in a Liquidation Amount of $100,000 (100 Capital Securities)
or any integral multiple of $1,000 in excess thereof provided that if any Old
Capital Securities are tendered in exchange for part, the untendered Liquidation
Amount must be $100,000 or any integral multiple of $1,000 in excess thereof.
The Company and the Issuer are making the Exchange Offer in order to satisfy
their obligations under the Registration Rights Agreement relating to the Old
Capital Securities. For a description of the procedures for tendering Old
Capital Securities, see "The Exchange Offer-Procedures for Tendering Old Capital
Securities."

<PAGE>
EXPIRATION DATE

The Expiration Date of the Exchange Offer will be 5:00 p.m., New York
City time, on March __, 1997, unless the Exchange Offer is extended by the
Company and the Issuer. See "The Exchange Offer-Expiration Date; Extensions;
Amendments."

CONDITIONS TO EXCHANGE OFFER

The Exchange Offer is subject to certain conditions, which may be
waived by the Company and the Issuer in their sole discretion. The Exchange
Offer is not conditioned upon any minimum Liquidation Amount of Old Capital
Securities being tendered. See "The Exchange Offer --Conditions to Exchange
Offer". The Company and the Issuer reserve the right in their sole discretion,
subject to applicable law, at any time and from time to time, (i) to delay the
acceptance of the Old Capital Securities for exchange, (ii) to terminate the
Exchange Offer if certain specified conditions have not been satisfied, (iii) to
extend the Expiration Date of the Exchange Offer and retain all Old Capital
Securities tendered pursuant to the Exchange Offer, subject, however, to the
right of holders of Old Capital Securities to withdraw their tendered Old
Capital Securities, or (iv) to waive any condition or otherwise amend the terms
of the Exchange Offer in any respect. See "The Exchange Offer-Expiration Date;
Extensions; Amendments."

WITHDRAWAL RIGHTS

Tenders of Old Capital Securities may be withdrawn at any time on or
prior to the Expiration Date by delivering a written notice of such withdrawal
to The Chase Manhattan Bank, as Exchange Agent (the "Exchange Agent"), in
conformity with certain procedures set forth below under "The Exchange
Offer-Withdrawal Rights."

PROCEDURES FOR TENDERING OLD CAPITAL SECURITIES

Tendering holders of Old Capital Securities must complete and sign a
Letter of Transmittal in accordance with the instructions contained therein and
forward the same by mail, facsimile or hand delivery, together with any other
required documents, to the Exchange Agent, either with the Old Capital
Securities to be tendered or in compliance with the specified procedures for
guaranteed delivery of Old Capital Securities. Certain brokers, dealers,
commercial banks, trust companies and other nominees may also effect tenders by
book-entry transfer, including an Agent's Message in lieu of the Letter of
Transmittal. Holders of Old Capital Securities registered in the name of a
broker, dealer, commercial bank, trust company or other nominee are urged to
contact such person promptly if they wish to tender Old Capital Securities
pursuant to the Exchange Offer. See "The Exchange Offer -- Procedures for
Tendering Old Capital Securities." Letters of Transmittal and certificates
representing Old Capital Securities should not be sent to the Company or the
Issuer. Such documents should only be sent to the Exchange Agent. Questions
regarding how to tender and requests for information should be directed to the
Exchange Agent. See "The Exchange Offer-Exchange Agent."

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<PAGE>

RESALES OF NEW CAPITAL SECURITIES

The Company and the Issuer are making the Exchange Offer in reliance on
the position of the staff of the Division of Corporation Finance of the
Commission as set forth in certain no-action letters addressed to third parties
in other transactions. However, neither the Company nor the Issuer has sought
its own no-action letter and there can be no assurance that the staff of the
Division of Corporation Finance of the Commission would make a similar
determination with respect to the Exchange Offer as it has in such no-action
letters to third parties. Based on these interpretations by the staff of the
Division of Corporation Finance, and subject to the two immediately following
sentences, the Company and the Issuer believe that New Capital Securities issued
pursuant to this Exchange Offer in exchange for Old Capital Securities may be
offered for resale, resold and otherwise transferred by a holder thereof (other
than a holder who is a broker-dealer) without further compliance with the
registration and prospectus delivery requirements of the Securities Act,
provided that such New Capital Securities are acquired in the ordinary course of
such holder's business and that such holder is not participating, and has no
arrangement or understanding with any person to participate, in a distribution
(within the meaning of the Securities Act) of such New Capital Securities.
However, any holder of Old Capital Securities who is an Affiliate or who intends
to participate in the Exchange Offer for the purpose of distributing the New
Capital Securities, or any broker-dealer who purchased the Old Capital
Securities from the Issuer to resell pursuant to Rule 144A or any other
available exemption under the Securities Act, (i) will not be able to rely on
the interpretations of the staff of the Division of Corporation Finance of the
Commission set forth in the above-mentioned no-action letters, (ii) will not be
permitted or entitled to tender such Old Capital Securities in the Exchange
Offer, and (iii) must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any sale or other transfer
of such Old Capital Securities unless such sale is made pursuant to an exemption
from such requirements. In addition, as described below, any Participating
Broker-Dealer must deliver a prospectus meeting the requirements of the
Securities Act in connection with any resales of such New Capital Securities.

Each holder of Old Capital Securities that wishes to exchange Old
Capital Securities for New Capital Securities in the Exchange Offer will be
required to represent that (i) it is not an Affiliate, (ii) any New Capital
Securities to be received by it are being acquired in the ordinary course of its
business, (iii) it has no arrangement or understanding with any person to
participate in a distribution (within the meaning of the Securities Act) of such
New Capital Securities, and (iv) if such holder is not a broker-dealer, such
holder is not engaged in, and does not intend to engage in, a distribution
(within the meaning of the Securities Act) of such New Capital Securities. The
Letter of Transmittal contains the foregoing representations. Each Participating
Broker-Dealer will be deemed to have acknowledged by execution of the Letter of
Transmittal or delivery of an Agent's Message (as defined herein) that it
acquired the Old Capital Securities for its own account as the result of
market-making activities or other trading activities and must agree that it will
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such New Capital Securities. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
Participating Broker-Dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. Based on the position
taken by the staff of the Division of Corporation Finance of the Commission in
the interpretive letters referred to above, the Company and the Issuer believe
that Participating Broker-Dealers may fulfill their prospectus delivery
requirements with respect to the New Capital Securities received upon exchange
of such Old Capital Securities (other than Old Capital Securities which
represent an unsold allotment from the original sale of the Old Capital
Securities) with a prospectus meeting the requirements of the Securities Act,
which may be the prospectus prepared for an exchange offer so long

<PAGE>

as it contains a description of the plan of distribution with respect to the
resale of such New Capital Securities. Accordingly, this Prospectus, as it may
be amended or supplemented from time to time, may be used by a Participating
Broker-Dealer in connection with resales of New Capital Securities received in
exchange for Old Capital Securities where such Old Capital Securities were
acquired by such Participating Broker-Dealer for its own account as a result of
market-making or other trading activities. Subject to certain provisions set
forth in the Registration Rights Agreement and to the limitations described
below under "The Exchange Offer-Resales of New Capital Securities," the Company
and the Issuer have agreed that this Prospectus, as it may be amended or
supplemented from time to time, may be used by a Participating Broker-Dealer in
connection with resales of such New Capital Securities for a period ending 180
days after the Expiration Date or, if earlier, when all such New Capital
Securities have been disposed of by such Participating Broker-Dealer. See "Plan
of Distribution." Any person, including any Participating Broker-Dealer, who is
an Affiliate may not rely on such interpretive letters and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction. See "The Exchange Offer-Resales of New
Capital Securities."

EXCHANGE AGENT

The Exchange Agent is The Chase Manhattan Bank. The address and
telephone and facsimile numbers of the Exchange Agent are set forth under "The
Exchange Offer-Exchange Agent" and in the Letter of Transmittal.

USE OF PROCEEDS

Neither the Company nor the Issuer will receive any proceeds from the
issuance of the New Capital Securities offered hereby. See "Use of Proceeds."

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS; CERTAIN ERISA CONSIDERATIONS

Holders of Old Capital Securities should review the information set
forth under "Certain Federal Income Tax Considerations" and "Certain ERISA
Considerations" prior to tendering Old Capital Securities in the Exchange Offer.

NEW SECURITIES

GENERAL

The Capital Securities represent undivided beneficial interests in the
assets of the Issuer and will have a preference over the Common Securities under
certain circumstances with respect to Distributions and amounts payable on
liquidation, redemption or otherwise over the Common Securities. See
"Description of New Securities-Description of Capital Securities" and
"-Subordination Of Common Securities." The sole assets of the Issuer are the
Subordinated Debentures, and payments under the Subordinated Debentures will be
the sole revenue of the Issuer. The Subordinated Debentures are unsecured
subordinated debt securities issued under the Indenture between the Company and
The Chase Manhattan Bank, as trustee.

15
<PAGE>

SECURITIES OFFERED

The Issuer is offering up to $200,000,000 aggregate Liquidation Amount
of the Issuer's Fixed/Adjustable Rate Capital Securities which have been
registered under the Securities Act (Liquidation Amount $1,000 per Capital
Security). The New Capital Securities will be issued, and the Old Capital
Securities were issued, under the Trust Agreement. The New Capital Securities
and any Old Capital Securities which remain outstanding after consummation of
the Exchange Offer will constitute a single series of Capital Securities under
the Trust Agreement and, accordingly, will vote together as a single class for
purposes of determining whether holders of the requisite percentage in
outstanding Liquidation Amount thereof have taken certain actions or exercised
certain rights under the Trust Agreement. See "Description of New
Securities-Description of Capital Securities" and "-General." The terms of the
New Capital Securities are identical in all material respects to the terms of
the Old Capital Securities, except that the New Capital Securities have been
registered under the Securities Act and therefore are not subject to certain
restrictions on transfer applicable to the Old Capital Securities and will not
provide for any increase in the Distribution rate thereon. See "The Exchange
Offer-Purpose and Effect of Exchange Offer," "Description of New Securities" and
"Description of Old Securities."

DISTRIBUTIONS

Holders of the Capital Securities will be entitled to receive
preferential cumulative cash Distributions accruing from the date of original
issuance of the Old Capital Securities and payable semi-annually in arrears on
January 15 and July 15 of each year (the "Distribution Dates"), commencing July
15, 1997, at the annual rate of 7.00% through January 15, 2002 and thereafter at
the Applicable Rate from time to time in effect, to the persons in whose names
the Capital Securities are registered at the close of business on the relevant
record dates. See "Description of New Securities-Description of Capital
Securities" and "-Distributions."

Holders of Old Capital Securities whose Old Capital Securities are
accepted for exchange will not receive accumulated Distributions on such Old
Capital Securities for any period from and after the last Distribution Date with
respect to such Old Capital Securities prior to the original issue date of the
New Capital Securities or, if no such Distributions have been made, will not
receive any accumulated Distributions on such Old Capital Securities, and will
be deemed to have waived the right to receive any Distributions on such Old
Capital Securities accumulated from and after such Distribution Date or, if no
such Distributions have been made, from and after January 29, 1997.

The Subordinated Debentures are unsecured and rank subordinate and
junior in right of payment to all Senior Indebtedness of the Company. The
ability of the Issuer to pay amounts due on the Capital Securities is solely
dependent upon the Company making payments on the Subordinated Debentures as and
when required. See "Risk Factors-Ranking of Obligations Under the Guarantee and
the Subordinated Debentures."

OPTION TO EXTEND INTEREST PAYMENT PERIOD

So long as no Debenture Event of Default (as defined herein) has
occurred and is continuing, the Company has the right to defer payments of
interest on the Subordinated Debentures at any time or from time to time for a
period not exceeding ten consecutive semi-annual periods with respect to each
such Extension Period; provided, however, that no Extension Period may extend
beyond

16
<PAGE>

the Stated Maturity. If interest payments on the Subordinated Debentures are
deferred, Distributions on the Capital Securities also will be deferred and the
Company will not be permitted, subject to certain exceptions set forth herein,
to declare or pay any cash distributions with respect to the Company's capital
stock or debt securities of the Company that rank pari passu with or junior to
the Subordinated Debentures. During an Extension Period, Distributions on the
Capital Securities will continue to accumulate and Distributions that are in
arrears will bear interest on the amount thereof at the annual rate of 7.00%
through January 15, 2002 and at the Applicable Rate thereafter, compounded
semi-annually, and holders of the Capital Securities, regardless of their
regular method of accounting, will be required to accrue income (in the form of
original issue discount) for United States Federal income tax purposes in
advance of receipt of the cash related to such income. Upon the termination of
any Extension Period and the payment of all amounts then due, the Company may
elect to begin a new Extension Period, subject to the requirements set forth
herein.

The Company believes that, as a result of its inability to pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock during an
Extension Period to the extent set forth herein and subject to certain
exceptions, the likelihood of its exercising its right to defer payments of
interest is remote. However, should the Company elect to exercise such right,
the market price of the Capital Securities is likely to be adversely affected. A
holder that disposes of its Capital Securities during an Extension Period,
therefore, might not receive the same return on its investment as a holder that
continues to hold its Capital Securities. See "Risk Factors- Option to Extend
Interest Payment Period; Tax Consequences; Price Consequences," "Description of
New Securities," "Description of Subordinated Debentures-Option to Defer
Interest Payments" and "Certain Federal Income Tax Consequences-Interest,
Original Issue Discount, Premium and Market Discount."

REDEMPTION; TAX EVENT

The Capital Securities are subject to mandatory redemption, (i) at the
Stated Maturity upon repayment of the Subordinated Debentures. The Subordinated
Debentures are redeemable, at the option of the Company, (i) on or after January
15, 2002, in whole at any time or in part from time to time, or (ii) at any time
in whole (but not in part), upon the occurrence and continuation of a Tax Event
(as defined herein). See "Risk Factors-Tax Event Redemption" and "Description of
New Securities-Description of Capital Securities" and "-Redemption."

See "Risk Factors-Possible Tax Law Changes Affecting the Capital
Securities" for a discussion of certain legislative proposals that, if adopted,
could give rise to a Tax Event, which may permit the Company to cause a
redemption of the Capital Securities prior to January 15, 2002.

No sinking fund will be established for the benefit of the Capital
Securities.

EXCHANGE OF CAPITAL SECURITIES FOR SUBORDINATED DEBENTURES

The holder of the Common Securities (i.e., the Company) has the right
to dissolve the Issuer at any time and, after satisfaction of liabilities to
creditors of the Issuer in accordance with applicable law cause the Subordinated
Debentures to be distributed to the holders of the Capital Securities in
liquidation of the Issuer, subject to the Issuer having received an opinion of
counsel to the effect that such distribution will not be a taxable event to
holders of Capital Securities. See "Description of New Securities-Description of
Capital Securities," "-Liquidation of Issuer and

17
<PAGE>

Distribution of Subordinated Debentures" and "Certain Federal Income Tax
Consequences-Receipt of Subordinated Debentures Upon Liquidation of the Issuer."

GUARANTEE

The payment of Distributions and payments on the liquidation of the
Issuer or the redemption of the Capital Securities are guaranteed by the Company
to the extent that the Issuer has sufficient funds available therefor. Such
guarantee is subordinate and junior in right of payment to all Senior Debt of
the Company. See "Risk Factors-Rights Under the Guarantee," "Description of New
Securities" and "Description of Guarantee."

TRANSFER

The Capital Securities will be issued, and may be transferred, only in
blocks having a Liquidation Amount of not less than $100,000 (100 Capital
Securities). Any transfer, sale or other disposition of Capital Securities
resulting in a block having a Liquidation Amount of less than $100,000 shall be
deemed to be void and of no legal effect whatsoever.

ABSENCE OF MARKET FOR NEW CAPITAL SECURITIES

The New Capital Securities will be a new issue of securities for which
there currently is no market. Although Bear, Stearns & Co. Inc., Chase
Securities Inc., Goldman, Sachs & Co., J.P. Morgan Securities Inc. and
NationsBanc Capital Markets, Inc., the initial purchasers of the Old Capital
Securities (the "Initial Purchasers"), informed the Company and the Issuer in
connection with the offering of the Old Capital Securities that they each
intended to make a market in the Old Capital Securities, they are not obligated
to make a market in the Old Capital Securities or the New Capital Securities,
and any such market making may be discontinued at any time without notice.
Accordingly, there can be no assurance as to the development or liquidity of any
market for the New Capital Securities. The Company has filed an application for
listing of the New Capital Securities on the NYSE.

<PAGE>

RISK FACTORS

Holders of the Old Capital Securities should carefully review the
information contained elsewhere in this Prospectus and should particularly
consider the following matters prior to tendering Old Capital Securities in the
Exchange Offer.

RANKING OF OBLIGATIONS UNDER THE GUARANTEE AND THE SUBORDINATED DEBENTURES

The obligations of the Company under the Guarantee and the Subordinated
Debentures are unsecured and rank subordinate and junior in right of payment to
all Senior Indebtedness of the Company. At September 27, 1996, the Company had
outstanding approximately $16.1 billion of Senior Indebtedness, none of which
was secured, and subsidiaries of the Company had outstanding approximately $1.2
billion of indebtedness (excluding $34.2 billion relating to securities sold
under repurchase agreements). None of the Indenture, the Guarantee or the Trust
Agreement places any limitation on the amount of secured or unsecured debt,
including Senior Indebtedness, that may be incurred by the Company. See
"Description of Guarantee-Status of the Guarantee" and "Description of
Subordinated Debentures-Subordination." Since the Company is a holding company,
the right of the Company to participate in any distribution of assets of any
subsidiary upon such subsidiary's liquidation or reorganization or otherwise
(and thus the ability of holders of the Capital Securities to benefit indirectly
from such distribution) is subject to the prior claims of creditors of that
subsidiary, except to the extent that the Company may itself be a creditor of
that subsidiary. Accordingly, the Subordinated Debentures will be effectively
subordinated to all existing and future liabilities of the Company's
subsidiaries, and holders of Subordinated Debentures should look only to the
assets of the Company for payments on the Subordinated Debentures. See "The Bear
Stearns Companies Inc."

The ability of the Issuer to pay amounts due on the Capital Securities
is solely dependent upon the Company making payments on the Subordinated
Debentures as and when required.

OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES; PRICE CONSEQUENCES

So long as no Debenture Event of Default has occurred and is
continuing, the Company has the right under the Indenture to defer the payment
of interest on the Subordinated Debentures at any time or from time to time for
a period not exceeding ten consecutive semi-annual periods with respect to each
Extension Period, provided that no Extension Period may extend beyond the Stated
Maturity. As a consequence of any such deferral, semi-annual Distributions on
the Capital Securities by the Issuer will be deferred (and the amount of
Distributions to which holders of the Capital Securities are entitled will
accumulate additional Distributions thereon at the rate of 7.00% per annum until
January 15, 2002, and at the Applicable Rate thereafter, compounded
semi-annually, but not exceeding the interest rate then accruing on the
Subordinated Debentures), from the relevant payment date for such Distributions
during any such Extension Period. During any such Extension Period, the Company
may not, and may not permit any subsidiary of the Company to, (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Company's capital stock (which
includes common and preferred stock) or (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company (including Other Debentures) (as defined herein) that
rank pari passu with or junior in interest to the Subordinated Debentures or
make any guarantee payments with respect to any guarantee by the Company of the
debt securities of any subsidiary of the Company (including Other Guarantees)
(as defined herein) if such guarantee ranks pari passu with or junior in
interest to the Subordinated Debentures (other than

<PAGE>

(a) dividends or distributions in capital stock of the Company, (b) any
declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under the Guarantee, (d) purchases of common stock related to the
issuance of common stock or rights under any of the Company's benefit plans for
its directors, officers or employees and (e) payments of interest pursuant to
the EPICS Loan Agreement (as defined herein). Prior to the termination of any
such Extension Period, the Company may further extend such Extension Period
provided that such extension does not cause such Extension Period to exceed 10
consecutive semi-annual periods or to extend beyond the Stated Maturity. Upon
the termination of any Extension Period and the payment of all interest then
accrued and unpaid on the Subordinated Debentures (together with interest
thereon at the annual rate of 7.00% until January 15, 2002, and at the
Applicable Rate thereafter, compounded semi-annually, to the extent permitted by
applicable law), the Company may elect to begin a new Extension Period subject
to the above requirements. There is no limitation on the number of times that
the Company may elect to begin an Extension Period. See "Description of Capital
Securities-Distributions" and "Description of Subordinated Debentures-Option to
Defer Interest Payments."

Should an Extension Period occur, a holder of Capital Securities will,
regardless of its regular method of accounting, continue to accrue income for
United States Federal income tax purposes (in the form of original issue
discount) in respect of its pro rata share of the Subordinated Debentures held
by the Trust. As a result, a holder of Capital Securities will include such
income in gross income for United States Federal income tax purposes in advance
of the receipt of cash, and will not receive the cash related to such income
from the Trust if the holder disposes of the Capital Securities prior to the
record date for the payment of Distributions. See "Certain Federal Income Tax
Consequences-Interest, Original Issue Discount, Premium and Market Discount" and
"-Sale or Redemption of Capital Securities."

The Company believes that, as a result of its inability to pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock during an
Extension Period to the extent described in the second preceding paragraph, or
the other limitations described in the second preceding paragraph, the
likelihood of its exercising its right to defer payments of interest is remote.
However, should the Company elect to exercise such right, the market price of
the Capital Securities is likely to be adversely affected. A holder that
disposes of its Capital Securities during an Extension Period, therefore, might
not receive the same return on its investment as a holder that continues to hold
its Capital Securities. In addition, as a result of the existence of the
Company's right to defer interest payments, the market price of the Capital
Securities (which represent preferred beneficial interests in the Issuer) may be
more volatile than the market prices of other securities on which original issue
discount accrues that are not subject to such deferrals.

TAX EVENT REDEMPTION

Upon the occurrence and continuation of a Tax Event, the Company has
the right to prepay the Subordinated Debentures in whole (but not in part)
within 90 days following the occurrence of such Tax Event, and therefore cause a
mandatory redemption of the Capital Securities at the Tax Event Redemption
Price. See "Description of Capital Securities-Redemption."

<PAGE>

A "Tax Event" means the receipt by the Issuer of an opinion of counsel
experienced in such matters to the effect that, as a result of any amendment to,
or change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or which
pronouncement or decision is announced on or after the date of issuance of the
Capital Securities under the Trust Agreement, there is more than an
insubstantial risk that (i) the Issuer is, or will be within 90 days of the date
of such opinion, subject to United States Federal income tax with respect to
income received or accrued on the Subordinated Debentures, (ii) interest payable
by the Company on the Subordinated Debentures is not, or within 90 days of such
opinion, will not be, deductible by the Company, in whole or in part, for United
States Federal income tax purposes, or (iii) the Issuer is, or will be within 90
days of the date of the opinion, subject to more than a de minimis amount of
taxes, duties or governmental charges.

See "-Possible Tax Law Changes Affecting the Capital Securities" for a
discussion of certain legislative proposals that, if adopted, could give rise to
a Tax Event, which may permit the Company to cause a redemption of the Capital
Securities prior to January 15, 2002.

EXCHANGE OF CAPITAL SECURITIES FOR SUBORDINATED DEBENTURES

The Company will have the right at any time to dissolve the Issuer and,
after satisfaction of liabilities to creditors as required by applicable law,
cause the Subordinated Debentures to be distributed to the holders of the
Capital Securities in liquidation of the Issuer. See "Description of New
Securities-Liquidation of the Issuer and Distribution of Subordinated
Debentures."

Under current United States Federal income tax law and interpretations
thereof and assuming, as expected, that the Issuer is treated as a grantor trust
for United States Federal income tax purposes, a distribution by the Issuer of
the Subordinated Debentures pursuant to a liquidation of the Issuer will not be
a taxable event to the Issuer or to holders of the Capital Securities and will
result in a holder of the Capital Securities receiving directly such holder's
pro rata share of the Subordinated Debentures (previously held indirectly
through the Issuer). If, however, the liquidation of the Issuer were to occur
because the Trust is subject to United States Federal income tax with respect to
income accrued or received on the Subordinated Debentures as a result of the
occurrence of a Tax Event or otherwise, the distribution of Subordinated
Debentures to holders of the Capital Securities by the Issuer would be a taxable
event to the Issuer and each holder, and holders of the Capital Securities would
recognize gain or loss as if they had exchanged their Capital Securities for the
Subordinated Debentures they received upon the liquidation of the Issuer. See
"Certain Federal Income Tax Consequences-Receipt of Subordinated Debentures Upon
Liquidation of the Issuer."

Because holders of Capital Securities may receive Subordinated
Debentures on termination of the Issuer and because Distributions are otherwise
limited to payments on the Subordinated Debentures, prospective purchasers of
Capital Securities are also making an investment decision with regard to the
Subordinated Debentures and should carefully review all the information
regarding the Subordinated Debentures contained herein. See "Description of New
Securities" and "Description of Subordinated Debentures."

21
<PAGE>

PRICES FOR CAPITAL SECURITIES OR SUBORDINATED DEBENTURES

There can be no assurance as to the market prices for Capital
Securities or Subordinated Debentures that may be distributed in exchange for
Capital Securities if a liquidation of the Issuer occurs. Accordingly, the
Capital Securities that an investor may hold, or the Subordinated Debentures
that a holder of Capital Securities may receive on liquidation of the Issuer,
may trade at a discount to the price that the investor paid to purchase the
Capital Securities.

RIGHTS UNDER THE GUARANTEE

The Chase Manhattan Bank will act as the Guarantee Trustee and will
hold the Guarantee for the benefit of the holders of the Capital Securities. The
Chase Manhattan Bank will also act as Debenture Trustee for the Subordinated
Debentures and as Property Trustee under the Trust Agreement and its affiliate
Chase Manhattan Bank Delaware will act as Delaware Trustee under the Trust
Agreement. The Guarantee guarantees to the holders of the Capital Securities the
following payments, to the extent not paid by the Issuer: (i) any accumulated
and unpaid Distributions required to be paid on the Capital Securities, to the
extent that the Issuer has funds on hand available therefor at such time, (ii)
the redemption price with respect to any Capital Securities called for
redemption, to the extent that the Issuer has funds on hand available therefor
at such time, and (iii) upon a voluntary or involuntary termination, winding-up
or liquidation of the Issuer (unless the Subordinated Debentures are distributed
to holders of the Capital Securities), the lesser of (a) the aggregate of the
Liquidation Amount and all accumulated and unpaid Distributions to the date of
payment to the extent that the Issuer has funds on hand available therefor at
such time and (b) the amount of assets of the Issuer remaining available for
distribution to holders of the Capital Securities. The holders of not less than
a majority in aggregate Liquidation Amount of the Capital Securities have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Guarantee Trustee in respect of the Guarantee or to
direct the exercise of any trust power conferred upon the Guarantee Trustee
under the Guarantee. Any holder of the Capital Securities may institute a legal
proceeding directly against the Company to enforce its rights under the
Guarantee without first instituting a legal proceeding against the Issuer, the
Guarantee Trustee or any other person or entity. If the Company were to default
on its obligation to pay amounts payable under the Subordinated Debentures, the
Trust would lack funds for the payment of Distributions or amounts payable on
redemption of the Capital Securities or otherwise, and, in such event, holders
of the Capital Securities would not be able to rely upon the Guarantee for
payment of such amounts. Instead, in the event a Debenture Event of Default
shall have occurred and be continuing and such event is attributable to the
failure of the Company to pay interest on or principal of the Subordinated
Debentures on the payment date on which such payment is due and payable, then a
holder of Capital Securities may institute a legal proceeding directly against
the Company for enforcement of payment to such holder of the principal of and
interest on such Subordinated Debentures having a principal amount equal to the
aggregate Liquidation Amount of the Capital Securities of such holder (a "Direct
Action"). Notwithstanding any payments made to a holder of Capital Securities by
the Company in connection with a Direct Action, the Company shall remain
obligated to pay the principal of and interest on the Subordinated Debentures,
and the Company shall be subrogated to the rights of the holder of such Capital
Securities with respect to payments on the Capital Securities to the extent of
any payments made by the Company to such holder in any Direct Action. Except as
described herein, holders of Capital Securities will not be able to exercise
directly any other remedy available to the holders of the Subordinated
Debentures or assert directly any other rights in respect of the Subordinated
Debentures. See "Description of Subordinated Debentures-Enforcement of Certain
Rights by Holders of Capital Securities," "Description of Subordinated
Debentures-Debenture Events

<PAGE>

of Default" and "Description of Guarantee." The Trust Agreement provides that
each holder of Capital Securities by acceptance thereof agrees to the provisions
of the Guarantee Agreement and the Indenture.

LIMITED VOTING RIGHTS

Holders of Capital Securities will generally have limited voting rights
relating only to the modification of the Capital Securities and the exercise of
the Issuer's rights as holder of Subordinated Debentures. Holders of Capital
Securities will have limited authority to vote to remove or replace the Issuer
Trustees. The Property Trustee and the holders of a majority of the Common
Securities may amend the Trust Agreement without the consent of holders of
Capital Securities to ensure that the Trust will be classified for United States
Federal income tax purposes as a grantor trust even if such action adversely
affects the interests of such holders. See "Description of New Securities-Voting
Rights: Amendment of the Trust Agreement" and "Description of New
Securities-Removal of Issuer Trustees."

POSSIBLE TAX LAW CHANGES AFFECTING THE CAPITAL SECURITIES

On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill")
proposed by the Clinton administration was released. The Bill would, among other
things, generally deny interest deductions for interest on an instrument issued
by a corporation that has a maximum term of more than 20 years and that is not
shown as indebtedness on the separate balance sheet of the issuer or, where the
instrument is issued to a related party (other than a corporation), where the
holder or some other related party issues a related instrument that is not shown
as indebtedness on the issuer's consolidated balance sheet. If such provision
were to apply to the Subordinated Debentures, the Company would be unable to
deduct interest on the Subordinated Debentures. However, on March 29, 1996, the
Chairmen of the Senate Finance and House Ways and Means Committees issued a
joint statement to the effect that it was their intention that the effective
date of the President's legislative proposals, if adopted, will be no earlier
than the date of "appropriate Congressional action" on the proposals. The
proposals were not enacted in the most recently concluded session of Congress
and, under current law, the Company believes it will be able to deduct the
interest on the Subordinated Debentures. There can be no assurance, however,
that final legislation similar to the Bill or future legislative proposals will
not affect the ability of the Company to deduct interest on the Subordinated
Debentures. Such a change could give rise to a Tax Event, which would permit the
Company to cause a redemption of the Capital Securities before, as well as
after, January 15, 2002. See "Description of New Securities-Redemption" and
"Certain Federal Income Tax Consequences-Possible Tax Law Changes."

CONSEQUENCES OF FAILURE TO EXCHANGE OLD CAPITAL SECURITIES

The Old Capital Securities have not been registered under the
Securities Act or any state securities laws and therefore may not be offered,
sold or otherwise transferred except in compliance with the registration
requirements of the Securities Act and any other applicable securities laws, or
pursuant to an exemption therefrom or in a transaction not subject thereto, and
in each case in compliance with certain other conditions and restrictions. Old
Capital Securities which remain outstanding after consummation of the Exchange
Offer will continue to bear a legend reflecting such restrictions on transfer.
In addition, upon consummation of the Exchange Offer, holders of Old Capital
Securities which remain outstanding will not be entitled to any rights to have
such Old Capital Securities registered under the Securities Act or to any
similar rights under the Registration Rights

23
<PAGE>

Agreement (subject to certain limited exceptions). The Company and the Issuer do
not intend to register under the Securities Act any Old Capital Securities which
remain outstanding after consummation of the Exchange Offer (subject to such
limited exceptions, if applicable).

To the extent that Old Capital Securities are tendered and accepted in
the Exchange Offer, a holder's ability to sell untendered Old Capital Securities
could be adversely affected. In addition, although the Old Capital Securities
have been designated for trading in the Private Offerings, Resale and Trading
through Automatic Linkages ("PORTAL") market, to the extent that Old Capital
Securities are tendered and accepted in connection with the Exchange Offer, any
trading market for Old Capital Securities which remain outstanding after the
Exchange Offer could be adversely affected.

The New Capital Securities and any Old Capital Securities which remain
outstanding after consummation of the Exchange Offer will constitute a single
series of Capital Securities under the Trust Agreement and, accordingly, will
vote together as a single class for purposes of determining whether holders of
the requisite percentage in outstanding Liquidation Amount thereof have taken
certain actions or exercised certain rights under the Trust Agreement. See
"Description of New Securities--Description of Capital Securities; General."

The Old Capital Securities provide that, if the Exchange Offer is not
consummated by March 30, 1997, the Distribution rate borne by the Old Capital
Securities will increase by 0.25% per annum commencing on March 31, 1997, until
the Exchange Offer is consummated. See "Description of Old Capital Securities."
Following consummation of the Exchange Offer, the Old Capital Securities will
not be entitled to any increase in the Distribution rate thereon. The New
Capital Securities will not be entitled to any such increase in the Distribution
rate thereon.

ABSENCE OF PUBLIC MARKET

The Old Capital Securities were issued to, and the Company believes are
currently owned by, a relatively small number of beneficial owners. The Old
Capital Securities have not been registered under the Securities Act and will be
subject to restrictions on transferability to the extent that they are not
exchanged for the New Capital Securities. Although the New Capital Securities
will generally be permitted to be resold or otherwise transferred by the holders
(who are not Affiliates) without compliance with the registration requirements
under the Securities Act, they will constitute a new issue of securities with no
established trading market. Capital Securities may be transferred by the holders
thereof only in blocks having a Liquidation Amount of not less than $100,000
(100 Capital Securities). The Company and the Issuer were advised by the Initial
Purchasers in connection with the offering of the Old Capital Securities that
the Initial Purchasers intended to make a market in the Old Capital Securities.
However, the Initial Purchasers are not obligated to make a market in the Old
Capital Securities or the New Capital Securities and any market-making activity
with respect to the New Capital Securities may be discontinued at any time
without notice. In addition, such market-making activity will be subject to the
limits imposed by the Securities Act and the Exchange Act and may be limited
during the Exchange Offer. The Company has filed an application for listing of
the New Capital Securities on the NYSE. However, there can be no assurance that
an active public or other market will develop for the New Capital Securities or
the Old Capital Securities or as to the liquidity of or the trading market for
the New Capital Securities or the Old Capital Securities. If an active public
market does not develop, the market price and liquidity of the New Capital
Securities may be adversely affected.

<PAGE>

If a public trading market develops for the New Capital Securities,
future trading prices of such securities will depend on many factors, including,
among other things, prevailing interest rates, results of operations and the
market for similar securities. Depending on prevailing interest rates, the
market for similar securities and other factors, including the financial
condition of the Company, the New Capital Securities may trade at a discount.

Each Participating Broker-Dealer that receives New Capital Securities
for its own account must acknowledge that it will deliver a prospectus in
connection with any resale of such New Capital Securities. See "Plan of
Distribution."

EXCHANGE OFFER PROCEDURES

Issuance of the New Capital Securities in exchange for Old Capital
Securities pursuant to the Exchange Offer will be made only after a timely
receipt by the Exchange Agent of such Old Capital Securities, a properly
completed and duly executed Letter of Transmittal or Agent's Message in lieu
thereof and all other required documents. Therefore, holders of the Old Capital
Securities desiring to tender such Old Capital Securities in exchange for New
Capital Securities should allow sufficient time to ensure timely delivery.
Neither the Company, the Issuer, nor the Exchange Agent is under any duty to
give notification of defects or irregularities with respect to the tenders of
Old Capital Securities for exchange.

<PAGE>

RATIOS OF EARNINGS TO FIXED CHARGES

The following sets forth the historical ratios of earnings to fixed
charges and the historical ratios of earning to fixed charges and preferred
stock dividends of the Company for the periods indicated:
<TABLE>
<CAPTION>

THREE MONTHS THREE MONTHS FISCAL YEAR FISCAL YEAR FISCAL YEAR FISCAL YEAR FISCAL YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
SEPT. 27, 1996 SEPT. 29, 1995 JUNE 30, 1996 JUNE 30, 1995 JUNE 30, 1994 JUNE 30, 1993 JUNE 30, 1992
---------------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED)
(IN THOUSANDS, EXCEPT FOR RATIO)

<S> <C> <C> <C> <C> <C> <C> <C>
Earnings before taxes on income. $ 178,517 $ 156,410 $ 834,926 $ 388,082 $ 642,799 $ 614,398 $ 507,625
----------- ----------- ----------- ----------- ----------- ----------- ------------
Added Fixed Charges: Interest.. 547,469 456,945 1,981,171 1,678,515 1,023,866 710,086 834,859

Interest factor in rents........ 6,514 6,459 25,672 24,594 21,772 20,084 20,874
----------- ----------- ----------- ----------- ----------- ----------- ------------

Total Fixed Charges............. 553,983 463,404 2,006,843 1,703,109 1,045,638 730,170 855,733
----------- ----------- ----------- ----------- ----------- ----------- ------------
Earnings before fixed charges and
taxes on income.............. $ 732,500 $ 619,814 $ 2,841,769 $ 2,091,191 $ 1,688,437 $ 1,344,568 $ 1,363,358
----------- ----------- ----------- ----------- ----------- ----------- ------------
----------- ----------- ----------- ----------- ----------- ----------- ------------
Ratio of Earnings to Fixed Charge 1.3 1.3 1.4 1.2 1.6 1.8 1.6
----------- ----------- ----------- ----------- ----------- ----------- ------------
----------- ----------- ----------- ----------- ----------- ----------- ------------

</TABLE>

USE OF PROCEEDS

Neither the Company nor the Issuer will receive any proceeds from the
issuance of New Capital Securities offered hereby. The Old Capital Securities
surrendered in exchange for the New Capital Securities will be retired and
cancelled.

The net proceeds to the Issuer from the offering of the Old Capital
Securities was approximately $200,000,000 (before deducting expenses associated
with the offering). All of the proceeds from the sale of Old Capital Securities
were invested by the Issuer in Old Subordinated Debentures. The net proceeds
from the sale of the Old Subordinated Debentures were used by the Company for
general corporate purposes. Specific allocations of the proceeds to such
purposes have not been determined. The net proceeds may be used to reduce
outstanding short-term indebtedness of the Company. Based upon the anticipated
future funding requirements of the Company and its subsidiaries, the Company
expects that it will, from time to time, engage in additional equity or debt
financings.

26
<PAGE>

CAPITALIZATION

The following table sets forth the consolidated capitalization of the
Company and its subsidiaries as of September 27, 1996 and as adjusted to give
effect to the consummation of the offering of the Old Capital Securities and the
application of the proceeds thereof. The following data should be read in
conjunction with the consolidated financial statements and notes thereto of the
Company and its subsidiaries incorporated herein by reference. See
"Incorporation of Certain Documents by Reference."
<TABLE>
<CAPTION>

September 27, 1996
------------------
Actual As Adjusted
------ -----------
(in thousands)
(unaudited)

<S> <C> <C>
SHORT-TERM BORROWINGS:
Bank Borrowings.............................................................. 807,816 807,816
Commercial Paper............................................................. 4,128,887 4,128,887
Medium-Term Notes & Other.................................................... 5,472,981 5,472,981
---------- ----------
TOTAL SHORT-TERM BORROWINGS............................................. 10,409,684 10,409,684
========== ==========

LONG-TERM BORROWINGS:
Floating Rate Notes due 1996 to 2030......................................... 924,264 924,264
Fixed Rate Senior Notes due 1998 to 2005; interest rates
ranging from 5.75% to 9.375%............................................... 2,569,001 2,569,001
Medium-Term Notes and Other.................................................. 2,996,255 2,996,255
--------- ---------
TOTAL LONG-TERM BORROWINGS.............................................. 6,489,520 6,489,520
========= =========

Preferred Stock Issued by Subsidiary............................................ 150,000 150,000
Company-obligated mandatorily redeemable preferred
securities of subsidiary trust (1)........................................... -0- 200,000
STOCKHOLDERS' EQUITY:........................................................
Preferred Stock, $1.00 par value, 10,000,000 shares authorized:.................
Adjustable Rate Cumulative Preferred Stock,
Series A--$50 liquidation preference; 3,000,000 shares issued.............. 150,000 150,000
Cumulative Preferred Stock, Series B--$200 liquidation preference;
937,500 shares issued and outstanding...................................... 187,500 187,500
Cumulative Preferred Stock, Series C--$200 liquidation preference;
500,000 shares issued and outstanding...................................... 100,000 100,000
Common Stock, $1.00 par value; 200,000,000 shares
authorized; 159,803,764 shares issued...................................... 159,804 159,804
Paid-in Capital .............................................................. 1,696,217 1,696,217
Retained Earnings............................................................... 778,781 778,781
Capital Accumulation Plan....................................................... 471,191 471,191
Treasury Stock: ..............................................................
Adjustable Rate Cumulative Preferred Stock,
Series A--2,507,350 shares................................................. (102,818) (102,818)
Common Stock--42,922,973 shares.............................................. (636,980) (636,980)
Note Receivable from ESOP Trust................................................. (19,800) (19,800)
---------- ----------
Total Stockholders' Equity.............................................. 2,783,895 2,783,895
---------- ----------
TOTAL LONG-TERM BORROWINGS, PREFERRED STOCK
ISSUED BY SUBSIDIARY, COMPANY-OBLIGATED MANDATORILY REDEEMABLE
PREFERRED SECURITIES OF SUBSIDIARY TRUST AND STOCKHOLDERS' EQUITY............ 9,423,415 9,623,415
========== ==========
<FN>
- -----------
Notes:
(1) The "company-obligated mandatorily redeemable preferred securities of
subsidiary trust" reflects the Capital Securities. The Issuer is a
wholly-owned subsidiary of the Company and will hold the Subordinated
Debentures as its sole asset.
</FN>
</TABLE>

27
<PAGE>

BEAR STEARNS CAPITAL TRUST I

Bear Stearns Capital Trust I is a statutory business trust created under
Delaware law pursuant to (i) the Trust Agreement executed by the Company, as
Depositor and the Delaware Trustee and (ii) the filing of a certificate of trust
with the Delaware Secretary of State on January 14, 1997. The Issuer exists for
the exclusive purposes of (i) issuing and selling the Capital Securities and
Common Securities, (ii) using the proceeds from the sale of Capital Securities
and Common Securities to acquire Subordinated Debentures issued by the Company,
and (iii) engaging in only those other activities necessary, advisable or
incidental thereto (such as registering the transfer of the Capital Securities).
Accordingly, the Subordinated Debentures are the sole assets of the Issuer, and
payments by the Company under the Subordinated Debentures and the expense
provisions in the indenture are the sole revenue of the Issuer. All of the
Common Securities are owned by the Company. The Common Securities rank pari
passu, and payments will be made thereon pro rata, with the Capital Securities
except that upon the occurrence and continuance of an event of default under the
Trust Agreement resulting from a Debenture Event of Default, the rights of the
Company as holder of the Common Securities to payment in respect of
Distributions and payments upon liquidation, redemption or otherwise will be
subordinated to the rights of the holders of the Capital Securities. See
"Description of New Securities--Subordination of Common Securities." The Company
acquired Common Securities in an aggregate liquidation amount equal to 3% (i.e.,
$6,186,000) of the total capital of the Issuer.

The Issuer has a term of 55 years, but may dissolve earlier as provided in
the Trust Agreement. The Issuer's business and affairs are conducted by the
Administrators and its trustees, each appointed by the Company as holder of the
Common Securities. Under the Amended and Restated Trust Agreement of the Issuer
(the "Trust Agreement"), the trustees for the Issuer are The Chase Manhattan
Bank as the Property Trustee and Chase Manhattan Bank Delaware as the Delaware
Trustee (collectively, the "Issuer Trustees"). In addition, three individuals
who are initially employees or officers of or affiliated with the holder of a
majority of the Common Securities act as administrators with respect to the
Issuer (the "Administrators"). The Administrators will be selected from time to
time by the holders of a majority of the Common Securities. The Chase Manhattan
Bank also acts as trustee under the Guarantee and the Indenture (each as defined
herein). See "Description of Guarantee" and "Description of Subordinated
Debentures." The holders of a majority in Liquidation Amount of outstanding
Capital Securities may remove the Property Trustee and the Delaware Trustee, if
a Debenture Event of Default has occurred and is continuing. If an Issuer
Trustee is removed by the holders of Capital Securities, the successor may be
appointed by the holders of a majority in Liquidation Amount of Capital
Securities. If an Issuer Trustee resigns, such Issuer Trustee shall appoint its
successor. The duties and obligations of each Issuer Trustee are governed by the
Trust Agreement. The Company will pay all fees and expenses relating to the
Issuer and the offering of the Capital Securities and will pay, directly or
indirectly, all ongoing costs, expenses and liabilities of the Issuer.

The principal executive office of the Issuer is 245 Park Avenue, New York,
New York 10167 and its telephone number is (212) 272-2000.

THE BEAR STEARNS COMPANIES INC.

The Company is a holding company that, through its principal subsidiaries,
Bear, Stearns & Co. Inc. ("Bear Stearns") and Bear Stearns Securities Corp.
("BSSC"), is a leading United States investment banking, securities trading and
brokerage firm serving corporations, governments and institutional and
individual investors worldwide. The business of the Company includes
market-making and trading in

<PAGE>

corporate, United States government, government-agency, mortgage-related,
asset-backed and municipal securities; trading in options, futures, foreign
currencies, interest-rate swaps and other derivative products; securities and
commodities arbitrage; securities, options and commodities brokerage;
underwriting and distributing securities; providing securities clearance
services; financing customer activities; securities lending; arranging for the
private placement of securities; assisting in mergers, acquisitions,
restructurings and leveraged transactions; providing other financial advisory
services; making principal investments in leveraged acquisitions; and acting as
specialist on the floor of the NYSE; providing fiduciary and other services,
such as real estate brokerage, investment management and investment advisory and
securities research.

The Company's business is conducted from its principal offices in New York
City; from domestic regional offices in Atlanta, Boston, Chicago, Dallas, Los
Angeles and San Francisco; from representative offices in Beijing, Geneva, Hong
Kong, Lugano and Shanghai; through international subsidiaries in Buenos Aires,
Dublin, Hong Kong, London, Paris, Sao Paulo, Singapore and Tokyo; and through
joint ventures with other firms in Madrid and Paris. The Company's foreign
offices provide services and engage in investment activities involving foreign
clients and international transactions. The Company provides trust-company
services through its subsidiary, Custodial Trust Company.

Bear Stearns and BSSC are broker-dealers registered with the Commission.
They also are members of the NYSE, all other principal United States securities
and commodities exchanges, the NASD and the National Futures Association. Bear
Stearns is a "primary dealer" in United States government securities, as
designated by the Federal Reserve Bank of New York.

The Company is incorporated in Delaware. The principal executive office of
the Company is located at 245 Park Avenue, New York, New York 10167; its
telephone number is (212) 272-2000.

ACCOUNTING TREATMENT

For financial reporting purposes, the Issuer will be treated as a
subsidiary of the Company and, accordingly, the accounts of the Issuer will be
included in the consolidated financial statements of the Company. The Capital
Securities will be presented as a separate line item in the consolidated balance
sheet of the Company, and appropriate disclosures about the Capital Securities,
the Guarantee and the Subordinated Debentures will be included in the notes to
the consolidated financial statements. For financial reporting purposes, the
Company will record Distributions paid and payable on the Capital Securities as
an expense in the consolidated statement of income.

THE EXCHANGE OFFER

PURPOSE AND EFFECT OF EXCHANGE OFFER

In connection with the sale of the Old Capital Securities, the Company
and the Issuer entered into the Registration Rights Agreement with the Initial
Purchasers, pursuant to which the Company and the Issuer agreed to file and to
use their reasonable best efforts to cause to be declared effective by the
Commission a registration statement with respect to the exchange of the Old
Capital Securities for capital securities with terms identical in all material
respects to the terms of the Old Capital Securities.

29
<PAGE>

A copy of the Registration Rights Agreement has been filed as an exhibit to the
Registration Statement of which this Prospectus is a part.

The Exchange Offer is being made to satisfy the contractual obligations
of the Company and the Issuer under the Registration Rights Agreement. The form
and terms of the New Capital Securities are the same as the form and terms of
the Old Capital Securities, except that the New Capital Securities (i) have been
registered under the Securities Act and therefore will not be subject to certain
restrictions on transfer applicable to the Old Capital Securities, and (ii) will
not provide for any increase in the Distribution rate thereon. In that regard,
the Old Capital Securities provide, among other things, that, if the Exchange
Offer is not consummated within a specified period after the date the Old
Capital Securities were issued, the Distribution rate borne by the Old Capital
Securities will increase by 0.25% per annum until the Exchange Offer is
consummated. Upon consummation of the Exchange Offer, holders of Old Capital
Securities will not be entitled to any increase in the Distribution rate thereon
or any further registration rights under the Registration Rights Agreement,
except under limited circumstances. See "Risk Factors-Consequences of Failure to
Exchange Old Capital Securities" and "Description of Old Securities."

The Exchange Offer is not being made to, nor will the Issuer or the
Company accept tenders for exchange from, holders of Old Capital Securities in
any jurisdiction in which the Exchange Offer or the acceptance thereof would not
be in compliance with the securities or blue sky laws of such jurisdiction.

Unless the context requires otherwise, the term "holder" with respect
to the Exchange Offer means any person in whose name the Old Capital Securities
are registered on the books of the Issuer or any other person who has obtained a
properly completed bond power from the registered holder, or any person whose
Old Capital Securities are held of record by DTC who desires to deliver such Old
Capital Securities by book entry transfer at DTC.

Pursuant to the Exchange Offer, the Company will exchange as soon as
practicable after the date hereof, the Old Guarantee for the New Guarantee and
all of the Old Subordinated Debentures, of which $206,186,000 aggregate
principal amount is outstanding, for a like aggregate principal amount of the
New Subordinated Debentures. The New Guarantee and New Subordinated Debentures
have been registered under the Securities Act.

TERMS OF EXCHANGE

The Issuer hereby offers, upon the terms and subject to the conditions
set forth in this Prospectus and in the accompanying Letter of Transmittal, to
exchange up to $200,000,000 aggregate Liquidation Amount of New Capital
Securities for a like aggregate Liquidation Amount of Old Capital Securities
properly tendered on or prior to the Expiration Date and not properly withdrawn
in accordance with the procedures described below. The Issuer will issue,
promptly after the Expiration Date, an aggregate Liquidation Amount of up to
$200,000,000 of New Capital Securities in exchange for a like aggregate
Liquidation Amount of outstanding Old Capital Securities tendered and accepted
in connection with the Exchange Offer. Holders may tender their Old Capital
Securities in whole or in part in a Liquidation Amount of not less than $100,000
or any integral multiple of $1,000 in excess thereof.

<PAGE>

The Exchange Offer is not conditioned upon any minimum Liquidation
Amount of Old Capital Securities being tendered. As of the date of this
Prospectus, $200,000,000 aggregate Liquidation Amount of the Old Capital
Securities is outstanding.

Holders of Old Capital Securities do not have any appraisal or
dissenters' rights in connection with the Exchange Offer. Old Capital Securities
which are not tendered for or are tendered but not accepted in connection with
the Exchange Offer will remain outstanding and be entitled to the benefits of
the Trust Agreement, but will not be entitled to any further registration rights
under the Registration Rights Agreement, except under limited circumstances. See
"Risk Factors-Consequences of Failure to Exchange Old Capital Securities" and
"Description of Old Securities."

If any tendered Old Capital Securities are not accepted for exchange
because of an invalid tender, the occurrence of certain other events set forth
therein or otherwise, certificates for any such unaccepted Old Capital
Securities will be returned, without expense, to the tendering holder thereof
promptly after the Expiration Date.

Holders who tender Old Capital Securities in connection with the
Exchange Offer will not be required to pay brokerage commissions or fees or,
subject to the instructions in the Letter of Transmittal, transfer taxes with
respect to the exchange of Old Capital Securities in connection with the
Exchange Offer. The Company will pay all charges and expenses, other than
certain applicable taxes described below, in connection with the Exchange Offer.
See "-Fees and Expenses."

NEITHER THE BOARD OF DIRECTORS OF THE COMPANY NOR ANY ADMINISTRATOR OR
ANY TRUSTEE OF THE ISSUER MAKES ANY RECOMMENDATION TO HOLDERS OF OLD CAPITAL
SECURITIES AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION
OF THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER. IN ADDITION, NO
ONE HAS BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF OLD CAPITAL
SECURITIES MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT TO THE
EXCHANGE OFFER AND, IF SO, THE AGGREGATE LIQUIDATION AMOUNT OF OLD CAPITAL
SECURITIES TO TENDER AFTER READING THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL
AND CONSULTING WITH THEIR ADVISERS, IF ANY, BASED ON THEIR OWN FINANCIAL
POSITION AND REQUIREMENTS.

EXPIRATION DATE; EXTENSIONS; AMENDMENTS

The term "Expiration Date" means 5:00 p.m., New York City time, on
March __, 1997, unless the Exchange Offer is extended by the Company and the
Issuer (in which case the term "Expiration Date" shall mean the latest date and
time to which the Exchange Offer is extended).

The Company and the Issuer expressly reserve the right in their sole
discretion, subject to applicable law, at any time and from time to time, (i) to
delay the acceptance of the Old Capital Securities for exchange, (ii) to
terminate the Exchange Offer (whether or not any Old Capital Securities have
theretofore been accepted for exchange) if the Company and the Issuer determine,
in their sole discretion, that any of the events or conditions referred to under
"-Conditions to the Exchange Offer" have occurred or exist or have not been
satisfied, (iii) to extend the Expiration Date of the Exchange Offer and retain
all Old Capital Securities tendered pursuant to the Exchange Offer, subject,
however, to the right of holders of Old Capital Securities to withdraw their
tendered Old Capital Securities as

<PAGE>

described under "-Withdrawal Rights," and (iv) to waive any condition or
otherwise amend the terms of the Exchange Offer in any respect. If the Exchange
Offer is amended in a manner determined by the Company and the Issuer to
constitute a material change, or if the Company and the Issuer waive a material
condition of the Exchange Offer, the Company and the Issuer will promptly
disclose such amendment by means of an amended or supplemented Prospectus that
will be distributed to the registered holders of the Old Capital Securities, and
the Company and the Issuer will extend the Exchange Offer to the extent required
by Rule 14e-l under the Exchange Act.

Any such delay in acceptance, extension, termination or amendment will
be followed promptly by oral or written notice thereof to the Exchange Agent and
by making a public announcement thereof, and such announcement in the case of an
extension will be made no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date. Without limiting
the manner in which the Company and the Issuer may choose to make any public
announcement and subject to applicable law, the Company and the Issuer shall
have no obligation to publish, advertise or otherwise communicate any such
public announcement other than by issuing a release to an appropriate news
agency.

ACCEPTANCE FOR EXCHANGE AND ISSUANCE OF NEW CAPITAL SECURITIES

Upon the terms and subject to the conditions of the Exchange Offer, the
Issuer will exchange, and will issue to the Exchange Agent, New Capital
Securities for Old Capital Securities validly tendered and not withdrawn
(pursuant to the withdrawal rights described under "-Withdrawal Rights")
promptly after the Expiration Date.

In all cases, delivery of New Capital Securities in exchange for Old
Capital Securities tendered and accepted for exchange pursuant to the Exchange
Offer will be made only after timely receipt by the Exchange Agent of (i) Old
Capital Securities or a book-entry confirmation of a book-entry transfer of Old
Capital Securities into the Exchange Agent's account at DTC, including an
Agent's Message if the tendering holder has not delivered a Letter of
Transmittal, (ii) the Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees or (in the
case of a book-entry transfer) an Agent's Message in lieu of the Letter of
Transmittal, and (iii) any other documents required by the Letter of
Transmittal.

The term "book-entry confirmation" means a timely confirmation of a
book-entry transfer of Old Capital Securities into the Exchange Agent's account
at DTC. The term "Agent's Message" means a message, transmitted by DTC to and
received by the Exchange Agent and forming a part of a book-entry confirmation,
which states that DTC has received an express acknowledgement from the tendering
participant, which acknowledgement states that such participant has received and
agrees to be bound by the Letter of Transmittal and that the Issuer and the
Company may enforce such Letter of Transmittal against such participant.

Subject to the terms and conditions of the Exchange Offer, the Company
and the Issuer will be deemed to have accepted for exchange, and thereby
exchanged, Old Capital Securities validly tendered and not withdrawn as, if and
when the Issuer gives oral or written notice to the Exchange Agent of the
Company's and the Issuer's acceptance of such Old Capital Securities for
exchange pursuant to the Exchange Offer. The Exchange Agent will act as agent
for the Company and the Issuer for the purpose of receiving tenders of Old
Capital Securities, Letters of Transmittal and related documents, and as

<PAGE>

agent for tendering holders for the purpose of receiving Old Capital Securities,
Letters of Transmittal and related documents and transmitting New Capital
Securities to validly tendering holders. Such exchange will be made promptly
after the Expiration Date. If for any reason whatsoever, acceptance for exchange
or the exchange of any Old Capital Securities tendered pursuant to the Exchange
Offer is delayed (whether before or after the Company's and the Issuer's
acceptance for exchange of Old Capital Securities) or the Company and the Issuer
extend the Exchange Offer or are unable to accept for exchange or exchange Old
Capital Securities tendered pursuant to the Exchange Offer, then, without
prejudice to the Company's and the Issuer's rights set forth herein, the
Exchange Agent may, nevertheless, on behalf of the Company and the Issuer and
subject to Rule 14e-1(c) under the Exchange Act, retain tendered Old Capital
Securities and such Old Capital Securities may not be withdrawn except to the
extent tendering holders are entitled to withdrawal rights as described under
"-Withdrawal Rights."

Pursuant to the Letter of Transmittal or Agent's Message in lieu
thereof, a holder of Old Capital Securities will warrant and agree in the Letter
of Transmittal that it has full power and authority to tender, exchange, sell,
assign and transfer Old Capital Securities, that the Issuer will acquire good,
marketable and unencumbered title to the tendered Old Capital Securities, free
and clear of all liens, restrictions, charges and encumbrances, and that the Old
Capital Securities tendered for exchange are not subject to any adverse claims
or proxies. The holder also will warrant and agree that it will, upon request,
execute and deliver any additional documents deemed by the Company, the Issuer
or the Exchange Agent to be necessary or desirable to complete the exchange,
sale, assignment, and transfer of the Old Capital Securities tendered pursuant
to the Exchange Offer.

PROCEDURES FOR TENDERING OLD CAPITAL SECURITIES

Valid Tender. Except as set forth below, in order for Old Capital
Securities to be validly tendered pursuant to the Exchange Offer, a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), with
any required signature guarantees, or (in the case of a book-entry tender) an
Agent's Message in lieu of the Letter of Transmittal, and any other required
documents, must be received by the Exchange Agent at its address set forth under
"-Exchange Agent," and either (i) tendered Old Capital Securities must be
received by the Exchange Agent, or (ii) such Old Capital Securities must be
tendered pursuant to the procedures for book-entry transfer set forth below and
a book-entry confirmation, including an Agent's Message if the tendering holder
has not delivered a Letter of Transmittal, must be received by the Exchange
Agent, in each case on or prior to the Expiration Date, or (iii) the guaranteed
delivery procedures set forth below must be complied with.

If less than all of the Old Capital Securities are tendered, a
tendering holder should fill in the amount of Old Capital Securities being
tendered in the appropriate box on the Letter of Transmittal or so indicate in
an Agent's Message in lieu of the Letter of Transmittal and the untendered
Liquidation Amount must be $100,000 or any integral multiple of $1,000 in excess
thereof. The entire amount of Old Capital Securities delivered to the Exchange
Agent will be deemed to have been tendered unless otherwise indicated.

THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS, IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL, RETURN RECEIPT
REQUESTED, PROPERLY INSURED, OR AN OVERNIGHT DELIVERY

<PAGE>

SERVICE IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED
TO ENSURE TIMELY DELIVERY.

Book Entry Transfer. The Exchange Agent will establish an account with
respect to the Old Capital Securities at DTC for purposes of the Exchange Offer
within two business days after the date of this Prospectus. Any financial
institution that is a participant in DTC's book-entry transfer facility system
may make a book entry delivery of the Old Capital Securities by causing DTC to
transfer such Old Capital Securities into the Exchange Agent's account at DTC in
accordance with DTC's procedures for transfers. However, although delivery of
Old Capital Securities may be effected through book entry transfer into the
Exchange Agent's account at DTC, the Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or an Agent's Message in lieu of the Letter of Transmittal, and any
other required documents, must in any case be delivered to and received by the
Exchange Agent at its address set forth under "-Exchange Agent" on or prior to
the Expiration Date, or the guaranteed delivery procedure set forth below must
be complied with.

DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT

Signature Guarantees. Certificates for the Old Capital Securities need
not be endorsed and signature guarantees on the Letter of Transmittal are
unnecessary unless (i) a certificate for the Old Capital Securities is
registered in a name other than that of the person surrendering the certificate
or (ii) such registered holder completes the box entitled "Special Issuance
Instructions" or "Special Delivery Instructions" in the Letter of Transmittal.
In the case of (i) or (ii) above, such certificates for Old Capital Securities
must be duly endorsed or accompanied by a properly executed bond power, with the
endorsement or signature on the bond power and on the Letter of Transmittal
guaranteed by a firm or other entity identified in Rule l7Ad-15 under the
Exchange Act as an "eligible guarantor institution," including (as such terms
are defined therein): (i) a bank; (ii) a broker, dealer, municipal securities
broker or dealer or government securities broker or dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
clearing agency; or (v) a savings association that is a participant in a
Securities Transfer Association (an "Eligible Institution"), unless surrendered
on behalf of such Eligible Institution. See Instruction 1 to the Letter of
Transmittal.

Guaranteed Delivery. If a holder desires to tender Old Capital
Securities pursuant to the Exchange Offer and the certificates for such Old
Capital Securities are not immediately available or time will not permit all
required documents to reach the Exchange Agent on or before the Expiration Date,
or the procedures for book-entry transfer cannot be completed on a timely basis,
such Old Capital Securities may nevertheless be tendered, provided that all of
the following guaranteed delivery procedures are complied with:

(i) such tenders are made by or through an Eligible Institution;

(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form accompanying the Letter of Transmittal,
is received by the Exchange Agent, as provided below, on or prior to
Expiration Date; and

(iii) the certificates (or a book-entry confirmation) representing all
tendered Old Capital Securities, in proper form for transfer, together with
a properly completed and duly executed Letter of Transmittal (or facsimile
thereof or Agent's Message in lieu thereof), with any required signature

<PAGE>

guarantees and any other documents required by the Letter of Transmittal
are received by the Exchange Agent within three New York Stock Exchange
trading days after the date of execution of such Notice of Guaranteed
Delivery.

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

Notwithstanding any other provision hereof, the delivery of New Capital
Securities in exchange for Old Capital Securities tendered and accepted for
exchange pursuant to the Exchange Offer will in all cases be made only after
timely receipt by the Exchange Agent of Old Capital Securities, or of a
book-entry confirmation with respect to such Old Capital Securities, and a
properly completed and duly executed Letter of Transmittal (or facsimile thereof
or Agent's Message in lieu thereof), together with any required signature
guarantees and any other documents required by the Letter of Transmittal.
Accordingly, the delivery of New Capital Securities might not be made to all
tendering holders at the same time, and will depend upon when Old Capital
Securities, book-entry confirmations with respect to Old Capital Securities and
other required documents are received by the Exchange Agent.

The Company's and the Issuer's acceptance for exchange of Old Capital
Securities tendered pursuant to any of the procedures described above will
constitute a binding agreement among the tendering holder, the Company and the
Issuer upon the terms and subject to the conditions of the Exchange Offer.

Determination Of Validity. All questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange of
any tendered Old Capital Securities will be determined by the Company and the
Issuer, in their sole discretion, whose determination shall be final and binding
on all parties. The Company and the Issuer reserve the absolute right, in their
sole discretion, to reject any and all tenders determined by them not to be in
proper form or the acceptance of which, or exchange for, may, in the view of
counsel to the Company or the Issuer, be unlawful. The Company and the Issuer
also reserve the absolute right, subject to applicable law, to waive any of the
conditions of the Exchange Offer as set forth under "-Conditions to the Exchange
Offer" or any condition or irregularity in any tender of Old Capital Securities
of any particular holder whether or not similar conditions or irregularities are
waived in the case of other holders.

The Company's and the Issuer's interpretation of the terms and
conditions of the Exchange Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding. No tender of Old Capital
Securities will be deemed to have been validly made until all irregularities
with respect to such tender have been cured or waived. Neither the Company, the
Issuer, any affiliates or assigns of the Company or the Issuer, the Exchange
Agent nor any other person shall be under any duty to give any notification of
any irregularities in tenders or incur any liability for failure to give any
such notification.

If any Letter of Transmittal, endorsement, bond power, power of
attorney, or any other document required by the Letter of Transmittal is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and unless waived by the Issuer,
proper evidence satisfactory to the Company and the Issuer, in their sole
discretion, of such person's authority to so act must be submitted.

<PAGE>

A beneficial owner of Old Capital Securities that are held by or
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee or custodian is urged to contact such entity promptly if such
beneficial holder wishes to participate in the Exchange Offer.

RESALES OF NEW CAPITAL SECURITIES

The Issuer is making the Exchange Offer for the Capital Securities in
reliance on the position of the staff of the Division of Corporation Finance of
the Commission as set forth in certain no-action letters addressed to third
parties in other transactions. However, neither the Company nor the Issuer
sought its own no-action letter, and there can be no assurance that the staff of
the Division of Corporation Finance of the Commission would make a similar
determination with respect to the Exchange Offer as it has in such no-action
letters to third parties. Based on these interpretations by the staff of the
Division of Corporation Finance, and subject to the two immediately following
sentences, the Company and the Issuer believe that New Capital Securities issued
pursuant to this Exchange Offer in exchange for Old Capital Securities may be
offered for resale, resold and otherwise transferred by a holder thereof (other
than a holder who is a broker-dealer) without further compliance with the
registration and prospectus delivery requirements of the Securities Act,
provided that such New Capital Securities are acquired in the ordinary course of
such holder's business and that such holder is not participating, and has no
arrangement or understanding with any person to participate, in a distribution
(within the meaning of the Securities Act) of such New Capital Securities.
However, any holder of Old Capital Securities who is an Affiliate or who intends
to participate in the Exchange Offer for the purpose of distributing New Capital
Securities, or any broker-dealer who purchased Old Capital Securities from the
Issuer to resell pursuant to Rule 144A or any other available exemption under
the Securities Act, (i) will not be able to rely on the interpretations of the
staff of the Division of Corporation Finance of the Commission set forth in the
above-mentioned no-action letters, (ii) will not be permitted or entitled to
tender such Old Capital Securities in the Exchange Offer, and (iii) must comply
with the registration and prospectus delivery requirements of the Securities Act
in connection with any sale or other transfer of such Old Capital Securities
unless such sale is made pursuant to an exemption from such requirements. In
addition, as described below, Participating Broker-Dealers must deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resales of New Capital Securities.

Each holder of Old Capital Securities who wishes to exchange Old
Capital Securities for New Capital Securities in the Exchange Offer will be
required to represent that (i) it is not an Affiliate, (ii) any New Capital
Securities to be received by it are being acquired in the ordinary course of its
business, (iii) it has no arrangement or understanding with any person to
participate in a distribution (within the meaning of the Securities Act) of such
New Capital Securities, and (iv) if such holder is not a broker-dealer, such
holder is not engaged in, and does not intend to engage in, a distribution
(within the meaning of the Securities Act) of such New Capital Securities. The
Letter of Transmittal contains the foregoing representations. In addition, the
Company and the Issuer may require such holder, as a condition to such holder's
eligibility to participate in the Exchange Offer, to furnish to the Company and
the Issuer (or an agent thereof) in writing information as to the number of
"beneficial owners" (within the meaning of Rule 13d-3 under the Exchange Act) on
behalf of whom such holder holds the Capital Securities to be exchanged in the
Exchange Offer. Each Participating Broker-Dealer will be deemed to have
acknowledged by execution of the Letter of Transmittal or delivery of an Agent's
Message that it acquired the Old Capital Securities for its own account as the
result of market-making activities or other trading activities and must agree
that it will deliver a prospectus meeting the requirements of the Securities Act
in connection with any resale of such New Capital Securities. The

<PAGE>

Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a Participating Broker-Dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act. Based on the position
taken by the staff of the Division of Corporation Finance of the Commission in
the interpretive letters referred to above, the Company and the Issuer believe
that Participating Broker-Dealers may fulfill their prospectus delivery
requirements with respect to the New Capital Securities received upon exchange
of such Old Capital Securities (other than Old Capital Securities which
represent an unsold allotment from the original sale of the Old Capital
Securities) with a prospectus meeting the requirements of the Securities Act,
which may be the prospectus prepared for an exchange offer so long as it
contains a description of the plan of distribution with respect to the resale of
such New Capital Securities. Accordingly, this Prospectus, as it may be amended
or supplemented from time to time, may be used by a Participating Broker-Dealer
during the period referred to below in connection with resales of New Capital
Securities received in exchange for Old Capital Securities where such Old
Capital Securities were acquired by such Participating Broker-Dealer for its own
account as a result of market-making or other trading activities. Subject to
certain provisions set forth in the Registration Rights Agreement, the Company
and the Issuer have agreed that this Prospectus, as it may be amended or
supplemented from time to time, may be used by a Participating Broker-Dealer in
connection with resales of such New Capital Securities for a period ending 180
days after the Expiration Date or, if earlier, when all such New Capital
Securities have been disposed of by such Participating Broker-Dealer. See "Plan
of Distribution." Any person, including any Participating Broker-Dealer, who is
an Affiliate may not rely on such interpretive letters and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction.

In that regard, each Participating Broker-Dealer who surrenders Old
Capital Securities pursuant to the Exchange Offer will be deemed to have agreed,
by execution of the Letter of Transmittal or delivery of an Agent's Message in
lieu thereof, that, upon receipt of notice from the Company or the Issuer of the
occurrence of any event or the discovery of any fact which makes any statement
contained or incorporated by reference in this Prospectus untrue in any material
respect or which causes this Prospectus to omit to state a material fact
necessary in order to make the statements contained or incorporated by reference
herein, in light of the circumstances under which they were made, not misleading
or of the occurrence of certain other events specified in the Registration
Rights Agreement, such Participating Broker-Dealer will suspend the sale of New
Securities pursuant to this Prospectus until the Company or the Issuer has
amended or supplemented this Prospectus to correct such misstatement or omission
and has furnished copies of the amended or supplemented Prospectus to such
Participating Broker-Dealer or the Company or the Issuer has given notice that
the sale of the New Securities may be resumed, as the case may be.

WITHDRAWAL RIGHTS

Except as otherwise provided herein, tenders of Old Capital Securities
may be withdrawn at any time on or prior to the Expiration Date.

In order for a withdrawal to be effective a written, telegraphic, telex
or facsimile transmission of such notice of withdrawal must be timely received
by the Exchange Agent at its address set forth under "-Exchange Agent" on or
prior to the Expiration Date. Any such notice of withdrawal must specify the
name of the person who tendered the Old Capital Securities to be withdrawn, the
aggregate principal amount of Old Capital Securities to be withdrawn, and (if
certificates for such Old Capital Securities have been tendered) the name of the
registered holder of the Old Capital Securities as set

37
<PAGE>

forth on the Old Capital Securities, if different from that of the person who
tendered such Old Capital Securities. If Old Capital Securities have been
delivered or otherwise identified to the Exchange Agent, then prior to the
physical release of such Old Capital Securities, the tendering holder must
submit the certificate numbers shown on the particular Old Capital Securities to
be withdrawn and the signature on the notice of withdrawal must be guaranteed by
an Eligible Institution, except in the case of Old Capital Securities tendered
for the account of an Eligible Institution. If Old Capital Securities have been
tendered pursuant to the procedures for book-entry transfer set forth in
"-Procedures for Tendering Old Capital Securities," the notice of withdrawal
must specify the name and number of the account at DTC to be credited with the
withdrawal of Old Capital Securities, in which case a notice of withdrawal will
be effective if delivered to the Exchange Agent by written, telegraphic, telex
or facsimile transmission. Withdrawals of tenders of Old Capital Securities may
not be rescinded. Old Capital Securities properly withdrawn will not be deemed
validly tendered for purposes of the Exchange Offer, but may be retendered at
any subsequent time on or prior to the Expiration Date by following any of the
procedures described above under "-Procedures for Tendering Old Capital
Securities."

All questions as to the validity, form and eligibility (including time
of receipt) of such withdrawal notices will be determined by the Company and the
Issuer, in their sole discretion, whose determination shall be final and binding
on all parties. Neither the Company, the Issuer, any affiliates or assigns of
the Company or the Issuer, the Exchange Agent nor any other person shall be
under any duty to give any notification of any irregularities in any notice of
withdrawal or incur any liability for failure to give any such notification. Any
Old Capital Securities which have been tendered but which are withdrawn will be
returned to the holder thereof promptly after withdrawal.

DISTRIBUTIONS ON NEW CAPITAL SECURITIES

CONDITIONS TO THE EXCHANGE OFFER

Notwithstanding any other provisions of the Exchange Offer, or any
extension of the Exchange Offer, the Company and the Issuer will not be required
to accept for exchange, or to exchange, any Old Capital Securities for any New
Capital Securities, and, as described below, may terminate the Exchange Offer
(whether or not any Old Capital Securities have theretofore been accepted for
exchange) or may waive any conditions to or amend the Exchange Offer, if any of
the following conditions have occurred or exists or have not been satisfied:

(a) there shall occur a change in the current interpretation by the
staff of the Commission which permits the New Capital Securities issued
pursuant to the Exchange Offer in exchange for Old Capital Securities to be
offered for resale, resold and otherwise transferred by holders thereof
(other than broker-dealers and any such holder which is an Affiliate)
without compliance with the registration and prospectus delivery provisions
of the Securities Act, provided that such New Capital Securities are
acquired in the ordinary course of such holders' business and such holders

<PAGE>

have no arrangement or understanding with any person to participate in the
distribution of such New Capital Securities;

(b) any action or proceeding shall have been instituted or threatened
in any court or by or before any governmental agency or body with respect
to the Exchange Offer which, in the Company's and the Issuer's judgment,
would reasonably be expected to impair the ability of the Issuer or the
Company to proceed with the Exchange Offer;

(c) any law, statute, rule or regulation shall have been adopted or
enacted which, in the Company's and the Issuer's judgment, would reasonably
be expected to impair the ability of the Issuer or the Company to proceed
with the Exchange Offer;

(d) a banking moratorium shall have been declared by United States
Federal or New York State authorities which, in the Company's and the
Issuer's judgment, would reasonably be expected to impair the ability of
the Issuer or the Company to proceed with the Exchange Offer;

(e) trading on the New York Stock Exchange or generally in the United
States over-the-counter market shall have been suspended by order of the
Commission or any governmental authority which, in the Company's and the
Issuer's judgment, would reasonably be expected to impair the ability of
the Issuer or the Company to proceed with the Exchange Offer;

(f) a stop order shall have been issued by the Commission or any state
securities authority suspending the effectiveness of the Registration
Statement or proceedings shall have been initiated or, to the knowledge of
the Company or the Issuer, threatened for that purpose any governmental
approval has not been obtained, which approval the Company and the Issuer
shall deem necessary for the consummation of the Exchange Offer as
contemplated hereby; or

(g) any change, or any development involving a prospective change, in
the business or financial affairs of the Issuer or the Company or any of
its subsidiaries has occurred which, in the judgment of the Company and the
Issuer, might materially impair the ability of the Issuer or the Company to
proceed with the Exchange Offer.

If the Company and the Issuer determine in their sole discretion that
any of the foregoing events or conditions has occurred or exists or has not been
satisfied, the Company and the Issuer may, subject to applicable law, terminate
the Exchange Offer (whether or not any Old Capital Securities have theretofore
been accepted for exchange) or may waive any such condition or otherwise amend
the terms of the Exchange Offer in any respect. If such waiver or amendment
constitutes a material change to the Exchange Offer, the Company and the Issuer
will promptly disclose such waiver by means of an amended or supplemented
Prospectus that will be distributed to the registered holders of the Old Capital
Securities, and the Company and the Issuer will extend the Exchange Offer to the
extent required by Rule 14e-1 under the Exchange Act.

EXCHANGE AGENT

The Chase Manhattan Bank has been appointed as Exchange Agent for the
Exchange Offer. Delivery of the Letters of Transmittal and any other required
documents, questions, requests for assistance, and requests for additional
copies of this Prospectus or of the Letter of Transmittal should be directed to
the Exchange Agent as follows:

39
<PAGE>

The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attention: Corporate Trustee Department
Telephone:
Facsimile:

Delivery to other than the above address or facsimile number will not
constitute a valid delivery.

FEES AND EXPENSES

The Company has agreed to pay the Exchange Agent reasonable and
customary fees for its services and will reimburse it for its reasonable
out-of-pocket expenses in connection therewith. The Company will also pay
brokerage houses and other custodians, nominees and fiduciaries the reasonable
out-of-pocket expenses incurred by them in forwarding copies of this Prospectus
and related documents to the beneficial owners of Old Capital Securities, and in
handling or tendering for their customers.

Holders who tender their Old Capital Securities for exchange will not
be obligated to pay any transfer taxes in connection therewith. If, however, New
Capital Securities are to be delivered to, or are to be issued in the name of,
any person other than the registered holder of the Old Capital Securities
tendered, or if a transfer tax is imposed for any reason other than the exchange
of Old Capital Securities in connection with the Exchange Offer, then the amount
of any such transfer taxes (whether imposed on the registered holder or any
other persons) will be payable by the tendering holder. If satisfactory evidence
of payment of such taxes or exemption therefrom is not submitted with the Letter
of Transmittal, the amount of such transfer taxes will be billed directly to
such tendering holder.

DESCRIPTION OF NEW SECURITIES

DESCRIPTION OF CAPITAL SECURITIES

Pursuant to the terms of the Trust Agreement, the Issuer has issued the
Capital Securities and the Common Securities and will issue the New Capital
Securities. The New Capital Securities will represent undivided beneficial
interests in the assets of the Issuer and the holders thereof will be entitled
to a preference over the Common Securities in certain circumstances with respect
to Distributions and amounts payable on redemption of the Trust Securities or
liquidation of the Issuer. See "-Subordination of Common Securities." The Trust
Agreement has been qualified under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"). This summary of certain provisions of the Capital
Securities, the Common Securities and the Trust Agreement does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
all the provisions of the Trust Agreement, including the definitions therein of
certain terms.

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GENERAL

The Capital Securities (including the Old Capital Securities and the New
Capital Securities) will be limited to $200,000,000 aggregate Liquidation Amount
at any one time outstanding, including, any Exchange Capital Securities that may
be issued from time to time in exchange for the Capital Securities as described
under "Exchange Offer; Registration Rights." The Capital Securities rank pari
passu, and payments will be made thereon pro rata, with the Common Securities
except as described under "-Subordination of Common Securities." Legal title to
the Subordinated Debentures is held by the Property Trustee in trust for the
benefit of the holders of the Capital Securities and Common Securities. The
Guarantee executed by the Company for the benefit of the holders of the Capital
Securities is a guarantee on a subordinated basis but does not guarantee payment
of Distributions or amounts payable on redemption of the Capital Securities or
on liquidation of the Issuer when the Issuer does not have funds on hand
available to make such payments. See "Description of New Securities--Description
of Guarantee."

DISTRIBUTIONS

Distributions on the Capital Securities are cumulative from the date of
original issuance of the Old Capital Securities and are payable at the annual
rate (the "Coupon Rate") of 7.00% of the Liquidation Amount until January 15,
2002, and at the Applicable Rate of the Liquidation Amount thereafter, and are
payable semi-annually in arrears on January 15 and July 15 of each year,
commencing July 15, 1997, to the holders of the Capital Securities on the
relevant record dates. The record dates are the first day of the month in which
the relevant Distribution Date (as defined below) occurs. The "Applicable Rate"
with respect to Distributions on the Capital Securities shall be the rate
determined by Bear Stearns, as Calculation Agent (the "Calculation Agent"), on
any Applicable Rate Determination Date (as hereinafter defined) to be a rate
equal to three-month LIBOR plus 1.75%. For this purpose, LIBOR shall be
calculated in accordance with the following provisions: (i) with respect to an
Applicable Rate Determination Date, LIBOR will be determined by the Calculation
Agent on the basis of the offered rate for three-month deposits in U.S. dollars,
commencing on the second London Banking Day immediately following such
Applicable Rate Determination Date, which appears on Telerate page 3750 (or such
other page as may replace such Telerate page 3750 for the purpose of displaying
London interbank rates of major banks), as of 11:00 A.M., London time, on such
Applicable Rate Determination Date. If no rate appears on Telerate page 3750 (or
such other page as may replace such page), LIBOR in respect of that Applicable
Rate Determination Date will be determined as if the parties had specified the
rate described in (ii) below; (ii) with respect to an Applicable Rate
Determination Date on which no offered rate appears on Telerate page 3750 (or
such other page), as applicable, as described in (i) above, LIBOR will be
determined by the Calculation Agent on the basis of the rates at approximately
11:00 A.M., London time, on such Applicable Rate Determination Date at which
three-month deposits in U.S. dollars are offered to prime banks in the London
interbank market by four major banks in the London interbank market selected by
the Calculation Agent commencing on the second London Banking Day immediately
following such Applicable Rate Determination Date and in a principal amount
equal to an amount of not less than $1,000,000 that is representative of a
single transaction in such market at such time. The Calculation Agent will
request the principal London office of each of such banks to provide a quotation
of its rate. If at least two such quotations are provided, LIBOR for such
Applicable Rate Determination Date will be the arithmetic mean of such
quotations. If fewer than two quotations are provided, LIBOR for such Applicable
Rate Determination Date will be the arithmetic mean of the rates quoted at
approximately 11:00 A.M., New York City time, on such Applicable Rate
Determination Date by three major banks in the City of New York, selected by the

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Calculation Agent for loans in U.S. dollars to leading European banks, having a
maturity of three months and commencing on the second London Banking Day
immediately following such Applicable Rate Determination Date and in a principal
amount equal to an amount of not less than $1,000,000 that is representative of
a single transaction in such market at such time; provided, however, that if the
banks selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the annual rate at which Distributions are payable
will be the annual rate in effect on such Applicable Rate Determination Date;
provided further, however, that if the banks selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence and such
Applicable Rate Determination Date is prior to January 15, 2002 or prior to the
first Applicable Rate Determination Date on which LIBOR can be determined as
aforesaid, the Applicable Rate for the following Applicable Rate Reset Date
shall be the Coupon Rate.

The amount of Distributions payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months until January 15, 2002, and
thereafter on the basis of a 360-day year and the actual number of days elapsed.
In the event that any date on which Distributions are payable on the Capital
Securities is not a Business Day (as defined below), payment of the Distribution
payable on such date will be made on the next succeeding day that is a Business
Day except that, if such Business Day is in the next succeeding calendar year,
payment of such Distribution shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date (each
date on which Distributions are payable in accordance with the foregoing, a
"Distribution Date"). Until January 15, 2002, in the event that any Distribution
Date is not a Business Day, Distributions will be paid on the next succeeding
Business Day, without any interest or other payment with respect to any such
delay. After January 15, 2002, Distributions shall be the amount of
Distributions accumulated from, and including, the last date on which
Distributions have previously been paid, to, but excluding, the Distribution
Date (or, if such date is not a Business Day, the next succeeding Business Day).
A "Business Day" shall mean any day other than a Saturday or a Sunday, or a day
on which banking institutions in The City of New York are authorized or required
by law or executive order to remain closed or a day on which the corporate trust
office of the Property Trustee or the Debenture Trustee is closed for business.
The "Applicable Rate Determination Date" shall mean the second London Banking
Day preceding each Applicable Rate Reset Date. An "Applicable Rate Reset Date"
shall mean January 15, 2002 and on the 15th of each April, July, October and
January thereafter until October 15, 2026. A "London Banking Day" shall mean any
day on which dealings in deposits in U.S. dollars are transacted in the London
interbank market.

So long as no Debenture Event of Default has occurred and is continuing,
the Company has the right under the Indenture to defer the payment of interest
on the Subordinated Debentures at any time or from time to time for a period not
exceeding 10 consecutive semi-annual periods with respect to each Extension
Period, provided that no Extension Period may extend beyond the Stated Maturity.
As a consequence of any such election, semi-annual Distributions on the Capital
Securities will be deferred by the Issuer during any such Extension Period.
Distributions to which holders of the Capital Securities are entitled will
accumulate additional Distributions thereon at the rate per annum of 7.00% until
January 15, 2002 and at the Applicable Rate thereafter compounded semi-annually
from the relevant Distribution Date, but not exceeding the interest rate then
accruing on the Subordinated Debentures. The term "Distributions" as used herein
shall include any such additional Distributions. During any such Extension
Period, the Company may not, and may not permit any subsidiary of the Company
to, (i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of the Company's
capital stock (which includes common and preferred stock) or (ii) make any
payment of principal, interest or premium, if any, on or repay, repurchase or

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redeem any debt securities of the Company (including Other Debentures) that rank
pari passu with or junior in interest to the Subordinated Debentures or (iii)
make any guarantee payments with respect to any guarantee by the Company of the
debt securities of any subsidiary of the Company (including Other Guarantees) if
such guarantee ranks pari passu with or junior in interest to the Subordinated
Debentures (other than (a) dividends or distributions in capital stock of the
Company, (b) any declaration of a dividend in connection with the implementation
of a stockholders' rights plan, or the issuance of stock under any such plan in
the future, or the redemption or repurchase of any such rights pursuant thereto,
(c) payments under the Guarantee, (d) purchases of common stock related to the
issuance of common stock or rights under any of the Company's benefit plans for
its directors, officers or employees and (e) payments of interest pursuant to
the EPICS Loan Agreement). Prior to the termination of any such Extension
Period, the Company may further extend such Extension Period, provided that such
extension does not cause such Extension Period to exceed 10 consecutive
semi-annual periods or to extend beyond the Stated Maturity. Upon the
termination of any such Extension Period and the payment of all amounts then
due, and subject to the foregoing limitations, the Company may elect to begin a
new Extension Period. There is no limitation on the number of times that the
Company may elect to begin an Extension Period. See "Description of Subordinated
Debentures-Option to Defer Interest Payments" and "Certain Federal Income Tax
Consequences-Interest, Original Issue Discount, Premium and Market Discount."

The revenue of the Issuer available for distribution to holders of the
Capital Securities will be limited to payments under the Subordinated Debentures
in which the Issuer will invest the proceeds from the issuance and sale of the
Trust Securities. See "Description of Subordinated Debentures-General." If the
Company does not make interest payments on the Subordinated Debentures, the
Property Trustee will not have funds available to pay Distributions on the
Capital Securities. The payment of Distributions (if and to the extent the
Issuer has funds available for the payment of such Distributions and cash
sufficient to make such payments) is guaranteed by the Company on a subordinated
basis as set forth herein under "Description of Guarantee."

REDEMPTION

Upon the repayment in full at the Stated Maturity or prepayment in whole
(but not in part) of the Subordinated Debentures (other than following the
distribution of the Subordinated Debentures to the holders of the Trust
Securities), the proceeds from such repayment or prepayment shall be applied by
the Property Trustee to redeem the Trust Securities, upon not less than 30 nor
more than 60 days' notice of a date of redemption (the "Redemption Date"), at
the applicable Redemption Price, which shall be equal to (i) in the case of the
repayment of the Subordinated Debentures at the Stated Maturity, the Maturity
Redemption Price (equal to the principal of, and accrued interest on, the
Subordinated Debentures), (ii) in the case of the prepayment of the Subordinated
Debentures upon the occurrence and continuation of a Tax Event, the Tax Event
Redemption Price (which is equal to the Tax Event Prepayment Price in respect of
the Subordinated Debentures) (see "Description of Subordinated Debentures-Tax
Event Prepayment") and (iii) in the case of the optional prepayment of the
Subordinated Debentures, the Optional Redemption Price. See "Description of
Subordinated Debentures-Optional Prepayment" and "Certain Federal Income Tax
Consequences-Sale or Redemption of Capital Securities."

Upon the optional prepayment in part of the Subordinated Debentures on or
after January 15, 2002, the proceeds from such partial prepayment shall be
applied by the Property Trustee to redeem a portion of the Trust Securities upon
not less than 30 nor more than 60 days' notice of a Redemption Date, at

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<PAGE>

the Optional Redemption Price. The Trust Securities shall be redeemed pro rata
as between the Capital Securities and the Common Securities.

The Company has the right to prepay the Subordinated Debentures (i) on or
after January 15, 2002, in whole at any time or in part from time to time at the
Optional Redemption Price (as defined under "Description of Subordinated
Debentures-Optional Prepayment"), and (ii) at any time, in whole (but not in
part) upon the occurrence of a Tax Event, at the Tax Event Prepayment Price.

LIQUIDATION OF THE ISSUER AND DISTRIBUTION OF SUBORDINATED DEBENTURES

The Company has the right at any time (including upon the occurrence of a
Tax Event) to dissolve the Issuer and, after satisfaction of liabilities to
creditors of the Issuer as provided by applicable law, cause a Like Amount of
the Subordinated Debentures to be distributed to the holders of the Trust
Securities in liquidation of the Issuer.

Under current United States Federal income tax law and interpretations and
assuming, as expected, that the Issuer is treated as a grantor trust, a
distribution of the Subordinated Debentures will not be a taxable event to
holders of the Capital Securities. Should there be a change in law, a change in
legal interpretation, a Tax Event or other circumstances, however, the
distribution could be a taxable event to holders of the Capital Securities. See
"Certain Federal Income Tax Consequences-Receipt of Subordinated Debentures Upon
Liquidation of the Issuer."

The Issuer shall automatically dissolve upon the first to occur of: (i)
certain events of bankruptcy, or dissolution or liquidation of the Company; (ii)
the written direction to the Property Trustee from the Depositor to dissolve the
Issuer (which direction is optional and, except as provided above, wholly within
the discretion of the Company, as Depositor); (iii) redemption of all of the
Trust Securities as described above under "-Redemption"; (iv) expiration of the
term of the Issuer; and (v) the entry of an order for the dissolution of the
Issuer by a court of competent jurisdiction.

If an early dissolution occurs as described in clause (i), (ii), (iv), or
(v) above, the Issuer shall be liquidated by the Issuer Trustees as
expeditiously as the Issuer Trustees determine to be possible by distributing,
after satisfaction of liabilities to creditors of the Issuer as provided by
applicable law, to the holders of the Trust Securities a Like Amount (as defined
below) of the Subordinated Debentures, unless such distribution is determined by
the Property Trustee not to be practical, in which event such holders will be
entitled to receive out of the liquidation of the assets of the Issuer available
for distribution to holders, after satisfaction of liabilities to creditors of
the Issuer as provided by applicable law, an amount equal to the aggregate of
the Liquidation Amount plus accrued and unpaid Distributions thereon to the date
of payment (such amount being the "Liquidation Distribution"). If such
Liquidation Distribution can be paid only in part because the Issuer has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by the Issuer on the Trust
Securities shall be paid on a pro rata basis. The holder(s) of the Common
Securities will be entitled to receive distributions upon any such liquidation
pro rata with the holders of the Capital Securities, except that if a Debenture
Event of Default has occurred and is continuing, the Capital Securities shall
have a priority over the Common Securities. See "-Subordination of Common
Securities." If an early dissolution occurs as described in clause (v) above,
the Subordinated Debentures will be subject to optional prepayment in whole (but
not in part).

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<PAGE>

"Like Amount" means (i) with respect to a redemption of Capital Securities,
Capital Securities having a Liquidation Amount equal to that portion of the
principal amount of Subordinated Debentures to be contemporaneously redeemed in
accordance with the Indenture, allocated to the Capital Securities based upon
the relative Liquidation Amounts of the Common Securities and the Capital
Securities and the proceeds of which will be used to pay the Redemption Price of
the Capital Securities and (ii) with respect to a distribution of Subordinated
Debentures to holders of Capital Securities in connection with a dissolution or
liquidation of the Issuer, Subordinated Debentures having a principal amount
equal to the Liquidation Amount of the Trust Securities of the holder to whom
such Subordinated Debentures are distributed.

If the Company elects not to prepay the Subordinated Debentures prior to
the Stated Maturity and there is no early dissolution of the Issuer, the Capital
Securities will remain outstanding until the repayment of the Subordinated
Debentures at the Stated Maturity.

After the liquidation date is fixed for any distribution of Subordinated
Debentures to holders of the Trust Securities (i) the Capital Securities will no
longer be deemed to be outstanding, (ii) DTC or its nominee, as the record
holder of the Capital Securities, will receive a registered global certificate
or certificates representing the Subordinated Debentures to be delivered upon
such distribution and (iii) any certificates representing Capital Securities not
held by DTC or its nominee will be deemed to represent Subordinated Debentures
having a principal amount equal to the Liquidation Amount of such Capital
Securities, and bearing accrued and unpaid interest in an amount equal to the
accrued and unpaid Distributions on such Capital Securities until such
certificates are presented to the Property Trustee or its agent for cancellation
whereupon the Company will issue to such holder, and the Debenture Trustee will
authenticate, a certificate representing such Subordinated Debentures.

There can be no assurance as to the market prices for the Capital
Securities or the Subordinated Debentures that may be distributed in exchange
for the Trust Securities if a dissolution and liquidation of the Issuer were to
occur. Accordingly, the Capital Securities that an investor may purchase, or the
Subordinated Debentures that the investor may receive on dissolution and
liquidation of the Issuer, may trade at a discount to the price that the
investor paid to purchase the Capital Securities offered hereby.

REDEMPTION PROCEDURES

Trust Securities shall be redeemed, if at all, at the applicable Redemption
Price with the proceeds from the contemporaneous repayment or prepayment of the
Subordinated Debentures. Redemptions of the Trust Securities shall be made and
the applicable Redemption Price shall be payable on the Redemption Date only to
the extent that the Issuer has funds on hand available for the payment of such
applicable Redemption Price. See "-Subordination of Common Securities."

If the Issuer gives a notice of redemption in respect of the Capital
Securities, then, by 12:00 noon, New York City time, on the Redemption Date, to
the extent funds are available, with respect to the Capital Securities held in
global form, the Property Trustee will deposit irrevocably with DTC funds
sufficient to pay the applicable Redemption Price and will give DTC irrevocable
instructions and authority to pay the applicable Redemption Price to the holders
of the Capital Securities. See "-Form, Denomination, Book-Entry Procedures and
Transfer" and "-Payment and Paying Agency." Notwithstanding the foregoing,
Distributions payable on or prior to the Redemption Date shall be payable to the
holders of such Capital Securities on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
deposited as required, then upon the

<PAGE>

date of such deposit, all rights of the holders of the Capital Securities will
cease, except the right of the holders of the Capital Securities to receive the
applicable Redemption Price, but without interest on such Redemption Price, and
the Capital Securities will cease to be outstanding. In the event that any date
fixed for redemption of Capital Securities is not a Business Day, then payment
of the applicable Redemption Price payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day falls
in the next calendar year, such payment will be made on the immediately
preceding Business Day. In the event that payment of the applicable Redemption
Price is improperly withheld or refused and not paid either by the Trust or by
the Company pursuant to the Guarantee as described under "--Description of
Guarantee," Distributions on Capital Securities will continue to accumulate at
the then applicable rate, from the Redemption Date originally established by the
Trust to the date such applicable Redemption Price is actually paid, in which
case the actual payment date will be the date fixed for redemption for purposes
of calculating the applicable Redemption Price.

Subject to applicable law (including, without limitation, United States
Federal securities law), the Company or its subsidiaries may at any time and
from time to time purchase outstanding Capital Securities by tender, in the open
market or by private agreement.

Payment of the applicable Redemption Price on, and any distribution of
Subordinated Debentures to holders of, the Trust Securities shall be made to the
applicable recordholders thereof as they appear on the register therefor on the
relevant record date, which shall be a date not more than 60 days nor less than
30 days prior to the Redemption Date or liquidation date, as applicable.

Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each holder of Trust Securities at its
registered address. Unless the Company defaults in payment of the applicable
Prepayment Price on, or in the repayment of, the Subordinated Debentures, on and
after the Redemption Date Distributions will cease to accrue on the Trust
Securities called for redemption.

SUBORDINATION OF COMMON SECURITIES

Payment of Distributions on, and the Redemption Price of, the Capital
Securities and Common Securities, as applicable, shall be made pro rata based on
the Liquidation Amounts of the Capital Securities and Common Securities;
provided, however, that if on any Distribution Date or Redemption Date a
Debenture Event of Default shall have occurred and be continuing, no payment of
any Distribution on, or applicable Redemption Price of, any of the Common
Securities, and no other payment on account of the redemption, liquidation or
other acquisition of the Common Securities, shall be made unless payment in full
in cash of all accumulated and unpaid Distributions on all of the outstanding
Capital Securities for all Distribution periods terminating on or prior thereto,
or in the case of payment of the applicable Redemption Price the full amount of
such Redemption Price on all of the outstanding Capital Securities then called
for redemption, shall have been made or provided for, and all funds available to
the Property Trustee shall first be applied to the payment in full in cash of
all Distributions on, or Redemption Price of, the Capital Securities then due
and payable.

In the case of any Event of Default under the Trust Agreement resulting
from a Debenture Event of Default, the Company as holder of the Common
Securities will be deemed to have waived any right to act with respect to any
such Event of Default until the effect of all such Events of Default has been
cured, waived or otherwise eliminated. Until any such Events of Default have
been so cured, waived

<PAGE>

or otherwise eliminated, the Property Trustee shall act solely on behalf of the
holders of the Capital Securities and not on behalf of the Company as holder of
the Common Securities, and only the holders of the Capital Securities will have
the right to direct the Property Trustee to act on their behalf.

EVENTS OF DEFAULT; NOTICE

Any one of the following events constitutes an Event of Default under the
Trust Agreement (an "Event of Default") (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):

(i) the occurrence of a Debenture Event of Default (see "Description
of Subordinated Debentures--Debenture Events of Default"); or

(ii) default by the Issuer in the payment of any Distribution when it
becomes due and payable, and continuation of such default for a period of
30 days; or

(iii) default by the Issuer in the payment of any Redemption Price of
any Trust Security when it becomes due and payable; or

(iv) default in the performance, or breach, in any material respect,
of any covenant or warranty of the Issuer Trustees in the Trust Agreement
(other than a covenant or warranty a default in the performance of which or
the breach of which is addressed in clause (ii) or (iii) above), and
continuation of such default or breach for a period of 60 days after there
has been given, by registered or certified mail, to the defaulting Issuer
Trustee or Trustees by the holders of at least 25% in aggregate Liquidation
Amount of the outstanding Capital Securities, a written notice specifying
such default or breach and requiring it to be remedied and stating that
such notice is a "Notice of Default" under the Trust Agreement; or

(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee and the failure by the Company to appoint a
successor Property Trustee within 60 days thereof.

Within five Business Days after the occurrence of any Event of Default
actually known to an officer of the Property Trustee assigned to its corporate
trust office, the Property Trustee shall transmit notice of such Event of
Default to the holders of the Capital Securities, the Administrators and the
Company, as Depositor, unless such Event of Default shall have been cured or
waived. The Company, as Depositor, and the Administrators are required to file
annually with the Property Trustee a certificate as to whether or not they are
in compliance with all the conditions and covenants applicable to them under the
Trust Agreement.

If a Debenture Event of Default has occurred and is continuing, the Capital
Securities shall have a preference over the Common Securities upon termination
of the Issuer as described above. See "-Liquidation of the Issuer and
Distribution of Subordinated Debentures." The existence of an Event of Default
does not entitle the holders of the Capital Securities to accelerate the
maturity thereof.

<PAGE>

REMOVAL OF ISSUER TRUSTEES

Unless a Debenture Event of Default shall have occurred and be continuing,
any Issuer Trustee may be removed at any time by the holder of the Common
Securities. If a Debenture Event of Default has occurred and is continuing, the
Property Trustee and the Delaware Trustee may be removed at such time by the
holders of a majority in Liquidation Amount of the outstanding Capital
Securities. In no event will the holders of the Capital Securities have the
right to vote to appoint, remove or replace the Administrators, which voting
rights are vested exclusively in the Company as the holder of the Common
Securities. No resignation or removal of an Issuer Trustee and no appointment of
a successor trustee shall be effective until the acceptance of appointment by
the successor trustee in accordance with the provisions of the Trust Agreement.

CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE

Unless a Debenture Event of Default shall have occurred and be continuing,
at any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the Issuer's
property may at the time be located, the Company, as the holder of a majority of
the Common Securities, and the Administrators, shall have power to appoint one
or more persons either to act as a co-trustee, jointly with the Property
Trustee, of all or any part of such Trust's property, or to act as separate
trustee of any such property, in either case with such powers as may be provided
in the instrument of appointment, and to vest in such person or persons in such
capacity any property, title, right or power deemed necessary or desirable,
subject to the provisions of the Trust Agreement. In case a Debenture Event of
Default has occurred and is continuing, the Property Trustee alone shall have
power to make such appointment.

MERGER OR CONSOLIDATION OF ISSUER TRUSTEES

Any entity into which the Property Trustee or the Delaware Trustee may be
merged or converted or with which it may be consolidated, or any entity
resulting from any merger, conversion or consolidation to which such Issuer
Trustee shall be a party, or any entity succeeding to all or substantially all
of the corporate trust business of such Issuer Trustee, shall be the successor
of such Issuer Trustee under the Trust Agreement, provided such entity shall be
otherwise qualified and eligible.

MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE ISSUER

The Issuer may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other entity, except as
described below or pursuant to a liquidation as described above in "-Liquidation
of the Issuer and Distribution of Subordinated Debentures." The Issuer may, at
the request of the holders of a majority of the Common Securities, without the
consent of the holders of the Capital Securities, merge with or into,
consolidate, amalgamate, or be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to a trust organized as such
under the laws of any State; provided, that (i) such successor entity either (a)
expressly assumes all of the obligations of the Issuer with respect to the
Capital Securities or (b) substitutes for the Capital Securities other
securities having substantially the same terms as the Capital Securities (the
"Successor Securities") so long as the Successor Securities rank the same as the
Capital Securities rank in priority with respect to distributions and payments
upon liquidation, redemption and otherwise, (ii) the Company expressly appoints
a trustee of such successor entity possessing the same powers and duties as the
Property Trustee as the holder of the Subordinated

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<PAGE>

Debentures, (iii) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Capital Securities (including
any Successor Securities) to be downgraded by any nationally recognized
statistical rating organization, (iv) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the Capital Securities (including
any Successor Securities) in any material respect, (v) such successor entity has
a purpose substantially identical to that of the Issuer, (vi) prior to such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease,
the Company has received an opinion from independent counsel to the Issuer
experienced in such matters to the effect that (a) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the holders of the Capital
Securities (including any Successor Securities) in any material respect, and (b)
following such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease, neither the Issuer nor such successor entity will be required
to register as an investment company under the Investment Company Act of 1940,
as amended (the "Investment Company Act"), and (vii) the Company or any
permitted successor or assignee owns all of the common securities of such
successor entity and guarantees the obligations of such successor entity under
the Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, the Issuer shall not, except with the consent of
holders of 100% in Liquidation Amount of the Trust Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey, transfer or lease
its properties and assets substantially as an entirety to any other entity or
permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger, replacement, conveyance,
transfer or lease would cause the Issuer or the successor entity to be
classified as other than a grantor trust for United States Federal income tax
purposes.

VOTING RIGHTS: AMENDMENT OF THE TRUST AGREEMENT

Except as provided below and under "Description of Guarantee-Amendments and
Assignment" and as otherwise required by law and the Trust Agreement, the
holders of the Capital Securities will have no voting rights.

The Trust Agreement may be amended from time to time by the Issuer Trustees
and the holders of a majority of the Common Securities without the consent of
the holders of the Capital Securities (i) to cure any ambiguity, correct or
supplement any provisions in the Trust Agreement that may be inconsistent with
any other provision, or to make any other provisions with respect to matters or
questions arising under the Trust Agreement, which shall not be inconsistent
with the other provisions of the Trust Agreement, or (ii) to modify, eliminate
or add to any provisions of the Trust Agreement to such extent as shall be
necessary to ensure that the Issuer will be classified for United States Federal
income tax purposes as a grantor trust at all times that any Trust Securities
are outstanding or to ensure that the Trust will not be required to register as
an "investment company" under the Investment Company Act; provided, however,
that in the case of clause (i), such action shall not adversely affect in any
material respect the interests of any holder of Trust Securities, and any
amendments of the Trust Agreement shall become effective when notice thereof is
given to the holders of the Trust Securities. The Trust Agreement may be amended
by the Issuer Trustees and the holders of a majority of the Common Securities
with (i) the consent of holders representing not less than a majority (based
upon Liquidation Amounts) of the outstanding Capital Securities, and (ii)
receipt by the Issuer Trustees of an opinion of counsel to the effect that such
amendment or the exercise of any power granted to the Issuer Trustees in
accordance with such amendment will not affect the Issuer's status as a grantor
trust for United States Federal income tax purposes or the Issuer's exemption
from status as an "investment

49
<PAGE>

company" under the Investment Company Act, provided that without the consent of
each holder of Trust Securities, the Trust Agreement may not be amended to (i)
change the amount or timing of any Distribution on the Trust Securities or
otherwise adversely affect the amount of any Distribution required to be made in
respect of the Trust Securities as of a specified date or (ii) restrict the
right of a holder of Trust Securities to institute suit for the enforcement of
any such payment on or after such date.

So long as any Subordinated Debentures are held by the Issuer, the Property
Trustee shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or execute any
trust or power conferred on such Debenture Trustee with respect to the
Subordinated Debentures, (ii) waive any past default that is waivable under the
Indenture, (iii) exercise any right to rescind or annul a declaration that the
principal of all the Subordinated Debentures shall be due and payable or (iv)
consent to any amendment, modification or termination of the Indenture or the
Subordinated Debentures, where such consent shall be required, without, in each
case, obtaining the prior approval of the holders of a majority in aggregate
Liquidation Amount of all outstanding Capital Securities; provided, however,
that where a consent under the Indenture would require the consent of each
holder of Subordinated Debentures affected thereby, no such consent shall be
given by the Property Trustee without the prior consent of each holder of the
Capital Securities. The Property Trustee shall not revoke any action previously
authorized or approved by a vote of the holders of the Capital Securities except
by subsequent vote of such holders. The Property Trustee shall notify each
holder of Capital Securities of any notice of default with respect to the
Subordinated Debentures. In addition to obtaining the foregoing approvals of
such holders of the Capital Securities, prior to taking any of the foregoing
actions, the Property Trustee shall obtain an opinion of counsel experienced in
such matters to the effect that the Trust will not be classified as an
association taxable as a corporation for United States Federal income tax
purposes on account of such action.

Any required approval of holders of Capital Securities may be given at a
meeting of such holders convened for such purpose or pursuant to written
consent. The Property Trustee will cause a notice of any meeting at which
holders of Capital Securities are entitled to vote, or of any matter upon which
action by written consent of such holders is to be taken, to be given to each
holder of record of Capital Securities in the manner set forth in the Trust
Agreement.

No vote or consent of the holders of Capital Securities will be required
for the Issuer to redeem and cancel the Capital Securities in accordance with
the Trust Agreement.

Notwithstanding that holders of the Capital Securities are entitled to vote
or consent under any of the circumstances described above, any of the Capital
Securities that are owned by the Company, the Issuer Trustees or any affiliate
of the Company or any Issuer Trustees, shall, for purposes of such vote or
consent, be treated as if they were not outstanding.

EXPENSES

In the Indenture, the Company, as borrower, has agreed to pay all debts and
other obligations (other than with respect to the Capital Securities) and all
costs and expenses of the Issuer (including costs and expenses relating to the
organization of the Issuer, the fees and expenses of the Issuer Trustees and the
costs and expenses relating to the operation of the Issuer) and the offering of
the Capital Securities and to pay any and all taxes and all costs and expenses
with respect to the foregoing (other than United States withholding taxes) to
which the Issuer might become subject. The foregoing

<PAGE>

obligations of the Company under the Indenture are for the benefit of, and shall
be enforceable by, any person to whom any such debts, obligations, costs,
expenses and taxes are owed (a "Creditor") whether or not such Creditor has
received notice thereof. Any such Creditor may enforce such obligations of the
Company directly against the Company and the Company has irrevocably waived any
right or remedy to require that any such Creditor take any action against the
Issuer or any other person before proceeding against the Company. The Company
has also agreed in the Indenture to execute such additional agreement(s) as may
be necessary or desirable to give full effect to the foregoing.

FORM, DENOMINATION, BOOK-ENTRY PROCEDURES AND TRANSFER

The Capital Securities will be in blocks having a Liquidation Amount of not
less than $100,000 (100 Capital Securities) and may be transferred or exchanged
in such blocks in the manner and at the offices described below.

The New Capital Securities initially will be represented by one or more
Capital Securities in registered, global form (collectively, the "Global Capital
Securities"). The Global Capital Securities will be deposited upon issuance with
the Property Trustee, as custodian for DTC in New York, New York, and registered
in the name of DTC or its nominee, in each case for credit to an account of a
direct or indirect participant in DTC as described below.

Except as set forth below, the Global Capital Securities may be
transferred, in whole and not in part, only to DTC, to another nominee of DTC or
to a successor of DTC or its nominee and only in amounts that would not cause a
holder to own less than 100 Capital Securities. Beneficial interests in the
Global Capital Securities may not be exchanged for Capital Securities in
certificated form except in the limited circumstances described below. See
"-Exchange of Book-Entry Capital Securities for Certificated Capital
Securities."

Depositary Procedures. DTC has advised the Issuer and the Company that DTC
is a limited-purpose trust company created to hold securities for its
participating organizations (collectively, the "Participants") and to facilitate
the clearance and settlement of transactions in those securities between
Participants through electronic book-entry changes in accounts of its
Participants. The Participants include securities brokers and dealers (including
the Initial Purchasers), banks, trust companies, clearing corporations and
certain other organizations. Access to DTC's system is also available to other
entities such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a Participant, either directly or
indirectly (collectively, the "Indirect Participants"). Persons who are not
Participants may beneficially own securities held by or on behalf of DTC only
through the Participants or the Indirect Participants. The ownership interest
and transfer of ownership interest of each actual purchaser of each security
held by or on behalf of DTC are recorded on the records of the Participants and
Indirect Participants.

DTC has also advised the Issuer and the Company that, pursuant to
procedures established by it, (i) upon deposit of the Global Capital Securities,
DTC will credit the accounts of Participants designated by the Initial
Purchasers with portions of the principal amount of the Global Capital
Securities and (ii) ownership of such interests in the Global Capital Securities
will be shown on, and the transfer of ownership thereof will be effected only
through, records maintained by DTC (with respect to the Participants) or by the
Participants and the Indirect Participants (with respect to other owners of
beneficial interests in the Global Capital Securities).

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<PAGE>

Investors in the Global Capital Securities may hold their interests therein
directly through DTC if they are Participants in such system, or indirectly
through organizations which are Participants in such system. All interest in a
Global Capital Security may be subject to the procedures and requirements of
DTC. The laws of some states require that certain persons take physical delivery
in certificated form of securities that they own. Consequently, the ability to
transfer beneficial interests in a Global Capital Security to such persons will
be limited to that extent. Because DTC can act only on behalf of Participants,
which in turn act on behalf of Indirect Participants and certain banks, the
ability of a person having beneficial interests in a Global Capital Security to
pledge such interests to persons or entities that do not participate in the DTC
system, or otherwise take actions in respect of such interests, may be affected
by the lack of a physical certificate evidencing such interests. For certain
other restrictions on the transferability of the Capital Securities, see
"--Exchange of Book-Entry Capital Securities for Certificated Capital
Securities."

EXCEPT AS DESCRIBED BELOW, OWNERS OF INTERESTS IN THE GLOBAL CAPITAL
SECURITIES WILL NOT HAVE CAPITAL SECURITIES REGISTERED IN THEIR NAME, WILL NOT
RECEIVE PHYSICAL DELIVERY OF CAPITAL SECURITIES IN CERTIFICATED FORM AND WILL
NOT BE CONSIDERED THE REGISTERED OWNERS OR HOLDERS THEREOF UNDER THE TRUST
AGREEMENT FOR ANY PURPOSE.

Payments in respect of the Global Capital Security registered in the name
of DTC or its nominee will be payable by the Property Trustee to DTC in its
capacity as the registered holder under the Trust Agreement. Under the terms of
the Trust Agreement, the Property Trustee will treat the persons in whose names
the Capital Securities, including the Global Capital Securities, are registered
as the owners thereof for the purpose of receiving such payments and for any and
all other purposes whatsoever. Consequently, neither the Property Trustee nor
any agent thereof has or will have any responsibility or liability for (i) any
aspect of DTC's records or any Participant's or Indirect Participant's records
relating to or payments made on account of beneficial ownership interests in the
Global Capital Securities, or for maintaining, supervising or reviewing any of
DTC's records or any Participant's or Indirect Participant's records relating to
the beneficial ownership interests in the Global Capital Securities or (ii) any
other matter relating to the actions and practices of DTC or any of its
Participants or Indirect Participants. DTC has advised the Issuer and the
Company that its current practice, upon receipt of any payment in respect of
securities such as the Capital Securities, is to credit the accounts of the
relevant Participants with the payment on the payment date, in amounts
proportionate to their respective holdings in Liquidation Amount of beneficial
interests in the relevant security as shown on the records of DTC unless DTC has
reason to believe it will not receive payment on such payment date. Payments by
the Participants and the Indirect Participants to the beneficial owners of
Capital Securities will be governed by standing instructions and customary
practices and will be the responsibility of the Participants or the Indirect
Participants and will not be the responsibility of DTC, the Property Trustee or
the Issuer. Neither the Issuer nor the Property Trustee will be liable for any
delay by DTC or any of its Participants in identifying the beneficial owners of
the Capital Securities, and the Trust and the Property Trustee may conclusively
rely on and will be protected in relying on instructions from DTC or its nominee
for all purposes.

Interests in the Global Capital Securities will trade in DTC's Same-Day
Funds Settlement System and secondary market trading activity in such interests
will therefore settle in immediately available funds, subject in all cases to
the rules and procedures of DTC and its participants.

Transfers between Participants in DTC will be effected in accordance with
DTC's procedures, and will be settled in same-day funds.

<PAGE>

DTC has advised the Issuer and the Company that it will take any action
permitted to be taken by a holder of Capital Securities only at the direction of
one or more Participants to whose account with DTC interests in the Global
Capital Securities are credited and only in respect of such portion of the
aggregate Liquidation Amount of the Capital Securities as to which such
Participant or Participants has or have given such direction. However, if there
is an Event of Default under the Trust Agreement, DTC reserves the right to
exchange the Global Capital Securities for legended Capital Securities in
certificated form and to distribute such Capital Securities to its Participants.

The information in this section concerning DTC and its book-entry systems
has been obtained from sources that the Issuer and the Company believe to be
reliable, but none of the Issuer or the Company or any of the Initial Purchasers
takes responsibility for the accuracy thereof.

Although DTC has agreed to the foregoing procedures to facilitate transfers
of interest in the Global Capital Securities among participants in DTC, it is
under no obligation to perform or to continue to perform such procedures, and
such procedures may be discontinued at any time. Neither the Issuer nor the
Property Trustee will have any responsibility for the performance by DTC or its
participants or indirect participants of their respective obligations under the
rules and procedures governing their operations.

Exchange of Book-Entry Capital Securities for Certificated Capital
Securities

A Global Capital Security is exchangeable for Capital Securities in
registered certificated form if (i) DTC (x) notifies the Issuer that it is
unwilling or unable to continue as Depositary for the Global Capital Security
and the Issuer thereupon fails to appoint a successor Depositary or (y) has
ceased to be a clearing agency registered under the Exchange Act, (ii) the
Company in its sole discretion elects to cause the issuance of the Capital
Securities in certificated form or (iii) there shall have occurred and be
continuing an Event of Default or any event which after notice or lapse of time
or both would be an Event of Default under the Trust Agreement. In all cases,
certificated Capital Securities delivered in exchange for any Global Capital
Security or beneficial interests therein will be registered in the names, and
issued in any approved denominations, requested by or on behalf of the
Depositary (in accordance with its customary procedures).

PAYMENT AND PAYING AGENCY

Payments in respect of the Capital Securities held in global form shall be
made to the Depositary, which shall credit the relevant accounts at the
Depositary on the applicable Distribution Dates. The paying agent (the "Paying
Agent") shall initially be the Property Trustee and any co-paying agent chosen
by the Property Trustee and acceptable to the Administrators. The Paying Agent
shall be permitted to resign as Paying Agent upon 30 days' written notice to the
Property Trustee and the Company. In the event that the Property Trustee shall
no longer be the Paying Agent, the Administrators shall appoint a successor
(which shall be a bank or trust company acceptable to the Administrators and the
Company) to act as Paying Agent.

RESTRICTIONS ON TRANSFER

The Capital Securities will be issued, and may be transferred only, in
blocks having a Liquidation Amount of not less than $100,000 (100 Capital
Securities). Any attempted transfer, sale or other disposition of Capital
Securities in a block having a Liquidation Amount of less than $100,000 shall be

<PAGE>

deemed to be void and of no legal effect whatsoever. Any such transferee shall
be deemed not to be the holder of such Capital Securities for any purpose,
including but not limited to the receipt of Distributions on such Capital
Securities, and such transferee shall be deemed to have no interest whatsoever
in such Capital Securities.

REGISTRAR AND TRANSFER AGENT

The Property Trustee will act as registrar and transfer agent for the
Capital Securities.

Registration of transfers of the Capital Securities will be effected
without charge by or on behalf of the Issuer, but upon payment of any tax or
governmental charges that may be imposed in connection with any transfer or
exchange. The Issuer will not be required to register or cause to be registered
the transfer of the Capital Securities (i) during a period beginning at the
opening of business 15 days before the day of the mailing of a notice of
redemption of Capital Securities and ending at the close of business on the day
of such mailing or (ii) that have been selected for redemption in whole or in
part, except the unredeemed portion of any Capital Security redeemed in part.

INFORMATION CONCERNING THE PROPERTY TRUSTEE

The Property Trustee, other than during the occurrence and continuance of
an Event of Default, undertakes to perform only such duties as are specifically
set forth in the Trust Agreement and, after such Event of Default, must exercise
the same degree of care and skill as a prudent person would exercise or use in
the conduct of his or her own affairs. The Property Trustee is under no
obligation to exercise any of the powers vested in it by the Trust Agreement at
the request of any holder of Trust Securities unless it is offered reasonable
indemnity against the costs, expenses and liabilities that might be incurred
thereby. If no Event of Default has occurred and is continuing and the Property
Trustee is required to decide between alternative causes of action, construe
ambiguous provisions in the Trust Agreement or is unsure of the application of
any provision of the Trust Agreement, and the matter is not one on which holders
of the Capital Securities or the Common Securities are entitled under the Trust
Agreement to vote, then the Property Trustee shall take such action as is
directed by the Company and if not so directed, shall take such action as it
deems advisable and in the best interests of the holders of the Trust Securities
and will have no liability except for its own bad faith, negligence or willful
misconduct.

MISCELLANEOUS

The Administrators and the Property Trustee are authorized and directed to
conduct the affairs of and to operate the Issuer in such a way that the Trust
will not be deemed to be an "investment company" required to be registered under
the Investment Company Act or fail to be classified as a grantor trust for
United States Federal income tax purposes and so that the Subordinated
Debentures will be treated as indebtedness of the Company for United States
Federal income tax purposes. In this connection, the Administrators, the
Property Trustee and the holders of a majority of the Common Securities are
authorized to take any action, not inconsistent with applicable law, the
certificate of trust of the Issuer or the Trust Agreement, that the
Administrators, the Property Trustee and such holders determine in their
discretion to be necessary or desirable for such purposes, as long as such
action does not materially adversely affect the interests of the holders of the
Trust Securities.

Holders of the Trust Securities have no preemptive or similar rights.

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<PAGE>

The Issuer may not borrow money or issue debt or mortgage or pledge any of
its assets.

DESCRIPTION OF SUBORDINATED DEBENTURES

The Old Subordinated Debentures were issued, and the New Subordinated
Debentures will be issued, as a separate series under the Indenture. The
Indenture has been qualified under the Trust Indenture Act. This summary of
certain terms and provisions of the Subordinated Debentures and the Indenture
does not purport to be complete, and where reference is made to particular
provisions of the Indenture, such provisions, including the definitions of
certain terms, some of which are not otherwise defined herein, are qualified in
their entirety by reference to all of the provisions of the Indenture.

GENERAL

Concurrently with the issuance of the Old Capital Securities, the Issuer
invested the proceeds thereof, together with the consideration paid by the
Company for the Common Securities, in Old Subordinated Debentures issued by the
Company. Pursuant to the Exchange Offer, the Company will exchange the Old
Subordinated Debentures for the New Subordinated Debentures as soon as
practicable after the date hereof. No Old Subordinated Debentures will remain
outstanding after such exchange. The Subordinated Debentures bear interest at
the annual rate of 7.00% of the principal amount thereof until January 15, 2002
and at the Applicable Rate thereafter, payable semi-annually in arrears on the
fifteenth day of January and July of each year (each, an "Interest Payment
Date"), commencing July 15, 1997, to the person in whose name each Subordinated
Debenture is registered, subject to certain exceptions, at the close of business
on the Business Day next preceding such Interest Payment Date. It is anticipated
that until the liquidation, if any, of the Issuer, each Subordinated Debenture
will be held in the name of the Property Trustee in trust for the benefit of the
holders of the Trust Securities. The "Applicable Rate" with respect to interest
on the Subordinated Debentures shall be the rate determined by the Calculation
Agent on any Applicable Rate Determination Date (as hereinafter defined) equal
to three-month LIBOR plus 1.75%. For this purpose, LIBOR shall be calculated in
accordance with the provisions set forth under "Description of Capital
Securities-Distributions." The amount of interest payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months until January
15, 2002 and thereafter on the basis of a 360-day year and the actual number of
days elapsed. In the event that any date on which interest is payable on the
Subordinated Debentures is not a Business Day, then payment of the interest
payable on such date will be made on the next succeeding day that is a Business
Day, except that, if such Business Day is in the next succeeding calendar year,
such payment shall be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on the date such payment was
originally payable. Until January 15, 2002, in the event that any Interest
Payment Date is not a Business Day, interest will be paid on the next succeeding
Business Day, without any interest or other payment with respect to any such
delay. After January 15, 2002, interest shall be the amount of interest accrued
from, and including, the last date on which interest has previously been paid
to, but excluding, the Interest Payment Date (or, if such date is not a Business
Day, the next succeeding Business Day). Accrued interest that is not paid on the
applicable Interest Payment Date will bear additional interest on the amount
thereof (to the extent permitted by law) at the rate per annum of 7.00% until
January 15, 2002, and at the Applicable Rate thereafter, compounded
semi-annually. The term "interest" as used herein shall include semi-annual
interest payments, interest on semi-annual interest payments not paid on the
applicable Interest Payment Date and Additional Sums (as defined below), as
applicable.

The Subordinated Debentures will mature on January 15, 2027.

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<PAGE>

The Subordinated Debentures are unsecured and rank junior and subordinate
in right of payment to all Senior Indebtedness of the Company. Because the
Company is a holding company, the right of the Company to participate in any
distribution of assets of any subsidiary upon such subsidiary's liquidation or
reorganization or otherwise (and thus the ability of holders of the Capital
Securities to benefit indirectly from such distribution) is subject to the prior
claims of creditors of that subsidiary, except to the extent that the Company
may itself be recognized as a creditor of that subsidiary. Accordingly, the
Subordinated Debentures are subordinated to all Senior Indebtedness of the
Company and effectively subordinated to all existing and future liabilities of
the Company's subsidiaries, and holders of Subordinated Debentures should look
only to the assets of the Company for payments on the Subordinated Debentures.
The Indenture does not limit the incurrence or issuance of other secured or
unsecured debt of the Company, including Senior Indebtedness whether under the
Indenture or any existing or other indenture that the Company may enter into in
the future or otherwise, including the Company's Senior Indenture entered into
with The Chase Manhattan Bank. See "-Subordination."

The Subordinated Debentures will rank pari passu with all Other Debentures
which may be issued and sold (if at all) to Other Trusts, and will be unsecured
and subordinate and junior in right of payment to the extent and in the manner
set forth in the Indenture to all Senior Indebtedness.

DENOMINATIONS, REGISTRATION AND TRANSFER

The Subordinated Debentures will be represented by one or more global
certificates registered in the name of Cede & Co. as the nominee of DTC if, and
only if, distributed to the holders of the Trust Securities. Until such time,
the Subordinated Debentures will be registered in the name of the trust and held
by the Property Trustee. Should the Subordinated Debentures be distributed to
holders of the Trust Securities, beneficial interests in the Subordinated
Debentures will be shown on, and transfers thereof will be effected only
through, records maintained by Participants in DTC. Except as described below,
Subordinated Debentures in certificated form will not be issued in exchange for
the global certificates.

A global security shall be exchangeable for Subordinated Debentures
registered in the names of persons other than Cede & Co. only if (i) DTC
notifies the Company that it is unwilling or unable to continue as a depositary
for such global security and no successor depositary shall have been appointed,
or if at any time DTC ceases to be a "clearing agency" registered under the
Exchange Act, at a time when DTC is required to be so registered to act as such
depositary, (ii) the Company in its sole discretion determines that such global
security shall be so exchangeable, or (iii) there shall have occurred and be
continuing a Debenture Event of Default. Any global security that is
exchangeable pursuant to the preceding sentence shall be exchangeable for
certificates registered in such names as DTC shall direct. It is expected that
such instructions will be based upon directions received by DTC from its
Participants with respect to ownership of beneficial interests in such global
security. In the event that Subordinated Debentures are issued in certificated
form, such Subordinated Debentures will be in minimum denominations of $100,000
and integral multiples of $1,000 in excess thereof and may be transferred or
exchanged only in such minimum denominations and in the manner and at the
offices described below.

Payments on Subordinated Debentures represented by a global security will
be made to DTC, as the depositary for the Subordinated Debentures. In the event
Subordinated Debentures are issued in certificated form, principal and interest
will be payable, the transfer of the Subordinated Debentures will be
registrable, and Subordinated Debentures will be exchangeable for Subordinated
Debentures of

56
<PAGE>

other denominations of a like aggregate principal amount, at the corporate
office of the Debenture Trustee in New York, New York, or at the offices of any
paying agent or transfer agent appointed by the Company, provided that payment
of interest may be made at the option of the Company by check mailed to the
address of the persons entitled thereto or by wire transfer. In addition, if the
Subordinated Debentures are issued in certificated form, the record dates for
payment of interest will be the 1st day of the first month of each semi-annual
period.

For a description of DTC and the terms of the depositary arrangements
relating to payments, transfers, voting rights, redemptions and other notices
and other matters, see "Description of New Securities-Form, Denomination,
Book-Entry Procedures and Transfer." If the Subordinated Debentures are
distributed to the holders of the Trust Securities upon the termination of the
Issuer, the form, denomination, book-entry and transfer procedures with respect
to the Capital Securities as described under "Description of New
Securities-Form, Denomination, Book-Entry Procedures and Transfer," shall apply
to the Subordinated Debentures mutatis mutandis.

PAYMENT AND PAYING AGENTS

Payment of principal of (and premium, if any) and any interest on
Subordinated Debentures will be made at the principal office of the Debenture
Trustee in the City of New York or at the office of such Paying Agent or Paying
Agents as the Company may designate from time to time, except that at the option
of the Company payment of any interest may be made, except in the case of
Subordinated Debentures in global form, (i) by check mailed to the address of
the Person entitled thereto as such address shall appear in the register for
Subordinated Debentures or (ii) by transfer to an account maintained by the
Person entitled thereto as specified in such register, provided that proper
transfer instructions have been received by the preceding Record Date. Payment
of any interest on any Subordinated Debenture will be made to the Person in
whose name such Subordinated Debenture is registered at the close of business on
the Record Date for such interest, except in the case of defaulted interest. The
Company may at any time designate additional Paying Agents or rescind the
designation of any Paying Agent; however the Company will at all times be
required to maintain a Paying Agent in each Place of Payment for the
Subordinated Debentures.

Any moneys deposited with the Debenture Trustee or any Paying Agent, or
then held by the Company in trust, for the payment of the principal of (and
premium, if any) or interest on any Subordinated Debenture and remaining
unclaimed for two years after such principal (and premium, if any) or interest
has become due and payable shall, at the request of the Company, be repaid to
the Company and the holder of such Subordinated Debenture shall thereafter look,
as a general unsecured creditor, only to the Company for payment thereof.

OPTION TO DEFER INTEREST PAYMENTS

So long as no Debenture Event of Default has occurred or is continuing, the
Company has the right under the Indenture at any time during the term of the
Subordinated Debentures to defer the payment of interest at any time or from
time to time for a period not exceeding 10 consecutive semi-annual periods with
respect to each Extension Period, provided that no Extension Period may extend
beyond the Stated Maturity. At the end of such Extension Period, the Company
must pay all interest then accrued and unpaid (together with interest thereon at
the annual rate of 7.00% until January 15, 2002 and at the Applicable Rate
thereafter, compounded semi-annually, to the extent permitted by applicable
law). During an Extension Period, interest will continue to accrue and holders
of Subordinated Debentures

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(and holders of the Capital Securities while Capital Securities are outstanding)
will be required to accrue interest income for United States Federal income tax
purposes. See "Certain Federal Income Tax Consequences-Interest, Original Issue
Discount, Premium and Market Discount."

During any such Extension Period, the Company may not, and may not permit
any subsidiary of the Company to, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company's capital stock (which includes common and
preferred stock) or (ii) make any payment of principal, interest or premium, if
any, on or repay, repurchase or redeem any debt securities of the Company that
rank pari passu with or junior to the Subordinated Debentures or make any
guarantee payments with respect to any guarantee by the Company of the debt
securities of any subsidiary of the Company if such guarantee ranks pari passu
with or junior in interest to the Subordinated Debentures (other than (a)
dividends or distributions in capital stock of the Company, (b) any declaration
of a dividend in connection with the implementation of a stockholders' rights
plan, or the issuance of stock under any such plan in the future, or the
redemption or repurchase of any such rights pursuant thereto, (c) payments under
the Guarantee, (d) purchases of common stock related to the issuance of common
stock or rights under any of the Company's benefit plans for its directors,
officers or employees and (e) payments of interest pursuant to the EPICS Loan
Agreement). Prior to the termination of any such Extension Period, the Company
may further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 10 consecutive semi-annual periods or to
extend beyond the Stated Maturity. Upon the termination of any such Extension
Period and the payment of all amounts then due on any Interest Payment Date, the
Company may elect to begin a new Extension Period subject to the above
requirements. No interest shall be due and payable during an Extension Period,
except at the end thereof. The Company must give the Property Trustee and the
Debenture Trustee notice of its election of any Extension Period (or an
extension thereof) at least five Business Days prior to the earlier of (i) the
date the Distributions on the Trust Securities would have been payable except
for the election to begin or extend such Extension Period or (ii) the date the
Property Trustee is required to give notice to any applicable self- regulatory
organization or to holders of Capital Securities of the record date or the date
such Distributions are payable, but in any event not less than five Business
Days prior to such record date. The Property Trustee shall give notice of the
Company's election to begin or extend a new Extension Period to the holders of
the Capital Securities. There is no limitation on the number of times that the
Company may elect to begin an Extension Period.

OPTIONAL PREPAYMENT

The Subordinated Debentures are prepayable, in whole or in part, at the
option of the Company at any time on or after January 15, 2002, at a prepayment
price (the "Optional Redemption Price") equal to the outstanding principal
amount of the Subordinated Debentures plus accrued interest thereon to the date
of prepayment.

TAX EVENT PREPAYMENT

If a Tax Event (as defined below) shall occur and be continuing, the
Company may, at its option, prepay the Subordinated Debentures in whole (but not
in part) at any time within 90 days of the occurrence of such Tax Event, at the
Tax Event Prepayment Price equal to the greater of (i) 100% of the principal
amount of such Subordinated Debentures and (ii) as determined by the Calculation
Agent, the sum of the present values of the principal amount that would be
payable as part of the Redemption Price with respect to an optional redemption
of such Subordinated Debentures on January 15, 2002,

<PAGE>

together with the present values of scheduled payments of interest from the
prepayment date to January 15, 2002 (the "Remaining Life"), in each case
discounted to the prepayment date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Adjusted CMT Rate, plus, in each
case, accrued interest thereon to but excluding the date of prepayment. However,
if the Company prepays Subordinated Debentures as a result of a Tax Event which
occurs on or after January 15, 2002, then the Tax Event Prepayment Price shall
be the Optional Redemption Price that would be payable on optional redemption of
the Subordinated Debentures on the date of prepayment, which includes interest
to the date of prepayment.

"Additional Sums" means the additional amounts as may be necessary in order
that the amount of Distributions then due and payable by the Trust on the
outstanding Capital Securities and Common Securities shall not be reduced as a
result of any additional taxes, duties and governmental charges to which the
Trust has become subject as a result of a Tax Event.

"Adjusted CMT Rate" means, with respect to any prepayment date, the CMT
Rate plus 0.475%.

"Calculation Agent" means Bear, Stearns & Co. Inc.

The "CMT Rate" will be determined by the Calculation Agent in accordance
with the following provisions:

(i) the CMT Rate will be determined on the basis of the latest rate
displayed at the close of business 10 Business Days before the date of such
Tax Event Prepayment on (x) Telerate page 7055 for "Yields on Treasury
Constant Maturities-Federal Reserve Board Statistical Release H.15(519)-
Mondays approximately 3:45 p.m. "EST" (or "EDT" as the case may be) for
U.S. Treasury Securities with a maturity corresponding to the Remaining
Life (or, if no maturity is within three months before or after the
Remaining Life, yields for the two published maturities most closely
corresponding to the Remaining Life shall be determined and the CMT Rate
shall be interpolated or extrapolated from such yields on a straight-line
basis, rounded to the nearest month), or (y) such other page as may replace
page 7055, as provided by the Telerate News Service, for the purpose of
displaying rates or prices that are comparable, as determined by the
Calculation Agent (after consultation with the Company), to the Constant
Maturity Treasury rates formerly displayed on Telerate page 7055;

(ii) if the information specified in subparagraph (i) above is not
available at the date 10 Business Days before such Tax Event Prepayment,
then the CMT Rate shall be determined on the basis of the Treasury Constant
Maturity rate with a maturity corresponding to the Remaining Life (adjusted
as aforesaid) (or other United States Treasury rate, with a maturity that
is closest to January 15, 2002) published as of that date by either the
Board of Governors of the Federal Reserve System or the United States
Department of the Treasury that the Calculation Agent (after consultation
with the Company) determines to be comparable to the rate formerly
displayed on Telerate page 7055 and published in the Federal Reserve Board
Statistical Release H.15 (519);

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basis of the arithmetic mean of the secondary market bid side prices for
such Reference Treasury Note quoted as of 3:00 p.m., New York City time (or
the closing of the market, if earlier), on the date 10 Business Days,
before the date of such Tax Event Prepayment, by (and appearing in the
written records of) three leading primary United States government
securities dealers in New York City selected by the Calculation Agent; and

(iv) if the information specified in subparagraphs (i) and (ii) above
is not available at the date 10 Business Days before such Tax Event
Prepayment and at least three price quotations for the Reference Treasury
Note are not available at that date from leading primary dealers in New
York City as provided in subparagraph (iii) above, then the CMT Rate shall
be the yield to maturity of the Reference Treasury Note, as calculated by
the Calculation Agent on the basis of the arithmetic mean of the secondary
market bid side prices for such Reference Treasury Note quoted as of 3:00
p.m., New York City time (or the closing of the market, if earlier), on
that date, by (and appearing in the written records of) any three primary
United States government securities dealers selected by the Calculation
Agent (irrespective of where such dealers may be located).

"Tax Event" means the receipt by the Issuer of an opinion of counsel
experienced in such matters to the effect that, as a result of any amendment to,
or change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or which
pronouncement or decision is announced on or after the Issue Date, there is more
than an insubstantial risk that (i) the Issuer is, or will be within 90 days of
the date of such opinion, subject to United States Federal income tax with
respect to income received or accrued on the Subordinated Debentures, (ii)
interest payable by the Company on the Subordinated Debentures is not, or within
90 days of the date of such opinion, will not be, deductible by the Company, in
whole or in part, for United States Federal income tax purposes, or (iii) the
Issuer is, or will be within 90 days of the date of such opinion, subject to
more than a de minimis amount of taxes, duties or governmental charges.

For purposes of a Tax Event and the redemption procedures applicable
thereto, reference to Subordinated Debentures shall include any Exchange
Securities issued in exchange therefor.

Notice of any prepayment will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of Subordinated Debentures to
be prepaid at its registered address. Unless the Company defaults in payment of
the prepayment price, on and after the prepayment date interest ceases to accrue
on such Subordinated Debentures called for prepayment.

If the Issuer is required to pay any additional taxes, duties or
governmental charges as a result of a Tax Event, the Company will also pay any
Additional Sums on the Subordinated Debentures.

RESTRICTIONS ON CERTAIN PAYMENTS

The Company has agreed (and in connection with the New Subordinated
Debentures will agree) that it will not, and will not permit any subsidiary of
the Company to, (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any of the
Company's capital stock (which includes common and preferred stock) or (ii) make
any payment of principal, interest or premium, if any, on or repay or repurchase
or redeem any debt securities of the

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Company that rank pari passu with or junior in interest to the Subordinated
Debentures or make any guarantee payments with respect to any guarantee by the
Company of the debt securities of any subsidiary of the Company if such
guarantee ranks pari passu with or junior in interest to the Subordinated
Debentures (other than (a) dividends or distributions in capital stock of the
Company, (b) any declaration of a dividend in connection with the implementation
of a stockholder's rights plan, or the issuance of stock under any such plan in
the future, or the redemption or repurchase of any such rights pursuant thereto,
(c) payments under the Guarantee, (d) purchases of common stock related to the
issuance of common stock or rights under any of the Company's benefit plans for
its directors, officers or employees) if at such time (i) there shall have
occurred any event of which the Company has actual knowledge that (a) with the
giving of notice or the lapse of time, or both, would constitute a "Debenture
Event of Default" and (b) in respect of which the Company shall not have taken
reasonable steps to cure, (ii) if such Subordinated Debentures are held by the
Trust, the Company shall be in default with respect to its payment of any
obligations under the Guarantee or (iii) the Company shall have given notice of
its election of an Extension Period as provided in the Indenture and shall not
have rescinded such notice, or such Extension Period, or any extension thereof,
shall be continuing.

MODIFICATION OF INDENTURE

From time to time, the Company and the Debenture Trustee may, without the
consent of the holders of any series of Subordinated Debentures, amend, waive or
supplement the Indenture for specified purposes, including, among other things,
curing ambiguities, defects or inconsistencies (provided that any such action
does not materially adversely affect the interest of the holders of any series
of Subordinated Debentures or the holders of Capital Securities so long as they
remain outstanding) and qualifying, or maintaining the qualification of, the
Indenture under the Trust Indenture Act.

The Indenture contains a provision permitting the Company and the Debenture
Trustee, with the consent of the holders of not less than a majority in
principal amount of the Subordinated Debentures, to modify the Indenture in a
manner affecting the rights of the holders of Subordinated Debentures; provided,
however, that no such modification may, among other things, (i) change the fixed
maturity of any Subordinated Debentures, or reduce the rate or extend the time
of payment of any interest thereon or reduce the principal amount thereof,
without the consent of the holders of all Subordinated Debentures so affected,
(ii) modify the provisions with respect to the subordination of the Subordinated
Debentures in a manner adverse to the holders thereof, without the consent of
the holders of all Subordinated Debentures so affected, or (iii) reduce the
percentage of principal amount of Subordinated Debentures the holders of which
are required to consent to any such modification, without the consent of holders
of all of the Subordinated Debentures.

In addition, the Company and the Debenture Trustee may execute, without the
consent of any holder of Subordinated Debentures, any supplemental indenture for
the purpose of creating any new series of Subordinated Debentures ("Other
Debentures").

DEBENTURE EVENTS OF DEFAULT

A Debenture Event of Default with respect to the Subordinated Debentures is
defined in the Indenture as being: (a) default for 30 days in payment of any
interest on the Subordinated Debentures (subject to the deferral of any due date
in the case of an Extension Period); (b) default in payment of any principal or
premium, if any, on Subordinated Debentures; (c) default by the Company in

<PAGE>

performance in any material respect of any of the covenants or agreements in the
Indenture specifically contained therein for the benefit of the Subordinated
Debentures which shall not have been remedied for a period of 90 days after
written notice to the Company by the Debenture Trustee or to the Company and the
Debenture Trustee by the holders of not less than 25% in principal amount of the
Subordinated Debentures outstanding; or (d) certain events of bankruptcy,
insolvency or reorganization.

The holders of a majority in aggregate outstanding principal amount of the
Subordinated Debentures have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee. The
Debenture Trustee or the holders of not less than 25% in aggregate outstanding
principal amount of the Subordinated Debentures may declare the principal due
and payable immediately upon a Debenture Event of Default and, should the
Debenture Trustee or such holders of Subordinated Debentures fail to make such
declaration, the holders of at least 25% in aggregate Liquidation Amount of the
Capital Securities shall have such right. The holders of a majority in aggregate
outstanding principal amount of the Subordinated Debentures may annul such
declaration and waive the default if the default (other than the non-payment of
the principal of the Subordinated Debentures which has become due solely by such
acceleration) has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration has
been deposited with the Debenture Trustee. Should the holders of Subordinated
Debentures fail to annul such declaration and waive such default, the holders of
a majority in aggregate Liquidation Amount of the Capital Securities shall have
such right.

The holders of a majority in aggregate outstanding principal amount of the
Subordinated Debentures affected thereby may, on behalf of the holders of all
the Subordinated Debentures, waive any past default, except a default in the
payment of principal or interest (unless such default has been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee) or
a default in respect of a covenant or provision which under the Indenture cannot
be modified or amended without the consent of the holder of each outstanding
Subordinated Debenture. Should the holders of such Subordinated Debentures fail
to annul such declaration and waive such default, the holders of a majority in
aggregate Liquidation Amount of the Capital Securities shall have such right.
The Company is required to file annually with the Debenture Trustee a
certificate as to whether or not the Company is in compliance with all the
conditions and covenants applicable to it under the Indenture.

In case a Debenture Event of Default shall occur and be continuing, the
Property Trustee will have the right to declare the principal of and the
interest on the Subordinated Debentures, and any other amount payable under the
Indenture, to be forthwith due and payable and to enforce its other rights as a
creditor with respect to the Subordinated Debentures.

ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CAPITAL SECURITIES

If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Company to pay interest or principal
on the Subordinated Debentures on the date such interest or principal is
otherwise payable, a holder of Capital Securities may institute a Direct Action
against the Company for enforcement of payment to such holder of the principal
of or interest on such related Subordinated Debentures having a principal amount
equal to the aggregate Liquidation Amount of the related Capital Securities of
such holder. The Company may not amend the Indenture to remove the foregoing
right to bring a Direct Action without the prior written consent of the holders
of all of the Capital Securities. If the right to bring a Direct Action is
removed, the Issuer may become subject to

<PAGE>

reporting obligations under the Securities Exchange Act of 1934, as amended.
Notwithstanding any payments made to a holder of Capital Securities by the
Company in connection with a Direct Action, the Company shall remain obligated
to pay the principal of or interest on the Subordinated Debentures, and the
Company shall be subrogated to the rights of the holder of such Capital
Securities with respect to payments on the Capital Securities to the extent of
any payments made by the Company to such holder in any Direct Action.

The holders of the Capital Securities would not be able to exercise
directly any remedies, other than those set forth in the preceding paragraph,
available to the holders of the Subordinated Debentures unless there shall have
been an Event of Default under the Trust Agreement. See "Description of New
Securities-Events of Default; Notice."

CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS

The Indenture provides that the Company may not merge or consolidate or
sell or convey all or substantially all of its assets unless (i) the successor
entity (if other than the Company) is a U.S. entity that assumes the Company's
obligations under such Indenture and on the Subordinated Debentures issued under
such Indenture, and, after giving effect to such transaction, the Company or the
successor would not be in default under such Indenture; and (ii) certain other
conditions as prescribed in the Indenture are met.

The general provisions of the Indenture do not afford holders of the
Subordinated Debentures protection in the event of a highly leveraged or other
transaction involving the Company that may adversely affect holders of the
Subordinated Debentures.

SATISFACTION AND DISCHARGE

The Indenture provides that when, among other things, all Subordinated
Debentures not previously delivered to the Debenture Trustee for cancellation
(i) have become due and payable or (ii) will become due and payable at their
Stated Maturity within one year, and the Company deposits or causes to be
deposited with the Debenture Trustee funds, in trust, for the purpose and in an
amount sufficient to pay and discharge the entire indebtedness on the
Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation, for the principal (and premium, if any) and interest to the date
of the deposit or to the Stated Maturity, as the case may be, then the Indenture
will cease to be of further effect (except as to the Company's obligations to
pay all other sums due pursuant to the Indenture and to provide the officers'
certificates and opinions of counsel described therein), and the Company will be
deemed to have satisfied and discharged the Indenture.

SUBORDINATION

In the Indenture, the Company has covenanted and agreed that any
Subordinated Debentures issued thereunder will be subordinate and junior in
right of payment to all Senior Indebtedness of the Company to the extent
described in the Indenture. Upon any payment or distribution of assets of the
Company upon any liquidation, dissolution, winding up, reorganization,
assignment for the benefit of creditors, marshaling of assets or any bankruptcy,
insolvency, debt restructuring or similar proceedings in connection with any
insolvency or bankruptcy proceeding of the Company, the holders of Senior
Indebtedness will first be entitled to receive payment in full of principal of
(and premium, if any) and interest, if any, on such Senior Indebtedness before
the holders of Subordinated Debentures will be

<PAGE>

entitled to receive or retain any payment in respect of the principal of (and
premium, if any) or interest, if any, on the Subordinated Debentures; provided,
however, that holders of Senior Indebtedness shall not be entitled to receive
payment of any such amounts to the extent that such holders would be required by
the subordination provisions of such Senior Indebtedness to pay such amounts
over to the obligees on trade accounts payable or other liabilities arising in
the ordinary course of the Company's business.

In the event of the acceleration of the maturity of any Subordinated
Debentures, the holders of all Senior Indebtedness outstanding at the time of
such acceleration will first be entitled to receive payment in full of all
amounts due thereon (including any amounts due upon acceleration) before the
holders of Subordinated Debentures will be entitled to receive or retain any
payment in respect of the principal of or premium, if any, or interest, if any,
on the Subordinated Debentures; provided, however, that holders of Senior
Indebtedness shall not be entitled to receive payment of any such amounts to the
extent that such holders would be required by the subordination provisions of
such Senior Indebtedness to pay such amounts over to the obligees on trade
accounts payable or other liabilities arising in the ordinary course of the
Company's business.

No payments on account of principal or premium, if any, or interest in
respect of the Subordinated Debentures may be made if there shall have occurred
and be continuing a default in any payment with respect to Senior Indebtedness
or an event of default with respect to any Senior Indebtedness resulting in the
acceleration of the maturity thereof, or if any judicial proceeding shall be
pending with respect to any such default.

"Indebtedness" means with respect to any person, whether recourse is to all
or a portion of the assets of such person and whether or not contingent, (i)
every obligation of such person for money borrowed; (ii) every obligation of
such person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such person; (iv) every obligation of such person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such person; (vi) every
obligation of such person for claims in respect of derivative products such as
interest and foreign exchange rate contracts, commodity contracts and similar
arrangements; and (vii) every obligation of the type referred to in clauses (i)
through (vi) of another person and all dividends of another person the payment
of which, in either case, such person has guaranteed or is responsible or
liable, directly or indirectly, as obligor or otherwise.

"Senior Indebtedness" means the principal of and premium, if any, and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not such claim for post-petition interest is allowed in such proceeding), on
Indebtedness, whether incurred on or prior to the date of the Indenture or
thereafter incurred, unless, in the instrument creating or evidencing the same
or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Subordinated Debentures
or to other Indebtedness which is pari passu with, or subordinated to, the
Subordinated Debentures; provided, however, that Senior Indebtedness shall not
be deemed to include (i) any Indebtedness of the Company which when incurred and
without respect to any election under Section 1111(b) of the United States
Bankruptcy Code of 1978, as amended, was without recourse to the Company, (ii)
any Indebtedness of the Company to any of its subsidiaries, (iii) Indebtedness
to any employee of the

<PAGE>

Company, (iv) Indebtedness which by its terms is subordinated to trade accounts
payable or accrued liabilities arising in the ordinary course of business to the
extent that payments made to the holders of such Indebtedness by the holders of
the Subordinated Debentures as a result of the subordination provisions of the
Indenture would be greater than such payments otherwise would have been as a
result of any obligation of such holders of such Indebtedness to pay amounts
over to the obligees on such trade accounts payable or accrued liabilities
arising in the ordinary course of business as a result of subordination
provisions to which such Indebtedness is subject, and (v) any other debt
securities issued pursuant to the Indenture. Except as described in the next
sentence, the Subordinated Debentures will rank pari passu with, and will not be
superior in right of payment to, the obligations of the Company under the Loan
Agreement (the "EPICS Loan Agreement"), dated as of March 24, 1994, between the
Company and Bear Stearns Finance LLC ("BS Finance") in the aggregate principal
amount of $189,875,000 (the "EPICS Loan") entered into in connection with the
issuance by BS Finance of 6,000,000 shares of 8% Exchangeable Preferred Income
Cumulative Shares ("EPICS"), Series A (having an aggregate liquidation
preference of $150,000,000). However, the Company will be permitted to make
payments of interest pursuant to the EPICS Loan Agreement during an Extension
Period. The EPICS Loan equals the sum of (i) the aggregate liquidation
preference of $150,000,000 of the EPICS and (ii) the consideration paid by the
Company, directly or indirectly, for all the outstanding common shares of BS
Finance.

The Indenture places no limitation on the amount of Senior Indebtedness
that may be incurred by the Company. The Company expects from time to time to
incur additional indebtedness and other obligations constituting Senior
Indebtedness.

RESTRICTIONS ON TRANSFER

The New Subordinated Debentures will be issued, and may be transferred
only, in minimum denominations of not less than $100,000 and multiples of $1,000
in excess thereof. Any transfer, sale or other disposition of Subordinated
Debentures in a denomination of less than $100,000 shall be deemed to be void
and of no legal effect whatsoever. Any such transferee shall be deemed not to be
the holder of such Subordinated Debentures for any purpose, including but not
limited to the receipt of payments on such Subordinated Debentures, and such
transferee shall be deemed to have no interest whatsoever in such Subordinated
Debentures.

GOVERNING LAW

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

INFORMATION CONCERNING THE DEBENTURE TRUSTEE

The Debenture Trustee has and is subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the Debenture Trustee is under no
obligation to exercise any of the powers vested in it by the Indenture at the
request of any holder of Subordinated Debentures, unless offered reasonable
indemnity by such holder against the costs, expenses and liabilities which might
be incurred thereby. The Debenture Trustee is not required to expend or risk its
own funds or otherwise incur personal financial liability in the performance of
its duties if the Debenture Trustee reasonably believes that repayment or
adequate indemnity is not reasonably assured to it.

<PAGE>

DESCRIPTION OF GUARANTEE

The Old Guarantee was entered into by the Company concurrently with the
issuance by the Issuer of the Old Capital Securities for the benefit of the
holders from time to time of the Old Capital Securities. As soon as practicable
after the date hereof, the Old Guarantee will be exchanged by the Company for
the New Guarantee. The New Guarantee has been qualified under the Trust
Indenture Act. The Chase Manhattan Bank acts as Guarantee Trustee. This summary
of certain provisions of the Guarantee Agreement does not purport to be complete
and is subject to, and qualified in its entirety by reference to, all of the
provisions of the Guarantee Agreement, including the definitions therein of
certain terms, and the Trust Indenture Act. The Guarantee Trustee will hold the
Guarantee for the benefit of the holders of the Capital Securities.

GENERAL

The Company will irrevocably agree to pay in full on a subordinated basis,
to the extent set forth herein, the Guarantee Payments (as defined below) to the
holders of the Capital Securities, as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert other than
the defense of payment. The following payments with respect to the Capital
Securities, to the extent not paid by or on behalf of the Issuer (the "Guarantee
Payments"), will be subject to the Guarantee: (i) any accumulated and unpaid
Distributions required to be paid on Capital Securities, to the extent that the
Issuer has funds on hand available therefor at such time, (ii) the applicable
Redemption Price with respect to Capital Securities called for redemption to the
extent that the Issuer has funds on hand available therefor at such time, or
(iii) upon a voluntary or involuntary termination, dissolution, winding up or
liquidation of the Issuer, (unless the Subordinated Debentures are distributed
to holders of Capital Securities) the lesser of (a) the Liquidation Distribution
and (b) the amount of assets of the Issuer remaining available for distribution
to holders of Capital Securities. The Company's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Company to the holders of the Capital Securities or by causing the Issuer to pay
such amounts to such holders.

The Guarantee will be an irrevocable guarantee on a subordinated basis of
the Issuer's obligations under the Capital Securities, but will apply only to
the extent that the Issuer has funds sufficient to make such payments, and is
not a guarantee of collection. If the Company does not make interest payments on
the Subordinated Debentures held by the Issuer, the Issuer will not be able to
pay Distributions on its Capital Securities and will not have funds legally
available therefor. In such event, holders of the Capital Securities would not
be able to rely on the Guarantee for such payments.

The Guarantee ranks subordinate and junior in right of payment to all
Senior Indebtedness of the Company. See "-Status of the Guarantee." Because the
Company is a holding company, the right of the Company to participate in any
distribution of assets of any subsidiary upon such subsidiary's liquidation or
reorganization or otherwise, is subject to the prior claims of creditors of that
subsidiary, except to the extent the Company may itself be recognized as a
creditor of that subsidiary. Accordingly, the Company's obligations under the
Guarantee will be effectively subordinated to all existing and future
liabilities of the Company's subsidiaries, and claimants should look only to the
assets of the Company for payments thereunder. See "The Bear Stearns Companies
Inc." The Guarantee does not limit the incurrence or issuance of other secured
or unsecured debt of the Company, including Senior Indebtedness, whether under
the Indenture, any other indenture that the Company may enter into in the future
or otherwise.

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The Company has, through the Guarantee Agreement, the Trust Agreement, the
Subordinated Debentures and the Indenture taken together, fully, irrevocably and
unconditionally guaranteed on a subordinated basis all of the Issuer's
obligations under the Capital Securities. No single document standing alone or
operating in conjunction with fewer than all of the other documents constitutes
such guarantee. It is only the combined operation of these documents that has
the effect of providing a full, irrevocable and unconditional guarantee of the
Issuer's obligations under the Capital Securities. See "Relationship Among the
Capital Securities, the Subordinated Debentures and the Guarantee."

The Company has also agreed separately to irrevocably and unconditionally
guarantee the obligations of the Issuer with respect to the Common Securities
(the "Common Securities Guarantee") to the same extent as the Guarantee, except
that upon the occurrence and continuance of an Event of Default under the Trust
Agreement, holders of Capital Securities shall have priority over holders of
Common Securities with respect to payments made by the Company on or in respect
of the Trust Securities under the Guarantee and the Common Securities Guarantee.

STATUS OF THE GUARANTEE

The Guarantee constitutes an unsecured obligation of the Company and ranks
subordinate and junior in right of payment to all Senior Indebtedness of the
Company.

The Guarantee ranks pari passu with all Other Guarantees issued by the
Company. The Guarantee constitutes a guarantee of payment and not of collection
(i.e., the guaranteed party may institute a legal proceeding directly against
the Company to enforce its rights under the Guarantee without first instituting
a legal proceeding against any other person or entity). The Guarantee is held
for the benefit of the holders of the Capital Securities. The Guarantee will not
be discharged except by payment of the Guarantee Payments in full to the extent
not paid by the Issuer or upon distribution to the holders of the Capital
Securities of the Subordinated Debentures. The Guarantee does not place a
limitation on the amount of additional Senior Indebtedness that may be incurred
by the Company. The Company expects from time to time to incur additional
indebtedness constituting Senior Indebtedness.

AMENDMENTS AND ASSIGNMENT

Except with respect to any changes which do not materially adversely affect
the rights of holders of the Capital Securities (in which case no vote will be
required), the Guarantee Agreement may not be amended without the prior approval
of the holders of not less than a majority of the aggregate Liquidation Amount
of such outstanding Capital Securities. The manner of obtaining any such
approval will be as set forth under "Description of New Securities-Voting
Rights: Amendment of the Trust Agreement." All guarantees and agreements
contained in the Guarantee Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the Company and shall inure to the
benefit of the holders of the Capital Securities then outstanding.

EVENTS OF DEFAULT

An event of default under the Guarantee Agreement will occur upon the
failure of the Company to perform any of its payment or other obligations
thereunder. The holders of not less than a majority in aggregate Liquidation
Amount of the Capital Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Guarantee
Trustee in respect of the

<PAGE>

Guarantee or to direct the exercise of any trust or power conferred upon the
Guarantee Trustee under the Guarantee Agreement.

Any holder of the Capital Securities may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Issuer, the Guarantee Trustee
or any other person or entity.

The Company, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not the Company is in compliance with all
the conditions and covenants applicable to it under the Guarantee Agreement.

CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS

The Guarantee Agreement provides that the Company shall not consolidate
with or merge into any other entity or convey, transfer or lease its properties
and assets substantially as an entirety to any entity, and no entity shall
consolidate with or merge into the Company or convey, transfer or lease its
properties and assets substantially as an entirety to the Company, unless (i) in
case the Company consolidates with or merges into another entity or conveys or
transfers its properties and assets substantially as an entirety to any entity,
the successor entity is organized under the laws of the United States or any
state or the District of Columbia, and such successor entity expressly assumes
the Company's obligations under the Guarantee; (ii) immediately after giving
effect thereto, no event of default under the Guarantee Agreement, and no event
which, after notice or lapse of time or both, would become an event of default
under the Guarantee Agreement, shall have happened and be continuing; and (iii)
certain other conditions as prescribed in the Guarantee Agreement are met.

INFORMATION CONCERNING THE GUARANTEE TRUSTEE

The Guarantee Trustee, other than during the occurrence and continuance of
a default by the Company in performance of the Guarantee, undertakes to perform
only such duties as are specifically set forth in the Guarantee Agreement and,
after default with respect to the Guarantee, must exercise the same degree of
care and skill as a prudent person would exercise or use in the conduct of his
or her own affairs. The Guarantee Trustee is under no obligation to exercise any
of the powers vested in it by the Guarantee Agreement at the request of any
holder of the Capital Securities unless it is offered reasonable indemnity
against the costs, expenses and liabilities that might be incurred thereby.

TERMINATION OF THE GUARANTEE

The Guarantee will terminate and be of no further force and effect upon
full payment of the applicable Redemption Price of the Capital Securities, upon
full payment of the amounts payable upon liquidation of the Trust or upon
distribution of Subordinated Debentures to the holders of the Capital
Securities. The Guarantee will continue to be effective or will be reinstated,
as the case may be, if at any time any holder of the Capital Securities must
restore payment of any sums paid under the Capital Securities or the Guarantee.

GOVERNING LAW

The Guarantee will be governed by and construed in accordance with the laws
of the State of New York.

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DESCRIPTION OF OLD SECURITIES

The terms of the Old Securities are identical in all material respects to
the New Securities, except that (i) the Old Securities have not been registered
under the Securities Act, are subject to certain restrictions on transfer and
are entitled to certain rights under the Registration Rights Agreement (which
rights will terminate upon consummation of the Exchange Offer, except under
limited circumstances); (ii) the New Capital Securities will not provide for any
increase in the Distribution rate thereon; and (iii) the New Subordinated
Debentures will not provide for any increase in the interest rate thereon. The
Old Securities provide that, in the event that the Exchange Offer is not
consummated on or prior to March 30, 1997, or, in certain limited circumstances,
in the event a shelf registration statement (the "Shelf Registration Statement")
with respect to the resale of the Old Capital Securities is not declared
effective on or prior to March 30, 1997, then interest will accrue (in addition
to the interest rate on the Subordinated Debentures) at the rate of 0.25% per
annum on the principal amount of the Subordinated Debentures, and Distributions
will accrue (in addition to the stated Distribution rate on the Capital
Securities) at the rate of 0.25% per annum on the Liquidation Amount of the
Capital Securities, for the period from the occurrence of such event until such
time as the Exchange Offer is consummated or any required Shelf Registration
Statement is effective. The New Securities are not, and upon consummation of the
Exchange Offer the Old Securities will not be, entitled to any such additional
interest or Distributions. Accordingly, holders of Old Capital Securities should
review the information set forth under "Risk Factors-Consequences of Failure to
Exchange Old Capital Securities" and "Description of New Securities."

RELATIONSHIP AMONG THE CAPITAL SECURITIES, THE
SUBORDINATED DEBENTURES AND THE GUARANTEE

FULL AND UNCONDITIONAL GUARANTEE

Payments of Distributions and other amounts due on the Capital Securities
(to the extent the Issuer has funds available for the payment of such
Distributions) are irrevocably guaranteed by the Company as and to the extent
set forth under "Description of Guarantee." Taken together, the Company's
obligations under the Subordinated Debentures, the Indenture, the Trust
Agreement, the Guarantee Agreement and the Guarantee provide, in the aggregate,
a full, irrevocable and unconditional guarantee of payments of distributions and
other amounts due on the Capital Securities. No single document standing alone
or operating in conjunction with fewer than all of the other documents
constitutes such guarantee. It is only the combined operation of these documents
that has the effect of providing a full, irrevocable and unconditional guarantee
of the Issuer's obligations under the Capital Securities. If and to the extent
that the Company does not make payments on the Subordinated Debentures, the
Issuer will not pay Distributions or other amounts due on the Capital
Securities. The Guarantee does not cover payment of Distributions when the
Issuer does not have sufficient funds to pay such Distributions. In such event,
the remedy of a holder of Capital Securities is to institute a Direct Action.
The obligations of the Company under the Guarantee are subordinate and junior in
right of payment to all Senior Indebtedness.

SUFFICIENCY OF PAYMENTS

As long as payments of interest and other payments are made when due on the
Subordinated Debentures such payments will be sufficient to cover Distributions
and other payments due on the Capital Securities, primarily because (i) the
aggregate principal amount or Prepayment Price of the

<PAGE>

Subordinated Debentures will be equal to the sum of the aggregate Liquidation
Amount or Redemption Price, as applicable, of the Capital Securities and Common
Securities; (ii) the interest rate and interest and other payment dates on the
Subordinated Debentures will match the Distribution rate and Distribution and
other payment dates for the Trust Securities; (iii) under the Indenture, the
Company shall pay for all and any costs, expenses and liabilities of the Issuer
except the Issuer's obligations to holders of Trust Securities under such Trust
Securities; and (iv) the Trust Agreement further provides that the Issuer will
not engage in any activity that is not consistent with the limited purposes
thereof.

ENFORCEMENT RIGHTS OF HOLDERS OF CAPITAL SECURITIES

A holder of any Capital Security may institute a legal proceeding directly
against the Company to enforce its rights under the Guarantee without first
instituting a legal proceeding against the Guarantee Trustee, the Issuer or any
other person or entity.

A default or event of default under any Senior Indebtedness would not
constitute a default or Event of Default under the Trust Agreement. However, in
the event of payment defaults under, or acceleration of, Senior Indebtedness,
the subordination provisions of the Indenture provide that no payments may be
made in respect of the Subordinated Debentures until such Senior Indebtedness
has been paid in full or any payment default thereunder has been cured or
waived. Failure to make required payments on Subordinated Debentures would
constitute an Event of Default under the Trust Agreement.

LIMITED PURPOSE OF THE ISSUER

The Capital Securities are beneficial interests in the Issuer, and the
Issuer exists for the sole purpose of issuing the Capital Securities and Common
Securities and investing the proceeds of the Trust Securities in Subordinated
Debentures pursuant to the Indenture. A principal difference between the rights
of a holder of a Capital Security and a holder of a Subordinated Debenture is
that a holder of a Subordinated Debenture is entitled to receive from the
Company the principal amount of and interest accrued on Subordinated Debentures
held, while a holder of Capital Securities is entitled to receive Distributions
from the Issuer (or from the Company under the Guarantee) if and to the extent
the Issuer has funds available for the payment of such Distributions.

RIGHTS UPON DISSOLUTION

Upon any voluntary or involuntary dissolution, winding-up or liquidation of
the Issuer involving the liquidation of the assets of the Issuer, after
satisfaction of liabilities to creditors as required by applicable law the
holders of the Trust Securities will be entitled to receive, out of assets held
by the Issuer, the Liquidation Distribution in cash. See "Description of New
Securities-Liquidation of the Issuer and Distribution of Subordinated
Debentures." Upon any voluntary or involuntary liquidation or bankruptcy of the
Company, the Property Trustee, as holder of the Subordinated Debentures, would
be a subordinated creditor of the Company, subordinated in right of payment to
all Senior Indebtedness as set forth in the Indenture, but entitled to receive
payment in full of principal and interest, before any stockholders of the
Company receive payments or distributions. Since the Company is the guarantor
under the Guarantee and has agreed to pay for all costs, expenses and
liabilities of the Issuer (other than the Issuer's obligations to the holders of
its Trust Securities), the positions of a holder of Capital Securities and a
holder of Subordinated Debentures relative to other creditors and to
stockholders of the Company in the event of liquidation or bankruptcy of the
Company are expected to be substantially the same.

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CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The following is a summary of certain of the principal United States
Federal income tax consequences of the purchase, ownership and disposition of
the Capital Securities to a holder that is a citizen or resident of the United
States, a corporation, partnership or other entity created or organized under
the laws of the United States or any state thereof or the District of Columbia
or an estate or trust the income of which is subject to United States Federal
income taxation regardless of source (a "U.S. Holder"). This summary does not
address the United States Federal income tax consequences to persons other than
U.S. Holders.

This summary is based on the United States Federal income tax laws,
regulations and rulings and decisions now in effect, all of which are subject to
change, possibly on a retroactive basis. This summary does not address the tax
consequences applicable to investors that may be subject to special tax rules
such as banks, thrifts, real estate investment trusts, regulated investment
companies, insurance companies, dealers in securities or currencies, tax-exempt
investors or persons that will hold the Capital Securities as a position in a
"straddle," as part of a "synthetic security" or "hedge," as part of a
"conversion transaction" or other integrated investment, or as other than a
capital asset. This summary also does not address the tax consequences to
persons that have a functional currency other than the U.S. dollar or the tax
consequences to shareholders, partners or beneficiaries of a holder of Capital
Securities. Further, it does not include any description of any alternative
minimum tax consequences or the tax laws of any state or local government or of
any foreign government that may be applicable to the Capital Securities.

PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISORS IN
LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES AS TO THE FEDERAL TAX CONSEQUENCES
OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF CAPITAL SECURITIES, AS WELL AS THE
EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS.

EXCHANGE OF CAPITAL SECURITIES

The exchange of Old Capital Securities for New Capital Securities pursuant
to the Exchange Offer should not constitute an "exchange" for United States
Federal income tax purposes. Accordingly, there should be no United States
Federal income tax consequences to U.S. Holders as a result of the consummation
of the Exchange Offer.

CLASSIFICATION OF THE TRUST

Upon the issuance of the Old Capital Securities, Weil, Gotshal & Manges LLP
issued its opinion (the "Tax Opinion") to the effect that, under then current
law and assuming full compliance with the terms of the Trust Agreement (and
certain other documents), and based on certain facts and assumptions contained
in such opinion, the Issuer will be classified, for United States Federal income
tax purposes, as a grantor trust and not as an association taxable as a
corporation. As a result, each holder of Capital Securities will be treated as
owning an undivided beneficial interest in the Subordinated Debentures and each
holder will be required to include in its gross income the items of income
realized with respect to its allocable share of those Subordinated Debentures.
Investors should be aware that the Tax Opinion does not address any other issue
and is not binding on the Internal Revenue Service (the "Service") or the
courts.

<PAGE>

INTEREST, ORIGINAL ISSUE DISCOUNT, PREMIUM AND MARKET DISCOUNT

Final Treasury Regulations issued on June 16, 1996 generally provide that
stated interest on a debt instrument is not "qualified stated interest" and,
therefore, will give rise to original issue discount ("OID") unless such
interest is unconditionally payable in cash or in property (other than debt
instruments of the issuer) at least annually at a single fixed rate. Interest is
considered to be unconditionally payable only if reasonable legal remedies exist
to compel timely payment or the debt instrument otherwise provides terms and
conditions that make the likelihood of late payment (other than late payment
that occurs within a reasonable grace period) or non-payment a "remote
contingency."

The Company has the right, at any time and from time to time during the
term of the Subordinated Debentures, to defer payments of interest by extending
the interest payment period for a period not exceeding 10 consecutive
semi-annual periods, provided that no Extension Period may extend beyond the
Stated Maturity of the Subordinated Debentures. Unless the likelihood of
exercise of such right to defer is remote, the Subordinated Debentures would be
issued with OID. During any such Extension Period, the Company may not, and may
not permit any subsidiary of the Company to, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company's capital stock (which includes common and
preferred stock) or (ii) make any payment of principal, interest or premium, if
any, on or repay, repurchase or redeem any debt securities of the Company
(including Other Debentures) that rank pari passu with or junior in interest to
the Subordinated Debentures or make any guarantee payments with respect to any
guarantee by the Company of the debt securities of any subsidiary of the Company
(including Other Guarantees) if such guarantee ranks pari passu with or junior
in interest to the Subordinated Debentures (other than (a) dividends or
distributions in capital stock of the Company, (b) any declaration of a dividend
in connection with the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the
Guarantee, (d) purchases of common stock related to the issuance of common stock
or rights under any of the Company's benefit plans for its directors, officers
or employees and (e) payments of interest pursuant to the EPICS Loan Agreement).
See "Description of Subordinated Debentures-Option to Defer Interest Payments."
The Company currently believes that the adverse impact that the imposition of
such restrictions would have on the Company and on the value of its equity
securities makes the likelihood of its exercising its right to defer payments of
interest on the Subordinated Debentures remote. Accordingly, the Company
believes that the stated interest on the Subordinated Debentures should be
considered unconditionally payable for purposes of the Code and that the
Subordinated Debentures should not be considered to have been issued with OID.
If so, stated interest paid or payable prior to the exercise, if any, by the
Company, of its right to defer interest payments, will be taxable to a holder as
ordinary interest income, generally at the time it is received or accrued, in
accordance with such holder's regular method of accounting for Federal income
tax purposes. In addition, because of the Company's entitlement to redeem the
Subordinated Debentures at any time on or after January 15, 2002, the Company
believes that any increase in interest rate occurring at such time should not
result in the Subordinated Debentures being issued with OID. There can be no
assurance, however, that the Service will agree with these determinations.

Moreover, if, notwithstanding the foregoing, the Company does exercise its
right to defer payments of interest thereon, the Subordinated Debentures will be
considered to be retired and reissued for their adjusted issue price at such
time, and the Subordinated Debentures thereafter will be considered to have been
issued with OID. In such case, all the interest payments thereafter payable will
be treated as OID. If the payments were treated as OID (either because the
Company exercises the right to defer interest

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payments or because the exercise of such right was not remote at the time of
issuance), holders must include that discount in income on an economic accrual
basis before the receipt of cash attributable to the interest, regardless of
their method of tax accounting, and any holders who dispose of Capital
Securities prior to the record date for payment of Distributions thereon
following such Extension Period will include OID in gross income but will not
receive any cash related thereto from the Issuer. The amount of OID that accrues
in any semi-annual period will approximately equal the amount of the interest
that accrues in that semi-annual period at the stated interest rate. In the
event that the interest payment period is extended, holders will accrue OID
approximately equal to the amount of the interest payment due at the end of the
extended interest payment period on an economic accrual basis over the length of
the extended interest period.

Holders of Capital Securities will not be entitled to a dividends-received
deduction with respect to any income earned on the Capital Securities.

Holders of Capital Securities other than a holder who purchased the Capital
Securities upon original issuance may be considered to have acquired their
undivided interests in the Subordinated Debentures with market discount or
acquisition premium, as such phrases are defined for United States Federal
income tax purposes. Such holders are advised to consult their tax advisors as
to the income tax consequences of the acquisition, ownership and disposition of
Capital Securities.

RECEIPT OF SUBORDINATED DEBENTURES UPON LIQUIDATION OF THE ISSUER

As described under "Description of New Securities-Liquidation of the Issuer
and Distribution of Subordinated Debentures," Subordinated Debentures may be
distributed to holders in exchange for the Capital Securities and in liquidation
of the Issuer. Under current law, such a distribution would be treated as a
non-taxable event to each holder and each holder's aggregate tax basis in the
Subordinated Debentures would be equal to such holder's aggregate tax basis in
its Capital Securities. A holder's holding period in the Subordinated Debentures
so received in liquidation of the Issuer would include the period for which the
Capital Securities were held by such holder. If, however, the liquidation of the
Issuer were to occur because the Issuer is subject to United States Federal
income tax with respect to income accrued or received on the Subordinated
Debentures, the distribution of Subordinated Debentures to the holders of
Capital Securities by the Issuer would be a taxable event to the Issuer and a
holder of Capital Securities would recognize gain or loss as if such holder had
exchanged its Capital Securities for the Subordinated Debentures it received
upon the liquidation of the Issuer. A holder will be taxable on interest or OID
in respect of Subordinated Debentures received from the Issuer in the manner
described above under "-Interest, Original Issue Discount, Premium and Market
Discount."

SALE OR REDEMPTION OF CAPITAL SECURITIES

A holder that sells Capital Securities (including a redemption for cash)
will recognize gain or loss equal to the difference between the amount realized
on the sale (other than amounts attributable to accrued but unpaid interest
which has not yet been included in income, which will be treated as ordinary
income) and its adjusted tax basis in the securities sold or redeemed. A
holder's adjusted tax basis in the Capital Securities generally will be its
initial purchase price increased by OID (if any) previously includible in such
holder's gross income to the date of disposition (and the accrual of market
discount, if any, if an election to accrue market discount in income currently
is made) and decreased by payments received on the Capital Securities (other
than payments of qualified stated interest). Except to the extent noted above
and subject to the market discount rules of the Code, any such gain or loss

<PAGE>

generally will be long-term capital gain or loss if the Capital Securities were
held for more than one year.

The Capital Securities may trade at a price that does not fully reflect the
value of accrued but unpaid interest with respect to the underlying Subordinated
Debentures. A holder who uses the accrual method of accounting for tax purposes
(and a cash method holder, if the Subordinated Debentures are deemed to have
been issued with OID) and who disposes of its Capital Securities between record
dates for payments of distributions thereon will be required to include accrued
but unpaid interest on the Subordinated Debentures through the date of
disposition in income as ordinary income (i.e., interest or, possibly, OID), and
to add such amount to its adjusted tax basis in its Capital Securities disposed
of. To the extent the selling price (which may not fully reflect the value of
accrued but unpaid interest) is less than such holder's adjusted tax basis
(which will include all OID and accrued but unpaid interest), a holder will
recognize a capital loss. Subject to certain limited exceptions, capital losses
cannot be applied to offset ordinary income for United States Federal income tax
purposes.

BACKUP WITHHOLDING TAX AND INFORMATION REPORTING

Subject to the qualifications discussed below, income on the Capital
Securities will be reported to holders on Forms 1099, which forms are expected
to be mailed to holders of Capital Securities by January 31 following each
calendar year.

The Issuer will be obligated to report annually to Cede & Co., as holder of
record of the Capital Securities, the interest (or OID) related to the
Subordinated Debentures for that year. The Issuer currently intends to report
such information on Form 1099 prior to January 31 following each calendar year
even though the Issuer is not legally required to report to record holders until
April 15 following each calendar year. The Initial Purchasers have indicated to
the Issuer that, to the extent that they hold Capital Securities as nominees for
beneficial holders, they currently expect to report to such beneficial holders
on Forms 1099 by January 31 following each calendar year. Under current law,
holders of Capital Securities who hold as nominees for beneficial holders will
not have any obligation to report information regarding the beneficial holders
to the Issuer. The Issuer, moreover, will not have any obligation to report to
beneficial holders who are not also record holders. Thus, beneficial holders of
Capital Securities who hold their Capital Securities through the Initial
Purchasers will receive Forms 1099 reflecting the income on their Capital
Securities from such nominee holders rather than the Issuer.

Payments made on, and proceeds from the sale of, the Capital Securities may
be subject to a "backup" withholding tax of 31% unless the holder complies with
certain identification requirements. Any withheld amounts will be allowed as a
credit against the holder's Federal income tax liability, provided the required
information is provided to the Service.

POSSIBLE TAX LAW CHANGES

On March 19, 1996, the Revenue Reconciliation Bill of 1996 proposed by the
Clinton administration was released. The Bill would, among other things,
generally deny interest deductions for interest on an instrument issued by a
corporation that has a maximum term of more than 20 years and that is not shown
as indebtedness on the separate balance sheet of the issuer or, where the
instrument is issued to a related party (other than a corporation), where the
holder or some other related party issues a related instrument that is not shown
as indebtedness on the issuer's consolidated balance sheet. If such provision
were to apply to the Subordinated Debentures, the Company would be unable to
deduct

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interest on the Subordinated Debentures. However, on March 29, 1996, the
Chairmen of the Senate Finance and House Ways and Means Committees issued a
joint statement to the effect that it was their intention that the effective
date of the President's legislative proposals, if adopted, will be no earlier
than the date of "appropriate Congressional action" on the proposals. The
proposals were not enacted in the most recently concluded session of Congress
and, under current law, the Company believes it will be able to deduct interest
on the Subordinated Debentures. There can be no assurance, however, that final
legislation similar to the Bill or future legislative proposals will not affect
the ability of the Company to deduct interest on the Subordinated Debentures.
Such a change could give rise to a Tax Event, which would permit the Company to
cause a redemption of the Capital Securities before, as well as after, January
15, 2002. See "Description of New Securities-Redemption."

THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S PARTICULAR
SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE EXCHANGE OFFER AND THE PURCHASE, OWNERSHIP AND
DISPOSITION OF THE CAPITAL SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER
STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN
FEDERAL OR OTHER TAX LAWS.

ERISA CONSIDERATIONS

The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
imposes certain responsibilities and limitations on fiduciaries of employee
benefit plans subject to Part 4 of Title I of ERISA and persons deemed to hold
plan assets of such employee benefit plans by reason of Department of Labor
regulation 29 C.F.R. ss. 2510.3-101 ("Plan Assets Regulation") or applicable law
("ERISA Plans"). When considering an investment in Capital Securities by an
ERISA Plan, such fiduciaries should also consider, among other matters, whether
such investment is prudent, is permitted by the documents governing the ERISA
Plan, and is appropriate in view of the ERISA Plan's investment policy and
portfolio.

The prohibited transaction provisions of ERISA and Section 4975 of the Code
impose limitations upon a broad range of direct or indirect transactions
involving the assets of an ERISA Plan or other plan subject to such provisions
(collectively, "Plans"), and a "party in interest" (as defined in ERISA) or a
"disqualified person" (as defined in such Section), unless an exemption applies.
By virtue of the activities of the Company and its subsidiaries, the Company is
a party in interest and disqualified person with respect to many Plans from time
to time.

Under a look-through rule set forth in the Plan Assets Regulation, the
assets of the Issuer could be treated as if they were "plan assets" of any Plan
acquiring a Capital Security, unless for purposes of the Plan Assets Regulation
(i) the Capital Securities constitute "publicly offered securities" or (ii)
immediately after any acquisition of a Capital Security, Plans and other
"benefit plan investors" own less than 25% of the Capital Securities (excluding
any Capital Securities owned by the Property Trustee, Delaware Trustee,
Administrators or any of their affiliates). The acquisition of Capital
Securities (i) by at least 100 persons who are independent of one another (at
the completion of the public offering or otherwise) for purposes of satisfying
the definition of a publicly offered security or (ii) by "benefit plan
investors" (as defined in the Plan Assets Regulation) will not be monitored.
Thus,

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there are no assurances that the assets of the Issuer could not be construed as
"plan assets" of any Plan acquiring a Capital Security.

If the assets of the Issuer were treated as plan assets, the fiduciary
standards in ERISA and the prohibited transaction provisions of ERISA and
Section 4975 of the Code would likely apply to the assets owned by and the
operations of the Trust. In particular, the loan between the Trust and the
Company, as evidenced by the Subordinated Debentures, might constitute a
non-exempt prohibited transaction unless the Company is not a party in interest
or a disqualified person with respect to any ERISA Plan which owns a Trust
Security. Furthermore, the Property Trustee, Delaware Trustee and Administrators
would likely be treated as "parties in interest" and "disqualified persons"
subject to the prohibited transaction provisions and could be construed as
fiduciaries for purposes of ERISA with respect to each ERISA Plan owning a
Capital Security.

Moreover, due to the narrow purpose of the Issuer, the extension of credit
between the Issuer and the Company could be construed as an indirect prohibited
transaction for which an exemption is required with respect to any Plan
acquiring Capital Securities and as to which the Company is a party in interest
or disqualified person, regardless of whether the assets of the Issuer are
treated as plan assets of any Plan acquiring a Capital Security.

As a result, no Plan should acquire Capital Securities unless one or more
prohibited transaction exemptions applies to its acquisition and holding of such
Securities, including the operation of the Issuer and the loan between the
Issuer and the Company. The acquisition of a Capital Security by an ERISA Plan
shall constitute a representation and warranty by such Plan and its fiduciary
responsible for such acquisition that such security is being acquired and held
pursuant to an applicable prohibited transaction exemption.

There are a number of prohibited transaction exemptions which could
reasonably be construed as applying to the acquisition and holding of a Capital
Security by a Plan (including the loan between the Issuer and the Company, and
the services provided by the Property Trustee, Delaware Trustee and
Administrators) depending upon the circumstances, including, but not limited to,
the following prohibited transaction class exemptions ("PTCEs"): PTCE 84-14
relating to qualified professional asset managers; PTCE 90-1 relating to
insurance company pooled separate accounts; PTCE 91-38 relating to bank
collective trust funds; PTCE 95-60 relating to insurance company general
accounts; and PTCE 96-23 relating to in-house asset managers.

The foregoing discussion with respect to Plans is general in nature and is
not intended to be all-inclusive. Any Plan considering a purchase of Capital
Securities should consult with its counsel regarding the potential consequences
of such purchase. In particular, Plans should consider the potential
consequences if the assets of the Issuer were treated as "plan assets" and the
availability and extent of exemptive relief under PTCE 96-23, 95-60, 91-38, 90-1
or 84-14, or other exemption.

<PAGE>

PLAN OF DISTRIBUTION

Each broker-dealer that receives New Capital Securities for its own
account in connection with the Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such New Capital
Securities. This Prospectus, as it may be amended or supplemented from time to
time, may be used by Participating Broker-Dealers during the period referred to
below in connection with resales of New Capital Securities received in exchange
for Old Capital Securities if such Old Capital Securities were acquired by such
Participating Broker-Dealers for their own accounts as a result of market-making
activities or other trading activities. The Issuer has agreed that this
Prospectus, as it may be amended or supplemented from time to time, may be used
by a Participating Broker-Dealer in connection with resales of such New Capital
Securities for a period ending 180 days after the Expiration Date (subject to
extension under certain limited circumstances described herein) or, if earlier,
when all such New Capital Securities have been disposed of by such Participating
Broker-Dealer. See "The Exchange Offer-Resales of New Capital Securities." The
Issuer will not receive any proceeds from the issuance of the New Capital
Securities offered hereby. New Capital Securities received by broker-dealers for
their own accounts in connection with the Exchange Offer may be sold from time
to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the New Capital
Securities or a combination of such methods of resale, at market prices
prevailing at the time of resale at prices related to such prevailing market
prices or at negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such broker-dealer and/or the
purchasers of any such New Capital Securities. Any broker-dealer that resells
New Capital Securities that were received by it for its own account in
connection with the Exchange Offer and any broker or dealer that participates in
a distribution of such New Capital Securities may be deemed to be an
"underwriter" within the meaning of the Securities Act, and any profit on any
such resale of New Capital Securities and any commissions or concessions
received by any such persons may be deemed to be underwriting compensation under
the Securities Act. The Letter of Transmittal states that by acknowledging that
it will deliver and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act.

This Prospectus may be used by Bear, Stearns & Co. Inc., an affiliate
of the Company, in connection with offers and sales related to market-making
transactions in New Securities effected from time to time after the commencement
of the offering to which this Prospectus relates. Bear, Stearns & Co. Inc. may
act as principal or agent in such transactions, including as agent for the
counterparty when acting as principal or as agent for both counterparties, and
may receive compensation in the form of discounts and commissions, including
from both counterparties when it acts as agent for both. Such sales will be made
at prevailing market prices at the time of sale, at prices related thereto or at
negotiated prices.

The Company has been advised by Bear, Stearns & Co. Inc. that,
subject to applicable laws and regulations, Bear, Stearns & Co. Inc. may make a
market in New Securities. However, they are not obligated to do so and any
market-making may be discounted at any time without notice. In addition, such
market-making activity is subject to the limits imposed by the Securities Act,
the Exchange Act. There can be no assurance that an active trading market will
be sustained.

The Company has indemnified Bear, Stearns & Co. Inc. with respect
to certain liabilities in connection with this Prospectus, including liabilities
under the Securities Act.

77
<PAGE>

VALIDITY OF NEW CAPITAL SECURITIES

Certain matters of Delaware law relating to the validity of the New Capital
Securities, the enforceability of the Trust Agreement and the creation of the
Issuer will be passed upon by Richards, Layton & Finger, special Delaware
counsel to the Company and the Issuer. The validity of the New Capital
Securities will be passed upon for the Company by Weil, Gotshal & Manges LLP,
New York, New York. Weil, Gotshal & Manges LLP will rely on the opinion of
Richards, Layton & Finger as to matters of Delaware law. Certain matters
relating to United States Federal income tax considerations will be passed upon
for the Company by Weil, Gotshal & Manges LLP.

INDEPENDENT PUBLIC ACCOUNTANTS

The consolidated financial statements and the related financial statement
schedules incorporated by reference from the Company's 1996 Annual Report on
Form 10-K in this Prospectus have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their reports, which are incorporated herein
by reference, and have been so incorporated in reliance upon the reports of such
firm given upon their authority as experts in accounting and auditing.

<PAGE>

================================================================================
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE
BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE ISSUER OR
BY THE INITIAL PURCHASERS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR THE ISSUER SINCE THE DATE HEREOF
OR THAT ANY INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
ITS DATE. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE
IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT BY AUTHORIZED OR
IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO
OR THE BEAR STEARNS TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH COMPANIES INC.
OFFER OR SOLICITATION.

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

TABLE OF CONTENTS
PAGE

Available Information............................. 11
Incorporation of Certain Documents
by Reference.................................... 11
Summary........................................... 12
Risk Factors...................................... 19
Ratios of Earnings to Fixed Charges............... 26
Use of Proceeds................................... 26
Capitalization.................................... 27
Bear Stearns Capital Trust I...................... 28
The Bear Stearns Companies Inc.................... 28
Accounting Treatment.............................. 29
The Exchange Offer................................ 29
Description of New Securities..................... 40
Description of Subordinated Debentures............ 55
Description of Guarantee.......................... 66
Description of Old Securities..................... 70
Relationship Among the Capital
Securities, the Subordinated
Debentures and the Guarantee.................... 69
Certain Federal Income Tax
Consequences.................................... 71
ERISA Considerations.............................. 75
Plan of Distribution.............................. 77
Validity of New Capital Securities................ 78
Independent Public Accountants.................... 78

$200,000,000

BEAR STEARNS CAPITAL TRUST I

FIXED/ADJUSTABLE RATE
CAPITAL SECURITIES

(LIQUIDATION AMOUNT $1,000
PER CAPITAL SECURITY)

FULLY AND UNCONDITIONALLY
GUARANTEED, AS DESCRIBED HEREIN

_____________________

PROSPECTUS
_____________________

FEBRUARY __, 1997

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

79
<PAGE>

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Reference is made to section 145 of the Delaware General Corporation
Law which provides for indemnification of directors and officers of the Company
in certain circumstances.

Article VIII of the Company's Restated Certificate of Incorporation
provides for indemnification of directors and officers of the registrant against
certain liabilities incurred as a result of their duties as such and also
provides for the elimination of the monetary liability of directors for certain
actions as such. The Company's Restated Certificate of Incorporation, as
amended, is filed as Exhibit 4(a) to the Registration Statement on Form S-8 (No.
33-49979) filed August 13, 1993.

The registrant has in effect reimbursement insurance for directors' and
officers' liability claims and directors' and officers' liability insurance
indemnifying, respectively, the registrant and its directors and officers within
specific limits for certain liabilities incurred by them, subject to the
conditions and exclusions and deductible provisions of the policies.

Under the Amended and Restated Trust Agreement, the Company has agreed
to indemnify each of the Issuer Trustees and Administrators, and to hold such
Issuer Trustees and Administrators harmless, against any loss, damage, claims,
liability or expense incurred without negligence or bad faith on their part,
arising out of or in connection with the acceptance of administration of such
Trust Agreement, including the costs and expenses of defense against any claim
or liability in connection with the exercise or performance of any of their
powers or duties under the Trust Agreement or the Amended and Restated Trust
Agreement each of which is filed as an exhibit to this Registration Statement.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
each Registrant pursuant to the provisions described under Item 15 above, or
otherwise (other than insurance), each 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 insurance or the payment by each Registrant of expenses incurred or paid by
a director, officer or controlling person of each Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, each
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.

ITEM 21. EXHIBITS.

EXHIBIT NO. DESCRIPTION OF EXHIBIT
<TABLE>
<C> <C>
4.1 Indenture, dated as of January 29, 1997, between the Company and The Chase Manhattan
Bank, as Debenture Trustee*
4.2 First Supplemental Indenture, dated as of January 29, 1997 between the Company and The
Chase Manhattan Bank, as Debenture Trustee*

80
<PAGE>
<CAPTION>

EXHIBIT NO. DESCRIPTION OF EXHIBIT

<S> <C>
4.3 Certificate of Trust of Bear Stearns Capital Trust I*
4.4 Amended and Restated Trust Agreement of Bear Stearns Capital Trust*
4.5 Form of Capital Security Certificate for Bear Stearns Capital Trust I (included in Exhibit 4.4)
4.6 Form of Junior Subordinated Debenture due January 15, 2027 (included in Exhibit 4.2)
4.7 Capital Securities Guarantee Agreement dated as of January 29, 1997*
4.8 Registration Rights Agreement, dated as of January 29, 1997, among the Company, the Issuer
and Chase Securities Inc., Goldman, Sachs & Co., J.P. Morgan Securities Inc. and
NationsBanc Securities, Inc.*
4.9 All instruments defining the rights of holders of long-term debt of
the Company and its subsidiaries (Not filed pursuant to clause 4
(iii) of Item 601(b) of Regulation S-K; to be furnished upon request
of the Commission)
5.1 Opinion of Richards, Layton & Finger as to validity of the New Capital
Securities 5.2 Opinion of Weil, Gotshal & Manges LLP as to validity of the
Guarantee and the New Subordinated Debentures to be issued by the Company
8 Opinion of Weil, Gotshal & Manges LLP as to certain federal income tax matters
12 Computations of Ratios of Earnings to Fixed Charges*
23.1 Consent of Deloitte & Touche LLP*
23.2 Consent of Richards, Layton & Finger (Included in Exhibit 5.1)
23.3 Consent of Weil, Gotshal & Manges LLP (Included in Exhibit 5.2)
23.4 Consent of Weil, Gotshal & Manges LLP (Included in Exhibit 8)
24 Powers of Attorney (Included in the signature pages to the Registration Statement)*
25.1 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act as trustee under the
Indenture**
25.2 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act as trustee under the
Amended and Restated Trust Agreement**
25.3 Form T-1 Statement of Eligibility of The Chase Manhattan Bank under the Guarantee for the
benefit of the holders of Capital Securities**
99.1 Form of Letter of Transmittal and instructions thereto**
99.2 Form of Notice of Guaranteed Delivery**
99.3 Form of Exchange Agent Agreement**
</TABLE>

* Filed herewith.
** To be filed by amendment.

81
<PAGE>

ITEM 22. UNDERTAKINGS.

Each of the undersigned Registrants hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, as
amended, each filing of a Registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

Each of the undersigned Registrants hereby also 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 this Registration Statement (or the most
recent post-effective amendment thereto) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in this 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; and

(iii) to respond to requests for information that is
incorporated by reference into the prospectus pursuant to Item 4,
10(b), 11 or 13 of Form S-4, within one business day of receipt of
such request, and to send the incorporated documents by first class
mail or other equally prompt means. This includes information
required in documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.

82
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
registrant, The Bear Stearns Companies, Inc., has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on the 4th day of
February 1997.

THE BEAR STEARNS COMPANIES INC.

By: /s/ William J. Montgoris
------------------------------
William J. Montgoris
Chief Operating Officer

We, the undersigned officers and directors of The Bear Stearns Companies
Inc., hereby severally constitute Alan C. Greenberg, James E. Cayne and William
J. Montgoris, and any of them singly, our true and lawful attorneys with full
power to them, and each of them singly, to sign for us and in our name in the
capacities indicated below, any and all amendments to this registration
statement on Form S-4 filed by The Bear Stearns Companies Inc. with the
Securities and Exchange Commission, and generally to do all such things in our
name and behalf in such capacities to enable The Bear Stearns Companies Inc. to
comply with the provisions of the Securities Act of 1933, as amended, and all
requirements of the Securities and Exchange Commission, and we hereby ratify and
confirm our signatures as they may be signed by our said attorneys, or any of
them, to any and all such amendments.

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

83
<PAGE>

SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ Alan C. Greenberg Chairman of the Board and Director February 4, 1997
- ----------------------------------
Alan C. Greenberg

/s/ James E. Cayne President and Chief February 4, 1997
- ---------------------------------- Executive Officer (Principal Executive
James E. Cayne Officer); Director

/s/ William J. Montgoris Chief Operating Officer; Director February 4, 1997
- ----------------------------------
William J. Montgoris

/s/ Mark E. Lehman Executive Vice President; Director February 4, 1997
- ----------------------------------
Mark E. Lehman

/s/ Alan D. Schwartz Executive Vice President; Director February 4, 1997
- ----------------------------------
Alan D. Schwartz

/s/ Warren J. Spector Executive Vice President; Director February 4, 1997
- ----------------------------------
Warren J. Spector

/s/ Michael Minikes Treasurer; Director February 4, 1997
- ----------------------------------
Michael Minikes

/s/ E. Garrett Bewkes III Director February 4, 1997
- ----------------------------------
E. Garrett Bewkes III

Director
- ----------------------------------
Denis A. Bovin

84
<PAGE>

SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>

Director
- ----------------------------------
Peter D. Cherasia

/s/ Ralph R. Cioffi Director February 4, 1997
- ----------------------------------
Ralph R. Cioffi

/s/ Barry J. Cohen Director February 4, 1997
- ----------------------------------
Barry J. Cohen

/s/ Wendy L. de Monchaux Director February 4, 1997
- ----------------------------------
Wendy L. de Monchaux

/s/ Bruce E. Geismar Director February 4, 1997
- ------------------------------------
Bruce E. Geismar

/s/ Carl D. Glickman Director February 4, 1997
- ----------------------------------
Carl D. Glickman

/s/ Thomas R. Green Director February 4, 1997
- ----------------------------------
Thomas R. Green

/s/ Donald J. Harrington Director February 4, 1997
- ----------------------------------
Donald J. Harrington

85
<PAGE>

SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ Richard Harriton Director February 4, 1997
- ----------------------------------
Richard Harriton

/s/ Daniel L. Keating Director February 4, 1997
- ----------------------------------
Daniel L. Keating

/s/ John W. Kluge Director February 4, 1997
- ----------------------------------
John W. Kluge

/s/ David A. Liebowitz Director February 4, 1997
- ----------------------------------
David A. Liebowitz

/s/ Bruce M. Lisman Director February 4, 1997
- ----------------------------------
Bruce M. Lisman

/s/ Roland N. Livney Director February 4, 1997
- ----------------------------------
Roland N. Livney

/s/ Donald R. Mullen, Jr. Director February 4, 1997
- ----------------------------------
Donald R. Mullen, Jr.

Director
- ----------------------------------
Frank T. Nickell

86
<PAGE>

SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
Director
- ----------------------------------
Craig M. Overlander

Director
- ----------------------------------
Stephen E. Raphael

/s/ E. John Rosenwald Jr. Vice-Chairman of the Board; Director February 4, 1997
- ----------------------------------
E. John Rosenwald Jr.

Director
- ----------------------------------
Lewis A. Sachs

Director
- ----------------------------------
Richard Sachs

Director
- ----------------------------------
Frederic V. Salerno

/s/ David M. Solomon Director February 4, 1997
- ----------------------------------
David M. Solomon

/s/ Robert M. Steinberg Director February 4, 1997
- ----------------------------------
Robert M. Steinberg

87
<PAGE>

SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ Michael L. Tarnopol Vice-Chairman of the Board; Director February 4, 1997
- ----------------------------------
Michael L. Tarnopol

Director
- ----------------------------------
Vincent Tese

/s/ Michael J. Urfirer Director February 4, 1997
- ----------------------------------
Michael J. Urfirer

/s/ Fred Wilpon Director February 4, 1997
- ----------------------------------
Fred Wilpon

/s/ Uzi Zucker Director February 4, 1997
- ----------------------------------
Uzi Zucker

/s/ Michael J. Abatemarco Controller February 4, 1997
- ----------------------------------
Michael J. Abatemarco

/s/ Samuel L. Molinaro Jr. Senior Vice President- Finance and February 4, 1997
- ---------------------------------- Chief Financial Officer (Principal
Samuel L. Molinaro Jr. Accounting Officer and Principal
Financial Officer)

</TABLE>

88
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
registrant, Bear Stearns Capital Trust I, has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on the 4th day of
February, 1997.

BEAR STEARNS CAPITAL TRUST I
By: The Bear Stearns Companies Inc.,
as Sponsor

By: /s/ William J. Montgoris
---------------------------
William J. Montgoris
Chief Operating Officer

89
<PAGE>
<TABLE>
<CAPTION>

Exhibit Index

<S> <C>
4.1 Indenture, dated as of January 29, 1997, between the Company and The Chase Manhattan
Bank, as Debenture Trustee*
4.2 First Supplemental Indenture, dated as of January 29, 1997 between the Company and The
Chase Manhattan Bank, as Debenture Trustee*
4.3 Certificate of Trust of Bear Stearns Capital Trust I*
4.4 Amended and Restated Trust Agreement of Bear Stearns Capital Trust*
4.5 Form of Capital Security Certificate for Bear Stearns Capital Trust I (included in Exhibit
4.4)
4.6 Form of Junior Subordinated Debenture due January 15, 2027 (included in
Exhibit 4.2)
4.7 Capital Securities Guarantee Agreement dated as of January 29, 1997*
4.8 Registration Rights Agreement, dated as of January 29, 1997, among the
Company, the Issuer and Chase Securities Inc., Goldman, Sachs & Co., J.P. Morgan Securities Inc. and
NationsBanc Securities, Inc.*
4.9 All instruments defining the rights of holders of long-term debt of
the Company and its subsidiaries (Not filed pursuant to clause 4
(iii) of Item 601(b) of Regulation S-K; to be furnished upon request
of the Commission)
5.1 Opinion of Richards, Layton & Finger as to validity of the New Capital Securities
5.2 Opinion of Weil, Gotshal & Manges LLP as to validity of the Guarantee and the New
Subordinated Debentures to be issued by the Company
8 Opinion of Weil, Gotshal & Manges LLP as to certain federal income tax matters
12 Computations of Ratios of Earnings to Fixed Charges*
23.1 Consent of Deloitte & Touche LLP*
23.2 Consent of Richards, Layton & Finger (Included in Exhibit 5.1)
23.3 Consent of Weil, Gotshal & Manges LLP (Included in Exhibit 5.2)
23.4 Consent of Weil, Gotshal & Manges LLP (Included in Exhibit 8)
24 Powers of Attorney (Included in the signature pages to the Registration Statement)*
25.1 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act as trustee under the
Indenture**
25.2 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act as trustee under the
Amended and Restated Trust Agreement**
25.3 Form T-1 Statement of Eligibility of The Chase Manhattan Bank under the Guarantee for the
benefit of the holders of Capital Securities**
99.1 Form of Letter of Transmittal and instructions thereto**
99.2 Form of Notice of Guaranteed Delivery**
99.3 Form of Exchange Agent Agreement**

</TABLE>

* Filed herewith.
** To be filed by amendment.

90
NYFS04...:\25\22625\0313\1773\FRM1247L.32C

EXHIBIT 4.1

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

THE BEAR STEARNS COMPANIES INC.

and

THE CHASE MANHATTAN BANK

Trustee

INDENTURE

Dated as of January 29, 1997

JUNIOR SUBORDINATED DEBENTURES

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

<PAGE>

Reconciliation and Tie Sheet*
between
Provisions of the Trust Indenture Act of 1939, as amended
and
Indenture Dated as of
between

The Chase Manhattan Bank, Trustee

Section of Act Section of Indenture
- -------------- --------------------

310(a)(1) 7.09
310(a)(2) 7.09
310(a)(3) Inapplicable
310(a)(4) Inapplicable
310(b) 7.08, 7.10
310(c) Inapplicable
311(a) 7.13(a), 7.13(c)
311(b) 7.13(b), 7.13(c)
311(c) Inapplicable
312(a) 5.01, 5.02(a)
312(b) 5.02(b)
312(c) 5.02(c)
313(a) 5.04(a)
313(b)(1) Inapplicable
313(b)(2) 5.04(b)
313(c) 5.04(c)
313(d) 5.04(d)
314(a)(1) 5.03(a)
314(a)(2) 5.03(b)
314(a)(3) 5.03(c)
314(a)(4) 4.06
314(b) Inapplicable
314(c)(1) 15.04
314(c)(2) 15.04
314(c)(3) Inapplicable
314(d) Inapplicable
314(e) 15.04
314(f) Omitted
315(a) 7.01
315(b) 6.07
315(c) 7.01
315(d) 7.01
315(e) 6.08
316(a)(1) 6.06, 8.04
316(a)(2) Omitted
316(b) 6.04
316(c) 10.05
317(a) 6.02
317(b) 4.04
318(a) 15.06

*This Reconciliation and Tie Sheet is not part of the Indenture.

i
<PAGE>

TABLE OF CONTENTS
Page

ARTICLE I DEFINITIONS.................................. 1

Section 1.01. Certain terms defined........................... 1
Additional Interest...................................... 2
Additional Sums.......................................... 2
Administrators........................................... 2
Authenticating Agent..................................... 2
Authorized Newspaper..................................... 2
Bear Stearns Guarantee................................... 3
Bear Stearns Trust....................................... 3
Board of Directors....................................... 3
Business Day............................................. 3
Capital Securities....................................... 3
Capital Securities Guarantee............................. 3
Capital Stock............................................ 3
Commission............................................... 4
Common Stock............................................. 4
Company.................................................. 4
Compounded Interest........................................4
Depositary............................................... 4
Distributions............................................ 4
Event of Default......................................... 4
Extension Period......................................... 5
Guarantee Agreement...................................... 5
Indenture................................................ 5
Indebtedness............................................. 5
Maturity................................................. 5
1940 Act................................................. 5
Officers' Certificate.................................... 5
Opinion of Counsel....................................... 6
Original Issue Date...................................... 6
Original Issue Discount Security......................... 6
Paying Agent............................................. 6
Person................................................... 6
Principal................................................ 6
Property Trustee......................................... 6
Ranking junior to the Securities......................... 7
Ranking on a parity with the Securities.................. 7
Register................................................. 7
Resolution of the Company................................ 7
Responsible Officer...................................... 7
Rights Plan.............................................. 7
Security or Securities; outstanding...................... 8
Securityholder; registered holder........................ 8
Senior Indebtedness of the Company....................... 9
Special Interest...........................................9

ii
<PAGE>

Stated Maturity.......................................... 9
Subsidiary............................................... 9
Tax Event................................................ 10
Trust Agreement.......................................... 10
Trustee; Principal Office of the Trustee................. 10
Trust Indenture Act of 1939.............................. 10
Trust Securities......................................... 10

ARTICLE II ISSUE, DESCRIPTION, EXECUTION, REGISTRATION OF
TRANSFER AND EXCHANGE OF SECURITIES................. 11

Section 2.01. Amount, series and delivery of Securities.... 11
Section 2.02. Form of Securities and Trustee's Certificate. 14
Section 2.03. Denominations of and payment of interest on
Securities ...................................16
Section 2.04. Execution of Securities...................... 16
Section 2.05. Registration, transfer and exchange of
Securities ...................................17
Section 2.06. Temporary Securities......................... 19
Section 2.07. Mutilated, destroyed, lost or stolen
Securities ...................................19
Section 2.08. Cancellation and destruction of surrendered
Securities ...................................20
Section 2.09. Authenticating Agents........................ 20
Section 2.10. Deferrals of Interest Payment Dates.......... 21
Section 2.11. Right of Set-Off............................. 22
Section 2.12. Shortening or Extension of Stated Maturity... 22
Section 2.13. Agreed Tax Treatment......................... 23

ARTICLE III REDEMPTION OF SECURITIES..................... 23

Section 3.01. Applicability of Article..................... 23
Section 3.02. Mailing of notice of redemption.............. 23
Section 3.03. When Securities called for redemption become
due and payable ..............................24
Section 3.04. Right of redemption of Securities initially
issued to a Bear Stearns Trust............... 25

ARTICLE IV PARTICULAR COVENANTS OF THE COMPANY.......... 25

Section 4.01. Payment of principal of and interest on
Securities.................................. 25
Section 4.02. Maintenance of offices or agencies for
registration of transfer, exchange and
payment of Securities........................ 25
Section 4.03. Appointment to fill a vacancy in the office
of Trustee ...................................26
Section 4.04. Duties of Paying Agent....................... 26
Section 4.05. Further assurances........................... 27
Section 4.06. Officers' Certificate as to defaults; notices
of certain defaults ..........................27
Section 4.07. Waiver of covenants.......................... 27
Section 4.08. Additional Sums.............................. 27
Section 4.09. Additional Covenants......................... 28

ARTICLE V SECURITYHOLDERS LISTS AND REPORTS BY THE COMPANY
AND THE TRUSTEE.............................. 29

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Section 5.01. Company to furnish Trustee information as to
the names and addresses of Securityholders... 29
Section 5.02. Trustee to preserve information as to the
names and addresses of Securityholders
received by it............................... 29
Section 5.03. Annual and other reports to be filed by
Company With Trustee .........................30
Section 5.04. Trustee to transmit annual report to
Securityholders ..............................31

ARTICLE VI REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON
EVENT OF DEFAULT............................. 32

Section 6.01. Events of Default defined.................... 32
Section 6.02. Covenant of Company to pay to Trustee whole
amount due on Securities or default in payment
of interest or principal .....................34
Section 6.03. Application of moneys collected by Trustee... 36
Section 6.04. Limitation on suits by holders of Securities. 37
Section 6.05. On Default Trustee may take appropriate action37
Section 6.06. Rights of holders of majority in principal
amount of Securities to direct Trustee and to
waive default................................ 38
Section 6.07. Trustee to give notice of defaults known to it,
but may withhold in certain circumstances.... 38
Section 6.08. Requirement of an undertaking to pay costs in
certain suits under the Indenture or against
the Trustee.................................. 39

ARTICLE VII CONCERNING THE TRUSTEE......................... 39

Section 7.01. Upon Event of Default occurring and continuing,
Trustee shall exercise powers vested in it,
and use same degree of care and skill in their
exercise, as a prudent man would use......... 39
Section 7.02. Reliance on documents, opinions, etc......... 40
Section 7.03. Trustee not liable for recitals in Indenture
or in Securities .............................41
Section 7.04. May own Securities........................... 41
Section 7.05. Moneys received by Trustee to be held in trust
without interest .............................41
Section 7.06. Trustee entitled to compensation, reimbursement
and indemnity ................................41
Section 7.07. Right of Trustee to rely on Officers'
Certificate where no other evidence specifically
prescribed................................... 42
Section 7.08. Disqualification; conflicting interests...... 42
Section 7.09. Requirements for eligibility of Trustee...... 42
Section 7.10. Resignation of Trustee....................... 42
Section 7.11. Acceptance by successor Trustee.............. 44
Section 7.12. Successor to Trustee by merger, consolidation
or succession to business.................... 45
Section 7.13. Limitations on rights of Trustee as a creditor
to obtain payment of certain claims within
three months prior to default or during
default, or to realize on property as such
creditor thereafter ..........................45

ARTICLE VIII CONCERNING THE SECURITYHOLDERS................ 48

Section 8.01. Evidence of action by Securityholders........ 48
Section 8.02. Proof of execution of instruments and of
holding of
Section 8.03. Who may be deemed owners of Securities....... 49

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<PAGE>

Section 8.04. Securities owned by Company or controlled or
controlling persons disregarded for certain
purposes..................................... 49
Section 8.05. Instruments executed by Securityholders bind
future holders............................... 50

ARTICLE IX SECURITYHOLDERS' MEETINGS.................... 50

Section 9.01. Purposes for which meeting, may be called.... 50
Section 9.02. Manner of calling meetings................... 51
Section 9.03. Call of meeting by Company or Securityholders 51
Section 9.04. Who may attend and vote at meetings.......... 51
Section 9.05. Regulations may be made by Trustee........... 51
Section 9.06. Manner of voting at meetings and record to be
kept .........................................52
Section 9.07. Exercise of rights of Trustee, Securityholders
and holders of Capital Securities not to be
hindered or delayed.......................... 52

ARTICLE X SUPPLEMENTAL INDENTURES...................... 53

Section 10.01. Purposes for which supplemental indentures
may be entered into without consent of
Securityholders.............................. 53
Section 10.02. Modification of Indenture with consent of
holders of a majority in principal amount
of Securities................................ 54
Section 10.03. Effect of supplemental indentures............ 55
Section 10.04. Securities may bear notation of changes by
supplemental indentures ......................55
Section 10.05. Revocation and effect of Consents............ 56

ARTICLE XI CONSOLIDATION, MERGER, SALE OR CONVEYANCE.... 56

Section 11.01. Company may consolidate, etc., on certain
terms ........................................56
Section 11.02. Successor corporation substituted............ 56
Section 11.03. Opinion of Counsel to Trustee................ 57

ARTICLE XII SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS.................................. 57

Section 12.01. Satisfaction and discharge of Indenture...... 57
Section 12.02. Application by Trustee of funds deposited
for payment of Securities ....................58
Section 12.03. Repayment of moneys held by Paying Agent..... 58
Section 12.04. Repayment of moneys held by Trustee.......... 58

ARTICLE XIII IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS, DIRECTORS AND EMPLOYEES............. 58

Section 13.01. Incorporators, stockholders, officers,
directors and employees of Company exempt from
individual liability......................... 58

ARTICLE XIV SUBORDINATION OF SECURITIES....................... 59

Section 14.01. Agreement to subordinate..................... 59
Section 14.02. Obligation of the Company unconditional...... 60

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Section 14.03. Limitations on duties to holders of Senior
Indebtedness of the Company.................. 60
Section 14.04. Notice to Trustee of facts prohibiting payment61
Section 14.05. Application by Trustee of moneys deposited
with it ......................................61
Section 14.06. Subrogation.................................. 61
Section 14.07. Subordination rights not impaired by acts or
omissions of Company or holders of Senior
Indebtedness of the Company ..................61
Section 14.08. Authorization of Trustee to effectuate
subordination of Securities ..................62
Section 14.09. No Payment when Senior Indebtedness in default62
Section 14.10. Right of Trustee to hold Senior Indebtedness
of the Company ...............................63
Section 14.11. Article XIV not to prevent defaults.......... 63

ARTICLE XV CONVERSION OF SECURITIES............................63

Section 15.01. Applicability of Article..................... 63
Section 15.02. Conversion privilege......................... 63
Section 15.03. Exercise of conversion privilege............. 63
Section 15.04. Fractional Interests......................... 64
Section 15.05. Conversion Price............................. 64
Section 15.06. Adjustment of Conversion Price............... 64
Section 15.07. Continuation of conversion privilege in case
of reclassification, change, merger, consoli-
dation or sale of assets..................... 67
Section 15.08. Notice of certain events..................... 68
Section 15.09. Taxes on conversion.......................... 68
Section 15.10. Company to provide Stock..................... 68
Section 15.11. Disclaimer of responsibility for certain
matters ......................................69
Section 15.12. Return of funds deposited for redemption of
converted Securities .........................69

ARTICLE XVI MISCELLANEOUS PROVISIONS.......................... 69

Section 16.01. Successors and assigns of Company bound by
Indenture ....................................69
Section 16.02. Acts of board, committee or officer of
successor corporation valid..................69
Section 16.03. Required notices or demands may be served by
mail......................................... 70
Section 16.04. Officers' Certificate and Opinion of
Counsel to be furnished upon applications or
demands by the Company....................... 70
Section 16.05. Payments due on Saturdays, Sundays, and
holidays .....................................71
Section 16.06. Provisions required by Trust Indenture Act
of 1939 to control ...........................71
Section 16.07. Indenture and Securities to be construed in
accordance with the laws of the State of
New York..................................... 71
Section 16.08. Provisions of the Indenture and Securities for
the sole benefit of the parties and the
Securityholders.............................. 71
Section 16.09. Indenture may be executed in counterparts.... 71
Section 16.10. Securities in foreign currencies............. 71

<PAGE>

THIS INDENTURE, dated as of the 29th day of January, 1997 between
THE BEAR STEARNS COMPANIES INC., a corporation duly organized and existing under
the laws of the State of Delaware (hereinafter sometimes referred to as the
"Company"), party of the first part, and THE CHASE MANHATTAN BANK, a banking
corporation duly organized and existing under the laws of the State of New York
(hereinafter sometimes referred to as the "Trustee"), party of the second part,

W I T N E S S E T H:

WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issuance from time to time of its unsecured subordinated
debentures or other evidences of indebtedness (hereinafter referred to as the
"Securities"), without limit as to principal amount, issuable in one or more
series, the amount and terms of each such series to be determined as hereinafter
provided, including, without limitation, Securities issued to evidence loans
made to the Company of the proceeds from the issuance from time to time by one
or more business trusts (each a "Bear Stearns Trust" and collectively, the "Bear
Stearns Trusts" or the "Trusts") of preferred interests in such Trusts (the
"Capital Securities" which may also be referred to, without limitation, as the
"Preferred Securities") and common interests in such Trusts (the "Common
Securities," and collectively with the Common Securities, the "Trust
Securities"); to be authenticated by the certificate of the Trustee; and, to
provide the terms and conditions upon which the Securities are to be
authenticated, issued and delivered, the Company has duly authorized the
execution of this Indenture; and

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

NOW, THEREFORE, in order to declare the terms and conditions upon
which the Securities are authenticated, issued and delivered, and in
consideration of the premises and of the purchase and acceptance of the
Securities by the holders thereof, the Company covenants and agrees with the
Trustee, for the equal and proportionate benefit of the respective holders from
time to time of the Securities or of series thereof, as follows:

ARTICLE I

DEFINITIONS

Section 1.01. Certain terms defined. For all purposes of this
Indenture, except as otherwise expressly provided or unless the context
otherwise requires:

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

(b) All other terms used herein which are defined in the Trust
Indenture Act of 1939, as amended, either directly or by reference therein, have
the meanings assigned to them therein;

<PAGE>

(c) All accounting terms used herein and not expressly defined
herein shall have the meanings assigned to them in accordance with generally
accepted accounting principles, and the term "generally accepted accounting
principles" with respect to any computation required or permitted hereunder
shall mean such accounting principles which are generally accepted at the date
or time of such computation; and

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

Additional Interest:

The term "Additional Interest" means the interest, if any, that
shall accrue on any interest on the Securities of any series the payment of
which has not been made on the applicable interest payment date and which shall
accrue at the rate per annum specified or determined as specified in such
Security.

Additional Sums:

The term "Additional Sums" shall have the meaning specified in
Section 4.08.

Administrators:

The term "Administrator" means, in respect of any Bear Stearns Trust
each Person identified as an "Administrator" in the related Trust Agreement,
solely in such Person's capacity as Administrator of such Bear Stearns Trust
under such Trust Agreement and not in such Person's individual capacity, or any
successor administrative trustee appointed as therein provided.

Authenticating Agent:

The term "Authenticating Agent" shall mean any Authenticating Agent
appointed by the Trustee pursuant to Section 2.09.

Authorized Newspaper:

The term "Authorized Newspaper" shall mean a newspaper in the
Borough of Manhattan, The City of New York, State of New York, each of which is
printed in the English language and customarily published at least once a day
for at least five days in each calendar week and of general circulation in such
city. Whenever successive publications are required to be made in an Authorized
Newspaper, the successive publications may be made in the same or in a different
newspaper meeting the foregoing requirements and in each case on any day of the
week. If it is impossible or, in the opinion of the Trustee, impracticable to
publish any notice in the manner herein provided, then such publication in lieu
thereof as shall be made with the approval of the Trustee shall constitute a
sufficient publication of such notice.

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<PAGE>

Bear Stearns Guarantee:

The term "Bear Stearns Guarantee" shall mean the guarantee by the
Company of distributions on the Capital Securities of a Bear Stearns Trust to
the extent provided in the applicable Guarantee Agreement.

Bear Stearns Trust:

The term "Bear Stearns Trust" shall mean a Delaware business trust,
or any similar trust created for the purpose of issuing Capital Securities in
connection with the issuance of Securities under this Indenture of which the
Company is the sponsor.

Board of Directors:

The term "Board of Directors," when used with reference to the
Company, shall mean the Board of Directors of the Company or the Executive
Committee or any other committee of or created by the Board of Directors of the
Company duly authorized to act hereunder.

Business Day:

The term "business day" shall mean any day which is not a Saturday
or Sunday and which in the City of New York is neither a legal holiday nor a day
on which banking institutions are authorized by law or executive order to close
or a day on which the corporate trust office of the Trustee is closed for
business.

Capital Securities:

The term "Capital Securities" shall mean undivided beneficial
interests in the assets of a Bear Stearns Trust which rank pari passu with
Common Securities issued by such Bear Stearns Trust; provided, however, that
upon the occurrence of an Event of Default (as defined in the Trust Agreement
with respect to such Bear Stearns Trust), the rights of holders of such Common
Securities to payment in respect of distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights of holders of such
Capital Securities.

Capital Securities Guarantee:

The term "Capital Securities Guarantee" shall mean, in respect of
any Bear Stearns Trust, any guarantee that the Company may enter into with The
Chase Manhattan Bank or other Persons that operates directly or indirectly for
the benefit of holders of Capital Securities of such Bear Stearns Trust.

Capital Stock:

The term "Capital Stock" shall mean shares of capital stock of any
class of any corporation whether now or hereafter authorized regardless of
whether such capital stock shall be limited to a fixed sum or percentage in
respect of the rights of the holders thereof to participate in dividends and in
the distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up.

3
<PAGE>

Commission:

The term "Commission" shall mean the Securities and Exchange
Commission, as from time to time constituted, created under the Securities
Exchange Act of 1934, as amended, 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 of 1939, then the body performing
such duties on such date.

Common Stock:

The term "Common Stock" means the common stock, par value $1.00 per
share, of the Company.

Company:

The term "Company" shall mean The Bear Stearns Companies Inc., a
corporation duly organized and existing under the laws of the State of Delaware
and, subject to the provisions of Article XI, shall also include its successors
and assigns.

Compounded Interest

The term "Compounded Interest" shall mean with respect to any series
of Securities any interest designated as Compounded Interest with respect to the
Securities of such series as contemplated by Section 2.01.

Depositary:

The term "Depositary" means, with respect to the Securities of any
series issuable or issued in whole or in part in the form of one or more global
Securities, the person designated as Depositary by the Company pursuant to
Section 2.01 until a successor Depositary shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter the term "Depositary"
shall mean or include each person who is then a Depositary hereunder and if at
any time there is more than one such person, the term "Depositary" as used with
respect to the Securities of any series shall mean the Depositary with respect
to the Securities of such series.

Distributions:

The term "Distributions," with respect to the Trust Securities
issued by a Bear Stearns Trust means amounts payable in respect of such Trust
Securities as provided in the related Trust Agreement and referred to therein as
"Distributions."

Event of Default:

The term "Event of Default" with respect to Securities of any series
shall mean any event specified as such in Section 6.01 and any other event as
may be established with respect to the Securities of such series as contemplated
by Section 2.01.

4
<PAGE>

Extension Period:

The term "Extension Period" has the meaning specified in Section
2.10.

Guarantee Agreement:

The term "Guarantee Agreement" means the guarantee agreement
executed by the Company of distributions on the Capital Securities of a Bear
Stearns Trust to the extent provided in any Bear Stearns Guarantee.

Indenture:

The term "Indenture" shall mean this instrument as originally
executed, or, if amended or supplemented as herein provided, then as so amended
or supplemented, and shall include the form and terms of particular series of
Securities established as contemplated by Sections 2.01 and 2.02.

Indebtedness:

The term "Indebtedness" or "indebtedness" shall mean with respect to
any person, whether recourse is to all or a portion of the assets of such person
and whether or not contingent, (i) every obligation of such person for money
borrowed; (ii) every obligation of such person evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in connection
with the acquisition of property, assets or businesses; (iii) every
reimbursement obligation of such person with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of such
person; (iv) every obligation of such person issued or assumed as the deferred
purchase price of property or services (but excluding trade accounts payable or
accrued liabilities arising in the ordinary course of business); (v) every
capital lease obligation of such person; (vi) every obligation of such person
for claims in respect of derivative products such as interest and foreign
exchange rate contracts, commodity contracts and similar arrangements; and (vii)
and every obligation of the type referred to in clauses (i) through (vi) of
another person and all dividends of another person the payment of which, in
either case, such person has guaranteed or is responsible or liable, directly or
indirectly, as obligor or otherwise.

Maturity:

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

1940 Act:

The term "1940 Act" means the Investment Company Act of 1940, as
amended.

Officers' Certificate:

The term "Officers' Certificate" shall mean a certificate signed by
the Chairman of the Board, any Vice Chairman of the Board, the President, any
Vice Chairman, any Executive Vice President, the Chief Operating Officer or the
Chief Financial Offer of the Company (whether or not

5
<PAGE>

designated by a number or a word or words added before or after the title Vice
President) and by the Treasurer or an Assistant Treasurer, Controller or the
Secretary or an Assistant Secretary of the Company and delivered to the Trustee.
Each such certificate shall include the statements provided for in Section
16.04, if and to the extent required by the provisions thereof and will comply
with Section 314 of the Trust Indenture Act of 1939.

Opinion of Counsel:

The term "Opinion of Counsel" shall mean an opinion in writing
signed by legal counsel, who shall be satisfactory to the Trustee, and who may
be an employee of, or counsel to, the Company and delivered to the Trustee. Each
such opinion shall include the statements provided for in Section 16.04, if and
to the extent required by the provisions thereof and will comply with Section
314 of the Trust Indenture Act of 1939.

Original Issue Date:

The term "Original Issue Date" means the first date of issuance of
each Security.

Original Issue Discount Security:

The term "Original Issue Discount Security" shall mean any Security
which provides for an amount less than the principal amount thereof to be due
and payable upon declaration pursuant to Section 6.01.

Paying Agent:

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

Person:

The term "Person" or "person" shall mean any individual,
corporation, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.

Principal:

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

Property Trustee:

The term "Property Trustee" means, in respect of any Bear Stearns
Trust, the commercial bank or trust company identified as the "Property Trustee"
in the related Trust Agreement, solely in its capacity as Property Trustee of
such Bear Stearns Trust under such Trust Agreement and not in its individual
capacity, or its successor in interest in such capacity, or any successor
property trustee appointed as therein provided.

<PAGE>

Ranking junior to the Securities:

The term "ranking junior to the Securities" when used with respect
to any obligation of the Company shall mean any obligation of the Company which
(a) ranks junior to and not equally with or prior to the Securities (or any
other obligations of the Company ranking on a parity with the Securities) in
right of payment upon the happening of any event of the kind specified in the
first sentence of the first paragraph of Section 14.01, (b) is specifically
designated as ranking junior to the Securities by express provision in the
instrument creating or evidencing such obligation.

The securing of any obligations of the Company, otherwise ranking
junior to the Securities, shall be deemed to prevent such obligations from
constituting obligations ranking junior to the Securities.

Ranking on a parity with the Securities:

The term "ranking on a parity with the Securities" when used with
respect to any obligation of the Company shall mean any obligation of the
Company which (a) ranks equally with and not prior to the Securities in right of
payment upon the happening of any event of the kind specified in the first
sentence of the first paragraph of Section 14.01, including without limitation,
the obligation of the Company under the EPICs Loan Agreement (as such term is
defined within the definition of "Senior Indebtedness of the Company" below) and
(b) is specifically designated as ranking on a parity with the Securities by
express provision in the instrument creating or evidencing such obligation.

The securing of any obligations of the Company, otherwise ranking on
a parity with the Securities, shall not be deemed to prevent such obligations
from constituting obligations ranking on a parity with the Securities.

The term "Register" shall have the meaning specified in Section
2.05.

Resolution of the Company:

The term "Resolution of the Company" means a resolution of the
Company, in the form of a resolution of the Board of Directors or in the form of
a resolution of senior officers of the Company pursuant to the Bylaws,
authorizing, ratifying, setting forth or otherwise validating agreements,
execution and delivery of documents, the issuance, form and terms of securities,
or any other actions or proceedings pursuant or with respect to this Indenture.

Responsible Officer:

The term "Responsible Officer," when used with respect to the
Trustee, shall mean the Chairman and Vice Chairman of the Board of Directors,
the President, the Chairman and vice chairman of the executive committee of the
Board of Directors, every Vice President or officer senior thereto, every
assistant Vice President, the Secretary, every Assistant Secretary, the
Treasurer, every assistant Treasurer, every Corporate Trust Officer, every
Assistant Corporate Trust Officer, and every other officer and assistant officer
of the Trustee customarily performing functions similar to those performed by

<PAGE>

the persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of his knowledge of, and familiarity
with, a particular subject.

Rights Plan:

The term "Rights Plan" means a plan of the Company providing for the
issuance by the Company to all holders of its Common Stock of rights entitling
the holders thereof to subscribe for or purchase shares of Common Stock or any
class or series of preferred stock, which rights (i) are deemed to be
transferred with such shares of Common Stock, (ii) are not exercisable and (iii)
are also issued in respect of future issuances of Common Stock, in each case
until the occurrence of a specified event or events.

Security or Securities; outstanding:

The term "Security" or "Securities" shall mean any security or
securities of the Company, as the case may be, without regard to series,
authenticated and delivered under this Indenture.

The term "outstanding," when used with reference to Securities,
shall, subject to the provisions of Section 8.04, mean as of any particular
time, all Securities authenticated and delivered by the Trustee under this
Indenture, except

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

(b) Securities, or portions thereof, for the payment or redemption
of which moneys in the necessary amount shall have been deposited in trust with
the Trustee or with any paying agent (other than the Company) or shall have been
set aside and segregated in trust by the Company (if the Company shall act as
its own paying agent), provided that such Securities shall have reached their
Stated Maturity or, if such Securities are to be redeemed prior to the maturity
thereof, notice of such redemption shall have been given as in Article III
provided, or provision satisfactory to the Trustee shall have been made for
giving such notice; and

(c) Securities in lieu of or in substitution for which other
Securities shall have been authenticated and delivered or which have been paid
pursuant to the terms of Section 2.07 unless proof satisfactory to the Trustee
is presented that any such Securities are held by persons in whose hands any of
such Securities is a valid, binding and legal obligation of the Company.

In determining whether the holders of the requisite principal amount
of outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, the principal amount of an
Original Issue Discount Security that shall be deemed to be outstanding for such
purposes shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon a declaration of acceleration
of the maturity thereof pursuant to Section 6.01.

Securityholder; registered holder:

The terms "Securityholder," "holder of Securities," "registered
holder" or other similar term, shall mean any person who shall at the time be
the registered holder of any Security or Securities on the Register kept for
that purpose in accordance with the provisions of this Indenture.

8
<PAGE>

Senior Indebtedness of the Company:

The term "Senior Indebtedness of the Company" shall mean the
principal of and premium, if any, and interest, if any (including interest
accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company whether or not such claim for
post-petition interest is allowed in such proceeding), on Indebtedness, whether
incurred on or prior to the date of the Indenture or thereafter incurred,
unless, in the instrument creating or evidencing the same or pursuant to which
the same is outstanding, it is provided that such obligations are not superior
in right of payment to the Securities or to other Indebtedness which is pari
passu with, or subordinated to, the Securities; provided, however, that Senior
Indebtedness shall not be deemed to include (i) any Indebtedness of the Company
which when incurred and without respect to any election under Section 1111(b) of
the Federal Bankruptcy Code was without recourse to the Company, (ii) any
Indebtedness of the Company to any of its subsidiaries, (iii) Indebtedness to
any employee of the Company, (iv) Indebtedness which by its terms is
subordinated to trade accounts payable or accrued liabilities arising in the
ordinary course of business to the extent that payments made to the holders of
such Indebtedness by the holders of the Securities as a result of the
subordination provisions of the Indenture would be greater than such payments
otherwise would have been as a result of any obligation of such holders of such
Indebtedness to pay amounts over to the obligees on such trade accounts payable
or accrued liabilities arising in the ordinary course of business as a result of
subordination provisions to which such Indebtedness is subject, and (v) any
other debt securities issued pursuant to the Indenture. The Securities of all
series will rank pari passu with, and will not be superior in right of payment
to, the obligation of the Company under the Loan Agreement (the "EPICS Loan
Agreement") dated as of February 24, 1994, between the Company and Bear Stearns
Finance LLC ("BS Finance") in the aggregate principal amount of $189,875,000
(the "EPICS Loan") entered into in connection with the issuance by BS Finance of
6,000,000 shares of 8% Exchangeable Preferred Income Cumulative Shares
("EPICS"), Series A (having an aggregate liquidation preference of
$150,000,000).

Special Interest:

The term "Special Interest" shall mean with respect to any series of
Securities any interest designated as Special Interest with respect to the
Securities of such series as contemplated by Section 2.01.

Stated Maturity:

The term "Stated Maturity" when used with respect to any Security or
any installment of principal thereof or interest thereon means the date
specified pursuant to the terms of such Security as the date on which the
principal of such Security or such installment of interest is due and payable in
the case of such principal, as such date may be shortened or extended as
provided pursuant to the terms of such Security and this Indenture.

Subsidiary:

The term "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 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.

9
<PAGE>

Tax Event:

The term "Tax Event" means the receipt by a Bear Stearns Trust of an
Opinion of Counsel (as defined in the relevant Trust Agreement) experienced in
such matters to the effect that, as a result of any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein or as a result of any official administrative
pronouncement or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or which pronouncement or
decision is announced on or after the date of issuance of the Capital Securities
of such Bear Stearns Trust, there is more than an insubstantial risk that (i)
the Bear Stearns Trust is, or will be within 90 days of the date of such Opinion
of Counsel, subject to United States federal income tax with respect to income
received or accrued on the corresponding series of Securities issued by the
Company to such Bear Stearns Trust, (ii) interest payable by the Company on such
corresponding series of Securities is not, or within 90 days of the date of such
Opinion of Counsel, will not be, deductible, in whole or in part, for United
States federal income tax purposes, or (iii) the Bear Stearns Trust is, or will
be within 90 days of the date of such Opinion of Counsel, subject to more than a
de minimis amount of taxes, duties or governmental charges.

Trust Agreement:

The term "Trust Agreement" means any Trust Agreement governing any
Bear Stearns Trust whether now existing or created in the future, relating to
the Securities of any series in, and including, without limitation, the Bear
Stearns Capital Trust I Trust Agreement dated January 14, 1997 as amended by the
Amended and Restated Trust Agreement dated as of January 29, 1997, as amended
from time to time.

Trustee; Principal Office of the Trustee:

The term "Trustee" shall mean The Chase Manhattan Bank and, subject
to the provisions of Article VII, shall also include its successors. The term
"principal office" of the Trustee shall mean the corporate trust office of the
Trustee at which the corporate trust business of the Trustee shall, at any
particular time, be principally administered. The present address of the office
at which the corporate trust business of the Trustee is administered is 450 West
33rd Street, 15th Floor, New York, New York 10001.

Trust Indenture Act of 1939:

Except as herein otherwise expressly provided or unless the context
requires otherwise, the term "Trust Indenture Act of 1939" shall mean the Trust
Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990, as
in force at the date as of which this Indenture was originally executed.

Trust Securities:

The term "Trust Securities," shall mean the Common Securities and
Capital Securities of a Bear Stearns Trust.

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ARTICLE II

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

Section 2.01. Amount, series and delivery of Securities. The
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.

The Securities may be issued in one or more series. The terms of
each series (which terms shall not be inconsistent with the provisions of this
Indenture) including:

(1) The designation of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities and
which shall include the word "subordinated" or a word of like meaning);

(2) Any limit upon the aggregate principal amount of the Securities
of the series which may be executed, authenticated and delivered under
this Indenture; provided, however, that nothing contained in this Section
or elsewhere in this Indenture or in the Securities or in such resolution
or in such certificate is intended to or shall limit execution by the
Company or authentication and delivery by the Trustee of Securities under
the circumstances contemplated by Sections 2.05, 2.06, 2.07, 3.02, 3.03
and 10.04;

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

(4) The rate or rates at which the Securities of the series shall
bear interest, if any, including Additional Sums, Additional Interest,
Compounded Interest and Special Interest, if any, the date or dates from
which such interest shall accrue, the dates on which such interest shall
be payable and the record date for the interest payable on any interest
payment date and the right to defer the payment of interest in accordance
with Section 2.10;

(5) The place or places where Securities of the series may be
presented for payment and for the other purposes provided in Section 4.02;

(6) Any price or prices at which, any period or periods within
which, and any terms and conditions upon which Securities of the series
may be redeemed, in whole or in part, at the option of the Company;

(7) The type or types (if any) of Capital Stock of the Company into
which, any period or periods within which, and any terms and conditions
upon which Securities of the series may be made payable, converted,
exchanged in whole or in part, at the option of the holder or of the
Company;

(8) If other than denominations of $1,000 and any whole multiple
thereof, the denominations in which Securities of the series shall be
issuable;

<PAGE>

(9) If other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the maturity thereof pursuant to Section
6.01;

(10) If other than such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public or
private debts, the coin or currency (which may be a composite currency) in
which payment of the principal of (and premium, if any) and interest, if
any, on the Securities of that series shall be payable;

(11) If the principal of (and premium, if any) or interest, if any,
on the Securities of that series are to be payable, at the election of the
Company or a holder thereof, in a coin or currency (including a composite
currency) other than that in which the Securities are stated to be
payable, the period or periods within which, and the terms and conditions
upon which, such election may be made;

(12) If the amounts of payments of principal of (and premium, if
any) or interest, if any, on the Securities of the series may be
determined with reference to an index based on a coin or currency
(including a composite currency) other than that in which the Securities
are stated to be payable, the manner in which such amounts shall be
determined;

(13) If the Securities of the series are payable at maturity or upon
earlier redemption in Capital Stock, the terms and conditions upon which
such payment shall be made;

(14) The person or persons who shall be registrar for the Securities
of the series, and the place or places where the Register of the
Securities of the series shall be kept;

(15) Any Events of Default with respect to the Securities of a
particular series, if not set forth herein;

(16) Whether any Securities of the series are to be issuable in
global form with or without coupons, and, if so, the Depositary for such
global Securities and whether beneficial owners of interests in any such
global Security may exchange such interests for definitive Securities of
such series and of like tenor of any authorized form and denomination and
the circumstances under which, and the place or places where, any such
exchanges may occur, if other than in the manner provided in Section 2.05;

(17) The form of Trust Agreement and Guarantee Agreement, if
applicable;

(18) If applicable, the relative degree to which Securities of the
series shall be senior to or be subordinated to other Series of such
Securities or other indebtedness of the Company in right of payment,
whether such other series of Securities or other indebtedness are
outstanding or not; and

(19) Whether the Securities of the series are to be issued pursuant
to an exemption from registration under the Securities Act; and

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

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<PAGE>

or in any case, the method for determining such terms, the persons authorized to
determine such terms and the limits, if any, within which any such determination
of such terms is to be made shall either be established in or pursuant to a
Resolution of the Company and set forth in an Officers' Certificate, or set
forth in one or more indentures supplemental hereto, prior to the issuance of
Securities of any series.

The Securities of all series shall be subordinate to Senior
Indebtedness of the Company as provided in Article XIV. The applicable Officers'
Certificate or supplemental indenture may provide that Securities of any
particular series may be issued at various times, with different dates on which
the principal or any installment of principal is payable, with different rates
of interest, if any, or different methods by which interest may be determined,
with different dates from which such interest shall accrue, with different dates
on which such interest may be payable or with any different terms other than
Events of Default but all such Securities of a particular series shall for all
purposes under this Indenture including, but not limited to, voting and Events
of Default, be treated as Securities of a single series.

If any of the terms of the series are established by action taken
pursuant to a Resolution of the Company, 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
Officers' Certificate or supplemental indenture setting forth the terms of the
series.

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 by it, and the Trustee shall
thereupon authenticate and deliver said Securities to or upon the written order
of the Company, signed by its Chairman of the Board, any Vice Chairman of the
Board, its President, any Vice Chairman, any Executive Vice President, the Chief
Operating Officer or the Chief Financial Officer of the Company, and by its
Treasurer or an Assistant Treasurer, Controller or its Secretary or an Assistant
Secretary, without any further corporate action by the Company. If the form or
terms of the Securities of the series have been established in or pursuant to
one or more Resolutions of the Company and set forth in an Officers' Certificate
or set forth in one or more indentures supplemental hereto, as permitted by this
Section and Section 2.02, 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 7.01) shall be
fully protected in relying upon:

(a) an Opinion of Counsel stating:

(i) If the form or terms of such Securities have been
established by or pursuant to Resolutions of the Company as permitted by Section
2.02 and set forth in an Officers' Certificate, that such form and terms have
been established in conformity with the provisions of this Indenture;

(ii) If the form or terms of such Securities have been
established by or pursuant to a Resolution of the Company and set forth in one
or more indentures supplemental hereto as permitted by Section 2.02, that such
form and terms have been established in conformity with the provisions of this
Indenture;

(iii) 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 of Counsel, will constitute legal, valid
and binding obligations of the Company, enforceable in accordance with their
terms, entitled to the benefits of the Indenture, subject to bankruptcy,
insolvency, reorganization and

<PAGE>

other laws of general applicability relating to or affecting the enforcement of
creditors' rights and to general equity principles;

(iv) If the form or terms of such Securities provide for the
conversion of such Securities into shares of Capital Stock of the Company, or
the payment in Capital Stock upon maturity or earlier redemption of the
Securities, that the Company has reserved a number of shares of Capital Stock
sufficient for issuance upon such conversion or payment, and such shares of
Capital Stock are fully paid and nonassessable; and

(v) Such other matters as the Trustee may reasonably request.

(b) An Officers' Certificate setting forth the form and terms of the
Securities of such series pursuant to Section 2.01 and Section 2.02 hereof (but
only if the form and terms of the Securities of such series are not set forth in
one or more supplemental indentures hereto) and stating that all conditions
precedent provided for in this Indenture relating to the authentication and
delivery of such Securities have been complied with, that no Event of Default
with respect to any series of Securities has occurred and is continuing and that
the issuance of such Securities is not and will not result in (i) an Event of
Default or an event or condition which, upon the giving of notice (or the
acquisition of knowledge) or the lapse of time or both, would become an Event of
Default or (ii) a default under the provisions of any other instrument or
agreement by which the Company is bound.

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.

If all the Securities of any series are not to be issued at one
time, it shall not be necessary to deliver either an Opinion of Counsel or an
Officers' Certificate at the time of issuance of each Security, provided that
such Opinion of Counsel and Officers' Certificate, with appropriate
modifications, are instead delivered at or prior to the time of issuance of the
first Security of such series.

Each Security shall be dated the date of its authentication.

Section 2.02. Form of Securities and Trustee's Certificate. The
Securities of each series shall be substantially of the tenor and purport as
shall be authorized in or pursuant to a Resolution of the Company and set forth
in an Officers' Certificate or set forth in an indenture or 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
or designation and such legends or endorsements thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Indenture,
or as may be required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on which
the Securities may be listed, or to conform to usage. If the form of Securities
of any series is authorized by action taken pursuant to a Resolution of the
Company, a copy of an appropriate record of such action shall be certified by
the Secretary or an Assistant

<PAGE>

Secretary of the Company and delivered to the Trustee at or prior to the
delivery of the Officers' Certificate contemplated by Section 2.01 setting forth
the terms of the series.

The Securities may be printed, lithographed or fully or partly
engraved.

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

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

THE CHASE MANHATTAN BANK,
as Trustee

By -----------------------------
Authorized Officer"

If Securities of a series are issuable in global form, as specified
pursuant to Section 2.01, then, notwithstanding clause (8) of Section 2.01 and
the provisions of Section 2.03, such Security shall represent such of the
outstanding Securities of such series as shall be specified therein and may
provide that it shall represent the aggregate amount of outstanding Securities
from time to time endorsed thereon and that the aggregate amount of outstanding
Securities represented thereby may from time to time be reduced to reflect
exchanges. Any endorsement of a Security in global form to reflect the amount,
or any increase or decrease in the amount, of outstanding Securities represented
thereby shall be made by the Trustee in such manner and upon instructions given
by such person or persons as shall be specified in such Security or by the
Company. Subject to the provisions of Section 2.04 and, if applicable, Section
2.06, the Trustee shall deliver and redeliver any Security in global form in the
manner and upon written instructions given by the person or persons specified in
such Security or by the Company. Any instructions by the Company with respect to
endorsement or delivery or redelivery of a Security in global form after the
original issuance of the Securities of such series shall be in writing but need
not comply with Section 16.04 and need not be accompanied by an Opinion of
Counsel.

Unless otherwise specified pursuant to Section 2.01, payment of
principal of and any premium and any interest on any Security in global form
shall be made to the person or persons specified therein.

The owners of beneficial interests in any global Security shall have
no rights under this Indenture with respect to any global Security held on their
behalf by a Depositary, and such Depositary may be treated by the Company, the
Trustee, and any agent of the Company or the Trustee as the sole holder and
owner of such global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any agent of
the Company or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by a Depositary, or impair, as between a
Depositary and its participants in any global Security, the operation of
customary practices governing the exercise of the rights of a holder of a
Security of any series, including, without limitation, the granting of proxies
or other authorization of participants to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action that a holder
is entitled to give or take under this Indenture.

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<PAGE>

Neither the Company, the Trustee nor any Authenticating Agent will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests of a global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.

Each Depositary designated pursuant to Section 2.01 for a global
Security must, at the time of its designation and at all times while it serves
as Depositary, be a clearing agency registered under the Securities Exchange Act
of 1934, as amended, and any other applicable statute or regulation

Section 2.03. Denominations of and payment of interest on
Securities. The Securities of each series shall be issuable as fully registered
Securities without coupons in such denominations as shall be specified as
contemplated by Section 2.01. In the absence of any such provisions with respect
to the Securities of any series, the Securities of such series shall be issuable
in denominations of $1,000 and integral multiples of $1,000 in excess thereof.

If the Securities of any series shall bear interest, each Security
of such series shall bear interest from the applicable date at the rate or rates
per annum, and such interest shall be payable on the dates, specified on, or
determined in the manner provided for in, the Security. The person in whose name
any Security is registered at the close of business on any record date (as
hereinbelow defined) for the Security with respect to any interest payment date
for such Security shall be entitled to receive the interest payable thereon on
such interest payment date notwithstanding the cancellation of such Security
upon any registration of transfer, exchange or conversion thereof subsequent to
such record date and prior to such interest payment date, unless such Security
shall have been called for redemption on a date fixed for redemption subsequent
to such record date and prior to such interest payment date, or unless the
Company shall default in the payment of interest due on such interest payment
date on such Security, in which case such defaulted interest shall be paid to
the person in whose name such Security (or any Security or Securities issued
upon registration of or exchange thereof) is registered at the close of business
on the record date for the payment of such defaulted interest, or except as
otherwise specified as contemplated by Section 2.01. The term "record date" as
used in this Section with respect to any regular interest payment date for any
Security shall mean such day or days as shall be specified as contemplated by
Section 2.01; provided, however, that in the absence of any such provisions with
respect to any Security, such term shall mean: (1) the last day of the calendar
month next preceding such interest payment date if such interest payment date is
the fifteenth day of a calendar month; or (2) the fifteenth day of the calendar
month next preceding such interest payment date if such interest payment date is
the first day of a calendar month; provided, further, that (except as otherwise
specified as contemplated by Section 2.01) if the day which would be the record
date as provided herein is not a Business Day, then it shall mean the Business
Day next preceding such day. Such term, as used in this Section, with respect to
the payment of any defaulted interest on any Security shall mean (except as
otherwise specified as contemplated by Section 2.01) the fifth day next
preceding the date fixed by the Company for the payment of defaulted interest,
established by notice given by first class mail by or on behalf of the Company
to the holder of such Security not less than 10 days preceding such record date,
or, if such fifth day is not a Business Day, the Business Day next preceding
such fifth day.

Section 2.04. Execution of Securities. The Securities shall be
signed on behalf of the Company, manually or in facsimile, by its Chairman of
the Board or any Vice Chairman of the Board, or its President or any Vice
Chairman or any Executive Vice President, the Chief Operating Officer or the
Chief Financial Officer of the Company and by its Treasurer or an Assistant
Treasurer, the Controller or its Secretary or an Assistant Secretary under its
corporate seal, which may be affixed thereto or printed,

<PAGE>

engraved or otherwise reproduced thereon, by facsimile or otherwise. Only such
Securities as shall bear thereon a certificate of authentication substantially
in the form recited herein, executed by or on behalf of the Trustee manually by
an authorized officer, shall be entitled to the benefits of this Indenture or be
valid or obligatory for any purpose. Such certificate by the Trustee upon any
Security executed by the Company shall be conclusive evidence that the Security
so authenticated has been duly authenticated and delivered hereunder and that
the holder is entitled to the benefits of this Indenture. Typographical or other
errors or defects in the seal or facsimile signature on any Security or in the
text thereof shall not affect the validity or enforceability of such Security if
it has been duly authenticated and delivered by the Trustee.

In case any officer of the Company who shall have signed any of the
Securities, manually or in facsimile, shall cease to be such officer before the
Securities so signed shall have been authenticated and delivered by the Trustee,
or disposed of by the Company, such Securities nevertheless may be authenticated
and delivered or disposed of as though the person who signed such Securities had
not ceased to be such officer of the Company; and any Security may be signed on
behalf of the Company, manually or in facsimile, by such persons as, at the
actual date of the execution of such Security, shall be the proper officers of
the Company, although at the date of the execution of this Indenture any such
person was not such officer.

Section 2.05. Registration, transfer and exchange of Securities.
Securities of any series (other than a global Security, except as set forth
below) may be exchanged for a like aggregate principal amount of Securities of
the same series of the same tenor and terms of other authorized denominations.
Securities to be exchanged shall be surrendered at the offices or agencies to be
maintained by the Company in accordance with the provisions of Section 4.02 and
the Company shall execute and the Trustee shall authenticate and deliver, or
cause to be authenticated and delivered, in exchange therefor the Security or
Securities which the Securityholder making the exchange shall be entitled to
receive.

The Company shall keep, at one of the offices or agencies to be
maintained by the Company in accordance with the provisions of Section 4.02 with
respect to the Securities of each series, a Register (herein defined as the
"Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall register the Securities of such series and the
transfer of Securities of such series as in this Article provided. Such Register
shall be in written form or in any other form capable of being converted into
written form within a reasonable time. At all reasonable times the Register
shall be open for inspection by the Trustee and any registrar of the Securities
of such series other than the Trustee. Upon due presentment for registration of
transfer of any Security of any series at the offices or agencies of the Company
to be maintained by the Company in accordance with Section 4.02 with respect to
the Securities of such series, the Company shall execute and register and the
Trustee shall authenticate and deliver in the name of the transferee or
transferees a new Security or Securities of the same series of like tenor and
terms for a like aggregate principal amount of authorized denominations.

Every Security issued upon registration of transfer or exchange of
Securities pursuant to this Section shall be the valid obligation of the
Company, evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Security or Securities surrendered upon registration of such
transfer or exchange.

All Securities of any series presented or surrendered for exchange,
registration of transfer, redemption, conversion or payment shall, if so
required by the Company or any registrar of the Securities of such series, be
accompanied by a written instrument or instruments of transfer, in form

17
<PAGE>

satisfactory to the Company and such registrar, duly executed by the registered
holder or by his attorney duly authorized in writing.

No service charge shall be made for any exchange or registration of
transfer 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 relation
thereto.

The Company shall not be required to exchange or register the
transfer of (a) any Securities of any series during a period beginning at the
opening of business fifteen days before the day of the mailing of a notice of
redemption of outstanding Securities of such series and ending at the close of
business on the day of such mailing, or (b) any Securities or portions thereof
called or selected for redemption, except, in the case of Securities called for
redemption in part, the portion thereof not so called for redemption.

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

Notwithstanding the foregoing, except as otherwise specified
pursuant to Section 2.01, any global Security shall be exchangeable pursuant to
this Section only as provided in this paragraph. If at any time the Depositary
for the Securities of a series notifies the Company that it is unwilling or
unable to continue as Depositary for the Securities of such series, or if at any
time the Depositary for the Securities of such series shall no longer be
eligible to so act, the Company shall appoint a successor Depositary with
respect to the Securities of such series. If (a) a successor Depositary for the
Securities of such series is not appointed by the Company within 90 days after
the Company receives such notice or becomes aware of such ineligibility (thereby
automatically making the Company's election pursuant to Section 2.01 no longer
effective with respect to the Securities of such series), (b) the beneficial
owners of interests in a global Security are entitled to exchange such interests
for Securities of such series and of the same tenor and terms, as specified
pursuant to Section 2.01, or (c) the Company in its sole discretion determines
that the Securities of any series issued in the form of one or more global
Securities shall no longer be represented by such global Security or Securities,
then without unnecessary delay, but, if appropriate, in any event not later than
the earliest date on which such interest may be so exchanged, the Company shall
deliver to the Trustee definitive Securities in aggregate principal amount equal
to the principal amount of such global Security, executed by the Company. On or
after the earliest date on which such interests are or may be so exchanged, such
global Security shall be surrendered by the Depositary to the Trustee, as the
Company's agent for such purpose, to be exchanged, in whole or from time to time
in part, for definitive Securities upon payment by the beneficial owners of such
interest, at the option of the Company, of a service charge for such exchange
and of a proportionate share of the cost of printing such definitive Securities,
and the Trustee shall authenticate and deliver, (a) to each person specified by
the Depositary in exchange for each portion of such global Security, an equal
aggregate principal amount of definitive Securities of the same series of
authorized denominations and of the same tenor and terms as the portion of such
global Security to be exchanged, and (b) to such Depositary a global Security in
a denomination equal to the difference, if any, between the principal amount of
the surrendered global Security and the aggregate principal amount of definitive
Securities delivered to holders thereof; provided, however, that no such
exchanges may occur during a period

18
<PAGE>

beginning at the opening of business 15 Business Days before any selection of
Securities of that series to be redeemed and ending on the relevant redemption
date. If a Security is issued in exchange for any portion of a global Security
after the close of business at the office or agency where such exchange occurs
on (i) any record date and before the opening of business at such office or
agency on the relevant interest payment date, or (ii) any record date for the
payment of defaulted interest and before the opening of business at such office
or agency on the related proposed date for payment of defaulted interest, then
interest or default interest, as the case may be, will not be payable on such
interest payment date or proposed date for payment of defaulted interest, as the
case may be, in respect of such Security, but will be payable on such interest
payment date or proposed date for payment of defaulted interest, as the case may
be, only to the person to whom interest in respect of such portion of such
global Security is payable in accordance with the provisions of this Indenture
and such global Security.

Section 2.06. Temporary Securities. Pending the preparation of
definitive Securities of any series, the Company may execute and the Trustee
shall authenticate and deliver temporary Securities of such series (printed or
lithographed) of any denomination and substantially in the form of the
definitive Securities of such series, but with or without a recital of specific
redemption prices or conversion provisions and with such omissions, insertions
and variations as may be appropriate for temporary Securities, all as may be
determined by the Company. Temporary Securities may contain such reference to
any provisions of this Indenture as may be appropriate. Every such temporary
Security shall be authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with the same effect, as the definitive
Securities. Without unreasonable delay the Company will execute and deliver to
the Trustee definitive Securities of such series and thereupon any or all
temporary Securities of such series may be surrendered in exchange therefor, at
the offices or agencies to be maintained by the Company as provided in Section
4.02 with respect to the Securities of such series, and the Trustee shall
authenticate and deliver in exchange for such temporary Securities an equal
aggregate principal amount of definitive Securities of such series. 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 authenticated and delivered hereunder.

Section 2.07. Mutilated, destroyed, lost or stolen Securities. In
case any temporary or definitive Security shall become mutilated or be
destroyed, lost or stolen, the Company, in the case of any mutilated Security
shall, and in the case of any destroyed, lost or stolen Security in its
discretion may, execute, and upon its request the Trustee shall authenticate and
deliver, or cause to be authenticated and delivered, a new Security of the same
series of like tenor and terms in exchange and substitution for the mutilated
Security, or in lieu of and in substitution for the Security so destroyed, lost
or stolen. In case any such Security shall have matured or shall be about to
mature, instead of issuing a substituted Security, the Company may pay or
authorize payment of the same (without surrender thereof, except in the case of
a mutilated Security). In every case the applicant for a substituted Security or
for such payment shall furnish to the Company and the Trustee such security or
indemnity as may be required by them to save each of them harmless, and, in
every case of destruction, loss or theft, the applicant shall also furnish to
the Company and to the Trustee evidence to their satisfaction of the
destruction, loss or theft of such Security and of the ownership thereof. The
Trustee may authenticate any such substituted Security and deliver the same, or
the Trustee or any paying agent of the Company may make any such payment, upon
the written request or authorization of any officer of the Company. Upon the
issue of any substituted Security, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses connected therewith
(including the fees and expenses of the Trustee).

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To the extent permitted by mandatory provisions of law, every
substituted Security issued pursuant to the provisions of this Section in
substitution for any destroyed, lost or stolen Security shall constitute an
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be found at any time, and shall be entitled to all
the benefits of this Indenture equally and proportionately with any and all
other Securities of the same series duly issued hereunder.

To the full extent legally enforceable, all Securities shall be held
and owned upon the express condition that the foregoing provisions are exclusive
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Securities and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the contrary
with respect to the replacement or payment of negotiable instruments or other
securities without their surrender.

Section 2.08. Cancellation and destruction of surrendered
Securities. All Securities surrendered for the purpose of payment, redemption,
conversion, exchange, substitution or registration of transfer, shall, if
surrendered to the Company or any agent of the Company or of the Trustee, be
delivered to the Trustee, and the same, together with Securities surrendered to
the Trustee for cancellation, shall be cancelled by it, and no Securities shall
be issued in lieu thereof except as expressly permitted by any of the provisions
of this Indenture. The Trustee shall dispose of cancelled Securities in
accordance with its customary procedures and deliver a certificate of
disposition thereof to the Company unless by an Officers' Certificate the
Company shall direct that cancelled Securities be returned to it. If the Company
shall purchase or otherwise acquire any of the Securities, however, such
purchase or acquisition shall not operate as a payment, redemption or
satisfaction of the Indebtedness represented by such Securities unless and until
the Company, at its option, shall deliver or surrender the same to the Trustee
for cancellation.

Section 2.09. Authenticating Agents. The Trustee may from time to
time appoint one or more Authenticating Agents with respect to one or more
series of Securities, which shall be authorized to act on behalf of the Trustee
and subject to its direction in authenticating and delivering Securities of such
series pursuant hereto in connection with exchanges, registrations of transfer,
redemptions and conversions as fully to all intents and purposes as though any
such Authenticating Agent had been expressly authorized to execute and deliver
Securities of such series, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as though authenticated by the Trustee. Wherever reference is made in
this Indenture to the authentication or delivery of Securities by the Trustee or
the Trustee's certificate of authentication, such reference shall be deemed to
include authentication or 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 at all times be a
corporation (including a banking association) organized and doing business under
the laws of the United States or any State or territory thereof or of the
District of Columbia, having a combined capital and surplus of at least five
million dollars, authorized under such laws to exercise corporate trust powers
and subject to supervision or examination by federal, state, territorial, or
District of Columbia authorities. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect herein specified in this Section.

<PAGE>

Any corporation succeeding to the corporate agency business of an
Authenticating Agent shall continue to be an Authenticating Agent, if such
successor corporation is 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 or such successor corporation.

Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may, or at the request of the Company
promptly shall, appoint a successor Authenticating Agent. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an Authenticating Agent herein. No
successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.

The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.

Any Authenticating Agent by the acceptance of its appointment shall
be deemed to have agreed with the Trustee that: it will perform and carry out
the duties of an Authenticating Agent as herein set forth, including among other
things the duties to authenticate and deliver Securities of any series for which
it has been appointed an Authenticating Agent it will furnish from time to time
as requested by the Trustee appropriate records of all transactions carried out
by it as Authenticating Agent and will furnish the Trustee such other
information and reports as the Trustee may reasonably require; it is eligible
for appointment as Authenticating Agent under this Section and will notify the
Trustee promptly if it shall cease to be so qualified; and it will indemnify the
Trustee against any loss, liability or expense incurred by the Trustee and will
defend any claim asserted against the Trustee by reason of any acts or failures
to act of the Authenticating Agent but it shall have no liability for any action
taken by it at the specific written direction of the Trustee.

Section 2.10. Deferrals of Interest Payment Dates. If specified as
contemplated by Section 2.01 or Section 2.02 with respect to the Securities of a
particular series, so long as no Event of Default has occurred and is
continuing, the Company shall have the right, at any time during the term of
such series, from time to time to defer the payment of interest on such
Securities for such period or periods as may be specified as contemplated by
Section 2.01 (each, an "Extension Period") during which Extension Periods the
Company shall have the right to make partial payments of interest on any
Interest Payment Date. No Extension Period shall end on a date other than an
interest payment date. At the end of any such Extension Period the Company shall
pay all interest then accrued and unpaid on the Securities (together with
Additional Sums, Additional Interest, Compounded Interest and Special Interest
thereon, if any, at the rate specified for the Securities of such series to the
extent permitted by applicable law); provided, however, that no Extension Period
shall extend beyond the Stated Maturity of the principal of the Securities of
such series; provided, further, that during any such Extension Period, the
Company shall not, and shall not permit any Subsidiary of the Company to, (i)
declare or pay any dividends or distributions on, or redeem, purchase, acquire
or make a liquidation payment with respect to, any of the Company's capital
stock (which includes common and preferred stock), or (ii) make any payment of
principal of or interest or premium, if any, on or repay, repurchase or redeem
any debt securities of the Company that rank pari passu with or junior in
interest to the Securities of such series or

<PAGE>

make any guarantee payments with respect to any Bear Stearns Guarantee or other
guarantee by the Company of the debt securities of any Subsidiary of the Company
that by their terms rank pari passu or junior in interest to the Securities of
such series (other than (a) dividends or distributions in capital stock; (b) any
declaration of a dividend in connection with the implementation of a Rights
Plan, the issuance of any common stock of any class or series of preferred stock
of the Company under any Rights Plan or the redemption or repurchase of any
rights distributed pursuant to a Rights Plan; (c) payments under any Bear
Stearns Guarantee; (d) purchases of common stock related to the issuance of
common stock or rights under any of the Company's benefit plans for its
directors, officers or employees; and (e) payments of interest pursuant to the
EPICS Loan Agreement). Prior to the termination of any such Extension Period,
the Company may further extend the interest payment period, provided that no
Extension Period shall exceed the period or periods specified in such Securities
or extend beyond the Stated Maturity of the principal of such Securities. Upon
termination of any Extension Period and upon the payment of all accrued and
unpaid interest and any Additional Sums, Additional Interest, Compounded
Interest and Special Interest then due on any interest payment date, the Company
may elect to begin a new Extension Period, subject to the above requirements. No
interest shall be due and payable during an Extension Period, except at the end
thereof. The Company shall give the holders of the Securities of such series and
the Trustee notice of its election to begin or extend any such Extension Period
at least five Business Days prior to the next succeeding interest payment date
on which interest on Securities of such series would be payable but for such
deferral or, with respect to the Securities of a series issued to a Bear Stearns
Trust so long as such Securities are held by such Bear Stearns Trust prior to
the earlier of (i) the next succeeding date on which Distributions on the
Capital Securities of such Bear Stearns Trust would be payable but for such
deferral, or (ii) the date the Property Trustee of such Bear Stearns Trust is
required to give notice to any securities exchange or other applicable
self-regulatory organization or to holders of such Capital Securities of the
record date or the date such Distributions are payable, but in any event not
less than five Business Days prior to such record date.

The Trustee shall promptly give notice of the Company's election to
begin any such Extension Period to the holders of the outstanding Securities of
such series.

Section 2.11. Right of Set-Off. With respect to the Securities of a
series issued to a Bear Stearns Trust notwithstanding anything to the contrary
in the Indenture, the Company shall have the right to set-off any payment it is
otherwise required to make thereunder in respect of any such Security to the
extent the Company has theretofore made, or is concurrently on the date of such
payment making, a payment under the Bear Stearns Guarantee relating to such
Security or under Section 6.05 of the Indenture.

Section 2.12. Shortening or Extension of Stated Maturity. If
specified as contemplated by Section 2.01 or Section 2.02 with respect to the
Securities of a particular series, the Company shall have the right to (i)
shorten the Stated Maturity of the principal of the Securities of such series at
any time to any date not earlier than the first date on which the Company has
the right to redeem the Securities of such Series, and (ii) extend the Stated
Maturity of the principal of the Securities of such series at any time at its
election for one or more periods, but in no event to a date later than the 49th
anniversary of the first interest payment date following the Original Issue Date
of the Securities of such series; provided that, if the Company elects to
exercise its right to extend the Stated Maturity of the principal of the
Securities of such series pursuant to this clause (ii), at the time such
election is made and at the time of extension (A) the Company is not in
bankruptcy, otherwise insolvent or in liquidation, (B) the Company is not in
default in the payment of any interest or principal on such Securities, (C) in
the case of any series of Securities issued to a Bear Stearns Trust such Bear
Stearns Trust is not in arrears on

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<PAGE>

payments of Distributions on the Capital Securities issued by such Bear Stearns
Trust and no deferred Distributions are accumulated, and (D) such Securities are
rated not less than BBB- by Standard & Poor's Ratings Services or Baa3 by
Moody's Investors Service, Inc. or the equivalent by any other nationally
recognized statistical rating organization. In the event the Company elects to
shorten or extend the Stated Maturity of the Securities, it shall give notice to
the Trustee, and the Trustee shall give notice of such shortening or extension
to the holders no less than 30 and no more than 60 days prior to the
effectiveness thereof.

Section 2.13. Agreed Tax Treatment. Each Security issued hereunder
shall provide that the Company and, by its acceptance of a Security or a
beneficial interest therein, the holder of, and any Person that acquires a
beneficial interest in, such Security agree that for United States federal,
state and local tax purposes it is intended that such Security constitute
indebtedness.

ARTICLE III

REDEMPTION OF SECURITIES

Section 3.01. Applicability of Article. Securities of any series
which are redeemable prior to Stated Maturity shall be redeemable in accordance
with their terms and (except as otherwise specified as contemplated by Section
2.01 for Securities of any series) in accordance with this Article.

Section 3.02. Mailing of notice of redemption. In case the Company
shall desire to exercise any right to redeem all or, as the case may be, any
part of the Securities of any series pursuant to this Indenture, it shall give
notice of such redemption to holders of the Securities to be redeemed as
hereinafter in this Section provided.

The Company covenants that it will pay to the Trustee or one or more
paying agents, on or before the Business Day next preceding the date fixed for
each redemption of Securities, a sum in cash sufficient to redeem on the
redemption date all the Securities so called for redemption at the applicable
redemption price, together with any accrued interest on the Securities to be
redeemed to the date fixed for redemption.

Notice of redemption shall be given to the holders of Securities to
be redeemed as a whole or in part by mailing by first class mail, postage
prepaid, a notice of such redemption not less than 30 nor more than 60 days
prior to the date fixed for redemption to their last addresses as they shall
appear upon the Register, but failure to give such notice by mailing in the
manner herein provided to the holder of any Security designated for redemption
as a whole or in part, or any defect therein, shall not affect the validity of
the proceedings for the redemption of any other Security.

Any notice which is mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the holder
receives the notice.

Each such notice of redemption shall specify the date fixed for
redemption and the redemption price at which Securities are to be redeemed or if
the redemption price cannot be calculated prior to the time the notice is
required to be given, the manner of calculation thereof, and shall state that
payment of the redemption price of the Securities or portions thereof to be
redeemed will be made at any of the offices or agencies to be maintained by the
Company in accordance with the provisions of Section

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<PAGE>

4.02 with respect to the Securities to be redeemed, upon presentation and
surrender of such Securities or portions thereof, and that, if applicable,
interest accrued to the date fixed for redemption will be paid as specified in
said notice and on and after said date interest thereon will cease to accrue and
shall also specify, if applicable, the conversion price and the date on which
the right to convert the Securities will expire and that holders must comply
with Article XV hereof in order to convert their Securities. If less than all
the Securities of any series are to be redeemed, the notice of redemption to
each holder shall specify such holder's Securities of such series to be redeemed
as a whole or in part. In case any Security is to be redeemed in part only, the
notice which relates to such Security shall state the portion of the principal
amount thereof to be redeemed (which shall be equal to the minimum authorized
denomination for Securities of such series or any whole multiple thereof), and
shall state that on and after the redemption date, upon surrender of such
Security, the holder will receive the redemption price in respect to the
principal amount thereof called for redemption and, without charge, a new
Security or Securities of the same series of authorized denominations for the
principal amount thereof remaining unredeemed.

In the case of any redemption at the election of the Company, the
Company shall, at least 60 days prior to the date fixed for redemption (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
redemption date, the basis for such redemption and of the principal amount of
Securities of the applicable series to be redeemed. In the case of any
redemption of Securities prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or that is subject to
compliance with conditions provided in the terms of such Securities, the Company
shall furnish the Trustee with an Officers' Certificate evidencing compliance
with such restriction or conditions.

If less than all the Securities of any series are to be redeemed,
the Company shall give the Trustee, at least 60 days in advance of the date
fixed for redemption, notice of the aggregate principal amount of Securities of
such series to be redeemed, and thereupon the Trustee shall select, pro rata, by
lot, or in any manner it shall deem fair, the Securities of such series to be
redeemed as a whole or in part and shall thereafter promptly notify the Company
in writing of the particular Securities of such series or portions thereof to be
redeemed. If the Securities of any series to be redeemed consist of Securities
having different dates on which the principal or any installment of principal is
payable or different rates of interest, if any, or different methods by which
interest may be determined or have any other different tenor or terms, then the
Company may, by written notice to the Trustee, direct that Securities of such
series to be redeemed shall be selected from among groups of such Securities
having specified term or terms and the Trustee shall thereafter select the
particular Securities to be redeemed in the manner set forth in the preceding
sentence from among the group of such Securities so specified.

Section 3.03. When Securities called for redemption become due and
payable. If the giving of notice of redemption shall have been completed as
above provided, the Securities or portions of Securities specified in such
notice shall become due and payable on the date and at the place or places
stated in such notice at the applicable redemption price, together, if
applicable, with any interest accrued (including any Additional Sums, Additional
Interest, Compounded Interest or Special Interest) to the date fixed for
redemption, and on and after such date fixed for redemption (unless the Company
shall default in the payment of such Securities at the applicable redemption
price, together with any interest accrued to the date fixed for redemption) any
interest on the Securities or portions of Securities so called for redemption
shall cease to accrue, and, except as provided in Sections 7.05 and 12.04, such
Securities shall cease from and after the date fixed for redemption to be
entitled to any benefit or security under this Indenture, and the holders
thereof shall have no right in respect of such Securities except the right to
receive the redemption price thereof and any unpaid interest accrued to the date
fixed for redemption.

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<PAGE>

On presentation and surrender of such Securities at said place of payment in
said notice specified, the said Securities or portions thereof shall be paid and
redeemed by the Company at the applicable redemption price, together with any
interest accrued to the date fixed for redemption; provided, however, that,
except as otherwise specified as contemplated by Section 2.01, any regular
payment of interest becoming due on the date fixed for redemption shall be
payable to the holders of the Securities registered as such on the relevant
record date as provided in Article II hereof. Upon presentation of any Security
which is redeemed in part only, the Company shall execute and the Trustee shall
authenticate and deliver at the expense of the Company a new Security of the
same series of like tenor and terms of authorized denomination in principal
amount equal to the unredeemed portion of the Security so presented; except that
if a global Security is so surrendered, the Company shall execute, and the
Trustee shall authenticate and deliver to the Depositary for such global
Security, without service charge, a global Security in a denomination equal to
and in exchange for the unredeemed portion of the principal of the global
Security so surrendered.

If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid, bear interest
from the date fixed for redemption at the rate borne by or prescribed therefor
in the Security, or, in the case of a Security which does not bear interest, at
the rate of interest set forth therefor in the Security to the extent permitted
by law.

Section 3.04. Right of redemption of Securities initially issued to
a Bear Stearns Trust. In the case of the Securities of a series initially issued
to Bear Stearns Trust, except as otherwise specified as contemplated by Section
2.01, the Company, at its option, may redeem such Securities on or after the
date five years after the Original Issue Date of such Securities, in whole at
any time or in part from time to time at a redemption price equal to 100% of the
principal amount thereof together with any unpaid interest accrued, (including
any Additional Sums, Additional Interest, Compounded Interest or Special
Interest) to the date fixed for redemption.

ARTICLE IV

PARTICULAR COVENANTS OF THE COMPANY

The Company covenants as follows:

Section 4.01. Payment of principal of and interest on Securities.
The Company will duly and punctually pay or cause to be paid the principal of
and interest, if any, on each of the Securities at the time and places and in
the manner provided herein and in the Securities. Except as otherwise specified
as contemplated by Section 2.01, if the Securities of any series bear interest,
each installment of interest on the Securities of such series may at the option
of the Company be paid (i) by mailing a check or checks for such interest
payable to the person entitled thereto pursuant to Section 2.03 to the address
of such person as it appears on the Register of the Securities of such series or
(ii) by transfer to an account maintained by the Person entitled thereto as
specified in the Register of Securities, provided that proper transfer
instructions have been received by the record date.

Section 4.02. Maintenance of offices or agencies for registration of
transfer, exchange and payment of Securities. So long as any of the Securities
shall remain outstanding, the Company will maintain an office or agency in the
City of New York, State of New York, where the Securities may be presented for
registration, conversion, exchange and registration of transfer as in this
Indenture provided,

25
<PAGE>

and where notices and demands to or upon the Company in respect of the
Securities or of this Indenture may be served, and where the Securities may be
presented for payment. In case the Company shall designate and maintain some
office or agency other than the previously designated office or agency, it shall
give the Trustee prompt written notice thereof. In case the Company shall fail
to maintain any such office or agency or shall fail to give such notice of the
location or of any change in the location thereof to the Trustee, presentations
and demands may be made and notices may be served at the principal office of the
Trustee.

In addition to such office or agency, the Company may from time to
time constitute and appoint one or more other offices or agencies for such
purposes with respect to Securities of any series, and one or more paying agents
for the payment of Securities of any series, in such cities or in one or more
other cities, and may from time to time rescind such appointments, as the
Company may deem desirable or expedient, and as to which the Company has
notified the Trustee; provided, however, that no such appointment or rescission
shall in any manner relieve the Company of its obligation to maintain such
office or agency in the Borough of Manhattan, City of New York, where Securities
of such series may be presented for payment.

Section 4.03. Appointment to fill a vacancy in the office of
Trustee. The Company, whenever necessary to avoid or fill a vacancy in the
office of Trustee, will appoint, in the manner provided in Section 7.10, a
Trustee, so that there shall at all times be a Trustee with respect to each
series of Securities hereunder.

Section 4.04. Duties of Paying Agent. (a) If the Company shall
appoint a Paying Agent other than the Trustee with respect to Securities of any
series, it will cause such Paying Agent to execute and deliver to the Trustee an
instrument in which such agent shall agree with the Trustee, subject to the
provisions of this Section and Section 12.03,

(1) That it will hold all sums held by it as such agent for the
payment of the principal of or interest, if any, on the Securities of such
series (whether such sums have been paid to it by the Company or by any
other obligor on the Securities of such series) in trust for the benefit
of the holders of the Securities entitled to such principal or interest
and will notify the Trustee of the receipt of sums to be so held,

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

(3) That it will at any time during the continuance of any Event of
Default, upon the written request of the Trustee, deliver to the Trustee
all sums so held in trust by it.

(b) Whenever the Company shall have one or more Paying Agents with
respect to the Securities of any series, it will, prior to each due date of the
principal of or any interest on a Security of such series, deposit with a Paying
Agent of such series a sum sufficient to pay the principal or interest so
becoming due, such sum to be held in trust for the benefit of the holders of
Securities entitled to such principal or interest, and (unless such Paying Agent
is the Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.

<PAGE>

(c) If the Company shall act as its own Paying Agent with respect to
the Securities of any series, it will, on or before each due date of the
principal of or any interest on a Security of such series, set aside, segregate
and hold in trust for the benefit of the holder of such Security, a sum
sufficient to pay such principal or interest so becoming due and will notify the
Trustee of such action, or any failure by it or any other obligor on the
Securities of such series to take such action and will at any time during the
continuance of any Event of Default, upon the written request of the Trustee,
deliver to the Trustee all sums so held in trust by it.

(d) Anything in this Section to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtain a satisfaction and discharge
of this Indenture with respect to one or more or all series of Securities
hereunder, or for any other reason, pay or cause to be paid to the Trustee all
sums held in trust for such series by it, or any Paying Agent hereunder, as
required by this Section, such sums are to be held by the Trustee upon the trust
herein contained.

(e) Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Sections 12.03 and 12.04.

Section 4.05. Further assurances. From time to time whenever
reasonably demanded by the Trustee, the Company will make, execute and deliver
or cause to be made, executed and delivered any and all such further and other
instruments and assurances and take all such further action as may be reasonably
necessary or proper to carry out the intention of or to facilitate the
performance of the terms of this Indenture or to secure the rights and remedies
hereunder of the holders of the Securities of any series.

Section 4.06. Officers' Certificate as to defaults; notices of
certain defaults. The Company will, so long as any of the Securities are
outstanding, deliver to the Trustee on or before September 15 of each year,
beginning with the year 1997, a certificate signed by the Company's principal
executive officer, principal financial officer or principal accounting officer
stating that a review has been made under his or her supervision of the
activities of the Company during such year and of the performance under this
Indenture and, to the best of his or her knowledge, the Company has complied
with all conditions and covenants under this Indenture throughout such year, or
if there has been a default in the fulfillment of any such obligation,
specifying each such default known and the nature and status thereof. For
purposes of this Section, such compliance shall be determined without regard to
any period of grace or requirement of notice provided under this Indenture.

Section 4.07. Waiver of covenants. The Company may omit in any
particular instance to comply with any covenant or condition specifically
contained in this Indenture for the benefit of one or more series of Securities,
if before the time for such compliance the holders of a majority in principal
amount of the Securities of all series affected (all series voting as one class)
at the time outstanding (determined as provided in Section 8.04) shall waive
such compliance in such instance, but no such waiver shall extend to or affect
such covenant 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 covenant or condition shall remain
in full force and effect.

Section 4.08. Additional Sums. In the case of the Securities of a
series issued to a Bear Stearns Trust, so long as no Event of Default has
occurred and is continuing and except as otherwise specified as contemplated by
Section 2.01 or Section 2.02, in the event that (i) a Bear Stearns Trust is the
holder of all of the Outstanding Securities of such series, (ii) a Tax Event in
respect of such Bear Stearns

27
<PAGE>

Trust shall have occurred and be continuing and (iii) the Company shall not have
(a) redeemed the Securities of such series or (b) terminated such Bear Stearns
Trust pursuant to the termination provisions of the related Trust Agreement, the
Company shall pay to such Trust (and its permitted successors or assign under
the related Trust Agreement) for so long as such Bear Stearns Trust (or its
permitted successor or assignee) is the registered holder of any Securities of
such series, such additional amounts as may be necessary in order that the
amount of Distributions (including any Additional Amounts (as defined in the
Trust Agreement)), then due and payable by such Bear Stearns Trust on the
related Capital Securities and Common Securities that at any time remain
outstanding in accordance with the terms thereof shall not be reduced as a
result of any additional taxes (the "Additional Sums"). Whenever in this
Indenture or the Securities there is a reference in any context to the payment
of principal of or interest on the Securities, such mention shall be deemed to
include mention of the payments of the Additional Sums provided for in this
paragraph to the extent that, in such context, Additional Sums are, were or
would be payable in respect thereof pursuant to the provisions of this paragraph
and express mention of the payment of Additional Sums (if applicable) in any
provisions hereof shall not be construed as excluding Additional Sums in those
provisions hereof where such express mention is not made, provided, however,
that the deferral of the payment of interest pursuant to Section 2.10 or the
Securities shall not defer the payment of any Additional Sums that may be due
and payable.

Section 4.09. Additional Covenants. The Company covenants and agrees
with each holder of Securities of a series issued to a Bear Stearns Trust that
it will not, and it will not permit any Subsidiary of the Company to, (a)
declare or pay any dividends or distributions on, or redeem purchase, acquire or
make a liquidation payment with respect to, any shares of the Company's capital
stock (which includes common and preferred stock), or (b) make any payment of
principal, interest or premium, if any, on or repay, repurchase or redeem any
debt securities of the Company that rank pari passu with or junior to the
Securities of such series or make any guarantee payments with respect to any
guarantee by the Company of debt securities of any subsidiary of the Company if
such guarantee ranks pari passu with or junior in interest to the Securities
(other than (a) dividends or distributions in common stock of the Company, (b)
any declaration of a dividend in connection with the implementation of a Rights
Plan or the issuance of stock under any such plan, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under any Bear
Stearns Guarantee and (d) purchases of common stock related to the issuance of
common stock under any of the Company's benefit plans for its directors,
officers or employees) if at such time (i) there shall have occurred any event
of which the Company has actual knowledge that (a) with the giving of notice or
the lapse of time or both, would constitute an Event of Default hereunder and
(b) in respect of which the Company shall not have taken reasonable steps to
cure, (ii) the Company shall be in default with respect to its payment of any
obligations under the related Bear Stearns Guarantee or (iii) the Company shall
have given notice of its election to begin an Extension Period as provided
herein and shall not have rescinded such notice, or such period, or any
extension thereof, shall be continuing.

The Company also covenants with each holder of Securities of a
series issued to Bear Stearns Trust (i) to maintain directly or indirectly 100%
ownership of the Common Securities of such Bear Stearns Trust; provided,
however, that any permitted successor of the Company hereunder may succeed to
the Company's ownership of such Common Securities, (ii) not to voluntarily
terminate, wind up or liquidate such Bear Stearns Trust, except (a) in
connection with a distribution of the Securities of such series to the holders
of Capital Securities in liquidation of such Bear Stearns Trust or (b) in
connection with certain mergers, consolidations or amalgamations permitted by
the related Trust Agreement and (iii) to use its reasonable efforts, consistent
with the terms and provisions of such Trust

28
<PAGE>

Agreement, to cause such Trust to remain classified as a grantor trust and not
an association taxable as a corporation for United States federal income tax
purposes.

The Company also covenants and agrees with each holder of Securities
of a series issued to a Bear Stearns Trust that it will pay all debts and other
obligations (other than with respect to the Capital Securities) and all costs
and expenses of the Bear Stearns Trust (including costs and expenses relating to
the organization of the Bear Stearns Trust, the fees and expenses of the
trustees of such Bear Stearns Trust and the costs and expenses relating to the
operation of the Bear Stearns Trust) and the offering of the Capital Securities
and to pay any and all taxes and all costs and expenses with respect to the
foregoing (other than United States withholding taxes) to which the Bear Stearns
Trust might become subject. The foregoing obligations of the Company are for the
benefit of, and shall be enforceable by, any person to whom any such debts,
obligations, costs, expenses and taxes are owed (a "Creditor") whether or not
such Creditor has received notice thereof. Any such Creditor may enforce such
obligations of the Company directly against the Company and the Company has
irrevocably waived any right or remedy to require that any such Creditor take
any action against the Bear Stearns Trust or any other person before proceeding
against the Company.

ARTICLE V

SECURITYHOLDERS LISTS AND REPORTS BY THE COMPANY
AND THE TRUSTEE

Section 5.01. Company to furnish Trustee information as to the names
and addresses of Securityholders. The Company covenants and agrees that it will
furnish or cause to be furnished to the Trustee, semiannually not more than 5
days after January 1 and July 1 of each year beginning with July 1997, and at
such other times as the Trustee may request in writing within 30 days after
receipt by the Company of any such request, a list in such form as the Trustee
may reasonably require containing all information in the possession or control
of the Company, or any Paying Agent or any registrar of the Securities of such
series, other than the Trustee, as to the names and addresses of the holders of
Securities of such series obtained (in the case of each list other than the
first list) since the date as of which the next previous list was furnished;
provided, however, that if the Trustee shall be the registrar of the Securities
of such series, no such list need be furnished. Any such list may be dated as of
a date not more than fifteen days prior to the time such information is
furnished or caused to be furnished, and need not include information received
after such date.

Section 5.02. Trustee to preserve information as to the names and
addresses of Securityholders received by it. (a) The Trustee shall preserve, in
as current a form as is reasonably practicable, all information as to the names
and addresses of the holders of Securities of each series (1) contained in the
most recent list furnished to it as provided in Section 5.01 and (2) received by
it in the capacity of Paying Agent or registrar (if so acting). The Trustee may
destroy any list furnished to it as provided in Section 5.01 upon receipt of a
new list so furnished.

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

29
<PAGE>

and is accompanied by a copy of the form of proxy or other communication which
such applicants propose to transmit, then the Trustee shall, within five
Business Days after the receipt of such application, at its election, either

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

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

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

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

(d) If there shall be different Trustees acting hereunder with
respect to separate series of Securities, applicants shall make separate
applications hereunder to each such Trustee, and such Trustees shall
collaborate, if necessary, in acting under this Section.

Section 5.03. Annual and other reports to be filed by Company With
Trustee. (a) The Company covenants and agrees to file with the Trustee within
fifteen days after the Company is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission may from
time to

30
<PAGE>

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

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

(c) The Company covenants and agrees to transmit to the holders of
Securities within 30 days after the filing thereof with the Trustee, in the
manner and to the extent provided in subsection (c) of Section 5.04 with respect
to reports pursuant to subsection (a) of said Section 5.04, such summaries of
any information, documents and reports required to be filed by the Company
pursuant to subsections (a) and (b) of this Section as may be required by rules
and regulations prescribed from time to time by the Commission.

Section 5.04. Trustee to transmit annual report to Securityholders.
(a) On or before January 15, 1998, and on or before January 15 in every year
thereafter, if and so long as any Securities are outstanding hereunder, the
Trustee shall transmit to the Securityholders as hereinafter in this Section
provided, a brief report dated as of the preceding November 15 with respect to
any of the following events which may have occurred within the previous twelve
(12) months (but if no such event has occurred within such period no report need
be transmitted):

(1) Any change to its eligibility under Section 7.09, and its
qualifications under Section 7.08;

(2) The creation of or any material change to a relationship which,
with the occurrence of an Event of Default, would create a conflicting
interest within the meaning of the Trust Indenture Act;

(3) The character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof) made
by the Trustee (as such) which remain unpaid on the date of such report,
and for the reimbursement of which it claims or may claim a lien or
charge, prior to that of the Securities of any series, on any property or
funds held or collected by it as Trustee, except that the Trustee shall
not be required (but may elect) to state such advances if such advances so
remaining unpaid aggregate not more than one-half of one percent of the
principal amount of the Securities of such series outstanding on the date
of such report;

(4) Any change to the amount, interest rate, and maturity date of
all other indebtedness owing by the Company (or by any other obligor on
the Securities) to the Trustee in its individual capacity, on the date of
such report, with a brief description of any property held as collateral

<PAGE>

security therefor, except indebtedness based upon a creditor relationship
arising in any manner described in paragraph (2), (3), (4), or (6) of
subsection (b) of Section 7.13;

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

(6) Any additional issue of Securities which the Trustee has not
previously reported; and

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

(b) The Trustee shall transmit to the Securityholders, as
hereinafter provided, a brief report with respect to the character and amount of
any advances (and if the Trustee elects so to state, the circumstances
surrounding the making thereof) made by the Trustee (as such) since the date of
the last report transmitted pursuant to the provisions of subsection (a) of this
Section (or if such report has not yet been so transmitted, since the date of
execution of this Indenture), for the reimbursement of which it claims or may
claim a lien or charge prior to that of the Securities of any series on property
or funds held or collected by it as Trustee, and which it has not previously
reported pursuant to this subsection, except that the Trustee shall not be
required (but may elect) to report such advances if such advances remaining
unpaid at any time aggregate ten percent or less of the principal amount of
Securities of such series outstanding at such time, such report to be
transmitted within 90 days after such time.

(c) Reports pursuant to this Section shall be transmitted by mail to
all holders of Securities of any series, as the names and addresses of such
holders shall appear upon the Register of the Securities of such series.

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

ARTICLE VI

REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT

Section 6.01. Events of Default defined. The term "Event of Default"
whenever used herein with respect to Securities of any series shall mean any one
of the following events:

(a) Default in the payment of any installment of interest upon any
of the Securities of such series as and when the same shall become due and
payable, and continuance of such default for a period of 30 days (subject to the
deferral of any due date in the case of an Extension Period); or

<PAGE>

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

(c) Failure on the part of the Company duly to observe or perform in
any material respect any other of the covenants or agreements on the part of the
Company in the Securities or in this Indenture (including any supplemental
indenture or pursuant to any Officers' Certificate as contemplated by Section
2.01) specifically contained for the benefit of the Securities of such series,
for a period of 90 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 not less than 25% in principal amount of the Securities of such
series and all other series so benefited (all series voting as one class) at the
time outstanding under this Indenture a written notice specifying such failure
and stating that such is a "Notice of Default" hereunder; or

(d) The commencement by the Company of a voluntary case under
Chapter 7 or Chapter 11 of the federal Bankruptcy Code or any other similar
state or federal law now or hereafter in effect, or the consent by the Company
to the entry of a decree or order for relief in an involuntary case under any
such law, or the consent by the Company to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator
(or similar official) of the Company or of any substantial part of its property,
or the making by the Company of any general assignment for the benefit of
creditors, or the failure by the Company generally to pay its debts as they
become due; or

(e) The entry of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Company in an involuntary case
under Chapter 7 or Chapter 11 of the federal Bankruptcy Code or any other
similar state or federal law now or hereafter in effect, or the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of the Company or for any substantial part of its property, or the
ordering of a winding-up or liquidation of its affairs, and the continuance of
any such decree or order unstayed and in effect for a period of 90 days.

If an Event of Default under clauses (a), (b) or (c) above shall
have occurred and be continuing (but, in the case of clause (c), only if the
Event of Default is with respect to less than all series of Securities then
outstanding under this Indenture), unless the principal of all the Securities
shall have already become due and payable, either the Trustee or the holders of
not less than 25% in principal amount of all the then outstanding Securities of
the series as to which such Event of Default under clauses (a), (b) or (c) above
has occurred (each such series voting as a separate class in the case of an
Event of Default under clauses (a) or (b), and all such series voting as one
class in the case of an Event of Default under clause (c)), by notice in writing
to the Company (and to the Trustee if given by Securityholders) may declare the
principal amount (or if Securities of any series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of such series) of all the Securities of such series, or of all such
series in the case of an Event of Default under clause (c) above, in each case
together with any accrued interest, to be due and payable immediately, and upon
any such declaration the same shall become and shall be immediately due and
payable; provided, however, that in the case of the Securities of a series
issued to a Bear Stearns Trust, if upon an Event of Default, the Trustee or the
holders of at least 25% in principal amount of the outstanding Securities of
that series fail to declare the principal of all the Securities of that series
to be immediately due and payable, the holders of at least 25% in aggregate
liquidation amount of the corresponding series of Capital Securities then
outstanding shall have such right by a notice in writing to the Company and the
Trustee. If an Event of Default under clauses (c), (d) or (e) above shall have
occurred and be continuing

<PAGE>

(but, in the case of clause (c), only if the Event of Default is with respect to
all Securities then outstanding under the Indenture), then and in each and every
such case, unless the principal of all the Securities shall have already become
due and payable, either the Trustee or the holders of not less than 25% in
principal amount of all the then outstanding Securities of each series as to
which such Event of Default under clauses (c), (d) or (e) above has occurred
(voting as one class), by notice in writing to the Company (and to the Trustee
if given by Securityholders) may declare the principal amount (or if Securities
of any series arc Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of such series) of all the
Securities as to which the Event of Default under clauses (c), (d) or (e) above
has occurred, together with any accrued interest, to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, anything contained in this Indenture or in the
Securities to the contrary notwithstanding; provided, however, that in the case
of the Securities of a series issued to a Bear Stearns Trust, if upon an Event
of Default, the Trustee or the holders of not less than 25% in principal amount
of the outstanding Securities of that series fail to declare the principal of
all the Securities of that series to be immediately due and payable, the holders
of at least 25% in aggregate liquidation amount of the corresponding series of
Capital Securities then outstanding shall have such right by a notice in writing
to the Company and the Trustee. The foregoing provisions, however, are subject
to the condition that if at any time after the principal amount (or specified
portion thereof) of the Securities of any one or more series (or of all the
Securities, as the case may be) shall have been so declared due and payable, and
before any judgment or decree for the payment of moneys due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest upon all the Securities of such series (or upon all the Securities, as
the case may be) and the principal of any and all Securities of such series (or
of any and all the Securities, as the case may be) which shall have become due
otherwise than by declaration (with interest on overdue installments of interest
to the extent permitted by law and on such principal at the rate or rates of
interest borne by, or prescribed therefor in, the Securities of each such series
to the date of such payment or deposit) and the amounts payable to the Trustee
under Section 7.06, and any and all defaults under the Indenture with respect to
Securities of such series (or all Securities, as the case may be), other than
the nonpayment of principal of and any accrued interest on Securities of such
series (or any Securities, as the case may be) which shall have become due by
declaration, shall have been cured, remedied or waived as provided in Section
6.06, then and in every such case the holders of a majority in principal amount
of the Securities of such series (or of all the Securities, as the case may be)
then outstanding and as to which such Event of Default has occurred (such series
or all series voting as one class, if more than one series are so entitled) by
written notice to the Company and to the Trustee, may rescind and annul such
declaration and its consequences. In the case of Securities issued to a Bear
Stearns Trust, should the holders of such Securities fail to annul such
declaration and waive such default, the holders of a majority in aggregate
liquidation preference of related Capital Securities shall have such right; but
no such rescission and annulment shall extend to or shall affect any subsequent
default, or shall impair any right consequent thereon.

In case the Trustee, any holder of Securities or any holder of
Capital Securities shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such rescission or annulment or for any other reason or shall have been
determined adversely to the Trustee, such holder of Securities or such holder of
Capital Securities then and in every such case the Company, the Trustee, the
holders of the Securities of such series (or of all the Securities, as the case
may be) and the holders of Capital Securities shall be restored respectively to
their former positions and rights hereunder, and all rights, remedies and powers
of the Company and

<PAGE>

the Trustee, the holders of the Securities of such series (or of all the
Securities, as the case may be) and the holders of Capital Securities shall
continue as though no such proceedings had been taken.

Section 6.02. Covenant of Company to pay to Trustee whole amount due
on Securities or default in payment of interest or principal. The Company
covenants that (1) in case default shall be made in the payment of any
installment of interest on any of the Securities of any series as and when the
same shall become due and payable, and such default shall have continued for a
period of 30 days (subject to the deferral of any due date in the case of an
Extension Period), or (2) in case default shall be made in the payment of all or
any part of the principal of any of the Securities of any series when the same
shall have become due and payable, whether upon maturity of the Securities of
such series or upon any redemption or upon declaration or otherwise, then, upon
demand of the Trustee, the Company will pay to the Trustee, for the benefit of
the holders of the Securities of such series, the whole amount that then shall
have become due and payable on all such Securities of such series for principal
or interest, or both, as the case may be, with interest upon the overdue
principal and installments of interest (to the extent permitted by law) at the
rate or rates of interest borne by or prescribed therefor in the Securities of
such series; and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including a reasonable
compensation to the Trustee, its agents, attorneys and counsel, and any expenses
or liabilities incurred, and all advances made, by the Trustee hereunder other
than through its negligence or bad faith.

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

The Trustee shall be entitled and empowered, either in its own name
or as trustee of an express trust, or as attorney-in-fact for the holders of the
Securities of any series, or in any one or more of such capacities (irrespective
of whether the principal of the Securities of such series shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand pursuant to the provisions of
this Section) to file and prove a claim or claims for the whole amount of
principal (or, if the Securities of such series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of such series) and interest owing and unpaid in respect of the Securities
of such series and to file such other documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for reasonable
compensation of the Trustee, its agents and counsel, and for reimbursement of
all expenses, disbursements and liabilities incurred, and all advances made, by
the Trustee, its agents and counsel, except as a result of its negligence or bad
faith) and of the holders of the Securities of such series allowed in any equity
receivership, insolvency, bankruptcy, liquidation, arrangement, readjustment,
reorganization or any other judicial proceedings relative to the Company or any
other obligor on the Securities or their creditors, or their property. The
Trustee is hereby irrevocably appointed (and the successive respective holders
of the Securities of each series by taking and holding the same shall be
conclusively deemed to have so appointed the Trustee) the true and lawful
attorney-in-fact of the respective holders of the Securities of such series,
with authority to make and file in the respective names of the holders of the
Securities of such series, or on behalf of the holders of the Securities of such
series as a class, any proof of debt, amendment of proof of debt, claim,
petition or other document in any such

<PAGE>

proceeding and to receive payment of any sums becoming distributable on account
thereof, and to execute any such other papers and documents and to do and
perform any and all such acts and things for and on behalf of such holders of
the Securities, as may be necessary or advisable in the opinion of the Trustee
in order to have the respective claims of the Trustee and of the holders of the
Securities of such series allowed in any such proceedings, and to receive
payment of or on account of such claims and to distribute the same, and any
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 to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.06; provided, however, that nothing herein shall be
deemed to authorize the Trustee to authorize or consent to or vote for or accept
or adopt on behalf of any Securityholder any plan of reorganization,
arrangement, adjustment or composition affecting the Securities of such series
or the rights of any holder thereof, or to authorize the Trustee to vote in
respect of the claim of any holder of Securities of such series in any such
proceeding.

All rights of action and of asserting claims under this Indenture,
or under any of the Securities of any series, may be enforced by the Trustee
without the possession of any of the Securities of such series, or the
production thereof on any trial or other proceeding relative thereto, and any
such suit or proceeding instituted by the Trustee, shall be brought in its own
name as trustee of an express trust, and any recovery of judgment shall be,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of such Trustee, its agents and counsel, for the
ratable benefit of the holders of the Securities of such series.

Section 6.03. Application of moneys collected by Trustee. Any moneys
collected by the Trustee pursuant to Section 6.02 shall be applied in the order
following, at the date or dates fixed by the Trustee for the distribution of
such moneys, upon presentation of the several Securities in respect of which
moneys have been collected, and stamping thereon the payment, if only partially
paid, and upon surrender thereof if fully paid:

First: To the payment of costs and expenses of collection, and of
all amounts payable to the Trustee under Section 7.06;

Second: In case the principal of the outstanding Securities in
respect of which moneys have been collected shall not have become due and
be unpaid, to the payment of any interest on such Securities, in the order
of the maturity of the installments of such interest, with interest upon
the overdue installments of interest (so far as permitted by law and to
the extent that such interest has been collected by the Trustee) at the
rate or rates of interest borne by, or prescribed therefor in, such
Securities, such payments to be made ratably to the persons entitled
thereto, without discrimination or preference;

Third: In case the principal of the outstanding Securities in
respect of which such moneys have been collected shall have become due, by
declaration or otherwise, to the payment of the whole amount then owing
and unpaid upon such Securities for principal and interest, if any, with
interest on the overdue principal and any installments of interest (so far
as permitted by law and to the extent that such interest has been
collected by the Trustee) at the rate or rates of interest borne by, or
prescribed therefor in, such Securities; and in case such moneys shall be
insufficient to pay in full the whole amount so due and unpaid upon such
Securities, then to the

<PAGE>

payment of such principal and interest, without preference or priority of
principal over interest, or of interest over principal, or of any
installment of interest over any other installment of interest, or of any
Security over any other Security, ratably to the aggregate of such
principal and accrued and unpaid interest; and

Fourth: To the payment of the remainder, if any, to the Company,
its successors or assigns, or to whomsoever may be lawfully entitled to
receive the same, or as a court of competent jurisdiction may direct.

Section 6.04. Limitation on suits by holders of Securities. No
holder of any Security of any series shall have any right by virtue or by
availing of any provision of this Indenture to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Indenture
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless such holder previously shall have given to the Trustee written
notice of default and of the continuance thereof, as hereinbefore provided, and
unless also the holders of not less than 25% in principal amount of all the
Securities at the time outstanding (considered as one class) shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding and no
direction inconsistent with such written request shall have been given to the
Trustee pursuant to Section 6.06; it being understood and intended, and being
expressly covenanted by the taker and holder of every Security with every other
taker and holder and the Trustee, that no one or more holders of Securities
shall have any right in any manner whatever by virtue or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of the
holders of any other of such Securities, or to obtain or seek to obtain priority
over or preference to any other such holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Securities. For the protection and enforcement
of the provisions of this Section, each and every Securityholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.

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

Section 6.05. On Default Trustee may take appropriate action. In
case of an Event of Default hereunder the Trustee may in its discretion proceed
to protect and enforce the rights vested in it by this Indenture by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any of such rights, either by suit in equity or by action at
law or by proceeding in bankruptcy or otherwise, whether for the specific
enforcement of any covenant or agreement contained in this Indenture or in aid
of the exercise of any power granted in this Indenture, or to enforce any other
legal or equitable right vested in the Trustee by this Indenture or by law. All
powers and remedies given by this Article to the Trustee or to the
Securityholders shall, to the extent permitted by law, be deemed cumulative and
not exclusive of any thereof or of any other powers and remedies available to
the Trustee or the holders of the Securities, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture, and no delay or omission of the

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Trustee, of any holder of any of the Securities or any holder of Capital
Securities to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power, or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and, subject to the provisions of Section 8.04, every
power and remedy given by this Article or by law to the Trustee, to the
Securityholders or the holders of Capital Securities may be exercised from time
to time, and as often as shall be deemed expedient, by the Trustee, by the
Securityholders or by the holders of Capital Securities, as the case may be.

In the case of Securities of a series issued to a Bear Stearns
Trust, any holder of the corresponding series of Capital Securities issued by
such Bear Stearns Trust shall have the right, upon the occurrence of an Event of
Default described in Section 6.01(a) or (b) above, to institute a suit directly
against the Company for enforcement of payment to such holder of principal of
(including premium, if any) and interest (including any Additional Sums,
Additional Interest, Compounded Interest and Special Interest, if any) on the
Securities having a principal amount equal to the aggregate liquidation amount
of such Capital Securities of the corresponding series held by such holder.

Section 6.06. Rights of holders of majority in principal amount of
Securities to direct Trustee and to waive default. The holders of a majority in
principal amount of the Securities of any one or more series or of all the
Securities, as the case may be (voting as one class), at the time outstanding
(determined as provided in Section 8.04) shall have the right to direct the
time, method, and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee with
respect to such one or more series; provided, however, that, subject to Section
7.01, the Trustee shall have the right to decline to follow any such direction
if the Trustee being advised by Opinion of Counsel determines that the action so
directed may not lawfully be taken, or if the Trustee in good faith shall, by a
Responsible Officer or Officers of the Trustee, determine that the proceedings
so directed would be illegal or involve it in personal liability or be unduly
prejudicial to the rights of Securityholders of such one or more series not
parties to such direction, and provided further that nothing in this Indenture
shall impair the right of the Trustee to take any action deemed proper by the
Trustee and which is not inconsistent with such direction by such
Securityholders of such one or more series. The holders of a majority in
principal amount of the Securities of all series as to which a default hereunder
has occurred (all series voting as one class) at the time outstanding
(determined as provided in Section 8.04) and, in the case of any Securities of a
series issued to a Bear Stearns Trust, the holders of a majority in aggregate
liquidation amount of the Capital Securities issued by such Bear Stearns Trust,
may waive any past default hereunder with respect to such series and its
consequences, except a default in the payment of the principal of or interest on
any of such Securities or in respect of a covenant or provision hereof which
under Article X cannot be modified or amended without the consent of the holder
of each Security so 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. Any such
waiver shall be deemed to be on behalf of the holders of all the Securities of
such series or, in the case of a waiver by holders of Capital Securities issued
by such Bear Stearns Trust, on behalf of all holders of Capital Securities
issued by such Bear Stearns Trust.

Section 6.07. Trustee to give notice of defaults known to it, but
may withhold in certain circumstances. The Trustee shall, within 90 days after
the occurrence of any default hereunder with respect to the Securities of any
series, give to the holders of the Securities of such series in the manner and
to the extent provided in subsection (c) of Section 5.04 with respect to reports
pursuant to subsection (a) of said Section 5.04, notice of such default known to
the Trustee unless such default shall

<PAGE>

have been cured, remedied or waived before the giving of such notice (the term
"default" for the purposes of this Section being hereby defined to be the events
specified in clauses (c), (d) and (e) of Section 6.01, default in the payment of
the principal of or interest on Securities of any series, and any additional
events specified in the terms of any series of Securities pursuant to Section
2.01, not including any periods of grace provided for therein, and irrespective
of the giving of written notice specified in any such terms, and irrespective of
the delivery of any Officers' Certificate provided for in any such terms);
provided, that, except in the case of default in the payment of the principal of
or interest on any of the Securities of such series, the Trustee shall be
protected in withholding such notice if and so long as the Board of Directors,
the Executive Committee, or a Trust Committee of directors and/or Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interest of the holders of the Securities of such series.

Section 6.08. Requirement of an undertaking to pay costs in certain
suits under the Indenture or against the Trustee. All parties to this Indenture
agree, and each holder of any Security by his acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the filing
by any party litigant in such suit of an undertaking to pay the costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any holder of Securities of
any series, or group of such Securityholders, holding in the aggregate more than
ten percent in principal amount of all the Securities (all series considered as
one class) outstanding; or to any suit instituted by any Securityholder for the
enforcement of the payment of the principal of or interest on any Security, on
or after the due date expressed in such Security (or in the case of any
redemption, on or after the date fixed for redemption).

ARTICLE VII

CONCERNING THE TRUSTEE

Section 7.01. Upon Event of Default occurring and continuing,
Trustee shall exercise powers vested in it, and use same degree of care and
skill in their exercise, as a prudent man would use. The Trustee, prior to the
occurrence of an Event of Default and after the curing, remedying or waiving of
all Events of Default which may have occurred, undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture. In case an
Event of Default has occurred (which has not been cured, remedied or waived) the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affair.

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

(a) Prior to the occurrence of an Event of Default and after the
curing, remedying or waiving of all Events of Default which may have occurred:

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

(2) In the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions which
by any provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture;

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

(c) The Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction of
the holders of Securities pursuant to Section 6.06 relating to the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under this
Indenture;

(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 7.01; and

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

Section 7.02. Reliance on documents, opinions, etc. Except as
otherwise provided in Section 7.01:

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

(b) Any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless other
evidence in respect thereof be herein specially prescribed); and any Resolution
of the Company may be evidenced to the Trustee by a copy thereof certified by
the Secretary or an Assistant Secretary of the Company;

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

<PAGE>

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

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

(f) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other paper or document, unless requested in writing to do so
by the holders of Securities pursuant to Section 6.06; provided, however, that
if the payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation, is
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such costs, expenses or liabilities as a condition
to so proceeding; and provided further, that nothing in this subsection (f)
shall require the Trustee to give the Securityholders any notice other than that
required by Section 6.07. The reasonable expense of every such examination shall
be paid by the Company or, if paid by the Trustee, shall be repaid by the
Company upon demand;

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

(h) The Trustee shall be under no responsibility for the approval by
it in good faith of any expert for any of the purposes expressed in this
Indenture.

Section 7.03. Trustee not liable for recitals in Indenture or in
Securities. The recitals contained herein and in the Securities (other than the
certificate of authentication on the Securities) shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities. The Trustee shall not be
accountable for the use or application by the Company of any of the Securities
or of the proceeds thereof.

Section 7.04. May own Securities. The Trustee or any agent of the
Company or of the Trustee, in its individual or any other capacity, may become
the owner or pledgee of Securities with the same rights it would have if it were
not Trustee or such agent.

Section 7.05. Moneys received by Trustee to be held in trust without
interest. Subject to the provisions of Section 12.04, all moneys received by the
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any moneys received by it hereunder.

Section 7.06. Trustee entitled to compensation, reimbursement and
indemnity. The Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled

<PAGE>

to, reasonable compensation (which shall not be limited by any provision of law
in regard to the compensation of a trustee of any express trust), and, the
Company will pay or reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
connection with the acceptance or administration of its trust under this
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel and of all persons not regularly in its
employ) except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Company also covenants to indemnify the Trustee and
its agents for, and to hold them harmless against, any loss, liability or
expense incurred without negligence or bad faith on their part and arising out
of or in connection with the acceptance or administration of this trust and
performance of their duties hereunder, including the costs and expenses
(including fees and disbursements of their counsel) of defending themselves
against any claim or liability in connection with the exercise or performance of
any of the powers or duties hereunder. The obligations of the Company under this
Section to compensate the Trustee, to pay or reimburse the Trustee for expenses,
disbursements and advances and to indemnify and hold harmless the Trustee shall
constitute additional indebtedness hereunder and shall survive the satisfaction
and discharge of this Indenture and the resignation or removal of the Trustee.
Such additional indebtedness shall be secured by a lien prior to that of the
Securities upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of or interest, if any,
on particular Securities.

Section 7.07. Right of Trustee to rely on Officers' Certificate
where no other evidence specifically prescribed. Except as otherwise provided in
Section 7.01, whenever in the administration of the provisions of this Indenture
the Trustee shall deem it necessary or desirable that a matter be proved or
established prior to taking suffering or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence or bad faith on the part of the
Trustee be deemed to be conclusively proved and established by an Officers'
Certificate delivered to the Trustee, and such Certificate, in the absence of
negligence or bad faith on the part of the Trustee, shall be full warrant to the
Trustee for any action taken, suffered or omitted by it under the provisions of
this Indenture upon the faith thereof.

Section 7.08. Disqualification; conflicting interests. If the
Trustee has or shall acquire any 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 any Trust Agreement.

Section 7.09. Requirements for eligibility of Trustee. The Trustee
hereunder shall at all times be a corporation organized and doing business under
the laws of the United States or any State or territory thereof or of the
District of Columbia authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, subject
to supervision or examination by federal, state, territorial, or District of
Columbia authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 7.10. Neither the Company, any other
obligor upon the Securities, nor any person directly or indirectly controlling,
controlled by, or under common control with the Company or any such obligor
shall serve as Trustee under this Indenture.

<PAGE>

Section 7.10. Resignation of Trustee. (a) The Trustee, or any
trustee or trustees hereafter appointed, may at any time resign with respect to
one or more or all series of Securities by giving written notice of such
resignation to the Company and by giving to the holders of Securities of the
applicable series notice thereof in the manner and to the extent provided in
subsection (c) of Section 5.04 with respect to reports pursuant to subsection
(a) of Section 5.04. Upon receiving such notice of resignation and if the
Company shall deem it appropriate evidence satisfactory to it of such mailing,
the Company shall promptly appoint a successor Trustee with respect to the
applicable series (it being understood that any successor Trustee may be
appointed with respect to the Securities of one or more or all of such series
and at any time there shall be only one Trustee with respect to the Securities
of any particular series) by written instrument, in duplicate, executed pursuant
to a Resolution of the Company, one copy of which instrument shall be delivered
to the resigning Trustee and one copy to the successor Trustee. If no successor
Trustee shall have been so appointed with respect to any series and have
accepted appointment within 30 days after the mailing of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee, or any Securityholder
who has been a bona fide holder of a Security or Securities of the applicable
series for at least six months may, subject to the provisions of Section 6.08,
on behalf of himself and all others similarly situated, petition any such court
for the appointment of a successor Trustee. Such court may thereupon after such
notice, if any, as it may deem proper and prescribe, appoint a successor
Trustee.

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

(1) The Trustee shall fail to comply with the provisions of Section
7.08 after written request therefor by the Company or by any Securityholder who
has been a bona fide holder of a Security or Securities of the applicable series
for at least six months, unless the Trustee's duty to resign is stayed as
provided in Section 310(b) of the Trust Indenture Act, or

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

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

then, in any such case, the Company may remove the Trustee with respect to the
applicable series and appoint a successor Trustee with respect to the applicable
series by written instrument, in duplicate, executed pursuant to a Resolution of
the Company, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor Trustee, or, subject to the provisions of
Section 6.08, any Securityholder who has been a bona fide holder of a Security
or Securities of the applicable series for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee with respect to the applicable series. Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, remove the Trustee and
appoint a successor Trustee.

(c) The holders of a majority in principal amount of the Securities
of any one series voting as a separate class or all series voting as one class
at the time outstanding (determined as provided in Section 8.04) may at any time
remove the Trustee with respect to the applicable series or all series, as

<PAGE>

the case may be, and appoint a successor Trustee with respect to the applicable
series or all series, as the case may be, by written instrument or instruments
signed by such holders or their attorneys-in-fact duly authorized, or by the
affidavits of the permanent chairman and secretary of a meeting of the
Securityholders evidencing the vote upon a resolution or resolutions submitted
thereto with respect to such removal and appointment (as provided in Article
IX), and by delivery thereof to the Trustee so removed, to the successor Trustee
and to the Company.

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

Section 7.11. Acceptance by successor Trustee. Any successor Trustee
with respect to all series of Securities appointed as provided in Section 7.10
shall execute, acknowledge and deliver to the Company and to its predecessor
Trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor Trustee with respect to all series
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, duties and
obligations with respect to such series of its predecessor hereunder, with like
effect as if originally named as Trustee herein; but, nevertheless, on the
written request of the Company or of the successor Trustee, the Trustee ceasing
to act shall, upon payment of any amounts then due it pursuant to the provisions
of Section 7.06, execute and deliver an instrument transferring to such
successor Trustee all the rights and powers with respect to such series of the
Trustee so ceasing to act. Upon the request of any such successor Trustee, the
Company shall execute any and all instruments in writing for more fully and
certainly vesting in and confirming to such successor Trustee all such rights
and powers. Any Trustee ceasing to act shall, nevertheless, retain a lien upon
all property or funds held or collected by such Trustee or any successor Trustee
to secure any amounts then due it pursuant to the provisions of Section 7.06.

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
such 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 such 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 such
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 such 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

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<PAGE>

retiring Trustee hereunder with respect to the Securities of such series to
which the appointment of such successor Trustee relates.

No successor Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Trustee shall be
qualified under the provisions of Section 7.08 and eligible under the provisions
of Section 7.09.

Upon acceptance of appointment by a successor Trustee as provided in
this Section, the successor Trustee shall at the expense of the Company transmit
notice of the succession of such Trustee hereunder to the holders of Securities
of any applicable series in the manner and to the extent provided in subsection
(c) of Section 5.04 with respect to reports pursuant to subsection (a) of said
Section 5.04.

Section 7.12. Successor to Trustee by merger, consolidation or
succession to business. Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation shall be qualified under the provisions of
Section 7.08 and eligible under the provisions of Section 7.09, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.

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

Section 7.13. Limitations on rights of Trustee as a creditor to
obtain payment of certain claims within three months prior to default or during
default, or to realize on property as such creditor thereafter. (a) Subject to
the provisions of subsection (b) of this Section, if the Trustee shall be or
shall become a creditor, directly or indirectly, secured or unsecured, of the
Company or of any other obligor on the Securities within three months prior to a
default, as defined in subsection (c) of this Section, or subsequent to such a
default, then, unless and until such default shall be cured, the Trustee shall
set apart and hold in a special account for the benefit of the Trustee
individually, the holders of the Securities of the one or more indenture
securities (as defined in subsection (c) of this Section):

(1) An amount equal to any and all reductions in the amount due and
owing upon any claim as such creditor in respect of principal or interest,
effected alter the beginning of such three months' period, and valid as
against the Company and its other creditors, except any such reduction
resulting from the receipt or disposition of any property described in
paragraph (2) of this subsection, or from the exercise of any right of
set-off which the Trustee could have exercised if a petition in bankruptcy
had been filed by or against the Company upon the date of such default;
and

<PAGE>

(2) All property received by the Trustee in respect of any claims as
such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such three
months' period, or an amount equal to the proceeds of any such property if
disposed of, subject, however, to the rights, if any, of the Company and
its other creditors in such property or such proceeds.

Nothing herein contained, however, shall affect the right of the
Trustee:

(A) To retain for its own account (i) payments made on account of
any such claim by any person (other than the Company) who is liable
thereon, (ii) the proceeds of the bona fide sale of any such claim by the
Trustee to a third person, and (iii) distributions made in cash,
securities, or other property in respect of claims filed against the
Company in bankruptcy or receivership or in proceedings for reorganization
pursuant to title 11 of the United States Code or applicable state laws;

(B) To realize, for its own account, upon any property held by it as
security for any such claim, if such property was so held prior to the
beginning of such three months' period;

(C) To realize, for its own account, but only to the extent of the
claim hereinafter mentioned, upon any property held by it as security for
any such claim, if such claim was created after the beginning of such
three months' period and such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee shall sustain
the burden of proving that at the time such property was so received, the
Trustee had no reasonable cause to believe that a default, as defined in
subsection (c) of this Section, would occur within three months; or

(D) To receive payment on any claim referred to in paragraph (B) or
(C) against the release of any property held as security for such claim as
provided in such paragraph (B) or (C), as the case may be, to the extent
of the fair value of such property.

For the purposes of paragraphs (B), (C), and (D), property
substituted after the beginning of such three months' period for property held
as security at the time of such substitution shall, to the extent of the fair
value of the property released, have the same status as the property released,
and to the extent that any claim referred to in any such paragraphs is created
in renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.

If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned
between the Trustee, the holders of Securities of the one or more series for
which it is acting as Trustee, and the holders of other indenture securities in
such manner that the Trustee, such Securityholders and the holders of other
indenture securities realize, as a result of payments from such special account
and payments of dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to title 11 of the
United States Code or applicable state law, the same percentage of their
respective claims, figured before crediting to the claim of the Trustee anytime
on account of the receipt by it from the Company of the funds and property in
such special account and before crediting to the respective claim's of the
Trustee, such Securityholders, and the holders of other indenture securities
dividends on claims filed against the

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Company in bankruptcy or receivership or in proceedings for reorganization
pursuant to title 11 of the United States Code or applicable state law, but
after crediting thereon receipts on account of the indebtedness represented by
their respective claims from all sources other than from such dividends and from
the funds and property so held in such special account. As used in this
paragraph, with respect to any claim, the term "dividends" shall include any
distribution with respect to such claim in bankruptcy or receivership or in
proceedings for reorganization pursuant to title 11 of the United States Code or
applicable state law, whether such distribution is made in cash, securities, or
other property, but shall not include any such distribution with respect to the
secured portion, if any, of such claim. The court in which such bankruptcy,
receivership or proceeding for reorganization is pending shall have jurisdiction
(i) to apportion among the Trustee, such Securityholders, and the holders of
other indenture securities, in accordance with the provisions of this paragraph,
the funds and property held in such special account and the proceeds thereof, or
(ii) in lieu of such apportionment, in whole or in part, to give to the
provisions of this paragraph due consideration in determining the fairness of
the distributions to be made to the Trustee, such Securityholders and the
holders of other indenture securities with respect to their respective claims,
in which event it shall not be necessary to liquidate or to appraise the value
of any securities or other property held in such special account or as security
for any such claim, or to make a specific allocation of such distributions as
between the secured and unsecured portions of such claim, or otherwise to apply
the provisions of this paragraph as a mathematical formula.

Any Trustee who has resigned or been removed after the beginning of
such three months' period shall be subject to the provisions of this subsection
(a) as though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such three months' period, it
shall be subject to the provisions of this subsection (a) if and only if the
following conditions exist:

(i) The receipt of property or reduction of claim which would have
given rise to the obligation to account, if such Trustee had continued as
trustee, occurred after the beginning of such three months' period; and

(ii) Such receipt of property or reduction of claim occurred within
three months after such resignation or removal;

(b) There shall be excluded from the operation of subsection (a) of
this Section a creditor relationship arising from:

(1) The ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;

(2) Advances authorized by a receivership or bankruptcy court of
competent jurisdiction, or by this Indenture, for the purpose of
preserving any property which shall at any time be subject to the lien of
this Indenture or of discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advances and of the circumstances
surrounding the making thereof is given to the Securityholders at the time
and in the manner provided in Section 5.04(c) with respect to reports
pursuant to subsections (a) and (b) thereof, respectively;

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(3) Disbursements made in the ordinary course of business in the
capacity of Trustee under an indenture, transfer agent, registrar,
custodian, Paying Agent, fiscal agent or depositary, or other similar
capacity;

(4) An indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in subsection (c) of this
Section;

(5) The ownership of stock or of other securities of a corporation
organized under the provisions of Section 25(a) of the Federal Reserve
Act, as amended, which is directly or indirectly a creditor of the
Company; or

(6) The acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within
the classification of self-liquidating paper as defined in subsection (c)
of this Section.

(1) The term "default" shall mean any failure to make payment in
full of the principal of or interest upon any of the Securities or upon
the other indenture securities when and as such principal or interest
becomes due and payable.

(2) The term "other indenture securities" shall mean securities upon
which the Company is an obligor (as defined in the Trust Indenture Act of
1939, as amended) outstanding under any other indenture (A) under which
the Trustee is also trustee, (B) which contains provisions substantially
similar to the provisions of subsection (a) of this Section, and (C) under
which a default exists at the time of the apportionment of the funds and
property held in said special account.

(3) The term "cash transaction" shall mean any transaction in which
full payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand.

(4) The term "self-liquidating paper" shall mean any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacture, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise, or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing,
negotiating or incurring of the draft, bill of exchange, acceptance or
obligation.

(5) The term "Company" shall mean any obligor upon the Securities.

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ARTICLE VIII

CONCERNING THE SECURITYHOLDERS

Section 8.01. Evidence of action by Securityholders. Whenever in
this Indenture it is provided that the holders of a specified percentage in
principal amount of the Securities of any or all series may take any action
(including the making of any demand or request, the giving of any notice,
consent, or waiver or the taking of any other action), the fact that at the time
of taking any such action the holders of such specified percentage have joined
therein may be evidenced (a) by any instrument or any number of instruments of
similar tenor executed by such Securityholders in person or by agent or proxy
appointed in writing, or (b) by the record of such holders of Securities voting
in favor thereof at any meeting of such Securityholders duly called and held in
accordance with the provisions of Article IX, or (c) by a combination of such
instrument or instruments and any such record of such a meeting of such
Securityholders.

If there shall be more than one Trustee acting hereunder with
respect to separate series of Securities, such Trustees shall collaborate, if
necessary, in acting under Article IX and in determining whether the holders of
a specified percentage in principal amount of the Securities of any or all
series have taken any such action.

Section 8.02. Proof of execution of instruments and of holding of
Securities. Subject to the provisions of Sections 7.01, 7.02 and 9.05, proof of
the execution of any instrument by a Securityholder or his agent or proxy and
proof of the holding by any person of any of the Securities shall be sufficient
if made in the following manner:

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

The ownership of Securities of any series shall be proved by the
Register of such Securities of such series, or by certificates of the Security
registrar or registrars thereof.

The Trustee shall not be bound to recognize any person as a
Securityholder unless and until the title to the Securities held by him is
proved in the manner in this Article VIII provided.

The record of any Securityholders' meeting shall be proved in the
manner provided in Section 9.06.

The Trustee may accept such other proof or require such additional
proof of any matter referred to in this Section as it shall deem reasonable.

Section 8.03. Who may be deemed owners of Securities. Prior to due
presentment for registration of transfer of any Security, the Company, the
Trustee and any agent of the Company or the Trustee may deem and treat the
person in whose name such Security shall be registered upon the Register of
Securities of the series of which such Security is a part as the absolute owner
of such Security (whether or not such Security shall be overdue and
notwithstanding any notation of ownership or other writing thereon) for the
purpose of receiving payment of or an account of the principal of and interest,
subject to Section 2.03, on such Security and for all other purposes; and
neither the Company nor the Trustee nor any agent of the Company or the Trustee
shall be affected by any notice to the contrary. All

<PAGE>

such payments so made to any such holder for the time being, or upon his order,
shall be valid, and, to the extent of the sum or sums so paid, effectual to
satisfy and discharge the liability for moneys payable upon any such Security.

Section 8.04. Securities owned by Company or controlled or
controlling persons disregarded for certain purposes. In determining whether the
holders of the requisite principal amount of Securities have concurred in any
demand, direction, request, notice, vote, consent, waiver or other action under
this Indenture, Securities which are owned by the Company or any other obligor
on the Securities or by any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
other obligor on the Securities shall be disregarded and deemed not to be
outstanding for the purpose of any such determination, provided that for the
purposes of determining whether the Trustee shall be protected in relying on any
such demand, direction, request, notice, vote, consent, waiver or other action,
only Securities which a Responsible Officer of the Trustee assigned to its
principal office knows are so owned shall be so disregarded. Securities so owned
which have been pledged in good faith may be regarded as outstanding for the
purposes of this Section, if the pledgee shall establish to the satisfaction of
the Trustee the pledgee's right to vote such Securities and that the pledgee is
not a person directly or indirectly controlling or controlled by or under direct
or indirect common control with the Company or any such other obligor. Upon
request of the Trustee, the Company shall furnish to the Trustee promptly an
Officers' Certificate listing and identifying all Securities, if any, known by
the Company to be owned or held by or for the account of the Company or any
other obligor on the Securities or by any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any other obligor on the Securities; and, subject to the provisions
of Section 7.01, the Trustee shall be entitled to accept such Officers'
Certificate as conclusive evidence of the facts therein set forth and of the
fact that all Securities not listed therein are outstanding for the purpose of
any such determination.

Section 8.05. Instruments executed by Securityholders bind future
holders. At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 8.01, of the taking of any action by the holders of the
percentage in principal amount of the Securities specified in this Indenture in
connection with such action, any holder of a Security which is shown by the
evidence to be included in the Securities the holders of which have consented to
such action may, by filing written notice with the Trustee at its principal
office and upon proof of holding as provided in Section 8.02, revoke such action
so far as concerns such Security. Except as aforesaid any such action taken by
the holder of any Security and any direction, demand, request, notice, waiver,
consent, vote or other action of the holder of any Security which by any
provisions of this Indenture is required or permitted to be given shall be
conclusive and binding upon such holder and upon all future holders and owners
of such Security, and of any Security issued in lieu thereof or upon
registration of transfer thereof, irrespective of whether any notation in regard
thereto is made upon such Security. Any action taken by the holders of the
percentage in principal amount of the Securities of any or all series specified
in this Indenture in connection with such action shall be conclusively binding
upon the Company, the Trustee and the holders of all of the Securities of such
series subject, however, to the provisions of Section 7.01.

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ARTICLE IX

SECURITYHOLDERS' MEETINGS

Section 9.01. Purposes for which meeting, may be called. A meeting
of holders of Securities of any or all series may be called at any time and from
time to time pursuant to the provisions of this Article for any of the following
purposes:

(1) To give any notice to the Company or to the Trustee, or to give
any directions to the Trustee, or to consent to the waiving of any default
hereunder and its consequences, or to take any other action authorized to
be taken by holders of Securities of any or all series, as the case may
be, pursuant to any of the provisions of Article VI;

(2) To remove the Trustee and appoint a successor Trustee pursuant
to the provisions of Article VII;

(3) To consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 10.02; or

(4) To take any other action authorized to be taken by or on behalf
of the holders of any specified principal amount of the Securities of any
or all series, as the case may be, under any other provision of this
Indenture or under applicable law.

Section 9.02. Manner of calling meetings. The Trustee may at any
time call a meeting of Securityholders to take any action specified in Section
9.01, to be held at such time and at such place in the Borough of Manhattan,
City of New York as the Trustee shall determine. Notice of every meeting of
Securityholders setting forth the time and place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be mailed not less
than 20 nor more than 60 days prior to the date fixed for the meeting.

Section 9.03. Call of meeting by Company or Securityholders. In case
at any time the Company, pursuant to a resolution of its Board of Directors, or
the holders of not less than ten percent in principal amount of the Securities
of any or all series, as the case may be, then outstanding, shall have requested
the Trustee to call a meeting of holders of Securities of any or all series, as
the case may be, to take any action authorized in Section 9.01 by written
request setting forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have mailed notice of such meeting within
20 days after receipt of such request, then the Company or such holders of
Securities in the amount above specified may determine the time and place in the
Borough of Manhattan, City of New York for such meeting and may call such
meeting to take any action authorized in Section 9.01, by mailing notice thereof
as provided in Section 9.02.

Section 9.04. Who may attend and vote at meetings. To be entitled to
vote at any meeting of Securityholders a person shall (a) be a holder of one or
more Securities with respect to which the meeting is being held, or (b) be a
person appointed by an instrument in writing as proxy by such holder of one or
more Securities. The only persons who shall be entitled to be present or to
speak at any meeting of Securityholders shall be the persons, entitled to vote
at such meeting and their counsel and any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.

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Section 9.05. Regulations may be made by Trustee. Notwithstanding
any other provisions of this Indenture, the Trustee may make such reasonable
regulations as it may deem advisable for any meeting of Securityholders, in
regard to proof of the holding of Securities and of the appointment of proxies,
and in regard to the appointment and duties of inspectors of votes, the
submission and examination of proxies, certificates and other evidence of the
right to vote, and such other matters concerning the conduct of the meeting as
it shall think fit. Except as otherwise permitted or required by any such
regulations, the holding of Securities shall be proved in the manner specified
in Section 8.02 and the appointment of any proxy shall be proved in the manner
specified in said Section 8.02; provided, however, that such regulations may
provide that written instruments appointing proxies regular on their face, may
be presumed valid and genuine without the proof hereinabove or in said Section
8.02 specified.

The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Securityholders as provided in Section 9.03, in which case the
Company or the Securityholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by majority vote of the meeting.

Subject to the provisions of Section 8.04, at any meeting each
Securityholder or proxy shall be entitled to one vote for each $1,000 principal
amount of Securities held or represented by him, provided, however, that no vote
shall be cast or counted at any meeting in respect of any Security challenged as
not outstanding and ruled by the chairman of the meeting to be not outstanding;
provided, however, that each holder of Original Issue Discount Securities shall
be entitled to one vote for each $1,000 amount which would be due upon
acceleration of his Original Issue Discount Security on the date of the meeting.
The chairman of the meeting shall have no right to vote other than by virtue of
Securities held by him or instruments in writing as aforesaid duly designating
him as the person to vote on behalf of other Securityholders. Any meeting of
Securityholders duly called pursuant to the provisions of Section 9.02 or 9.03
may be adjourned from time to time, and the meeting may be held so adjourned
without further notice.

At any meeting of Securityholders, the presence of persons holding
or representing Securities in principal amount sufficient to take action on the
business for the transaction of which such meeting was called shall constitute a
quorum, but, if less than a quorum is present, the persons holding or
representing a majority in principal amount of the securities represented at the
meeting may adjourn such meeting with the same effect for all intents and
purposes, as though a quorum had been present.

Section 9.06. Manner of voting at meetings and record to be kept.
The vote upon any resolution submitted to any meeting of Securityholders shall
be by written ballots on which shall be subscribed the signatures of the holders
of Securities or of their representatives by proxy and the principal amount or
principal amounts of the Securities held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record in duplicate of the
proceedings of each meeting of Securityholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was mailed as
provided in Section 9.02. The record shall show the principal amount or
principal amounts of the Securities voting in favor of or against any
resolution. The record shall be signed and verified by the affidavits of the
permanent chairman and

52
<PAGE>

secretary of the meeting and one of the duplicates shall be delivered to the
Company and the other to the Trustee to be preserved by the Trustee, the latter
to have attached thereto the ballots voted at the meeting.

Any record so signed and verified shall be conclusive evidence of
the matters therein stated.

Section 9.07. Exercise of rights of Trustee, Securityholders and
holders of Capital Securities not to be hindered or delayed. Nothing in this
Article contained shall be deemed or construed to authorize or permit, by reason
of any call of a meeting of Securityholders or any rights expressly or impliedly
conferred hereunder to make such call any hindrance or delay in the exercise of
any right or rights conferred upon or reserved to the Trustee, to the
Securityholders or the holders of Capital Securities under any of the provisions
of this Indenture or of the Securities.

ARTICLE X

SUPPLEMENTAL INDENTURES

Section 10.01. Purposes for which supplemental indentures may be
entered into without consent of Securityholders. The Company, when authorized by
a Resolution of the Company, and the Trustee may from time to time and at any
time enter into an indenture or indentures supplemental hereto, in form
satisfactory to such Trustee (which shall comply with the provisions of the
Trust Indenture Act of 1939 as then in effect), for one or more of the following
purposes:

(a) To evidence the succession of another corporation to the
Company, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Company pursuant
to Article XI hereof and to comply with Section 15.07.

(b) To add to the covenants of the Company such further covenants,
restrictions or conditions as the Company and the Trustee shall consider to be
for the protection of the holders of all or any series of Securities (and if
such covenants, restrictions or conditions are to be for the benefit of less
than all series of Securities, stating that such covenants, restrictions or
conditions are expressly being included solely for the benefit of such series),
and to make the occurrence, or the occurrence and continuance, of a default in
any such additional covenants, restrictions or conditions a default or an Event
of Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, however, that in
respect to any such additional covenant, restriction or condition such
supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the case of
other defaults) or may provide for an immediate enforcement upon such default or
may limit the remedies available to the Trustee upon such default;

(c) To add 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;

(d) To change or eliminate any of the provisions of this Indenture;
provided, however, that any such change or elimination shall become effective
only when there is no Security of any series

53
<PAGE>

outstanding created prior to the execution of such supplemental indenture which
is entitled to the benefit of such provision;

(e) To establish the form or terms of Securities of any series as
permitted by Sections 2.01 and 2.02;

(f) To cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provisions contained herein or in any supplemental
indenture, or to make such other provision in regard to matters or questions
arising under this Indenture or any supplemental indenture; provided that such
action shall not adversely affect the interest of the holders of Securities of
any series in any material respect or, in the case of the Securities of a series
issued to a Bear Stearns Trust and for so long as any of the corresponding
series of Capital Securities issued by such Bear Stearns Trust shall remain
outstanding, the holders of such Capital Securities;

(g) To mortgage or pledge to the Trustee as security for the
Securities any property or assets which the Company may desire to mortgage or
pledge as security for the Securities; and

(h) To qualify, or maintain the qualification of, the Indenture
under the Trust Indenture Act.

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

Any supplemental indenture authorized by the provisions of this
Section may be executed by the Company and the Trustee without the consent of
the holders of any of the Securities at the time outstanding, notwithstanding
any of the provisions of Section 10.02.

Section 10.02. Modification of Indenture with consent of holders of
a majority in principal amount of Securities. With the consent (evidenced as
provided in Section 8.01) of the holders of not less than a majority in
principal amount of the Securities of all series at the time outstanding
(determined as provided in Section 8.04) affected by such supplemental indenture
(voting as one class), the Company, when authorized by a Resolution of the
Company, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto (which shall be in conformity with
the provisions of the Trust Indenture Act of 1939 as then in effect) for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the holders of the Securities of each such
series; provided, however, that no such supplemental indenture shall (i) change
the fixed maturity of any Securities, or reduce the rate or extend the time of
payment of any interest thereon, or reduce the principal amount thereof, or
change the provisions pursuant to which the rate of interest on any Security is
determined if such change could reduce the rate of interest thereon, or reduce
the minimum rate of interest thereon, or reduce any amount payable upon any
redemption thereof, or adversely affect any right to convert the Securities in
accordance herewith, or reduce the amount to be paid at maturity or upon
redemption, or make the principal thereof or any interest thereon or on any
overdue principal amount payable in any coin or currency other than that
provided in the Security without the consent of

<PAGE>

the holder of each Security so affected, (ii) reduce the aforesaid percentage of
Securities, the holders of which are required to consent to any such
supplemental indenture, without the consent of the holders of all Securities
then Outstanding, or (iii) modify any of the provisions of this Section, Section
4.07 or Section 6.06, 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 Security affected thereby or (iv) modify the
provisions of Article XIV with respect to the subordination of outstanding
Securities of any series in a manner adverse to the holders thereof, without the
consent of the holder of each Security so affected, provided that, in the case
of the Securities of a series issued to a Bear Stearns Trust, so long as any of
the corresponding series of Capital Securities issued by such Bear Stearns Trust
remains outstanding, (i) no such amendment shall be made that adversely affects
the holders of such Capital Securities in any material respect (including any
amendment which would result in a Bear Stearns Trust being classified as other
than a grantor trust for United States federal income taxes), and no termination
of this Indenture shall occur, and no waiver of any Event of Default with
respect to such series or compliance with any covenant with respect to such
series under this Indenture shall be effective, without the prior consent of the
holders of at least a majority of the aggregate liquidation preference of such
Capital Securities then outstanding unless and until the principal (and premium,
if any) of the Securities of such series and all accrued and unpaid interest
(including any Additional Sums, Additional Interest, Compounded Interest or
Special Interest, if any) thereon have been paid in full; and (ii) no amendment
shall be made to Section 6.05 of this Indenture that would impair the rights of
the holders of Capital Securities provided therein without the prior consent of
the holders of each Capital Security then outstanding. unless and until the
principal (and premium, if any) of the Securities of such series and all accrued
and unpaid interest (including any Additional Sums, Additional Interest,
Compounded Interest and Special Interest) thereon have been paid in full.

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 Capital
Securities, or which modifies the rights of holders of Securities or holders of
Capital 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 or holders of Capital Securities of any other series.

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

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

Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Company
shall mail a notice to the holders of Securities of each series so affected,
setting forth in general terms the substance of such supplemental indenture. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture.

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Section 10.03. Effect of supplemental indentures. Upon the execution
of any supplemental indenture pursuant to the provisions of this Article, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company and the holders
of Securities shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments, and all the terms
and conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.

The Trustee shall be entitled to receive, and subject to the
provisions of Section 7.01 shall be entitled to rely upon, an Opinion of Counsel
as conclusive evidence that any such supplemental indenture complies with the
provisions of this Article 10.

Section 10.04. Securities may bear notation of changes by
supplemental indentures. Securities authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article, or after any action taken at a Securityholders' meeting pursuant to
Article IX, may bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture or as to any action taken at any
such meeting. If the Company or the Trustee shall so determine, new Securities
so modified as to conform, in the opinion of the Trustee and the Board of
Directors of the Company, to any modification of this Indenture contained in any
such supplemental indenture may be prepared by the Company, authenticated by the
Trustee and delivered in exchange for the Securities then outstanding.

Section 10.05. Revocation and effect of Consents. Subject to Section
8.05, until an amendment, supplement, waiver or other action becomes effective,
a consent to it by a Securityholder of a Security is a continuing consent
conclusive and binding upon such Securityholder and every subsequent
Securityholder of the same Security or portion thereof, and of any Security
issued upon the registration of transfer thereof or in exchange therefor or in
place thereof, even if notation of the consent is not made on any such Security.
Subject to Section 8.05, any such Securityholder or subsequent Securityholder
may not revoke the consent as to his Security or portion of a Security.

The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Securityholders entitled to consent to any
amendment, supplement or waiver. If a record date is fixed, then,
notwithstanding the preceding paragraph, those Persons who were Securityholders
at such record date (or their duly designated proxies), and only such Persons,
shall be entitled to consent or revoke such consent to such amendment,
supplement or waiver, whether or not such Persons continue to be Securityholders
after such record date. No such consent shall be valid or effective for more
than 180 days after such record date.

After an amendment, supplement, waiver or other action becomes
effective, it shall bind every Securityholder.

ARTICLE XI

CONSOLIDATION, MERGER, SALE OR CONVEYANCE

Section 11.01. Company may consolidate, etc., on certain terms. The
Company covenants that it will not merge or consolidate with any other
corporation or sell or convey all or

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substantially all of its assets to any person, firm or corporation, unless (i)
either the Company shall be the continuing corporation, or the successor
corporation (if other than the Company) shall be a corporation organized and
existing under the laws of the United States of America or a State thereof or
the District of Columbia and such corporation shall expressly assume the due and
punctual payment of the principal of and interest on all the Securities,
according to their tenor, and the due and punctual performance and observance of
all of the covenants and conditions of this Indenture to be performed by the
Company by supplemental indenture in form satisfactory to the Trustee, executed
and delivered to the Trustee by such corporation, (ii) the Company or such
successor corporation, as the case may be, shall not, immediately after such
merger or consolidation, or such sale or conveyance, be in default in the
performance of any such covenant or condition, and (iii) in the case of
Securities of a series issued to a Bear Stearns Trust, such consolidation,
merger, sale or conveyance is permitted under the related Trust Agreement and
Guarantee and does not give rise to any breach or violation of the related Trust
Agreement or Guarantee.

Section 11.02. Successor corporation substituted. In case of any
such consolidation, merger, sale or conveyance and upon any such assumption by
the successor corporation, such successor corporation shall succeed to and be
substituted for the Company, with the same effect as if it had been named herein
as the party of the first part. Such successor corporation thereupon may cause
to be signed, and may issue either in its own name or in the name of the
Company, any or all of the Securities issuable hereunder which theretofore shall
not have been delivered to the Trustee; and upon the order of such successor
corporation, instead of the Company, and subject to all the terms, conditions
and limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any Securities which previously shall have been signed and
delivered by the officers of the Company to the Trustee, and any Securities
which such successor corporation thereafter shall cause to be signed and
delivered to the Trustee. All the Securities so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Securities had been issued at the date of the execution
hereof.

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

Section 11.03. Opinion of Counsel to Trustee. The Trustee shall be
entitled to receive, and subject to the provisions of Section 7.01 shall be
entitled to rely upon, an Opinion of Counsel as conclusive evidence that any
such consolidation, merger, sale or conveyance and any such assumption, complies
with the provisions of this Article and that all conditions precedent herein
provided for relating to such transaction have been complied with.

ARTICLE XII

SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS

Section 12.01. Satisfaction and discharge of Indenture. If (a) the
Company shall deliver to the Trustee for cancellation all Securities of any
series theretofore authenticated (other than any Securities of such series which
shall have been destroyed, lost or stolen and which shall have been replaced or
paid as provided in Section 2.07) and not theretofore cancelled, or (b) all the
Securities of such series not theretofore cancelled or delivered to the Trustee
for cancellation shall have become due

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and payable, or are by their terms to become due and payable within one year or
are to be called for redemption within one year under arrangements satisfactory
to the Trustee for the giving of notice of redemption, and the Company shall
deposit with the Trustee as trust funds the entire amount sufficient to pay at
maturity or upon redemption all of such Securities not theretofore cancelled or
delivered to the Trustee for cancellation, including principal and any interest
due or to become due to such date of maturity or redemption date, as the case
may be, and if in either case the Company shall also pay or cause to be paid all
other sums payable hereunder by the Company with respect to Securities of such
series, then this Indenture shall cease to be of further effect with respect to
Securities of such series (except as to (i) remaining rights of registration of
transfer, conversion, substitution and exchange and the Company's right of
optional redemption of Securities of such series, (ii) rights hereunder of
holders to receive payments of principal of and any interest on, the Securities
of such series, and other rights, duties and obligations of the holders of
Securities of such series as beneficiaries hereof with respect to the amounts,
if any, so deposited with the Trustee, and (iii) the rights, obligations and
immunities of the Trustee hereunder), and the Trustee, on demand of the Company,
and at the cost and expense of the Company, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture. The Company hereby
agrees to compensate the Trustee for any services thereafter reasonably and
properly rendered and to reimburse the Trustee for any costs or expenses
theretofore and thereafter reasonably and properly incurred by the Trustee in
connection with this Indenture or the Securities of such series.

Notwithstanding the satisfaction and discharge of this Indenture
with respect to the Securities of any or all series, the obligations of the
Company to the Trustee under Section 7.06 hereof shall survive.

Section 12.02. Application by Trustee of funds deposited for payment
of Securities. Subject to Section 12.04, all moneys deposited with the Trustee
pursuant to Section 12.01 shall be held in trust and applied by it to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent), to the holders of the particular Securities of
such series, for the payment or redemption of which such moneys have been
deposited with the Trustee, of all sums due and to become due thereon for
principal and interest.

Section 12.03. Repayment of moneys held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect to
Securities of any series, all moneys with respect to Securities of such series
then held by any Paying Agent under the provisions of this Indenture shall, upon
demand of the Company, be paid to the Trustee and thereupon such Paying Agent
shall be released from all further liability with respect to such moneys.

Section 12.04. Repayment of moneys held by Trustee. Any moneys
deposited with the Trustee or any Paying Agent for the payment of the principal
of or any interest on any Securities of any series and not applied but remaining
unclaimed by the holders of Securities of such series for two years after the
date upon which such payment shall have become due and payable, shall, at the
request of the Company, be repaid to the Company by the Trustee or by such
Paying Agent; and the holder of any of the Securities of such series entitled to
receive such payment shall thereafter look only to the Company for the payment
thereof; 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 a week for two successive weeks (in each case on any day of
the week) in an Authorized Newspaper, or mailed to the registered holders
thereof, a notice that said moneys have not been so applied and that after

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a date named therein any unclaimed balance of said money then remaining will be
returned to the Company.

ARTICLE XIII

IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS,
DIRECTORS AND EMPLOYEES

Section 13.01. Incorporators, stockholders, officers, directors and
employees of Company exempt from individual liability. No recourse under or upon
any obligation, covenant or agreement of this Indenture, or of any Security, or
for any claim based thereon or otherwise in respect thereof, shall be had
against any incorporator, stockholder, officer, director or employee, as such,
past, present or future, of the Company or of any successor corporation, either
directly or through the Company, whether by virtue of any constitution, statute
or rule of law, or by the enforcement of any assessment or penalty or otherwise;
it being expressly understood that this Indenture and the obligations issued
hereunder are solely corporate obligations, and that no personal liability
whatever shall attach to, or is or shall be incurred by, the incorporators,
stockholders, officers or directors, as such, of the Company or any successor
corporation, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Securities or implied therefrom;
and that any and all such personal liability of every name and nature, either at
common law or in equity or by constitution or statute, of, and any and all such
rights and claims against every such incorporator, stockholder, officer or
director, as such, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Securities or implied therefrom are
hereby expressly waived and released as a condition of and as a consideration
for, the execution of this Indenture and the issue of such Securities.

ARTICLE XIV

SUBORDINATION OF SECURITIES

Section 14.01. Agreement to subordinate. The Company, for itself,
its successors and assigns, covenants and agrees, and each holder of a Security
of any series likewise covenants and agrees by his acceptance thereof, that the
Securities of any series shall be subordinate and junior in right of payment to
all Senior Indebtedness of the Company, and that upon any payment or
distribution of assets of the Company upon any liquidation, dissolution,
winding-up, reorganization, assignment for benefit of creditors, marshaling of
assets or any bankruptcy, insolvency, debt restructurings or similar proceedings
or in connection with any insolvency or bankruptcy proceedings of the Company,
the holders of Senior Indebtedness of the Company shall first be entitled to
receive payment in full of principal of (and premium, if any) and interest, if
any, on such Senior Indebtedness before any payment shall be made on account of
the principal of or interest on any of the Securities. In the event of any such
proceeding, after payment in full of all sums owing with respect to Senior
Indebtedness of the Company, the holders of the Securities of each series,
together with the holders of any obligations of the Company ranking on a parity
with the Securities, shall be entitled to be paid from the remaining assets of
the Company the amounts at the time due and owing on account of unpaid principal
of and interest on the Securities of any series before any payment or other
distribution, whether in cash, property or otherwise, shall be made on

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account of any capital stock or any obligations of the Company ranking junior to
the Securities. In addition, in the event of any such proceeding, if any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities, including any such payment or distribution which
may be payable or deliverable by reason of the payment of any other indebtedness
of the Company being subordinated to the payment of the Securities of any series
shall be received by the Trustee or the holders of the Securities of any series
before all Senior Indebtedness of the Company is paid in full, such payment or
distribution shall be held in trust for the benefit of and shall be paid over to
the holders of such Senior Indebtedness of the Company or their representative
or representatives or to the trustee or trustees under any indenture under which
any instruments evidencing any of such Senior Indebtedness of the Company may
have been issued, ratably, for application to the payment of all Senior
Indebtedness of the Company remaining unpaid until all such Senior Indebtedness
of the Company shall have been paid in full, after giving effect to any
concurrent payment or distribution to the holders of such Senior Indebtedness of
the Company. The obligations of the Company in respect of the Securities of all
series shall rank on a parity with any obligations of the Company ranking on a
parity with the Securities. Nothing in this Article shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.06.

The Company shall give prompt written notice to the Trustee of any
insolvency, receivership, conservatorship, reorganization, readjustment of debt,
marshalling of assets and liabilities or similar proceedings or any liquidation
or winding-up of or relating to the Company as a whole, whether voluntary or
involuntary and of any event specified in Section 14.09. The Trustee, subject to
the provisions of Section 7.01, shall be entitled to assume that, and may act as
if, no event referred to in the preceding sentence has occurred unless a
Responsible Officer of the Trustee assigned to the Trustee's Corporate Trustee
Administration Department has received at the principal office of the Trustee
from the Company or any one or more holders of Senior Indebtedness of the
Company or any trustee or representative therefor (who shall have been certified
or otherwise established to the satisfaction of the Trustee to be such a holder
or trustee or representative) written notice thereof. Upon any distribution of
assets of the Company referred to in this Article, the Trustee and holders of
the Securities of each series shall be entitled to rely upon any order or decree
of a court of competent jurisdiction in which proceedings relating to any event
specified in the first sentence of this paragraph are pending for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Indebtedness of the Company, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon, and all other facts
pertinent thereto or to this Article, and the Trustee, subject to the provisions
of Article VII, and the holders of the Securities of each series shall be
entitled to rely upon a certificate of the liquidating trustee or agent or other
person making any distribution to the Trustee or to the holders of the
Securities of each series for the purpose of ascertaining the persons entitled
to participate in such distribution, the holders of the Senior Indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article.
In the absence of any such liquidating trustee, agent or other person, the
Trustee shall be entitled to rely upon a written notice by a Person representing
himself to be a holder of Senior Indebtedness of the Company (or a trustee or
representative on behalf of such holder) as evidence that such Person is a
holder of such Senior Indebtedness (or is such a trustee or representative). In
the event that the Trustee determines, in good faith, that further evidence is
required with respect to the right of any Person, as a holder of Senior
Indebtedness of the Company, to participate in any payment or distribution
pursuant to this Article, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of such
Senior Indebtedness held by such Person, as to the extent to which such Person
is entitled to participation in such payment or distribution, and as to other
facts pertinent to the rights of such Person under this Article, and if such
evidence is not furnished,

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the Trustee may defer any payment to such Person pending judicial determination
as to the right of such Person to receive such payment.

Section 14.02. Obligation of the Company unconditional. Nothing
contained in this Article or elsewhere in this Indenture is intended to or shall
impair, as between the Company and the holders of the Securities of each series,
the obligation of the Company, which is absolute and unconditional, to pay to
such holders the principal of and interest on such Securities of each series
when, where and as the same shall become due and payable, all in accordance with
the terms of such Securities, or is intended to or shall affect the relative
rights of such holders and creditors of the Company other than the holders of
the Senior Indebtedness of the Company, nor shall anything herein or therein
prevent the Trustee or the holder of any Security from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article of the holders of Senior Indebtedness
of the Company in respect of cash, property, or securities of the Company
received upon the exercise of any such remedy.

Section 14.03. Limitations on duties to holders of Senior
Indebtedness of the Company. With respect to the holders of Senior Indebtedness
of the Company, the Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this Article, and no
implied covenants or obligations with respect to the holders of Senior
Indebtedness of the Company shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness of the Company, except with respect to moneys
held in trust pursuant to the first paragraph of Section 14.01.

Section 14.04. Notice to Trustee of facts prohibiting payment.
Notwithstanding any of the provisions of this Article or any other provisions of
this Indenture, the Trustee shall not at any time be charged with knowledge of
the existence of any facts which would prohibit the making of any payment of
moneys to or by the Trustee unless and until a Responsible Officer of the
Trustee assigned to its Corporate Trustee Administration Department shall have
received at the principal office of the Trustee written notice thereof from the
Company or from one or more holders of Senior Indebtedness of the Company or
from any trustee or representative therefor who shall have been certified by the
Company or otherwise established to the reasonable satisfaction of the Trustee
to be such a holder or trustee or representative; and, prior to the receipt of
any such written notice, the Trustee, subject to the provisions of Section 7.01,
shall be entitled in all respects to assume that no such facts exist; provided,
however, that, if prior to the fifth Business Day preceding the date upon which
by the terms hereof any such moneys may become payable for any purpose, or in
the event of the execution of an instrument pursuant to Section 12.01
acknowledging satisfaction and discharge of this Indenture, then if prior to the
second Business Day preceding the date of such execution, the Trustee shall not
have received with respect to such moneys the notice provided for in this
Section, then, anything herein contained to the contrary notwithstanding, the
Trustee shall have full power and authority to receive such moneys and/or apply
the same to the purpose for which they were received, and shall not be affected
by any notice to the contrary which may be received by it on or after such date;
provided, however, no such application shall affect the obligations under this
Article of the Persons receiving such moneys from the Trustee.

Section 14.05. Application by Trustee of moneys deposited with it.
Anything in this Indenture to the contrary notwithstanding, any deposit of
moneys by the Company with the Trustee or any agent (whether or not in trust)
for any payment of the principal of or interest on any Securities shall, except
as provided in Section 14.04, be subject to the provisions of Section 14.01.

<PAGE>

Section 14.06. Subrogation. Subject to the payment in full of all
Senior Indebtedness of the Company, the holders of the Securities of each series
shall be subrogated to the rights of the holders of such Senior Indebtedness to
receive payments or distributions of assets of the Company applicable to such
Senior Indebtedness until the Securities shall be paid in full, and none of the
payments or distributions to the holders of such Senior Indebtedness to which
the holders of the Securities of any series or the Trustee would be entitled
except for the provisions of this Article or of payments over, pursuant to the
provisions of this Article, to the holders of such Senior Indebtedness by the
holders of such Securities or the Trustee shall, as between the Company, its
creditors other than the holders of such Senior Indebtedness, and the holders of
such Securities, be deemed to be a payment by the Company to or on account of
such Senior Indebtedness; it being understood that the provisions of this
Article are and are intended solely for the purpose of defining the relative
rights of the holders of such Securities, on the one hand, and the holders of
the Senior Indebtedness of the Company, on the other hand.

Section 14.07. Subordination rights not impaired by acts or
omissions of Company or holders of Senior Indebtedness of the Company. No right
of any present or future holders of any Senior Indebtedness of the Company to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof with which any such holder may
have or be otherwise charged. The holders of Senior Indebtedness of the Company
may, at any time or from time to time and in their absolute discretion, change
the manner, place or terms of payment, change or extend the time of payment of,
or renew or alter, any such Senior Indebtedness of the Company, or amend or
supplement any instrument pursuant to which any such Senior Indebtedness of the
Company is issued or by which it may be secured, or release any security
therefor, or exercise or refrain from exercising any other of their rights under
the Senior Indebtedness of the Company including, without limitation, the waiver
of default thereunder, all without notice to or assent from the holders of the
Securities of each series or the Trustee and without affecting the obligations
of the Company, the Trustee or the holders of such Securities under this
Article.

Section 14.08. Authorization of Trustee to effectuate subordination
of Securities. Each holder of a Security of any series, by his acceptance
thereof, authorizes and expressly directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate, as between the holders
of such Securities and the holders of Senior Indebtedness of the Company, the
subordination provided in this Article. If, in the event of any proceeding or
other action relating to the Company referred to in the first sentence of
Section 14.01, a proper claim or proof of debt in the form required in such
proceeding or action is not filed by or on behalf of the holders of the
Securities of any series prior to fifteen days before the expiration of the time
to file such claim or claims, then the holder or holders of Senior Indebtedness
of the Company shall have the right to file and are hereby authorized to file an
appropriate claim for and on behalf of the holders of such Securities.

Section 14.09. No Payment when Senior Indebtedness in default. In
the event and during the continuation of any default in the payment of principal
of (or premium, if any) or interest on any Senior Indebtedness, or in the event
that any event of default with respect to any Senior Indebtedness shall have
occurred and be continuing and shall have resulted in such Senior Indebtedness
becoming or being declared due and payable prior to the date on which it would
otherwise have become due and payable, unless and until such event of default
shall have been cured or waived or shall have ceased to exist and such
acceleration shall have been rescinded or annulled, or in the event any judicial
proceeding shall be pending with respect to any such default in payment or such
event or default, then no payment or

<PAGE>

distribution of any kind or character, whether in cash, properties or securities
shall be made by the Company on account of principal of (or premium, if any) or
interest (including any Additional Sums, Additional Interest, Compounded
Interest and Special Interest), if any, on the Securities or on account of the
purchase or other acquisition of Securities by the Company or any subsidiary.

In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known to the Trustee or, as the case may
be, such holder, then and in such event payment shall be paid over and delivered
forthwith to the Company.

Section 14.10. Right of Trustee to hold Senior Indebtedness of the
Company. The Trustee shall be entitled to all of the rights set forth in this
Article in respect of any Senior Indebtedness of the Company at any time held by
it in its individual capacity to the same extent as any other holder of such
Senior Indebtedness, and nothing in this Indenture shall be construed to deprive
the Trustee of any of its rights as such holder.

Section 14.11. Article XIV not to prevent defaults. The failure to
make a payment pursuant to the terms of Securities of any series by reason of
any provision in this Article shall not be construed as preventing the
occurrence of a default under this Indenture.

ARTICLE XV

CONVERSION OF SECURITIES

Section 15.01. Applicability of Article. Securities of any series
which are convertible into Capital Stock of the Company shall be convertible in
accordance with their terms and (except as otherwise specified as contemplated
by Section 2.01 for Securities of any series) in accordance with this Article.

Section 15.02. Conversion privilege. If Securities of a series are
subject to conversion, as specified pursuant to Section 2.01, then subject to
and upon compliance with the provisions of this Article, at the option of the
holder thereof, any such Security may, at any time until and including, but not
after the close of business on the date specified in such Security, or in case
such Security or some portion thereof shall be called for redemption pursuant to
Section 3.02 prior to such date, then, with respect to such Security or portion
thereof as is so called, until and including, but (if no default is made in
making due provision for the payment of the redemption price) not after, the
close of business on, the date fixed for redemption, be converted, in whole, or
in part in whole multiples of $1,000 principal amount, at 100% of the principal
amount of such Security (or portion thereof), into fully paid and non-assessable
shares of the Company's Capital Stock, as specified in the Security, issuable
upon conversion of the Securities, at the conversion price in effect at the Date
of Conversion (as hereinafter defined).

Section 15.03. Exercise of conversion privilege. In order to
exercise the conversion privilege, the holder of any Security to be converted
shall surrender such Security to the Company at any time during usual business
hours at the offices or agencies to be maintained by the Company in accordance
with the provisions of Section 4.02 with respect to the Securities to be
converted, accompanied by a fully executed written notice, in the form set forth
on the reverse of the Security, that

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the holder elects to convert such Security or a stated portion thereof
constituting a whole multiple of $1,000 principal amount, and, if such Security
is surrendered for conversion during the period between the close of business on
the record date next preceding the Interest Payment Date (as defined in the
Security) and the opening of business on the Interest Payment Date and has not
been called for redemption on a redemption date within such period (or on such
Interest Payment Date), accompanied also by payment of an amount equal to the
interest payable on such Interest Payment Date on the principal amount of the
Security being surrendered for conversion. Such notice shall also state the name
or names (with address) in which the certificate or certificates for shares of
Capital Stock shall be issued. Securities surrendered for conversion shall (if
so required by the Company or the registrar of such Securities) be duly endorsed
by, or be accompanied by written instrument or instruments of transfer in form
satisfactory to the Company and such registrar duly executed by, the holder or
its attorney duly authorized in writing. As promptly as practicable after the
receipt of such notice and the surrender of such Security as aforesaid, the
Company shall, subject to the provisions of Section 15.09, issue and deliver at
such office or agency to such holder, or to such other person on his written
order, a certificate or certificates for the number of full shares of Capital
Stock issuable on such conversion of Securities in accordance with the
provisions of this Article and cash as provided in Section 15.04, in respect of
any fraction of a share of Capital Stock otherwise issuable upon conversion.
Such conversion shall be deemed to have been effected immediately prior to the
close of business on the date (herein called the "Date of Conversion") on which
such notice shall have been received by the Company and such Security shall have
been surrendered as aforesaid, accompanied (if required by this Section) also by
payment of an amount equal to the interest payable on the next Interest Payment
Date on the principal amount of the Security being surrendered for conversion,
and the person or persons in whose name or names any certificate or certificates
for shares of Capital Stock shall be issuable upon such conversion shall be
deemed to have become on the Date of Conversion the holder or holders of record
of the shares of Capital Stock represented thereby; provided, however, that any
such surrender on any date when the stock transfer books of the Company shall be
closed shall constitute the person or persons in whose name or names the
certificate or certificates for such shares are to be issued as the recordholder
or holders thereof for all purposes at the opening of business on the next
succeeding day on which such stock transfer books are open but such conversion
shall nevertheless be at the conversion price in effect at the close of business
on the date when such Security shall have been so surrendered with the
conversion notice. In the case of conversion of a portion, but less than all, of
a Security, the Company shall execute, and the Trustee shall authenticate and
deliver to the holder thereof, at the expense of the Company, a Security or
Securities in the aggregate principal amount of the unconverted portion of the
Security surrendered. Except as otherwise expressly provided in Section 2.01, no
payment or adjustment shall be made for interest accrued on any Security
converted or for accrued dividends or distributions on any Capital Stock issued
upon conversion of any Security or portion thereof.

Section 15.04. Fractional Interests. No fractions of shares or scrip
representing fractions of shares shall be issued upon conversion of Securities.
If more than one Security shall be surrendered for conversion at one time by the
same holder, the number of full shares which shall be issuable upon conversion
thereof shall be computed on the basis of the aggregate principal amount of the
Securities so surrendered. If any fraction of a share of Capital Stock would,
except for the provisions of this Section, be issuable on the conversion of any
Security or Securities, the Company shall make payment in lieu thereof in an
amount of United States dollars equal to the value of such fraction computed on
the basis of the current market price of the Capital Stock, rounded to the
nearest cent. The current market price of a share of Capital Stock is the
closing price reported by the New York Stock Exchange consolidated transaction
reporting system for the last trading day before the Date of Conversion. In the
absence of such a quotation, the Company shall determine the current market
price

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on the basis of such quotation or quotations as it considers appropriate. Any
determination that the Company or the Board of Directors makes regarding
fractional shares shall be conclusive.

Section 15.05. Conversion Price. The conversion price per share of
Capital Stock issuable upon conversion of the Securities shall be as specified
in such Securities.

Section 15.06. Adjustment of Conversion Price. The conversion price
(herein called the "Conversion Price") shall be subject to adjustment from time
to time as follows:

(a) In case the Company shall (1) pay a dividend or make a
distribution in shares of Capital Stock, (2) subdivide its outstanding shares of
Capital Stock into a greater number of shares or (3) combine its outstanding
shares of Capital Stock into a smaller number of shares, the Conversion Price in
effect immediately prior to such action shall be adjusted so that the holder of
any Security thereafter surrendered for conversion shall be entitled to receive
the number of shares of Capital Stock which he would have owned immediately
following such action had such Security been converted immediately prior
thereto. An adjustment made pursuant to this subsection (a) shall become
effective immediately, except as provided in subsection (e) below, after the
record date in the case of a dividend and shall become effective immediately
after the effective date in the case of a subdivision or combination. If after
an adjustment a holder upon conversion of the Capital Stock may receive shares
of two or more classes of Capital Stock of the Company, the Company shall
determine the allocation of the adjusted Conversion Price between the classes of
Capital Stock. After such allocation, the conversion privilege and Conversion
Price of each class of Capital Stock shall thereafter be subject to adjustment
on terms comparable to those set forth in this paragraph.

(b) In case the Company shall issue rights or warrants to all
holders of Capital Stock entitling them (for a period not exceeding 45 days from
the date of such issuance) to subscribe for or purchase shares of Capital Stock
at a price per share less than the current market price per share (as determined
pursuant to subsection (d) below) of the Capital Stock on the record date
mentioned below, the Conversion Price shall be adjusted to a price, computed to
the nearest cent, in accordance with the following formula:

N x P
-----
AP = CP x O + M
----------------
O + N

where:

AP = the adjusted Conversion Price.

CP = the current Conversion Price.

O = the number of shares of Capital Stock outstanding on the
record date for the distribution.

N = the number of additional shares of Capital Stock offered.

P = the offering price per share of the additional shares.

<PAGE>

M = the current market price per share of Capital Stock on
the record date.

Such adjustment shall become effective immediately, except as provided in
subsection (e) below, after the record date for the determination of holders
entitled to receive such rights or warrants.

(c) In case the Company shall distribute to all holders of Capital
Stock, evidences of indebtedness, equity securities other than Capital Stock or
other assets (other than cash dividends or other distributions to the extent
paid from current or retained earnings of the Company), or shall distribute to
all holders of Capital Stock rights or warrants to subscribe to securities
(other than those referred to in subsection (b) above), then in each such case
the Conversion Price shall be adjusted in accordance with the following formula:

AP = CP x M - F
-------------
M

where:

AP = the adjusted Conversion Price.

CP = the current Conversion Price.

M = the current market price per share of Capital Stock on the
record date mentioned below.

F = the fair market value on the record date of the assets,
securities, rights or warrants applicable to one share of
Capital Stock, as determined by the Company.

Such adjustment shall become effective immediately, except as provided in
subsection (e) below, after the record date for the determination of
stockholders entitled to receive such distribution.

(d) For the purpose of any computation under subsections (b) and (c)
above, the current market price per share of Capital Stock on any date shall be
deemed to be the average of the closing price of the Capital Stock reported by
the New York Stock Exchange consolidated transaction reporting system for the 30
consecutive trading days commencing 45 trading days before the date of
determination. In the absence of one or more such quotations, the Company shall
determine the current market price on the basis of such quotations as it
considers appropriate.

(e) In any case in which this Section shall require that an
adjustment be made immediately following a record date, the Company may elect to
defer the effectiveness of such adjustment (but in no event until a date later
than the effective time of the event giving rise to such adjustment), in which
case the Company shall, with respect to any Security converted after such record
date and before such adjustment shall have become effective (i) defer paying any
cash payment pursuant to Section 15.04 or issuing to the holder of such Security
the number of shares of Capital Stock and other capital stock of the Company
issuable upon such conversion in excess of the number of shares of Capital Stock
and other capital stock of the Company issuable thereupon only on the basis of
the Conversion Price prior to adjustment, and (ii) not later than five Business
Days after such adjustment shall have

<PAGE>

become effective, pay to such holder the appropriate cash payment pursuant to
Section 15.04 and issue to such holder the additional shares of Capital Stock
and other capital stock of the Company issuable on such conversion.

(f) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in such
price; provided that any adjustments which by reason of this subsection (f) are
not required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Article shall be made to the
nearest cent or to the nearest one-hundredth of a share, as the case may be.

(g) Whenever the Conversion Price is adjusted as herein provided,
the Company shall promptly (i) file with the Trustee and each conversion agent
an Officers' Certificate setting forth the Conversion Price after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment, which certificate shall be conclusive evidence of the correctness of
such adjustment, and (ii) mail or cause to be mailed a notice of such adjustment
to each holder of Securities entitled to the benefits of this Article at his
address as the same appears on the registry books of the Company.

Anything in this Section to the contrary notwithstanding the Company
shall be entitled to make such adjustments in the Conversion Price, in addition
to those required by this Section, and to make any election under Treasury
Regulation ss. 1.305-3(d)(2), as it in its discretion shall determine to be
advisable in order that any stock dividend, subdivision of shares, distribution
of rights or warrants to purchase stock or securities, or distribution of other
assets (other than cash dividends) hereafter made by the Company to its
stockholders shall not be taxable.

Section 15.07. Continuation of conversion privilege in case of
reclassification, change, merger, consolidation or sale of assets. If any of the
following shall occur, namely: (a) any reclassification or change of outstanding
shares of Capital Stock issuable upon conversion of the Securities (other than a
change in par value, or from par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination), (b) any
consolidation, merger or combination of the Company with another corporation as
a result of which the holders of Capital Stock shall be entitled to receive
stock, other securities or other assets with respect to or in exchange for
Capital Stock or (c) sale or conveyance of all or substantially all of the
property or business of the Company as an entirety as a result of which the
holders of Capital Stock shall be entitled to receive stock, other securities or
other assets with respect to or in exchange for Capital Stock, then the Company
or such successor or purchasing corporation, as the case may be, shall, as a
condition precedent to such reclassification, change, consolidation, merger,
combination, sale or conveyance, execute and deliver to the Trustee a
supplemental indenture (which shall conform to the Trust Indenture Act of 1939
as in force at the date of the execution thereof) providing that the holder of
each Security then outstanding shall have the right to convert such Security
into the kind and amount of shares of stock and other securities and property
receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance by a holder of the number of shares of Capital
Stock issuable upon conversion of such Security immediately prior to such
reclassification, change, consolidation, merger, combination, sale or
conveyance. Such supplemental indenture shall provide for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article. If, in the case of any such consolidation, merger,
combination, sale or conveyance, the stock or other securities and property
receivable thereupon by a holder of shares of Capital Stock includes shares of
stock or other securities and property of a corporation other than the successor
or purchasing corporation, as the case may be, in such consolidation, merger,
combination, sale or conveyance, then such supplemental indenture shall also be
executed by

<PAGE>

such other corporation and shall contain such additional provisions to protect
the interests of the holders of the Securities as the Board of Directors shall
reasonably consider necessary by reason of the foregoing. The provisions of this
Section shall similarly apply to successive consolidations, mergers,
combinations, sales or conveyances.

Notice of the execution of each such supplemental indenture shall be
mailed to each holder of Securities at his address as the same appears on the
registry books of the Company.

Neither the Trustee nor any conversion agent shall be under any
responsibility to determine the correctness of any provisions contained in any
such supplemental indenture relating either to the kind or amount of shares of
stock or securities or property receivable by holders of Securities upon the
conversion of their Securities after any such reclassification, change,
consolidation, merger, sale or conveyance or to any adjustment to be made with
respect thereto, but, subject to the provisions of Sections 7.01 and 7.02, may
accept as conclusive evidence of the correctness of any such provisions, and
shall be protected in relying upon, the Officers' Certificate (which the Company
shall be obligated to file with the Trustee prior to the execution of such any
supplemental indenture) with respect thereto.

Section 15.08. Notice of certain events. In case:

(a) the Company shall declare a dividend (or any other distribution)
payable to the holders of Capital Stock otherwise than in cash; or

(b) the Company shall authorize the granting to the holders of
Capital Stock of rights to subscribe for or purchase any shares of stock of any
class or of any other rights; or

(c) the Company shall authorize any reclassification or change of
the Capital Stock (other than a subdivision or combination of its outstanding
shares of Capital Stock), or any consolidation or merger to which the Company is
a party and for which approval of any stockholders of the Company is required,
or the sale or conveyance of all or substantially all the property or business
of the Company;

then, the Company shall cause to be filed at the office or agency maintained for
the purpose of conversion of the Securities as provided in Section 4.02, and
shall cause to be mailed to each holder of Securities entitled to the benefits
of this Article, at his address as it shall appear on the registry books of the
Company, at least 20 days before the date hereinafter specified (or the earlier
of the dates hereinafter specified, in the event that more than one date is
specified), a notice stating the date on which (1) a record is expected to be
taken for the purpose of such dividend, distribution or rights, or if a record
is not to be taken, the date as of which the holders of Capital Stock of record
to be entitled to such dividend, distribution or rights are to be determined, or
(2) such reclassification, change, consolidation, merger, sale, conveyance,
dissolution, liquidation or winding-up is expected to become effective and the
date, if any is to be fixed, as of which it is expected that holders of Capital
Stock of record shall be entitled to exchange their shares of Capital Stock for
securities or other property deliverable upon such reclassification, change,
consolidation, merger, sale, conveyance, dissolution, liquidation or winding-up.

Section 15.09. Taxes on conversion. The Company will pay any and all
documentary, stamp or similar taxes payable to the United States of America or
any political subdivision or taxing authority thereof or therein in respect of
the issue or delivery of shares of Capital Stock on conversion of Securities
pursuant thereto; provided, however, that the Company shall not be required to
pay any tax which may be payable in respect of any transfer involved in the
issue or delivery of shares of Capital

<PAGE>

Stock in a name other than that of the holder of the Securities to be converted
and no such issue or delivery shall be made unless and until the person
requesting such issue or delivery has paid to the Company the amount of any such
tax or has established, to the satisfaction of the Company, that such tax has
been paid. The Company shall pay no tax that may be payable with respect to any
other taxes imposed in connection with conversion of Securities.

Section 15.10. Company to provide Stock. The Company shall reserve,
free from preemptive rights, out of its authorized but unissued shares of
Capital Stock, sufficient shares to provide for the conversion of the Securities
from time to time as such Securities are presented for conversion, provided,
that nothing contained herein shall be construed to preclude the Company from
satisfying its obligations in respect of the conversion of Securities by
delivery of repurchased shares of Capital Stock which are held in the treasury
of the Company.

If any shares of Capital Stock to be reserved for the purpose of
conversion of Securities hereunder require registration with or approval of any
governmental authority under any federal or state law before such shares may be
validly issued or delivered upon conversion, then the Company covenants that it
will in good faith and as expeditiously as possible endeavor to secure such
registration or approval, as the case may be, provided, however, that nothing in
this Section shall be deemed to affect in any way the obligations of the Company
to convert Securities into Capital Stock as provided in this Article.

Before taking any action which would cause an adjustment reducing
the Conversion Price below the then par value, if any, of the Capital Stock, the
Company will take all corporate action which may, in the Opinion of Counsel, be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable shares of Capital Stock at such adjusted Conversion Price.

The Company covenants that all shares of Capital Stock which may be
issued upon conversion of Securities will upon issue be fully paid and
nonassessable by the Company and free of preemptive rights.

Section 15.11. Disclaimer of responsibility for certain matters.
Neither the Trustee nor any agent of the Trustee shall at any time be under any
duty or responsibility to any holder of Securities to determine whether any
facts exist which may require an adjustment of the Conversion Price, or with
respect to the Officers' Certificate referred to in Section 15.06(g), or with
respect to the nature or extent of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. Neither the Trustee nor any agent
of the Trustee shall be accountable with respect to the validity or value (or
the kind or amount) of any shares of Capital Stock, or of any securities or
property, which may at any time be issued or delivered upon the conversion of
any Security; and neither the Trustee nor any conversion agent makes any
representation with respect thereto. Neither the Trustee nor any agent of the
Trustee shall be responsible for any failure of the Company to issue, register
the transfer of or deliver any shares of Capital Stock or stock certificates or
other securities or property upon the surrender of any Security for the purpose
of conversion or, subject to Sections 7.01 and 7.02, to comply with any of the
covenants of the Company contained in this Article.

Section 15.12. Return of funds deposited for redemption of converted
Securities. Any funds which at any time shall have been deposited by the Company
or on its behalf with the Trustee or any other Paying Agent for the purpose of
paying the principal of and interest on any of the Securities and which shall
not be required for such purposes because of the conversion of such Securities,
as

69
<PAGE>

provided in this Article, shall after such conversion be repaid to the Company
by the Trustee or such other Paying Agent.

ARTICLE XVI

MISCELLANEOUS PROVISIONS

Section 16.01. Successors and assigns of Company bound by Indenture.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or in behalf of the Company shall bind its successors and assigns,
whether so expressed or not.

Section 16.02. Acts of board, committee or officer of successor
corporation valid. Any act or proceeding by any provision of this Indenture
authorized or required to be done or performed by any board, committee or
officer or officers of the Company shall and may be done and performed with like
force and effect by the like board, committee or officer or officers of any
corporation that shall at the time be the lawful sole successor of the Company.

Section 16.03. Required notices or demands may be served by mail.
Any notice or demand which by any provisions of this Indenture is required or
permitted to be given or served by the Trustee, by the holders of Securities or
by the holders of Capital Securities to or on the Company may be given or served
by registered mail postage prepaid addressed (until another address is filed by
the Company with the Trustee for such purpose), as follows: The Bear Stearns
Companies Inc., 245 Park Avenue, New York, New York 10167, Attention: Secretary.
Any notice, direction, request, demand, consent or waiver by the Company, by any
Securityholder or by any holder of a Preferred Security to or upon the Trustee
shall be deemed to have been sufficiently given, made or filed, for all
purposes, if given, made or filed in writing at the principal office of the
Trustee, Attention: Corporate Trustee Administration Department.

Section 16.04. Officers' Certificate and Opinion of Counsel to be
furnished upon applications or demands by the Company. Upon any request or
application by the Company to the Trustee to take any action under any of the
provisions of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent have been complied with, except that in the case of any
such application or demand as to which the furnishing of such document is
specifically required by any provision of this Indenture relating to such
particular application or demand, no additional certificate or opinion need be
furnished.

Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture, other than certificates provided pursuant to
Section 4.06, shall include (1) a statement that the person making such
certificate or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based; (3) a statement that, in the opinion of such person, he 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 or not, in the opinion of such
person, such condition or covenant has been complied with.

70
<PAGE>

Any certificate, statement 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 that the
certificate or opinion or representations with respect to the matters upon which
his certificate, statement or opinion may be based as aforesaid are erroneous,
or in the exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of counsel may be based, insofar as it
relates to factual matters, upon the certificate, statement 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 that the certificate, statement or opinion or
representations with respect to the matters upon which his certificate,
statement or opinion may be based as aforesaid are erroneous, or in the exercise
of reasonable care should know that the same are erroneous.

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

Section 16.05. Payments due on Saturdays, Sundays, and holidays.
Except as otherwise specified as contemplated by Section 2.01, in any case where
the date of payment of interest on or principal of the Securities of any series
or the date fixed for any redemption of any Security of any series shall not be
a Business Day, then payment of interest or principal need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date fixed for the payment of interest on or
principal of the Security or the date fixed for any redemption of any Security
of such series, and no additional interest shall accrue for the period alter
such date and before payment.

Section 16.06. Provisions required by Trust Indenture Act of 1939 to
control. If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed under Sections 310 through 317 of the Trust Indenture Act of
1939, as amended, such duties 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 excluded, as the case may be.

Section 16.07. Indenture and Securities to be construed in
accordance with the laws of the State of New York. This Indenture and each
Security shall be deemed to be a contract made under the laws of the State of
New York, and for all purposes shall be construed in accordance with the laws of
said State, provided, however, that the rights and duties of the Trustee
hereunder shall be construed in accordance with the laws of the State of the
Trustee's principal place of business.

Section 16.08. Provisions of the Indenture and Securities for the
sole benefit of the parties and the Securityholders. Nothing in this Indenture
or in the Securities, expressed or implied, shall give or be construed to give
any person, firm or corporation, other than the parties hereto and their
successors and assigns and the holders of the Securities, any legal or equitable
right, remedy or claim under or in respect of this Indenture, or under any
covenant, condition and provision herein contained; all its covenants,
conditions and provisions being for the sole benefit of the parties hereto and
their

<PAGE>

successors and assigns and of the holders of the Securities and, to the extent
expressly provided in Sections 6.01, 6.05, 6.06, 9.07, 10.01 and 10.02, the
holders of Capital Securities.

Section 16.09. Indenture may be executed in counterparts. This
Indenture may be executed in any number of counterparts, each of which shall be
an original; but such counterparts shall together constitute but one and the
same instrument.

Section 16.10. Securities in foreign currencies. Whenever this
Indenture provides for any action by, or any distribution to, holders of
Securities denominated in United States dollars and in any other currency, in
the absence of any provision to the contrary in the form of Security of any
particular series, the relative amount in respect of any Security denominated in
a currency other than United States dollars shall be treated for any such action
or distribution as that amount of United States dollars that could be obtained
for such amount on such reasonable basis of exchange and as of such date as the
Company may specify in a written notice to the Trustee.

The Chase Manhattan Bank, the party of the second part, hereby
accepts the trusts in this Indenture declared and provided, upon the terms and
conditions hereinabove set forth.

72
<PAGE>

IN WITNESS WHEREOF, The Bear Stearns Companies, Inc., the party of
the first part, has caused this Indenture to be signed by its President and
Chief Executive Officer, and The Chase Manhattan Bank, the party of the second
part, has caused this Indenture to be signed by one of its Vice Presidents, all
as of the day and year first written above.

THE BEAR STEARNS COMPANIES INC.

By /s/ James E. Cayne
-------------------------------------
President and Chief Executive Officer

THE CHASE MANHATTAN BANK, as Trustee

By /s/ Anne G. Brenner
-----------------------------------
Vice President

EXHIBIT 4.2

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

FIRST SUPPLEMENTAL INDENTURE

between

The Bear Stearns Companies Inc.

and

The Chase Manhattan Bank

Dated as of January 29, 1997

Fixed/Adjustable Rate Junior Subordinated Deferrable Interest Debentures,

due

January 15, 2027

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

<PAGE>

TABLE OF CONTENTS

Page

ARTICLE 1
DEFINITIONS

SECTION 1.01. Definition of Terms . . . . . . . . . . . . . 2

ARTICLE 2
GENERAL TERMS AND CONDITIONS OF THE
DEBENTURES

SECTION 2.01. Designation and Principal Amount . . . . . . 8
SECTION 2.02. Stated Maturity . . . . . . . . . . . . . . . 8
SECTION 2.03. Form and Payment; Minimum Transfer
Restriction . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.04. Exchange and Registration of Transfer of
Debentures; Restrictions on Transfers; Depositary . . . 9
SECTION 2.05. Interest . . . . . . . . . . . . . . . . . . 13

ARTICLE 3
REDEMPTION AND PREPAYMENT OF THE
DEBENTURES

SECTION 3.01. Optional Redemption by Company . . . . . . . . 15
SECTION 3.02. Tax Event Prepayment . . . . . . . . . . . . . 16
SECTION 3.03. Notice of Prepayment . . . . . . . . . . . . . 16

ARTICLE 4
EXTENSION OF INTEREST PAYMENT PERIOD

SECTION 4.01. Extension of Interest Payment Period . . . . 17
SECTION 4.02. Notice of Extension . . . . . . . . . . . . . 17

<PAGE>

ARTICLE 5
EXPENSES

SECTION 5.01. Payment of Expenses . . . . . . . . . . . . . 18
SECTION 5.02. Payment upon Resignation or Removal . . . . . 19

ARTICLE 6
FORM OF DEBENTURE

SECTION 6.01. Form of Debenture . . . . . . . . . . . . . . 19

ARTICLE 7
ORIGINAL ISSUE OF DEBENTURES

SECTION 7.01. Original Issue of Debentures . . . . . . . . 19

ARTICLE 8
MISCELLANEOUS

SECTION 8.01. Ratification of Indenture; First Supplemental
Indenture Controls . . . . . . . . . . . . . 20
SECTION 8.02. Trustee Not Responsible for Recitals . . . . 20
SECTION 8.03. Governing Law . . . . . . . . . . . . . . . . 20
SECTION 8.04. Separability . . . . . . . . . . . . . . . . 20
SECTION 8.05. Counterparts . . . . . . . . . . . . . . . . 20

<PAGE>

FIRST SUPPLEMENTAL INDENTURE, dated as of January 29, 1997
(the "First Supplemental Indenture"), between The Bear Stearns
Companies Inc., a Delaware corporation (the "Company"), and The Chase
Manhattan Bank, as trustee (the "Trustee") under the Indenture dated
as of January 29, 1997 between the Company and the Trustee (the "Base
Indenture" and together with the First Supplemental Indenture, the
"Indenture").

WHEREAS, the Company executed and delivered the Base
Indenture to the Trustee to provide for the future issuance of the
Company's unsecured subordinated debentures to be issued from time to
time in one or more series as might be determined by the Company under
the Indenture, in an unlimited aggregate principal amount which may be
authenticated and delivered as provided in the Base Indenture;

WHEREAS, pursuant to the terms of the Base Indenture, the
Company desires to provide for the establishment of a new series of
its unsecured subordinated debentures to be known as its
Fixed/Adjustable Rate Junior Subordinated Deferrable Interest
Debentures due January 15, 2027 (the "Original Debentures"), and to
provide for, if and when issued in exchange for the Original
Debentures pursuant to the Indenture and the Registration Rights
Agreement, a series of its unsecured subordinated debentures to be
known as its Fixed/Adjustable Rate Junior Subordinated Deferrable
Interest Exchange Debentures due January 15, 2027 (the "Exchange
Debentures" and together with the Original Debentures, the
"Debentures"), the form and substance of such Debentures and the
terms, provisions and conditions thereof to be set forth as provided
in the Base Indenture and this First Supplemental Indenture;

WHEREAS, Bear Stearns Capital Trust I, a Delaware statutory
business trust (the "Trust"), has offered to the purchasers (the
"Purchasers") named in Schedule I to the Purchase Agreement (the
"Purchase Agreement") dated as of January 22, 1997 among the
Purchasers, the Trust and the Company in a private placement
$200,000,000 aggregate liquidation amount of its Fixed/Adjustable Rate
Capital Securities (the "Initial Capital Securities"), representing
undivided beneficial interests in the assets of the Trust and proposes
to invest the proceeds from such offering in $200,000,000 aggregate
principal amount of the Debentures;

WHEREAS, the Trust may offer and issue Fixed/Adjustable Rate
Exchange Capital Securities (the "Exchange Capital Securities") in
exchange for the Initial Capital Securities pursuant to the
Registration Rights Agreement; and

WHEREAS, the Company has requested that the Trustee execute
and deliver this First Supplemental Indenture; all requirements
necessary to make this First Supplemental

<PAGE>

Indenture a valid instrument in accordance with its terms, and to make
the Debentures, when executed by the Company and authenticated and
delivered by the Trustee, the valid obligations of the Company, have
been performed; and the execution and delivery of this First
Supplemental Indenture has been duly authorized in all respects.

NOW THEREFORE, in consideration of the purchase and
acceptance of the Debentures by the Holders thereof, and for the
purpose of setting forth, as provided in the Base Indenture, the form
and substance of the Debentures and the terms, provisions and
conditions thereof, the Company covenants and agrees with the Trustee
as follows:

ARTICLE I.

DEFINITIONS

SECTION 1.01. Definition of Terms. For all purposes of the
-------------------
First Supplemental Indenture, except as otherwise expressly provided
or unless the context otherwise requires:

(a) the terms which are defined in the Base Indenture have
the same meanings when used in this First Supplemental Indenture;

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

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

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

(e) a reference to a Section or Article is to a Section or
Article of this First Supplemental Indenture;

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

<PAGE>

(g) headings are for convenience of reference only and do
not affect interpretation; and

(h) the following terms have the meanings given to them in
the Trust Agreement: (i) Affiliate; (ii) Administrators; (iii)
Business Day; (iv) Clearing Agency; (v) Capital Securities
Certificate; (vi) Closing Date; (vii) Common Securities;
(viii) Delaware Trustee; (ix) Distribution; (x) Exchange Act;
(xi) Guarantee; (xii) Like Amount; (xiii) Property Trustee; (xiv)
PORTAL Market; (xv) QIB; (xvi) Rule 144A; (xvii) Rule 144(k);
(xviii) Tax Event; and (xix) Trust Securities.

(i) References herein to the prepayment of the Debentures
shall be deemed to be references to the redemption of the Debentures
for the purposes of Article III of the Base Indenture.

"Additional Sums" means the additional amounts as may be
---------------
necessary in order that the amount of Distributions then due and
payable by the Trust on the outstanding Capital Securities and Common
Securities shall not be reduced as a result of any additional taxes,
duties and other governmental charges to which the Trust has become
subject as a result of a Tax Event.

"Adjusted CMT Rate" means, with respect to any prepayment
-----------------
date, the CMT Rate plus 0.475%.

"Applicable Rate" with respect to interest on the Debentures
---------------
shall be the rate determined by the Calculation Agent on any
Applicable Rate Determination Date to be a rate equal to three-month
LIBOR plus 1.75%. For this purpose, LIBOR shall be calculated in
accordance with the following provisions:

(i) With respect to an Applicable Rate Determination Date,
LIBOR will be determined on the basis of the offered rate
for three-month deposits in U.S. dollars, commencing on the
second London Banking Day immediately following such
Applicable Rate Determination Date, which appears on
Telerate page 3750 (or such other page as may replace such
Telerate page 3750 for the purpose of displaying London
interbank rates of major banks), as of 11:00 A.M., London
time, on such Applicable Rate Determination Date. If no
rate appears on Telerate page 3750 (or such other page as
may replace such page), LIBOR in respect of that Applicable
Rate Determination Date will be determined as if the parties
had specified the rate described in (ii) below.

<PAGE>

(ii) With respect to an Applicable Rate Determination Date
on which no offered rate appears on Telerate page 3750 (or
such other page), as applicable, as described in (i) above,
LIBOR will be determined on the basis of the rates at
approximately 11:00 A.M., London time, on such Applicable
Rate Determination Date at which three-month deposits in
U.S. dollars are offered to prime banks in the London
interbank market by four major banks in the London interbank
market selected by the Calculation Agent commencing on the
second London Banking Day immediately following such
Applicable Rate Determination Date and in a principal amount
equal to an amount of not less than $1,000,000 that is
representative of a single transaction in such market at
such time. The Calculation Agent will request the principal
London office of each of such banks to provide a quotation
of its rate. If at least two such quotations are provided,
LIBOR for such Applicable Rate Determination Date will be
the arithmetic mean of such quotations. If fewer than two
quotations are provided, LIBOR for such Applicable Rate
Determination Date will be the arithmetic mean of the rates
quoted at approximately 11:00 A.M., New York City time, on
such Applicable Rate Determination Date by three major banks
in the City of New York, selected by the Calculation Agent
for loans in U.S. dollars to leading European banks, having
a maturity of three months and commencing on the second
London Banking Day immediately following such Applicable
Rate Determination Date and in a principal amount equal to
an amount of not less than $1,000,000 that is representative
of a single transaction in such market at such time;
provided, however, that if the banks selected as aforesaid
by the Calculation Agent are not quoting as mentioned in
this sentence, LIBOR will be LIBOR in effect on such
Applicable Rate Determination Date, provided further,
however, that if the banks selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this
sentence and such Applicable Rate Determination Date is
prior to January 15, 2002 or prior to the first Applicable
Rate Determination Date on which LIBOR can be determined as
aforesaid, the Applicable Rate for the following Applicable
Rate Reset Date shall be the Coupon Rate.

"Applicable Rate Determination Date" shall mean the second
----------------------------------
London Banking Day preceding each Applicable Rate Reset Date.

"Applicable Rate Reset Date" shall mean January 15, 2002 and
--------------------------
the 15th of each April, July, October and January thereafter until
October 15, 2026.

"Calculation Agent" means Bear, Stearns & Co. Inc.
-----------------

<PAGE>

"CMT Rate" will be determined by the Calculation Agent in
--------
accordance with the following provisions:

(i) the CMT Rate will be determined on the basis of the
latest rate displayed at the close of business 10 Business Days
before the date of a Tax Event Prepayment on (x) Telerate page
7055 for "Yields on Treasury Constant Maturities -- Federal
Reserve Board Statistical Release H.15(519) -- Mondays
approximately 3:45 pm EST" (or "EDT" as the case may be) for U.
S. Treasury Securities with a maturity corresponding to the
Remaining Life (or if no maturity is within three months before
or after the Remaining Life, yields for the two published
maturities most closely corresponding to the Remaining Life shall
be determined and the CMT Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounded
to the nearest month), or (y) such other page as may replace page
7055, as provided by the Telerate News Service, for the purpose
of displaying rates or prices that are comparable, as determined
by the Calculation Agent (after consultation with the Company),
to the Constant Maturity Treasury rates formerly displayed on
Telerate page 7055;

(ii) if the information specified in subparagraph (i) above
is not available at the date 10 Business Days before such Tax
Event Prepayment, then the CMT Rate shall be determined on the
basis of the Treasury Constant Maturity rate with a maturity
corresponding to the Remaining Life (adjusted as aforesaid) (or
other United States Treasury rate, with a maturity that is
closest to January 15, 2002) published as of that date by either
the Board of Governors of the Federal Reserve System or the
United States Department of the Treasury that the Calculation
Agent (after consultation with the Company) determines to be
comparable to the rate formerly displayed on Telerate page 7055
and published in the Federal Reserve Board Statistical Release
H.15 (519);

(iii) if the information specified in subparagraphs (i) and
(ii) is not available at the date 10 Business Days before the
date of such Tax Event Prepayment then the CMT Rate shall be the
yield to maturity of the then most recently issued direct non-
callable fixed rate United States Treasury Note with an original
maturity corresponding to the Remaining Life (adjusted as
aforesaid) (the "Reference Treasury Note"), such yield to
maturity to be calculated by the Calculation Agent on the basis
of the arithmetic mean of the secondary market bid side prices
for such Reference Treasury Note quoted as of 3:00 pm, New York
City time (or the closing of the market, if earlier), on the date
10 Business Days before the date of such Tax Event Prepayment, by
(and appearing in the written records of) three leading primary

<PAGE>

United States government securities dealers in New York City
selected by the Calculation Agent; and

(iv) if the information specified in subparagraphs (i) and
(ii) above is not available at the date 10 Business Days before
such Tax Event Prepayment and at least three price quotations for
the Reference Treasury Note are not available at that date from
leading primary dealers in New York City as provided in
subparagraph (iii) above, then the CMT Rate shall be the yield to
maturity of the Reference Treasury Note, as calculated by the
Calculation Agent on the basis of the arithmetic mean of the
secondary market bid side prices for such Reference Treasury Note
quoted as of 3:00 pm, New York City time (or the closing of the
market, if earlier), on that date, by (and appearing in the
written records of) any three primary United States government
securities dealers selected by the Calculation Agent
(irrespective of where such dealers may be located).

"Capital Securities" means the Original Capital Securities
------------------
and the Exchange Capital Securities.

"Coupon Rate" has the meaning specified in Section 2.05.
-----------
"Compounded Interest" shall have the meaning specified in
-------------------
Section 4.01.

"Deferred Interest" has the meaning specified in Section
-----------------
4.01.

"Exchange Offer" has the meaning set forth in the
--------------
Registration Rights Agreement.

"Extension Period" has the meaning specified in Section
----------------
4.01.

"Global Debenture" has the meaning specified in Section
----------------
2.04.

"Liquidation Amount" means the stated amount of $1,000 per
------------------
Capital Security.

"London Banking Day" shall mean any day on which dealings in
------------------
deposits in U.S. dollars are transacted in the London interbank
market.

"Optional Redemption Price" has the meaning specified in
-------------------------
Section 3.01.

"Prepayment Date" has the meaning specified in Section 3.01.
---------------

<PAGE>

"Purchase Agreement" has the meaning specified in the third
------------------
recital to this First Supplemental Indenture.

"Purchasers" has the meaning specified in the third recital
----------
to this First Supplemental Indenture.

"Registration Rights Agreement" means the Registration
-----------------------------
Rights Agreement dated January 29, 1997 relating to the Debentures and
the other securities described therein among the Company, the
Purchasers and the Trust.

"Remaining Life" has the meaning specified in Section 3.02.
--------------
"Restricted Security" has the meaning specified in Section
-------------------
2.04(d).

"Special Interest" has the meaning set forth in Section
----------------
2.05(d).

"Tax Event" means the receipt by the Trust of an opinion of
---------
counsel experienced in such matters to the effect that, as a result of
any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or
therein, or as a result of any official administrative pronouncement
or judicial decision interpreting or applying such laws or regula-
tions, which amendment or change is effective or which pronouncement
or decision is announced on or after the Closing Date, there is more
than an insubstantial risk that (i) the Trust is, or will be within 90
days of the date of such opinion, subject to United States Federal
income tax with respect to income received or accrued on the
Debentures, (ii) interest payable by the Company on the Debentures is
not, or within 90 days of the date of such opinion, will not be,
deductible by the Company, in whole or in part, for United States
Federal income tax purposes, or (iii) the Trust is, or will be within
90 days of the date of such opinion, subject to more than a de minimis
amount of taxes, duties or other governmental charges.

"Tax Event Prepayment" means the prepayment of the
--------------------
Debentures upon the occurrence and continuation of a Tax Event.

"Transfer Restriction Termination Date" means with respect
-------------------------------------
to any particular Debenture the first date on which such Debenture
(other than a Debenture held by the Company or any Affiliate thereof)
may be sold pursuant to Rule 144(k).

"Trust Agreement" means the Amended and Restated Trust

Agreement of the Trust, dated as of January 29, 1997.

<PAGE>

ARTICLE II.

GENERAL TERMS AND CONDITIONS OF THE
DEBENTURES

SECTION 2.01. Designation and Principal Amount. The
--------------------------------
Initial Debentures and the Exchange Debentures are hereby authorized
as two series of Debentures. The aggregate principal amount of
Debentures outstanding at any time shall not exceed $206,186,000
(except as set forth in Section 2.01(2) of the Base Indenture). Upon
receipt of a written order of the Company (executed as required by
Section 2.01 of the Base Indenture) for the authentication and
delivery of a series of Debentures and (with respect to the following
clause (a)) satisfaction of the requirements of the fifth paragraph of
Section 2.01 of the Base Indenture, the Trustee shall authenticate (a)
Original Debentures for original issuance in an aggregate principal
amount not to exceed $206,186,000 (except as set forth in Section
2.01(2) of the Base Indenture) or (b) Exchange Debentures for issuance
pursuant to the Exchange Offer for Original Debentures in a principal
amount equal to the principal amount of Original Debentures exchanged
in such Exchange Offer.

The Original Debentures shall be issued pursuant to an
exemption from registration under the Securities Act and the
Restricted Security legend shall appear thereon, unless otherwise
determined by the Company in accordance with applicable law. The
Original Debentures may not be transferred except in compliance with
the Restricted Security legend set forth in Section 2.04(d) of this
Supplemental Indenture, unless otherwise determined by the Company in
accordance with applicable law.

SECTION 2.02. Stated Maturity. The Stated Maturity of the
---------------
Debentures is January 15, 2027, and shall not be subject to extension.

SECTION 2.03. Form and Payment; Minimum Transfer
----------------------------------
Restriction. (a) Except as provided in Section 2.04, the Debentures
-----------
shall be issued to the Trust and held by the Property Trustee in fully
registered certificated form without coupons in minimum denominations
of $100,000 and integral multiples of $1,000 in excess thereof.
Principal and interest on the Debentures issued in certificated form
will be payable, the transfer of such Debentures will be registrable
and such Debentures will be exchangeable for Debentures bearing
identical terms and provisions at the principal office of the Trustee;
provided, however, that payment of interest may be made at the option
of the Company (i) by check mailed to the registered holder at such
address as shall appear in the Register or (ii) by transfer to an
account maintained by such Person as specified in such Register,
provided that proper transfer instructions have been received by the
preceding record date. Notwithstanding the foregoing, so long as the
registered holder of any Debentures is the

<PAGE>

Property Trustee, the payment of the principal of and interest
(including Additional Sums, Additional Interest, Compounded Interest
and Special Interest, if any) on such Debentures held by the Property
Trustee will be made at such place and to such account as may be
designated by the Property Trustee.

(b) The Debentures may be transferred or exchanged only in
minimum denominations of $100,000 and integral multiples of $1,000 in
excess thereof; and any attempted transfer, sale or other disposition
of Debentures in a denomination of less than $100,000 shall be deemed
to be void and of no legal effect whatsoever (the foregoing
restriction being the "Minimum Transfer Restriction").

SECTION 2.04. Exchange and Registration of Transfer of
----------------------------------------
Debentures; Restrictions on Transfers; Depositary. If an early
-------------------------------------------------
dissolution of the Trust occurs as described in the Trust Agreement
and Debentures are to be distributed to the holders of the Capital
Securities, a Like Amount of the Debentures will be issued to holders
of the Trust Securities in the same form as the Trust Securities that
such Debentures replace in accordance with the following procedures:

(a) So long as Debentures are eligible for book- entry
settlement with the Depositary, or unless otherwise required by law,
all Debentures that are so eligible may be represented by one or more
Debentures in global form registered in the name of Cede & Co. the
nominee of the Depositary, except as otherwise specified below. The
transfer and exchange of beneficial interests in any such Debenture in
global form shall be shown on, and transfers thereof will be effected
only through, records maintained by participants in the Depositary.

Debentures that are distributed in replacement of Capital
Securities represented by a global Capital Security will be
represented by a global Debenture (the "Global Debenture").

Except as provided below, beneficial owners of a Debenture
in global form shall not be entitled to have certificates registered
in their names, will not receive or be entitled to receive physical
delivery of certificates in definitive form and will not be considered
registered holders of such Debentures in global form.

(b) Trust Securities held in certificated form, except for
certificates representing Capital Securities held by Cede & Co. as
nominee of the Depositary (or any successor Clearing Agency or its
nominee), shall upon presentation to the Trustee by the Property
Trustee or by the holder thereof or by the Property Trustee on behalf
of such holders be exchanged for a Like Amount of Debentures in fully
registered certificated form.

<PAGE>

(c) Any Global Debenture may be endorsed with or have
incorporated in the text thereof such legends or recitals or changes
not inconsistent with the provisions of the Indenture as may be
required by the Depositary, by the New York Stock Exchange or by the
National Association of Securities Dealers, Inc. in order for the
Original Debentures to be tradeable on the PORTAL Market or as may be
required for the Original Debentures to be tradable on any other
market developed for trading of securities pursuant to Rule 144A or
required to comply with any applicable law or any regulation
thereunder or with the rules and regulations of any securities
exchange upon which the Original Debentures may be listed or traded or
to conform with any usage with respect thereto, or to indicate any
special limitations or restrictions to which any particular Original
Debentures are subject.

(d) Each Original Debenture that bears or is required to
bear the legend set forth in this Section 2.04(d) (a "Restricted
Security") shall be subject to the restrictions on transfer provided
in the legend set forth in this Section 2.04(d), unless such
restrictions on transfer shall be waived by the written consent of the
Company, and the registered holder of each Restricted Security, by
such Securityholder's acceptance thereof, agrees to be bound by such
restrictions on transfer. As used in this Section 2.04(d) and in
Section 2.04(e), the term "transfer" encompasses any sale, pledge,
transfer or other disposition of any Restricted Security.

Prior to the Transfer Restriction Termination Date, any
certificate evidencing an Original Debenture shall bear a legend in
substantially the following form, unless otherwise agreed by the
Company (with written notice thereof to the Trustee):

"THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (A)(i) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES
ACT ACQUIRING THE SECURITIES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A OR (ii) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL IF THE COMPANY SO REQUESTS) OR (iii)
PURSUANT TO AN EFFECTIVE REGISTRATION

<PAGE>

STATEMENT UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND
OTHER JURISDICTIONS."

Following the Transfer Restriction Termination Date, the
sale of an Original Debenture pursuant to an effective registration
statement under the Act, the transfer of an Original Debenture in
accordance with Rule 144 (or any successor provision) under the Act or
the transfer of an Original Debenture in accordance with another
exemption from registration under the Act in a transaction that
results in such Debentures no longer being "restricted securities" (as
defined under Rule 144), any Original Debenture (or security issued in
exchange or substitution therefor (other than Original Debentures
acquired by the Company or any Affiliate thereof since the issue date
of the Capital Securities)) may upon surrender of such Original
Debenture for exchange to the security registrar in accordance with
the provisions of this Section 2.04, be exchanged for a new Original
Debenture or Original Debentures, of like tenor and aggregate
principal amount, which shall not bear the restrictive legend required
by this Section 2.04(d), provided that the Trustee shall have received
an Opinion of Counsel and an Officers' Certificate that such
restrictions on transfer shall have expired in accordance with their
terms or shall have terminated. Prior to such time as the
restrictions on transfer of Original Debentures imposed by the Act and
the rules and regulations promulgated by the Commission thereunder
shall be terminated as provided in this Section 2.04(d), any transfer
of a definitive Original Debenture shall be registered upon the
Register only upon receipt by the Trustee of such definitive Original
Debenture accompanied by a duly completed and executed certificate of
transfer in the form attached to Exhibit A and, in the case of a
transfer in another transaction exempt from the registration
requirements of the Act, upon receipt by the Trustee of such
certifications, legal opinions or other information as the Company may
reasonably request to confirm that such transfer is exempt from the
registration requirements of the Act.

Notwithstanding any other provisions of the Indenture (other
than the provisions set forth in this Section 2.04(d)), a Debenture in
global form may not be exchanged in whole or in part for Debentures
registered, and no transfer of a Debenture in global form may be
registered, in the name of any person other than Cede & Co. unless (i)
the Depositary (A) has notified the Company that it is unwilling or
unable to continue as Depositary for such Global Debenture or (B) has
ceased to be a clearing agency registered as such under the Exchange
Act, (ii) there shall have occurred and be continuing an Event of
Default, or any event which after notice or lapse of time or both
would be an Event of Default under the Indenture, with respect to such
Global Debenture, or (iii) the Company in its sole discretion
instructs the Trustee to exchange such Global Debenture for a
Debenture that is not a Global Debenture (in which case such exchange
shall be effected by the Trustee).

<PAGE>

The Depositary shall be a clearing agency registered under
the Exchange Act. The Company initially appoints The Depository Trust
Company to act as Depositary with respect to the Debentures in global
form. Initially, the Global Debentures shall be issued to the
Depositary, registered in the name of Cede & Co., as the nominee of
the Depositary, and deposited with the Trustee as custodian for Cede &
Co.

If at any time the Depositary for the Global Debentures
notifies the Company that it is unwilling or unable to continue as
Depositary for such Debentures or has ceased to be a Clearing Agency
registered as such under the Exchange Act, the Company may appoint a
successor Depositary with respect to such Debentures. If a successor
Depositary for the Debentures is not appointed by the Company within
90 days after the Company receives such notice or becomes aware of
such ineligibility, the Company will execute, and the Trustee, upon
receipt of an Officers' Certificate for authentication and delivery of
Debentures, will authenticate and deliver, Debentures in definitive
form, in an aggregate principal amount equal to the principal amount
of the Global Debentures, in exchange for the such Global Debentures.

Definitive Debentures issued in exchange for all or a part
of a Global Debenture pursuant to this Section 2.04(d) shall be
registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. Upon execution
and authentication, the Trustee shall deliver such definitive
Debentures to the person in whose names such definitive Debentures are
so registered.

At such time as all interests in a Global Debenture have
been redeemed, exchanged, repurchased or canceled, such Global
Debenture shall be, upon receipt thereof, canceled by the Trustee in
accordance with standing procedures and instructions of the
Depositary. At any time prior to such cancellation, if any interest
in a Global Debenture is exchanged for definitive Debentures,
redeemed, exchanged, or canceled, or transferred for part of a Global
Debenture, the principal amount of such Global Debenture shall, in
accordance with the standing procedures and instructions of the
Depositary be reduced, and an endorsement shall be made on such Global
Debenture by, or at the direction of, the Trustee to reflect such
reduction.

(e) Any Original Debenture that, prior to the Transfer
Restriction Termination Date, is purchased or owned by the Company or
any Affiliate thereof may not be resold by the Company or such
Affiliate unless registered under the Securities Act or resold
pursuant to an exemption from the registration requirements of the
Securities Act.

<PAGE>

SECTION 2.05. Interest. (a) Each Debenture will bear
--------
interest at the rate (the "Coupon Rate") of 7.00% per annum until
-----------
January 15, 2002, and at the Applicable Rate thereafter, until the
principal thereof becomes due and payable, and on any overdue
principal and (to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of
interest at the Coupon Rate or the Applicable Rate, as the case may
be, compounded semiannually, payable (subject to the provisions of
Article 4) semiannually in arrears on the fifteenth day of January and
July of each year (each, an "Interest Payment Date"), commencing on
---------------------
July 15, 1997 to the Person in whose name such Debenture is
registered, subject to certain exceptions, at the close of business on
the Business Day next preceding such Interest Payment Date. If the
Debentures are issued in certificated form (other than to the Property
Trustee), the record dates for payment of interest will be the first
day of the first month of each semi-annual period. Until liquidation,
if any, of the Trust, each Debenture will be held in the name of the
Property Trustee in trust for the benefit of the holders of the Trust
Securities. The Company shall notify the Trustee of the Applicable
Rate, as soon as practicable after each calculation thereof.

(b) The amount of interest payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months until
January 15, 2002 and thereafter on the basis of a 360-day year and the
actual number of days elapsed. In the event that any date on which
interest is payable on the Debentures is not a Business Day, then
payment of interest payable on such date will be made on the next suc-
ceeding day which is a Business Day, except that, if such Business Day
is in the next succeeding calendar year, such payment shall be made on
the immediately preceding Business Day, in each case with the same
force and effect as if made on the date such payment was originally
payable. Until January 15, 2002, in the event that any Interest
Payment Date is not a Business Day, interest will be paid on the next
succeeding Business Day (subject as aforesaid), without any interest
or other payment with respect to any such delay. After January 15,
2002, interest shall be the amount of interest accrued from, and
including, the last date on which interest has previously been paid,
to, but excluding, the Interest Payment Date (or if such date is not a
Business Day, the next succeeding Business Day (subject as
aforesaid)).

(c) If an Original Debenture is exchanged in the Exchange
Offer prior to the record date for the first Interest Payment Date
following such exchange, accrued and unpaid interest, if any, on such
Original Debenture, up to but not including the date of issuance of
the Exchange Debenture or Exchange Debentures issued in exchange for
such Original Debenture, shall be paid on the first Interest Payment
Date for such Exchange Debenture or Exchange Debentures to the
registered holder or registered holders of such Exchange Debenture or
Exchange Debentures on the first record date with respect to such
Exchange Debenture or Exchange Debentures. If an Original Debenture
is exchanged in the Exchange Offer subsequent to the record date for
the first Interest Payment Date following

<PAGE>

such exchange but on or prior to such Interest Payment Date, then any
such accrued and unpaid interest with respect to such Original
Debenture and any accrued and unpaid interest on the Exchange
Debenture or Exchange Debentures issued in exchange for such Original
Debenture, through the day before such Interest Payment Date, shall be
paid on such Interest Payment Date to the registered holder of such
Original Debenture on such record date.

(d) The following terms relate to Special Interest:

(i) In the event that (A) the Exchange Offer Registration
Statement or the Shelf Registration Statement (as such terms are
defined in the Registration Rights Agreement), as the case may be, is
not filed with the Securities and Exchange Commission (the
"Commission") on or prior to the 60th day following the Closing Date,
(B) the Exchange Offer Registration Statement is not declared
effective on or prior to the 150th day following the Closing Date
(unless the Company has previously filed a Shelf Registration
Statement as contemplated by the Registration Rights Agreement) or (C)
the Exchange Offer is not consummated or the Shelf Registration
Statement is not declared effective on or prior to the 180th day
following the Closing Date, interest, in addition to any other
interest on the Original Debentures shall accrue from and including
the next day following each of (a) such 60-day period in the case of
clause (A) above, (b) such 150-day period in the case of the clause
(B) above and (c) such 180-day period in the case of clause (C) above,
in each case at a rate equal to 0.25% per annum. The aggregate amount
of interest on the Original Debentures payable pursuant to the above
provisions will in no event exceed 0.50% per annum.

(ii) If a Tax Contingency (as defined in the Registration
Rights Agreement) shall exist on or before the 60th day following the
Closing Date, then clauses (A) and (a) of the immediately preceding
paragraph shall not apply. To the extent that such a Tax Contingency
exists and the Company has filed a Shelf Registration Statement
covering resales of the Original Debentures by the 150th day following
the Closing Date, then clauses (B) and (b) of the immediately
preceding paragraph shall not apply, and to the extent a Tax
Contingency exists on the 180th day following the Closing Date, the
period specified in clauses (C) and (c) of the immediately preceding
paragraph will be 240 days. Upon (1) the filing of the Exchange Offer
Registration Statement, the filing of the Shelf Registration Statement
or the occurrence of a Tax Contingency, if applicable, as described
above after the 60-day period described in clause (A) of the
immediately preceding paragraph, (2) the effectiveness of the Exchange
Offer Registration Statement, if applicable (or the filing of a Shelf
Registration Statement in the event of a Tax Contingency) after the
150-day period described in clause (B) of the immediately preceding
paragraph or (3) the consummation of the Exchange Offer or the
effectiveness of a Shelf Registration Statement, as the case may be,
after the 180-day period (or the consummation of the Exchange Offer or
the effectiveness

<PAGE>

of a Shelf Registration Statement after the 240-day period specified
above, in the event of a Tax Contingency, if applicable, as described
above) described in clause (C) of the immediately preceding paragraph,
the interest on the Original Debentures attributable to the occurrence
of the event described in such clause (A), (B) or (C) of the
immediately preceding paragraph will cease to accrue from the date of
such filing, effectiveness or consummation, as the case may be.

(iii) In the event that a Shelf Registration Statement is
declared effective pursuant to the foregoing paragraphs, if the
Company fails to keep such Shelf Registration Statement continuously
effective or useable for resales for the period required by the
Registration Rights Agreement, then from such time as the Shelf
Registration Statement is no longer effective or useable until the
earlier of (i) the date that the Shelf Registration Statement is again
deemed effective or is useable, (ii) the date that is the third
anniversary of the effective date (or, if Rule 144(k) is amended to
provide a shorter restrictive period, such shorter period) or (iii)
the date as of which all of the Original Debentures are sold pursuant
to the Shelf Registration Statement, interest, in addition to any
other interest due on the Original Debentures shall accrue at a rate
equal to 0.25% per annum.

(iv) Any additional interest that accrues with respect to
the Original Debentures pursuant to this Section 2.05(d) is referred
to as "Special Interest" and shall be payable at the same time and to
the same Persons as the other interest due on the Debentures.

ARTICLE III.

REDEMPTION AND PREPAYMENT OF THE
DEBENTURES

SECTION 3.01. Optional Redemption by Company. Subject to
------------------------------
the provisions of Article III of the Base Indenture, except as
otherwise may be specified in Section 3.02 or elsewhere in this First
Supplemental Indenture, the Company shall have the right to prepay the
Debentures, in whole or in part, from time to time, on or after
January 15, 2002, at a prepayment price (the "Optional Redemption
Price") equal to the outstanding principal amount of the Debentures
plus, in each case, accrued and unpaid interest, including Additional
Sums, Additional Interest, Compounded Interest and Special Interest
thereon to the date of prepayment (the "Prepayment Date"):

If the Debentures are only partially prepaid pursuant to
this Section 3.01, the Debentures will be selected for prepayment by
any method utilized by the Trustee. The Optional Redemption Price,
together with any required interest payment, shall be paid prior

<PAGE>

to 12:00 Noon, New York time, on the Prepayment Date or at such
earlier time as the Company determines provided that the Company shall
deposit with the Trustee an amount sufficient to pay the Optional
Redemption Price, together with any required interest payment, by
10:00 A.M., New York time, on the date such amounts are to be paid.

SECTION 3.02. Tax Event Prepayment. If a Tax Event shall
--------------------
occur and be continuing, the Company may, at its option, prepay the
Debentures in whole (but not in part) at any time within 90 days of
the occurrence of such Tax Event, at a prepayment price (the "Tax
Event Prepayment Price") equal to the greater of (i) 100% of the
principal amount of such Debentures or (ii) as determined by a
Calculation Agent, the sum of the present values of the principal
amount that would be payable as part of the Optional Redemption Price
pursuant to Section 3.01 with respect to an optional prepayment of
such Debentures on January 15, 2002, together with the present values
of scheduled payments of interest from the Prepayment Date to January
15, 2002 (the "Remaining Life"), in each case discounted to the
Prepayment Date on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Adjusted CMT Rate, plus, in
each case, accrued and unpaid interest including Additional Sums,
Additional Interest, Compounded Interest and Special Interest thereon
to but excluding the Prepayment Date, provided that with respect to
any prepayment under this Section 3.02 of Debentures as a result of a
Tax Event that occurs on or after January 15, 2002 the Tax Event
Prepayment Price shall be an amount equal to the Optional Redemption
Price that would be payable on optional redemption of the Debentures
on the Prepayment Date (including accrued and unpaid interest,
Additional Sums, Additional Interest, Compounded Interest and Special
Interest to the Prepayment Date). The Company shall notify the
Trustee of the Tax Event Prepayment Price, as soon as practicable
after the calculation thereof.

SECTION 3.03. Notice of Prepayment. Subject to Article III
--------------------
of the Base Indenture, notice of any prepayment will be mailed at
least 30 days but not more than 60 days before the redemption date to
each holder of Debentures to be prepaid at its registered address.
Unless the Company defaults in payment of the Prepayment Price, on and
after the Prepayment Date interest ceases to accrue on such Debentures
called for prepayment.

If the Trust is required to pay any additional taxes, duties
or other governmental charges as a result of a Tax Event, the Company
will also pay any Additional Sums on the Debentures.

<PAGE>

ARTICLE IV.

EXTENSION OF INTEREST PAYMENT PERIOD

SECTION 4.01. Extension of Interest Payment Period. So
------------------------------------
long as an Event of Default under Section 6.01 of the Base Indenture
shall not have occurred and be continuing, the Company shall have the
right, subject to the provisions of Section 2.10 of the Base
Indenture, at any time and from time to time during the term of the
Debentures, to defer payments of interest by extending the interest
payment period of such Debentures for a period not exceeding 10
consecutive semi-annual periods (the "Extension Period"), during which
----------------
Extension Period no interest shall be due and payable; provided that
--------
no Extension Period shall end on a date other than an Interest Payment
Date or extend beyond the Stated Maturity or any earlier redemption
date. To the extent permitted by applicable law, interest, the
payment of which has been deferred because of the extension of the
interest payment period pursuant to this Section 4.01, will bear
interest thereon at the Coupon Rate compounded semiannually
("Compounded Interest"). At the end of the Extension Period, the
-------------------
Company shall pay all interest accrued and unpaid on the Debentures,
including any Additional Sums, Additional Interest, Special Interest
and Compounded Interest (together, "Deferred Interest") to the holders
-----------------
of the Debentures in whose names the Debentures are registered in the
Register on the first record date preceding the end of the Extension
Period. Before the termination of any Extension Period, the Company
may further extend such period, provided that such period together
with all such further extensions thereof shall not exceed 10
consecutive semi-annual periods, or extend beyond the Stated Maturity
or any earlier redemption date. Upon the termination of any Extension
Period and upon the payment of all Deferred Interest then due, the
Company may commence a new Extension Period, subject to the foregoing
requirements. No interest shall be due and payable during an
Extension Period, except at the end thereof, but the Company may
prepay at any time all or any portion of the interest accrued during
an Extension Period.

SECTION 4.02. Notice of Extension. (a) If the Property
-------------------
Trustee is the only registered holder of the Debentures at the time
the Company selects (or extends) an Extension Period, the Company
shall give written notice to the Administrators, the Property Trustee
and the Trustee of its selection (or extension) of such Extension
Period at least five Business Days before the earlier of (i) the next
succeeding date on which Distributions on the Capital Securities
issued by the Trust are payable, or (ii) the date the Trust is
required to give notice of the record date, or the date such
Distributions are payable, to any applicable self-regulatory
organization or to holders of the Capital Securities issued by the
Trust, but in any event not less than five Business Days before such
record date. The Property Trustee shall give notice of the Company's
election to begin or extend a new Extension Period to the holders of
the Capital Securities.

<PAGE>

(b) If the Property Trustee is not the only holder of the
Debentures at the time the Company selects (or extends) an Extension
Period, the Company shall give the holders of the Debentures and the
Trustee written notice of its selection (or extension) of such
Extension Period at least 10 Business Days before the earlier of (i)
the next succeeding Interest Payment Date or (ii) the date the Company
is required to give notice of the record or payment date of such
interest payment to any applicable self-regulatory organization or to
holders of the Debentures.

(c) The semi-annual period in which any notice is given
pursuant to paragraphs (a) or (b) of this Section 4.02 shall be
counted as one of the 10 consecutive semi-annual periods permitted in
the maximum Extension Period permitted under Section 4.01.

ARTICLE V.

EXPENSES

SECTION 5.01. Payment of Expenses. In connection with the
-------------------
offering, sale and issuance of the Debentures to the Property Trustee
and in connection with the sale of the Capital Securities by the
Trust, the Company, in its capacity as borrower with respect to the
Debentures, shall:

(a) pay all costs and expenses relating to the offering,
sale and issuance of the Debentures, including commissions to the
Purchasers payable pursuant to the Purchase Agreement and compensation
of the Trustee under the Indenture in accordance with the provisions
of Section 7.06 of the Base Indenture;

(b) pay all costs and expenses of the Trust (including, but
not limited to, costs and expenses relating to the organization of the
Trust, the fees and expenses of the Property Trustee and the Delaware
Trustee, the costs and expenses relating to the operation of the
Trust, including without limitation, costs and expenses of
accountants, attorneys, statistical or bookkeeping services, expenses
for printing and engraving and computing or accounting equipment,
paying agent(s), registrar(s), transfer agent(s), duplicating, travel
and telephone and other telecommunications expenses and costs and
expenses incurred in connection with the acquisition, financing, and
disposition of Trust assets);

(c) pay all costs and expenses related to the enforcement
by the Property Trustee of the rights of the registered holders of the
Capital Securities;

<PAGE>

(d) be primarily liable for any indemnification obligations
arising with respect to the Trust Agreement or the Purchase Agreement
or the Registration Rights Agreement; and

(e) pay any and all taxes (other than United States
withholding taxes attributable to the Trust or its assets) and all
liabilities, costs and expenses with respect to such taxes of the
Trust.

SECTION 5.02. Payment upon Resignation or Removal. Upon
-----------------------------------
termination of this First Supplemental Indenture or the Base
Indenture or the removal or resignation of the Trustee pursuant to
Section 7.10 of the Base Indenture, the Company shall pay to the
Trustee all amounts accrued to the date of such termination, removal
or resignation. Upon termination of the Trust Agreement or the
removal or resignation of the Delaware Trustee or the Property
Trustee, as the case may be, pursuant to Section 8.10 of the Trust
Agreement, the Company shall pay to the Delaware Trustee or the
Property Trustee, and their respective counsel, as the case may be,
all amounts accrued to the date of such termination, removal or
resignation.

ARTICLE VI.

FORM OF DEBENTURE

SECTION 6.01. Form of Debenture. The Debentures and the
-----------------
Trustee's Certificate of Authentication to be endorsed thereon are to
be substantially in the form attached hereto as Exhibit A.

ARTICLE VII.

ORIGINAL ISSUE OF DEBENTURES

SECTION 7.01. Original Issue of Debentures. Debentures in
----------------------------
the aggregate principal amount of up to $206,186,000 may, upon
execution of this First Supplemental Indenture, be executed by the
Company and delivered to the Trustee for authentication, and the
Trustee shall thereupon authenticate and make available for delivery
said Debentures to or upon the written order of the Company, signed by
its Chairman of the Board, any Vice Chairman of the Board, the
President, any Vice Chairman, any Executive Vice President, the Chief
Operating Officer or the Chief Financial Officer and by its Treasurer
or Assistant Treasurer, Controller or the Secretary or an Assistant
Secretary without any further action by the Company, except as
otherwise provided in Section 2.01 of the Base Indenture.

<PAGE>

ARTICLE VIII.

MISCELLANEOUS

SECTION 8.01. Ratification of Indenture; First Supplemental
---------------------------------------------
Indenture Controls. The Indenture, as supplemented by this First
------------------
Supplemental Indenture, is in all respects ratified and confirmed, and
this First Supplemental Indenture shall be deemed part of the
Indenture in the manner and to the extent herein and therein provided.
The provisions of this First Supplemental Indenture shall supersede
the provisions of the Indenture to the extent the Indenture is
inconsistent herewith.

SECTION 8.02. Trustee Not Responsible for Recitals. The
------------------------------------
recitals herein contained are made by the Company and not by the
Trustee, and the Trustee assumes no responsibility for the correctness
thereof. The Trustee makes no representation as to the validity or
sufficiency of this First Supplemental Indenture.

SECTION 8.03. Governing Law. This First Supplemental
-------------
Indenture and each Debenture shall be deemed to be a contract made
under the internal laws of the State of New York, and for all purposes
shall be governed by and construed in accordance with the laws of said
State.

SECTION 8.04. Separability. In case any one or more of the
------------
provisions contained in this First Supplemental Indenture or in the
Debentures shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this First
Supplemental Indenture or of the Debentures, but this First
Supplemental Indenture and the Debentures shall be construed as if
such invalid or illegal or unenforceable provision had never been
contained herein or therein.

SECTION 8.05. Counterparts. This First Supplemental
------------
Indenture may be executed in any number of counterparts each of which
shall be an original; but such counterparts shall together constitute
but one and the same instrument.

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this
First Supplemental Indenture to be duly executed on the date or dates
indicated in the acknowledgements and as of the day and year first
above written.

THE BEAR STEARNS COMPANIES INC.

By: /s/ James E. Cayne
-------------------------------------
Name: James E. Cayne
Title: President and Chief
Executive Officer

THE CHASE MANHATTAN BANK,
as Trustee

By: /s/ Anne G. Brenner
-------------------------------------
Name: Anne G. Brenner
Title: Vice President

<PAGE>

EXHIBIT A
----------

Registered
-----------
NUMBER _________

FIXED/ADJUSTABLE RATE SUBORDINATED DEFERRABLE INTEREST [EXCHANGE]*
DEBENTURE DUE JANUARY 15, 2027

Dated: ____________CUSIP _______

Registered Holder: [The Chase Manhattan Bank
as Property Trustee of Bear Stearns Capital Trust
I]**

[PRIOR TO THE TRANSFER RESTRICTION TERMINATION DATE, INSERT
THE FOLLOWING IN ORIGINAL DEBENTURES -- THE DEBENTURE
EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A)(I) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT
ACQUIRING THE DEBENTURE FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (II) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL IF THE COMPANY SO REQUESTS) OR (III)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, AND (B) IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER
JURISDICTIONS.]

* Insert in Exchange Debentures.

** Insert in Debentures held by Property Trustee.

<PAGE>

The Bear Stearns Companies Inc., a corporation duly organized and
existing under the laws of the State of Delaware (herein referred to
as the "Company", which term includes any successor corporation under
the Indenture hereinafter referred to), for value received, hereby
promises to pay to the Registered Holder named above, the principal
sum [of Dollars ($ )]* [specified in
------------------------
the Schedule annexed hereto]**, on __________, in such coin or
currency of the United States of America as at the time of payment is
legal tender for the payment of public and private debt. The Company
further promises to pay to the registered holder hereof as hereinafter
provided (a) interest on said principal sum (subject to deferral as
set forth herein) at the rate of 7.00% per annum, until January 15,
2002 (the "Coupon Rate") and thereafter at the Applicable Rate (as
defined in the Indenture referred to below) per annum (determined as
provided in the Indenture), in like coin or currency, semiannually in
arrears on the fifteenth day of January and July (each an "Interest
Payment Date") commencing July 15, 1997 from the date next preceding
the date hereof to which interest has been paid or duly provided for
(unless (i) no interest has yet been paid or duly provided for on this
debenture (the "Debenture"), in which case from the date of original
issuance, or (ii) the date hereof is before an Interest Payment Date
but after the related Record Date (as defined below), in which case
from such following Interest Payment Date or next succeeding Business
Day to which interest shall have been paid, provided, however, that if
the Company shall default in payment of the interest due on such
following Interest Payment Date or Business Day, then from the next
preceding date to which interest has been paid or duly provided for),
until the principal hereof shall become due and payable, plus
(b) interest on overdue principal and, to the extent permitted by
applicable law, on any interest payment that is not made when due at
the Coupon Rate or the Applicable Rate, as the case may be, compounded
semiannually. The interest so payable will, subject to certain
exceptions provided in the Indenture hereinafter referred to, be paid
to the person in whose name this Debenture is registered at the close
of business on the Record Date next preceding such Interest Payment
Date. The Record Date shall be the Business Day next preceding the
Interest Payment Date, unless this Certificate is registered to a
holder other than the Property Trustee or a nominee of The Depository
Trust Company, in which case the Record Date will be the first day of
the first month of each semi-annual period. This Debenture may be
presented for payment of principal and interest at the offices of The
Chase Manhattan Bank, as paying agent for the Company, maintained for
that purpose in the Borough of Manhattan, The City of New York, State
of New York; provided, however, that payment of interest may be made
at the option of the Company (i) by check mailed to such address of
the person entitled thereto as the address shall appear on the
Register of the Debentures or (ii) by transfer to an account
maintained by the Person entitled thereto as specified in the
Register, provided that proper transfer instructions have been
received by the Record Date. Interest on the Debenture will be
computed on the basis of a 360-day year of twelve 30-day months until
January 15, 2002 and thereafter on the basis of a 360-day year

* Insert in Debentures other than Global Debentures.

** Insert in Global Debentures.

<PAGE>

and the actual number of days elapsed. In the event that any date on
which interest is payable on the Debentures is not a Business Day,
then payment of interest payable on such date will be made on the next
succeeding day which is a Business Day, except that, if such Business
Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the
same force and effect as if made on the date such payment was
originally payable. Until January 15, 2002, in the event that any
Interest Payment Date is not a Business Day, interest will be paid on
the next succeeding Business Day (subject as aforesaid), without any
interest or other payment with respect to any such delay. After
January 15, 2002, interest shall be the amount of interest accrued
from, and including, the last date on which interest has previously
been paid, to, but excluding, the Interest Payment Date (or if such
date is not a Business Day, the next succeeding Business Day (subject
as aforesaid)).

So long as no Event of Default has occurred and is
continuing, the Company shall have the right, at any time during the
term of this Debenture to defer payment of interest on this Debenture,
at any time or from time to time, for up to ten consecutive semiannual
interest payment periods with respect to each deferral period (each an
"Extension Period"), during which Extension Periods the Company shall
have the right to make partial payments of interest on any Interest
Payment Date; provided, however, that no Extension Period shall end on
a date other than on Interest Payment Date or extend beyond January
15, 2027 or any earlier redemption date. At the end of each Extension
Period, the Company must pay all interest then accrued and unpaid
(together with Additional Sums, Additional Interest, Compounded
Interest and Special Interest thereon, if any, to the extent permitted
by applicable law). During any such Extension Period, the Company may
not, and may not permit any Subsidiary of the Company to, (i) declare
or pay any dividends or distributions on, or redeem, purchase, acquire
or make a liquidation payment with respect to, any of the Company's
capital stock (which includes common stock and preferred stock) or
(ii) make any payment of principal of, or interest or premium, if any,
on or repay, repurchase or redeem any debt security of the Company
that ranks pari passu with or junior in interest to this Debenture or
make any guarantee payments with respect to any guarantee by the
Company of the debt securities of any Subsidiaries of the Company if
such guarantee ranks pari passu with or junior in interest to this
Debenture (other than (a) dividends or distributions in capital stock,
(b) any declaration of a dividend in connection with the
implementation of a Rights Plan, the issuance of any Common Stock or
any class or series of preferred stock of the Company under any Rights
Plan or the redemption or repurchase of any rights distributed
pursuant to a Rights Plan, (c) payments under the Guarantee, (d)
purchases of Common Stock related to the issuance of Common Stock or
rights under any of the Company's benefit plans for its directors,
officers or employees and (e) payments of interest pursuant to the
EPICS Loan Agreement). Prior to the termination of any such Extension
Period, the Company may further extend the interest payment period,
provided that no Extension Period

<PAGE>

shall exceed ten consecutive semiannual periods or extend beyond
January 15, 2027 or any earlier redemption date. At any time
following the termination of any Extension Period and the payment of
all accrued and unpaid interest (including Additional Sums, Additional
Interest, Compounded Interest and Special Interest, if any) then due,
the Company may elect to begin a new Extension Period, subject to the
above requirements. No interest shall be due and payable during an
Extension Period, except at the end thereof. The Company shall give
the Trustee and the Property Trustee notice of its election to begin
or extend any Extension Period at least five Business Days prior to
the earlier of (i) the next succeeding date on which Distributions on
the Capital Securities issued by Bear Stearns Capital Trust I would be
payable but for such election to begin or extend a new Extension
Period, or (ii) the date the Property Trustee is required to give
notice to any applicable self-regulatory organization or to holders of
such Capital Securities of the record date or the date such
Distributions are payable, but in any event not less than five
Business Days prior to such record date.

This Debenture is issued pursuant to an Indenture, dated as
of January 29, 1997, between the Company, as issuer, and The Chase
Manhattan Bank, a banking corporation duly organized and existing
under the laws of the State of New York, as trustee, as supplemented
by a First Supplemental Indenture dated January 29, 1997, (as further
supplemented or amended from time to time, the "Indenture").
Reference is made to the Indenture for a description of the respective
rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Company and the Holders (the word
"Holder" or "Holders" meaning the registered holder or registered
holders) of the Debentures. Terms used herein which are defined in
the Indenture shall have the respective meanings assigned thereto in
the Indenture. By acceptance of this Debenture, the Holder hereof
agrees to be bound by the provisions of the Indenture.

The Debentures are limited to the aggregate principal amount
of Two Hundred Six Million One Hundred Eighty-Six Thousand Dollars
($206,186,000).

The Debentures evidenced by this Certificate may be
transferred or exchanged only in minimum denominations of $100,000 and
integral multiples of $1,000 in excess thereof, and any attempted
transfer, sale or other disposition of Debentures in a denomination of
less than $100,000 shall be deemed to be void and of no legal effect
whatsoever.

The indebtedness of the Company evidenced by the Debentures,
including the principal thereof and interest thereon, is, to the
extent and in the manner set forth in the Indenture, subordinate and
junior in right of payment to its obligations to Holders of Senior
Indebtedness of the Company and each Holder of a Debenture, by
acceptance thereof, agrees to and shall be bound by such provisions of
the Indenture and all other provisions of the Indenture.

<PAGE>

If this Debenture is exchanged in an Exchange Offer prior to
the Record Date for the first Interest Payment Date following such
exchange, accrued and unpaid interest, if any, on this Debenture, up
to but not including the date of issuance of the Exchange Debenture or
Exchange Debentures issued in exchange for this Debenture, shall be
paid on the first Interest Payment Date for such Exchange Debenture or
Exchange Debentures to the Securityholder or Securityholders of such
Exchange Debenture or Exchange Debentures on the first Record Date
with respect to such Exchange Debenture or Exchange Debentures. If
this Debenture is exchanged in a Exchange Offer subsequent to the
Record Date for the first Interest Payment Date following such
exchange but on or prior to such Interest Payment Date, then any such
accrued and unpaid interest with respect to this Debenture and any
accrued and unpaid interest on the Exchange Debenture or Exchange
Debentures issued in exchange for this Debenture, through the day
before such Interest Payment Date, shall be paid on such Interest
Payment Date to the Securityholder of this Debenture on such Record
Date.

[IF THIS DEBENTURE IS AN ORIGINAL DEBENTURE INSERT -- In
addition, the interest rate payable on the Debentures of this series
is subject to increase as provided in the Indenture if, pursuant to
the Registration Rights Agreement, except as provided in the following
paragraph, either (A) the Exchange Offer Registration Statement or the
Shelf Registration Statement (as such terms are defined in the
Registration Rights Agreement), as the case may be, are not filed with
the Securities and Exchange Commission (the "Commission") on or prior
to the 60th day following the Closing Date (as such term is defined
the Registration Rights Agreement), (B) the Exchange Offer
Registration Statement is not declared effective by the Commission on
or prior to the 150th day following the Closing Date (unless the
Company has previously filed a Shelf Regulation Statement as
contemplated in the Registration Rights Agreement) or (C) the Exchange
Offer (as such term is defined in the Registration Rights Agreement)
is not consummated or a Shelf Registration Statement is not declared
effective by the Commission on or prior to the 180th day following the
Closing Date.

In the event that the Company shall determine in good faith
that there is a reasonable likelihood that, or a material uncertainty
as to whether, consummation of the Exchange Offer would result in an
adverse tax consequence to the Company (a "Tax Contingency") then the
Company and the Trust may file and cause to be declared effective a
Shelf Registration Statement covering resales of the Original
Debentures and use their best efforts to keep such Shelf Registration
Statement effective until three years (or, if Rule 144(k) is amended
to provide a shorter restrictive period, such shorter period) after
its effective date or such time as all the Original Debentures have
been sold thereunder. To the extent that such a Tax Contingency
exists on or before the 60th day following the Closing

<PAGE>

Date, then clause (A) of the immediately preceding paragraph shall not
apply, and to the extent such a Tax Contingency exists and the Company
has filed a Shelf Registration Statement covering resales of the
Original Debentures by the 150th day following the Closing Date, then
clause (B) of the immediately preceding paragraph shall not apply, and
to the extent a Tax Contingency exists on the 180th day following the
Closing Date, the period specified in clause (C) of the immediately
preceding paragraph will be 240 days. Upon (1) the filing of the
Exchange Offer Registration Statement, the filing of the Shelf
Registration Statement or the occurrence of a Tax Contingency, if
applicable, as described above after the 60-day period described in
clause (A) of the immediately preceding paragraph, (2) the
effectiveness of the Exchange Offer Registration Statement, if
applicable (or the filing of a Shelf Registration Statement in the
event of a Tax Contingency), if after the 150-day period described in
clause (B) of the immediately preceding paragraph or (3) the
consummation of the Exchange Offer or the effectiveness of a Shelf
Registration Statement, as the case may be, after the 180-day period
(or the effectiveness of a Shelf Registration Statement after the 240-
day period specified above, in the event of a Tax Contingency, if
applicable, as described above) described in clause (C) of the
immediately preceding paragraph, the interest on the Original
Debentures attributable to the occurrence of the event described in
such clause (A), (B) or (C) will cease to accrue from the date of such
filing, effectiveness or consummation, as the case may be.

In addition, the interest rate payable on the Debentures is
subject to increase as provided in the Indenture if, pursuant to the
Registration Rights Agreement, in the event that a Shelf Registration
Statement is declared effective pursuant to the foregoing paragraphs,
the Company fails to keep such Shelf Registration Statement
continuously effective or useable for resales for the period required
by the Registration Rights Agreement, from such time as the Shelf
Registration Statement is no longer effective or useable until the
earlier of (i) the date that the Shelf Registration Statement is again
deemed effective or is useable, (ii) the date that is the third
anniversary of the effective date (or, if Rule 144(k) is amended to
provide a shorter restrictive period, such shorter period) or (iii)
the date as of which all of the Original Debentures are sold pursuant
to the Shelf Registration Statement.

This Debenture shall not be valid or become obligatory for
any purpose until the certificate of authentication hereon shall have
been signed by or on behalf of the Trustee under the Indenture.

<PAGE>

IN WITNESS WHEREOF, the Company has caused this instrument
to be signed, manually or in facsimile, by its Chairman of the Board,
any Vice Chairman of the Board, the President, any Vice Chairman, any
Executive Vice President, the Chief Operating Officer or the Chief
Financial Officer and by its Treasurer or Assistant Treasurer,
Controller or the Secretary or an Assistant Secretary and a facsimile
of its corporate seal to be affixed hereunto.

THE BEAR STEARNS COMPANIES INC.

By
------------------

Secretary

[SEAL]

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

THE CHASE MANHATTAN BANK

By
Authorized Officer

<PAGE>

REVERSE OF DEBENTURE

As provided in and subject to the provisions of the
Indenture, if an Event of Default with respect to the payment of
principal or interest on the Debentures or with respect to compliance
with certain covenants occurs and is continuing, then in every such
case the Trustee or the Holders of not less than 25% in principal
amount of the then-outstanding Debentures may declare the principal
amount of all the Debentures, together with any accrued interest
(including Additional Sums, Additional Interest, Compounded Interest
and Special Interest), to be due and payable immediately, by a notice
in writing to the Company (and to the Trustee, if such notice is given
by Holders). If the Debentures have been issued to Bear Stearns
Capital Trust I, upon such an Event of Default, if the Trustee or the
Holders of not less than 25% in principal amount of the outstanding
Debentures fails to declare the principal of all the Debentures to be
immediately due and payable, the holders of at least 25% in aggregate
liquidation amount of the corresponding Capital Securities of Bear
Stearns Capital Trust I then outstanding shall have such right by a
notice in writing to the Company and the Trustee, and upon such
declaration the principal amount of and the accrued interest
(including any Additional Sums, Additional Interest, Compounded
Interest and Special Interest) on all the Debentures shall become
immediately due and payable, provided that the payment of principal
and interest on such Debentures shall remain subordinated to the
extent provided in the Indenture.

If an Event of Default with respect to certain covenants
applicable to all series of securities issued under the Indenture
(collectively, the "Securities"), or with respect to events of
bankruptcy, insolvency or reorganization of the Company occurs and is
continuing, then and in every such case the Trustee or the Holders of
not less than 25% in principal amount of all Securities outstanding
under the Indenture (voting as a single class) may declare the
principal amount of all such Securities to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee
if such notice is given by Holders), provided that, in the case of
Securities of a series issued under the Indenture to a Bear Stearns
Trust, if upon such an Event of Default the Trustee and the Holders of
not less than 25% in principal amount of all outstanding Securities of
that series fail to declare the principal of all the Securities of
that series to be immediately due and payable, the holders of at least
25% in aggregate liquidation amount of the corresponding Capital
Securities of such Bear Stearns Trust then outstanding shall have such
right by a notice in writing to the Company and the Trustee; and upon
any such declaration the principal amount of and the accrued interest
(including any Additional Sums, Additional Interest, Compounded
Interest and Special Interest) on all the Securities of that series
shall become immediately due and

<PAGE>

payable, provided that the payment of principal and interest shall
remain subordinated to the extent provided in the Indenture.

The Indenture provides that in certain events such
declaration that principal and accrued interest are due and payable,
and the consequences of such declaration, may be rescinded and
annulled by the holders of a majority in principal amount of the
Securities then outstanding under the Indenture as to which such an
acceleration of the payment of principal has occurred, voting as one
class. In the case of Securities of a series issued under the
Indenture to a Bear Stearns Trust, should the Holders of Securities of
that series fail to rescind and annul such declaration and its
consequences, the Holders of a majority in aggregate liquidation
amount of the corresponding Capital Securities or Preferred Securities
of such Bear Stearns Trusts shall have such right. The Indenture also
provides that the Holders of a majority in principal amount of all of
the Securities of all series then outstanding as to which an Event of
Default has occurred may, on behalf of all Holders of such Securities,
waive any past default under the Indenture other than (a) a default in
the payment of the principal of or interest on any of the Securities
or (b) a default in respect of a covenant or provision of the
Indenture which under the terms of the Indenture cannot be modified or
amended without the consent of each Holder of Securities so affected.
In the case of Securities of one or more series issued to one or more
Bear Stearns Trusts, the Indenture provides that the Holders of a
majority in aggregate liquidation amount of the corresponding Capital
Securities or Preferred Securities issued by such Bear Stearns Trusts
shall also have the right to waive such defaults.

The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the Holders of not less than a
majority in principal amount of the outstanding Securities of all
affected series (voting as one class), to modify the Indenture in a
manner affecting the rights of the holders of the Securities of each
such series; provided, however, that no such modification shall (i)
change the fixed maturity of any Securities, or reduce the rate or
extend the time of payment of interest thereon or reduce the principal
amount thereof, or change the provisions pursuant to which the rate of
interest on the Securities is determined if such change could reduce
the rate of interest thereon, or reduce the minimum rate of interest
thereon, or reduce any amount payable upon any redemption thereof, or
adversely affect any right to convert the Securities in accordance
with the Indenture, or reduce the amount to be paid at maturity or
upon redemption or make the principal thereof or any interest thereon
or on any overdue principal amount payable in any coin or currency
other than that provided in the Securities without the consent of the
holder of each Security so affected, (ii) reduce the aforesaid
percentage of Securities, the holders of which are required to consent
to any supplemental indenture, without the consent of the holders of
all Securities then Outstanding, or (iii) modify any of the provisions
of Section

NYFS04...:\25\22625\0110\2322\IND1097R.25E
<PAGE>

4.07, Section 6.06 or Section 10.02 of the Indenture, except to
increase any such percentage or to provide that certain other
provisions of the Indenture cannot be modified or waived without the
consent of the holder of each Security affected thereby or (iv) modify
the provisions of Article XIV of the Indenture with respect to the
subordination of outstanding Securities of any series in a manner
adverse to the holders thereof, without the consent of the holder of
each Security so affected; provided, further, that, in the case of the
Securities of a series issued to a Bear Stearns Trust, so long as any
of the corresponding series of Capital Securities issued by such Bear
Stearns Trust remains outstanding, (i) no such amendment shall be made
that adversely affects the holders of such Capital Securities in any
material respect (including any amendment which would result in a Bear
Stearns Trust being classified as other than a grantor trust for
United States federal income taxes), and no termination of the
Indenture shall occur, and no waiver of any Event of Default with
respect to such series or compliance with any covenant with respect to
such series under the Indenture shall be effective, without the prior
consent of the holders of at least a majority of the aggregate
liquidation amount of such Capital Securities then outstanding, unless
and until the principal (and premium, if any) of the Securities of
such series and all accrued and unpaid interest (including any
Additional Sums, Additional Interest, Compounded Interest and Special
Interest) thereon shall have been paid in full and (ii) no amendment
shall be made to Section 6.05 of the Indenture (regarding the right of
holders of Capital Securities to institute a suit directly against the
Company) that would impair the rights of the holders of Capital
Securities provided therein without the prior consent of all holders
of Capital Securities then outstanding, unless and until the principal
(and premium, if any) of the Securities of such series and all accrued
and unpaid interest (including any Additional Sums, Additional
Interest, Compounded Interest and Special Interest) thereon have been
paid in full.

The Debenture will be prepayable, in whole or in part, at
the option of the Company at any time on or after January 15, 2002, at
a prepayment price (the "Optional Redemption Price") equal to the
outstanding principal amount of the Debenture plus accrued interest
thereon to the date of prepayment.

Upon the occurrence and during the continuation of a Tax
Event, in respect of the Trust, the Company may, at its option, at any
time within 90 days of the occurrence of such Tax Event redeem this
Debenture, in whole but not in part, at a prepayment price (the "Tax
Event Prepayment Price") equal to the greater of (i) 100% of the
principal amount hereof; or (ii) as determined by a Calculation Agent,
the sum of the present value of the principal amount that would be
payable with respect to an optional redemption of a Debenture on
January 15, 2002, together with the present values of scheduled
payments of interest from the prepayment date to January 15, 2002, in
each case discounted to the prepayment date on a semi-annual basis at
the Adjusted CMT Rate, plus, in each case,

<PAGE>

accrued and unpaid interest to but excluding the date of prepayment.
However, if the Company redeems the Debenture as a result of a Tax
Event which occurs on or after January 15, 2002, then the Tax Event
Prepayment Price shall be the Optional Redemption Price that would be
payable on optional redemption of the Debentures on the date of such
prepayment, which includes accrued and unpaid interest to the date of
prepayment.

Any consent or waiver by the Holder of this Debenture given
as provided in the Indenture (unless effectively revoked as provided
in the Indenture) shall be conclusive and binding upon such Holder and
upon all future Holders of this Debenture and of any Debenture issued
in exchange, registration of transfer, or otherwise in lieu hereof
irrespective of whether any notation of such consent or waiver is made
upon this Debenture or such other Debentures. No reference herein to
the Indenture and no provision of this Debenture or of the Indenture
shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of and interest on this
Debenture, at the places, at the respective times, at the 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 Debenture may be
registered on the Register of the Debentures upon surrender of this
Debenture for registration of transfer at the offices maintained by
the Company or its agent for such purpose, duly endorsed by the Holder
hereof or his attorney duly authorized in writing, or accompanied by a
written instrument of transfer in form satisfactory to the Company and
the Securities registrar duly executed by the Holder hereof or his
attorney duly authorized in writing, but without payment of any charge
other than a sum sufficient to reimburse the Company for any tax or
other governmental charge incident thereto. Upon any such
registration of transfer, a new Debenture or Debentures of authorized
denomination or denominations for the same aggregate principal amount
will be issued to the transferee in exchange herefor.

Prior to due presentment for registration of transfer of
this Debenture, the Company, the Trustee, and any agent of the Company
or the Trustee may deem and treat the person in whose name this
Debenture shall be registered upon the Register of the Debentures of
this series as the absolute owner of this Debenture (whether or not
this Debenture shall be overdue and notwithstanding any notation of
ownership or other writing hereon) for the purpose of receiving
payment of or on account of the principal hereof and, subject to the
provisions on the face hereof, interest due hereon and for all other
purposes; and neither the Company nor the Trustee nor any such agent
shall be affected by any notice to the contrary.

No recourse shall be had for the payment of the principal of
or interest on this Debenture, or for any claim based hereon or
otherwise in respect hereof, or based on or in

<PAGE>

respect of the Indenture or any indenture supplemental thereto,
against any stockholder, officer, director or employee, as such, past,
present or future, of the Company or of any successor corporation,
either directly or through the Company, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as a part of the consideration for the issue
hereof, expressly waived and released.

This Debenture shall be deemed to be a contract made under
the laws of the State of New York and for all purposes shall be
governed by and construed in accordance with, the laws of said State.

<PAGE>

[IF DEBENTURE IS AN ORIGINAL DEBENTURE, INSERT:]

FORM OF ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto

Please insert Social Security or other
identifying number of assignee:

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

----------------------------------------------------------------------
(Name and Address of Assignee, including Zip Code,
must be printed or typewritten)

----------------------------------------------------------------------
the within Junior Subordinated Deferrable Interest Debenture (the
"Debenture"), and all rights thereunder, hereby irrevocably
constituting and appointing

Attorney to transfer said Debenture on the
--------------------
Register of the Debentures, with full power of substitution in the
premises.

In connection with any transfer of the within Debenture occurring
prior to the Transfer Restriction Termination Date, the undersigned
confirm that such Debenture is being transferred:

[_] To The Bear Stearns Companies Inc. (the "Company") or a
subsidiary thereof; or

[_] Pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended; or

[_] Pursuant to or in accordance with another exemption
from the registration requirements of the Securities
Act of 1933, as amended;

<PAGE>

and unless the box below is checked, the undersigned
confirms that such Security is not being transferred to
an "affiliate" of the Company, as defined in Rule 144
under the Securities Act of 1933, as amended (an
"Affiliate"):

[_] The transferee is an Affiliate of the Company.

Date:
-------------------

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

---------------
Signature(s)

Signature(s) must be guaranteed by a commercial
bank or trust company or a member firm of a major
stock exchange.

NOTICE: The signature to this assignment must correspond
with the name as it appears upon the face of the within Junior
Subordinated Deferrable Interest Debenture in every particular,
without alteration or enlargement or any change whatever.

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

<PAGE>

[IF DEBENTURE IS AN EXCHANGE DEBENTURE, INSERT:]

FORM OF ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers the within Junior Subordinated Deferrable Interest Debenture
(the "Debenture") and all rights thereunder, unto

Please insert Social Security or other
identifying number of assignee:

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

----------------------------------------------------------------------
(Name and Address of Assignee, including Zip Code,
must be printed or typewritten)

----------------------------------------------------------------------
and hereby irrevocably constitutes and appoints

Attorney to transfer said Debenture on the
--------------------
Register of the Debentures, with full power of substitution in the
premises.

Date:
-------------------

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

---------------
Signature(s)

Signature(s) must be guaranteed by a commercial
bank or trust company or a member firm of a major
stock exchange.

<PAGE>

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

<PAGE>

FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL DEBENTURE
TO REFLECT CHANGES IN PRINCIPAL AMOUNT

The initial principal amount
evidenced by this
Global Debenture is $________.

Changes to Principal Amount of Global Debenture

Principal Amount by which this Remaining Principal
Global Debenture is to be Amount of this Global
Date Reduced and Reason for Reduction
-------------------------------------

NYFS04...:\25\22625\0110\2322\IND1097R.25E

EXHIBIT 4.3

CERTIFICATE OF TRUST

BEAR STEARNS CAPITAL TRUST I

THIS Certificate of Trust of Bear Stearns Capital Trust I
(the "Trust"), dated as of January 14, 1997, is being duly executed
and filed by the undersigned, as trustee, to form a business trust
under the Delaware Business Trust Act (12 Del. D. ss. 3801, et seq.).
------- -- ----

1. Name. The name of the business trust formed hereby is
----
Bear Stearns Capital Trust.

2. Delaware Trustee. The name and business address of the
----------------
trustee of the Trust with a principal place of business in the State
of Delaware are Chase Manhattan Bank Delaware, 1201 Market Street,
Wilmington, Delaware 19801.

3. Effective Date. This Certificate of Trust shall be
--------------
effective upon the Trust, has executed this Certificate of Trust as of
the date first-above written.

CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity but
solely as trustee of the Trust

By:/s/ John J. Cashin
--------------------------------
Name: John J. Cashin
Title: Senior Trust Officer

NYFS04...:\25\22625\0110\6678\CRT1317F.190

EXHIBIT 4.4

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

AMENDED AND RESTATED

TRUST AGREEMENT

among

THE BEAR STEARNS COMPANIES INC., as Depositor,

THE CHASE MANHATTAN BANK
as Property Trustee,

CHASE MANHATTAN BANK DELAWARE
as Delaware Trustee,

THE ADMINISTRATORS NAMED HEREIN,

and

THE SEVERAL HOLDERS OF THE TRUST CERTIFICATES

Dated as of January 29, 1997

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

<PAGE>

TABLE OF CONTENTS
-----------------

ARTICLE I
DEFINED TERMS

SECTION 1.1. Definitions. . . . . . . . . . . . . . . . . . . . . 2

ARTICLE II
CONTINUATION OF THE TRUST

SECTION 2.1. Name . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.2. Office of the Delaware Trustee; Principal Place of
Business . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.3. Initial Contribution of Trust Property;
Organizational Expenses . . . . . . . . . . . . . 12
SECTION 2.4. Issuance of the Capital Securities. . . . . . . . 12
SECTION 2.5. Issuance of the Common Securities; Subscription
and Purchase of Debentures . . . . . . . . . . . . 13
SECTION 2.6. Declaration of Trust . . . . . . . . . . . . . . . 13
SECTION 2.7. Authorization to Enter into Certain Transactions . 14
SECTION 2.8. Assets of Trust. . . . . . . . . . . . . . . . . . 19
SECTION 2.9. Title to Trust Property . . . . . . . . . . . . . 19

ARTICLE III
PAYMENT ACCOUNT

SECTION 3.1. Payment Account. . . . . . . . . . . . . . . . . . 19

ARTICLE IV
DISTRIBUTIONS; REDEMPTION

SECTION 4.1. Distributions. . . . . . . . . . . . . . . . . . . 20
SECTION 4.2. Redemption. . . . . . . . . . . . . . . . . . . . 21
SECTION 4.3. Subordination of Common Securities . . . . . . . . 23
SECTION 4.4. Payment Procedures . . . . . . . . . . . . . . . . 24
SECTION 4.5. Tax Returns and Reports . . . . . . . . . . . . . 24
SECTION 4.6. Payment of Taxes, Duties, Etc. of the Trust . . . 24
SECTION 4.7. Reduction for Payments under Indenture or Pursuant
to Direct Actions . . . . . . . . . . . . . . . . 24

ARTICLE V
TRUST SECURITIES CERTIFICATES

SECTION 5.1. Initial Ownership . . . . . . . . . . . . . . . . 25
SECTION 5.2. The Trust Securities Certificates; Execution and
Delivery Thereof . . . . . . . . . . . . . . . . . 25
SECTION 5.3. Transfer of Capital Securities. . . . . . . . . . 26
SECTION 5.4. Registration of Transfer and Exchange of Capital
Securities Certificates . . . . . . . . . . . . . 27

<PAGE>

SECTION 5.5.Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates 28

SECTION 5.6. Persons Deemed Securityholders . . . . . . . . . . 29
SECTION 5.7. Access to List of Securityholders' Names and
Addresses . . . . . . . . . . . . . . . . . . . . 29
SECTION 5.8. Maintenance of Office or Agency for Transfers . . 30
SECTION 5.9. Appointment of Paying Agent . . . . . . . . . . . 30
SECTION 5.10. Ownership of Common Securities by Depositor . . . 31
SECTION 5.11. Book-Entry Interests. . . . . . . . . . . . . . . 31
SECTION 5.12. Notices to Clearing Agency . . . . . . . . . . . . 33
SECTION 5.13. Procedures for Issuance of Definitive Capital
Securities Certificates . . . . . . . . . . . . . 33
SECTION 5.14. Rights of Securityholders . . . . . . . . . . . . 34

ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING

SECTION 6.1. Limitations on Voting Rights . . . . . . . . . . . 36
SECTION 6.2. Notice of Meetings . . . . . . . . . . . . . . . . 37
SECTION 6.3. Meetings of Capital Securityholders . . . . . . . 37
SECTION 6.4. Voting Rights . . . . . . . . . . . . . . . . . . 38
SECTION 6.5. Proxies, etc. . . . . . . . . . . . . . . . . . . 38
SECTION 6.6. Securityholder Action by Written Consent . . . . . 38
SECTION 6.7. Record Date for Voting and Other Purposes . . . . 39
SECTION 6.8. Acts of Securityholders . . . . . . . . . . . . . 39
SECTION 6.9. Inspection of Records . . . . . . . . . . . . . . 40

ARTICLE VII
REPRESENTATIONS AND WARRANTIES

SECTION 7.1. Representations and Warranties of the Property
Trustee and the Delaware Trustee . . . . . . . . . 40
SECTION 7.2. Representations and Warranties of Depositor . . . 41

ARTICLE VIII
THE TRUSTEES

SECTION 8.1. Corporate Property Trustee Required; Eligibility
of Trustees . . . . . . . . . . . . . . . . . . . 42
SECTION 8.2. Certain Duties and Responsibilities . . . . . . . 43
SECTION 8.3. Certain Notices . . . . . . . . . . . . . . . . . 44
SECTION 8.4. Certain Rights of Property Trustee . . . . . . . . 45
SECTION 8.5. Not Responsible for Recitals or Issuance of
Securities . . . . . . . . . . . . . . . . . . . . 47
SECTION 8.6. May Hold Securities . . . . . . . . . . . . . . . 47
SECTION 8.7. Compensation; Indemnity; Fees . . . . . . . . . . 47
SECTION 8.8. Conflicting Interests. . . . . . . . . . . . . . . 49
SECTION 8.9. Co-Trustees and Separate Trustee . . . . . . . . . 49
SECTION 8.10. Resignation and Removal; Appointment of Successor 50
SECTION 8.11. Acceptance of Appointment by Successor . . . . . . 52
SECTION 8.12. Merger, Conversion, Consolidation or Succession to
Business . . . . . . . . . . . . . . . . . . . . . 52
SECTION 8.13. Property Trustee May File Proofs of Claim . . . . 53

<PAGE>

SECTION 8.14. Reports by Property Trustee. . . . . . . . . . . . 53
SECTION 8.15. Reports to the Property Trustee . . . . . . . . . 54
SECTION 8.16. Evidence of Compliance with Conditions Precedent . 54
SECTION 8.17. Number of Trustee . . . . . . . . . . . . . . . . 54
SECTION 8.18. Delegation of Power. . . . . . . . . . . . . . . . 55

ARTICLE IX
DISSOLUTION, LIQUIDATION AND MERGER

SECTION 9.1. Dissolution Upon Expiration Date . . . . . . . . . 55
SECTION 9.2. Early Dissolution . . . . . . . . . . . . . . . . 55
SECTION 9.3. Dissolution . . . . . . . . . . . . . . . . . . . 56
SECTION 9.4. Liquidation . . . . . . . . . . . . . . . . . . . 56
SECTION 9.5. Mergers, Consolidations, Amalgamations or
Replacements of the Trust . . . . . . . . . . . . 57

ARTICLE X
MISCELLANEOUS PROVISIONS

SECTION 10.1. Limitation of Rights of Securityholders to
Terminate Trust . . . . . . . . . . . . . . . . . 58
SECTION 10.2. Amendment . . . . . . . . . . . . . . . . . . . . 59
SECTION 10.3. Separability . . . . . . . . . . . . . . . . . . . 60
SECTION 10.4. Governing Law . . . . . . . . . . . . . . . . . . 60
SECTION 10.5. Payments Due on Non-Business Day . . . . . . . . . 61
SECTION 10.6. Successors. . . . . . . . . . . . . . . . . . . . 61
SECTION 10.7. Headings. . . . . . . . . . . . . . . . . . . . . 61
SECTION 10.8. Reports, Notices and Demands . . . . . . . . . . . 61
SECTION 10.9. Agreement Not to Petition . . . . . . . . . . . . 62
SECTION 10.10. Trust Indenture Act; Conflict with Trust Indenture
Act . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 10.11. Acceptance of Terms of Trust Agreement, Guarantee
and Indenture . . . . . . . . . . . . . . . . . . 63
SECTION 10.12. Counterparts . . . . . . . . . . . . . . . . . . . 63

<PAGE>

Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:

Trust Indenture Trust Agreement
Act Section Section
------------------ ---------------
<S> <C>
(ss.)310 (a)(l) . . . . . . . . . . . . . . . . . . . 8.1
(a)(2) . . . . . . . . . . . . . . . . . . . 8.1
(a)(3) . . . . . . . . . . . . . . . . . . . 8.9
(a)(4) . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . 8.8
(ss.)311 (a) . . . . . . . . . . . . . . . . . . . . . 8.13
(b) . . . . . . . . . . . . . . . . . . . . . 8.13
(ss.)312 (a) . . . . . . . . . . . . . . . . . . . . . 5.7
(b) . . . . . . . . . . . . . . . . . . . . . 5.7
(c) . . . . . . . . . . . . . . . . . . . . . 5.7
(ss.)313 (a) . . . . . . . . . . . . . . . . . . . . . 8.14(a), 8.14(b)
(b) . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c) . . . . . . . . . . . . . . . . . . . . . 10.8
(d) . . . . . . . . . . . . . . . . . . . . . 8.14(c)
(ss.)314 (a) . . . . . . . . . . . . . . . . . . . . . 8.15
(b) . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . 8.16
(c)(2) . . . . . . . . . . . . . . . . . . . 8.16
(c)(3) . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . 1.1, 8.16
(ss.)315 (a) . . . . . . . . . . . . . . . . . . . . . 8.2
(b) . . . . . . . . . . . . . . . . . . . . . 8.2, 10.8
(c) . . . . . . . . . . . . . . . . . . . . . 8.2
(d) . . . . . . . . . . . . . . . . . . . . . 8.2
(e) . . . . . . . . . . . . . . . . . . . . . Not Applicable
(ss.)316 (a) . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(1)(A) . . . . . . . . . . . . . . . . . . Not Applicable
(a)(1)(B) . . . . . . . . . . . . . . . . . . Not Applicable
(a)(2) . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . .
(c) . . . . . . . . . . . . . . . . . . . . . 6.7
(ss.)317 (a)(1) . . . . . . . . . . . . . . . . . . .
(a)(2) . . . . . . . . . . . . . . . . . . .
(b) . . . . . . . . . . . . . . . . . . . . . 5.9
(ss.)318 (a) . . . . . . . . . . . . . . . . . . . . . 10.10

_______________

</TABLE>
Note: This reconciliation and tie sheet shall not, for any purpose,
be deemed to be a part of the Trust Agreement.

<PAGE>

AMENDED AND RESTATED TRUST AGREEMENT, dated as of January
29, 1997 among The Bear Stearns Companies Inc., a Delaware corporation
(including any successors or assigns, the "Depositor"), (ii) The Chase
Manhattan Bank, a banking corporation duly organized and existing
under the laws of the State of New York, as property trustee (in such
capacity, the "Property Trustee" and, in its separate corporate
capacity and not in its capacity as Property Trustee, the "Bank"),
(iii) Chase Manhattan Bank Delaware, a Delaware banking corporation
that maintains its principal place of business in Delaware, as
Delaware Trustee (the "Delaware Trustee"), (the Property Trustee and
the Delaware Trustee referred to jointly as the "Trustees"), (iv)
William J. Montgoris, an individual, Samuel L. Molinaro, Jr., an
individual and Kenneth L. Edlow, an individual, each of whose address
is c/o The Bear Stearns Companies Inc., 245 Park Avenue, New York, New
York 10167 (each an "Administrator", all collectively, the
"Administrators") and (v) the several Holders, as hereinafter defined.

WITNESSETH

WHEREAS, the Depositor and the Delaware Trustee, as
applicable, have heretofore duly declared and established a business
trust pursuant to the Delaware Business Trust Act by entering into
that certain Trust Agreement, dated as of January 14, 1997 (the
"Original Trust Agreement"), and by the execution and filing with the
Secretary of State of the State of Delaware of a Certificate of Trust,
filed on January 14, 1997, attached as Exhibit A (the "Certificate of
Trust");

WHEREAS, the parties hereto desire to amend and restate the
Original Trust Agreement in its entirety as set forth herein to
provide for, among other things, (i) the issuance of the Common
Securities by the Trust to the Depositor, (ii) the issuance and sale
of the Capital Securities by the Trust pursuant to the Purchase
Agreement and the Registration Rights Agreement, (iii) the acquisition
by the Trust from the Depositor of all of the right, title and
interest in the Debentures, (iv) the appointment of the Administrators
and (v) the exchange by the Property Trustee with the Depositor of the
Original Debentures for the Exchange Debentures, and the exchange by
the Trust with the Holders of the Original Capital Securities for the
Exchange Capital Securities, each such exchange registered under the
Securities Act;

NOW THEREFORE, in consideration of the agreements and
obligations set forth herein and for other good and valuable
consideration, the sufficiency of which is hereby acknowledged, each
party, for the benefit of the other parties and for the benefit of the
Securityholders, hereby amends and restates the Original Trust
Agreement in its entirety and agrees as follows:

<PAGE>

ARTICLE I

DEFINED TERMS

SECTION 1.1. Definitions.

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

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

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

(c) 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 Trust Agreement; and

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

"Act" has the meaning specified in Section 6.8.

"Additional Amount" means, with respect to Trust Securities
of a given Liquidation Amount and/or a given period, the amount of
Additional Interest, Compounded Interest (each as defined in the
Indenture) and Additional Sums paid by the Depositor on a Like Amount
of Debentures for such period.

"Additional Sums" has the meaning specified in Section 4.08
of the Indenture.

"Administrators" has the meaning specified in the preamble
to this Agreement or any successors appointed in accordance with
Section 8.10 solely in such Person's capacity as Administrator of the
Trust heretofore created and continued hereunder and not in such
Person's individual capacity.

"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.

<PAGE>

"Bank" has the meaning specified in the preamble to this
Trust Agreement.

"Bankruptcy Event" means, with respect to any Person:

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

(b) the institution by such Person of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization
or relief under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law, or the consent by it
to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or similar
official) of such Person 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 and its willingness to be adjudicated a
bankrupt, or the taking of corporate action by such Person in
furtherance of any such action.

"Bankruptcy Laws" has the meaning specified in Section 10.9.

"Book-Entry Capital Securities Certificates" has the meaning
specified in Section 5.11.

"Business Day" means any day which is not a Saturday or
Sunday and which in The City of New York is neither a legal holiday
nor a day on which banking institutions are authorized or required by
law or regulation to close or a day on which the corporate trust
office of the Property Trustee or the Debenture Trustee is closed for
business.

"Capital Security" means an undivided beneficial interest in
the assets of the Trust, having a Liquidation Amount of $1,000 and
having the rights provided therefor in this Trust Agreement, including
the right to receive Distributions and a Liquidation Distribution as
provided herein. The Capital Securities shall consist of the Original
Capital Securities and, if issued, the Exchange Capital Securities.

"Capital Securities Certificate" means a certificate
evidencing ownership of Capital Securities, substantially in the form
attached as Exhibit D.

<PAGE>

"Certificate Depository Agreement" means the agreement among
the Trust, the Property Trustee and DTC, as the initial Clearing
Agency, dated as of the Closing Date, relating to the Trust Securities
Certificates, substantially in the form attached as Exhibit B, as the
same may be amended and supplemented from time to time.

"Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act. DTC
will be the initial Clearing Agency.

"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time
a Clearing Agency effects book-entry transfers and pledges of
securities deposited with the Clearing Agency.

"Closing Date" means January 29, 1997, which is the date of
execution and delivery of this Trust Agreement, or such other date as
may be designated the Closing Date pursuant to the Purchase Agreement.

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

"Common Security" means a common undivided beneficial
interest in the assets of the Trust, having a Liquidation Amount of
$1,000 and having the rights provided therefor in this Trust
Agreement, including the right to receive Distributions and a
Liquidation Distribution as provided herein.

"Common Securities Certificate" means a certificate
evidencing ownership of Common Securities, substantially in the form
attached as Exhibit C.

"Corporate Trust Office" means (i) when used with respect to
the Property Trustee, the principal corporate trust office of the
Property Trustee and (ii) when used with respect to the Debenture
Trustee, the principal corporate trust office of the Debenture
Trustee.

"Debenture Applicable Rate" means the "Applicable Rate" as
defined in the Indenture.

"Debenture Event of Default" means an "Event of Default" as
defined in the Indenture.

"Debenture Redemption Date" means, with respect to any
Debentures to be redeemed under the Indenture, the date fixed for
redemption under the Indenture.

<PAGE>

"Debenture Trustee" means The Chase Manhattan Bank, and any
successor thereto under the Indenture.

"Debentures" means the aggregate principal amount of the
Depositor's Fixed/Adjustable Rate Junior Subordinated Deferrable
Interest Debentures due January 15, 2027 issued pursuant to the
Indenture.

"Definitive Capital Securities Certificates" means Capital
Securities Certificates issued in certificated, fully registered form
as provided in Section 5.13.

"Delaware Business Trust Act" means Chapter 38 of Title 12
of the Delaware Code, 12 Del. C. (ss.) 3801, et seq., as it may be
amended from time to time.

"Delaware Trustee" means the corporation identified as the
"Delaware Trustee" in the preamble to this Trust Agreement solely in
its capacity as Delaware Trustee of the Trust created and continued
hereunder, or its successor in interest in such capacity, or any
successor Delaware trustee appointed as herein provided.

"Depositor" has the meaning specified in the preamble to
this Trust Agreement.

"Distribution Date" has the meaning specified in Section
4.1(a).

"Distributions" means amounts payable in respect of the
Trust Securities as provided in Section 4.1.

"DTC" means The Depository Trust Company.

"Early Termination Event" has the meaning specified in
Section 9.2.

"Event of Default" means any one of the following events
(whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body):

(a) the occurrence of a Debenture Event of Default; or

(b) default by the Trust in the payment of any Distribution
when it becomes due and payable, and continuation of such default for
a period of 30 days; or

(c) default by the Trust in the payment of any Redemption
Price of any Trust Security when it becomes due and payable; or

<PAGE>

(d) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Trustees in this Trust
Agreement (other than a covenant or warranty a default in the
performance or breach of which is dealt with in clause (b) or (c)
above), and continuation of such default or breach for a period of 60
days after there has been given, by registered or certified mail, to
the defaulting Trustee or Trustees by the Holders of at least 25% in
aggregate liquidation preference of the Outstanding Capital
Securities, 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

(e) the occurrence of a Bankruptcy Event with respect to
the Property Trustee and the failure by the Depositor to appoint a
successor Property Trustee within 60 days thereof.

"Exchange Act" means the Securities Exchange Act of 1934, as
amended.

"Exchange Capital Securities" has the meaning specified in
Section 2.4

"Exchange Debentures" means a new series of junior
subordinated debentures issued by the Depositor in an exchange offer
for the Original Debentures, such exchange offer being registered
under the Securities Act, all pursuant to the Registration Rights
Agreement.

"Exchange Offer" means an exchange offer of the Exchange
Capital Securities for the Original Capital Securities, which is
registered under the Securities Act pursuant to Registration Rights
Agreement.

"Expiration Date" has the meaning specified in Section 9.1.

"Guarantee" means the Capital Securities Guarantee Agreement
executed and delivered by the Depositor and The Chase Manhattan Bank,
as trustee, contemporaneously with the execution and delivery of this
Trust Agreement, for the benefit of the Holders of the Capital
Securities, as amended from time to time.

"Holder" means a Person in whose name a Trust Security or
Trust Securities is registered in the Securities Register; any such
Person shall be deemed to be a beneficial owner within the meaning of
the Delaware Business Trust Act.

"Indenture" means the Indenture, dated as of January 29,
1997, between the Depositor and the Debenture Trustee, as trustee, as
supplemented by the First Supplemental Indenture of the same date, as
amended or supplemented from time to time.

"Initial Purchasers" means the initial purchasers named in
Schedule I to the Purchase Agreement.

<PAGE>

"Lien" means any lien, pledge, charge, encumbrance,
mortgage, deed of trust, adverse ownership interest, hypothecation,
assignment, security interest or preference, priority or other
security agreement or preferential arrangement of any kind or nature
whatsoever.

"Like Amount" means (a) with respect to a redemption of
Trust Securities, Trust Securities having a Liquidation Amount equal
to the principal amount of Debentures to be contemporaneously redeemed
in accordance with the Indenture the proceeds of which will be used to
pay the Redemption Price of such Trust Securities, and (b) with
respect to a distribution of Debentures to Holders of Trust Securities
in connection with a dissolution or liquidation of the Trust,
Debentures having a principal amount equal to the Liquidation Amount
of the Trust Securities of the Holder to whom such Debentures are
distributed.

"Liquidation Amount" means the stated amount of $1,000 per
Trust Security.

"Liquidation Date" means the date on which Debentures are to
be distributed to Holders of Trust Securities in connection with a
termination and liquidation of the Trust pursuant to Section 9.4(a).

"Liquidation Distribution" has the meaning specified in
Section 9.4(d).

"1940 Act" means the Investment Company Act of 1940, as
amended.

"Officers' Certificate" means a certificate signed by the
Chairman of the Board or any Vice Chairman of the Board or the
President or any Executive Vice President or Chief Operating Officer
or Chief Financial Officer of the Depositor and by the Treasurer or an
Assistant Treasurer or Controller or the Secretary or an Assistant
Secretary of the Depositor and delivered to the appropriate Trustee.
Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Trust Agreement shall
include:

(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;

(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officers' Certificate;

(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and

<PAGE>

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

"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Trust, the Property Trustee or the Depositor
(including counsel who is an employee of the Depositor), who is
experienced in matters related to the substance of the opinion.

"Original Capital Securities" has the meaning specified in
Section 2.4.

"Original Debentures" means the aggregate principal amount
of the Depositor's Fixed/Adjustable Rate Junior Subordinated
Deferrable Interest Debentures due January 15, 2027, issued pursuant
to the Indenture on the Closing Date.

"Original Guarantee" means the Guarantee extended by the
Depositor for the benefit of the Holders of Original Capital
Securities.

"Original Trust Agreement" has the meaning specified in the
recitals to this Trust Agreement.

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

(a) Trust Securities theretofore cancelled by the
Securities Registrar or delivered to the Securities Registrar for
cancellation;

(b) Trust Securities for whose payment or redemption money
in the necessary amount has been theretofore deposited with the
Property Trustee or any Paying Agent for the Holders of such Trust
Securities; provided that, if such Trust Securities are to be
redeemed, notice of such redemption has been duly given pursuant to
this Trust Agreement; and

(c) Trust Securities which have been paid or in exchange
for or in lieu of which other Trust Securities have been executed and
delivered pursuant to Sections 5.4, 5.5, 5.11 and 5.13; provided,
however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Capital Securities have given
any request, demand, authorization, direction, notice, consent or
waiver hereunder, Capital Securities owned by the Depositor, any
Trustee or any Affiliate of the Depositor or any Trustee shall be
disregarded and deemed not to be Outstanding, except that (a) in
determining whether any Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or
waiver, only Capital Securities that such Trustee knows to be so owned
shall be so disregarded and (b) the foregoing shall not apply at any
time when all of the outstanding Capital Securities are owned by the
Depositor, one or more of the Trustees and/or any such

<PAGE>

Affiliate. Capital Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Administrators the pledgee's right so to
act with respect to such Capital Securities and that the pledgee is
not the Depositor or any Affiliate of the Depositor.

"Owner" means each Person who is the beneficial owner of a
Book-Entry Capital Securities Certificate as reflected in the records
of the Clearing Agency or, if a Clearing Agency Participant is not the
Owner, then as reflected in the records of a Person maintaining an
account with such Clearing Agency (directly or indirectly, in
accordance with the rules of such Clearing Agency).

"Paying Agent" means any paying agent or co-paying agent
appointed pursuant to Section 5.9 and shall initially be the Bank.

"Payment Account" means a segregated non-interest-bearing
corporate trust account maintained by the Property Trustee with the
Bank in its trust department for the benefit of the Securityholders in
which all amounts paid in respect of the Debentures will be held and
from which the Property Trustee, through the Paying Agent, shall make
payments to the Securityholders in accordance with Sections 4.1 and
4.2.

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

"PORTAL Market" means the Private Offerings, Resales and
Trading through Automated Linkages Market operated by the National
Association of Securities Dealers, Inc. (or any successor thereto).

"Property Trustee" means the commercial bank or trust
company identified as the "Property Trustee" in the preamble to this
Trust Agreement solely in its capacity as Property Trustee of the
Trust heretofore created and continued hereunder, or its successor in
interest in such capacity, or any successor property trustee appointed
as herein provided.

"Purchase Agreement" means the Purchase Agreement, dated as
of January 22, 1997 among the Trust, the Depositor and the Initial
Purchasers named therein.

"QIB" means a "qualified institutional buyer" as defined in
Rule l44A.

"Redemption Date" means, with respect to any Trust Security
to be redeemed, the date fixed for such redemption by or pursuant to
this Trust Agreement; provided that each Debenture Redemption Date and
the stated maturity of the Debentures shall be a Redemption Date for a
Like Amount of Trust Securities.

<PAGE>

"Redemption Price" means, with respect to any Trust
Security, the Liquidation Amount of such Trust Security, plus
accumulated and unpaid Distributions to the Redemption Date, plus the
related amount of the premium, if any, paid by the Depositor upon the
concurrent redemption of a Like Amount of Debentures, allocated on a
pro rata basis (based on Liquidation Amounts) among the Trust
Securities.

"Registration Rights Agreement" means the Registration
Rights Agreement dated the date hereof among the Depositor, the Trust
and the Initial Purchasers for the benefit of themselves and the
Holders as the same may be amended from time to time in accordance
with the terms thereof.

"Relevant Trustee" shall have the meaning specified in
Section 8.10

"Restricted Security" has the meaning specified in Section
5.3(c).

"Rule 144" means Rule 144 as promulgated under the
Securities Act, or any successor rule.

"Rule 144A" means Rule 144A as promulgated under the
Securities Act, or any successor rule.

"Rule 144A Capital Securities" means the Capital Securities
sold by the Initial Purchasers in reliance on Rule 144A.

"Rule 144(k)" means Rule 144(k) as promulgated under the
Securities Act, or any successor rule.

"Securities Act Legend" has the meaning specified in Section
5.3.

"Securities Register" and "Securities Registrar" have the
respective meanings specified in Section 5.4

"Securityholder" means a Person in whose name a Trust
Security or Trust Securities is registered in the Securities Register;
any such Person shall be a beneficial owner within the meaning of the
Delaware Business Trust Act.

"Special Interest" shall have the meaning specified in the
Indenture.

"Tax Event" means the receipt by the Trust of an Opinion of
Counsel experienced in such matters to the effect that, as a result of
any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or
therein, or as a result of any official administrative pronouncement
or judicial decision interpreting or

<PAGE>

applying such laws or regulations, which amendment or change is
effective or which pronouncement or decision is announced on or after
the date of issuance of the Capital Securities under this Trust
Agreement, there is more than an insubstantial risk that (i) the Trust
is, or will be within 90 days after the date of such Opinion of
Counsel, subject to United States Federal income tax with respect to
income received or accrued on the Debentures, (ii) interest payable by
the Depositor on the Debentures is not, or within 90 days after the
date of such Opinion of Counsel, will not be, deductible by the
Depositor, in whole or in part, for United States Federal income tax
purposes or (iii) the Trust is, or will be within 90 days after the
date of such Opinion of Counsel, subject to more than a de minimis
amount of other taxes, duties or other governmental charges. For
purposes of a Tax Event and the redemption procedures applicable
thereto, reference to the Debentures shall include any Exchange
Debentures issued in exchange therefor.

"Transfer Restriction Termination Date" means with respect
to any particular Capital Security the first date on which such
Capital Security (other than a Capital Security held by the Trust or
any Affiliate thereof) may be sold pursuant to Rule 144(k).

"Trust" means the Delaware business trust created under the
Original Trust Agreement and continued hereby and identified on the
cover page to this Trust Agreement.

"Trust Agreement" means this Amended and Restated Trust
Agreement, as the same may be modified, amended or supplemented in
accordance with the applicable provisions hereof, including for all
purposes of this Trust Agreement and any such modification, amendment
or supplement, the provisions of the Trust Indenture Act that are
deemed to be a part of and govern this Trust Agreement and any such
modification, amendment or supplement, respectively.

"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.

"Trust Property" means (a) the Debentures, (b) any cash on
deposit in, or owing to, the Payment Account and (c) all proceeds and
rights in respect of the foregoing and any other property and assets
for the time being held or deemed to be held by the Property Trustee
pursuant to the trusts of this Trust Agreement.

"Trust Security" means any one of the Common Securities or
the Capital Securities. The Trust Securities represent undivided
beneficial interests in the Trust Property.

"Trust Securities Certificate" means any one of the Common
Securities Certificates or the Capital Securities Certificates.

<PAGE>

"Trustees" means, collectively, the Property Trustee and the
Delaware Trustee.

ARTICLE II

CONTINUATION OF THE TRUST

SECTION 2.1. Name.

The Trust continued hereby shall be known as "Bear Stearns
Capital Trust I" as such name may be modified from time to time by the
Administrators following written notice to the Securityholders and the
Trustees, in which name the Property Trustee and the Administrators
may conduct the business of the Trust, make and execute contracts and
other instruments on behalf of the Trust and sue and be sued.

SECTION 2.2. Office of the Delaware Trustee; Principal
Place of Business.

The address of the Delaware Trustee in the State of Delaware
is Chase Manhattan Bank Delaware, 1201 Market Street, Wilmington,
Delaware 19801, Attention: Corporate Trustee Administration
Department, or such other address in the State of Delaware as the
Delaware Trustee may designate by written notice to the
Securityholders and the Depositor. The principal executive office of
the Trust is c/o The Bear Stearns Companies Inc. 245 Park Avenue, New
York, New York 10167.

SECTION 2.3. Initial Contribution of Trust Property;
Organizational Expenses.

The Trust acknowledges receipt in trust from the Depositor
in connection with the Original Trust Agreement of the sum of $10,
which constituted the initial Trust Property. The Depositor shall pay
organizational expenses of the Trust as they arise or shall, upon
request of any Trustee, promptly reimburse such Trustee for any such
expenses paid by such Trustee. The Depositor shall make no claim upon
the Trust Property for the payment of such expenses.

SECTION 2.4. Issuance of the Capital Securities.

The Depositor, on behalf of the Trust and pursuant to the
Original Trust Agreement, executed and delivered the Purchase
Agreement. Contemporaneously with the execution and delivery of this
Trust Agreement, an Administrator, on behalf of the Trust, shall
execute in accordance with Section 5.2 and deliver to the Initial
Purchasers, Capital Securities Certificates, registered in the name of
the nominee of the initial Clearing Agency, in an aggregate amount of
200,000 Capital Securities (the "Original Capital Securities")

<PAGE>

having an aggregate Liquidation Amount of $200,000,000 against receipt
of an aggregate purchase price for such Capital Securities of
$199,884,000 ($999.42 per Capital Security). The Original Capital
Securities shall consist of Rule 144A Capital Securities.

In addition, an Administrator, on behalf of the Trust, shall
execute Capital Securities Certificates in accordance with Section 5.2
representing an additional class of Capital Securities to be issued
only in exchange for all or part of the Original Capital Securities
pursuant to the Exchange Offer contemplated by the Registration Rights
Agreement ("Exchange Capital Securities"); provided, that the
aggregate number of issued and outstanding Capital Securities shall
not at any time exceed 200,000 less the number of Capital Securities
redeemed pursuant to Section 4.2.

SECTION 2.5. Issuance of the Common Securities;
Subscription and Purchase of Debentures.

Contemporaneously with the execution and delivery of this
Trust Agreement, an Administrator, on behalf of the Trust, shall
execute in accordance with Section 5.2 and deliver to the Depositor,
Common Securities Certificates, registered in the name of the
Depositor, in an aggregate amount of 6,186 Common Securities having an
aggregate Liquidation Amount of $6,186,000 against payment by the
Depositor of an aggregate purchase price of $6,182,412.12 ($999.42 per
Common Security). Contemporaneously therewith, an Administrator, on
behalf of the Trust, shall subscribe to and purchase from the
Depositor Debentures, registered in the name of the Property Trustee
and having an aggregate principal amount equal to $206,186,000 and, in
satisfaction of the purchase price for such Debentures, the Trust
shall deliver to the Depositor the sum of $206,066,412.12 such sum
being the sum of the amounts delivered to the Trust pursuant to (i)
the second sentence of Section 2.4 and (ii) the first sentence of this
Section 2.5).

SECTION 2.6. Declaration of Trust; Intention of Parties

The exclusive purposes and functions of the Trust are (a) to
issue and sell Trust Securities (including the Exchange Capital
Securities pursuant to the Exchange Offer), (b) to use the proceeds
from such sale to acquire the Original Debentures, (c) to exchange the
Original Debentures for the Exchange Debentures pursuant to the
Indenture and (d) to engage in those activities necessary, convenient
or incidental thereto. The Depositor hereby appoints the Trustees as
trustees of the Trust and the Administrators, to have all the rights,
powers and duties to the extent set forth herein, and the Trustees and
the Administrators hereby accept such appointment. The Property
Trustee hereby declares that it will hold the Trust Property in trust
upon and subject to the conditions set forth herein for the benefit of
the Trust and the Securityholders. The Administrators shall have only
those ministerial duties set forth herein with respect to
accomplishing the purposes of the Trust and, to the fullest extent
permitted by law, shall not be trustees or fiduciaries with respect to
the Trust. The Property Trustee shall have the power (but not the
obligation) to perform those duties

<PAGE>

assigned to the Administrators. The Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have
any of the duties and responsibilities, of the Property Trustee or the
Administrators set forth herein. The Delaware Trustee shall be one of
the Trustees of the Trust for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Delaware Business
Trust Act. The Trust shall not borrow money, issue debt or reinvest
proceeds derived from investments, pledge any assets, or otherwise
undertake or permit to be undertaken any activity that would cause the
Trust not to be classified for United States federal income tax
purposes as a grantor trust. It is the intention of the parties hereto
that the Trust be classified as a grantor trust for United States
federal income tax purposes. The provisions of this Agreement shall be
interpreted to further this intention of the parties.

SECTION 2.7. Authorization to Enter into Certain
Transactions.

(a) The Trustees and the Administrators shall conduct the
affairs of the Trust in accordance with the terms of this Trust
Agreement. Subject to the limitations set forth in paragraph (b) of
this Section, and in accordance with the following provisions (i) and
(ii), the Trustees and the Administrators shall have the authority to
enter into all transactions and agreements determined by the Trustees
or the Administrators to be appropriate in exercising the authority,
express or implied, otherwise granted to the Trustees or the
Administrators under this Trust Agreement, and to perform all acts in
furtherance thereof, including without limitation, the following:

(i) Each Administrator shall have the power and
authority to act on behalf of the Trust with respect to the
following matters:

(A) the issuance and sale of the Trust
Securities;

(B) to cause the Trust to enter into, and to
execute, deliver and perform on behalf of the Trust, the
Certificate Depository Agreement, the Registration Rights
Agreement and such other agreements as may be necessary or
desirable in connection with the purposes and function of
the Trust;

(C) assisting in the qualification of the Capital
Securities under any applicable state securities or blue sky
laws, as the same may be deemed necessary or advisable;

(D) assisting in the registration of the Exchange
Offer and the Exchange Capital Securities under the
Securities Act, and under the state securities or blue sky
laws, and the qualification of this Trust Agreement as a
trust indenture under the Trust Indenture Act, all in
accordance with the Registration Rights Agreement;

<PAGE>

(E) registration of the Capital Securities under
the Exchange Act, if required, and the preparation and
filing of all periodic and other reports and other documents
pursuant to the foregoing;

(F) assisting in the designation of the Capital
Securities for trading by QIBs in the PORTAL Market at the
time of issuance thereof, including the preparation,
execution and filing on behalf of the Trust an application,
prepared by the Depositor, to the PORTAL Market and the
preparation, execution and filing on behalf of the Trust of
documents or instruments to be delivered to the Clearing
Agency relating to the Capital Securities; or such other
market designation or listings as shall be determined by the
Depositor, and the registration of the Capital Securities
under the Exchange Act, if required by applicable law, and
the execution and filing of all applications, periodic and
other reports and other documents pursuant to the foregoing,
or the seeking of relief from same;

(G) the sending of notices (other than notices of
default) and other information regarding the Trust
Securities and the Debentures to the Securityholders in
accordance with this Trust Agreement;

(H) the consent to the appointment of a Paying
Agent and Securities Registrar in accordance with this Trust
Agreement which consent shall not be unreasonably withheld

(I) execution of the Trust Securities on behalf
of the Trust in accordance with this Trust Agreement;

(J) execution and delivery of closing
certificates, if any, pursuant to the Purchase Agreement and
application for a taxpayer identification number for the
Trust;

(K) the taking of any action incidental to the
foregoing as the Administrators may from time to time
determine is necessary or advisable to give effect to the
terms of this Trust Agreement for the benefit of the
Securityholders (without consideration of the effect of any
such action on any particular Securityholder);

(L) execution and delivery of letters or
documents to, or instruments with DTC relating to the
Capital Securities;

(M) to establish a record date with respect to
all actions to be taken hereunder that require a record date
be established, including and with respect to, for the
purposes of ss. 316(c) of the Trust Indenture Act,

<PAGE>

Distributions, voting rights, redemptions and exchanges, and
to issue relevant notices to the Holders of Capital
Securities and Holders of Common Securities as to such
actions and applicable record dates; and

(N) to duly prepare and file all applicable tax
returns and tax information reports that are required to be
filed with respect to the Trust on behalf of the Trust.

(ii) As among the Trustees and the Administrators, the
Property Trustee shall have the power, duty and authority to act
on behalf of the Trust with respect to the following matters:

(A) the establishment of the Payment Account;

(B) the receipt of the Debentures;

(C) the collection of interest, principal and any
other payments made in respect of the Debentures in the
Payment Account;

(D) the distribution through the Paying Agent of
amounts owed to the Securityholders in respect of the Trust
Securities;

(E) subject to the provisions hereof, the
exercise of all of the rights, powers and privileges of a
holder of the Debentures;

(F) the sending of notices of default and other
information regarding the Trust Securities and the
Debentures to the Securityholders in accordance with this
Trust Agreement;

(G) the distribution of the Trust Property in
accordance with the terms of this Trust Agreement;

(H) to the extent provided in this Trust
Agreement, the winding up of the affairs of and liquidation
of the Trust and the preparation, execution and filing of
the certificate of cancellation with the Secretary of State
of the State of Delaware;

(I) to exchange the Original Debentures for the
Exchange Debentures in an exchange in connection with the
Exchange Offer pursuant to the Registration Rights
Agreement;

(J) after an Event of Default (other than under
paragraph (b), (c), (d) or (e) of the definition of such
term if such Event of Default is by

<PAGE>

or with respect to the Property Trustee) the taking of any
action incidental to the foregoing as the Property Trustee
may from time to time determine is necessary or advisable to
give effect to the terms of this Trust Agreement and protect
and conserve the Trust Property for the benefit of the
Securityholders (without consideration of the effect of any
such action on any particular Securityholder); and

(K) to take all reasonable action at the
direction of the Depositor that may be necessary or
appropriate for the preservation and the continuation of the
Trust's valid existence, rights, franchises and privileges
as a statutory business trust under the laws of the State of
Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of
the Holders of the Capital Securities or to enable the Trust
to effect the purposes for which the Trust was created;

(iii) The Property Trustee shall have the power and
authority to act on behalf of the Trust with respect to any of
the duties, liabilities, powers or the authority of the
Administrators set forth in Section 2.7(a)(i)(I); and in the
event of a conflict between the action of the Administrators and
the action of the Property Trustee, the action of the Property
Trustee shall prevail.

(b) So long as this Trust Agreement remains in effect, the
Trust (or the Trustees or the Administrators acting on behalf of the
Trust) shall not undertake any business, activities or transaction
except as expressly provided herein or contemplated hereby. In
particular, neither the Trustees nor the Administrators shall, on
behalf of the Trust, (i) acquire any investments or assets other than
the Trust Property or engage in any activities not authorized by this
Trust Agreement, (ii) sell, assign, transfer, exchange, mortgage,
pledge, set-off or otherwise dispose of any of the Trust Property or
interests therein, including to Securityholders, except as expressly
provided herein, (iii) take any action that would cause the Trust to
fail or cease to qualify as a "grantor trust" for United States
Federal income tax purposes, (iv) incur any indebtedness for borrowed
money or issue any other debt or (v) take or consent to any action
that would result in the placement of a Lien on any of the Trust
Property. The Property Trustee shall defend all claims and demands of
all Persons at any time claiming any Lien on any of the Trust Property
adverse to the interest of the Trust or the Securityholders in their
capacity as Securityholders.

(c) In connection with the issuance and sale of the Capital
Securities, the Depositor shall have the right and responsibility to
assist the Trust with respect to, or effect on behalf of the Trust,
the following (and any actions taken by the Depositor in furtherance
of the following prior to the date of this Trust Agreement are hereby
ratified and confirmed in all respects):

<PAGE>

(i) the preparation by the Trust of an offering
circular, including any amendment or supplement thereto, in
relation to the Original Capital Securities;

(ii) the compliance by the Trust with the Registration
Rights Agreement, including the preparation and filing by the
Trust with the Commission and the execution on behalf of the
Trust of a registration statement or statements on the
appropriate form in relation to the Capital Securities, including
any amendments thereto and/or a "shelf" registration statement to
register the Original Capital Securities, the Original Guarantee
and the Original Debentures pursuant to the Registration Rights
Agreement;

(iii) preparation of an application for designation of
the Capital Securities for trading in the PORTAL Market of the
National Association of Securities Dealers, Inc. at the time of
issuance thereof; and

(iv) the determination of the states, if any, in which
to take appropriate action to qualify or register for sale all or
part of the Capital Securities and the determination of any and
all such acts, other than actions which must be taken by or on
behalf of the Trust, and the advice to the Trustees of actions
they must take on behalf of the Trust, and the preparation for
execution and filing of any documents to be executed and filed by
the Trust or on behalf of the Trust, as the Depositor deems
necessary or advisable in order to comply with the applicable
laws of any such state; and

(v) if the Depositor shall desire, the preparation for
filing by the Trust and execution on behalf of the Trust of an
application to the New York Stock Exchange or any other national
stock exchange or the Nasdaq National Market for listing, upon
notice of issuance, of any Capital Securities; and the
preparation for filing by the Trust with the Commission and the
execution on behalf of the Trust of a registration statement on
Form 8-A relating to the registration of the Capital Securities
under Section 12(b) or 12(g) of the Exchange Act, including any
amendments thereto;

(vi) the negotiation of the terms of, and the execution
and delivery of, the Purchase Agreement providing for the sale of
the Capital Securities; and

(vii) any other actions necessary or desirable to
carry out any of the foregoing activities.

(d) Notwithstanding anything herein to the contrary, the
Administrators and the Property Trustee are authorized and directed to
conduct the affairs of the Trust and to operate the Trust so that the
Trust will not be deemed to be an "investment company" required to be
registered under the 1940 Act or fail to be classified as a grantor
trust for United States Federal income tax purposes and so that the
Debentures will be treated as

<PAGE>

indebtedness of the Depositor for United States Federal income tax
purposes. In this regard, the Property Trustee shall be protected if
it shall have conducted the affairs of the Trust and operated the
Trust in accordance with its rights, powers and duties as specifically
set forth in this Trust Agreement. In this connection, the
Administrators, the Property Trustee and the Holder of the Common
Securities are authorized to take any action, not inconsistent with
applicable law, the Certificate of Trust or this Trust Agreement, that
any of the Administrators, Property Trustee and the Holder of the
Common Securities determines in its discretion to be necessary or
desirable for such purposes, as long as such action does not
materially adversely affect the interests of the Holders of the
Capital Securities. The Property Trustee shall not be required to
take any action under this clause (d) unless directed to do so by the
Depositor, the Administrators or (subject to the provisions hereof) by
Holders of not less than a majority in Liquidation Amount of the Trust
Securities.

SECTION 2.8. Assets of Trust.

The assets of the Trust shall consist of the Trust Property.

SECTION 2.9. Title to Trust Property.

Legal title to all Trust Property shall be vested at all
times in the Property Trustee (in its capacity as such) and shall be
held and administered by the Property Trustee for the benefit of the
Trust and the Securityholders in accordance with this Trust Agreement.

ARTICLE III

PAYMENT ACCOUNT

SECTION 3.1. Payment Account.

(a) On or prior to the Closing Date, the Property Trustee
shall establish the Payment Account. The Property Trustee and any
agent of the Property Trustee shall have exclusive control and sole
right of withdrawal with respect to the Payment Account for the
purpose of making deposits in and withdrawals from the Payment Account
in accordance with this Trust Agreement. All monies and other
property deposited or held from time to time in the Payment Account
shall be held by the Property Trustee in the Payment Account for the
exclusive benefit of the Securityholders and for distribution as
herein provided, including (and subject to) any priority of payments
provided for herein.

(b) The Property Trustee shall deposit in the Payment
Account, promptly upon receipt, all payments of principal of or
interest on, and any other payments or proceeds with respect to, the
Debentures. Amounts held in the Payment Account shall not be invested
by the Property Trustee pending distribution thereof.

<PAGE>

ARTICLE IV

DISTRIBUTIONS; REDEMPTION

SECTION 4.1. Distributions.

(a) Distributions (including Distributions of Additional
Amounts and/or Special Interest, if applicable) will be made on the
Trust Securities at the rate and on the dates that payments of
interest (including Additional Amounts and Special Interest) are made
on the Debentures. Distributions on the Trust Securities shall be
cumulative, and will accumulate whether or not there are funds of the
Trust available for the payment of Distributions. Distributions shall
accumulate from January 29, 1997 and, except in the event (and to the
extent) that the Depositor exercises its right to defer the payment of
interest on the Debentures pursuant to the Indenture, shall be payable
semiannually on January 15, and July 15, of each year, commencing on
July 15, 1997. If any date on which a Distribution is otherwise
payable on the Trust Securities is not a Business Day, then the
payment of such Distribution shall be made on the next succeeding day
that is a Business Day or if such Business Day falls in the next
calendar year, on the immediately preceding Business Day, in each
case, with the same force and effect as if made on such date (each
date on which Distributions are payable in accordance with this
Section 4.1(a), a "Distribution Date"). Until January 15, 2002, in
the event that any January 15 or July 15 is not a Business Day,
Distributions will be paid on the next succeeding Business Day,
without any interest or other payment with respect to any such delay.
After January 15, 2002, Distributions shall be the amount of
Distributions accumulated from, and including, the last date on which
Distributions have previously been paid, to, but excluding, the
Distribution Date.

(b) Assuming payments of interest on the Debentures are
made when due (and before giving effect to any Additional Amounts
and/or Special Interest, if applicable), Distributions on the Trust
Securities shall be payable at a rate of 7.00% per annum of the
Liquidation Amount of the Trust Securities until January 15, 2002, and
at the Debenture Applicable Rate of the Liquidation Amount thereafter.
The amount of Distributions payable for any full period shall be
computed on the basis of a 360-day year of twelve 30-day months until
January 15, 2002, and thereafter on the basis of a 360-day year and
the actual number of days elapsed. The amount of Distributions
payable for any period shall include the Additional Amounts, if any,
and Special Interest, if any.

(c) Distributions on the Trust Securities shall be made by
the Property Trustee from the Payment Account and shall be payable on
each Distribution Date only to the extent that the Trust has funds
then on hand and available in the Payment Account for the payment of
such Distributions.

(d) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they
appear on the Securities Register for the Trust

<PAGE>

Securities on the relevant record date, which shall be the first day
of the month in which the relevant Distribution Date occurs.

SECTION 4.2. Redemption.

(a) On each Debenture Redemption Date and on the stated
maturity of the Debentures, the Trust will be required to redeem a
Like Amount of Trust Securities at the Redemption Price.

(b) Notice of redemption shall be given by the Property
Trustee 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
Trust Securities, at such Holder's address appearing in the Security
Register. All notices of redemption shall state:

(i) the Redemption Date;

(ii) the Redemption Price or if the Redemption Price
cannot be calculated prior to the time the notice of redemption
is required to be sent, the manner of calculation thereof;

(iii) the CUSIP number;

(iv) if less than all the Outstanding Trust Securities
are to be redeemed, the identification and the total Liquidation
Amount of the particular Trust Securities to be redeemed; and

(v) that on the Redemption Date the Redemption Price
will become due and payable upon each such Trust Security to be
redeemed and that Distributions thereon will cease to accumulate
on and after said date.

(c) The Trust Securities redeemed on each Redemption Date
shall be redeemed at the Redemption Price with the proceeds from the
contemporaneous redemption of Debentures. Redemptions of the Trust
Securities shall be made and the Redemption Price shall be payable on
each Redemption Date only to the extent that the Trust has funds then
on hand and available in the Payment Account for the payment of such
Redemption Price.

(d) If the Property Trustee gives a notice of redemption in
respect of any Capital Securities, then, by 10:00 a.m., New York City
time, on the Redemption Date, the Depositor shall deposit sufficient
funds with the Property Trustee to pay the Redemption Price. If such
deposit has been made, then, by 12:00 noon, New York City time, on the
Redemption Date, subject to Section 4.2(c), the Property Trustee will,
so long as the Capital Securities are in book-entry-only form,
irrevocably deposit with the Clearing Agency for the Capital
Securities funds sufficient to pay the applicable Redemption Price and
will give such

<PAGE>

Clearing Agency irrevocable instructions and authority to pay the
Redemption Price to the Holders thereof. If Capital Securities are no
longer in book-entry-only form, the Property Trustee, subject to
Section 4.2(c), will irrevocably deposit with the Paying Agent funds
sufficient to pay the applicable Redemption Price and will give the
Paying Agent irrevocable instructions and authority to pay the
Redemption Price with respect to such Capital Securities to the
Holders thereof upon surrender of their Capital Securities
Certificates. Notwithstanding the foregoing, Distributions payable on
or prior to the Redemption Date for any Trust Securities called for
redemption shall be payable to the Holders of such Trust Securities as
they appear on the Securities Register for the Trust Securities on the
relevant record dates for the related Distribution. If notice of
redemption shall have been given and funds deposited as required, then
upon the date of such deposit, all rights of Securityholders holding
Trust Securities so called for redemption will cease, except the right
of such Securityholders to receive the Redemption Price and any unpaid
Distribution payable on or prior to the Redemption Date, but without
interest, and such Trust Securities will cease to be outstanding. In
the event that any date on which any Redemption Price is payable is
not a Business Day, then payment of the Redemption Price payable on
such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such
date. In the event that payment of the Redemption Price in respect of
any Trust Securities called for redemption is improperly withheld or
refused and not paid either by the Trust or by the Depositor pursuant
to the Guarantee, Distributions on such Trust Securities will continue
to accumulate, at the then applicable rate, from the Redemption Date
originally established by the Trust for such Trust Securities to the
date such Redemption Price is actually paid, in which case the actual
payment date will be the date fixed for redemption for purposes of
calculating the Redemption Price.

(e) Payment of the Redemption Price on the Trust Securities
shall be made to the recordholders thereof as they appear on the
Securities Register for the Trust Securities on a date to be
established as the record date for the distribution by the
Administrators, which date shall be not more than 60 days nor less
than 30 days prior to the relevant Redemption Date.

(f) Subject to Section 4.3(a), if less than all the
Outstanding Trust Securities are to be redeemed on a Redemption Date,
then the aggregate Liquidation Amount of Trust Securities to be
redeemed shall be allocated on a pro rata basis (based on Liquidation
Amounts) among the Common Securities and the Capital Securities. The
particular Capital Securities to be redeemed shall be selected on a
pro rata basis (based upon Liquidation Amounts) not less than 30 nor
more than 60 days prior to the Redemption Date by the Property Trustee
from the Outstanding Capital Securities not previously called for
redemption, by such method as the Property Trustee shall deem fair and
appropriate. Any such proration may be based on the aggregate
Liquidation Amount of Trust Securities held

<PAGE>

by each Holder and in making any such proration the Property Trustee
may make such adjustments as may be appropriate in order that only
Trust Securities in Liquidation Amount equal to $1,000 or integral
multiples of $1,000 in excess thereof shall be redeemed. The Property
Trustee shall promptly notify the Securities Registrar in writing of
the Capital Securities selected for redemption and, in the case of any
Capital Securities selected for partial redemption, the Liquidation
Amount thereof to be redeemed. For all purposes of this Trust
Agreement, unless the context otherwise requires, all provisions
relating to the redemption of Capital Securities shall relate, in the
case of any Capital Securities redeemed or to be redeemed only in
part, to the portion of the Liquidation Amount of Capital Securities
that has been or is to be redeemed.

(g) In the event that there is any money or other property
held by or for the Trust that is not accounted for hereunder, such
property shall be distributed pro rata among the Holders of Trust
Securities on the next Distribution Date.

SECTION 4.3. Subordination of Common Securities.

(a) Payment of Distributions (including Additional Amounts
and/or Special Interest, if applicable) on, and the Redemption Price
of, the Trust Securities, as applicable, shall be made, subject to
Section 4.2(f), pro rata among the Common Securities and the Capital
Securities based on the Liquidation Amount of the Trust Securities;
provided, however, that if on any Distribution Date or Redemption Date
any Event of Default resulting from a Debenture Event of Default shall
have occurred and be continuing, no payment of any Distribution
(including Additional Amounts or Special Interest, if applicable) on,
or Redemption Price of, any Common Security, and no other payment on
account of the redemption, liquidation or other acquisition of Common
Securities, shall be made unless payment in full in cash of all
accumulated and unpaid Distributions (including Additional Amounts, if
applicable, and/or Special Interest, if applicable) on all Outstanding
Capital Securities, for all Distribution periods terminating on or
prior thereto, or in the case of payment of the Redemption Price the
full amount of such Redemption Price on all Outstanding Capital
Securities then called for redemption, shall have been made or
provided for, and all funds immediately available to the Property
Trustee shall first be applied to the payment in full in cash of all
Distributions (including Additional Amounts and/or Special Interest,
if applicable) on, or the Redemption Price of, Capital Securities then
due and payable.

(b) In the case of the occurrence of any Event of Default
resulting from any Debenture Event of Default, the Holder of Common
Securities will be deemed to have waived any right to act with respect
to any such Event of Default under this Trust Agreement until the
effect of all such Events of Default with respect to the Capital
Securities have been cured, waived or otherwise eliminated. Until any
such Event of Default under this Trust Agreement with respect to the
Capital Securities has been so cured, waived or otherwise eliminated,
the Property Trustee shall act solely on behalf of the Holders of the
Capital

<PAGE>

Securities and not the Holder of the Common Securities, and only the
Holders of the Capital Securities will have the right to direct the
Property Trustee to act on their behalf.

SECTION 4.4. Payment Procedures.

Payments of Distributions (including Additional Amounts
and/or Special Interest, if applicable) in respect of the Capital
Securities shall be made by check mailed to the address of the Person
entitled thereto as such address shall appear on the Securities
Register or, if the Capital Securities are held by a Clearing Agency,
such Distributions shall be made to the Clearing Agency in immediately
available funds, which shall credit the relevant Persons' accounts at
such Clearing Agency on the applicable Distribution Dates. Payments
in respect of the Common Securities shall be made in such manner as
shall be mutually agreed between the Property Trustee and the Common
Securityholder.

SECTION 4.5. Tax Returns and Reports.

The Administrators shall prepare (or cause to be prepared),
at the Depositor's expense, and file all United States Federal, state
and local tax and information returns and reports required to be filed
by or in respect of the Trust. In this regard, the Administrators
shall (a) prepare and file (or cause to be prepared and filed) the
appropriate Internal Revenue Service Form required to be filed in
respect of the Trust in each taxable year of the Trust and (b) prepare
and furnish (or cause to be prepared and furnished) to each
Securityholder the appropriate Internal Revenue Service form required
to be so provided and furnished. The Administrators shall provide the
Depositor and the Property Trustee with a copy of all such returns and
reports promptly after such filing or furnishing. The Property
Trustee shall comply with United States Federal withholding and backup
withholding tax laws and information reporting requirements with
respect to any payments to Securityholders under the Trust Securities.

SECTION 4.6. Payment of Taxes, Duties, Etc. of the Trust.

Upon receipt under the Debentures of Additional Sums and the
written direction of any of the Administrators, the Property Trustee
shall promptly pay, solely out of monies on deposit pursuant to this
Trust Agreement, any taxes, duties or governmental charges of
whatsoever nature (other than withholding taxes) imposed on the Trust
by the United States or any other taxing authority.

SECTION 4.7. Reduction for Payments under Indenture or
Pursuant to Direct Actions.

Any amount payable hereunder to any Holder of Capital
Securities shall be reduced by the amount of any corresponding payment
such Holder (or an Owner with respect

<PAGE>

to the Holder's Capital Securities) has directly received pursuant to
the Indenture or Section 5.14 of this Trust Agreement.

ARTICLE V

TRUST SECURITIES CERTIFICATES

SECTION 5.1. Initial Ownership.

Upon the creation of the Trust and the contribution by the
Depositor pursuant to Section 2.3 and until the issuance of the Trust
Securities, and at any time during which no Trust Securities are
outstanding, the Depositor shall be the sole beneficial owner of the
Trust.

SECTION 5.2. The Trust Securities Certificates; Execution
and Delivery Thereof.

(a) The Capital Securities Certificates shall be issued in
minimum denominations of $1,000 Liquidation Amount and integral
multiples of $1,000 in excess thereof, and the Common Securities
Certificates shall be issued in denominations of $1,000 Liquidation
Amount and integral multiples thereof. The Trust Securities
Certificates shall be executed on behalf of the Trust by manual
signature of at least one Administrator and shall be dated their date
of execution. Trust Securities Certificates bearing the manual
signatures of individuals who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the Trust,
shall be validly issued and entitled to the benefits of this Trust
Agreement, notwithstanding that such individuals or any of them shall
have ceased to be so authorized prior to the delivery of such Trust
Securities Certificates or did not hold such offices at the date of
delivery of such Trust Securities Certificates. A transferee of a
Trust Securities Certificate shall become a Securityholder, and shall
be entitled to the rights and subject to the obligations of a
Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Sections
5.4, 5.11 and 5.13.

(b) At the Closing Date, the Administrators, or any of
them, shall cause Trust Securities Certificates, in an aggregate
Liquidation Amount as provided in Sections 2.4 and 2.5, to be executed
on behalf of the Trust and delivered to or upon the written order of
the Depositor, signed by its Chairman of the Board, any Vice Chairman
of the Board, its President, any Executive Vice President, its Chief
Operating Officer, its Chief Financial Officer, its Treasurer or any
Assistant Treasurer or its Controller, without further corporate
action by the Depositor, in authorized denominations.

<PAGE>

SECTION 5.3. Transfer of Capital Securities.

(a) Capital Securities may only be transferred, in whole or
in part, in accordance with the terms and conditions set forth in this
Trust Agreement and in the terms of the Capital Securities. To the
fullest extent permitted by law, any transfer or purported transfer of
any Capital Security not made in accordance with this Trust Agreement
shall be null and void.

(b) Subject to this Section 5.3, Capital Securities shall
be freely transferable; provided, however, that no transfer shall be
effected unless such transfer (whether by sale or any other
disposition) is comprised of a block of Capital Securities having an
aggregate Liquidation Amount of not less than $100,000. Any transfer,
sale or other disposition of Capital Securities in a block having a
Liquidation Amount of less than $100,000 shall be deemed to be void
and of no legal effect whatsoever. Any such transferee shall be
deemed not to be the Holder of such Capital Securities for any
purpose, including but not limited to the receipt of Distributions on
such Capital Securities, and such transferee shall be deemed to have
no interest whatsoever in such Capital Securities.

(c) Beneficial ownership of every Original Capital Security
is subject to the restrictions on transfer imposed by the Securities
Act and rules and regulations promulgated by the Commission thereunder
and each certificate representing Original Capital Securities
("Restricted Securities") shall bear the restrictive legend (the
"Securities Act Legend") set forth in this Section 5.3, unless such
restrictions on transfer shall be terminated in accordance with this
Section. The Holder of each Original Capital Security, by such
Holder's acceptance thereof, agrees to be bound by such restrictions
on transfer.

Each Restricted Security shall bear the following Securities
Act Legend:

THE CAPITAL SECURITIES EVIDENCED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") AND MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (i)
TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT ACQUIRING THE
CAPITAL SECURITIES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, OR
(ii) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), OR IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF

<PAGE>

THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF
THE TRUST SO REQUESTS) OR (iii) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES
OF THE UNITED STATES AND OTHER JURISDICTIONS.

The restrictions imposed by Section 5.3(c) upon the
transferability of any particular Original Capital Security shall
cease and terminate upon (i) the Transfer Restriction Termination Date
or (ii) delivery by at least one Administrator on behalf of the Trust
to the Property Trustee of an Officers' Certificate and Opinion of
Counsel stating that such Original Capital Security has been sold
pursuant to an effective registration statement under the Securities
Act, exchanged for a corresponding Liquidation Amount of Exchange
Capital Securities pursuant to an effective registration statement
under the Securities Act, or transferred in compliance with Rule 144
under the Securities Act (or any successor provision thereto) or
transferred in accordance with another exemption from registration
under the Securities Act in a transaction that results in such Capital
Securities no longer being "restricted securities" under Rule 144 (or
any successor provision thereto). Any Original Capital Security as to
which such Administrator has delivered to the Property Trustee an
Officers' Certificate and Opinion of Counsel that such restrictions on
transfer shall have expired in accordance with their terms or shall
have terminated may, upon surrender of such Original Capital Security
for exchange to the Securities Registrar or any transfer agent in
accordance with the provisions of this Section 5.3(c) be exchanged for
a new Capital Security, of like tenor and aggregate Liquidation
Amount, which shall not bear the Securities Act Legend. The
Administrator shall inform the Property Trustee in writing of the
effective date of any registration statement registering the Original
Capital Securities or the Exchange Capital Securities under the
Securities Act. The Property Trustee shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance
with the aforementioned registration statement, Officers' Certificate
or Opinion of Counsel.

Any Original Capital Security that, prior to the Transfer
Restriction Termination Date, is purchased or owned by the Depositor
or any Affiliate thereof may not be resold by the Depositor or such
Affiliate unless registered under the Securities Act or resold
pursuant to an exemption from the registration requirements of the
Securities Act.

SECTION 5.4. Registration of Transfer and Exchange of
Capital Securities Certificates.

The Depositor shall keep or cause to be kept, at the office
or agency maintained pursuant to Section 5.8, a register for the
purpose of registering Trust Securities Certificates and transfers and
exchanges of Capital Securities Certificates (the "Securities
Register") in which the registrar designated by the Depositor (the
"Securities Registrar"), subject to such reasonable regulations as it
may prescribe, shall provide for the registration

<PAGE>

of Capital Securities Certificates and Common Securities Certificates
(subject to Section 5.10 in the case of the Common Securities
Certificates) and registration of transfers and exchanges of Capital
Securities Certificates as herein provided. The Bank shall be the
initial Securities Registrar. The Securities Registrar shall not be
required to register the transfer or exchange of any Capital
Securities (i) during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of
Capital Securities and ending at the close of business on the day of
such mailing or (ii) that have been selected for redemption in whole
or in part, except the unredeemed portion of any Capital Security
redeemed in part.

Upon surrender for registration of transfer of any Capital
Securities Certificate at the office or agency maintained pursuant to
Section 5.8, the Administrators or any one of them shall execute and
the Property Trustee shall deliver, in the name of the designated
transferee or transferees, one or more new Capital Securities
Certificates in authorized denominations of a like aggregate
Liquidation Amount dated the date of execution by such Administrator.
Subject to Section 5.11, at the option of a Holder, Capital Securities
Certificates may be exchanged for other Capital Securities
Certificates in authorized denominations of the same class and of a
like aggregate Liquidation Amount upon surrender of the Capital
Securities Certificates to be exchanged at the office or agency
maintained pursuant to Section 5.8.

Every Capital Securities Certificate presented or
surrendered for registration of transfer or exchange shall be
accompanied by a written instrument of transfer in form satisfactory
to the Securities Registrar duly executed by the Holder or his
attorney duly authorized in writing. Each Capital Securities
Certificate surrendered for registration of transfer or exchange shall
be cancelled and subsequently disposed of by the Property Trustee or
the Securities Registrar in accordance with such Person's customary
practice.

No service charge shall be made for any registration of
transfer or exchange of Capital Securities Certificates, but the
Securities Registrar may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with
any transfer or exchange of Capital Securities Certificates.

SECTION 5.5. Mutilated, Destroyed, Lost or Stolen Trust
Securities Certificates.

If (a) any mutilated Trust Securities Certificate shall be
surrendered to the Securities Registrar, or if the Securities
Registrar shall receive evidence to its satisfaction of the
destruction, loss or theft of any Trust Securities Certificate and (b)
there shall be delivered to the Securities Registrar and the
Administrators such security or indemnity as may be required by them
to save each of them harmless, then in the absence of notice that such
Trust Securities Certificate shall have been acquired by a bona fide
purchaser, the Administrators, or any one of them, on behalf of the
Trust shall execute and make available

<PAGE>

for delivery, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Trust Securities Certificate, a new Trust
Securities Certificate of like class, tenor and denomination. In
connection with the issuance of any new Trust Securities Certificate
under this Section, the Administrators or the Securities Registrar may
require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any
duplicate Trust Securities Certificate issued pursuant to this Section
shall constitute conclusive evidence of an undivided beneficial
interest in the Trust Property, as if originally issued, whether or
not the lost, stolen or destroyed Trust Securities Certificate shall
be found at any time.

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

SECTION 5.6. Persons Deemed Securityholders.

The Trustees, the Administrators or the Securities Registrar
shall treat the Person in whose name any Trust Securities Certificate
shall be registered in the Securities Register as the owner of such
Trust Securities Certificate for the purpose of receiving
Distributions and for all other purposes whatsoever (subject to the
record date provisions hereof), and neither the Trustees nor the
Securities Registrar shall be bound by any notice to the contrary.

SECTION 5.7. Access to List of Securityholders' Names and
Addresses.

At any time when the Property Trustee is not also acting as
the Securities Registrar, the Depositor shall furnish or cause to be
furnished to the Property Trustee, semiannually not more than 5 days
after January 1 and July 1 of each year beginning with July 1997, and
at such other times as the Property Trustee may request in writing
within 30 days after receipt by the Depositor of any such request, a
list, in such form as the Property Trustee may reasonably require
containing all information in the possession or control of the
Depositor, or any Paying Agent or any registrar of the Trust
Securities other than the Property Trustee, as to the names and
addresses of the Securityholders obtained (in the case of each list
other than the first list) since the date as of which the next
previous list was furnished. Any such list may be dated as of a date
not more than fifteen days prior to the time such information is
furnished or caused to be furnished, and need not include information
received after such date. The rights of Securityholders to
communicate with other Securityholders with respect to their rights
under this Trust Agreement or under the Trust Securities, and the
corresponding obligations and rights of the Property Trustee, shall be
as provided in the Trust Indenture Act. Each Holder, by receiving and
holding a Trust Securities Certificate, and each Owner shall be deemed
to have agreed not to hold the Depositor, the Property Trustee or the
Administrators accountable by reason of the disclosure of its name and
address, regardless of the source from which such information was
derived.

<PAGE>

SECTION 5.8. Maintenance of Office or Agency for Transfers.

The Administrators or the Property Trustee shall maintain an
office or offices or agency or agencies where Capital Securities
Certificates may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Trustees in
respect of the Trust Securities Certificates may be served. The
Administrators initially designate The Chase Manhattan Bank, 450 West
33rd Street, New York, New York 10001, Attn: Corporate Trustee
Administration Department, as the office or agency for such purposes.
The Administrators or the Property Trustee shall give prompt written
notice to the Depositor and to the Securityholders of any change in
the location of the Securities Register or any such office or agency.

SECTION 5.9. Appointment of Paying Agent.

The Paying Agent shall make Distributions to Securityholders
from the Payment Account and shall report the amounts of such
Distributions to the Property Trustee and the Administrators. Any
Paying Agent shall have the revocable power to withdraw funds from the
Payment Account for the purpose of making the Distributions referred
to above. The Property Trustee may revoke such power and remove the
Paying Agent if such Trustee determines in its sole discretion that
the Paying Agent shall have failed to perform its obligations under
this Trust Agreement in any material respect. The Paying Agent shall
initially be the Bank, and any copaying agent chosen by the Bank, and
acceptable to the Administrators and the Depositor. Any Person acting
as Paying Agent shall be permitted to resign as Paying Agent upon 30
days' written notice to the Administrators, the Property Trustee and
the Depositor. In the event that the Bank shall no longer be the
Paying Agent or a successor Paying Agent shall resign or its authority
to act be revoked, the Administrators shall appoint a successor that
is acceptable to the Property Trustee and the Depositor to act as
Paying Agent (which shall be a bank or trust company). The
Administrators shall cause such successor Paying Agent or any
additional Paying Agent appointed by the Administrators to execute and
deliver to the Trustees an instrument in which such successor Paying
Agent or additional Paying Agent shall agree with the Trustees that as
Paying Agent, such successor Paying Agent or additional Paying Agent
will hold all sums, if any, held by it for payment to the
Securityholders in trust for the benefit of the Securityholders
entitled thereto until such sums shall be paid to such
Securityholders. The Paying Agent shall return all unclaimed funds to
the Property Trustee and upon removal of a Paying Agent such Paying
Agent shall also return all funds in its possession to the Property
Trustee. The provisions of Sections 8.2, 8.4 and 8.6 herein shall
apply to the Bank also in its role as Paying Agent, for so long as the
Bank shall act as Paying Agent and, to the extent applicable, to any
other paying agent appointed hereunder. Any reference in this Trust
Agreement to the Paying Agent shall include any co-paying agent unless
the context requires otherwise.

<PAGE>

SECTION 5.10. Ownership of Common Securities by Depositor.

At the Closing Date, the Depositor shall acquire and retain
beneficial and record ownership of the Common Securities. To the
fullest extent permitted by law, other than a transfer in connection
with a consolidation or merger of the Depositor into another Person,
or any sale or conveyance by the Depositor of all or substantially all
of its assets to any Person, pursuant to Article XI of the Indenture,
any attempted transfer of the Common Securities shall be void. The
Administrators shall cause each Common Securities Certificate issued
to the Depositor to contain a legend stating "THIS CERTIFICATE IS NOT
TRANSFERABLE".

SECTION 5.11. Book-Entry Interests.

(a) So long as Capital Securities are eligible for book-
entry settlement with the Clearing Agency or unless otherwise required
by law, all Capital Securities that are so eligible will be
represented by one or more fully registered Capital Securities
Certificates (each a "Book Entry Capital Securities Certificate") in
global form to be delivered to the Clearing Agency or its custodian,
by, or on behalf of, the Trust. Such Book Entry Capital Securities
Certificates shall initially be registered on the Securities Register
in the name of Cede & Co., the nominee of DTC, and no Owner will
receive a Definitive Capital Securities Certificate representing such
Owner's interests in such Book Entry Capital Securities Certificates,
except as provided in Section 5.11(d) below. The transfer and
exchange of beneficial interests in any such Capital Security in
global form shall be effected through the Clearing Agency in
accordance with this Trust Agreement and the procedures of the
Clearing Agency therefor.

(b) Except as provided in subparagraph (d) of this Section
5.11, Owners of a Capital Security in global form shall not be
entitled to have certificates registered in their names, will not
receive or be entitled to receive physical delivery of certificates in
definitive form and will not be considered Holders of such Capital
Securities in global form.

(c) Any Book Entry Capital Securities Certificate may be
endorsed with or have incorporated in the text thereof such legends or
recitals or changes not inconsistent with the provisions of this Trust
Agreement as may be required by the Clearing Agency, by any national
securities exchange or by the National Association of Securities
Dealers, Inc. in order for the Capital Securities to be tradeable on
the PORTAL Market or as may be required for the Capital Securities to
be tradeable on any other market developed for trading of securities
pursuant to Rule l44A or required to comply with any applicable law or
any regulation thereunder or with the rules and regulations of any
securities exchange upon which the Capital Securities may be listed or
traded or to conform with any usage with respect thereto, or to
indicate any special limitations or restrictions to which any
particular Capital Securities are subject.

<PAGE>

(d) Notwithstanding any other provisions of this Trust
Agreement (other than the provisions set forth in this Section
5.11(d)), a Capital Security in global form may not be exchanged in
whole or in part for Capital Securities registered, and no transfer of
a Capital Security in global form may be registered, in the name of
any Person other than the Clearing Agency or nominee thereof unless
(i) such Clearing Agency (A) has notified the Property Trustee and the
Depositor that it is unwilling or unable to continue as Clearing
Agency for such global Capital Security and the Depositor on behalf of
the Trust thereupon fails to appoint a successor Clearing Agency
within 90 days after the receipt of such notice or (B) has ceased to
be a clearing agency registered as such under the Exchange Act, (ii)
the Depositor in its sole discretion elects to cause the issuance of
the Capital Securities in certificated form or (iii) there shall have
occurred and be continuing an Event of Default, or any event which
after notice or lapse of time or both would be an Event of Default
under the Trust Agreement, with respect to such global Capital
Security. Following exchange of a global Capital Security, or a
portion thereof, for a definitive Capital Security, no such definitive
Capital Security, or portion thereof, shall be included in any Book
Entry Capital Securities Certificate.

Unless and until Definitive Capital Securities Certificates
have been issued to Owners pursuant to Section 5.13:

(i) the provisions of this Section 5.11(d) shall be in
full force and effect;

(ii) the Securities Registrar, the Administrators and
the Trustees shall be entitled to deal with the Clearing Agency
for all purposes of this Trust Agreement relating to the Book-
Entry Capital Securities Certificates (including the payment of
the Liquidation Amount of and Distributions on the Capital
Securities evidenced by Book-Entry Capital Securities and the
giving of instructions or directions to Owners of Capital
Securities evidenced by Book-Entry Capital Securities) as the
sole Holder of Capital Securities evidenced by Book-Entry Capital
Securities and shall have no obligations to the Owners thereof;

(iii) to the extent that the provisions of this
Section 5.11 conflict with any other provisions of this Trust
Agreement, the provisions of this Section 5.11 shall control; and

(iv) the rights of the Owners of the Book-Entry
Capital Securities Certificates shall be exercised only through
the Clearing Agency and shall be limited to those established by
law and agreements between such Owners and the Clearing Agency
and/or the Clearing Agency Participants. Pursuant to the
Certificate Depository Agreement, unless and until Definitive
Capital Securities Certificates are issued pursuant to Section
5.13, the initial Clearing Agency will make book-entry

<PAGE>

transfers among the Clearing Agency Participants and receive and
transmit payments on the Capital Securities to such Clearing
Agency Participants.

(e) A single Common Securities Certificate representing the
Common Securities shall be issued to the Depositor in the form of a
definitive Common Securities Certificate.

(f) Prior to such time as the restrictions on transfer of
Original Capital Securities imposed by the Securities Act and the
rules and regulations promulgated by the Commission thereunder shall
be terminated as provided in Section 5.4, any transfer of a definitive
Original Capital Security shall be registered upon the Securities
Register only upon receipt by the Property Trustee of such definitive
Original Capital Security accompanied by a duly completed and executed
certificate of transfer in the form attached to Exhibit D and, in the
case of a transfer in another transaction exempt from the registration
requirements of the Securities Act, upon receipt by the Property
Trustee of such certifications, legal opinions or other information as
the Depositor may reasonably request to confirm that such transfer is
exempt from the registration requirements of the Securities Act.

SECTION 5.12. Notices to Clearing Agency.

To the extent that a notice or other communication to the
Owners is required under this Trust Agreement, unless and until
Definitive Capital Securities Certificates shall have been issued to
Owners pursuant to Section 5.13, the Trustees shall give all such
notices and communications specified herein to be given to Owners to
the Clearing Agency, and shall have no obligations to the Owners.

SECTION 5.13. Procedures for Issuance of Definitive Capital
Securities Certificates.

Upon surrender to the Securities Registrar of the
typewritten Capital Securities Certificate or Certificates
representing the Book Entry Capital Securities Certificates by the
Clearing Agency upon occurrence of any of the events described in
Section 5.11(d), accompanied by registration instructions, the
Administrators, or any one of them, shall execute and the Securities
Registrar shall register the Definitive Capital Securities
Certificates in accordance with the instructions of the Clearing
Agency. Neither the Securities Registrar nor the Trustees nor the
Administrators shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of Definitive
Capital Securities Certificates, the Trustees and the Administrators
shall recognize the Holders of the Definitive Capital Securities
Certificates as Securityholders. The Definitive Capital Securities
Certificates shall be printed, lithographed or engraved or may be
produced in any other manner as is reasonably acceptable to the
Administrators, as evidenced by the execution thereof by the
Administrators or any one of them.

<PAGE>

SECTION 5.14. Rights of Securityholders.

(a) The legal title to the Trust Property is vested
exclusively in the Property Trustee (in its capacity as such) in
accordance with Section 2.9, and the Securityholders shall not have
any right or title therein other than the undivided beneficial
interest in the assets of the Trust conferred by their Trust
Securities and they shall have no right to call for any partition or
division of property, profits or rights of the Trust except as
described below. The Trust Securities shall be personal property
giving only the rights specifically set forth therein and in this
Trust Agreement. The Trust Securities shall have no preemptive or
similar rights. When issued and delivered to Securityholders against
payment of the purchase price therefor, the Capital Securities will be
fully paid and nonassessable undivided beneficial interests in the
Trust Property. The Holders of the Capital Securities, in their
capacities as such, shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations
for profit organized under the General Corporation Law of the State of
Delaware.

(b) For so long as any Capital Securities remain
Outstanding, if, upon a Debenture Event of Default, the Debenture
Trustee fails or the holders of not less than 25% in principal amount
of the outstanding Debentures fail to declare the principal of all of
the Debentures to be immediately due and payable, the Holders of at
least 25% in Liquidation Amount of the Capital Securities then
Outstanding shall have such right by a notice in writing to the
Depositor and the Debenture Trustee; and upon any such declaration
such principal amount of and the accrued interest on all of the
Debentures shall become immediately due and payable, provided that the
payment of principal and interest on such Debentures shall remain
subordinated to the extent provided in the Indenture.

At any time after such a declaration of acceleration with
respect to the Debentures has been made and before a judgment or
decree for payment of the money due has been obtained by the Debenture
Trustee as provided in the Indenture, the Holders of a majority in
Liquidation Amount of the Capital Securities, by written notice to the
Property Trustee, the Depositor and the Debenture Trustee, may rescind
and annul such declaration and its consequences if:

(i) the Depositor has paid or deposited with the
Debenture Trustee a sum sufficient to pay

(A) all overdue installments of interest
(including any Additional Amounts and/or Special Interest
(as defined in the Indenture), if any, on all of the
Debentures,

(B) the principal of (and premium, if any, on)
any Debentures which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate
borne by the Debentures, and

<PAGE>

(C) all sums paid or advanced by the Debenture
Trustee under the Indenture and the reasonable compensation,
expenses, disbursements and advances of the Debenture
Trustee and the Property Trustee, their agents and counsel
and the amounts payable to the Debenture Trustee under
Section 7.06 of the Indenture; and

(ii) all Debenture Events of Default, other than the
non-payment of the principal of the Debentures which has become
due solely by such acceleration, have been cured or waived as
provided in Article Six of the Indenture.

The Holders of a majority in aggregate Liquidation Amount of
the Capital Securities may, on behalf of the Holders of all the
Capital Securities, waive any past default under the Indenture, except
a default in the payment of principal or interest (unless such default
has been cured and a sum sufficient to pay all matured installments of
interest and principal due otherwise than by acceleration has been
deposited with the Debenture Trustee) or a default in respect of a
covenant or provision which under the Indenture cannot be modified or
amended without the consent of the holder of each outstanding
Debenture. No such rescission shall affect any subsequent default or
impair any right consequent thereon.

Upon receipt by the Property Trustee of written notice
declaring such an acceleration, or rescission and annulment thereof,
by Holders of the Capital Securities all or part of which is
represented by Book-Entry Capital Securities Certificates, a record
date shall be established for determining Holders of Outstanding
Capital Securities entitled to join in such notice, which record date
shall be at the close of business on the day the Property Trustee
receives such notice. The Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to join
in such notice, whether or not such Holders remain Holders after such
record date; provided, that, unless such declaration of acceleration,
or rescission and annulment, as the case may be, shall have become
effective by virtue of the requisite percentage having joined in such
notice prior to the day which is 90 days after such record date, such
notice of declaration of acceleration, or rescission and annulment, as
the case may be, shall automatically and without further action by any
Holder be canceled and of no further effect. Nothing in this
paragraph shall prevent a Holder, or a proxy of a Holder, from giving,
after expiration of such 90-day period, a new written notice of
declaration of acceleration, or rescission and annulment thereof, as
the case may be, that is identical to a written notice which has been
canceled pursuant to the proviso to the preceding sentence, in which
event a new record date shall be established pursuant to the
provisions of this Section 5.14(b).

(c) For so long as any Capital Securities remain
Outstanding, to the fullest extent permitted by law and subject to the
terms of this Trust Agreement and the Indenture, upon a Debenture
Event of Default specified in Section 6.01(a) or 6.01(b) of the
Indenture, any Holder of Capital Securities shall have the right to
institute a proceeding directly against the Depositor, pursuant to
Article VI of the Indenture, for enforcement of payment to such

<PAGE>

Holder of the principal amount of or interest on Debentures having a
principal amount equal to the Liquidation Amount of the Capital
Securities of such Holder (a "Direct Action"). Except as set forth in
Section 5.14(b) and this Section 5.14(c), the Holders of Capital
Securities shall have no right to exercise directly any right or
remedy available to the holders of, or in respect of, the Debentures.

ARTICLE VI

ACTS OF SECURITYHOLDERS; MEETINGS; VOTING

SECTION 6.1. Limitations on Voting Rights.

(a) Except as provided in this Section, in Sections 5.14,
8.10 and 10.2 and in the Indenture, and as otherwise required by law,
no Holder of Capital Securities shall have any right to vote or in any
manner otherwise control the administration, operation and management
of the Trust or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the Trust
Securities Certificates, be construed so as to constitute the
Securityholders from time to time as partners or members of an
association.

(b) So long as any Debentures are held by the Property
Trustee, the Property Trustee shall not (i) direct the time, method or
place of conducting any proceeding for any remedy available to the
Debenture Trustee, or executing any trust or power conferred on the
Debenture Trustee with respect to such Debentures, (ii) waive any past
default which is waivable under the Indenture, (iii) exercise any
right to rescind or annul a declaration that the principal of all the
Debentures shall be due and payable or (iv) consent to any amendment,
modification or termination of the Indenture or the Debentures, where
such consent shall be required, without, in each case, obtaining the
prior approval of the Holders of at least a majority in Liquidation
Amount of all Outstanding Capital Securities, provided, however, that
where a consent under the Indenture would require the consent of each
holder of Debentures affected thereby, no such consent shall be given
by the Property Trustee without the prior written consent of each
Holder of Capital Securities. The Property Trustee shall not revoke
any action previously authorized or approved by a vote of the Holders
of Capital Securities, except by a subsequent vote of the Holders of
Capital Securities. Subject to Section 8.3, the Property Trustee
shall notify all Holders of the Capital Securities of any notice of
default received from the Debenture Trustee with respect to the
Debentures. In addition to obtaining the foregoing approvals of the
Holders of the Capital Securities, prior to taking any of the
foregoing actions, the Property Trustee shall, at the expense of the
Depositor, obtain an Opinion of Counsel to the effect that such action
shall not cause the Trust to be classified as an association taxable
as a corporation or as other than a grantor trust for United States
Federal income tax purposes.

<PAGE>

(c) If any proposed amendment to the Trust Agreement
provides for, or the Trustees otherwise propose to effect, (i) any
action that would adversely affect in any material respect the powers,
preferences or special rights of the Capital Securities, whether by
way of amendment to the Trust Agreement or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than
pursuant to the terms of this Trust Agreement, then the Holders of
Outstanding Capital Securities as a class will be entitled to vote on
such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a
majority in Liquidation Amount of the Outstanding Capital Securities,
except as otherwise provided in Section 10.2(c). Notwithstanding any
other provision of this Trust Agreement, no amendment to this Trust
Agreement may be made if, as a result of such amendment, it would
cause the Trust to be classified as an association taxable as a
corporation or as other than a grantor trust for United States Federal
income tax purposes.

The Holders of a majority in Liquidation Amount of the
Capital Securities at the time Outstanding shall have the right to
direct the time, method, and place of conducting any proceeding for
any remedy available to the Property Trustee, or exercising any trust
or power conferred on the Property Trustee with respect to such
Capital Securities; provided, however, that, the Property Trustee
shall have the right to decline to follow any such direction if the
Property Trustee being advised by Opinion of Counsel determines that
the action so directed may not lawfully be taken, or if the Property
Trustee in good faith shall determine that the proceedings so directed
would be illegal or involve it in personal liability or be unduly
prejudicial to the rights of Holders of Capital Securities not parties
to such direction, and provided further that nothing in the Trust
Agreement shall impair the right of the Property Trustee to take any
action deemed proper by the Property Trustee and which is not
inconsistent with such direction by such Securityholders.

SECTION 6.2. Notice of Meetings.

Notice of all meetings of the Capital Securityholders,
stating the time, place and purpose of the meeting, shall be given by
the Property Trustee pursuant to Section 10.8 to each Capital
Securityholder of record, at his registered address, at least 15 days
and not more than 90 days before the meeting. At any such meeting,
any business properly before the meeting may be so considered whether
or not stated in the notice of the meeting. Any adjourned meeting may
be held as adjourned without further notice.

SECTION 6.3. Meetings of Capital Securityholders.

No annual meeting of Securityholders is required to be held.
The Property Trustee, however, shall call a meeting of Capital
Securityholders to vote on any matter upon the written request of the
Capital Securityholders of record of at least 25% of the Capital
Securities (based upon their aggregate Liquidation Amount) and the
Administrators or the Property Trustee may, at any time in their
discretion, call a meeting of Capital

<PAGE>

Securityholders to vote on any matters as to which Capital
Securityholders are entitled to vote.

Capital Securityholders of record of at least 50% of the
Outstanding Capital Securities (based upon their Liquidation Amount),
present in person or by proxy, shall constitute a quorum at any
meeting of Capital Securityholders.

If a quorum is present at a meeting, an affirmative vote by
the Capital Securityholders of record present, in person or by proxy,
holding at least a majority of the Capital Securities (based upon
their Liquidation Amount) held by the Capital Securityholders of
record present, either in person or by proxy, at such meeting shall
constitute the action of the Capital Securityholders, unless this
Trust Agreement requires a greater number of affirmative votes.

SECTION 6.4. Voting Rights.

Securityholders shall be entitled to one vote for each
$1,000 of Liquidation Amount represented by their Trust Securities in
respect of any matter as to which such Securityholders are entitled to
vote.

SECTION 6.5. Proxies, etc.

At any meeting of Securityholders, any Securityholder
entitled to vote thereat may vote by proxy, provided that no proxy
shall be voted at any meeting unless it shall have been placed on file
with the Property Trustee, or with such other officer or agent of the
Trust as the Property Trustee may direct, for verification prior to
the time at which such vote shall be taken. Pursuant to a resolution
of the Property Trustee, proxies may be solicited in the name of the
Property Trustee or one or more officers of the Property Trustee.
Only Securityholders of record shall be entitled to vote. When Trust
Securities are held jointly by several Persons, any one of them may
vote at any meeting in person or by proxy in respect of such Trust
Securities, but if more than one of them shall be present at such
meeting in person or by proxy, and such joint owners or their proxies
so present disagree as to any vote to be cast, such vote shall not be
received in respect of such Trust Securities. A proxy purporting to
be executed by or on behalf of a Securityholder shall be deemed valid
unless challenged at or prior to its exercise, and the burden of
proving invalidity shall rest on the challenger. No proxy shall be
valid more than three years after its date of execution.

SECTION 6.6. Securityholder Action by Written Consent.

Any action which may be taken by Securityholders at a
meeting may be taken without a meeting if Securityholders holding more
than a majority of all Outstanding Trust Securities (based upon their
aggregate Liquidation Amount) entitled to vote in respect of such

<PAGE>

action (or such larger proportion thereof as shall be required by any
express provision of this Trust Agreement) shall consent to the action
in writing.

SECTION 6.7. Record Date for Voting and Other Purposes.

For the purposes of determining the Securityholders who are
entitled to notice of and to vote at any meeting or by written
consent, or to participate in any Distribution on the Trust Securities
in respect of which a record date is not otherwise provided for in
this Trust Agreement, or for the purpose of any other action, the
Administrators may from time to time fix a date, not more than 90 days
prior to the date of any meeting of Securityholders or the payment of
a Distribution or other action, as the case may be, as a record date
for the determination of the identity of the Securityholders of record
for such purposes.

SECTION 6.8. Acts of Securityholders.

Any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Trust
Agreement to be given, made or taken by Securityholders may be
embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Securityholders in person or by an agent
duly appointed in writing; and, except as otherwise expressly provided
herein, such action shall become effective when such instrument or
instruments are delivered to the Property Trustee. Such instrument or
instruments (and the action embodied therein and evidenced thereby)
are herein sometimes referred to as the "Act" of the Securityholders
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 Trust Agreement and (subject to
Section 8.2) conclusive in favor of the Trustees, 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 any Trustee receiving the same deems
sufficient.

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

Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Securityholder of any Trust
Security shall bind every future Securityholder of the same Trust
Security and the Securityholder of every Trust Security issued upon
the registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of

<PAGE>

anything done, omitted or suffered to be done by the Trustees or the
Trust in reliance thereon, whether or not notation of such action is
made upon such Trust Security.

Without limiting the foregoing, a Securityholder entitled
hereunder to take any action hereunder with regard to any particular
Trust Security may do so with regard to all or any part of the
Liquidation Amount of such Trust 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 Liquidation Amount.

If any dispute shall arise among the Securityholders and the
Administrators or among such Securityholders or Trustees with respect
to the authenticity, validity or binding nature of any request,
demand, authorization, direction, consent, waiver or other Act of such
Securityholder or Administrators under this Article VI, then the
determination of such matter by the Property Trustee shall be
conclusive with respect to such matter.

SECTION 6.9. Inspection of Records.

Upon reasonable notice to the Administrators and the
Property Trustee, the records of the Trust shall be open to inspection
by Securityholders during normal business hours for any purpose
reasonably related to such Securityholder's interest as a
Securityholder.
ARTICLE VII

REPRESENTATIONS AND WARRANTIES

SECTION 7.1. Representations and Warranties of the Property
Trustee and the Delaware Trustee.

The Property Trustee and the Delaware Trustee, each
severally on behalf of and as to itself, hereby represents and
warrants for the benefit of the Depositor and the Securityholders
that:

(a) the Property Trustee is a corporation duly organized,
validly existing and in good standing under the laws of the State of
New York;

(b) the Property Trustee has full corporate power,
authority and legal right to execute, deliver and perform its
obligations under this Trust Agreement and has taken all necessary
action to authorize the execution, delivery and performance by it of
this Trust Agreement;

<PAGE>

(c) the Delaware Trustee is a Delaware banking corporation
duly organized, validly existing and in good standing with its
principal place of business in the State of Delaware;

(d) the Delaware Trustee has full corporate power,
authority and legal right to execute, deliver and perform its
obligations under this Trust Agreement and has taken all necessary
action to authorize the execution, delivery and performance by it of
this Trust Agreement;

(e) this Trust Agreement has been duly authorized, executed
and delivered by the Property Trustee and the Delaware Trustee and
constitutes the valid and legally binding agreement of each of the
Property Trustee and the Delaware Trustee enforceable against each of
them in accordance with its 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;

(f) the execution, delivery and performance of this Trust
Agreement have been duly authorized by all necessary corporate or
other action on the part of the Property Trustee and the Delaware
Trustee and do not require any approval of stockholders of the
Property Trustee and the Delaware Trustee and such execution, delivery
and performance will not (i) violate the Charter or By-laws of the
Property Trustee or the Delaware Trustee, or (ii) violate any law,
governmental rule or regulation of the State of New York or the State
of Delaware, as the case may be, governing the banking or, trust
powers of the Property Trustee or the Delaware Trustee (as appropriate
in context) or any order, judgment or decree applicable to the
Property Trustee or the Delaware Trustee; and

(g) neither the authorization, execution or delivery by the
Property Trustee or the Delaware Trustee of this Trust Agreement nor
the consummation of any of the transactions by the Property Trustee or
the Delaware Trustee (as appropriate in context) contemplated herein
or therein requires the consent or approval of, the giving of notice
to, the registration with or the taking of any other action with
respect to any governmental authority or agency under any existing
State of New York or State of Delaware law governing the banking or
trust powers of the Property Trustee or the Delaware Trustee, as the
case may be.

Any successor Property Trustee and Delaware Trustee shall
make similar representations and warranties as contained in this
Section 7.1 for the benefit of the Depositor and the Securityholders.

SECTION 7.2. Representations and Warranties of Depositor.

The Depositor hereby represents and warrants for the benefit
of the Securityholders that:

<PAGE>

(a) the Trust Securities Certificates issued at the Closing
Date on behalf of the Trust have been duly authorized and will have
been duly and validly executed, issued and delivered by the
Administrators pursuant to the terms and provisions of, and in
accordance with the requirements of, this Trust Agreement and the
Securityholders will be, as of each such date, entitled to the
benefits of this Trust Agreement; and

(b) there are no taxes, fees or other governmental charges
payable by the Trust (or the Trustees on behalf of the Trust) under
the laws of the State of Delaware or any political subdivision thereof
in connection with the execution, delivery and performance by the
Property Trustee or the Delaware Trustee, as the case may be, of this
Trust Agreement.

ARTICLE VIII

THE TRUSTEES AND ADMINISTRATORS

SECTION 8.1. Corporate Property Trustee Required;
Eligibility of Trustees.

(a) There shall at all times be a Property Trustee
hereunder with respect to the Trust Securities. The Property Trustee
shall be a Person that is eligible pursuant to the Trust Indenture Act
to act as such and 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, 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 Property
Trustee with respect to the Trust Securities 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.

(b) There shall at all times be one or more Administrators
hereunder with respect to the Trust Securities, who shall be appointed
by the Holder of Common Securities. Each Administrator shall be
either a natural person who is at least 21 years of age or a legal
entity that shall act through one or more persons authorized to bind
that entity.

(c) There shall at all times be a Delaware Trustee with
respect to the Trust Securities. The Delaware Trustee shall either be
(i) a natural person who is at least 21 years of age and a resident of
the State of Delaware or (ii) a legal entity with its principal place
of business in the State of Delaware and that otherwise meets the
requirements of applicable Delaware law that shall act through one or
more persons authorized to bind such entity.

<PAGE>

SECTION 8.2. Certain Duties and Responsibilities.

(a) The duties and responsibilities of the Trustees shall
be as provided by this Trust Agreement and, in the case of the
Property Trustee, by the Trust Indenture Act and no implied covenants
or obligations shall be read into this Trust Agreement against the
Property Trustee. Notwithstanding the foregoing, no provision of this
Trust Agreement shall require the Trustees to expend or risk their own
funds or otherwise incur any financial liability in the performance of
any of their duties hereunder, or in the exercise of any of their
rights or powers, if they shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to them. In the absence of bad
faith on its part, the Property Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the
Property Trustee and conforming to the requirements of this Trust
Agreement. Whether or not therein expressly so provided, every
provision of this Trust Agreement relating to the conduct or affecting
the liability of or affording protection to the Trustees shall be
subject to the provisions of this Section. Nothing in this Trust
Agreement shall be construed to release an Administrator or the
Delaware Trustee from liability for his own gross negligence or
willful misconduct. To the extent that, at law or in equity, an
Administrator, or the Delaware Trustee has duties (including fiduciary
duties) and liabilities relating thereto to the Trust or to the
Securityholders, such Administrator and the Delaware Trustee shall not
be liable to the Trust or any other Trustee or to any Securityholder
for such Administrator's or the Delaware Trustee's good faith reliance
on the provisions of this Trust Agreement. The provisions of this
Trust Agreement, to the extent that they restrict the duties and
liabilities of the Administrators and the Delaware Trustee otherwise
existing at law or in equity, are agreed by the Depositor, the
Trustees and the Securityholders to replace such other duties and
liabilities of the Administrators and the Delaware Trustee.

(b) All payments made by the Property Trustee or a Paying
Agent in respect of the Trust Securities shall be made only from the
revenue and proceeds from the Trust Property and only to the extent
that there shall be sufficient revenue or proceeds from the Trust
Property to enable the Property Trustee or a Paying Agent to make
payments in accordance with the terms hereof. Each Securityholder, by
its acceptance of a Trust Security, agrees that it will look solely to
the revenue and proceeds from the Trust Property to the extent legally
available for distribution to it as herein provided and that the
Trustees are not personally liable to it for any amount distributable
in respect of any Trust Security or for any other liability in respect
of any Trust Security. This Section 8.2(b) does not limit the
liability of the Trustees expressly set forth elsewhere in this Trust
Agreement or, in the case of the Property Trustee, in the Trust
Indenture Act.

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

<PAGE>

(i) the Property Trustee shall not be liable for any
error of judgment made in good faith by an authorized officer of
the Property Trustee, unless it shall be proved that the Property
Trustee was negligent in ascertaining the pertinent facts;

(ii) the Property Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of not less
than a majority in Liquidation Amount of the Capital Securities
or the Common Securities relating to the time, method and place
of conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power conferred upon
the Property Trustee under this Trust Agreement;

(iii) the Property Trustee's sole duty with respect to
the custody, safe keeping and physical preservation of the Trust
Property shall be to deal with such property in a similar manner
as the Property Trustee deals with similar property for its own
account, subject to the protections and limitations on liability
afforded to the Property Trustee under this Trust Agreement and
the Trust Indenture Act;

(iv) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise
agree with the Depositor; and money held by the Property Trustee
need not be segregated from other funds held by it except in
relation to the Payment Account maintained by the Property
Trustee pursuant to Section 3.1 and except to the extent
otherwise required by law; and

(v) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrators or the Depositor
with their respective duties under this Trust Agreement, nor
shall the Property Trustee be liable for the default or
misconduct of any Administrator or the Depositor.

SECTION 8.3. Certain Notices.

Within five Business Days after the occurrence of any Event
of Default actually known to an officer of the Property Trustee
assigned to its Corporate Trust Office, the Property Trustee shall
transmit, in the manner and to the extent provided in Section 10.8,
notice of such Event of Default to the Securityholders, the
Administrators and the Depositor, unless such Event of Default shall
have been cured or waived.

Within five Business Days after the receipt of notice of the
Depositor's exercise of its right to defer the payment of interest on
the Debentures pursuant to the Indenture, the Property Trustee shall
transmit, in the manner and to the extent provided in Section 10.8,
notice of such exercise to the Securityholders, unless such exercise
shall have been revoked.

<PAGE>

SECTION 8.4. Certain Rights of Property Trustee.

Subject to the provisions of Section 8.2:

(a) the Property Trustee may rely and shall be protected in
acting or refraining from acting in good faith upon any resolution,
Opinion of Counsel, certificate, written representation of a Holder or
transferee, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent,
order, appraisal, 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;

(b) if (i) in performing its duties under this Trust
Agreement the Property Trustee is required to decide between
alternative courses of action or (ii) in construing any of the
provisions of this Trust Agreement the Property Trustee finds the same
ambiguous or inconsistent with any other provisions contained herein
or (iii) the Property Trustee is unsure of the application of any
provision of this Trust Agreement, then, except as to any matter as to
which the Capital Securityholders are entitled to vote under the terms
of this Trust Agreement, the Property Trustee shall deliver a notice
to the Depositor requesting written instructions of the Depositor as
to the course of action to be taken and the Property Trustee shall
take such action, or refrain from taking such action, as the Property
Trustee shall be instructed in writing to take, or to refrain from
taking, by the Depositor; provided, however, that if the Property
Trustee does not receive such instructions of the Depositor within ten
Business Days after it has delivered such notice, or such reasonably
shorter period of time set forth in such notice (which to the extent
practicable shall not be less than two Business Days), it may, but
shall be under no duty to, take or refrain from taking such action not
inconsistent with this Trust Agreement as it shall deem advisable and
in the best interests of the Securityholders, in which event the
Property Trustee shall have no liability except for its own bad faith,
negligence or willful misconduct;

(c) any direction or act of the Depositor or the
Administrators contemplated by this Trust Agreement shall be
sufficiently evidenced by an Officers' Certificate or a certificate
signed by any Administrator;

(d) whenever in the administration of this Trust Agreement,
the Property Trustee shall deem it desirable that a matter be
established before undertaking, suffering or omitting any action
hereunder, the Property Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Depositor or the
Administrators;

(e) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or reregistration
thereof;

<PAGE>

(f) the Property Trustee may consult with counsel (which
counsel may be counsel to the Depositor or any of its Affiliates, and
may include any of its employees) and the advice of such 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 and in accordance with such advice; the Property
Trustee shall have the right at any time to seek instructions
concerning the administration of this Trust Agreement from any court
of competent jurisdiction;

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

(h) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond, debenture, note or other evidence of
indebtedness or other paper or document, unless requested in writing
to do so by one or more Securityholders, but the Property Trustee may
make such further inquiry or investigation into such facts or matters
as it may see fit;

(i) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through its agents or attorneys, provided that the Property Trustee
shall not be responsible for any misconduct or negligence on the part
of, or for the supervision of, any such agent or attorney appointed
with due care by it hereunder;

(j) whenever in the administration of this Trust Agreement
the Property Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder the Property Trustee (i) may request instructions
from the Holders of the Trust Securities which instructions may only
be given by the Holders of the same proportion in Liquidation Amount
of the Trust Securities as would be entitled to direct the Property
Trustee under the terms of the Trust Securities in respect of such
remedy, right or action, (ii) may refrain from enforcing such remedy
or right or taking such other action until such instructions are
received, and (iii) shall be protected in acting in accordance with
such instructions;

(k) except as otherwise expressly provided by this Trust
Agreement, the Property Trustee shall not be under any obligation to
take any action that is discretionary under the provisions of this
Trust Agreement; and

(l) the Property Trustee shall not be charged with
knowledge of an Event of Default unless an officer of the Property
Trustee assigned to its Corporate Trust Office

<PAGE>

obtains actual knowledge of such event or the Property Trustee
receives written notice of such event from the Depositor, any Trustee
or Administrator or Securityholders.

No provision of this Trust Agreement shall be deemed to
impose any duty or obligation on the Property Trustee to perform any
act or acts or exercise any right, power, duty or obligation conferred
or imposed on it, in any jurisdiction in which it shall be illegal, or
in which the Property Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts, or to
exercise any such right, power, duty or obligation. No permissive
power or authority available to the Property Trustee shall be
construed to be a duty.

SECTION 8.5. Not Responsible for Recitals or Issuance of
Securities.

The recitals contained herein and in the Trust Securities
Certificates shall be taken as the statements of the Trust, and the
Trustees do not assume any responsibility for their correctness. The
Trustees shall not be accountable for the use or application by the
Depositor of the proceeds of the Debentures.

SECTION 8.6. May Hold Securities.

Any Trustee or any other agent of any Trustee or the Trust,
in its individual or any other capacity, may become the owner or
pledgee of Trust Securities and, subject to Section 8.8 and to Section
311 of the Trust Indenture Act and except as provided in the
definition of the term "Outstanding" in Article I, may otherwise deal
with the Trust with the same rights it would have if it were not a
Trustee or such other agent.

SECTION 8.7. Compensation; Indemnity; Fees.

The Depositor agrees:

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

(b) except as otherwise expressly provided herein, to
reimburse the Trustees upon request for all reasonable expenses,
disbursements and advances incurred or made by the Trustees in
accordance with any provision of this Trust Agreement (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;

(c) to the fullest extent permitted by applicable law, to
indemnify and hold harmless (i) each Trustee, (ii) any Affiliate of
any Trustee, (iii) any officer, director,

<PAGE>

shareholder, employee, representative or agent of any Trustee, and
(iv) any employee or agent of the Trust or its Affiliates, (referred
to herein as an "Indemnified Person") from and against any loss,
damage, liability, tax, penalty, expense or claim of any kind or
nature whatsoever incurred without gross 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; and

(d) to the fullest extent permitted by applicable law, to
advance expenses (including legal fees) incurred by an Indemnified
Person in defending any claim, demand, action, suit or proceeding
which shall be advanced, from time to time, prior to the final
disposition of such claim, demand, action, suit or proceeding upon
receipt by the Depositor of (x) a written affirmation by or on behalf
of the Indemnified Person of its or his good faith belief that it or
he has met the standard of conduct set forth in this Section 8.7 and
(y) an undertaking by or on behalf of the Indemnified Person to repay
such amount if it shall be determined that the Indemnified Person is
not entitled to be indemnified as authorized in the preceding
subsection.

The provisions of this Section 8.7 shall survive the
termination of this Trust Agreement and the resignation or removal of
any Trustee.

No Trustee may claim any lien or charge on any Trust
Property as a result of any amount due pursuant to this Section 8.7.

The Depositor, any Administrator and any Trustee (in the
case of the Property Trustee, subject to Section 8.8 hereof) may
engage in or possess an interest in other business ventures of any
nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders
of Trust Securities shall have no rights by virtue of this Trust
Agreement in and to such independent ventures or the income or profits
derived therefrom, and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed
wrongful or improper. Neither the Depositor, any Administrator nor
any Trustee, shall be obligated to present any particular investment
or other opportunity to the Trust even if such opportunity is of a
character that, if presented to the Trust, could be taken by the
Trust, and the Depositor, any Administrator or any Trustee shall have
the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or
other opportunity. Any Trustee may engage or be interested in any
financial or other transaction with the Depositor or any Affiliate of
the Depositor, or may act as depository for, trustee or agent for, or
act on any committee or body of holders of, securities or other
obligations of the Depositor or its Affiliates.

<PAGE>

SECTION 8.8. Conflicting Interests.

If the Property Trustee has or shall acquire a conflicting
interest within the meaning of the Trust Indenture Act, the Property
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 Trust Agreement.

SECTION 8.9. Co-Trustees and Separate Trustee.

Unless a Debenture Event of Default shall have occurred and
be continuing, at any time or times, for the purpose of conforming to
the legal requirements of the Trust Indenture Act or of any
jurisdiction in which any part of the Trust Property may at the time
be located, the Depositor and the Administrators, except in such
instance as set forth in the following sentence, by agreed action of a
majority of such Administrators, shall have the power to appoint, and
upon the written request of the Administrators, the Depositor shall
for such purpose join with the Administrators in the execution,
delivery, and performance of all instruments and agreements necessary
or proper to appoint one or more Persons approved by the Property
Trustee either to act as co-trustee, jointly with the Property
Trustee, of all or any part of such Trust Property, or to the extent
required by law to act as separate trustee of any such property, in
either case with such powers as may be provided in the instrument of
appointment, and to vest in such Person or Persons in the capacity
aforesaid, any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Section. If the
Depositor does not join in such appointment within 15 days after the
receipt by it of a request so to do, or in case a Debenture Event of
Default has occurred and is continuing, the Property Trustee alone
shall have power to make such appointment. Any co-trustee or separate
trustee appointed pursuant to this Section shall either be (i) a
natural person who is at least 21 years of age and a resident of the
United States or (ii) a legal entity with its principal place of
business in the United States that shall act through one or more
persons authorized to bind such entity.

Should any written instrument from the Depositor be required
by any co-trustee or separate trustee so appointed for more fully
confirming to such co-trustee or separate trustee such property,
title, right, or power, any and all such instruments shall, on
request, be executed, acknowledged and delivered by the Depositor.

Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the
following terms, namely:

(a) The Trust Securities shall be delivered and all rights,
powers, duties, and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to
be deposited or pledged with, the Trustees specified hereunder, shall
be exercised, solely by such Trustees and not by such co-trustee or
separate trustee.

<PAGE>

(b) The rights, powers, duties, and obligations hereby
conferred or imposed upon the Property Trustee in respect of any
property covered by such appointment shall be conferred or imposed
upon and exercised or performed by the Property Trustee or by the
Property Trustee and such co-trustee or separate trustee jointly, as
shall be provided in the instrument appointing such co-trustee or
separate trustee, except to the extent that under any law of any
jurisdiction in which any particular act is to be performed, the
Property Trustee shall be incompetent or unqualified to perform such
act, in which event such rights, powers, duties and obligations shall
be exercised and performed by such co-trustee or separate trustee.

(c) The Property Trustee at any time, by an instrument in
writing executed by it, with the written concurrence of the Depositor,
may accept the resignation of or remove any co-trustee or separate
trustee appointed under this Section, and, in case a Debenture Event
of Default has occurred and is continuing, the Property Trustee shall
have power to accept the resignation of, or remove, any such co-
trustee or separate trustee without the concurrence of the Depositor.
Upon the written request of the Property Trustee, the Depositor shall
join with the Property Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to
effectuate such resignation or removal. A successor to any co-trustee
or separate trustee so resigned or removed may be appointed in the
manner provided in this Section.

(d) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Property
Trustee or any other trustee hereunder.

(e) The Property Trustee shall not be liable by reason of
any act of a co-trustee or separate trustee.

(f) Any Act of Holders delivered to the Property Trustee
shall be deemed to have been delivered to each such co-trustee and
separate trustee.

SECTION 8.10. Resignation and Removal; Appointment of
Successor.

No resignation or removal of any Trustee (the "Relevant
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 8.11.

Subject to the immediately preceding paragraph, the Relevant
Trustee may resign at any time by giving written notice thereof to the
Securityholders. If the instrument of acceptance by the successor
Trustee required by Section 8.11 shall not have been delivered to the
Relevant Trustee within 60 days after the giving of such notice of
resignation, the Relevant Trustee may petition, at the expense of the
Trust, any court of competent jurisdiction for the appointment of a
successor Relevant Trustee.

<PAGE>

Unless a Debenture Event of Default shall have occurred and
be continuing any Trustee may be removed at any time by the Holder of
the Common Securities. If a Debenture Event of Default has occurred
and is continuing, the Property Trustee or the Delaware Trustee, or
both of them, may be removed by Act of the Holders of a majority in
Liquidation Amount of the Capital Securities, delivered to the
Relevant Trustee (in its individual capacity and on behalf of the
Trust). In no event will the Holders of the Capital Securities have
the right to vote to appoint, remove or replace the Administrators,
which voting rights are vested exclusively in the Depositor, as Holder
of the Common Securities.

If any Trustee shall resign, be removed or become incapable
of acting as Trustee, or if a vacancy shall occur in the office of any
Trustee for any cause, at a time when no Debenture Event of Default
shall have occurred and be continuing, the Holder of the Common
Securities, by Act of the Holder of the Common Securities, delivered
to the retiring Trustee, shall promptly appoint a successor Trustee or
Trustees, and the retiring Trustee shall comply with the applicable
requirements of Section 8.11. If any Trustee shall resign, be removed
or become incapable of acting as Trustee, at a time when a Debenture
Event of Default Exists, the Holders of the Capital Securities, by Act
of the Holders of a majority in Liquidation Amount of the Capital
Securities then Outstanding delivered to the retiring Relevant
Trustee, shall promptly appoint a successor Relevant Trustee or
Trustees, and each successor Trustee shall comply with the applicable
requirements of Section 8.11. If an Administrator shall resign, be
removed or become incapable of acting as Administrator, the Holder of
Common Securities by Act of the Holder of Common Securities delivered
to the Administrator shall promptly appoint a successor Administrator
or Administrators and such successor Administrator or Administrators
shall comply with the applicable requirements of Section 8.11. If no
successor Relevant Trustee shall have been so appointed by the Holder
of the Common Securities or the Holders of the Capital Securities and
accepted appointment in the manner required by Section 8.11, any
Holder who has been a Holder of Trust Securities for at least six
months may, on behalf of himself and all other similarly situated,
petition any court of competent jurisdiction for the appointment of a
successor Relevant Trustee.

The Property Trustee shall give notice of each resignation
and each removal of a Trustee and each appointment of a successor
Trustee to all Securityholders in the manner provided in Section 10.8
and shall give notice to the Depositor. Each notice shall include the
name of the successor Relevant Trustee and the address of its
Corporate Trust Office if it is the Property Trustee.

Notwithstanding the foregoing or any other provision of this
Trust Agreement, in the event any Administrator or a Delaware Trustee
who is a natural person dies or becomes, in the opinion of the
Depositor, incompetent or incapacitated, the vacancy created by such
death, incompetence or incapacity may be filled by (a) the unanimous
act of remaining Administrators if there are at least two of them
prior to such vacancy or (b) otherwise by the Depositor (with the
successor in each case being a Person who satisfies the

<PAGE>

eligibility requirement for Administrators or Delaware Trustee, as the
case may be, set forth in Section 8.1).

SECTION 8.11. Acceptance of Appointment by Successor.

In case of the appointment hereunder of a successor Relevant
Trustee, the retiring Relevant Trustee and each successor Relevant
Trustee shall execute and deliver an amendment hereto wherein each
successor Relevant Trustee shall accept such appointment and which
shall contain such provisions as shall be necessary or desirable to
transfer and confirm to, and to vest in, each successor Relevant
Trustee all the rights, powers, trusts and duties of the retiring
Relevant Trustee with respect to the Trust Securities and the Trust.
Upon the execution and delivery of such amendment the resignation or
removal of the retiring Relevant Trustee shall become effective to the
extent provided therein and each such successor Relevant Trustee,
without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Relevant
Trustee; but, on request of the Trust or any successor Relevant
Trustee such retiring Relevant Trustee shall, upon payment of its
charges, duly assign, transfer and deliver to such successor Relevant
Trustee all Trust Property, all proceeds thereof and money held by
such retiring Relevant Trustee hereunder with respect to the Trust
Securities and the Trust.

Upon request of any such successor Relevant Trustee, the
Trust shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Relevant Trustee
all such rights, powers and trusts referred to in the preceding
paragraph.

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

SECTION 8.12. Merger, Conversion, Consolidation or
Succession to Business.

Any Person into which the Property Trustee or the Delaware
Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which such Relevant Trustee shall be a party, or any
Person succeeding to all or substantially all the corporate trust
business of such Relevant Trustee, shall be the successor of such
Relevant Trustee hereunder, provided such Person 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.

<PAGE>

SECTION 8.13. Property Trustee May File Proofs of Claim.

In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other similar judicial proceeding relative to the Trust
or any other obligor upon the Trust Securities or the property of the
Trust or of such other obligor or their creditors, the Property
Trustee (irrespective of whether any Distributions or other amounts
due on the Trust Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether
the Property Trustee shall have made any demand on the Trust for the
payment of any past due Distributions or such other amounts) shall be
entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of any
Distributions and other amounts owing and unpaid in respect of the
Trust Securities and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Property
Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Property Trustee, its
agents and counsel) and of the Holders allowed in such judicial
proceeding, and

(b) 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
Property Trustee and, in the event the Property Trustee shall consent
to the making of such payments directly to the Holders, to pay to the
Property Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee
under Section 8.7.

Nothing herein contained shall be deemed to authorize the
Property 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 Trust Securities or the rights
of any Holder thereof or to authorize the Property Trustee to vote in
respect of the claim of any Holder in any such proceeding.

SECTION 8.14. Reports by Property Trustee.

(a) Not later than January 15 of each year commencing with
January 15, 1998, the Property Trustee shall transmit to all
Securityholders in accordance with Section 10.8, and to the Depositor,
a brief report dated as of the immediately preceding November 15
concerning the Property Trustee and its actions under this Trust
Agreement if and as may be required pursuant to Section 313(a) of the
Trust Indenture Act.

<PAGE>

(b) In addition the Property Trustee shall transmit to
Securityholders such other reports concerning the Property Trustee and
its actions under this Trust Agreement as would be required pursuant
to the Trust Indenture Act were this Trust Agreement to be qualified
under the Trust Indenture Act at the times and in the manner provided
pursuant thereto.

(c) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Property Trustee with any
interdealer quotation system or self-regulatory organization upon
which the Trust Securities are designated for trading, and with the
Depositor. The Depositor will notify the Property Trustee when and as
the Capital Securities become so designated for trading.

SECTION 8.15. Reports to the Property Trustee.

The Depositor and the Administrators on behalf of the Trust
shall provide to the Property Trustee such documents, reports and
information as required by Section 314 of the Trust Indenture Act (if
any) and the compliance certificate required by Section 314(a)(4) of
the Trust Indenture Act in the form, in the manner and at the times
required by Section 314 of the Trust Indenture Act, such compliance
certificate to be delivered annually on or before September 15 of each
year beginning in 1997.

SECTION 8.16. Evidence of Compliance with Conditions
Precedent.

Each of the Depositor and the Administrators on behalf of
the Trust shall provide to the Property Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this
Trust Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) of
the Trust Indenture Act shall be given in the form of an Officers'
Certificate.

SECTION 8.17. Number of Trustees.

(a) The number of Trustees shall be two. The Property
Trustee and the Delaware Trustee may be the same Person.

(b) If a Trustee ceases to hold office for any reason the
vacancy shall be filled with a Trustee appointed in accordance with
the provisions of Section 8.10.

(c) The death, resignation, retirement, removal,
bankruptcy, incompetence or incapacity to perform the duties of a
Trustee shall not operate to dissolve, terminate or annul the Trust.

<PAGE>

SECTION 8.18. Delegation of Power.

(a) Any Administrator may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age
of 21 his or her power for the purpose of executing any documents
contemplated in Section 2.7(a) or mailing any other governmental
filing; and

(b) The Administrators shall have power to delegate from
time to time to such of their number or to the Depositor the doing of
such things and the execution of such instruments either in the name
of the Trust or the names of the Administrators or otherwise as the
Administrators may deem expedient, to the extent such delegation is
not prohibited by applicable law or contrary to the provisions of this
Trust Agreement, as set forth herein.

ARTICLE IX

DISSOLUTION, LIQUIDATION AND MERGER

SECTION 9.1. Dissolution Upon Expiration Date.

Unless earlier dissolved, the Trust shall automatically
dissolve on January 15, 2052 (the "Expiration Date"), following the
distribution of the Trust Property in accordance with Section 9.4.

SECTION 9.2. Early Dissolution.

The first to occur of any of the following events is an
"Early Termination Event":

(a) the occurrence of a Bankruptcy Event in respect of, or
the dissolution or liquidation of, the Holder of the Common
Securities;

(b) the written direction to the Property Trustee from the
Depositor at any time to dissolve the Trust and, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law,
distribute Debentures to Securityholders in exchange for the Capital
Securities;

(d) the entry of an order for dissolution of the Trust by a
court of competent jurisdiction.

<PAGE>

SECTION 9.3. Dissolution.

The respective obligations and responsibilities of the
Trustees and the Trust created and continued hereby shall terminate
upon the latest to occur of the following: (a) the distribution by the
Property Trustee to Securityholders upon the liquidation of the Trust
pursuant to Section 9.4, or upon the redemption of all of the Trust
Securities pursuant to Section 4.2, of all amounts required to be
distributed hereunder upon the final payment of the Trust Securities;
(b) the payment of any expenses owed by the Trust; and (c) the
discharge of all administrative duties of the Administrators,
including the performance of any tax reporting obligations with
respect to the Trust or the Securityholders.

SECTION 9.4. Liquidation.

(a) If an Early Termination Event specified in clause (a),
(b) or (d) of Section 9.2 occurs or upon the Expiration Date, the
Trust shall be liquidated by the Trustees as expeditiously as the
Trustees determine to be possible by distributing, after satisfaction
of liabilities to creditors of the Trust as provided by applicable
law, to each Securityholder a Like Amount of Debentures, subject to
Section 9.4(d). Notice of liquidation shall be given by the Property
Trustee by first- class mail, postage prepaid mailed not later than 15
nor more than 60 days prior to the Liquidation Date to each Holder of
Trust Securities at such Holder's address appearing in the Securities
Register. All notices of liquidation shall:

(i) state the Liquidation Date;

(ii) state that from and after the Liquidation Date,
the Trust Securities will no longer be deemed to be Outstanding
and any Trust Securities Certificates not surrendered for
exchange will be deemed to represent a Like Amount of Debentures;
and

(iii) provide such information with respect to the
mechanics by which Holders may exchange Trust Securities
Certificates for Debentures, or if Section 9.4(d) applies receive
a Liquidation Distribution, as the Administrators or the Property
Trustee shall deem appropriate.

(b) Except where Section 9.2(c) or 9.4(d) applies, in order
to effect the liquidation of the Trust and distribution of the
Debentures to Securityholders, the Property Trustee shall establish a
record date for such distribution (which shall be not more than 45
days nor less than 15 days prior to the Liquidation Date) and, either
itself acting as exchange agent or through the appointment of a
separate exchange agent, shall establish such procedures as it shall
deem appropriate to effect the distribution of Debentures in exchange
for the Outstanding Trust Securities Certificates.

<PAGE>

(c) Except where Section 9.2(c) or 9.4(d) applies, after
the Liquidation Date, (i) the Trust Securities will no longer be
deemed to be Outstanding, (ii) certificates representing a Like Amount
of Debentures will be issued to Holders of Trust Securities
Certificates, upon surrender of such certificates to the exchange
agent for exchange, (iii) the Depositor shall use its reasonable
efforts to have the Debentures designated on or with any interdealer
quotation system or self-regulatory organization as the Capital
Securities are then listed, including PORTAL, (iv) any Trust
Securities Certificates not so surrendered for exchange will be deemed
to represent a Like Amount of Debentures, accruing interest at the
rate provided for in the Debentures from the last Distribution Date on
which a Distribution was made on such Trust Securities Certificates
until such certificates are so surrendered (and until such
certificates are so surrendered, no payments of interest or principal
will be made to Holders of Trust Securities Certificates with respect
to such Debentures) and (v) all rights of Securityholders holding
Trust Securities will cease, except the right of such Securityholders
to receive Debentures upon surrender of Trust Securities Certificates.

(d) In the event that, notwithstanding the other provisions
of this Section 9.4, whether because of an order for dissolution
entered by a court of competent jurisdiction or otherwise,
distribution of the Debentures in the manner provided herein is
determined by the Property Trustee not to be practical, the Trust
Property shall be liquidated, and the Trust shall be dissolved, wound-
up or terminated, by the Property Trustee in such manner as the
Property Trustee determines. In such event, on the date of the
dissolution, winding-up or other termination of the Trust,
Securityholders will be entitled to receive out of the assets of the
Trust available for distribution to Securityholders, after
satisfaction of liabilities to creditors of the Trust as provided by
applicable law, an amount equal to the Liquidation Amount per Trust
Security plus accumulated and unpaid Distributions thereon to the date
of payment (such amount being the "Liquidation Distribution"). If,
upon any such dissolution, winding up or termination, the Liquidation
Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then, subject to the next succeeding sentence, the
amounts payable by the Trust on the Trust Securities shall be paid on
a pro rata basis (based upon Liquidation Amounts). The Holder of the
Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution, winding-up or termination pro
rata (determined as aforesaid) with Holders of Capital Securities,
except that, if a Debenture Event of Default has occurred and is
continuing, the Capital Securities shall have a priority over the
Common Securities.

SECTION 9.5. Mergers, Consolidations, Amalgamations or
Replacements of the Trust.

The Trust may not merge with or into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to any Person,
except pursuant to this Article IX. At the request of the Holder of a
majority of the Common Securities, without the consent of the Holders
of the Capital Securities, the Property Trustee or the Delaware
Trustee, the Trust may merge with or into, consolidate,

<PAGE>

amalgamate, or be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to a trust
organized as such under the laws of any State; provided, that (i) such
successor entity either (a) expressly assumes all of the obligations
of the Trust with respect to the Capital Securities or (b) substitutes
for the Capital Securities other securities having substantially the
same terms as the Capital Securities (the "Successor Securities") so
long as the Successor Securities rank the same as the Capital
Securities rank in priority with respect to distributions and payments
upon liquidation, redemption and otherwise, (ii) the Depositor
expressly appoints a trustee of such successor entity possessing the
same powers and duties as the Property Trustee as the holder of the
Debentures, (iii) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the Capital
Securities (including any Successor Securities) to be downgraded by
any nationally recognized statistical rating organization, (iv) such
merger, consolidation, amalgamation, replacement, conveyance, transfer
or lease does not adversely affect the rights, preferences and
privileges of the Holders of the Capital Securities (including any
Successor Securities) in any material respect, (v) such successor
entity has a purpose substantially identical to that of the Trust,
(vi) prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the Depositor has received an opinion
of counsel from independent counsel to the Trust experienced in such
matters to the effect that (a) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the Holders
of the Capital Securities (including any Successor Securities) in any
material respect, and (b) following such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, neither the
Trust nor such successor entity will be required to register as an
investment company under the 1940 Act and (vii) the Depositor owns all
of the common securities of such successor entity and guarantees the
obligations of such successor entity under the Successor Securities at
least to the extent provided by the Guarantee. Notwithstanding the
foregoing, the Trust shall not, except with the consent of Holders of
100% in Liquidation Amount of the Capital Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey, transfer
or lease its properties and assets substantially as an entirety to any
other Person or permit any other Person to consolidate, amalgamate,
merge with or into, or replace it if such consolidation, amalgamation,
merger, replacement, conveyance, transfer or lease would cause the
Trust or the successor entity to be classified as other than a grantor
trust for United States Federal income tax purposes.
ARTICLE X

MISCELLANEOUS PROVISIONS

SECTION 10.1. Limitation of Rights of Securityholders to
Terminate Trust.

Except to the extent set forth in Section 9.2, the death,
incapacity, dissolution, liquidation, termination or bankruptcy of any
Person having an interest, beneficial or

<PAGE>

otherwise, in Trust Securities shall not operate to terminate this
Trust Agreement, nor dissolve, terminate or annul the Trust, nor
entitle the legal representatives, successors or heirs of such Person
or any Securityholder for such Person, to claim an accounting, take
any action or bring any proceeding in any court for a partition or
winding up of the arrangements contemplated hereby, nor otherwise
affect the rights, obligations and liabilities of the parties hereto
or any of them.

SECTION 10.2. Amendment.

(a) This Trust Agreement may be amended from time to time
by the Trustees, and the Holders of a majority of the Common
Securities, without the consent of any Holders of the Capital
Securities, (i) to cure any ambiguity, correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Trust Agreement, which shall not be
inconsistent with the other provisions of this Trust Agreement, or
(ii) to modify, eliminate or add to any provisions of this Trust
Agreement to such extent as shall be necessary to ensure that the
Trust will be classified for United States Federal income tax purposes
as a grantor trust at all times that any Trust Securities are
outstanding or to ensure that the Trust will not be required to
register as an investment company under the 1940 Act; provided,
however, that in the case of clause (i), such action shall not
adversely affect in any material respect the interests of any
Securityholder, and any amendments of this Trust Agreement shall
become effective when notice thereof is given to the Securityholders.

(b) Except as provided in Section 10.2(c) hereof, any
provision of this Trust Agreement may be amended by the Trustees and
the Holders of a majority of the Common Securities with (i) the
consent of Trust Securityholders representing not less than a majority
(based upon Liquidation Amounts) of the Trust Securities then
Outstanding and (ii) receipt by the Trustees of an Opinion of Counsel
to the effect that such amendment or the exercise of any power granted
to the Trustees in accordance with such amendment will not affect the
Trust's status as a grantor trust for United States Federal income tax
purposes or the Trust's exemption from status of an investment company
under the 1940 Act.

(c) In addition to and notwithstanding any other provision
in this Trust Agreement, without the consent of each affected
Securityholder (such consent being obtained in accordance with Section
6.3 or 6.6 hereof), this Trust Agreement may not be amended to (i)
change the amount or timing of any Distribution on the Trust
Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the Trust Securities as
of a specified date or (ii) restrict the right of a Securityholder to
institute suit for the enforcement of any such payment on or after
such date; notwithstanding any other provision herein, without the
unanimous consent of the Securityholders (such consent being obtained
in accordance with Section 6.3 or 6.6 hereof), this paragraph (c) of
this Section 10.2 may not be amended.

<PAGE>

(d) Notwithstanding any other provisions of this Trust
Agreement, no Trustee shall enter into or consent to any amendment to
this Trust Agreement which would cause the Trust to fail or cease to
qualify for the exemption from status of an investment company under
the 1940 Act or fail or cease to be classified as a grantor trust for
United States Federal income tax purposes.

(e) Notwithstanding anything in this Trust Agreement to the
contrary, without the consent of the Depositor, this Trust Agreement
may not be amended in a manner which imposes any additional obligation
on the Depositor.

(f) In the event that any amendment to this Trust Agreement
is made, the Property Trustees or the Administrators shall promptly
provide to the Depositor a copy of such amendment.

(g) Neither the Property Trustee nor the Delaware Trustee
shall be required to enter into any amendment to this Trust Agreement
which affects its own rights, duties or immunities under this Trust
Agreement. The Property Trustee shall be entitled to receive an
Opinion of Counsel and an Officers' Certificate stating that any
amendment to this Trust Agreement is in compliance with this Trust
Agreement.

SECTION 10.3. Separability.

In case any provision in this Trust Agreement or in the
Trust Securities Certificates 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 10.4. Governing Law.

THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH
OF THE SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO
THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE
(WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES), PROVIDED THAT THE
IMMUNITIES AND STANDARD OF CARE OF THE PROPERTY TRUSTEE IN CONNECTION
WITH THE ADMINISTRATION OF ITS TRUSTS AND DUTIES HEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK.

<PAGE>

SECTION 10.5. Payments Due on Non-Business Day.

If the date fixed for any payment on any Trust Security
shall be a day that is not a Business Day, then such payment need not
be made on such date but may be made on the next succeeding day that
is a Business Day (except as otherwise provided in Sections 4.1(a) and
4.2(d)), with the same force and effect as though made on the date
fixed for such payment, and no interest shall accrue thereon for the
period after such date.

SECTION 10.6. Successors.

This Trust Agreement shall be binding upon and shall inure
to the benefit of any successor to the Depositor, the Trust or the
Relevant Trustee, including any successor by operation of law. Except
in connection with a consolidation, merger or sale involving the
Depositor that is permitted under Article XI of the Indenture and
pursuant to which the assignee agrees in writing to perform the
Depositor's obligations hereunder, the Depositor shall not assign its
obligations hereunder.

SECTION 10.7. Headings.

The Article and Section headings are for convenience only
and shall not affect the construction of this Trust Agreement.

SECTION 10.8. Reports, Notices and Demands.

Any report, notice, demand or other communication which by
any provision of this Trust Agreement is required or permitted to be
given or served to or upon any Securityholder or the Depositor may be
given or served in writing by deposit thereof, first-class postage
prepaid, in the United States mail, hand delivery or facsimile
transmission, in each case, addressed, (a) in the case of a Capital
Securityholder, to such Capital Securityholder as such
Securityholder's name and address may appear on the Securities
Register; and (b) in the case of the Common Securityholder or the
Depositor, to The Bear Stearns Companies, Inc., 245 Park Avenue, New
York, New York 10167, Attention: David Granville-Smith, Facsimile
No.:(212-272-6227) (until another address is designated by notice to
the Trustees). Such notice, demand or other communication to or upon
a Securityholder shall be deemed to have been sufficiently given or
made, for all purposes, upon hand delivery, mailing or transmission.

Any notice, demand or other communication which by any
provision of this Trust Agreement is required or permitted to be given
or served to or upon the Trust, the Property Trustee, the Delaware
Trustee or the Administrators shall be given in writing addressed
(until another address is designated by notice to the other parties
hereto) as follows: (a) with respect to the Property Trustee to The
Chase Manhattan Bank 450 West 33rd Street, New York, New York 10001,
Attention: Corporate Trustee Administration

<PAGE>

Department; (b) with respect to the Delaware Trustee, to Chase
Manhattan Bank Delaware, 1201 Market Street, Wilmington, Delaware
19801, Attention: Corporate Trustee Administration Department; (c)
with respect to the Administrators, to them at the address above for
notices to the Depositor, marked "Attention: Administrators of Bear
Stearns Capital Trust I" and (d) with respect to the Trust, c/o The
Bear Stearns Companies, Inc., 245 Park Avenue, New York, New York,
10167, Attention: David Granville-Smith. Such notice, demand or other
communication to or upon the Trust, the Administrators, the Property
Trustee or the Delaware Trustee shall be deemed to have been
sufficiently given or made only upon actual receipt of the writing by
the Trust, the Administrators, the Property Trustee or the Delaware
Trustee, as the case may be.

SECTION 10.9. Agreement Not to Petition.

Each of the Trustees and the Depositor agree for the benefit
of the Securityholders that, until at least one year and one day after
the Trust has been terminated in accordance with Article IX, they
shall not file, or join in the filing of, a petition against the Trust
under any bankruptcy, insolvency, reorganization or other similar law
(including, without limitation, the United States Bankruptcy Code)
(collectively, "Bankruptcy Laws") or otherwise join in the
commencement of any proceeding against the Trust under any Bankruptcy
Law. In the event the Depositor takes action in violation of this
Section 10.9, the Property Trustee agrees, for the benefit of
Securityholders, that at the expense of the Depositor, it shall file
an answer with the bankruptcy court or otherwise properly contest the
filing of such petition by the Depositor against the Trust or the
commencement of such action and raise the defense that the Depositor
has agreed in writing not to take such action and should be stopped
and precluded therefrom and such other defenses, if any, as counsel
for the Property Trustee or the Trust may assert. The provisions of
this Section 10.9 shall survive the termination of this Trust
Agreement.

SECTION 10.10. Trust Indenture Act; Conflict with Trust
Indenture Act.

(a) This Trust Agreement is intended to be in conformity
with the provisions of he Trust Indenture Act that would be required
to be part of this Trust Agreement were this Trust Agreement to be
qualified under the Trust Indenture Act and shall, to the extent
applicable, be governed by such provisions.

(b) The Property Trustee shall be the only Trustee which is
a trustee for the purposes of the Trust Indenture Act.

(c) If any provision hereof limits, qualifies or conflicts
with the duties imposed under Section 310 through 313 of the Trust
Indenture Act were this Trust Agreement so qualified under the Trust
Indenture Act, such duties shall control. If any provision of this
Trust Agreement modifies or excludes any provision of the Trust
Indenture

<PAGE>

Act which may be so modified or excluded, the latter provision shall
be deemed to apply to this Trust Agreement as so modified or excluded,
as the case may be.

(d) The application of the Trust Indenture Act to this
Trust Agreement shall not affect the nature of the Trust Securities as
equity securities representing undivided beneficial interests in the
assets of the Trust.

SECTION 10.11. Acceptance of Terms of Trust Agreement,
Guarantee and Indenture.

THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY
INTEREST THEREIN BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL
OWNER, WITHOUT ANY SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL
CONSTITUTE THE UNCONDITIONAL ACCEPTANCE BY THE SECURITYHOLDER AND ALL
OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL THE
TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND AGREEMENT TO THE
SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND THE
INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST THE
TRUSTEES, THE ADMINISTRATORS, SUCH SECURITYHOLDER AND SUCH OTHERS THAT
THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT SHALL BE BINDING,
OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER
AND SUCH OTHERS.

SECTION 10.12. Counterparts.

This Trust Agreement 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 have executed this Amended
and Restated Trust Agreement of Bear Stearns Capital Trust I as of the
date first above written.

THE BEAR STEARNS COMPANIES INC.

By:/s/ Samuel L. Molinaro, Jr.
--------------------------
Samuel L. Molinaro, Jr.
Chief Financial Officer and
Senior Vice President-Finance

<PAGE>

THE CHASE MANHATTAN BANK,
as Property Trustee

By: /s/ Anne G. Brenner
--------------------------
Name: Anne G. Brenner
Title: Vice President

CHASE MANHATTAN BANK DELAWARE,
as Delaware Trustee

By:/s/ John J. Cashin
--------------------------
Name: John J. Cashin
Title: Senior Trust Officer

/s/ William J. Montgoris
-----------------------------
William J. Montgoris,
as Administrator

/s/ Samuel L. Molinaro, Jr.
-----------------------------
Samuel L. Molinaro, Jr.,
as Administrator

/s/ Kenneth L. Edlow
-----------------------------
Kenneth L. Edlow,
as Administrator

<PAGE>

EXHIBIT A
---------
CERTIFICATE OF TRUST

<PAGE>

EXHIBIT B
---------

DTC LETTER

<PAGE>

EXHIBIT C
---------

COMMON SECURITIES CERTIFICATE

<PAGE>

EXHIBIT C
---------

THIS CERTIFICATE IS NOT TRANSFERABLE

CERTIFICATE NUMBER NUMBER OF COMMON SECURITIES ___

CERTIFICATE EVIDENCING FIXED/ADJUSTABLE RATE COMMON SECURITIES
OF
BEAR STEARNS CAPITAL TRUST I
(LIQUIDATION AMOUNT $1,000 PER COMMON SECURITY)

Bear Stearns Capital Trust I a statutory business trust
created under the laws of the State of Delaware (the "Trust"), hereby
certifies that _____________________________ (the "Holder") is the
registered owner of _____________________ ( ) Common
Securities of the Trust representing undivided beneficial interests in
the assets of the Trust and designated the Fixed/Adjustable Rate
Common Securities (liquidation amount $1,000 per Common Security) (the
"Common Securities"). In accordance with Section 5.10 of the Trust
Agreement (as defined below), the Common Securities are not
transferable and any attempted transfer hereof shall be void. The
designations, rights, privileges, restrictions, preferences and other
terms and provisions of the Common Securities are set forth in, and
this certificate and the Common Securities represented hereby are
issued and shall in all respects be subject to the terms and
provisions of, the Amended and Restated Trust Agreement of the Trust
dated as of January 29, 1997, as the same may be amended from time to
time (the "Trust Agreement"), including the designation of the terms
of the Common Securities as set forth therein. The Trust will furnish
a copy of the Trust Agreement to the Holder without charge upon
written request to the Trust at its principal place of business.

Upon receipt of this certificate, the Holder is bound by the
Trust Agreement and is entitled to the benefits thereunder.

IN WITNESS WHEREOF, one of the Administrators of the Trust
has executed this certificate this ___ day of _____________.

By:
------------------------------
Name;
Administrator

<PAGE>

EXHIBIT D
---------

CAPITAL SECURITIES CERTIFICATE

<PAGE>

EXHIBIT D
---------

CERTIFICATE NUMBER NUMBER OR CAPITAL SECURITIES [UP TO]*

CUSIP NO.___

CERTIFICATE EVIDENCING FIXED/ADJUSTABLE RATE [EXCHANGE]**
CAPITAL SECURITIES
OF
BEAR STEARNS CAPITAL TRUST I
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)

Registered Holder: Cede & Co.

THE CAPITAL SECURITIES EVIDENCED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") AND MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (I)
TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT ACQUIRING THE
CAPITAL SECURITIES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, OR
(II) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), OR IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE TRUST
SO REQUESTS) OR (III) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B)
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE STATES OF THE UNITED STATES AND OTHER
JURISDICTIONS.

[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC") TO BEAR STEARNS CAPITAL TRUST
I OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS

____________
* Insert in Book-Entry Capital Security Certificate only.

** Insert in Exchange Capital Securities only

<PAGE>

REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO A PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]*

THE CAPITAL SECURITIES WILL BE ISSUED, AND MAY BE
TRANSFERRED, ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT
OF $100,000 OR MORE (AT LEAST 100 CAPITAL SECURITIES).
ANY ATTEMPTED TRANSFER, SALE OR OTHER DISPOSITION OF
CAPITAL SECURITIES IN A BLOCK HAVING A LIQUIDATION
AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID
AND OF NO LEGAL EFFECT WHATSOEVER. ANY TRANSFEREE OF
SUCH A BLOCK OF LESS THAN 100 CAPITAL SECURITIES SHALL
BE DEEMED NOT TO BE THE HOLDER OF SUCH CAPITAL
SECURITIES FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED
TO THE RECEIPT OF DISTRIBUTIONS ON SUCH CAPITAL
SECURITIES, AND SUCH TRANSFEREE SHALL BE DEEMED TO HAVE
NO INTEREST WHATSOEVER IN SUCH CAPITAL SECURITIES.

Bear Stearns Capital Trust I a statutory business trust
created under the laws of the State of Delaware (the "Trust"), hereby
certifies that ____________ (the "Holder") is the registered owner of
[___________________ ( ) Capital Securities of the
Trust]** [the number of Capital Securities of the Trust
specified in Schedule A hereto]* representing an undivided beneficial
interest in the assets of the Trust and designated the
Fixed/Adjustable Rate Capital Securities of Bear Stearns Capital Trust
I (liquidation amount $1,000 per Capital Security) (the "Capital
Securities"). The Capital Securities are transferable on the books
and records of the Trust, in person or by a duly authorized attorney,
upon surrender of this certificate duly endorsed and in proper form
for transfer as provided in Section 5.4 of the Trust Agreement (as
defined below). The designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Capital Securities
are set forth in, and this certificate and the Capital Securities
represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Trust Agreement
of the Trust dated as of January 29, 1997, as the same may be amended
from time to time (the "Trust Agreement"). The Holder is entitled to
the benefits of the Capital Securities Guarantee Agreement entered
into by the Bear Stearns Companies, Inc., a Delaware corporation, and
The Chase Manhattan Bank as guarantee trustee, dated as of January 29,
1997, as the same may be amended from time to time (the "Guarantee
Agreement"), to the extent provided therein. The Trust will furnish a
copy of the Trust Agreement and the Guarantee Agreement

___________
* Insert in Book-Entry Capital Security Certificate only

** Insert in Definitive Capital Securities Certificates only

<PAGE>

to the Holder without charge upon written request to the Trust at its
principal place of business.

Upon receipt of this certificate, the Holder is bound by the
Trust Agreement and is entitled to the benefits thereunder.

IN WITNESS WHEREOF, one of the administrators of the Trust
has executed this certificate this _____ day of ______________.

By:
--------------------------------
Name:
Administrator

<PAGE>

SCHEDULE A

Changes to Number of Capital Securities
in Book-entry Security

The initial number of Capital Securities
evidenced by this Book-Entry Capital
Securities Certificate is ___________.

Number of Capital
Securities by which Remaining
this Book-entry Principal
Security Is To Be Amount of
Reduced, and Reason for this Book-entry Notation
Date Reduction Security Made by
---- --------- -------- -------

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

<PAGE>

SCHEDULE B

[IF CAPITAL SECURITY IS AN ORIGINAL CAPITAL SECURITY, INSERT]

FORM OF ASSIGNMENT

For value received hereby
------------------------------------
sell(s), assign(s) and transfer(s) unto
------------------------------

----------------------------------------------------------------------
(Please insert social security or other taxpayer identification number
of assignee.)

the within Capital Securities Certificate and hereby irrevocably
constitutes and appoints attorney to transfer the said
---------------
security on the books of the Trust, with full power of substitution in
the premises.

In connection with any transfer of the within security occurring prior
to the Transfer Restriction Termination Date, the undersigned confirms
that such security is being transferred:

To Bear Stearns Capital Trust I or a subsidiary thereof; or

Pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended; or

Pursuant to or in accordance with another exemption from the
registration requirements of the Securities Act of 1933, as
amended;

and unless the box below is checked, the undersigned confirms that
such security is not being transferred to an "affiliate" of the Trust
as defined in Rule 144 under the Securities Act of 1933, as amended
(an "Affiliate"):

<PAGE>

The transferee is an Affiliate of the Trust.

Date:
-------------------

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

-----------------------------------
Signature(s)

Signature(s) must be guaranteed by a
commercial bank or trust company or a member
firm of a major stock exchange.

-----------------------------------
Signature Guarantee

NOTICE: The above signatures of the holder(s) hereof must correspond
with the name as written upon the face of this Security in every
particular without alteration or enlargement or any change whatever.

<PAGE>

[IF CAPITAL SECURITY IS AN EXCHANGE CAPITAL SECURITY, INSERT]

FORM OF ASSIGNMENT

FOR VALUE RECEIVED, the undersigned assigns and transfers
this Capital Security to:

(Insert assignee's social security or tax
---------------
identification number)

(Insert address and zip code of assignee)
--------------- ------------

--------
and irrevocably appoints
---------------------------------------------
.

agent to transfer this Capital Securities Certificate on the books of
the Trust. The agent may substitute another to act for him or her.

Date:

Signature(s):

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

-----------------------------------------------------------
(Sign exactly as your name appears on the other side of this
Capital
Securities Certificate)

NOTICE: The signature(s) should be guaranteed by an eligible
guarantor institution (banks, stockbrokers, savings and loan
associations and credit unions with membership in an approved
signature guarantee medallion program), pursuant to S.E.C. Rule 17 Ad-
15.

NYFS04...:\25\22625\0110\2322\AGR1097R.21F

EXHIBIT 4.7

-----------------------------------------------------------------
CAPITAL SECURITIES GUARANTEE AGREEMENT

Bear Stearns Capital Trust I

Dated as of January 29, 1997

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

<PAGE>

CROSS-REFERENCE TABLE(1)
---------------------
Section of Trust Indenture Section of Capital Securities
Act of 1939, as amended Guarantee Agreement
-------------------------- -----------------------------

310(a) . . . . . . . . . . . 4.1(a)
310(b) . . . . . . . . . . . 4.1(c)
310(c) . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . 2.2(a)
311(b) . . . . . . . . . . . 2.2(b)
311(c) . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . 2.2(a)
312(b) . . . . . . . . . . . 2.2(b)
313 . . . . . . . . . . . . . 2.3
314(a) . . . . . . . . . . . 2.4
314(b) . . . . . . . . . . . Inapplicable
314(c) . . . . . . . . . . . 2.5
314(d) . . . . . . . . . . . Inapplicable
314(f) . . . . . . . . . . . Inapplicable
315(a) . . . . . . . . . . . 3.1(b)
315(b) . . . . . . . . . . . 2.7
315(c) . . . . . . . . . . . 3.1(a)
315(d) . . . . . . . . . . . 3.1(a)
316(a) . . . . . . . . . . . 5.4(a), 2.6

________
(1) This Cross-Reference Table does not constitute part of
this Guarantee Agreement and shall not affect the interpretation
of any of its terms or provisions.

<PAGE>

TABLE OF CONTENTS
-----------------
Page

CROSS-REFERENCE TABLE . . . . . . . . . . . . . . . . . . . . . . i

ARTICLE I
DEFINITIONS AND INTERPRETATION . . . . . . . 2

SECTION 1.1 Definitions and Interpretation . . . . . . . . . . . . 2

ARTICLE II
TRUST INDENTURE ACT . . . . . . . . . . . 6

SECTION 2.1 Trust Indenture Act; Application . . . . . . . . . . . 6
SECTION 2.2 Lists of Holders of Securities . . . . . . . . . . . . 6
SECTION 2.3 Reports by the Guarantee Trustee . . . . . . . . . . . 6
SECTION 2.4 Periodic Reports to Guarantee Trustee . . . . . . . . 7
SECTION 2.5 Evidence of Compliance with Conditions Precedent . . . 7
SECTION 2.6 Events of Default; Waiver . . . . . . . . . . . . . . 7
SECTION 2.7 Events of Default; Notice . . . . . . . . . . . . . . 7
SECTION 2.8 Conflicting Interests . . . . . . . . . . . . . . . . 8

ARTICLE III
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE

SECTION 3.1 Powers and Duties of the Guarantee Trustee . . . . . . 8
SECTION 3.2 Certain Rights of Guarantee Trustee . . . . . . . . 11
SECTION 3.3 Not Responsible for Recitals or Issuance of Capital
Securities Guarantee . . . . . . . . . . . . . . . . 13

ARTICLE IV
GUARANTEE TRUSTEE

SECTION 4.1 Guarantee Trustee; Eligibility . . . . . . . . . . . 13
SECTION 4.2 Appointment, Removal and Resignation
of Guarantee Trustee . . . . . . . . . . . 14

<PAGE>

ARTICLE V
GUARANTEE

SECTION 5.1 Capital Securities Guarantee . . . . . . . . . . . . 15
SECTION 5.2 Waiver of Notice and Demand . . . . . . . . . . . . 15
SECTION 5.3 Obligations Not Affected . . . . . . . . . . . . . . 16
SECTION 5.4 Rights of Holders . . . . . . . . . . . . . . . . . 17
SECTION 5.5 Guarantee of Payment . . . . . . . . . . . . . . . . 18
SECTION 5.6 Subrogation . . . . . . . . . . . . . . . . . . . . 18
SECTION 5.7 Independent Obligations . . . . . . . . . . . . . . 18
SECTION 5.8 Consolidation, Merger, Sale of Assets and Other
Transactions . . . . . . . . . . . . . . . . . . . . 18

ARTICLE VI
SUBORDINATION

SECTION 6.1 Ranking . . . . . . . . . . . . . . . . . . . . . . 19

ARTICLE VII
TERMINATION

SECTION 7.1 Termination . . . . . . . . . . . . . . . . . . . . 20

ARTICLE VIII
INDEMNIFICATION

SECTION 8.1 Exculpation . . . . . . . . . . . . . . . . . . . . 20
SECTION 8.2 Indemnification . . . . . . . . . . . . . . . . . . 21
SECTION 8.3 Compensation; Reimbursement of Expenses . . . . . . 21

ARTICLE IX
MISCELLANEOUS

SECTION 9.1 Successors and Assigns . . . . . . . . . . . . . . . 21
SECTION 9.2 Amendments . . . . . . . . . . . . . . . . . . . . . 22
SECTION 9.3 Notices . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 9.4 Benefit . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 9.5 Governing Law . . . . . . . . . . . . . . . . . . . 23

<PAGE>

GUARANTEE AGREEMENT
-------------------
This GUARANTEE AGREEMENT (the "Capital Securities
Guarantee"), dated as of January 29, 1997, is executed and delivered
by The Bear Stearns Companies Inc., a Delaware corporation (the
"Guarantor"), and The Chase Manhattan Bank, a New York State banking
corporation, as trustee (the "Guarantee Trustee"), for the benefit of
the Holders (as defined herein) from time to time of the Capital
Securities (as defined herein) of Bear Stearns Capital Trust I, a
Delaware statutory business trust (the "Issuer").

WHEREAS, pursuant to an Amended and Restated Trust Agreement
(the "Trust Agreement"), dated as of January 29, 1997, among the
trustees named therein of the Issuer, the administrators named
therein, The Bear Stearns Companies Inc., as sponsor, and the holders
from time to time of undivided beneficial interests in the assets of
the Issuer, the Issuer is issuing on the date hereof securities,
having an aggregate liquidation amount of up to $200,000,000,
designated the Fixed/Adjustable Rate Capital Securities (the "Initial
Capital Securities") and may issue in the future, pursuant to the
Registration Rights Agreement (as defined in the Trust Agreement)
securities solely to be exchanged for Initial Capital Securities, with
terms that are substantially identical to those of the Initial Capital
Securities (the "Exchange Capital Securities" and together with the
Initial Capital Securities, the "Capital Securities");

WHEREAS, as incentive for the Holders to purchase the
Capital Securities, the Guarantor desires irrevocably and
unconditionally to agree, to the extent set forth in this Capital
Securities Guarantee, to pay to the Holders of Capital Securities the
Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein; and

WHEREAS, the Guarantor is also executing and delivering a
guarantee agreement (the "Common Securities Guarantee") in similar
terms to this Capital Securities Guarantee for the benefit of the
holders of the Common Securities (as defined in the Trust Agreement)
of the Issuer, except that if an Event of Default (as defined in the
Trust Agreement), has occurred and is continuing, the rights of
holders of the Common Securities to receive Guarantee Payments under
the Common Securities Guarantee are subordinated to the rights of
Holders of Capital Securities to receive Guarantee Payments under this
Capital Securities Guarantee.

NOW, THEREFORE, in consideration of the purchase by each
Holder of Capital Securities, which purchase the Guarantor hereby
agrees shall benefit the Guarantor, the Guarantor executes and
delivers this Capital Securities Guarantee for the benefit of the
Holders.

<PAGE>

ARTICLE I
DEFINITIONS AND INTERPRETATION

SECTION 1.1 Definitions and Interpretation
------------------------------
In this Capital Securities Guarantee, unless the context
otherwise requires:

(a) capitalized terms used in this Capital Securities
Guarantee but not defined in the preamble above have the
respective meanings assigned to them in this Section 1.1;

(b) a term defined anywhere in this Capital Securities
Guarantee has the same meaning throughout;

(c) all references to "the Capital Securities Guarantee" or
"this Capital Securities Guarantee" are to this Capital
Securities Guarantee as modified, supplemented or amended from
time to time;

(d) all references in this Capital Securities Guarantee to
Articles and Sections are to Articles and Sections of this
Capital Securities Guarantee, unless otherwise specified;

(e) terms defined in the Trust Agreement as at the date of
execution of this Capital Securities Guarantee or in the Trust
Indenture Act as the case may be, have the same meanings when
used in this Capital Securities Guarantee, unless otherwise
defined in this Capital Securities Guarantee or unless the
context otherwise requires; and

(f) a reference to the singular includes the plural and
vice versa.

"Corporate Trust Office" means the office of the Guarantee
Trustee at which the corporate trust business of the Guarantee Trustee
shall, at any particular time, be principally administered, which
office at the date of execution of this Guarantee Agreement is located
at 450 West 33rd Street, New York, New York 10001.

"Covered Person" means any Holder or beneficial owner of
Capital Securities.

<PAGE>

"Debentures" means the junior subordinated debentures of The
Bear Stearns Companies Inc. designated the Fixed/Adjustable Rate
Junior Subordinated Deferrable Interest Debentures due January 15,
2027, held by the Property Trustee (as defined in the Trust Agreement)
of the Issuer.

"EPICS Loan Agreement" means the loan agreement dated as of
February 24, 1994 between the Company and Bear Stearns Finance LLC in
the aggregate principal amount of $189,875,000.

"Event of Default" means a default by the Guarantor on any
of its payment or other obligations under this Capital Securities
Guarantee.

"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Capital
Securities, to the extent not paid or made by the Issuer: (i) any
accumulated and unpaid Distributions (as defined in the Trust
Agreement) which are required to be paid on such Capital Securities to
the extent the Issuer shall have funds available therefor, (ii) the
redemption price, including all accumulated and unpaid Distributions
to the date of redemption (the "Redemption Price") to the extent the
Issuer has funds available therefor, with respect to any Capital
Securities called for redemption by the Issuer, and (iii) upon a
voluntary or involuntary dissolution, winding-up or termination of the
Issuer (other than in connection with the distribution of Debentures
to the Holders in exchange for Capital Securities as provided in the
Trust Agreement), the lesser of (a) the aggregate of the liquidation
amount and all accumulated and unpaid Distributions on the Capital
Securities to the date of payment, to the extent the Issuer shall have
funds available therefor, and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution").

"Guarantees" means the Common Securities Guarantee and this
Capital Securities Guarantee, collectively.

"Guarantee Trustee" means The Chase Manhattan Bank, a New
York State banking corporation, until a Successor Guarantee Trustee
has been appointed and has accepted such appointment pursuant to the
terms of this Capital Securities Guarantee and thereafter means each
such Successor Guarantee Trustee.

"Holder" shall mean any holder, as registered on the books
and records of the Issuer, of any Capital Securities; provided,
however, that, in determining whether the holders of the requisite
percentage of Capital Securities have given any request, notice,
consent or waiver hereunder, "Holder" shall not include the Guarantor
or any Affiliate of the Guarantor.

<PAGE>

"Indemnified Person" means the Guarantee Trustee, any
Affiliate of the Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Guarantee Trustee.

"Indenture" means the Indenture dated as of January 29,
1997, among the Guarantor and The Chase Manhattan Bank, not in its
individual capacity but solely as trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued
to the Property Trustee of the Issuer.

"Liquidation Distribution" has the meaning set forth in the
definition of "Guarantee Payments" herein.

"Majority in liquidation amount of the Capital Securities"
means, except as provided by the Trust Indenture Act, a vote by
Holder(s) of Capital Securities, voting together as a class, but
separately from the holders of Common Securities, of more than 50% of
the aggregate liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus
accumulated and unpaid Distributions to the date upon which the voting
percentages are determined) of all Capital Securities then
outstanding.

"Officers' Certificate" means a certificate signed by the
Chairman of the Board or any Vice Chairman of the Board or the
President or any Executive Vice President or Chief Operating Officer
or Chief Financial Officer of the Depositor and by the Treasurer or an
Assistant Treasurer or Controller or the Secretary or an Assistant
Secretary of the Depositor and delivered to the Guarantee Trustee.
Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Capital Securities
Guarantee (other than pursuant to Section 2.4) shall include:

(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the
definitions relating thereto;

(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in
rendering the Officers' Certificate;

(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion
as to whether or not such covenant or condition has been complied
with; and

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

<PAGE>

"Other Guarantees" means all other guarantees (if any) to be
issued by the Company with respect to capital securities (if any) to
be issued by other trusts to be established by the Company (if any).

"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint
stock company, limited liability company, trust, unincorporated
association, or government or any agency or political subdivision
thereof, or any other entity of whatever nature.

"Responsible Officer" means, with respect to the Guarantee
Trustee, any officer within the Corporate Trust Office of the
Guarantee Trustee, including any vice president, any assistant vice
president, any assistant secretary, the treasurer, any assistant
treasurer, any trust officer, any senior trust officer, or other
officer of the Corporate Trust Office of the Guarantee Trustee
customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and
familiarity with the particular subject.

"Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee
under Section 4.1.

"Trust Event of Default" means an "Event of Default" as
defined in the Trust Agreement.

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

"Trust Securities" means the Common Securities and the
Capital Securities.

ARTICLE II
TRUST INDENTURE ACT

SECTION 2.1 Trust Indenture Act; Application
--------------------------------
(a) This Capital Securities Guarantee is subject to the
provisions of the Trust Indenture Act that would be required to
be part of this Capital Securities Guarantee if this Capital
Securities Guarantee were qualified under the Trust Indenture Act
and shall, to the extent applicable, be governed by such
provisions; and

<PAGE>

(b) if and to the extent that any provision of this Capital
Securities Guarantee limits, qualifies or conflicts with the
duties imposed by Sections 310 to 317, inclusive, of the Trust
Indenture Act, such imposed duties shall control.

SECTION 2.2 Lists of Holders of Securities
------------------------------
(a) The Guarantor shall provide the Guarantee Trustee (i)
within 5 ("five") days after each record date for payment of
Distributions, a list, in such form as the Guarantee Trustee may
reasonably require, of the names and addresses of the Holders of
the Capital Securities ("List of Holders") as of such record
date, provided that the Guarantor shall not be obligated to
provide such List of Holders at any time the List of Holders does
not differ from the most recent List of Holders given to the
Guarantee Trustee by the Guarantor, and (ii) at any other time
within 30 days of receipt by the Guarantor of a written request
for a List of Holders, which List of Holders shall be as of a
date no more than 14 days before such List of Holders is given to
the Guarantee Trustee. The Guarantee Trustee may destroy any
List of Holders previously given to it on receipt of a new List
of Holders.

(b) The Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.

SECTION 2.3 Reports by the Guarantee Trustee
--------------------------------
Within 60 days after November 15 of each year, the Guarantee
Trustee shall provide to the Holders of the Capital Securities such
reports dated as of such November 15 as are required by Section 313(a)
of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Guarantee
Trustee shall also comply with the requirements of Section 313 (d) of
the Trust Indenture Act. The Guarantor will notify the Guarantee
Trustee if and when any Capital Securities are listed on any stock
exchange.

SECTION 2.4 Periodic Reports to Guarantee Trustee
-------------------------------------
The Guarantor shall provide to the Guarantee Trustee, the
Securities and Exchange Commission and the Holders as applicable, such
documents, reports and information (if any) as required by Section 314
and the compliance certificate required by Section 314(a)(4) of the
Trust Indenture Act in the form, in the manner and at the times
required by Section 314 of the Trust Indenture Act, such compliance
certificate to be delivered annually on or before September 15 of each
year beginning in 1997.

<PAGE>

SECTION 2.5 Evidence of Compliance with Conditions Precedent
------------------------------------------------
The Guarantor shall provide to the Guarantee Trustee such
evidence of compliance with any conditions precedent provided for in
this Capital Securities Guarantee that relate to any of the matters
set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) may be given in the form of an Officers'
Certificate.

SECTION 2.6 Events of Default; Waiver
-------------------------
The Holders of a Majority in liquidation amount of Capital
Securities may, voting or consenting as a class, on behalf of the
Holders of all of the Capital Securities, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of
Default shall cease to exist, and shall be deemed to have been cured,
for every purpose of this Capital Securities Guarantee, but no such
waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent therefrom.

SECTION 2.7 Events of Default; Notice
-------------------------
(a) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class
postage prepaid, to the Holders of the Capital Securities,
notices of all Events of Default actually known to a Responsible
Officer of the Guarantee Trustee, unless such defaults have been
cured before the giving of such notice, provided, however, that,
except in the case of a default in the payment of a Guarantee
Payment, the Guarantee Trustee shall be protected in withholding
such notice if and so long as the board of directors, the
executive committee, or a trust committee of directors and/or
responsible officers of the Guarantee Trustee in good faith
determines that the withholding of such notice is in the
interests of the Holders of the Capital Securities.

(b) The Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Guarantee Trustee
shall have received written notice thereof from the Guarantor or
a Holder, or a Responsible Officer of the Guarantee Trustee
charged with the administration of this Capital Securities
Guarantee shall have obtained written notice thereof.

<PAGE>

SECTION 2.8 Conflicting Interests
---------------------
The Indenture, the Debentures and the Securities (each as
defined therein) issued or to be issued thereunder and the Trust
Agreement and the Trust Securities issued or to be issued thereunder
shall be deemed to be specifically described in this Capital
Securities Guarantee for the purposes of clause (i) of the proviso
contained in Section 310(b)(l) of the Trust Indenture Act.

ARTICLE III
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE

SECTION 3.1 Powers and Duties of the Guarantee Trustee
------------------------------------------
(a) This Capital Securities Guarantee shall be held by the
Guarantee Trustee for the benefit of the Holders of the Capital
Securities, and the Guarantee Trustee shall not transfer this
Capital Securities Guarantee to any Person except a Holder of
Capital Securities exercising his or her rights pursuant to
Section 5.4(b) or to a Successor Guarantee Trustee on acceptance
by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee. The right, title and interest of
the Guarantee Trustee shall automatically vest in any Successor
Guarantee Trustee, upon acceptance by such Successor Guarantee
Trustee of its appointment hereunder, and such vesting and
cessation of title shall be effective whether or not conveyancing
documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.

(b) If an Event of Default actually known to a Responsible
Officer of the Guarantee Trustee has occurred and is continuing,
the Guarantee Trustee shall enforce this Capital Securities
Guarantee for the benefit of the Holders of the Capital
Securities.

(c) The Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default
that may have occurred, shall undertake to perform only such
duties as are specifically set forth in this Capital Securities
Guarantee, and no implied covenants shall be read into this
Capital Securities Guarantee against the Guarantee Trustee. In
case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6) and is actually known to a
Responsible Officer of the Guarantee Trustee, the Guarantee
Trustee shall exercise

<PAGE>

such of the rights and powers vested in it by this Capital
Securities Guarantee, and use the same degree of care and skill
in its exercise thereof, as a prudent person

<PAGE>

would exercise or use under the circumstances in the conduct of
his or her own affairs.

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

(i) prior to the occurrence of any Event of
Default and after the curing or waiving of all such
Events of Default that may have occurred:

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

(B) in the absence of bad faith on the part
of the Guarantee Trustee, the Guarantee Trustee
may conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and
conforming to the requirements of this Capital
Securities Guarantee; but in the case of any such
certificates or opinions that by any provision
hereof are specifically required to be furnished
to the Guarantee Trustee, the Guarantee Trustee
shall be under a duty to examine the same to
determine whether or not they conform to the
requirements of this Capital Securities Guarantee;

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

<PAGE>

(iii) the Guarantee Trustee shall not be liable
with respect to any action taken or omitted to be taken
by it in good faith in accordance with the direction of
the Holders of not less than a Majority in liquidation
amount of the Capital Securities relating to the time,
method and place of conducting any proceeding for any
remedy available to the Guarantee Trustee, or
exercising any trust or power conferred upon the
Guarantee Trustee under this Capital Securities
Guarantee; and

(iv) no provision of this Capital Securities
Guarantee shall require the Guarantee Trustee to expend
or risk its own funds or otherwise incur personal
financial liability in the performance of any of its
duties or in the exercise of any of its rights or
powers, if the Guarantee Trustee shall have reasonable
grounds for believing that the repayment of such funds
is not reasonably assured to it under the terms of this
Capital Securities Guarantee or indemnity, reasonably
satisfactory to the Guarantee Trustee, against such
risk or liability is not reasonably assured to it.

SECTION 3.2 Certain Rights of Guarantee Trustee
-----------------------------------
(a) Subject to the provisions of Section 3.1:

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

(ii) Any direction or act of the Guarantor
contemplated by this Capital Securities Guarantee shall
be sufficiently evidenced by an Officers' Certificate.

(iii) Whenever, in the administration of this
Capital Securities Guarantee, the Guarantee Trustee
shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any
action hereunder, the Guarantee Trustee (unless other
evidence is herein specifically prescribed) may, in the
absence of bad faith on its part,

<PAGE>

request and conclusively rely upon an Officers'
Certificate which, upon receipt of such request, shall
be promptly delivered by the Guarantor.

(iv) The Guarantee Trustee shall have no duty to
see to any recording, filing or registration of any
instrument (or any rerecording, refiling or
registration thereof).

(v) The Guarantee Trustee may consult with
counsel of its selection, and the written advice or
opinion of such counsel with respect to legal matters
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 accordance with such
advice or opinion. Such counsel may be counsel to the
Guarantor or any of its Affiliates and may include any
of its employees. The Guarantee Trustee shall have the
right at any time to seek instructions concerning the
administration of this Guarantee from any court of
competent jurisdiction.

(vi) The Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers
vested in it by this Capital Securities Guarantee at
the request or direction of any Holder, unless such
Holder shall have provided to the Guarantee Trustee
such security and indemnity, reasonably satisfactory to
the Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses and the
expenses of the Guarantee Trustee's agents, nominees or
custodians) and liabilities that might be incurred by
it in complying with such request or direction,
including such reasonable advances as may be requested
by the Guarantee Trustee; provided, however, that
nothing contained in this Section 3.2(a) (vi) shall be
taken to relieve the Guarantee Trustee, upon the
occurrence of an Event of Default, of its obligation to
exercise the rights and powers vested in it by this
Capital Securities Guarantee.

(vii) The Guarantee 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
Guarantee Trustee, in its discretion, may make such
further inquiry or investigation into such facts or
matters as it may see fit.

<PAGE>

(viii) The Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents,
nominees, custodians or attorneys, and the Guarantee
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.

(ix) Whenever in the administration of this
Capital Securities Guarantee the Guarantee Trustee
shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any
other action hereunder, the Guarantee Trustee (i) may
request instructions from the Holders of a Majority in
liquidation amount of the Capital Securities, (ii) may
refrain from enforcing such remedy or right or taking
such other action until such instructions are received,
and (iii) shall be protected in conclusively relying on
or acting in accordance with such instructions.

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

(b) No provision of this Capital Securities Guarantee shall
be deemed to impose any duty or obligation on Guarantee Trustee
to perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it, in any jurisdiction in
which it shall be illegal or in which the Guarantee Trustee shall
be unqualified or incompetent in accordance with applicable law
to perform any such act or acts or to exercise any such right,
power, duty or obligation. No permissive power or authority
available to the Guarantee Trustee shall be construed to be a
duty.

SECTION 3.3 Not Responsible for Recitals or Issuance of Capital
---------------------------------------------------
Securities Guarantee
--------------------
The recitals contained in this Capital Securities Guarantee
shall be taken as the statements of the Guarantor, and the Guarantee
Trustee does not assume any responsibility for their correctness. The
Guarantee Trustee makes no representation as to the validity or
sufficiency of this Capital Securities Guarantee.

<PAGE>

ARTICLE IV
GUARANTEE TRUSTEE

SECTION 4.1 Guarantee Trustee; Eligibility
------------------------------
(a) There shall at all times be a Guarantee Trustee which
shall:

(i) not be an Affiliate of the Guarantor; and

(ii) be a corporation organized and doing business
under the laws of the United States of America or any
State or Territory thereof or of the District of
Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an
institutional trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at
least 50 million U.S. dollars ($50,000,000), and
subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority.
If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements
of the supervising or examining authority referred to
above, then, for the purposes of this Section 4.1(a)
(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of
condition so published.

(b) If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Guarantee Trustee
shall immediately resign in the manner and with the effect set
out in Section 4.2(c).

(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of
the Trust Indenture Act, the Guarantee Trustee and Guarantor
shall in all respects comply with the provisions of Section
310(b) of the Trust Indenture Act, subject to the penultimate
paragraph thereof.

SECTION 4.2 Appointment, Removal and Resignation of Guarantee Trustee
---------------------------------------------------------
(a) Subject to Section 4.2(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor
except during an Event of Default.

<PAGE>

(b) The Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee
and delivered to the Guarantor.

(c) The Guarantee Trustee appointed to office shall hold
office until a Successor Guarantee Trustee shall have been
appointed or until its removal or resignation. The Guarantee
Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing executed by
the Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by
an instrument in writing executed by such Successor Guarantee
Trustee and delivered to the Guarantor and the resigning
Guarantee Trustee.

(d) If no Successor Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section
4.2 within 60 days after delivery of an instrument of removal or
resignation, the Guarantee Trustee resigning or being removed may
petition any court of competent jurisdiction for appointment of a
Successor Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a
Successor Guarantee Trustee.

(e) No Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Guarantee Trustee.

(f) Upon termination of this Capital Securities Guarantee
or removal or resignation of the Guarantee Trustee pursuant to
this Section 4.2, the Guarantor shall pay to the Guarantee
Trustee all amounts owing to the Guarantee Trustee under Sections
8.2 and 8.3 accrued to the date of such termination, removal or
resignation.

ARTICLE V
GUARANTEE

SECTION 5.1 Capital Securities Guarantee
----------------------------
The Guarantor irrevocably and unconditionally agrees to pay
in full to the Holders the Guarantee Payments (without duplication of
amounts theretofore paid by the Issuer), as and when due, regardless
of any defense, right of set-off or counterclaim that the Issuer may
have or assert. Such obligations will not be discharged except by
payment of the Guarantee Payments in full. The Guarantor's obligation
to make a Guarantee Payment may

<PAGE>

be satisfied by direct payment of the required amounts by the
Guarantor to the Holders or by causing the Issuer to pay such amounts
to the Holders.

SECTION 5.2 Waiver of Notice and Demand
---------------------------
The Guarantor hereby waives notice of acceptance of this
Capital Securities Guarantee and of any liability to which it applies
or may apply, presentment, demand for payment, any right to require a
proceeding first against the Guarantee Trustee, the Issuer or any
other Person before proceeding against the Guarantor, protest, notice
of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.

SECTION 5.3 Obligations Not Affected
------------------------
The obligations, covenants, agreements and duties of the
Guarantor under this Capital Securities Guarantee shall in no way be
affected or impaired by reason of the happening from time to time of
any of the following:

(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Issuer of any
express or implied agreement, covenant, term or condition
relating to the Capital Securities to be performed or observed by
the Issuer;

(b) the extension of time for the payment by the Issuer of
all or any portion of the Distributions, Redemption Price,
Liquidation Distribution or any other sums payable under the
terms of the Capital Securities or the extension of time for the
performance of any other obligation under, arising out of, or in
connection with, the Capital Securities (other than an extension
of time for payment of Distributions, Redemption Price,
Liquidation Distribution or other sum payable that results from
the extension of any interest payment period on the Debentures or
any extension of the maturity date of the Debentures permitted by
the Indenture);

(c) any failure, omission, delay or lack of diligence on
the part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to
the terms of the Capital Securities, or any action on the part of
the Issuer granting indulgence or extension of any kind;

(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of debt of, or other
similar proceedings affecting, the Issuer or any of the assets of
the Issuer;

<PAGE>

(e) any invalidity of, or defect or deficiency in, the
Capital Securities;

(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or

(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a
guarantor, it being the intent of this Section 5.3 that the
obligations of the Guarantor hereunder shall be absolute and
unconditional under any and all circumstances

There shall be no obligation of the Holders to give notice
to, or obtain consent of, the Guarantor with respect to the happening
of any of the foregoing.

SECTION 5.4 Rights of Holders
-----------------
(a) The Holders of a Majority in liquidation amount of the
Capital Securities have the right to direct the time, method and
place of conducting of any proceeding for any remedy available to
the Guarantee Trustee in respect of this Capital Securities
Guarantee or exercising any trust or power conferred upon the
Guarantee Trustee under this Capital Securities Guarantee;
provided however, that (subject to Section 3.1) the Guarantee
-------- -------
Trustee shall have the right to decline to follow any such
direction if the Guarantee Trustee shall determine that the
actions so directed would be unjustly prejudicial to the Holders
not taking part in such direction or if the Guarantee Trustee
being advised by counsel determines that the action or proceeding
so directed may not lawfully be taken or if the Guarantor Trustee
in good faith by its board of directors or trustees, executive
committees or a trust committee of directors or trustees and/or
Responsible Officers shall determine that the action or
proceedings so directed would involve the Guarantee Trustee in
personal liability.

(b) Any Holder of Capital Securities may institute a legal
proceeding directly against the Guarantor to enforce its rights
under this Capital Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the Guarantee
Trustee or any other Person. The Guarantor waives any right or
remedy to require that any such action be brought first against
the Issuer or any other Person before so proceeding directly
against the Guarantor.

(c) The Guarantor expressly acknowledges that (i) this
Capital Securities Guarantee will be deposited with the Guarantee
Trustee to be held for the benefit of the Holders; (ii) the
Guarantee Trustee has the right to enforce this Capital
Securities Guarantee on behalf of the Holders.

<PAGE>

SECTION 5.5 Guarantee of Payment
--------------------
This Capital Securities Guarantee creates a guarantee of
payment and not of collection. This Capital Securities Guarantee will
not be discharged except by payment of the Guarantee Payments in full
(without duplication of amounts theretofore paid by the Issuer) or
upon distribution of Debentures to Holders as provided in the Trust
Agreement.

SECTION 5.6 Subrogation
-----------
The Guarantor shall be subrogated to all (if any) rights of
the Holders of Capital Securities against the Issuer in respect of any
amounts paid to such Holders by the Guarantor under this Capital
Securities Guarantee; provided, however, that the Guarantor shall not
(except to the extent required by mandatory provisions of law) be
entitled to enforce or exercise any right that it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in
all cases as a result of payment under this Capital Securities
Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Capital Securities Guarantee. If any amount
shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.

SECTION 5.7 Independent Obligations
-----------------------
The Guarantor acknowledges that its obligations hereunder
are independent of the obligations of the Issuer with respect to the
Capital Securities and that the Guarantor shall be liable as principal
and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Capital Securities Guarantee notwithstanding the
occurrence of any event referred to in subsections (a) through (g),
inclusive, of Section 5.3 hereof.

SECTION 5.8 Consolidation, Merger, Sale of Assets and Other
-----------------------------------------------
Transactions
------------

The Guarantor 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 no Person shall
consolidate with or merge into the Guarantor or convey, transfer or
lease its properties and assets substantially as an entirety to the
Guarantor, unless (i) either the Guarantor shall be the continuing
corporation, or the successor shall be a Person organized under the
laws of the United States or any state or the District of Columbia,
and such successor Person expressly assumes the Guarantor's
obligations under this Capital Securities Guarantee by written
instrument in form satisfactory to the Guarantee Trustee, (ii)
immediately after giving effect thereto, no Event of Default under
this Capital Securities Guarantee, and no event which, after notice or
lapse of time or both, would become an

<PAGE>

Event of Default under this Capital Securities Guarantee, shall have
occurred and be continuing, and (iii) such consolidation, merger,
conveyance, transfer or lease shall be permitted under the Trust
Agreement and the Indenture and does not give rise to any breach or
violation of the Trust Agreement or Indenture.

ARTICLE VI
SUBORDINATION

SECTION 6.1 Ranking
-------
This Capital Securities Guarantee will constitute an
unsecured obligation of the Guarantor and will rank subordinate and
junior in right of payment to all present and future Senior
Indebtedness (as defined in the Indenture) of the Guarantor. This
Capital Securities Guarantee will rank pari passu with all Other
Guarantees. By their acceptance thereof, each Holder of Capital
Securities agrees to the foregoing provisions of this Capital
Securities Guarantee and the other terms set forth herein.

If a Trust Event of Default has occurred and is continuing,
the rights of holders of the Common Securities of the Issuer to
receive payments under the Common Securities Guarantee are
subordinated to the rights of Holders of Capital Securities to receive
Guarantee Payments.

ARTICLE VII
TERMINATION

SECTION 7.1 Termination
-----------
This Capital Securities Guarantee shall terminate, subject
to Sections 8.2 and 8.3, (i) upon full payment of the Redemption Price
of all Capital Securities, (ii) upon the distribution of the
Debentures to the Holders of all of the Capital Securities or (iii)
upon full payment of the amounts payable in accordance with the Trust
Agreement upon dissolution of the Issuer. Notwithstanding the
foregoing, this Capital Securities Guarantee will continue to be
effective or will be reinstated, as the case may be, if at any time
any Holder of Capital Securities must restore payment of any sums paid
under the Capital Securities or under this Capital Securities
Guarantee.

<PAGE>

ARTICLE VIII
INDEMNIFICATION

SECTION 8.1 Exculpation
-----------
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any
Covered Person for any loss, damage or claim incurred by reason
of any act or omission performed or omitted by such Indemnified
Person in good faith in accordance with this Capital Securities
Guarantee and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on
such Indemnified Person by this Capital Securities Guarantee or
by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified
Person's negligence or willful misconduct with respect to such
acts or omissions.

(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Issuer or the
Guarantor and upon such information, opinions, reports or
statements presented to the Trust or the Guarantor by any Person
as to matters the Indemnified Person reasonably believes are
within such other Person's professional or expert competence and
who, if selected by such Indemnified Person, has been selected
with reasonable care by such Indemnified Person, including
information, opinions, reports or statements as to the value and
amount of the assets, liabilities, profits, losses, or any other
facts pertinent to the existence and amount of assets from which
Distributions to Holders of Capital Securities might properly be
paid.

SECTION 8.2 Indemnification
---------------
The Guarantor agrees to indemnify each Indemnified Person
for, and to hold each Indemnified Person harmless against, any and all
loss, liability, damage, claim 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 (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder. The Guarantee Trustee will not claim or
exact any lien or charge on any Guarantee Payments as a result of any
amount due to it under this Guarantee Agreement. The obligation to
indemnify as set forth in this Section 8.2 shall survive the
termination of this Capital Securities Guarantee.

<PAGE>

SECTION 8.3 Compensation; Reimbursement of Expenses
---------------------------------------
The Guarantor agrees:

(a) to pay to the Guarantee 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); and

(b) except as otherwise expressly provided herein, to
reimburse the Guarantee Trustee upon request for all reasonable
expenses, disbursements and advances incurred or made by it in
accordance with any provision of this Capital Securities Guarantee
(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.

The provisions of this Section 8.3 shall survive the
termination of this Capital Securities Guarantee,

ARTICLE IX
MISCELLANEOUS

SECTION 9.1 Successors and Assigns
----------------------
All guarantees and agreements contained in this Capital
Securities Guarantee shall bind the successors, assigns, receivers,
trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Capital Securities then outstanding.
Except in connection with any merger or consolidation of the Guarantor
with or into another entity or any sale or conveyance of the
Guarantor's assets to another entity or of another entity's assets to
the Guarantor, in each case, to the extent permitted under Section 5.8
of this Guarantee Agreement, the Guarantor may not assign its rights
or delegate its obligations under this Capital Securities Guarantee
without the prior approval of the Holders of at least a Majority in
liquidation amount of the Capital Securities.

SECTION 9.2 Amendments
----------
Except with respect to any changes that do not adversely
affect the rights of Holders of Capital Securities in any material
respect (in which case no consent of Holders will be required), this
Capital Securities Guarantee may only be amended with the prior
approval of the Holders of a least a Majority in liquidation amount of
the Capital Securities.

<PAGE>

The provisions of the Trust Agreement with respect to amendments
thereof apply to the giving of such approval.

SECTION 9.3 Notices
-------
All notices provided for in this Capital Securities
Guarantee shall be in writing, duly signed by the party giving such
notice, and shall be delivered, telecopied or mailed by first class
mail, as follows:

(a) If given to the Guarantee Trustee, at the Guarantee
Trustee's mailing address set forth below (or such other address
as the Guarantee Trustee may give notice of to the Holders of the
Capital Securities):

The Chase Manhattan Bank
450 West 33rd Street
New York, NY 10001
Attention: Corporate Trustee Administration
Department

(b) If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor
may give notice of to the Holders of the Capital Securities and
to the Guarantee Trustee):

The Bear Stearns Companies Inc.
245 Park Avenue
New York, NY 10167
Attention: David Granville Smith

All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by
first class mail, postage prepaid except that if a notice or other
document is refused delivery or cannot be delivered because of a
changed address of which no notice was given, such notice or other
document shall be deemed to have been delivered on the date of such
refusal or inability to deliver.

<PAGE>

SECTION 9.4 Benefit
-------
This Capital Securities Guarantee is solely for the benefit
of the Holders of the Capital Securities and, subject to Section
3.1(a), is not separately transferable from the Capital Securities.

SECTION 9.5 Governing Law
-------------
THIS CAPITAL SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.

<PAGE>

This Capital Securities Guarantee is executed as of the day
and year first above written.

THE BEAR STEARNS COMPANIES, INC.
as Guarantor

By:/s/ James E. Cayne
-------------------------------------
James E. Cayne
President and Chief Executive
Officer

THE CHASE MANHATTAN BANK,
as Guarantee Trustee

By: /s/ Anne G. Brenner
-------------------------------------
Name: Anne G. Brenner
Title: Vice President

EXHIBIT 4.8

REGISTRATION RIGHTS AGREEMENT

REGISTRATION RIGHTS AGREEMENT, dated as of January 29,
1997 among The Bear Stearns Companies Inc. (the "Company"),
Bear Stearns Capital Trust I, a Delaware statutory business
trust (the "Trust"), and Bear, Stearns & Co. Inc., Chase
Securities Inc., Goldman, Sachs & Co., J.P. Morgan
Securities Inc. and NationsBanc Capital Markets, Inc. as the
initial purchasers (the "Initial Purchasers") of the
Fixed/Adjustable Rate Capital Securities of the Trust, which
are guaranteed by the Company.

I. Certain Definitions.

For purposes of this Registration Rights Agreement, the
following terms shall have the following respective
meanings:

(a) "Administrators" shall mean the
Administrators named under the Trust Agreement.

(b) "Capital Securities" shall mean the
Fixed/Adjustable Rate Capital Securities,
Liquidation Amount $1,000 per Capital Security, to
be issued under the Trust Agreement and sold to
the Initial Purchasers, and those securities
issued in exchange therefor or in lieu thereof
pursuant to the Trust Agreement.

(d) "Commission" shall mean the Securities and
Exchange Commission, or any other federal agency
at the time administering the Exchange Act or the
Securities Act, whichever is the relevant statute
for the particular purpose.

(e) "Debentures" shall mean the Fixed/Adjustable
Rate Junior Subordinated Deferrable Interest
Debentures due 2027 of the Company to be issued
under the Indenture, and securities issued in
exchange therefor or in lieu thereof pursuant to
the Indenture.

(f) "Effective Time", in the case of (i) an
Exchange Offer, shall mean the time and date as of
which the Commission declares the Exchange Offer
Registration Statement effective or as of which
the Exchange Offer Registration Statement
otherwise becomes effective and (ii) a Shelf
Registration, shall mean the time and date as of
which the Commission declares the Shelf
Registration effective or as of which the Shelf
Registration otherwise becomes effective.

(g) "Exchange Act" shall mean the Securities
Exchange Act of 1934, or any successor thereto, as
the same shall be amended from time to time.
<PAGE>

(h) "Exchange Offer" shall have the meaning
assigned thereto in Section 2(a) hereof.

(i) "Exchange Offer Registration Statement" shall
have the meaning assigned thereto in Section 2(a)
hereof.

(j) "Exchange Registration" shall have the
meaning assigned thereto in Section 3(f) hereof.

(k) "Exchange Securities" shall have the meaning
assigned thereto in Section 2(a) hereof.

(l) "Guarantee" shall mean the guarantee of the
Capital Securities by the Company under the
Guarantee Agreement, dated as of January 29, 1997,
between the Company and The Chase Manhattan Bank,
as Guarantee Trustee.

(m) The term "holder" shall mean the Initial
Purchasers for so long as they own any Registrable
Securities, and such of their respective
successors and assigns who acquire Registrable
Securities, directly or indirectly, from such
person or from any successor or assign of such
person, in each case for so long as such person
owns any Registrable Securities.

(n) "Indenture" shall mean the Indenture, dated
as of January 29, 1997, between the Company and
The Chase Manhattan Bank, as Trustee, as the same
shall be amended from time to time.

(o) "Liquidation Amount" shall mean the stated
amount of $1,000 per Trust Security.

(p) The term "person" shall mean a corporation,
association, partnership, organization, business,
individual, government or political subdivision
thereof or governmental agency.

(q) "Registrable Securities" shall mean the
Securities; provided, however, that such
Securities shall cease to be Registrable
Securities when (i) in the circumstances
contemplated by Section 2(a) hereof, such
Securities have been exchanged for Exchange
Securities in an Exchange Offer as contemplated in
Section 2(a) (provided that any Exchange
--------
Securities received by a broker-dealer in an
Exchange Offer in exchange for Registrable
Securities that were not acquired by the broker-
dealer directly from the Company will also be
Registrable Securities through and including the
earlier of the 180th day after the Exchange Offer
is completed or such time as such broker-dealer no
longer owns such Exchange Securities); (ii) in the
circumstances contemplated by Section 2(b) hereof,
a registration statement registering such
Securities under the Securities Act has been
declared or becomes effective and such Securities
have been sold or otherwise transferred by the
holder thereof pursuant to such effective
registration statement; (iii) such Securities are
sold pursuant to Rule 144 under circumstances in
which any legend borne by such Securities relating
to restrictions on transferability thereof, under
the Securities Act or otherwise, is removed or
such Securities are eligible to be sold pursuant
to paragraph (k) of Rule 144; or (iv) such
Securities shall cease to be outstanding.
<PAGE>

(r) "Registration Default" shall have the meaning
assigned thereto in Section 2(c) hereof.

(s) "Registration Default Interest" shall have
the meaning assigned thereto in Section 2(c)
hereof.

(t) "Registration Default Distributions" shall
have the meaning assigned thereto in Section 2(c).

(u) "Registration Expenses" shall have the
meaning assigned thereto in Section 4 hereof.

(v) "Resale Period" shall have the meaning
assigned thereto in Section 2(a) hereof.

(w) "Restricted Holder" shall mean (i) a holder
that is an affiliate of the Company within the
meaning of Rule 405, (ii) a holder who acquires
Exchange Securities outside the ordinary course of
such holder's business or (iii) a holder who has
arrangements or understandings with any person to
participate in the Exchange Offer for the purpose
of distributing Exchange Securities.

(x) "Rule 144," "Rule 405" and "Rule 415" shall
mean, in each case, such rule promulgated under
the Securities Act.

(y) "Securities" shall mean, collectively, the
Capital Securities, the Guarantee and the
Debentures.

(z) "Securities Act" shall mean the Securities
Act of 1933, or any successor thereto, as the same
shall be amended from time to time.

(aa) "Shelf Registration" shall have the meaning
assigned thereto in Section 2(b) hereof.

(ab) "Trust Agreement" shall mean the Amended and
Restated Trust Agreement, dated as of January 29,
1997, among the Company, as Depositor, The Chase
Manhattan Bank, as Property Trustee, the
individuals named therein, as Administrators and
Chase Manhattan Bank Delaware, as Delaware
Trustee.
<PAGE>

(ac) "Trust Indenture Act" shall mean the Trust
Indenture Act of 1939, or any successor thereto,
as the same shall be amended from time to time.

(ad) "Trust Securities" shall mean collectively
the Capital Securities and the Common Securities
to be issued under the Trust Agreement to the
Company.

Unless the context otherwise requires, any
reference herein to a "Section" or "clause" refers to a
Section or clause, as the case may be, of this Registration
Rights Agreement, and the words "herein," "hereof' and,
hereunder' and other words of similar import refer to this
Registration Rights Agreement as a whole and not to any
particular Section or other subdivision. Unless the context
otherwise requires, any reference to a statute, rule or
regulation refers to the same (including any successor
statute, rule or regulation thereto) as it may be amended
from time to time.

2. Registration Under the Securities Act.

(a) Except as set forth in Section 2(b) below, the
Company and the Trust agree to file under the Securities Act
within 60 days after the Closing Date, a registration
statement (the "Exchange Offer Registration Statement")
relating to an offer to exchange (the "Exchange Offer") any
and all of the Securities for a like aggregate amount of
capital securities issued by the Trust and guaranteed by the
Company and underlying fixed/adjustable rate junior
subordinated interest deferrable debentures of the Company,
which capital securities, guarantee and debentures are
identical to the Capital Securities, the Guarantee and the
Debentures, respectively (and are entitled to the benefits
of trust indentures which have been qualified under the
Trust Indenture Act) except that they have been registered
pursuant to an effective registration statement under the
Securities Act, do not contain restrictions on transfers and
do not contain provisions for the additional interest and
additional distributions contemplated in Section 2(c) below
(such new securities hereinafter called "Exchange
Securities"). Except as set forth in Section 2(b) below,
the Company and the Trust agree to use their best efforts to
cause the Exchange Offer Registration Statement to be
declared effective under the Securities Act within 150 days
after the Closing Date. The Exchange Offer will be
registered under the Securities Act on the appropriate form
and will comply with all applicable tender offer rules and
regulations under the Exchange Act. Except as set forth in
Section 2(b) below, the Company and the Trust further agree
to use their best efforts to commence and complete the
Exchange Offer promptly after the Exchange Offer
Registration Statement has become effective, hold the
Exchange Offer open for at least 30 days after the date
notice of the Exchange Offer is mailed to the holders of the
Securities (the "Commencement") and exchange Exchange
Securities for all Securities that have been properly
tendered and not withdrawn on or prior to the expiration of
the Exchange Offer. Except as set forth in Section 2(b)
below, the Company and the Trust agree to use their best
efforts to consummate the Exchange Offer within 180 days

<PAGE>

after the Closing Date. The Exchange Offer will be deemed
to have been completed only if the Exchange Securities
received by holders other than Restricted Holders in the
Exchange Offer for Securities are, upon receipt,
transferable by each such holder without restriction under
the Securities Act and the Exchange Act and without material
restrictions under the blue sky or securities laws of a
substantial majority of the States of the United States of
America. The Exchange Offer shall be deemed to have been
completed upon the earlier to occur of (i) the Company and
the Trust having exchanged the Exchange Securities for all
outstanding Securities pursuant to the Exchange Offer and
(ii) the Company having exchanged, pursuant to the Exchange
Offer, Exchange Securities for all Securities that have been
properly tendered and not withdrawn before the expiration of
the Exchange Offer, which shall be on a date that is no less
than 30 days following the Commencement of the Exchange
Offer. The Company and the Trust, agree (x) to include in
the registration statement a prospectus for use in
connection with any resales of Exchange Securities by a
holder that is a broker-dealer registered under the Exchange
Act ("broker-dealer") other than resales of Exchange
Securities received by a broker-dealer pursuant to the
Exchange Offer in exchange for Registrable Securities
acquired by such broker-dealer directly from the Trust, and
(y) to keep the Exchange Offer Registration Statement
effective for a period (the "Resale Period") beginning when
Exchange Securities are first issued in the Exchange Offer
and ending upon the earlier of (i) either (a) the expiration
of the 180th day after the Exchange Offer has been completed
or (b) in the event the Company and the Trust have at any
time notified any broker-dealers pursuant to Section
3(f)(ii) hereof, the day beyond the 180th day after the
Exchange Offer has been completed that reflects an
additional period of days equal to the number of days during
all of the periods from and including the dates the Company
and the Trust give notice pursuant to Section 3(f)(ii)(F)
hereof to and including the date when broker-dealers receive
an amended or supplemented prospectus necessary to permit
resales of Exchange Securities or to and including the date
on which the Company and the Trust give notice that the
resale of Exchange Securities under the Exchange Offer
Registration Statement may resume or (ii) such time as such
broker-dealers no longer own any Registrable Securities.
With respect to such registration statement, each broker-
dealer that holds Exchange Securities received in an
Exchange Offer in exchange for Registrable Securities not
acquired by it directly from the Company shall have the
benefit of the rights of indemnification and contribution
set forth in Section 6 hereof.

<PAGE>

(b) If (i) because of any change in law or in
currently prevailing interpretations of the staff of the
Commission, the Company and the Trust are not permitted to
effect the Exchange Offer, (ii) the Company shall determine
in good faith there is a reasonable likelihood that, or a
material uncertainty exists as to whether, consummation of
the Exchange Offer would result in an adverse tax
consequence to the Company ( a "Tax Contingency"), (iii) the
Exchange Offer is not consummated within 180 days of the
Closing Date, (iv) certain holders of unregistered Exchange
Securities shall notify the Company and the Trust following
the consummation of the Exchange Offer that (A) such holder
is prohibited by state or federal securities law or
Commission policy from participating in the Exchange Offer
or (B) such holder may not resell the Securities acquired by
it in the Exchange Offer to the public without delivering a
prospectus and the prospectus contained in the Exchange
Offer Registration Statement is not appropriate or available
for such resales by such holder or (C) such holder is a
broker-dealer and holds Securities acquired directly from
the Company, the Trust or an affiliate of the Company, or
the Trust, or (v) in the case of any holder that
participates in the Exchange Offer, such holder does not
receive Exchange Securities on the date of the exchange that
may be sold without restriction under state and Federal
securities laws (other than due solely to the status of such
holder as an affiliate of the Company or the Trust within
the meaning of the Securities Act), then in addition to or
in lieu of conducting the Exchange Offer contemplated by
Section 2(a), the Company and the Trust shall file under the
Securities Act as promptly as practicable a "shelf'
registration statement providing for the registration of,
and the sale on a continuous or delayed basis by the holders
of, all of the Registrable Securities, pursuant to Rule 415
or any similar rule that may be adopted by the Commission
(the "Shelf Registration"). The Administrators will
promptly deliver to the holders of the Capital Securities,
the Property Trustee and the Delaware Trustee, or the
Company will promptly deliver to the holders of the
Debentures, if not the Trust, written notice that the
Company and the Trust will be complying with the provisions
of this Section 2(b). The Company and the Trust agree to
(i) as promptly as practicable, file a Shelf Registration
covering resales of the Securities, (ii) use their best
efforts to cause the Shelf Registration to become or be
declared effective under the Securities Act and (iii) use
their best efforts to keep such Shelf Registration
continuously effective for a period ending on the earlier of
(i) either (x) three years (or, if Rule 144(k) is amended to
provide a

<PAGE>

shorter restrictive period, such shorter period) after the
Effective Time, or (y) in the event the Company and the
Trust have at any time suspended the use of the prospectus
contained in the Shelf Registration pursuant to Section 3(c)
hereof, the date beyond the third anniversary of the
Effective Time that reflects an additional period of days
equal to the number of days during all of the periods from
and including the dates the Company and the Trust give
notice of such suspension pursuant to Section 3(c) to and
including the date when holders of Registrable Securities
receive an amended or supplemented prospectus necessary to
permit resales as Registrable Securities under the Shelf
Registration or to and including the date on which the
Company and Trust give notice that the resale to Registrable
Securities may resume or (ii) such time as there are no
longer any Registrable Securities outstanding. The Company
and the Trust further agree to supplement or make amendments
to the Shelf Registration, as and when required by the
rules, regulations or instructions applicable to the
registration form used by the Company and the Trust for such
Shelf Registration or by the Securities Act or rules and
regulations thereunder for shelf registration, and the
Company and the Trust agree to furnish to the holders of the
Registrable Securities copies of any such supplement or
amendment prior to its being used or promptly following its
filing with the Commission.

(c) In the event that (i) the Exchange Offer
Registration Statement or a registration statement relating
to a Shelf Registration (a "Shelf Registration Statement"),
as the case may be, is not filed with the Commission on or
prior to the 60th day following the Closing Date, (ii) the
Exchange Offer Registration Statement is not declared
effective on or prior to the 150th day following the Closing
Date (unless the Company has previously filed a Shelf
Registration as contemplated herein) or (iii) the Exchange
Offer is not consummated or the Shelf Registration is not
declared effective on or prior to the 180th day following
the Closing Date (any such event a "Registration Default"),
then, as liquidated damages, registration default interest
(the "Registration Default Interest"), in addition to any
other interest due, shall become payable in respect of the
Debentures, and corresponding registration default
Distributions (the "Registration Default Distributions")
shall become payable on the Trust Securities as follows:

(i) if neither the Exchange Offer Registration
Statement nor a Shelf Registration Statement, as the
case may be, is filed with the Commission on or prior
to the 60th day after the Closing Date, then commencing
on the day after either such required filing date,
Registration Default Interest shall accrue on the
principal amount of the Debentures, and Registration
Default Distributions shall accumulate on the
Liquidation Amount of the Trust Securities, at a rate
of 0.25% per annum;
<PAGE>

(ii) if (A) the Exchange Offer Registration
Statement is not declared effective by the Commission
on or prior to the 150th day after the Closing Date
(unless the Company has previously filed a Shelf
Registration as contemplated herein) or (B) the Company
has not filed a Shelf Registration on or prior to the
150th day after the Closing Date as contemplated in
2(b) hereof, then commencing on the day after the
applicable required effectiveness date or filing date,
as the case may be, Registration Default Interest shall
accrue on the principal amount of the Debentures, and
Registration Default Distributions shall accumulate on
the Liquidation Amount of the Trust Securities, at a
rate of 0.25% per annum; and

(iii) if (A) the Trust and the Company have not
consummated the Exchange Offer, in accordance with the
terms of the Exchange Offer on or prior to the 180th
day after the Closing Date or (B) if applicable, the
Shelf Registration has not been declared effective on
or prior to the 180th day after the Closing Date or
such Shelf Registration ceases to be effective at any
time prior to the third anniversary of the Closing Date
(other than after such time as there are no longer any
Registrable Securities), then Registration Default
Interest shall accrue on the principal amount of
Debentures, and Registration Default Distributions
shall accumulate on the Liquidation Amount of the Trust
Securities, each at a rate of 0.25% per annum
commencing on (x) the day after the applicable required
date for consummation, in the case of (A) above, or (y)
the day such Shelf Registration is required to be
declared effective or ceases to be effective, as the
case may be, in the case of (B) above;

provided, however, in the event that a Tax Contingency shall
exist on or before the 60th day following the Closing Date,
then clause (i) of this Section 2(c) shall not apply. To
the extent that such a Tax Contingency exists and the Company
has filed a Shelf Registration Statement covering resales of
the Securities by the 150th day following the Closing Date,
then clause (ii) of this Section 2(c) shall not apply, and
to the extent a Tax Contingency exists on the 180th day
following the Closing Date, the period specified in clause
(iii) of this Section 2(c) shall be 240 days; provided,
further, however, that neither the Registration Default
Interest rate on the Debentures, nor the Registration
Default Distributions rate on the Liquidation Amount of the
Trust Securities, shall exceed in the aggregate 0.50% per
annum; and provided, further, however, that (1) upon the
filing of the Exchange Offer Registration Statement, a Shelf
Registration or the occurrence of a Tax Contingency, if
applicable, (in the case of clause (i) above) (2) upon the
effectiveness of the Exchange Offer Registration Statement
or the filing of a Shelf Registration (in the case of clause
(ii) above), or (3) upon the consummation of the Exchange
Offer (in the case of clause (iii) (A) above), or upon the
effectiveness of the Shelf Registration or the effectiveness
of a Shelf Registration which had ceased to remain effective
(in the case of clause (iii) (B) above), Registration
Default Interest on the Debentures, and Registration Default
Distributions on the Liquidation Amount of the Trust
Securities as a result of such clause (or the relevant
subclause thereof), as the case may be, shall cease to
accrue.
<PAGE>

(d) Any reference herein to a registration statement
shall be deemed to include any document incorporated therein
by reference as of the applicable Effective Time and any
reference herein to any post-effective amendment to a
registration statement shall be deemed to include any
document incorporated therein by reference as of a time
after such Effective Time.

(e) Notwithstanding any other provisions of this
Registration Rights Agreement, in the event that Debentures
are distributed to holders of Capital Securities in
liquidation of the Trust pursuant to the Trust Agreement (i)
all references in this Section 2 and Section 3 to
Securities, Registrable Securities and Exchange Securities
shall not include the Capital Securities and Guarantee or
Capital Securities and Guarantee issued or to be issued in
exchange therefor in the Exchange Offer, (ii) all
requirements for action to be taken by the Trust in this
Section 2 and Section 3 shall cease to apply and all
requirements for action to be taken by the Company in this
Section 2 and Section 3 shall apply to Debentures and
Debentures issued or to be issued in exchange therefor
in the Exchange Offer.

III. Registration Procedures.

The following provisions shall apply to registration
statements filed pursuant to Section 2:

(a) At or before the Effective Time of the Exchange
Offer or the Shelf Registration, as the case may be, the
Company and the Trust shall qualify the Indenture (if not
already qualified), the Trust Agreement and the Guarantee
under the Trust Indenture Act of 1939.

(b) In connection with the Company's and the Trust's
obligations with respect to the Shelf Registration, if
applicable, the Company and the Trust shall, as soon as
reasonably practicable (or as otherwise specified herein):

(i) prepare and file with the Commission a
registration statement with respect to the Shelf
Registration on any form which may be utilized by the
Trust and the Company and which shall permit the
disposition of the Registrable Securities in accordance
with the intended method or methods thereof, as
specified in writing by the holders of the Registrable
Securities, and use its best efforts to cause such
registration statement to become effective as soon as
practicable thereafter;

(ii) prepare and file with the Commission such
amendments and supplements to such registration
statement and the prospectus included therein as may be
necessary to effect and maintain the effectiveness of
such registration statement for the period specified in
Section 2(b) hereof and as may be required by the
applicable rules and regulations of the Commission and
the instructions applicable to the form of such
registration statement, and furnish to the holders of
the Registrable Securities copies of any such
supplement or amendment simultaneously with or prior to
its being used or filed with the Commission;

(iii) comply, as to all matters within the
Company's and the Trust's control, with the provisions
of the Securities Act with respect to the disposition
of all of the Registrable Securities covered by such
registration statement in accordance with the intended
methods of disposition by the holders thereof provided
for in such registration statement;

<PAGE>

(iv) provide to any of (A) the holders of the
Registrable Securities to be included in such
registration statement, (B) the underwriters (which
term, for purposes of this Registration Rights
Agreement, shall include a person deemed to be an
underwriter within the meaning of Section 2(11) of the
Securities Act), if any, thereof, (C) the sales or
placement agent, if any, therefor, (D) counsel for such
underwriters or agent and (E) not more than one counsel
for all the holders of such Registrable Securities who
so request of the Company in writing the opportunity to
participate in the preparation of such registration
statement, each prospectus included therein or filed
with the Commission and each amendment or supplement
thereto;

(v) for a reasonable period prior to the filing
of such registration statement, and throughout the
period specified in Section 2(b), make available at
reasonable times at the Company's principal place of
business or such other reasonable place for inspection
by the persons referred to in Section 3(b)(iv) who
shall certify to the Company and the Trust that they
have a current intention to sell the Registrable
Securities pursuant to the Shelf Registration such
financial and other information and books and records
of the Company, and cause the officers, employees,
counsel and independent certified public accountants of
the Company to respond to such inquiries, as shall be
reasonably necessary, in the judgment of the respective
counsel referred to in such Section, to conduct a
reasonable investigation within the meaning of Section
11 of the Securities Act; provided, however, that each
such party shall be required to maintain in confidence
and not to disclose to any other person any information
or records reasonably designated by the Company in
writing as being confidential, until such time as (A)
such information becomes a matter of public record
(whether by virtue of its inclusion in such
registration statement or otherwise), or (B) such
person shall be required so to disclose such
information pursuant to a subpoena or order of any
court or other governmental agency or body having
jurisdiction over the matter (subject to the
requirements of such order, and only after such person
shall have given the Company prompt prior written
notice of such requirement), or (C) such information is
required to be set forth in such registration statement
or the prospectus included therein or in an amendment
to such registration statement or an amendment or
supplement to such prospectus in order that such
registration statement, prospectus, amendment or
supplement, as the case may be, does not contain an
untrue statement of a material fact or omit to state
therein a material fact required to be stated therein
or necessary to make the statements therein not
misleading in light of the circumstances then existing;
<PAGE>

(vi) promptly notify the selling holders of
Registrable Securities, the sales or placement agent,
if any, therefor and the managing underwriter or
underwriters, if any, thereof and confirm such advice
in writing, (A) when such registration statement or the
prospectus included therein or any prospectus amendment
or supplement or post-effective amendment has been
filed, and, with respect to such registration statement
or any post-effective amendment, when the same has
become effective, (B) of any comments by the Commission
and by the Blue Sky or securities commissioner or
regulator of any state with respect thereto or any
request by the Commission for amendments or supplements
to such registration statement or prospectus or for
additional information, (C) of the issuance by the
Commission of any stop order suspending the
effectiveness of such registration statement or the
initiation or threatening of any proceedings for that
purpose, (D) if at any time the representations and
warranties of the Company or the Trust contemplated by
Section 3(b)(xv) or Section 5 cease to be true and
correct in all material respects, (E) of the receipt by
the Company or the Trust of any notification with
respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or
the initiation or threatening of any proceeding for
such purpose, or (F) at any time when a prospectus is
required to be delivered under the Securities Act, that
such registration statement, prospectus, prospectus
amendment or supplement or post-effective amendment
does not conform in all material respects to the
applicable requirements of the Securities Act and the
Trust Indenture Act and the rules and regulations of
the Commission thereunder or contains an untrue
statement of a material fact or omits to state any
material fact required to be stated therein or
necessary to make the statements therein not misleading
in light of the circumstances then existing;

(vii) use its best efforts to obtain the withdrawal
of any order suspending the effectiveness of such
registration statement or any post-effective amendment
thereto at the earliest practicable date;

(viii) if requested by any managing underwriter or
underwriters, any placement or sales agent or any
holder of Registrable Securities, promptly incorporate
in a prospectus supplement or post-effective amendment
such information as is required by the Securities Act,
Exchange Act and the applicable rules and regulations
of the Commission thereunder and as such managing
underwriter or underwriters, such agent or such holder
specifies should be included therein relating to the
terms of the sale of such Registrable Securities,
including information with respect to the principal
amount of Registrable Securities being sold by such
holder or agent or to any underwriters, the name and
description of such holder, agent or underwriter, the
offering price of such Registrable Securities and any
discount, commission or other compensation payable in
respect thereof, the purchase price being paid therefor
by such underwriters and with respect to any other
terms of the offering of the Registrable Securities to
be sold by such holder or agent or to such
underwriters; and make all required filings of such
prospectus supplement or post-effective amendment
promptly after notification of the matters to be
incorporated in such prospectus supplement or post-
effective amendment;
<PAGE>

(ix) furnish to each holder of Registrable
Securities, each placement or sales agent, if any,
therefor, each underwriter, if any, thereof and the
respective counsel referred to in Section 3(b)(iv) an
executed copy (or, in the case of a holder of
Registrable Securities, a conformed copy) of such
registration statement, each such amendment and
supplement thereto (in each case including all exhibits
thereto (in the case of a holder of Registrable
Securities, upon request) and documents incorporated by
reference therein) and such number of copies of such
registration statement (excluding exhibits thereto and
documents incorporated by reference therein unless
specifically so requested by such holder, agent or
underwriter, as the case may be) and of the prospectus
included in such registration statement (including each
preliminary prospectus and any summary prospectus), in
conformity in all material respects with the applicable
requirements of the Securities Act and the Trust
Indenture Act and the rules and regulations of the
Commission thereunder, and such other documents, as
such holder, agent, if any, and underwriter, if any,
may reasonably request in order to facilitate the
offering and disposition of the Registrable Securities
owned by such holder, offered or sold by such agent or
underwritten by such underwriter and to permit such
holder, agent and underwriter to satisfy the prospectus
delivery requirements of the Securities Act; and the
Company and the Trust hereby consent to the use of such
prospectus (including such preliminary and summary
prospectus) and any amendment or supplement thereto by
each such holder and by any such agent and underwriter,
in each case in the form most recently provided to such
person by the Company or the Trust, in connection with
the offering and sale of the Registrable Securities
covered by the prospectus (including such preliminary
and summary prospectus) or any supplement or amendment
thereto;

(x) use its best efforts to (A) register or
qualify the Registrable Securities to be included in
such registration statement under such securities laws
or blue sky laws of such United States jurisdictions as
any holder of such Registrable Securities and each
placement or sales agent, if any, therefor and
underwriter, if any, thereof shall reasonably request,
(B) keep such registrations or qualifications in effect
and comply with such laws so as to permit the
continuance of offers, sales and dealings therein in
such jurisdictions during the period the Shelf
Registration is required to remain effective under
Section 2(b) above and for so long as may be necessary
to enable any such holder, agent or underwriter to
complete its distribution of Securities pursuant to
such registration statement but in any event not later
than the date through which the Company and the Trust
are required to keep the Shelf Registration Effective
pursuant to Section 2(b) and (C) take any and all other
actions as may be reasonably requested to enable each
such holder, agent, if any, and underwriter, if any, to
consummate the disposition in such jurisdictions of
such Registrable Securities; provided, however, that
neither the Company nor the Trust shall be required for
any such purpose to (1) qualify as a foreign corporation
in any jurisdiction wherein it would not otherwise be required
to qualify but for the requirements of this Section
3(b)(x), (2) consent to general service of process in
any such jurisdiction or (3) make any changes to its
certificate of incorporation or by-laws or any
agreement between it and its stockholders;
<PAGE>

(xi) use its best efforts to obtain the consent or
approval of each governmental agency or authority,
whether federal, state or local, which may be required
to be obtained by the Company or the Trust to effect
the Shelf Registration or the offering or sale in
connection therewith or to enable the selling holder or
holders to offer, or to consummate the disposition of,
their Registrable Securities;

(xii) cooperate with the holders of the Registrable
Securities and the managing underwriters, if any, to
facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be
sold, which certificates shall be printed, lithographed
or engraved, or produced by any combination of such
methods, and which shall not bear any restrictive
legends, except as may be required by applicable law;
and, in the case of an underwritten offering, enable
such Registrable Securities to be in such denominations
and registered in such names as the managing
underwriters may request at least two business days
prior to any sale of the Registrable Securities;

(xiii) provide a CUSIP number for all applicable
Registrable Securities, not later than the Effective
Time;

(xiv) enter into one or more underwriting
agreements, engagement letters, agency agreements,
"best efforts" underwriting agreements or similar
agreements, as appropriate, including customary
provision agreed to by the Company relating to
indemnification and contribution, and take such other
actions in connection therewith as any holders of
Registrable Securities aggregating at least 25% in
aggregate principal amount of the Registrable
Securities at the time outstanding shall reasonably
request in order to expedite or facilitate the
disposition of such Registrable Securities; provided,
that the Company and the Trust shall not be required to
enter into any such agreement more than once with
respect to all of the Registrable Securities
and may delay entering into such agreement
until the consummation of any underwritten public
offering which the Company shall have then undertaken;
<PAGE>

(xv) whether or not an agreement of the type
referred to in Section (3)(b)(xiv) hereof is entered
into and whether or not any portion of the offering
contemplated by such registration statement is an
underwritten offering or is made through a placement or
sales agent or any other entity, (A) make such
representations and warranties to the holders of such
Registrable Securities and the placement or sales
agent, if any, therefor and the underwriters, if any,
thereof in form, substance and scope as are customarily
made by the Company in connection with an offering of
debt securities pursuant to any appropriate agreement
or to a registration statement filed on the form
applicable to the Shelf Registration; (B) obtain an
opinion of counsel to the Company and an opinion of
counsel to the Trust in each case in customary form and
covering such matters, of the type customarily covered
by such an opinion, and in the case of the Company as
customarily given in public offerings of the Company's
debt securities as the managing underwriters, if any,
or as any holders of at least 25% in aggregate
principal amount of the Registrable Securities at the
time outstanding may reasonably request, addressed to
such holder or holders and the placement or sales
agent, if any, therefor and the underwriters, if any,
thereof and dated the effective date of such
registration statement (and if such registration
statement contemplates an underwritten offering of a
part or all of the Registrable Securities, dated the
date of the closing under the underwriting agreement
relating thereto); (C) obtain a "cold comfort" letter
or letters from the independent certified public
accountants of the Company addressed to the selling
holders of Registrable Securities, the placement or
sales agent, if any, therefor or the underwriters, if
any, thereof, dated (i) the effective date of such
registration statement and (ii) the effective date of
any prospectus supplement to the prospectus included in
such registration statement or post-effective amendment
to such registration statement which includes audited
financial statements as of a date or for a period
subsequent to that of the latest such statements
included in such prospectus (and, if such registration
statement contemplates an underwritten offering
pursuant to any prospectus supplement to the prospectus
included in such registration statement or post-effective
amendment to such registration statement which includes
unaudited or audited financial statements as of a date
or for a period subsequent to that of the latest such
statements included in such prospectus, dated the date
of the closing under the underwriting agreement
relating thereto), such letter or letters to be in
customary form and covering such matters of the type
customarily covered by letters of such type in public
offerings of debt securities of the Company; (D)
deliver such documents and certificates, including
officers' or trustees' or Administrators' certificates,
as applicable, as may be reasonably requested by any
holders of at least 25% in aggregate principal amount
of the Registrable Securities at the time outstanding
or the placement or sales agent, if any, therefor and
the managing underwriters, if any, thereof to evidence
the accuracy of the representations and warranties made
pursuant to clause (A) above or those contained in
Section 5(a) hereof and the compliance with or
satisfaction of any agreements or conditions contained
in the underwriting agreement or other agreement
entered into by the Company or the Trust, as
applicable; and (E) undertake such obligations relating
to expense reimbursement, indemnification and
contribution as are provided in Section 6 hereof;
<PAGE>

(xvi) notify in writing each holder of Registrable
Securities of any proposal by the Company and/or the
Trust to amend or waive any provision of this
Registration Rights Agreement pursuant to Section 9(h)
hereof and of any amendment or waiver effected pursuant
thereto, each of which notices shall contain the text
of the amendment or waiver proposed or effected, as the
case may be;

(xvii) in the event that any broker-dealer
registered under the Exchange Act shall underwrite any
Registrable Securities or participate as a member of an
underwriting syndicate or selling group or "assist in
the distribution" (within the meaning of the Rules of
Conduct Practice and the By-Laws of the National
Association of Securities Dealers, Inc. ("NASD") or any
successor thereto, as amended from time to time)
thereof, whether as a holder of such Registrable
Securities or as an underwriter, a placement or sales
agent or a broker or dealer in respect thereof, or
otherwise, assist such broker-dealer in complying with
the requirements of such Rules and By-Laws, including
by (A) if such Rules shall so require, permitting a
"qualified independent underwriter" (as defined in such
Schedule (or any successor thereto)) to participate in
the preparation of the registration statement relating
to such Registrable Securities, to exercise usual
standards of due diligence in respect thereto and, if
any portion of the offering contemplated by such
registration statement is an underwritten offering or
is made through a placement or sales agent, to
recommend the yield of such Registrable Securities, (B)
indemnifying any such qualified independent underwriter
to the extent of the indemnification of underwriters
provided in Section 6 hereof, and (C) providing such
information to such broker-dealer as may be required in
order for such broker-dealer to comply with the
requirements of the Rules of Conduct of the NASD;

(xviii) make generally available to its security
holders as soon as practicable but in any event not
later than eighteen months after the effective date of
such registration statement, an earning statement of
the Company and its subsidiaries complying with Section
11(a) of the Securities Act (including, at the option
of the Company, Rule 158 thereunder);

(xix) on or prior to the Effective Time of the
Shelf Registration, the Company shall use its
reasonable best efforts to have caused the Registrable
Securities to be duly authorized for listing, on the
New York Stock Exchange as a fixed income security (or,
if such listing is unavailable, as an equity security);
and
<PAGE>

(xx) use its best efforts to cause the Registrable
Securities covered by the Shelf Registration to be
rated by two nationally recognized statistical rating
organizations (as such term is defined in Rule
436(g)(2) under the Securities Act).

In case any of the foregoing obligations is dependent upon
information provided or to be provided by a party other than
the Company or the Trust, such obligation shall be subject
to the provision of such information.

(c) In the event that the Company and the Trust would
be required, pursuant to Section 3(b)(vi)(F) above, to
notify the selling holders of Registrable Securities, the
placement or sales agent, if any, therefor and the managing
underwriters, if any, thereof, the Company and the Trust
shall promptly prepare and furnish to each such holder, to
each placement or sales agent, if any, and to each such
underwriter, if any, a reasonable number of copies of a
prospectus supplemented or amended so that, as thereafter
delivered to purchasers of Registrable Securities, such
prospectus shall conform in all material respects to the
applicable requirements of the Securities Act and the Trust
Indenture Act and the rules and regulations of the
Commission thereunder and shall 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 in light of the
circumstances then existing. Each holder of Registrable
Securities agrees that upon receipt of any notice from the
Company or the Trust, pursuant to Section 3(b)(vi)(F)
hereof, such holder shall forthwith discontinue the
disposition of Registrable Securities pursuant to the
registration statement applicable to such Registrable
Securities until such holder (i) shall have received copies
of such amended or supplemented prospectus and, if so
directed by the Company or the Trust, such holder shall
deliver to the Company (at the Company's expense) all
copies, other than permanent file copies, then in such
holder's possession of the prospectus covering such
Registrable Securities at the time of receipt of such notice
or (ii) shall have received notice from the Company or the
Trust that the disposition of Registrable Securities
pursuant to the Shelf Registration may continue.

(d) The Company and the Trust may require each holder
of Registrable Securities as to which any registration
pursuant to Section 2(b) is being effected to furnish to the
Company such information regarding such holder and such
holder's intended method of distribution of such Registrable
Securities as the Company and the Trust may from time to
time reasonably request in writing, but only to the extent
that such information is required in order to comply with
the Securities Act. Each such holder agrees to notify the
Company and the Trust as promptly as practicable of any
inaccuracy or change in information previously furnished by
such holder to the Company and the Trust or of the
occurrence of any event in either case as a result of which
any prospectus relating to such registration contains or
would contain an untrue statement of a material fact
regarding such holder or such holder's intended method of
disposition of such Registrable Securities or omits to state
any material fact regarding such holder or such holder's
intended method of disposition of such Registrable Securities
required to be stated therein or necessary to make
the statements therein not misleading in light
of the circumstances then existing,
and promptly to furnish to the Company and the Trust any
<PAGE>

additional information required to correct and update any
previously furnished information or required so that such
prospectus shall not contain, with respect to such holder or
the disposition of such Registrable Securities, 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 in light of the
circumstances then existing.

(e) Until the expiration of three years after the
Closing Date, the Company will not, and will not permit any
of its "affiliates" (as defined in Rule 144) to, resell any
of the Capital Securities or Debentures that have been
reacquired by any of them except pursuant to an effective
registration statement or exemption under the Act.

(f) In connection with the Company's and the Trust's
obligations with respect to the registration of Exchange
Securities as contemplated by Section 2(a) (the "Exchange
Registration"), if applicable, the Company and the Trust
shall, as soon as reasonably practicable (or as otherwise
specified):

(i) prepare and file with the Commission such
amendments and supplements to the Exchange Offer
Registration Statement and the prospectus included
therein as may be necessary to effect and maintain the
effectiveness thereof for the periods and purposes
contemplated in Section 2(a) hereof and as may be
required by the applicable rules and regulations of the
Commission and the instructions applicable to the form
of the Exchange Offer Registration Statement, and
promptly provide each broker-dealer holding Exchange
Securities with such number of copies of the prospectus
included therein (as then amended or supplemented), in
conformity in all material respects with the
requirements of the Securities Act and the Trust
Indenture Act and the rules and regulations of the
Commission thereunder, as such broker-dealer reasonably
may request prior to the expiration of the Resale
Period, for use in connection with resales of Exchange
Securities. Notwithstanding the foregoing, the Company
shall not be required to amend or supplement a Shelf
Registration, any related prospectus or any document
incorporated therein by reference in the event that,
for a period not to exceed an aggregate of 90 days (or
an aggregate of 120 days in any consecutive 18 month
period) if (x) an event occurs and is continuing as a
result of which a Shelf Registration, any related
prospectus or any document incorporated therein by
reference as then amended or supplemented would, in the
Company's good faith judgment, contain an untrue
statement of a material fact or omit to state a
material fact necessary in order to make the statements
therein, in light of the circumstances under which they
were made, not misleading, and (y) (1) the Company
determines in good faith that the disclosure of such
event at such time would have a material adverse effect
on the business, operations or prospects of the Company
and the Trust or (2) the disclosure otherwise related
to a pending financing, acquisition, divestiture,
corporate reorganization or other material business
transaction which has not yet been publicly disclosed
in any relevant jurisdiction;
<PAGE>

(ii) promptly notify each broker-dealer that has
requested or received copies of the prospectus included
in the Exchange Offer Registration Statement, and
confirm such advice in writing, (A) when the Exchange
Offer Registration Statement or the prospectus included
therein or any prospectus amendment or supplement or
post-effective amendment has been filed, and, with
respect to the Exchange Offer Registration Statement or
any post-effective amendment, when the same has become
effective, (B) of any comments by the Commission and by
the Blue Sky or securities commissioner or regulator of
any state with respect thereto or any request by the
Commission for amendments or supplements to the
Exchange Offer Registration Statement or prospectus or
for additional information, (C) of the issuance by the
Commission of any stop order suspending the
effectiveness of the Exchange Offer Registration
Statement or the initiation or threatening of any
proceedings for that purpose, (D) if at any time the
representations and warranties of the Company and/or
the Trust contemplated by Section 5 cease to be true
and correct in all material respects, (E) of the
receipt by the Company or the Trust of any notification
with respect to the suspension of the qualification of
the Exchange Securities for sale in any United States
jurisdiction or the initiation or threatening of any
proceeding for such purpose, or (F) at any time during
the Resale Period when a prospectus is required to be
delivered under the Securities Act, that the Exchange
Offer Registration Statement, prospectus, prospectus
amendment or supplement of post-effective amendment
does not conform in all material respects to the
applicable requirements of the Securities Act and the
Trust Indenture Act and the rules and regulations of
the Commission thereunder or contains an untrue
statement of a material fact or omits to state a
material fact required to be stated therein or
necessary to make the statements therein not misleading
in light of the circumstances then existing;

(iii) in the event that the Company and the Trust
would be required, pursuant to Section 3(f)(ii)(F)
above, to notify any broker-dealers holding Exchange
Securities, promptly prepare and furnish to each such
holder a reasonable number of copies of a prospectus
supplemented or amended so that, as thereafter
delivered to purchasers of such Exchange Securities
during the Resale Period, such prospectus shall conform
in all material respects to the applicable requirements
of the Securities Act and the Trust Indenture Act and
the rules and regulations of the Commission thereunder
and shall 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 in light of the circumstances
then existing or notify such broker-dealers that the
date of Exchange Securities pursuant to the Exchange
Offer Registration Statement may continue;

(iv) use its reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of
the Exchange Offer Registration Statement or any post-
effective amendment thereto at the earliest practicable
date;
<PAGE>

(v) use its best efforts to (A) register or
qualify the Exchange Securities under the securities
laws or blue sky laws of such jurisdictions as are
contemplated by Section 2(a) no later than the
commencement of the Exchange Offer, (B) keep such
registrations or qualifications in effect and comply
with such laws so as to permit the continuance of
offers, sales and dealings therein in such
jurisdictions until the expiration of the Resale Period
and (C) take any and all other actions as may be
reasonably necessary or advisable to enable each
broker-dealer holding Exchange Securities to
consummate the disposition thereof in such
jurisdictions; provided, however, that
neither the Company nor the Trust shall be required for
any such purpose to (1) qualify as a foreign
corporation in any jurisdiction wherein it would not
otherwise be required to qualify but for the
requirements of this Section 3(f)(v), (2) consent to
general service of process in any such jurisdiction or
(3) make any changes to its certificate of
incorporation or by-laws or any agreement between it
and its stockholders;

(vi) use its best efforts to obtain the consent or
approval of each United States governmental agency or
authority, whether federal, state or local, which may
be required to be obtained by the Company or the Trust
to effect the Exchange Registration, the Exchange Offer
and the offering and sale of Exchange Securities by
broker-dealers during the Resale Period;

(vii) provide a CUSIP number for all applicable
Exchange Securities, not later than the applicable
Effective Time;

(viii) make generally available to its security
holders as soon as practicable but no later than
eighteen months after the effective date of such
registration statement, an earning statement of the
Company and its subsidiaries complying with Section
11(a) of the Securities Act (including, at the option
of the Company, Rule 158 thereunder);

(ix) on or prior to the Effective Time of the
Exchange Offer Registration Statement, the Company
shall use its reasonable best efforts to have caused
the Exchange Securities to be duly authorized for
listing, subject to official notice of issuance, on the
New York Stock Exchange as a fixed income security (or,
if such listing is unavailable, as an equity security);
and

(x) use its best efforts to cause the Exchange
Securities covered by the Exchange Offer Registration
Statement to be rated by two nationally recognized
statistical rating organizations (as such term is
defined in Rule 436(g)(2) under the Securities Act.

<PAGE>

4. Registration Expenses.

The Company agrees to bear and to pay or cause to be
paid promptly upon request being made therefor all expenses
incident to the Company's and the Trust's performance of or
compliance with this Registration Rights Agreement,
including (a) all Commission and any NASD registration and
filing fees and expenses, (b) all fees and expenses in
connection with the qualification of the Securities or
Exchange Securities for offering and sale under the State
securities and blue sky laws referred to in Section 3(b)(x)
and Section 3(f)(v) hereof, including reasonable fees and
disbursements of one counsel for the placement or sales
agent or underwriters in connection with such
qualifications, (c) all expenses relating to the
preparation, printing, distribution and reproduction of each
registration statement required to be filed hereunder, each
prospectus included therein or prepared for distribution
pursuant hereto, each amendment or supplement to the
foregoing, the certificates representing the Securities and
all other documents relating hereto, (d) messenger and
delivery expenses, (e) fees and expenses of the Trustee
under the Indenture, the Property Trustee and Debenture
Trustee under the Trust Agreement and the Guarantee Trustee
under the Guarantee and of any escrow agent or custodian,
(f) internal expenses (including all salaries and expenses
of the Company's officers and employees performing legal or
accounting duties), (g) fees, disbursements and expenses of
counsel and independent certified public accountants of the
Company (including the expenses of any opinions or "cold
comfort" letters required by or incident to such performance
and compliance), (h) reasonable fees, disbursements and
expenses of one counsel for the holders of Registrable
Securities retained in connection with a Shelf Registration,
as selected by the holders of at least a majority in
aggregate principal amount of the Registrable Securities
being registered, and fees, expenses and disbursements of
any other persons, including special experts, retained by
the Company in connection with such registration, (i) all
application and filing fees in connection with listing the
Exchange Securities or Registrable Securities on a national
exchange or automated quotation system pursuant to the
requirements hereof, and (j) all fees and disbursements of
independent certified public accountants of the Company
(including the expenses of any special audit and comfort
letters required by or incident to
such performance) (collectively, the "Registration
Expenses"). To the extent that any Registration Expenses
are incurred, assumed or paid by any holder of Registrable
Securities or any placement or sales agent therefor or
underwriter thereof, the Company shall reimburse such person
for the full amount of the Registration Expenses so
incurred, assumed or paid promptly after receipt of a
request therefor. Notwithstanding the foregoing, the
holders of the Registrable Securities being registered shall
pay all agency fees and commissions and underwriting
discounts and commissions attributable to the sale of such
Registrable Securities and the fees and disbursements of any
counsel or other advisors or experts retained by such
holders (severally or jointly), other than the counsel and
experts specifically referred to above.
<PAGE>

5. Representations and Warranties.

Each of the Company and the Trust represents and
warrants to, and agrees with, the Initial Purchasers and
each of the holders from time to time of Registrable
Securities that:

(a) Each registration statement covering
Registrable Securities and each prospectus (including
any preliminary or summary prospectus) contained
therein or furnished pursuant to Section 3(c) or
Section 3(f) hereof and any further amendments or
supplements to any such registration statement or
prospectus, when it becomes effective or is filed with
the Commission, as the case may be, and, in the case of
an underwritten offering of Registrable Securities, at
the time of the closing under the underwriting
agreement relating thereto, will conform in all
material respects to the applicable requirements of the
Securities Act and the Trust Indenture Act 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; and at all times subsequent to the
Effective Time when a prospectus would be required to
be delivered under the Securities Act, other than from
(i) such time as a notice has been given to holders of
Registrable Securities pursuant to Section 3(b)(vi)(F)
or Section 3(f)(ii)(F) hereof until (ii) such time as
the Company furnishes an amended or supplemented
prospectus pursuant to Section 3(c) or Section
3(f)(iii) hereof, each such registration
statement, and each prospectus (including any summary
prospectus) contained therein or furnished pursuant to
Section 3(b) or Section 3(f) hereof, as then amended or
supplemented, will conform in all material respects to
the applicable requirements of the Securities Act and
the Trust Indenture Act 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
in the light of the circumstances then existing;
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 and the
Trust by a holder of Registrable Securities expressly
for use therein.

(b) Any documents incorporated by reference in
any prospectus referred to in Section 5(a) hereof, when
they become or became effective or are or were filed
with the Commission, as the case may be, will conform
or conformed in all material respects to the
requirements of the Securities Act or the Exchange Act,
as applicable, and none of such documents will contain
or contained an untrue statement of a material fact or
will omit or omitted 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 a holder of Registrable Securities
expressly for use therein.
<PAGE>

(c) The compliance by the Company and the Trust
with all of the provisions of this Registration Rights
Agreement and the consummation of the transactions
herein contemplated will not, as of the date hereof,
(A) conflict with or result in a breach of any of the
terms and provisions of, or constitute a default (or an
event which with notice or lapse of time, or both,
would constitute a default) or require consent under,
or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of
the Guarantor or any of its subsidiaries considered as
one enterprise or the Trust, as applicable, pursuant
to, the terms of any contract, agreement, indenture,
mortgage, loan agreement, note, lease or other
instrument, franchise, license or permit to which
the Guarantor or any of its subsidiaries, or
the Trust, as applicable, is a party or
by which the Guarantor or any of its
subsidiaries, or the Trust, as applicable, or their
respective properties or assets may be bound or subject
and that is material to the Guarantor and its
subsidiaries considered as one enterprise, or the
Trust, as applicable, or (B) violate or conflict with
any provision of the certificate of incorporation or
by-laws of the Guarantor or any of its subsidiaries, or
the Trust Agreement of the Trust, or any law, judgment,
decree, order, statute, rule or regulation of any court
or any public, governmental or regulatory agency or
body or any arbitrator having jurisdiction over the
Guarantor or any of its subsidiaries, or the Trust, as
applicable, or any of their respective properties or
assets. No consent, approval, authorization, order,
registration, filing, qualification, license or permit
of or with any court or any public, governmental or
regulatory agency or body having jurisdiction over the
Guarantor or any of its subsidiaries, or the Trust, as
applicable, or any of their respective properties or
assets, is required for the execution, delivery and
performance of the Registration Rights Agreement and
the compliance with the provisions hereof and thereof,
except such as may be required under applicable state
securities or "blue sky" laws and such consents,
approvals, authorizations, registrations and
qualifications as may be required under the Securities
Act, the Trust Indenture Act and state securities or
"blue sky" laws in connection with the exchange offer
or resale registration statement contemplated in this
Registration Rights Agreement.
<PAGE>

(d) This Registration Rights Agreement has been
duly authorized, executed and delivered by the Company
or the Trust, as applicable.

6. Indemnification.

(a) The Trust and the Company, jointly and severally,
agree to indemnify and hold harmless (i) each holder, (ii)
each person, if any, who controls a holder within the
meaning of Section 15 of the Securities Act or Section 20(a)
of the Exchange Act and (iii) the respective officers,
directors, partners, employees, representatives and agents
of any holder or any controlling person to the fullest
extent lawful, from and against any and all losses,
liabilities, claims, damages and expenses whatsoever
(including but not limited to attorneys' fees
and any and all expenses whatsoever incurred
in investigating, preparing or defending against any
investigation or litigation, commenced or threatened, or any
claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they
or any of them may become subject under the Securities Act,
the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in
respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact
contained in any registration statement under which such
Registrable Securities were registered under the Securities
Act, or any preliminary, final or summary prospectus
contained therein, or in any supplement thereto or amendment
thereof, 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, in the light of the circumstances under which they
were made, not misleading; provided, however, that the
Company and the Trust will not be liable in any such case to
the extent, but only to the extent, that any such loss,
liability, claim, damage or expense arises out of or is
based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in
reliance upon and in conformity with written information
furnished to the Company by or on behalf of such holder
expressly for use therein. This indemnity agreement will be
in addition to any liability which the Trust and the Company
may otherwise have, including, under this Agreement.

(b) Each holder, severally and not jointly,
agrees to indemnify and hold harmless the Trust, the
Company, and each person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20(a)
of the Exchange Act, against any losses, liabilities,
claims, damages and expenses whatsoever (including but not
limited to attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending
against any investigation or litigation, commenced or
threatened, or any claim whatsoever and any and all amounts
paid in settlement of any claim or litigation), joint or
several, to which they or any of them may become subject
under the Securities Act, the Exchange Act or otherwise,
insofar as such losses, liabilities, claims, damages or
expenses (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement
of a material fact contained in any registration statement
under which such Registrable Securities were registered
under the Securities

<PAGE>

Act, or any preliminary, final or summary prospectus
contained therein, or in any amendment thereof 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, in the light of the circumstances under which they
were made, not misleading, in each case to the extent, but
only to the extent, that any such loss, liability, claim,
damage or expense arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity
with written information furnished to the Company by or on
behalf of such holder expressly for use therein. This
indemnity will be in addition to any liability which a
holder may otherwise have, including under this Agreement.
In no event, however, shall the liability of any selling
holder hereunder be greater in amount than the dollar amount
of the proceeds received by such holder upon its sale of the
Registrable Securities giving rise to such indemnification
obligation.

(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 each party
against whom indemnification is to be sought in writing of
the commencement thereof (but the failure so to notify an
indemnifying party shall not relieve it from any liability
which it may have under this Section 6 except to the extent
that it has been prejudiced in any material respect by such
failure or from any liability which it may otherwise have).
In case any such action is brought against any indemnified
party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be
entitled to participate therein, and to the extent it may
elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or
parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such indemnified party or
parties unless (i) the employment of such counsel shall have
been authorized in writing by the indemnifying parties in
connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel to take
charge of the defense of such action within a reasonable
time after notice of commencement of the action,
or (iii) such indemnified party or parties
shall have reasonably concluded that there may be
defenses available to it or them which are different from or
additional to those available to one or all of the
indemnifying parties (in which case the indemnifying party
or parties shall not have the right to direct the defense of
such action on behalf of the indemnified party or parties),
in any of which events such fees and expenses of counsel
shall be borne by the indemnifying parties; provided,
however, that the indemnifying party under subsection (a) or
(b) above, shall only be liable for the legal expenses of
one counsel (in addition to any local counsel) for all
indemnified parties in each jurisdiction in which any claim
or action is brought. Anything in this subsection to the
contrary notwithstanding, an indemnifying party shall not be
liable for any settlement of any claim or action effected
without its written consent; provided, however, that such
consent was not unreasonably withheld.
<PAGE>

(d) In order to provide for contribution in
circumstances in which the indemnification provided for in
this Section 6 is for any reason held to be unavailable from
the Company or the Trust or is insufficient to hold harmless
a party indemnified thereunder, the Company, Trust and each
holder shall contribute to the aggregate losses, claims,
damages, liabilities and expenses of the nature contemplated
by such indemnification provision (including any
investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any
action, suit or proceeding or any claims asserted, but after
deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Company and the
Trust, any contribution received by the Company and the
Trust from persons, other than the holders, who may also be
liable for contribution, including persons who control the
Company within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act) to which the Company and
any holder may be subject, in such proportion as is
appropriate to reflect the relative benefits received by the
Company and the Trust from the offering of Securities and
any such holder from its sale of Securities or, if such
allocation is not permitted by applicable law or
indemnification is not available as a result of the
indemnifying party not having received notice as provided in
this Section 6, in such proportion as is appropriate to
reflect not only the relative benefits referred to above but
also the relative fault of the Company, the Trust and the
holders in connection with the statements or omissions which
resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by
the Company, the Trust and any holder shall be deemed to be
in the same proportion as (x) the total proceeds from the
offering of the Securities (net of discounts but before
deducting expenses) received by the Company and (y) the
total proceeds received by such holder upon its sale of
Securities which would otherwise give rise to the
indemnification obligation, respectively. The relative
fault of the Company, the Trust and of the holders 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, the Trust or
the holders and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent
such statement or omission. The Company, the Trust and each
holder agree that it would not be just and equitable if
contribution pursuant to this Section 6 were determined by
pro rata allocation or by any other method of allocation
which does not take into account the equitable
considerations referred to above. Notwithstanding the
provisions of this Section 6, (i) no holder shall be
required to contribute, in the aggregate, any amount in
excess of the amount by which the total received by such
holder with respect to the sale of its Securities exceeds
the sum of (A) the amount paid by such holder for such
Securities plus (B) the amount of any damages which such
holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged
omission and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 1l(f) of
the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
<PAGE>

For purposes of this Section 6, (A) each person, if any, who
controls a holder within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act and (B) the
respective officers, directors, partners, employees,
representatives and agents of a holder or any controlling
person shall have the same rights to contribution as such
holder, and each person, if any, who controls the Company
and the Trust within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act shall have the same rights
to contribution as the Company and the Trust, subject in
each case to clauses (i) and (ii) of this Section 6(d). Any
party entitled to contribution will, promptly after receipt
of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for
contribution may be made against another party or parties
under this Section 6, notify such party or
parties from whom contribution may be
sought, but the failure to so notify such party or parties
shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they
may have under this Section 6 or otherwise. No party shall
be liable for contribution with respect to any action or
claim settled without its written consent; provided,
however, that such written consent was not unreasonably
withheld.

7. Underwritten Offerings.

(a) Selection of Underwriters. If any of the
Registrable Securities covered by the Shelf Registration are
to be sold pursuant to an underwritten offering, the
managing underwriter or underwriters thereof shall be
designated by the holders of at least a majority in
aggregate principal amount of the Registrable Securities to
be included in such offering, provided that such designated
managing underwriter or underwriters is or are reasonably
acceptable to the Company.

(b) Participation by Holders. Each holder of
Registrable Securities hereby agrees with each other such
holder that no such holder may participate in any
underwritten offering hereunder unless such holder (i)
agrees to sell such holder's Registrable Securities on the
basis provided in any underwriting arrangements approved by
the persons entitled hereunder to approve such arrangements
and (ii) completes and executes all questionnaires, powers
of attorney, indemnities, underwriting agreements and other
documents reasonably required under the terms of such under-
writing arrangements.

8. Rule 144. The Company covenants to the
holders of Registrable Securities that the Company shall use
its best efforts to timely file the reports required to be
filed by it under the Exchange Act or the Securities Act
(including the reports under Section 13 and 15(d) of the
Exchange Act referred to in subparagraph (c)(1) of Rule 144
adopted by the Commission under the Securities Act) and the
rules and regulations adopted by the Commission thereunder,
and shall take such further action as any holder of
Registrable Securities may reasonably request, all to the
extent required from time to time to enable such holder to
sell Registrable Securities without registration under the
Securities Act within the limitations of the exemption
provided by Rule 144 under the Securities Act, as such Rule
may be amended from time to time, or any similar or
successor rule or regulation hereafter adopted
by the Commission. Upon the request of
any holder of Registrable Securities in connection with that
holder's sale pursuant to Rule 144, the Company shall
deliver to such holder a written statement as to whether it
has complied with such requirements.
<PAGE>

9. Miscellaneous.

(a) No Inconsistent Agreements. Each of the Company
and the Trust represents, warrants, covenants and agrees
that it has not granted, and shall not grant, registration
rights with respect to Registrable Securities which would be
inconsistent with the terms contained in this Registration
Rights Agreement.

(b) Specific Performance. The parties hereto
acknowledge that there would be no adequate remedy at law if
any party fails to perform any of its obligations hereunder
and that each party may be irreparably harmed by any such
failure, and accordingly agree that each party, in addition
to any other remedy to which it may be entitled at law or in
equity, shall be entitled to compel specific performance of
the obligations of any other party under this Exchange and
Registration Rights Agreement in accordance with the terms
and conditions of this Exchange and Registration Rights
Agreement, in any court of the United States or any State
thereof having jurisdiction.

(c) Notices. All notices, requests, claims, demands,
waivers and other communications hereunder shall be in
writing and shall be deemed to have been duly given when
delivered by hand, if delivered personally or by courier, or
three days after being deposited in the mail (registered or
certified mail, postage prepaid, return receipt requested)
as follows: If to the Company, to it at The Bear Stearns
Companies Inc., 245 Park Avenue, New York, New York 10167,
Attention: David Granville-Smith; if to the Trust, to it at
The Chase Manhattan Bank, Attention: Corporate Trust
Administration; and if to a holder, to the address of such
holder set forth in the security register or other records
of the Trust or the Company, as the case may be, or to such
other address as the Company, the Trust or any such holder
may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be
effective only upon receipt.

(d) Parties in Interest. All the terms and provisions
of this Registration Rights Agreement shall be binding upon,
shall inure to the benefit of and shall be enforceable by
the respective successors and assigns of the parties hereto.
In the event that any transferee of any holder of
Registrable Securities shall acquire Registrable Securities,
in any manner, whether by gift, bequest, purchase, operation
of law or otherwise, such transferee shall, without any
further writing or action of any kind, be deemed a party
hereto for all purposes and such Registrable Securities
shall be held subject to all of the terms of this
Registration Rights Agreement, and by taking and holding
such Registrable Securities such transferee shall be
entitled to receive the benefits of, and be conclusively
deemed to have agreed to be bound by and to perform, all of
the applicable terms and provisions of this Registration
Rights Agreement.

(e) Survival. The respective indemnities, agreements,
representations, warranties and each other provision set
forth in this Registration Rights Agreement or made pursuant
hereto shall remain in full force and effect regardless of
any investigation (or statement as to the results thereof)
made by or on behalf of any holder of Registrable
Securities, any director, officer or partner of such holder,
any agent or underwriter or any director, officer or partner
thereof, or any controlling person of any of the foregoing,
and shall survive delivery of and payment for the
Registrable Securities pursuant to the Purchase Agreement
and the transfer and registration of Registrable Securities
by such holder and the consummation of an Exchange Offer.
<PAGE>

(f) LAW GOVERNING. THIS REGISTRATION RIGHTS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK.

(g) Headings. The descriptive headings of the several
Sections and paragraphs of this Registration Rights
Agreement are inserted for convenience only, do not
constitute a part of this Registration Rights Agreement and
shall not affect in any way the meaning or interpretation of
this Registration Rights Agreement.

(h) Entire Agreement; Amendments. This Registration
Rights Agreement and the other writings referred to herein
(including the Trust Agreement, the Guarantee and the
Indenture) or delivered pursuant hereto which form a part
hereof contain the entire understanding of the parties with
respect to its subject matter. This Registration Rights
Agreement supersedes all prior agreements and understandings
between the parties with respect to its subject matter.
This Registration Rights Agreement may be amended and the
observance of any term of this Registration Rights Agreement
may be waived (either generally or in a particular instance
and either retroactively or prospectively) only by a written
instrument duly executed by the Company, the Trust and the
holders of at least a majority in aggregate principal amount
of the Registrable Securities at the time outstanding. Each
holder of any Registrable Securities at the time or
thereafter outstanding shall be bound by any amendment or
waiver effected pursuant to this Section 9(h), whether or
not any notice, writing or marking indicating such amendment
or waiver appears on such Registrable Securities or is
delivered to such holder.

(i) Inspection. For so long as this Registration
Rights Agreement shall be in effect, this Registration
Rights Agreement and a complete list of the names and
addresses of all the holders of Registrable Securities shall
be made available for inspection and copying on any business
day by any holder of Registrable Securities for proper
purposes only (which shall include any purpose related to
the rights of the holders of Registrable Securities under
the Securities, the Indenture and this Agreement) at the
offices of the Company at the address thereof set forth in
Section 9(c) above, at the office of the Property Trustee or
at the office of the Trustee under the Indenture.

(j) Counterparts. This agreement may be executed by
the parties in counterparts, each of which shall be deemed
to be an original, but all such respective counterparts
shall together constitute one and the same instrument.

[Remainder of page intentionally blank]

<PAGE>

Agreed to and accepted as of the date referred to
above.

BEAR STEARNS CAPITAL TRUST I

By: /s/ Kenneth L. Edlow
---------------------------------
Kenneth L. Edlow, as Administrator

THE BEAR STEARNS COMPANIES INC.

By: /s/ James E. Cayne
---------------------------------
James E. Cayne
President and Chief
Executive Officer

BEAR, STEARNS & CO. INC.
CHASE SECURITIES INC.
GOLDMAN, SACHS & CO.
J.P. MORGAN SECURITIES INC.
NATIONSBANC CAPITAL MARKETS, INC.

By: BEAR, STEARNS & CO. INC.

By: /s/ James E. Cayne
---------------------------------
James E. Cayne
President and Chief
Executive Officer

NYFS04...:\25\22625\0110\6522\AGR2047L.360

EXHIBIT 5.1

[Letterhead of Richards, Layton & Finger]

February 5, 1997

Bear Stearns Capital Trust I
c/o Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167

Re: Bear Stearns Capital Trust I
----------------------------

Ladies and Gentlemen:

We have acted as special Delaware counsel for The Bear Stearns
Companies Inc., a Delaware corporation ("Bear Stearns"), and Bear Stearns
Capital Trust I, a Delaware business trust (the "Trust"), in connection with the
matters set forth herein. At your request, this opinion is being furnished to
you.

For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:

(a) The Certificate of Trust of the Trust, dated January 14, 1997
(the "Certificate"), as filed in the office of the Secretary of State of the
State of Delaware (the "Secretary of State") on January 14, 1997;

(b) The Trust Agreement of the Trust, dated as of January 14, 1997,
by and between Bear Stearns and the trustee of the Trust named therein;

<PAGE>

Bear Stearns Capital Trust I
February 5, 1997
Page 2

(c) The Amended and Restated Trust Agreement of the Trust, dated as
of January 29, 1997 (including Exhibits A, C and D thereto) (the "Trust
Agreement"), among Bear Stearns, as depositor, the trustees of the Trust named
therein, the Administrators named therein and the holders, from time to time, of
undivided beneficial interests in the assets of the Trust;

(d) The Registration Statement on Form S-4, including a preliminary
prospectus ("Prospectus"), relating to the Fixed/Adjustable Rate Capital
Securities of the Trust representing undivided beneficial interests in the
assets of the Trust (each, a "Capital Security" and collectively, the "Capital
Securities"), as proposed to be filed by Bear Stearns and the Trust with the
Securities and Exchange Commission on or about February 5, 1997; and

(e) A Certificate of Good Standing for the Trust, dated February 5,
1997, obtained from the Secretary of State.

Initially capitalized terms used herein and not otherwise defined
are used as defined in the Trust Agreement.

For purposes of this opinion, we have not reviewed any documents
other than the documents listed in paragraphs (a) through (e) above. In
particular, we have not reviewed any document (other than the documents listed
in paragraphs (a) through (e) above) that is referred to in or incorporated by
reference into the documents reviewed by us. We have assumed that there exists
no provision in any document that we have not reviewed that is inconsistent with
the opinions stated herein. We have conducted no independent factual
investigation of our own but rather have relied solely upon the foregoing
documents, the statements and information set forth therein and the additional
matters recited or assumed herein, all of which we have assumed to be true,
complete and accurate in all material respects.

With respect to all documents examined by us, we have assumed (i)
the authenticity of all documents submitted to us as authentic originals, (ii)
the conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.

For purposes of this opinion, we have assumed (i) that the Trust
Agreement and the Certificate are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph 1 below, the due
creation or due organization or due formation, as the case may be, and valid
existence in good standing of each party to the documents examined by us under
the laws of the jurisdiction governing its creation, organization or formation,
(iii) the legal capacity of natural persons who are parties to the documents
examined by us, (iv) that each of the parties to the documents examined by us
has the power and authority to

<PAGE>

Bear Stearns Capital Trust I
February 5, 1997
Page 3

execute and deliver, and to perform its obligations under, such documents, (v)
the due authorization, execution and delivery by all parties thereto of all
documents examined by us, (vi) the receipt by each Person to whom a Capital
Security is to be issued by the Trust (collectively, the "Capital Security
Holders") of a Capital Securities Certificate for such Capital Security and the
payment for the Capital Security acquired by it, in accordance with the Trust
Agreement and the Registration Statement, and (vii) that the Capital Securities
are issued and sold to the Capital Security Holders in accordance with the Trust
Agreement and the Registration Statement. We have not participated in the
preparation of the Registration Statement and assume no responsibility for its
contents.

This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder that are currently in effect.

Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:

1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act.

2. The Capital Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.

3. The Capital Security Holders, as beneficial owners of the Trust,
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Capital Security
Holders may be obligated to make payments as set forth in the Trust Agreement.

We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition, we
hereby consent to the use of our name under the heading "Validity of New Capital
Securities" in the Prospectus. In giving the foregoing consents, we do not
thereby admit that we come within the category of Persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended, or the

<PAGE>

Bear Stearns Capital Trust I
February 5, 1997
Page 4

rules and regulations of the Securities and Exchange Commission thereunder.
Except as stated above, without our prior written consent, this opinion may not
be furnished or quoted to, or relied upon by, any other Person for any purpose.

Very truly yours,

RICHARDS, LAYTON & FINGER

EXHIBIT 5.2

WEIL, GOTSHAL & MANGES LLP
A Limited Liability Partnership Including Professional Corporations
767 Fifth Avenue New York, NY 10153-0119
(212) 310-8000
Fax: (212) 310-8007

February 5, 1997

The Board of Directors
The Bear Stearns Companies Inc.
245 Park Avenue
New York, NY 10167

Ladies and Gentlemen:

We have acted as counsel to The Bear Stearns Companies Inc.,
a Delaware corporation (the "Company"), in connection with the
preparation and filing of a Registration Statement on Form
S-4 (the "Registration Statement") under the Securities Act of 1933,
as amended, with respect to $200,000,000 aggregate principal amount of
Fixed/Adjustable Rate Junior Subordinated Deferrable Interest
Debentures (the "Debentures") of the Company, $200,000,000 aggregate
liquidation amount of Fixed/Adjustable Rate Capital Securities (the
"Capital Securities") of Bear Stearns Capital Trust I, a business
trust created under the laws of the State of Delaware (the "Issuer"),
and the guarantee with respect to the Capital Securities (the
"Guarantee") executed and delivered by the Company for the benefit of
the holders from time to time of the Capital Securities.

In so acting, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of the
Registration Statement, the Prospectus that is a part of the
Registration Statement (the "Prospectus"), the Indenture and the First
Supplemental Indenture, in the forms filed as exhibits to the
Registration Statement, the form of Debenture set forth in the First
Supplemental Indenture, and such corporate records, agreements,
documents and other instruments, and such certificates or comparable
documents of public officials and of officers and representatives of
the Company, and have made such inquiries of such officers and
representatives of the Company as we have deemed relevant and
necessary as a basis for the opinions hereinafter set forth.

<PAGE>

The Bear Stearns Companies Inc.
February 5, 1997
Page 2

In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of
all documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as certified, conformed or
photostatic copies and the authenticity of the originals of such
latter documents. As to all questions of fact material to this
opinion that have not been independently established, we have relied
upon certificates or comparable documents of officers and
representatives of the Company.

Based on the foregoing, and subject to the qualifications stated
herein, we are of the opinion that:

1. The Debentures, when duly executed by the Company,
authenticated by the Trustee pursuant to the terms of the Indenture
and the First Supplemental Indenture, and delivered and paid for in
accordance with the terms of the Indenture and the First Supplemental
Indenture, and as contemplated by the Registration Statement, will be
validly issued and will constitute the legally binding obligations of
the Company entitled to the benefits of the Indenture and the First
Supplemental Indenture, in accordance with their terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally, and subject, as to enforceability, to
general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).

2. The Guarantee constitutes the legally binding obligation
of the Company, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally, and subject, as to enforceability, to
general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).

The opinions herein are limited to the laws of the State of
New York and the corporate laws of the State of Delaware, and we
express no opinion as to the effect on the matters covered by this
opinion of the laws of any other jurisdiction.

<PAGE>

The Bear Stearns Companies Inc.
February 5, 1997
Page 3

The opinions expressed herein are rendered solely for your
benefit in connection with the transactions described herein. Those
opinions may not be used or relied upon by any other person, nor may
this letter or any copies thereof be furnished to a third party, filed
with a governmental agency, quoted, cited or otherwise referred to
without our prior written consent.

We understand that you have received an opinion from
Richards, Layton & Finger, LLP, special Delaware counsel for the
Company and the Issuer. We are expressing no opinion with respect to
the matters contained in such opinion.

We hereby consent to the use of this opinion as an exhibit
to the Registration Statement. We also consent to any and all
references to our firm under the caption "Validity of New Capital
Securities" in the Prospectus.

Very truly yours,

WEIL GOTSHAL & MANGES LLP

NYFS04...:\25\22625\0313\1773\OPN1307S.19A

EXHIBIT 8

WEIL, GOTSHAL & MANGES LLP
A Limited Liability Partnership Including Professional Corporations
767 Fifth Avenue New York, NY 10153-0119
(212) 310-8000
Fax: (212) 310-8007

February 5, 1997

The Bear Stearns Companies Inc.
245 Park Avenue
New York, NY 10167

Ladies and Gentlemen:

We have acted as counsel to The Bear Stearns Companies Inc.,
a Delaware corporation (the "Company"), in connection with (i) the
preparation and filing with the Securities and Exchange Commission
(the "Commission") of the Prospectus dated the date hereof (the
"Prospectus") and of the Registration Statement on Form S-4, as
amended to the date hereof, filed with the Commission (the
"Registration Statement") under the Securities Act of 1933, as
amended, with respect to $200,000,000 aggregate principal amount of
Fixed/Adjustable Rate Junior Subordinated Debentures (the
"Debentures") of the Company and $200,000,000 aggregate liquidation
amount of Fixed/Adjustable Rate Capital Securities (the "Capital
Securities") of Bear Stearns Capital Trust I, a Delaware business
trust (the "Trust") and (ii) the Exchange Offer of the Capital
Securities specified in the Prospectus. All capitalized terms not
otherwise defined herein shall have the same meaning ascribed thereto
in the Prospectus.

In so acting, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of the
Registration Statement, the Prospectus, the Trust Agreement,
the forms of Capital Securities and Common Securities,
the form of Indenture, the form of the Capital Securities
Guarantee Agreement and the Common Securities Guarantee Agreement
(collectively, the "Agreements"). In addition, we have examined
originals or copies, certified or otherwise identified to our
satisfaction of such corporate records, agreements, documents and
other instruments, and have

<PAGE>

The Bear Stearns Companies Inc.
February 5, 1997
Page 2

made such inquiries of such officers and representatives of the
Company, as we have deemed relevant and necessary as a basis for the
opinion hereinafter set forth.

In such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as
originals, the conformity to original documents of documents submitted
to us as certified or photostatic copies and the authenticity of the
originals of such latter documents. We have further assumed (i) that
the Capital Securities as executed and delivered by the requisite
signatories thereto will conform in substance and form in all material
respects to the respective forms thereof examined by us, (ii) timely
compliance by all parties to the Agreements to the terms thereof
(without waiver or amendment of any of the terms thereof) and (iii)
that the Agreements constitute all the agreements, arrangements and
understandings between the parties thereto with respect to the
transactions contemplated therein and that the representations and
warranties contained therein are true.

The terms of the Agreements and the Capital Securities are
incorporated herein by reference.

Based on the foregoing, it is our opinion that the
statements contained in the Prospectus, under the caption "Certain
Federal Income Tax Consequences", insofar as such statements
constitute matters of law or legal conclusions and except to the
extent qualified therein, are correct in all material respects.

The foregoing opinion is based on current provisions of the
Internal Revenue Code of 1986, as amended, the Treasury Regulations
promulgated thereunder (including proposed Treasury Regulations),
published pronouncements of the Internal Revenue Service, and case
law, any of which may be changed at any time with retroactive effect.
We express no opinion as to the effect on the matters covered by this
opinion of the laws of any other jurisdiction.

We hereby consent to the filing of this opinion with the
Commission as an exhibit to the Registration Statement and to the
references to our firm under the captions "Certain Federal Income Tax
Consequences" and "Legal Matters" in the Prospectus. This

<PAGE>

The Bear Stearns Companies Inc.
February 5, 1997
Page 3

opinion may not be used for any other purpose and may not otherwise be
relied upon by, or disclosed to, any other person, quoted or referred
to.

Very truly yours,

WEIL GOTSHAL & MANGES LLP

NYFS04...:\25\22625\0313\2051\OPN1307X.180

EXHIBIT 12
<TABLE>
<CAPTION>
THE BEAR STEARNS COMPANIES INC.
STATEMENT RE COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In thousands, except for ratio)

(Unaudited) (Unaudited)
Three Months Three Months Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year
Ended Ended Ended Ended Ended Ended Ended
Sept. 27, 1996 Sept. 29, 1995 June 30, 1996 June 30, 1995 June 30, 1994 June 30, 1993 June 30, 1992
-------------- -------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings before taxes
on income $ 178,517 $ 156,410 $ 834,926 $ 388,082 $ 642,799 $ 614,398 $ 507,625
------------ ----------- ----------- ----------- ----------- ----------- -----------

Added Fixed Charges:
Interest 547,469 456,945 1,981,171 1,678,515 1,023,866 710,086 834,859

Interest factor in rents 6,514 6,459 25,672 24,594 21,772 20,084 20,874
------------ ----------- ----------- ----------- ----------- ----------- -----------

Total Fixed Charges 553,983 463,404 2,006,843 1,703,109 1,045,638 730,170 855,733
------------ ----------- ----------- ----------- ----------- ----------- -----------

Earnings before fixed charges
and taxes on income $ 732,500 $ 619,814 $ 2,841,769 $ 2,091,191 $ 1,688,437 $ 1,344,568 $ 1,363,358
============ =========== =========== =========== =========== =========== ===========

Ratio of Earnings to Fixed
Charges 1.3 1.3 1.4 1.2 1.6 1.8 1.6
============ =========== =========== =========== =========== =========== ===========

</TABLE>

NYFS04...:\25\22625\0122\1773\CHTD126J.570

EXHIBIT 23.1

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this Registration Statement of
The Bear Stearns Companies Inc. on Form S-4 of our reports dated August 26,
1996, appearing in and incorporated by reference in the Annual Report on Form
10-K of The Bear Stearns Companies, Inc., for the year ended June 30, 1996, and
to the reference to us under the heading "Independent Public Accountants" in the
Prospectus, which is part of this Registration Statement.

DELOITTE & TOUCHE LLP

February 5, 1997
New York, New York