SOUTHERN CALIFORNIA EDISON CO, S-3, 1995-05-02

SOUTHERN CALIFORNIA EDISON CO
S-3, 1995-05-02
ELECTRIC SERVICES

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As filed with the Securities and Exchange Commission on May __, 1995
Registration No. 33-

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-3
Registration Statement
under
The Securities Act of 1933

SOUTHERN CALIFORNIA EDISON COMPANY
(Exact name of registrant as specified in its charter)

California 95-1240335
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

2244 Walnut Grove Avenue
Rosemead, California 91770
818-302-1212
(Address and telephone number of principal executive offices)

Kenneth S. Stewart, Assistant General Counsel
2244 Walnut Grove Avenue (P.O. Box 800)
Rosemead, California 91770
818-302-6601
(Name, address, and telephone number of agent for service)

COPIES TO: Peter P. Wallace, Esq.
Milbank, Tweed, Hadley & McCloy
601 South Figueroa Street, Los Angeles, California 90017
213-892-4000

Approximate Date of Commencement of Proposed Sale to the Public: From
time to time after the effective date of this Registration Statement as
determined by market conditions.

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

If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, as amended (the "Securities Act") other than
securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
CALCULATION OF REGISTRATION FEE
========================================================================
Proposed Proposed
maximum maximum
Title of each class Amount offering aggregate Amount of
of securities to to be price offering registration
be registered registered per unit price fee
- -----------------------------------------------------------------------
Debt Securities $600,000,000(1) 100%(2)$600,000,000(1) $206,898(3)
========================================================================
(1) In no event will the aggregate initial offering price of all
securities issued from time to time pursuant to this registration
statement exceed $600,000,000, or if Securities are issued in foreign
currency units, the U.S. dollar equivalent of $600,000,000. If any
such securities are issued at an original issue discount, then the
aggregate initial public offering price as so discounted shall not
exceed $600,000,000, notwithstanding that the stated principal amount
of such securities may exceed such amount.
(2) The proposed maximum initial offering price per unit will be
determined, from time to time, by the registrant in connection with
the issuance by the registrant of the securities registered
hereunder.
(3) Calculated pursuant to Rule 457(o) of the rules and regulations under
the Securities Act.
Pursuant to Rule 429 of the rules and regulations under the
Securities Act, this registration statement contains a combined prospectus
relating to the $600,000,000 principal amount of Debt Securities
registered hereby in addition to $105,000,000 principal amount of Debt
Securities which became effective on November 6, 1992, pursuant to
Registration No. 33-53290.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act or until the
Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
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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 May __, 1995
- ----------------------------------------------------------------------

PROSPECTUS

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SOUTHERN CALIFORNIA EDISON COMPANY

Debt Securities

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

Southern California Edison Company (the "Company") from time to time
may offer, in one or more series, its unsecured debt securities (the "Debt
Securities") on terms to be determined at the time of sale, from which the
Company will receive up to an aggregate of $705,000,000 in proceeds or,
if the principal of the Debt Securities is payable in a foreign or
composite currency, the equivalent thereof at the time of offering. The
specific designation, aggregate principal amount, designated currency or
composite currency, authorized denominations, purchase price, maturity,
rate (which may be fixed or variable) and time of payment of any interest,
any redemption terms, terms for sinking fund payments, terms of
subordination and other specific terms in connection with the offering and
sale of Debt Securities, and any listing on a securities exchange of the
Debt Securities in respect of which this Prospectus is being delivered
("Offered Debt Securities") are set forth in the accompanying prospectus
supplement ("Prospectus Supplement").

The Company may sell Debt Securities to or through underwriters or
dealers, and also may sell Debt Securities directly to other purchasers
or through agents. See "Plan of Distribution". The accompanying
Prospectus Supplement sets forth the names of any underwriters or agents
involved in the sale of the Offered Debt Securities in respect of which
this Prospectus is being delivered, the principal amounts, if any, to be
purchased by underwriters and the compensation, if any, of such
underwriters or agents.

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

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

The date of this Prospectus is May , 1995
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No person is authorized to give any information or to make any
representations other than those contained or incorporated by reference
in this Prospectus or the Prospectus Supplement and, if given or made,
such information or representations must not be relied upon as having been
authorized. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any securities other than the registered
securities to which it relates or an offer to sell or a solicitation of
an offer to buy such securities in any jurisdiction to any person to whom
it is unlawful to make such offer or solicitation in such jurisdiction.
Neither the delivery of this Prospectus or the Prospectus Supplement nor
any sale made hereunder or thereunder shall, under any circumstances,
create any implication that there has been no change in the affairs of the
Company since the date hereof or thereof or that the information
contained or incorporated by reference herein or therein is correct as of
any time subsequent to its date.

AVAILABLE INFORMATION

The Company is subject to 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 may be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's
Regional Offices at 7 World Trade Center, Suite 1300, New York, New York
10048 and Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material may be obtained by mail
from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. In addition, reports,
proxy statements and other information concerning the Company may be
inspected at the offices of the New York, American and Pacific Stock
Exchanges.

The Company has filed with the Commission a registration statement on
Form S-3 (together with all amendments and exhibits thereto, the
"Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"). This Prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. For further information, reference is made to the
Registration Statement.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed by the Company with the Commission (File
No. 1-2313) under the Exchange Act are incorporated in this Prospectus by
reference:

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

2. Current Report on Form 8-K dated March 31, 1995.

3. All other documents filed by the Company pursuant to Section 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
Debt Securities. Any documents incorporated by reference do not
form part of the listing particulars of the Council of the
International Stock Exchange of the United Kingdom and the Republic
of Ireland Limited.

The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
request of such person, a copy of any or all of the documents which are
incorporated by reference herein, other than exhibits to such documents
(unless such exhibits are specifically incorporated by reference therein).
Written or telephone requests should be directed to Southern California
Edison Company, P.O. Box 800, Rosemead, California 91770, Attention:
Corporate Finance Division, telephone (818) 302-2662.

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SELECTED INFORMATION

The following material is qualified in its entirety by the detailed
information and financial statements appearing elsewhere in this
Prospectus, including the documents incorporated by reference in this
Prospectus.

THE COMPANY
<TABLE>
<CAPTION>
<S> <C>
Customers (December 31, 1994) 4,150,863
Area Generation Capacity at Peak (Megawatts) (December 31, 1994) 20,615
Kilowatt-Hour Sales (12 Months Ended December 31, 1994) 77,985,856,000
Funds Required for Construction Expenditures (1995-1999) $4,740,000,000
Energy Sources (12 Months Ended December 31, 1994) Purchased Power 37%; Natural Gas
26%; Nuclear 20%; Coal 13%;
Hydroelectric 4%.
</TABLE>
CONSOLIDATED FINANCIAL INFORMATION
(Dollars in Thousands)

<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------
1990 1991 1992 1993 1994
------- ------ ------ ----- --------
Income Statement Data:
<S> <C>
Total Operating Revenue $6,986,460 $7,297,759 $7,721,613 $7,396,599 $7,798,601
Operating Income . . 1,147,132 1,117,034 1,230,084 1,164,443 1,093,929
Total Interest Expense(1) 552,567 542,732 517,142 449,230 443,219
Net Income . . . . . 736,753 629,553 672,909 678,045 638,581
Ratios of Earnings to
Fixed Charges(1)(2) 3.17 2.92 3.16 3.39 3.43
</TABLE>
<TABLE>
<CAPTION>
December 31, 1994
---------------------
Capitalization(3):
<S> <C> <C>
Common Shareholder's Equity. . . . . . . . . . . . . $ 5,028,973 47.2%
Preferred Stock without Mandatory Redemption Requirements 358,755 3.4
Preferred Stock with Mandatory Redemption Requirements 275,000 2.6
Long-Term Debt . . . . . . . . . . . . . . . . . . . 4,987,978 46.8
----------- ------
Total Capitalization . . . . . . . . . . . . . . . $10,650,706 100.0%
=========== ======
</TABLE>
________________
(1)Net of capitalized interest related to nuclear fuel. Such amounts
have been included in the computation of the ratios of earnings to
fixed charges.

(2)For purposes of computing the ratios of earnings to fixed charges,
"earnings" are defined as income before fixed charges and taxes on
income, excluding the cumulative effect of a change in accounting
principle for unbilled revenues. Income includes the allowance for
funds used during construction and subsidiary earnings. Fixed charges
consist of interest (including interest on affiliate indebtedness) and
an allocable portion of rentals and long-term contracts for the
purchase of power.

(3)Excludes long-term debt due within one year.
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THE COMPANY

The Company, incorporated in 1909 under California law, is a public
utility primarily engaged in the business of supplying electric energy in
portions of Central and Southern California, excluding the City of Los
Angeles and certain other cities. The mailing address and telephone
number of the Company's principal executive offices are P.O. Box 800,
Rosemead, California 91770 and (818) 302-1212.

USE OF PROCEEDS

Except as otherwise described in the Prospectus Supplement, the net
proceeds of the Debt Securities will be applied to the redemption,
repayment or retirement of outstanding indebtedness or other securities,
the financing of construction expenditures or other general corporate
purposes.

DESCRIPTION OF DEBT SECURITIES

The Debt Securities are to be issued under an Indenture dated as of
January 15, 1993, (the "Senior Indenture") between the Company and Harris
Trust and Savings Bank, as Trustee (the "Senior Trustee"), or under an
Indenture dated as of May 1, 1995 (the "Subordinated Indenture") between
the Company and The First National Bank of Chicago (the "Subordinated
Trustee"), a copy of each of which is filed as an exhibit to the
Registration Statement. The Senior Indenture and the Subordinated
Indenture are each sometimes referred to herein as the "Indenture," and
the Senior Trustee and the Subordinated Trustee are each sometimes
referred to herein as the "Trustee". The following summaries of certain
provisions of the Indenture do not purport to be complete and are subject
to, and are qualified in their entirety by reference to, all provisions
of the Indenture, including the definitions therein of certain terms.
Wherever particular provisions or defined terms of the Indenture are
referred to herein or in the Prospectus Supplement, such provisions or
defined terms are incorporated herein or therein by reference.

The Debt Securities may be issued from time to time in one or more
series. The following description sets forth certain general terms and
provisions of the Debt Securities to which any Prospectus Supplement will
relate. The particular terms of the Offered Debt Securities offered by
any Prospectus Supplement will be described in such Prospectus Supplement.

General

The Indenture does not limit the amount of Debt Securities which may
be issued thereunder and provides that Debt Securities may be issued
thereunder up to the aggregate principal amount which may be authorized
from time to time by the Company. The Debt Securities under the Senior
Indenture will be unsecured and will rank on a parity with all other
unsecured and unsubordinated indebtedness of the Company. The Debt
Securities under the Subordinated Indenture will be subordinated to all
senior indebtedness of the Company. Substantially all properties of the
Company are currently subject to the lien of a trust indenture securing
first mortgage bonds of the Company, of which approximately $4.5 billion
principal amount were outstanding at December 31, 1994.

Reference is hereby made to the Prospectus Supplement relating to the
Offered Debt Securities for the terms of such Debt Securities, including,
where applicable: (i) the title of such Debt Securities; (ii) any limit
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on the aggregate principal amount of such Debt Securities; (iii) the price
or prices at which such Debt Securities will be issued; (iv) the date or
dates on which the principal of such Debt Securities will be payable; (v)
if other than United States Dollars, the currency, currencies or composite
currencies in which such Debt Securities are being sold and in which the
principal of and any interest on such Debt Securities will be payable and
whether the holder of any such Debt Securities may elect the currency in
which payments thereon are to be made, and if so, the manner of such
election; (vi) the rate or rates (which may be fixed or variable) per
annum, or the method or methods of calculating such rates, at which such
Debt Securities will bear interest, if any; (vii) each office or agency
where, subject to the terms of the Indenture as described below under
"Payment and Paying Agents," the principal of and any premium and interest
on such Debt Securities will be payable and each office or agency where,
subject to the terms of the Indenture as described below under "Form,
Exchange Registration and Transfer," such Debt Securities may be presented
for registration of transfer or exchange, (viii) the date from which such
interest on such Debt Securities will accrue, the dates on which such
interest will be payable and the date on which payment of such interest
will commence; (ix) the dates on which and the price or prices at which
such Debt Securities will, pursuant to any mandatory sinking fund
provision, or may, pursuant to any optional redemption or required
repayment provisions, be redeemed or repaid and the other terms and
provisions of any such mandatory sinking fund, optional redemption or
required repayment; (x) whether such Debt Securities are to be issuable
as Registered Securities, Bearer Securities or both and the terms upon
which any Bearer Securities of such series may be exchanged for Registered
Securities of such series; (xi) whether such Debt Securities are to be
issued in whole or in part in the form of one or more Global Securities
and, if so, the identity of the Depositary or Depositaries for such Global
Security or Securities; (xii) any special provisions for the payment of
additional amounts with respect to such Debt Securities; (xiii) if a
temporary Global Security is to be issued with respect to such series, the
requirements for certification of ownership by non-United States persons
that will apply prior to (a) the issuance of a definitive Bearer Security
or (b) the payment of interest on an Interest Payment Date that occurs
before the issuance of a definitive Bearer Security; (xiv) if a temporary
Global Security is to be issued with respect to such series, the terms
upon which interests in such temporary Global Security may be exchanged
for interests in a definitive Global Security or for definitive Debt
Securities of the series and the terms upon which interests in a
definitive Global Security, if any, may be exchanged for definitive Debt
Securities of the series; (xv) the denominations in which such Debt
Securities which are Registered Securities will be issuable if other than
denominations of $1,000 and any integral multiples thereof, and the
denomination or denominations in which any such Debt Securities which are
Bearer Securities will be issued if other than denominations of $1,000,
$10,000 and $100,000; (xvi) if such Debt Securities are Original Issue
Discount Securities, the amount of principal payable upon acceleration of
such Debt Securities following an Event of Default; (xvii) any index used
to determine the amount of payments of principal of and any premium and
interest on such Debt Securities (xviii) any deletions, modifications or
additions to the covenants or Events of Default provided with respect to
such Debt Securities; (xix) whether the Debt Securities of such series are
subject to discharge and defeasance at the option of the Company; and (xx)
any other terms and conditions of the Offered Debt Securities. In
addition, the Prospectus Supplement relating to any offering of Debt
Securities under the Subordinated Indenture will provide, if applicable:
(i) any right to extend the interest payment periods and the duration of
such extension; (ii) whether any one or more series of Debt Securities
shall be junior in right of payment to any other one or more series of
Debt Securities; and (iii) any deletions, modifications or additions to
the subordination provisions of Article Sixteen with respect to any series
of Debt Securities. (Section 301 of Senior Indenture, and Section 3.1 of
Subordinated Indenture)
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Debt Securities may be issued under the Indenture as Original Issue
Discount Securities to be offered and sold at a substantial discount below
their stated principal amount. Federal income tax consequences and other
special considerations applicable to any such Original Issue Discount
Securities will be described in the Prospectus Supplement relating
thereto. "Original Issue Discount Security" means (i) any Debt Security
that provides for an amount less than the principal amount thereof to be
due and payable upon a declaration of acceleration of the Maturity thereof
upon the occurrence of an Event of Default and the continuation thereof
and (ii) any Debt Security issued with original issue discount for United
States Federal income tax purposes. (Section 101 of Senior Indenture, and
Section 1.1 of Subordinated Indenture)

Form, Exchange, Registration and Transfer

The Debt Securities may be issuable as Registered Securities, Bearer
Securities or both. Debt Securities of a series may be issuable in whole
or in part in the form of one or more Global Securities, as described
below under "Global Securities". Unless the Prospectus Supplement
relating thereto specifies otherwise, Registered Securities denominated
in United States dollars will be issued only in the denominations of
$1,000 and any integral multiple thereof and Bearer Securities denominated
in United States dollars will be issued only in denominations of $1,000,
$10,000, and $100,000. All Debt Securities of any one series shall be
substantially identical except as to denomination and except as may
otherwise be provided in or pursuant to a Board Resolution and set forth
in an Officer's Certificate or in any indenture supplemental thereto.
See, however, "Limitations on Issuance of Bearer Securities" below. The
Prospectus Supplement relating to a series of Debt Securities denominated
in foreign or composite currency will specify the denomination thereof and
any special United States Federal income tax and other considerations
relating thereto. No service charge will be made for any transfer or
exchange of Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith. (Sections 302 and 305 of Senior Indenture, and
Sections 3.2 and 3.5 of Subordinated Indenture)

At the option of the Holder, subject to the terms of the Indenture,
Bearer Securities (with all unmatured coupons, except as provided below)
of any series will be exchangeable into an equal aggregate principal
amount of Registered Securities (if the Debt Securities of such series are
issuable as Registered Securities) or Bearer Securities of the same series
(with the same interest rate and maturity date), however, delivery of a
Bearer Security shall occur only outside the United States, and Registered
Securities of any series (other than a Global Security, except as set
forth below) will be exchangeable into an equal aggregate principal amount
of Registered Securities of the same series (with the same interest rate
and maturity date) of different authorized denominations. If a Holder
surrenders Bearer Securities in exchange for Registered Securities between
a Regular Record Date or, in certain circumstances, a Special Record Date,
and the relevant interest payment date, such Holder will not be required
to surrender the coupon relating to such interest payment date.
Registered Securities may not be exchanged for Bearer Securities.
(Section 305 of Senior Indenture, and Section 3.5 of Subordinated
Indenture)

Debt Securities may be presented for exchange, and Registered
Securities (other than a Global Security) may be presented for transfer,
at the office of the Security Registrar or at the office of any transfer
agent designated by the Company for such purpose with respect to the Debt
Securities of a series and referred to in an applicable Prospectus
Supplement, without service charge and upon payment of any taxes and other
governmental charges as described in the Indenture. Such transfer or
exchange will be effected upon the Security Registrar or such transfer
agent, as the case may be. The Company has initially appointed the
Trustee to act as Security Registrar. Bearer Securities will be
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transferable by delivery. (Section 305 of Senior Indenture,and Section
3.5 of Subordinated Indenture)

If a Prospectus Supplement refers to any transfer agents (in addition
to the Security Registrar) initially designated by the Company with
respect to any series of Debt Securities, the Company may at any time
rescind the designation of any such transfer agent or approve a change in
the location through which any such transfer agent acts, except that if
Debt Securities of a series are issuable solely as Registered Securities,
the Company will be required to maintain a transfer agent in each place
where principal and any premium and interest in respect of such series
shall be payable and, if Debt Securities of a series are issuable as
Bearer Securities, the Company will be required to maintain, subject to
any laws or regulation applicable thereto, a transfer agent in a place
outside of the United States where principal and any premium and interest
in respect of such series shall be payable. The Company may at any time
designate additional transfer agents with respect to any series of Debt
Securities. (Section 1002 of Senior Indenture, and Section 10.2 of
Subordinated Indenture)

In the event of any redemption, the Company shall not be required (i)
to issue, register the transfer of or exchange Debt Securities of any
particular series during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of Debt
Securities of such series selected for redemption and ending at the close
of business on (a) the day of mailing the relevant notice of redemption,
if Debt Securities of the series are issuable only as Registered
Securities and (b) the day of the first publication of the relevant notice
of redemption, if the Debt Securities of the series are issuable as
Bearer Securities, or the mailing of the relevant notice of redemption,
if the Debt Securities of the series are also issuable as Registered
Securities and there is no publication; (ii) to register the transfer of
or exchange any Registered Security so selected for redemption in whole
or in part, except the unredeemed portion of any Registered Security being
redeemed in part; (iii) to exchange any Bearer Security so selected for
redemption except that such a Bearer Security may be exchanged for a
Registered Security of that series (if the Debt Securities of such series
are issuable as Registered Securities); or (iv) to register the transfer
of or exchange any Debt Security if the Holder thereof has expressed his
right, if any, to require the Company to repurchase such Debt Security,
in whole or in part, except that portion of such Debt Security not
required to be repurchased, provided that such Registered Security shall
be immediately surrendered for redemption with written instructions for
payment consistent with the provisions of the Indenture. (Section 305 of
Senior Indenture, and Section 3.5 of Subordinated Indenture)

Global Securities

The Debt Securities of a series may be issued in whole or in part in
the form of one or more Global Securities that will be deposited with, or
on behalf of, a Depositary (the "Depositary"). Global Securities may be
issued in either registered or bearer form and in either temporary or
definitive form. One or more Global Securities will be issued in a
denomination or aggregate denominations equal to the aggregate principal
amount of Outstanding Debt Securities of the series to be represented by
such Global Security or Securities. Unless and until it is exchanged in
whole or in part for Debt Securities in definitive form, a Global Security
may not be transferred except as a whole by the Depositary for such Global
Security 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 of such Depositary or
a nominee of such successor Depositary. (Sections 303 and 305 of Senior
Indenture, and Sections 3.3 and 3.5 of Subordinated Indenture)

The specific terms of the depositary arrangement with respect to any
Debt Securities of a series will be described in the Prospectus Supplement
relating to such series if other than or in addition to the description
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below. The Company anticipates that the following provisions will
generally apply to depositary arrangements.

Upon the issuance of a Global Security, the Depositary for such Global
Security will credit, on its book-entry registration and transfer system,
the respective principal amounts of the Debt Securities represented by
such Global Security to the accounts of institutions that have accounts
with such Depositary ("participants"). The accounts to be credited shall
be designated by the underwriters of such Debt Securities, by certain
agents of the Company or by the Company, if such Debt Securities are
offered and sold directly by the Company. Ownership of beneficial
interests in a Global Security will be limited to participants or persons
that may hold interests through participants. Ownership of beneficial
interests in such Global Security will be shown on, and the transfer of
that ownership will be effected only through, records maintained by the
Depositary for such Global Security or by participants or persons that
hold through participants. The laws of some states require that certain
purchasers of securities take physical delivery of such securities in
definitive form. Such limits and such laws may impair the ability to
transfer beneficial interests in a Global Security.

So long as the Depositary for a Global Security, or its nominee, is the
holder of such Global Security, such Depositary or such nominee, as the
case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. Except as set forth below, owners of beneficial interests in
a Global Security will not be entitled to have Debt Securities of the
series represented by such Global Security registered in their names, will
not receive or be entitled to receive physical delivery of Debt Securities
of such series in definitive form and will not be considered the owners
or holders thereof under the Indenture. Accordingly, each person owning
a beneficial interest in a Global Security must rely on the procedures of
the Depositary and, if such person is not a participant, on the procedures
of the participant and, if applicable, the indirect participant, through
which such person owns its interest, to exercise any rights of a holder
under the Indenture. Nothing in the Indenture will prevent the Company,
the Trustee, or any agent of the Company or the Trustee, from giving any
effect to any written certification, proxy or other authorization
furnished by a Depositary or impair, as between a Depositary and holders
of beneficial interests in a Global Security, the operation of customary
practices governing the exercise of rights of the Depositary (or its
nominee) as Holder of such Global Security. (Section 308 of Senior
Indenture, and Section 3.8 of Subordinated Indenture)

Subject to the restrictions discussed under "Limitations on Issuance
of Bearer Securities" below, principal, premium, if any, and interest
payments on Debt Securities registered in the name of or held by a
Depositary or its nominee will be made to the Depositary or its nominee,
as the case may be, as the registered owner or the holder of the Global
Security representing such Debt Securities. The Company expects that the
Depositary for Debt Securities of a series, upon receipt of any payment
of principal, premium or interest in respect of a definitive Global
Security, immediately will credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the
principal amount of such Global Security as shown on the records of such
Depositary. The Company also expects that payments by participants to
owners of beneficial interests in such Global Security held through such
participants will be governed by standing instructions and customary
practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name", and will be the
responsibility of such participants. Receipt by owners of beneficial
interests in a temporary Global Security of payments in respect of such
temporary Global Security will be subject to the restrictions discussed
under "Limitations on Issuance of Bearer Securities" below.

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If a Depositary for Debt Securities of a series is at any time
unwilling or unable to continue as Depositary and a successor Depositary
is not appointed by the Company within 90 days, the Company will issue
Debt Securities of such series in definitive form in exchange for the
Global Security or Securities representing the Debt Securities of such
series. In addition, the Company may at any time and in its sole
discretion determine not to have any Debt Securities of a series
represented by one or more Global Securities and, in such event, will
issue Debt Securities of such series in definitive form in exchange for
the Global Security or Securities representing such Debt Securities.
Further, if specified by the Company with respect to a particular series
of Debt Securities, which is represented by Global Securities, the
Depositary for Debt Securities of such series may, on terms acceptable to
the Company and the Depositary for such Global Security, receive Debt
Securities of such series in definitive form. In any such instance, an
owner of a beneficial interest in a Global Security will be entitled to
physical delivery in definitive form of Debt Securities of the series
represented by such Global Security equal in principal amount to such
beneficial interest and to have such Debt Securities registered in its
name (if the Debt Securities of such series are issuable as Registered
Securities). (Section 305 of Senior Indenture, and Section 3.5 of
Subordinated Indenture) See, however, "Limitations on Issuance of Bearer
Securities" below for a description of certain restrictions on the
issuance of a Bearer Security in definitive form in exchange for an
interest in a Global Security.

Payment and Paying Agents

Payment of principal of and premium, if any, and interest on Bearer
Securities will be payable in the currency designated in the Prospectus
Supplement, subject to any applicable laws and regulations, at such paying
agencies outside the United States as the Company may appoint from time
to time. Any such payment may be made, at the option of a Holder, by a
check in the designated currency or by transfer to an account in the
designated currency maintained by the payee with a bank located outside
the United States. Unless otherwise indicated in an applicable Prospectus
Supplement, payment of any interest due on Bearer Securities will be made
only against surrender of the coupon for such interest instalment.
(Section 1001 of Senior Indenture, and Section 10.1 of Subordinated
Indenture) No payment with respect to any Bearer Security will be made
at the Corporate Trust Office of the Trustee or any other paying agency
maintained by the Company in the United States nor will any such payment
be made by transfer to an account, or by mail to an address, in the United
States. Notwithstanding the foregoing, payments of principal of and
premium, if any, and interest on Bearer Securities may be made in United
States dollars at the Corporate Trust Office of the Trustee in the City
of Chicago, Illinois, if payment of the full amount thereof at all paying
agencies outside the United States is illegal or effectively precluded by
exchange controls or other similar restrictions. (Section 1002 of Senior
Indenture, and Section 10.2 of Subordinated Indenture)

Unless otherwise indicated in the Prospectus Supplement, payment of
principal of and premium, if any, on Registered Securities will be made
in the designated currency against surrender of such Registered Securities
at the Corporate Trust Office of the Trustee in the City of Chicago,
Illinois. Unless otherwise indicated in the Prospectus Supplement,
payment of any instalment of interest on Registered Securities will be
made to the person in whose name such Debt Security is registered at the
close of business on the Regular Record Date for such interest. Unless
otherwise indicated in the Prospectus Supplement, at the option of the
Company, payments of such interest may be made by check in the designated
currency mailed to each Holder at such Holder's registered address or by
wire transfer to an account designated by such person pursuant to an
arrangement that is satisfactory to the Trustee and the Company.
(Sections 307 and 1001 of Senior Indenture, and Sections 3.7 and 10.1 of
Subordinated Indenture)
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Any paying agents outside the United States and any other paying agents
in the United States initially appointed by the Company for a series of
Debt Securities will be named in the Prospectus Supplement. The Company
may terminate the appointment of any of the paying agents from time to
time, except that the Company will maintain at least one paying agent in
the City of Chicago for payments with respect to Registered Securities and
at least one paying agent in a city outside the United States so long as
any Bearer Securities are outstanding where Bearer Securities may be
presented for payment and may be surrendered for exchange, provided that
so long as any series of Debt Securities is listed on The International
Stock Exchange of the United Kingdom and the Republic of Ireland Limited
or the Luxembourg Stock Exchange or any other stock exchange located
outside the United States and such stock exchange shall so require, the
Company will maintain a paying agent in London or Luxembourg or any other
required city located outside the United States, as the case may be, for
such series of Debt Securities. (Section 1002 of Senior Indenture, and
Section 10.2 of Subordinated Indenture)

All moneys paid by the Company to a paying agent for the payment of
principal of or premium, if any, or interest on any Debt Security that
remains unclaimed at the end of two years after such principal, premium
or interest shall have become due and payable will be repaid to the
Company and the Holder of such Debt Security or any coupon appertaining
thereto will thereafter look only to the Company for payment thereof.
(Section 1003 of Senior Indenture, and Section 10.3 of Subordinated
Indenture)

Modification of the Indenture

The Indenture permits the Company and the Trustee, with the consent of
the holders of not less than a majority in principal amount of the Debt
Securities at the time outstanding thereunder and affected thereby, to
execute a supplemental indenture modifying the Indenture or the rights of
the holders of such Debt Securities and any related coupons, provided
that no such modification shall, without the consent of the holder of each
Debt Security affected thereby, (i) change the maturity of any Debt
Security or coupon, or reduce the principal amount thereof, or reduce the
rate or change the method of computation of the rate of interest, or
reduce any premium payable upon redemption, or change any obligation of
the Company to pay additional amounts, or reduce the amount of principal
of an Original Issue Discount Security payable upon acceleration thereof,
or change the time of payment of interest thereon, or change any place of
payment or change the coin or currency in which a Debt Security or coupon
is payable or impair the right of any holder to institute suit for the
enforcement of payment in accordance with the foregoing, or (ii) reduce
the aforesaid percentage of Debt Securities, the consent of the holders
of which is required for any such modification. (Section 902 of Senior
Indenture, and Section 9.2 of Subordinated Indenture)

The Indenture contains provisions for convening meetings of the Holders
of Debt Securities of a series. (Section 1401 of Senior Indenture, and
Section 14.1 of Subordinated Indenture) A meeting may be called at any
time by the Trustee or upon the request of the Company or the Holders of
at least 10% in principal amount of the Outstanding Debt Securities of
such series, in any such case upon notice given in accordance with the
Indenture. (Section 1402 of Senior Indenture, and Section 14.2 of
Subordinated Indenture) Except as limited by the proviso in the preceding
paragraph, any resolution presented at a meeting or adjourned meeting at
which a quorum is present may be adopted by the affirmative vote of the
Holders of not less than a majority in principal amount of the Outstanding
Debt Securities of that series; provided, however, that, except as limited
by the proviso in the preceding paragraph, any resolution with respect to
any demand, consent, waiver or other action that may be made, given or
taken by the Holders of a specified percentage, which is less than a
majority in principal amount of outstanding Debt Securities of a series,
may be adopted at a meeting or adjourned meeting at which a quorum is
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present by the affirmative vote of the Holders of such specified
percentage in principal amount of the outstanding Debt Securities of that
series. (Section 1404 of Senior Indenture, and Section 14.4 of
Subordinated Indenture)

The Indenture provides that in determining whether the Holders of the
requisite principal amount of the Outstanding Debt Securities have given
any request, demand, authorization, direction, notice, consent or waiver
thereunder or are present at a meeting of Holders of Debt Securities for
quorum purposes, (1) the principal amount of an Original Issue Discount
Security that shall be deemed to be Outstanding will be the amount of the
principal thereof that would be due and payable as of the date of such
determination upon acceleration of the Maturity thereof, and (2) the
principal amount of a Debt Security denominated in a foreign currency or
composite currency shall be the United States dollar equivalent of the
principal amount (or, in the case of an Original Issue Discount Security,
the United States dollar equivalent of the amount determined as provided
in (1) above) of such Debt Security. (Section 101 of Senior Indenture,
and Section 1.1 of Subordinated Indenture)

Any resolution passed or decision taken at any meeting of Holders of
Debt Securities of any series duly held in accordance with the Indenture
will be binding on all Holders of Debt Securities of that series and the
related coupons. The quorum at any meeting called to adopt a resolution,
and at any reconvened meeting, will be persons holding or representing not
less than a majority in principal amount of the outstanding Debt
Securities of a series. (Section 1404 of Senior Indenture, and Section
14.4 of Subordinated Indenture)

Events of Default

The Indenture defines an Event of Default with respect to any series
of Debt Securities as being any one of the following events and such other
event as may be established for the Debt Securities of a particular
series: (a) default for 30 days in any payment of interest on such
series; (b) default in any payment of principal, and premium, if any, on
such series; (c) default in the payment of any sinking fund instalment on
such series; (d) default for 60 days after appropriate notice in
performance of any other covenant in the Indenture; (e) failure to pay any
obligation for borrowed money of, or guaranteed by, the Company when due
by reason of acceleration or otherwise, the grace period, if any, provided
with respect thereto shall have elapsed or any security therefor shall
have become enforceable, and, the aggregate due but unpaid amount of all
such obligations shall be in excess of $10,000,000, and within 30 days
after receipt of notice by the Company from the Trustee or by the Company
and the Trustee from the Holders of 25% in principal amount of all the
Debt Securities at the time Outstanding of any such acceleration or
failure to pay or accrual of such right of enforcement, such acceleration
or failure to pay shall not have been rescinded, annulled or cured or such
right of enforcement shall not have been terminated; or (f) certain events
involving bankruptcy, insolvency or reorganization. No Event of Default
with respect to a particular series of Debt Securities issued under the
Indenture necessarily constitutes an Event of Default with respect to any
other series of Debt Securities issued thereunder. (Section 501 of Senior
Indenture, and Section 5.1 of Subordinated Indenture) The Company is
required to file with the Trustee annually an Officer's Certificate
indicating whether the Company is in default under the Indenture.
(Section 1008 of Senior Indenture, and Section 10.8 of Subordinated
Indenture)

The Indenture provides that if an Event of Default specified therein
or established for the Debt Securities of any particular series shall
occur and be continuing with respect to any series of Debt Securities,
either the Trustee or the Holders of 25% in principal amount of the Debt
Securities of such series (in the case of defaults under clauses (d), (e)
and (f) above, the Holders of 25% in principal amount of all the Debt
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Securities) then outstanding may declare the principal (or in the case of
Original Issue Discount Securities, such portion of the principal amount
thereof as may be specified in the terms thereof) of and all accrued but
unpaid interest on the Debt Securities of such series (or of all the Debt
Securities, as the case may be) to be due and payable. At any time after
a declaration of acceleration with respect to Debt Securities of any
series (or all of the Debt Securities, in case of a default described in
clauses (d), (e) or (f) above) has been made, but before a judgment or
decree based on acceleration has been obtained, the Holders of a majority
in aggregate principal amount of Outstanding Debt Securities of that
series (or Holders of a majority in aggregate principal amount of all of
the Outstanding Debt Securities, in case of a default described in clauses
(d), (e) or (f) above) may, under certain circumstances, rescind and annul
such acceleration. (Section 502 of Senior Indenture, and Section 5.2 of
Subordinated Indenture) In certain cases, the Holders of a majority in
principal amount of the outstanding Debt Securities of any series (or in
the case of defaults under clauses (d), (e) and (f) above, the Holders of
a majority in principal amount of all the Debt Securities) may on behalf
of the Holders of all the Debt Securities of any such series (or of all
the Debt Securities, as the case may be) and any related coupons waive
any past default or event of default except a default not theretofore
cured in payment of the principal of or premium, if any, or interest on
any of the Debt Securities of such series (or of all the Debt Securities,
as the case may be) and any related coupons. (Section 513 of Senior
Indenture, and Section 5.13 of Subordinated Indenture)

The Indenture contains a provision entitling the Trustee, subject to
the duty of the Trustee during default to act with the required standard
of care, to be indemnified by the Holders of the Debt Securities of any
series or any related coupons before proceeding to exercise any right or
power under the Indenture with respect to such series at the request of
such Holders. (Section 603 of Senior Indenture, and Section 6.3 of
Subordinated Indenture) The Indenture provides that no Holder of any Debt
Securities of any series or any related coupons may institute any
proceeding, judicial or otherwise, to enforce such Indenture, except among
other things, where the Trustee has, for 60 days after it is given notice
of default, failed to act, and where there has been both a request to
enforce such Indenture by the Holders of not less than 25% in aggregate
principal amount of the then outstanding Debt Securities of such series
and an offer of reasonable indemnity to the Trustee. (Section 507 of
Senior Indenture, and Section 5.7 of Subordinated Indenture) This
provision will not prevent any Holder of Debt Securities or any related
coupons from enforcing payment of the principal thereof and premium, if
any, and interest thereon at the respective due dates thereof. (Section
508 of Senior Indenture, and Section 5.8 of Subordinated Indenture) The
Holders of a majority in aggregate principal amount of the Debt Securities
of any series then outstanding may direct the time, method and place of
conducting any proceedings for any remedy available to the Trustee or
exercising any trust or power conferred on it with respect to the Debt
Securities of such series. (Section 512 of Senior Indenture, and Section
5.12 of Subordinated Indenture)

The Indenture provides that the Trustee will, within 90 days after the
occurrence of a default with respect to any series of Debt Securities
known to it, give to the Holders of Debt Securities of such series notice
of such default if not cured or waived, but, except in the case of a
default in the payment of principal of (or premium, if any), or interest
on, any Debt Securities, the Trustee shall be protected in withholding
such notice if it determines in good faith that the withholding of such
notice is in the interests of the Holders of such Debt Securities.
(Section 602 of Senior Indenture, and Section 6.2 of Subordinated
Indenture)

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Consolidation, Merger and Sale of Assets

The Company, without the consent of the Holders of any of the
Outstanding Debt Securities under the Indenture, may consolidate with or
merge into, or transfer or lease its assets substantially as an entirety
to, any Person which is a corporation, partnership or trust organized and
validly existing under the laws of any domestic jurisdiction, or may
permit any such Person to consolidate with or merge into the Company or
convey, transfer or lease its properties and assets substantially as an
entirety to the Company, provided that any successor Person assumes the
Company's obligations on the Debt Securities and under the Indenture, that
after giving effect to the transaction no Event of Default, and no event
which, after notice or lapse of time, would become an Event of Default,
shall have occurred and be continuing, and that certain other conditions
are met. (Section 801 of Senior Indenture, and Section 8.1 of
Subordinated Indenture)

There are no provisions of the Indenture which afford holders of the
Debt Securities protection in the event of a highly leveraged transaction
involving the Company. However, such a transaction would require
regulatory approval and management of the Company believes that such
approval would be unlikely in a highly leveraged context.

Discharge and Defeasance

The Indenture provides that the Company may specify that, with respect
to the Debt Securities of a certain series, it will be discharged from any
and all obligations in respect of such Debt Securities (except for certain
obligations to register the transfer or exchange of Debt Securities, to
replace stolen, lost or mutilated Debt Securities, to maintain paying
agencies and hold monies for payment in trust and, if so specified with
respect to the Debt Securities of a certain series, to pay the principal
of (and premium, if any) and interest, if any, on such specified Debt
Securities) upon the irrevocable deposit with the Trustee, in trust, of
money and/or Government Obligations which through the payment of interest
and principal thereof in accordance with their terms will provide money
in an amount sufficient to pay any instalment of principal (and premium,
if any) and interest, if any, on and any mandatory sinking fund payments
in respect of such Debt Securities on the stated maturity of such payments
in accordance with the terms of the Indenture and such Debt Securities.
If so specified with respect to the Debt Securities of a series, such a
trust may only be established if establishment of the trust would not
cause the Debt Securities of any such series listed on any nationally
recognized securities exchange to be de-listed as a result thereof. Also,
if so specified with respect to a series of Debt Securities, such
establishment of such a trust may be conditioned on the delivery by the
Company to the Trustee of an Opinion of Counsel (who may be counsel to the
Company) to the effect that, based upon applicable United States Federal
income tax law or a ruling published by the United States Internal Revenue
Service, such a defeasance and discharge will not be deemed, or result
in, a taxable event with respect to Holders of such Debt Securities.
(Section 1301 of Senior Indenture, and Section 13.1 of Subordinated
Indenture)

Subordination

Unless otherwise provided in the Prospectus Supplement (and indicated
in a Board Resolution, Officer's Certificate or any supplemental indenture
with respect to Offered Debt Securities under the Subordinated Indenture),
the Debt Securities issued pursuant to the Subordinated Indenture will
have the subordination provisions as set forth under this caption
"Subordination". The Subordinated Indenture provides that the Debt
Securities issued thereunder (the "Subordinated Debt Securities") are
subordinate and junior in right of payment to all Senior Indebtedness (as
defined below) of the Company as provided in the Indenture. No payment
of principal of (including redemption and sinking fund payments), or
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premium, if any, or interest on, the Subordinated Debt Securities may be
made if any Senior Indebtedness is not paid when due, any applicable grace
period with respect to such default has ended and such default has not
been cured or waived, or if the maturity of any Senior Indebtedness has
been accelerated because of a default. Upon any payment by the Company
or any distribution of assets of the Company to creditors upon any
dissolution, winding-up, liquidation or reorganization, whether voluntary
or involuntary or in bankruptcy, insolvency, receivership or other
proceedings, all principal of and premium, if any, and interest due on or
to become due on, all Senior Indebtedness must be paid in full before the
holders of the Subordinated Debt Securities are entitled to receive or
retain any payment. The rights of the holders of the Subordinated Debt
Securities will be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions applicable to Senior
Indebtedness until all amounts owing on the Senior Indebtedness are paid
in full. (Sections 16.1 to 16.4 of the Subordinated Indenture)

The term "Senior Indebtedness" shall mean the principal of and premium,
if any, interest on and any other payment due pursuant to any of the
following, whether outstanding at the date of execution of the
Subordinated Indenture or thereafter incurred, created or assumed: (a)
all indebtedness of the Company evidenced by notes, debentures, bonds or
other securities sold by the Company for money; (b) all indebtedness of
others of the kinds described in the preceding clause (a) assumed by or
guaranteed in any manner by the Company or in effect guaranteed by the
Company; and (c) all renewals, extensions or refundings of indebtedness
of the kinds described in any of the preceding clause (a) and (b) unless,
in the case of any particular indebtedness, renewal, extension or
refunding, the instrument creating or evidencing the same or the
assumption or guarantee of the same expressly provides that such
indebtedness, renewal, extension or refunding is not superior in right of
payment to or is pari passu with the Subordinated Debt Securities.
(Section 1.1 of the Subordinated Indenture)

Concerning the Trustees

Harris Trust and Savings Bank acts as Trustee for the Company's First
and Refunding Mortgage Bonds. The Company maintains bank deposits with
Harris Trust and Savings Bank and intends to borrow money from such bank
from time to time.

The First National Bank of Chicago acts as Trustee for certain of the
Company's Pollution Control Bonds. The Company maintains bank deposits
with The First National Bank of Chicago and intends to borrow money from
such bank from time to time.

LIMITATIONS ON ISSUANCE OF BEARER SECURITIES

In compliance with United States Federal tax laws and regulations, in
general Bearer Securities may not be offered or sold during a restricted
period to a person within the United States or its possessions or to or
for the account or benefit of a United States person. However, subject
to certain restrictions and limitations, offers or sales may be made to
(i) the United States office of an international organization (as defined
in Section 7701(a) (18) of the United States Internal Revenue Code of
1986, as amended (the "Code") and the regulations thereunder), (ii) the
United States office of a foreign central bank (as defined in Section 895
of the Code and the regulations thereunder) and (iii) United States
persons that are (a) foreign branches of United States financial
institutions (as defined in United States Treasury Regulation Section
1.165-12(c)(1)(v) ("financial institutions")), which are purchasing for
their own account or for resale, or (b) persons that acquire and hold
Bearer Securities through a foreign branch of a U.S. financial
institution, and in either case, such financial institution agrees to
comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the
Code. Definitive Bearer Securities will not be delivered during the same
restricted period within the United States and will not be delivered in
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any event unless the beneficial owner of the Bearer Securities provides
the required certification as to non-United States beneficial ownership.
The restricted period for these purposes is the period beginning upon the
earlier of the issue date of any Bearer Securities or the date on which
such Bearer Securities are first offered and ending 40 days after such
issue date or later date in the case of any unsold original allotment or
subscription.

Bearer Securities will bear the following legend on their face and on
any interest coupons which may be detached therefrom or, if the obligation
is evidenced by a book entry, in the book of record in which the book
entry is made: "Any United States person who holds this obligation will
be subject to limitations under the United States income tax laws,
including the limitations provided in Sections 165(j) and 1287(a) of the
United States Internal Revenue Code". The Sections referred to in such
legend provide that a United States person who holds a Bearer Security
will not be allowed to deduct any loss realized on the sale, exchange or
redemption of such Bearer Security and any gain (which might otherwise be
characterized as capital gain) recognized on such sale, exchange or
redemption will be treated as ordinary income.

As used herein, "United States person" means an individual who is a
citizen or resident of the United States, a corporation, partnership or
other entity created or organized in or under the laws of the United
States or any political subdivision thereof, or any estate or trust the
income of which is subject to United States Federal income taxation
regardless of its source.

EXPERTS

The consolidated financial statements and related schedules of the
Company incorporated by reference in this Prospectus have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving
said reports.

VALIDITY OF DEBT SECURITIES

The validity of the Debt Securities will be passed upon for the Company
by Bryant C. Danner, Senior Vice President and General Counsel, or Kenneth
S. Stewart, Assistant General Counsel, of the Company, and for any
underwriters by Milbank, Tweed, Hadley & McCloy, 601 S. Figueroa Street,
Los Angeles, California 90017. As to matters governed by Arizona, Nevada
and New Mexico law, such counsel will rely upon opinions of Snell &
Wilmer, One Arizona Center, Phoenix, Arizona 85004, Jeppson & Lee, a
Nevada professional corporation, 100 West Liberty Street, Suite 990, Reno,
Nevada 89501, and Rodey, Dickason, Sloan, Akin & Robb, P.A., a New Mexico
professional corporation, 20 First Plaza, Suite 700, Albuquerque, New
Mexico 87103, respectively. As to all matters governed by New York law,
Mr. Danner or Mr. Stewart will rely upon the opinion of Milbank, Tweed,
Hadley & McCloy.

The statements of law and legal conclusions under the caption
"Regulation" in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1994, which is incorporated by reference in this
Prospectus, have been reviewed by Mr. Danner and Mr. Stewart and have been
incorporated by reference in this Prospectus upon the authority of such
counsel.

Mr. Danner and Mr. Stewart are salaried employees of the Company and
share in the benefits accruing to such employees. As of December 31,
1994, Mr. Danner and Mr. Stewart had a direct or indirect interest in
97,618 and 12,972 shares of SCEcorp's Common Stock, respectively. These
shares include those credited and conditionally credited to their accounts
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as of such date with the trustees of the Company's Employee Stock
Ownership and Stock Savings Plus Plans and with the agent for the
Company's Dividend Reinvestment and Stock Purchase Plan.

From time to time, Milbank, Tweed, Hadley & McCloy performs legal
services for the Company and its affiliates relating to special matters.

PLAN OF DISTRIBUTION

The Company may sell Debt Securities to or through underwriters or
dealers and also may sell Debt Securities directly to other purchasers or
through agents.

The distribution of the Debt Securities may be effected from time to
time in one or more transactions at a fixed price or prices, which may be
changed, or at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices.

In connection with the sale of Debt Securities, underwriters may
receive compensation from the Company or from purchasers of Debt
Securities for whom they may act as agents in the form of discounts,
concessions or commissions. Underwriters, dealers and agents that
participate in the distribution of Debt Securities may be deemed to be
underwriters, and any discounts or commissions received by them from the
Company and any profit on the resale of Debt Securities by them may be
deemed to be underwriting discounts and commissions under the Act. Any
such person who may be deemed to be an underwriter will be identified, and
any such compensation received from the Company will be described, in the
Prospectus Supplement.

The Debt Securities may or may not be listed on a national securities
exchange. There can be no assurance that there will be a market for the
Debt Securities.

Under agreements which may be entered into by the Company,
underwriters, dealers and agents who participate in the distribution of
Debt Securities may be entitled to indemnification by the Company against
certain liabilities, including liabilities under the Act.

Each underwriter, dealer and agent participating in the distribution
of any Offered Debt Securities which are issuable in bearer form will
agree that it will not offer, sell or deliver Offered Debt Securities in
bearer form within the United States or to, or for the account or benefit
of, United States persons (other than qualifying financial institutions,
(i) until 40 days after the settlement date or (ii) at any time if the
obligation is held as part of an unsold allotment or subscription (the
"Restricted Period").

If so indicated in the Prospectus Supplement, the Company will
authorize underwriters or other persons acting as the Company's agents to
solicit offers by certain institutions to purchase Debt Securities from
the Company pursuant to contracts providing for payment and delivery on
a future date. Institutions with which such contracts may be made include
commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and others,
but in all cases such institutions must be approved by the Company. The
obligations of any purchaser under any such contract will be subject to
the condition that the purchase of the Offered Debt Securities shall not
at the time of delivery be prohibited under the laws of the jurisdiction
to which such purchaser is subject. The underwriters and such other
agents will not have any responsibility in respect of the validity or
performance of such contracts.
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PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution.

The following is a statement of estimated expenses in connection with
the issuance and distribution of the securities being registered, other
than underwriting discounts and commissions.

1. Registration Fee . . . . . . . . . . . . . . . . . . $ 206,898
2. California Public Utilities Commission . . . . . . . 306,000
3. Cost of Printing, Engraving and Freight. . . . . . . 50,000
4. Legal Fees and Expenses. . . . . . . . . . . . . . . 50,000
5. Accounting Fees. . . . . . . . . . . . . . . . . . . 60,000
6. Trustee Fees . . . . . . . . . . . . . . . . . . . . 30,000
7. Blue Sky Expenses. . . . . . . . . . . . . . . . . . 22,500
8. Rating Agency Fees . . . . . . . . . . . . . . . . . 260,000
9. Miscellaneous. . . . . . . . . . . . . . . . . . . . 29,602
----------
Total. . . . . . . . . . . . . . . . . . . . . . $1,015,000
==========

Item 15. Indemnification of Directors and Officers.

Pursuant to the California Corporations Code and Article VI of the
Company's Bylaws, directors, officers, employees and agents of the Company
may be indemnified by the Company in certain circumstances against
liabilities they incur while acting in such capacities.

The Company also maintains insurance for its officers and directors
against certain liabilities under the Securities Act of 1933, as amended
(the "Act"), under insurance policies, the premiums for which are paid by
the Company.

Item 16. Exhibits.

Exhibit
Number Description

1.1 Form of Underwriting Agreement with respect to Debt Securities
issued under the Senior Indenture (the "Senior Debt Securities")*

1.2 Form of Underwriting Agreement with respect to Subordinated Debt
Securities

4.1 Form of Indenture between the Company and Harris Trust and
Savings Bank, as Trustee, relating to the Senior Debt Securities*

4.2 Form of Indenture between the Company and The First National Bank
of Chicago, as Trustee, relating to the Subordinated Debt
Securities

4.3 Form of Senior Debt Security (included in Exhibit 4.1)

4.4 Form of Subordinated Debt Security (included in Exhibit 4.2)

5. Opinion of Counsel as to Legality of Securities Being Registered

12. Ratio of Earnings to Fixed Charges (Form 10-K dated December 31,
1994, File No. 1-2313)**

II-1
<PAGE>
<PAGE>
23.1 Consents of Bryant C. Danner and Kenneth S. Stewart, Southern
California Edison Company

23.2 Consent of Arthur Andersen LLP

24.1 Power of Attorney

24.2 Certified Copy of Resolution of Board of Directors Authorizing
Signature

25.1 Form T-1 Statement of Eligibility under Trust Indenture Act of
1939 of Harris Trust Company*

25.2 Form T-1 Statement of Eligibility under the Trust Indenture Act
of 1939 of The First National Bank of Chicago

27 Financial Data Schedule (Form 10-K dated December 31, 1994, File No.
1-2313)**
________________
* Incorporated by reference from Registration Statement No. 33-53290.
** Incorporated by reference pursuant to Rule 411.

Item 17. Undertakings.

The Company hereby undertakes:

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

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

(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information
set forth in the registration statement;

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

provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), that are incorporated by reference in the
registration statement;

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

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

(4) That, for purposes of determining any liability under the Act,
each filing of the Company's annual report pursuant to Section 13(a)
or Section 15(d) of the Exchange Act (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Exchange Act) that is incorporated by reference in the

II-2
<PAGE>
<PAGE>
Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof;

(5) That, in the event the securities are to be offered at
competitive bidding, (i) to use its best efforts to distribute prior
to the opening of bids, to prospective bidders, underwriters and
dealers, a reasonable number of copies of a prospectus which at that
time meets the requirements of Section 10(a) of the Act, and relating
to the securities offered at competitive bidding, as contained in the
registration statement, together with any supplements thereto, and (ii)
to file an amendment to the registration statement reflecting the
results of bidding, the terms of the reoffering and related matters to
the extent required by the applicable form, not later than the first
use, authorized by the issuer after the opening of bids, of a
prospectus relating to the securities offered at competitive bidding,
unless no further public offering of such securities by the issuer and
no reoffering of such securities by the purchasers is proposed to be
made;

(6) That, insofar as indemnification for liabilities arising under
the Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the provisions described in Item 15 above,
or otherwise, the Company has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Company of expenses incurred or paid by
a director, officer, or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted
against the Company by such director, officer or controlling person in
connection with the securities being registered, the Company 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;

(7) That, for purposes of determining any liability under the Act,
the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained
in a form of prospectus filed by the Company pursuant to Rule 424(b)(1)
or (4) or 497(h) under the Act shall be deemed to be part of this
registration statement as of the time it was declared effective; and

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

II-3
<PAGE>
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant duly certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Rosemead, State of
California on the 1st day of May, 1995.

SOUTHERN CALIFORNIA EDISON COMPANY

W. J. Scilacci
------------------------------------
(W. J. Scilacci,
Assistant Treasurer)

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 date indicated.

Signature Title Date
--------- ----- ----

Principal Executive Officer:
John E. Bryson* Chairman of the Board,May 1, 1995
Chief Executive
Officer and Director

Principal Financial Officer:
Alan J. Fohrer* Senior Vice President May 1, 1995
and Chief Financial
Officer

Controller or Principal
Accounting Officer:
Richard K. Bushey* Vice President and May 1, 1995
Controller

Majority of Board of Directors:
Howard P. Allen* Director May 1, 1995
Camilla C. Frost* Director May 1, 1995
Joan C. Hanley* Director May 1, 1995
Carl F. Huntsinger* Director May 1, 1995
Charles D. Miller* Director May 1, 1995
Luis G. Nogales* Director May 1, 1995
J. J. Pinola* Director May 1, 1995
James M. Rosser* Director May 1, 1995
E. L. Shannon, Jr.* Director May 1, 1995
Robert H. Smith* Director May 1, 1995
Daniel M. Tellep* Director May 1, 1995
James D. Watkins* Director May 1, 1995
Edward Zapanta* Director May 1, 1995

* W. J. Scilacci
---------------------------------
(W. J. Scilacci, Attorney-in-Fact)

II-4

<PAGE>
<PAGE>
Exhibit 1.1
SOUTHERN CALIFORNIA EDISON COMPANY

UNDERWRITING AGREEMENT

SUBORDINATED DEBT SECURITIES

To the Representatives named
in Schedule I hereto
of the Underwriters named
in Schedule II hereto

Dear Sirs:

Southern California Edison Company, a California corporation (the
"Company"), proposes to sell to the underwriters named in Schedule II
hereto (the "Underwriters") for whom you are acting as representatives
(the "Representatives"), the principal amount of its securities identified
in Schedule I hereto (the "Securities"). The Securities will be issued
under an indenture, dated as of May 1, 1995 (the "Indenture"), between the
Company and The First National Bank of Chicago, as trustee (the
"Trustee"). If the firm or firms listed in Schedule II hereto include
only the firm or firms listed in Schedule I hereto, then the terms
"Underwriters" and "Representatives," as used herein, shall each be deemed
to refer to such firm or firms.

1. Representations and Warranties. The Company represents and
warrants to, and agrees with, each Underwriter that:

(a) The Company meets the requirements for use of Form S-3 under
the Securities Act of 1933 (the "Act") and has filed with the
Securities and Exchange Commission (the "Commission") a registration
statement on such Form (the file number of which is set forth in
Schedule I hereto), which has become effective, for the registration
under the Act of the Securities. Such registration statement, as
amended at the date of this Agreement, meets the requirements set
forth in Rule 415(a)(1)(x) under the Act and complies in all other
material respects with said Rule. The Company proposes to file with
the Commission pursuant to Rule 424(b) under the Act an amendment and
supplement to the form of Prospectus included in such Registration
Statement relating to the Securities and the plan of distribution
thereof and has previously advised the Representatives of all further
information (financial and other) with respect to the Company to be
set forth therein. Such registration statement, including the
exhibits thereto, as amended at the date of this Agreement, is
hereinafter called the "Registration Statement"; such prospectus in
the form in which it appears in the Registration Statement is
hereinafter called the "Basic Prospectus"; and such supplemented form
of prospectus, in the form in which it shall be filed with the
Commission pursuant to Rule 424(b) (including the Basic Prospectus as
so amended and supplemented) is hereinafter called the "Final
Prospectus". Any preliminary form of the Final Prospectus which has
heretofore been filed pursuant to Rule 424(b) is hereinafter called
the "Preliminary Final Prospectus". Any reference herein to the
Registration Statement, the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 which were filed under the Securities Exchange Act
of 1934 (the "Exchange Act") on or before the date of this Agreement,
or the issue date of the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus, as the case may be; and any
reference herein to the terms "amend", "amendment" or "supplement"
<PAGE>
<PAGE>
with respect to the Registration Statement, the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus shall be deemed
to refer to and include the filing of any document under the Exchange
Act after the date of this Agreement, or the issue date of the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus,
as the case may be, deemed to be incorporated therein by reference.

(b) As of the date hereof, when the Final Prospectus is first
filed pursuant to Rule 424(b) under the Act, when, prior to the
Closing Date (as hereinafter defined), any amendment to the
Registration Statement becomes effective (including the filing of any
document incorporated by reference in the Registration Statement),
when any supplement to the Final Prospectus is filed with the
Commission and at the Closing Date, (i) the Registration Statement,
as amended as of any such time, and the Final Prospectus, as amended
or supplemented as of any such time, and the Indenture will comply in
all material respects with the applicable requirements of the Act, the
Trust Indenture Act of 1939 (the "Trust Indenture Act") and the
Exchange Act and the respective rules thereunder and (ii) neither the
Registration Statement, as amended as of any such time, nor the Final
Prospectus, as amended or supplemented as of any such time, will
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein not misleading; provided, however, that
the Company makes no representations or warranties as to (i) that part
of the Registration Statement which shall constitute the Statement of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act
of the Trustee or (ii) the information contained in or omitted from
the Registration Statement or the Final Prospectus or any amendment
thereof or supplement thereto in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter through the Representatives specifically for use in
connection with the preparation of the Registration Statement and the
Final Prospectus.

(c) Since the respective dates as of which information is given
in the Registration Statement and the Basic Prospectus, there has not been
any material adverse change, or any development involving a prospective
material adverse change, in or affecting the financial position,
stockholders' equity, business, properties or results of operations of the
Company and its subsidiaries, otherwise than as set forth or contemplated
in the Final Prospectus.

2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at the purchase
price set forth in Schedule I hereto the principal amount of the
Securities set forth opposite such Underwriter's name in Schedule II
hereto.

3. Delivery and Payment. Delivery of and payment for the Securities
shall be made at the office, on the date and at the time specified in
Schedule I hereto, which date and time may be postponed by agreement
between the Representatives and the Company or as provided in Section 9
hereof (such date and time of delivery and payment for the Securities
being herein called the "Closing Date"). Delivery of the Securities shall
be made to the Representatives for the respective accounts of the several
Underwriters through the Representatives against payment of the purchase
price thereof payable to the Company in the funds specified in Schedule
I hereto at the Company's General Office, 2244 Walnut Grove Avenue,
Rosemead, California 91770, as provided in Schedule I hereto.
<PAGE>
Certificates for the Securities shall be registered in such names and in
such denominations as the Representatives may request not less than three
full business days in advance of the Closing Date.

The Company agrees to have the Securities available for inspection,
checking and packaging by the Representatives in New York, New York, not
later than 3:00 PM, New York time, on the business day prior to the
Closing Date.

4. Agreements. The Company agrees with the several Underwriters
that:

(a) Prior to the termination of the offering of the Securities,
the Company will not file any amendment of the Registration Statement
or amendment or supplement (including the Final Prospectus) to the
Basic Prospectus unless the Company has furnished the Representatives
a copy for the Representatives' review prior to filing and will not
file any such proposed amendment or supplement to which the
Representatives reasonably object. Subject to the foregoing sentence,
the Company will cause the Final Prospectus to be filed with the
Commission in accordance with the requirements of Rule 424(b). The
Company will promptly advise the Representatives (i) when the Final
Prospectus shall have been filed with the Commission pursuant to Rule
424(b), (ii) when any amendment to the Registration Statement relating
to the Securities shall have become effective, (iii) of any request
by the Commission for any amendment of the Registration Statement or
amendment of or supplement to the Final Prospectus or for any
additional information, (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement
or the institution or threatening of any proceeding for that purpose
and (v) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding
for such purpose. The Company will use every reasonable effort to
prevent the issuance of any such stop order and, if issued, to obtain
as soon as possible the withdrawal thereof.

(b) If, at any time when a prospectus relating to the Securities
is required to be delivered under the Act, any event occurs as a
result of which the Final Prospectus as then amended or supplemented
would include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein in
the light of the circumstances under which they were made not
misleading, or if it shall be necessary to amend or supplement the
Final Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Company promptly will prepare and
file with the Commission, subject to the first sentence of paragraph
(a) of this Section 4, an amendment or supplement which will correct
such statement or omission or an amendment which will effect such
compliance.

(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an
earnings statement or statements of the Company which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act.

(d) The Company will furnish to the Representatives and counsel
for the Underwriters, without charge, copies of the Registration
Statement (including exhibits thereto) and each amendment thereto
which shall become effective on or prior to the Closing Date and, so
long as delivery of a prospectus by an Underwriter or dealer may be
required by the Act, as many copies of any Preliminary Final
<PAGE>
Prospectus and the Prospectus and any amendments thereof and
supplements thereto as the Representatives may reasonably request.
The Company will pay the expenses of printing all documents relating
to the offering.

(e) The Company agrees to use its best efforts to qualify the
Securities and to assist in the qualification of the Securities by or
on behalf of the Representatives or of any of one or more of the
several Underwriters for sale under the laws of such States as the
Representatives may designate, to maintain such qualifications in
effect so long as required for the distribution of the Securities and
to assist in the determination of the legality of the Securities for
purchase by institutional investors under the laws of such States as
the Representatives may designate; provided that the Company shall not
be required to qualify as a foreign corporation in any State, or to
consent to service of process in any State other than with respect to
claims arising out of the offering or sale of the Securities.

(f) Until the business day following the Closing Date, the
Company will not, without the consent of the Representatives, offer,
sell or contract to sell, or announce the offering of, any debt
securities (i) covered by the Registration Statement or any other
registration statement filed under the Act or (ii) to purchasers for
resale in reliance on the exemption from registration under the Act
provided by Rule 144A under the Act.

5. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Securities shall be
subject to the accuracy of the representations and warranties on the part
of the Company contained herein as of the date hereof, as of the date of
the effectiveness of any amendment to the Registration Statement filed
prior to the Closing Date (including the filing of any document
incorporated by reference therein) and as of the Closing Date, to the
accuracy of the statements of the Company made in any certificates
pursuant to the provisions hereof, to the performance by the Company of
its obligations hereunder and to the following additional conditions:

(a) No stop order suspending the effectiveness of the
Registration Statement, as amended from time to time, shall have been
issued and no proceedings for that purpose shall have been instituted
or threatened; and the Final Prospectus shall have been filed with the
Commission in accordance with the requirements of Rule 424(b).

(b) At or before the Closing Date, the Public Utilities
Commission of the State of California and any other regulatory
authority whose consent or approval shall be required for the issue
and sale of the Securities by the Company as herein provided shall
have entered an order or orders authorizing the issue and sale of the
Securities by the Company on the terms set forth in the Final
Prospectus and herein, and at the Closing Date such order or orders
shall be in full force and effect.

(c) At the Closing Date, the Representatives shall have received
the written opinion, dated the Closing Date, of Bryant C. Danner,
Senior Vice President and General Counsel, or Kenneth S. Stewart,
Assistant General Counsel of the Company, to the effect that:

(i) The Company is a corporation validly organized and
existing in good standing under the laws of the State of
California; the Company has full corporate power to own its
properties and conduct its business as now being conducted; and
the Company is duly qualified and in good standing as a foreign
<PAGE>
corporation under the laws of the States of Arizona, Nevada, New
Mexico and Utah;

(ii) The Indenture has been duly authorized, executed and
delivered, is qualified under the Trust Indenture Act, and is a
legally valid and binding instrument, enforceable in accordance
with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws
or equitable principles relating to or limiting creditors' rights
generally;

(iii) The Securities have been duly authorized and, when
executed, authenticated, issued and delivered against payment
therefor in accordance with the Indenture and this Agreement,
will constitute legally valid and binding obligations of the
Company entitled to the benefits provided by the Indenture and
enforceable against the Company in accordance with their terms,
subject, as to enforcement, to the matters set forth in clause
(ii) above and the Securities and the Indenture conform to the
description in the Final Prospectus;

(iv) The Registration Statement has become effective under
the Act, and, to the best of the knowledge of such counsel: no
stop order suspending the effectiveness of the Registration
Statement or of any part thereof has been issued and no
proceedings for that purpose have been instituted or are pending
or contemplated under the Act; the Registration Statement and the
Final Prospectus, and each amendment or supplement thereto, if
any, as of their respective effective or issue dates, complied
as to form in all material respects with the requirements of the
Act and the Trust Indenture Act, and the applicable published
rules and regulations of the Commission thereunder and no facts
have come to his attention which lead him to believe that the
Registration Statement or the Final Prospectus, or any amendment
or supplement thereto, as of their respective effective or issue
dates, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, or
that the Final Prospectus, at the Closing Date, contained any
untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not
misleading; the documents incorporated by reference in the Final
Prospectus, when they became effective or were filed with the
Commission, as the case may be, complied as to form in all
material respects with the requirements of the Act or the
Exchange Act, as applicable, and the applicable published rules
and regulations of the Commission thereunder; the descriptions
in the Registration Statement and the Final Prospectus of federal
and state statutes, legal and governmental proceedings and
contracts and other documents are accurate and fairly present the
information required to be shown; and he does not know of any
legal or governmental proceedings required to be described in the
Final Prospectus, which are not described as required or of any
contracts or documents of a character required to be described
in the Registration Statement or the Final Prospectus or to be
filed as exhibits to the Registration Statement which are not
described and filed as required; it being understood that such
counsel need not pass upon the financial statements and other
financial data contained in the Registration Statement or the
Final Prospectus;
<PAGE>
(v) All legally required proceedings in connection with
the authorization of the Securities, the issue and sale of the
Securities by the Company pursuant hereto and the authorization
of the transactions related to such authorization, issue and
sale, and all such approvals, authorizations, consents or other
orders of such public boards of bodies, if any, as may be legally
required with respect to all or any of such matters, have been
had or obtained, except that the offer and sale of the Securities
in certain jurisdictions may be subject to the provisions of the
securities or Blue Sky laws of such jurisdictions;

(vi) The execution, delivery and performance of the
Indenture and this Agreement, the issuance and sale of the
Securities, and compliance with the terms and provisions hereof
or thereof, will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, the
charter or bylaws of the Company, or, to his knowledge, any
statute, rule, regulation or order of any governmental agency
or body or any court having jurisdiction over the Company or its
subsidiaries or any of its properties or any agreement or
instrument to which the Company or any such subsidiary is a party
or by which the Company or any such subsidiary is bound or to
which any of the properties of the Company or any such subsidiary
is subject; and

(vii) This Agreement has been duly authorized, executed and
delivered by the Company.

In rendering the opinion called for above, Mr. Danner or Mr. Stewart,
as the case may be, may rely upon appropriate certificates of public
officials and officers or employees of the Company and the Trustee as to
factual matters and upon opinions, dated the Closing Date, of Snell &
Wilmer, Phoenix, Arizona, as to legal conclusions affected by the law of
Arizona, upon opinions, dated the Closing Date, of Jeppson & Lee, a Nevada
professional corporation, Reno, Nevada as to legal conclusions affected
by the law of Nevada and upon opinions, dated the Closing Date, of Rodey,
Dickason, Sloan, Akin & Robb, P.A., a New Mexico professional corporation,
Albuquerque, New Mexico, as to legal conclusions affected by the law of
New Mexico and (with regard to the interest of the Company and the rights
of the Trustee in the New Mexico Generating Station and the easement and
lease therefor) the laws of the United States and The Navajo Tribe of
Indians, provided that he shall state that he believes that both he and
the Representatives are justified in relying upon such certificates and
opinions. As to all matters governed by New York law, Mr. Danner or Mr.
Stewart, as the case may be, will rely upon the opinion of Milbank, Tweed,
Hadley & McCloy.

In rendering the opinion called for by clauses (ii) and (iii) above,
Mr. Danner or Mr. Stewart, as the case may be, may state that he is
expressing no opinion as to the availability of equitable remedies and may
advise that a California court may not strictly enforce certain covenants
of the Indenture or the Securities or allow acceleration of the due date
of the Securities if it concludes that such enforcement or acceleration
would be unreasonable under the then existing circumstances, although, in
his opinion, acceleration would be available if an event of default occurs
as a result of a material breach of a material covenant contained in the
Indenture or the Securities.

(d) The Representatives shall have received from Milbank, Tweed,
Hadley & McCloy, counsel for the Underwriters, such opinion or
opinions, dated the Closing Date, with respect to the issuance and
sale of the Securities, the Indenture, the Registration Statement, the
<PAGE>
Final Prospectus and other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling
them to pass upon such matters.

(e) The Representatives shall have received certificates of the
Chairman of the Board, the President or any Vice President of the
Company, dated the Closing Date, to the effect that the signer of such
certificate has carefully examined the Registration Statement, the
Final Prospectus and this Agreement and that to the best of his
knowledge after reasonable investigation:

(i) the representations and warranties of the Company in
this Agreement are true and correct in all material respects on
and as of the Closing Date with the same effect as if made on the
Closing Date and the Company has complied with all the agreements
and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date;

(ii) no stop order suspending the effectiveness of the
Registration Statement, as amended, has been issued and no
proceedings for that purpose have been instituted or, to the
Company's knowledge, threatened; and

(iii) since the date of the most recent financial statements
included in the Final Prospectus, there has been no material
adverse change in the financial condition or results of
operations of the Company, except as set forth in or contemplated
in the Final Prospectus or as described in such certificate.

(f) At the Closing Date, Arthur Andersen LLP shall have
furnished to the Representatives a letter or letters (which may refer
to letters previously delivered to one or more of the Representatives)
dated as of the Closing Date, in form and substance satisfactory to
the Representatives, confirming that they are independent accountants
with respect to the Company within the meaning of the Act and the
Exchange Act and the respective applicable published rules and
regulations thereunder, and stating in effect that:

(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated in the
Registration Statement and the Final Prospectus and reported on
by them comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange
Act and the related published rules and regulations;

(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Company; carrying out
certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) which
would not necessarily reveal matters of significance with respect
to the comments set forth in such letter; a reading of the
minutes of the meetings of the stockholders, directors and
executive committee of the Company; and inquiries of certain
officials of the Company who have responsibility for financial
and accounting matters of the Company as to transactions and
events subsequent to the date of the most recent audited
financial statements incorporated in the Registration Statement
and the Final Prospectus, nothing came to their attention which
caused them to believe that:
<PAGE>
<PAGE>
(1) any unaudited financial statements included
or incorporated in the Registration Statement and the Final
Prospectus do not comply as to form in all material respects
with applicable accounting requirements and with the
published rules and regulations of the Commission with
respect to financial statements included or incorporated in
quarterly reports on Form 10-Q of the Company under the
Exchange Act; and said unaudited financial statements are
not fairly presented (except as permitted by Form 10-Q) in
conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the
audited financial statements included or incorporated in the
Registration Statement and the Final Prospectus; or

(2) with respect to the period subsequent to the
date of the most recent financial statements incorporated
in the Registration Statement and the Final Prospectus,
there were any decreases, at the date of the latest
available unaudited financial statements prepared by the
Company, in the stockholders' equity of the Company or any
changes, at a specified date not more than five business
days prior to the date of the letter, in the long-term debt
or capital stock of the Company (other than changes
resulting from conversions of outstanding securities,
drawdowns of and earnings on funds held in trust in
connection with pollution control bonds and issuances of
stock under existing stock plans) as compared with the
amounts shown on the most recent consolidated balance sheet
included or incorporated in the Registration Statement and
the Final Prospectus, or for the period from the date of the
most recent financial statements incorporated in the
Registration Statement and the Final Prospectus to the date
of the latest available unaudited financial statements
prepared by the Company there were any decreases, as
compared with the corresponding period in the preceding
year, in total operating revenues or net income, except in
all instances for changes or decreases set forth in such
letter, in which case the letter shall be accompanied by an
explanation by the Company as to the significance thereof
unless said explanation is not deemed necessary by the
Representatives; and

(iii) they have performed certain other specified procedures
as a result of which they determined that certain information of
an accounting, financial or statistical nature (which is limited
to accounting, financial or statistical information derived from
the general accounting records of the Company) set forth in the
Registration Statement, as amended, and the Final Prospectus, as
amended or supplemented, including the information included or
incorporated in Items 1, 2, 6, 7 and 11 of the Company's annual
report on Form 10-K incorporated therein or in "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" included or incorporated in any of the Company's
quarterly reports on Form 10-Q incorporated therein, agrees with
the accounting records of the Company and its subsidiaries,
excluding any questions of legal interpretation.

At the Closing Date, Arthur Andersen LLP shall have furnished to the
Representatives a letter or letters, in form and substance satisfactory
to the Representatives, to the effect set forth in the introductory
paragraph to this paragraph (f), in subparagraphs (i) and (ii) (1) above
and, to the extent referring to information contained in Exchange Act
<PAGE>
reports incorporated in the Registration Statement and the Final
Prospectus, in subparagraph (iii) above.

(g) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Final Prospectus, there
shall not have been (i) any material adverse change described in the
certificate referred to in paragraph (e) of this Section 5, (ii) any
change or decrease specified in the letter or letters referred to in
paragraph (f) of this Section 5 or (iii) any change, or any
development involving a prospective change, in or affecting the
financial position, stockholders' equity, business or properties of
the Company and its subsidiaries the effect of which, in any case
referred to in clause (i), (ii) or (iii) above, is, in the judgment
of the Representatives, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or the
delivery of the Securities as contemplated by the Registration
Statement and the Final Prospectus.

(h) Subsequent to the execution of this Agreement, there shall
not have been any decrease in the ratings of any of the Company's debt
securities by Moody's Investors Service, Inc. or Standard & Poor's
Corporation.

(i) At or prior to the Closing Date, the Company shall have
furnished to the Representatives such further information,
certificates and documents as the Representatives may reasonably
request and such additional opinions and letters as are provided for
in Schedule I.

If any of the conditions specified in this Section 5 shall not have
been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects
reasonably satisfactory in form and substance to the Representatives, this
Agreement and all obligations of the Underwriters hereunder may be
cancelled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the
Company in writing or by telephone confirmed in writing.

6. Conditions to the Obligations of the Company. The obligations
of the Company to sell and deliver the Securities shall be subject to the
condition that, at or before the Closing Date, the Public Utilities
Commission of the State of California and any other regulatory authority
whose consent or approval shall be required for the issue and sale of the
Securities to the Underwriters as herein provided shall have entered an
order or orders authorizing the issue and sale of the Securities on the
terms set forth in the Final Prospectus and herein, and at the Closing
Date such order or orders shall be in full force and effect.

If the condition specified in this Section 6 shall not have been
fulfilled when and as provided in this Agreement, this Agreement and all
obligations of the Company hereunder, except for the Company's obligations
under Sections 7 and 8 hereunder, may be cancelled at, or at any time
prior to, the Closing Date. Notice of such cancellation shall be given
to the Representatives in writing or by telephone confirmed in writing.

7. Reimbursement of Underwriters' Expenses. The Company will pay
all expenses incident to the performance of its obligations under this
Agreement and will reimburse the Underwriters for any expenses incurred
by them in connection with qualification of the Securities for sale and
determination of their eligibility for investment under the laws of such
jurisdictions as the Representatives may designate (including reasonable
<PAGE>
<PAGE>
fees, and disbursements of counsel incurred in connection with such
qualification and determination of eligibility) and the printing of
memoranda relating thereto, for any fees charged by investment rating
agencies for the rating of the Securities, for any filing fee of the
National Association of Securities Dealers, Inc. relating to the
Securities and for expenses incurred in distributing the Prospectus and
all supplements thereto, any preliminary prospectuses and any preliminary
prospectus supplements to each Underwriter. If the sale of the Securities
provided for herein is not consummated because (i) any condition to the
obligations of the Underwriters set forth in Section 5 hereof is not
satisfied, (ii) any condition to the obligations of the Company set forth
in Section 6 hereof is not satisfied, (iii) this Agreement is terminated
pursuant to Section 10 hereof or (iv) the Company refuses, is unable or
fails to perform any agreement herein or comply with any provision hereof
other than by reason of a default by any of the Underwriters, the Company
will reimburse the Underwriters severally upon demand for all out-of-
pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them in connection with the proposed
purchase and sale of the Securities.

8. Indemnification and Contribution.

(a) The Company agrees to indemnify and each person who controls
any Underwriter within the meaning of either the Act or the Exchange
Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the
Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (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 the registration statement
for the registration of the Securities as originally filed or in any
amendment thereof, or in the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus, 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 not
misleading, and agrees periodically to reimburse each such indemnified
party for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that (i) the Company
will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon 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 any
Underwriter through the Representatives specifically for use therein,
and (ii) such indemnity with respect to the Basic Prospectus or any
Preliminary Final Prospectus shall not inure to the benefit of any
Underwriter (or any person controlling such Underwriter) from whom the
person asserting any such loss, claim, damage or liability purchased
the Securities which are the subject thereof if such person did not
receive a copy of the Final Prospectus (or the Final Prospectus as
amended or supplemented) excluding documents incorporated therein by
reference at or prior to the confirmation of the sale of such
Securities to such person in any case where such delivery is required
by the Act and the untrue statement or omission of a material fact
contained in the Basic Prospectus or any Preliminary Final Prospectus
was corrected in the Final Prospectus (or the Final Prospectus as
amended or supplemented). This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
<PAGE>
<PAGE>
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who
signs the Registration Statement, and each person who controls the
Company within the meaning of either the Act or the Exchange Act, to
the same extent as the foregoing indemnity from the Company to each
Underwriter, but only with reference to written information relating
to such Underwriter furnished to the Company by or on behalf of such
Underwriter through the Representatives specifically for use in the
preparation of the documents referred to in the foregoing indemnity.
This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have. The Company acknowledges that the
statements set forth in the second sentence of the second paragraph
under the heading "Underwriting" in the Final Prospectus constitute
the only information furnished in writing by or on behalf of the
several Underwriters for inclusion in the documents referred to in the
foregoing indemnity, and you, as the Representatives, confirm that
such statements are correct.

(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) of notice of the commencement of any action,
such indemnified party will, if a claim in respect thereof is to be
made against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise
than under such subsection. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party
of the commencement thereof, the indemnifying party will be entitled
to participate therein, and to the extent that 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 satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include
both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be
legal defenses available to it and/or other indemnified parties which
are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the
right to select separate counsel to assert such legal defenses and
to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to
assume the defense of such action and approval by the indemnified
party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof unless (i) the indemnified party shall have employed
separate counsel in connection with the assertion of legal defenses
in accordance with the proviso to the next preceding sentence (it
being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel, approved
by the Representatives in the case of paragraph (a) of this Section
8, representing the indemnified parties under such paragraph (a) who
are parties to such action), (ii) the indemnifying party shall not
have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice
of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party; and except that, if clause (i) or
(iii) is applicable, such liability shall be only in respect of the
counsel referred to in such clause (i) or (iii). No indemnifying
party shall, without the written consent of the indemnified party,
<PAGE>
<PAGE>
effect the settlement or compromise of, or consent to the entry of
any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified party is an actual
or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the
indemnified party from all liability arising out of such action or
claim and (ii) does not include a statement as to or an admission of
fault, culpability or a failure to act, by or on behalf of any
indemnified party. Each indemnified party agrees promptly to notify
each indemnifying party of the commencement of any litigation or
proceedings against it in connection with the issue and sale of the
Securities.

(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph
(a) or (b) of this Section 8 is unavailable to or insufficient to hold
harmless an indemnified party under subsection (a) or (b) above in
respect of any losses, claims, damages or liabilities referred to
therein, the Company on the one hand and the Underwriters on the other
hand shall contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) to which the Company
and one or more of the Underwriters may be subject (i) in such
proportion so that the Underwriters are responsible for that portion
represented by the percentage that the underwriting discount bears to
the sum of such discount and the purchase price of the Securities
specified in Schedule I hereto and the Company is responsible for the
balance or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect the relative benefit represented by the percentage that the
underwriting discount bears to the sum of such discount and the
purchase price for the Securities referred to in clause (i) above, but
also the relative fault of the Company on the one hand and the
Underwriters on the other in connection with the statements or
omissions which resulted in such loss, claim, damage or liability as
well as any other relevant equitable considerations. The relative
fault of the Company and the Underwriters 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
or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Underwriters agree
that it would not be just and equitable if contribution pursuant to
this subsection (d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by
any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d).
Notwithstanding anything in this subsection (d) to the contrary, (x)
in no case shall any Underwriter (except as may be provided in any
agreement among underwriters relating to the offering of the
Securities) be responsible for any amount in excess of the
underwriting discount applicable to the Securities purchased by such
Underwriter hereunder and (y) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. For purposes of this Section
8, each person who controls an Underwriter within the meaning of the
Act shall have the same rights to contribution as the Underwriter, and
each person who controls the Company within the meaning of either the
<PAGE>
<PAGE>
Act or the Exchange Act, each officer of either of the Company who
shall have signed the Registration Statement and each director of the
Company shall have the same rights to contribution as the Company,
subject in each case to clause (x) of this paragraph (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 paragraph (d), notify such party or
parties from whom contribution may be sought, but the omission 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 paragraph (d), except to the extent that the party
or parties from whom contribution may be sought was prejudiced by the
failure to so notify. No party shall be liable for contribution with
respect to any action or claim settled without its consent. The
Underwriters' obligations in this subsection (d) to contribute are
several in proportion to their respective underwriting obligation and
not joint.

9. Default by an Underwriter.

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

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

<PAGE>
<PAGE>
(c) If, after giving effect to any arrangements for the purchase
of the Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above,
the aggregate principal amount of Securities which remains unpurchased
exceeds one-eleventh of the aggregate principal amount of all the
Securities but does not exceed fifty percent of the aggregate
principal amount of all the Securities or if the Company shall not
exercise the right described in subsection (b) above to require non-
defaulting Underwriters to purchase Securities of a defaulting
Underwriter or Underwriters, then, at the Company's option, (i) this
Agreement shall thereupon terminate, without liability on the part of
any non-defaulting Underwriter or the Company, except for the expenses
to be borne by the Company and the Underwriters as provided in Section
7 hereof and the indemnity and contribution agreements in Section 8
hereof, or (ii) the Company shall have the right to require each non-
defaulting Underwriter to purchase the principal amount of Securities
which such non-defaulting Underwriter agreed to purchase hereunder.
Notwithstanding the foregoing, nothing contained in this Section 9(c)
shall relieve a defaulting Underwriter from liability for its default.

(d) If, after giving effect to any arrangements for the purchase
of the Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above,
the aggregate principal amount of Securities which remains unpurchased
exceeds fifty percent of the aggregate principal amount of all the
Securities, then this Agreement shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the
Company, except for the expenses to be borne by this Company and the
Underwriters as provided in Section 7 hereof and the indemnity and
contribution agreements in Section 8 hereof. Notwithstanding the
foregoing, nothing contained in this Section 9(d) shall relieve a
defaulting Underwriter from liability for its default.

10. Termination. This Agreement shall be subject to termination in
the absolute discretion of the Representatives, by notice given to the
Company prior to delivery of and payment for the Securities, if prior to
such time (i) trading in the Common Stock of SCEcorp, a California
corporation, shall have been suspended by the Commission or the New York
Stock Exchange or trading in securities generally on the New York Stock
Exchange shall have been suspended or limited or minimum prices shall have
been established on such Exchange, (ii) a banking moratorium shall have
been declared either by Federal or New York State authorities or (iii)
there shall have occurred any outbreak or escalation of hostilities or
other calamity or crisis the effect of which on the financial markets of
the United States is such as to make it, in the judgment of the
Representatives, impracticable or inadvisable to proceed with the public
offering or the delivery of the Securities on the terms and in the manner
contemplated in the Final Prospectus.

11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements
of the Company or its officers and of the Underwriters set forth in or
made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter,
or the Company or any of the officers, directors or controlling persons
referred to in Section 8 hereof, and will survive delivery of and payment
for the Securities. The provisions of Sections 7 and 8 hereof shall
survive the termination or cancellation of this Agreement.

12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telecopied and confirmed to them, at the address
specified in Schedule I hereto; or, if sent to the Company, will be
<PAGE>
<PAGE>
mailed, delivered or telecopied and confirmed to it at 2244 Walnut Grove
Avenue, Rosemead, California 91770, attention Vice President and
Treasurer.

13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8
hereof, and no other person will have any right or obligation hereunder.

14. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York.

15. Counsel for the Underwriters. As discussed in the Registration
Statement, from time to time Milbank, Tweed, Hadley & McCloy performs
legal services for the Company and its subsidiaries relating to special
matters. The Company and each Underwriter hereby consent to Milbank,
Tweed, Hadley & McCloy acting as counsel for the Underwriters in
connection with the offer and sale of the Securities.

If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon
this letter and your acceptance shall represent a binding agreement among
the Company and the several Underwriters.

Very truly yours,

SOUTHERN CALIFORNIA EDISON COMPANY

BY:
-----------------------------------------

Assistant Treasurer

The foregoing Agreement is hereby
confirmed and accepted as of the
date specified in Schedule I hereto.

BY:

BY:
-------------------------------------------
Name:
Title:

For themselves and the other several
Underwriters, if any, named in Schedule
II to the foregoing Agreement.
<PAGE>
<PAGE>
SCHEDULE I

Underwriting Agreement dated

Registration Statement No.

Representatives and Address:

Title, Purchase Price and Description of Securities:

Title:
Principal Amount:

Purchase Price:

Maturity:

Interest:

Sinking Fund Provisions:

Optional Redemption:

Closing Date and Time:

Method of Payment: Federal Reserve funds in Los Angeles, California

Modification of items to be covered by the letter from Arthur Andersen
LLP deliver pursuant to Section 5(f):

Items to be delivered pursuant to Section 5(i):

<PAGE>
<PAGE>
SCHEDULE II

Principal
Amount
of Securities
to be
Underwriters Purchased
------------ ------------

<PAGE>
<PAGE>
EXHIBIT 4.2

______________________________________________________________________

SOUTHERN CALIFORNIA EDISON COMPANY

The First National Bank of Chicago,
Trustee

____________________

INDENTURE
Dated as of May 1, 1995

____________________

SUBORDINATED DEBT SECURITIES

______________________________________________________________________
<PAGE>
<PAGE>
SOUTHERN CALIFORNIA COMPANY
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939,
AS AMENDED, AND
INDENTURE, DATED AS OF MAY 1, 1995

Trust Indenture
Act Section Indenture Section

310 . . . . . . . . . . . . . . . . . . . . . . . . . . . (a)(1)6.9
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . 6.9
(a)(3). . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4). . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(5). . . . . . . . . . . . . . . . . . . . . . . . 6.9
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 6.8
. . . . . . . . . . . . . . . . . . . . . . . . . . . 6.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
311 . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.13
312 . . . . . . . . . . . . . . . . . . . . . . . . . . . (a)7.1
. . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 7.2
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 7.2
313 . . . . . . . . . . . . . . . . . . . . . . . . . . . (a)7.3
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 7.3
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 7.3
(d) . . . . . . . . . . . . . . . . . . . . . . . . . 7.3
314 . . . . . . . . . . . . . . . . . . . . . . . . . . . (a)(1)(2)(3)7.4
(a)(4). . . . . . . . . . . . . . . . . . . . . . . . 10.8
(b) . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1). . . . . . . . . . . . . . . . . . . . . . . . 1.2
(c)(2). . . . . . . . . . . . . . . . . . . . . . . . 1.2
(c)(3). . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . 1.2
315 . . . . . . . . . . . . . . . . . . . . . . . . . . . (a)6.1
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 6.2
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 6.1
(d) . . . . . . . . . . . . . . . . . . . . . . . . . 6.1
(e) . . . . . . . . . . . . . . . . . . . . . . . . . 5.14
316 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 1.1
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . 5.2
. . . . . . . . . . . . . . . . . . . . . . . . . . . 5.12
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . 5.13
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 5.8
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 1.4
317 (a)(1). . . . . . . . . . . . . . . . . . . . . . . . 5.3
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . 5.4
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 10.3
318 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 1.7

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

<PAGE>
<PAGE>
TABLE OF CONTENTS

__________

PAGE

PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION. . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . 1
Article . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
herein. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
hereof. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
hereunder . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . 2
control . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent. . . . . . . . . . . . . . . . . . . . . 2
Authorized Newspaper. . . . . . . . . . . . . . . . . . . . . 2
Bearer Security . . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors. . . . . . . . . . . . . . . . . . . . . . 2
Board Resolution. . . . . . . . . . . . . . . . . . . . . . . 2
Business Day. . . . . . . . . . . . . . . . . . . . . . . . . 2
Commission. . . . . . . . . . . . . . . . . . . . . . . . . . 2
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Company Request" and "Company Order" . . . . . . . . . . . . 2
Components. . . . . . . . . . . . . . . . . . . . . . . . . . 3
Conversion Date . . . . . . . . . . . . . . . . . . . . . . . 3
Corporate Trust Office. . . . . . . . . . . . . . . . . . . . 3
corporation . . . . . . . . . . . . . . . . . . . . . . . . . 3
coupon. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Subordinated Debt Securities. . . . . . . . . . . . . . . . . 3
Defaulted Interest. . . . . . . . . . . . . . . . . . . . . . 3
Depositary. . . . . . . . . . . . . . . . . . . . . . . . . . 3
Designated Currency . . . . . . . . . . . . . . . . . . . . . 3
Dollar. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ECU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
European Communities. . . . . . . . . . . . . . . . . . . . . 3
Event of Default. . . . . . . . . . . . . . . . . . . . . . . 3
Exchange Rate . . . . . . . . . . . . . . . . . . . . . . . . 4
Exchange Rate Officer's Certificate . . . . . . . . . . . . . 4
Foreign Currency. . . . . . . . . . . . . . . . . . . . . . . 5
Global Security . . . . . . . . . . . . . . . . . . . . . . . 5
Government Obligations. . . . . . . . . . . . . . . . . . . . 5
Holder. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . 5
interest. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Interest Payment Date . . . . . . . . . . . . . . . . . . . . 5
Maturity. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Officer's Certificate . . . . . . . . . . . . . . . . . . . . 5
Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . . 5
Original Issue Discount Security. . . . . . . . . . . . . . . 5
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . 6
Paying Agent. . . . . . . . . . . . . . . . . . . . . . . . . 7
Person. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Place of Payment. . . . . . . . . . . . . . . . . . . . . . . 7
Predecessor Security. . . . . . . . . . . . . . . . . . . . . 7
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . 7
Redemption Price. . . . . . . . . . . . . . . . . . . . . . . 7

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Registered Security . . . . . . . . . . . . . . . . . . . . . 7
Regular Record Date . . . . . . . . . . . . . . . . . . . . . 7
Repayment Date. . . . . . . . . . . . . . . . . . . . . . . . 7
Repayment Price . . . . . . . . . . . . . . . . . . . . . . . 8
Responsible Officer . . . . . . . . . . . . . . . . . . . . . 8
"Security Register" and "Security Registrar". . . . . . . . . 8
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . 8
Special Record Date . . . . . . . . . . . . . . . . . . . . . 8
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . 8
Subsidiary. . . . . . . . . . . . . . . . . . . . . . . . . . 8
Tranche . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
"Trust Indenture Act" or "TIA". . . . . . . . . . . . . . . . 9
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
United States . . . . . . . . . . . . . . . . . . . . . . . . 9
United States Alien . . . . . . . . . . . . . . . . . . . . . 9
Yield to Maturity . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 1.2 Compliance Certificates and Opinions. . . . . . . . . . 9
SECTION 1.3 Form of Documents Delivered to Trustee. . . . . . . . . 10
SECTION 1.4 Acts of Holders . . . . . . . . . . . . . . . . . . . . 10
SECTION 1.5 Notices, etc., to Trustee and Company . . . . . . . . . 14
SECTION 1.6 Notice to Holders; Waiver . . . . . . . . . . . . . . . 14
SECTION 1.7 Conflict with Trust Indenture Act . . . . . . . . . . . 15
SECTION 1.8 Effect of Headings and Table of Contents. . . . . . . . 15
SECTION 1.9 Successors and Assigns. . . . . . . . . . . . . . . . . 15
SECTION 1.10 Separability Clause. . . . . . . . . . . . . . . . . . 15
SECTION 1.11 Benefits of Indenture. . . . . . . . . . . . . . . . . 15
SECTION 1.12 Governing Law. . . . . . . . . . . . . . . . . . . . . 16
SECTION 1.13 Legal Holidays . . . . . . . . . . . . . . . . . . . . 16
SECTION 1.14 No Security Interest Created . . . . . . . . . . . . . 16

ARTICLE 2 SUBORDINATED DEBT SECURITY FORMS. . . . . . . . . . . . . . . 16
SECTION 2.1 Forms Generally . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.2 Forms of Subordinated Debt Securities . . . . . . . . . 17
SECTION 2.3 Form of Trustee's Certificate of
Authentication. . . . . . . . . . . . . . . . . . . . . 17

ARTICLE 3 THE SUBORDINATED DEBT SECURITIES. . . . . . . . . . . . . . . 18
SECTION 3.1 Amount Unlimited; Issuable in Series. . . . . . . . . . 18
SECTION 3.2 Denominations . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.3 Execution, Authentication, Delivery and Dating. . . . . 21
SECTION 3.4 Temporary Subordinated Debt Securities. . . . . . . . . 23
SECTION 3.5 Registration, Registration of Transfer and
Exchange. . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.6 Mutilated, Destroyed, Lost and Stolen
Subordinated Debt Securities. . . . . . . . . . . . . . 28
SECTION 3.7 Payment of Interest, Interests Rights
Preserved . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 3.8 Persons Deemed Owners . . . . . . . . . . . . . . . . . 31
SECTION 3.9 Cancellation. . . . . . . . . . . . . . . . . . . . . . 31
SECTION 3.10 Computation of Interest . . . . . . . . . . . . . . . . 32
SECTION 3.11 Payment in Currencies . . . . . . . . . . . . . . . . . 32
SECTION 3.12 Certification by a Person Entitled to Delivery
of a Bearer Security. . . . . . . . . . . . . . . . . . 35
SECTION 3.13 Judgments . . . . . . . . . . . . . . . . . . . . . . . 35

ARTICLE 4 SATISFACTION AND DISCHARGE. . . . . . . . . . . . . . . . . . 36
SECTION 4.1 Satisfaction and Discharge of Indentures. . . . . . . . 36
SECTION 4.2 Application of Trust Money. . . . . . . . . . . . . . . 37

ARTICLE 5 REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.1 Events of Default . . . . . . . . . . . . . . . . . . . 37

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SECTION 5.2 Acceleration of Maturity: Rescission and
Annulment . . . . . . . . . .. . . . . . . . . . . . . 39
SECTION 5.3 Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . . . . . . . . 40
SECTION 5.4 Trustee May File Proofs of Claim . . . . . . . . . . . 41
SECTION 5.5 Trustee May Enforce Claims Without Possession
of Subordinated Debt Securities or Coupons . . . . . . 42
SECTION 5.6 Application of Money Collected . . . . . . . . . . . . 42
SECTION 5.7 Limitation on Suits. . . . . . . . . . . . . . . . . . 43
SECTION 5.8 Right of Holders to receive Principal, Premium
and Interest . . . . . . . . . . . . . . . . . . . . . 44
SECTION 5.9 Restoration of Rights and Remedies . . . . . . . . . . 44
SECTION 5.10 Rights and Remedies Cumulative . . . . . . . . . . . . 44
SECTION 5.11 Delay or Omission Not Waiver . . . . . . . . . . . . . 44
SECTION 5.12 Control by Holders of Subordinated Debt
Securities . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.13 Waiver of Past Defaults. . . . . . . . . . . . . . . . 45
SECTION 5.14 Undertaking for Costs. . . . . . . . . . . . . . . . . 45
SECTION 5.15 Waiver of Usury, Stay or Extension Laws. . . . . . . . 46

ARTICLE 6 THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 6.1 Certain Duties and Responsibilities . . . . . . . . . . 46
SECTION 6.2 Notice of Defaults. . . . . . . . . . . . . . . . . . . 47
SECTION 6.3 Certain Rights of Trustee . . . . . . . . . . . . . . . 48
SECTION 6.4 Not Responsible for Recitals or Issuance of
Subordinated Debt Securities. . . . . . . . . . . . . . 48
SECTION 6.5 May Hold Subordinated Debt Securities or
Coupons . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 6.6 Money Held in Trust . . . . . . . . . . . . . . . . . . 49
SECTION 6.7 Compensation and Reimbursement. . . . . . . . . . . . . 49
SECTION 6.8 Disqualification; Conflicting Interests . . . . . . . . 49
SECTION 6.9 Corporate Trustee Required; Eligibility . . . . . . . . 50
SECTION 6.10 Resignation and Removal; Appointment of
Successor. . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 6.11 Acceptance of Appointment by Successor . . . . . . . . 52
SECTION 6.12 Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . . . . . . . 53
SECTION 6.13 Preferential Collection of Claims Against
Company. . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 6.14 Appointment of Authenticating Agent. . . . . . . . . . 53
SECTION 6.15 Administrative Expense Claim in Bankruptcy . . . . . . 54

ARTICLE 7 HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY . . . . . . 54
SECTION 7.1 Company to Furnish Trustee names and Addresses
of Holders. . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 7.2 Preservation of Information; Communications to
Holders . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 7.3 Reports by Trustee. . . . . . . . . . . . . . . . . . . 56
SECTION 7.4 Reports by Company. . . . . . . . . . . . . . . . . . . 56

ARTICLE 8 CONSOLIDATION, MERGER, CONVEYANCE SALE OR LEASE . . . . . . . 57
SECTION 8.1 Company May Consolidate, etc., Only on Certain
Terms . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 8.2 Successor Substituted . . . . . . . . . . . . . . . . . 58

ARTICLE 9 SUPPLEMENTAL INDENTURES . . . . . . . . . . . . . . . . . . . 58
SECTION 9.1 Supplemental Indentures Without Consent of
Holders . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 9.2 Supplemental Indentures with Consent of
Holders . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 9.3 Execution of Supplemental Indentures. . . . . . . . . . 60
SECTION 9.4 Effect of Supplemental Indentures . . . . . . . . . . . 61
SECTION 9.5 Conformity with Trust Indenture Act . . . . . . . . . . 61
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<PAGE>
SECTION 9.6 Reference in Subordinated Debt Securities to
Supplemental Indentures . . . . . . . . . . . . . . . . 61

ARTICLE 10 COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 10.1 Payment of Principal, Premium and Interest . . . . . . 61
SECTION 10.2 Maintenance of Office or Agency. . . . . . . . . . . . 61
SECTION 10.3 Money for Subordinated Debt Securities
Payments to Be Held in Trust . . . . . . . . . . . . . 63
SECTION 10.4 Existence. . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 10.5 Appointments to Fill Vacancies in Trustee's
Office . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 10.6 Payment of Additional Amounts. . . . . . . . . . . . . 64
SECTION 10.7 Purchase of Subordinated Debt Securities by
Company or Subsidiary. . . . . . . . . . . . . . . . . 65
SECTION 10.8 Officer's Certificate as to Default. . . . . . . . . . 65
SECTION 10.9 Waiver of Certain Covenants. . . . . . . . . . . . . . 65

ARTICLE 11 REDEMPTION OF SUBORDINATED DEBT SECURITIES. . . . . . . . . . 66
SECTION 11.1 Applicability of Article . . . . . . . . . . . . . . . 66
SECTION 11.2 Election to Redeem; Notice to Trustee. . . . . . . . . 66
SECTION 11.3 Selection by Trustee of Subordinated Debt
Securities to Be Redeemed. . . . . . . . . . . . . . . 66
SECTION 11.4 Notice of Redemption . . . . . . . . . . . . . . . . . 67
SECTION 11.5 Deposit of Redemption Price. . . . . . . . . . . . . . 67
SECTION 11.6 Subordinated Debt Securities Payable on
Redemption Date. . . . . . . . . . . . . . . . . . . . 67
SECTION 11.7 Subordinated Debt Security Redeemed in Part. . . . . . 68

ARTICLE 12 SINKING FUNDS . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 12.1 Applicability of Article . . . . . . . . . . . . . . . 69
SECTION 12.2 Satisfaction of Sinking Fund Payments with
Subordinated Debt Securities . . . . . . . . . . . . . 69
SECTION 12.3 Redemption of Subordinated Debt Securities
for Sinking Fund . . . . . . . . . . . . . . . . . . . 69

ARTICLE 13 DEFEASANCE. . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 13.1 Discharge and Defeasance of Subordinated Debt
Securities of any Series . . . . . . . . . . . . . . . 70
SECTION 13.2 Repayment to Company . . . . . . . . . . . . . . . . . 72
SECTION 13.3 Indemnity for Government Obligations . . . . . . . . . 72
SECTION 13.4 Application of Trust Money . . . . . . . . . . . . . . 73
SECTION 13.5 Reinstatement. . . . . . . . . . . . . . . . . . . . . 73

ARTICLE 14 MEETING OF HOLDERS OF SUBORDINATED DEBT SECURITIES. . . . . . 73
SECTION 14.1 Purposes for Which Meetings May Be Called. . . . . . . 73
SECTION 14.2 Call, Notice and Place of Meetings . . . . . . . . . . 73
SECTION 14.3 Persons Entitled to Vote at Meetings . . . . . . . . . 74
SECTION 14.4 Quorum; Action . . . . . . . . . . . . . . . . . . . . 74
SECTION 14.5 Determination of Voting Rights; Conduct and
Adjournment of Meetings. . . . . . . . . . . . . . . . 75
SECTION 14.6 Counting Votes and Recording Action of
Meetings . . . . . . . . . . . . . . . . . . . . . . . 76

ARTICLE 15 REPAYMENT AT OPTION OF HOLDERS. . . . . . . . . . . . . . . . 76
SECTION 15.1 Applicability of Article . . . . . . . . . . . . . . . 76
SECTION 15.2 Repayment of Subordinated Debt Securities. . . . . . . 76
SECTION 15.3 Exercise of Option . . . . . . . . . . . . . . . . . . 77
SECTION 15.4 When Subordinated Debt Securities Presented
for Repayment Become Due and Payable . . . . . . . . . 77
SECTION 15.5 Subordinated Debt Securities Repaid in Part. . . . . . 78

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ARTICLE 16 SUBORDINATION OF SUBORDINATED DEBT SECURITIES . . . . . . . . 78
SECTION 16.1 Agreement of Subordination . . . . . . . . . . . . . . 78
SECTION 16.2 Limitations on Payments to Holders of
Subordinated Debt Securities . . . . . . . . . . . . . 78
SECTION 16.3 Payments in Bankruptcy . . . . . . . . . . . . . . . . 79
SECTION 16.4 Subrogation of Subordinated Debt Securities. . . . . . 80
SECTION 16.5 Authorization By Holders of Subordinated Debt
Securities . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 16.6 Notice to Trustee. . . . . . . . . . . . . . . . . . . 81
SECTION 16.7 Trustee's Relation to Senior Indebtedness. . . . . . . 82
SECTION 16.8 Acts of Holders of Senior Indebtedness . . . . . . . . 82

TESTIMONIUM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SIGNATURES AND SEALS . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
ACKNOWLEDGMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
EXHIBIT A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
EXHIBIT B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1

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<PAGE>
INDENTURE, dated as of May __, 1995 between Southern
California Edison Company, a California corporation (hereinafter called
the "Company"), having its principal place of business at 2244 Walnut
Grove Avenue, Rosemead, California 91770, and The First National Bank of
Chicago, a national banking association (hereinafter called the
"Trustee"), having its Corporate Trust Office at One First National
Plaza, Suite 0126, Chicago, Illinois 60670-0126.

RECITALS OF THE COMPANY

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

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

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

ARTICLE 1

DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION

SECTION 1.1 Definitions.

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

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

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

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

(4) the words "Article" and "Section" refer to an
Article and Section, respectively, of this Indenture; and

(5) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a
whole and not to any particular Article, Section or other
subdivision.
<page 1>
"Act" when used with respect to any Holder has the meaning
specified in Section 1.4.

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

"Authenticating Agent" has the meaning specified in Section
6.14.

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

"Bearer Security" means any Subordinated Debt Security in
the form of bearer securities established pursuant to Section 2.2 that
is payable to bearer.

"Board of Directors" means either the Board of Directors of
the Company or any committee of that board duly authorized to act in
respect thereof.

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

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

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

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

"Company Request" and "Company Order" mean, respectively, a
written request or order signed in the name of the Company by any one of
the Chairman of the Board, President, Chief Financial Officer, any Vice
President, the Treasurer, any Assistant Treasurer or the Manager of
Corporate Finance of the Company, and delivered to the Trustee.
<page 2>
"Components", with respect to a composite currency
(including but not limited to the ECU), means the currency amounts that
are components of such composite currency on the Conversion Date. If
after such Conversion Date the official unit of any component currency
is altered by way of combination or subdivision, the number of units of
such currency shall be divided or multiplied in the same proportion to
calculate the Component. If after such Conversion Date two or more
component currencies are consolidated into a single currency, the
amounts of those currencies as Components shall be replaced by an amount
in such single currency equal to the sum of the amounts of such
consolidated component currencies expressed in such single currency, and
such amount shall thereafter be a Component. If after such Conversion
Date any component currency shall be divided into two or more
currencies, the amount of such currency as a Component shall be replaced
by amounts of such two or more currencies, each of which shall be equal
to the amount of such former component currency divided by the number of
currencies into which such component currency was divided, and such
amounts shall thereafter be Components.

"Conversion Date", with respect to a composite currency
(including but not limited to the ECU), has the meaning specified in
Section 3.11.

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

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

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

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

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

"Depositary" means, with respect to the Subordinated Debt
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 3.1 until a successor
Depositary shall have become such pursuant to the applicable provisions
of this Indenture, and thereafter "Depositary" shall mean or include
each Person who is then a Depositary hereunder, and if at any time there
is more than one such Person, "Depositary" as used with respect to the
Subordinated Debt Securities of any such series shall mean the
Depositary with respect to the Subordinated Debt Securities of that
series.

"Designated Currency" has the meaning specified in Section
3.13.

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

"ECU" means the European Currency Unit as defined and
revised from time to time by the Council of the European Communities.
<page 3>
"European Communities" means the European Economic
Community, the European Coal and Steel Community and the European Atomic
Energy Community.

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

"Exchange Rate" means (a) with respect to a currency (other
than a composite currency) in which payment is to be made on
Subordinated Debt Securities denominated in a composite currency, the
exchange rate between such composite currency and such currency reported
by the agency or organization, if any, designated pursuant to Section
3.1 (15) or by the Council of the European Communities (in the case of
ECU, whose reports are currently based on the rates in effect at 2:30
P.M., Brussels time, on the relevant exchange markets), as appropriate,
or if such exchange rate is not or ceases to be so reported, then such
exchange rate as shall be determined by the Trustee using, in its sole
discretion and without liability on its part, quotations from one or
more major banks in The City of New York or such other quotations as the
Trustee shall deem appropriate, in either case on the applicable Regular
or Special Record Date or the fifteenth day immediately preceding the
maturity of an installment of principal, as the case may be, (b) with
respect to Dollars in which payment is to be made on Subordinated Debt
Securities denominated in a Foreign Currency, the noon Dollar buying
rate for that currency for cable transfers quoted in The City of New
York on the Regular or Special Record Date with respect to an Interest
Payment Date or the fifteenth day immediately preceding the Maturity of
an installment of principal, as the case may be, as certified for
customs purposes by the Federal Reserve Bank of New York, (c) with
respect to a Foreign Currency in which payment is to be made on
Subordinated Debt Securities denominated in Dollars or converted into
Dollars pursuant to Section 3.11 (d) (ii), the noon Dollar selling rate
for that currency for cable transfers quoted in The City of New York on
the Regular or Special Record Date with respect to an Interest Payment
Date or the fifteenth day immediately preceding the Maturity of an
installment of principal, as the case may be, as certified for customs
purposes by the Federal Reserve Bank of New York, and (d) with respect
to a Foreign Currency in which payment is to be made on Subordinated
Debt Securities denominated in a different Foreign Currency, the
exchange rate between such Foreign Currencies determined in the manner
specified pursuant to Section 3.1(18). Except in the situation
contemplated in (a) above, if for any reason such rates are not
available with respect to one or more currencies for which an Exchange
Rate is required, the Trustee shall use, in its sole discretion and
without liability on its part, such quotation of the Federal Reserve
Bank of New York as of the most recent available date, or quotations
from one or more major banks in The City of New York or in the country
of issue of the currency in question, or such other quotations as the
Trustee shall deem appropriate. Unless otherwise specified by the
Trustee, if there is more than one market for dealing in any currency by
reason of foreign exchange regulations or otherwise, the market to be
used in respect of such currency shall be that upon which a nonresident
issuer of securities designated in such currency would purchase such
currency in order to make payments in respect of such securities.

"Exchange Rate Officer's Certificate", with respect to any
date for the payment of principal of, premium, if any, or interest on
any series of Subordinated Debt Securities, means a certificate setting
forth the applicable Exchange Rate or Rates as of the Regular or Special
Record Date with respect to an Interest Payment Date or the fifteenth
day immediately preceding the Maturity of an installment of principal,
as the case may be, and the amounts payable in Dollars, Foreign
Currencies and composite currencies in respect of the principal of (and
<page 4>
premium, if any) and interest on Subordinated Debt Securities
denominated in ECU, any other composite currency or any Foreign
Currency, and signed by any one of the Chairman of the Board, the
President, the Chief Financial Officer, any Vice President, the
Treasurer, any Assistant Treasurer or the Manager of Corporate Finance
of the Company, and delivered to the Trustee.

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

"Global Security" means a Registered or Bearer Security
evidencing all or part of a series of Subordinated Debt Securities,
issued to the Depositary for such series or a nominee thereof in
accordance with Section 3.3, and bearing the legend prescribed in
Section 3.3(c).

"Government Obligations" has the meaning specified in
Section 13.1.

"Holder", with respect to a Registered Security, means the
Person in whose name such Registered Security is registered in the
Security Register and, with respect to a Bearer Security or a coupon,
means the bearer thereof.

"Indenture" means this instrument as originally executed or
as it may from time to time be supplemented, amended or restated by or
pursuant to one or more indentures supplemental hereto entered into
pursuant to the applicable provisions hereof and, unless the context
otherwise requires, shall include the terms of a particular series of
Subordinated Debt Securities established as contemplated by Section 3.1.

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

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

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

"Officer's Certificate" means a certificate signed by any
one of the Chairman of the Board, the President, the Chief Financial
Officer, any Vice President, the Treasurer, any Assistant Treasurer or
the Manager of Corporate Finance of the Company, and delivered to the
Trustee.

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

"Original Issue Discount Security" means (i) any
Subordinated Debt Security that provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 5.2 and (ii)
any Subordinated Debt Security issued with original issue discount for
United States Federal income tax purposes.
<page 5>
"Outstanding" when used with respect to Subordinated Debt
Securities means, as of the date of determination, all Subordinated Debt
Securities theretofore authenticated and delivered under this Indenture,
except:

(i) Subordinated Debt Securities
theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;

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

(iii) Subordinated Debt Securities that
have been paid pursuant to Section 3.6 or in
exchange for or in lieu of which other
Subordinated Debt Securities have been
authenticated and delivered pursuant to this
Indenture, other than any such Subordinated Debt
Securities in respect of which there shall have
been presented to the Trustee proof satisfactory
to it that such Subordinated Debt Securities are
held by a bona fide purchaser in whose hands
such Subordinated Debt Securities are valid
obligations of the Company; and

(iv) Subordinated Debt Securities as to
which Defeasance has been effected pursuant to
Section 13.1(c)(1);

provided, however, that in determining whether the Holders of the
requisite principal amount of Subordinated Debt Securities Outstanding
have given any request, demand, authorization, direction, notice,
consent or waiver or taken any other action hereunder or whether a
quorum is present at a meeting of Holders of Outstanding Subordinated
Debt Securities or the number of votes entitled to be cast by each
Holder of a Subordinated Debt Security in respect of such Subordinated
Debt Security at any such meeting (i) 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 to such date
pursuant to Section 5.2, (ii) the principal amount of a Subordinated
Debt Security denominated in a Foreign Currency or composite currency
shall be deemed to have the principal amount determined by the Trustee
by converting the principal amount of such Subordinated Debt Security in
the currency in which such Subordinated Debt Security is denominated
into Dollars at the Exchange Rate as of the date such Act is delivered
to the Trustee and, where it is hereby expressly required, to the
Company (or, if there is no such rate on such date for the reasons
<page 6>
specified in Section 3.11(d)(i), such rate on the date specified in such
Section), and (iii) Subordinated Debt Securities owned by the Company or
any other obligor upon the Subordinated Debt Securities or any Affiliate
of the Company or of such other obligor shall be disregarded and deemed
not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon such request, demand, authorization,
direction, notice, consent, waiver or action, only Subordinated Debt
Securities that the Trustee knows to be so owned shall be so
disregarded. Subordinated Debt Securities so owned that have been
pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Subordinated Debt Securities and that the
pledgee is not the Company or any other obligor upon the Subordinated
Debt Securities or any Affiliate of the Company or of such other
obligor.

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

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

"Place of Payment", when used with respect to the Registered
Securities of any series payable in Dollars, means the Corporate Trust
Office of the Trustee in Chicago, Illinois and, when used with respect
to the Subordinated Debt Securities of any series, means such other
place or places, if any, where the principal of (and premium, if any)
and interest on the Subordinated Debt Securities of that series are
payable as specified as contemplated by Section 3.1.

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

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

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

"Registered Security" means any Subordinated Debt Security
in the form of registered securities established pursuant to Section 2.2
that is registered in the Security Register.

"Regular Record Date" for the interest payable on any
Interest Payment Date on the Subordinated Debt Securities of any series
means the date specified for that purpose as contemplated by Section
3.1.

"Repayment Date" means, when used with respect to any
Subordinated Debt Security to be repaid at the option of the Holder, the
date fixed for such repayment by or pursuant to this Indenture.
<page 7>
"Repayment Price" means, when used with respect to any
Subordinated Debt Security to be repaid at the option of the Holder, the
price at which such Subordinated Debt Security is to be repaid by or
pursuant to this Indenture.

"Responsible Officer" when used with respect to the Trustee
means the chairman or any vice-chairman of the board of directors, the
chairman or any vice chairman of the executive committee of the board of
directors, the chairman of the trust committee, the president, any vice
president, any assistant vice president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the
controller or any assistant controller or any other officer or assistant
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of his knowledge of and familiarity
with the particular subject.

"Security Register" and "Security Registrar" have the
respective meanings specified in Section 3.5.

"Senior Indebtedness" of the Company shall mean the
principal of, premium, if any, interest on and any other payment due
pursuant to any of the following, whether outstanding at the date of
execution of this Indenture or thereafter incurred, created or assumed:
(a) all indebtedness of the Company evidenced by notes, debentures,
bonds or other securities sold by the Company for money, (b) all
indebtedness of others of the kinds described in the preceding clause
(a) assumed by or guaranteed in any manner by the Company or in effect
guaranteed by the Company through an agreement to purchase, contingent
or otherwise, and (c) all renewals, extensions or refundings of
indebtedness of the kinds described in any of the preceding clauses (a)
and (b) unless, in the case of any particular indebtedness, renewal,
extension or refunding, the instrument creating or evidencing the same
or the assumption or guarantee of the same expressly provides that such
indebtedness, renewal, extension or refunding is not superior in right
of payment to or is pari passu with the Subordinated Debt Securities.

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

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

"Subsidiary" means any corporation which is consolidated in
the Company's accounts and any corporation of which at least a majority
of the outstanding stock having by the terms thereof ordinary voting
power to elect a majority of the board of directors of such corporation
(irrespective of whether or not at the time stock of any other class or
classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by the Company, or by one or more
Subsidiaries, or by the Company and one or more Subsidiaries.

"Tranche" means a group of Subordinated Debt Securities
which are of the same series and have identical terms except as to
principal amount and date of issuance.
<page 8>
"Trust Indenture Act" or "TIA" (except as herein otherwise
expressly provided) 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 such
amendment, the Trust Indenture Act of 1939 as so amended.

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

"United States" means the United States of America
(including the States thereof and the District of Columbia), its
territories and possessions and other areas subject to its jurisdiction.

"United States Alien" means any Person who, for United
States Federal income tax purposes, is a foreign corporation, a non-
resident alien individual, a non-residential alien fiduciary of a
foreign estate or trust, or a foreign partnership one or more of the
members of which is, for United States Federal income tax purposes, a
foreign corporation, a non-resident alien individual or a non-resident
alien fiduciary of a foreign estate or trust.

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

SECTION 1.2 Compliance Certificates and Opinions.

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

Every certificate or opinion with respect to compliance with
a condition or covenant provided for in this Indenture (other than
annual certificates provided pursuant to Section 10.8) shall include

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

(2) a brief statement as to the nature and scope of
the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are
based;
<page 9>
(3) a statement that, in the opinion of such
individual, the individual has made such examination or
investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such
covenant or condition has been complied with; and

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

SECTION 1.3 Form of Documents Delivered to Trustee.

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

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

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

SECTION 1.4 Acts of Holders.

(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture
to be given or taken by Holders may be embodied in and evidenced by one
or more instruments of substantially similar tenor signed by such
Holders in person or by an agent duly appointed in writing. If
Subordinated Debt Securities of a series are issuable in whole or in
part as Bearer Securities, any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this
Indenture to be given or taken by Holders of such series may,
alternatively, be embodied in and evidenced by the record of Holders of
Subordinated Debt Securities of such series voting in favor thereof,
either in person or by proxies duly appointed in writing, at any meeting
of Holders of Subordinated Debt Securities of such series duly called
and held in accordance with the provisions of Article Fourteen, or a
combination of such instruments and any such record. Except as herein
otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee, and, where
it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Holders signing such
<page 10>
instruments or instruments and so voting at any such meeting. Proof of
execution of any such instrument or of a writing appointing any such
agent or proxy or of the holding by any Person of a Subordinated Debt
Security, shall be sufficient for any purpose of this Indenture and
(subject to Section 6.1) conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section. The record of
any meeting of Holders of Subordinated Debt Securities shall be provided
in the manner provided in Section 14.6.

(b) The fact and date of the execution by any Person of
any such instrument or writing may be proved in any manner that the
Trustee deems sufficient.

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

(e) The fact and date of execution of any such instrument
or writing, the authority of the Person executing the same and the
principal amount and serial numbers of Bearer Securities held by the
Person so executing such instrument or writing and the date of holding
the same may also be proved in any other manner that the Trustee deems
sufficient; and the Trustee may in any instance require further proof
with respect to any of the matters referred to in this Section.

(f) If the Company shall solicit from the Holders of
Subordinated Debt Securities of any series any request, demand,
authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to authority granted in a
Board Resolution, set in advance a record date for the determination of
Holders of Registered Securities entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. Any such record date shall
be fixed at the Company's discretion. If such a record date is fixed,
by operation of law or otherwise, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be sought or
given before or after the record date, but only the Holders of
Registered Securities of record at the close of business on such record
date shall be deemed to be Holders of Registered Securities for the
purpose of determining whether Holders of the requisite proportion of
Subordinated Debt Securities of such series Outstanding have authorized
or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other Act, and for that purpose
the Registered Securities of such series Outstanding shall be computed
<page 11>
as of such record date. With regard to any record date set pursuant to
this paragraph, the Holders of Outstanding Subordinated Debt Securities
of the relevant series on such record date (or their duly appointed
agents), and only such Persons, shall be entitled to give or take the
relevant action, whether or not such Holders remain Holders after such
record date. With regard to any action that may be given or taken
hereunder only by Holders of a requisite principal amount of outstanding
Subordinated Debt Securities of any series (or their duly appointed
agents) and for which a record date is set pursuant to this paragraph,
the Company may, at its option, set an expiration date after which no
such action purported to be given or taken by any Holder shall be
effective hereunder unless given or taken on or prior to such expiration
date by Holders of the requisite principal amount of Outstanding
Subordinated Debt Securities of such series on such record date (or
their duly appointed agents). On or prior to any expiration date set
pursuant to this paragraph, the Company may, on one or more occasions at
its option, extend such date to any later date. Nothing in this
paragraph shall prevent any Holder (or any duly appointed agent thereof)
from giving or taking, after any such expiration date, any action
identical to, or, at any time, contrary to or different from, the action
or purported action to which such expiration date relates, in which
event the Company may set a record date in respect thereof pursuant to
this paragraph. Nothing in this paragraph shall be construed to render
ineffective any action taken at any time by the Holders (or their duly
appointed agents) of the requisite principal amount of Outstanding
Subordinated Debt Securities of the relevant series on the date such
action is so taken. Notwithstanding the foregoing or the Trust
Indenture Act, the Company shall not set a record date for, and the
provisions of this paragraph shall not apply with respect to, any
notice, declaration or direction referred to in the next paragraph.

Upon receipt by the Trustee from any Holder of Subordinated
Debt Securities of a particular series of (i) any notice of default or
breach referred to in Section 5.1(d) or 5.1(e), if such default or
breach has occurred and is continuing and the Trustee shall not have
given such a notice to the Company, (ii) any declaration of acceleration
referred to in Section 5.2, if an Event of Default with respect to
Subordinated Debt Securities of such series has occurred and is
continuing and the Trustee shall not have given such a declaration to
the Company, or (iii) any direction referred to in Section 5.12 with
respect to Subordinated Debt Securities of such series, if the Trustee
shall not have taken the action specified in such direction, then a
record date shall automatically and without any action by the Company or
the Trustee be set for determining the Holders of Outstanding
Subordinated Debt Securities of such series, or all series, if
applicable, entitled to join in such notice, declaration or direction,
which record date shall be the close of business on the tenth day
following the day on which the Trustee receives such notice, declaration
or direction. Promptly after such receipt by the Trustee, and in any
case not later than the fifth day thereafter, the Trustee shall notify
the Company and the Holders of Outstanding Subordinated Debt Securities
of such series of any such record date so fixed. The Holders of
Outstanding Subordinated Debt Securities of such series on such record
date (or their duly appointed agents), and only such Persons, shall be
entitled to join in such notice, declaration or direction whether or not
such Holders remain Holders after such record date; provided that,
unless such notice, declaration or direction shall have become effective
by virtue of Holders of the requisite principal amount of Outstanding
Subordinated Debt Securities of such series on such record date (or
their duly appointed agents) having joined therein on or prior to the
90th day after such record date, such notice, declaration or direction
shall automatically and without any action by any Person be cancelled
<page 12>
and of no further effect. Nothing in this paragraph shall be construed
to prevent a Holder (or a duly appointed agent thereof) from giving,
before or after the expiration of such 90-day period, a notice,
declaration or direction contrary to or different from, or, after the
expiration of such period, identical to, the notice, declaration or
direction to which such record date relates, in which event a new record
date in respect thereof shall be set pursuant to this paragraph.
Nothing in this paragraph shall be construed to render ineffective any
notice, declaration or direction of the type referred to in this
paragraph given at any time to the Trustee and the Company by Holders
(or their duly appointed agents) of the requisite principal amount of
Outstanding Subordinated Debt Securities of the relevant series on the
date such notice, declaration or directions is so given.

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

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

page 13
<PAGE>
SECTION 1.5 Notices, etc., to Trustee and Company.

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

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

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

SECTION 1.6 Notice to Holders; Waiver.

Except as otherwise expressly provided herein, where this
Indenture provides for notice to Holders of any event, (1) such notice
shall be sufficiently given to Holders of Registered Securities if in
writing and mailed, first-class postage prepaid, to each Holder of a
Registered Security affected by such event, at his address as it appears
in the Security Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such
notice; and (2) such notice shall be sufficiently given to Holders of
Bearer Securities if published in an authorized Newspaper in The City of
New York (and, if such Subordinated Debt Securities are not listed on
any stock exchange outside the United States, in London) and, if the
Subordinated Debt Securities of such series are then listed on The
International Stock Exchange of the United Kingdom and the Republic of
Ireland Limited and such stock exchange shall so require, in London and,
if the Subordinated Debt Securities of such series are then listed on
the Luxembourg Stock Exchange and such stock exchange shall so require,
in Luxembourg and, if the Subordinated Debt Securities of such series
are then listed on any other stock exchange outside the United States
and such stock exchange shall so require, in any other required city
outside the United States or, if not practicable, in Europe on a
Business Day at least twice, the first such publication to be not
earlier than the earliest date and not later than the latest date
prescribed for the giving of such notice.

In the event of suspension of regular mail service or if for
any other reason it shall be impracticable to give such notice to
Holders of Registered Securities by mail, then such a notification to
holders of Registered Securities as shall be made with the approval of
the Trustee shall constitute a sufficient notification for every purpose
hereunder. In any case where notice to Holders of Registered Securities
is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder of a Registered
Security shall affect the sufficiency of such notice with respect to
other Holders of Registered Securities or the sufficiency of any notice
by publication to Holders of Bearer Securities given as provided above.

In case by reason of the suspension of publication of any
Authorized Newspaper or Authorized Newspapers or by reason of any other
<page 14>
cause it shall be impracticable to publish any notice to Holders of
Bearer Securities as provided above, then such notification to Holders
of Bearer Securities as shall be given with the approval of the Trustee
shall constitute sufficient notice to such Holders for every purpose
hereunder. Neither failure to give notice by publication to Holders of
Bearer Securities as provided above, nor any defect in any notice so
published, shall affect the sufficiency of any notice mailed to Holders
of Registered Securities as provided above.

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

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

SECTION 1.7 Conflict with Trust Indenture Act.

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

SECTION 1.8 Effect of Headings and Table of Contents.

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

SECTION 1.9 Successors and Assigns.

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

SECTION 1.10 Separability Clause.

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

SECTION 1.11 Benefits of Indenture.

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

page 15
<PAGE>
SECTION 1.12 Governing Law.

This Indenture and the Subordinated Debt Securities and
coupons shall be governed by and construed in accordance with the law of
the State of New York, but without regard to principles of conflicts of
laws thereof.

SECTION 1.13 Legal Holidays.

In any case where any Interest Payment Date, Redemption Date
or Stated Maturity of any Subordinated Debt Security shall not be a
Business Day at any Place of Payment, then (notwithstanding any other
provision of this Indenture or of the Subordinated Debt Securities
(other than a provision of the Subordinated Debt Securities of any
series which specifically states that such provisions shall apply in
lieu of this Section)) payment of interest or principal (and premium, if
any) need not be made at such Place of Payment on such date, but may be
made on the next succeeding Business Day at such Place of Payment with
the same force and effect as if made on the Interest Payment Date or
Redemption Date, or at the Stated Maturity, and no interest shall accrue
on such payment for the period from and after such Interest Payment
date, Redemption Date or Stated Maturity, as the case may be.

SECTION 1.14 No Security Interest Created.

Nothing in this Indenture or in the Subordinated Debt
Securities expressed or implied, shall be construed to constitute a
security interest under the Uniform Commercial Code or similar
legislation, as now or hereafter enacted and in effect in any
jurisdiction where property of the Company or its subsidiaries is
located.

ARTICLE 2

SUBORDINATED DEBT SECURITY FORMS

SECTION 2.1 Forms Generally.

The Subordinated Debt Securities of each series and the
coupons, if any, to be attached thereto, shall be in substantially the
form established by or pursuant to the authority granted in a resolution
of the Board of Directors or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture. The Subordinated Debt Securities may have notations, legends
or endorsements placed thereon as may be required by law, or securities
exchange rule, or as may, consistently herewith, be determined by the
officers executing such Subordinated Debt Securities and coupons, if
any, as evidenced by their execution of the Subordinated Debt Securities
and coupons, if any.

Each Bearer Security and Coupon shall bear a legend
substantially to the following effect: "Any United States person who
holds this obligation will be subject to limitations under the United
States income tax law, including the limitations provided in Sections
165(j) and 1287(a) of the United States Internal Revenue Code."

The definitive Subordinated Debt Securities and coupons, if
any, shall be printed, lithographed or engraved or produced by any
combination of these methods on steel engraved borders or may be
produced in any other manner, all as determined by the officers
executing such Subordinated Debt Securities and coupons, as conclusively
<page 16>
evidenced by their execution of such Subordinated Debt Securities and
coupons.

SECTION 2.2 Forms of Subordinated Debt Securities.

Unless otherwise provided as contemplated by Section 3.1
with respect to any series of Subordinated Debt Securities, the
Subordinated Debt Securities of each series shall be issuable in
registered form without coupons. If so provided as contemplated by
Section 3.1, the Subordinated Debt Securities of a series shall be
issuable (a) in bearer form, with interest coupons attached, (b) in
registered and bearer form or (c) in the form of one or more Global
Securities in whole or in part.

SECTION 2.3 Form of Trustee's Certificate of
Authentication.

The form of the Trustee's certificate of authentication to
be borne by the Subordinated Debt Securities shall be substantially as
follows:

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

The First National Bank of Chicago
as Trustee

By
--------------------------------------
Authorized Signatory

[OR
The First National Bank of Chicago
as Trustee

By
---------------------------------------
Authenticating Agent

By
---------------------------------------
Authorized Signatory

- ----------------
* To be inserted only if an Authenticating Agent is appointed under
Section 614.
page 17
<PAGE>
ARTICLE 3

THE SUBORDINATED DEBT SECURITIES

SECTION 3.1 Amount Unlimited; Issuable in Series.

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

The Subordinated Debt Securities may be issued in one or
more series. There shall be established in or pursuant to a Board
Resolution, and, subject to Section 3.3, set forth or determined in the
manner provided, in an Officers' Certificate or established in one or
more indentures supplemental hereto, prior to the issuance of
Subordinated Debt Securities of any series:

(1) the title of the Subordinated Debt Securities of
the series (which shall distinguish the Subordinated Debt
Securities of the series from all other Subordinated Debt
Securities);

(2) the limit, if any, upon the aggregate principal
amount of the Subordinated Debt Securities of the series
that may be authenticated and delivered under this Indenture
(except for Subordinated Debt Securities authenticated and
delivered upon registration or transfer of, or in exchange
for, or in lieu of, other Subordinated Debt Securities of
the series pursuant to Section 3.4, 3.5, 3.6, 9.6 or 11.7);

(3) the date or dates on which the principal of the
Subordinated Debt Securities of the series is payable or the
means by which such date or dates shall be determined or
specified;

(4) the rate or rates, if any, or the method of
calculating the rates, at which the Subordinated Debt
Securities of the series shall bear interest, the date or
dates from which such interest shall accrue, the Interest
Payment Dates on which such interest shall be payable and
the Regular Record Date for the interest payable on any
Interest Payment Date and whether any special terms and
conditions relating to the payment of additional amounts in
respect of payments on the Subordinated Debt Securities of
such series shall, in the event of certain changes in the
United States Federal income tax laws, apply to the Debt
Securities or the means by which such rate or rates or date
or dates shall, be determined or specified;

(5) the right, if any, to extend the interest
payment periods and the duration of such extension;

(6) whether any one or more series of Subordinated
Debt Securities shall be junior in right of payment to any
other one or more series of Subordinated Debt Securities;

(7) the place or places where the principal of (and
premium, if any) and interest on Subordinated Debt
Securities of the series shall be payable;

(8) the period or periods within which or the date
or dates on which, if any, the price or prices at which and
<page 18>
the terms and conditions upon which Subordinated Debt
Securities of the series may be redeemed, in whole or in
part, at the option of the Company or the means by which
such period or periods or the date or dates or price or
prices shall be determined or specified;

(9) the obligation, if any, of the Company to
redeem, repay or purchase Subordinated Debt Securities of
the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the
price or prices at which and the currency or currency unit
in which the Subordinated Debt Securities of each series are
payable and the terms and conditions upon which and the
period or periods within which Subordinated Debt Securities
of the series shall be redeemed, repaid or purchased, in
whole or in part, pursuant to such obligation or the means
by which such price or prices or period or periods shall be
determined or specified;

(10) whether Bearer Securities of the series are to
be issuable and, if so, whether Registered Securities of the
series are also to be issuable and whether Registered
Securities of such series may be exchanged for Bearer
Securities of such series and the circumstances under which
and the place or places where any such exchange, if
permitted, may be made;

(11) if Bearer Securities of the series are to be
issuable, (x) whether interest in respect of any portion of
a temporary Global Security of the series payable in respect
of any Interest Payment Date prior to the exchange of such
temporary Global Security for a definitive Global Security
or for definitive Subordinated Debt Securities of the series
shall be paid to any clearing organization with respect to
the portion of such temporary Global Security held for its
account and, in such event, the terms and conditions
(including any certification requirements) upon which any
such interest payment receive by a clearing organization
will be credited to the Persons entitled to interest payable
on such Interest Payment Date, and (y) the terms and
conditions (including any certification requirements) upon
which interests in such temporary Global Security may be
exchanged for interests in a definitive Global Security or
for definitive Subordinated Debt Securities of the series
and the terms and conditions (including any certification
requirements) upon which interests in a definitive Global
Security, if any, may be exchanged for definitive
Subordinated Debt Securities of the series;

(12) whether the Subordinated Debt Securities of the
series shall be issued in whole or in part in the form of
one or more Global Securities and, in such case, the
Depositary or Depositaries for such Global Security or
Securities;

(13) the denominations in which Registered Securities
of the series, if any, shall be issuable, if other than
denominations of $1,000 and any integral multiple thereof,
and the denominations in which Bearer Securities of the
series, if any, shall be issuable if other than
denominations of $1,000, $10,000 and $100,000 or the means
<page 19>
by which such denominations shall be determined or
specified;

(14) if other than the principal amount thereof, the
portion of the principal amount of Subordinated Debt
Securities of the series that shall be payable upon
declaration of acceleration of the Maturity thereof pursuant
to Section 5.2 or the means by which such portion shall be
determined or specified;

(15) if other than Dollars, the currency or
currencies of denomination of the Subordinated Debt
Securities of any series, which may be in any Foreign
Currency or any composite currency, including but not
limited to the ECU, and, if any such currency of
denomination is a composite currency other than the ECU, the
agency or organization, if any, responsible for overseeing
such composite currency;

(16) the currency or currencies in which payment of
the principal of (and premium, if any) and interest on the
Subordinated Debt Securities of the series will be made, and
the currency or currencies, if any, in which payment of the
principal of (and premium, if any) or the interest on
Registered Securities of the series, at the election of each
of the Holders thereof, may also be payable;

(17) if the amount of payments of principal of (and
premium, if any) or interest on the Subordinated Debt
Securities of the series may be determined with reference to
an index, formula or other method based on a currency or
currencies other than that in which the Subordinated Debt
Securities of the series are denominated or designated to be
payable, the manner in which such amounts shall be
determined;

(18) if the payments of principal of (and premium, if
any) or the interest on the Subordinated Debt Securities of
the series are to be made in a Foreign Currency other than
the Foreign Currency in which such Subordinated Debt
Securities are denominated, the manner in which the exchange
rate with respect to such payments shall be determined;

(19) any deletions, modifications or additions to the
Events of Default or covenants with respect to any series,
other than or in addition to those set forth herein and any
deletions, modifications or additions to the covenants of
the Company with respect to the Subordinated Debt Securities
of such series set forth herein provided that no covenant
required by the Trust Indenture Act as then in effect may be
deleted;

(20) whether the Subordinated Debt Securities of a
series shall be subject to discharge and defeasance at the
option of the Company pursuant to Section 13.1;

(21) if Subordinated Debt Securities of a series are
subject to discharge and defeasance at the option of the
Company pursuant to Section 13.1, which of either Section
13.1(c)(1) or (2) applies and whether Section 13.1(g) or
13.1(j) applies;
<page 20>
(22) any trustees, authenticating or paying agents,
transfer agents or registrars or any other agents with
respect to the Subordinated Debt Securities of a series;

(23) any deletions, modifications or additions to the
subordination provisions of Article Sixteen with respect to
any series; and

(24) any other terms and conditions (including any
certification requirements) of the series.

All Subordinated Debt Securities of any one series and the
coupons appertaining to Bearer Securities of such series, if any, shall
be substantially identical except as to denomination and except as may
otherwise be provided in or pursuant to such Board Resolution and set
forth in such Officer's Certificate or in any such indenture
supplemental hereto.

If any of the terms of the series are established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by a Secretary or an Assistant Secretary
of the Company and delivered to the Trustee at or prior to the delivery
of the Officers' Certificate setting forth the terms of the series.

SECTION 3.2 Denominations.

Unless otherwise provided as contemplated by Section 3.1
with respect to any series of Subordinated Debt Securities and except as
provided in Section 3.3, the Subordinated Debt Securities of each
series, if any, shall be issuable in denominations of $1,000 and any
integral multiple thereof, if in registered form, and $1,000, $10,000,
and $100,000, if in bearer form.

All Subordinated Debt Securities of any one series shall be
substantially identical except as to denomination and except as may
otherwise be provided in or pursuant to such Board Resolution and set
forth in such Officer's Certificate or in any such indenture
supplemental hereto.

SECTION 3.3 Execution, Authentication, Delivery and Dating.

(a) The Subordinated Debt Securities shall be executed on
behalf of the Company by its Chairman of the Board, its President, a
Vice President or the Treasurer, under its corporate seal reproduced
thereon and attested to by its Secretary or an Assistant Secretary. The
signature of any of these officers on the Subordinated Debt Securities
may be manual or facsimile. Coupons shall bear the facsimile signature
of the Treasurer or any Assistant Treasurer of the Company.

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

(b) At any time and from time to time after the execution
and delivery of this Indenture, the Company may deliver Subordinated
Debt Securities of any series executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Subordinated Debt Securities, and the Trustee in
<page 21>
accordance with the Company Order shall authenticate and deliver such
Subordinated Debt Securities; provided, however, that, in connection
with its original issuance, a Bearer Security in definitive form may be
delivered only outside the United States and only if the Company or its
agent shall have received from the Person entitled to delivery of such
Bearer Security a certificate substantially in the form set forth in
Exhibit A hereto and only if the Company has no reason to know that such
certificate is false. The Trustee shall be entitled to receive, prior
to the authentication and delivery of such Subordinated Debt Securities,
the supplemental indenture or the Board Resolution by or pursuant to
which the terms and form of such Subordinated Debt Securities have been
approved (and, if such form is approved pursuant to a Board Resolution
together with an appropriate record of any action taken pursuant to such
resolution, in each case certified by the Secretary or an Assistant
Secretary of the Company), an Officer's Certificate as to the absence of
any event that is, or after notice or lapse of time or both would
become, an Event of Default, and, an Opinion of Counsel stating that:

(1) all instruments furnished by the Company to the
Trustee in connection with the authentication and delivery
of such Subordinated Debt Securities and coupons, if any,
conform to the requirements of this Indenture and constitute
sufficient authority hereunder for the Trustee to
authenticate and deliver such Subordinated Debt Securities;

(2) the forms of such Subordinated Debt Securities
and coupons, if any, have been established in conformity
with the provisions of this Indenture;

(3) the terms of such Subordinated Debt Securities
and coupons, if any, have been established in conformity
with the provisions of this Indenture;

(4) in the event that the forms or terms of such
Subordinated Debt Securities and coupons, if any, have been
established in a supplemental indenture, the execution and
delivery of such supplemental indenture has been duly
authorized by all necessary corporate action of the Company,
such supplemental indenture has been duly executed and
delivered by the Company and, assuming due authorization,
execution and delivery by the Trustee, is a valid and
binding obligation enforceable against the Company in
accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium
and similar laws affecting creditors' rights generally and
to general equity principles;

(5) the execution and delivery of such Subordinated
Debt Securities and coupons, if any, have been duly
authorized by all necessary corporate action of the Company
and such Subordinated Debt Securities and coupons, if any,
have been duly executed by the Company and, assuming due
authentication by the Trustee and delivery by the Company,
are the valid and binding obligations of the Company
enforceable against the Company in accordance with their
terms, entitled to the benefit of the Indenture, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws affecting creditors' rights
generally and to general equity principles; and
<page 22>
(6) all laws and requirements in connection with the
execution and delivery of Subordinated Debt Securities of
such series have been complied with.

Such Opinion of Counsel shall also address such other
matters as the Trustee reasonably requests.

(c) If the Company shall establish pursuant to Section 3.1
that the Subordinated Debt Securities of a series are to be issued in
whole or in part in the form of one or more Global Securities, then the
Company shall execute and the Trustee shall, in accordance with this
Section and the Company Order with respect to such series, authenticate
and deliver one or more Global Securities in temporary or permanent form
that (i) shall represent and shall be denominated in an aggregate amount
equal to the aggregate principal amount of the Outstanding Subordinated
Debt Securities of such series to be represented by one or more Global
Securities, (ii) shall be registered, if in registered form, in the name
of the Depositary for such Global Security or Securities or the nominee
of such Depositary, (iii) shall be delivered by the Trustee to such
Depositary or pursuant to such Depositary's instruction and (iv) shall
bear a legend substantially to the following effect: "This Subordinated
Debt Security is a Global Security within the meaning of the Indenture
hereafter referred to and is registered in the name of a Depositary or a
nominee thereof. Unless and until it is exchanged in whole or in part
for Subordinated Debt Securities in definitive form, this Subordinated
Debt Security may not be transferred except as a whole by the Depositary
to a nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or
any such nominee to a successor Depositary or a nominee of such
successor Depositary."

(d) Each Depositary designated pursuant to Section 3.1 for
a Global Security in registered form 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 and
any other applicable statute or regulation.

(e) Each Registered Security shall be dated the date of
its authentication. Each Bearer Security shall be dated as of the date
specified as contemplated by Section 3.1.

(f) No Subordinated Debt Security or coupon attached
thereto shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such
Subordinated Debt Security a certificate of authentication substantially
in the form provided for herein duly executed by the Trustee by manual
signature of one of its authorized officers, and such certificate upon
any Subordinated Debt Security shall be conclusive evidence, and the
only evidence, that such Subordinated Debt Security has been duly
authenticated and delivered hereunder and is entitled to the benefits of
this Indenture. Except as permitted by Section 3.6 or 3.7, the Trustee
shall not authenticate and deliver any Bearer Security unless all
appurtenant coupons for interest then matured have been detached and
cancelled.

SECTION 3.4 Temporary Subordinated Debt Securities.

Pending the preparation of a definitive Global Security or
definitive Subordinated Debt Securities of any series, the Company may
execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Subordinated Debt Securities that are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any
<page 23>
authorized denomination, substantially of the tenor of the definitive
Subordinated Debt Securities in lieu of which they are issued, in
registered form or, if authorized, in bearer form with one or more
coupons or without coupons, and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing
such Subordinated Debt Securities and coupons may determine, as
conclusively evidenced by their execution of such Subordinated Debt
Securities and coupons. In the case of Subordinated Debt Securities of
any series, such temporary Subordinated Debt Securities may be in global
form, representing all or a portion of the Outstanding Subordinated Debt
Securities of such series.

If temporary Subordinated Debt Securities of any series are
issued, the Company will cause definitive Subordinated Debt Securities
of such series to be prepared without unreasonable delay. Except as
otherwise specified as contemplated by Section 3.1(11)(y) with respect
to a series of Subordinated Debt Securities issuable as Bearer
Securities (a) after the preparation of definitive Subordinated Debt
Securities of such series, the temporary Subordinated Debt Securities of
such series shall be exchangeable for definitive Subordinated Debt
Securities of such series upon surrender of the temporary Subordinated
Debt Securities of such series at the office or agency of the Company in
a Place of Payment for such series, without charge to the Holder and (b)
upon surrender for cancellation of any one or more temporary
Subordinated Debt Securities of any series (accompanied by any unmatured
coupons appertaining thereto), the Company shall execute and the Trustee
shall authenticate and deliver in exchange therefor a like principal
amount of definitive Subordinated Debt Securities of the same series of
authorized denominations and of like tenor; provided, however, that no
definitive Bearer Security shall be delivered in exchange for a
temporary Registered Security; and provided further that neither a
beneficial interest in a definitive Global Security in bearer form nor a
definitive Bearer Security shall be delivered in exchange for a
temporary Subordinated Debt Security unless the Company or its agent
shall have received a certificate substantially in the form set forth in
Exhibit A hereto from the person entitled to receive such beneficial
interest in a definitive Global Security or definitive Bearer Security;
and provided further that delivery of a definitive Global Security in
bearer form or a Bearer Security shall occur only outside the United
States; and provided further that neither a beneficial interest in a
definitive Global Security in bearer form nor a definitive Bearer
Security will be issued if the Company has reason to know that such
certificate is false. Until so exchanged, the temporary Subordinated
Debt Securities of any series shall in all respects be entitled to the
same benefits under this Indenture as definitive Subordinated Debt
Securities of such series except as otherwise specified as contemplated
by Section 3.1 with respect to the payment of interest on Subordinated
Debt Securities in temporary form.

SECTION 3.5 Registration, Registration of Transfer and
Exchange.

The Company shall cause to be kept a register (herein
sometimes referred to as the "Security Register") in which, subject to
such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Registered Securities and of transfers
of Registered Securities. The Trustee is hereby appointed "Security
Registrar" for the purpose of registering Subordinated Debt Securities
and transfers of Debt Securities as herein provided. Unless and until
otherwise determined by the Company, the Trustee shall act as Security
Registrar and the Security Register shall be kept at the office or
agency of the Trustee in Chicago, Illinois. Such Security Register
<page 24>
shall be in written form or in any other form capable of being converted
into written form within a reasonable period of time. At all reasonable
times the Security Register shall be open for inspection by the Trustee.

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

Notwithstanding any other provision of this Section, unless
and until it is exchanged in whole or in part for Subordinated Debt
Securities in definitive form, a Global Security representing all or a
portion of the Subordinated Debt 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.

At the option of the Holder, Registered Securities of any
series (other than a Global Security, except as set forth below) may be
exchanged for other Registered Securities of like tenor and terms of the
same series, of any authorized denomination or denominations and of a
like aggregate principal amount, upon surrender of the Registered
Securities to be exchanged at such office or agency. Bearer Securities
may not be delivered by the Trustee in exchange for Registered
Securities.

At the option of the Holder, except as otherwise specified
as contemplated by Section 3.1(11)(y) with respect to a Global Security
issued in bearer form, Bearer Securities of any series may be exchanged
for Registered Securities (if the Subordinated Debt Securities of such
series are issuable as Registered Securities) or Bearer Securities (if
Bearer Securities of such series are issuable in more than one
denomination) of like tenor and terms of the same series, of any
authorized denominations and of a like aggregate principal amount, upon
surrender of the Bearer Securities to be exchanged at any such office or
agency, with all unmatured coupons and all matured coupons in default
thereto appertaining; provided, however, that delivery of a Bearer
Security shall occur only outside the United States. If the Holder of a
Bearer Security is unable to produce any such unmatured coupon or
coupons or matured coupon or coupons in default, such exchange may be
effected if the Bearer Securities are accompanied by payment in funds
acceptable to the Company and the Trustee in an amount equal to the face
amount of such missing coupon or coupons, or the surrender of such
missing coupon or coupons may be waived by the Company and the Trustee
if there be furnished to them such security or indemnity as they may
require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Bearer Security shall surrender to any
Paying Agent any such missing coupon in respect of which such a payment
shall have been made, such Holder shall be entitled to receive the
amount of such payment; provided, however, that, except as otherwise
provided in Section 10.2, interest represented by coupons shall be
payable only upon presentation and surrender of those coupons at an
office or agency located outside the United States. Notwithstanding the
foregoing, in case a Bearer Security of any series is surrendered at any
such office or agency in exchange for a Registered Security of the same
series after the close of business at such office or agency on (i) any
Regular Record Date and before the opening of business at such office or
<page 25>
agency on the relevant Interest Payment Date, or (ii) any Special Record
Date and before the opening of business at such office or agency on the
related date for payment of Defaulted Interest, such Bearer Security
shall be surrendered without the coupon relating to such Interest
Payment Date or proposed date of payment, as the case may be.

Whenever any Subordinated Debt Securities are so surrendered
for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Subordinated Debt Securities that the
Holder making the exchange is entitled to receive.

If at any time the Depositary for the Subordinated Debt
Securities of a series notifies the Company that it is unwilling or
unable to continue as Depositary for the Subordinated Debt Securities of
such series or if at any time the Depositary for the Subordinated Debt
Securities of such series shall no longer be eligible under Section
3.3(d), the Company shall appoint a successor Depositary with respect to
the Subordinated Debt Securities of such series. If a successor
Depositary for the Subordinated Debt 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, the Company's election
pursuant to Section 3.1(12) shall no longer be effective with respect to
the Subordinated Debt Securities of such series and the Company will
execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of definitive Subordinated Debt Securities
of such series, will authenticate and deliver, Subordinated Debt
Securities of such series in definitive form in an aggregate principal
amount equal to the principal amount of the Global Security or
Securities representing such series in exchange for such Global Security
or Securities.

The Company may at any time and in its sole discretion
determine that the Subordinated Debt 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. In such event the Company will
execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of definitive Subordinated Debt Securities
of such series, will authenticate and deliver, Debt Securities of such
series in definitive form and in an aggregate principal amount equal to
the principal amount of the Global Security or Securities representing
such series in exchange for such Global Security or Securities.

If specified by the Company pursuant to Section 3.1 with
respect to a series of Subordinated Debt Securities, the Depositary for
such series of Subordinated Debt Securities may surrender a Global
Security for such series of Subordinated Debt Securities in exchange in
whole or in part for Subordinated Debt Securities of such series in
definitive form on such terms as are acceptable to the Company and such
Depositary. Thereupon, the Company shall execute, and the Trustee shall
authenticate and deliver, without service charge:

(i) to each Person specified by such
Depositary a new Subordinated Debt Security or
Securities of the same series, of any authorized
denomination as requested by such Person in
aggregate principal amount equal to and in
exchange for such Person's beneficial interest
in the Global Security; and

(ii) to such Depositary a new Global
Security in a denomination equal to the
difference, if any, between the principal amount
<page 26>
of the surrendered Global Security and the
aggregate principal amount of Subordinated Debt
Securities delivered to Holders thereof.

In any exchange provided for in any of the preceding three
paragraphs, the Company will execute and the Trustee will authenticate
and deliver Subordinated Debt Securities (a) in definitive registered
form in authorized denominations, if the Subordinated Debt Securities of
such series are issuable as Registered Securities, (b) in definitive
bearer form in authorized denominations, with coupons attached, if the
Subordinated Debt Securities of such series are issuable as Bearer
Securities or (c) as either Registered or Bearer Securities, if the
Subordinated Debt Securities of such series are issuable in either form;
provided, however, that no definitive Bearer Security shall be delivered
in exchange for a temporary Global Security unless the Company or its
agent shall have received from the person entitled to receive the
definitive Bearer Security a certificate substantially in the form set
forth in Exhibit A hereto; and provided further that delivery of a
Bearer Security shall occur only outside the United States; and provided
further that no definitive Bearer Security will be issued if the Company
has reason to believe that such certificate is false.

Upon the exchange of a Global Security for Subordinated Debt
Securities in definitive form, such Global Security shall be cancelled
by the Trustee. Registered Securities issued in exchange for a Global
Security pursuant to this Section shall be registered in such names and
in such authorized denominations as the Depositary for such Global
Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Registered Securities to the Persons in whose names
such Subordinated Debt Securities are so registered. The Trustee shall
deliver Bearer Securities issued in exchange for a Global Security
pursuant to this Section to the Persons, and in such authorized
denominations, as the Depositary for such Global Security, pursuant to
instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee; provided, however, that no definitive Bearer
Security shall be delivered in exchange for a temporary Global Security
unless the Company or its agent shall have received from the Person
entitled to receive the definitive Bearer Security a certificate
substantially in the form set forth in Exhibit A hereto; and provided
further that delivery of a Bearer Security shall occur only outside the
United States; and provided further that no definitive Bearer Security
will be issued if the Company has reason to believe that such
certificate is false.

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

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

No service charge shall be made for any registration of
transfer or exchange of Subordinated Debt Securities, but the Company
may require payment of a sum sufficient to cover any tax or other
<page 27>
governmental charge that may be imposed in connection with any transfer,
registration of transfer or exchange of Subordinated Debt Securities,
other than exchanges pursuant to Sections 3.4, 9.6 or 11.7 not involving
any transfer.

The Company shall not be required (i) to issue, register the
transfer of or exchange Subordinated Debt Securities of any particular
series during a period beginning at the opening of business 15 days
before the day of the mailing of a notice of redemption of Subordinated
Debt Securities of such series selected for redemption under Section
11.3 and ending at the close of business on (A) the day of mailing the
relevant notice of redemption, if Subordinated Debt Securities of the
series are issuable only as Registered Securities, and (B) the day of
the first publication of the relevant notice of redemption, if the
Subordinated Debt Securities of the series are issuable as Bearer
Securities, or the mailing of the relevant notice of redemption, if the
Subordinated Debt Securities of the series are also issuable as
Registered Securities and there is no publication, or (ii) to register
the transfer of or exchange any Registered Security so selected for
redemption in whole or in part, except the unredeemed portion of any
Registered Security being redeemed in part, or (iii) to exchange any
Bearer Security so selected for redemption except that such a Bearer
Security may be exchanged for a Registered Security of that series (if
the Subordinated Debt Securities of such series are issuable as
Registered Securities), or (iv) to register the transfer of or exchange
any Subordinated Debt Security if the Holder thereof has expressed his
right, if any, to require the Company to repurchase such Subordinated
Debt Security, in whole or in part, except that portion of such
Subordinated Debt Security not required to be repurchased, provided that
such Registered Security shall be immediately surrendered for redemption
with written instructions for payment consistent with the provisions of
this Indenture.

Notwithstanding any other provision in this Indenture, the
exchange of Bearer Securities for Registered Securities will be subject
to the provisions of United States income tax laws and regulations
applicable to Subordinated Debt Securities in effect at the time of such
exchange.

SECTION 3.6 Mutilated, Destroyed, Lost and Stolen
Subordinated Debt Securities.

If (i) any mutilated Subordinated Debt Security or a Bearer
Security with a mutilated coupon appertaining to it is surrendered to
the Trustee, or (ii) the Company and the Trustee receive evidence to
their satisfaction of the destruction, loss or theft of any Subordinated
Debt Security or coupon, and there is delivered to the Company and the
Trustee such security or indemnity as may be required by them to save
each of them harmless, then, in the absence of notice to the Company or
the Trustee that such Subordinated Debt Security or coupon has been
acquired by a bona fide purchaser, the Company shall execute and upon
its written request the Trustee shall authenticate and deliver, in
exchange for any such mutilated Subordinated Debt Security or Bearer
Security with a mutilated coupon appertaining to it or to which a
destroyed, lost or stolen coupon appertains (with all appurtenant
coupons not destroyed, lost or stolen) or in lieu of any such destroyed,
lost or stolen Subordinated Debt Security, a new Subordinated Debt
Security of like tenor and terms and principal amount, bearing a number
not contemporaneously outstanding, with coupons corresponding to the
coupons, if any, appertaining to such destroyed, lost or stolen Security
or to the Security to which such destroyed, lost or stolen coupon
appertains.
<page 28>
In case any such mutilated, destroyed, lost or stolen
Subordinated Debt Security or coupon has become or is about to become
due and payable, the Company in its discretion may, instead of issuing a
new Subordinated Debt Security, pay such Subordinated Debt Security or
coupon; provided, however, that payment of principal of (and premium, if
any) and any interest on Bearer Securities shall, except as otherwise
provided in Section 10.2, be payable only at an office or agency located
outside the United States; and provided further that, with respect to
any such coupons, interest represented thereby shall be payable only
upon presentation and surrender of the coupons appertaining thereto.

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

Every new Subordinated Debt Security of any series, with its
coupons, if any, issued pursuant to this Section in exchange for any
mutilated security or in lieu of any destroyed, lost or stolen
Subordinated Debt Security, or in exchange for a Bearer Security to
which a destroyed, lost or stolen coupon appertains, shall constitute an
original additional contractual obligation of the Company, whether or
not the mutilated, destroyed, lost or stolen Subordinated Debt Security
and its coupons, if any, or the destroyed, lost or stolen coupon shall
be at any time enforceable by anyone, and any such new Subordinated Debt
Security and coupons, if any, shall be entitled to all the benefits of
this Indenture equally and proportionately with any and all other
Subordinated Debt Securities of that series and their coupons, if any,
duly issued hereunder.

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

SECTION 3.7 Payment of Interest, Interests Rights
Preserved.

Interest on any Registered Security that is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall
be paid to the Person in whose name that Registered Security (or one or
more Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest. In case a Bearer Security of
any series is surrendered in exchange for a Registered Security of such
series after the close of business (at an office or agency in a Place of
Payment for such series) on any Regular Record Date and before the
opening of business (at such office or agency) on the next succeeding
Interest Payment Date, such Bearer Security shall be surrendered without
the coupon relating to such Interest Payment Date and interest will not
be payable on such Interest Payment Date in respect of the Registered
Security issued in exchange for such Bearer Security, but will be
payable only to the Holder of such coupon when due in accordance with
the provisions of this Indenture. At the option of the Company, payment
of interest on any Registered Security may be made by check mailed to
the address of the Person entitled thereto as such address shall appear
in the Security Register or by wire transfer to an account designated by
such person pursuant to an arrangement that is satisfactory to the
Trustee and the Company. In the event that payments shall be made by
wire transfer, the Company shall arrange by 10:00 a.m. New York time on
the Interest Payment Date for the wire transfer of money in immediately
available funds to the Trustee or Paying Agent. The Trustee shall not
<page 29>
be responsible or held liable for any loss resulting from a failure of
the federal funds wire system or any other occurrence beyond its control
in connection with wire transfers made pursuant to this Section.

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

(1) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the
Registered Securities of such series (or their respective
Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each
Registered Security of such series and the date of the
proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory
to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such
Defaulted Interest as in this Clause provided. Thereupon
the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which shall be not more than 15
days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt
by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special
Record Date. Unless the Trustee is acting as the Security
Registrar, promptly after such special Record Date, the
Company shall furnish the Trustee with a list, or shall make
arrangements satisfactory to the Trustee with respect
thereto, of the names and addresses of, and principal
amounts of Registered Securities of such series held by, the
Holders appearing on the Security Register at the close of
business on such Special Record Date. In the name and at
the expense of the Company, the Trustee shall cause notice
of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be mailed, first-class
postage prepaid, to each Holder of Registered Securities of
such series at his address as it appears in the Security
Register, not less than 10 days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been
mailed as aforesaid, such Defaulted Interest shall be paid
to the Persons in whose names the Registered Securities of
such series (or their respective Predecessor Securities) are
registered at the close of business on such Special Record
Date and shall no longer be payable pursuant to the
following Clause (2). In case a Bearer Security of any
series is surrendered at the office or agency in a Place of
Payment for such series in exchange for a Registered
Security of such series after the close of business at such
office or agency on any Special Record Date and before the
opening of business at such office or agency on the related
<page 30>
proposed date for payment of Defaulted Interest, such Bearer
Security shall be surrendered without the coupon relating to
such proposed date of payment and Defaulted Interest will
not be payable on such proposed date of payment in respect
of the Registered Security issued in exchange for such
Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provision of
this Indenture.

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

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

SECTION 3.8 Persons Deemed Owners.

Prior to due presentment of a Registered Security for
registration of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name such
Registered Security is registered as the owner of such Registered
Security for the purpose of receiving payment of principal of (and
premium, if any) and (subject to Section 3.7) interest on such
Registered Security and for all other purposes whatsoever, whether or
not such Registered Security be overdue, and neither the Company or the
Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.

The Company, the Trustee and any agent of the Company or the
Trustee may treat the bearer of any Bearer Security and the bearer of
any coupon as the absolute owner of such Bearer Security or coupon for
the purpose of receiving payment thereof or on account thereof and for
all other purposes whatsoever, whether or not such Bearer Security or
coupon be overdue, and neither the Company nor the Trustee nor any agent
of the Company or the Trustee shall be affected by notice to the
contrary.

Notwithstanding the foregoing, with respect to any Global
Security, nothing herein shall prevent the Company, the Trustee, or any
agent of the Company or the Trustee, from giving effect to any written
certification, proxy or other authorization furnished by a Depositary or
impair, as between a Depositary and holders of beneficial interests in a
Global Security, the operation of customary practices governing the
exercise of rights of the Depositary (or its nominee) as Holder of such
Global Security.

SECTION 3.9 Cancellation.

Unless otherwise provided with respect to a series of
Subordinated Debt Securities, all Subordinated Debt Securities and
coupons surrendered for payment, redemption, registration of transfer or
<page 31>
exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly cancelled by it. The
Company may at any time deliver to the Trustee for cancellation any
Subordinated Debt Securities previously authenticated and delivered
hereunder that the Company may have acquired in any manner whatsoever,
and may deliver to the Trustee (or to any other Person for delivery to
the Trustee) for cancellation any Securities previously authenticated
hereunder for which the Company has not issued and sold, and all
Subordinated Debt Securities so delivered shall be promptly cancelled by
the Trustee. No Subordinated Debt Securities shall be authenticated in
lieu of or in exchange for any Subordinated Debt Securities cancelled as
provided in this Section, except as expressly permitted by this
Indenture. All cancelled Subordinated Debt Securities and coupons held
by the Trustee shall be destroyed and certification of their destruction
delivered to the Company unless by a Company Order the Company shall
direct that the cancelled Subordinated Debt Securities or coupons be
returned to it.

SECTION 3.10 Computation of Interest.

Except as otherwise specified as contemplated by Section 3.1
for Subordinated Debt Securities of any series, interest on the
Subordinated Debt Securities of each series shall be computed on the
basis of a 360-day year of twelve 30-day months.

SECTION 3.11 Payment in Currencies.

(a) Payment of the principal of (and premium, if any) and
interest on the Subordinated Debt Securities of any series shall be made
in the currency or currencies specified pursuant to Section 3.1;
provided that the Holder of a Registered Security of such series may
elect to receive such payment in any one of (i) Dollars and (ii) any
other currency designated for such purpose pursuant to Section 3.1. A
Holder of a Registered Security may make such election by delivering to
the Trustee a written notice thereof, substantially in the form attached
hereto as Exhibit B or in such other form as may be acceptable to the
Trustee, not later than the close of business on the Regular or Special
Record Date immediately preceding the applicable Interest Payment Date
or the fifteenth day immediately preceding the Maturity of an
installment of principal, as the case may be. Such election shall
remain in effect with respect to such Holder until such Holder delivers
to the Trustee a written notice substantially in the form attached
hereto as Exhibit B or in such other form as may be acceptable to the
Trustee specifying a change in the currency in which such payment is to
be made provided that any such notice must be delivered to the Trustee
not later than the close of business on the Regular or Special Record
Date immediately preceding the next Interest Payment Date or the
fifteenth day immediately preceding the Maturity of an installment of
principal, as the case may be, in order to be effective for the payment
to be made thereon; and provided further that no such change in currency
may be made with respect to payments to be made on any Registered
Security with respect to which notice of redemption has been given by
the Company pursuant to Article Eleven.

(b) Except as otherwise specified as contemplated by
Section 3.1, the Trustee shall deliver to the Company, not later than
the eighth Business Day after the Regular or Special Record Date with
respect to an Interest Payment Date or the tenth day immediately
preceding the Maturity of an installment of principal, as the case may
be, with respect to a series of Subordinated Debt Securities, a written
notice specifying, in the currency or currencies in which the
Subordinated Debt Securities of such series are denominated, the
<page 32>
aggregate amount of the principal of (and premium, if any) and interest
on such Subordinated Debt Securities to be paid on such payment date.
If payments on any such Subordinated Debt Securities are designated to
be made in a currency other than the currency in which such Subordinated
Debt Securities are denominated or if at least one Holder of a
Registered Security has made the election referred to in subsection (a)
above with respect to such Subordinated Debt Securities, then the
written notice referred to in the proceeding sentence shall also
specify, in each currency in which payment with respect to such series
of Subordinated Debt Securities is to be made pursuant to said
subsection (a), the amount of principal of (and premium, if any) and
interest on such series of Subordinated Debt Securities to be paid in
such currency on such payment date.

(c) The Company shall deliver, not later than the fourth
Business Day following each Regular or Special Record Date or the tenth
day immediately preceding the Maturity of an installment of principal,
as the case may be, to the Trustee an Exchange Rate Officer's
Certificate in respect of the Dollar or Foreign Currency payments to be
made on such payment date. Except as otherwise specified as
contemplated by Section 3.1, the amount receivable by Holders of
Registered Securities who have elected payment in a currency other than
the currency in which such Registered Securities are denominated as
provided in subsection (a) above shall be determined by the Company on
the basis of the applicable Exchange Rate set forth in the applicable
Exchange Rate Officer's Certificate.

(d) (i) If the Foreign Currency in which
Subordinated Debt Securities of a series are
denominated ceases to be used both by the government
of the country which issued such currency and for the
settlement of transactions by public institutions of
or within the international banking community, then
with respect to each date for the payment of principal
of (and premium, if any) and interest on such
Subordinated Debt Securities and any coupons
appertaining thereto occurring after the final date on
which the Foreign Currency was so used, all payments
with respect to such Subordinated Debt Securities and
any coupons appertaining thereto shall be made in
Dollars, provided that payment to a Holder of a
Registered Security of such series shall be made in a
different Foreign Currency if that Holder has elected
or elects payment in such Foreign Currency as provided
for by subsection (a) above. If payment is to be made
in Dollars to the Holders of any such Subordinated
Debt Securities or coupons pursuant to the provisions
of the preceding sentence, then the amount to be paid
in Dollars on a payment date by the Company to the
Trustee and by the Trustee or any Paying Agent to
Holders shall be determined by the Trustee as of the
Regular or Special Record Date with respect to such
Interest Payment Date or the fifteenth day immediately
preceding the Maturity of an installment of principal,
as the case may be, and shall be equal to the sum
obtained by converting the specified Foreign Currency
into Dollars at the Exchange Rate on the last Record
Date on which such Foreign Currency was so used in
either such capacity.

If a Holder of a Registered Security denominated
in a composite currency has elected payment in a
<page 33>
specified Foreign Currency as provided for by
subsection (a) above and such Foreign Currency ceases
to be used both by the government of the country which
issued such currency and for the settlement of
transactions by public institutions of or within the
international banking community, such Holder shall,
subject to subsection (d)(ii) below, receive payment
in such composite currency, provided that such payment
to such Holder shall be made in a different Foreign
Currency or in Dollars if that Holder has elected or
elects payment in such Foreign Currency or in Dollars
as provided for by subsection (a) above.

(ii) If the ECU ceases to be used both within
the European Monetary System and for the settlement of
transactions by public institutions of or within the
European Communities, or if any other composite
currency in which a Subordinated Debt Security is
denominated or payable ceases to be used for the
purposes for which it was established, then with
respect to each date for the payment of principal of
(and premium, if any) and interest on Subordinated
Debt Securities of a series denominated in ECU or such
other composite currency, as the case may be,
occurring after the last date on which the ECU or such
other composite currency, as the case may be, was so
used (the "Conversion Date"), all payments with
respect to such Subordinated Debt Securities and any
appurtenant coupons shall be made in Dollars, provided
that payment to a Holder of a Registered Security of
such series shall be made in a Foreign Currency if
that Holder has elected or elects payment in such
Foreign Currency as provided for by subsection (a)
above.

If payment with respect to Subordinated Debt
Securities of a series denominated in ECU or any other
composite currency is to be made in Dollars pursuant
to the provisions of the preceding paragraph, then the
amount to be paid in Dollars on a payment date by the
Company to the Trustee and by the Trustee or any
Paying Agent to Holders shall be determined by the
Trustee as of the Regular or Special Record Date with
respect to such Interest Payment Date or the fifteenth
day immediately preceding the Maturity of an
installment of principal, as the case may be, and
shall be equal to the sum of the amounts obtained by
converting each Component of such composite currency
into Dollars at the Exchange Rate for such Component
on such Record Date or fifteenth day, as the case may
be, multiplied by the number of ECU or units of such
other composite currency, as the case may be, that
would have been so paid had the ECU or such other
composite currency, as the case may be, not ceased to
be so used. If payment is to be made in a Foreign
Currency to the Holders of Subordinated Debt
Securities of such series pursuant to the preceding
paragraph, then the amount to be paid in such Foreign
Currency on a payment date by the Company to the
Trustee and by the Trustee or any Paying Agent to
Holders shall be determined by the Trustee as of the
Regular or Special Record Date with respect to such
<page 34>
Interest Payment Date or the fifteenth day immediately
preceding the Maturity of an installment of principal,
as the case may be, and shall be determined by (A)
converting each Component of such composite currency
into Dollars at the Exchange Rate for such Component
on such Record Date or fifteenth day, as the case may
be, and (B) converting the sum in Dollars so obtained
into such Foreign Currency at the Exchange Rate for
such Foreign Currency on such Record Date or fifteenth
day, as the case may be.

(e) All decisions and determinations of the Trustee
regarding conversion of Foreign Currency into Dollars pursuant to
subsection (d)(i) above or the conversion of ECU or any other composite
currency into Dollars or Foreign Currency pursuant to subsection (d)(ii)
above or the Exchange Rate shall, in the absence of manifest error, be
conclusive for all purposes and irrevocably binding upon the Company and
all Holders of the Subordinated Debt Securities. If a Foreign Currency
in which payment of Subordinated Debt Securities of a series may be
made, pursuant to subsection (a) above, ceases to be used both by the
government of the country which issued such currency and for the
settlement of transactions by public institutions of or within the
international banking community, the Company, after learning thereof,
will give notice thereof to the Trustee immediately (and the Trustee
promptly thereafter will give notice to the Holders in the manner
provided in Section 1.6) specifying the last date on which the Foreign
Currency was used for the payment of principal of (and premium, if any)
or interest on such Subordinated Debt Securities. In the event the ECU
ceases to be used both within the European Monetary System and for the
settlement of transactions by public institutions of or within the
European Communities, or any other composite currency in which a
Subordinated Debt Security is denominated or payable ceases to be used
for the purposes for which it was established, the Company, after
learning thereof, will give notice thereof to the Trustee immediately
(and the Trustee promptly thereafter will give notice to the Holders in
the manner provided in Section 1.6) specifying the Conversion Date with
respect to such composite currency and the Components of such composite
currency on such Conversion Date. In the event of any subsequent change
in any Component, the Company, after learning thereof, will give notice
to the Trustee similarly. The Trustee shall be fully justified and
protected in relying and acting upon the information so received by it
from the Company and shall not otherwise have any duty or obligation to
determine such information independently.

SECTION 3.12 Certification by a Person Entitled to Delivery
of a Bearer Security.

Whenever any provision of this Indenture or a Subordinated
Debt Security contemplates that certification be given by a person
entitled to delivery of a Bearer Security, such certification shall be
provided substantially in the form of Exhibit A hereto, with only such
changes as shall be approved by the Company.

SECTION 3.13 Judgments.

The Company may provide, pursuant to Section 3.1, for the
Subordinated Debt Securities of any series that (a) the obligation, if
any, of the Company to pay the principal of (and premium, if any) and
interest on the Subordinated Debt Securities of such series and any
appurtenant coupons in a Foreign Currency, composite currency or Dollars
(the "Designated Currency") as may be specified pursuant to Section 3.1
or elected pursuant to Section 3.11 is of the essence and agree that, to
<page 35>
the fullest extent possible under applicable law and except as otherwise
provided by Section 3.11, judgments in respect of such Subordinated Debt
Securities shall be given in the Designated Currency; (b) the obligation
of the Company to make payments in the Designated Currency of the
principal of (and premium, if any) and interest on such Subordinated
Debt Securities and any appurtenant coupons shall, notwithstanding any
payment in any other currency (whether pursuant to a judgment or
otherwise), be discharged only to the extent of the amount in the
Designated Currency that the Holder receiving such payment may, in
accordance with normal banking procedures, purchase with the sum paid in
such other currency (after any premium and cost of exchange) on the
Business Day immediately following the day on which such Holder receives
such payment; (c) if the amount in the Designated Currency that may be
so purchased for any reason falls short of the amount originally due,
the Company shall pay such additional amounts as may be necessary to
compensate for such shortfall; and (d) any obligation of the Company not
discharged by such payment shall be due as a separate and independent
obligation and, until discharged as provided herein, shall continue in
full force and effect.

ARTICLE 4

SATISFACTION AND DISCHARGE

SECTION 4.1 Satisfaction and Discharge of Indentures.

This Indenture shall upon Company Request cease to be of
further effect (except as to any surviving rights of registration of
transfer or exchange of Subordinated Debt Securities herein expressly
provided for and rights to receive payments of principal (and premium,
if any) and interest thereon and any right to receive additional
amounts, as provided in Section 10.6) and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction
and discharge of this Indenture, when

(1) either

(A) all Subordinated Debt Securities
theretofore authenticated and delivered and all
coupons appertaining thereto (other than (i) coupons
appertaining to Bearer Securities surrendered in
exchange for Registered Securities and maturing after
such exchange, surrender of which is not required or
has been waived as provided in Section 3.5, (ii)
Subordinated Debt Securities and coupons that have
been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 3.6, (iii)
coupons appertaining to Bearer Securities called for
redemption and maturing after the relevant Redemption
Date, surrender of which has been waived as provided
in Section 11.7, and (iv) Subordinated Debt Securities
and coupons for whose payment money has theretofore
been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the
Company or discharged from such trust, as provided in
Section 10.3) have been delivered to the Trustee for
cancellation; or

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

(i) have become due and payable, or
<page 36>
(ii) will become due and payable at their
Stated Maturity within one year, or

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

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

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

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

Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, the
obligations of the Trustee to any Authenticating Agent under Section
6.14 and, if money shall have been deposited with the Trustee pursuant
to Subclause (B) of Clause (1) of this Section, the obligations of the
Trustee under Section 4.2 and the last paragraph of Section 10.3 shall
survive.

SECTION 4.2 Application of Trust Money.

Subject to the provisions of the last paragraphs of Section
10.3, all money deposited with the Trustee pursuant to Section 4.1 shall
be held in trust and applied by it, in accordance with the provisions of
the Subordinated Debt Securities, the coupons and this Indenture, to the
payment, either directly or through any Paying Agent (including the
Company acting as its own Paying Agent) as the Trustee may determine, to
the Persons entitled thereto, of the principal (and premium, if any) and
interest for whose payment such money has been deposited with the
Trustee.

ARTICLE 5

REMEDIES

SECTION 5.1 Events of Default.

"Event of Default" whenever used herein with respect to
Subordinated Debt Securities of any series means any one of the
following events (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation
of law or pursuant to any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental body)
<page 37>
and such other events as may be established with respect to the
Securities of that series as contemplated by Section 3.1 hereof:

(a) default in the payment of any installment of interest
upon any Subordinated Debt Security of that series as and when the same
shall become due and payable, and continuance of such default for a
period of 30 days; or

(b) default in the payment of the principal of and
premium, if any, on any Subordinated Debt Security of that series as and
when the same shall become due and payable at Maturity or by declaration
or upon repayment; or

(c) default in the payment of any sinking fund installment
as and when the same shall become due and payable by the terms of a
Subordinated Debt Security of that series; or

(d) failure on the part of the Company to observe or
perform any other of the covenants or agreements on the part of the
Company in this Indenture (other than a covenant or warranty a default
in whose performance or whose breach is elsewhere in this Section
specifically dealt with or those set forth exclusively in the terms of
any particular series of Subordinated Debt Securities established as
contemplated in this Indenture) continued for a period of 60 days after
there has been given to the Company by the Trustee, or to the Company
and the Trustee by the Holders of at least 25% in aggregate principal
amount of the Subordinated Debt Securities at the time Outstanding, 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) any obligation for borrowed money of, or guaranteed
by, the Company shall not be paid when due by reason of acceleration or
otherwise, the grace period, if any, provided with respect thereto shall
have elapsed or any security therefor shall have become enforceable, and
the aggregate due but unpaid amount of all such obligations shall be in
excess of $10,000,000, and such acceleration or failure to pay shall not
be rescinded, annulled or cured or such right of enforcement shall not
be terminated for a period of 30 days after there has been given, by
registered or certified mail to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in principal
amount of the Subordinated Debt Securities at the time Outstanding, a
written notice specifying such Event of Default and requiring the
Company to cause such acceleration or failure to pay or accrual of such
right of enforcement to be rescinded, annulled, cured or terminated and
stating that such notice is a "Notice of Default" hereunder, provided,
however, that if such acceleration and the event of default giving rise
thereto or such failure to pay such obligations or the events giving
rise to such right of enforcement shall be remedied or cured by the
Company or waived or terminated by the holders of such obligations, in
each case prior to acceleration of the Maturity of the Subordinated Debt
Securities of such series, then the Event of Default hereunder by reason
thereof shall be deemed likewise to have been thereupon remedied, cured,
waived or terminated without further action upon the part of either the
Trustee or any of the Holders of the Subordinated Debt Securities of
such series; and provided, further, that, subject to the provisions of
Sections 6.1 and 6.2, the Trustee shall not be deemed to have knowledge
of such default unless either (A) a Responsible Officer of the Trustee
shall have actual knowledge of such default or (B) the Trustee shall
have received written notice thereof from the Company, from any Holder,
from the holder of any such indebtedness or from the trustee under any
such mortgage, indenture or other instrument; or
<page 38>
(f) a court having jurisdiction in the premises shall
enter a decree or order for relief in respect of the Company in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of the Company or for any substantial part of its property, or
ordering the winding-up or liquidation of its affairs and such decree or
order shall remain unstayed and in effect for a period of 60 consecutive
days; or

(g) the Company shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or shall consent to the entry of an order for relief in an
involuntary case under any such law, or shall consent to the appointment
of or taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or similar official) of the Company or for any
substantial part of its property, or shall make any general assignment
for the benefit of creditors, or shall fail generally to pay its debts
as they become due or the Company shall take corporate action in
furtherance of any such action; or

(h) any other Event of Default provided with respect to
the Subordinated Debt Securities of that series.

SECTION 5.2 Acceleration of Maturity: Rescission and
Annulment.

If an Event of Default described in clauses (a), (b) or (c)
of Section 5.1 or established pursuant to Section 3.1 with respect to
Subordinated Debt Securities of any series at the time Outstanding
occurs and is continuing, then and in every such case unless the
principal of all the Subordinated Debt Securities of such series shall
have already become due and payable, either the Trustee or the Holders
of not less than 25% in principal amount of Outstanding Subordinated
Debt Securities of such series (voting as a single class) may declare
the principal amount (or, if the Subordinated Debt 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) of and
all accrued but unpaid interest on all the Subordinated Debt Securities
of such series to be due and payable immediately, by a notice in writing
to the Company (and to the Trustee if given by Holders), and upon any
such declaration such amount shall become immediately due and payable.
If an Event of Default described in clauses (d), (e), (f) or (g) of
Section 5.1 occurs and is continuing, then and in every such case,
unless the principal of all the Subordinated Debt 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
Subordinated Debt Securities hereunder (treated as one class) may
declare the principal amount (or, if any Subordinated Debt Securities
are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms thereof) of and all accrued but
unpaid interest on all the then Outstanding Subordinated Debt Securities
to be due and payable immediately, by a notice in writing to the Company
(and to the Trustee if given by the Holders), and upon any such
declaration such amount shall become immediately due and payable.

At any time after such declaration of acceleration with
respect to Subordinated Debt Securities of any series (or all the
Subordinated Debt Securities, as the case may be) has been made and
before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article provided, the
Holders of a majority in principal amount of the Outstanding
<page 39>
Subordinated Debt Securities of such series, by written notice to the
Company and the Trustee, may rescind and annul such declaration with
respect to any Event of Default described in clauses (a), (b), or (c) of
Section 5.1 or any other Event of Default established pursuant to
Section 3.1 with respect to the Subordinated Debt Securities of that
series (or, in the case of an Event of Default described in clauses (d),
(e), (f) or (g) of Section 5.1, the Holders of a majority in principal
amount of all the Outstanding Subordinated Debt Securities may, by
written notice to the Company and the Trustee, rescind and annul such
declaration), and its consequences if

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

(A) all overdue installments of interest on
the Subordinated Debt Securities of such series (or
all Subordinated Debt Securities, as the case may be)
and any related coupons,

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

(C) to the extent that payment of such
interest is lawful, interest upon overdue installments
of interest on each such Subordinated Debt Security
and any related coupons at the rate or rates
prescribed therefor in such Subordinated Debt
Securities,

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

(2) all Events of Default with respect to
Subordinated Debt Securities of such series (or all
Subordinated Debt Securities, as the case may be), other
than the non-payment of the principal of such Subordinated
Debt Securities that have become due solely by such
declaration of acceleration, have been cured or waived as
provided in Section 5.13.

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

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

The Company covenants that if:

(1) default is made in the payment of any
installment of interest on any Subordinated Debt Security or
any related coupon when such interest becomes due and
payable and such default continues for a period of 30 days,
or
<page 40>
(2) default is made in the payment of the principal
of (or premium, if any, on) any Subordinated Debt Security
at the Maturity thereof,

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

If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust,
may institute a judicial proceeding for the collection of the sums so
due and unpaid, and may prosecute such proceeding to judgment or final
decree, and may enforce the same against the Company or any other
obligor upon such Subordinated Debt Securities and coupons and collect
the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon such
Subordinated Debt Securities and coupons, wherever situated.

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

SECTION 5.4 Trustee May File Proofs of Claim.

In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceedings, or any voluntary or
involuntary case under the Federal bankruptcy laws as now or hereafter
constituted, relative to the Company or any other obligor upon the
Subordinated Debt Securities of a particular series or any related
coupons or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of such
Subordinated Debt Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the payment of
overdue principal or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise,

(i) to file and prove a claim for the
whole amount of principal (and premium, if any)
and interest owing and unpaid in respect of the
Subordinated Debt Securities of such series and
any appurtenant coupons and to file such other
papers or documents as may be necessary or
advisable in order to have the claims of the
Trustee (including any claim for the reasonable
compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel)
<page 41>
and of the Holders allowed in such judicial
proceeding, and

(ii) to collect and receive any moneys or
other property payable or deliverable on any
such claims and to distribute the same;

and any receiver, assignee, trustee, custodian, liquidator, sequestrator
or other similar official in any such proceeding is hereby authorized by
each Holder to make such payments to the Trustee, and in the event that
the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and any other amounts due the Trustee under Section
6.7.

Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Subordinated Debt Securities or coupons or the
rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided,
however, that the Trustee may, on behalf of the Holders, vote for the
election of a trustee in bankruptcy or similar official and be a member
of a creditors' or other similar committee.

SECTION 5.5 Trustee May Enforce Claims Without Possession
of Subordinated Debt Securities or Coupons.

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

SECTION 5.6 Application of Money Collected.

Any money collected by the Trustee pursuant to this Article
shall be applied in the following order, at the date or dates fixed by
the Trustee, and, in case of the distribution of such money on account
of principal (and premium, if any) or interest, upon presentation of the
Subordinated Debt Securities or coupons, or both, as the case may be,
and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:

FIRST: To the payment of all amounts due the Trustee
under Section 6.7; and

SECOND: To the payment of the amounts then due and
unpaid for principal of (and premium, if any) and interest
on the Subordinated Debt Securities and any coupons, in
respect of which or for the benefit of which such money has
been collected, and any coupons for principal (and premium,
if any) and interest, respectively; provided, that if any
one or more series of Subordinated Debt Securities provide
by the terms thereof that such Subordinated Debt Securities
<page 42>
(the "Junior Series of Subordinated Securities") shall be
junior in right of payment to any other one or more series
of Subordinated Debt Securities (the "Senior Series of
Subordinated Debt Securities") under the circumstances of a
distribution to be made pursuant to this Section 5.6, then
all amounts due and unpaid for principal of (and premium, if
any) and interest on such Junior Series of Subordinated Debt
Securities shall be paid after all amounts due and unpaid
for principal of (and premium, if any) and interest on such
Senior Series of Subordinated Debt Securities have been
paid. The Holders of any Subordinated Debt Securities
denominated in ECU, any other composite currency or a
Foreign Currency and any matured coupons relating thereto
shall be entitled to receive a ratable portion of the amount
determined by the Trustee by converting the principal amount
Outstanding of such Subordinated Debt Securities and matured
but unpaid interest on such Subordinated Debt Securities in
the currency in which such Subordinated Debt Securities are
denominated into Dollars at the Exchange Rate as of the date
of declaration of acceleration of the Maturity of the
Subordinated Debt Securities (or, if there is no such rate
on such date for the reasons specified in Section
3.11(d)(i), such rate on the date specified in such
Section).

Any surplus then remaining shall be paid to the Company or
to such other Person as shall be entitled to receive such surplus as
specified by the Company.

SECTION 5.7 Limitation on Suits.

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

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

(2) the Holders of not less than 25% in principal
amount of the Outstanding Subordinated Debt Securities of
such series, or, in the case of any Event of Default
described in clauses (d), (e), (f) or (g) of Section 5.1,
25% in principal amount of all the Outstanding Subordinated
Debt Securities, have made written request to the Trustee to
institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;

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

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

(5) no direction inconsistent with such written
request has been given to the Trustee during such 60-day
period by the Holders of a majority in principal amount of
the Outstanding Subordinated Debt Securities of such series
<page 43>
or all the Outstanding Subordinated Debt Securities, as the
case may be;

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

SECTION 5.8 Right of Holders to receive Principal, Premium
and Interest.

Notwithstanding any other provision in this Indenture, the
right of any Holder of any Subordinated Debt Security or coupon to
receive payment of the principal of (and premium, if any) and (subject
to Section 3.7) interest on such Subordinated Debt Security or payment
of such coupon on the respective Stated Maturity or Maturities expressed
in such Subordinated Debt Security or coupon (or, in the case of
redemption, on the Redemption Date), or to institute suit for the
enforcement of any such payment on or after such respective Stated
Maturities or Redemption Date, shall not be impaired without the consent
of such Holder.

SECTION 5.9 Restoration of Rights and Remedies.

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

SECTION 5.10 Rights and Remedies Cumulative.

Except as otherwise provided with respect to the replacement
or payment of mutilated, damaged or stolen Subordinated Debt Securities
or coupons in the last paragraph of Section 3.6, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right
and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate
right or remedy.

SECTION 5.11 Delay or Omission Not Waiver.

No delay or omission of the Trustee or of any Holder of any
Subordinated Debt Security or coupon to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy
or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article or by law to the
Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as
the case may be.
<page 44>
SECTION 5.12 Control by Holders of Subordinated Debt
Securities.

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

(1) such direction shall not be in conflict with any
rule of law or with this Indenture or expose the Trustee to
personal liability; and

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

SECTION 5.13 Waiver of Past Defaults.

The Holders of not less than a majority in principal amount
of the Outstanding Subordinated Debt Securities of any series may on
behalf of the Holders of all the Subordinated Debt Securities of any
such series and any related coupons waive any past default hereunder
with respect to such series described in clauses (a), (b) or (c) of
Section 5.1 or established pursuant to Section 3.1 with respect to the
Subordinated Debt Securities of that series (or, the Holders of not less
than a majority in principal amount of all the Outstanding Subordinated
Debt Securities may on behalf of the Holders of all the Subordinated
Debt Securities and any related coupons waive any past default hereunder
described in clauses (d), (e), (f) or (g) or Section 5.1) and its
consequences, except a default

(1) in the payment of the principal of (or premium,
if any) or interest on any Subordinated Debt Security of
such series (or any Subordinated Debt Security, as the case
may be), or

(2) in respect of a covenant or provision hereof
that under Article Nine cannot be modified or amended
without the consent of the Holder of each Outstanding
Subordinated Debt Security of such series (or each
Outstanding Subordinated Debt Security, as the case may be)
or coupon affected.

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

SECTION 5.14 Undertaking for Costs.

All parties to this Indenture agree, and each Holder of any
Subordinated Debt Security or coupon by his acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant
in such suit of an undertaking to pay the costs of such suit, and that
<page 45>
such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this Section shall
not apply to any suit instituted by the Trustee, to any suit instituted
by any Holder, or group of Holders, holding in the aggregate more than
10% in principal amount of the Outstanding Subordinated Debt Securities
of any series, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (or premium, if any) or
interest on any Subordinated Debt Security or the payment of any coupon
on or after the respective Stated Maturity or Maturities expressed in
such Subordinated Debt Security or coupon (or, in the case of
redemption, on or after the Redemption Date); provided that neither this
Section nor the Trust Indenture Act shall be deemed to authorize any
court to require such an undertaking or to make such an assessment in
any suit instituted by the Company.

SECTION 5.15 Waiver of Usury, Stay or Extension Laws.

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

ARTICLE 6

THE TRUSTEE

SECTION 6.1 Certain Duties and Responsibilities.

(a) With respect to Subordinated Debt Securities of any
series, except during the continuance of an Event of Default with
respect to the Subordinated Debt Securities of such series:

(1) the Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and

(2) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or
opinions which by any provisions 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) In case an Event of Default with respect to
Subordinated Debt Securities of any series has occurred and is
continuing, the Trustee shall, with respect to the Subordinated Debt
Securities of such series or any coupons, as the case may be, 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 person
<page 46>
would exercise or use under the circumstances in the conduct of his or
her own affairs.

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

(1) this Subsection shall not be construed to limit
the effect of Subsection (a) of this Section;

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

(3) the Trustee shall not be liable with respect to
any action taken, suffered or omitted to be taken by it with
respect to Subordinated Debt Securities of any series in
good faith in accordance with the direction of the Holders
of a majority in principal amount of the Outstanding
Subordinated Debt Securities of such series relating to the
time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture.

(d) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.

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

SECTION 6.2 Notice of Defaults.

Within 90 days after the occurrence of any default hereunder
with respect to Subordinated Debt Securities of any series the Trustee
shall transmit by mail to all Holders of Subordinated Debt Securities of
such series, entitled to receive reports pursuant to Trust Indenture Act
Section 313(c), notice of each default hereunder known to the Trustee,
unless such default shall have been cured or waived; provided, however,
that, except in the case of a default in the payment of the principal of
(or premium, if any) or interest on any Subordinated Debt Security of
such series or any related coupons or in the payment of any sinking fund
installment with respect to Subordinated Debt 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 Subordinated Debt Securities of such series; and provided
further that in the case of any default of the character specified in
Section 5.1(d) with respect to Subordinated Debt Securities of such
series no such notice to Holders shall be given until at least 30 days
after the occurrence thereof. For the purpose of this Section, the term
"default" means any event that is, or after notice or lapse of time or
both would become, an Event of Default with respect to Subordinated Debt
Securities of such series.
<page 47>
SECTION 6.3 Certain Rights of Trustee.

Except as otherwise provided in Section 6.1:

(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, direction, consent, order,
bond, debenture, note, coupon or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party
or parties;

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

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

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

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

(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,
direction, consent, order, bond, debenture, note, coupon, other evidence
of indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation, into such
facts or matters as it may see fit, and, if the Trustee shall determine
to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or by
agent or attorney; and

(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.

SECTION 6.4 Not Responsible for Recitals or Issuance of
Subordinated Debt Securities.

The recitals contained herein and in the Subordinated Debt
Securities, except the Trustee's certificates of authentication, and in
any coupons shall be taken as the statements of the Company, and the
Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this
<page 48>
Indenture or of the Subordinated Debt Securities of any series or any
coupons. The Trustee shall not be accountable for the use or
application by the Company of any Subordinated Debt Securities or the
proceeds thereof.

SECTION 6.5 May Hold Subordinated Debt Securities or
Coupons.

The Trustee, any Paying Agent, the Security Registrar or any
other agent of the Company, in its individual or any other capacity, may
become the owner or pledgee of Subordinated Debt Securities and coupons,
and, subject to Sections 6.8 and 6.13, may otherwise deal with the
Company with the same rights it would have if it were not Trustee,
Paying Agent, Security Registrar or such other agent.

SECTION 6.6 Money Held in Trust.

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

SECTION 6.7 Compensation and Reimbursement.

The Company agrees

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

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

(3) to indemnify the Trustee for, and to hold it
harmless against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of
or in connection with the acceptance or administration of
this trust or performance of its duties 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.

As security for the performance of the obligations of the
Company under this Section the Trustee shall have a claim prior to the
Subordinated Debt Securities and any coupons upon all property and funds
held or collected by the Trustee as such, except funds held in trust for
the payment of principal of (and premium, if any) or interest on
Subordinated Debt Securities or any coupons.

SECTION 6.8 Disqualification; Conflicting Interests.

The Trustee shall comply with the terms of Section 310(b) of
the TIA.
<page 49>
SECTION 6.9 Corporate Trustee Required; Eligibility.

There shall at all times be a Trustee hereunder that shall
be a Person that is eligible pursuant to the TIA to act as such and has
a combined capital and surplus of at least $10,000,000. If such Person
publishes reports of condition at least annually, pursuant to law or to
the requirements of said supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of such
Person shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. Neither the
Company nor any Person directly or indirectly controlling, controlled
by, or under common control with the Company shall serve as a Trustee
hereunder.

SECTION 6.10 Resignation and Removal; Appointment of
Successor.

(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee
under Section 6.11.

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

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

(d) If at any time:

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

(2) the Trustee shall cease to be eligible under
Section 6.9 and shall fail to resign after written request
therefor by the Company or by any such Holder, or

(3) the Trustee shall become incapable of acting or
a decree or order for relief by a court having jurisdiction
in the premises shall have been entered in respect of the
Trustee in an involuntary case under the Federal bankruptcy
laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or
similar law; or a decree or order by a court having
jurisdiction in the premises shall have been entered for the
appointment of a receiver, custodian, liquidator, assignee,
trustee, sequestrator (or other similar official) of the
Trustee or of its property or affairs, or any public officer
shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation,
conservation, winding up or liquidation, or
<page 50>
(4) the Trustee shall commence a voluntary case
under the Federal bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal or State
bankruptcy, insolvency or similar law or shall consent to
the appointment of or taking possession by a receiver,
custodian, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Trustee or its property or
affairs, or shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay
its debts generally as they become due, or shall take
corporate action in furtherance of any such action.

then, in any such case, (i) the Company by or pursuant to a Board
Resolution may remove the Trustee with respect to all Subordinated Debt
Securities, or (ii) subject to Section 5.14, any Holder who has been a
bona fide Holder of a Subordinated Debt Security of any 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 for the Subordinated Debt Securities of such series and
the appointment of a successor Trustee.

(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of
Trustee for any cause, with respect to the Subordinated Debt Securities
of one or more series, the Company, by or pursuant to a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Subordinated Debt Securities of that or those series (it
being understood that any such successor Trustee may be appointed with
respect to the Subordinated Debt Securities of one or more or all of
such series and that at any time there shall be only one Trustee with
respect to the Subordinated Debt Securities of any particular series)
and shall comply with the applicable requirements of Section 6.11. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to the
Subordinated Debt Securities of any series shall be appointed by Act of
the Holders of a majority in principal amount of the Outstanding
Subordinated Debt Securities of such series delivered to the Company and
the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment, become the successor
Trustee with respect to the Subordinated Debt Securities of such series
and to that extent supersede the successor Trustee appointed by the
Company. If no successor Trustee with respect to the Subordinated Debt
Securities of any series shall have been so appointed by the Company or
the Holders and accepted appointment in the manner hereinafter provided,
any Holder who has been a bona fide Holder of a Subordinated Debt
Security of such series for at least six months may, subject to Section
5.14, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the debt Securities of such series.

(f) The Company shall give notice of each resignation and
each removal of the Trustee with respect to the Subordinated Debt
Securities of any series and each appointment of a successor Trustee
with respect to the Subordinated Debt Securities of any series by
mailing written notice of such event by first-class mail, postage
prepaid, to the Holders of Registered Securities, if any, of such series
as their names and addresses appear in the Security Register and, if
Subordinated Debt Securities of such series are issuable as Bearer
Securities, by publishing notice of such event once in an Authorized
Newspaper in each Place of Payment located outside the United States.
Each notice shall include the name of the successor Trustee with respect
<page 51>
to the Subordinated Debt Securities of such series and the address of
its Corporate Trust Office.

SECTION 6.11 Acceptance of Appointment by Successor.

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

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

(c) Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Trustee all such
rights, powers and trusts referred to in paragraph (a) or (b) of this
Section, as the case may be.
<page 52>
(d) No successor Trustee shall accept its appointment
unless at the time of such acceptance such successor Trustee shall be
qualified and eligible under this Article.

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

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

SECTION 6.13 Preferential Collection of Claims Against
Company.

The preferential collection of claims against the Company
are governed by TIA Section 311.

SECTION 6.14 Appointment of Authenticating Agent.

Upon a Company Request, the Trustee shall appoint an
authenticating agent with respect to a series of Subordinated Debt
Securities (the "Authenticating Agent"), for such period as the Company
shall elect, to act as the Trustee's agent on its behalf and subject to
its direction in connection with the authentication and delivery of
Subordinated Debt Securities of such series. Subordinated Debt
Securities of such series authenticated by such Authenticating Agent
shall be entitled to the benefits of this Indenture and shall be valid
and obligatory for all purposes as if authenticated by the Trustee.
Wherever reference is made in this Indenture to the authentication and
delivery of Subordinated Debt Securities of any series by the Trustee or
to the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee
by the Authenticating Agent for such series and a certificate of
authentication executed on behalf of such Trustee by such Authenticating
Agent. Such Authenticating Agent shall at all times meet the
eligibility requirements for the Trustee set forth in Section 6.9.

Any corporation into which any Authenticating Agent may be
merged or converted, or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to
which any Authenticating Agent shall be a party, or any corporation
succeeding to the corporate agency or corporate trust business of any
Authenticating Agent, shall continue to be the Authenticating Agent with
respect to all series of Subordinated Debt Securities for which it
served as Authenticating Agent without the execution or filing of any
<page 53>
paper or any further act on the part of the Trustee or such
Authenticating Agent. Any Authenticating Agent may at any time, and if
it shall cease to be eligible shall, resign with respect to one or more
series of Subordinated Debt Securities by giving written notice of
resignation to the Trustee and the Company. The Trustee may at any time
terminate the agency of any Authenticating Agent by giving written
notice of such 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 any Authenticating Agent shall cease
to be eligible in accordance with the provisions of this Section 6.14
with respect to one or more series of Subordinated Debt Securities, the
Trustee shall upon Company Request appoint a successor Authenticating
Agent, and the Company shall provide notice of such appointment to all
Holders of Subordinated Debt Securities of such series in the manner and
to the extent provided in Section 1.6. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested
with all rights, powers, duties and responsibilities of its predecessor
hereunder, with like effect as if originally named as Authenticating
Agent. The Trustee agrees to pay each Authenticating Agent from time to
time reasonable compensation for its services, and the Trustee shall be
entitled to be reimbursed for such payment, subject to the provisions of
Section 6.7. The Authenticating Agent for the Subordinated Debt
Securities of any series shall have no responsibility or liability for
any action taken by it as such at the direction of the Trustee.

SECTION 6.15 Administrative Expense Claim in Bankruptcy.

The Company's payment obligations pursuant to this Section
6.15 shall survive the discharge of this Indenture. When the Trustee
incurs expenses after the occurrence of an Event of Default specified in
Section 5.1(f) or (g), the expenses are intended to constitute expenses
of administration under any Bankruptcy Law.

ARTICLE 7

HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 7.1 Company to Furnish Trustee names and Addresses
of Holders.

The Company will furnish or cause to be furnished to the
Trustee with respect to Subordinated Debt Securities of each series for
which it acts as Trustee:

(a) at least semi-annually, not more than 15 days after
the Regular Record Dates in respect of the Subordinated Debt Securities
of such series or on June 30 and December 31 of each year with respect
to each series of Subordinated Debt Securities for which there are no
Regular Record Dates, (i) a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders of
Registered Securities as of such Regular Record Date or ________ 15 or
__________ 15, as the case may be, and (ii) all other information in the
possession or control of the Company or any Paying Agent as to the names
and addresses of the Holders of Subordinated Debt Securities, and

(b) at such other times as the Trustee may request in
writing, within 30 days after the receipt by the Company of any such
request, a list of similar form and content as of a date not more than
15 days prior to the time such list is furnished;
<page 54>
provided, however, that if and so long as the Trustee shall be the
Security Registrar, no such list need be furnished.

SECTION 7.2 Preservation of Information; Communications to
Holders.

(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders of Registered
Securities contained in the most recent list furnished to the Trustee as
provided in Section 7.1 and the names and addresses of Holders of
Registered Securities received by the Trustee in its capacity as
Security Registrar, if so acting. The Trustee may destroy any list
furnished to it as provided in Section 7.1 upon receipt of a new list so
furnished. The Trustee shall preserve for at least two years the names
and addresses of Holders of Bearer Securities filed with the Trustee
pursuant to TIA Section 313(c).

(b) If three or more Holders (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
Subordinated Debt 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 Subordinated Debt
Securities of a particular series (in which case the applicants must
hold Subordinated Debt Securities of such series) or with all Holders of
Subordinated Debt Securities with respect to their rights under this
Indenture or under the Subordinated Debt Securities 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

(i) afford such applicants access to the
information preserved at the time by the Trustee
in accordance with Section 7.2(a), or

(ii) inform such applicants as to the
approximate number of Holders of Subordinated
Debt Securities of such series or of all
Subordinated Debt Securities, as the case may
be, whose names and addresses appear in the
information preserved at the time by the Trustee
in accordance with Section 7.2(a), and as to the
approximate cost of mailing to such Holders the
form of proxy or other communication, if any,
specified in such application.

If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written request
of such applicants, mail to each Holder whose name and address appear in
the information preserved at the time by the Trustee in accordance with
Section 7.2(a), 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 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
<page 55>
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 Holders 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) Every Holder of Subordinated Debt Securities or
coupons, by receiving and holding the same, agrees with the Company and
the Trustee that neither the Company nor the Trustee shall be held
accountable by reason of the disclosure of any such information as to
the names and addresses of the Holders in accordance with Section
7.2(b), regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of
mailing any material pursuant to a request made under Section 7.2(b).

SECTION 7.3 Reports by Trustee.

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

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

SECTION 7.4 Reports by Company.

The Company will:

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

(2) file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time
to time by the Commission, such additional information,
documents and reports with respect to compliance by the
Company with the conditions and covenants of this Indenture
<page 56>
as may be required from time to time by such rules and
regulations; and

(3) transmit by mail to all Holders of Subordinated
Debt Securities, in the manner and to the extent provided in
TIA Section 313(c) with respect to reports pursuant to
Section 7.3(a), within 30 days after the filing thereof with
the Trustee, such summaries of any information, documents
and reports required to be filed by the Company pursuant to
paragraphs (1) and (2) of this Section as may be required by
rules and regulations prescribed from time to time by the
Commission.

ARTICLE 8

CONSOLIDATION, MERGER, CONVEYANCE SALE OR LEASE

SECTION 8.1 Company May Consolidate, etc., Only on Certain
Terms.

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

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

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

(3) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each
stating that such consolidation, merger, conveyance,
transfer or lease and, if a supplemental indenture is
required in connection with such transaction, such
supplemental indenture comply with this Article and that all
<page 57>
conditions precedent herein provided for relating to such
transaction have been complied with.

SECTION 8.2 Successor Substituted.

Upon any consolidation of the Company with, or merger of the
Company into, any other Person or any conveyance, transfer or lease of
the properties and assets of the Company substantially as an entirety in
accordance with Section 8.1, the successor Person formed by such
consolidation or into which the Company is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect and if such successor Person
had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations
and covenants under this Indenture and the Subordinated Debt Securities.

ARTICLE 9

SUPPLEMENTAL INDENTURES

SECTION 9.1 Supplemental Indentures Without Consent of
Holders.

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

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

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

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

(4) to add to or change any of the provisions of
this Indenture to provide that Bearer Securities may be
registrable as to principal, to change or eliminate any
restrictions on the payment of principal of (or premium, if
any, on) Registered Securities to be exchanged for Bearer
Securities, provided that any such action shall not
adversely affect the interests of the Holders of
Subordinated Debt Securities of any series or any related
coupons in any material respect; or

(5) to add to, change or eliminate any of the
provisions of this Indenture in respect of one or more
<page 58>
series of Subordinated Debt Securities, provided that any
such addition, change or elimination (i) shall neither (A)
apply to any Subordinated Debt Security of any series
created prior to the execution of such supplemental
indenture and entitled to the benefit of such provision nor
(B) modify the rights of the Holders of any such
Subordinated Debt Security with respect to such provision
or, (ii) shall become effective only when there is no such
Subordinated Debt Security Outstanding; or

(6) to establish the form or terms of Subordinated
Debt Securities of any series as permitted by Sections 2.1
and 3.1; or

(7) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to
the Subordinated Debt Securities of one or more series and
to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 6.11 (b);
or

(8) to secure the Subordinated Debt Securities
pursuant to the requirements of Section 8.1 or otherwise; or

(9) to evidence any changes to Sections 6.8, 6.9 or
Article Sixteen as permitted by the terms thereof; or

(10) to cure any ambiguity, to correct or supplement
any provision herein which may be defective or inconsistent
with any other provision herein, or to make any other
provisions with respect to matters or questions arising
under this Indenture that shall not be inconsistent with any
provision of this Indenture, provided such other provisions
shall not adversely affect the interests of the Holders of
Subordinated Debt Securities of any series or any related
coupons; or

(11) to effect any change to qualify this Indenture
under the Trust Indenture Act.

SECTION 9.2 Supplemental Indentures with Consent of
Holders.

With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Subordinated Debt Securities
affected by such supplemental indenture, by Act of said Holders
delivered to the Company and the Trustee, the Company, when authorized
by a Board Resolution, and the Trustee may enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders
under this Indenture of such Subordinated Debt Securities and any
related coupons; provided, however, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding
Subordinated Debt Security or coupon affected thereby:

(1) change the Stated Maturity of the principal of,
or any installment of principal of or interest on, any
Subordinated Debt Security, or reduce the principal amount
thereof or the interest thereon or the method of computation
<page 59>
of the rate of interest thereon or any premium payable upon
redemption thereof, or change any obligation of the Company
to pay additional amounts pursuant to Section 10.6, or
reduce the amount of the principal of an Original Issue
Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant
to Section 5.2, or change any Place of Payment where, or
change the coin or currency in which, any Subordinated Debt
Security or the interest thereon or the method of
computation of the rate of interest thereon or any coupon is
payable, change any right of redemption, purchase or
repayment by the Company at the option of the Holders, or
impair the right to institute suit for the enforcement of
any such payment on or after the Stated Maturity thereof
(or, in the case of redemption, on or after the Redemption
Date), or

(2) reduce the percentage in principal amount of the
Outstanding Subordinated Debt Securities of any series, the
consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is
required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults hereunder
and their consequences) provided for in this Indenture, or
reduce the requirements of Section 14.4 for quorum or
voting, or

(3) modify any of the provisions of this Section,
Section 5.13 or Section 10.9, except to increase any such
percentage or to provide that certain other provisions of
this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Subordinated Debt
Security affected thereby; provided, however, that this
clause shall not be deemed to require the consent of any
Holder with respect to changes in the references to "The
Trustee" and concomitant changes in this Section and Section
10.9, or the deletion of this proviso in accordance with
Sections 6.11 and 9.1(7).

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

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

SECTION 9.3 Execution of Supplemental Indentures.

In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be
entitled to receive, and (subject to Section 6.1) shall be fully
protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by
this Indenture, is not inconsistent herewith, is the legal, valid and
<page 60>
binding obligation of the Company, enforceable in accordance with its
terms, and, in connection with a supplemental indenture executed
pursuant to Section 9.1, no consent of the Holders is required in
connection therewith, and, in connection with a supplemental indenture
executed pursuant to Section 9.2, that the requisite consents of the
Holders have been validly obtained in accordance with Section 9.2
hereof. The Trustee may, but shall not be obligated to, enter into any
such supplemental indenture that affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise.

SECTION 9.4 Effect of Supplemental Indentures.

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

SECTION 9.5 Conformity with Trust Indenture Act.

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

SECTION 9.6 Reference in Subordinated Debt Securities to
Supplemental Indentures.

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

ARTICLE 10

COVENANTS

SECTION 10.1 Payment of Principal, Premium and Interest.

The Company covenants and agrees for the benefit of each series of
Subordinated Debt Securities and any appurtenant coupons that it will
duly and punctually pay the principal of (and premium, if any) and
interest on the Subordinated Debt Securities and any appurtenant coupons
in accordance with the terms of the Subordinated Debt Securities, any
appurtenant coupons and this Indenture. Any interest due on Bearer
Securities on or before Maturity, other than additional amounts, if any,
payable as provided in Section 10.6 in respect of principal of (or
premium, if any, on) such a Subordinated Debt Security, shall be payable
only upon presentation and surrender of the several coupons for such
interest installments as are evidenced thereby as they severally mature.

SECTION 10.2 Maintenance of Office or Agency.

The Company will maintain in each Place of Payment for any series
of Subordinated Debt Securities an office or agency where Subordinated
Debt Securities of such series (but, except as otherwise provided below,
<page 61>
unless such Place of Payment is located outside the United States, not
Bearer Securities) may be presented or surrendered for payment, where
Subordinated Debt Securities of such series (but, except as otherwise
provided below, unless such Place of Payment is located outside the
United States, not Bearer Securities) may be surrendered for
registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Subordinated Debt Securities of such
series and this Indenture may be served. If Subordinated Debt
Securities of a series are issuable as Bearer Securities, the Company
will maintain, subject to any laws or regulations applicable thereto, an
office or agency in a Place of Payment for such series that is located
outside the United States where Subordinated Debt Securities of such
series and the related coupons may be presented and surrendered for
payment (including payment of any additional amounts payable on
Subordinated Debt Securities of such series pursuant to Section 10.6);
provided, however, that if the Subordinated Debt Securities of such
series are listed on The International Stock Exchange of the United
Kingdom and the Republic of Ireland Limited or the Luxembourg Stock
Exchange or any other stock exchange located outside the United States
and such stock exchange shall so require, the Company will maintain a
Paying Agent in London or Luxembourg or any other required city located
outside the United States, as the case may be, so long as the
Subordinated Debt Securities of such series are listed on such exchange.
The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of any such office or agency.
If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee, except that
Bearer Securities of that series and the related coupons may be
presented and surrendered for payment (including payment of any
additional amounts payable on Bearer Securities of that series pursuant
to Section 10.6) at the place specified for the purpose pursuant to
Section 3.1 or, if no such place is specified, at the main office of the
Trustee in London, and the Company hereby appoints the Trustee its agent
to receive all such presentations, surrenders, notices and demands.

No payment of principal of or premium or interest (including
additional amounts payable in respect thereof) on Bearer Securities
shall be made at any office or agency of the Company in the United
States or by check mailed to any address in the United States or by
transfer to an account maintained with a bank located in the United
States; provided, however, that payment of principal of and any premium
and interest (including additional amounts payable in respect thereof)
on any Bearer Security may be made in Dollars at the Corporate Trust
Office of the Trustee in Chicago, Illinois if (but only if) payment of
the full amount of such principal, premium, interest or additional
amounts at all offices outside the United States maintained for the
purpose by the Company in accordance with this Indenture is illegal or
effectively precluded by exchange controls or other similar
restrictions.

The Company may also from time to time designate one or more other
offices or agencies (in or outside of such Place of Payment) where the
Subordinated Debt Securities of one or more series and any appurtenant
coupons (subject to the preceding paragraph) may be presented or
surrendered for any or all of such purposes, and may from time to time
rescind such designations; provided, however, that no such designation
or rescission shall in any manner relieve the Company of its obligation
to maintain an office or agency in each Place of Payment for any series
of Subordinated Debt Securities, for such purposes. The Company will
<page 62>
give prompt written notice to the Trustee of any such designation and
any change in the location of any such other office or agency.

SECTION 10.3 Money for Subordinated Debt Securities
Payments to Be Held in Trust.

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

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

The Company will cause each Paying Agent with respect to any
series of Subordinated Debt Securities other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of its Section,
that such Paying Agent will

(1) hold all sums held by it for the payment of the
principal of (and premium, if any) or interest on
Subordinated Debt Securities of such series and any
appurtenant coupons in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;

(2) give the Trustee notice of any default by the
Company (or any other obligor upon the Subordinated Debt
Securities of such series or any appurtenant coupons) in the
making of any payment of principal of (and premium, if any)
or interest on the Subordinated Debt Securities of such
series or any appurtenant coupons; and

(3) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held in trust by such Paying
Agent.

The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose,
pay, or by Company Order direct any Paying Agent to pay, to the Trustee
all sums held in trust by the Company or such Paying Agent, such sums to
be held by the Trustee upon the same trusts as those upon which such
sums were held by the Company or such Paying Agent; and, upon such
payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
<page 63>
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of (and
premium, if any) or interest on any Subordinated Debt Security of any
series or any appurtenant coupons and remaining unclaimed for two years
after such principal (and premium, if any) or interest has become due
and payable shall be paid to the Company on Company Request, or (if then
held by the Company) shall be discharged from such trust; and the Holder
of such Subordinated Debt Security or any coupon appertaining thereto
shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any
such repayment, may at the expense of the Company cause to be published
once, in an Authorized Newspaper of general circulation in the Borough
of Manhattan, The City of New York, and each Place of Payment or mailed
to each such Holder, or both, notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than
30 days from the date of such publication or mailing, any unclaimed
balance of such money then remaining will be repaid to the Company.

SECTION 10.4 Existence.

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

SECTION 10.5 Appointments to Fill Vacancies in Trustee's
Office.

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

SECTION 10.6 Payment of Additional Amounts.

If the Subordinated Debt Securities of a series provide for the
payment of additional amounts, the Company will pay to the Holder of any
Subordinated Debt Security of any series or any coupon appertaining
thereto additional amounts upon the terms and subject to the conditions
provided therein. Whenever in this Indenture there is mentioned, in any
context, the payment of the principal of (or premium, if any) or
interest on, or in respect of, any Subordinated Debt Security of any
series or any related coupon or the net proceeds received on the sale or
exchange of any Subordinated Debt Security of any series, such mention
shall be deemed to include mention of the payment of additional amounts
provided for in terms of such Subordinated Debt Securities and this
Section to the extent that, in such context, additional amounts are,
were or would be payable in respect thereof pursuant to the provisions
of this Section and express mention of the payment of additional amounts
(if applicable) in any provisions hereof shall not be construed as
excluding additional amounts in those provisions hereof where such
express mention is not made.

If the Subordinated Debt Securities of a series provide for the
payment of additional amounts, at least 10 days prior to the first
Interest Payment Date with respect to that series of Subordinated Debt
Securities (or if the Subordinated Debt Securities of that series will
not bear interest prior to Maturity, the first day on which a payment of
principal (and premium, if any) is made), and at least 10 days prior to
each date of payment of principal (and premium, if any) or interest if
<page 64>
there has been any change with respect to the matters set forth in the
below-mentioned Officer's Certificate, the Company will furnish the
Trustee and the Company's principal Paying Agent or Paying Agents, if
other than the Trustee, with an Officer's Certificate instructing the
Trustee and such Paying Agent or Paying Agents whether such payment of
principal of (and premium, if any) or interest on the Subordinated Debt
Securities of that series shall be made to Holders of Subordinated Debt
Securities of that series or the related coupons who are United States
Aliens without withholding for or on account of any tax, assessment or
other governmental charge described in the Subordinated Debt Securities
of that series. If any such withholding shall be required, then such
Officer's Certificate shall specify by country the amount, if any,
required to be withheld on such payments to such Holders of Subordinated
Debt Securities or coupons and the Company will pay to the Trustee or
such Paying Agent prior to the payment of interest or principal the
additional amounts, if any, required by the terms of such Subordinated
Debt Securities and the first paragraph of this Section. The Company
covenants to indemnify the Trustee and any Paying Agent for, and to hold
them harmless against, any loss, liability or expense reasonably
incurred without negligence or bad faith on their part arising out of or
in connection with actions taken or omitted by any of them in reliance
on any Officer's Certificate furnished pursuant to this Section 10.6.

SECTION 10.7 Purchase of Subordinated Debt Securities by
Company or Subsidiary.

If and so long as the Subordinated Debt Securities of a series are
listed on The Stock Exchange of the United Kingdom and the Republic of
Ireland and such stock exchange shall so require, the Company will not,
and will not permit any of its Subsidiaries to, purchase any
Subordinated Debt Securities of that series by private treaty at a price
(exclusive of expenses and accrued interest) which exceeds 120% of the
mean of the nominal quotations of the Subordinated Debt Securities of
that series as shown in The Stock Exchange Daily Official List for the
last trading day preceding the date of purchase.

SECTION 10.8 Officer's Certificate as to Default.

The Company will deliver to the Trustee, on or before a date not
more than four months after the end of each fiscal year of the Company
(which on the date hereof is the calendar year) ending after the date
hereof, a certificate of the principal executive officer, principal
financial officer or principal accounting officer as to his or her
knowledge of the Company's compliance with all conditions and covenants
under this Indenture, and, if the Company shall be in default,
specifying all such defaults and the nature thereof of which they may
have knowledge. For the purpose of this Section 10.8, compliance shall
be determined without regard to any grace period or requirement of
notice provided pursuant to the terms of this Indenture.

SECTION 10.9 Waiver of Certain Covenants.

The Company may omit in any particular instance to comply with any
covenant or condition set forth in Section 10.7 with respect to the
Subordinated Debt Securities of any series if, before the time for such
compliance, the Holders of at least a majority in principal amount of
the Subordinated Debt Securities of such series at the time Outstanding
shall, by Act of such Holders, either waive such compliance in such
instance or generally waiver compliance with such covenant or condition,
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
<page 65>
Trustee in respect of any such covenant or condition shall remain in
full force and effect.

ARTICLE 11

REDEMPTION OF SUBORDINATED DEBT SECURITIES

SECTION 11.1 Applicability of Article.

Subordinated Debt Securities of any series, or any Tranche
thereof, that are redeemable before their Stated Maturity shall be
redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 3.1 for Subordinated Debt
Securities of any series or Tranche) in accordance with this Article.

SECTION 11.2 Election to Redeem; Notice to Trustee.

The election of the Company to redeem any Subordinated Debt
Securities shall be pursuant to a Board Resolution. In case of any
redemption at the election of the Company of less than all of the
Subordinated Debt Securities of any series or Tranche, the Company
shall, at least 60 days prior to the Redemption Date fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee of such Redemption Date, the series or the Tranche of
the Subordinated Debt Securities to be redeemed and of the principal
amount of Subordinated Debt Securities of any series or such Tranche to
be redeemed. In the case of any redemption of Subordinated Debt
Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Subordinated Debt Securities or elsewhere
in this Indenture, the Company shall furnish the Trustee with an
Officer's Certificate evidencing compliance with such restriction.

SECTION 11.3 Selection by Trustee of Subordinated Debt
Securities to Be Redeemed.

Except as otherwise specified as contemplated by Section 3.1 for
Subordinated Debt Securities of any series, if less than all the
Subordinated Debt Securities of any series, or any Tranche thereof, are
to be redeemed, the particular Subordinated Debt Securities to be
redeemed shall be selected not more than 60 days prior to the Redemption
Date by the Trustee from the Outstanding Subordinated Debt Securities of
such series, or any Tranche thereof, not previously called for
redemption, by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of
portions (equal to the minimum authorized denomination for Subordinated
Debt Securities of such series or any integral multiple thereof that is
also an authorized denomination) of the principal amount of Registered
Securities or Bearer Securities (if issued in more than one authorized
denomination) of such series, or any Tranche thereof, of a denomination
larger than the minimum authorized denomination for Subordinated Debt
Securities of such series.

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

For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Subordinated Debt
Securities shall relate, in the case of any Subordinated Debt Security
redeemed or to be redeemed only in part, to the portion of the principal
<page 66>
amount of such Subordinated Debt Security that has been or is to be
redeemed.

SECTION 11.4 Notice of Redemption.

Notice of redemption shall be given in the manner provided in
Section 1.6 not less than 30 or more than 60 days prior to the
Redemption Date, to each Holder of Subordinated Debt Securities to be
redeemed.

All notices of redemption shall state:

(1) the Redemption Date,

(2) the Redemption Price,

(3) if less than all Outstanding Subordinated Debt
Securities of any series, or any Tranche thereof, are to be
redeemed, the identification (and, in the case of partial
redemption, the principal amounts) of the particular
Subordinated Debt Securities to be redeemed,

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

(5) the Place or Places of Payment where such
Subordinated Debt Securities, together in the case of Bearer
Securities with all coupons, if any, appertaining thereto
maturing after the Redemption Date, are to be surrendered
for payment of the Redemption Price,

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

(7) the CUSIP number, if any.

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

SECTION 11.5 Deposit of Redemption Price.

On or prior to any Redemption Date, the Company shall deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its
own Paying Agent, segregate and hold in trust as provided in Section
10.3) an amount of money sufficient to pay the Redemption Price of, and
(except if the Redemption Date shall be an Interest Payment Date)
accrued interest on, all the Subordinated Debt Securities or portions
thereof that are to be redeemed on that date.

SECTION 11.6 Subordinated Debt Securities Payable on
Redemption Date.

Notice of redemption having been given as aforesaid, the
Subordinated Debt Securities so to be redeemed shall, on the Redemption
Date, become due and payable at the Redemption Price therein specified
and from and after such date (unless the Company shall default in the
payment of the Redemption Price and accrued interest) such Subordinated
Debt Securities shall cease to bear interest and the coupons for such
<page 67>
interest appertaining to any Bearer Securities so to be redeemed, except
to the extent provided below, shall be void. Upon surrender of any such
Subordinated Debt Security for redemption in accordance with said
notice, such Subordinated Debt Security shall be paid by the Company at
the Redemption Price, together with accrued interest to the Redemption
Date; provided, however, that installments of interest on Bearer
Securities whose Stated Maturity is on or prior to the Redemption Date
shall be payable only upon presentation and surrender of coupons for
such interest (at an office or agency located outside the United States
except as otherwise provided in Section 10.2), and provided further that
installments of interest on Registered Securities whose Stated Maturity
is on or prior to the Redemption Date shall be payable to the Holders of
such Subordinated Debt Securities, or one or more Predecessor
Securities, registered as such on the relevant Record Dates according to
their terms and the provisions of Section 3.7.

If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption
Date, such Bearer Security may be paid after deducting from the
Redemption Price an amount equal to the face amount of all such missing
coupons, or the surrender of such missing coupon or coupons may be
waived by the Company and the Trustee if there be furnished to them such
security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Bearer Security
shall surrender to the Trustee or any Paying Agent any such missing
coupon in respect of which a deduction shall have been made from the
Redemption Price, such Holder shall be entitled to receive the amount so
deducted; provided, however, that interest represented by coupons shall
be payable only upon presentation and surrender of those coupons at an
office or agency located outside of the United States except as
otherwise provided in Section 10.2.

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

SECTION 11.7 Subordinated Debt Security Redeemed in Part.

Any Registered Security that is to be redeemed only in part shall
be surrendered at a Place of Payment therefor (with, if the Company, the
Security Registrar or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company, the
Security Registrar and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of
such Subordinated Debt Security without service charge, a new Registered
Security or Registered Securities of the same series, or Tranche
thereof, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Subordinated Debt Security so
surrendered, and any Bearer Security that is to be redeemed only in part
shall be surrendered at an office or agency of the Company located
outside the United States, except as otherwise provided in Section 10.2,
and the Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Subordinated Debt Security outside the
United States without service charge, a new Bearer Security or Bearer
Securities of the same series, or Tranche thereof, (or a new Registered
Security or Registered Securities of the same series, or Tranche
thereof, if the Subordinated Debt Securities of such series are issuable
as Registered Securities), of any authorized denomination as requested
by such Holder in aggregate principal amount equal to and in exchange
<page 68>
for the unredeemed portion of the principal of the Subordinated Debt
Security so surrendered; except in either case 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 new Global Security in a denomination equal to
and in exchange for the unredeemed portion of the principal of the
Global Security so surrendered.

ARTICLE 12

SINKING FUNDS

SECTION 12.1 Applicability of Article.

The provisions of this Article shall be applicable to any sinking
fund for the retirement of Subordinated Debt Securities of a series
except as otherwise specified as contemplated by Section 3.1 for
Subordinated Debt Securities of such series.

The minimum amount of any sinking fund payment provided for by the
terms of Subordinated Debt Securities of any series is herein referred
to as a "mandatory sinking fund payment", and any payment in excess of
such minimum amount provided for by the terms of Subordinated Debt
Securities of any series is herein referred to as an "optional sinking
fund payment". If provided for by the terms of Subordinated Debt
Securities of any series, the amount of any sinking fund payment may be
subject to reduction as provided in Section 12.2. Each sinking fund
payment shall be applied to the redemption of Subordinated Debt
Securities of any series as provided for by the terms of Subordinated
Debt Securities of such series.

SECTION 12.2 Satisfaction of Sinking Fund Payments with
Subordinated Debt Securities.

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

SECTION 12.3 Redemption of Subordinated Debt Securities for
Sinking Fund.

Not less than 60 days prior to each sinking fund payment date for
any series of Subordinated Debt Securities (unless a shorter period
shall be satisfactory to the Trustee), the Company will deliver to the
Trustee an Officer's Certificate specifying the amount of the next
ensuing sinking fund payment for that series pursuant to the terms of
that series, the portion thereof, if any, that is to be satisfied by
<page 69>
payment of cash, the portion thereof, if any, that is to be satisfied by
crediting Subordinated Debt Securities of that series pursuant to
Section 12.2 and the basis for any such credit and, prior to or
concurrently with the delivery of such Officer's Certificate, will also
deliver to the Trustee any Subordinated Debt Securities to be so
credited and not theretofore delivered to the Trustee. Not less than 30
days (unless a shorted period shall be satisfactory to the Trustee)
before each such sinking fund payment date the Trustee shall select the
Subordinated Debt Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 11.3 and cause notice of
the redemption thereof to be given in the name of and at the expense of
the Company in the manner provided in Section 11.4. Such notice having
been duly given, the redemption of such Subordinated Debt Securities
shall be made upon the terms and in the manner stated in Sections 11.5,
11.6 and 11.7.

ARTICLE 13

DEFEASANCE

SECTION 13.1 Discharge and Defeasance of Subordinated Debt
Securities of any Series.

If this Section 13.1 is specified, as contemplated by Section 3.1,
to be applicable to the Subordinated Debt Securities of any series,
then, notwithstanding the provisions of Section 4.1, the Company shall
be deemed to have paid and discharged the entire indebtedness on all the
Outstanding Subordinated Debt Securities of any such series on the 91st
day after the date of the deposit referred to in subparagraph (d)
hereof, and the provisions of this Indenture, as it relates to such
Outstanding Subordinated Debt Securities, shall no longer be in effect
(and the Trustee, at the expense of the Company, shall upon Company
Request, execute proper instruments acknowledging the same), except as
to:

(a) the rights of Holders of Subordinated Debt Securities
of such series to receive, solely from the trust funds described in
subparagraph (d) hereof, (i) payment of the principal of (and premium,
if any) and each installment of principal of (and premium, if any) and
interest, if any, on the Outstanding Securities of such series on the
Stated Maturity of such principal or installment of principal or
interest and (ii) any mandatory sinking fund payments or analogous
payments applicable to the Subordinated Debt Securities of such series
on the day on which such payments are due and payable in accordance with
the terms of this Indenture and such Subordinated Debt Securities; and

(b) the rights, powers, trusts, duties and immunities of
the Trustee hereunder with respect to such series, including those set
forth in Section 6.7; and

(c) either (1) if this Section 13.1 (c) (1) is specified,
as contemplated by Section 3.1, to be applicable to the Subordinated
Debt Securities of any series, the Company's obligations with respect to
the Subordinated Debt Securities of such series under Section 3.4, 3.5,
3.6, 10.2 and 10.3; or, alternatively, (2) if this Section 13.1(c) (2)
is specified as contemplated by Section 3.1, to be applicable to the
Subordinated Debt Securities of any series, the Company's obligations
with respect to such Subordinated Debt Securities under Sections 3.4,
3.5, 3.6, 10.1, 10.2 and 10.3;

provided that the following conditions shall have been satisfied:
<page 70>
(d) the Company shall have irrevocably deposited or caused
to be deposited with the Trustee (or another trustee that satisfies the
requirements of Section 6.9 and agrees to comply with the provisions of
this Article Thirteen applicable to it) as trust funds in trust
specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of the Subordinated Debt Securities of that
series, with reference to this Section 13.1, (i) money in an amount, or
(ii) Government Obligations which through the payment of interest and
principal in respect thereof in accordance with their terms will provide
not later than one Business Day before the due date of any payment
referred to in clause (A) or (B) of this subparagraph (d) money in an
amount, or (iii) a combination thereof, sufficient, in the opinion of a
nationally recognized firm of independent certified public accountants
expressed in a written certification thereof delivered to the Trustee,
to pay and discharge (A) the principal of (and premium, if any) and each
installment of principal of (and premium, if any) and interest, if any,
on the Outstanding Subordinated Debt Securities of such series on the
Stated Maturity of such principal or installment of principal or
interest or on the applicable Redemption Date and (B) any mandatory
sinking fund payments or analogous payments applicable to the
Subordinated Debt Securities of such series on the day on which such
payments are due and payable in accordance with the terms of this
Indenture and of such Subordinated Debt Securities;

(e) such deposit shall not cause the Trustee with respect
to the Subordinated Debt Securities of such series to have a conflicting
interest as defined in Section 6.8 or for purposes of the Trust
Indenture Act with respect to the Subordinated Debt Securities of any
series;

(f) such deposit will not result in a breach or violation
of, or constitute a default under, any applicable laws, this Indenture
or any other agreement or instrument to which the Company is a party or
by which it is bound;

(g) if this Section 13.1(g) is specified, as contemplated
by Section 3.1, to be applicable to the Subordinated Debt Securities of
any series, such provision would not cause any Outstanding Subordinated
Debt Securities of such series then listed on the New York Stock
Exchange or other nationally-recognized securities exchange to be de-
listed as a result thereof;

(h) no Event of Default or event which with the giving of
notice or lapse of time or both would become an Event of Default with
respect to the Subordinated Debt Securities of that series shall have
occurred and be continuing on the date of such deposit or at any time
during the period ending on the 91st day after such date;

(i) such deposit shall not result in the trust arising
from such deposit constituting an investment company as defined in the
Investment Company Act of 1940, as amended, or such trust shall be
qualified under such Act or exempt from regulation thereunder;

(j) if this Section 13.1(j) is specified, as contemplated
by Section 3.1, to be applicable to the Subordinated Debt Securities of
any series, the Company has delivered to the Trustee an Opinion of
Counsel to the effect that, based upon applicable United States Federal
income tax law or a ruling published by the United States Internal
Revenue Service (which opinion, for the purposes contemplated by Section
13.1(c)(1), must be based on a change in applicable United States
Federal income tax law after the date of this Indenture or a ruling
published by the United States Internal Revenue Service after the date
<page 71>
of this Indenture), the Holders of the Subordinated Debt Securities of
such series will not recognize income, gain or loss for United States
Federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to United States Federal income tax on the
same amount and in the same manner and at the same times, as would have
been the case if such deposit, defeasance and discharge had not
occurred; and

(k) the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent relating to the defeasance and discharge contemplated by this
Section have been complied with.

"Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its
full faith and credit is pledged or (ii) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality
of the United States of America, the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by the
United States of America, that, in either case under Clause (i) or (ii),
are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank (as defined in
Section 3(a)(2) of the Securities Act of 1933) company as custodian with
respect to any such Government Obligation or a specific payment of
interest on or principal of any such Government Obligation held by such
custodian for the account of the holder of a depository receipt;
provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder
of such depository receipt from any amount received by the custodian in
respect of the Government Obligation or the specific payment of interest
on or principal of the Government Obligations evidenced by such
depository receipt.

SECTION 13.2 Repayment to Company.

The Trustee and any Paying Agent shall promptly pay to the Company
upon Company Request any money or Government Obligations which, in the
opinion of a nationally recognized firm of independent accounts
expressed in a written certification thereof delivered to the Trustee,
are not required for the payment of the principal of (and premium, if
any) and interest on the Subordinated Debt Securities of any series and
any related coupons for which money or Government Obligations have been
deposited pursuant to Section 13.1 held by them at any time.

The Trustee and any Paying Agent shall pay to the Company upon
Company Request any money held by them for the payment of principal (and
premium, if any) and interest that remains unclaimed for two years after
the Maturity of the Subordinated Debt Securities for which a deposit has
been made pursuant to Section 13.1. After such payment to the Company,
the Holders of the Subordinated Debt Securities of such series and any
related coupons shall thereafter, as unsecured general creditors, look
only to the Company for the payment thereof.

SECTION 13.3 Indemnity for Government Obligations.

The Company shall pay and shall indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the deposited
Government Obligations or the principal or interest received or accrued
on such Government Obligations.

page 72
<PAGE>
SECTION 13.4 Application of Trust Money.

Subject to the provisions of Section 13.2, all money and
Government Obligations deposited with the Trustee pursuant to Section
13.1 and all money received by the Trustee in respect of Government
Obligations deposited with the Trustee pursuant to Section 13.1 shall be
held in trust and applied by it, in accordance with the provisions of
the Subordinated Debt Securities, the coupons and this Indenture, to the
payment, either directly or through any Paying Agent (including the
Company acting as its own Paying Agent) as the Trustee may determine, to
the Persons entitled thereto, of the principal (and premium, if any) and
interest for whose payment such money and Government Obligations have
been deposited with the Trustee or to make mandatory sinking fund
payments or analogous payments as contemplated by Section 13.1.

SECTION 13.5 Reinstatement.

If the Trustee or any Paying Agent is unable to apply any money or
Government Obligations in accordance with Section 13.4 by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's obligations under this Indenture
and the Subordinated Debt Securities shall be revived and reinstated as
though no deposit had occurred pursuant to Section 13.4 until such time
as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 13.4; provided, however, that if the Company
makes any payment of principal, premium, if any, or interest on any
Subordinated Debt Security following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the
Holders of such Subordinated Debt Securities to receive such payment
from the money held by the Trustee or Paying Agent.

ARTICLE 14

MEETING OF HOLDERS OF SUBORDINATED DEBT SECURITIES

SECTION 14.1 Purposes for Which Meetings May Be Called.

A meeting of Holders of Subordinated Debt Securities of any or all
series may be called at any time and from time to time pursuant to this
Article to make, give or take any request, demand, authorization,
direction, notice, consent, waiver or other Act provided by this
Indenture to be made, given or taken by Holders of Subordinated Debt
Securities of such series.

SECTION 14.2 Call, Notice and Place of Meetings.

(a) The Trustee may at any time call a meeting of Holders
of Subordinated Debt Securities of any or all series for any purpose
specified in Section 14.1, to be held at such time and at such place in
the Borough of Manhattan, The City of New York, or in London as the
Trustee shall determine. Notice of every meeting of Holders of
Subordinated Debt Securities of any series, setting forth the time and
the place of such meeting and in general terms the action proposed to be
taken at such meeting, shall be given, in the manner provided in Section
1.6, not less than 21 or more than 180 days prior to the date fixed for
the meeting.

(b) In case at any time the Company, pursuant to a Board
Resolution, or the Holders of at least 10% in principal amount of the
Outstanding Subordinated Debt Securities of any series shall have
requested the Trustee to call a meeting of the Holders of Subordinated
<page 73>
Debt Securities of such series for any purpose specified in Section
14.1, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have made
the first publication of the notice of such meeting within 21 days after
receipt of such request or shall not thereafter proceed to cause the
meeting to be held as provided herein, then the Company or the Holders
of Subordinated Debt Securities of such series in the amount above
specified, as the case may be, may determine the time and the place in
the Borough of Manhattan, The City of New York, or in London for such
meeting and may call such meeting for such purposes by giving notice
thereof as provided in Subsection (a) of this Section.

SECTION 14.3 Persons Entitled to Vote at Meetings.

To be entitled to vote at any meeting of Holders of Subordinated
Debt Securities of any series, a Person shall be (1) a Holder of one or
more Outstanding Subordinated Debt Securities of such series, or (2) a
Person appointed by an instrument in writing as proxy for a Holder or
Holders of one or more Outstanding Subordinated Debt Securities of such
series by such Holder or Holders. The only Persons who shall be
entitled to be present or to speak at any meeting of Holders of
Subordinated Debt Securities of any series shall be the Persons entitled
to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Company and its
counsel.

SECTION 14.4 Quorum; Action.

The Persons entitled to vote not less than a majority in principal
amount of the Outstanding Subordinated Debt Securities of a series shall
constitute a quorum for a meeting of Holders of Subordinated Debt
Securities of such series. In the absence of a quorum within 30 minutes
of the time appointed for any such meeting, the meeting shall, if
convened at the request of Holders of Subordinated Debt Securities of
such series, be dissolved. In the absence of a quorum in any other case
the meeting may be adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of
such meeting. In the absence of a quorum at any such adjourned meeting,
such adjourned meeting may be further adjourned for a period of not less
than 10 days as determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Notice of the reconvening of any
adjourned meeting shall be given as provided in Section 14.2(a), except
that such notice need be given only once not less than five days prior
to the date on which the meeting is scheduled to be reconvened. Notice
of the reconvening of an adjourned meeting shall state expressly the
percentage, as provided above, of the principal amount of the
Outstanding Subordinated Debt Securities of such series that shall
constitute a quorum.

Any resolution presented to a meeting or adjourned meeting duly
reconvened at which a quorum is present as aforesaid may be adopted only
by the affirmative vote of the Holders of not less than a majority in
principal amount of the Outstanding Subordinated Debt Securities of that
series; provided, however, that any resolution with respect to any
request, demand, authorization, direction, notice, consent, waiver or
other Act that this Indenture expressly provides may be made, given or
taken by the Holders of a specified percentage, which is less than a
majority, in principal amount of the Outstanding Subordinated Debt
Securities of a series may be adopted at a meeting or an adjourned
meeting duly reconvened and at which a quorum is present as aforesaid by
the affirmative vote of the Holders of such specified percentage in
<page 74>
principal amount of the Outstanding Subordinated Debt Securities of that
series.

To the extent consistent with the terms of this Indenture, any
resolution passed or decision taken at any meeting of Holders of
Subordinated Debt Securities of any series duly held in accordance with
this Section shall be binding on all the Holders of Subordinated Debt
Securities of such series and the related coupons, whether or not
present or represented at the meeting.

SECTION 14.5 Determination of Voting Rights; Conduct and
Adjournment of Meetings.

(a) Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may
deem advisable for any meeting of Holders of Subordinated Debt
Securities of such series in regard to proof of the holding of
Subordinated Debt Securities of such series and of the appointment of
proxies and in regard to the appointment and duties of inspectors of
votes, the submission and examination of proxies, certificates and other
evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall deem appropriate. Except as
otherwise permitted or required by any such regulations, the holding of
Subordinated Debt Securities shall be proved in the manner specified in
Section 1.4 and the appointment of any proxy shall be proved in the
manner specified in Section 1.4 or, in the case of Bearer Securities, by
having the signature of the person executing the proxy witnessed or
guaranteed by any trust company, bank or banker authorized by Section
1.4 to certify to the holding of Bearer Securities. Such regulations
may provide that written instruments appointing proxies, regular on
their face, may be presumed valid and genuine without the proof
specified in Section 1.4 or other proof.

(b) The Trustee shall, by an instrument in writing,
appoint a temporary chairman of the meeting, unless the meeting shall
have been called by the Company or by Holders of Subordinated Debt
Securities as provided in Section 14.2(b), in which case the Company or
the Holders of Subordinated Debt Securities of the series calling the
meeting, as the case may be, shall in like manner appoint a temporary
chairman. A permanent chairman and a permanent secretary of the meeting
shall be elected by vote of the Persons entitled to vote a majority in
principal amount of the Outstanding Subordinated Debt Securities of such
series represented at the meeting.

(c) At any meeting each Holder of a Subordinated Debt
Security of such series or proxy shall be entitled to one vote for each
$1,000 principal amount (or the equivalent in ECU, any other composite
currency or a Foreign Currency (as determined by the Company in good
faith) as of the date of original issuance of such Subordinated Debt
Security) of Subordinated Debt Securities of such series held or
represented by him; provided, however, that no vote shall be cast or
counted at any meeting in respect of any Subordinated Debt Security
challenged as not Outstanding and ruled by the chairman of the meeting
to be not Outstanding. The chairman of the meeting shall have no right
to vote, except as a Holder of a Subordinated Debt Security of such
series or proxy.

(d) Any meeting of the Holders of Subordinated Debt
Securities of any series duly called pursuant to Section 14.2 at which a
quorum is present may be adjourned from time to time by Persons entitled
to vote a majority in principal amount of the Outstanding Subordinated
<page 75>
Debt Securities of such series represented at the meeting; and the
meeting may be held as so adjourned without further notice.

SECTION 14.6 Counting Votes and Recording Action of
Meetings.

The vote upon any resolution submitted to any meeting of Holders
of Subordinated Debt Securities of any series shall be by written
ballots on which shall be subscribed the signatures of the Holders of
Subordinated Debt Securities of such series or of their representatives
by proxy and the principal amounts and serial numbers of the Outstanding
Subordinated Debt Securities of such series held or represented by them.
The permanent chairman of the meeting shall appoint two inspectors of
votes who shall count all votes cast at the meeting for or against
resolution and who shall make and file with the secretary of the meeting
their verified written reports in triplicate of all votes cast at the
meeting. A record, at least in triplicate, of the proceedings of each
meeting of Holders of Subordinated Debt Securities of any series shall
be prepared by the secretary of the meeting and there shall be attached
to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons
having knowledge of the facts setting forth a copy of the notice of the
meeting and showing that said notice was given as provided in Section
14.2 and, if applicable, Section 14.4. Each copy shall be signed and
verified by the affidavits of the permanent chairman and secretary of
the meeting and one such copy shall be delivered to the Company, and
another to the Trustee to be preserved by the Trustee, the latter to
have attached thereto the ballots voted at the meeting. Any record so
signed and verified shall be conclusive evidence of the matters therein
stated.

ARTICLE 15

REPAYMENT AT OPTION OF HOLDERS

SECTION 15.1 Applicability of Article.

Repayment of Subordinated Debt Securities of any series before
their Stated Maturity at the option of Holders thereof shall be made in
accordance with the terms of such Subordinated Debt Securities and
(except as otherwise specified as contemplated by Section 3.1 for
Subordinated Debt Securities of any series) in accordance with this
Article.

SECTION 15.2 Repayment of Subordinated Debt Securities.

Subordinated Debt Securities of any series subject to repayment in
whole or in part at the option of the Holders thereof will, unless
otherwise provided in the terms of such Subordinated Debt Securities, be
repaid at a price equal to the principal amount thereof, together with
interest thereon accrued to the Repayment Date specified in the terms of
such Subordinated Debt Securities. The Company covenants that on or
before the Repayment Date the Company will deposit with the Trustee or
with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 10.3) an
amount of money sufficient to pay the principal (or, if so provided by
the terms of the Subordinated Debt Securities of any series, a
percentage of the principal) of, and (except if the Repayment Date shall
be an Interest Payment Date) accrued interest, if any, on, all the
Subordinated Debt Securities or portions thereof, as the case may be, to
be repaid on such date provided, however, that the Repayment Price of
and accrued interest on Bearer Securities shall be deposited only at an
<page 76>
office or agency located outside the United States (except as otherwise
provided in Section 10.2).

If any Bearer Security surrendered for repayment shall not be
accompanied by all appurtenant coupons maturing after the Repayment
Date, such Bearer Security may be paid after deducting from the
Repayment Price an amount equal to the face amount of all such missing
coupons, or the surrender of such missing coupon or coupons may be
waived by the Company and the Trustee if there be furnished to them such
security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Bearer Security
shall surrender to the Trustee or any Paying Agent any such missing
coupon in respect of which a deduction shall have been made from the
Repayment Price, such Holder shall be entitled to receive the amount so
deducted; provided, however, that interest represented by coupons shall
be payable only at an office or agency located outside the United States
(except as otherwise provided in Section 10.2) and, unless otherwise
specified as contemplated by Section 3.1, only upon presentation and
surrender of those coupons.

SECTION 15.3 Exercise of Option.

Subordinated Debt Securities of any series subject to repayment at
the option of the Holders thereof will contain an "Option to Elect
Repayment" form on the reverse of such Subordinated Debt Securities. To
be repaid at the option of the Holder, any Subordinated Debt Security so
providing for such repayment, with the "Option of Elect Repayment" form
on the reverse of such Subordinated Debt Security duly completed by the
Holder, must be received by the Company at the Place of Payment therefor
specified in the terms of such Subordinated Debt Security (or at such
other place or places of which the Company shall from time to time
notify the Holders of such Subordinated Debt Securities) not earlier
than 60 days nor later than 30 days prior to the Repayment Date;
provided, however, that Bearer Securities shall be surrendered, and
notice of the exercise of such option shall be delivered, only at an
office or agency located outside the United States (except as otherwise
provided in Section 10.2). If less than the entire principal amount of
such Subordinated Debt Security is to be repaid in accordance with the
terms of such Subordinated Debt Security, the principal amount of such
Subordinated Debt Security to be repaid, in increments of $1,000 unless
otherwise specified in the terms of such Subordinated Debt Security, and
the denomination or denominations of the Subordinated Debt Security or
Subordinated Debt Securities to be issued to the Holder for the portion
of the principal amount of such Subordinated Debt Security surrendered
that is not to be repaid must be specified. The principal amount of any
Subordinated Debt Security providing for repayment at the option of the
Holder thereof may not be repaid in part if, following such repayment,
the unpaid principal amount of such Subordinated Debt Security would be
less than the minimum authorized denomination of Subordinated Debt
Securities of the series of which such Subordinated Debt Security to be
repaid is a part. Except as otherwise may be provided by the terms of
any Subordinated Debt Security providing for repayment at the option of
the Holder thereof, exercise of the repayment option by the Holder shall
be irrevocable unless waived by the Company.

SECTION 15.4 When Subordinated Debt Securities Presented
for Repayment Become Due and Payable.

If Subordinated Debt Securities of any series providing for
repayment at the option of the Holders thereof shall have been
surrendered as provided in this Article and as provided by the terms of
such Subordinated Debt Securities, such Subordinated Debt Securities or
<page 77>
the portions thereof, as the case may be, to be repaid shall become due
and payable and shall be paid by the Company on the Repayment Date
therein specified, and on and after such Repayment Date (unless the
Company shall default in the payment of such Subordinated Debt
Securities on such Repayment Date) interest on such Subordinated Debt
Securities or the portions thereof, as the case may be, shall cease to
accrue.

SECTION 15.5 Subordinated Debt Securities Repaid in Part.

Upon surrender of any Subordinated Debt Security which is to be
repaid in part only, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Subordinated Debt
Security, without service charge and at the expense of the Company, a
new Subordinated Debt Security or Subordinated Debt Securities of the
same series, of any authorized denomination specified by the Holder, in
an aggregate principal amount equal to and in exchange for the portion
of the principal of such Subordinated Debt Security so surrendered which
is not to be repaid.

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

ARTICLE 16

SUBORDINATION OF SUBORDINATED DEBT SECURITIES

Unless otherwise indicated in or pursuant to a Board Resolution,
and, subject to Section 3.1, set forth or determined in the manner provided
in an Officers' Certificate or established in one or more indentures
supplemental hereto, each series of Debt Securities shall be subject to
the subordination provisions of this Article Sixteen.

SECTION 16.1 Agreement of Subordination.

The Company covenants and agrees, and each Holder of
Subordinated Debt Securities issued hereunder by his acceptance thereof
likewise covenants and agrees, that all Subordinated Debt Securities
shall be issued subject to the provisions of this Article; and each
Holder of a Subordinated Debt Security, whether upon original issue or
upon transfer or assignment thereof, accepts and agrees to be bound by
such provisions.

The payment of the principal of, premium, if any, and
interest on all Subordinated Debt Securities issued hereunder shall, to
the extent and in the manner hereinafter set forth, be subordinated and
subject in right of payment to the prior payment in full of all Senior
Indebtedness, whether outstanding at the date of this Indenture or
thereafter incurred.

No provision of this Article shall prevent the occurrence of
any default or Event of Default hereunder.

SECTION 16.2 Limitations on Payments to Holders of
Subordinated Debt Securities.

In the event and during the continuation of any default in
the payment of principal, premium, interest or any other payment due on
<page 78>
any Senior Indebtedness continuing beyond the period of grace, if any,
specified in the instrument evidencing such Senior Indebtedness, unless
and until such default shall have been cured or waived or shall have
ceased to exist, and in the event that the maturity of any Senior
Indebtedness has been accelerated because of a default, then no payment
shall be made by the Company with respect to the principal (including
redemption and sinking fund payments) of, or premium, if any, or
interest on the Subordinated Debt Securities.

In the event that, notwithstanding the foregoing, any
payment shall be received by the Trustee or any holder when such payment
is prohibited by the preceding paragraphs of this Section 16.2, such
payment shall be held in trust for the benefit of, and shall be paid
over or delivered to, the holders of Senior Indebtedness or their
respective representatives, or to the trustee or trustees under any
indenture pursuant to which any of such Senior Indebtedness may have
been issued, as their respective interests may appear, but only to the
extent that the holders of the Senior Indebtedness (or their
representative or representatives or a trustee) notify the Trustee
within 90 days of such payment of the amounts then due and owing on the
Senior Indebtedness and only the amounts specified in such notice to the
Trustee shall be paid to the holders of Senior Indebtedness.

SECTION 16.3 Payments in Bankruptcy.

Upon any payment by the Company, or distribution of assets
of the Company of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution or winding-up or
liquidation or reorganization of the Company, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other
proceedings, all amounts due or to become due upon all Senior
Indebtedness shall first be paid in full, or payment thereof provided
for in money in accordance with its terms, before any payment is made on
account of the principal (and premium, if any) or interest on the
Subordinated Debt Securities; and upon any such dissolution or
winding-up or liquidation or reorganization any payment by the Company,
or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the Holders of the
Subordinated Debt Securities or the Trustee would be entitled, except
for the provisions of this Article, shall be paid by the Company or by
any receiver, trustee in bankruptcy, liquidating trustee, agent or other
person making such payment or distribution, or by the Holders of the
Subordinated Debt Securities or by the Trustee under this Indenture if
received by them or it, directly to the holders of Senior Indebtedness
(pro rata to such holders on the basis of the respective amounts of
Senior Indebtedness held by such holders, as calculated by the Company)
or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments
evidencing any Senior Indebtedness may have been issued, as their
respective interests may appear, to the extent necessary to pay all
Senior Indebtedness in full, in money or money's worth, after giving
effect to any concurrent payment or distribution to or for the holders
of Senior Indebtedness, before any payment or distribution is made to
the holders of Subordinated Debt Securities or to the Trustee.

In the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, prohibited by the
foregoing, shall be received by the Trustee or the holders of the
Subordinated Debt Securities before all Senior Indebtedness is paid in
full, or provision is made for such payment in money in accordance with
its terms, such payment or distribution shall be held in trust for the
<page 79>
benefit of and shall be paid over or delivered to the holders of Senior
Indebtedness or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any
instruments evidencing any Senior Indebtedness may have been issued, as
their respective interests may appear, as calculated by the Company, for
application to the payment of all Senior Indebtedness remaining unpaid
to the extent necessary to pay all Senior Indebtedness in full in money
in accordance with its terms, after giving effect to any concurrent
payment or distribution to or for the holders of such Senior
Indebtedness.

For purposes of this Article, the words, "cash, property or
securities" shall not be deemed to include shares of stock of the
Company as reorganized or readjusted, or securities of the Company or
any other corporation provided for by a plan of reorganization or
readjustment, the payment of which is subordinated at least to the
extent provided in this Article with respect to the Subordinated Debt
Securities to the payment of all Senior Indebtedness which may at the
time be outstanding; provided that (i) the Senior Indebtedness is
assumed by the new corporation, if any, resulting from any such
reorganization or readjustment, and (ii) the rights of the holders of
the Senior Indebtedness are not, without the consent of such holders,
altered by such reorganization or readjustment. The consolidation of the
Company with, or the merger of the Company into, another corporation or
the liquidation or dissolution of the Company following the conveyance
or transfer of its property as an entirety, or substantially as an
entirety, to another corporation upon the terms and conditions provided
for in Article Nine hereof shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this
Section 16.3 if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the
conditions stated in Article Nine hereof. Nothing in Section 16.2 or in
this Section 16.3 shall apply to claims of, or payments to, the Trustee
under or pursuant to Section 6.7.

SECTION 16.4 Subrogation of Subordinated Debt Securities.

Subject to the payment in full of all Senior Indebtedness,
the rights of the holders of the Subordinated Debt Securities shall be
subrogated to the rights of the holders of Senior Indebtedness to
receive payments or distributions of cash, property or securities of the
Company applicable to the Senior Indebtedness until the principal of
(and premium, if any) and interest on the Senior Indebtedness shall be
paid in full; and, for the purposes of such subrogation, no payments or
distributions to the holders of the Senior Indebtedness of any cash,
property or securities to which the holders of the Subordinated Debt
Securities or the Trustee would be entitled except for the provisions of
this Article, and no payment over pursuant to the provisions of this
Article, to or for the benefit of the holders of Senior Indebtedness by
holders of the Subordinated Debt Securities or the Trustee, shall, as
between the Company, its creditors other than holders of Senior
Indebtedness, and the Holders of the Subordinated Debt Securities, be
deemed to be a payment by the Company to or on account of the Senior
Indebtedness. It is understood that the provisions of this Article are
and are intended solely for the purposes of defining the relative rights
of the holders of the Subordinated Debt Securities, on the one hand, and
the holders of the Senior Indebtedness on the other hand.

Nothing contained in this Article or elsewhere in this
Indenture or in the Subordinated Debt Securities is intended to or shall
impair, as between the Company, its creditors other than the holders of
Senior Indebtedness, and the holders of the Subordinated Debt
<page 80>
Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the holders of the Subordinated Debt Securities
the principal of (and premium, if any) and interest on the Subordinated
Debt Securities as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the
relative rights of the holders of the Subordinated Debt Securities and
creditors of the Company other than the holders of the Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee
or the holder of any Subordinated Debt 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 in respect of cash, property or
securities of the Company received upon the exercise of any such remedy.

Upon any payment or distribution of assets of the Company
referred to in this Article, the Trustee, subject to the provision of
Section 6.1, and the holders of the Subordinated Debt Securities shall
be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which such dissolution, winding-up,
liquidation or reorganization proceedings are pending, or a certificate
of the receiver, trustee in bankruptcy, liquidation trustee, agent or
other person making such payment or distribution, delivered to the
Trustee or to the Holders of the Subordinated Debt Securities, for the
purposes of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other
indebtedness of the Company, the amount hereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article.

SECTION 16.5 Authorization By Holders of Subordinated Debt
Securities.

Each Holder of a Subordinated Debt Security by his
acceptance thereof authorizes and directs the Trustee in his behalf to
take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article and appoints the Trustee his
attorney-in-fact for any and all such purposes.

SECTION 16.6 Notice to Trustee.

The Company shall give prompt written notice to a
Responsible Officer of the Trustee of any fact known to the Company
which would prohibit the making of any payment of monies to or by the
Trustee in respect of the Subordinated Debt Securities pursuant to the
provisions of this Article. Notwithstanding the provisions of this
Article or any other provision of this Indenture, the Trustee shall not
be charged with knowledge of the existence of any facts which would
prohibit the making of any payment of monies to or by the Trustee in
respect of the Subordinated Debt Securities pursuant to the provisions
of this Article, unless and until a Responsible Officer of the Trustee
shall have received written notice thereof at the Principal Office of
the Trustee from the Company or a holder or holders of Senior
Indebtedness or from any trustee therefor; and before the receipt of any
such written notice, the Trustee, subject to the provisions of Section
6.1, shall be entitled in all respects to assume that no such facts
exist; provided that if the Trustee shall not have received the notice
provided for in this Section 16.6 at least two business days prior to
the date upon which by the terms hereof any money may become payable for
any purpose (including, without limitation, the payment of the principal
of (or premium, if any) or interest on any Subordinated Debt Security),
then, anything herein contained to the contrary notwithstanding, the
Trustee shall have full power and authority to receive such money and to
<page 81>
apply the same to the purposes for which they were received, and shall
not be affected by any notice to the contrary which may be received by
it within two business days prior to such date.

The Trustee, subject to the provisions of Section 6.1, shall
be entitled to rely on the delivery to it of a written notice by a
person representing himself to be a holder of Senior Indebtedness (or a
trustee on behalf of such holder) to establish that such notice has been
given by a holder of Senior Indebtedness or a trustee on behalf of any
such holder or holders. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any
person as a holder of Senior Indebtedness 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 Senior Indebtedness held by such person, the extent
to which such person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such person
under this Article, and if such evidence is not furnished the Trustee
may defer any payment to such person pending judicial determination as
to the right of such person to receive such payment.

SECTION 16.7 Trustee's Relation to Senior Indebtedness.

The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article in respect of any Senior
Indebtedness at any time held by it, to the same extent as any other
holder of Senior Indebtedness, and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder.

With respect to the holders of Senior Indebtedness, 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 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 and, subject to the provisions of Section 6.1, the
Trustee shall not be liable to any holder of Senior Indebtedness if it
shall pay over or deliver to holders of Subordinated Debt Securities,
the Company or any other person money or assets to which any holder of
Senior Indebtedness shall be entitled by virtue of this Article or
otherwise.

SECTION 16.8 Acts of Holders of Senior Indebtedness.

No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at any
time in any way be prejudiced or impaired by any act or failure to act
on the part of the Company or by any act or failure to act, in good
faith, by any such holder, or by any noncompliance by the Company with
the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof which any such holder may have or otherwise be charged
with.

Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and from
time to time, without the consent of or notice to the Trustee or the
holders of the Subordinated Debt Securities, without incurring
responsibility to the holders of the Subordinated Debt Securities and
without impairing or releasing the subordination provided in this
Article or the obligations hereunder of the holders of the Subordinated
Debt Securities to the holders of Senior Indebtedness, do any one or
more of the following: (i) change the manner, place or terms of payment
<page 82>
or extend the time of payment of, or renew or alter, Senior
Indebtedness, or otherwise amend or supplement in any manner Senior
Indebtedness or any instrument evidencing the same or any agreement
under which Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Indebtedness; (iii) release any person liable
in any manner for the collection of Senior Indebtedness; and (iv)
exercise or refrain from exercising any rights against the Company and
any other person.

* * * * * *

This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all
such counterparts shall together constitute but one and the same
instrument.
<page 83>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, and their respective corporate seals to be hereunto
affixed and attested, all as of the day and year first above written.

SOUTHERN CALIFORNIA EDISON COMPANY

By ________________________________
CORPORATE SEAL

Attest:

_____________________________

The First National Bank of Chicago

By ________________________________
Name:
Title:

CORPORATE SEAL

Attest:

____________________________
Name:
Title:

<page 84>
<PAGE>
STATE OF CALIFORNIA }
} SS.
COUNTY OF LOS ANGELES }

On ____________, 1995, before me, ___________________, a Notary
Public, personally appeared _____________ and __________________
personally known to me (or proved to me on the basis of satisfactory
evidence) to be the persons whose names are subscribed to the within
instrument and acknowledged to me that they executed the same in their
authorized capacities and that by their signatures on the instrument the
persons, or the entity upon behalf of which the persons acted, executed
the instrument.

WITNESS my hand and official seal.

_____________________________________________
Notary Public, State of California

(Seal)

My Commission expires on ________, ____
<page 85>
<PAGE>
STATE OF ILLINOIS }
} SS.
COUNTY OF COOK }

On ____________, 1995, before me personally appeared _________ and
__________ of The First National Bank of Chicago, respectively, known to
me to be the persons who executed the within instrument on behalf of the
corporation therein named and acknowledged to me that such corporation
executed the within instrument pursuant to its by-laws or a resolution
of its board of directors.

WITNESS my hand and official seal.

_____________________________________________
Notary Public, Cook County, State of Illinois

(Seal)

My Commission expires on _________________
<page 86>
<PAGE>
Exhibit A

Form of Certificate to be Given by
[Person Entitled to Receive Bearer Security]

Certificate

[Insert title or sufficient description of Subordinated Debt Securities
to be delivered]

This is to certify that the above-captioned Subordinated
Debt Securities, held by you for our account (i) are owned by Person(s)
that are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the income of
which is subject to United States federal income taxation regardless of
its source ("United States person(s)"), (ii) are owned by United States
person(s) that are (a) foreign branches of United States financial
institutions (as defined in United States Treasury Regulations Section
1.165-12(c)(1)(v)) ("financial institutions") purchasing for their own
account or for resale, or (b) United States person(s) who acquired the
Subordinated Debt Securities through foreign branches of United States
financial institutions and who hold the Subordinated Debt Securities
through such branches of United States financial institutions on the
date hereof (and in either case (a) or (b), each such United States
financial institution hereby agrees on its own behalf or through its
agent, that it will provide a proper certificate to the Company stating
that it will comply with the requirements of Section 165(j)(3)(A), (B)
or (C) of the United States Internal Revenue code of 1986, as amended,
and the regulations thereunder), or (iii) are owned by United States or
foreign financial institution(s) for purposes of resale during the
restricted period (as defined in United States Treasury Regulations
Section 1.163-5(c)(2)(i)(D)(7)), and, in addition, if we are a United
States or foreign financial institution described in clause (iii) above
(whether or not also described in clause (i) or (ii)), we certify that
we have not acquired the Subordinated Debt Securities for purposes of
resale directly or indirectly to a United States person or to a person
within the United States or its possessions.

As used herein, "United States" means the United States of
America (including the States and the District of Columbia); and its
"possessions" include Puerto Rico, the U.S. Virgin Islands, Guam,
American Samoa, Wake Island and Northern Mariana Islands.

We undertake to advise you by telex if the above statement
as to beneficial ownership is not correct on the date of delivery of
above-captioned Subordinated Debt Securities in bearer form as to all of
such Securities.

A-1
<PAGE>
<PAGE>
We understand that this certificate may be required in
connection with certain tax legislation in the United States. If
administrative or legal proceedings are commenced or threatened in
connection with which this certificate is or would be relevant, we
irrevocably authorize you to produce this certificate or a copy thereof
to any interested party in such proceedings.

Dated: ___________________, 1995.

(Name of Person Entitled to Receive Bearer
Security)

_____________________________________
Name:
Title:

A-2
<PAGE>
<PAGE>
Exhibit B

Form of Election to receive payments in
[Dollars or other applicable currency]
or to rescind such election

The undersigned, registered owner of certificate number R-
, representing [name of series of Subordinated Debt Securities] (the
"Subordinated Debt Securities") in an aggregate principal amount of
________________, hereby

/ / elects to receive all payments in respect of the Subordinated Debt
Securities in [Dollars or other applicable currency], it being
understood that such election shall take effect as provided in the
Subordinated Debt Securities and, subject to the terms and
conditions set forth in the Indenture under which the Subordinated
Debt Securities were issued, shall remain in effect until it is
rescinded by the undersigned or until such certificate is
transferred.

/ / rescinds the election previously submitted by the undersigned to
receive all payments in respect of the Subordinated Debt
Securities in [Dollars or other applicable currency], it being
understood that such rescission shall take effect as provided in
the Subordinated Debt Securities.

_____________________________
(Name of Owner)

_____________________________
(Signature of Owner)

B-1

<PAGE>
<PAGE>
Exhibit 5
May 1, 1995

Southern California Edison Company
2244 Walnut Grove Avenue
Rosemead, CA 91770

Ladies and Gentlemen:

This opinion is rendered in connection with the filing with the
Securities and Exchange Commission under the Securities Act of 1933 (the
"Act"), of a Registration Statement on Form S-3 (which Registration
Statement, pursuant to Rule 429 of the Act, contains a combined prospectus
which includes $105,000,000 principal amount of Debt Securities which
became effective on November 6, 1992 pursuant to Registration No. 33-
53290) (the "Registration Statement") registering $600,000,000 aggregate
principal amount of Debt Securities (the "Debt Securities"), of Southern
California Edison Company (the "Company").

As Assistant General Counsel of the Company, I have general
responsibility over the attorneys within the Company's Law Department
responsible for rendering legal counsel to the Company regarding
corporate, financial, and securities matters. I am generally familiar
with the organization, history, and affairs of the Company. I am also
familiar with the proceedings taken and proposed to be taken by the
Company in connection with the proposed offering and sale of the Debt
Securities, and I have examined a copy of the Registration Statement. In
addition, I have responsibility for supervising lawyers who may have been
asked, by me or others, to review legal matters arising in connection with
the offering and sale of the Debt Securities. Accordingly, some of the
matters referred to herein have not been handled personally by me, but I
have been made familiar with the facts and circumstances and the
applicable law, and the opinions herein expressed are my own or are
opinions of others in which I concur.

Based upon the foregoing, and subject to (a) the Registration
Statement having become effective under the Act, (b) the continued
effectiveness of the appropriate order of the Public Utilities Commission
of the State of California authorizing the issuance and sale of the Debt
Securities in the manner contemplated in the Registration Statement, and
(c) completion of such corporate proceedings as are now contemplated prior
to the offering and sale of the Debt Securities, it is my opinion that,
when sold as provided in the Registration Statement, the Debt Securities
will constitute legally valid and binding obligations of the Company
enforceable in accordance with their terms, except that enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium, or other laws or equitable principles relating to or limiting
creditors' rights generally.

This opinion does not relate to state Blue Sky or securities laws.

I hereby consent to the reference to me under the caption "Validity
of Debt Securities" in the Registration Statement and to the filing of
this opinion as an exhibit to the Registration Statement. By giving such
consent, I do not thereby admit that I am an expert with respect to any
part of the Registration Statement, including this exhibit to the
Registration Statement, within the meaning of Section 7 of the Act or the
rules and regulations of the Securities and Exchange Commission
thereunder.

Very truly yours,

KENNETH S. STEWART
KENNETH S. STEWART

KSS/ch

<PAGE>
<PAGE>
EXHIBIT 23.1

CONSENT

We hereby consent to the references made to us, and to the use of our
names, in this Registration Statement including the Prospectus filed as a part
thereof.

Bryant C. Danner
---------------------------------------
(Bryant C. Danner)

Kenneth S. Stewart
---------------------------------------
(Kenneth S. Stewart)

May 1, 1995

<PAGE>
<PAGE>
EXHIBIT 23.2

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement of our reports
dated February 3, 1995 included (or incorporated by reference) in the
Annual Report on Form 10-K for the year ended December 31, 1994, of
Southern California Edison Company, and to all references to our Firm
included in this Registration Statement.

ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP

Los Angeles, California
May 1, 1995

<PAGE>
<PAGE>
Exhibit 24.1
SOUTHERN CALIFORNIA EDISON COMPANY
POWER OF ATTORNEY

The undersigned Southern California Edison Company, a California
corporation, and certain of its officers and/or directors, pursuant to a
Resolution adopted January 19, 1995, do each hereby constitute and appoint
JOHN E. BRYSON, ALAN J. FOHRER, R. K. BUSHEY, BRYANT C. DANNER, KENNETH
S. STEWART, C. ALEX MILLER, W. J. SCILACCI, JAMES R. BERG, PATRICIA N.
GLAZIER, VICTORIA W. SCHWARTZ, L. C. CLARK, DOROTHY J. FULCO, JOHN
STADNIK, THOMAS J. DENNIS, CHARLES COOKE AND TERRANCE M. ADLHOCK and/or
any one of them, to act as attorney-in-fact, for and in their respective
names, places and steads, to execute, sign, file or cause to be filed a
Registration Statement or Statements and any and all exhibits, amendments
and/or supplements thereto to be filed by Southern California Edison
Company with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, for the purpose of registering one or more series
of First and Refunding Mortgage Bonds ("New Bonds"), and/or unsecured
indebtedness (collectively "Debt Securities") of an aggregate principal
amount not to exceed $700,000,000, such New Bonds to be issued under the
Indenture between this corporation and Harris Trust and Savings Bank and
D. G. Donovan, as trustee dated as of October 1, 1923, as amended and
supplemented, and for the further purpose of qualifying the Indenture as
amended and supplemented under the Trust Indenture Act of 1939; granting
unto said attorney-in-fact, and each of them, full power and authority to
do and perform all and every act and thing whatsoever necessary or
appropriate as fully and to all intents and purposes as the undersigned
or any of them might or could do if personally present, hereby ratifying
and approving the acts of each of said attorneys-in-fact.

Executed at Rosemead, California, as of this 19th day of January, 1995.

SOUTHERN CALIFORNIA EDISON COMPANY

By John E. Bryson
-------------------------------------
Chairman of the Board,
Chief Executive Officer and Director
(Seal)

Attest:

Kenneth S. Stewart
- -----------------------------
Secretary
<PAGE>
<PAGE>
Principal Executive Officer and Director:

John E. Bryson
------------------- Chairman of the Board,
John E. Bryson Chief Executive
Officer and Director

Principal Financial Officer:

Alan J. Fohrer
------------------- Senior Vice President and
Alan J. Fohrer Chief Financial Officer

Controller and Principal Accounting Officer:

R. K. Bushey
------------------- Vice President and Controller
R. K. Bushey

Directors: Howard P. Allen
-------------------
Howard P. Allen Director

N. Barker, Jr.
------------------- Director
N. Barker, Jr.

Camilla C. Frost
------------------- Director
Camilla C. Frost

Walter B. Gerken
------------------- Director
Walter B. Gerken

Joan C. Hanley
------------------- Director
Joan C. Hanley

Carl F. Huntsinger
------------------- Director
Carl F. Huntsinger

Charles D. Miller
------------------- Director
Charles D. Miller

Luis G. Nogales
------------------- Director
Luis G. Nogales

J. J. Pinola
------------------- Director
J. J. Pinola

James M. Rosser
------------------- Director
James M. Rosser

Henry T. Segerstrom
------------------- Director
Henry T. Segerstrom

<PAGE>
E. L. Shannon, Jr.
------------------- Director
E. L. Shannon, Jr.

Robert H. Smith
------------------- Director
Robert H. Smith

Daniel M. Tellep
------------------- Director
Daniel M. Tellep

James D. Watkins
------------------- Director
James D. Watkins

Edward Zapanta
------------------- Director
Edward Zapanta

<PAGE>
Exhibit 24.2

I, PATRICIA N. GLAZIER, Assistant Secretary of SOUTHERN CALIFORNIA EDISON
COMPANY, certify that the attached is an accurate and complete copy of a
resolution of the Board of Directors of the corporation, duly adopted at
a meeting of its Board of Directors held on January 19, 1995.

Patricia N. Glazier
----------------------------------
Assistant Secretary
SOUTHERN CALIFORNIA EDISON COMPANY
<PAGE>
<PAGE>
RESOLUTION OF THE BOARD OF DIRECTORS

OF SOUTHERN CALIFORNIA EDISON COMPANY

Adopted: January 19, 1995

RE: ISSUANCE AND SALE OF DEBT SECURITIES

WHEREAS, it is in the best interest of this corporation to authorize
the issuance, sale and delivery of one or more series of First and
Refunding Mortgage Bonds ("New Bonds") and/or unsecured indebtedness
(collectively "Debt Securities");

WHEREAS, it is desirable that preparations be made for this corporation
to issue up to $700,000,000 of Debt Securities;

WHEREAS, in order to carry out the foregoing, this corporation desires
to use the "Shelf Registration" procedures of the Securities and Exchange
Commission ("SEC") for registration of securities pursuant to Rule 415
under the Securities Act of 1933, as amended ("Securities Act");

WHEREAS, it is appropriate for this corporation to file a Shelf
Registration Statement or Statements with the SEC for the purpose of
registering under the Securities Act, the Debt Securities, in an amount
not to exceed $700,000,000;

WHEREAS, this corporation proposes to issue the New Bonds pursuant to
the terms of a trust indenture dated as of October 1, 1923, as amended and
supplemented, between this corporation and Harris Trust and Savings Bank
and D. G. Donovan, as trustees ("Trust Indenture");

WHEREAS, this corporation presently contemplates that the issuance and
sale of the Debt Securities may be undertaken through competitively bid
public offerings, negotiated public offerings and/or competitively bid or
negotiated private placements (including offerings made in reliance on the
SEC's Rule 144A under the Securities Act);

WHEREAS, it is appropriate that the procedures applicable to the
issuance of the Debt Securities may include applications to be made for
the listing on national and/or foreign stock exchanges and registration
under the Securities Exchange Act of 1934 ("Exchange Act") (if deemed
necessary or desirable by the Chairman of the Board, the President, the
Chief Financial Officer, any Vice President, the Treasurer, an Assistant
Treasurer, or counsel acting on behalf of this corporation);

WHEREAS, in connection with the issuance and sale of the Debt
Securities, this corporation may undertake to qualify the Debt Securities
on behalf of this corporation or the purchasers thereof for offer and sale
under the securities, Blue Sky or other similar laws of certain states or
other jurisdictions;

WHEREAS, it is appropriate that the Chairman of the Board, the
President, the Chief Financial Officer, the Treasurer, or any Assistant
Treasurer determine the nature, terms, timing, and aggregate amounts of
the Debt Securities to be issued.

NOW, THEREFORE, BE IT RESOLVED, that the Chairman of the Board, the
President, the Chief Financial Officer, the Treasurer, or any Assistant
Treasurer is hereby authorized to determine the nature, terms, timing, and
aggregate amounts, which shall not exceed $700,000,000 of Debt Securities,
to be issued by this corporation.

BE IT FURTHER RESOLVED, that the Chairman of the Board, the President,
any Vice President, the Treasurer, or any Assistant Treasurer of this
corporation is hereby authorized to prepare, execute and file, or cause
to be prepared and filed with the SEC, a Shelf Registration Statement or
<PAGE>
Statements and any and all required or appropriate exhibits, supplements
and/or amendments to said Registration Statements for the registration of
an aggregate principal amount of the Debt Securities of this corporation
of not to exceed $700,000,000 under the Securities Act (including the
qualification of any trust indenture under the Trust Indenture Act of
1939, as amended).

BE IT FURTHER RESOLVED, that each of the officers of this corporation
is hereby authorized to execute and deliver on behalf of this corporation
and in its name a power of attorney appointing John E. Bryson, Alan J.
Fohrer, R. K. Bushey, Bryant C. Danner, Kenneth S. Stewart, Patricia N.
Glazier, Victoria W. Schwartz, C. Alex Miller, W. J. Scilacci, James R.
Berg, L. C. Clark, Dorothy J. Fulco, John Stadnik, Thomas J. Dennis,
Charles Cooke and Terrance M. Adlhock, and/or any one of them, to act
severally as attorney-in-fact for this corporation for the purpose of
executing, signing, filing or causing to be filed, on its behalf and in
its name, the Shelf Registration Statement or Statements and any and all
exhibits, amendments and/or supplements thereto to be filed by this
corporation with the SEC under the Securities Act for the purpose of
registering the Debt Securities.

BE IT FURTHER RESOLVED, that the price at which the New Bonds shall be
sold by this corporation and the terms and conditions of said sale shall
be such as may hereafter be determined by or pursuant to the direction and
approval of this corporation's Board of Directors or the Executive
Committee thereof.

BE IT FURTHER RESOLVED, that each of the officers of this corporation
is hereby authorized and directed to prepare and distribute or cause to
be prepared and distributed and to execute or cause to be executed one or
more offering circulars, prospectuses or supplemental prospectuses,
containing such information with respect to this corporation and the Debt
Securities as they, or any of them, or counsel for this corporation shall
deem necessary or appropriate.

BE IT FURTHER RESOLVED, that, if deemed necessary or desirable by the
Chairman of the Board, the President, the Chief Financial Officer, the
Treasurer, an Assistant Treasurer, or counsel acting on behalf of this
corporation, application may be made for listing on any national and/or
foreign stock exchanges, and registration of the Debt Securities may be
made under the Exchange Act.

BE IT FURTHER RESOLVED, that John E. Bryson, Alan J. Fohrer, Bryant C.
Danner, Kenneth S. Stewart, Patricia N. Glazier, Victoria W. Schwartz, C.
Alex Miller, W. J. Scilacci, James R. Berg, L. C. Clark, Dorothy J. Fulco,
John Stadnik, and/or any one of them, is hereby authorized to execute such
applications for listing on national and foreign stock exchanges and
Exchange Act registration statements for and on behalf of this corporation
and any other documents or agreements relating thereto, and to amend,
supplement or make such changes to such applications, Exchange Act
registration statements, documents or agreements as may be necessary to
conform to the requirements for such listing and registration, and to
appear (if requested) before the officials of said national and foreign
stock exchanges.

BE IT FURTHER RESOLVED, that the Chairman of the Board, the President,
any Vice President, the Treasurer or any Assistant Treasurer of this
corporation is hereby authorized and directed, at his or her discretion
and in the name and on behalf of this corporation, or otherwise, to
execute and file, or cause to be filed, such consents to service of
process, powers of attorney, applications and other documents with such
state authorities and to do such other acts and things as the said officer
or officers acting or counsel for this corporation shall deem necessary
or appropriate so as to register by notification or qualify the Debt
Securities or any part thereof, for offer and sale under the securities,
Blue Sky or other similar laws of such states or jurisdictions; provided,
<PAGE>
however, that this corporation shall not, pursuant to this authorization,
qualify as a foreign corporation in any such state or jurisdiction other
than with respect to claims arising out of the offering or sale of the
Debt Securities by this corporation or the purchasers thereof from this
corporation.

BE IT FURTHER RESOLVED, that the Chairman of the Board, the President,
or any Vice President of this corporation is hereby authorized to (i)
execute on behalf of this corporation, affix the seal of this corporation
and deliver to Harris Trust and Savings Bank and D. G. Donovan, as
trustees, one or more Supplemental Indentures in substantially the form
approved by the Chairman of the Board, the President, the Chief Financial
Officer, the Treasurer, or any Assistant Treasurer, said officers being
hereby authorized to make such changes thereto or complete the blanks
therein as they in their discretion deem appropriate, and (ii) cause said
Supplemental Indentures to be recorded and filed for record.

BE IT FURTHER RESOLVED, that each of the officers of this corporation
is hereby authorized to execute on behalf and in the name of this
corporation the documents specified or contemplated in these resolutions
through the act or acts of a duly appointed power of attorney.

BE IT FURTHER RESOLVED, that each of the officers of this corporation
is hereby authorized to do and perform, or cause to be done and performed,
all such acts, deeds and things and to make, execute and deliver, or cause
to be made, executed and delivered, all such agreements, undertakings,
documents, instruments or certificates in the name and on behalf of this
corporation or otherwise as each such officer may deem necessary,
advisable or appropriate to effect or carry out fully the purposes and
intents of the foregoing resolutions.

<PAGE>
<PAGE>
EXHIBIT 25.2
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM T-1
--------

STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) _____

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

THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)

A National Banking Association 36-0899825
(I.R.S. employer
identification number)

One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)

The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)

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

SOUTHERN CALIFORNIA EDISON COMPANY
(Exact name of obligor as specified in its charter)

California 95-1240335
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)

2244 Walnut Grove Avenue
Rosemead, California 91170
(Address of principal executive offices) (Zip Code)

Debt Securities
(Title of Indenture Securities)
<PAGE>
<PAGE>

Item 1. General Information. Furnish the following
information as to the trustee:

(a) Name and address of each examining or
supervising authority to which it is subject.

Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.

(b) Whether it is authorized to exercise
corporate trust powers.

The trustee is authorized to exercise corporate
trust powers.

Item 2. Affiliations With the Obligor. If the obligor
is an affiliate of the trustee, describe each
such affiliation.

No such affiliation exists with the trustee.

Item 16. List of exhibits. List below all exhibits filed as a
part of this Statement of Eligibility.

1. A copy of the articles of association of the
trustee now in effect.*

2. A copy of the certificates of authority of the
trustee to commence business.*

3. A copy of the authorization of the trustee to
exercise corporate trust powers.*

4. A copy of the existing by-laws of the trustee.*

5. Not Applicable.

6. The consent of the trustee required by
Section 321(b) of the Act.
<PAGE>
<PAGE>

7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.

8. Not Applicable.

9. Not Applicable.

Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago and State of Illinois, on the 25th day of April, 1995.

The First National Bank of Chicago,
Trustee,

By /s/ R. D. Manella
R. D. Manella
Vice President and Senior Counsel
Corporate Trust Services Division

* Exhibit 1,2,3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 12 of the Form T-1 of The First National
Bank of Chicago, filed as Exhibit 26 to the Registration Statement on Form
S-3 of The CIT Group Holdings, Inc., filed with the Securities and
Exchange Commission on February 16, 1993 (Registration No. 33-58418).

EXHIBIT 6

THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT

April 25, 1995

Securities and Exchange Commission
Washington, D.C. 20549

Gentlemen:

In connection with the qualification of an indenture between Southern
California Edison Company and The First National Bank of Chicago, the
undersigned, in accordance with Section 321(b) of the Trust Indenture Act
of 1939, as amended, hereby consents that the reports of examinations of
the undersigned, made by Federal or State authorities authorized to make
such examinations, may be furnished by such authorities to the Securities
and Exchange Commission upon its request therefor.

Very truly yours,

The First National Bank of Chicago

By: /s/ R. D. Manella
R. D. Manella
Vice President and Senior Counsel
Corporate Trust Services Division
<PAGE>
<PAGE>

EXHIBIT 7

A copy of the latest report of conditions of the trustee published
pursuant to law or the requirements of its supervising or examining
authority.

<PAGE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/94 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-1
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for December 31, 1994

All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business
day of the quarter.

Schedule RC--Balance Sheet

<TABLE>
<CAPTION>
Dollar Amounts in C400 <-
Thousands RCFD BIL MIL THOU

ASSETS
1. Cash and balances due from depository
institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and
<S> <C> <C> <C> <C>
currency and coin(1) 0081 3,776.149 1.a.
b. Interest-bearing balances(2) 0071 7,670,634 1.b.
2. Securities
a. Held-to-maturity securities(from
Schedule RC-B, column A) 1754 163,225 2.a.
b. Available-for-sale securities
(from Schedule RC-B, column D) 1773 533,857 2.b.
3. Federal funds sold and securities
purchased under agreements to
resell in domestic offices of
the bank and its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal Funds sold 0276 4,037,205 3.a.
b. Securities purchased under
agreements to resell 0277 423,381 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned
income (from Schedule RC-C) RCFD 2122 15,617,618 4.a.
b. LESS: Allowance for loan and
lease losses RCFD 3123 351,191 4.b.
c. LESS: Allocated transfer risk
reserve RCFD 3128 0 4.c.
d. Loans and leases, net of unearned
income, allowance, and
reserve (item 4.a minus
4.b and 4.c) 2125 15,266,427 4.d.
5. Assets held in trading accounts 3545 8,227,304 5.
6. Premises and fixed assets
(including capitalized leases) 2145 512,222 6.
7. Other real estate owned
(from Schedule RC-M) 2150 46,996 7.
8. Investments in unconsolidated
subsidiaries and associated
companies (from Schedule RC-M) 2130 7,571 8.
9. Customers' liability to this
bank on acceptances outstanding 2155 507,151 9.
10. Intangible assets (from
Schedule RC-M) 2143 120,504 10.
11. Other assets (from Schedule RC-F) 2160 1,250,306 11.
12. Total assets (sum of items 1
through 11) 2170 42,542,932 12.
</TABLE>
- ----------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE>
<PAGE>
Legal Title of Bank: The First National Bank of Chicago
Call Date: 12/31/94
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-2
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
---------

Schedule RC-Continued

<TABLE>
<CAPTION>
Dollar Amounts in
Thousands Bil Mil Thou

LIABILITIES
13. Deposits:
a. In domestic offices (sum of
totals of columns A and C
<S> <C> <C> <C> <C>
from Schedule RC-E, part 1) RCON 2200 15,103,504 13.a.
(1) Noninterest-bearing(1) RCON 6631 6,129,078 13.a.(1)
(2) Interest-bearing RCON 6636 8,974,426 13.a.(2)
b. In foreign offices, Edge
and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II) RCFN 2200 10,633,999 13.b.
(1) Noninterest bearing RCFN 6631 460,916 13.b.(1)
(2) Interest-bearing RCFN 6636 10,173,083 13.b.(2)
14. Federal funds purchased and
securities sold under agreements
to repurchase in domestic offices
of the bank and of its Edge and
Agreement subsidiaries, and in IBFs:
a. Federal funds purchased RCFD 0278 2,883,499 14.a.
b. Securities sold under
agreements to repurchase RCFD 0279 502,401 14.b.
15. a. Demand notes issued to the
U.S. Treasury RCON 2840 112,289 15.a.
b. Trading Liabilities RCFD 3548 4,798,720 15.b.
16. Other borrowed money:
a. With original maturity of
one year or less RCFD 2332 2,355,421 16.a.
b. With original maturity of
more than one year RCFD 2333 382,801 16.b.
17. Mortgage indebtedness and
obligations under capitalized
leases RCFD 2910 275,794 17.
18. Bank's liability on acceptance
executed and outstanding RCFD 2920 507,151 18.
19. Subordinated notes and debentures RCFD 3200 1,225,000 19.
20. Other liabilities (from
Schedule RC-G) RCFD 2930 860,989 20.
21. Total liabilities (sum of items
13 through 20) RCFD 2948 39,641,568 21.
22. Limited-Life preferred stock
and related surplus RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and
related surplus RCFD 3838 0 23.
24. Common stock RCFD 3230 200,858 24.
25. Surplus (exclude all surplus
related to preferred stock) RCFD 3839 2,273,657 25.
26. a. Undivided profits and
capital reserves RCFD 3632 431,545 26.a.
b. Net unrealized holding gains
(losses) on available-for-sale
securities RCFD 8434 [ 4,184) 26.b.
27. Cumulative foreign currency
translation adjustments RCFD 3284 (512) 27.
28. Total equity capital
(sum of items 23 through 27) RCFD 3210 2,901,364 28.
29. Total liabilities, limited-life
preferred stock, and equity
capital (sum of items 21, 22, and 28) RCFD 3300 42,542,932 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
<TABLE>
<CAPTION>
1. Indicate in the box at the right the number of the statement below
that best describes the most comprehensive level of auditing work
<S> <C> <C>
performed for the bank by independent external Number
auditors as of any date during 1993 RCFD 6724 N/A M.1.
</TABLE>
<PAGE>
<PAGE>

<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. = Independent audit of the bank 4. = Director's examination of the bank performed
conducted in accordance with by other external auditors (may be required
generally accepted auditing by state chartering authority)
standards by a certified public 5. = Review of the bank's financial statements
accounting firm which submits by external auditors
a report on the bank 6. = Compilation of the bank's financial statements
2. = Independent audit of the bank's by external auditors
parent holding company conducted 7. = Other audit procedures (excluding tax preparation
in accordance with generally work)
accepted auditing standards 8. = No external audit work
by a certified public accounting
firm which submits a report on
the consolidated holding company
(but not on the bank separately)
3. = Directors' examination of the
bank conducted in accordance
with generally accepted
auditing standards by a certified
public accounting firm (may
be required by state
chartering authority)
</TABLE>
- ----------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.