
<PAGE>
                                                                  Exhibit 4(a)

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


                              AMENDED AND RESTATED

                                 TRUST AGREEMENT

                                     between

                  MINNESOTA POWER & LIGHT COMPANY, as Depositor

                                       and

                              THE BANK OF NEW YORK,

                        THE BANK OF NEW YORK (DELAWARE),

                              PHILIP R. HALVERSON,

                                DAVID G. GARTZKE,

                                       and

                          JAMES K. VIZANKO, as Trustees

                            Dated as of March 1, 1996

                                 MP&L CAPITAL I

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

<PAGE>


                                 MP&L Capital I

              Certain Sections of this Trust Agreement relating to
                         Sections 310 through 318 of the
                          Trust Indenture Act of 1939:

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

Section 310(a)(1)          ..............................       8.07
               (a)(2)      ..............................       8.07
               (a)(3)      ..............................       8.09
               (a)(4)      ..............................       Not Applicable
               (b)         ..............................       8.08
Section 311(a)             ..............................       8.13
               (b)         ..............................       8.13
Section 312(a)             ..............................       5.07
               (b)         ..............................       5.07
               (c)         ..............................       5.07
Section 313(a)             ..............................       8.14(a)
               (a)(4)      ..............................       8.14(b)
               (b)         ..............................       8.14(b)
               (c)         ..............................       8.14(a)
               (d)         ..............................       8.14(a), 8.14(b)
Section 314(a)             ..............................       Not Applicable
               (b)         ..............................       Not Applicable
               (c)(1)      ..............................       Not Applicable
               (c)(2)      ..............................       Not Applicable
               (c)(3)      ..............................       Not Applicable
               (d)         ..............................       Not Applicable
               (e)         ..............................       Not Applicable
Section 315(a)             ..............................       8.01
               (b)         ..............................       8.02, 8.14(b)
               (c)         ..............................       8.01(a)
               (d)         ..............................       8.01, 8.03
               (e)         ..............................       Not Applicable
Section 316(a)             ..............................       Not Applicable
               (a)(1)(A)   ..............................       Not Applicable
               (a)(1)(B)   ..............................       Not Applicable
               (a)(2)      ..............................       Not Applicable
               (b)         ..............................       Not Applicable
               (c)         ..............................       Not Applicable
<PAGE>

Section 317(a)(1)          ..............................       Not Applicable
               (a)(2)      ..............................       Not Applicable
               (b)         ..............................       5.09
Section 318(a)             ..............................       10.10

Note:    This reconciliation and tie shall not, for any purpose, be deemed to be
         a part of the Trust Agreement.

<PAGE>

                                TABLE OF CONTENTS


                                    ARTICLE I.

                                  Defined Terms
         Section 1.01.   Definitions.......................................  2

                                    ARTICLE II.

                           Establishment of the Trust
         Section 2.01.  Name............................................... 11
         Section 2.02.  Office of the Delaware Trustee; Principal 
                         Place of Business................................. 11
         Section 2.03.  Initial Contribution of Trust Property; 
                         Organizational Expenses........................... 11
         Section 2.04.  Issuance of the Preferred Securities............... 11
         Section 2.05.  Subscription and Purchase of Debentures; 
                         Issuance of the Common Securities................. 11
         Section 2.06.  Declaration of Trust; Appointment of Additional 
                         Administrative Trustees .......................... 12
         Section 2.07.  Authorization to Enter into Certain Transactions... 12
         Section 2.08.  Assets of Trust.................................... 16
         Section 2.09.  Title to Trust Property............................ 16

                                   ARTICLE III.

                                 Payment Account
         Section 3.01.  Payment Account.................................... 16

                                   ARTICLE IV.

                            Distributions; Redemption
         Section 4.01.  Distributions...................................... 17
         Section 4.02.  Redemption......................................... 18
         Section 4.03.  Subordination of Common Securities................. 20
         Section 4.04.  Payment Procedures................................. 20
         Section 4.05.  Tax Returns and Reports............................ 20
         Section 4.06.  Payments under Indenture........................... 21

                                   ARTICLE V.

                          Trust Securities Certificates
         Section 5.01.  Initial Ownership.................................. 21
         Section 5.02.  The Trust Securities Certificates.................. 21
         Section 5.03.  Execution and Delivery of Trust Securities 
                         Certificates...................................... 22
<PAGE>

         Section 5.04.  Registration of Transfer and Exchange of 
                         Preferred Securities Certificates ................ 22
         Section 5.05.  Mutilated, Destroyed, Lost or Stolen Trust 
                         Securities Certificates .......................... 23
         Section 5.06.  Persons Deemed Securityholders..................... 23
         Section 5.07.  Access to List of Securityholders' Names 
                         and Addresses..................................... 23
         Section 5.08.  Maintenance of Office or Agency.................... 24
         Section 5.09.  Appointment of Paying Agent........................ 24
         Section 5.10.  Ownership of Common Securities by Depositor........ 25
         Section 5.11.  Definitive Preferred Securities Certificates....... 25
         Section 5.12.  Book-Entry System.................................. 25
         Section 5.13.  Rights of Securityholders.......................... 26

                                 ARTICLE VI.

                    Acts of Securityholders; Meetings; Voting
         Section 6.01.  Limitations on Voting Rights....................... 26
         Section 6.02.  Notice of Meetings................................. 28
         Section 6.03.  Meetings of Holders of Preferred Securities........ 28
         Section 6.04.  Voting Rights...................................... 28
         Section 6.05.  Proxies, etc....................................... 28
         Section 6.06.  Securityholder Action by Written Consent........... 29
         Section 6.07.  Record Date for Voting and Other Purposes.......... 29
         Section 6.08.  Acts of Securityholders............................ 29
         Section 6.09.  Inspection of Records.............................. 30

                                ARTICLE VII.

                 Representations and Warranties of the Property
                        Trustee and the Delaware Trustee
         Section 7.01.  Property Trustee................................... 30
         Section 7.02.  Delaware Trustee................................... 31

                               ARTICLE VIII.

                                  The Trustees
         Section 8.01.  Certain Duties and Responsibilities................ 32
         Section 8.02.  Notice of Defaults................................. 33
         Section 8.03.  Certain Rights of Property Trustee................. 33
         Section 8.04.  Not Responsible for Recitals or Issuance of 
                         Securities........................................ 36
         Section 8.05.  May Hold Securities................................ 36
         Section 8.06.  Compensation; Fees; Indemnity...................... 36
         Section 8.07.  Certain Trustees Required; Eligibility............. 37
         Section 8.09.  Co-Trustees and Separate Trustee................... 38
<PAGE>

         Section 8.10.  Resignation and Removal; Appointment of Successor.. 39
         Section 8.11.  Acceptance of Appointment by Successor............. 41
         Section 8.12.  Merger, Conversion, Consolidation or Succession
                         to Business....................................... 41
         Section 8.13.  Preferential Collection of Claims Against 
                         Depositor or Trust................................ 41
         Section 8.14.  Reports by Property Trustee........................ 42
         Section 8.15.  Reports to the Property Trustee.................... 42
         Section 8.16.  Evidence of Compliance With Conditions Precedent... 42
         Section 8.17.  Number of Trustees................................. 42
         Section 8.18.  Delegation of Power................................ 43
         Section 8.19.  Fiduciary Duty..................................... 43

                                    ARTICLE IX.

                           Termination and Liquidation
         Section 9.01.  Termination Upon Expiration Date................... 44
         Section 9.02.  Early Termination.................................. 44
         Section 9.03.  Termination........................................ 45
         Section 9.04.  Liquidation........................................ 45

                                   ARTICLE X.

                            Miscellaneous Provisions
         Section 10.01.  Guarantee by the Depositor and Assumption of 
                              Obligations.................................. 47
         Section 10.02.  Limitation of Rights of Securityholders........... 47
         Section 10.03.  Amendment......................................... 47
         Section 10.04.  Separability...................................... 49
         Section 10.05.  Governing Law..................................... 49
         Section 10.06.  Successors........................................ 49
         Section 10.07.  Headings.......................................... 49
         Section 10.08.  Notice and Demand................................. 49
         Section 10.09.  Agreement Not to Petition......................... 50
         Section 10.10.  Conflict with Trust Indenture Act................. 50

<PAGE>                              

                                                                              
                  AMENDED AND  RESTATED  TRUST  AGREEMENT,  dated as of March 1,
1996, between (i) Minnesota Power & Light Company, a Minnesota  corporation (the
"Depositor"),  (ii) The Bank of New York, a banking  corporation  duly organized
and existing under the laws of New York, as trustee (the "Property Trustee" and,
in its  separate  capacity  and not in its  capacity  as Property  Trustee,  the
"Bank"),  (iii)  The Bank of New York  (Delaware),  a banking  corporation  duly
organized  under the laws of Delaware,  as trustee (the "Delaware  Trustee") and
(iv)  Philip  R.  Halverson,  David G.  Gartzke  and James K.  Vizanko,  each an
individual, as trustee, and each of whose address is c/o Minnesota Power & Light
Company,   30  West  Superior   Street,   Duluth,   Minnesota  55802  (each,  an
"Administrative  Trustee" and collectively the  "Administrative  Trustees") (the
Property Trustee, the Delaware Trustee and the Administrative  Trustees referred
to collectively as the "Trustees") and (v) the several  Holders,  as hereinafter
defined.


                              W I T N E S S E T H:
                              - - - - - - - - - -


                  WHEREAS,  the Depositor,  the Property  Trustee,  the Delaware
Trustee and Philip R. Halverson,  as the Administrative Trustee, have heretofore
duly declared and established a business trust pursuant to the Delaware Business
Trust Act by the entering  into of that  certain  Trust  Agreement,  dated as of
February 15, 1996 (the "Original Trust Agreement"),  and by the execution by the
Property   Trustee,   the  Delaware   Trustee  and  Philip  R.   Halverson,   as
Administrative  Trustee and filing with the  Secretary  of State of the State of
Delaware of the  Certificate of Trust,  dated February 15, 1996, a copy of which
is attached as Exhibit A; and

                  WHEREAS, the Depositor, the Property Trustee, Delaware Trustee
and Philip R. Halverson,  as Administrative Trustee, desire to amend and restate
the Original Trust Agreement in its entirety as set forth herein to provide for,
among other things,  (i) the  acquisition by the Trust from the Depositor of all
of the right,  title and  interest in the  Debentures,  (ii) the issuance of the
Common  Securities  by the Trust to the  Depositor,  (iii) the  issuance  of the
Preferred  Securities  by the  Trust  and (iv)  the  appointment  of  additional
Administrative Trustees of the Trust;

                  NOW  THEREFORE,   in   consideration  of  the  agreements  and
obligations set forth herein and for other good and valuable consideration,  the
sufficiency of which is hereby acknowledged,  each party, for the benefit of the
other  party and for the  benefit  of the  Securityholders,  hereby  amends  and
restates the Original Trust Agreement in its entirety and agrees as follows:

<PAGE>

                                   ARTICLE I.

                                  Defined Terms

                 Section 1.01. Definitions. For all purposes of
this Trust Agreement, except as otherwise expressly provided or unless the
context otherwise requires:

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

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

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

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

                  "Act" has the meaning specified in Section 6.08.

                  "Additional Amount" means, with respect to Trust Securities of
a given  Liquidation  Amount  and/or a given  period,  the amount of  Additional
Interest (as defined in the  Subordinated  Indenture) paid by the Depositor on a
Like Amount of Debentures for such period.

                  "Administrative   Trustee"  means  each  of  the   individuals
identified  as an  "Administrative  Trustee"  in  the  preamble  to  this  Trust
Agreement  solely in their  capacities as  Administrative  Trustees of the Trust
created  hereunder and not in their  individual  capacities,  or such  trustee's
successor in interest in such capacity,  or any successor  trustee  appointed as
herein provided.

                  "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.

                  "Bank" has the meaning specified in the preamble to this Trust
Agreement.

                                        -2-
<PAGE>
                  "Bankruptcy Event" means, with respect to any Person:

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

                        (ii) the institution by such Person of proceedings to be
                  adjudicated a bankrupt or  insolvent,  or of the consent by it
                  to the  institution  of bankruptcy  or insolvency  proceedings
                  against  it, or the  filing by it of a  petition  or answer or
                  consent  seeking   reorganization   or  relief  under  Federal
                  bankruptcy law or any other  applicable  Federal or State law,
                  or the consent by it to the filing of such  petition or to the
                  appointment  of a  receiver,  liquidator,  assignee,  trustee,
                  sequestrator  or  similar  official  of such  Person or of any
                  substantial  part of its  property,  or the making by it of an
                  assignment  for the benefit of creditors,  or the admission by
                  it in writing of its  inability to pay its debts  generally as
                  they become due.

                  "Bankruptcy Laws" has the meaning specified in Section 10.09.

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

                  "Business  Day"  means a day other  than (x) a  Saturday  or a
Sunday,  (y) a day on which  banks in New  York,  New  York  are  authorized  or
obligated by law or executive  order to remain  closed or (z) a day on which the
Property Trustee's  Corporate Trust Office or the Debenture  Trustee's principal
corporate trust office is closed for business.

                  "Certificate of Trust" has the meaning specified in Section 
2.07(d).

                  "Clearing  Agency"  means  an  organization  registered  as  a
"clearing agency" pursuant to Section 17A of the Exchange Act.

                  "Closing Date" means the date of delivery of this Trust 
Agreement.

                  "Code" means the Internal Revenue Code of 1986, as amended.

                                        -3-
<PAGE>
                  "Commission" means the Securities and Exchange Commission,  as
from time to time  constituted,  created  under the Exchange  Act, or, if at any
time after the execution of this  instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.

                  "Common  Security" means an undivided  beneficial  interest in
the assets of the Trust having a Liquidation Amount of $25 and having the rights
provided  therefor  in this  Trust  Agreement,  including  the right to  receive
Distributions and a Liquidation Distribution as provided herein.

                  "Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit B.

                  "Corporate  Trust Office" means the principal  corporate trust
office of the Property Trustee located in New York, New York.

                  "Covered Person" means:(a) any officer, director, shareholder,
partner, member, representative, employee or agent of the Trust or the Trust's 
Affiliates; and (b) any Holder of Trust Securities.

                  "Debenture Event of Default" means an "Event of Default" as 
defined in the Subordinated Indenture.

                  "Debenture  Issuer" means Minnesota  Power & Light Company, a
Minnesota corporation, in its capacity as issuer of the Debentures.

                  "Debenture Redemption Date" means "Redemption Date" as defined
in the Subordinated Indenture with respect to the Debentures.

                  "Debenture Trustee" means The Bank of New York, as trustee 
under the Subordinated Indenture.

                  "Debentures" means the $77,500,000  aggregate principal amount
of the Depositor's  8.05% Junior  Subordinated  Debentures,  Series A, Due 2015,
issued pursuant to the Subordinated Indenture.

                  "Definitive Preferred Securities Certificates" means Preferred
Securities  Certificates  issued  in  certificated,  fully  registered  form  as
provided in Section 5.11.

                  "Delaware  Business Trust Act" means Chapter 38 of Title 12 of
the Delaware  Code, 12 Del. Code Section 3801 et seq., as it may be amended from
time to time.

                  "Delaware Trustee" means the banking corporation identified as
the  "Delaware  Trustee" in the preamble to this Trust  Agreement  solely in its
capacity  as  Delaware  Trustee  
                                        -4-
<PAGE>

of the  Trust  formed  hereunder  and  not in its  individual  capacity,  or its
successor in interest in such capacity,  or any successor  trustee  appointed as
herein provided.

                  "Depositor" has the meaning specified in the preamble to this
Trust Agreement.

                  "Distribution Date" has the meaning specified in Section 
4.01(a).

                  "Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.01.

                  "Early Termination Event" has the meaning specified in 
Section 9.02.

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

                         (i)  the occurrence of a Debenture Event of Default; or

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

                       (iii)  default  by  the  Trust  in  the  payment  of  any
                  Redemption Price, plus accumulated and unpaid distributions of
                  any Trust Security when it becomes due and payable; or

                        (iv)  default  in the  performance,  or  breach,  in any
                  material  respect of any  covenant or warranty of the Trustees
                  in this Trust  Agreement  (other than a covenant or warranty a
                  default in whose  performance or breach is specifically  dealt
                  with in clause (ii) or (iii),  above) and continuation of such
                  default or breach for a period of 60 days after there has been
                  given,  by registered  or certified  mail, to the Trust by the
                  Holders  of  at  least  10%  in  Liquidation   Amount  of  the
                  Outstanding  Preferred  Securities a written notice specifying
                  such  default or breach and  requiring  it to be remedied  and
                  stating  that such notice is a "Notice of Default"  hereunder;
                  or

                         (v)  the occurrence of a Bankruptcy Event with respect
to the Trust.

                  "Exchange Act" has the meaning specified in Section 2.07(c).

                                        -5-
<PAGE>

                  "Expense  Agreement"  means the  Agreement  as to Expenses and
Liabilities  between  the  Depositor  and the Trust,  substantially  in the form
attached as Exhibit C, as amended from time to time.

                  "Expiration Date" shall have the meaning specified in Section 
9.01.

                  "Guarantee"  means  the  Guarantee   Agreement   executed  and
delivered  by the  Depositor  and  The  Bank of New  York,  a New  York  banking
corporation,  as trustee,  contemporaneously  with the execution and delivery of
this  Trust  Agreement,  for  the  benefit  of  the  Holders  of  the  Preferred
Securities, as amended from time to time.

                  "Indemnified  Person" means any Trustee,  any Affiliate of any
Trustee,  or any officer,  director,  shareholder,  member,  partner,  employee,
representative or agent of any Trustee, or any employee or agent of the Trust or
its Affiliates.

                  "Investment Company Event" means the occurrence of a change in
law or  regulation  or a  change  in  interpretation  or  application  of law or
regulation by any legislative  body,  court,  governmental  agency or regulatory
authority to the effect that the Trust is or will be considered  an  "investment
company" that is required to be registered  under the Investment  Company Act of
1940, as amended,  which change in law becomes effective on or after the date of
original issuance of the Preferred Securities.

                  "Lien" means any lien, pledge, charge, encumbrance,  mortgage,
deed of trust, adverse ownership interest,  hypothecation,  assignment, security
interest or  preference,  priority or other security  agreement or  preferential
arrangement of any kind or nature whatsoever.

                  "Like Amount" means (i) Trust Securities  having a Liquidation
Amount  equal to the  principal  amount of  Debentures  to be  contemporaneously
redeemed in accordance with the Subordinated Indenture and the proceeds of which
will  be used  to pay  the  Redemption  Price  of  such  Trust  Securities  plus
accumulated  and  unpaid  Distributions  to the  date of such  payment  and (ii)
Debentures  having a principal  amount  equal to the  Liquidation  Amount of the
Trust Securities of the Holder to whom such Debentures are distributed.

                  "Liquidation Amount" means the stated amount of $25 per Trust 
Security.

                  "Liquidation  Date" means the date on which  Debentures are to
be distributed to Holders of Trust  Securities in connection  with a termination
and liquidation of the Trust pursuant to Section 9.04(a).

                  "Liquidation Distribution" has the meaning specified in 
Section 9.04(e).

                  "Offer" has the meaning specified in Section 2.07(c).

                                        -6-
<PAGE>

                  "Officers'  Certificate"  means a  certificate  signed  by the
Chairman of the Board,  a Vice  Chairman of the Board,  the  President or a Vice
President,  and by the Treasurer,  an Assistant  Treasurer,  the Secretary or an
Assistant Secretary, of the Depositor, and delivered to the appropriate Trustee.
One of the officers signing an Officers'  Certificate  given pursuant to Section
8.16 shall be the principal  executive,  financial or accounting  officer of the
Depositor. Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Trust Agreement shall include:

                  (a)  a statement that each officer signing the Officers' 
         Certificate has read the covenant or condition and the definitions 
         relating thereto;

                  (b)  a brief statement of the nature and scope of the 
         examination or investigation undertaken by each officer in rendering
         the Officers' Certificate;

                  (c)  a  statement   that  each  such  officer  has  made  such
         examination  or  investigation  as,  in  such  officer's  opinion,   is
         necessary to enable such  officer to express an informed  opinion as to
         whether or not such covenant or condition has been complied with; and

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

                  "Opinion of Counsel" means a written  opinion of counsel,  who
may be counsel for the Trust, the Property Trustee,  the Delaware Trustee or the
Depositor,  but not an employee of the Trust, the Property Trustee, the Delaware
Trustee or the Depositor, and who shall be reasonably acceptable to the Property
Trustee.

                  "Original Trust Agreement" has the meaning specified in the 
recitals to this Trust Agreement.

                  "Outstanding," when used with respect to Preferred Securities,
means, as of the date of  determination,  all Preferred  Securities  theretofore
delivered under this Trust Agreement, except:

                         (i)  Preferred Securities theretofore canceled by the 
                  Administrative Trustees or delivered to the Administrative 
                  Trustees for cancellation;

                        (ii)   Preferred   Securities   for  whose   payment  or
                  redemption  money in the necessary amount has been theretofore
                  deposited  with the  Property  Trustee or any Paying Agent for
                  the Holders of such  Preferred  Securities;  provided that, if
                  such Preferred  Securities are to be redeemed,  notice of such
                  redemption   has  been  duly  given  pursuant  to  this  Trust
                  Agreement; and
                                        -7-
<PAGE>
                       (iii) Preferred  Securities in exchange for or in lieu of
                  which other Preferred  Securities have been delivered pursuant
                  to this Trust Agreement,  including pursuant to Sections 5.04,
                  5.05 or 5.11;

provided,  however,  that in  determining  whether the Holders of the  requisite
Liquidation  Amount  of the  Outstanding  Preferred  Securities  have  given any
request, demand, authorization,  direction, notice, consent or waiver hereunder,
Preferred Securities owned by the Depositor, any Trustee or any Affiliate of the
Depositor or any Trustee shall be disregarded  and deemed not to be Outstanding,
except that (a) in determining whether any Trustee shall be protected in relying
upon any such request,  demand,  authorization,  direction,  notice,  consent or
waiver, only Preferred  Securities which such Trustee knows to be so owned shall
be so disregarded  and (b) the foregoing shall not apply at any time when all of
the outstanding Preferred Securities are owned by the Depositor,  one or more of
the Trustees and/or any such Affiliate. Preferred Securities so owned which have
been  pledged  in good  faith may be  regarded  as  Outstanding  if the  pledgee
establishes  to the  satisfaction  of the  Administrative  Trustee the pledgee's
right so to act with respect to such  Preferred  Securities and that the pledgee
is not the Depositor or any Affiliate of the Depositor.

                  "Owner"  means each  Person who is the  beneficial  owner of a
Preferred  Securities  Certificate as reflected in the records of the Securities
Depository  or, if a Securities  Depository  Participant  is not the  beneficial
owner, then as reflected in the records of a Person  maintaining an account with
such  Securities  Depository  (directly or  indirectly),  in accordance with the
rules of such Securities Depository.

                  "Paying  Agent"  means any  paying  agent or  co-paying  agent
appointed pursuant to Section 5.09 and shall initially be The Bank of New York.

                  "Payment  Account"  means  a  segregated  non-interest-bearing
corporate  trust account  maintained by the Property  Trustee at The Bank of New
York, or such other  banking  institution  as the Depositor  shall select in its
trust  department  for the benefit of the  Securityholders  in which all amounts
paid in respect of the Debentures  will be held and from which the Paying Agent,
pursuant  to  Section  5.09,  shall  make  payments  to the  Securityholders  in
accordance with Sections 4.01 and 4.02.

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

                  "Preferred   Security"  means  a  quarterly  income  preferred
security  representing  an  undivided  beneficial  interest in the assets of the
Trust having a Liquidation  Amount of $25 and having rights provided therefor in
this  Trust  Agreement,  including  the  right to  receive  Distributions  and a
Liquidation Distribution as provided herein.

                                        -8-
<PAGE>
                  "Preferred   Securities   Certificate"   means  a  certificate
evidencing ownership of Preferred Securities, substantially in the form attached
as Exhibit D.

                  "Property  Trustee" means the commercial bank or trust company
identified  as the  "Property  Trustee" in the preamble to this Trust  Agreement
solely in its  capacity as Property  Trustee of the Trust  formed and  continued
hereunder and not in its  individual  capacity,  or its successor in interest in
such capacity, or any successor trustee appointed as herein provided.

                  "Redemption Date" means, with respect to any Trust Security to
be  redeemed,  the date fixed for such  redemption  by or pursuant to this Trust
Agreement;  provided that each Debenture  Redemption  Date shall be a Redemption
Date for a Like Amount of Trust Securities.

                  "Redemption  Price" means,  with respect to any date fixed for
redemption of any Trust Security, the Liquidation Amount of such Trust Security.

                  "Redemption Tax Opinion" has the meaning specified in Section 
9.04(d).

                  "Registrar" shall  mean  the  registrar  for  the  Preferred
Securities appointed by the Trust and shall be initially The Bank of New York.

                  "Relevant Trustee" shall have the meaning specified in 
Section 8.10.

                  "Responsible  Officer," when used with respect to the Property
Trustee  means an officer  of the  Property  Trustee  assigned  by the  Property
Trustee to administer its corporate trust matter.

                  "Securities Depository" shall be The Depository Trust Company.

                  "Securities Depository Participant" means an institution which
deposits securities with a Securities Depository for holding thereby.

                  "Securities Register" shall mean the Securities Register
described in Section 5.04.

                  "Securityholder"  or  "Holder"  means a Person in whose name a
Trust Security or Securities is registered in the Securities Register;  any such
Person  shall be deemed to be a  beneficial  owner  within  the  meaning  of the
Delaware Business Trust Act.

                  "Special Event" means either a Tax Event or an Investment 
Company Event.
                                        -9-
<PAGE>
                  "Subordinated  Indenture"  means  the  Indenture,  dated as of
March 1, 1996, between the Depositor and the Debenture Trustee,  as trustee,  as
amended or supplemented from time to time.

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

                  "Transfer  Agent" shall mean one or more  transfer  agents for
the Preferred  Securities appointed by the Trust and shall be initially The Bank
of New York.

                  "Trust"  means the  Delaware  business  trust  created  by the
Original Trust  Agreement and continued  hereby and identified on the cover page
to this Trust Agreement.

                  "Trust  Agreement"  means  this  Amended  and  Restated  Trust
Agreement,  as the same may be modified,  amended or  supplemented in accordance
with the applicable provisions hereof, including all exhibits hereto, including,
for all  purposes of this  Amended and  Restated  Trust  Agreement  and any such
modification, amendment or supplement, the provisions of the Trust Indenture Act
that are deemed to be a part of and  govern  this  Amended  and  Restated  Trust
Agreement and any such modification, amendment or supplement, respectively.

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

                  "Trust  Property" means (i) the  Debentures,  (ii) any cash on
deposit in, or owing to, the Payment  Account and (iii) all  proceeds and rights
in respect of the foregoing and any other property and assets for the time being
held by the Property Trustee pursuant to the trusts of this Trust Agreement.

                                      -10-
<PAGE>
                 "Trust Security" means any one of the Common  Securities or the
Preferred Securities.

                 "Trust  Securities  Certificate"  means  any one of the  Common
Securities Certificates or the Preferred Securities Certificates.

                 "Underwriting  Agreement"  means the  Underwriting  Agreement,
dated as of March 15, 1996,  among the Trust, the Depositor and the underwriters
named therein.


                                  ARTICLE II.

                           Establishment of the Trust

                 Section 2.01.  Name. The Trust created hereby shall be known as
"MP&L  Capital I", in which name the  Trustees  may conduct the  business of the
Trust,  make and execute  contracts and other instruments on behalf of the Trust
and sue and be sued.

                 Section 2.02. Office of the Delaware  Trustee;  Principal Place
of  Business.  The office of the  Delaware  Trustee in the State of  Delaware is
White Clay Center,  Route 273, Newark,  Delaware 19711, or at such other address
in  Delaware as the  Delaware  Trustee may  designate  by written  notice to the
Securityholders and the Depositor.  The principal place of business of the Trust
is c/o  Minnesota  Power  & Light  Company,  30 West  Superior  Street,  Duluth,
Minnesota 55802.

                 Section  2.03.   Initial   Contribution   of  Trust   Property;
Organizational Expenses. The Property Trustee acknowledges receipt in trust from
the Depositor in connection with the Original Trust Agreement of the sum of $10,
which   constituted  the  initial  Trust  Property.   The  Depositor  shall  pay
organizational expenses of the Trust as they arise or shall, upon request of any
Trustee,  promptly  reimburse  such Trustee for any such  expenses  paid by such
Trustee.  The  Depositor  shall  make no claim upon the Trust  Property  for the
payment of such expenses.

                 Section 2.04.  Issuance of the Preferred  Securities.  On March
15, 1996 the Depositor and an  Administrative  Trustee,  on behalf of the Trust,
both executed and delivered the Underwriting  Agreement.  Contemporaneously with
the execution and delivery of this Trust  Agreement,  one of the  Administrative
Trustees,  on behalf of the Trust in  accordance  with  Section  5.02,  executed
manually and  delivered a Preferred  Securities  Certificate,  registered in the
name of the  nominee  of The  Depositary  Trust  Company,  having  an  aggregate
Liquidation Amount of $75,000,000.

                 Section 2.05. Subscription and Purchase of Debentures; Issuance
of the Common Securities.  Contemporaneously  with the execution and delivery of
this Trust Agreement, the Administrative Trustees, on behalf of the Trust, shall
subscribe to and 
                                      -11-
<PAGE>

purchase from the Depositor  Debentures,  registered in the name of the Property
Trustee and having an aggregate  principal amount equal to $77,500,000,  and, in
satisfaction  of  the  purchase  price  for  such  Debentures,  (x)  one  of the
Administrative  Trustees,  on behalf of the Trust,  shall execute and deliver to
the  Depositor  Common  Securities  Certificates,  registered in the name of the
Depositor,  in an  aggregate  amount  of  100,000  Common  Securities  having an
aggregate  Liquidation  Amount of $2,500,000,  and (y) the Property Trustee,  on
behalf of the Trust,  shall  deliver  to the  Depositor  the sum of  $75,000,000
representing the proceeds from the sale of the Preferred  Securities pursuant to
the Underwriting Agreement.

                 Section 2.06.  Declaration of Trust;  Appointment of Additional
Administrative  Trustees.  (a) The exclusive purposes and functions of the Trust
are (i) to issue Trust Securities and invest the proceeds thereof in Debentures,
and (ii) to engage  in those  activities  necessary,  convenient  or  incidental
thereto. The Depositor hereby appoints the Trustees as trustees of the Trust, to
have all the  rights,  powers and duties to the  extent  set forth  herein.  The
Property  Trustee hereby  declares that it will hold the Trust Property in trust
upon and  subject to the  conditions  set forth  herein  for the  benefit of the
Securityholders. The Trustees shall have all rights, powers and duties set forth
herein and in accordance with applicable law with respect to  accomplishing  the
purposes  of the  Trust.  Anything  in  this  Trust  Agreement  to the  contrary
notwithstanding  the  Delaware  Trustee  shall not be entitled  to exercise  any
powers,   nor  shall  the   Delaware   Trustee   have  any  of  the  duties  and
responsibilities,  of the Property  Trustee or the  Administrative  Trustees set
forth herein. The Delaware Trustee shall be one of the Trustees of the Trust for
the sole and limited  purpose of fulfilling the  requirements of Section 3807 of
the Delaware Business Trust Act.

                 Section 2.07. Authorization to Enter into Certain Transactions.
(a) The Trustees  shall conduct the affairs of the Trust in accordance  with the
terms of this Trust Agreement. Subject to the limitations set forth in paragraph
(b) of this  Section  and  Article  VIII and in  accordance  with the  following
provisions  (A) and (B), the Trustees shall have the authority to enter into all
transactions  and  agreements  determined by the Trustees to be  appropriate  in
exercising the authority,  express or implied, otherwise granted to the Trustees
under this Trust  Agreement,  and to perform  all acts in  furtherance  thereof,
including without limitation, the following:

         (A) As among the Trustees,  the Administrative  Trustees shall have the
power,  duty and  authority  to act on behalf of the Trust  with  respect to the
following matters:

                         (i)  the issuance and sale of the Trust Securities;

                        (ii)  without the  consent of any  Person,  to cause the
                  Trust to enter into and to  execute,  deliver  and  perform on
                  behalf  of  the  Trust,  the  Expense   Agreement,   and  such
                  agreements as may be necessary or desirable in connection with
                  the consummation of the Underwriting Agreement (such execution
                  to be by the Administrative Trustees or any one of them);

                                      -12-
<PAGE>

                       (iii)  to qualify the Trust to do business in any 
                  jurisdiction as may be necessary or desirable;

                        (iv)  the collection of interest, principal and any 
                  other payments made in respect of the Debentures in the 
                  Payment Account;

                         (v) the registration of the Preferred  Securities under
                  the  Securities  Act of 1933,  as  amended,  and  under  state
                  securities  or blue sky laws,  and the  qualification  of this
                  Trust Agreement as a trust indenture under the Trust Indenture
                  Act;

                        (vi) the listing of the Preferred  Securities  upon such
                  securities exchange or exchanges as shall be determined by the
                  Depositor and the  registration  of the  Preferred  Securities
                  under the Exchange Act, and the  preparation and filing of all
                  periodic and other reports and other documents pursuant to the
                  foregoing;

                       (vii) the  appointments  of a Paying  Agent,  a  Transfer
                  Agent and a Registrar in accordance  with this Trust Agreement
                  (subject to Section 5.09);

                      (viii)  registering transfers of the Trust Securities 
                  in accordance with this Trust Agreement; and

                        (ix)  the  taking  of  any  action   incidental  to  the
                  foregoing as the Administrative Trustees may from time to time
                  determine  is  necessary  or advisable to protect and conserve
                  the Trust  Property  for the  benefit  of the  Securityholders
                  (without consideration of the effect of any such action on any
                  particular Securityholder).

         (B) As among the Trustees,  the Property  Trustee shall have the power,
duty and  authority to act on behalf of the Trust with respect to the  following
ministerial matters:

                         (i)  the establishment of the Payment Account;

                        (ii)  the receipt of the Debentures;

                       (iii)  the deposit of interest, principal and any other 
                  payments made in respect of the Debentures in the Payment
                  Account;

                        (iv)   the   distribution   of   amounts   owed  to  the
                  Securityholders   in  respect  of  the  Trust   Securities  in
                  accordance with the terms of this Trust Agreement;

                                      -13-
<PAGE>

                         (v)  the  sending  of  notices  of  default  and  other
                  information  regarding the Trust Securities and the Debentures
                  to the  Securityholders  in accordance  with the terms of this
                  Trust Agreement;

                        (vi)  the distribution of the Trust Property in 
                  accordance with the terms of this Trust Agreement;

                       (vii) as provided in this Trust Agreement, the winding up
                  of  the  affairs  of and  liquidation  of the  Trust  and  the
                  execution of the  certificate of  cancellation  to be prepared
                  and filed by the Administrative Trustees with the Secretary of
                  State of the State of Delaware; and

                      (viii) the taking of any ministerial  action incidental to
                  the  foregoing as the  Property  Trustee may from time to time
                  determine  is  necessary  or advisable to protect and conserve
                  the Trust  Property  for the  benefit  of the  Securityholders
                  (without consideration of the effect of any such action on any
                  particular Securityholder).

                  Subject to this Section 2.07(a)(B), the Property Trustee shall
have none of the duties,  powers or authority of the Administrative  Trustee set
forth in Section  2.07(a)(A) or the Depositor set forth in Section 2.07(c).  The
Property  Trustee  shall have the power and  authority  to  exercise  all of the
rights,  powers and privileges of a holder of Debentures  under the Subordinated
Indenture  and, if an Event of Default  occurs and is  continuing,  the Property
Trustee  may,  for the  benefit  of  Holders  of the  Trust  Securities,  in its
discretion proceed to protect and enforce its rights as holder of the Debentures
subject  to the  rights  of the  Holder  pursuant  to the  terms  of this  Trust
Agreement.

                  (b) So long as this Trust  Agreement  remains  in effect,  the
Trust (or the Trustees  acting on behalf of the Trust) shall not  undertake  any
business,  activities  or  transaction  except as expressly  provided  herein or
contemplated  hereby.  In  particular,  the  Trustees  shall not (i) acquire any
investments or engage in any activities not authorized by this Trust  Agreement,
(ii) sell, assign, transfer,  exchange,  pledge, set-off or otherwise dispose of
any of the Trust Property or interests  therein,  including to  Securityholders,
except as expressly provided herein,  (iii) take any action that would cause the
Trust to fail or cease to qualify as a "grantor trust" for United States federal
income tax purposes and not as an  association  taxable as a  corporation,  (iv)
incur any  indebtedness  for borrowed money or (v) take or consent to any action
that would result in the placement of a Lien on any of the Trust  Property.  The
Trustees shall defend all claims and demands of all Persons at any time claiming
any Lien on any of the Trust  Property  adverse to the  interest of the Trust or
the Securityholders in their capacity as Securityholders.

                  (c) In connection with the issue of the Preferred  Securities,
the Depositor shall have the right and  responsibility  to assist the Trust with
respect  to, or effect on behalf of the 

                                      -14-
<PAGE>
Trust,  the following  (and any actions taken by the Depositor in furtherance of
the following  prior to the date of this Trust Agreement are hereby ratified and
confirmed in all respects):

                         (i) to  prepare  for  filing  by  the  Trust  with  the
                  Commission and to execute a registration statement on Form S-3
                  in  relation  to  the  Preferred  Securities,   including  any
                  amendments thereto;

                        (ii)  to   determine   the   States  in  which  to  take
                  appropriate action to qualify or register for sale all or part
                  of the Preferred  Securities  and to do any and all such acts,
                  other than actions  which must be taken by or on behalf of the
                  Trust,  and advise the  Trustees of actions  they must take on
                  behalf of the Trust,  and prepare for execution and filing any
                  documents  to be executed  and filed by the Trust or on behalf
                  of the Trust, as the Depositor deems necessary or advisable in
                  order to comply with the applicable laws of any such States;

                       (iii) to prepare  for filing by the Trust an  application
                  to the New York Stock  Exchange  or any other  national  stock
                  exchange or the Nasdaq National Market for listing upon notice
                  of issuance of any Preferred  Securities  and to file or cause
                  the  Administrative  Trustees  to file  thereafter  with  such
                  exchange such  notifications and documents as may be necessary
                  from time to time to maintain such listing;

                        (iv)  to  prepare  for  filing  by the  Trust  with  the
                  Commission and to execute a registration statement on Form 8-A
                  relating to the registration of the Preferred Securities under
                  Section  12(b) of the  Securities  Exchange  Act of  1934,  as
                  amended ("Exchange Act"), including any amendments thereto;

                         (v) to execute  and  deliver on behalf of the Trust the
                  Underwriting  Agreement  and such other  agreements  as may be
                  necessary  or desirable in  connection  with the  consummation
                  thereof;

                        (vi) to select the  investment  banker or bankers to act
                  as  underwriters  with  respect  to the  offer and sale by the
                  Trust of Preferred  Securities  ("Offer")  and  negotiate  the
                  terms  of an  Underwriting  Agreement  and  pricing  agreement
                  providing for the Offer; and

                       (vii)  to take any other actions necessary or desirable
                  to carry out any of the foregoing activities.

                  (d)  Notwithstanding  anything  herein  to the  contrary,  the
Administrative  Trustees are  authorized  and directed to conduct the affairs of
the Trust and to operate the Trust so that the Trust will not be deemed to be an
"investment  company" required to be registered under the Investment Company Act
of 1940, as amended,  or classified  other than as a "grantor  trust" for United
States  federal  income  tax  purposes  and not as an  association  

                                      -15-
<PAGE>
taxable  as a  corporation  and so  that  the  Debentures  will  be  treated  as
indebtedness of the Depositor for United States federal income tax purposes.  In
this  connection,  subject to the provisions of Section 10.03, the Depositor and
the Administrative  Trustees are authorized to take any action, not inconsistent
with  applicable law, the certificate of trust filed with the Secretary of State
of the State of Delaware  with respect to the Trust (as amended or restated from
time to time, the "Certificate of Trust") or this Trust Agreement,  that each of
the Depositor and the Administrative Trustees determines in its discretion to be
necessary  or  desirable  for such  purposes,  as long as such  action  does not
materially  adversely  affect the  interests  of the  Holders  of the  Preferred
Securities.

                 Section 2.08. Assets of Trust. The assets of the Trust shall 
consist of the Trust Property.

                 Section 2.09.  Title  to Trust  Property. Legal title to all 
Trust Property shall be vested at all times in the Property Trustee (in its 
capacity as such) and shall be held and administered by the Property Trustee for
the benefit of the  Securityholders  in accordance with this Trust Agreement.


                                  ARTICLE III.

                                 Payment Account

                  Section 3.01.  Payment Account.

                  (a) On or prior to the  Closing  Date,  the  Property  Trustee
shall establish the Payment Account.  The Property Trustees and the Paying Agent
appointed by the  Administrative  Trustees shall have exclusive control and sole
right of  withdrawal  with  respect to the  Payment  Account  for the purpose of
making deposits in and  withdrawals  from the Payment Account in accordance with
this Trust Agreement.  All monies and other property deposited or held from time
to time in the  Payment  Account  shall be held by the  Property  Trustee in the
Payment Account for the exclusive benefit of the Holders of Trust Securities and
for distribution as herein provided,  including (and subject to) any priority of
payments provided for herein.

                  (b) The Property Trustee shall deposit in the Payment Account,
promptly upon  receipt,  all payments of principal or interest on, and any other
payments  or  proceeds  with  respect to, the  Debentures.  Amounts  held in the
Payment  Account  shall  not  be  invested  by  the  Property   Trustee  pending
distribution thereof.
                                      -16-
<PAGE>

                                   ARTICLE IV.

                            Distributions; Redemption

                  Section 4.01.  Distributions.

                  (a) Distributions on the Trust Securities shall be cumulative,
and will  accumulate  whether or not there are funds of the Trust  available for
the payment of Distributions.  Distributions shall accrue from the Closing Date,
and,  except in the event that the  Depositor  exercises its right to extend the
interest  payment  period for the  Debentures  pursuant  to  Section  311 of the
Subordinated Indenture,  shall be payable quarterly in arrears on March 31, June
30, September 30 and December 31 of each year,  commencing on March 31, 1996. If
any date on which Distributions are otherwise payable on the Trust Securities is
not a Business Day, then the payment of such  Distribution  shall be made on the
next  succeeding  day which is a Business Day (and without any interest or other
payment in respect of any such delay)  except that,  if such  Business Day is in
the next succeeding calendar year, payment of such distribution shall be made on
the  immediately  preceding  Business Day, in each case, with the same force and
effect as if made on such date (each date on which  distributions are payable in
accordance with this Section 4.01(a) a "Distribution Date").

                  (b)  Distributions  payable on the Trust  Securities  shall be
fixed at a rate of  8.05%  per  annum of the  Liquidation  Amount  of the  Trust
Securities.  The amount of  Distributions  payable for any full quarterly period
shall be computed on the basis of twelve  30-day  months and a 360-day  year and
for any period  shorter than a full month,  on the basis of the actual number of
days  elapsed.  If the interest  payment  period for the  Debentures is extended
pursuant to Section 311 of the Subordinated Indenture, then Distributions on the
Preferred  Securities  will be deferred for the period equal to the extension of
the interest  payment  period for the Debentures and the rate per annum at which
Distributions on the Trust Securities accumulate shall be increased by an amount
such that the aggregate  amount of  Distributions  that  accumulate on all Trust
Securities  during any such  extended  interest  payment  period is equal to the
aggregate  amount  of  interest  (including,  to the  extent  permitted  by law,
interest  payable on unpaid  interest at the percentage rate per annum set forth
above,  compounded  quarterly)  that accrues  during any such extended  interest
payment period on the Debentures.  The amount of  Distributions  payable for any
period shall include the Additional Amounts, if any.

                  (c)  Distributions  on the Trust  Securities shall be made and
shall be deemed  payable on each  Distribution  Date only to the extent that the
Trust has  funds  available  in the  Payment  Account  for the  payment  of such
Distributions.

                  (d)  Distributions on the Trust Securities with respect to a
Distribution  Date shall be payable to the Holders thereof as they appear on the
Securities  Register for the Trust 

                                      -17-
<PAGE>

Securities  on the  relevant  record  date,  which shall be 15 days prior to the
relevant Distribution Date.

                  Section 4.02.  Redemption.

                  (a) On each Debenture Redemption Date and at the maturity date
for the  Debentures  (as defined in the  Subordinated  Indenture),  the Property
Trustee  will be  required to redeem a Like  Amount of Trust  Securities  at the
Redemption Price plus  accumulated and unpaid  Distributions to the date of such
payment.

                  (b)  Notice  of  redemption  shall be  given  by the  Property
Trustee by first-class mail,  postage prepaid,  mailed not less than 30 nor more
than 60 days prior to the Redemption Date to each Holder of Trust  Securities to
be redeemed,  at such Holder's address appearing in the Security  Register.  All
notices of redemption or liquidation shall state:

                         (i)  the Redemption Date;

                        (ii)  the Redemption Price and the amount of accumulated
                  and unpaid Dividends to be paid on the Redemption Date;

                       (iii)  the CUSIP number;

                        (iv) if less than all the Outstanding  Trust  Securities
                  are  to  be  redeemed,   the   identification  and  the  total
                  Liquidation  Amount of the particular  Trust  Securities to be
                  redeemed; and

                         (v) that on the Redemption  Date the  Redemption  Price
                  plus accumulated and unpaid  Distributions to the date of such
                  payment  will  become  due and  payable  upon each such  Trust
                  Security to be redeemed and that  interest  thereon will cease
                  to accrue on and after said date.

                  (c) The Trust  Securities  redeemed  on each  Redemption  Date
shall  be  redeemed  at  the  Redemption   Price  plus  accumulated  and  unpaid
Distributions   to  the  date  of  such  payment  with  the  proceeds  from  the
contemporaneous  redemption of Debentures.  Redemptions of the Trust  Securities
shall be made and the Redemption Price plus accumulated and unpaid Distributions
to the date of such payment shall be deemed payable on each Redemption Date only
to the extent  that the Trust has funds  immediately  available  in the  Payment
Account for such payment.

                  (d) If the Property  Trustee  gives a notice of  redemption in
respect of any Preferred Securities,  then, by 12:00 noon, New York time, on the
Redemption  Date,  subject  to  Section  4.02(c),  the  Property  Trustee  shall
irrevocably  deposit with the Paying  Agent (or  Securities  Depository,  in the
event the Preferred  Securities are book-entry only) funds 

                                      -18-
<PAGE>
sufficient to pay the applicable  Redemption  Price plus  accumulated and unpaid
Distributions  to the date of such  payment  and  will  give  the  Paying  Agent
irrevocable  instructions  and  authority  to  pay  the  Redemption  Price  plus
accumulated and unpaid  Distributions to the date of such payment to the Holders
thereof   upon   surrender   of   their   Preferred   Securities   Certificates.
Notwithstanding  the  foregoing,  Distributions  payable  on  or  prior  to  the
redemption date for any Trust Securities  called for redemption shall be payable
to the  Holders  of such  Trust  Securities  as they  appear  on the  Securities
Register for the Trust  Securities on the relevant  record dates for the related
Distribution  Dates.  If notice of  redemption  shall  have been given and funds
deposited   as  required,   then  on  the   Redemption   Date,   all  rights  of
Securityholders  holding Trust  Securities so called for redemption  will cease,
except the right of such  Securityholders  to receive the Redemption  Price plus
accumulated and unpaid  Distributions  to the date of such payment,  but without
interest thereon, and such Trust Securities will cease to be outstanding. In the
event  that any  Redemption  Date is not a  Business  Day,  then  payment of the
Redemption Price payable on such date plus accumulated and unpaid  Distributions
to such date shall be made on the next  succeeding  day which is a Business  Day
(and without any interest or other payment in respect of any such delay). In the
event  that  payment  of  the  Redemption  Price  plus  accumulated  and  unpaid
Distributions  in  respect of any Trust  Securities  called  for  redemption  is
improperly  withheld  or  refused  and not paid  either  by the  Trust or by the
Depositor pursuant to the Guarantee, Distributions on such Trust Securities will
continue  to accrue,  at the then  applicable  rate,  from the  Redemption  Date
originally  established by the Trust for such Trust  Securities to the date such
Redemption Price plus accumulated and unpaid  Distributions is actually paid, in
which case the actual  payment date will be deemed the date fixed for redemption
for purposes of calculating  the Redemption  Price plus  accumulated  and unpaid
Distributions to such date.

                  (e) Payment of the  Redemption  Price on the Trust  Securities
shall be made to the Holders  thereof as they appear on the Securities  Register
for the  Trust  Securities  on the  relevant  record  date,  which  shall be the
fifteenth day prior to the Redemption Date.

                  (f) If less than all the Outstanding  Trust  Securities are to
be redeemed on a Redemption Date, then the aggregate Liquidation Amount of Trust
Securities to be redeemed shall be allocated 3% to the Common Securities and 97%
to the Preferred Securities.  The particular Preferred Securities to be redeemed
shall be  selected  not more than 60 days  prior to the  Redemption  Date by the
Property Trustee from the Outstanding Preferred Securities not previously called
for  redemption,  by such  method as the  Property  Trustee  shall deem fair and
appropriate and which may provide for the selection for a redemption of portions
(equal  to $25 or  integral  multiples  thereof)  of the  Liquidation  Amount of
Preferred  Securities of a  denomination  larger than $25. The Property  Trustee
shall  promptly  notify  the  Transfer  Agent and  Registrar  in  writing of the
Preferred  Securities  selected for redemption and, in the case of any Preferred
Securities selected for partial redemption, the Liquidation Amount thereof to be
redeemed. For all purposes of this Trust Agreement, unless the context otherwise
requires,  all  provisions  relating to the  redemption of Preferred  Securities
shall relate, in the case of any Preferred Securities redeemed or to be redeemed
only in part, to

                                      -19-
<PAGE>

the portion of the Liquidation Amount of Preferred  Securities which has been or
is to be redeemed.

                 Section 4.03.  Subordination of Common Securities.  (a) Payment
of  Distributions  (including  Additional  Amounts,  if applicable)  on, and the
Redemption  Price  plus  accumulated  and  unpaid  distributions  of,  the Trust
Securities,  as  applicable,  shall be made pro  rata  based on the  Liquidation
Amount of the Trust Securities;  provided,  however, that if on any Distribution
Date or Redemption  Date a Debenture Event of Default shall have occurred and be
continuing,  no payment of any Distribution  (including  Additional  Amounts, if
applicable)  on, or  Redemption  Price of,  any  Common  Security,  and no other
payment on account of the redemption, liquidation or other acquisition of Common
Securities,  shall be made unless payment in full in cash of all accumulated and
unpaid  Distributions  (including  Additional  Amounts,  if  applicable)  on all
Outstanding  Preferred Securities for all distribution periods terminating on or
prior  thereto,  or in  the  case  of  payment  of  the  Redemption  Price  plus
accumulated and unpaid  Distributions  the full amount of such Redemption  Price
plus  accumulated  and  unpaid   Distributions  on  all  Outstanding   Preferred
Securities,  shall have been made or  provided  for,  and all funds  immediately
available to the Property  Trustee shall first be applied to the payment in full
in cash of all Distributions  (including  Additional Amounts, if applicable) on,
or Redemption  Price plus  accumulated and unpaid  Distributions  of,  Preferred
Securities then due and payable.

                  (b) In the case of the  occurrence  of any  Event  of  Default
resulting  from a Debenture  Event of Default,  the Holder of Common  Securities
will be deemed  to have  waived  any such  Event of  Default  under  this  Trust
Agreement  until the effect of all such  Events of Default  with  respect to the
Preferred Securities have been cured, waived or otherwise eliminated.  Until any
such Events of Default under this Trust  Agreement with respect to the Preferred
Securities  have been so cured,  waived or  otherwise  eliminated,  the Property
Trustee  shall act solely on behalf of the Holders of the  Preferred  Securities
and not the  Holder  of the  Common  Securities,  and  only the  Holders  of the
Preferred  Securities will have the right to direct the Property  Trustee to act
on their behalf.

                 Section 4.04.  Payment  Procedures.  Payments in respect of the
Preferred  Securities shall be made by check mailed to the address of the Person
entitled thereto as such address shall appear on the Securities  Register or, if
the Preferred Securities are held by a Securities Depository, such Distributions
shall be made to the  Securities  Depository,  which shall  credit the  relevant
Persons' accounts at such Securities  Depository on the applicable  distribution
dates. Payments in respect of the Common Securities shall be made in such manner
as shall be mutually agreed between the  Administrative  Trustees and the Holder
of the Common Securities.

                 Section  4.05.  Tax Returns  and  Reports.  The  Administrative
Trustees shall prepare (or cause to be prepared), at the Depositor's expense and
direction,  and  file  all  United  States  federal,  state  and  local  tax and
information  returns  and  reports  required to be filed by or in respect of the
Trust. In this regard,  the  Administrative  Trustees shall (a) 

                                      -20-
<PAGE>
prepare and file (or cause to be prepared or filed) the Internal Revenue Service
Form 1041 (or any successor  form)  required to be filed in respect of the Trust
in each  taxable  year of the Trust and (b)  prepare and furnish (or cause to be
prepared and  furnished) to each  Securityholder  the related  Internal  Revenue
Service  Form 1099,  or any  successor  form or the  information  required to be
provided on such form. The  Administrative  Trustees shall provide the Depositor
and the Property Trustee with a copy of all such returns,  reports and schedules
promptly after such filing or furnishing.  The Trustees shall comply with United
States  federal  withholding  and backup  withholding  tax laws and  information
reporting requirements with respect to any payments to Securityholders under the
Trust Securities.

                 Section 4.06.  Payments  under  Indenture.  Any amount  payable
hereunder to any Holder of Preferred  Securities  shall be reduced by the amount
of any  corresponding  payment  such Holder has  directly  received  pursuant to
Section  808 of  the  Subordinated  Indenture.  Notwithstanding  the  provisions
hereunder  to the  contrary,  Securityholders  acknowledge  that any  Holder  of
Preferred Securities that receives payment under Section 808 of the Subordinated
Indenture  may  receive  amounts  greater  than the  amount  such  Holder may be
entitled to receive pursuant to the other provisions of this Trust Agreement.


                                    ARTICLE V.

                          Trust Securities Certificates

                 Section 5.01. Initial Ownership. Upon the creation of the Trust
by the  contribution  by the  Depositor  pursuant to Section  2.03 and until the
issuance  of the  Trust  Securities,  and at any  time  during  which  no  Trust
Securities are outstanding,  the Depositor shall be the sole beneficial owner of
the Trust.

                 Section  5.02.  The Trust  Securities  Certificates.  The Trust
Securities  Certificates  shall be issued in  denominations  of $25  Liquidation
Amount and integral multiples  thereof.  Subject to Section 2.04 relating to the
original issuance of the Preferred Securities Certificate registered in the name
of  the  nominee  of  The  Depository   Trust  Company,   the  Trust  Securities
Certificates  shall be  executed  on behalf of the Trust by manual or  facsimile
signature of at least one  Administrative  Trustee and, if executed on behalf of
the Trust by  facsimile  signature,  countersigned  by a  Transfer  Agent or its
agent.   Trust  Securities   Certificates   bearing  the  manual  signatures  of
individuals who were, at the time when such signatures  shall have been affixed,
authorized  to sign on behalf of the Trust  and,  if  executed  on behalf of the
Trust by facsimile  signature,  countersigned  by a Transfer Agent or its agent,
shall be validly  issued and entitled to the  benefits of this Trust  Agreement,
notwithstanding  that such individuals or any of them shall have ceased to be so
authorized  prior to the delivery of such Trust  Securities  Certificates or did
not  hold  such  offices  at the  date  of  delivery  of such  Trust  Securities
Certificates.  A transferee  of a Trust  Securities  Certificate  shall become a
Securityholder,  and  shall  be  entitled  to  the  rights  and  

                                      -21-
<PAGE>
subject to the obligations of a Securityholder  hereunder, upon due registration
of such Trust  Securities  Certificate  in such  transferee's  name  pursuant to
Section 5.04 or 5.11.

                 Section  5.03.  Execution  and  Delivery  of  Trust  Securities
Certificates. On the Closing Date, the Administrative Trustees shall cause Trust
Securities  Certificates,  in an  aggregate  Liquidation  Amount as  provided in
Sections 2.04 and 2.05,  to be executed on behalf of the Trust,  and in the case
of Preferred  Securities  executed by facsimile  signature,  countersigned  by a
Transfer  Agent or its agent,  and delivered to or upon the written order of the
Depositor signed by its chairman of the board, any of its vice presidents or its
Treasurer,  without  further  corporate  action by the Depositor,  in authorized
denominations.  The Depositor agrees to indemnify, defend and hold each Transfer
Agent  harmless  against  any and all costs  and  liabilities  incurred  without
negligence arising out of or in connection with any such countersigning by it.

                 Section  5.04.   Registration   of  Transfer  and  Exchange  of
Preferred Securities Certificates. The Registrar shall keep or cause to be kept,
at its principal  corporate office, a Securities  Register in which,  subject to
such reasonable regulations as it may prescribe, the Registrar shall provide for
the registration of Preferred Securities  Certificates and the Common Securities
Certificates  (subject  to  Section  5.10 in the case of the  Common  Securities
Certificates)   and   registration  of  transfers  and  exchanges  of  Preferred
Securities Certificates as herein provided.

                  Upon surrender for  registration  of transfer of any Preferred
Securities  Certificate at the office or agency  maintained  pursuant to Section
5.08, the Administrative  Trustees,  or any one of them, shall execute on behalf
of the Trust by manual or facsimile  signature and, if executed on behalf of the
Trust by facsimile signature, cause a Transfer Agent or its agent to countersign
and deliver,  in the name of the designated  transferee or  transferees,  one or
more new Preferred Securities Certificates in authorized denominations of a like
aggregate  Liquidation Amount. At the option of a Holder,  Preferred  Securities
Certificates  may be exchanged for other  Preferred  Securities  Certificates in
authorized  denominations of the same class and of a like aggregate  Liquidation
Amount upon surrender of the Preferred  Securities  Certificates to be exchanged
at the office or agency maintained pursuant to Section 5.08.

                  Every   Preferred   Securities    Certificate   presented   or
surrendered  for  registration of transfer or exchange shall be accompanied by a
written  instrument  of  transfer  in form  satisfactory  to the  Administrative
Trustees  and a Transfer  Agent  duly  executed  by the Holder or such  Holder's
attorney  duly  authorized in writing.  Each  Preferred  Securities  Certificate
surrendered  for  registration  of transfer or  exchange  shall be canceled  and
subsequently  disposed  of by the  Administrative  Trustees in  accordance  with
customary practice.  The Trust shall not be required to (i) issue,  register the
transfer of, or exchange any Preferred  Securities  during a period beginning at
the opening of  business 15 calendar  days before the day of mailing of a notice
of redemption of any Preferred  Securities  called for  redemption and ending at
the close of business on the day of such  mailing or (ii)  register the transfer
of 

                                      -22-
<PAGE>

or exchange any Preferred Securities so selected for redemption,  in whole or in
part,  except the  unredeemed  portion of any such  Preferred  Securities  being
redeemed in part.

                  No  service  charge  shall  be made  for any  registration  of
transfer or exchange of Preferred Securities Certificates,  but a Transfer Agent
may require payment of a sum sufficient to cover any tax or governmental  charge
that may be imposed in  connection  with any  transfer or exchange of  Preferred
Securities Certificates.

                 Section  5.05.  Mutilated,  Destroyed,  Lost  or  Stolen  Trust
Securities Certificates. If (a) any mutilated Trust Securities Certificate shall
be  surrendered  to a Transfer  Agent,  or if a  Transfer  Agent  shall  receive
evidence  to its  satisfaction  of the  destruction,  loss or theft of any Trust
Securities  Certificate  and (b) there shall be delivered to the Transfer  Agent
and the Administrative Trustees such security or indemnity as may be required by
them to save each of them and the  Depositor  harmless,  then in the  absence of
notice that such Trust Securities Certificate shall have been acquired by a bona
fide purchaser,  the Administrative  Trustees,  or any one of them, on behalf of
the Trust,  shall execute by manual or facsimile  signature and, if execution on
behalf of the  Trust is by  facsimile  signature,  countersigned  by a  Transfer
Agent; and the Administrative Trustees, or any one of them, shall make available
for delivery, in exchange for or in lieu of any such mutilated,  destroyed, lost
or stolen Trust Securities  Certificate,  a new Trust Securities  Certificate of
like class,  tenor and denomination.  In connection with the issuance of any new
Trust Securities Certificate under this Section, the Administrative  Trustees or
the Transfer  Agent may require the payment of a sum sufficient to cover any tax
or other governmental  charge that may be imposed in connection  therewith.  Any
duplicate  Trust  Securities  Certificate  issued pursuant to this Section shall
constitute  conclusive  evidence of an  ownership  interest in the Trust,  as if
originally issued, whether or not the lost, stolen or destroyed Trust Securities
Certificate shall be found at any time.

                 Section  5.06.  Persons  Deemed  Securityholders.  Prior to due
presentation of a Trust Securities Certificate for registration of transfer, the
Trustees and the  Registrar  shall be entitled to treat the Person in whose name
any Trust Securities  Certificate shall be registered in the Securities Register
as the owner of such Trust  Securities  Certificate for the purpose of receiving
Distributions  and for all other purposes  whatsoever,  and neither the Trustees
nor the Registrar shall be bound by any notice to the contrary.

                 Section  5.07.  Access  to List of  Securityholders'  Names and
Addresses.  The  Administrative  Trustees shall furnish or cause to be furnished
(x) to the Depositor, within 15 days after receipt by any Administrative Trustee
of a request  therefor  from the  Depositor  in writing and (y) to the  Property
Trustee,  promptly  after  receipt  by any  Administrative  Trustee of a request
therefor  from the  Property  Trustee in writing in order to enable the Property
Trustee to discharge its obligations under this Trust Agreement, a list, in such
form as the Depositor or the Property  Trustee may  reasonably  require,  of the
names and addresses of the Securityholders as of the most recent record date. If
Holders of Trust Securities  Certificates  evidencing ownership at such time and
for the  previous  six  months  not 

                                      -23-
<PAGE>

less than 25% of the outstanding  aggregate  Liquidation Amount apply in writing
to any Administrative  Trustee,  and such application states that the applicants
desire to communicate  with other  Securityholders  with respect to their rights
under this Trust Agreement or under the Trust  Securities  Certificates and such
application is accompanied by a copy of the  communication  that such applicants
propose  to  transmit,  then the  Administrative  Trustees  shall,  within  five
Business  Days after the receipt of such  application,  afford  such  applicants
access during normal business hours to the current list of Securityholders. Each
Holder, by receiving and holding a Trust Securities Certificate, shall be deemed
to have agreed not to hold either the Depositor or the  Administrative  Trustees
accountable by reason of the  disclosure of its name and address,  regardless of
the source from which such information was derived.

                 Section  5.08.  Maintenance  of Office or Agency.  The  Company
shall or shall cause the Transfer Agent to maintain in the Borough of Manhattan,
The City of New York, an office or offices or agency or agencies where Preferred
Securities  Certificates  may be  surrendered  for  registration  of transfer or
exchange  and where  notices and demands to or upon the Company or the  Transfer
Agent in respect of the Trust Securities Certificates may be served. The Company
initially  designates  The Bank of New  York at its  principal  corporate  trust
office for such purposes. The Company shall or shall cause the Transfer Agent to
give prompt  written notice to the  Depositor,  the Property  Trustee and to the
Securityholders of any change in any such office or agency.

                 Section 5.09.  Appointment  of Paying  Agent.  The Paying Agent
shall make distributions to  Securityholders  from the Payment Account and shall
report the amounts of such distributions to the Administrative  Trustees and the
Property  Trustee.  Any Paying Agent shall have the revocable  power to withdraw
funds from the  Payment  Account  for the  purpose  of making the  Distributions
referred  to  above.  The  Property  Trustee  shall be  entitled  to rely upon a
certificate of the Paying Agent stating in effect the amount of such funds so to
be withdrawn  and that same are to be applied by the Paying Agent in  accordance
with this  Section  5.09.  The  Administrative  Trustees  or any one of them may
revoke such power and remove the Paying Agent if the  Administrative  Trustee or
any one of them  determines in its sole  discretion  that the Paying Agent shall
have  failed to  perform  its  obligations  under this  Trust  Agreement  in any
material  respect.  The  Paying  Agent may choose  any  co-paying  agent that is
acceptable to the  Administrative  Trustees and the Depositor.  The Paying Agent
shall be permitted to resign upon 30 days' written notice to the  Administrative
Trustees and the  Depositor.  In the event of the removal or  resignation of the
Paying Agent,  the  Administrative  Trustees  shall appoint a successor  that is
reasonably acceptable to the Property Trustee and the Depositor to act as Paying
Agent (which shall be a bank,  trust company or an Affiliate of the  Depositor).
The  Administrative  Trustees  shall cause such  successor  Paying  Agent or any
additional Paying Agent appointed by the Administrative  Trustees to execute and
deliver to the Trustees an  instrument in which such  successor  Paying Agent or
additional Paying Agent shall agree with the Trustees that as Paying Agent, such
successor  Paying Agent or  additional  Paying Agent will hold all sums, if any,
held by it for  payment to the  Securityholders  in trust for the benefit of the

                                      -24-
<PAGE>
Securityholders  entitled  thereto  until  such  sums  shall  be  paid  to  such
Securityholders.  The  Paying  Agent  shall  return all  unclaimed  funds to the
Property  Trustee and upon  resignation or removal of a Paying Agent such Paying
Agent shall also return all funds in its possession to the Property Trustee. The
provisions  of  Sections  8.01,  8.03 and 8.06 shall  apply to the Paying  Agent
appointed  hereunder,  and the Paying  Agent shall be bound by the  requirements
with  respect  to  paying  agents of  securities  issued  pursuant  to the Trust
Indenture  Act. Any reference in this Trust  Agreement to the Paying Agent shall
include any co-paying agent unless the context requires otherwise.

                 Section 5.10.  Ownership of Common Securities by Depositor.  On
the  Closing  Date and on each other date  provided  for in  Section  2.05,  the
Depositor shall acquire, and thereafter retain,  beneficial and record ownership
of the Common Securities.  Any attempted transfer of the Common Securities shall
be  void.  The  Administrative  Trustees  shall  cause  each  Common  Securities
Certificate   issued  to  the  Depositor  to  contain  a  legend  stating  "THIS
CERTIFICATE IS NOT TRANSFERABLE".  Common Securities  Certificates  representing
the  Common  Securities  shall  be  issued  to the  Depositor  in the  form of a
typewritten or definitive Common Securities Certificate.

                 Section 5.11.  Definitive  Preferred  Securities  Certificates.
Upon initial  issuance of the  Preferred  Securities  the  Definitive  Preferred
Securities Certificates shall be typewritten,  printed, lithographed or engraved
or may be  produced  in any other  manner  as is  reasonably  acceptable  to the
Administrative   Trustees,   as  evidenced  by  the  execution  thereof  by  the
Administrative Trustees, or any one of them. The Administrative Trustees, or any
one of them,  shall  execute  on behalf  of the  Trust by  manual  or  facsimile
signature,  and, if executed by facsimile on behalf of the Trust,  countersigned
by  the  Transfer  Agent  or  its  agent  the  Definitive  Preferred  Securities
Certificates  initially in accordance  with the  instructions  of the Depositor.
Neither  the  Transfer  Agent nor any of the  Administrative  Trustees  shall be
liable for any delay in delivery of such  instructions and may conclusively rely
on, and shall be protected in relying on, such instructions.

                 Section 5.12.  Book-Entry System.  Some or all of the Preferred
Securities  may be  registered  in the name of the  Securities  Depository  or a
nominee therefor, and held in the custody of the Securities Depository.  In such
event,  a single  certificate  will be issued and  delivered  to the  Securities
Depository  for such  Preferred  Securities,  in which  case the  Owners of such
Preferred  Securities will not receive  physical  delivery of  certificates  for
Preferred  Securities.  Except as provided  herein,  all transfers of beneficial
ownership  interests in such  Preferred  Securities  will be made by  book-entry
only,  and  no  investor  or  other  party  purchasing,   selling  or  otherwise
transferring beneficial ownership of the Preferred Securities will receive, hold
or deliver any certificate for Preferred Securities. The Depositor, the Trustees
and the Paying Agent will recognize the Securities  Depository or its nominee as
the Holder of  Preferred  Securities  for all  purposes,  including  notices and
voting.

                  The Administrative  Trustees,  at the direction and expense of
the  Depositor,  may from time to time  appoint  a  Securities  Depository  or a
successor thereto and enter into a 

                                      -25-
<PAGE>

letter of representations or other agreement with such Securities  Depository to
establish  procedures with respect to the Preferred  Securities.  Any Securities
Depository shall be a Clearing Agency.

                  The Depositor and the Trustees  covenant and agree to meet the
requirements  of a  Securities  Depository  for the  Preferred  Securities  with
respect  to   required   notices   and  other   provisions   of  the  letter  of
representations or agreement executed with respect to such Preferred Securities.

                  Whenever the beneficial  ownership of any Preferred Securities
is determined through the books of a Securities Depository,  the requirements in
this Trust  Agreement of holding,  delivering  or  transferring  such  Preferred
Securities shall be deemed modified with respect to such Preferred Securities to
meet the  requirements  of the Securities  Depository with respect to actions of
the  Trustees,  the  Depositor  and the  Paying  Agent.  Any  provisions  hereof
permitting or requiring delivery of such Preferred  Securities shall, while such
Preferred Securities are in a book-entry system, be satisfied by the notation on
the books of the Securities Depository in accordance with applicable state law.

                 Section 5.13. Rights of Securityholders. The legal title to the
Trust Property is vested exclusively in the Property Trustee (in its capacity as
such) in accordance  with Section 2.09, and the  Securityholders  shall not have
any right or title  therein other than an undivided  beneficial  interest in the
assets of the Trust  conferred by their Trust  Securities and they shall have no
right to call for any  partition or division of  property,  profits or rights of
the Trust  except as described  below.  The Trust  Securities  shall be personal
property giving only the rights specifically set forth therein and in this Trust
Agreement.  The Preferred  Securities shall have no preemptive or similar rights
and when issued and delivered to Securityholders against payment of the purchase
price therefor will be fully paid and nonassessable interests in the Trust.


                                 ARTICLE VI.

                    Acts of Securityholders; Meetings; Voting

                 Section 6.01.  Limitations on Voting Rights.

                  (a) Except as provided in this Section  6.01, in Section 10.03
and as otherwise  required by law, no Holder of Preferred  Securities shall have
any  right  to vote  or in any  manner  otherwise  control  the  administration,
operation and management of the Trust or the  obligations of the parties hereto,
nor shall  anything  herein set forth,  or  contained  in the terms of the Trust
Securities  Certificates,  be construed so as to constitute the  Securityholders
from time to time as  partners  or members of an  association.  If the  Property
Trustee  fails  to  enforce  its  rights  under  the  Debentures  or this  Trust
Agreement,  a Holder of Preferred  Securities  may institute a legal  proceeding
directly  against the Depositor to enforce the 

                                      -26-
<PAGE>

Property  Trustee's rights under the Debentures or this Trust Agreement,  to the
fullest extent permitted by law, without first  instituting any legal proceeding
against the Property Trustee or any other person. Notwithstanding the foregoing,
a Holder of  Preferred  Securities  may  directly  institute  a  proceeding  for
enforcement  of payment to such Holder  directly of  principal of or interest on
the  Debentures  having a principal  amount equal to the  aggregate  liquidation
preference amount of the Preferred Securities of such Holder on or after the due
dates specified in the Debentures.

                  (b) So  long  as  any  Debentures  are  held  by the  Property
Trustee,  the  Trustees  shall  not (i)  direct  the time,  method  and place of
conducting any proceeding for any remedy available to the Debenture Trustee,  or
executing any trust or power conferred on the Debenture  Trustee with respect to
such Debentures, (ii) waive any past default which is waivable under Section 813
of the  Subordinated  Indenture,  (iii) exercise any right to rescind or annul a
declaration that the principal of all the Debentures shall be due and payable or
(iv) consent to any amendment,  modification or termination of the  Subordinated
Indenture or the Debentures,  where such consent shall be required,  without, in
each case,  obtaining  the prior  approval of the Holders of at least 66 2/3% of
the  aggregate  Liquidation  Amount  of the  Outstanding  Preferred  Securities;
provided,  however, that where a consent under the Subordinated  Indenture would
require the  consent of each  holder of  Debentures  affected  thereby,  no such
consent shall be given by any Trustee  without the prior written consent of each
holder of  Preferred  Securities.  The  Trustees  shall not  revoke  any  action
previously authorized or approved by a vote of the Preferred Securities,  except
pursuant to a subsequent vote of the Preferred Securities.  The Property Trustee
shall notify all Holders of the  Preferred  Securities  of any notice of default
received from the Debenture Trustee with respect to the Debentures.  In addition
to obtaining the foregoing approvals of the Holders of the Preferred Securities,
prior to taking any of the foregoing actions, the Property Trustee shall, at the
expense of the  Depositor,  obtain an Opinion  of  Counsel  experienced  in such
matters to the effect that the Trust will be classified as a "grantor trust" and
not as an association  taxable as a corporation for United States federal income
tax purposes on account of such action.

                  (c) If any proposed  amendment to the Trust Agreement provides
for,  or the  Trustees  otherwise  propose to effect,  (i) any action that would
materially  adversely  affect the powers,  preferences  or special rights of the
Preferred  Securities,  whether by way of  amendment  to the Trust  Agreement or
otherwise,  or (ii) the  dissolution,  winding-up or  termination  of the Trust,
other than  pursuant to the terms of this Trust  Agreement,  then the Holders of
Outstanding  Preferred  Securities  as a class will be  entitled to vote on such
amendment  or proposal  and such  amendment  or proposal  shall not be effective
except with the approval of the Holders of at least 66 2/3 in Liquidation Amount
of the Outstanding  Preferred  Securities.  No amendment to this Trust Agreement
may be made if, as a result of such amendment, the Trust would not be classified
as a "grantor  trust" but as an association  taxable as a corporation for United
States federal income tax purposes.

                                      -27-
<PAGE>

                 Section 6.02. Notice of Meetings. Notice of all meetings of the
Holders of  Preferred  Securities,  stating  the time,  place and purpose of the
meeting, shall be given by the Administrative Trustees pursuant to Section 10.08
to each Holder of a Preferred  Security,  at his registered address, at least 15
days and not more than 90 days  before the  meeting.  At any such  meeting,  any
business properly before the meeting may be so considered  whether or not stated
in the notice of the  meeting.  Any  adjourned  meeting may be held as adjourned
without further notice.

                 Section 6.03. Meetings of Holders of Preferred  Securities.  No
annual meeting of  Securityholders  is required to be held.  The  Administrative
Trustees, however, shall call a meeting of Securityholders to vote on any matter
upon the written request of the Holders of 25% of the then Outstanding Preferred
Securities (based upon their aggregate  Liquidation Amount) and may, at any time
in their discretion,  call a meeting of Holders of Preferred  Securities to vote
on any matters as to which the Holders of Preferred  Securities  are entitled to
vote.

                  Holders of 50% of the then  Outstanding  Preferred  Securities
(based upon their aggregate Liquidation Amount),  present in person or by proxy,
shall constitute a quorum at any meeting of Securityholders.

                  If a quorum is present at a meeting,  an  affirmative  vote by
the Holders of Preferred Securities present, in person or by proxy, holding more
than the  lesser  of (x) 66 2/3% of the then  Outstanding  Preferred  Securities
(based  upon their  aggregate  Liquidation  Amount)  held by the Holders of then
Outstanding Preferred Securities present,  either in person or by proxy, at such
meeting and (y) 50% of the Outstanding  Preferred  Securities  (based upon their
aggregate   Liquidation   Amount)   shall   constitute   the   action   of   the
Securityholders,  unless  this  Trust  Agreement  requires  a greater  number of
affirmative votes.

                 Section 6.04. Voting Rights.  Securityholders shall be entitled
to one vote  for  each $25 of  Liquidation  Amount  represented  by their  Trust
Securities  in  respect  of any  matter  as to which  such  Securityholders  are
entitled to vote.

                 Section 6.05. Proxies,  etc. At any meeting of Securityholders,
any Securityholder  entitled to vote thereat may vote by proxy, provided that no
proxy  shall be voted at any  meeting  unless it shall have been  placed on file
with the  Administrative  Trustees,  or with such other  officer or agent of the
Trust as the  Administrative  Trustees may direct, for verification prior to the
time at which such vote shall be taken. Only  Securityholders of record shall be
entitled to vote. When Trust Securities are held jointly by several Persons, any
one of them may vote at any  meeting  in person or by proxy in  respect  of such
Trust Securities,  but if more than one of them shall be present at such meeting
in  person or by proxy,  and such  joint  owners  or their  proxies  so  present
disagree  as to any vote to be cast,  such vote shall not be received in respect
of such Trust Securities. A proxy purporting to be executed by or on behalf of a
Securityholder  shall  be  deemed  valid  unless  

                                      -28-
<PAGE>
challenged  at or prior to its  exercise,  or, if earlier,  until eleven  months
after  it is  sent  and the  burden  of  proving  invalidity  shall  rest on the
challenger.

                 Section 6.06.  Securityholder  Action by Written  Consent.  Any
action which may be taken by Securityholders at a meeting may be taken without a
meeting if Securityholders holding more than a majority of all Outstanding Trust
Securities entitled to vote in respect of such action (or such larger proportion
thereof as shall be required by any express  provision of this Trust  Agreement)
shall consent to the action in writing (based upon their  aggregate  Liquidation
Amount).

                 Section 6.07.  Record Date for Voting and Other  Purposes.  For
the purposes of determining  the  Securityholders  who are entitled to notice of
and to vote at any  meeting  or by written  consent,  or to  participate  in any
Distribution  on the Trust  Securities  in respect of which a record date is not
otherwise provided for in this Trust Agreement,  or for the purpose of any other
action, the  Administrative  Trustees may from time to time fix a date, not more
than 90 days prior to the date of any meeting of  Securityholders or the payment
of  Distribution  or other action,  as the case may be, as a record date for the
determination  of the  identity  of  the  Securityholders  of  record  for  such
purposes.

                 Section 6.08.  Acts of  Securityholders.  Any request,  demand,
authorization,  direction,  notice,  consent, waiver or other action provided or
permitted by this Trust Agreement to be given, made or taken by  Securityholders
may be embodied in and  evidenced by one or more  instruments  of  substantially
similar  tenor  signed by such  Securityholders  in  person or by an agent  duly
appointed in writing;  and, except as otherwise  expressly provided herein, such
action shall become  effective when such instrument or instruments are delivered
to the Administrative  Trustees.  Such instrument or instruments (and the action
embodied therein and evidenced  thereby) are herein sometimes referred to as the
"Act" of the  Securityholders  signing such instrument or instruments.  Proof of
execution of any such instrument or of a writing appointing any such agent shall
be  sufficient  for any purpose of this Trust  Agreement and (subject to Section
8.01)  conclusive  in favor of the Trustees,  if made in the manner  provided in
this Section.

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

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

                                      -29-
<PAGE>
                  Any  request,  demand,   authorization,   direction,   notice,
consent,  waiver or other Act of the  Securityholder of any Trust Security shall
bind  every  future   Securityholder   of  the  same  Trust   Security  and  the
Securityholder  of every Trust Security issued upon the registration of transfer
thereof or in exchange  therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Trustees or the Trust in reliance thereon,
whether or not notation of such action is made upon such Trust Security.

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

                  If  any   dispute   shall   arise   between   or   among   the
Securityholders   and  the   Administrative   Trustees   with   respect  to  the
authenticity,  validity or binding nature of any request, demand, authorization,
direction,  consent, waiver or other Act of such Securityholder or Trustee under
this Article VI, then the  determination  of such matter by the Property Trustee
shall be conclusive with respect to such matter.

                 Section 6.09.  Inspection  of Records.  Subject to Section 5.07
concerning access to the list of Securityholders,  upon reasonable notice to the
Administrative Trustees and the Property Trustee, the other records of the Trust
shall be open to inspection by Securityholders  during normal business hours for
any  purpose  reasonably  related  to  such   Securityholder's   interest  as  a
Securityholder.


                                   ARTICLE VII.

                 Representations and Warranties of the Property
                        Trustee and the Delaware Trustee


                 Section 7.01.  Property  Trustee.  The Property  Trustee hereby
represents and warrants for the benefit of the Depositor and the Securityholders
that:

                  (a) the  Property  Trustee is a banking  corporation  or trust
company duly organized,  validly existing and in good standing under the laws of
the State of New York;

                  (b) the Property Trustee has full corporate  power,  authority
and legal right to execute, deliver and perform its obligations under this Trust
Agreement  and has  taken  all  necessary  action to  authorize  the  execution,
delivery and performance by it of this Trust Agreement;

                                      -30-
<PAGE>
                  (c) this Trust  Agreement has been duly  authorized,  executed
and  delivered by the  Property  Trustee and  constitutes  the valid and legally
binding agreement of the Property Trustee  enforceable  against it in accordance
with  its  terms,  subject  to  bankruptcy,   insolvency,  fraudulent  transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles;

                  (d) the  execution,  delivery and  performance by the Property
Trustee of this Trust Agreement will not violate,  conflict with or constitute a
breach of the Property Trustee's charter or by-laws; and

                  (e) neither the  authorization,  execution  or delivery by the
Property  Trustee of this Trust  Agreement  nor the  consummation  of any of the
transactions by the Property Trustee  contemplated herein require the consent or
approval of, the giving of notice to, the registration with or the taking of any
other  action with  respect to any  governmental  authority  or agency under any
existing  Federal or New York law  governing  the banking or trust powers of the
Property Trustee.

                 Section 7.02. Delaware Trustee. The Delaware Trustee represents
and warrants for the benefit of the Depositor and the Securityholders that:

                  (a) the  Delaware  Trustee is a banking  corporation  or trust
company duly organized,  validly existing and in good standing under the laws of
the State of Delaware;

                  (b) the Delaware Trustee has full corporate  power,  authority
and legal right to execute, deliver and perform its obligations under this Trust
Agreement  and has  taken  all  necessary  action to  authorize  the  execution,
delivery and performance by it of this Trust Agreement;

                  (c) this Trust  Agreement has been duly  authorized,  executed
and  delivered by the  Delaware  Trustee and  constitutes  the valid and legally
binding agreement of the Delaware Trustee  enforceable  against it in accordance
with  its  terms,  subject  to  bankruptcy,   insolvency,  fraudulent  transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles;

                  (d) the  execution,  delivery and  performance by the Delaware
Trustee of this Trust Agreement will not violate the Delaware  Trustee's charter
or by-laws; and

                  (e) neither the  authorization,  execution  or delivery by the
Delaware  Trustee of this Trust  Agreement  nor the  consummation  of any of the
transactions by the Delaware Trustee  contemplated herein require the consent or
approval of, the giving of notice to, the registration with or the taking of any
other  action with  respect to any  governmental  authority  or agency under any
existing  Federal or Delaware law  governing  the banking or trust powers of the
Delaware Trustee.

                                      -31-
<PAGE>


                                 ARTICLE VIII.

                                  The Trustees

                 Section 8.01.  Certain Duties and Responsibilities.

                  (a) The duties and  responsibilities  of the Trustees shall be
as provided by this Trust  Agreement  and, in the case of the Property  Trustee,
the Trust Indenture Act, and no implied  covenants or obligations  shall be read
into this Trust  Agreement  against  any of the  Trustees.  Notwithstanding  the
foregoing,  no  provision  of this  Trust  Agreement  shall  require  any of the
Trustees  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. Notwithstanding anything contained
in this Trust Agreement to the contrary,  the duties and responsibilities of the
Property Trustee under this Trust Agreement shall be subject to the protections,
exculpations and limitations on liability afforded to the Property Trustee under
the provisions of the Trust  Indenture Act and, to the extent  applicable,  Rule
3A-7 under the Investment Company Act of 1940, as amended, or any successor rule
thereunder.  Whether or not therein  expressly so provided,  every  provision of
this Trust  Agreement  relating to the conduct or affecting  the liability of or
affording  protection to the Trustees shall be subject to the provisions of this
Section.

                  (b) All  payments  made by the  Property  Trustee  or a Paying
Agent in respect of the Trust  Securities shall be made only from the income and
proceeds  from the Trust  Property  and only to the extent  that there  shall be
sufficient  income or proceeds  from the Trust  Property to enable the  Property
Trustee or Paying Agent to make  payments in  accordance  with the terms hereof.
Each Securityholder,  by its acceptance of a Trust Security, agrees that it will
look  solely to the income and  proceeds  from the Trust  Property to the extent
available for  distribution  to it as herein  provided and that the Trustees are
not personally liable to it for any amount distributable in respect of any Trust
Security  or for any other  liability  in  respect of any Trust  Security.  This
Section 8.01(b) does not limit the liability of the Trustees expressly set forth
elsewhere in this Trust  Agreement or, in the case of the Property  Trustee,  in
the Trust Indenture Act.

                  (c) All duties and  responsibilities  of the Property  Trustee
contained in this Trust Agreement are subject to the following:

                         (i) the  Property  Trustee's  sole duty with respect to
                  the custody,  safe keeping and  physical  preservation  of the
                  Trust  Property  shall  be to deal  with  such  property  in a
                  similar  manner as the  Property  Trustee  deals with  similar
                  property for its own account,  subject to the  protections and
                  limitations  on  liability  afforded to the  Property  Trustee
                  under this Trust  Agreement,  the Trust  

                                      -32-
<PAGE>

                  Indenture Act and, to the extent applicable,  Rule 3a-7 under
                  the Investment Company Act of 1940, as amended;

                        (ii)  the  Property   Trustee  shall  have  no  duty  or
                  liability  for or  with  respect  to the  value,  genuineness,
                  existence or  sufficiency of the Trust Property or the payment
                  of any taxes or  assessments  levied  thereon or in connection
                  therewith;

                       (iii) the  Property  Trustee  shall not be liable for any
                  interest  on  any  money  received  by it  except  as  it  may
                  otherwise agree with the Depositor. Money held by the Property
                  Trustee  need not be  segregated  from other  funds held by it
                  except in relation to the Payment  Account  established by the
                  Property  Trustee  pursuant to this Trust Agreement and except
                  to the extent otherwise required by law; and

                        (iv) the Property  Trustee shall not be responsible  for
                  monitoring  the compliance by the  Administrative  Trustees or
                  the Depositor  with their  respective  duties under this Trust
                  Agreement,  nor shall the  Property  Trustee be liable for the
                  default or  misconduct of the  Administrative  Trustees or the
                  Depositor.

                 Section  8.02.  Notice of Defaults.  Within five  Business Days
after the  occurrence  of any  Event of  Default,  the  Property  Trustee  shall
transmit,  in the manner and to the extent provided in Section 10.08,  notice of
any  default  known  to the  Property  Trustee  to the  Securityholders  and the
Depositor,  unless such default shall have been cured or waived. For the purpose
of this Section, the term "default" means any event which is, or after notice or
lapse of time or both would become, an Event of Default.

                 Section 8.03.  Certain Rights of Property  Trustee.  Subject to
the provisions of Section 8.01 and except as provided by law:

                         (i)  the  Property   Trustee  may  rely  and  shall  be
                  protected  in acting or  refraining  from acting in good faith
                  upon any resolution, Opinion of Counsel, certificate,  written
                  representation  of a  Holder  or  transferee,  certificate  of
                  auditors  or any  other  certificate,  statement,  instrument,
                  opinion, report, notice, request,  direction,  consent, order,
                  appraisal,   bond,   debenture,   note,   other   evidence  of
                  indebtedness or other paper or document reasonably believed by
                  it to be genuine and to have been signed or  presented  by the
                  proper party or parties;

                        (ii) if (A) in  performing  its duties  under this Trust
                  Agreement the Property  Trustee is required to decide  between
                  alternative  courses of action or (B) in construing any of the
                  provisions in this Trust Agreement the Property  Trustee finds
                  the same ambiguous or inconsistent  with any other  provisions

                                      -33-
<PAGE>
                  contained  herein or (C) the Property Trustee is unsure of the
                  application  of any provision of this Trust  Agreement,  then,
                  except  as  to  any   matter   as  to  which   the   Preferred
                  Securityholders  are  entitled to vote under the terms of this
                  Trust  Agreement,  the Property Trustee shall deliver a notice
                  to  the  Depositor  requesting  written  instructions  of  the
                  Depositor as to the course of action to be taken. The Property
                  Trustee  shall take such  action,  or refrain from taking such
                  action, as the Property Trustee shall be instructed in writing
                  to  take,  or  to  refrain  from  taking,  by  the  Depositor;
                  provided,  however,  that if the  Property  Trustee  does  not
                  receive such instructions of the Depositor within ten Business
                  Days after it has delivered  such notice,  or such  reasonably
                  shorter  period of time set forth in such notice (which to the
                  extent  practicable shall not be less than two Business Days),
                  it may,  but shall be under no duty to,  take or refrain  from
                  taking such action not inconsistent  with this Trust Agreement
                  as it shall deem  advisable  and in the best  interests of the
                  Securityholders,  in which event the  Property  Trustee  shall
                  have no liability except for its own bad faith,  negligence or
                  willful misconduct;

                       (iii)  whenever  in  the  administration  of  this  Trust
                  Agreement the Property  Trustee shall deem it desirable that a
                  matter be proved or established prior to taking,  suffering or
                  omitting any action  hereunder,  the Property  Trustee (unless
                  other evidence be herein specifically  prescribed) may, in the
                  absence  of bad  faith on its part,  request  and rely upon an
                  Officers'  Certificate  which,  upon receipt of such  request,
                  shall  be  promptly   delivered   by  the   Depositor  or  the
                  Administrative Trustees;

                        (iv) the  Property  Trustee may consult  with counsel of
                  its  selection  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;

                         (v) the Property  Trustee  shall be under no obligation
                  to exercise  any of the rights or powers  vested in it by this
                  Trust  Agreement  at the  request or  direction  of any of the
                  Securityholders pursuant to this Trust Agreement,  unless such
                  Securityholders  shall have  offered to the  Property  Trustee
                  reasonable  security or indemnity against the costs,  expenses
                  (including   reasonable  attorneys'  fees  and  expenses)  and
                  liabilities  which might be incurred by it in  complying  with
                  such request or direction;

                        (vi) the Property Trustee shall not be bound to make any
                  investigation   into  the  facts  or  matters  stated  in  any
                  resolution,   certificate,   statement,  instrument,  opinion,
                  report, notice, request, direction,  consent, order, approval,
                  bond,  debenture,  note or other evidence of  indebtedness  or
                  other  paper  or  document  reasonably  believed  by  it to be
                  genuine,  unless  requested in writing to do so by one or more
                  Securityholders,  but the Property Trustee, in 

                                      -34-
<PAGE>
                  its discretion, may make such further inquiry or investigation
                  into such facts or matters as it may see fit, and, if the 
                  Property  Trustee shall determine to make such further inquiry
                  or investigation, it shall  be  entitled to examine the books,
                  records  and premises of the Depositor personally or by agent
                  or attorney;

                       (vii) the Property  Trustee may execute any of the trusts
                  or powers  hereunder  or perform any duties  hereunder  either
                  directly  or by or through  its agents or  attorneys,  and the
                  Property  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,  provided  that the  Property
                  Trustee  shall  be  responsible  for  its  own  negligence  or
                  recklessness  with  respect  to  selection  of  any  agent  or
                  attorney appointed by it hereunder;

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

                        (ix) the  Property  Trustee  shall not be  charged  with
                  knowledge  of any default or Event of Default  with respect to
                  the Trust Securities  unless either (1) a Responsible  Officer
                  of the  Property  Trustee  shall have actual  knowledge of the
                  default  or Event of  Default  or (2)  written  notice of such
                  default  or Event of  Default  shall  have  been  given to the
                  Property Trustee by the Depositor, the Administrative Trustees
                  or by any Holder of the Trust Securities;

                         (x) no  provision  of this  Trust  Agreement  shall  be
                  deemed  to  impose  any  duty or  obligation  on the  Property
                  Trustee  to  perform  any act or acts or  exercise  any right,
                  power,  duty or  obligation  conferred or imposed on it in any
                  jurisdiction  in which it shall be  illegal,  or in which  the
                  Property  Trustee  shall  be  unqualified  or  incompetent  in
                  accordance  with  applicable  law,  to perform any such act or
                  acts or to exercise any such right, power, duty or obligation;
                  and  no  permissive  or   discretionary   power  or  authority
                  available to the Property  Trustee  shall be construed to be a
                  duty;

                        (xi) no provision of this Trust  Agreement shall require
                  the  Property  Trustee  to  expend  or risk  its own  funds or
                  otherwise   incur   personal   financial   liability   in  the
                  performance  of any of its duties or in the exercise of any of
                  its  rights or  powers,  if the  Property  Trustee  shall have
                  reasonable  grounds for  believing  that the repayment of such
                  funds or liability is not  reasonably  assured to it under the
                  terms of this Trust  Agreement or adequate  indemnity  against
                  such risk or liability is not reasonably assured to it;

                       (xii) the Property  Trustee  shall have no duty to see to
                  any  recording,  filing  or  registration  of  any  instrument
                  (including any financing or continuation  

                                      -35-
<PAGE>

                  statement or any tax or securities) (or any  rerecording,  
                  refiling or registration thereof);

                      (xiii) the  Property  Trustee  shall have the right at any
                  time to seek  instructions  concerning the  administration  of
                  this Trust Agreement from any court of competent jurisdiction;
                  and

                       (xiv)  whenever  in  the  administration  of  this  Trust
                  Agreement  the  Property  Trustee  shall deem it  desirable to
                  receive  instructions  with respect to enforcing any remedy or
                  right or  taking  any  other  action  hereunder  the  Property
                  Trustee (i) may request  instructions  from the Holders of the
                  Trust Securities,  which instructions may only be given by the
                  Holders of the same  proportion of  Liquidation  Amount of the
                  Trust  Securities  as would be entitled to direct the Property
                  Trustee under the terms of this Trust  Agreement in respect of
                  such  remedies,  rights  or  actions,  (ii) may  refrain  from
                  enforcing  such  remedy or right or taking  such other  action
                  until  such  instructions  are  received,  and (iii)  shall be
                  protected in acting in accordance with such instructions.

                  Section  8.04.  Not  Responsible  for  Recitals or Issuance of
Securities.   The  recitals   contained  herein  and  in  the  Trust  Securities
Certificates shall be taken as the statements of the Trust, and the Trustees do
not  assume any  responsibility  for their  correctness.  The  Trustees  make no
representations as to the value or condition of the property of the Trust or any
part  thereof  or as to the title of the  Trust  thereto  or as to the  security
afforded  thereby  or  hereby,  or as to  the  validity  or  genuineness  of any
securities at any time pledged and deposited with any Trustees hereunder, nor as
to the validity or sufficiency of this Trust Agreement or the Trust  Securities.
The Trustees shall not be accountable for the use or application by the Trust of
the proceeds of the Trust Securities in accordance with Section 2.05.

                  Section 8.05. May Hold  Securities.  Except as provided in the
definition  of the term  "Outstanding"  in Article  I, any  Trustee or any other
agent of any Trustee or the Trust, in its individual or any other capacity,  may
become the owner or pledgee of Trust  Securities and may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or such other
agent.

                  Section 8.06. Compensation; Fees; Indemnity.

                  The Depositor agrees

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

                                      -36-
<PAGE>

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

                  (3) to  indemnify  each  Trustee for, and to hold each Trustee
         harmless  against,  any and all  loss,  damage,  claims,  liability  or
         expense incurred without negligence (gross  negligence,  in the case of
         any  Administrative  Trustee),  bad faith or willful  misconduct on its
         part,   arising  out  of  or  in  connection  with  the  acceptance  or
         administration of this Trust Agreement,  including the reasonable 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
Depositor  under this Section,  each of the Trustees  shall have a lien prior to
the Trust  Securities  upon all  property  and funds held or  collected  by such
Trustee as such,  except funds held in trust for the payment of Distributions on
the Trust Securities.

                  The  provisions of this Section shall survive the  termination
of this Trust Agreement.

                  Section 8.07.  Certain  Trustees  Required;  Eligibility.  (a)
There shall at all times be a Property  Trustee  hereunder  with  respect to the
Trust  Securities.  The Property  Trustee  shall be a Person that has a combined
capital  and  surplus  of at least  $50,000,000.  If any such  Person  publishes
reports of condition at least annually,  pursuant to law or to the  requirements
of its  supervising  or  examining  authority,  then  for the  purposes  of this
Section,  the combined  capital and surplus of such Person shall be deemed to be
its  combined  capital  and  surplus as set forth in its most  recent  report of
condition so published.  If at any time the Property Trustee with respect to the
Trust Securities shall cease to be eligible in accordance with the provisions of
this  Section,  it shall  resign  immediately  in the manner and with the effect
hereinafter specified in this Article VIII.

                  (b)  There  shall at all  times be one or more  Administrative
         Trustees   hereunder  with  respect  to  the  Trust  Securities.   Each
         Administrative Trustee shall be either a natural person who is at least
         21 years of age or a legal  entity  that shall act  through one or more
         persons authorized to bind such entity.

                  (c)  There  shall at all  times  be a  Delaware  Trustee  with
         respect to the Trust  Securities.  The Delaware Trustee shall either be
         (i) a natural  person who is at least 21 years of age and a resident of
         the State of Delaware or (ii) a legal entity with its  principal  place
         of  business  in  the  State  of  Delaware  that  otherwise  meets the

                                      -37-
<PAGE>
         requirements of applicable  Delaware law and that shall act through
         one or more persons authorized to bind such entity.

                  Section 8.08. Conflicting Interests.

                  If the  Property  Trustee has or shall  acquire a  conflicting
interest  within the meaning of the Trust  Indenture  Act, the Property  Trustee
shall either eliminate such interest or resign,  to the extent and in the manner
provided by, and subject to the provisions of, the Trust  Indenture Act and this
Trust Agreement. The Subordinated Indenture and the Guarantee Agreement shall be
deemed to be specifically  described in this Trust Agreement for the purposes of
clause  (i) of the  first  proviso  contained  in  Section  310(b)  of the Trust
Indenture Act.

                  Section  8.09.   Co-Trustees  and  Separate  Trustee.

                  Unless a Debenture Event of Default shall have occurred and be
continuing,  at any  time or  times,  for  the  purpose  of  meeting  the  legal
requirements of the Trust Indenture Act or of any jurisdiction in which any part
of the Trust Property may at the time be located, the Depositor and the Property
Trustee  shall  have  power to  appoint,  and upon the  written  request  of the
Property  Trustee,  the Depositor  shall for such purpose join with the Property
Trustee in the  execution,  delivery,  and  performance of all  instruments  and
agreements  necessary or proper to appoint,  one or more Persons approved by the
Property Trustee either to act as co-trustee, jointly with the Property Trustee,
of all or any part of such Trust Property,  or to act as separate trustee of any
such  property,  in  either  case with such  powers  as may be  provided  in the
instrument of appointment, and to vest in such Person or Persons in the capacity
aforesaid,  any property,  title,  right or power deemed necessary or desirable,
subject to the other provisions of this Section.  If the Depositor does not join
in such  appointment  within 15 days after the  receipt by it of a request so to
do, or in case an Event of Default under the Subordinated Indenture has occurred
and is  continuing,  the  Property  Trustee  alone shall have power to make such
appointment.

                  Should any written  instrument  from the Depositor be required
by any co-trustee or separate  trustee so appointed for more fully confirming to
such co-trustee or separate trustee such property,  title,  right, or power, any
and all such  instruments  shall,  on request,  be executed,  acknowledged,  and
delivered by the Depositor.

                  Every  co-trustee  or separate  trustee  shall,  to the extent
permitted by law, but to such extent only, be appointed subject to the following
terms, namely:

                  (1) The Trust  Securities  shall be executed and delivered and
         all rights, powers, duties, and obligations hereunder in respect of the
         custody of  securities,  cash and other  personal  property held by, or
         required to be deposited or pledged with,  the Trustees  designated for
         such purpose hereunder, shall be exercised, solely by such Trustees.

                                      -38-
<PAGE>

                  (2)  The  rights,   powers,  duties,  and  obligations  hereby
         conferred  or  imposed  upon the  Property  Trustee  in  respect of any
         property covered by such appointment shall be conferred or imposed upon
         and  exercised or performed by the Property  Trustee or by the Property
         Trustee and such co-trustee or separate  trustee  jointly,  as shall be
         provided  in the  instrument  appointing  such  co-trustee  or separate
         trustee, except to the extent that under any law of any jurisdiction in
         which any particular act is to be performed, the Property Trustee shall
         be  incompetent or unqualified to perform such act, in which event such
         rights,   powers,  duties,  and  obligations  shall  be  exercised  and
         performed by such co-trustee or separate trustee.

                  (3) The  Property  Trustee at any time,  by an  instrument  in
         writing executed by it, with the written  concurrence of the Depositor,
         may accept the  resignation  of or remove any  co-trustee  or  separate
         trustee  appointed  under this Section  8.09,  and, in case an Event of
         Default   under  the   Subordinated   Indenture  has  occurred  and  is
         continuing,  the  Property  Trustee  shall  have  power to  accept  the
         resignation  of, or remove,  any such  co-trustee  or separate  trustee
         without the  concurrence of the Depositor.  Upon the written request of
         the  Property  Trustee,  the  Depositor  shall  join with the  Property
         Trustee in the execution,  delivery, and performance of all instruments
         and agreements  necessary or proper to effectuate  such  resignation or
         removal.  A successor to any co-trustee or separate trustee so resigned
         or removed may be appointed in the manner provided in this Section.

                  (4) No  co-trustee  or  separate  trustee  hereunder  shall be
         personally  liable by reason of any act or omission of the Trustee,  or
         any other such trustee hereunder.

                  (5)  The Property Trustee shall not be liable by reason of any
         act of a  co-trustee or separate trustee.

                  (6) Any Act of Holders delivered to the Property Trustee shall
         be deemed to have been  delivered to each such  co-trustee and separate
         trustee.

                  Section  8.10.   Resignation   and  Removal;   Appointment  of
Successor.  No  resignation  or removal of any  Trustee (as the case may be, the
"Relevant  Trustee") and no appointment of a successor Relevant Trustee pursuant
to this Article shall become  effective  until the  acceptance of appointment by
the successor Relevant Trustee in accordance with the applicable requirements of
Section 8.11.

                  The Relevant  Trustee may resign at any time by giving written
notice  thereof to the  Securityholders.  If the  instrument  of acceptance by a
successor  Relevant  Trustee  required  by  Section  8.11  shall  not have  been
delivered to the Relevant Trustee within 30 days after the giving of such notice
of  resignation,  the  resigning  Relevant  Trustee  may  petition  any court of
competent jurisdiction for the appointment of a successor Relevant Trustee.

                                      -39-
<PAGE>

                  Unless a Debenture Event of Default shall have occurred and be
continuing, the Relevant Trustee may be removed at any time by Act of the Common
Securityholder.  If a  Debenture  Event of Default  shall have  occurred  and be
continuing,  the  Relevant  Trustee  may be  removed  at such time by Act of the
Securityholders  of a  majority  of  the  aggregate  Liquidation  Amount  of the
Outstanding  Preferred  Securities,  delivered to the  Relevant  Trustee (in its
individual capacity and on behalf of the Trust).

                  If the Relevant  Trustee  shall  resign,  be removed or become
incapable of continuing  to act as Relevant  Trustee at a time when no Debenture
Event  of  Default   shall  have   occurred  and  be   continuing,   the  Common
Securityholder,  by Act of the Common  Securityholder  delivered to the retiring
Relevant  Trustee,  shall  promptly  appoint a  successor  Relevant  Trustee  or
Trustees,  and the retiring  Relevant  Trustee shall comply with the  applicable
requirements of Section 8.11. If the Relevant  Trustee shall resign,  be removed
or become  incapable of continuing to act as the Relevant Trustee at a time when
a  Debenture  Event of  Default  shall  have  occurred  and be  continuing,  the
Preferred Securityholders, by Act of the Preferred Securityholders of a majority
in Liquidation Amount of the Outstanding  Preferred  Securities delivered to the
retiring Relevant Trustee,  shall promptly appoint a successor  Relevant Trustee
or  Trustees,  and  the  Relevant  Trustee  shall  comply  with  the  applicable
requirements of Section 8.11. If no successor  Relevant  Trustee shall have been
so appointed by the Common Securityholders or the Preferred  Securityholders and
accepted  appointment in the manner required by Section 8.11, any Securityholder
who has been a Securityholder  for at least six months may, on behalf of himself
and all others similarly situated,  petition any court of competent jurisdiction
for the appointment of a successor Relevant Trustee.

                  The  retiring  Relevant  Trustee  shall  give  notice  of each
resignation and each removal of the Relevant  Trustee and each  appointment of a
successor Trustee to all Securityholders in the manner provided in Section 10.08
and shall give notice to the  Depositor.  Each notice shall include the name and
address of the  successor  Relevant  Trustee  and,  in the case of the  Property
Trustee, the address of its Corporate Trust Office.

                  Notwithstanding  the foregoing or any other  provision of this
Trust Agreement,  in the event any Administrative  Trustee or a Delaware Trustee
who is a natural  person  dies or  becomes  incompetent  or  incapacitated,  the
vacancy  created by such death,  incompetence or incapacity may be filled by (i)
the unanimous act of remaining Administrative Trustees if there are at least two
of them or (ii)  otherwise  by the  Depositor  (with the  successor in each case
being  an   individual   who   satisfies  the   eligibility   requirements   for
Administrative  Trustees or Delaware  Trustee,  as the case may be, set forth in
Section  8.07).  Additionally,   notwithstanding  the  foregoing  or  any  other
provision  of this  Trust  Agreement,  in the  event  the  Depositor  reasonably
believes  that any  Administrative  Trustee  who is a natural  person has become
incompetent  or  incapacitated,  the  Depositor,  by  notice  to  the  remaining
Trustees,  may terminate the status of such Person as an Administrative  Trustee
(in which  case the  vacancy so created  will be filled in  accordance  with the
preceding sentence).

                                      -40-
<PAGE>

                  Section 8.11. Acceptance of Appointment by Successor.  In case
of the  appointment  hereunder  of a successor  Relevant  Trustee,  the retiring
Relevant  Trustee  and each  successor  Trustee  shall  execute  and  deliver an
amendment  hereto  wherein each  successor  Relevant  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  Relevant
Trustee  all the  rights,  powers,  trusts and duties of the  retiring  Relevant
Trustee with respect to the Trust  Securities and the Trust and (2) shall add to
or change any of the provisions of this Trust Agreement as shall be necessary to
provide for or facilitate  the  administration  of the trusts  hereunder by more
than one Relevant  Trustee,  it being  understood that nothing herein or in such
amendment shall constitute such Relevant Trustees  co-trustees of the same trust
and that  each  such  Relevant  Trustee  shall be  trustee  of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder  administered by
any other such  Relevant  Trustee and upon the  execution  and  delivery of such
amendment  the  resignation  or removal of the retiring  Relevant  Trustee shall
become effective to the extent provided therein and each such successor Relevant
Trustee,  without any further act, deed or conveyance,  shall become vested with
all the rights, powers, trusts and duties of the retiring Relevant Trustee; but,
on request of the Trust or any successor Relevant Trustee such retiring Relevant
Trustee shall duly assign,  transfer and deliver to such  successor  Trustee all
Trust Property,  all proceeds  thereof and money held by such retiring  Relevant
Trustee hereunder with respect to the Trust Securities and the Trust.

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

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

                  Section 8.12. Merger, Conversion,  Consolidation or Succession
to Business.  Any Person into which the Property Trustee or the Delaware Trustee
or any Administrative Trustee or any Trustee that is not a natural person may be
merged  or  converted  or  with  which  it may be  consolidated,  or any  Person
resulting from any merger,  conversion or  consolidation  to which such Relevant
Trustee shall be a party, or any Person  succeeding to all or substantially  all
the corporate trust business of such Relevant Trustee, shall be the successor of
such  Relevant  Trustee  hereunder,  provided  such  Person  shall be  otherwise
qualified and eligible under this Article VIII,  without the execution or filing
of any paper or any further act on the part of any of the parties hereto.

                  Section  8.13.   Preferential  Collection  of  Claims  Against
Depositor  or  Trust.  If and when the  Property  Trustee  shall be or  become a
creditor of the Depositor or the Trust (or any other obligor upon the Debentures
or  the  Trust  Securities),  the  Property  

                                      -41-
<PAGE>
Trustee shall be subject to the provisions of the Trust  Indenture Act regarding
the  collection  of claims  against  the  Depositor  or Trust (or any such other
obligor).

                  Section 8.14.  Reports by Property  Trustee.  (a) the Property
Trustee shall transmit to  Securityholders  such reports concerning the Property
Trustee and its actions under this Trust  Agreement as may be required  pursuant
to the Trust  Indenture  Act at the times and in the  manner  provided  pursuant
thereto. Such of those reports as are required to be transmitted by the Property
Trustee  pursuant  to  Section  313(a)  of the Trust  Indenture  Act shall be so
transmitted within 60 days after July 31 of each year, commencing July 31, 1996.

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

                  Section 8.15.  Reports to the Property Trustee.  The Depositor
and the  Administrative  Trustees  on behalf of the Trust  shall  provide to the
Property Trustee such documents,  reports and information as required by Section
314 (if any) and the compliance certificate required by Section 314 of the Trust
Indenture  Act in the form,  in the manner and at the times  required by Section
314 of the Trust Indenture Act.

                  Section   8.16.   Evidence  of  Compliance   With   Conditions
Precedent.  Each of the Depositor and the  Administrative  Trustees on behalf of
the Trust shall provide to the Property Trustee such evidence of compliance with
any  conditions  precedent,  if  any,  provided  for  in  this  Trust  Agreement
(including  any  covenants   compliance  with  which   constitutes  a  condition
precedent)  that relate to any of the matters set forth in Section 314(c) of the
Trust  Indenture  Act.  Any  certificate  or opinion  required to be given by an
officer pursuant to Section 314(c)(1) of the Trust Indenture Act may be given in
the form of an Officers' Certificate.

                  Section 8.17. Number of Trustees.

                  (a) The  number  of  Trustees  shall  be five,  provided  that
Depositor,  by  written  instrument  may  increase  or  decrease  the  number of
Administrative Trustees.

                  (b) If a Trustee  ceases to hold office for any reason and the
number of Administrative Trustees is not reduced pursuant to Section 8.17(a), or
if the number of Trustees is increased  pursuant to Section  8.17(a),  a vacancy
shall occur. The vacancy shall be filled with a Trustee  appointed in accordance
with Section 8.10.

                  (c) The death, resignation,  retirement,  removal, bankruptcy,
incompetence  or incapacity to perform the duties of a Trustee shall not operate
to annul the Trust. Whenever a vacancy in the number of Administrative  Trustees
shall  occur,   until  such  vacancy  is  filled  by  the   appointment   of  an
Administrative  Trustee in  accordance  with Section  8.10,  the  

                                      -42-
<PAGE>

Administrative   Trustees   in  office,   regardless   of  their   number   (and
notwithstanding  any other  provision  of this  Agreement),  shall  have all the
powers granted to the Administrative Trustees and shall discharge all the duties
imposed upon the Administrative Trustees by this Trust Agreement.

                  Section 8.18. Delegation of Power.

                  (a) Any  Administrative  Trustee  may,  by power  of  attorney
consistent with  applicable  law,  delegate to any other natural person over the
age  of 21  his  or her  power  for  the  purpose  of  executing  any  documents
contemplated  in  Section  2.07(a),  including  any  registration  statement  or
amendment  thereto filed with the Commission,  or making any other  governmental
filing; and

                  (b) the  Administrative  Trustees shall have power to delegate
from  time to time to such of their  number  the  doing of such  things  and the
execution  of such  instruments  either in the name of the Trust or the names of
the Administrative Trustees or otherwise as the Administrative Trustees may deem
expedient,  to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.

                  Section 8.19. Fiduciary Duty.

                  (a) To the extent that,  at law or in equity,  an  Indemnified
Person has duties (including  fiduciary duties) and liabilities relating thereto
to the Trust or to any other Covered Person, an Indemnified  Person acting under
this Trust  Agreement  shall not be liable to the Trust or to any other  Covered
Person for its good faith  reliance on the  provisions of this Trust  Agreement.
The  provisions  of this Trust  Agreement,  to the extent that they restrict the
duties and liabilities of an Indemnified  Person otherwise existing at law or in
equity  (other than the duties  imposed on the Property  Trustee under the Trust
Indenture  Act),  are agreed by the parties  hereto to replace such other duties
and liabilities of such Indemnified Person;

                  (b) Unless otherwise  expressly provided herein and subject to
the provisions of the Trust Indenture Act:

                         (i)  whenever a conflict of interest exists or arises
between an Indemnified Person and any Covered Person; or

                        (ii)  whenever   this  Trust   Agreement  or  any  other
                  agreement  contemplated  herein or  therein  provides  that an
                  Indemnified  Person shall act in a manner that is, or provides
                  terms that are, fair and reasonable to the Trust or any Holder
                  of Trust Securities, the Indemnified Person shall resolve such
                  conflict of interest,  take such action or provide such terms,
                  considering  in each case the relative  interest of each party
                  (including  its own  interest)  to such  conflict,  agreement,
                  transaction or situation and the benefits and burdens relating
                  to  

                                      -43-
<PAGE>
                  such  interests,   any  customary  or  accepted   industry
                  practices,  and any applicable  generally accepted  accounting
                  practices  or  principles.  In the absence of bad faith by the
                  Indemnified  Person,  the resolution,  action or term so made,
                  taken  or  provided  by  the  Indemnified   Person  shall  not
                  constitute  a breach  of this  Trust  Agreement  or any  other
                  agreement  contemplated herein or of any duty or obligation of
                  the Indemnified Person at law or in equity or otherwise; and

                  (c) Unless otherwise  expressly provided herein and subject to
the provisions of the Trust  Indenture Act,  whenever in this Trust Agreement an
Indemnified Person is permitted or required to make a decision

                         (i) in its  "discretion"  or under a grant  of  similar
                  authority,   the  Indemnified  Person  shall  be  entitled  to
                  consider such interests and factors as it reasonably  desires,
                  including  its  own  interests,  and  shall  have  no  duty or
                  obligation  to give any  consideration  to any  interest of or
                  factors affecting the Trust or any other Person; or

                        (ii)  in its  "good  faith"  or  under  another  express
                  standard,  the Indemnified Person shall act under such express
                  standard  and shall not be subject  to any other or  different
                  standard imposed by this Trust Agreement or by applicable law.


                                   ARTICLE IX.

                           Termination and Liquidation

                  Section 9.01.  Termination  Upon  Expiration  Date.  The Trust
shall  automatically  terminate on December 31, 2020 (the "Expiration Date") and
the Trust Property shall be distributed in accordance with Section 9.04.

                  Section 9.02.  Early  Termination.  Upon the first to occur of
any of the  following  events  (such  first  occurrence,  an "Early  Termination
Event"):

                         (i)  the occurrence of a Bankruptcy Event in respect 
                  of, or the dissolution or liquidation of, the Depositor;

                        (ii)  the redemption of all of the Preferred Securities;

                       (iii)  termination of the Trust in accordance with 
                  Section 9.04(d);

                        (iv)  an order for judicial termination of the Trust 
                  having been entered by a court of competent jurisdiction;

                                      -44-
<PAGE>

the Trust shall terminate and the Trustees shall take such action as is required
by Section 9.04.

                  Section 9.03.  Termination.  The  respective  obligations  and
responsibilities  of the Trust and the Trustees  created hereby shall  terminate
upon the latest to occur of the following:  (i) the distribution by the Property
Trustee to Securityholders upon the liquidation of the Trust pursuant to Section
9.04, or upon the redemption of all of the Trust Securities  pursuant to Section
4.02 or 9.04(d),  of all amounts  required to be distributed  hereunder upon the
final payment of the Trust Securities;  (ii) the payment of any expenses owed by
the  Trust;  and  (iii)  the  discharge  of  all  administrative  duties  of the
Administrative  Trustees,   including  the  performance  of  any  tax  reporting
obligations with respect to the Trust or the Securityholders.

                  Section 9.04.  Liquidation.  (a) If an Early Termination Event
specified in clause (i) or (iv) of Section 9.02 occurs,  after  satisfaction  of
creditors of the Trust,  if any, as provided by applicable  law, the Trust shall
be liquidated by the Property  Trustee as  expeditiously as the Property Trustee
determines to be  appropriate  by  distributing  to each  Securityholder  a Like
Amount of Debentures, subject to Section 9.04(e). Notice of liquidation shall be
given by the  Administrative  Trustees by  first-class  mail,  postage  prepaid,
mailed not later than 30 nor more than 60 days prior to the Liquidation  Date to
each  Holder of Trust  Securities  at such  Holder's  address  appearing  in the
Securities Register. All notices of liquidation shall:

                         (i)  state the Liquidation Date;

                        (ii) state that from and after the Liquidation Date, the
                  Trust  Securities  will no longer be deemed to be  outstanding
                  and any Trust  Securities  Certificates  not  surrendered  for
                  exchange  will  be  deemed  to  represent  a  Like  Amount  of
                  Debentures; and

                       (iii)  provide  such  information  with  respect  to  the
                  mechanics  by which  Holders  may  exchange  Trust  Securities
                  Certificates  for  Debentures,  or if Section  9.04(e) applies
                  receive  a  Liquidation  Distribution,  as the  Administrative
                  Trustees or the Property Trustee shall deem appropriate.

                  (b) In order to effect any liquidation of the Trust hereunder,
and  any  resulting  distribution  of the  Debentures  to  Securityholders,  the
Property  Trustee  shall  establish a record date for such  distribution  (which
shall be not more than 45 days prior to the Liquidation Date) and, either itself
acting as  exchange  agent or through  the  appointment  of a separate  exchange
agent,  shall establish such  procedures as it shall deem  appropriate to effect
the distribution of Debentures in exchange for the Outstanding  Trust Securities
Certificates.

                  (c) After any Liquidation  Date, (i) the Trust Securities will
no longer be deemed to be  Outstanding,  (ii)  certificates  representing a Like
Amount of Debentures will be 

                                      -45-
<PAGE>

issued to Holders of Trust Securities Certificates, upon surrender of such Trust
Securities  Certificates  to the  Administrative  Trustees  or their  agent  for
exchange,  (iii)  any  Trust  Securities  Certificates  not so  surrendered  for
exchange  will be deemed to  represent  a Like  Amount of  Debentures,  accruing
interest at the rate provided for in the Debentures  from the last  Distribution
Date on which a  Distribution  was made on such  Trust  Certificates  until such
Trust  Securities   Certificates  are  so  surrendered  (and  until  such  Trust
Securities Certificates are so surrendered, no payments or interest or principal
will be made to Holders of Trust  Securities  Certificates  with respect to such
Debentures) and (iv) all rights of Securityholders holding Trust Securities will
cease,  except  the right of such  Securityholders  to receive  Debentures  upon
surrender of Trust Securities Certificates.

                  (d) If at  any  time,  a  Special  Event  shall  occur  and be
continuing,  the Depositor  has the right to (i) redeem the  Debentures in whole
but not in part and therefore cause a mandatory  redemption of all the Preferred
Securities at the  Redemption  Price within 90 days  following the occurrence of
such Special Event, or (ii) cause the termination of the Trust.  Further,  if at
any time,  the Trust is not or will not be taxed as a  grantor  trust  under the
United  States  federal  income tax law, but a Tax Event has not  occurred,  the
Depositor may elect  termination of the Trust. In the event the Depositor elects
under  the  provisions  of this  section  for the  Trust to be  terminated,  the
Administrative  Trustees shall,  terminate the Trust and, after  satisfaction of
creditors of the Trust, if any, as provided by applicable law, cause  Debentures
held by the Property  Trustee  having a Like Amount of the Preferred  Securities
and the Common  Securities  to be  distributed  to the Holders of the  Preferred
Securities and the Common  Securities on a pro rata basis in liquidation of such
Holders'  interests in the Trust (in the case of such an election  following the
occurrence of a Special  Event) within 90 days  following the occurrence of such
Special Event.  The Common  Securities will be redeemed on a pro rata basis with
the  Preferred  Securities,  except  that if a  Debenture  Event of Default  has
occurred and is continuing,  the Preferred  Securities will have a priority over
the Common  Securities  with  respect to  payment  of the  Redemption  Price and
accumulated and unpaid Distributions to the date of such payment.

                  (e) In the event that, notwithstanding the other provisions of
this Section  9.04,  whether  because of an order for  termination  entered by a
court of competent jurisdiction or otherwise,  distribution of the Debentures in
the manner  provided  herein is  determined  by the  Property  Trustee not to be
practical,  the Trust  Property  shall be  liquidated,  and the  Trust  shall be
dissolved, wound-up or terminated, by the Property Trustee in such manner as the
Property  Trustee  determines.  In such event,  on the date of the  dissolution,
winding-up or other termination of the Trust,  Securityholders  will be entitled
to  receive  out of the  assets  of the  Trust  available  for  distribution  to
Securityholders, after satisfaction of liabilities to creditors of the Trust, if
any, as provided by applicable  law, an amount equal to the  Liquidation  Amount
per Trust Security plus accumulated and unpaid Distributions thereon to the date
of payment (such amount being the "Liquidation Distribution"). If, upon any such
dissolution, winding up or termination, the Liquidation Distribution can be paid
only in part because the Trust has insufficient  assets available to pay in full
the aggregate  Liquidation  Distribution,  then,  subject to the next succeeding
sentence, the amounts payable by the Trust

                                      -46-
<PAGE>

on  the  Trust  Securities  shall  be  paid  on a pro  rata  basis  (based  upon
Liquidation  Amounts).  The  Holder of Common  Securities  will be  entitled  to
receive  Liquidation  Distributions  upon any such  dissolution,  winding-up  or
termination  pro rata  (determined  as  aforesaid)  with  Holders  of  Preferred
Securities,  except  that,  if a Debenture  Event of Default has occurred and is
continuing or if a Debenture  Event of Default has not occurred solely by reason
of a requirement  that time lapse or notice be given,  the Preferred  Securities
shall have a priority over the Common Securities.

                                   ARTICLE X.

                            Miscellaneous Provisions

                  Section  10.01.  Guarantee by the Depositor and  Assumption of
Obligations.   Subject  to  the  terms  and  conditions  hereof,  the  Depositor
irrevocably and  unconditionally  guarantees to each Person to whom the Trust is
now or hereafter becomes indebted or liable (the "Beneficiaries"), and agrees to
assume  liability  for,  the  full  payment,  when  and as  due,  of any and all
Obligations  (as  hereinafter  defined) to such  Beneficiaries.  As used herein,
"Obligations"  means any  indebtedness,  expenses or  liabilities  of the Trust,
other than obligations of the Trust to pay to Holders or other similar interests
in the Trust the amounts due such Holders pursuant to the terms of the Preferred
Securities or such other similar  interests,  as the case may be. This guarantee
and assumption is intended to be for the benefit,  of, and to be enforceable by,
all such  Beneficiaries,  whether or not such Beneficiaries have received notice
hereof.

                  Section 10.02.  Limitation of Rights of  Securityholders.  The
death or incapacity  of any person having an interest,  beneficial or otherwise,
in a Trust  Security shall not operate to terminate  this Trust  Agreement,  nor
entitle the legal  representatives or heirs of such person or any Securityholder
for such person, to claim an accounting, take any action or bring any proceeding
in any court for a  partition  or  winding up of the  arrangements  contemplated
hereby,  nor otherwise  affect the rights,  obligations  and  liabilities of the
parties hereto or any of them.

                  Section 10.03. Amendment.

                  (a) This Trust  Agreement  may be amended from time to time by
the Trust (on  approval of a majority  of the  Administrative  Trustees  and the
Depositor,  without  the  consent  of  any  Securityholders),  (i) to  cure  any
ambiguity,  correct or supplement  any provision  herein or therein which may be
inconsistent  with any other provision  herein or therein,  or to make any other
provisions  with  respect  to  matters  or  questions  arising  under this Trust
Agreement,  which shall not be  inconsistent  with the other  provisions of this
Trust  Agreement or (ii) to modify,  eliminate or add to any  provisions of this
Trust  Agreement  to such extent as shall be  necessary to ensure that the Trust
will not be classified  for United States federal income tax purposes other than
as a "grantor  trust" and not as an association  taxable as a 

                                      -47-
<PAGE>

corporation at any time that any Trust  Securities are  outstanding or to ensure
the  Trust's  exemption  from the status of an  "investment  company"  under the
Investment Company Act of 1940, as amended;  provided,  however, that, except in
the case of clause (ii), such action shall not adversely  affect in any material
respect the interests of any Securityholder  and, in the case of clause (i), any
amendments of this Trust Agreement shall become effective when notice thereof is
given to the Securityholders.

                  (b) Except as provided in Sections  6.01(c) and 10.03(c),  any
provision of this Trust Agreement may be amended by the Administrative  Trustees
and  the  Depositor  with  (i)  the  consent  of  Holders  of  Trust  Securities
representing  not less than a majority (based upon  Liquidation  Amounts) of the
Outstanding  Trust  Securities and (ii) receipt by the Trustees of an Opinion of
Counsel to the effect that such  amendment or the exercise of any power  granted
to the Trustees in accordance  with such  amendment  will not affect the Trust's
status as a  grantor  trust for  federal  income  tax  purposes  or the  Trust's
exemption  from status of an "investment  company" under the Investment  Company
Act of 1940, as amended.

                  (c) In addition to and  notwithstanding any other provision in
this Trust Agreement,  without the consent of each affected Securityholder (such
consent  being  obtained in  accordance  with Section 6.03 or 6.06),  this Trust
Agreement  may  not be  amended  to (i)  change  the  amount  or  timing  of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution  required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a Securityholder  to institute suit
for the enforcement of any such payment on or after such date.

                  (d)   Notwithstanding  any  other  provisions  of  this  Trust
Agreement, no Trustee shall enter into or consent to any amendment to this Trust
Agreement  which  would  cause  the  Trust to fail or cease to  qualify  for the
exemption  from status of an "investment  company" under the Investment  Company
Act of 1940, as amended, afforded by Rule 3a-5 thereunder.

                  (e)  Notwithstanding  anything in this Trust  Agreement to the
contrary,  without the consent of the  Depositor  and the  Trustees,  this Trust
Agreement may not be amended in a manner which imposes any additional obligation
on the Depositor or any Trustee.

                  (f) In the event that any amendment to this Trust Agreement is
made, the Administrative Trustees shall promptly provide to the Depositor a copy
of such amendment.

                  (g) The Property  Trustee is entitled to receive an Opinion of
Counsel as  conclusive  evidence  that any  amendment  to this  Trust  Agreement
executed  pursuant to this Section  10.03 is  authorized  or  permitted  by, and
conforms to, the terms of this Section  10.03,  has been duly  authorized by and
lawfully  executed and delivered on behalf of the other requisite  parties,  and
that it is proper for the Property  Trustee under the provisions of this Section
10.03 to join in the execution thereof.

                                      -48-
<PAGE>

                  Section  10.04.  Separability.  In case any  provision in this
Trust  Agreement  or in the  Trust  Securities  Certificates  shall be  invalid,
illegal or  unenforceable,  the  validity,  legality and  enforceability  of the
remaining provisions shall not in any way be affected or impaired thereby.

                  Section  10.05.  Governing  Law. This Trust  Agreement and the
rights  and  obligations  of  each of the  Securityholders,  the  Trust  and the
Trustees with respect to this Trust Agreement and the Trust  Securities shall be
construed in  accordance  with and governed by the laws of the State of Delaware
(without regard to conflict of laws principles).

                  Section  10.06.  Successors.  This  Trust  Agreement  shall be
binding upon and shall inure to the benefit of any successor to the Trust or the
Relevant Trustees or any of them, including any successor by operation of law.

                  Section 10.07.  Headings. The Article and Section headings are
for  convenience  only and shall  not  affect  the  construction  of this  Trust
Agreement.

                  Section 10.08. Notice and Demand. Any notice,  demand or other
communication  which by any  provision  of this Trust  Agreement  is required or
permitted to be given or served to or upon any  Securityholder  or the Depositor
may be given or served in writing by deposit thereof,  postage  prepaid,  in the
United  States  mail,  hand  delivery or facsimile  transmission,  in each case,
addressed,  (i) in the case of a  Preferred  Securityholder,  to such  Preferred
Securityholder  as such  Securityholder's  name and  address  may  appear on the
Securities  Register  and (ii) in the case of the Common  Securityholder  or the
Depositor,  to Minnesota Power & Light Company, 30 West Superior Street, Duluth,
Minnesota 55802, Attention: Treasurer, facsimile no. (218) 723-3912, with a copy
to the Secretary,  facsimile no. (218)  723-3955.  Such notice,  demand or other
communication  to or  upon  a  Securityholder  shall  be  deemed  to  have  been
sufficiently  given or made, for all purposes,  upon hand  delivery,  mailing or
transmission.
                  Any  notice,  demand  or  other  communication  which  by  any
provision of this Trust Agreement is required or permitted to be given or served
to or upon  the  Trust,  the  Property  Trustee,  the  Delaware  Trustee  or the
Administrative  Trustees  shall be given in  writing  addressed  (until  another
address is published by the Trust) as follows:  (i) with respect to the Property
Trustee or the Delaware Trustee, 101 Barclay Street, 21 West, New York, New York
10286 marked  "Attention:  Corporate Trust  Administration"  with a copy to: The
Bank of New York  (Delaware),  White Clay Center,  Route 273,  Newark,  Delaware
19711 and (ii) with respect to the Trust or the Administrative  Trustees, at the
address above for notice to the  Depositor,  marked  "Attention:  Administrative
Trustees for MP&L Capital I". Such notice,  demand or other  communication to or
upon the Trust or the Property Trustee shall be deemed to have been sufficiently
given or made  only  upon  actual  receipt  of the  writing  by the Trust or the
Property Trustee.

                                      -49-
<PAGE>

                  Section 10.09. Agreement Not to Petition. Each of the Trustees
and the Depositor agrees for the benefit of the  Securityholders  that, until at
least one year and one day after the  Trust has been  terminated  in  accordance
with Article IX, it shall not file, or join in the filing of, a petition against
the  Trust  under  any  bankruptcy,  reorganization,   arrangement,  insolvency,
liquidation  or other similar law  (including,  without  limitation,  the United
States Bankruptcy Code)  (collectively,  "Bankruptcy Laws") or otherwise join in
the  commencement of any proceeding  against the Trust under any Bankruptcy Law.
In the event the Depositor takes action in violation of this Section 10.09,  the
Property Trustee agrees, for the benefit of Securityholders,  that it shall file
an answer with the bankruptcy court or otherwise  properly contest the filing of
such petition by the  Depositor  against the Trust or the  commencement  of such
action and raise the  defense  that the  Depositor  has agreed in writing not to
take such action and should be stopped and  precluded  therefrom  and such other
defenses,  if any, as counsel for the Property  Trustee or the Trust may assert.
The provisions of this Section 10.09 shall survive the termination of this Trust
Agreement.

                  Section 10.10.  Conflict with Trust  Indenture Act.

                  (a) This Trust  Agreement is subject to the  provisions of the
Trust  Indenture  Act that  are  required  or  deemed  to be part of this  Trust
Agreement and shall, to the extent applicable, be governed by such provisions.

                  (b) The Property  Trustee shall be the only Trustee which is a
trustee for the purposes of the Trust Indenture Act.

                  (c) If any  provision  hereof  limits,  qualifies or conflicts
with another provision hereof which is required or deemed to be included in this
Trust  Agreement  by any of the  provisions  of the Trust  Indenture  Act,  such
required or deemed provision shall control.

                  (d) The  application of the Trust  Indenture Act to this Trust
Agreement  shall  not  affect  the  nature  of the  Trust  Securities  as equity
securities representing interests in the Trust.

THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST  THEREIN BY OR ON
BEHALF OF A  SECURITYHOLDER  OR ANY BENEFICIAL  OWNER,  WITHOUT ANY SIGNATURE OR
FURTHER  MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL  ACCEPTANCE
BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL  INTEREST IN SUCH TRUST
SECURITY  OF ALL THE  TERMS  AND  PROVISIONS  OF THIS  TRUST  AGREEMENT  AND THE
AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THOSE TERMS AND
PROVISIONS  SHALL BE BINDING,  OPERATIVE  AND EFFECTIVE AS BETWEEN THE TRUST AND
SUCH SECURITYHOLDER AND SUCH OTHERS.

                                      -50-
<PAGE>


IN WITNESS  WHEREOF,  the parties  have caused this Trust  Agreement  to be duly
executed, all as of the day and year first above written.


                                             MINNESOTA POWER & LIGHT COMPANY


                                             By:  D. G. Gartzke
                                                --------------------------------
                                                  Title: Treasurer


                                             THE BANK OF NEW YORK,
                                               as Property Trustee


                                             By:  Helen M. Cotiaux
                                                --------------------------------
                                                  Title: Vice President


                                             THE BANK OF NEW YORK (DELAWARE),
                                               as Delaware Trustee


                                             By:  Donald J. Wrobel
                                                --------------------------------
                                                 Title: Executive Vice President


                                                  Philip R. Halverson
                                                --------------------------------
                                                PHILIP R. HALVERSON
                                                 solely in his capacity as 
                                                 Administrative Trustee


                                                D. G. Gartzke
                                                --------------------------------
                                                DAVID G. GARTZKE
                                                 solely in his capacity as
                                                 Administrative Trustee


                                                James Vizanko
                                                --------------------------------
                                                 JAMES K. VIZANKO
                                                  solely in his capacity as 
                                                  Administrative Trustee


                                      -51-
<PAGE>
                                                                   EXHIBIT A


                              CERTIFICATE OF TRUST

                                       OF

                                 MP&L CAPITAL I

                  THIS  CERTIFICATE  OF TRUST of MP&L  Capital I (the  "Trust"),
dated as of , 1996,  is being duly  executed  and filed by the  undersigned,  as
trustees,  to create a business trust under the Delaware  Business Trust Act (12
Del. C. Section 3801, et seq.).

                  1.  Name.  The name of the business trust being created hereby
is MP&L Capital I.

                  2.  Delaware  Trustee.  The name and  business  address of the
trustee of the Trust with a principal place of business in the State of Delaware
are The Bank of New York  (Delaware),  White Clay  Center,  Route  273,  Newark,
Delaware 19711.

                  3.  Effective Date.  This Certificate of Trust shall be 
effective as of its filing.

                  IN WITNESS WHEREOF,  the undersigned,  being the only trustees
of the Trust, have executed this Certificate of Trust as of the date first above
written.

THE BANK OF NEW YORK (DELAWARE),                  PHILIP R. HALVERSON,
not in its individual capacity                    not in his individual capacity
but solely as Trustee                             but solely as Trustee


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



THE BANK OF NEW YORK,
not in its individual capacity
but solely as Trustee


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

                                        A-1

<PAGE>
                                                                   EXHIBIT B
            

                      THIS CERTIFICATE IS NOT TRANSFERABLE

Certificate Number                              Number of Common Securities

         C-[ ]

                    Certificate Evidencing Common Securities

                                       of

                                 MP&L CAPITAL I

                                Common Securities
                  (Liquidation Amount $25 per Common Security)


                  MP&L Capital I, a statutory  business  trust created under the
laws of the State of Delaware (the  "Trust"),  hereby  certifies  that Minnesota
Power & Light Company (the  "Holder") is the  registered  owner of _____ (_____)
common securities of the Trust representing  undivided  beneficial  interests in
the assets of the Trust and designated the Common Securities (liquidation amount
$25 per Common Security) (the "Common  Securities").  In accordance with Section
5.10 of the Trust  Agreement (as defined  below) the Common  Securities  are not
transferable and any attempted  transfer hereof shall be void. The designations,
rights, privileges, restrictions,  preferences and other terms and provisions of
the  Common  Securities  are set forth in, and this  certificate  and the Common
Securities represented hereby are issued and shall in all respects be subject to
the terms and  provisions  of, the Amended and Restated  Trust  Agreement of the
Trust dated as of _______  ___,  1995,  as the same may be amended  from time to
time  (the  "Trust  Agreement").  The  Trust  will  furnish  a copy of the Trust
Agreement to the Holder without charge upon written  request to the Trust at its
principal place of business or registered office.

                  Upon receipt of this  certificate,  the Holder is bound by the
Trust Agreement and is entitled to the benefits thereunder.

                                       B-1

<PAGE>

                  IN WITNESS WHEREOF, an Administrative Trustee of the Trust has
executed  this  certificate  for and on  behalf  of the  Trust  this ____ day of
_________, 199 .


                                 MP&L CAPITAL I


                                 By:
                                    -----------------------------------------
                                    not in his (her) individual capacity, but
                                    solely as Administrative Trustee



                                        B-2
<PAGE>
                                                                   EXHIBIT C



                    AGREEMENT AS TO EXPENSES AND LIABILITIES

                  AGREEMENT  dated as of ________ ___, 1995,  between  Minnesota
Power & Light Company, a Minnesota  corporation  ("Minnesota  Power"),  and MP&L
Capital I, a Delaware business trust (the "Trust").

                  WHEREAS, the Trust intends to issue its Common Securities (the
"Common Securities") to and receive Debentures from Minnesota Power and to issue
its ___% Quarterly Income Preferred Securities (the "Preferred Securities") with
such powers, preferences and special rights and restrictions as are set forth in
the Amended and Restated  Trust  Agreement of the Trust dated as of ________ __,
1996 as the same may be amended from time to time (the "Trust Agreement");

                  WHEREAS, Minnesota Power is the issuer of the Debentures;

                  NOW,  THEREFORE,  in  consideration  of the acceptance by each
holder of the Preferred  Securities,  which  acceptance  Minnesota  Power hereby
agrees  shall  benefit  Minnesota  Power and which  acceptance  Minnesota  Power
acknowledges  will be made in reliance  upon the  execution and delivery of this
Agreement,  Minnesota  Power,  including in its capacity as holder of the Common
Securities, and the Trust hereby agree as follows:

                                    ARTICLE I

                  Section 1.01.  Assumption by Minnesota  Power.  Subject to the
terms  and  conditions   hereof,   Minnesota   Power  hereby   irrevocably   and
unconditionally  assumes  the  full  payment,  when  and as due,  of any and all
Obligations (as hereinafter  defined) to each person or entity to whom the Trust
is now or hereafter  becomes indebted or liable (the  "Beneficiaries").  As used
herein,  "Obligations"  means any  indebtedness,  expenses or liabilities of the
Trust,  other  than  (i)  obligations  of the  Trust  to pay to  holders  of any
Preferred  Securities  or other  similar  interests in the Trust the amounts due
such holders  pursuant to the terms of the  Preferred  Securities  or such other
similar  interests,  as the case may be and (ii) obligations  arising out of the
negligence,  willful  misconduct or bad faith of the Trustees of the Trust. This
Agreement  is intended to be for the benefit of, and to be  enforceable  by, all
such  Beneficiaries,  whether or not such  Beneficiaries  have  received  notice
hereof.

                  Section  1.02.   Term  of  Agreement.   This  Agreement  shall
terminate and be of no further force and effect upon the date on which there are
no  Beneficiaries  remaining;  provided,  however,  that  this  Agreement  shall
continue to be effective or shall be  reinstated,  as the case may be, if at any
time any holder of Preferred  Securities or any Beneficiary must restore payment
of any sums paid under the Preferred Securities, under any Obligation, under the
Guarantee Agreement dated the date hereof by Minnesota Power and The Bank of 

                                       C-1
<PAGE>


New York, as guarantee trustee, or under this Agreement for any reason 
whatsoever. This Agreement is continuing, irrevocable, unconditional and 
absolute.

                  Section 1.03. Waiver of Notice.  Minnesota Power hereby waives
notice of acceptance of this Agreement and of any Obligation to which it applies
or may apply, and Minnesota Power hereby waives presentment, demand for payment,
protest, notice of nonpayment,  notice of dishonor, notice of redemption and all
other notices and demands.

                  Section  1.04.  No  Impairment.  The  obligations,  covenants,
agreements and duties of Minnesota Power under this Agreement shall in no way be
affected or impaired by reason of the happening  from time to time of any of the
following:

                  (a) the  extension of time for the payment by the Trust of all
or any portion of the Obligations or for the performance of any other obligation
under, arising out of, or in connection with, the Obligations;

                  (b) any failure,  omission,  delay or lack of diligence on the
part of the Beneficiaries to enforce,  assert or exercise any right,  privilege,
power or remedy conferred on the  Beneficiaries  with respect to the Obligations
or any action on the part of the Trust  granting  indulgence or extension of any
kind; or

                  (c) the  voluntary or  involuntary  liquidation,  dissolution,
sale of any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors,  reorganization,  arrangement, composition or readjustment
of debt of,  or other  similar  proceedings  affecting,  the Trust or any of the
assets of the Trust.

There shall be no obligation of the  Beneficiaries  to give notice to, or obtain
the consent of,  Minnesota  Power with  respect to the  happening  of any of the
foregoing.

                  Section  1.05.  Enforcement.  A  Beneficiary  may enforce this
Agreement  directly against Minnesota Power and Minnesota Power waives any right
or remedy to require  that any action be brought  against the Trust or any other
person or entity before proceeding against Minnesota Power.


                                   ARTICLE II

                  Section 2.01.  Binding  Effect.  All guarantees and agreements
contained  in this  Agreement  shall bind the  successors,  assigns,  receivers,
trustees and  representatives  of Minnesota Power and shall inure to the benefit
of the Beneficiaries.

                  Section  2.02.  Amendment.   So  long  as  there  remains  any
Beneficiary  or any  Preferred  Securities of any series are  outstanding,  this
Agreement  shall not be  modified  or  amended  in any  manner  adverse  to such
Beneficiary or to the holders of the Preferred Securities.

                                       C-2
<PAGE>

                  Section   2.03.   Notices.   Any  notice,   request  or  other
communication  required or  permitted  to be given  hereunder  shall be given in
writing  by  delivering   the  same  against   receipt   therefor  by  facsimile
transmission  (confirmed by mail),  telex or by  registered  or certified  mail,
addressed as follows (and if so given, shall be deemed given when mailed or upon
receipt of an answer-back, if sent by telex), to wit:

                            MP&L Capital I
                            c/o Philip R. Halverson, Administrative Trustee
                            30 West Superior Street
                            Duluth, Minnesota  55802
                              Facsimile No.: (218) 723-3955

                            Minnesota Power & Light Company
                            30 West Superior Street
                            Duluth, Minnesota  55802
                              Facsimile No.: (218) 723-3912
                              Attention: Treasurer

                  Section 2.04 THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND  INTERPRETED  IN ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES).

                  THIS  AGREEMENT is executed as of the day and year first above
written.

                                       MINNESOTA POWER & LIGHT COMPANY


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

                                       MP&L CAPITAL I

                                       By:
                                          ---------------------------------
                                          Philip R. Halverson
                                           not in his individual capacity, 
                                           but solely as Administrative Trustee

                                       C-3

<PAGE>

                            [Clearing Agency Legend]
               
                                                                 EXHIBIT D


         Certificate Number              Number of Preferred Securities

                P-                              CUSIP NO.

                   Certificate Evidencing Preferred Securities

                                       of

                                 MP&L CAPITAL I

                     % Quarterly Income Preferred Securities
                 (Liquidation Amount $25 per Preferred Security)


                  MP&L Capital I, a statutory  business  trust created under the
laws of the State of Delaware (the "Trust"),  hereby certifies that ____________
(the "Holder") is the registered owner of _____ (_____) preferred  securities of
the Trust  representing  an undivided  beneficial  interest in the assets of the
Trust and designated the MP&L Capital I % Quarterly Income Preferred  Securities
(liquidation  amount $25 per Preferred  Security) (the "Preferred  Securities").
The Preferred Securities are transferable on the books and records of the Trust,
in person or by a duly authorized  attorney,  upon surrender of this certificate
duly  endorsed  and in proper form for  transfer as provided in Section  5.04 or
5.11 of the Trust  Agreement  (as  defined  below).  The  designations,  rights,
privileges,  restrictions,  preferences  and other terms and  provisions  of the
Preferred  Securities are set forth in, and this  certificate  and the Preferred
Securities represented hereby are issued and shall in all respects be subject to
the terms and  provisions  of, the Amended and Restated  Trust  Agreement of the
Trust  dated as of , 1996,  as the same may be  amended  from  time to time (the
"Trust  Agreement").  The holder of this certificate is entitled to the benefits
of the  Guarantee  Agreement of  Minnesota  Power & Light  Company,  a Minnesota
corporation,  and The Bank of New York, as guarantee trustee, dated as of , 1996
(the "Guarantee") to the extent provided therein.  The Trust will furnish a copy
of the Trust  Agreement  and the  Guarantee  to the  holder of this  certificate
without  charge  upon  written  request to the Trust at its  principal  place of
business or registered office.

                  Upon  receipt  of  this   certificate,   the  holder  of  this
certificate  is bound by the Trust  Agreement  and is entitled  to the  benefits
thereunder.

                                       D-1
<PAGE>

                  IN WITNESS WHEREOF, one of the Administrative  Trustees of the
Trust has executed this certificate for and on behalf of the Trust.

Dated:

                              MP&L CAPITAL I


                              By:
                                 -----------------------------------------
                                    [                    ]
                                      not in his (her) individual capacity, but
                                      solely as Administrative Trustee

                                       D-2
<PAGE>


                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security to:


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

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

- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)


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

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

- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)

of the Preferred Securities represented by this Preferred Securities Certificate
and irrevocably appoints

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

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

- --------------------------------------------------------------------------------
attorney to transfer such Preferred Securities Certificate on the books of the
Trust.  The attorney may substitute another to act for him or her.

Date:
     ------------------------
Signature:
          ---------------------------

(Sign exactly as your name appears on the other side of this Preferred 
Securities Certificate)

Signature:
          ---------------------------

(Sign exactly as your name appears on the other side of this Preferred 
Securities Certificate)

                                       D-3
