





                                                      Exhibit 4.07


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



                   AMENDED AND RESTATED TRUST AGREEMENT

                                 AMONG

                   SOUTH CAROLINA ELECTRIC & GAS COMPANY,
                               as Depositor

                             THE BANK OF NEW YORK,
                             as Property Trustee

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

                   THE ADMINISTRATIVE TRUSTEES NAMED HEREIN

                                     and

                    THE SEVERAL HOLDERS (as defined herein)
                               ---------------------

                          Dated as of October 28, 1997

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

                                  SCE&G TRUST I

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



<PAGE>


                                                   SCE&G TRUST 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)                                         8.7
            (a)(2)                                         8.7
            (a)(3)                                         8.9
            (a)(4)                                     2.7(a)(ii)
            (a)(5)                                      8.7(a)(5)
            (b)                                            8.8
            (c)                                      Not Applicable
Section 311 (a)                                           8.13
            (b)                                           8.13
            (c)                                      Not Applicable
Section 312 (a)                                           5.8
            (b)                                           5.8
            (c)                                           5.8
Section 313 (a)                                        8.15(a)
            (b)                                        8.15(b)
            (c)                                        10.8
            (d)                                        8.15(c)
Section 314 (a)                                        8.16
            (b)                                      Not Applicable
            (c)(1)                                      8.17
            (c)(2)                                      8.17
            (c)(3)                                   Not Applicable
            (d)                                      Not Applicable
            (e)                                       1.1, 8.17
Section 315 (a)                                       8.1(d)(i)
            (b)                                       8.2, 10.8
            (c)                                         8.1(c)
            (d)                                       8.1, 8.3
            (e)                                      Not Applicable
Section 316 (a)                                      Not Applicable
            (a)(1)(A)                                Not Applicable
            (a)(1)(B)                                Not Applicable
            (a)(2)                                   Not Applicable
            (b)                                         5.13(c)
            (c)                                          6.7
Section 317 (a)(1)Not Applicable
            (a)(2)Not Applicable
            (b)5.10
Section 318 (a)10.10

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





<PAGE>



                           TABLE OF CONTENTS


                              ARTICLE I

                            DEFINED TERMS                         8

    SECTION 1.1.   Definitions.                                   8

                             ARTICLE II

                 CONTINUATION OF THE ISSUER TRUST                18

   SECTION 2.1.   Name.                                          18
   SECTION 2.2.   Office of the Delaware Trustee; Principal
                    Place of Business                            18
   SECTION 2.3.   Initial Contribution of Trust Property;
                    Organizational Expenses                      18
   SECTION 2.4.   Issuance of the Trust Preferred Securities     19
   SECTION 2.5.   Issuance of the Common Securities;
                    Subscription and Purchase of Debentures      19
   SECTION 2.6.   Continuation of Trust                          19
   SECTION 2.7.   Authorization to Enter into Certain
                    Transactions                                 20
   SECTION 2.8.   Assets of Trust                                24
   SECTION 2.9.   Title to Trust Property                        24

                             ARTICLE III

                           PAYMENT ACCOUNT                       24

   SECTION 3.1.   Payment Account                                24

                              ARTICLE IV

                              REDEMPTION                         25

   SECTION 4.1.   Distributions                                  25
   SECTION 4.2.   Redemption                                     26
   SECTION 4.3.   Subordination of Common Securities             28
   SECTION 4.4.   Payment Procedures                             29
   SECTION 4.5.   Tax Returns and Reports                        29
   SECTION 4.6.   Payment of Taxes, Duties, Etc. of
                    the Issuer Trust                             29
   SECTION 4.7.   Payments under Indenture or Pursuant
                    to Direct Actions                            30

                                ARTICLE V

                        TRUST SECURITIES CERTIFICATES            30

     SECTION 5.1.   Initial Ownership                            30
     SECTION 5.2.   The Trust Securities Certificates            30
     SECTION 5.3.   Execution and Delivery of Trust Securities
                      Certificates                               31
     SECTION 5.4.   Book-Entry Trust Preferred Securities        31
     SECTION 5.5.   Registration of Transfer and Exchange of
                      Trust Preferred Securities Certificates    33
     SECTION 5.6.   Mutilated, Destroyed, Lost or Stolen Trust
                      Securities Certificates                    35
     SECTION 5.7.   Persons Deemed Holders                       36
     SECTION 5.8.   Access to List of Holders' Names
                      and Addresses                              36
     SECTION 5.9.   Maintenance of Office or Agency              36
     SECTION 5.10.  Appointment of Paying Agent                  36
     SECTION 5.11.  Ownership of Common Securities by Depositor  37
     SECTION 5.12.  Notices to Clearing Agency                   37
     SECTION 5.13.  Rights of Holders; Waivers of Past Defaults  38

                             ARTICLE VI

                    ACTS OF HOLDERS; MEETINGS; VOTING            40

     SECTION 6.1.   Limitations on Voting Rights                 40
     SECTION 6.2.   Notice of Meetings                           42
     SECTION 6.3.   Meetings of Holders of the Trust Preferred
                      Securities                                 42
     SECTION 6.4.   Voting Rights                                42
     SECTION 6.5.   Proxies, etc                                 43
     SECTION 6.6.   Holder Action by Written Consent             43
     SECTION 6.7.   Record Date for Voting and Other Purposes    43
     SECTION 6.8.   Acts of Holders                              44
     SECTION 6.9.   Inspection of Records                        45

                            ARTICLE VII

                    REPRESENTATIONS AND WARRANTIES               45

     SECTION 7.1.  Representations and Warranties of the
                     Property Trustee and the Delaware Trustee   45
     SECTION 7.2.  Representations and Warranties of Depositor   46

                           ARTICLE VIII

                       THE ISSUER TRUSTEES                       47

     SECTION 8.1.   Certain Duties and Responsibilities          47
     SECTION 8.2.   Certain Notices                              50
     SECTION 8.3.   Certain Rights of Property Trustee           50
     SECTION 8.4.   Not Responsible for Recitals or Issuance
                      of Securities                              52
     SECTION 8.5.   May Hold Securities                          53
     SECTION 8.6.   Compensation; Indemnity; Fees                53
     SECTION 8.7.   Corporate Property Trustee Required;
                      Eligibility of Issuer Trustees             54
     SECTION 8.8.   Conflicting Interests                        54
     SECTION 8.9.   Co-Trustees and Separate Trustee             55
     SECTION 8.10.  Resignation and Removal; Appointment of
                      Successor                                  56
     SECTION 8.11.  Acceptance of Appointment by Successor       58
     SECTION 8.12.  Merger, Conversion, Consolidation or
                      Succession to Business                     59


<PAGE>



     SECTION 8.13.  Preferential Collection of Claims Against
                      Depositor or Issuer Trust                  59
     SECTION 8.14.  Property Trustee May File Proofs of Claim    59
     SECTION 8.15.  Reports by Property Trustee                  60
     SECTION 8.16.  Reports to the Property Trustee              61
     SECTION 8.17.  Evidence of Compliance with Conditions
                      Precedent                                  61
     SECTION 8.18.  Number of Issuer Trustees                    61
     SECTION 8.19.  Delegation of Power                          61
     SECTION 8.20.  Appointment of Administrative Trustees       62

                             ARTICLE IX

                   TERMINATION, LIQUIDATION AND MERGER           63

     SECTION 9.1.  Dissolution Upon Expiration Date              63
     SECTION 9.2.  Early Dissolution                             63
     SECTION 9.3.  Termination                                   63
     SECTION 9.4.  Liquidation                                   64
     SECTION 9.5.  Mergers, Consolidations, Amalgamations
                     or Replacements of Issuer Trust             65

                           ARTICLE X

                    MISCELLANEOUS PROVISIONS                     67

     SECTION 10.1.  Limitation of Rights of Holders              67
     SECTION 10.2.  Amendment                                    67
     SECTION 10.3.  Separability                                 68
     SECTION 10.4.  Governing Law                                68
     SECTION 10.5.  Payments Due on Non-Business Day             69
     SECTION 10.6.  Successors                                   69
     SECTION 10.7.  Headings                                     69
     SECTION 10.8.  Reports, Notices and Demands                 69
     SECTION 10.9.  Agreement Not to Petition                    70
     SECTION 10.10. Trust Indenture Act; Conflict with Trust
                      Indenture Act                              70
     SECTION 10.11.  Acceptance of Terms of Trust Agreement,
                       Guarantee Agreement and Indenture         71

     Exhibit A      Certificate of Trust
     Exhibit B      Form of Letter of Representations
     Exhibit C      Form of Common Securities Certificate
     Exhibit D      Form of Trust Preferred Securities Certificate





<PAGE>


     AMENDED AND RESTATED TRUST  AGREEMENT,  dated as of October 28, 1997, among
(i)  South  Carolina  Electric  & Gas  Company,  a  South  Carolina  corporation
(including any  successors or assigns,  the  "Depositor"),  (ii) The Bank of New
York, a New York banking corporation, as property trustee (in such capacity, the
"Property  Trustee"  and,  in its  separate  corporate  capacity  and not in its
capacity  as  Property  Trustee,  the  "Bank"),  (iii)  The  Bank  of  New  York
(Delaware),  a  Delaware  banking  corporation,  as  Delaware  trustee  (in such
capacity,  the "Delaware  Trustee"),  (iv) M. R. Cannon,  an  individual,  K. B.
Marsh, an individual, and H. T. Arthur, an individual,  each of whose address is
c/o South Carolina  Electric & Gas Company,  1426 Main Street,  Columbia,  South
Carolina  29201  (each  an   "Administrative   Trustee"  and   collectively  the
"Administrative  Trustees") (the Property Trustee,  the Delaware Trustee and the
Administrative Trustees being referred to collectively as the "Issuer Trustees")
and (iv) the several Holders, as hereinafter defined.

                            WITNESSETH

     WHEREAS, the Depositor, Delaware Trustee and an Administrative Trustee have
heretofore  duly  declared  and  established  a business  trust  pursuant to the
Delaware  Business  Trust Act (as  defined  herein) by  entering  into the Trust
Agreement,  dated as of October 8, 1997 (the "Original Trust  Agreement") and by
the execution and filing with the Secretary of State of the State of Delaware of
the Certificate of Trust, filed on October 8, 1997, attached as Exhibit A; and

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

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

                           ARTICLE I

                         DEFINED TERMS

     SECTION 1.1.                               Definitions.

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

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

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

     (c)   The words "include," "includes" and "including" shall be deemed to be
           followed by the phrase "without limitation";

     (d)   All  accounting  terms used but not defined  herein have the meanings
           assigned to them in accordance with United States generally  accepted
           accounting principles;

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

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

     "Act" has the meaning specified in Section 6.8.

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

     "Additional Sums" has the meaning specified in Section 10.6 of the
Indenture.

     "Administrative  Trustee" means each of the Persons appointed in accordance
with Section 8.20 solely in such Person's capacity as Administrative  Trustee of
the Issuer  Trust  heretofore  formed and  continued  hereunder  and not in such
Person's individual capacity, or any successor  Administrative 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.

     "Applicable  Procedures" means, with respect to any transfer or transaction
involving a Book-Entry Trust Preferred Security, the rules and procedures of the
Clearing Agency for such Book-Entry  Trust Preferred  Security,  in each case to
the extent applicable to such transaction and as in effect from time to time.

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



<PAGE>


     "Bankruptcy Event" means, with respect to any Person:

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

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

     "Bankruptcy Laws" has the meaning specified in Section 10.9.

     "Board of  Directors"  means the board of directors of the Depositor or the
Executive  Committee of the board of directors  of the  Depositor  (or any other
committee  of the  board  of  directors  of  the  Depositor  performing  similar
functions) or a committee  designated by the board of directors of the Depositor
(or any  such  committee),  comprised  of two or more  members  of the  board of
directors of the Depositor or officers of the Depositor, or both.

     "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 officers of the Depositor to which authority
to act on behalf of the Board of Directors has been  delegated and to be in full
force and effect on the date of such certification,  and delivered to the Issuer
Trustees.

     "Book-Entry Trust Preferred Securities Certificate" means a Trust
Preferred Securities Certificate evidencing ownership of Book-Entry
Trust Preferred Securities.

     "Book-Entry Trust Preferred Security" means a Trust Preferred Security, the
ownership  and  transfers  of which  shall be made  through  book  entries  by a
Clearing Agency as described in Section 5.4.



<PAGE>


     "Business Day" means a day other than (i) a Saturday or Sunday,  (ii) a day
on which banking institutions in The City of New York are authorized or required
by law or executive  order to remain closed or (iii) a day on which the Property
Trustee's  Corporate Trust Office or the Corporate Trust Office of the Debenture
Trustee is closed for business.

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

     "Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry  transfers  and pledges of  securities  deposited  with the  Clearing
Agency.

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

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

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

     "Common  Security"  means a common  undivided  beneficial  interest  in the
assets of the Issuer 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 to the extent provided herein.

     "Corporate  Trust  Office" means (i) when used with respect to the Property
Trustee,  the principal  office of the Property Trustee located in New York, New
York,  and (ii) when used with respect to the Debenture  Trustee,  the principal
office of the Debenture Trustee located in Wilmington, Delaware.

     "Debenture  Event of  Default"  means any "Event of Default"  specified  in
Section 5.1 of the Indenture.

     "Debenture  Redemption  Date" means,  with respect to any  Debentures to be
redeemed under the Indenture,  the date fixed for redemption of such  Debentures
under the Indenture.

     "Debenture Tax Event" means a "Tax Event" as defined in the
Indenture.



<PAGE>


     "Debenture  Trustee"  means the Person  identified  as the "Trustee" in the
Indenture,  solely in its capacity as Trustee  pursuant to the Indenture and not
in its individual  capacity,  or its successor in interest in such capacity,  or
any successor Trustee appointed as provided in the Indenture.

     "Debentures" means the Depositor's 7.55% Junior Subordinated
Deferrable Interest Debentures, Series A, issued pursuant to the
Indenture.

     "Definitive Trust Preferred  Securities  Certificates" means either or both
(as the context requires) of (i) Trust Preferred Securities  Certificates issued
as Book-Entry Trust Preferred Securities Certificates as provided in Section 5.2
or 5.4 and (ii) Trust Preferred Securities  Certificates issued in certificated,
fully registered form as provided in Section 5.2, 5.4 or 5.5.

     "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 Person identified as the "Delaware Trustee" in
the preamble to this Trust Agreement, solely in its capacity as Delaware Trustee
of the trust heretofore formed and continued hereunder and not in its individual
capacity,  or its  successor  in interest  in such  capacity,  or any  successor
Delaware Trustee appointed as herein provided.

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

     "Distribution Date" has the meaning specified in Section 4.1(a).

     "Distributions" means amounts payable in respect of the Trust Securities as
provided in Section 4.1.

     "DTC" means The Depository Trust Company.

     "Early Termination Event" has the meaning specified in Section 9.2.

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

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

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

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



<PAGE>


     (d) default in the performance,  or breach, in any material respect, of any
covenant or warranty of the Issuer Trustees in this Trust Agreement  (other than
those specified in clause (b) or (c) above) and  continuation of such default or
breach for a period of 60 days after  there has been  given,  by  registered  or
certified mail, to the Issuer Trustees and to the Depositor by the Holders of at
least 25% in aggregate  Liquidation  Amount of the  Outstanding  Trust 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

     (e) the  occurrence  of a  Bankruptcy  Event with  respect to the  Property
Trustee if a successor  Property  Trustee has not been appointed  within 90 days
thereof.

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

     "Expiration Date" has the meaning specified in Section 9.1.

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

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

     "Indenture" means the Junior  Subordinated  Indenture,  dated as of October
28, 1997,  between the  Depositor  and the  Debenture  Trustee,  as trustee,  as
amended or supplemented from time to time.

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

     "Issuer  Trust" means the Delaware  business trust known as "SCE&G Trust I"
which was  formed on  October  8, 1997  under the  Delaware  Business  Trust Act
pursuant to the Original  Trust  Agreement and the filing of the  Certificate of
Trust, and continued pursuant to this Trust Agreement.

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

     "Letter of Representations" means the agreement among the Issuer Trust, the
Property  Trustee  and DTC,  as the  initial  Clearing  Agency,  dated as of the
Closing Date,  substantially  in the form attached as Exhibit B, as the same may
be amended and supplemented from time to time.

     "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)  with  respect  to a  redemption  of  any  Trust
Securities,  Trust Securities having a Liquidation Amount equal to the principal
amount of Debentures  to be  contemporaneously  redeemed in accordance  with the
Indenture,  the  proceeds of which will be used to pay the  Redemption  Price of
such Trust  Securities,  (ii) with respect to a  distribution  of  Debentures to
Holders of Trust  Securities in connection  with a dissolution or liquidation of
the Issuer Trust,  Debentures having a principal amount equal to the Liquidation
Amount of the  Trust  Securities  of the  Holder  to whom  such  Debentures  are
distributed and (iii) with respect to any distribution of Additional  Amounts to
Holders of Trust  Securities,  Debentures having a principal amount equal to the
Liquidation Amount of the Trust Securities in respect of which such distribution
is made.

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

     "Liquidation  Date"  means  the  date  of the  dissolution,  winding-up  or
termination of the Issuer Trust pursuant to Section 9.4.

     "Liquidation Distribution" has the meaning specified in Section
9.4(d).

     "Majority  in  Liquidation  Amount of the Trust  Preferred  Securities"  or
"Majority  in  Liquidation  Amount of the Common  Securities"  means,  except as
provided  by the Trust  Indenture  Act,  Trust  Preferred  Securities  or Common
Securities,  as the case may be,  representing  more  than 50% of the  aggregate
Liquidation Amount of all then Outstanding Trust Preferred  Securities or Common
Securities, as the case may be.

     "Officers'  Certificate"  means a certificate signed by the Chairman of the
Board, the President,  the Chief Executive Officer, the Chief Financial Officer,
any  Vice  President  or the  Treasurer  and by the  Secretary  or an  Assistant
Secretary of the Depositor and delivered to the Issuer  Trustees.  Any Officers'
Certificate  delivered  with respect to compliance  with a condition or covenant
provided for in this Trust Agreement shall include:

     (a) a statement by each officer signing the Officers' Certificate that such
officer 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 such officer in rendering the
Officers' Certificate;
     (c)  a  statement   that  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 such  officer,  such
condition or covenant has been complied with.



<PAGE>


     "Opinion of Counsel" means a written opinion of counsel, who may be counsel
for or an employee of the Depositor or any Affiliate of the Depositor.

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

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

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

     (b) Trust Securities for whose payment or redemption money in the necessary
amount has been  theretofore  deposited with the Property  Trustee or any Paying
Agent;  provided that, if such Trust  Securities  are to be redeemed,  notice of
such redemption has been duly given pursuant to this Trust Agreement; and

     (c) Trust  Securities  that have been paid or in exchange for or in lieu of
which  other Trust  Securities  have been  executed  and  delivered  pursuant to
Sections 5.4, 5.5, 5.6 and 5.11; provided,  however, that in determining whether
the  Holders  of the  requisite  Liquidation  Amount  of the  Outstanding  Trust
Preferred Securities have given any request, demand,  authorization,  direction,
notice,  consent or waiver  hereunder,  Trust Preferred  Securities owned by the
Depositor, any Issuer Trustee or any Affiliate of the Depositor or of any Issuer
Trustee shall be disregarded and deemed not to be  Outstanding,  except that (a)
in determining whether any Issuer Trustee shall be protected in relying upon any
such request, demand, authorization,  direction, notice, consent or waiver, only
Trust  Preferred  Securities that such Issuer 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  Trust Preferred  Securities are owned by the Depositor,  one or
more  of  the  Issuer  Trustees  and/or  any  such  Affiliate.  Trust  Preferred
Securities  so owned that have been  pledged in good  faith may be  regarded  as
Outstanding if the pledgee establishes to the satisfaction of the Administrative
Trustees  the  pledgee's  right so to act with  respect to such Trust  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 Book-Entry  Trust
Preferred Securities as reflected in the records of the Clearing Agency or, if a
Clearing Agency  Participant is not the Owner,  then as reflected in the records
of a Person  maintaining  an account  with such  Clearing  Agency  (directly  or
indirectly, in accordance with the rules of such Clearing Agency).

     "Paying Agent" means any paying agent or co-paying agent appointed pursuant
to Section 5.10 and shall initially be the Bank.



<PAGE>


     "Payment Account" means a segregated  non-interest-bearing  corporate trust
account  maintained  by the  Property  Trustee for the benefit of the Holders in
which all amounts paid in respect of the Debentures  will be held and from which
the  Property  Trustee,  through the Paying  Agent,  shall make  payments to the
Holders in accordance with Sections 4.1 and 4.2.

     "Person"  means a legal  person,  including  any  individual,  corporation,
estate, partnership,  joint venture, association,  joint stock company, company,
limited liability company,  trust,  unincorporated  association or government or
any agency or  political  subdivision  thereof,  or any other entity of whatever
nature.

     "Property Trustee" means the Person identified as the "Property Trustee" in
the preamble to this Trust Agreement, solely in its capacity as Property Trustee
of the trust heretofore formed and continued hereunder and not in its individual
capacity,  and its  successor  in interest in such  capacity,  or any  successor
Property 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 and the stated  maturity of the
Debentures shall be a Redemption Date for a Like Amount of Trust Securities.

     "Redemption  Price"  means,  with  respect  to  any  Trust  Security,   the
Liquidation  Amount  of  such  Trust  Security,   plus  accumulated  and  unpaid
Distributions to the Redemption Date, plus the related amount of the premium, if
any, paid by the Depositor  upon the  concurrent  redemption of a Like Amount of
Debentures.

     "Relevant Trustee" has the meaning specified in Section 8.10.

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


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

     "Securities  Register"  and  "Securities  Registrar"  have  the  respective
meanings specified in Section 5.5.



<PAGE>


     "Successor  Trust Preferred  Securities" of any particular  Trust Preferred
Securities Certificate means every Trust Preferred Securities Certificate issued
after,  and evidencing all or a portion of the same  beneficial  interest in the
Issuer Trust as that evidenced by, such particular  Trust  Preferred  Securities
Certificate;  and,  for the  purposes of this  definition,  any Trust  Preferred
Securities  Certificate executed and delivered under Section 5.6 in exchange for
or in lieu of a mutilated,  destroyed, lost or stolen Trust Preferred Securities
Certificate  shall be deemed to  evidence  the same  beneficial  interest in the
Issuer  Trust  as the  mutilated,  destroyed,  lost or  stolen  Trust  Preferred
Securities Certificate.

     "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 (i) all exhibits and (ii) for all purposes of this
Trust  Agreement  and  any  such  modification,  amendment  or  supplement,  the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this  Trust  Agreement  and any  such  modification,  amendment  or  supplement,
respectively.

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

     "Trust Preferred  Securities  Certificate"  means a certificate  evidencing
ownership of Trust Preferred  Securities,  substantially in the form attached as
Exhibit D.

     "Trust Preferred Security" means a preferred undivided  beneficial interest
in the assets of the Issuer 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  to the extent  provided
herein.

     "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 or
deemed to be held by the Property  Trustee  pursuant to the trusts of this Trust
Agreement.

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


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

     "Underwriters"   means  Credit   Suisse   First   Boston  and   PaineWebber
Incorporated as the underwriters under the Underwriting Agreement.

     "Underwriting  Agreement" means the Underwriting  Agreement,  dated October
22,  1997,  among  the  Issuer  Trust,  the  Depositor  and the  underwriter  or
underwriters named therein, as the same may be amended from time to time.

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

                          ARTICLE II

                 CONTINUATION OF THE ISSUER TRUST

     SECTION 2.1.     Name.

     The trust continued  hereby shall be known as "SCE&G Trust I," as such name
may be  modified  from  time to time by the  Administrative  Trustees  following
written notice to the Holders of Trust Securities and the other Issuer Trustees,
in which name the Issuer  Trustees may conduct the business of the Issuer Trust,
make and execute  contracts and other  instruments on behalf of the Issuer Trust
and sue and be sued.

     SECTION 2.2.     Office of the Delaware Trustee; Principal Place of
Business.

     The address of the Delaware  Trustee in the State of Delaware is White Clay
Center,   Rte  273,   Newark,   Delaware  19711,   Attention:   Corporate  Trust
Administration,  or such other  address in the State of Delaware as the Delaware
Trustee may  designate by written  notice to the  Holders,  the  Depositor,  the
Property Trustee and the Administrative Trustees. The principal executive office
of the Issuer Trust is South Carolina Electric & Gas Company,  1426 Main Street,
Columbia, South Carolina 29201, Attention: Chief Financial Officer.

     SECTION 2.3.     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 Issuer Trust as they arise or shall,  upon request of any Issuer
Trustee,  promptly  reimburse  such Issuer Trustee for any such expenses paid by
such Issuer  Trustee.  The Depositor shall make no claim upon the Trust Property
for the payment of such expenses.

     SECTION 2.4.     Issuance of the Trust Preferred Securities.

     The  Depositor,  both on its own behalf  and on behalf of the Issuer  Trust
pursuant  to  the  Original   Trust   Agreement,   executed  and  delivered  the
Underwriting  Agreement.  Contemporaneously  with the  execution and delivery of
this Trust Agreement,  an Administrative Trustee, on behalf of the Issuer Trust,
shall manually  execute in accordance  with Sections 5.2, 5.3 and 8.9(a) and the
Property Trustee shall deliver to the Underwriters,  Trust Preferred  Securities
Certificates,  registered in the names requested by the Underwriters, evidencing
an  aggregate  of  2,000,000  Trust  Preferred  Securities  having an  aggregate
Liquidation  Amount of $50,000,000,  against  receipt of the aggregate  purchase
price  of such  Trust  Preferred  Securities  of  $50,000,000,  by the  Property
Trustee.



<PAGE>


     SECTION 2.5.     Issuance of the Common Securities; Subscription
and Purchase of Debentures.

     Contemporaneously  with the execution and delivery of this Trust Agreement,
an  Administrative  Trustee,  on behalf of the Issuer  Trust,  shall  execute in
accordance  with  Sections  5.2, 5.3 and 8.9(a) and the Property  Trustee  shall
deliver to the Depositor, Common Securities Certificates, registered in the name
of the Depositor,  evidencing an aggregate of 61,856 Common Securities having an
aggregate  Liquidation  Amount of $1,546,400,  against  receipt of the aggregate
purchase price of such Common Securities of $1,546,400, to the Property Trustee.
Contemporaneously  therewith, an Administrative Trustee, on behalf of the Issuer
Trust,  shall  subscribe for and purchase  from the  Depositor  the  Debentures,
registered in the name of the Property Trustee on behalf of the Issuer Trust and
having an aggregate principal amount equal to $51,546,400,  and, in satisfaction
of the purchase price for such Debentures,  the Property  Trustee,  on behalf of
the Issuer Trust,  shall deliver to the Depositor the sum of $51,546,400  (being
the sum of the amounts  delivered  to the Property  Trustee  pursuant to (i) the
second sentence of Section 2.4 and (ii) the first sentence of this Section 2.5).

     SECTION 2.6.     Continuation of Trust.

     The  exclusive  purposes and functions of the Issuer Trust are (a) to issue
and sell Trust  Securities  and use the  proceeds  from such sale to acquire the
Debentures  and (b) to  engage  in  those  activities  necessary  or  incidental
thereto.  The Depositor hereby reaffirms the appointment of the Delaware Trustee
and  appoints  and  reaffirms  the  appointment  of,  as the  case  may be,  the
Administrative Trustees as trustees of the Issuer Trust, to have all the rights,
powers  and duties to the extent set forth  herein,  and the  respective  Issuer
Trustees hereby accept such  appointment.  The Property  Trustee hereby declares
that it will hold the Trust Property in trust upon and subject to the conditions
set forth  herein  for the  benefit  of the Issuer  Trust and the  Holders.  The
Administrative  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 Issuer  Trust.  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 Issuer
Trust for the sole and limited purpose of fulfilling the requirements of Section
3807 of the  Delaware  Business  Trust Act and for  taking  such  actions as are
required to be taken by a Delaware  trustee  under the Delaware  Business  Trust
Act.




<PAGE>


          SECTION 2.7.     Authorization to Enter into Certain Transactions.

     (a) The Issuer  Trustees  shall  conduct the affairs of the Issuer Trust in
accordance  with the terms of this Trust  Agreement.  Subject to the limitations
set forth in paragraph (b) of this Section and in accordance  with the following
provisions (i) and (ii),  the Issuer  Trustees shall have the authority to enter
into all  transactions  and agreements  determined by the Issuer  Trustees to be
appropriate in exercising the authority,  express or implied,  otherwise granted
to the Issuer  Trustees,  as the case may be, under this Trust  Agreement and to
perform all acts in furtherance  thereof,  including,  without  limitation,  the
following:

         (i) As among the Issuer Trustees,  each Administrative  Trustee, acting
         singly or  collectively,  shall have the power and  authority to act on
         behalf of the Issuer Trust with respect to the following matters:

 (A)     effecting the issuance and sale of the Trust
         Securities;

 (B)     causing  the Issuer  Trust to enter into,  and to execute,  deliver and
         perform, the Letter of Representations and such other agreements as may
         be necessary or desirable in connection  with the purposes and function
         of the Issuer Trust;

 (C)     assisting in the  registration of the Trust Preferred  Securities under
         the Securities Act, and under  applicable  state securities or blue sky
         laws and the qualification of this Trust Agreement as a trust indenture
         under the Trust Indenture Act;

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

 (E)     assisting in the sending of notices (other than notices of default) and
         other information  regarding the Trust Securities and the Debentures to
         the Holders in accordance with this Trust Agreement;

(F)      consenting to the appointment of a Paying Agent,  authenticating  agent
         and Securities Registrar in accordance with this Trust Agreement (which
         consent shall not be unreasonably withheld);

 (G)     executing  the  Trust  Securities  on  behalf  of the  Issuer  Trust in
         accordance with this Trust Agreement;

 (H)     executing and delivering closing certificates,  if any, pursuant to the
         Underwriting  Agreement  and  applying  for a  taxpayer  identification
         number for the Issuer Trust; and



<PAGE>


 (I)     taking any action  incidental to the  foregoing as the Issuer  Trustees
         may from time to time  determine  to be  necessary or advisable to give
         effect to the terms of this Trust Agreement.

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

                  (A)     establishing the Payment Account;

                  (B)     receiving the Debentures;

                  (C)     collecting interest,  principal and any other payments
                          made in respect of the  Debentures  and  holding  such
                          amounts in the Payment Account;

                  (D)     distributing  through  the  Paying  Agent  of  amounts
                          distributable  to the  Holders in respect of the Trust
                          Securities;

                  (E)     exercising all of the rights, powers and
                          privileges of a holder of the Debentures;

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

                  (G)     distributing the Trust Property in accordance
                          with the terms of this Trust Agreement;

                  (H)     to  the  extent  provided  in  this  Trust  Agreement,
                          winding  up  the  affairs  of and  liquidation  of the
                          Issuer Trust and the  preparing,  executing and filing
                          of the certificate of cancellation  with the Secretary
                          of State of the State of Delaware;

                  (I)     performing the duties of the Property Trustee
                          set forth in this Trust Agreement;


                        (J)  after  an  Event  of  Default   (other  than  under
              paragraph  (b), (c), (d) or (e) of the  definition of such term if
              such  Event  of  Default  is by or with  respect  to the  Property
              Trustee)  taking any action  incidental  to the  foregoing  as the
              Property  Trustee may from time to time  determine is necessary or
              advisable to give effect to the terms of this Trust  Agreement and
              protect and  conserve  the Trust  Property  for the benefit of the
              Holders (without consideration of the effect of any such action on
              any particular Holder); and

                        (K) exercising any of the duties, liabilities, powers or
              the authority of the Administrative  Trustees set forth in Section
              2.7(a)(i)(E)  and  (I)  herein;  and in the  event  of a  conflict
              between the action of the  Administrative  Trustees and the action
              of the Property Trustee,  the action of the Property Trustee shall
              prevail.

     (b) So long as this Trust Agreement remains in effect, the Issuer Trust (or
the Issuer  Trustees  acting on behalf of the Issuer  Trust) shall not undertake
any business,  activities or transaction  except as expressly provided herein or
contemplated  hereby.  In particular,  the Issuer Trustees shall not (i) acquire
any  investments  or engage  in any  activities  not  authorized  by this  Trust
Agreement, (ii) sell, assign, transfer,  exchange,  mortgage,  pledge, setoff or
otherwise dispose of any of the Trust Property or interests  therein,  including
to Holders,  except as  expressly  provided  herein,  (iii) take any action that
would  reasonably  be expected to cause the Issuer Trust to become  taxable as a
corporation  or  classified  as other  than a grantor  trust for  United  States
federal income tax purposes,  (iv) incur any  indebtedness for borrowed money or
issue any other debt or (v) take or consent to any action  that would  result in
the  placement  of a  Lien  on any of the  Trust  Property.  The  Administrative
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 Issuer
Trust or the Holders in their capacity as Holders.

     (c)  In  connection  with  the  issue  and  sale  of  the  Trust  Preferred
Securities,  the Depositor shall have the right and responsibility to assist the
Issuer  Trust with  respect  to, or effect on behalf of, the Issuer  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)     the  preparation and filing by the Issuer Trust with the Commission and
         the execution on behalf of the Issuer Trust of a registration statement
         on the appropriate form in relation to the Trust Preferred  Securities,
         including any amendments thereto and the taking of any action necessary
         or desirable to sell the Trust Preferred Securities in a transaction or
         a series of transactions pursuant thereto;

(ii)     the determination of the jurisdictions in which to
         take appropriate action to qualify or register for sale all or part
         of the Trust Preferred Securities and the taking of any and all
         such acts, other than actions that must be taken by or on behalf of
         the Issuer Trust, and advice to the Issuer Trust of actions that must
         be taken by or on behalf of the Issuer Trust, and the preparation for
         execution and filing of any documents to be executed and filed by the
         Issuer Trust or on behalf of the Issuer Trust, as the Depositor deems
         necessary or advisable in order to comply with the applicable laws of
         any such states in connection with the sale of the Trust Preferred
         Securities;

     (iii)     the  preparation  for filing by the Issuer Trust and execution on
               behalf of the Issuer Trust of an application or  applications  to
               such  securities  exchange or exchanges as shall be determined by
               Depositor  for  listing  upon  notice  of  issuance  of any Trust
               Preferred Securities;

      (iv)     the   preparation  for  filing  by  the  Issuer  Trust  with  the
               Commission  and the  execution on behalf of the Issuer Trust of a
               registration  statement on Form 8-A relating to the  registration
               of the Trust Preferred Securities under Section 12(b) or 12(g) of
               the Exchange Act, including any amendments thereto;

       (v)     the negotiation of the terms of, and the execution
               and delivery of, the Underwriting Agreement providing for the
               sale of the Trust Preferred Securities; and

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

     (d) Notwithstanding  anything herein to the contrary,  the Property Trustee
and the  Administrative  Trustees  are  authorized  and  directed to conduct the
affairs of the Issuer  Trust and to operate the Issuer  Trust so that the Issuer
Trust will not be deemed to be an "investment company" required to be registered
under the  Investment  Company Act, and will not be taxable as a corporation  or
classified as other than a grantor trust for United  States  federal  income tax
purposes  and so that the  Debentures  will be  treated as  indebtedness  of the
Depositor for United States  federal  income tax purposes.  In this  connection,
each Administrative  Trustee, the Property Trustee and the Holders of at least a
Majority in Liquidation  Amount of the Common  Securities are authorized to take
any action,  not  inconsistent  with applicable law, the Certificate of Trust or
this Trust Agreement,  that such Administrative Trustee, the Property Trustee or
Holders of Common  Securities  determine in their  discretion to be necessary or
desirable for such purposes, as long as such action does not adversely affect in
any  material  respect the  interests  of the Holders of the  Outstanding  Trust
Preferred  Securities.  In no event  shall the Issuer  Trustees be liable to the
Issuer  Trust or the Holders for any  failure to comply with this  section  that
results from a change in law or regulation or in the interpretation thereof.

     SECTION 2.8.     Assets of Trust.

     The assets of the Issuer Trust shall consist of the Trust Property.

     SECTION 2.9.     Title to Trust Property.

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

                            ARTICLE III

                          PAYMENT ACCOUNT

     SECTION 3.1.     Payment Account.

     (a) On or prior to the Closing Date, the Property  Trustee shall  establish
the Payment  Account.  The Property  Trustee and its agents 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 moneys 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 and for
distribution  as herein  provided,  including  (and  subject to) any priority of
payments provided for herein.

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

                          ARTICLE IV

                          REDEMPTION

     SECTION 4.1.     Distributions.

     (a) The Trust Securities  represent undivided  beneficial  interests in the
Trust Property, and Distributions (including of Additional Amounts) will be made
on the Trust  Securities  at the rate and on the dates that payments of interest
(including of Additional Interest,  as defined in the Indenture) are made on the
Debentures. Accordingly:

      (i)     Distributions on the Trust Securities shall be
              cumulative, and will accumulate whether or not there are funds of
              the Issuer Trust available for the payment of Distributions.
              Distributions shall accumulate from October 28, 1997, and, except
              in the event (and to the extent) that the Depositor exercises its
              right to defer the payment of interest on the Debentures pursuant
              to the Indenture, shall be payable quarterly in arrears on March
              31, June 30, September 30 and December 31 of each year, commencing
              on December 31, 1997. If any date on which a  Distribution is
              otherwise payable on the Trust Securities is not a Business Day,
              then the payment of such Distribution shall be made on the next
              succeeding day that is a Business Day (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, the 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 the date on which such payment was originally payable
              (each date on which distributions are payable in accordance with
              this Section 4.1(a), a "Distribution Date").

     (ii)     The Trust Securities shall be entitled to
              Distributions payable at a rate of 7.55% per annum of the
              Liquidation Amount of the Trust Securities. The amount of
              Distributions payable for any period less than a full Distribution
              period shall be computed on the basis of a 360-day year of twelve
              30-day months and the actual number of days elapsed in a partial
              month in a period. Distributions payable for each full
              Distribution period will be computed by dividing the rate per
              annum by four. The amount of Distributions payable for any period
              shall include any Additional Amounts in respect of such period.

    (iii)     Distributions  on  the  Trust  Securities  shall  be  made  by the
              Property  Trustee from the Payment Account and shall be payable on
              each  Distribution  Date only to the extent that the Issuer  Trust
              has funds then on hand and available in the Payment
             Account for the payment of such Distributions.

     (b)  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  Securities  at the close of  business  on the  relevant
record  date,  which  shall be at the close of  business  on the  fifteenth  day
(whether or not a Business Day) next preceding the relevant Distribution Date.

     SECTION 4.2.     Redemption.

     (a) On each  Debenture  Redemption  Date and on the stated  maturity of the
Debentures,  the Issuer  Trust will be required to redeem a Like Amount of Trust
Securities at the Redemption Price.

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

    (i)     the Redemption Date;

   (ii)     the Redemption Price or if the Redemption Price
            cannot be calculated prior to the time the notice is required to be
            sent, an estimate of the Redemption Price together with a statement
            that it is an estimate and that the actual Redemption Price will be
            calculated on the third Business Day prior to the Redemption Date
            (and if an estimate is provided, a further notice shall be sent of
            the actual Redemption Price on the date that such Redemption Price
            is calculated);

  (iii)     the CUSIP number or CUSIP numbers of the Trust
            Preferred Securities affected (if applicable);

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

    (v)     that on the Redemption Date the Redemption Price will become due and
            payable  upon each  such  Trust  Security  to be  redeemed  and that
            Distributions  thereon  will cease to  accumulate  on and after said
            date, except as provided in Section 4.2(d) below; and

   (vi)     the place or places where the Trust Securities are to be surrendered
            for the payment of the Redemption Price.

     The Issuer Trust in issuing the Trust  Securities  may use "CUSIP"  numbers
(if then generally in use), and, if so, the Property  Trustee shall indicate the
"CUSIP"  numbers of the Trust  Securities in notices of  redemption  and related
materials as a convenience  to Holders;  provided that any such notice may state
that no  representation  is made as to the correctness of such numbers either as
printed on the Trust  Securities or as contained in any notice of redemption and
related materials.



<PAGE>


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

     (d) If the Property  Trustee gives a notice of redemption in respect of any
Trust  Preferred  Securities,  then,  by 12:00 noon,  New York City time, on the
Redemption  Date,  subject to Section  4.2(c),  the Property  Trustee will, with
respect to Book-Entry Trust Preferred  Securities,  irrevocably deposit with the
Clearing Agency for such Book- Entry Trust Preferred  Securities,  to the extent
available therefor,  funds sufficient to pay the applicable Redemption Price and
will give such Clearing Agency irrevocable instructions and authority to pay the
Redemption Price to the Holders of the Trust Preferred Securities.  With respect
to  Trust  Preferred   Securities  that  are  not  Book-Entry   Trust  Preferred
Securities,  the Property Trustee,  subject to Section 4.2(c),  will irrevocably
deposit  with  the  Paying  Agent,  to  the  extent  available  therefor,  funds
sufficient to pay the applicable Redemption Price and will give the Paying Agent
irrevocable  instructions  and  authority  to pay the  Redemption  Price  to the
Holders  of the  Trust  Preferred  Securities  upon  surrender  of  their  Trust
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 upon the date of such
deposit, all rights of Holders holding Trust Securities so called for redemption
will cease, except the right of such Holders to receive the Redemption Price and
any  Distribution  payable in respect of the Trust Securities on or prior to the
Redemption  Date, but without  interest,  and such  Securities  will cease to be
outstanding. In the event that any date on which any Redemption Price is payable
is not a Business Day, then payment of the Redemption Price payable on such date
will be made on the next  succeeding  day that is a Business  Day  (without  any
interest or other  payment in respect of any such delay),  except that,  if such
Business Day falls in the next calendar  year,  such payment will be made on the
immediately preceding Business Day, in each case, with the same force and effect
as if made on such date.  In the event that payment of the  Redemption  Price in
respect of any Trust Securities called for redemption is improperly  withheld or
refused and not paid either by the Issuer Trust or by the Depositor  pursuant to
the Guarantee Agreement, Distributions on such Trust Securities will continue to
accumulate,  as set forth in Section 4.1, from the  Redemption  Date  originally
established  by the  Issuer  Trust for such  Trust  Securities  to the date such
Redemption Price is actually paid, in which case the actual payment date will be
the date fixed for redemption for purposes of calculating the Redemption Price.

     (e) Subject to the priority  provisions of Section 4.3(a), if less than all
the Outstanding  Trust  Securities are to be redeemed on a Redemption Date, then
the aggregate  Liquidation  Amount of Trust  Securities to be redeemed  shall be
allocated pro rata to the Common  Securities and the Trust Preferred  Securities
based upon the relative  Liquidation  Amounts of such  classes.  The  particular
Trust Preferred  Securities to be redeemed shall be selected on a pro rata basis
based upon their respective  Liquidation  Amounts not more than 60 days prior to
the Redemption Date by the Property Trustee from the Outstanding Trust Preferred
Securities not previously  called for  redemption,  provided that so long as the
Trust Preferred Securities are in book-entry-only  form, such selection shall be
made in accordance with the customary procedures for the Clearing Agency for the
Trust  Preferred  Securities.  The Property  Trustee shall  promptly  notify the
Securities  Registrar in writing of the Trust Preferred  Securities selected for
redemption  and,  in the case of any Trust  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 Trust  Preferred  Securities  shall
relate, in the case of any Trust Preferred Securities redeemed or to be redeemed
only in part,  to the  portion  of the  aggregate  Liquidation  Amount  of Trust
Preferred Securities that has been or is to be redeemed.

     SECTION 4.3.     Subordination of Common Securities.

     (a) Payment of  Distributions  (including any  Additional  Amounts) on, the
Redemption  Price of, and the  Liquidation  Distribution in respect of the Trust
Securities,  as applicable,  shall be made, subject to the allocation provisions
of Section 4.2(e),  pro rata among the Common Securities and the Trust Preferred
Securities based on the Liquidation  Amount of the Trust  Securities;  provided,
however,  that if on any Distribution Date,  Redemption Date or Liquidation Date
any Event of Default  resulting from a Debenture  Event of Default  specified in
Section 5.1(a) or 5.1(b) of the Indenture shall have occurred and be continuing,
no payment of any Distribution (including any Additional Amounts) on, Redemption
Price of, or Liquidation  Distribution in respect 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 any Additional Amounts) on all
Outstanding Trust Preferred  Securities for all Distribution periods terminating
on or prior thereto,  or in the case of payment of the Redemption Price the full
amount of such Redemption  Price on all Outstanding  Trust Preferred  Securities
then  called  for  redemption,  or in the  case of  payment  of the  Liquidation
Distribution the full amount of such Liquidation Distribution on all Outstanding
Trust 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 any Additional Amounts)
on, or the  Redemption  Price of, the Trust  Preferred  Securities  then due and
payable.

     (b) In the case of the  occurrence of any Event of Default  resulting  from
any Debenture Event of Default,  the Holders of the Common Securities shall have
no right to act with  respect  to any such  Event of  Default  under  this Trust
Agreement  until the effect of all such  Events of Default  with  respect to the
Trust  Preferred  Securities  have been cured,  waived or otherwise  eliminated.
Until all such Events of Default under this Trust  Agreement with respect to the
Trust Preferred  Securities have been so cured, waived or otherwise  eliminated,
the  Property  Trustee  shall act  solely on behalf of the  Holders of the Trust
Preferred  Securities and not on behalf of the Holders of the Common Securities,
and only the Holders of the Trust  Preferred  Securities  will have the right to
direct the Property Trustee to act on their behalf.

     SECTION 4.4.     Payment Procedures.

     Payments of Distributions  (including any Additional Amounts) in respect of
the Trust 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 Trust  Preferred  Securities are held by a Clearing  Agency,
such Distributions shall be made to the Clearing Agency in immediately available
funds. Payments in respect of the Common Securities shall be made in such manner
as shall be mutually agreed between the Property  Trustee and the Holders of the
Common Securities.

     SECTION 4.5.     Tax Returns and Reports.

     The Administrative Trustees shall prepare (or cause to be prepared), at the
Depositor's expense, and file all United States federal, state and local tax and
information  returns  and  reports  required to be filed by or in respect of the
Issuer Trust. In this regard, the Administrative  Trustees shall (i) prepare and
file (or cause to be prepared  and filed) all  Internal  Revenue  Service  forms
required to be filed in respect of the Issuer  Trust in each taxable year of the
Issuer  Trust  and  (ii)  prepare  and  furnish  (or  cause to be  prepared  and
furnished)  to each Holder all Internal  Revenue  Service  forms  required to be
provided by the Issuer  Trust.  The  Administrative  Trustees  shall provide the
Depositor  and the Property  Trustee with a copy of all such returns and reports
promptly after such filing or furnishing.  The Issuer Trustees shall comply with
United  States  federal   withholding  and  backup   withholding  tax  laws  and
information reporting requirements with respect to any payments to Holders under
the Trust Securities.

     SECTION 4.6.     Payment of Taxes, Duties, Etc. of the Issuer
Trust.

     Upon receipt under the Debentures of Additional  Sums, the Property Trustee
shall  promptly  pay any taxes,  duties or  governmental  charges of  whatsoever
nature (other than withholding  taxes) imposed on the Issuer Trust by the United
States or any other taxing  authority,  which were  included in such  Additional
Sums.


     SECTION 4.7.     Payments under Indenture or Pursuant to Direct
Actions.

     Any amount payable  hereunder to any Holder of Trust  Preferred  Securities
with respect thereto shall be reduced by the amount of any corresponding payment
such Holder (or any Owner) has directly  received pursuant to Section 5.8 of the
Indenture or Section 5.13 of this Trust Agreement.






                              ARTICLE V

                      TRUST SECURITIES CERTIFICATES

     SECTION 5.1.     Initial Ownership.

     Upon the creation of the Issuer Trust and the contribution by the Depositor
pursuant to Section 2.3 and until the issuance of the Trust  Securities,  and at
any time during which no Trust Securities are  outstanding,  the Depositor shall
be the sole beneficial owner of the Issuer Trust.

     SECTION 5.2.     The Trust Securities Certificates.

     (a) The Trust Preferred Securities  Certificates shall be issued in minimum
denominations of $25 Liquidation  Amount and integral multiples of $25 in excess
thereof and the Common Securities  Certificates shall be issued in denominations
of $25 Liquidation Amount and integral  multiples thereof.  The Trust Securities
Certificates shall be executed on behalf of the Issuer Trust by manual signature
of at least one Administrative  Trustee.  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 Issuer Trust, shall
be  validly  issued  and  entitled  to the  benefits  of this  Trust  Agreement,
notwithstanding  that such individuals or any of them shall have ceased to be so
authorized  prior to the delivery of such Trust  Securities  Certificates or did
not  hold  such  offices  at the  date  of  delivery  of such  Trust  Securities
Certificates.  A transferee  of a Trust  Securities  Certificate  shall become a
Holder and shall be entitled to the rights and subject to the  obligations  of a
Holder hereunder upon due  registration of such Trust Securities  Certificate in
such transferee's name pursuant to Section 5.5.

     (b) Upon their original issuance,  Trust Preferred Securities  Certificates
shall be issued in the form of one or more Book-Entry Trust Preferred Securities
Certificates  registered in the name of DTC, as Clearing Agency,  or its nominee
and  deposited  with  DTC  or a  custodian  for  DTC  for  credit  by DTC to the
respective  accounts of the Owners  thereof (or such other  accounts as they may
direct).

     (c)  A  single  Common  Securities  Certificate   representing  the  Common
Securities  shall be issued to the Depositor in the form of a definitive  Common
Securities Certificate.

     SECTION 5.3.     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 2.4 and 2.5, to be executed on behalf of the Issuer Trust and delivered
to or upon  the  written  order of the  Depositor,  executed  by one  authorized
officer  thereof,   without  further  corporate  action  by  the  Depositor,  in
authorized denominations.






     SECTION 5.4.     Book-Entry Trust Preferred Securities.

     (a) Each Book-Entry  Trust Preferred  Securities  Certificate  issued under
this Trust Agreement shall be registered in the name of the Clearing Agency or a
nominee  thereof and delivered to such Clearing  Agency or a nominee  thereof or
custodian  therefor  and  each  such  Book-  Entry  Trust  Preferred  Securities
Certificate shall constitute a single Trust Preferred Securities Certificate for
all purposes of this Agreement.

     (b)  Notwithstanding  any  other  provision  in this  Trust  Agreement,  no
Book-Entry Trust Preferred  Securities  Certificate may be exchanged in whole or
in part for Trust Preferred Securities Certificates registered,  and no transfer
of a Book-Entry Trust Preferred  Securities  Certificate in whole or in part may
be registered, in the name of any Person other than the Clearing Agency for such
Book-Entry Trust Preferred  Securities  Certificates or a nominee thereof unless
(i) the  Clearing  Agency  advises the Issuer Trust in writing that the Clearing
Agency is no longer willing or able to properly  discharge its  responsibilities
with respect to the Book-Entry Trust Preferred Securities  Certificates,  and is
unable to locate a qualified  successor or a qualified  successor shall not have
been appointed, or the Clearing Agency ceases to be a clearing agency registered
under the Exchange Act at a time when it is required to be so  registered to act
as such clearing  agent,  (ii) the Issuer Trust at its option  determines that a
Book Entry Trust Preferred  Securities  Certificate  shall be so exchangeable or
(iii) a Debenture  Event of Default has  occurred  and is  continuing.  Upon the
occurrence  of any event  specified  in clause  (i),  (ii) or (iii)  above,  the
Property  Trustee  shall  notify the  Clearing  Agency and instruct the Clearing
Agency to notify all  Owners of Book-  Entry  Trust  Preferred  Securities,  the
Delaware Trustee and the Administrative Trustees of the occurrence of such event
and  of  the   availability  of  the  Definitive   Trust  Preferred   Securities
Certificates to Owners of such class or classes,  as applicable,  requesting the
same.

     (c) If any  Book-Entry  Trust  Preferred  Securities  Certificate  is to be
exchanged  for other Trust  Preferred  Securities  Certificates  or cancelled in
part, or if any other Trust Preferred Securities  Certificate is to be exchanged
in whole or in part for Book-Entry Trust Preferred  Securities  represented by a
Book-Entry  Trust  Preferred  Securities  Certificate,   then  either  (i)  such
Book-Entry Trust Preferred  Securities  Certificate  shall be so surrendered for
exchange or  cancellation  as provided in this  Article V or (ii) the  aggregate
Liquidation  Amount  represented by such Book-Entry  Trust Preferred  Securities
Certificate shall be reduced,  subject to Section 5.2, or increased by an amount
equal to the  Liquidation  Amount  represented by that portion of the Book-Entry
Trust Preferred Securities Certificate to be so exchanged or cancelled, or equal
to the Liquidation Amount  represented by such other Trust Preferred  Securities
Certificates  to be so  exchanged  for  Book-Entry  Trust  Preferred  Securities
represented  thereby, as the case may be, by means of an appropriate  adjustment
made on the records of the Securities Registrar, whereupon the Property Trustee,
in accordance with the Applicable Procedures, shall instruct the Clearing Agency
or its  authorized  representative  to make a  corresponding  adjustment  to its
records.  Upon  surrender  to the  Administrative  Trustees  or  the  Securities
Registrar  of  the  Book-Entry   Trust  Preferred   Securities   Certificate  or
Certificates by the Clearing Agency,  accompanied by registration  instructions,
the  Administrative  Trustees,  or any one of them, shall execute the Definitive
Trust Preferred  Securities  Certificates in accordance with the instructions of
the Clearing Agency.  None of the Securities  Registrar,  the Issuer Trustees or
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.  Upon the issuance of Definitive Trust Preferred  Securities
Certificates,  the Issuer Trustees shall recognize the Holders of the Definitive
Trust  Preferred  Securities  Certificates  as  Holders.  The  Definitive  Trust
Preferred Securities Certificates shall be 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.

     (d) Every Trust  Preferred  Securities  Certificate  executed and delivered
upon registration of transfer of, or in exchange for or in lieu of, a Book-Entry
Trust Preferred Securities Certificate or any portion thereof,  whether pursuant
to this Article V or Article IV or otherwise, shall be executed and delivered in
the form of, and shall be, a Book-Entry Trust Preferred Securities  Certificate,
unless such Trust Preferred Securities  Certificate is registered in the name of
a Person  other than the Clearing  Agency for such  Book-Entry  Trust  Preferred
Securities Certificate or a nominee thereof.

     (e) The Clearing Agency or its nominee, as registered owner of a Book-Entry
Trust Preferred Securities  Certificate,  shall be the Holder of such Book-Entry
Trust Preferred Securities Certificate for all purposes under this Agreement and
the Book-Entry Trust Preferred Securities Certificate and Owners with respect to
a Book-Entry Trust Preferred  Securities  Certificate  shall hold such interests
pursuant to the Applicable  Procedures.  The Securities Registrar and the Issuer
Trustees shall be entitled to deal with the Clearing  Agency for all purposes of
this Trust  Agreement  relating to the  Book-Entry  Trust  Preferred  Securities
Certificates   (including  the  payment  of  the   Liquidation   Amount  of  and
Distributions on the Book-Entry Trust Preferred  Securities  represented thereby
and the giving of  instructions  or  directions  by Owners of  Book-Entry  Trust
Preferred  Securities  represented thereby) as the sole Holder of the Book-Entry
Trust Preferred Securities  represented thereby and shall have no obligations to
the Owners  thereof.  None of the Issuer  Trustees nor the Securities  Registrar
shall have any  liability in respect of any  transfers  effected by the Clearing
Agency.



<PAGE>


     The rights of the Owners of the Book-Entry Trust Preferred Securities shall
be  exercised  only  through the  Clearing  Agency and shall be limited to those
established by law, the Applicable Procedures and agreements between such Owners
and the Clearing Agency and/or the Clearing Agency Participants. Pursuant to the
Letter  of   Representations,   unless  and  until  Definitive  Trust  Preferred
Securities  Certificates  are issued  pursuant  to Section  5.4(b),  the initial
Clearing  Agency  will  make  book-entry  transfers  among the  Clearing  Agency
Participants and receive and transmit payments on the Trust Preferred Securities
to such  Clearing  Agency  Participants  and none of the Depositor or the Issuer
Trustees shall have any responsibility or obligation with respect thereto.

     SECTION 5.5.     Registration of Transfer and Exchange of Trust
Preferred Securities Certificates.

     (a) The Property  Trustee  shall keep or cause to be kept, at the office or
agency  maintained  pursuant  to Section  5.9, a register or  registers  for the
purpose of registering Trust Securities Certificates and transfers and exchanges
of Trust  Securities  Certificates  (the  "Securities  Register")  in which  the
registrar  and  transfer  agent  with  respect  to  the  Trust  Securities  (the
"Securities  Registrar"),  subject  to  such  reasonable  regulations  as it may
prescribe,  shall provide for the  registration  of Trust  Preferred  Securities
Certificates and Common Securities  Certificates (subject to Section 5.11 in the
case of the Common  Securities  Certificates)  and registration of transfers and
exchanges of Trust Preferred  Securities  Certificates as herein  provided.  The
Person acting as the Property  Trustee shall at all times also be the Securities
Registrar.

     Upon  surrender  for  registration  of  transfer  of  any  Trust  Preferred
Securities  Certificate at the office or agency  maintained  pursuant to Section
5.9, the Administrative Trustees or any one of them shall execute and deliver to
the Property Trustee, and the Property Trustee shall deliver, in the name of the
designated transferee or transferees, one or more new Trust Preferred Securities
Certificates in authorized  denominations of a like aggregate Liquidation Amount
dated the date of execution by such Administrative Trustee or Trustees.

     The Securities  Registrar shall not be required (i) to issue,  register the
transfer of or exchange any Trust Preferred  Security during a period  beginning
at the opening of business 15 days before the day of selection for redemption of
such Trust Preferred  Securities  pursuant to Article IV and ending at the close
of  business  on the day of  mailing  of the  notice  of  redemption  or (ii) to
register the transfer of or exchange  any Trust  Preferred  Security so selected
for  redemption  in  whole  or in part,  except,  in the case of any such  Trust
Preferred  Security  to be  redeemed  in part,  any  portion  thereof  not to be
redeemed.

     Every Trust 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 an Administrative Trustee and the
Securities Registrar duly executed by the Holder or its attorney duly authorized
in  writing.  Each  Trust  Preferred  Securities  Certificate   surrendered  for
registration  of  transfer  or  exchange  shall be  cancelled  and  subsequently
disposed of by the Property Trustee in accordance with its customary practice.

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

     (b)  Notwithstanding  any other provision of this Agreement,  transfers and
exchanges of Trust Preferred Securities Certificates and beneficial interests in
a Book-Entry  Trust Preferred  Securities  Certificate of the kinds specified in
this Section 5.5(b) shall be made only in accordance with this Section 5.5(b).

  (i)     Non-Book-Entry Trust Preferred Securities Certificate
          to Book-Entry Trust Preferred Securities Certificate. If the Holder
          of a Trust Preferred Securities Certificate (other than a Book-
          Entry Trust Preferred Securities Certificate) wishes at any time to
          transfer all or any portion of such Trust Preferred Securities
          Certificate to a Person who wishes to take delivery thereof in the
          form of a beneficial interest in a Book-Entry Trust Preferred
          Securities Certificate, such transfer may be effected only in
          accordance with the provisions of this Clause (b)(i) and subject to
          the Applicable Procedures. Upon receipt by the Securities Registrar
          of such Trust Preferred Securities Certificate as provided in
          Section 5.5(a) and instructions satisfactory to the Securities
          Registrar directing that a beneficial interest in the Book-Entry
          Trust Preferred Securities Certificate of a specified number of
          Trust Preferred Securities not greater than the number of Trust
          Preferred Securities represented by such Trust Preferred Securities
          Certificate be credited to a specified Clearing Agency
          Participant's account, then the Securities Registrar shall cancel
          such Trust Preferred Securities Certificate (and issue a new Trust
          Preferred Securities Certificate in respect of any untransferred
          portion thereof) as provided in Section 5.5(a) and increase the
          aggregate Liquidation Amount of the Book-Entry Trust Preferred
          Securities Certificate by the Liquidation Amount represented by
          such Trust Preferred Securities so transferred as provided in
          Section 5.4(c).

 (ii)     Non-Book-Entry    Trust    Preferred    Securities    Certificate   to
          Non-Book-Entry  Trust  Preferred  Securities   Certificate.   A  Trust
          Preferred  Securities  Certificate  that  is  not a  Book-Entry  Trust
          Preferred  Securities  Certificate may be transferred,  in whole or in
          part,  to a Person who takes  delivery  in the form of  another  Trust
          Preferred  Securities  Certificate  that  is  not a  Book-Entry  Trust
          Preferred Securities Certificate as provided in Section 5.5(a).

(iii)     Exchanges between  Book-Entry Trust Preferred  Securities  Certificate
          and  Non-Book-Entry   Trust  Preferred   Securities   Certificate.   A
          beneficial  interest  in  a  Book-Entry  Trust  Preferred   Securities
          Certificate  may  be  exchanged  for  a  Trust  Preferred   Securities
          Certificate  that  is  not a  Book-Entry  Trust  Preferred  Securities
          Certificate as provided in Section 5.4.

     SECTION 5.6.     Mutilated, Destroyed, Lost or Stolen Trust
Securities Certificates.



<PAGE>


     If (i) any mutilated Trust Securities  Certificate  shall be surrendered to
the Securities Registrar,  or if the Securities Registrar shall receive evidence
to its  satisfaction of the  destruction,  loss or theft of any Trust Securities
Certificate  and (ii) there shall be delivered to the  Securities  Registrar and
the  Administrative  Trustees  such  security or indemnity as may be required by
them to save each of them  harmless,  then in the  absence  of notice  that such
Trust Securities  Certificate shall have been acquired by a bona fide purchaser,
the Administrative  Trustees,  or any one of them, on behalf of the Issuer Trust
shall execute and 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 5.6, the Administrative Trustees or the Securities Registrar may require
the payment of a sum  sufficient to cover any tax or other  governmental  charge
that may be imposed in  connection  therewith.  Any duplicate  Trust  Securities
Certificate issued pursuant to this Section shall constitute conclusive evidence
of  an  undivided  beneficial  interest  in  the  assets  of  the  Issuer  Trust
corresponding  to  that  evidenced  by  the  lost,  stolen  or  destroyed  Trust
Securities Certificate, as if originally issued, whether or not the lost, stolen
or destroyed Trust Securities Certificate shall be found at any time.

     SECTION 5.7.     Persons Deemed Holders.

     The  Issuer  Trustees  and the  Securities  Registrar  shall each 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
none of the Issuer  Trustees and the Securities  Registrar shall be bound by any
notice to the contrary.

     SECTION 5.8.     Access to List of Holders' Names and Addresses.

     Each  Holder and each Owner  shall be deemed to have agreed not to hold the
Depositor,  the Property  Trustee,  the Delaware  Trustee 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 5.9.     Maintenance of Office or Agency.

     The   Property   Trustee   shall   designate,   with  the  consent  of  the
Administrative  Trustees,  which consent shall not be unreasonably  withheld, an
office or  offices  or agency  or  agencies  where  Trust  Preferred  Securities
Certificates  may be surrendered  for  registration  of transfer or exchange and
where notices and demands to or upon the Issuer Trustees in respect of the Trust
Securities  Certificates may be served.  The  Administrative  Trustees initially
designate  South Carolina  Electric & Gas Company,  1426 Main Street,  Columbia,
South Carolina  29201  Attention:  Treasurer,  as its office and agency for such
purposes.  The  Property  Trustee  shall  give  prompt  written  notice  to  the
Depositor,  the Administrative  Trustees and to the Holders of any change in the
location of the Securities Register or any such office or agency.



<PAGE>


     SECTION 5.10.     Appointment of Paying Agent.

     The Paying  Agent  shall make  Distributions  to Holders  from the  Payment
Account  and shall  report the  amounts of such  Distributions  to the  Property
Trustee  and the  Administrative  Trustees.  Any  Paying  Agent  shall  have the
revocable  power to  withdraw  funds  from the  Payment  Account  solely for the
purpose  of making  the  Distributions  referred  to above.  The  Administrative
Trustees  may  revoke  such  power and  remove  the  Paying  Agent in their sole
discretion.  The Paying Agent shall  initially be the Bank. Any Person acting as
Paying Agent shall be permitted to resign as Paying Agent upon 30 days'  written
notice to the  Administrative  Trustees  and the Property  Trustee.  If the Bank
shall no longer be the Paying Agent or a successor  Paying Agent shall resign or
its authority to act be revoked,  the  Administrative  Trustees  shall appoint a
successor (which shall be a bank or trust company) to act as Paying Agent.

Such  successor  Paying Agent or any  additional  Paying Agent  appointed by the
Administrative  Trustees  shall  execute and  deliver to the Issuer  Trustees an
instrument in which such successor Paying Agent or additional Paying Agent shall
agree with the Issuer 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 Holders in trust for the benefit of the Holders  entitled thereto until such
sums shall be paid to such Holders.  The Paying Agent shall return all unclaimed
funds to the  Property  Trustee and upon  removal of a Paying  Agent such Paying
Agent shall also return all funds in its possession to the Property Trustee. The
provisions  of Sections  8.1, 8.3 and 8.6 herein shall apply to the Bank also in
its role as Paying Agent, for so long as the Bank shall act as Paying Agent and,
to the extent  applicable,  to any other paying agent appointed  hereunder.  Any
reference  in this  Agreement to the Paying  Agent shall  include any  co-paying
agent unless the context requires otherwise.

     SECTION 5.11.     Ownership of Common Securities by Depositor.

     On the Closing Date,  the Depositor  shall acquire,  and  thereafter  shall
retain, beneficial and record ownership of the Common Securities.  The Depositor
may  not  transfer  the  Common  Securities  except  (i)  in  connection  with a
consolidation  or merger of the Depositor into another Person or any conveyance,
transfer or lease by the Depositor of its properties and assets substantially as
an entirety to any Person  pursuant to Section 8.1 of the  Indenture  or (ii) to
the  Depositor  or an  Affiliate  thereof  in  compliance  with  applicable  law
(including the  Securities  Act, and  applicable  state  securities and blue sky
laws).  To the fullest  extent  permitted by law, any attempted  transfer of the
Common Securities other than as set forth in the next proceeding  sentence shall
be  void.  The  Administrative  Trustees  shall  cause  each  Common  Securities
Certificate  issued to the Depositor to contain a legend  stating  substantially
"THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO THE DEPOSITOR OR AN AFFILIATE OF
THE DEPOSITOR IN COMPLIANCE  WITH  APPLICABLE  LAW AND SECTION 5.11 OF THE TRUST
AGREEMENT."



<PAGE>


     SECTION 5.12.     Notices to Clearing Agency.

     To the  extent  that a notice  or other  communication  to the  Holders  is
required under this Trust Agreement,  for so long as Trust Preferred  Securities
are represented by a Book-Entry  Trust  Preferred  Securities  Certificate,  the
Issuer Trustees shall give all such notices and communications  specified herein
to be given to the Clearing Agency and shall have no obligations to the Owners.

     SECTION 5.13.     Rights of Holders; Waivers of Past Defaults.

     (a) The legal  title to the Trust  Property  is vested  exclusively  in the
Property  Trustee (in its capacity as such) in  accordance  with Section 2.9 and
the Holders  shall not have any right or title  therein other than the undivided
beneficial  interest in the assets of the Issuer 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 Issuer Trust except as described  below. The
Trust Securities shall be personal property giving only the rights  specifically
set forth therein and in this Trust  Agreement.  The Trust Securities shall have
no preemptive or similar rights and when issued and delivered to Holders against
payment of the purchase price therefor will be fully paid and  nonassessable  by
the Issuer Trust.  The Holders of the Trust  Securities,  in their capacities as
such, shall be entitled to the same limitation of personal liability extended to
stockholders  of private  corporations  for profit  organized  under the General
Corporation Law of the State of Delaware.

     (b) For so long as any Trust Preferred  Securities remain Outstanding,  if,
upon a Debenture Event of Default, the Debenture Trustee fails or the holders of
not less than 25% in  principal  amount of the  outstanding  Debentures  fail to
declare  the  principal  of all of the  Debentures  to be  immediately  due  and
payable,  the  Holders  of at  least  25% in  Liquidation  Amount  of the  Trust
Preferred  Securities  then  Outstanding  shall  have  the  right  to make  such
declaration  by a notice in writing to the Property  Trustee,  the Depositor and
the Debenture Trustee.

     At any  time  after a  declaration  of  acceleration  with  respect  to the
Debentures  has been made and  before a judgment  or decree  for  payment of the
money  due has  been  obtained  by the  Debenture  Trustee  as in the  Indenture
provided,  if the Property Trustee fails to annul any such declaration and waive
such default,  the Holders of at least a Majority in  Liquidation  Amount of the
Trust  Preferred  Securities,  by written  notice to the Property  Trustee,  the
Depositor and the Debenture Trustee,  may rescind and annul such declaration and
its consequences if:

   (i)     the Depositor has paid or deposited with the
           Debenture Trustee a sum sufficient to pay

          (A)     all overdue installments of interest on all of
                  the Debentures,

          (B)     any accrued Additional Interest on all of the
                  Debentures,

          (C)     the principal of (and premium, if any, on) any Debentures that
                  have  become  due  otherwise  than  by  such   declaration  of
                  acceleration  and interest and Additional  Interest thereon at
                  the rate borne by the Debentures, and

          (D)     all sums paid or advanced by the  Debenture  Trustee under the
                  Indenture   and   the   reasonable   compensation,   expenses,
                  disbursements  and advances of the  Debenture  Trustee and the
                  Property Trustee, their agents and counsel; and

  (ii)     all Events of Default with respect to the
           Debentures,  other  than  the  non-payment  of the  principal  of the
           Debentures that has become due solely by such acceleration, have been
           cured or waived as provided in Section 5.13 of the Indenture.

     The  Holders  of at least a  Majority  in  Liquidation  Amount of the Trust
Preferred  Securities  may, on behalf of the Holders of all the Trust  Preferred
Securities,  waive any past default under the Indenture, except a default in the
payment of principal  or interest  (unless such default has been cured and a sum
sufficient  to pay all  matured  installments  of  interest  and  principal  due
otherwise than by acceleration has been deposited with the Debenture Trustee) or
a default in respect of a covenant or provision that under the Indenture  cannot
be  modified or amended  without  the consent of the holder of each  outstanding
Debenture.  No such rescission shall affect any subsequent default or impair any
right consequent thereon.

     Upon receipt by the Property  Trustee of written  notice  declaring such an
acceleration, or rescission and annulment thereof, by Holders of any part of the
Trust  Preferred  Securities a record date shall be established  for determining
Holders of  Outstanding  Trust  Preferred  Securities  entitled  to join in such
notice,  which  record  date  shall be at the close of  business  on the day the
Property Trustee receives such notice. The Holders on such record date, or their
duly  designated  proxies,  and only such Persons,  shall be entitled to join in
such notice,  whether or not such Holders remain Holders after such record date;
provided,  that,  unless such  declaration  of  acceleration,  or rescission and
annulment,  as the case may be,  shall have  become  effective  by virtue of the
requisite  percentage  having  joined in such notice prior to the day that is 90
days after such record date,  such notice of  declaration  of  acceleration,  or
rescission and annulment,  as the case may be, shall  automatically  and without
further  action by any Holder be canceled and of no further  effect.  Nothing in
this paragraph shall prevent a Holder or a proxy of a Holder from giving,  after
expiration  of such  90-day  period,  a new  written  notice of  declaration  of
acceleration,  or rescission and annulment thereof,  as the case may be, that is
identical to a written notice that has been canceled  pursuant to the proviso to
the preceding  sentence,  in which event a new record date shall be  established
pursuant to the provisions of this Section 5.13(b).

     (c) For so long as any Trust Preferred  Securities remain  Outstanding,  to
the  fullest  extent  permitted  by law and  subject  to the terms of this Trust
Agreement  and the  Indenture,  upon a Debenture  Event of Default  specified in
Section  5.1(a) or  5.1(b)  of the  Indenture,  any  Holder  of Trust  Preferred
Securities  shall have the right to institute a proceeding  directly against the
Depositor,  pursuant to Section 5.8 of the Indenture, for enforcement of payment
to such  Holder of any  amounts  payable  in  respect  of  Debentures  having an
aggregate  principal  amount equal to the  aggregate  Liquidation  Amount of the
Trust  Preferred  Securities of such Holder (a "Direct  Action").  Except as set
forth in  Section  5.13(b)  and  this  Section  5.13(c),  the  Holders  of Trust
Preferred  Securities  shall  have no right to  exercise  directly  any right or
remedy available to the holders of, or in respect of, the Debentures.

     (d)  Except as  otherwise  provided  in  clauses  (a),  (b) and (c) of this
Section 5.13,  the Holders of at least a Majority in  Liquidation  Amount of the
Trust  Preferred  Securities  may,  on  behalf of the  Holders  of all the Trust
Preferred  Securities,  waive  any past  default  or Event  of  Default  and its
consequences. Upon such waiver, any such default or Event of Default shall cease
to exist and any default or Event of Default  arising  therefrom shall be deemed
to have been cured for every purpose of this Trust Agreement, but no such waiver
shall extend to any  subsequent  or other  default or Event of Default or impair
any right consequent thereon.

                           ARTICLE VI

                  ACTS OF HOLDERS; MEETINGS; VOTING

     SECTION 6.1.     Limitations on Voting Rights.

     (a)  Except  as  expressly  provided  in this  Trust  Agreement  and in the
Indenture  and as  otherwise  required  by law,  no  Holder  of Trust  Preferred
Securities shall have any right to vote or in any manner  otherwise  control the
administration,  operation and management of the Issuer 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
Holders from time to time as partners or members of an association.

     (b) So long as any Debentures are held by the Property Trustee on behalf of
the Issuer Trust, the Property Trustee shall not (i) direct the time, method and
place of conducting  any  proceeding  for any remedy  available to the Debenture
Trustee,  or execute any trust or power  conferred on the Property  Trustee with
respect to the Debentures,  (ii) waive any past default that may be waived under
Section 5.13 of the  Indenture,  (iii)  exercise any right to rescind or annul a
declaration that the principal of all the Debentures shall be due and payable or
(iv) consent to any amendment,  modification  or termination of the Indenture or
the  Debentures,  where such consent shall be required,  without,  in each case,
obtaining  the  prior  approval  of  the  Holders  of at  least  a  Majority  in
Liquidation Amount of the Trust Preferred  Securities;  provided,  however, that
where a consent under the Indenture  would require the consent of each Holder of
Debentures  affected  thereby,  no such  consent  shall be given by the Property
Trustee  without the prior  written  consent of each  Holder of Trust  Preferred
Securities.  The  Property  Trustee  shall  not  revoke  any  action  previously
authorized  or  approved  by a  vote  of the  Holders  of  the  Trust  Preferred
Securities,  except by a subsequent  vote of the Holders of the Trust  Preferred
Securities. The Property Trustee shall notify all Holders of the Trust Preferred
Securities of any notice of default received with respect to the Debentures.  In
addition  to  obtaining  the  foregoing  approvals  of the  Holders of the Trust
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 such action shall not cause the
Issuer  Trust to be  taxable  as a  corporation  or  classified  as other than a
grantor trust for United States federal income tax purposes.

     (c) If any proposed  amendment to the Trust Agreement  provides for, or the
Issuer Trustees otherwise propose to effect, (i) any action that would adversely
affect in any material respect the powers,  preferences or special rights of the
Trust Preferred Securities,  whether by way of amendment to this Trust Agreement
or otherwise or (ii) the  dissolution,  winding-up or  termination of the Issuer
Trust,  other  than  pursuant  to the terms of this  Trust  Agreement,  then the
Holders of Outstanding Trust 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 a Majority in
Liquidation Amount of the Trust Preferred Securities.  Notwithstanding any other
provision of this Trust  Agreement,  no amendment to this Trust Agreement may be
made if, as a result of such  amendment,  it would cause the Issuer  Trust to be
taxable as a corporation  or classified as other than a grantor trust for United
States federal income tax purposes.

     SECTION 6.2.     Notice of Meetings.

     Notice of all  meetings of the Holders of the Trust  Preferred  Securities,
stating  the  time,  place and  purpose  of the  meeting,  shall be given by the
Property  Trustee  pursuant to Section  10.8 to each  Holder of Trust  Preferred
Securities,  at such Holder's  registered address, at least 15 days and not more
than 90 days before the meeting.  At any such  meeting,  any  business  properly
before the meeting may be so  considered  whether or not stated in the notice of
the meeting.  Any  adjourned  meeting may be held as adjourned  without  further
notice.

     SECTION 6.3.     Meetings of Holders of the Trust Preferred
Securities.

     No annual  meeting of Holders is  required to be held.  The  Administrative
Trustees,  however,  shall call a meeting of the Holders of the Trust  Preferred
Securities  to vote on any matter upon the written  request of the Holders of at
least 25% in aggregate  Liquidation  Amount of the  Outstanding  Trust Preferred
Securities and the  Administrative  Trustees or the Property Trustee may, at any
time in their  discretion,  call a meeting of the Holders of the Trust Preferred
Securities to vote on any matters as to which such Holders are entitled to vote.

     The  Holders  of at least a  Majority  in  Liquidation  Amount of the Trust
Preferred  Securities,  present in person or by proxy, shall constitute a quorum
at any meeting of the Holders of the Trust Preferred Securities.

     If a quorum is present at a meeting,  an  affirmative  vote by the  Holders
present, in person or by proxy, holding Trust Preferred Securities  representing
at least a  Majority  in  aggregate  Liquidation  Amount of the Trust  Preferred
Securities  held by the Holders  present,  either in person or by proxy, at such
meeting  shall  constitute  the  action of the  Holders  of the Trust  Preferred
Securities, unless this Trust Agreement requires a greater number of affirmative
votes.

     SECTION 6.4.     Voting Rights.

     Holders  shall be entitled to one vote for each $25 of  Liquidation  Amount
represented by their Outstanding Trust Securities in respect of any matter as to
which such Holders are entitled to vote.

     SECTION 6.5.     Proxies, etc.

     At any meeting of Holders,  any Holder 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 Issuer  Trust as the  Administrative  Trustees  may direct,  for
verification prior to the time at which such vote shall be taken.  Pursuant to a
resolution of the Property Trustee,  proxies may be solicited in the name of the
Property Trustee or one or more officers of the Property  Trustee.  Only Holders
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 Holder shall be deemed valid unless  challenged at or prior
to its  exercise,  and  the  burden  of  proving  invalidity  shall  rest on the
challenger.  No proxy  shall be valid  more than three  years  after its date of
execution.

     SECTION 6.6.     Holder Action by Written Consent.

     Any action that may be taken by Holders at a meeting may be taken without a
meeting if Holders  holding at least a  Majority  in  Liquidation  Amount of all
Trust Preferred  Securities  entitled to vote in respect of such action (or such
larger  proportion  thereof as shall be required by any other  provision of this
Trust Agreement) shall consent to the action in writing.

     SECTION 6.7.     Record Date for Voting and Other Purposes.

     For the purposes of  determining  the Holders 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 or Property Trustee may from time to time
fix a date, not more than 90 days prior to the date of any meeting of Holders or
the payment of a distribution  or other action,  as the case may be, as a record
date for the  determination  of the  identity  of the Holders of record for such
purposes.

     SECTION 6.8.     Acts of Holders.

     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 Holders may be embodied in and evidenced by one or more  instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing;  and, except as otherwise  expressly provided herein, such
action shall become  effective when such instrument or instruments are delivered
to an  Administrative  Trustee.  Such instrument or instruments  (and the action
embodied therein and evidenced  thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments.  Proof of execution
of any such  instrument  or of a  writing  appointing  any such  agent  shall be
sufficient for any purpose of this Trust  Agreement and (subject to Section 8.1)
conclusive in favor of the Issuer  Trustees,  if made in the manner  provided in
this Section.

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

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

     Any request, demand,  authorization,  direction, notice, consent, waiver or
other Act of the Holder of any Trust  Security shall bind every future Holder of
the same Trust Security and the Holder 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 Issuer Trustees
or the Issuer Trust in reliance thereon,  whether or not notation of such action
is made upon such Trust Security.

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

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

     SECTION 6.9.     Inspection of Records.

     Upon  reasonable  notice to the  Administrative  Trustees  and the Property
Trustee,  the records of the Issuer Trust shall be open to inspection by Holders
during normal business hours for any purpose reasonably related to such Holder's
interest as a Holder.

                          ARTICLE VII

                   REPRESENTATIONS AND WARRANTIES

     SECTION 7.1.     Representations and Warranties of the Property
Trustee and the Delaware Trustee.

     The Property Trustee and the Delaware Trustee,  each severally on behalf of
and as to  itself,  hereby  represents  and  warrants  for  the  benefit  of the
Depositor and the Holders that:

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

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

     (c)     the Delaware Trustee is a Delaware banking corporation;

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

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

     (f) the execution,  delivery and  performance  of this Trust  Agreement has
been duly  authorized by all necessary  corporate or other action on the part of
the Property  Trustee and the Delaware Trustee and does not require any approval
of  stockholders  of the  Property  Trustee  or the  Delaware  Trustee  and such
execution,  delivery and performance will not (i) violate the Charter or By-laws
of the Property Trustee or the Delaware Trustee,  (ii) violate any provision of,
or  constitute,  with or without  notice or lapse of time, a default  under,  or
result in the creation or imposition of, any Lien on any properties  included in
the Trust  Property  pursuant to the  provisions  of, any  indenture,  mortgage,
credit agreement, license or other agreement or instrument to which the Property
Trustee  or the  Delaware  Trustee  is a party  or by which it is bound or (iii)
violate any law,  governmental  rule or  regulation  of the United States or the
State of Delaware,  as the case may be, governing the banking,  trust or general
powers of the  Property  Trustee or the  Delaware  Trustee  (as  appropriate  in
context) or any order,  judgment or decree applicable to the Property Trustee or
the Delaware Trustee;

     (g)  neither the  authorization,  execution  or  delivery  by the  Property
Trustee or the Delaware  Trustee of this Trust Agreement nor the consummation of
any of the  transactions  by the Property  Trustee or the  Delaware  Trustee (as
appropriate in context) contemplated herein requires the consent or approval of,
the giving of notice to, the registration with or the taking of any other action
with respect to any  governmental  authority or agency under any existing law of
the United  States or the State of  Delaware  governing  the  banking,  trust or
general powers of the Property Trustee or the Delaware Trustee,  as the case may
be; and

     (h)  there  are no  proceedings  pending  or,  to the  best  of each of the
Property Trustee's and the Delaware Trustee's  knowledge,  threatened against or
affecting  the Property  Trustee or the Delaware  Trustee in any court or before
any  governmental  authority,  agency or  arbitration  board or  tribunal  that,
individually  or in the aggregate,  would  materially  and adversely  affect the
Issuer Trust or would  question the right,  power and  authority of the Property
Trustee or the  Delaware  Trustee,  as the case may be, to enter into or perform
its obligations as one of the Issuer Trustees under this Trust Agreement.

     SECTION 7.2.     Representations and Warranties of Depositor.

     The Depositor hereby represents and warrants for the benefit of the Holders
that:

     (a) the Trust Securities  Certificates issued on behalf of the Issuer Trust
have been duly authorized and will have been duly and validly  executed,  issued
and delivered by the Issuer  Trustees  pursuant to the terms and  provisions of,
and in accordance with the requirements of, this Trust Agreement and the Holders
will be, as of each such date, entitled to the benefits of this Trust Agreement;
and

     (b) there are no taxes, fees or other  governmental  charges payable by the
Issuer  Trust (or the Issuer  Trustees on behalf of the Issuer  Trust) under the
laws of the State of Delaware or any political subdivision thereof in connection
with the  execution,  delivery and  performance  by the Property  Trustee or the
Delaware Trustee, as the case may be, of this Trust Agreement.

                          ARTICLE VIII

                      THE ISSUER TRUSTEES

     SECTION 8.1.     Certain Duties and Responsibilities.

     (a) The duties and  responsibilities  of the  Issuer  Trustees  shall be as
provided by this Trust  Agreement and, in the case of the Property  Trustee,  by
the Trust  Indenture Act.  Notwithstanding  the foregoing,  no provision of this
Trust  Agreement  shall require any of the Issuer 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. 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 Issuer  Trustees  shall be subject to the  provisions of this
Section 8.1.  Nothing in this Trust  Agreement  shall be construed to release an
Administrative  Trustee  from  liability  for his or her own  grossly  negligent
action,  his or her own  negligent  failure  to act,  or his or her own  willful
misconduct.  To the extent  that,  at law or in equity,  an Issuer  Trustee  has
duties and  liabilities  relating to the Issuer  Trust or to the  Holders,  such
Issuer Trustee shall not be liable to the Issuer Trust or to any Holder for such
Issuer  Trustee's good faith reliance on the provisions of this Trust Agreement.
The  provisions  of this Trust  Agreement,  to the extent that they restrict the
duties and  liabilities of the Issuer Trustees  otherwise  existing at law or in
equity, are agreed by the Depositor and the Holders to replace such other duties
and liabilities of the Issuer Trustees.

     (b) All payments made by the Property  Trustee or a Paying Agent in respect
of the Trust  Securities  shall be made only from the revenue and proceeds  from
the Trust Property and only to the extent that there shall be sufficient revenue
or proceeds from the Trust  Property to enable the Property  Trustee or a Paying
Agent to make payments in accordance with the terms hereof.  Each Holder, by its
acceptance of a Trust  Security,  agrees that it will look solely to the revenue
and  proceeds  from the Trust  Property  to the  extent  legally  available  for
distribution  to it as herein  provided  and that the  Issuer  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 8.1(b) does not limit the liability of the Issuer Trustees expressly set
forth elsewhere in this Trust Agreement or, in the case of the Property Trustee,
in the Trust Indenture Act.

     (c) The Property Trustee, before the occurrence of any Event of Default and
after  the  curing  of all  Events  of  Default  that may have  occurred,  shall
undertake  to perform  only such  duties as are  specifically  set forth in this
Trust Agreement  (including pursuant to Section 10.10), and no implied covenants
shall be read into this Trust  Agreement  against the  Property  Trustee.  If an
Event of Default  has  occurred  (that has not been cured or waived  pursuant to
Section 5.13, the Property  Trustee shall exercise such of the rights and powers
vested in it by this Trust Agreement,  and use the same degree of care and skill
in its exercise  thereof,  as a prudent  person would  exercise or use under the
circumstances in the conduct of his or her own affairs.

     (d) No provision of this Trust  Agreement shall be construed to relieve the
Property  Trustee or the Delaware  Trustee from  liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct,  except
that:


<PAGE>



    (i)     prior to the occurrence of any Event of Default and after the curing
            or waiving of all such Events of Default that may have occurred:

            (A)     the duties and obligations of the Property  Trustee shall be
                    determined  solely by the express  provisions  of this Trust
                    Agreement  (including  pursuant to Section  10.10),  and the
                    Property   Trustee  shall  not  be  liable  except  for  the
                    performance   of  such   duties  and   obligations   as  are
                    specifically  set forth in this Trust  Agreement  (including
                    pursuant to Section 10.10); and

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

     (ii)     the Property Trustee shall not be liable for any error of judgment
              made  in good  faith  by an  authorized  officer  of the  Property
              Trustee,  unless it shall be proved that the Property  Trustee was
              negligent in ascertaining the pertinent facts;

   (iii)     the Property Trustee shall not be liable with
             respect to any action taken or omitted to be taken by it in good
             faith in accordance with the direction of the Holders of at
             least a Majority in Liquidation Amount of the Trust Preferred
             Securities relating to the time, method and place of conducting
             any proceeding for any remedy available to the Property Trustee,
             or exercising any trust or power conferred upon the Property
             Trustee under this Trust Agreement;

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

     (v)     the  Property  Trustee  shall not be liable for any interest on any
             money  received  by it except as it may  otherwise  agree  with the
             Depositor;  and  money  held by the  Property  Trustee  need not be
             segregated  from other  funds held by it except in  relation to the
             Payment  Account  maintained  by the Property  Trustee  pursuant to
             Section 3.1 and except to the extent otherwise required by law;

    (vi)     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 any
             other Issuer Trustee or the Depositor; and

   (vii)     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.

     (e) The Administrative Trustees shall not be responsible for monitoring the
compliance by the other Issuer  Trustees or the Depositor with their  respective
duties under this Trust Agreement,  nor shall either  Administrative  Trustee be
liable for the default or misconduct of any other  Administrative  Trustee,  the
other Issuer Trustees or the Depositor.

     SECTION 8.2.     Certain Notices.

     Within  five  Business  Days after the  occurrence  of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit,  in
the manner and to the extent  provided in Section 10.8,  notice of such Event of
Default to the Holders,  the Administrative  Trustees and the Depositor,  unless
such Event of Default shall have been cured or waived.

     Within five  Business  Days after the receipt of notice of the  Depositor's
exercise  of its  right to defer  the  payment  of  interest  on the  Debentures
pursuant to the Indenture,  the Administrative  Trustees shall transmit,  in the
manner and to the extent  provided in Section  10.8,  notice of such exercise to
the Holders, unless such exercise shall have been revoked.

     The Property  Trustee shall not be deemed to have knowledge of any Event of
Default  unless the Property  Trustee  shall have received  written  notice or a
Responsible  Officer of the Property Trustee charged with the  administration of
this Trust  Agreement  shall have  obtained  actual  knowledge  of such Event of
Default.

     SECTION 8.3.     Certain Rights of Property Trustee.

     Subject to the provisions of Section 8.1:

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

     (b) if (i) in performing its duties under this Trust Agreement the Property
Trustee is required to decide  between  alternative  courses of action,  (ii) in
construing  any of the provisions of this Trust  Agreement the Property  Trustee
finds the same ambiguous or  inconsistent  with any other  provisions  contained
herein or (iii)  the  Property  Trustee  is  unsure  of the  application  of any
provision of this Trust Agreement, then, except as to any matter as to which the
Holders of the Trust  Preferred  Securities are entitled to vote under the terms
of this Trust  Agreement,  the Property  Trustee  shall  deliver a notice to the
Depositor  requesting the  Depositor's  opinion as to the course of action to be
taken and the Property  Trustee  shall take such action,  or refrain from taking
such action,  as the Property Trustee shall be instructed in writing to take, or
to  refrain  from  taking,  by the  Depositor;  provided,  however,  that if the
Property Trustee does not receive such  instructions of the Depositor within ten
Business Days after it has delivered  such notice,  or such  reasonably  shorter
period of time set forth in such notice (which to the extent  practicable  shall
not be less than two Business Days), it may, but shall be under no duty to, take
or refrain from taking such action not inconsistent with this Trust Agreement as
it shall deem advisable and in the best interests of the Holders, in which event
the  Property  Trustee  shall  have no  liability  except for its own bad faith,
negligence or willful misconduct;

     (c)     any direction or act of the Depositor contemplated by
this Trust Agreement shall be sufficiently evidenced by an Officers'
Certificate;

     (d) any direction or act of an Administrative  Trustee contemplated by this
Trust  Agreement shall be  sufficiently  evidenced by a certificate  executed by
such Administrative Trustee and setting forth such direction or act;

     (e) the Property Trustee shall have no duty to see to any recording, filing
or  registration  of any  instrument  (including  any financing or  continuation
statement  or any  filing  under  tax or  securities  laws) or any  rerecording,
refiling or re-registration thereof;

     (f) the Property  Trustee may consult with counsel of its selection  (which
counsel  may be  counsel  to the  Depositor  or any of its  Affiliates,  and may
include any of its  employees)  and the advice of such counsel shall be full and
complete  authorization and protection in respect of any action taken,  suffered
or  omitted  by it  hereunder  in good  faith  and in  reliance  thereon  and in
accordance  with such advice;  the Property  Trustee shall have the right at any
time to seek instructions  concerning the administration of this Trust Agreement
from any court of competent jurisdiction;

     (g) the Property  Trustee  shall be under no  obligation to exercise any of
the rights or powers  vested in it by this  Trust  Agreement  at the  request or
direction of any of the Holders  pursuant to this Trust  Agreement,  unless such
Holders  shall have  offered to the  Property  Trustee  reasonable  security  or
indemnity against the costs,  expenses and liabilities that might be incurred by
it in  compliance  with  such  request  or  direction;  provided  that,  nothing
contained in this Section 8.3(g) shall be taken to relieve the Property Trustee,
upon the  occurrence of an Event of Default,  of its  obligation to exercise the
rights and powers vested in it by this Trust Agreement;

     (h) the Property Trustee shall not be bound to make any investigation  into
the  facts  or  matters  stated  in  any  resolution,   certificate,  statement,
instrument,  opinion,  report, notice, request,  consent, order, approval, bond,
debenture,  note or other evidence of  indebtedness  or other paper or document,
unless  requested in writing to do so by one or more  Holders,  but the Property
Trustee  may make such  further  inquiry  or  investigation  into such  facts or
matters as it may see fit;

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

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

     (k) except as otherwise  expressly  provided by this Trust  Agreement,  the
Property  Trustee  shall not be under any  obligation to take any action that is
discretionary under the provisions of this Trust Agreement.

     No provision of this Trust  Agreement shall be deemed to impose any duty or
obligation  on any Issuer  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 such  Person  shall be  unqualified  or
incompetent in accordance  with  applicable law, to perform any such act or acts
or to exercise any such right, power, duty or obligation. No permissive power or
authority available to any Issuer Trustee shall be construed to be a duty.

     SECTION 8.4.     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 Issuer Trust and the Depositor,  and the
Issuer  Trustees do not assume any  responsibility  for their  correctness.  The
Issuer  Trustees  shall not be  accountable  for the use or  application  by the
Depositor of the proceeds of the Debentures.

     The  Property  Trustee  may  conclusively  assume that any funds held by it
hereunder  are  legally  available  unless an  officer of the  Property  Trustee
assigned to its Corporate Trust  Administration  department  shall have received
written notice from the  Depositor,  any Holder or any other Issuer Trustee that
such funds are not legally available.

     SECTION 8.5.     May Hold Securities.

     Any Issuer  Trustee or any other agent of any Issuer  Trustee or the Issuer
Trust, in its individual or any other capacity,  may become the owner or pledgee
of Trust Securities and, subject to Sections 8.8 and 8.13 and except as provided
in the  definition of the term  "Outstanding"  in Article I, may otherwise  deal
with the  Issuer  Trust  with the same  rights  it would  have if it were not an
Issuer Trustee or such other agent.
     SECTION 8.6.     Compensation; Indemnity; Fees.

     The Depositor agrees:

     (a) to pay to the Issuer  Trustees from time to time such  compensation  as
the  parties  shall  agree from time to time for all  services  rendered by them
hereunder as may be agreed by the Depositor and the Issuer Trustees from time to
time (which  compensation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust);

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

     (c) to the fullest  extent  permitted by  applicable  law, to indemnify and
hold harmless (i) each Issuer Trustee, (ii) any Affiliate of any Issuer Trustee,
(iii) any officer, director, shareholder,  employee,  representative or agent of
any Issuer Trustee and (iv) any employee or agent of the Issuer Trust  (referred
to  herein as an  "Indemnified  Person")  from and  against  any  loss,  damage,
liability,  tax,  penalty,  expense  or claim of any kind or  nature  whatsoever
incurred by such  Indemnified  Person by reason of the  creation,  operation  or
termination  of the Issuer Trust or any act or omission  performed or omitted by
such  Indemnified  Person  on  behalf  of  the  Issuer  Trust,  except  that  no
Indemnified  Person shall be entitled to be  indemnified in respect of any loss,
damage or claim incurred by such Indemnified Person by reason of negligence, bad
faith or willful misconduct with respect to such acts or omissions.

     The  provisions of this Section 8.6 shall survive the  termination  of this
Trust Agreement and the removal or resignation of any Issuer Trustee.


<PAGE>



     No Issuer  Trustee may claim any Lien on any Trust  Property as a result of
any amount due pursuant to this Section 8.6.

     SECTION 8.7.     Corporate Property Trustee Required; Eligibility
of Issuer Trustees.

     (a) There shall at all times be a Property  Trustee  hereunder with respect
to the  Trust  Securities.  The  Property  Trustee  shall be a Person  that is a
national or state  chartered  bank and  eligible  pursuant to Section 310 of the
Trust  Indenture Act to act as such and 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 and to the extent
permitted by the Trust  Indenture Act, the combined  capital and surplus of such
Person  shall be deemed to be its  combined  capital and surplus as set forth in
its most recent  report of condition so  published.  If at any time the 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.  At the
time of appointment,  the Property  Trustee must have securities rated in one of
the three  highest  rating  categories  by a nationally  recognized  statistical
rating organization.

     (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 that
entity.

     (c) There  shall at all times be a  Delaware  Trustee  with  respect to the
Trust Securities.  The Delaware Trustee shall either be (i) a natural person who
is at least 21 years of age and a resident of the State of  Delaware,  or (ii) a
legal entity with its  principal  place of business in the State of Delaware and
that otherwise meets the requirements of applicable  Delaware law and that shall
act through one or more persons authorized to bind such entity.

     SECTION 8.8.     Conflicting Interests.

     (a) 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.

     (b) The  Guarantee  Agreement  and the  Indenture  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 8.9.     Co-Trustees and Separate Trustee.

     Unless an 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 Administrative Trustees, by agreed
action of the majority of such Trustees,  shall have power to appoint,  and upon
the written request of the Administrative Trustees, the Depositor shall for such
purpose join with the  Administrative  Trustees in the  execution,  delivery and
performance of all  instruments  and agreements  necessary or proper to appoint,
one  or  more  Persons  approved  by  the  Property  Trustee  either  to  act as
co-trustee,  jointly with the Property Trustee, of all or any part of such Trust
Property,  or to the extent  required by law to act as  separate  trustee of any
such  property,  in  either  case with such  powers  as may be  provided  in the
instrument of appointment, and to vest in such Person or Persons in the capacity
aforesaid,  any property,  title,  right or power deemed necessary or desirable,
subject to the other  provisions  of this  Section.  Any  co-trustee or separate
trustee appointed  pursuant to this Section shall either be (i) a natural person
who is at least 21 years of age and a resident of the United  States,  or (ii) a
legal  entity with its  principal  place of  business in the United  States that
shall act through one or more persons authorized to bind such entity. In case an
Event of Default under the Indenture shall have occurred and be continuing,  the
Property Trustee alone shall have the 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:

     (a) The Trust  Securities  shall be executed by one or more  Administrative
Trustees and delivered by the Property  Trustee 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  Property  Trustee  specified  hereunder  shall be  exercised  solely by the
Property Trustee and not by such co-trustee or separate trustee.

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

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

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

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

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

     SECTION 8.10.     Resignation and Removal; Appointment of
Successor.

     No resignation  or removal of any Issuer  Trustee (the "Relevant  Trustee")
and no appointment of a successor  Issuer Trustee pursuant to this Article shall
become  effective  until the acceptance of  appointment by the successor  Issuer
Trustee in accordance with the applicable requirements of Section 8.11.

     Subject to the immediately  preceding  paragraph,  the Relevant Trustee may
resign at any time by giving  written  notice  thereof  to the  Holders.  If the
instrument of acceptance by the successor 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 Relevant Trustee may petition, at the expense
of the Trust,  any court of  competent  jurisdiction  for the  appointment  of a
successor Relevant Trustee.

     Unless a Debenture  Event of Default shall have occurred and be continuing,
any Issuer  Trustee  may be removed at any time by Act of the  Holders of Common
Securities.  If a  Debenture  Event  of  Default  shall  have  occurred  and  be
continuing,  the Property Trustee or the Delaware Trustee,  or both of them, may
be removed  at such time by Act of the  Holders  of a  majority  in  Liquidation
Amount of the Trust Preferred Securities,  delivered to the Relevant Trustee (in
its individual  capacity and on behalf of the Trust). An Administrative  Trustee
may be removed by the Holders of Common Securities at any time. In no event will
the Holders of the Trust  Preferred  Securities have a right to vote to appoint,
remove or replace the Administrative Trustees.

     If any Issuer  Trustee  shall  resign,  be removed or become  incapable  of
acting  as Issuer  Trustee,  or if a vacancy  shall  occur in the  office of any
Issuer  Trustee for any  reason,  at a time when no  Debenture  Event of Default
shall have occurred and be continuing,  the Holders of Common Securities, by Act
of the Holders of Common  Securities,  shall promptly appoint a successor Issuer
Trustee or Issuer Trustees and the retiring Issuer Trustee shall comply with the
applicable requirements of Section 8.11. If the Property Trustee or the Delaware
Trustee shall resign, be removed or become incapable of continuing to act as the
Property Trustee or the Delaware  Trustee,  as the case may be, at a time when a
Debenture Event of Default shall have occurred and be continuing, the Holders of
Trust Preferred  Securities,  by Act of the Holders of a majority in Liquidation
Amount  of the Trust  Preferred  Securities  then  Outstanding,  shall  promptly
appoint a successor  Relevant  Trustee or Trustees  and such  successor  Trustee
shall  comply  with  the  applicable   requirements   of  Section  8.11.  If  an
Administrative Trustee shall resign, be removed or become incapable of acting as
Administrative  Trustee,  at a time when a Debenture Event of Default shall have
occurred  and be  continuing,  the  Holders of Common  Securities  by Act of the
Holders of Common  Securities shall promptly appoint a successor  Administrative
Trustee or Administrative Trustees and such successor  Administrative Trustee or
Trustees  shall comply with the applicable  requirements  of Section 8.11. If no
successor Relevant Trustee shall have been so appointed by the Holders of Common
Securities or the Holders of Trust Preferred Securities and accepted appointment
in the  manner  required  by Section  8.11,  any Holder who has been a Holder of
Trust  Securities  for at least six months  may,  on behalf of  himself  and all
others similarly situated,  petition any court of competent jurisdiction for the
appointment of a successor Relevant Trustee.

     The Property Trustee shall give notice of each resignation and each removal
of an Issuer Trustee and each  appointment of a successor  Issuer Trustee to all
Holders in the manner  provided  in  Section  10.8 and shall give  notice to the
Depositor.  Each notice shall include the name of the successor Relevant Trustee
and the address of its Corporate Trust Office if it is the Property Trustee.

     Notwithstanding  the  foregoing  or  any  other  provision  of  this  Trust
Agreement,  in the event any Administrative Trustee or a Delaware Trustee who is
a natural person dies or becomes,  in the opinion of the Depositor,  incompetent
or incapacitated,  the vacancy created by such death, incompetence or incapacity
may be filled by (a) the unanimous act of the remaining  Administrative Trustees
if there are at least two of them or (b)  otherwise by the  Depositor  (with the
successor in each case being a Person who satisfies the eligibility  requirement
for Administrative  Trustees or Delaware Trustee,  as the case may be, set forth
in Section 8.7).

     SECTION 8.11.     Acceptance of Appointment by Successor.

     In case of the appointment  hereunder of a successor Relevant Trustee,  the
retiring  Relevant  Trustee and each successor  Relevant Trustee with respect to
the Trust  Securities shall execute and deliver an amendment hereto wherein each
successor  Relevant  Trustee shall accept such  appointment  and which (a) 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 Issuer Trust and (b) 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 Issuer  Trust by more than one  Relevant
Trustee,  it being  understood  that nothing herein or in such  amendment  shall
constitute  such  Relevant  Trustees  co-trustees  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 Issuer Trust or any successor Relevant
Trustee such retiring  Relevant Trustee shall duly assign,  transfer and deliver
to such successor Relevant Trustee all Trust Property,  all proceeds thereof and
money held by such retiring Relevant Trustee hereunder with respect to the Trust
Securities and the Issuer Trust.

     Upon request of any such successor Relevant Trustee, the Issuer Trust shall
execute  any and all  instruments  for more fully and  certainly  vesting in and
confirming to such successor Relevant Trustee all such rights, powers and trusts
referred to in the 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.

     SECTION 8.12.     Merger, Conversion, Consolidation or Succession
to Business.

     Any Person into which the Property  Trustee,  the  Delaware  Trustee or any
Administrative  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 that such Person shall be otherwise  qualified and eligible
under this Article,  without the execution or filing of any paper or any further
act on the part of any of the parties hereto.

     SECTION 8.13.  Preferential Collection of Claims Against
Depositor or Issuer Trust.

     If and when the  Property  Trustee  shall  be or shall  become a  creditor,
directly or  indirectly,  secured or  unsecured,  of the Depositor or the Issuer
Trust (or any other obligor upon the Trust Preferred  Securities),  the Property
Trustee shall be subject to the provisions of Section 311 of the Trust Indenture
Act regarding the collection of claims against the Depositor or the Issuer Trust
(or any such other obligor).

     SECTION 8.14.     Property Trustee May File Proofs of Claim.

     In  case  of  any  receivership,   insolvency,   liquidation,   bankruptcy,
reorganization,  arrangement,  adjustment, composition or other similar judicial
proceeding  relative  to the Issuer  Trust or any other  obligor  upon the Trust
Securities or the property of the Issuer Trust or of such other obligor or their
creditors,  the Property Trustee  (irrespective of whether any  Distributions on
the Trust  Securities  shall then be due and payable and irrespective of whether
the  Property  Trustee  shall have made any  demand on the Issuer  Trust for the
payment of any past due Distributions)  shall be entitled and empowered,  to the
fullest  extent  permitted  by  law,  by  intervention  in  such  proceeding  or
otherwise:

     (a) to file and  prove a claim for the  whole  amount of any  Distributions
owing and  unpaid in  respect  of the Trust  Securities  and to file such  other
papers or documents as may be necessary or advisable in order to have the claims
of the Property  Trustee  (including any claim for the reasonable  compensation,
expenses,  disbursements  and advances of the Property  Trustee,  its agents and
counsel) and of the Holders allowed in such judicial proceeding, and

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

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

     Nothing herein  contained shall be deemed to authorize the Property Trustee
to  authorize  or consent to or accept or adopt on behalf of any Holder any plan
of reorganization,  arrangement,  adjustment or compensation affecting the Trust
Securities  or the rights of any Holder  thereof or to  authorize  the  Property
Trustee to vote in respect of the claim of any Holder in any such proceeding.

     SECTION 8.15.     Reports by Property Trustee.

     (a) Not later than  January 31 of each year,  the  Property  Trustee  shall
transmit to all Holders in  accordance  with Section 10.8 and to the Depositor a
brief report dated as of the immediately preceding December 31 with respect to:

     (i)     its  eligibility  under Section 8.7 or, in lieu thereof,  if to the
             best of its  knowledge it has  continued to be eligible  under said
             Section, a written statement to such effect;

    (ii)     a statement that the Property  Trustee has complied with all of its
             obligations  under this Trust Agreement  during the 12-month period
             (or,  in the case of the  initial  report,  the  period  since  the
             Closing  Date)  ending with such  December  31 or, if the  Property
             Trustee  has  not  complied  in  any  material  respect  with  such
             obligations, a description of such noncompliance; and

   (iii)     any change in the property and funds in its
             possession  as Property  Trustee  since the date of its last report
             and any action taken by the Property  Trustee in the performance of
             its duties hereunder which it has not previously reported and which
             in its opinion materially affects the Trust Securities.

     (b) In addition the Property Trustee shall transmit to Holders 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.

     (c) A copy of each such report shall,  at the time of such  transmission to
Holders, be filed by the Property Trustee with each national stock exchange, the
Nasdaq  National  Market  or  such  other   interdealer   quotation   system  or
self-regulatory  organization  upon  which the Trust  Securities  are  listed or
traded, with the Commission and with the Depositor.

     SECTION 8.16.     Reports to the Property Trustee.

     Each of the Depositor and the Administrative  Trustees shall provide to the
Property  Trustee,  the Commission and the Holders such  documents,  reports and
information  as required by Section 314 of the Trust  Indenture Act (if any) and
the compliance certificate required by Section 314(a) of the Trust Indenture Act
in the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act. The Depositor and the Administrative Trustees shall annually file
with the Property  Trustee a  certificate  specifying  whether such Person is in
compliance  with  all of the  terms  and  covenants  applicable  to such  Person
hereunder.

     SECTION 8.17.     Evidence of Compliance with Conditions
Precedent.

     Each of the Depositor and the Administrative  Trustees shall provide to the
Property Trustee such evidence of compliance with the conditions  precedent,  if
any,  provided for in this Trust Agreement that relate to any of the matters set
forth in Section 314(c) of the Trust  Indenture Act. Any  certificate or opinion
required to be given by an officer  pursuant to Section  314(c)(1)  of the Trust
Indenture Act shall be given in the form of an Officers' Certificate.

     SECTION 8.18.     Number of Issuer Trustees.

     (a) The number of Issuer Trustees shall be five, provided that the Property
Trustee and the Delaware Trustee may be the same Person.

     (b) If an Issuer  Trustee  ceases to hold office for any reason,  a vacancy
shall occur.  The vacancy  shall be filled with an Issuer  Trustee  appointed in
accordance with Section 8.10.

     (c) The death, resignation,  retirement, removal, bankruptcy,  incompetence
or  incapacity  to perform the duties of an Issuer  Trustee shall not operate to
annul, dissolve or terminate the Issuer Trust.
     SECTION 8.19.     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
2.7(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 or to the  Depositor  the doing of such things and
the execution of such instruments  either in the name of the Issuer 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 this Trust Agreement.

     SECTION 8.20.     Appointment of Administrative Trustees.

     (a)  The  Administrative  Trustees  shall  initially  be K.  B.  Marsh,  an
individual,  M. R. Cannon, an individual,  and H. T. Arthur, an individual,  and
their  successors shall be appointed by the Holders of a Majority in Liquidation
Amount of the Common  Securities and may resign or may be removed by the Holders
of a Majority in Liquidation  Amount of the Common  Securities at any time. Upon
any   resignation   or  removal,   the  Depositor   shall  appoint  a  successor
Administrative  Trustee.  Each  Administrative  Trustee  shall sign an agreement
agreeing to comply with the terms of this Trust Agreement.  If at any time there
is no Administrative  Trustee, the Property Trustee or any Holder who has been a
Holder of Trust  Securities  for at least six months may  petition  any court of
competent  jurisdiction  for  the  appointment  of  one or  more  Administrative
Trustees.

     (b)  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 this Section 8.20,  the  Administrative  Trustees in
office,  regardless of their number (and not withstanding 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.

     (c)  Notwithstanding  the  foregoing  or any other  provision of this Trust
Agreement,  if any  Administrative  Trustee  who is a  natural  person  dies  or
becomes,  in the opinion of the  Depositor,  incompetent or  incapacitated,  the
vacancy  created by such death,  incompetence or incapacity may be filled by the
unanimous acts of the remaining  Administrative Trustees, if there were at least
two of them prior to such vacancy,  and by the Depositor,  if there were not two
such  Administrative  Trustees  immediately  prior  to such  vacancy  (with  the
successor  being  a  Person  who  satisfies  the  eligibility   requirement  for
Administrative Trustees set forth in Section 8.7).

                           ARTICLE IX

                  DISSOLUTION, LIQUIDATION AND MERGER

     SECTION 9.1.     Dissolution Upon Expiration Date.

     Unless earlier dissolved,  the Issuer Trust shall automatically dissolve on
October 1, 2052 (the "Expiration Date").



<PAGE>


     SECTION 9.2.     Early Dissolution.

     The first to occur of any of the following events is an "Early  Dissolution
Event":

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

     (b) the written  direction to the Property  Trustee from all of the Holders
of the  Common  Securities  at any time to  dissolve  the  Issuer  Trust  and to
distribute  the  Debentures  to  Holders  in  exchange  for the Trust  Preferred
Securities  (which direction is optional and wholly within the discretion of the
Holders of the Common Securities);

     (c)     the redemption of all of the Trust Preferred Securities
in connection with the redemption of all the Debentures;

     (d)     the entry of an order for dissolution of the Issuer Trust
by a court of competent jurisdiction; and

     (e) the expiration of the term as provided in Section 9.1.

     SECTION 9.3.     Termination.

     The respective  obligations and responsibilities of the Issuer Trustees and
the Issuer Trust created and continued hereby shall terminate upon the latest to
occur of the following:  (a) the distribution by the Property Trustee to Holders
of all amounts required to be distributed  hereunder upon the liquidation of the
Issuer Trust pursuant to Section 9.4, or upon the redemption of all of the Trust
Securities  pursuant to Section 4.2; (b) the payment of any expenses owed by the
Issuer  Trust;  and  (c)  the  discharge  of all  administrative  duties  of the
Administrative  Trustees,   including  the  performance  of  any  tax  reporting
obligations with respect to the Issuer Trust or the Holders.

     SECTION 9.4.     Liquidation.

     (a) If an Early  Termination  Event  specified in clause (a), (b) or (d) of
Section  9.2  occurs or upon the  Expiration  Date,  the Issuer  Trust  shall be
liquidated  by the Issuer  Trustees  as  expeditiously  as the  Issuer  Trustees
determine to be possible by distributing,  after  satisfaction of liabilities to
creditors  of the Issuer Trust as provided by  applicable  law, to each Holder a
Like Amount of  Debentures,  subject to Section  9.4(d).  Notice of  liquidation
shall be given by the Property  Trustee by  first-class  mail,  postage  prepaid
mailed not less 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 such 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  procedures  by which
            Holders may exchange Trust  Securities  Certificates for Debentures,
            or if Section 9.4(d) applies receive a Liquidation Distribution,  as
            Administrative   Trustees  or  the  Property   Trustee   shall  deem
            appropriate.

     (b) Except where Section 9.2(c) or 9.4(d)  applies,  in order to effect the
liquidation of the Issuer Trust and  distribution  of the Debentures to Holders,
the Property  Trustee,  either  itself  acting as exchange  agent or through the
appointment of a separate exchange agent, shall establish a record date for such
distribution  (which  shall be not more  than 30 days  prior to the  Liquidation
Date) and,  establish such procedures as it shall deem appropriate to effect the
distribution  of Debentures  in exchange for the  Outstanding  Trust  Securities
Certificates.

     (c) Except where Section 9.2(c) or 9.4(d)  applies,  after the  Liquidation
Date, (i) the Trust Securities will no longer be deemed to be Outstanding,  (ii)
certificates  representing a Like Amount of Debentures will be issued to Holders
of Trust  Securities  Certificates,  upon surrender of such  Certificates to the
exchange agent for exchange,  (iii) the Depositor  shall use its best efforts to
have the Debentures  listed on the national stock exchange,  the Nasdaq National
Market   or  on  such   other   exchange,   interdealer   quotation   system  or
self-regulatory  organization as the Trust Preferred Securities are then listed,
(iv) any Trust  Securities  Certificates not so surrendered for exchange will be
deemed to  represent  a Like  Amount of  Debentures  bearing  accrued and unpaid
interest in an amount equal to the accumulated and unpaid  Distributions on such
Trust Securities  Certificates  until such  certificates are so surrendered (and
until such certificates are so surrendered, no payments of interest or principal
will be made to Holders of Trust  Securities  Certificates  with respect to such
Debentures) and (v) all rights of Holders  holding Trust  Securities will cease,
except the right of such Holders to receive  Debentures  upon surrender of Trust
Securities Certificates.

     (d) If,  notwithstanding  the other provisions of this Section 9.4, whether
because of an order for dissolution entered by a court of competent jurisdiction
or otherwise,  distribution  of the Debentures in the manner  provided herein is
determined  by  the  Property  Trustee  not  to be  practical,  or  if an  Early
Termination  Event specified in Section 9.2(c) occurs,  the Trust Property shall
be  liquidated  and the Issuer  Trust  shall be wound-up  or  terminated  by the
Property  Trustee in such manner as the  Property  Trustee  determines.  In such
event, Holders will be entitled to receive out of the assets of the Issuer Trust
available for  distribution  to Holders,  after  satisfaction  of liabilities to
creditors of the Issuer Trust as provided by applicable  law, an amount equal to
the  Liquidation   Amount  per  Trust  Security  plus   accumulated  and  unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution").  If, upon any such winding up or  termination,  the  Liquidation
Distribution  can be paid only in part because the Issuer 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 Issuer Trust
on  the  Trust  Securities  shall  be  paid  on a pro  rata  basis  (based  upon
Liquidation  Amounts).  The Holders of the Common Securities will be entitled to
receive  Liquidation  Distributions  upon any such winding-up or termination pro
rata  (determined  as  aforesaid)  with Holders of Trust  Preferred  Securities,
except that,  if a Debenture  Event of Default  specified  in Section  5.1(a) or
5.1(b) of the  Indenture  has occurred and is  continuing,  the Trust  Preferred
Securities  shall have a priority  over the Common  Securities  as  provided  in
Section 4.3.

     SECTION 9.5.     Mergers, Consolidations, Amalgamations  or
Replacements of Issuer Trust.

     The Issuer Trust may not merge with or into, consolidate,  amalgamate or be
replaced  by,  or  convey,   transfer  or  lease  its   properties   and  assets
substantially  as an entirety to any corporation or other body,  except pursuant
to this  Sections  9.4 or 9.5.  At the  request  of the  Holders  of the  Common
Securities,  with the consent of the Administrative  Trustees,  the Issuer Trust
may merge with or into,  consolidate,  amalgamate  or be  replaced by or convey,
transfer or lease its  properties and assets  substantially  as an entirety to a
trust  organized  as such under the laws of any state;  provided,  that (i) such
successor  entity either (a)  expressly  assumes all of the  obligations  of the
Issuer Trust with respect to the Trust  Preferred  Securities or (b) substitutes
for the Trust Preferred  Securities other securities  having  substantially  the
same terms as the Trust Preferred  Securities  (the  "Successor  Securities") so
long as the Successor  Securities  have the same priority as the Trust Preferred
Securities  with  respect  to  distributions   and  payments  upon  liquidation,
redemption and otherwise, (ii) a trustee of such successor entity possessing the
same  powers  and  duties  as the  Property  Trustee  is  appointed  to hold the
Debentures,  (iii)  such  merger,  consolidation,   amalgamation,   replacement,
conveyance,  transfer  or lease  does not cause the Trust  Preferred  Securities
(including  any  Successor  Securities)  to  be  downgraded  by  any  nationally
recognized  statistical  rating  organization which assigns ratings to the Trust
Preferred Securities, (iv) the Successor Securities are listed, or any Successor
Securities  will be listed upon notice of issuance,  on the national  securities
exchange,  the Nasdaq  National  Market or on such other  exchange,  interdealer
quotation  system  or  self-regulatory   organization  as  the  Trust  Preferred
Securities   are  then  listed,   if  any,   (v)  such  merger,   consolidation,
amalgamation,  replacement,  conveyance,  transfer  or lease does not  adversely
affect  the  rights,  preferences  and  privileges  of the  holders of the Trust
Preferred  Securities  (including  any  Successor  Securities)  in any  material
respect,  (vi) such successor  entity has a purpose  substantially  identical to
that  of  the  Issuer  Trust,   (vii)  prior  to  such  merger,   consolidation,
amalgamation,  replacement,  conveyance,  transfer or lease,  the  Depositor has
received   an  Opinion  of  Counsel  to  the  effect   that  (a)  such   merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely  affect the rights,  preferences  and privileges of the Holders of the
Trust Preferred Securities  (including any Successor Securities) in any material
respect and (b) following such merger, consolidation, amalgamation, replacement,
conveyance,  transfer  or lease,  neither  the Issuer  Trust nor such  successor
entity  will be  required  to  register  as an  "investment  company"  under the
Investment Company Act and (viii) the Depositor or its permitted transferee owns
all of the  common  securities  of such  successor  entity  and  guarantees  the
obligations of such successor entity under the Successor  Securities at least to
the extent provided by the Guarantee  Agreement.  Notwithstanding the foregoing,
the Issuer  Trust  shall not,  except  with the consent of Holders of all of the
Trust Preferred Securities,  consolidate,  amalgamate, merge with or into, or be
replaced by or convey, transfer or lease its properties and assets substantially
as an entirety to any other  entity or permit any other  entity to  consolidate,
amalgamate,   merge  with  or  into,  or  replace  it  if  such   consolidation,
amalgamation, merger, replacement, conveyance, transfer or lease would cause the
Issuer  Trust  or  the  successor  entity  to be  taxable  as a  corporation  or
classified as other than a grantor trust for United  States  federal  income tax
purposes.

                         ARTICLE X

                    MISCELLANEOUS PROVISIONS

     SECTION 10.1.     Limitation of Rights of Holders.

     Except as set forth in  Section  9.2,  the death,  incapacity,  bankruptcy,
dissolution  or  termination  of any Person  having an interest,  beneficial  or
otherwise,  in Trust  Securities  shall not  operate  to  terminate  this  Trust
Agreement,  or dissolve,  terminate or annul the Issuer  Trust,  nor entitle the
legal  representatives or heirs of such Person or any Holder for such Person, to
claim an accounting,  take any action or bring any proceeding in any court for a
partition or winding up of the arrangements  contemplated  hereby, nor otherwise
affect the rights,  obligations  and liabilities of the parties hereto or any of
them.

     SECTION 10.2.     Amendment.

     (a) This Trust  Agreement  may be amended from time to time by the Property
Trustee,  the  Administrative  Trustees  and the  Holders  of all of the  Common
Securities, without the consent of any Holder of the Trust Preferred Securities,
(i) to cure any ambiguity,  correct or supplement any provision  herein that may
be inconsistent  with any other provision herein or to make any other provisions
with respect to matters or questions  arising under this Trust  Agreement  which
shall not be inconsistent  with the other  provisions of this Trust Agreement or
(ii) to modify,  eliminate or add to any  provisions of this Trust  Agreement to
such extent as shall be  necessary  to ensure that the Issuer  Trust will not be
taxable as a corporation  or classified as other than a grantor trust for United
States  federal  income tax purposes at all times that any Trust  Securities are
outstanding  or to ensure that the Issuer Trust will not be required to register
as an "investment company" under the Investment Company Act, provided,  however,
that in the case of either  clause  (i) or clause  (ii)  such  action  shall not
adversely  affect in any material  respect the interests of any Holder,  and any
such  amendment  of this Trust  Agreement  shall  become  effective  when notice
thereof is given to the Holders.

     (b) Except as  provided in Section  10.2(c),  any  provision  of this Trust
Agreement  may be amended by the Issuer  Trustees  and the Holders of all of the
Common  Securities and with (i) the consent of Holders of at least a Majority in
Liquidation  Amount of the  Trust  Securities  and (ii)  receipt  by the  Issuer
Trustees  of an Opinion of Counsel  to the  effect  that such  amendment  or the
exercise of any power  granted to the Issuer  Trustees in  accordance  with such
amendment  will not cause the Issuer Trust to be taxable as a corporation  or as
other than a grantor  trust for United  States  federal  income tax  purposes or
affect the Issuer Trust's exemption from status as an "investment company" under
the Investment Company Act.

     (c) In addition to and  notwithstanding  any other  provision in this Trust
Agreement,  without the consent of each  affected  Holder  (such  consent  being
obtained in accordance with Section 6.3 or 6.6), 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 Holder to institute suit for the enforcement of any such
payment on or after such date; and  notwithstanding  any other provision herein,
without the unanimous  consent of the Holders  (such  consent being  obtained in
accordance with Section 6.3 or 6.6), this Section 10.2(e) may not be amended.

     (d) Notwithstanding any other provisions of this Trust Agreement, no Issuer
Trustee  shall enter into or consent to any  amendment  to this Trust  Agreement
that would cause the Issuer Trust to fail or cease to qualify for the  exemption
from status as an "investment company" under the Investment Company Act or to be
taxable as a  corporation  or to be classified as other than a grantor trust for
United States federal income tax purposes.

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

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

     (g) Neither the Property Trustee nor the Delaware Trustee shall be required
to enter into any amendment to this Trust Agreement that affects its own rights,
duties or immunities under this Trust  Agreement.  The Property Trustee shall be
entitled to receive an Opinion of Counsel and an Officers'  Certificate  stating
that any  amendment  to this Trust  Agreement is in  compliance  with this Trust
Agreement.

     SECTION 10.3.     Separability.

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



<PAGE>


     SECTION 10.4.     Governing Law.

     THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE HOLDERS,
THE ISSUER TRUST,  THE DEPOSITOR,  AND THE ISSUER  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  REFERENCE  TO ITS
CONFLICTS OF LAWS PROVISIONS.

     SECTION 10.5.     Payments Due on Non-Business Day.

     If the date fixed for any payment on any Trust Security shall be a day that
is not a Business  Day,  then such payment need not be made on such date but may
be made on the next  succeeding  day that is a Business Day (except as otherwise
provided  in  Sections  4.1(a)  and  4.2(d)),  with the same force and effect as
though  made on the date  fixed for such  payment,  and no  Distributions  shall
accumulate on such unpaid amount for the period after such date.

     SECTION 10.6.     Successors.

     This Trust  Agreement  shall be binding upon and shall inure to the benefit
of any  successor to the  Depositor,  the Issuer  Trust and any Issuer  Trustee,
including  any  successor  by  operation  of law.  Except in  connection  with a
consolidation,  merger or sale involving the Depositor  that is permitted  under
Article  Eight of the  Indenture  and pursuant to which the  assignee  agrees in
writing to perform the Depositor's  obligations  hereunder,  the Depositor shall
not assign its obligations hereunder.

     SECTION 10.7.     Headings.

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

     SECTION 10.8.     Reports, Notices and Demands.

     Any report,  notice, demand or other communication that by any provision of
this Trust  Agreement  is required or permitted to be given or served to or upon
any  Holder  or the  Depositor  may be given or  served in  writing  by  deposit
thereof,  first-class  postage prepaid, in the United States mail, hand delivery
or facsimile  transmission,  in each case, addressed (i) in the case of a Holder
of Trust  Preferred  Securities to such Holder as such Holder's name and address
may appear on the Securities  Register and (ii) in the case of the Holder of the
Common Securities, the Depositor, to South Carolina Electric & Gas Company, 1426
Main Street, Columbia, South Carolina,  29201, Attention:  Treasurer,  facsimile
no.: (803)  933-7037,  or to such other address as may be specified in a written
notice by the Holder of the Common Securities or the Depositor,  as the case may
be to the Property  Trustee.  Such notice,  demand or other  communication to or
upon a Holder shall be deemed to have been  sufficiently  given or made, for all
purposes,  upon hand delivery,  mailing or transmission.  Such notice, demand or
other  communication  to or upon the  Depositor  shall be  deemed  to have  been
sufficiently  given or made only  upon  actual  receipt  of the  writing  by the
Depositor.



<PAGE>


     Any notice,  demand or other  communication  that by any  provision of this
Trust  Agreement  is required or  permitted to be given or served to or upon the
Property  Trustee,  the Delaware  Trustee,  the  Administrative  Trustees or the
Issuer Trust shall be given in writing addressed to such Person as follows:  (i)
with  respect  to the  Property  Trustee  to The Bank of New York,  101  Barclay
Street,  Floor 21 West, New York,  New York 10286,  Attention:  Corporate  Trust
Administration;  (ii) with respect to the Delaware Trustee, The Bank of New York
(Delaware),  White Clay Center,  Rte 273,  Newark,  Delaware  19711,  Attention:
Corporate  Trust  Administration;  (iii)  with  respect  to  the  Administrative
Trustees,  to them at the  address  above for notices to the  Depositor,  marked
"Attention:  Administrative Trustees of SCE&G Trust I"; and (iv) with respect to
the Issuer Trust, to its principal  office specified in Section 2.1, with a copy
to the Property Trustee.  Such notice,  demand or other communication to or upon
the Issuer Trust, the Property Trustee or the  Administrative  Trustees shall be
deemed to have been  sufficiently  given or made only upon actual receipt of the
writing  by the  Issuer  Trust,  the  Property  Trustee  or such  Administrative
Trustee.

     SECTION 10.9.     Agreement Not to Petition.

     Each of the Issuer  Trustees and the Depositor agree for the benefit of the
Holders  that,  until at least one year and one day after the  Issuer  Trust has
been  terminated in accordance  with Article IX, they shall not file, or join in
the  filing of, a  petition  against  the  Issuer  Trust  under any  bankruptcy,
insolvency,  reorganization  or other similar law  (including  the United States
Bankruptcy  Code)  (collectively,  "Bankruptcy  Laws") or otherwise  join in the
commencement  of any  proceeding  against the Issuer Trust under any  Bankruptcy
Law. If the  Depositor  takes  action in violation  of this  Section  10.9,  the
Property Trustee agrees, for the benefit of Holders,  that at the expense of the
Depositor,  it shall  file an  answer  with the  bankruptcy  court or  otherwise
properly contest the filing of such petition by the Depositor against the Issuer
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
Issuer Trustees or the Issuer Trust may assert.

     SECTION 10.10.     Trust Indenture Act; Conflict with Trust
Indenture Act.

     (a)  This  Trust  Agreement  is  subject  to the  provisions  of the  Trust
Indenture Act that are required 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 Issuer Trustee that is a trustee
for the purposes of the Trust Indenture Act.

     (c) If any provision hereof limits,  qualifies or conflicts with the duties
imposed by Sections 310 to and including 317 of the Trust  Indenture Act through
operation of Section 318(c) thereof,  such imposed duties shall control.  If any
provision  of this Trust  Agreement  modifies or excludes  any  provision of the
Trust Indenture Act which may be so modified or excluded,  the latter  provision
shall be deemed to apply to this Trust Agreement as so modified or excluded,  as
the case may be.

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

     SECTION 10.11.     Acceptance of Terms of Trust Agreement,
Guarantee Agreement and Indenture.

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

     IN WITNESS  WHEREOF,  the parties  hereto have  executed  this  Amended and
Restated Trust Agreement.

                  SOUTH CAROLINA ELECTRIC & GAS COMPANY, as Depositor


                         By: s/M. R. Cannon
                         Name:  M. R. Cannon
                         Title: Treasurer



                        THE BANK OF NEW YORK,
                        as Property Trustee


                         By:  s/Van K. Brown
                         Name: Van K. Brown
                         Title: Assistant Vice President



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



                         By:  s/Betty A. Cocozza
                         Name: Betty A. Cocozza
                         Title:



<PAGE>



s/K. B. Marsh
Name:  K. B. Marsh, as Administrative Trustee


s/M. R. Cannon
Name:  M. R. Cannon, as Administrative Trustee


s/ H. T. Arthur
Name: H. T. Arthur, as Administrative Trustee





<PAGE>


                                                                     Exhibit A


                     CERTIFICATE OF TRUST

                             OF

                       SCE&G TRUST I


          This  Certificate  of  Trust  of SCE&G  Trust I (the  "Trust"),  dated
October  8,  1997,  is being  duly  executed  and filed by the  undersigned,  as
trustees,  to form a business  trust under the Delaware  Business  Trust Act (12
Del. C. (S) 3801 et seq.)

          1.     Name. The name of the business trust being
formed hereby is SCE&G Trust 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 is The
Bank of New York (Delaware),  whose business address is White Clay Center, Route
273, Newark, Delaware 19711.
          IN WITNESS WHEREOF, the undersigned,  being the trustees of the Trust,
have executed this Certificate of Trust as of the date first above written.

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



        By:   s/WALTER N. GITLIN
        Name: WALTER N. GITLIN
        Title: Authorized Signatory


        s/M. R. Cannon
        M. R. Cannon, as Administrative Trustee









<PAGE>



                                                     Exhibit B


           BOOK-ENTRY-ONLY CORPORATE EQUITY ISSUES

                  Letter of Representations
           [To be Completed by Issuer and Agent]

                       SCE&G TRUST I
                     [Name of Issuer]

                    The Bank of New York
                      [Name of Agent]

                                    OCTOBER 23, 1997
                                         [Date]

Attention: General Counsel's Office
The Depository Trust Company
55 Water Street; 49th Floor
New York, NY 10041-0099

          Re:    7.55% Trust Preferred Securities, Series A
                 (Liquidation Amount $25 per Trust Preferred
                 Security)

                                   CUSIP No. 78389A203

                        [Issue Description, including CUSIP number]

Ladies and Gentlemen:

     This letter sets forth our  understanding  with respect to certain  matters
relating to the above-referenced issue (the "Securities"). Issuer is selling the
Securities  to  Credit   Suisse  First  Boston   Corporation   and   PaineWebber
Incorporated  (the "Initial  Purchaser")  pursuant to a  Underwriting  Agreement
dated October 22 , 1997 (the  "Document").  Initial Purchaser will take delivery
of the Securities through The Depository Trust Company ("DTC").  The Bank of New
York is acting as transfer  agent,  paying agent,  and registrar with respect to
the Securities (the "Agent").

     To induce DTC to accept the  Securities as eligible for deposit at DTC, and
to act in accordance with its Rules with respect to the  Securities,  Issuer and
Agent make the following representations to DTC.

     1. Prior to closing on the Securities on October 28 , 1997 , there shall be
deposited  with DTC one  Security  certificate  registered  in the name of DTC's
nominee,  Cede & Co., for each of the  Securities  with the  offering  value set
forth on Schedule A hereto,  the total of which  represents 100% of the offering
value of such  Securities.  If,  however,  the  offering  value of any  Security
exceeds $200 million,  one certificate  will be issued with respect to each $200
million of  offering  value and an  additional  certificate  will be issued with
respect to any remaining  offering value.  Each Security  certificate shall bear
the following legend:

             Unless   this   certificate   is   presented   by   an   authorized
             representative  of  The  Depository  Trust  Company,   a  New  York
             corporation  ("DTC"),  to Issuer or its agent for  registration  of
             transfer,  exchange,  or  payment,  and any  certificate  issued is
             registered  in the name of Cede & Co. or in such  other  name as is
             requested by an authorized  representative  of DTC (and any payment
             is made to Cede & Co. or to such other entity as is requested by an
             authorized  representative of DTC), ANY TRANSFER,  PLEDGE, OR OTHER
             USE HEREOF FOR VALUE OR  OTHERWISE  BY OR TO ANY PERSON IS WRONGFUL
             inasmuch  as the  registered  owner  hereof,  Cede  &  Co.,  has an
             interest herein.

If the  Securities  will be held by Agent,  as custodian  for DTC, such Security
certificate  shall remain in Agent's  custody  pursuant to the provisions of the
FAST Balance Certificate Agreement currently in effect between Agent and DTC.

     2. Issuer:  (a)  understands  that DTC has no obligation  to, and will not,
communicate  to its  Participants  or to any person  having an  interest  in the
Securities any  information  contained in the Security  certificate(s);  and (b)
acknowledges  that neither DTC's  Participants nor any person having an interest
in the  Securities  shall be deemed  to have  notice  of the  provisions  of the
Security certificate(s) by virtue of submission of such certificate(s) to DTC.

     3. In the event of any  solicitation  of consents from or voting by holders
of the  Securities,  Issuer  or Agent  shall  establish  a record  date for such
purposes  (with no provision  for  revocation of consents or votes by subsequent
holders)  and shall  send  notice of such  record  date to DTC not less shall 15
calendar  days in advance of such record  date.  Notices to DTC pursuant to this
Paragraph by telecopy shall be sent to DTC's Reorganization  Department at (212)
709-6896 or (212)  709-6897,  and receipt of such notices  shall be confirmed by
telephoning (212) 709-6870. Notices to DTC pursuant to this Paragraph by mail or
by any other means shall be sent to DTC's Reorganization Department as indicated
in Paragraph 7.

     4. In the  event of a stock  split,  recapitalization,  conversion,  or any
similar  transaction  resulting  in the  cancellation  of all or any part of the
Securities  represented thereby, the Agent shall send DTC a notice of such event
as soon as  practicable,  but in no event less than five  business days prior to
the effective date of such transaction.

     5. In the event of a full or partial redemption, Issuer or Agent shall send
a notice to DTC specifying:  (a) the amount of the redemption or refunding;  (b)
in  the  case  of a  refunding,  the  maturity  date(s)  established  under  the
refunding; and (c) the date such notice is to be distributed to Security holders
or published  (the  "Publication  Date").  Such notice shall be sent to DTC by a
secure means (e.g.,  legible telecopy,  registered or certified mail,  overnight
delivery)  in a timely  manner  designed  to assure that such notice is in DTC's
possession no later than the close of business on the business day before or, if
possible,  two business days before the Publication  Date. Issuer or Agent shall
forward  such notice  either in a separate  secure  transmission  for each CUSIP
number or in a secure  transmission  for multiple CUSIP numbers (if  applicable)
which  includes  a  manifest  or list of each  CUSIP  number  submitted  in that
transmission.  (The  party  sending  such  notice  shall have a method to verify
subsequently  the use of such  means and the  timeliness  of such  notice.)  The
Publication  Date  shall be not less than 30 days nor more than 60 days prior to
the redemption date or, in the case of an advance  refunding,  the date that the
proceeds are deposited in escrow.  Notices to DTC pursuant to this  Paragraph by
telecopy shall be sent to DTC's Call  Notification  Department at (516) 227-4039
or (516)  227-4190.  If the party sending the notice does not receive a telecopy
receipt from DTC confining that the notice has been  received,  such party shall
telephone (516)  227-4070.  Notices to DTC pursuant to this Paragraph by mail or
by any other means shall be sent to:

               Manager; Call Notification Department
               The Depository Trust Company
               711 Stewart Avenue
               Garden City, NY 11530-4719

     6. In the event of an offering  or  issuance of rights with  respect to the
Securities  outstanding,  Agent  shall send DTC's  Dividend  and  Reorganization
Departments  a notice  specifying:  (a) the  amount of and  conditions,  if any,
applicable to such rights offering or issuance; (b) any applicable expiration or
deadline  date,  or any date by which any  action on the part of holders of such
Securities is required; and (c) the Publication Date of such notice.

     The Publication Date will be as soon as practicable  after the announcement
by the Company of any such  offering  or issuance of rights with  respect to the
Securities  represented  thereby.  DTC requires that the Publication Date be not
less  than 30 days nor more  than 60 days  prior to the  related  payment  date,
distribution date, or issuance date, respectively.

     Notices to DTC  pursuant to this  Paragraph  by  telecopy  shall be sent to
DTC's Dividend  Department at (212) 709-1623,  and receipt of such notices shall
be confirmed by telephoning (212) 709-1282. Notices to DTC pursuant to the above
by mail or any other means shall be sent to:

               Supervisor; Stock Dividends
               Dividend Department
               7 Hanover Square; 24th Floor
               New York, NY 10004-2695

     Notices to DTC  pursuant to this  Paragraph  by  telecopy  shall be sent to
DTC's Reorganization Department at (212) 709-1093, and receipt of such fax shall
be confirmed  by  telephoning  (2l2) 709-- 1063.  Notices to DTC pursuant to the
above by mail or any other means shall be sent to

               Supervisor; Rights Offerings
               Reorganization Department
               7 Hanover Square; 23rd Floor
               New York, NY 10004-2695

     7. In the  event of an  invitation  to  tender  the  Securities  (including
mandatory tenders, exchanges, and capital changes), notice by Issuer or Agent to
Security holders  specifying the terms of the tender and the Publication Date of
such  notice  shall be sent to DTC by a secure  means in the manner set forth in
Paragraph  5.  Notices to DTC  pursuant to this  Paragraph  and notices of other
corporate actions by telecopy shall be sent to DTC's  Reorganization  Department
at (212)  709-1093  or (212)  709-1094,  and  receipt of such  notices  shall be
confirmed by telephoning (212) 709-6884. Notices to DTC pursuant to the above by
mail or by any other means shall be sent to:

               Manager; Reorganization Department
               Reorganization Window
               The Depository Trust Company
               7 Hanover Square; 23rd Floor
               New York NY 10004-2695

     8. All  notices  and payment  advices  sent to DTC shall  contain the CUSIP
number of the  Securities  (listed on  Schedule A hereto)  and the  accompanying
description  of such  Securities,  which,  as of the date of this  letter,  is "
78389A203 ."

     9.  Issuer  or Agent  shall  provide  written  notice of  dividend  payment
information to a standard dividend  announcement service subscribed to by DTC as
soon as the information is available.  In the event that no such service exists,
Issuer or Agent shall  provide such notice  directly to DTC  electronically,  as
previously  arranged  by  Issuer  or  Agent  and  DTC,  as soon  as the  payment
information  is available.  If electronic  transmission  has not been  arranged,
absent any other arrangements  between Issuer or Agent and DTC, such information
should be sent by telecopy to DTC's  Dividend  Department  at (212)  709-1723 or
(212)  709-1686,  and receipt of such notices shall be confirmed by  telephoning
(212)  709-1270.  Notices to DTC  pursuant  to the above by mail or by any other
means shall be sent to:

               Manager; Announcements
               Dividend Department
               The Depository Trust Company
               7 Hanover Square; 22nd Floor
               New York NY 10004-2695

     After  establishing  the amount of payment to be made on the  Securities in
question,  Issuer or Agent will notify DTC's Dividend  Department of the payment
and payment date preferably five, but not less than two,  business days prior to
the effective date for such transaction.

     10. Issuer or Agent shall provide  CUSIP-level detail for dividend payments
to DTC no later than noon (Eastern Time) on the payment date.

     11. Dividend  payments and cash  distributions  shall be received by Cede &
Co. as nominee of DTC, or its  registered  assigns,  in same-day  funds no later
shall  2:30  p.m.  (Eastern  Time)  on  each  payment  date.  Absent  any  other
arrangements  between  Issuer or Agent  and DTC,  such  funds  shall be wired as
follows:

               The Chase Manhattan Bank
               ABA # 021 000 021
               For credit to a/c Cede & Co.
               c/o The Depository Trust Company
               Dividend Deposit Account # O66-026776

     12. Redemption payments shall be received by Cede & Co., as nominee of DTC,
or its registered  assigns;  in same-day funds no later than 2:30 p.m.  (Eastern
Time) on payment date. Absent any other arrangements between Agent and DTC, such
funds shall be wired as follows:

               The Chase Manhattan Bank
               ABA # 021 000 021
               For credit to a/c Cede & Co.
               c/o The Depository Trust Company
               Redemption Deposit Account # 066-027306

     13.  Reorganization  payments  resulting  from  corporate  actions (such as
tender offers or mergers) shall be received by Cede & Co., as nominee of DTC, or
its  registered  assigns,  in same-day  funds no later shall 2:30 p.m.  (Eastern
Time) on payment date. Absent any other arrangements between Agent and DTC, such
funds shall be wired as follows:

               The Chase Manhattan Bank
               ABA # 021 000 021
               For credit to a/c Cede & Co.
               c/o The Depository Trust Company
               Reorganization Deposit Account # O66-0276O8

     14.  DTC may direct  Issuer or Agent to use any other  number or address as
the number or address to which notices or payments of dividends,  distributions,
or redemption proceeds may be sent.

     15.  In the  event of a  redemption,  acceleration,  or any  other  similar
transaction  (e.g.,  tender made and accepted in response to Issuer's or Agent's
invitation)  necessitating  a reduction  in the  aggregate  principal  amount of
Securities  outstanding  or an  advance  refunding  of  part  of the  Securities
outstanding,  DTC, in its  discretion:  (a) may request Issuer or Agent to issue
and  authenticate  a new Security  certificate;  or (b) may make an  appropriate
notation  on the  Security  certificate  indicating  the date and amount of such
reduction in the number of Securities  outstanding,  except in the case of final
redemption,  in which case the certificate  will be presented to Issuer or Agent
prior to payment, if required.

  16. In the event that Issuer  determines that beneficial  owners of Securities
shall be able to obtain  certificated  Securities,  Issuer or Agent shall notify
DTC of the  availability of certificates.  In such event,  Issuer or Agent shall
transfer and exchange  certificates in appropriate  amounts,  as required by DTC
and others.

     17. DTC may  discontinue  providing its services as  securities  depository
with respect to the Securities at any time by giving reasonable notice to Issuer
or Agent (at which  time DTC will  confirm  with  Issuer or Agent the  aggregate
principal amount of Securities outstanding).  Under such circumstances, at DTC's
request Issuer and Agent shall  cooperate  fully with DTC by taking  appropriate
action to make available one or more separate certificates evidencing Securities
to any DTC Participant having Securities credited to its DTC accounts.

     18.  Nothing  herein shall be deemed to require  Agent to advance  funds on
behalf of Issuer.

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

     20. This Letter of  Representations  is governed by, and shall be construed
in accordance  with,  the laws of the State of New York without giving effect to
principles of conflicts of Law.

     21. The following  riders,  attached hereto,  are hereby  incorporated into
this Letter of Representations:

Notes:
A. If there is an Agent (as defined in this Letter of Representations), Agent as
well as Issuer  must sign this  Letter.  If there is no Agent,  in signing  this
Letter Issuer  itself  undertakes  to perform all of the  obligations  set forth
herein Very truly yours,

B. Schedule B contains statements that DTC believes accurately describe DTC, the
method of effecting book-entry transfers of securities  distributed through DTC,
and certain related matters.

                                  SCE&G Trust I
                                    (Issuer)

                               By: s/M. R. Cannon
                               (Authorized Officer's Signature)
                                   M. R. Cannon
                                   Administrative Trustee


<PAGE>


   The Bank of New York
      (Agent)
By:
    (Authorized Office's Signature)

Received and Accepted:
THE DEPOSITORY TRUST COMPANY

By:

CC:  Underwriter
       Underwriter's Counsel




<PAGE>




                                             SCHEDULE A


       2,000,000 Trust Preferred Securities. Series A (Liquidation

       Amount $25 per Trust Preferred Security)

                      (Describe Issue)




CUSIP Number           Share Total        Offering ($) Value

78389A 203              2,000,000            50,000,000




<PAGE>






                                               SCHEDULE B


                SAMPLE OFFERING DOCUMENT LANGUAGE
                DESCRIBING BOOK-ENTRY-ONLY ISSUANCE
           (Prepared by DTC--bracketed material may be
              applicable only to certain issues)

     1.  The  Depository  Trust  Company  ("DTC"),  New  York,  NY,  will act as
securities depository for the securities (the "Securities"). The Securities will
be issued as  fully-registered  securities  registered in the name of Cede & Co.
(DTC's partnership nominee).  One fully-registered  Security certificate will be
issued for [each issue of] the  Securities,  [each] in the  aggregate  principal
amount  of such  issue,  and will be  deposited  with  DTC.  [If,  however,  the
aggregate principal amount of [any] issue exceeds $200 million,  one certificate
will be issued  with  respect to each $200  million of  principal  amount and an
additional  certificate  will be issued with respect to any remaining  principal
amount of such issue.]

     2. DTC is a  limited-purpose  trust  company  organized  under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning  of the New  York  Uniform  Commercial  Code,  and a  "clearing  agency"
registered  pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities that its participants ("Participants") deposit
with DTC. DTC also facilitates the settlement  among  Participants of securities
transactions,  such as transfers and pledges,  in deposited  securities  through
electronic computerized  book-entry changes in Participants'  accounts,  thereby
eliminating the need for physical  movement of securities  certificates.  Direct
Participants  include  securities  brokers and dealers,  banks, trust companies,
clearing corporations, and certain other organizations. DTC is owned by a number
of its  Direct  Participants  and by the New  York  Stock  Exchange,  Inc.,  the
American  Stock  Exchange,  Inc.,  and the National  Association  of  Securities
Dealers,  Inc.  Access to the DTC  system is also  available  to others  such as
securities brokers and dealers, banks, and trust companies that clear through or
maintain a custodial relationship with a Direct Participant,  either directly or
indirectly  ("Indirect  Participants").  The  Rules  applicable  to DTC  and its
Participants are on file with the Securities and Exchange Commission.

     3. Purchases of Securities  under the DTC system must be made by or through
Direct  Participants,  which will receive a credit for the  Securities  on DTC's
records.  The  ownership  interest of each  actual  purchaser  of each  Security
("Beneficial  Owner")  is in turn to be  recorded  on the  Direct  and  Indirect
Participants'  records.  Beneficial Owners will not receive written confirmation
from DTC of their  purchase,  but  Beneficial  Owners  are  expected  to receive
written confirmations providing details of the transaction,  as well as periodic
statements of their holdings,  from the Direct or Indirect  Participant  through
which the Beneficial Owner entered into the transaction.  Transfers of ownership
interests in the Securities are to be  accomplished by entries made on the books
of Participants  acting on behalf of Beneficial  Owners.  Beneficial Owners will
not receive  certificates  representing their ownership interests in Securities,
except in the event  that use of the  book-entry  system for the  Securities  is
discontinued.

     4.  To  facilitate  subsequent  transfers,   all  Securities  deposited  by
Participants with DTC are registered in the name of DTC's  partnership  nominee,
Cede & Co. The deposit of Securities with DTC and their registration in the name
of Cede & Co. effect no change in beneficial ownership.  DTC has no knowledge of
the actual Beneficial  Owners of the Securities;  DTC's records reflect only the
identity  of the Direct  Participants  to whose  accounts  such  Securities  are
credited,  which may or may not be the Beneficial  Owners. The Participants will
remain  responsible  for  keeping  account of their  holdings on behalf of their
customers.

     5.  Conveyance  of  notices  and  other  communications  by DTC  to  Direct
Participants,  by Direct  Participants to Indirect  Participants,  and by Direct
Participants and Indirect  Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory  requirements as
may be in effect from time to time.

     6.  Redemption  notices  shall  be  sent to DTC.  If less  than  all of the
Securities within an issue are being redeemed, DTC's practice is to determine by
lot the amount of the  interest of each Direct  Participant  in such issue to be
redeemed.]

     7.  Neither  DTC nor  Cede & Co.  will  consent  or vote  with  respect  to
Securities.  Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as
soon as possible  after the record date.  The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct  Participants  to whose accounts the
Securities are credited on the record date  (identified in a listing attached to
the Omnibus Proxy).

     8.  Redemption  proceeds,  distributions,  and  dividend  payments  on  the
Securities  will be made to Cede & Co., as nominee of DTC.  DTC's practice is to
credit  Direct  Participants'   accounts,   upon  DTC's  receipt  of  funds  and
corresponding  detail  information  from  Issuer  or  Agent on  payable  date in
accordance with their  respective  holdings shown on DTC's records.  Payments by
Participants to Beneficial Owners will be governed by standing  instructions and
customary  practices,  as is the case with  securities  held for the accounts of
customers  in  bearer  form or  registered  in  "street  name,"  and will be the
responsibility of such Participant and not of DTC, Agent, or Issuer,  subject to
any statutory or regulatory  requirements as may be in effect from time to time.
Payment of redemption  proceeds,  distributions,  and dividends to Cede & Co. is
the  responsibility of Issuer or Agent,  disbursement of such payments to Direct
Participants shall be the responsibility of Cede & Co., and disbursement of such
payments to the  Beneficial  Owners  shall be the  responsibility  of Direct and
Indirect Participants.

      9. A  Beneficial  Owner shall give notice to elect to have its  Securities
purchased or tendered, through its Participant,  to [Tender/Remarketing]  Agent,
and shall effect delivery of such  Securities by causing the Direct  Participant
to transfer the Participant's  interest in the Securities,  on DTC's records, to
[Tender/Remarketing]  Agent. The requirement for physical delivery of Securities
in  connection  with an optional  tender or a mandatory  purchase will be deemed
satisfied when the ownership  rights in the Securities are transferred by Direct
Participants  on DTC's  records and followed by a book-entry  credit of tendered
securities to [Tender/Remarketing] Agents DTC account.]

     10. DTC may  discontinue  providing its services as  securities  depository
with respect to the Securities at any time by giving reasonable notice to Issuer
or Agent.  Under such  circumstances,  in the event that a successor  securities
depository is not obtained, Security certificates are required to be printed and
delivered.

     11.  Issuer  may  decide to  discontinue  use of the  system of  book-entry
transfers  through DTC (or a successor  securities  depository).  In that event,
Security certificates will be printed and delivered.

     12. The  information in this section  concerning  DTC and DTC's  book-entry
system has been obtained.

