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<DESCRIPTION>FORM 10-K
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================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-K

              Annual Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


                  FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001

                          Commission file number 1-2918

                                  ASHLAND INC.
                            (a Kentucky corporation)
                              I.R.S. No. 61-0122250
                           50 E. RiverCenter Boulevard
                                  P.O. Box 391
                         Covington, Kentucky 41012-0391

                        Telephone Number: (859) 815-3333

                Securities Registered Pursuant to Section 12(b):


                                              Name of each exchange
Title of each class                            on which registered
-------------------                           -------------------

Common Stock, par value $1.00 per share     New York Stock Exchange
                                             and Chicago Stock Exchange
Rights to Purchase Series A Participating   New York Stock Exchange
  Cumulative Preferred Stock                 and Chicago Stock Exchange


              Securities Registered Pursuant to Section 12(g): None

     Indicate  by check  mark  whether  the  Registrant  (1) has  filed all
reports  required  to be filed  by  Section  13 or 15(d) of the  Securities
Exchange  Act of 1934 during the  preceding  12 months (or for such shorter
period that the Registrant was required to file such reports),  and (2) has
been subject to such filing requirements for the past 90 days.
Yes [X] No
     Indicate by check mark if disclosure of delinquent  filers pursuant to
Item  405 of  Regulation  S-K is not  contained  herein,  and  will  not be
contained,  to the best of Registrant's  knowledge,  in definitive proxy or
information  statements  incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [X]
     At October  31,  2001,  based on the New York Stock  Exchange  closing
price, the aggregate market value of voting stock held by non-affiliates of
the  Registrant  was  approximately  $2,759,644,567.  In  determining  this
amount,  the  Registrant  has  assumed  that its  directors  and  executive
officers are affiliates. Such assumption shall not be deemed conclusive for
any other purpose.
     At October 31,  2001,  there were  69,041,473  shares of  Registrant's
common stock outstanding.

                       Documents Incorporated by Reference

     Portions of Registrant's  Annual Report to Shareholders for the fiscal
year ended  September 30, 2001 are  incorporated by reference into Parts I,
II and IV.
     Portions of  Registrant's  definitive  Proxy Statement for its January
31, 2002 Annual Meeting of Shareholders  are incorporated by reference into
Part III.
================================================================================
<PAGE>
                             TABLE OF CONTENTS
                                                                        Page
PART I

 Item 1.  Business ......................................................  1
          APAC...........................................................  1
          Ashland Distribution...........................................  2
          Ashland Specialty Chemical.....................................  3
          Valvoline......................................................  4
          Refining and Marketing.........................................  5
          Miscellaneous..................................................  8
 Item 2.  Properties..................................................... 11
 Item 3.  Legal Proceedings.............................................. 11
 Item 4.  Submission of Matters to a
           Vote of Security Holders...................................... 12
 Item X.  Executive Officers of Ashland.................................. 12

PART II

 Item 5.  Market for Registrant's Common Stock and Related
           Security Holder Matters....................................... 13
 Item 6.  Selected Financial Data........................................ 13
 Item 7.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations........................... 13
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk..... 13
 Item 8.  Financial Statements and Supplementary Data.................... 13
 Item 9.  Changes in and Disagreements with Accountants
           on Accounting and Financial Disclosure........................ 13

PART III

Item 10.  Directors and Executive Officers of the Registrant............. 13
Item 11.  Executive Compensation......................................... 14
Item 12.  Security Ownership of Certain Beneficial
           Owners and Management......................................... 14
Item 13.  Certain Relationships and Related Transactions................. 14

PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports
           on Form 8-K................................................... 14


<PAGE>


                                   PART I

ITEM 1. BUSINESS

     Ashland Inc. is a Kentucky corporation, organized on October 22, 1936,
with  its  principal   executive  offices  located  at  50  E.  RiverCenter
Boulevard,  Covington,  Kentucky 41011 (Mailing Address:  50 E. RiverCenter
Boulevard, P.O. Box 391, Covington,  Kentucky 41012-0391) (Telephone: (859)
815-3333).  The terms  "Ashland" and the  "Company" as used herein  include
Ashland Inc. and its  consolidated  subsidiaries,  except where the context
indicates otherwise.

     Ashland's  businesses are grouped into five industry  segments:  APAC,
Ashland  Distribution,  Ashland Specialty Chemical,  Valvoline and Refining
and  Marketing.  Financial  information  about these segments for the three
fiscal  years ended  September  30, 2001 is set forth on pages 54 and 55 of
Ashland's Annual Report to Shareholders for the fiscal year ended September
30, 2001 ("Annual Report").

     APAC  performs  asphalt  and  concrete  contract   construction  work,
including  highway paving and repair,  excavation  and grading,  and bridge
construction,  and produces asphaltic and ready-mix concrete, crushed stone
and other aggregate in the southern and midwestern United States.

     Ashland  Distribution  distributes  industrial chemicals and solvents,
plastics,  fiber  reinforcements  and fine ingredients in North America and
plastics in Europe.  Ashland  Distribution also provides  environmental and
energy management  services.  Ashland Specialty  Chemical  manufactures and
sells a wide variety of high-performance  chemicals,  resins,  products and
services and certain petrochemicals.

     Valvoline is a producer and marketer of premium packaged motor oil and
automotive chemicals, including appearance products,  antifreeze,  filters,
rust  preventives  and coolants.  In addition,  Valvoline is engaged in the
"fast oil change"  business  through outlets  operating under the Valvoline
Instant Oil Change(R) name.

     Marathon Ashland Petroleum LLC ("MAP"),  a joint venture with Marathon
Oil  Company,  operates  seven  refineries  with a total crude oil refining
capacity  of 935,000  barrels per day.  Refined  products  are  distributed
through a network of independent and company-owned  outlets in the Midwest,
the upper Great Plains and the  southeastern  United  States.  Marathon Oil
Company  holds a 62% interest in MAP,  and Ashland  holds a 38% interest in
MAP. Ashland accounts for its investment in MAP using the equity method.

     At September 30, 2001,  Ashland and its consolidated  subsidiaries had
approximately 25,100 employees (excluding contract employees).


                                    APAC

     The APAC  group of  companies  is the  nation's  largest  asphalt  and
concrete paving company and is a major supplier of construction  materials.
APAC performs construction work, such as paving,  repairing and resurfacing
highways,  streets,  airports,  residential  and  commercial  developments,
sidewalks  and  driveways,  and  grading  and base work.  In  addition,  it
performs a number of  construction  services such as excavation and related
activities  in  the  construction  of  bridges  and  structures,   drainage
facilities and underground utilities. APAC conducts its business through 45
divisions operating in 14 southern and midwestern states.  Distinguished by
their local  identities,  these divisions  provide  construction  services,
technologies  and materials  throughout  the regions in which they operate.
These  divisions are supported by management  and  administrative  staff in
Atlanta, Georgia.

     To  deliver  its  services  and  products,   APAC  utilizes  extensive
aggregate-producing properties and construction equipment. It currently has
37 permanent  operating  quarry  locations,  58 other aggregate  production
facilities,  68 ready-mix concrete plants, 248 hot-mix asphalt plants and a
fleet of over 17,000 mobile equipment units,  including heavy  construction
equipment and  transportation-related  equipment.  In certain  market areas
APAC  is  vertically  integrated  with  asphalt,  aggregate  and  ready-mix
operations, all complementing one another.

     Raw aggregate generally consists of sand, gravel,  granite,  limestone
and sandstone.  About 30% of the raw aggregate  produced by APAC is used in
APAC's  own  contract  construction  work  and the  production  of  various
processed construction  materials.  The remainder is sold to third parties.
APAC also purchases substantial quantities

                                     1
<PAGE>


of raw  aggregate  from other  producers  whose  proximity  to the job site
renders  it  economically  attractive.  Most other raw  materials,  such as
liquid asphalt,  portland cement and reinforcing  steel, are purchased from
third parties.

     APAC  has   customers   in  both  the  public  and  private   sectors.
Approximately  68% of APAC's revenues are derived directly from highway and
other public sector sources.  The other 32% are derived from industrial and
commercial  customers,  private  developers  and other  contractors  to the
public sector.

     Climate and weather  significantly affect revenues in the construction
business.  Due to its  location,  APAC  tends  to enjoy a  relatively  long
construction  season.  Most of APAC's  operating income is generated during
the construction period of May to October.

     Total  backlog at September 30, 2001 was $1,629  million,  compared to
$1,397 million at September 30, 2000. APAC includes a construction  project
in its backlog when a contract is awarded or a firm letter of commitment is
obtained  and  funding is in place.  The backlog at  September  30, 2001 is
considered  firm,  and a major  portion is expected to be completed  during
fiscal 2002.


                            ASHLAND DISTRIBUTION

     Ashland   Distribution   distributes   chemicals,    plastics,   fiber
reinforcements  and fine  ingredients  in North  America  and  plastics  in
Europe.  Ashland  Distribution owns or leases approximately 70 distribution
facilities  in North America and 20  distribution  facilities in 13 foreign
countries. Ashland Distribution is comprised of the following divisions:

     INDUSTRIAL  CHEMICALS  &  SOLVENTS  DIVISION - This  division  markets
specialty and  industrial  chemicals,  additives and solvents to industrial
chemical users in major markets through  distribution centers in the United
States,  Canada, Mexico and Puerto Rico, as well as some export operations.
It distributes approximately 7,000 chemicals,  solvents,  additives and raw
materials made by many of the nation's leading chemical manufacturers and a
growing number of offshore  producers.  It  specializes in supplying  mixed
truckloads and less-than-truckload quantities to many industries, including
the paint and coatings, inks, adhesives,  polymer,  rubber,  industrial and
institutional compounding,  automotive, appliance and paper industries. The
Industrial  Chemicals & Solvents  division  offers  e-commerce  ordering at
www.go2ashland.com.

     GENERAL  POLYMERS  DIVISION - This  division  markets a broad range of
branded thermoplastic resins to injection molders, extruders, blow molders,
and  rotational  molders  in the  plastics  industry  through  distribution
locations in the United  States,  Canada,  Mexico and Puerto Rico.  It also
provides   plastic   material   transfer   and   packaging   services   and
less-than-truckload  quantities  of  packaged  thermoplastics.  The General
Polymers division offers e-commerce ordering at www.gpashland.com.

     FRP SUPPLY  DIVISION  - This  division  markets  mixed  truckload  and
less-than-truckload   quantities   of   polyester   thermosetting   resins,
fiberglass  and  other  specialty  reinforcements,   catalysts  and  allied
products to  customers  in the  reinforced  plastics  and  cultured  marble
industries  through   distribution   facilities  located  throughout  North
America.   The  FRP  Supply   division   offers   e-commerce   ordering  at
www.eFRP.com.

     FINE  INGREDIENTS  DIVISION - This division  distributes  cosmetic and
pharmaceutical specialty chemicals and food-grade and nutritional additives
and ingredients across North America.  The Fine Ingredients division offers
e-commerce ordering at www.FIDonline.com.

     ASHLAND PLASTICS EUROPE DIVISION - This division markets a broad range
of  thermoplastics  to processors in Europe.  Ashland  Plastics  Europe has
distribution centers located in Belgium, England, Finland, France, Germany,
Ireland,  Italy,  the  Netherlands,  Norway,  Poland,  Portugal,  Spain and
Sweden.  The  division  also has a small  compound  manufacturing  facility
located in Spain.

     SERVICE  BUSINESSES  DIVISION  -  This  division  consists  of  Energy
Services and Environmental  Services.  Energy Services provides  customized
management of energy purchasing,  supply and transportation.  Environmental
Services  provides  customers  chemical  waste  collection,   disposal  and
recycling  services,  working in  cooperation  with chemical waste services
companies.   Environmental   Services   offers   e-commerce   ordering   at
www.ashlandES.com.
                                     2
<PAGE>


                         ASHLAND SPECIALTY CHEMICAL

     Ashland  Specialty   Chemical   manufactures  and  supplies  specialty
chemical  products  and services to  industries  including  the  adhesives,
automotive,  composites,  foundry, merchant marine, paint, paper, plastics,
semiconductor  fabrication,  watercraft  and  water  treatment  industries.
Ashland  Specialty  Chemical owns and operates 33 manufacturing  facilities
and  participates  in 14  manufacturing  joint  ventures  in 18  countries.
Ashland Specialty Chemical is comprised of the following divisions:

     COMPOSITE  POLYMERS DIVISION - This division  manufactures and sells a
broad  range of  chemical-resistant,  fire-retardant,  general-purpose  and
high-performance  marine  grades of  unsaturated  polyester and vinyl ester
resins and  gelcoats  for the  reinforced  plastics  industry.  Key markets
include  the  transportation,   construction  and  marine  industries.  The
division has manufacturing plants in Jacksonville and Fort Smith, Arkansas;
Los   Angeles,   California;   Bartow,   Florida;   McMinnville,    Oregon;
Philadelphia,  Pennsylvania;  Johnson Creek,  Wisconsin;  Kelowna,  British
Columbia,  Canada; Kunshan,  China; Porvoo and Lahti, Finland;  Sauveterre,
France;  Miszewo,  Poland;  Benicarlo,  Spain;  and, through separate joint
ventures has manufacturing  plants in Sao Paolo,  Brazil and Jeddah,  Saudi
Arabia. In addition,  the division also manufactures products through other
Ashland   Specialty   Chemical   facilities   located  in  Neville  Island,
Pennsylvania and Mississauga, Ontario, Canada.

     FOUNDRY  PRODUCTS  DIVISION  - This  division  manufactures  and sells
foundry  chemicals   worldwide,   including   sand-binding  resin  systems,
refractory  coatings,  release agents,  engineered sand additives and riser
sleeves.  This division  serves the global metal  casting  industry from 24
manufacturing locations in 18 countries.

     DREW  INDUSTRIAL   DIVISION  -  This  division  supplies   specialized
chemicals  and  consulting  services  for the  treatment  of boiler  water,
cooling  water,  steam,  fuel and waste streams.  It also supplies  process
chemicals  and  technical  services  to  the  pulp  and  paper  and  mining
industries and additives to  manufacturers  of latex and paint. It conducts
operations  throughout  North  America,  Europe  and the Far  East  through
subsidiaries,  joint venture companies and  distributors.  The division has
manufacturing  plants in Kearny,  New Jersey;  Houston,  Texas;  Sydney and
Perth, Australia;  Singapore; Ajax, Ontario, Canada;  Somercotes,  England;
and Auckland, New Zealand.

     ELECTRONIC CHEMICALS DIVISION - This division manufactures and sells a
variety of ultrapure  chemicals  for the worldwide  semiconductor  industry
through various manufacturing locations and also custom blends and packages
ultrapure  liquid  chemicals  to  customer  specifications.   The  division
operates manufacturing plants in Pueblo,  Colorado;  Easton,  Pennsylvania;
Dallas, Texas; Pyongtaek-Shi, Kyonggi-Do, Korea; Milan, Italy and through a
joint venture with Union Petrochemical  Corporation,  an  ultrapure-process
chemicals  manufacturing  facility in Taiwan.  In addition,  it enters into
long-term  agreements  to  provide  complete  on-site  chemical  management
services,  including  purchasing,  warehousing and delivering chemicals for
in-plant  use,  at major  facilities  of large  consumers,  of high  purity
chemicals.  The  division's  Fab Services  business  provides  full-service
equipment  parts-cleaning  refurbishment  and  management  services  to the
semiconductor manufacturing industry from facilities in Chandler and Tempe,
Arizona; and Austin and Carrollton, Texas.

     SPECIALTY POLYMERS & ADHESIVES  DIVISION - This division  manufactures
and sells  specialty  phenolic resins for paper  impregnation  and friction
material  bonding;  acrylic  polymers  for  pressure-sensitive   adhesives;
emulsion  polymer   isocyanate   adhesives  for  structural  wood  bonding;
polyurethane  and  epoxy  structural   adhesives  for  bonding   fiberglass
reinforced plastics,  composites,  thermoplastics and metals in automotive,
recreational,  and industrial  applications;  induction bonding systems for
thermoplastic  materials;  elastomeric  polymer  adhesives and butyl rubber
roofing  tapes  for  commercial  roofing  applications;  and  vapor-curing,
high-performance  urethane coatings systems. It has manufacturing plants in
Calumet  City,  Illinois;  Norwood  and  Totowa,  New  Jersey;  Ashland and
Columbus, Ohio; White City, Oregon; and Kidderminster, England.

     DREW MARINE DIVISION - This division supplies specialty  chemicals for
water  and fuel  treatment  and  general  maintenance,  as well as  sealing
products,  welding and  refrigerant  products and fire  fighting and safety
services to the  world's  merchant  marine  fleet.  Drew  Marine  currently
provides shipboard technical service for more than 11,000 vessels from more
than 100 locations serving approximately 900 ports throughout the world.

     PETROCHEMICALS  DIVISION - This division manufactures maleic anhydride
at Neal,  West Virginia and also markets  maleic  anhydride and methanol in
North America.
                                     3
<PAGE>

OTHER MATTERS

     For information on Ashland Distribution and Ashland Specialty Chemical
and federal,  state and local statutes and regulations  governing  releases
into,  or  protection  of,  the  environment,   see  "Item  1.  Business  -
Miscellaneous  -  Environmental  Matters" and "Item 3. Legal  Proceedings -
Environmental Proceedings" in this Form 10-K.


                                 VALVOLINE

     The  Valvoline  Company,  a division  of  Ashland,  is a  marketer  of
premium-branded  automotive  and  industrial  oils,  automotive  chemicals,
automotive appearance products and automotive services,  with sales in more
than 140 countries.  The Valvoline(R) trademark was federally registered in
1873  and is the  oldest  trademark  for a  lubricating  oil in the  United
States. Valvoline is comprised of the following business units:

     NORTH AMERICAN  PRODUCTS - This unit,  Valvoline's  largest  operating
division,  markets  automotive,   commercial,  and  industrial  lubricants,
automotive chemicals and automotive  appearance products to a broad network
of North American customers. This unit markets Valvoline-branded motor oil,
one of the top selling brands in the U.S.  private  passenger car and light
truck market, and premium synthetic  SynPower(R)  automobile  chemicals for
"under-the-hood" use. During fiscal 2001, Valvoline successfully introduced
MaxLife(TM)  motor oil, the first  lubricant  for  vehicles  with more than
75,000 miles.

     North American  Products also markets Eagle One(R) premium  automotive
appearance   products,   Zerex(R)   antifreeze  and  Pyroil(R)   automotive
chemicals.  Zerex is the  second  leading  antifreeze  brand in the  United
States. This division also markets R-12, an automotive refrigerant that was
phased out of production in 1995. R-12 is being replaced in the market by a
new  generation of  refrigerants  and  Valvoline's  inventories of R-12 are
expected to be depleted in fiscal 2002.

     The domestic  commercial  and  specialty  products  group of the North
American  Products  unit  has a  strategic  alliance  with  Cummins  Engine
Company, Inc. to distribute heavy-duty lubricants to the commercial market.

     In September 2001, Valvoline introduced Spirit(TM) 3-D Foam. Spirit is
a spray-on,  peel-off 3-D foam that can be used for spraying spirit slogans
on cars, SUVs and trucks, as well as around the home, office or school.

     EAGLE  ONE - Eagle  One is a brand of  premium  automobile  appearance
chemicals  for  "above-the-hood"  applications.   Products  include  waxes,
polishes and wheel  cleaners.  Managed by Valvoline as a separate  business
unit,  Eagle One markets its products  through  Valvoline's  North American
Products and Valvoline International divisions.

     VALVOLINE  INTERNATIONAL - Valvoline  International  markets Valvoline
branded  products  and Eagle One  automotive  appearance  products  through
company-owned  affiliates  or divisions in Argentina,  Australia,  Austria,
Belgium,  Brazil,  Denmark,  Finland,  Germany,  Great Britain,  Italy, the
Netherlands,  Poland, South Africa, Sweden and Switzerland.  TECTYL(R) rust
preventives  are  marketed in Europe.  Licensees  and  distributors  market
certain  products  in other  parts of  Europe,  Mexico,  Central  and South
America, the Far East, the Middle East and certain African countries. Joint
ventures  have been  established  in China,  Ecuador,  India,  Thailand and
Venezuela.  Packaging  and  blending  plants  and  distribution  centers in
Australia,   Canada,   the   Netherlands   and  the  United  States  supply
international customers.

     VALVOLINE INSTANT OIL CHANGE(R)  ("VIOC") - VIOC is one of the largest
competitors  in the  expanding  U.S.  "fast oil change"  service  business,
providing  Valvoline with a significant  share of the installed  segment of
the  passenger  car and light truck motor oil market.  As of September  30,
2001, 364 company-owned  and 311 franchised  service centers were operating
in 38 states.

     VIOC has continued its customer service innovation through its Maximum
Vehicle Performance program ("MVP").  MVP is a computer-based  program that
maintains  system-wide  service records on all customer vehicles.  MVP also
contains a database  on all car  models,  which  allows  employees  to make
service recommendations based on a vehicle owner's manual recommendations.

                                     4
<PAGE>


                           REFINING AND MARKETING

     Refining  and  Marketing  operations  are  conducted  by MAP  and  its
subsidiaries,    including   its   wholly-owned   subsidiaries,    Speedway
SuperAmerica LLC and Marathon  Ashland Pipe Line LLC.  Marathon Oil Company
("Marathon")  holds a 62% interest in MAP and Ashland  holds a 38% interest
in MAP.

REFINING

     MAP owns and operates  seven  refineries  with an  aggregate  refining
capacity of 935,000  barrels of crude oil per  calendar  day (1 barrel = 42
United States  gallons).  The table below sets forth the location and daily
crude  oil  throughput  capacity  (measured  in  barrels)  of each of MAP's
refineries as of September 30, 2001:

 Garyville, Louisiana........................................... 232,000
 Catlettsburg, Kentucky......................................... 222,000
 Robinson, Illinois............................................. 192,000
 Detroit, Michigan..............................................  74,000
 Canton, Ohio...................................................  73,000
 Texas City, Texas..............................................  72,000
 St. Paul Park, Minnesota.......................................  70,000
                                                                 -------
 Total.......................................................... 935,000
                                                                 =======

     MAP's   refineries   include   crude  oil   atmospheric   and   vacuum
distillation,    fluid    catalytic    cracking,    catalytic    reforming,
desulfurization   and  sulfur  recovery  units.  The  refineries  have  the
capability  to process a wide variety of crude oils and to produce  typical
refinery products,  including reformulated gasoline ("RFG"). In addition to
typical refinery products, the Catlettsburg refinery, an ISO-9000 certified
facility, manufactures lubricating oils and a wide range of petrochemicals.
For the twelve months ended September 30, 2001, 76% of MAP's  production of
lubricating  oils was purchased by Valvoline and 38% of MAP's production of
petrochemicals was purchased by Ashland Distribution.

     MAP also produces a wide range of asphalt  products,  petroleum  pitch
(primarily  used in the  graphite  electrode,  clay  target and  refractory
industries), aromatics, aliphatic hydrocarbons, cumene, base oil, slack wax
and molten sulfur.

     The table below sets forth  MAP's  refinery  total input and  refinery
production by product group for the twelve months ended September 30, 2001,
2000  and  1999.   Refinery  total  inputs  include  crude  oil  and  other
feedstocks.
<TABLE>
<CAPTION>


                                                          Twelve Months Ended September 30
                                                     ------------------------------------------
     <S>                                               <C>              <C>              <C>

                                                       2001             2000             1999
                                                       ----             ----             ----
     Refinery Input
     (in thousands of barrels per day)               1,051.0          1,033.4           1,034.0
     -----------------------------------

     Refined Product Yields
     (in thousands of barrels per day)
     -----------------------------------
     Gasoline...........................               560.5            559.0             565.5
     Distillates........................               278.7            271.5             265.6
     Propane............................                21.2             21.0              22.2
     Feedstocks & Special Products......                69.9             68.9              64.9
     Heavy Fuel Oils....................                44.7             41.2              45.1
     Asphalt............................                74.5             73.3              70.4
                                                     -------          -------           -------
                      Total.............             1,049.5          1,034.9           1,033.7
                                                     =======          =======           =======
</TABLE>


     Planned maintenance activities requiring temporary shutdown of certain
refinery operating units are periodically  performed at each refinery.  MAP
completed major  turnarounds at the Robinson and Detroit  refineries in the
twelve months ended September 30, 2001, and at the Catlettsburg refinery in
the period ended September 30, 2000.

                                     5
<PAGE>


     The  Garyville,  Louisiana  coker  unit  project  achieved  mechanical
completion in early October  2001.  It is  anticipated  that the coker unit
project will be at full  production  in December  2001.  To supply this new
unit, MAP reached an agreement with P.M.I. Comercio Internacional,  S.A. de
C.V., an affiliate of Petroleos Mexicanos, to purchase approximately 90,000
barrels per day of heavy Mayan crude oil. This  agreement is multi-year and
will begin upon completion of the coker unit.

MARKETING

     MAP's principal  marketing areas for gasoline and distillates  include
the Midwest,  the upper Great Plains and the  southeastern  United  States.
Gasoline  and  distillates  are  sold  in 24  states.  Gasoline  is sold at
wholesale primarily to independent  marketers,  jobbers and chain retailers
who  resell  these  products   through  several   thousand  retail  outlets
principally  under their own names. MAP also supplies  approximately  3,800
jobber-dealer,   open-dealer   and   lessee-dealer   locations   using  the
Marathon(R) and Ashland(R) brand names.

     Gasoline,   distillates  and  aviation   products  are  also  sold  to
utilities,  railroads, river towing companies,  commercial fleet operators,
airlines and governmental agencies.

     MAP  markets  asphalt  through  owned  and  leased  terminals  located
throughout  the Midwest  and  Southeast.  The MAP  customer  base  includes
approximately 900 asphalt paving contractors,  government entities (states,
counties, cities and townships) and asphalt roofing shingle manufacturers.

     Retail  sales of  gasoline  and  diesel  fuel are made  through  MAP's
wholly-owned subsidiary, Speedway SuperAmerica LLC ("SSA"). As of September
30,  2001,  SSA had 2,145  retail  outlets in 17 states in the  Midwest and
Southeast which sell petroleum  products and convenience  store merchandise
primarily under the brand names Speedway(R) and SuperAmerica(R). The retail
locations  sell a  variety  of food,  merchandise,  cigarettes,  candy  and
beverages.  Several locations also have on-premises  brand-name restaurants
such as Subway(R) and Taco Bell(R).

     During  the twelve  months  ended  September  30,  2001,  67% of SSA's
revenues  (excluding  excise  taxes) were derived from the sale of gasoline
and  diesel  fuel,  and  the  remainder  were  derived  from  the  sale  of
merchandise.

     Effective  September  1,  2001,  MAP and Pilot  Corporation  ("Pilot")
completed a  transaction  to form Pilot  Travel  Centers LLC ("PTC")  which
combined  SSA's and Pilot's  travel  centers.  Pilot and MAP each own a 50%
interest in PTC. By  combining  these  travel  centers,  MAP  continues  to
further enhance its retail presence.  PTC is the largest operator of travel
centers in the United States with more than 235 locations in 35 states. The
travel centers offer diesel fuel,  gasoline and a variety of other services
associated   with  such   locations,   including   on-premises   brand-name
restaurants.

     The table below shows the volume of MAP's consolidated refined product
sales for the twelve months ended September 30, 2001, 2000 and 1999.

<TABLE>
<CAPTION>
                                                              Twelve Months Ended September 30
                                                       ------------------------------------------
   <S>                                                 <C>                 <C>              <C>

                                                        2001                2000             1999
                                                        ----                ----             ----

   Refined Product Sales
   (in thousands of barrels per day)
   ---------------------------------
      Gasoline                                         741.0               752.1            699.3
      Distillates                                      349.6               351.2            324.6
      Propane                                           21.5                21.6             22.4
      Feedstocks & Special Products                     68.1                67.6             65.1
      Heavy Fuel Oils                                   46.3                40.9             44.9
      Asphalt                                           75.8                75.1             74.3
                                                     -------             -------          -------
                           Total                     1,302.3             1,308.5          1,230.6
                                                     =======             =======          =======

   Matching Buy/Sell Volumes
   included in above....................                43.7                41.4             47.7
</TABLE>

                                     6
<PAGE>

     MAP sells RFG in parts of its marketing territory,  primarily Chicago,
Illinois; Louisville,  Kentucky; Northern Kentucky; Maryland; Virginia; and
Milwaukee,  Wisconsin.  MAP also  markets  low-vapor-pressure  gasolines in
eleven states.

SUPPLY AND TRANSPORTATION

     The  crude  oil  processed  in  MAP's   refineries  is  obtained  from
negotiated contract and spot purchases or exchanges.  For the twelve months
ended September 30, 2001, MAP's negotiated  contract and spot purchases for
refinery input of crude oil produced in the U.S.  averaged  388,700 barrels
per day,  including an average of 28,200 net barrels per day acquired  from
Marathon.  For the twelve months ended  September  30, 2001,  MAP's foreign
crude oil  requirements  were met largely  through  purchases  from various
foreign national oil companies,  producing companies and traders. Purchases
of foreign crude oil  represented 57% of MAP's crude oil  requirements  for
the twelve months ended September 30, 2001.

     MAP's  ownership  or  interest  in  domestic  pipeline  systems in its
refining and marketing  areas is  significant.  MAP owns,  leases or has an
ownership  interest in 6,466 miles of pipelines in 11 states.  This network
transports crude oil and refined products to and from terminals, refineries
and other  pipelines.  It includes 68 miles of crude oil  gathering  lines,
3,564  miles of crude oil trunk  lines and 2,834  miles of refined  product
lines.

     MAP has a 46.7% ownership interest in LOOP LLC ("LOOP"),  which is the
owner and  operator of the only U.S.  deepwater  port  facility  capable of
receiving crude oil from very large crude carriers.  Ashland has retained a
4% ownership  interest in LOOP. MAP also owns a 49.9% ownership interest in
LOCAP  INC.  ("LOCAP"),  which is the  owner  and  operator  of a crude oil
pipeline  connecting  LOOP to the Capline  system.  Ashland has retained an
8.6% ownership  interest in LOCAP.  In addition,  MAP has a 37.2% ownership
interest in the Capline system. These port and pipeline systems provide MAP
with access to common carrier  transportation from the Louisiana Gulf Coast
to Patoka,  Illinois.  At Patoka,  the Capline  system  connects with other
common carrier pipelines owned or leased by MAP that provide transportation
to MAP's refineries in Illinois, Kentucky, Michigan, Minnesota and Ohio.


     MAP's subsidiary,  Ohio River Pipe Line LLC ("ORPL"), plans to build a
pipeline from Kenova,  West Virginia,  to Columbus,  Ohio. ORPL is a common
carrier  pipeline  company and the pipeline  will be an  interstate  common
carrier pipeline. The pipeline,  which will be named Cardinal Products Pipe
Line, is expected to initially move about 50,000 barrels per day of refined
petroleum products into the central Ohio region.  Construction is currently
planned for the summer of 2002 pending receipt of permits, with start-up of
the pipeline to follow late in the fourth quarter of calendar 2002.

     MAP has a 33.3%  ownership  interest  in  Centennial  Pipeline  LLC, a
limited liability company formed to develop an interstate refined petroleum
products pipeline extending from the U.S. Gulf of Mexico to the Midwest. In
March  2001,  the  Federal  Energy  Regulatory   Commission   approved  the
abandonment  of  a  720-mile,  26-inch  diameter  pipeline  extending  from
Longville, Louisiana to Bourbon, Illinois, from natural gas service thereby
allowing  conversion  to  refined  products  transportation  by  Centennial
Pipeline.  Also as part  of the  project,  a  two-million  barrel  terminal
storage facility is being  constructed and a new 74-mile,  24-inch diameter
pipeline extending from Beaumont,  Texas, to Longville,  Louisiana has been
built.  Marathon Ashland Pipe Line LLC has been designated  operator of the
pipeline.  The  Centennial  Pipeline  system will connect with existing MAP
transportation  assets and other common carrier lines. It is expected to be
operational in the first quarter of calendar 2002.

     MAP  also  has a 33.3%  ownership  interest  in  Minnesota  Pipe  Line
Company,  which operates a crude oil pipeline in Minnesota.  Minnesota Pipe
Line  Company  provides  MAP  with  access  to  crude  oil  common  carrier
transportation  from Clearbrook,  Minnesota,  to Cottage Grove,  Minnesota,
which is in the vicinity of MAP's St. Paul Park, Minnesota refinery.

     MAP's marine  transportation  operations  include  towboats and barges
that  transport  refined  products on the Ohio,  Mississippi  and  Illinois
rivers,  their tributaries and the Intracoastal  Waterway.  MAP also leases
and owns railcars in various sizes and  capacities for movement and storage
of petroleum  products and a large  number of tractors,  tank  trailers and
general service trucks.

     In addition,  MAP owns and operates 91 terminal  facilities from which
it sells a wide range of petroleum products.  These facilities are supplied
by a combination of barges, pipeline, truck and/or rail.

                                     7
<PAGE>


OTHER MATTERS

     For  information  on MAP and  federal,  state and local  statutes  and
regulations  governing  releases into the  environment or protection of the
environment, see "Item 1. Business - Miscellaneous - Environmental Matters"
in this Form 10-K.


                               MISCELLANEOUS

ENVIRONMENTAL MATTERS

     Ashland has implemented a company-wide  environmental  policy overseen
by the  Public  Policy -  Environmental  Committee  of  Ashland's  Board of
Directors.  Ashland's  Environmental,  Health  and  Safety  group  has  the
responsibility   to  ensure  that  Ashland's   operating   groups  maintain
environmental   compliance  in   accordance   with   applicable   laws  and
regulations.

     Federal,  state  and  local  laws  and  regulations  relating  to  the
protection  of the  environment  have a  significant  impact on how Ashland
conducts its  businesses.  New laws are being enacted and  regulations  are
being adopted by various regulatory agencies on a continuing basis, and the
costs of  compliance  with these new rules  cannot be  estimated  until the
manner in which they will be implemented has been more accurately  defined.
In addition, most foreign countries in which Ashland conducts business have
laws dealing with similar matters.

     At  September   30,  2001,   Ashland's   reserves  for   environmental
remediation amounted to $176 million, reflecting Ashland's estimates of the
most  likely  costs  which  will be  incurred  over an  extended  period to
remediate  identified  environmental  conditions  for  which  the costs are
reasonably  estimable,   without  regard  to  any  third-party  recoveries.
Environmental   remediation  reserves  are  subject  to  numerous  inherent
uncertainties  that affect  Ashland's  ability to estimate its share of the
ultimate  costs of the required  remediation  efforts.  Such  uncertainties
involve the nature and extent of  contamination at each site, the extent of
required cleanup efforts under existing environmental  regulations,  widely
varying  costs of  alternate  cleanup  methods,  changes  in  environmental
regulations, the potential effect of continuing improvements in remediation
technology,  and the number and  financial  strength  of other  potentially
responsible parties at multiparty sites. Reserves are regularly adjusted as
environmental  remediation continues.  None of the remediation locations is
individually  material  to Ashland as its  largest  reserve for any site is
under $10 million. As a result,  Ashland's exposure to adverse developments
with respect to any  individual  site is not  expected to be material,  and
these sites are in various stages of the ongoing environmental  remediation
process. Although environmental remediation could have a material effect on
results  of  operations  if a series of  adverse  developments  occurs in a
particular quarter or fiscal year, Ashland believes that the chance of such
developments  occurring  in the same  quarter  or  fiscal  year is  remote.
Ashland does not believe that any liability  resulting  from  environmental
remediation,  after  taking into  consideration  expected  recoveries  from
insurers,  contributions by other  responsible  parties and amounts already
provided  for,  will have a  material  adverse  effect on its  consolidated
financial position, cash flows or liquidity.

     In  connection  with the  formation of MAP,  Marathon and Ashland each
retained  responsibility  for certain  environmental  costs  arising out of
their   respective   prior   ownership  and  operation  of  the  facilities
transferred to MAP. In certain  situations,  various  threshold  provisions
apply,   eliminating  or  reducing  the  financial  responsibility  of  the
contributing  party until certain levels of expenditure  have been reached.
In other  situations,  sunset  provisions  gradually  diminish the level of
financial responsibility of the contributing party over time.

     AIR - The Clean Air Act (the "CAA")  imposes  stringent  limits on air
emissions,  establishes a federally mandated operating permit program,  and
allows  for  civil  and  criminal  enforcement  actions.  Additionally,  it
establishes air quality attainment deadlines and control requirements based
on the severity of air  pollution  in a given  geographical  area.  Various
state clean air acts implement,  complement and, in some instances,  add to
the  requirements  of the federal CAA. The  requirements of the CAA and its
state  counterparts  have a  significant  impact on the daily  operation of
Ashland's  businesses and, in many cases, on product  formulation and other
long-term  business  decisions.   Ashland's  businesses  maintain  numerous
permits  pursuant to these clean air laws and have  implemented  systems to
oversee ongoing compliance efforts.

                                     8
<PAGE>


     In July  1997,  the  United  States  Environmental  Protection  Agency
("EPA") promulgated revisions to the National Ambient Air Quality Standards
("NAAQS") for ground level ozone and particulate  matter.  These revisions,
if they are implemented by the states,  could have a significant  effect on
certain of Ashland's  chemical  manufacturing and distribution  businesses,
and on MAP. The EPA's  authority and scientific  basis to promulgate  these
standards were  challenged by industry.  Although in 2001 the U.S.  Supreme
Court upheld the EPA's ability to set NAAQS's without considering the costs
related to compliance, several other EPA actions were remanded to the Court
of Appeals for further consideration.  Litigation continues,  as do efforts
by the EPA and other regulatory and law enforcement agencies to achieve the
objectives  of these  standards  through  other means.  It is not currently
possible  to  estimate  any  potential  financial  impact  that any revised
standards may have on Ashland's operations.

     WATER - Ashland's  businesses  maintain numerous discharge permits, as
the National Pollutant Discharge  Elimination System of the Clean Water Act
("CWA") and state programs require, and have implemented systems to oversee
their compliance  efforts.  In addition,  several of MAP's  operations,  in
particular its barge and terminal  facilities,  are regulated under the Oil
Pollution Act of 1990.

     SOLID  WASTE  -  Ashland's  businesses  are  subject  to the  Resource
Conservation and Recovery Act ("RCRA"), which establishes standards for the
management of solid and hazardous  wastes.  Besides affecting current waste
disposal  practices,  RCRA also  addresses  the  environmental  effects  of
certain past waste  disposal  operations,  the  recycling of wastes and the
storage of regulated substances in underground tanks.

     REMEDIATION - Ashland currently operates, and in the past has operated
various facilities where, during the normal course of operations,  releases
of hazardous  substances have occurred.  Federal and state laws,  including
but  not  limited  to RCRA  and  various  remediation  laws,  require  that
contamination  caused by such  releases  be  assessed  and,  if  necessary,
remediated to meet applicable standards.  MAP operates, and in the past has
operated,  certain  retail  outlets  where,  during  the  normal  course of
operations,  releases of petroleum products from underground  storage tanks
have occurred.  Federal and state laws require that contamination caused by
such releases at these sites be assessed  and, if necessary,  remediated to
meet applicable standards.

RESEARCH

     Ashland  conducts a program of research and  development to invent and
improve  products and processes and to improve  environmental  controls for
its existing  facilities.  It maintains its research  facilities in Dublin,
Ohio; Lexington,  Kentucky; and Atlanta,  Georgia. Research and development
costs are  expensed as they are  incurred and totaled $36 million in fiscal
2001 ($33 million in 2000 and $30 million in 1999).

COMPETITION

     In all its operations,  Ashland is subject to intense competition both
from  companies in the industries in which it operates and from products of
companies in other industries.

     The majority of the  business  for which APAC  competes is obtained by
competitive  bidding.  There are a substantial number of competitors in the
markets in which APAC  operates  and, as a result,  all of APAC's goods and
services are marketed under highly  competitive  conditions.  Factors which
influence APAC's  competitiveness  are price,  reputation for quality,  the
availability of aggregate materials,  machinery and equipment, knowledge of
local markets and conditions and estimating abilities.

     Each of Ashland  Distribution's  businesses,  except for the  plastics
distribution  businesses,   compete  with  national,   regional  and  local
companies  throughout North America. The plastics  distribution  businesses
compete in both North America and Europe.  Competition in these  businesses
is based  primarily on price and reliability of supply.  Ashland  Specialty
Chemical's  businesses compete globally in selected niche markets,  largely
on the basis of technology  and service.  The number of  competitors in the
specialty  chemical business varies from product to product,  and it is not
practical  to  identify  such  competitors  because  of the broad  range of
products and markets  served by those  products.  However,  many of Ashland
Specialty Chemical's  businesses hold proprietary  technology,  and Ashland
believes  it has a  leading  or  strong  market  position  in  most  of its
specialty chemical products.  Ashland Specialty  Chemical's  petrochemicals
business is largely a commodities business,  with pricing and quality being
the most important factors.

     Valvoline  competes  in the  highly  competitive  lubricants  business
principally through product and service quality, distribution capability, a
focused "master" brand strategy,  advertising and sales promotion.  Some of
the

                                     9
<PAGE>


major  brands  of  motor  oils  and  lubricants   Valvoline  competes  with
internationally  are  Havoline(R),   Castrol(R),   Pennzoil(R)  and  Quaker
State(R).  The highly  competitive  consumer  products car care business is
primarily composed of maintenance  chemicals,  appearance products and tire
cleaners.  Valvoline  competes  primarily in this market  through  specific
product performance benefits,  distribution  capability and advertising and
sales  promotion.  In the highly  competitive  "fast oil change"  business,
Valvoline  competes  with other leading  independent  fast lube chains on a
national,  regional  or local  basis,  as well as  automobile  dealers  and
service  stations.  Valvoline's  brand  recognition,  service  offering and
increasing market presence in the U.S. "fast oil change" market, as well as
quality of service, speed, location,  convenience and sales promotion,  are
important competitive factors.

     MAP competes with a large number of companies to acquire crude oil for
refinery  processing and in the  distribution and marketing of a full array
of  petroleum  products.  MAP  believes  it  ranks  among  the top ten U.S.
petroleum  companies  on the basis of crude  oil  refining  capacity  as of
September 30, 2001.  MAP competes in four distinct  markets for the sale of
refined products - wholesale,  spot, branded and retail  distribution.  MAP
believes it competes  with  approximately  50  companies  in the  wholesale
distribution  of petroleum  products to private  brand  marketers and large
commercial and industrial consumers; approximately 75 companies in the sale
of  petroleum  products in the spot  market;  13  refiner/marketers  in the
supply of branded petroleum  products to dealers and jobbers;  and over 600
petroleum product retailers in the retail sale of petroleum  products.  MAP
also  competes in the  convenience  store  industry  through  SSA's  retail
outlets and in the travel center  industry  through their ownership in PTC.
The retail  outlets  offer  consumers  gasoline,  diesel fuel (at  selected
locations)  and a  variety  of food,  merchandise,  cigarettes,  candy  and
beverages.

FORWARD-LOOKING STATEMENTS

     This Form 10-K and the  documents  incorporated  by reference  contain
forward-looking  statements  within  the  meaning  of  Section  27A  of the
Securities  Act of 1933 and Section 21E of the  Securities  Exchange Act of
1934,   including  various  information  within  the  "Capital  Resources,"
"Derivative  Instruments,"  "Outlook" and "Conversion to the Euro" sections
in Management's  Discussion and Analysis in Ashland's Annual Report.  Words
such as  "anticipates,"  "believes,"  "estimates,"  "expects," "is likely,"
"predicts,"  and  variations  of such  words and  similar  expressions  are
intended to identify  such  forward-looking  statements.  Although  Ashland
believes  that its  expectations  are based on reasonable  assumptions,  it
cannot assure that the  expectations  contained in such  statements will be
achieved.  Important  factors  which could cause  actual  results to differ
materially  from those  contained in such  statements  are discussed  under
"Risks  and  Uncertainties"  in Note A of Notes to  Consolidated  Financial
Statements in Ashland's  Annual  Report.  For a discussion of other factors
and risks affecting Ashland's revenues and operations see "Item 1. Business
- Miscellaneous - Marketing Conditions" below.

 MARKETING CONDITIONS

     Domestic and  international  political,  legislative,  regulatory  and
legal  changes  may  adversely  affect  Ashland's  results  of  operations.
Political  actions may include changes in the policies of the  Organization
of  Petroleum  Exporting  Countries  or  other  developments  involving  or
affecting oil-producing countries,  including military conflict, embargoes,
internal  instability  or actions or  reactions of the U.S.  government  in
anticipation  of, or in response  to, such  actions.  Profitability  of MAP
depends  largely  on the  margin  between  the cost of crude  oil and other
feedstocks  refined and the selling  prices of refined  products.  MAP is a
purchaser  of  crude  oil in  order  to  satisfy  its  refinery  throughput
requirements.  As a result, MAP's overall  profitability could be adversely
affected by increases in crude oil and other feedstock  prices that are not
recovered in the market place through  higher prices.  Reference  should be
made to the Refining and Marketing  section of the Management's  Discussion
and Analysis  section in Ashland's  Annual  Report for a discussion  of the
impact of crude oil costs on MAP's  operating  performance.  While  Ashland
maintains  reserves for anticipated  liabilities and carries various levels
of insurance,  Ashland could be affected by civil, criminal,  regulatory or
administrative actions, claims or proceedings.

     Ashland's  operations are subject to various U.S. and foreign laws and
regulations  relating to  environmental  protection  and worker  health and
safety.  These laws and regulations  regulate discharges of pollutants into
the air and water, the management and disposal of hazardous substances, and
the cleanup of contaminated  properties.  The costs of complying with these
laws and  regulations  can be  substantial  and may increase as  applicable
requirements  become  more  stringent  and new  rules are  implemented.  If
violation of these laws and regulations occur, Ashland may be

                                    10
<PAGE>

forced to pay substantial fines, to complete additional costly projects, or
to modify or curtail its operations to limit contaminant emissions.

     The profitability of Ashland's businesses are particularly susceptible
to downturns in the economy,  particularly downturns in the segments of the
U.S.  economy related to the purchase and sale of durable goods,  including
housing, construction,  automotive, marine and semiconductor.  Both overall
demand for  Ashland's  products  and its profit  margins  may  decline as a
direct result of an economic recession, inflation, changes in the prices of
hydrocarbons  and other raw  materials  (e.g.,  crude oil and petroleum and
chemical  products),  consumer  confidence,  interest rates or governmental
fiscal  policies.  In  addition,  Ashland's  profitability  may  experience
significant changes as a result of variations in sales,  changes in product
mix or pricing competition.

     In addition,  changes in climate and weather can significantly  affect
the performance of several of Ashland's operations. Extreme variations from
normal climatic conditions could have a significant effect on the operating
results  of APAC's  construction  operations.  In  particular,  unfavorable
weather conditions will delay the completion of construction  projects, and
may require  the use of  additional  resources.  In  addition,  most of the
refined  products  sold by MAP are seasonal in nature,  and thus demand for
those products may decline due to significant changes in prevailing climate
and weather  conditions.  MAP's  production or distribution  operations are
also subject to disruption by extreme  weather  conditions  such as floods,
frozen rivers or hurricanes.

ITEM 2. PROPERTIES

     Ashland's  corporate  headquarters,  which is  leased,  is  located in
Covington,  Kentucky.  Principal  offices  of other  major  operations  are
located in Atlanta,  Georgia (APAC); Dublin, Ohio (Ashland Distribution and
Ashland Specialty Chemical);  Lexington, Kentucky (Valvoline); and Russell,
Kentucky (Administrative Services). All of these offices are leased, except
for the Russell office, which is owned. Principal manufacturing,  marketing
and other  materially  important  physical  properties  of Ashland  and its
subsidiaries  are described under the  appropriate  segment under Item 1 in
this Form 10-K.  Additional  information  concerning  certain leases may be
found in Note J of Notes to Consolidated  Financial Statements in Ashland's
Annual Report.

ITEM 3. LEGAL PROCEEDINGS

     ENVIRONMENTAL  PROCEEDINGS - (1) As of September 30, 2001, Ashland has
been  identified  as  a  "potentially   responsible  party"  ("PRP")  under
Superfund or similar state laws for potential  joint and several  liability
for  clean-up  costs in  connection  with  alleged  releases  of  hazardous
substances  associated  with 99 waste  treatment or disposal  sites.  These
sites  are  currently   subject  to  ongoing   investigation  and  remedial
activities,  overseen  by the EPA or a state  agency,  in which  Ashland is
typically participating as a member of a PRP group. Generally,  the type of
relief sought includes remediation of contaminated soil and/or groundwater,
reimbursement for past costs of site clean-up and administrative oversight,
and/or long-term  monitoring of environmental  conditions at the sites. The
ultimate  costs are not  predictable  with assurance and could be material.
However, based on its experience with site remediation, its analysis of the
specific hazardous  substances at issue, the existence of other financially
viable  PRPs and its  current  estimates  of  investigatory,  clean-up  and
monitoring costs at each site,  Ashland does not believe that any liability
at these  sites,  either  individually  or in the  aggregate,  will  have a
material adverse effect on Ashland's consolidated financial position,  cash
flows or liquidity.  For  additional  information  regarding  environmental
matters  and  reserves,   see  "Management's   Discussion  and  Analysis  -
Environmental  Matters"  and  Note M of  Notes  to  Consolidated  Financial
Statements in Ashland's Annual Report and "Item 1. Business - Miscellaneous
- Environmental Matters" in this Form 10-K.

     (2) As a result of an EPA enforcement  initiative wherein  information
relating to construction  projects  conducted within refineries since 1980,
including  financial  data,  permit  status and  operational  results,  are
reviewed for compliance  with specific  provisions of the CAA, MAP, as well
as several other refiners,  entered into  negotiations with the EPA and the
Justice  Department.  On August 30, 2001,  the U.S.  District Court for the
Eastern  District  of  Michigan   approved  and  entered  MAP's  settlement
agreement  with  the  EPA,   which  includes  MAP's   commitment  to  spend
approximately  $270  million  in  environmental  capital  expenditures  and
improvements  to  MAP's   refineries.   These   improvements   include  the
installation of specific control technologies over a period of eight years.
In addition,  MAP's  settlement  provides for payment of a civil penalty in
the amount of $3.8 million and the

                                    11
<PAGE>

performance of $8 million in supplemental  environmental projects.  Ashland
has agreed to reimburse MAP a total of $1 million for these projects.

     OTHER PROCEEDINGS - In addition to the environmental matters described
above,  there are pending or threatened against Ashland and its current and
former   subsidiaries   various   claims,   lawsuits   and   administrative
proceedings.  Such actions are with respect to commercial matters,  product
liability,  toxic  tort  liability,  numerous  asbestos  claims,  and other
environmental matters, which seek remedies or damages some of which are for
substantial amounts. While these actions are being contested, their outcome
is not  predictable  with  assurance  and could be  material  to results of
operations  in the period they are  recognized.  However,  Ashland does not
believe that any liability  resulting  from these actions after taking into
consideration  expected  recoveries from insurers,  contributions  by other
responsible  parties and amounts already provided for, will have a material
adverse  effect  on its  consolidated  financial  position,  cash  flows or
liquidity.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were submitted to a vote of security  holders,  through the
solicitation  of proxies or otherwise,  during the quarter ended  September
30, 2001.

ITEM X. EXECUTIVE OFFICERS OF ASHLAND

     The following is a list of Ashland's  executive  officers,  their ages
and  their  positions  and  offices  during  the last  five  years  (listed
alphabetically  after the Chief  Executive  Officer as to other Senior Vice
Presidents, Administrative Vice Presidents and other executive officers).

     PAUL W. CHELLGREN (age 58) is Chairman of the Board,  Chief  Executive
Officer and  Director of Ashland  and has served in such  capacities  since
1997, 1996 and 1992, respectively.

     JAMES R. BOYD (age 55) is Senior Vice  President  and Group  Operating
Officer of Ashland and has served in such  capacities  since 1990 and 1993,
respectively. Mr. Boyd will retire from Ashland effective January 31, 2002.

     DAVID  J.  D'ANTONI  (age  56) is  Senior  Vice  President  and  Group
Operating  Officer of Ashland and has served in such capacities  since 1988
and 1999,  respectively.  During the past five years, he has also served as
President of Ashland Chemical Company.

     JAMES J. O'BRIEN (age 47) is Senior Vice President and Group Operating
Officer of Ashland and President of The Valvoline Company and has served in
such capacities since 1997, 2001, and 1995,  respectively.  During the past
five years, he has also served as Vice President of Ashland.

     CHARLES F.  POTTS (age 57) is Senior  Vice  President  of Ashland  and
President of APAC, Inc. and has served in such capacities since 1992.

     J. MARVIN QUIN (age 54) is Senior Vice  President and Chief  Financial
Officer of Ashland and has served in such capacities since 1992.

     KENNETH  L.  AULEN  (age  52) is  Administrative  Vice  President  and
Controller of Ashland and has served in such capacities since 1992.

     PHILIP W.  BLOCK (age 54) is  Administrative  Vice  President  - Human
Resources of Ashland and has served in such capacity since 1992.

     PETER M. BOKACH (age 55) is Vice President of Ashland and President of
Ashland  Distribution Company and has served in such capacities since 1999.
During the past five years,  he has also  served as Group Vice  President -
Distribution Division of Ashland Chemical Company.

     JAMES A. DUQUIN (age 54) is Vice President of Ashland and President of
Ashland Specialty  Chemical Company and has served in such capacities since
1999.  During  the past  five  years,  he has  also  served  as Group  Vice
President - Specialty Chemical Division of Ashland Chemical Company.

     DAVID L.  HAUSRATH (age 49) is Vice  President and General  Counsel of
Ashland   and  has  served  in  such   capacities   since  1998  and  1999,
respectively.  During the past five years,  he has also served as Associate
General Counsel of Ashland.

                                    12
<PAGE>


     J. DAN LACY (age 54) is Vice President - Corporate  Affairs of Ashland
and has served in such capacity since 1986.

     RICHARD P. THOMAS (age 55) is Vice  President and Secretary of Ashland
and has served in such capacities since 1998 and 1999, respectively. During
the past five years,  he has also served as  Associate  General  Counsel of
Ashland and  Administrative  Vice President and General  Counsel of Ashland
Petroleum Company.

     Each executive officer is elected by the Board of Directors of Ashland
to a term of one  year,  or until his  successor  is duly  elected,  at the
annual meeting of the Board of Directors,  except in those  instances where
the  officer  is elected  other  than at an annual  meeting of the Board of
Directors,  in which case his tenure will expire at the next annual meeting
of the Board of Directors unless the officer is re-elected.

                                  PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SECURITY
HOLDER MATTERS

     There is hereby incorporated by reference the information appearing in
Note P of Notes to Consolidated  Financial  Statements in Ashland's  Annual
Report.

     At September  30, 2001,  there were  approximately  18,500  holders of
record of Ashland's Common Stock. Ashland Common Stock is listed on the New
York and  Chicago  stock  exchanges  (ticker  symbol  ASH) and has  trading
privileges  on the  Boston,  Cincinnati,  Pacific  and  Philadelphia  stock
exchanges.

ITEM 6. SELECTED FINANCIAL DATA

     There is hereby  incorporated by reference the  information  appearing
under the caption "Five-Year Selected Financial  Information" on page 56 in
Ashland's Annual Report.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

     There is hereby  incorporated by reference the  information  appearing
under the caption "Management's  Discussion and Analysis" on pages 28 to 35
in Ashland's Annual Report.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     There is hereby  incorporated by reference the  information  appearing
under the caption "Derivative  Instruments" on pages 33 and 34 in Ashland's
Annual Report.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     There is hereby  incorporated by reference the consolidated  financial
statements appearing on pages 37 through 55 in Ashland's Annual Report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE

     None.

                                 PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     There is hereby  incorporated  by reference the  information to appear
under the  caption  "Ashland  Inc.'s  Board of  Directors  -  Nominees  for
Election at the 2002 Annual Meeting" and the information  regarding Section
16 beneficial  ownership reporting compliance in Ashland's definitive Proxy
Statement for its January 31, 2002 Annual  Meeting of  Shareholders,  which
will be filed with the SEC within 120 days after September 30, 2001 ("Proxy
Statement").  See also the list of Ashland's executive officers and related
information  under  "Executive  Officers  of Ashland" in Part I - Item X in
this Form 10-K.

                                    13
<PAGE>


ITEM 11. EXECUTIVE COMPENSATION

     There is hereby  incorporated  by reference the  information to appear
under the captions  "Executive  Compensation,"  "Compensation of Directors"
and  "Miscellaneous - Personnel and Compensation  Committee  Interlocks and
Insider Participation" in Ashland's Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

     There is hereby  incorporated  by reference the  information to appear
under the caption  "Ashland Common Stock Ownership of Directors and Certain
Officers  of  Ashland"  and the  information  regarding  the  ownership  of
securities of Ashland in Ashland's Proxy Statement.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     There is hereby  incorporated  by reference the  information to appear
under the caption  "Miscellaneous  - Business  Relationships"  in Ashland's
Proxy Statement.

                                  PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (A) DOCUMENTS FILED AS PART OF THIS REPORT

     (1) and (2) Financial Statements and Financial Schedule

     The  consolidated  financial  statements  and  financial  schedule  of
Ashland presented or incorporated by reference in this report are listed in
the index on page 19.

     (3) Exhibits

3.1      Second Restated  Articles of Incorporation of Ashland,  as amended
         to January 30, 1998 (filed as Exhibit 3 to Ashland's Form 10-Q for
         the quarter  ended  December 31, 1997 and  incorporated  herein by
         reference).

3.2      By-laws  of  Ashland,  effective  as of June 21,  2001  (filed  as
         Exhibit 3.2 to Ashland's  Form 10-Q for the quarter ended June 30,
         2001 and incorporated herein by reference).

4.1      Ashland  agrees  to  provide  the SEC,  upon  request,  copies  of
         instruments  defining the rights of holders of  long-term  debt of
         Ashland  and all of its  subsidiaries  for which  consolidated  or
         unconsolidated  financial statements are required to be filed with
         the SEC.

4.2      Indenture, dated as of August 15, 1989, as amended and restated as
         of August  15,  1990,  between  Ashland  and  Citibank,  N.A.,  as
         Trustee.

4.3      Indenture, dated as of September 7, 2001, between Ashland and U.S.
         Bank National Association, as Trustee.

4.4      Rights Agreement,  dated as of May 16, 1996,  between Ashland Inc.
         and the Rights Agent, together with Form of Right Certificate.


     The following  Exhibits 10.1 through 10.15 are  compensatory  plans or
arrangements  or  management  contracts  required  to be filed as  exhibits
pursuant to Item 601(b)(10)(ii)(A) of Regulation S-K.


10.1     Amended Stock Incentive Plan for Key Employees of Ashland Inc. and
         its Subsidiaries (filed as Exhibit 10.1 to Ashland's Form 10-K for
         the fiscal year ended September 30, 1999 and  incorporated  herein
         by reference).

10.2     Ashland Inc. Deferred Compensation Plan for Non-Employee Directors
         (filed as Exhibit 10.2 to Ashland's  Form 10-K for the fiscal year
         ended September 30, 1999 and incorporated herein by reference).

                                    14
<PAGE>

10.3     Ashland Inc. Deferred Compensation Plan (filed as Exhibit 10.14 to
         Ashland's  Form 10-K for the fiscal year ended  September 30, 2000
         and incorporated herein by reference).

10.4     Tenth  Amended  and  Restated  Ashland  Inc.   Supplemental  Early
         Retirement  Plan for  Certain  Employees,  as  amended  (filed  as
         Exhibit 10.2 to Ashland's Form 10-Q for the quarter ended December
         31, 2000 and incorporated herein by reference).

10.5     Ashland Inc. Salary Continuation Plan.

10.6     Form of Ashland Inc. Executive Employment Contract between Ashland
         Inc. and certain  executives of Ashland  (filed as Exhibit 10.6 to
         Ashland's  Form 10-K for the fiscal year ended  September 30, 1999
         and incorporated herein by reference).

10.7     Form of Separation  Agreement and General  Release between Ashland
         Inc. and James R. Boyd, an executive officer of Ashland.

10.8     Form of  Indemnification  Agreement  between Ashland Inc. and each
         member of its Board of Directors.

10.9     Ashland Inc.  Nonqualified  Excess Benefit  Pension Plan (filed as
         Exhibit  10.11 to  Ashland's  Form 10-K for the fiscal  year ended
         September 30, 1998 and incorporated herein by reference).

10.10    Ashland Inc.  Long-Term  Incentive  Plan (filed as Exhibit 10.9 to
         Ashland's  Form 10-K for the fiscal year ended  September 30, 2000
         and incorporated herein by reference).

10.11    Ashland Inc. Directors' Charitable Award Program (filed as Exhibit
         10.10 to Ashland's  Form 10-K for the fiscal year ended  September
         30, 2000 and incorporated herein by reference).

10.12    Ashland Inc. 1993 Stock  Incentive Plan (filed as Exhibit 10.11 to
         Ashland's  Form 10-K for the fiscal year ended  September 30, 2000
         and incorporated herein by reference).

10.13    Ashland Inc. 1995 Performance Unit Plan (filed as Exhibit 10.12 to
         Ashland's  Form 10-K for the fiscal year ended  September 30, 2000
         and incorporated herein by reference).

10.14    Ashland Inc. 1997 Stock  Incentive Plan (filed as Exhibit 10.15 to
         Ashland's  Form 10-K for the fiscal year ended  September 30, 2000
         and incorporated herein by reference).

10.15    Ashland Inc.  Amended and Restated  Ashland  Inc.  Incentive  Plan
         (filed as  Exhibit  10.1 to  Ashland's  Form 10-Q for the  quarter
         ended December 31, 2000 and incorporated herein by reference).

10.16    Amended  and  Restated  Limited  Liability  Company  Agreement  of
         Marathon  Ashland  Petroleum  LLC dated as of  December  31,  1998
         (filed as Exhibit 10.17 to Ashland's Form 10-K for the fiscal year
         ended September 30, 1999 and incorporated herein by reference).

10.17    Put/Call,  Registration Rights and Standstill Agreement as amended
         to December 31, 1998 among Marathon Oil Company,  USX Corporation,
         Ashland  Inc.  and Marathon  Ashland  Petroleum  (filed as Exhibit
         10.18 to Ashland's  Form 10-K for the fiscal year ended  September
         30, 1999 and incorporated herein by reference).

11       Computation  of  Earnings  Per  Share  (appearing  on  page  43 of
         Ashland's Annual Report to Shareholders, incorporated by reference
         herein, for the fiscal year ended September 30, 2001).

12       Computation of Ratios of Earnings to Fixed Charges and Earnings to
         Combined Fixed Charges and Preferred Stock Dividends.

13       Portions of Ashland's Annual Report to Shareholders,  incorporated
         by reference herein, for the fiscal year ended September 30, 2001.

21       List of subsidiaries.

                                    15
<PAGE>


23.1     Consent of independent auditors.

24       Power  of  Attorney,   including   resolutions  of  the  Board  of
         Directors.

     Upon written or oral  request,  a copy of the above  exhibits  will be
furnished at cost.

     (B) REPORTS ON FORM 8-K

         None.

                                    16


<PAGE>



                                 SIGNATURES

     PURSUANT TO THE  REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE  ACT OF 1934,  THE  REGISTRANT  HAS DULY  CAUSED THIS REPORT TO BE
SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.

                                         ASHLAND INC.
                                         (Registrant)

                                         By:
                                                 /s/ Kenneth L. Aulen
                                        ---------------------------------------
                                            (Kenneth L. Aulen, Administrative
                                              Vice President and Controller)

                                         Date:  December 3, 2001

     PURSUANT TO THE  REQUIREMENTS OF THE SECURITIES  EXCHANGE ACT OF 1934,
THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT, IN THE CAPACITIES INDICATED, ON DECEMBER 3, 2001.

      SIGNATURES                                   CAPACITY
      ----------                                   --------

/s/ PAUL W. CHELLGREN                     Chairman of the Board, Chief
---------------------------------          Executive Officer and Director
    PAUL W. CHELLGREN

/s/ J. MARVIN QUIN                        Senior Vice President and Chief
---------------------------------          Financial Officer
    J. MARVIN QUIN


/s/ KENNETH L. AULEN                      Administrative Vice President,
---------------------------------          Controller and Principal
    KENNETH L. AULEN                       Accounting Officer


            *                             Director
---------------------------------
    SAMUEL C. BUTLER


            *                             Director
---------------------------------
    FRANK C. CARLUCCI


            *                             Director
---------------------------------
    ERNEST H. DREW

                                    17
<PAGE>



            *                             Director
---------------------------------
    JAMES B. FARLEY


            *                             Director
---------------------------------
    RALPH E. GOMORY


            *                             Director
---------------------------------
    ROGER W. HALE


            *                             Director
---------------------------------
    BERNADINE P. HEALY


            *                             Director
---------------------------------
    MANNIE L. JACKSON


            *                             Director
---------------------------------
    PATRICK F. NOONAN


            *                             Director
---------------------------------
    JANE C. PFEIFFER


            *                             Director
---------------------------------
    WILLIAM L. ROUSE , JR.


            *                             Director
---------------------------------
    THEODORE M. SOLSO


            *                             Director
---------------------------------
    MICHAEL J. WARD





       *  By: /s/ David L. Hausrath
              ---------------------
              David L. Hausrath
              Attorney-in-Fact





       Date:  December 3, 2001


                                    18

<PAGE>




            INDEX TO FINANCIAL STATEMENTS AND FINANCIAL SCHEDULE

                                                                     PAGE
                                                                     ----
     Consolidated financial statements:
     Statements of consolidated income ...............................*
     Consolidated balance sheets .....................................*
     Statements of consolidated stockholders' equity .................*
     Statements of consolidated cash flows ...........................*
     Notes to consolidated financial statements ......................*
     Information by industry segment .................................*
     Report of independent auditors................................. 20

     Consolidated financial schedule:
     Schedule II - Valuation and qualifying accounts................ 21
     -----------

     *The consolidated  financial  statements appearing on pages 37 through
55 in Ashland's  Annual Report are incorporated by reference in this Annual
Report on Form 10-K.

     Schedules  other than that listed above have been  omitted  because of
the absence of the conditions  under which they are required or because the
information  required is shown in the consolidated  financial statements or
the notes thereto.  Separate financial  statements for MAP required by Rule
3-09 of  Regulation  S-X will be filed as an  amendment  to this  Form 10-K
within 90 days after the end of MAP's fiscal year ending December 31, 2001.
Separate  financial  statements  of  other  unconsolidated  affiliates  are
omitted  because each company does not constitute a significant  subsidiary
using the 20% tests  when  considered  individually.  Summarized  financial
information  for  such  affiliates  is  disclosed  in  Note F of  Notes  to
Consolidated Financial Statements in Ashland's Annual Report.

                                    19


<PAGE>



                       REPORT OF INDEPENDENT AUDITORS

     We have audited the consolidated  financial statements and schedule of
Ashland Inc. and consolidated subsidiaries listed in the accompanying index
to  financial   statements  and  financial  schedule  (Item  14(a)).  These
financial  statements  and  schedule  are the  responsibility  of Ashland's
management.  Our responsibility is to express an opinion on these financial
statements and schedule based on our audits.

     We  conducted  our  audits  in  accordance  with  auditing   standards
generally  accepted in the United States.  Those standards  require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material  misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in  the  financial  statements.   An  audit  also  includes  assessing  the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

     In our opinion,  the financial  statements  listed in the accompanying
index to financial  statements (Item 14(a)) present fairly, in all material
respects,   the  consolidated   financial  position  of  Ashland  Inc.  and
consolidated   subsidiaries  at  September  30,  2001  and  2000,  and  the
consolidated  results of their  operations and their cash flows for each of
the three years in the period ended  September 30, 2001, in conformity with
accounting principles generally accepted in the United States. Also, in our
opinion,  the related  financial  statement  schedule,  when  considered in
relation  to the  basic  financial  statements  taken as a whole,  presents
fairly in all material respects the information set forth therein.

     As  discussed  in Note A to the  financial  statements,  in  2001  the
Company and its unconsolidated  affiliate,  Marathon Ashland Petroleum LLC,
changed their method of accounting for derivatives.

                                              /s/ Ernst & Young LLP

                                              Ernst & Young LLP


Cincinnati, Ohio
October 31, 2001

                                    20
<PAGE>

<TABLE>
<CAPTION>


 ----------------------------------------------------------------------------------------------------------------------------------
 Ashland Inc. and Consolidated Subsidiaries
 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS


<S>                                                       <C>             <C>             <C>                 <C>         <C>

-----------------------------------------------------------------------------------------------------------------------------------
(In millions)                                              Balance at      Provisions                                      Balance
                                                            beginning      charged to      Reserves            Other        at end
Description                                                   of year        earnings      utilized          changes       of year
===================================================================================================================================
YEAR ENDED SEPTEMBER 30, 2001
Reserves deducted from asset accounts
   Accounts receivable                                         $  25             $ 34          $(25)  (1)       $  -         $  34
   Inventories                                                    13                5            (3)               -            15
-----------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED SEPTEMBER 30, 2000
Reserves deducted from asset accounts
   Accounts receivable                                         $  23             $ 15          $(12)  (1)       $ (1)        $  25
   Inventories                                                    15                3            (5)               -            13
-----------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED SEPTEMBER 30, 1999
Reserves deducted from asset accounts
   Accounts receivable                                         $  19             $ 12          $ (8)  (1)       $  -         $  23
   Inventories                                                    11                7            (3)               -            15
-----------------------------------------------------------------------------------------------------------------------------------

(1)      Uncollected  amounts  written off, net of recoveries of $1 million
         in 2001, $1 million in 2000 and $2 million in 1999.


</TABLE>



                                    21

<PAGE>


                               EXHIBIT INDEX
Exhibit
 No.                               Description
-------  ------------------------------------------------------------------

4.2      Indenture between Ashland and Citibank, N.A., as trustee.

4.3      Indenture between Ashland and U. S. Bank National Association,  as
         trustee.

4.4      Rights  Agreement  between Ashland and the Rights Agent,  together
         with Form of Right Certificate.

10.5     Ashland Inc. Salary Continuation Plan.

10.7     Form of Separation  Agreement and General  Release between Ashland
         Inc. and James R. Boyd.

10.8     Form of  Indemnification  Agreement  between Ashland Inc. and each
         member of its Board of Directors.

12       Computation of Ratios of Earnings to Fixed Charges and Earnings to
         Combined Fixed Charges and Preferred Stock Dividends.

13       Portions of Ashland's Annual Report to Shareholders for the fiscal
         year ended September 30, 2001.

21       List of subsidiaries.

23.1     Consent of independent auditors.

24       Power  of  Attorney,   including   resolutions  of  the  Board  of
         Directors.





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4
<SEQUENCE>4
<FILENAME>ex42.txt
<DESCRIPTION>EXHIBIT 4.2
<TEXT>
                                                              [EXECUTION COPY]













                                  ASHLAND OIL, INC.

                                       and

                                  CITIBANK, N.A.,
                                     Trustee




                            Amendment and Restatement

                              as of August 15, 1990

                                     of the

                                    Indenture

                           Dated as of August 15, 1989




                                 Debt Securities




<PAGE>


                                   AMENDMENT AND RESTATEMENT as of August 15,
                          1990, of the INDENTURE, dated as of August 15, 1989,
                          between ASHLAND OIL, INC., a corporation duly
                          organized and existing under the laws of the
                          Commonwealth of Kentucky (herein called the
                          "Company"), having its principal office at 1000
                          Ashland Drive, Russell, Kentucky 41169 and CITIBANK,
                          N.A., a national banking association duly incorporated
                          and existing under the laws of the United States
                          (herein called the "Trustee").


                                   RECITALS OF THE COMPANY

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

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


                   NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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


                                   ARTICLE ONE

                        Definitions and Other Provisions
                             of General Application

                   SECTION 1.01. Definitions. For all purposes of this
Indenture, except as otherwise expressly provided or unless the context
otherwise requires:
                                 -----------


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

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

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

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

                   Certain terms, used solely or principally within an Article
of this Indenture, may be defined in that Article.

                   "Act", when used with respect to any Holder, has the meaning
specified in Section 1.04.

                   "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,
"controls" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

                   "Authenticating Agent" means any Person authorized by the
Trustee pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
securities of one or more series.

                   "Authorized Newspaper" means a newspaper of general
circulation in the place of publication, printed in the English Language or
official language of the country of publication and customarily published on
each Business Day, whether or not published on Saturdays, Sundays or holidays.
Whenever successive weekly publications in an Authorized Newspaper are
authorized or required hereunder, they may be made (unless otherwise expressly
provided herein) on the same or different days of the week and in the same or
different Authorized Newspapers.

                   "Bearer Security" means any Security which is not registered
in the Security Register as to Principal (including without limitation any
Security in temporary or definitive global bearer form).

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


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

                   "Business Day", when used with respect to any Place of
Payment or place of publication, means any day which is not a day on which
banking institutions generally in that Place of Payment or place of publication
are authorized or obligated by or pursuant to law, regulation or executive order
to close or as specified for a series of Securities pursuant to Section 3.01 or
as specified for any Security in such Security.

                   "Change in Control" has the meaning specified in Section
11.07.

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

                   "Company" means the Person named as the "Company" paragraph
this in the first of instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation, and shall also mean any obligor
upon the Securities authenticated and delivered under this Indenture.

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

                   "Corporate Trust Office" means the office of the Trustee in
New York, New York, at which at any particular time its corporate trust business
shall be principally administered, which office at the date hereof is located at
120 Wall Street, New York, N.Y. 10043, except that, with respect to presentation
of Securities for payment or registration of transfers and exchanges and the
location of the Security Registrar, such term means the office or agency of the
Trustee in said city at which at any particular time its corporate agency
business shall be conducted, which at the date hereof is located at 111 Wall
Street, New York, N.Y. 10043.

                   "corporation" includes corporations, associations,
companies and business trusts.

                   "Coupon" or "coupon" means any interest coupon appertaining
to a Bearer Security.

                   "Defaulted Interest" has the meaning specified in Section
3.07.

                   "Depositary" means, with respect to the Securities of any
series issuable or issued in whole or in part in the form of one or more Global
Securities, the Person designated as Depositary by the Company pursuant to
Section 3.01 until a successor Depositary shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Depositary" shall mean
or include each Person who is then a Depositary hereunder, and if at any time
there is more than one such Person, "Depositary" as used with respect to the
Securities of any such series shall mean the Depositary with respect to the
Securities of that series.

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

                   "ECU" means the European Currency Unit as defined and revised
from time to time by the Council of the European Communities.

                   "Euroclear" means the operator of the Euroclear System.

                   "European Communities" means the European Economic Community,
the European Coal and Steel Community and the European Atomic Energy Community.

                   "Event of Default" has the meaning specified in Section 5.01.

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

                   "Full Rating Category" has the meaning specified in Section
11.07.

                   "Global Security" means a Registered Security or a Bearer
Security evidencing all or part of a series of Securities issued to the
Depositary for such series in accordance with Section 3.03.

                   "Holder" or "holder" means, with respect to a Registered
Security, the Person in whose name at the time a particular Registered Security
is registered in the Security Register and, with respect to a Bearer Security
and/or Coupon, the bearer thereof.

                   "Indenture" means this instrument as originally executed or
as it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of particular series of Securities established as
contemplated by Section 3.01.

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

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

                   "Officers' Certificate" means a certificate signed by the
Chairman of the Board, the Vice Chairman of the Board, the President or any Vice
President, and by the Treasurer, the Controller, the Secretary or any Assistant
Treasurer, Assistant Controller or Assistant Secretary, of the Company, and
delivered to the Trustee. Each such Officers' Certificate shall contain the
statements Provided in Section 1.02, if applicable.

                   "Opinion of Counsel" means a written opinion of counsel, who
may be counsel for or an employee of the Company and who shall be reasonably
acceptable to the Trustee. Each Opinion of Counsel shall contain the statements
provided in Section 1.02, if applicable.

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

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

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

                (iii) Securities which have been paid pursuant to Section 3.06
         or in exchange for or in lieu of which other Securities have been
         authenticated and delivered pursuant to this Indenture, other than any
         such Securities in respect of which there shall have been presented to
         the Trustee proof satisfactory to it that such Securities are held by a
         .bona fide purchaser in whose hands such Securities are valid
         obligations of the Company;

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, .consent or waiver hereunder or whether a
quorum is present at a meeting of Holders of Outstanding Securities or the
number of votes entitled to be cast by each Holder of a Security in respect of
such security at any such meeting (1) the principal amount of a Security
denominated in a Foreign Currency or currency unit shall be the Dollar
equivalent (as determined by the Company in good faith) as of the date of
original issuance of such Security of the principal amount of such Security and
(ii) Securities owned by the Company or any other obligor upon the Securities or
any Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, or upon any such determination as to the
presence of a quorum, only Securities which the Trustee knows to be so owned
shall be so disregarded. Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledge establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor.

                   "Paying Agent" means any Person authorized by the Company to
pay the Principal of (and Premium, if any) or interest, if any, on any
Securities on behalf of the Company.

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

                   "Place of Payment", when used with respect to the Securities
of any series, means the place or places where, subject to the provisions of
Section 10.02, the principal of (and premium, if any) and interest on the
Securities of that series are payable as specified in accordance with Section
3.01.

                   "Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such Particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 3.06 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains, as the case may be.

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

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

                   "Registered Security" means any Security (including without
limitation any Security in temporary or definitive global registered form) which
is registered in the Security Register.

                   "Regular Record Date" for the interest payable on any
Interest Payment Date on the Registered Securities of any series means she date
specified for that purpose as contemplated by Section 3.01, which date shall be,
unless otherwise specified pursuant to Section 3.01, the fifteenth day preceding
such Interest Payment pate, whether or not such day shall be a Business Day.
                   "Required Currency" has the meaning specified in Section
1.15.

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

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

                   "Security Register" and "Security Registrar" have the
respective meanings specified in Section 3.05.

                   "Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 3.07.

                   "Stated Maturity", when used with respect to any Security (or
Coupon, if any, representing an installment of interest) or any installment of
principal thereof or interest thereon, means the date specified in such Security
(or Coupon) as the fixed date on which the Principal of such Security or such
installment of principal or interest is due and payable.

                   "Subsidiary" means any corporation (a) substantially all the
property of which is located, and substantially all the operations of which are
conducted, in the continental United States of America, and (b) of which the
Company, directly or indirectly, owns more than fifty percent (50%) of the
outstanding stock which at the time shall have by the terms thereof ordinary
voting power to elect directors of such corporation, irrespective of whether or
not at the time stock of any other class or classes of such corporation shall
have or might have voting power by reason of the happening of any contingency,
or (c) any such corporation of which such percentage of shares of outstanding
stock of the character described in the foregoing clause (b) shall at the time
be owned, directly or indirectly, by the Company and one or more Subsidiaries as
defined in the foregoing clauses (a) and (b) or by one or more such
Subsidiaries.

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

                   "Trust Indenture Act" means the Trust Indenture Act of 1939
as in force at the date as of which this instrument was executed, except as
provided in Section 9.05.

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

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

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

                   "Voting Stock" means stock of any class or classes (however
designated) the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of a majority of the directors
(or persons performing similar functions) of the corporation, association or
other business entity in question, even though the right so to vote is at the
time suspended by reasons of the happening of such a contingency.

                   SECTION 1.02. Compliance Certificates and Opinions. Except as
otherwise expressly provided by this Indenture, upon any application or request
by the Company to the Trustee to take any action under any provision of this
Indenture, the Company shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with and an Opinion of
Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.

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

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

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

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

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

                   SECTION 1.03. Form of Documents Delivered to Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.

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

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

                   SECTION 1.04. Acts of Holders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such Holders
in person or by agent duly appointed in writing, or by any Person duly
authorized by means of any written certification, proxy or other authorization
furnished by a Depositary. If Securities of a series are issuable as Bearer
Securities, any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders of such the record of Holders of Securities of such series voting in
series may, alternatively, be embodied in and evidenced by the record of Holders
of Securities of such series voting in favor thereof, either in person or by
proxies duly appointed in writing, at any meeting of Holders of Securities of
such series duly called and held in accordance with the provisions of Article
Thirteen, or a combination of such instruments and any such record. Except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments or record are delivered to the Trustee and, where
it is hereby expressly required, to the Company. Such instrument or instruments
or record (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments or so voting at any such meeting or, in the case of the Depositary,
furnishing the written certification, proxy or other authorization pursuant to
which such instrument or instruments are signed. Proof of execution of any such
instrument or of a writing appointing any such agent or authorizing any such
Person or any such written certification or proxy shall be sufficient for any
purpose of this Indenture and (subject to Section 6.01) conclusive in favor of
the Trustee and the Company, if made in the manner provided in this Section.
The record of any meeting of Holders of Securities shall be proved in the
manner Provided in Section 13.06.

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

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

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

                   (e) The Principal amount and serial numbers of Registered
Securities held by any Person and the date of holding the same shall be proved
by the Security Register.

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

                   (g) If the Company shall solicit from the Holders any
request, demand, authorization, direction, notice, consent, waiver or other Act,
the Company may, at its option, by or pursuant to a Board Resolution, fix in
advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so. If such a record date is
fixed, such request, demand, authorization, direction, notice, consent, waiver
or other Act may be given before or after such record date, but only the Holders
of record at the close of business on such record date shall be deemed to be
Holders for the purposes of determining whether Holders of the requisite
proportion of Outstanding Securities have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent, waiver or other
Act, and for that purpose the Outstanding Securities shall be computed as of
such record date; provided that no such authorization, agreement or consent by
the holders on such record date shall be deemed effective unless it shall become
effective pursuant to the provisions of this Indenture not later than six months
after the record date.

                   SECTION 1.05. Notices. etc.. to Trustee and Company.
                                 -------------------------------------
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,

                   (1) the Trustee by any Holder or by the Company shall be
         made, given, furnished or filed in writing to or with the Trustee at
         its Corporate Trust Office, Attention: Corporate Trust Administration
         and unless otherwise herein expressly provided, any such document shall
         be deemed to be sufficiently made, given, furnished or filed upon its
         receipt by a Responsible Officer of the Trustee assigned to its
         Corporate Trust Administration, or

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

                   SECTION 1.06. Notice to Holders; Waiver. Where this Indenture
 provides for notice to Holders of any event:
                                 -------------------------

                   (i) if any of the Securities affected by such event are
         Registered Securities, such notice shall be sufficiently given (unless
         otherwise herein expressly Provided) if in writing and mailed,
         first-class postage prepaid, to each Holder affected by such event, at
         his address as it appears in the Security Register, within the time
         prescribed for the giving of such notice, and

                   (ii) if any of the Securities affected by such event are
         Bearer Securities, such notice shall be sufficiently given (unless
         otherwise herein expressly provided or unless otherwise specified in
         such Securities) if published once in an Authorized Newspaper in New
         York City and London and such other cities as shall be specified with
         respect to such Securities and mailed to such Persons whose names and
         addresses were previously filed with the Trustee within the two
         preceding years pursuant to Section 7.03(d), within the time prescribed
         for the giving of such notice.

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

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

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

                   SECTION 1.07. Conflict with Trust Indenture Act. If any
provision hereof limits, qualifies or conflicts with another provision hereof
which is required to be included in this Indenture by any of the provisions of
the Trust Indenture Act, such required provision shall control.

                   SECTION 1.08. Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.

                   SECTION 1.09. Successors and Assigns.
                                  ----------------------
All covenants and agreements in this Indenture by the Company shall bind its
successors and assigns, whether so expressed or not.

                   SECTION 1.10. Separability Clause. In case any provision in
this Indenture or in the Securities or Coupons shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

                   SECTION 1.11. Benefits of Indenture. Nothing in this
Indenture or in the Securities or Coupons, express or implied, shall give to any
Person, other than the parties hereto and their successors hereunder and the
Holders, any benefit or any legal or equitable right, remedy or claim under this
Indenture.

                   SECTION 1.12. Governing Law.
                                 -------------
This Indenture and the Securities and Coupons shall be governed by and
construed in accordance with the laws of the State of New York.

                   SECTION 1.13. Legal Holidays. Except as otherwise specified
as contemplated by Section 3.01, in any case where any Interest Payment Date,
Redemption Date or Stated Maturity of any Security shall not be a Business Day
at any Place of Payment, then (notwithstanding any other provision of this
Indenture or of the Securities or Coupons, if any) payment of interest or
principal (and premium, if any) need not be made at such Place of Payment on
such date, but may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on the Interest Payment Date
or Redemption Date, or at the Stated Maturity, and, if so made, no interest
shall accrue for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be, to the next succeeding
Business Day at such Place of Payment.

                   SECTION 1.14. Moneys of Different Currencies To Be
Segregated. The Trustee shall segregate moneys, funds and accounts held by the
Trustee hereunder in one currency (or unit thereof) from any moneys, funds or
accounts in any other currencies (or units thereof) notwithstanding any
provision herein which would otherwise permit the Trustee to commingle such
amounts.

                   SECTION 1.15. Payment To Be in Proper Currency. In the case
of any Security denominated in any particular currency or currency unit (the
"Required Currency"), except as otherwise provided herein, therein or in or
pursuant to the related Board Resolution or supplemental indenture, the
obligation of the company to make any payment of principal, premium or interest
thereon shall not be discharged or satisfied by any tender by the Company, or
recovery by the Trustee, in any currency or currency unit other than the
Required Currency, except to the extent that such tender or recovery shall
result in the Trustee timely holding the full amount of the Required Currency
then due and payable. If any such tender or recovery is made in other than the
Required Currency, the Trustee may take such actions as it considers appropriate
to exchange such other currency or currency unit for the Required Currency. The
costs and risks of any such exchange, including without limitation the risks of
delay and exchange rate fluctuation, shall be borne by the Company, the Company
shall remain fully liable for any shortfall or delinquency in the full amount of
the Required Currency then due and payable and in no circumstances shall the
Trustee be liable therefor. The Company hereby waives any defense of payment
based upon any such tender or recovery which is not in the Required Currency, or
which, when exchanged for the Required Currency by the Trustee, is less than the
full amount of the Required Currency then due and payable.

                   SECTION 1.16. Language of Notices, etc. Any request, demand,
authorization, direction, notice, consent or waiver required or permitted under
this Indenture shall be in the English language, except that any published
notice may be in an official language of the country of publication.

                                   ARTICLE TWO

                                 Security Forms

                   SECTION 2.01. Forms Generally. The Securities of each series
and the Coupons, if any, to be attached thereto shall be in substantially the
forms (including temporary or definitive global form) as shall be established by
or pursuant to a Board Resolution or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities and Coupons, if any, as evidenced by their
execution of the Securities and Coupons, if any. If the forms of Securities or
Coupons of any series (or any such temporary or definitive Global Security) are
established by, or by action taken pursuant to a Board Resolution, a copy of the
Board Resolution together with an appropriate record of any action taken
pursuant thereto, which Board Resolution or record of such action shall have
attached thereto a true and correct copy of the forms of Security approved by or
pursuant to such Board Resolution, shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Company Order contemplated by Section 3.03 for the
authentication and delivery of such Securities (or any such temporary or
definitive Global Security) or Coupons.

                   Unless otherwise specified as contemplated by Section 3.01,
Securities in bearer form shall have interest Coupons attached.


                   The definitive Securities and Coupons, if any, shall be
printed, lithographed or engraved on steel engraved borders or may be produced
in any other manner, all as determined by the officers executing such Securities
and Coupons, if any, as evidenced by their execution of such Securities and
Coupons, if any.

                  SECTION 2.02. Form of Trustee's Certificate of Authentication
                                -----------------------------------------------
The Trustee's certificate of authentication shall be
in substantially the following form:

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

                                                      [full name of Trustee]
                                                      as Trustee


                                                      By _______________________
                                                         Authorized Officer

                   SECTION 2.03. Securities in Global Form. If Securities of a
series are issuable in global form, as specified as contemplated by Section
3.01, then, notwithstanding clause (8) of Section 3.01 and the provisions of
Section 3.02, such Security shall represent such of the Outstanding Securities
of such series as shall be specified therein and may provide that it shall
represent the aggregate amount of Outstanding Securities from time to time
endorsed thereon and that the aggregate amount of Outstanding Securities
represented thereby may from time to time be reduced to reflect exchanges. Any
endorsement of a Security in global form to reflect the amount, or any increase
or decrease in the amount, of Outstanding Securities represented thereby shall
be made by the Trustee in such manner and upon instructions given by such Person
or Persons as shall be specified therein or in the Company Order to be delivered
to the Trustee pursuant to Section 3.03 or Section 3.04. Subject to the
provisions of Section 3.03 and, if applicable, Section 3.04, the Trustee shall
deliver and redeliver any Security in definitive global bearer form in the
manner and upon written instructions given by the Person or Persons specified
therein or in the applicable Company Order. If a Company Order pursuant to
Section 3.03 or 3.04 has been, or simultaneously is, delivered, any instructions
by the Company with respect to endorsement or delivery or redelivery of a
Security in global form shall be in writing but need not comply with Section
1.02 and need not be accompanied by an Opinion of Counsel. The beneficial owner
of a Note represented by a definitive Global Security in bearer form may, upon
no less than 30 days' written notice to the Trustee, given by the beneficial
owner through a Depositary, exchange its interest in such definitive Global
Security for a definitive Bearer Note or Notes, or a definitive Registered Note
or Notes, of any authorized denomination. No individual definitive Bearer Note
will be delivered in or to the United States.

                   The provisions of the last sentence of the third to the last
paragraph of Section 3.03 shall apply to any Security represented by a Security
in global form if such Security was never issued and sold by the Company and the
Company delivers to the Trustee the Security in global form together with
written instructions (which need not comply with Section 1.02 and need not be
accompanied by an Opinion of Counsel) with regard to the reduction in the
principal amount of Securities represented thereby, together with the written
statement contemplated by the last sentence of the third to the last paragraph
of Section 3.03.

                   Notwithstanding the provisions of Sections 2.01 and 3.07,
unless otherwise specified as contemplated by Section 3.01, payment of principal
of and any premium and any interest on any Security in definitive global form
shall be made to the Person or Persons specified therein.

                                  ARTICLE THREE

                                 The Securities

                  SECTION 3.01. Amount Unlimited; Issuable in Series.
                                ------------------------------------
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.

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

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

                   (2) any limit upon the aggregate principal amount of the
         Securities of the series which may be authenticated and delivered under
         this Indenture (except for Securities authenticated and delivered upon
         registration of transfer of, or in exchange for, or in lieu of, other
         Securities of the series pursuant to Section 3.04, 3.05, 3.06, 9.06 or
         11.06 and except for any Securities which, pursuant to Section 3.03 are
         deemed never to have been authenticated and delivered hereunder);

                   (3) the date or dates on which the principal (and premium, if
         any) of any of the Securities of the series are payable or the method
         of determination thereof;

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

                   (5) the place or places where the principal of (and premium,
         if any) and interest, if any, on any of the Securities and Coupons, if
         any of the series shall be payable and the office or agency for the
         Securities of the series maintained by the Company pursuant to Section
         10.02;

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

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

                   (8) if other than denominations of $1,000, if registered, and
         $5,000, if bearer, and in any integral multiple of the applicable
         denominations for Securities denominated in Dollars, the denominations
         in which the Securities of the series shall be issuable;

                   (9) if other than the principal amount thereof, the portion
         of the principal amount of any of the Securities of the series which
         shall be payable upon declaration of acceleration of the Maturity
         thereof pursuant to Section 5.02;

                (10)    the application, if any, of Section 4.03, or such other
         means of satisfaction and discharge as may be
         specified for the Securities and Coupons, if any, for a series;

                (11) any deletions or modifications of or additions to the
         Events of Default set forth in Section 5.01 or covenants of the Company
         set forth in Article Ten pertaining to the Securities of the series
         (including without limitation whether the provisions of Section 10.08
         or 10.09 shall not be applicable to the Securities of the series);

                (12)     the forms of the Securities and Coupons, if any, of
the series;

                 (13) if other than Dollars, the coin or currency or currencies,
         or currency unit or units, in which payment of the principal of (and
         premium, if any) and interest, if any, on any of the Securities of the
         series shall be payable;

                (14) if the principal of (and premium, if any) or interest, if
         any, on any of the Securities of the series are to be payable at the
         election of the Company or a Holder thereof, or under some or all other
         circumstances, in a coin or currency or currencies, or currency unit or
         units, other than that in which the Securities are denominated, the
         period or periods within which, and the terms and conditions upon
         which, such election may be made, or the other circumstances under
         which any of the Securities are to be so payable, and any provision
         requiring the Holder .to bear currency exchange costs by deduction from
         such payments;

                (15) if the amount of payments of principal (and premium, if
         any) or interest, if any, on any of the Securities of the series may be
         determined with reference to an index based on (i) a coin or currency
         or currencies, or currency unit or units other than that in which such
         Securities are stated to be payable or (ii) any method not inconsistent
         with the provisions of this Indenture specified in or pursuant to such
         Board Resolution, then in each case (i) and (ii) the manner in which
         such amounts shall be determined;

                (16) whether the Securities of the series are to be issued as
         Registered Securities or Bearer Securities (with or without Coupons);
         whether Bearer Securities may be exchanged for Registered Securities of
         the series and whether Registered Securities may be exchanged for
         Bearer Securities of the series (if permitted by applicable laws and
         regulations) and the circumstances under which and the place or places
         where any such exchanges, if permitted, may be made; and whether the
         Securities of the series shall be issued in whole or in part in the
         form of one or more Global Securities and, in such case, the Depositary
         for such Global Security or Securities and whether any Global
         Securities of the series are to be issuable initially in temporary form
         and whether any Global Securities of the series are to be issuable in
         definitive form with or without coupons and, if so, whether beneficial
         owners of interests in any such definitive Global Security may exchange
         such interests for Securities of such series and of like tenor of any
         authorized form and denomination and the circumstances under which and
         the place or places where any such exchanges may occur, if other than
         in the manner provided in Section 3.05;

                (17) whether and under what circumstances and with what
         procedures and documentation the Company will pay additional amounts on
         any of the Securities and Coupons, if any, of the series to any Holder
         who is not a U.S. Person (including a definition of such term), in
         respect of any tax, assessment or governmental charge withheld or
         deducted and, if so, whether the Company will have the option to redeem
         such Securities rather than pay additional amounts (and the terms of
         any such option);

                  (18) the Person to whom any interest on any Registered
         Security of the series shall be payable, if other than the Person in
         whose name that Security (or one or more Predecessor Securities) is
         registered at the close of business on the Regular Record Date for such
         interest, the manner in which, or the Person to whom, any interest on
         any Bearer Security of the series shall be payable, if otherwise than
         upon presentation and surrender of the Coupons appertaining thereto as
         they severally mature and to the extent to which, or the manner in
         which, any interest payable on a temporary Global Security on an
         Interest Payment Date will be paid if other than in the manner provided
         in Section 3.04; and

                (19)     any other terms of any of the Securities of the series.

                   All Securities of any one series and the Coupons appertaining
to any Bearer Securities of such series shall be substantially identical except,
in the case of Registered Securities, as to denomination and except as may
otherwise be provided in or pursuant to the Board Resolution referred to above
and (subject to Section 3.03) set forth in the Officers' Certificate referred to
above or in any such indenture supplemental hereto.

                   At the option of the Company, interest on the Registered
Securities of any series that bears interest may be paid by mailing a check to
the address of any Holder as such address shall appear in the Securities
Register.

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

                   SECTION 3.02. Denominations. The Securities of each series
shall be issuable in such denominations as shall be specified as contemplated by
Section 3.01. In the absence of any such provisions with respect to the
Securities of any series, the Securities of such series denominated in Dollars
shall be issuable in denominations of $1,000, if registered, and $5,000, if
bearer, and in any integral multiple of the applicable denominations. Securities
of each series shall be numbered, lettered or otherwise distinguished in such
manner or in accordance with such plan as the officers of the Company executing
the same may determine with the approval of the Trustee.

                  SECTION 3.03. Execution, Authentication. Delivery and Dating.
The Securities shall be executed on behalf of the Company by manual or facsimile
signatures of its Chairman, its President or any of its Vice Presidents or its
Treasurer, under its corporate seal reproduced thereon attested by the manual or
facsimile signature of its Secretary or one of its Assistant Secretaries. Any
Coupons shall be executed on behalf of the Company by the manual or facsimile
signature of any such officer of the Company.

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

                   At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any series,
together with any Coupons appertaining thereto, executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities; provided, however, that,
in connection with its original issuance, no Bearer Security (including any
temporary Bearer Security issued pursuant to Section 3.04 which is not a Global
Security) shall be mailed or otherwise delivered to any location in the United
States; and provided; further that a Bearer Security may be delivered outside
the United States in connection with its original issuance only if the Person
entitled to receive such Bearer Security (including any temporary Bearer
Security issued pursuant to Section 3.04 which is not a Global Security) shall
have furnished a certificate in the form set forth in Exhibit A.1 to this
Indenture, dated on the earlier of the first Interest Payment Date and the date
of the delivery -of the Bearer Security in definitive form. If any Security
shall be represented by a definitive Global Security in bearer form, then, for
purposes of this Section and Section 3.04, the notation of a beneficial owner's
interest therein upon original issuance of such Security or upon exchange of a
portion of a temporary Global Security shall be deemed to be delivery in
connection with its original issuance of such beneficial owner's interest in
such definitive Global Security in bearer form. Except as permitted by Section
3.06, the Trustee shall not authenticate and deliver any Bearer Security unless
all appurtenant Coupons for interest then matured have been detached and
canceled.

                   If the forms or terms of the Securities of the series and any
related Coupons have been established by or pursuant to one or more Board
Resolutions as permitted by Sections 2.01 and 3.01, in authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to Section 6.01) shall be fully protected in relying upon, an Opinion
of Counsel stating:

                   (a) if the forms of such Securities and any Coupons have been
         established by or pursuant to a Board Resolution as permitted by
         Section 2.01, that such forms have been established in conformity with
         the provisions of this Indenture;

                   (b) if the terms of such Securities and any Coupons have been
         or are to be established by or pursuant to a Board Resolution as
         permitted by Section 3.01, that such terms (or in the case of the
         issuance of Securities pursuant to the next paragraph, the procedures
         for determining such terms) have been established in conformity with
         the provisions of this Indenture; and

                   (c) that such Securities, together with any Coupons
         appertaining thereto, when authenticated and delivered by the Trustee
         and issued by the Company in the manner and subject to any conditions
         specified in such Opinion of Counsel, will constitute valid and legally
         binding obligations of the Company, entitled to the benefits of the
         Indenture and enforceable in accordance with their terms, subject, as
         to enforcement, to bankruptcy, insolvency, reorganization and other
         laws of general applicability relating to or affecting the enforcement
         of creditors' rights and to general equity principles.

If such forms or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee. Without limiting the
generality of the foregoing, the Trustee shall not be required to authenticate
Securities denominated in a Foreign Currency if the Trustee reasonably believes
that it will be unable to perform its duties with respect to such Securities.

                   Each Registered Security shall be dated the date of its
authentication; and each Bearer Security and any Global Security in bearer form
shall be dated as of the date of original issuance of the first Security of such
series to be issued.

No Security or Coupon shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been duly authenticated and delivered
hereunder but never issued and sold by the Company, and the Company' shall
deliver such Security to the Trustee for cancellation as provided in Section
3.09 together with a written statement (which need not comply with Section 1.02
and need not be accompanied by an Opinion of Counsel) stating that such Security
has never been issued and sold by the Company, for all purposes of this
Indenture such Security shall be deemed never to have been authenticated and
delivered hereunder and shall never be entitled to the benefits of this
Indenture.

                   If the Company shall establish pursuant to Section 3.01 that
the Securities of a series are to be issued in whole or in part in the form of a
Global Security, then the Company shall execute and the Trustee shall in
accordance with this Section and the Company Order with respect to such series
authenticate and deliver the Global Security that (i) shall represent and shall
be denominated in an aggregate amount equal to the aggregate principal amount of
Outstanding Securities of such series to be represented by the Global Security,
(ii) shall be registered, if in registered form, in the name of the Depositary
for such Global Security or the nominee of such Depositary, and (iii) shall be
delivered by the Trustee to such Depositary or pursuant to such Depository's
instruction.

                   Each Depositary designated pursuant to Section 3.01 for a
Global Security in registered form must, at the time of its designation and at
all times while it serves as Depositary, be a clearing agency registered under
the Securities Exchange Act of 1934 and any other applicable statute or
regulation.

                  SECTION 3.04. Temporary Securities. Pending the preparation of
definitive Securities of any series, the Company may execute, and upon Company
Order the Trustee shall authenticate and deliver, temporary Securities which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Securities
in lieu of which they are issued, in registered form or, if authorized, in
bearer form with one or more Coupons or without Coupons, and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Securities may determine, as evidenced conclusively by
their execution of such Securities. Such temporary Securities may be in global
form.

                   Except in the case of temporary Global Securities in bearer
form (which shall be exchanged in accordance with the provisions of the
following paragraphs), if temporary Securities of any series are issued, the
Company will cause definitive Securities of that series to be prepared without
unreasonable delay. After the preparation of definitive Securities of such
series, the temporary Securities of such series shall be exchangeable for
definitive Securities of such series upon surrender of the temporary Securities
of such series at the office or agency of the Company maintained pursuant to
Section 10.02 in a Place of Payment for such series for the purpose of exchanges
of Securities of such series, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities of any series (accompanied
by any unmatured Coupons appertaining thereto) the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a like aggregate
principal amount of definitive Securities of the same series and of like tenor
or authorized denominations and having the same terms and conditions; provided,
however, that no definitive Bearer Security shall be delivered in exchange for a
temporary Registered Security; and provided further that a definitive Bearer
Security shall be delivered in exchange for a temporary Bearer Security only in
compliance with the conditions set forth in Section 3.03.

                   If temporary Global Securities of any series are issued in
bearer form, any such temporary Global Securities in bearer form shall, unless
otherwise provided therein, be delivered to the London office of a Depositary
(the "Common Depositary"), for the benefit of Euroclear and CEDEL S.A., for
credit to the respective accounts of the beneficial owners of such Securities
(or to such other accounts as they may direct).

Without unnecessary delay but not later than the date specified in, or
determined pursuant to the terms of, any such temporary Global Security (but in
any event in the case of definitive Securities to be delivered in bearer form
not before the beneficial owners of interests in the temporary Global Security
have provided the certification set forth in Section 3.03) (the "Exchange
Date"), the Company shall deliver to the Trustee definitive Securities, in
aggregate principal amount equal to the principal amount of such temporary
Global Security, executed by the Company. On or after the Exchange Date such
temporary Global Security shall be surrendered by the Common Depositary to the
Trustee, as the Company's agent for such purpose, to be exchanged, in whole or
from time to time in part, for definitive Securities without charge and the
Trustee shall authenticate and deliver, in exchange for each portion of such
temporary Global Security, an equal aggregate principal amount of definitive
Securities of the same series of authorized denominations and of like tenor as
the portion of such temporary Global Security to be exchanged. The definitive
Securities to be delivered in exchange for any such temporary Global Security in
bearer form shall be in bearer form, registered form, definitive global form
(registered or bearer), or any combination thereof, as specified as contemplated
by Section 3.01, and, if any combination thereof is so specified, as requested
by the beneficial owner thereof; provided, however, that, unless otherwise
specified in such temporary Global Security in bearer form, upon such
presentation by the Common Depositary, such temporary Global Security in bearer
form shall be accompanied by a certificate dated the Exchange Date or a
subsequent date and signed by Euroclear as to the portion of such temporary
Global Security in bearer form held for its account then to be exchanged and a
certificate dated the Exchange Date or a subsequent date and signed by CEDEL
S.A. as to the portion of such temporary Global Security in bearer form held for
its account then to be exchanged, each in the form set forth in Exhibit A.2 to
this Indenture; and Provided further that definitive Bearer Securities shall be
delivered in exchange for a portion of a temporary Global Security in bearer
form only in compliance with the requirements of Section 3.03.

Unless otherwise specified in such temporary Global Security in bearer form, the
interest of a beneficial owner of Securities of a series in a temporary Global
Security in bearer form shall be exchanged for definitive Securities of the same
series and of like tenor following the Exchange Date when the beneficial owner
instructs Euroclear or CEDEL S.A., as the case may be, to request such exchange
on his behalf and delivers to Euroclear or CEDEL S.A., as the case may be, a
certificate in the form set forth in Exhibit A.1 to this Indenture, dated on the
earlier of the first Interest Payment Date and the date of delivery of the
Securities in definitive form, copies of which certificate in blank shall be
available from the offices of Euroclear, CEDEL S.A., the Trustee, any
Authenticating Agent appointed for such series of Securities and any Paying
Agent appointed for such series of Securities. Unless otherwise specified in
such temporary Global Security in bearer form, any such exchange shall be made
free of charge to the beneficial owners of such temporary Global Security in
bearer form, except that a Person receiving definitive Securities must bear the
cost of insurance, postage, transportation and the like in the event that such
Person does not take delivery of such definitive Securities in person at the
offices of Euroclear or CEDEL S.A. The definitive Securities in bearer form to
be delivered in exchange for any portion of a temporary Global Security in
bearer form shall be delivered only outside the United States.

                  Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of the same series and of like
tenor authenticated and delivered hereunder, except that, unless otherwise
specified as contemplated by Section 3.01, interest payable on a temporary
Global Security in bearer form on an Interest Payment Date for Securities of
such series occurring prior to the applicable Exchange Date shall be payable to
Euroclear and CEDEL S.A. on such Interest Payment Date upon delivery by
Euroclear and CEDEL S.A. to the Trustee of a certificate or certificates in the
form set forth in Exhibit A.3 to this Indenture, for credit without further
interest on or after such Interest Payment Date to the respective accounts of
the Persons who are the beneficial owners of such temporary Global Security in
bearer form (or to such other accounts as they may direct) on such Interest
Payment Date and who have each delivered to Euroclear or CEDEL S.A., as the case
may be, a certificate in the form set forth in Exhibit A.4 to this Indenture.
Any interest so received by Euroclear and CEDEL S.A. and not paid as herein
provided shall be returned to the Trustee immediately prior to the expiration of
two years after such Interest Payment Date in order to be repaid to the Company
in accordance with Section 10.03.

                  SECTION 3.05. Registration; Registration of Transfer and
Exchange. The Company shall cause to be kept at an office or agency to be
maintained by the Company in accordance with Section 10.02 a register (the
"Security Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Registered
Securities and the registration of transfers of Registered Securities. The
Trustee is hereby appointed "Security Registrar" for the purpose of registering
Registered Securities and transfers of Registered Securities as herein provided.

                  Upon surrender for registration of transfer of any Registered
Security of any series at the office or agency of the Company maintained
pursuant to Section 10.02 for such purpose in a Place of Payment for such
series, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Registered Securities of the same series of any authorized denominations and
of a like aggregate principal amount and tenor and having the same terms and
conditions.

                  The Company may establish pursuant to Section 3.01 that, at
the option of the Holder, Registered Securities of any series may be exchanged
for other Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor and having the
same terms and conditions, upon surrender of the Securities to be exchanged at
any such office or agency. Whenever any Securities are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to
receive. Bearer Securities may not be issued in exchange for Registered
Securities.

                  At the option of the Holder (if so provided pursuant to
Section 3.01) Bearer Securities of any series may be exchanged for Registered
Securities of the same series of any authorized denominations and of a like
aggregate principal amount and tenor and having the same terms and conditions,
upon surrender of the Bearer Securities to be exchanged at any such office or
agency, with all unmatured Coupons and all matured Coupons in default thereto
appertaining. If the Holder of a Bearer Security is unable to produce any such
unmatured Coupon or Coupons or matured Coupon or Coupons in default, such
exchange may be effected if the Bearer Securities are accompanied by payment in
funds acceptable to the Company in an amount equal to the face amount of such
missing Coupon or Coupons, or the surrender of such missing Coupon or Coupons
may be waived by the Company and the Trustee if there is furnished to them such
security or indemnity as they may require to save each of them and any Paying
Agent harmless. If thereafter the Holder of such Security shall surrender to any
Paying Agent any such missing Coupon in respect of which such a payment shall
have been made, such Holder shall be entitled to receive the amount of such
payment; provided, however, that, except as otherwise provided in Section 10.02,
interest represented by Coupons shall be payable only upon presentation and
surrender of those Coupons at an office or agency located outside the United
States. Notwithstanding the foregoing, in case a Bearer Security of any series
is surrendered at any such office or agency in exchange for a Registered
Security of the same series and like tenor after the close of Business at such
office or agency on (i) any Regular Record Date and before the opening of
business at such office or agency on the relevant Interest Payment Date, or (ii)
any Special Record Date and before the opening of business at such office or
agency on the related proposed date for payment of Defaulted Interest, such
Bearer Security shall be surrendered without the Coupon relating to such
Interest Payment Date or proposed date for payment, as the case may be, and
interest or Defaulted Interest, as the case may be, will not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such Coupon when due in accordance
with the provisions of this Indenture.

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

                  Notwithstanding the foregoing, except as otherwise specified
as contemplated by Section 3.01, any definitive Global Security in bearer form
shall be exchangeable only as provided in this paragraph. If the beneficial
owners of interests in a definitive Global Security in bearer form are entitled
to exchange such interests for Securities of such series and of like tenor and
principal amount of another authorized form and denomination, as specified as
contemplated by Section 3.01, then without unnecessary delay but in any event
not later than the earliest date on which such interest may be so exchanged, the
Company shall deliver to the Trustee definitive Securities in aggregate
principal amount equal to the principal amount of such definitive Global
Security in bearer form, executed by the Company. On or after the earliest date
on which such interest may be so exchanged, such definitive Global Security in
bearer form shall be surrendered by the Common Depositary or such other
depositary or Common Depositary as shall be specified in the Company Order with
respect thereto to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Securities
without charge and the Trustee shall authenticate and deliver, in exchange for
each portion of such definitive Global Security in bearer form, an equal
aggregate principal amount of definitive Securities of the same series of
authorized denominations and of like tenor as the portion of such definitive
Global Security in bearer form to be exchanged which, unless the Securities of
the series are not issuable both as Bearer Securities and as Registered
Securities, as specified as contemplated by Section 3.01, shall be in the form
of Bearer Securities or Registered Securities, or any combination thereof, as
shall be specified by the beneficial owner thereof; provided, however, that no
such exchanges may occur during a period beginning at the opening of business 15
days before any selection of Securities of that series to be redeemed and ending
on the relevant Redemption Date; and provided further that no Bearer Security
delivered in exchange for a portion of a definitive Global Security shall be
mailed or otherwise delivered to any location in the United States. If a
Registered Security is issued in exchange for any portion of a definitive Global
Security in bearer form after the close of business at the office or agency
where such exchange occurs on (i) any Regular Record Date and before the opening
of business at such office or agency on the relevant Interest Payment Date, or
(ii) any Special Record Date and the opening of business at such office or
agency on the related proposed date for payment of Defaulted Interest, interest
or Defaulted Interest, as the case may be, will not be payable on such Interest
Payment Date or proposed date for payment, as the case may be, in respect of
such Registered Security, but will be payable on such Interest Payment Date or
proposed date for payment, as the case may be, only to the Person to whom
interest in respect of such portion of such definitive Global Security in bearer
form is payable in accordance with the provisions of this Indenture.

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

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

                  No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 3.04, 9.06 or 11.06 not involving any
transfer.

                  The Company shall not be required (i) to issue, register the
transfer of or exchange Securities of any series during a period beginning at
the opening of business 15 days before any selection of Securities of that
series to be redeemed and ending at the close of business on (A) if Securities
of the series are issuable only as Registered Securities, the day of the mailing
of the relevant notice of redemption and (B) if Securities of the series are
issuable as Bearer Securities, the day of the first publication of the relevant
notice of redemption or, if Securities of the series are also issuable as
Registered Securities and there is no publication, the mailing of the relevant
notice of redemption, or (ii) to register the transfer of or exchange of any
Registered Security so selected for redemption, in whole or in part, except the
unredeemed portion of any Security being redeemed in part, or (iii) to exchange
any Bearer Security so selected for redemption except that such a Bearer
Security may be exchanged for a Registered Security of that series and like
tenor; provided that such Registered Security shall be simultaneously
surrendered for redemption.

If at any time the Depositary for the Global Securities of a series notifies the
Company that it is unwilling or unable to continue as Depositary for the Global
Securities of such series or if at any time the Depositary for the Global
Securities of such series shall no longer be eligible under Section 3.03, the
Company shall appoint a successor Depositary with respect to the Global
Securities of such series. If a successor Depositary for the Global Securities
of such series is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility, the Company's
election pursuant to Section 3.01 that such Registered Securities be represented
by one or more Global Securities shall no longer be effective with respect to
the Global Securities of such series and the Company will execute, and the
Trustee, upon receipt of a Company Order for the authentication and delivery of
definitive Securities of such series, will authenticate and deliver, Securities
of such series in definitive form in an aggregate principal amount equal to the
principal amount of the Global Security or Securities representing such series
in exchange for such Global Security or Securities.

                  If specified by the Company pursuant to Section 3.01 with
respect to a series of Securities, the Company may at any time and in its sole
discretion determine that the Securities of any series issued in the form of one
or more Global Securities shall no longer be represented by such Global Security
or Securities. In such event the Company will execute, and the Trustee, upon
receipt of a Company Order for the authentication and delivery of definitive
Securities of such series, will authenticate and deliver Securities of such
series in definitive form and in an aggregate principal amount equal to the
principal amount of the Global Security or Securities representing such series
in exchange for such Global Security or Securities.

                  If specified by the Company pursuant to Section 3.01 with
respect to a series of Securities, the Depositary for such series of Securities
may at its option surrender a Global Security for such series of Securities in
exchange in whole or in part for Securities of such series in definitive form on
such terms as are acceptable to the Company and such Depositary. Thereupon, the
Company shall execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of definitive Securities of such series, shall
authenticate and deliver, without charge to the Holders,

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

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

In any exchange provided for in any of the preceding three paragraphs, the
Company will execute and the Trustee will authenticate and deliver Securities
(a) in definitive registered form in authorized denominations, if the Securities
of such series are issuable as Registered Securities, (b) in definitive bearer
form in authorized denominations, with coupons attached, if the Securities of
such series are issuable as Bearer Securities or (c) as either Registered or
Bearer Securities, if the Securities of such series are issuable in either form;
provided, however, that a definitive Bearer Security shall be delivered in
exchange for a temporary Global Security only in compliance with the conditions
set forth in Section 3.04; and provided further that delivery of a Bearer
Security shall occur only outside the United States.

                  Upon the exchange of a Global Security for Securities in
definitive form, such Global Security shall be canceled by the Trustee.
Registered Securities issued in exchange for a Global Security pursuant to this
Section shall be registered in such names and in such authorized denominations
as the Depositary for such Global Security, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee. The
Trustee shall deliver such Registered Securities to the persons in whose names
such Securities are so registered.

                  Unless otherwise specified by the Company pursuant to Section
3.01, a Global Security representing all or a portion of the Securities of a
series may not be transferred except as a whole by the Depositary for such
series to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor Depositary for such series or a nominee of such
successor Depositary.

                  SECTION 3.06. Mutilated, Destroyed. Lost and Stolen
Securities. If any mutilated Security or Security with a mutilated Coupon
appertaining to it is surrendered to the Trustee, the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a new Security
of the same series and of like tenor and principal amount and with the same
terms and conditions and bearing a number not contemporaneously outstanding with
Coupons corresponding to the Coupons, if any, appertaining to the surrendered
Security.

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

                  In case any such mutilated, destroyed, lost or stolen Security
or Coupon has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security or Coupon pay such Security or
Coupon; provided, however, that principal of (and premium, if any) and any
interest on Bearer Securities shall, except as otherwise provided in Section
10.02, be payable only at an office or agency located outside the United States
and, unless otherwise specified as contemplated by Section 3.01, any interest on
Bearer Securities shall be payable only upon presentation and surrender of the
Coupons appertaining thereto.

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

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

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

                  SECTION 3.07. Payment of Interest; Interest Rights Preserved.
Unless otherwise provided as contemplated by Section 3.01 with respect to any
series of Securities, interest on any Registered Security which is payable, and
is punctually paid or duly provided for, on any Interest Payment Date shall be
paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.

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

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

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

                  Subject to the foregoing provisions of this Section and
Section 3.05, each Security delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Security shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried by such
other Security.

                  None of the Company, the Trustee, any Authenticating Agent,
any Paying Agent or the Security Registrar will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of any beneficial ownership interest in a Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interest.

                  SECTION 3.08. Persons Deemed Owners. Prior to due presentment
of a Registered Security for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may treat the Person in whose name
such Registered Security is registered as the owner of such Registered Security
for the purpose of receiving payment of principal of (and premium, if any) and
(subject to Sections 3.05 and 3.07) interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.

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

                  SECTION 3.09. Cancellation. All Securities and Coupons
surrendered for payment, redemption, registration of transfer or exchange or for
credit against any sinking fund payment shall, if surrendered to any Person
other than the Trustee, be delivered to the Trustee. All Securities and Coupons
so delivered shall be promptly canceled by the Trustee. All Bearer Securities
and unmatured Coupons held by the Trustee pending such cancellation shall be
deemed to be delivered for cancellation for all purposes of this Indenture and
the Securities. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and may deliver to
the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder which the Company
has not issued and sold, and all Securities so delivered shall be promptly
canceled by the Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Securities and Coupons held
by the Trustee shall be destroyed in a manner selected by the Trustee unless
otherwise directed by a Company Order.

                  SECTION 3.10. Computation of Interest. Except as otherwise
specified as contemplated by Section 3.01 for Securities of any series, interest
on the Securities of each series shall be computed on the basis of a 360--day
year of twelve 30-day months.

                  SECTION 3.11. Compliance with Certain Laws and Regulations. If
any Bearer Securities are to be issued in any series of Securities, the Company
will use reasonable efforts to provide for arrangements and procedures designed
pursuant to then applicable laws and regulations, if any, to ensure that such
Bearer Securities are sold or resold, exchanged, transferred and paid only in
compliance with such laws and regulations and without adverse consequences to
the Company, the Holders and the Trustee.

                  SECTION 3.12. Medium-Term Securities. Notwithstanding any
contrary provision herein, if all Securities of a series are not to be
originally issued at one time, it shall not be necessary to deliver the Company
Order, Officers' Certificate, supplemental indenture or Opinion of Counsel
otherwise required pursuant to Sections 1.02, 3.01, 3.03 and 3.04 at or prior to
the time of authentication of each Security of such series if such documents are
delivered at or prior to the authentication upon original issuance of the first
Security of such series to be issued.

                  An Officers' Certificate or supplemental indenture, delivered
pursuant to this Section 3.12 in the circumstances set forth in the preceding
paragraph may provide that Securities which are the subject thereof will be
authenticated and delivered by the Trustee on original issue from time to time
upon the telephonic or written order of persons designated in such Officers'
Certificate or supplemental indenture (telephonic instructions to be promptly
confirmed in writing by such persons) and that such persons are authorized to
determine, consistent with such Officers' Certificate or any applicable
supplemental indenture such terms and conditions of said Securities as are
specified in such Officers' Certificate or supplemental indenture, provided that
the foregoing procedure is acceptable to the Trustee.


                                  ARTICLE FOUR

                           Satisfaction and Discharge

                  SECTION 4.01. Satisfaction and Discharge of Indenture. This
Indenture shall upon Company Request cease to be of further effect with respect
to a series of Securities (except as to any surviving rights of (as applicable)
registration of transfer or exchange of Securities and Coupons, if any, of such
series herein expressly provided for) and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to such series, when

                  (1) either

                          (A) all Securities and Coupons of such series
                  theretofore authenticated and delivered (other than (i)
                  Coupons appertaining to Bearer Securities surrendered for
                  exchange for Registered Securities and maturing after such
                  exchange, whose surrender is not required or has been waived
                  as provided in Section 3.05, (ii) Securities and Coupons of
                  such series which have been destroyed, lost or stolen and
                  which have been replaced or paid as provided in Section 3.06,
                  (iii) Coupons appertaining to Securities called for redemption
                  and maturing after the relevant Redemption Date, whose
                  surrender has been waived as provided in Section 11.06, and
                  (iv) Securities and Coupons of such series for whose payment
                  money has theretofore been deposited in trust or segregated
                  and held in trust by the Company and thereafter repaid to the
                  Company or discharged from such trust, as provided in Section
                  10.03) have been delivered to the Trustee for cancellation; or

                         (B)    all such Securities and Coupons of such series
                  not theretofore delivered to the Trustee for
                  cancellation

                                  (i)     have become due and payable, or

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

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

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

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

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

                  Notwithstanding the satisfaction and discharge of this
Indenture with respect to a series, the obligations of the Company to the
Trustee under Section 6.07, the obligations of the Trustee to any Authenticating
Agent under Section 6.14 and, if money shall have been deposited with the
Trustee pursuant to subclause (B) of clause (1) of this Section, the obligations
of the Trustee under Section 4.02 and the last paragraph of Section 10.03 shall
survive.

                  SECTION 4.02. Application of Trust Money. Subject to the
provisions of the last paragraph of Section 10.03, all money deposited with the
Trustee pursuant to Sections 4.01 and 4.03 shall be held in trust and applied by
it, in accordance with the provisions of the Securities and Coupons, if any, and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee.

                  SECTION 4.03. Satisfaction. Discharge and Defeasance
                                ---------------------------------------

of Securities of Any Series.
---------------------------


If this Section is specified, as contemplated by Section 3.01, to be applicable
 to Securities and Coupons, if any, of any series, at the Company's option,
either

                  (a) the Company will be deemed to have been Discharged (as
         defined below) from its obligations with respect to Securities and
         Coupons, if any, of such series or

                  (b) the Company will cease to be under any obligation to
         comply with any term, provision or condition set forth in (x) Sections
         8.01, 8.02, 10.08 and 10.09 or (y) the instrument or instruments
         setting forth the terms, provisions or conditions of such series
         pursuant to Section 3.01 provided in case of this subclause (y) that
         such instrument or instruments specify which terms, provisions or
         conditions, if any, are subject to this clause (b) provided further,
         however, that no such instrument may specify that the Company may cease
         to comply with any obligations as to which it may not be Discharged
         pursuant to the definition of "Discharged"); in each case (a) and (b)
         with respect to the Securities and Coupons, if any, of such series on
         the 91st day after the applicable conditions set forth below in (p) and
         either (q) or (r) have been satisfied:

                  (p) (1) the Company has paid or caused to be paid all other
         sums payable with respect to the Outstanding Securities and Coupons, if
         any, of such series (in addition to any required under (q) or (r)); and

                  (2) the Company has delivered to the Trustee an Officers'
         Certificate and an Opinion of Counsel , each stating that all
         conditions precedent herein provided for relating to, as applicable (i)
         the satisfaction and discharge of the entire indebtedness on all
         Outstanding Securities and Coupons, if any, of any such series, or (ii)
         the discharge of the obligations with respect to the Securities of such
         series set forth in (b) above, have been complied with;

                  (q) (1) the Company shall have with respect to (a) or (b)
         above deposited or caused to be deposited irrevocably with the Trustee
         as a trust fund specifically pledged as security for, and dedicated
         solely to, the benefit of the Holders of the Securities and Coupons, if
         any, of such series (i) money in an amount (in such currency,
         currencies or currency unit or units in which any Outstanding
         Securities and Coupons, if any, of such series are payable) or (ii) in
         the case of Securities and Coupons, if any, denominated in Dollars,
         U.S. Government Obligations (as defined below) or, in the case of
         Securities and Coupons, if any, denominated in a Foreign Currency,
         Foreign Government Securities (as defined below), which through the
         payment of interest and principal in respect thereof in accordance with
         their terms will provide, not later than one day before the due date of
         any payment of principal (including any premium) and interest, if any,
         under the Securities and Coupons, if any, of such series, money in an
         amount or (iii) a combination of (i) and (ii), sufficient (in the
         opinion with respect to (ii) and (iii) of a nationally recognized firm
         of independent public accountants expressed in a written certification
         thereof delivered to the Trustee) to pay and discharge each installment
         of principal of (including any premium), and interest, if any, on, the
         Outstanding Securities and Coupons, if any, of such series on the dates
         such installments of interest or principal (including any premium) are
         due, in the currency, currencies or currency unit or units, in which
         such Securities and Coupons, if any, are payable;

                  (2) (i) no Event of Default or event (including such deposit)
         which with notice or lapse of time would become an Event of Default
         shall have occurred and be continuing on the date of such deposit, (ii)
         no Event of Default as defined in clause (5) or (6) of Section 5.01, or
         event which with notice or lapse of time or both would become an Event
         of Default under either such clause, shall have Occurred within 90 days
         after the date of such deposit and (iii) such deposit and the related
         intended consequence under (a) or (b) will not result in any default or
         event of default under any material indenture, agreement or other
         instrument binding upon the Company or any Subsidiary or any of their
         properties; and

                  (3) the Company shall have delivered to the Trustee an Opinion
         of Counsel to the effect that Holders of the Securities and Coupons, if
         any, of such series will not recognize income, gain or loss for Federal
         income tax purposes as a result of the Company's exercise of its option
         under this Section 4.03 and will be subject to Federal income tax in
         the same amount, in the same manner and at the same times as would have
         been the case if such option had not been exercised;

                  (r) the Company has properly fulfilled such other means of
         satisfaction and discharge as is specified, as contemplated by Section
         3.01, to be applicable to the Securities and Coupons, if any, of such
         series.

                  Any deposits with the Trustee referred to in clause (q) (1)
above will be made under the terms of an escrow trust agreement in form
satisfactory to the Trustee. If any Outstanding Securities and Coupons, if any,
of such series are to be redeemed prior to their Stated Maturity, whether
pursuant to any mandatory redemption provisions or in accordance with any
mandatory sinking fund requirement, the applicable escrow trust agreement will
provide therefor and the Company will make arrangements for the giving of notice
of redemption by the Trustee in the name, and at the expense, of the Company.

SECTION 4.04. Reinstatement. If the Trustee is unable to apply any money, U.S.
Government Obligations or Foreign Government Securities in accordance with
Section 4.01 or 4.03 by reason of any legal proceeding or by reason of any order
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities and Coupons, if any, of such series shall be
revived and reinstated as though no deposit had occurred pursuant to Section
4.01 or 4.03 until such time as the Trustee is permitted to apply all such
money, U.S. Government Obligations or Foreign Government Securities in
accordance with Section 4.01 or 4.03; provided, however, that if the Company has
made any payment of interest on or principal of (and premium, if any) on any
Securities and Coupons, if any, of such series because of the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders of
such series of Securities and Coupons, if any, to receive such payment from the
money, U.S. Government Obligations or Foreign Government Securities held by the
Trustee.

                  SECTION 4.05. Definitions. The following terms, as used in
                                -----------
this Article IV, shall have the following meanings:


                  "Discharged" means that the Company will be deemed to have
         paid and discharged the entire indebtedness represented by, and
         obligations under, the Securities and Coupons, if any, of the series as
         to which this Section is specified as applicable as aforesaid and to
         have satisfied all the obligations under this Indenture relating to the
         Securities and Coupons, if any, of such series (and the Trustee, at the
         expense of the Company, will execute proper instruments acknowledging
         the same), except (A) the rights of Holders thereof to receive, from
         the trust fund described in clause (q) (1) above, payment of the
         principal of (premium, if any) and the interest, if any, on such
         Securities and Coupons, if any, when such payments are due, (B) the
         Company's obligations with respect to such Securities and Coupons, if
         any, under Sections 3.05 and 3.06 (insofar as applicable to Securities
         of such series), 4.02, 10.02 and 10.03 (last paragraph only) and the
         Company's obligations to the Trustee under Sections 6.07 and 6.10, (C)
         the rights of Holders of Securities of any series with respect to the
         currency or currency units in which they are to receive payments of
         principal, premium, if any, and interest and (D) the rights, powers,
         trusts, duties and immunities of the Trustee hereunder, will survive
         such discharge. The Company will reimburse the trust fund for any loss
         suffered by it as a result of any tax, fee or other charge imposed on
         or assessed against deposited U.S. Government Obligations or Foreign
         Government Securities, as the case may be, or any principal or interest
         paid on such obligations, and, subject to the provisions of Section
         6.07, will indemnify the Trustee against any claims made against the
         Trustee in connection with any such loss.

                  "Foreign Government Securities" means, with respect to
         Securities and Coupons, if any, of any series that are denominated in a
         Foreign Currency, securities that are (i) direct obligations of the
         government that issued or caused to be issued such currency for the
         payment of which obligations its full faith and credit is pledged or
         (ii) obligations of a Person controlled or supervised by and acting as
         an agency or instrumentality of such government the timely payment of
         which is unconditionally guaranteed as a full faith and credit
         obligation by such government, which, in either case under clauses (i)
         or (ii), are not callable or redeemable at the option of the issuer
         thereof.

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

                                  ARTICLE FIVE

                                    Remedies

                  SECTION 5.01. Events of Default. "Event of Default", wherever
used herein with respect to Securities of any series, means any one of the
following events (whatever the reason for such Event of Default and 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), unless it is either inapplicable to
a particular series or it is specifically deleted or modified in or pursuant to
the supplemental indenture or Board Resolution establishing such series of
Securities or in the form of Security for such series:

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

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

                  (3) default in the deposit of any sinking fund payment, when
         and as due by the terms of a Security of that series, and continuance
         of such default for a period of 30 days; or

                  (4) default in the performance, or breach, of any covenant or
         warranty of the Company in this Indenture (other than a covenant or
         warranty a default in the performance or breach of which is elsewhere
         in this Section specifically dealt with or which has expressly been
         included in this Indenture solely for the benefit of a series of
         Securities other than that series) and continuance of such default or
         breach for a period of 60 days after there has been given, by
         registered or certified mail, to the Company by the Trustee or to the
         Company and the Trustee by the Holders of at least 25% in principal
         amount of the Outstanding Securities of that series a written notice
         specifying such default or breach and requiring it to be remedied and
         stating that such notice is a "Notice of Default" hereunder; or

                  (5) the entry by a court having jurisdiction in the premises
         of (A) a decree or order for relief in respect of the Company in an
         involuntary case or proceeding under any applicable Federal or State
         bankruptcy, insolvency, reorganization or other similar law or (B) a
         decree or order adjudging the Company a bankrupt or insolvent, or
         approving as properly filed a petition seeking reorganization,
         arrangement, adjustment or composition of or in respect of the Company
         under any applicable Federal or State law, or appointing a custodian,
         receiver, liquidator, assignee, trustee, sequestrator or other similar
         official of the Company or of any substantial part of its property, or
         ordering the winding up or liquidation of its affairs, and the
         continuance of any such decree or order for relief or any such other
         decree or order unstayed and in effect for a period of 90 consecutive
         days; or

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

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

                  SECTION 5.02. Acceleration of Maturity; Rescission and
Annulment. If an Event of Default with respect to Securities of any series at
the time Outstanding occurs and is continuing, then in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal amount of all of
the Securities of that series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders) and upon any
such declaration such principal amount (or specified amount) shall become
immediately due and payable.

                   At any time after such a declaration of acceleration with
respect to Securities of any series has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of a majority in principal
amount of the Outstanding Securities of that series, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if

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

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

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

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

                            (D) in Dollars all sums paid or advanced by the
                  Trustee hereunder and the reasonable compensation, expenses,
                  disbursements and advances of the Trustee, its agents and
                  counsel and all other amounts due the Trustee under Section
                  6.07;

         and

                  (2) all Events of Default with respect to Securities of that
         series, other than the nonpayment of the principal of Securities of
         that: series which have become due solely by such declaration of
         acceleration, have been cured or waived as provided in Section 5.13. No
         such rescission shall affect any subsequent default or impair any right
         consequent thereon.

                   SECTION 5.03. Collection of Indebtedness and Suits for
                                 ----------------------------------------
                                 Enforcement by Trustee.
                                 -----------------------
                The Company covenants that if


                  (1) default is made in the payment of any interest on any
         Security or Coupon when such interest becomes due and payable and such
         default continues for the period of grace provided for with respect to
         such Security,

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

                   (3) default is made in the deposit of any sinking fund
         payment, when and as due by the terms of a Security, the Company will,
         upon demand of the Trustee, pay to it, for the benefit of the Holders
         of such Securities and Coupons, if any, the whole amount then due and
         payable on such Securities and Coupons, if any, for principal (and
         premium, if any) and interest and, to the extent that payment of such
         interest shall be legally enforceable, interest on any overdue
         principal (and premium, if any) and on any overdue interest, at the
         rate or rates prescribed therefor in such Securities and Coupons, if
         any, and, in addition thereto, such further amount as shall be
         sufficient to cover the costs and expenses of collection, including the
         reasonable compensation, expenses, disbursements and advances of the
         Trustee, its agents and counsel and all other amounts due the Trustee
         under Section 6.07.

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

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

                   SECTION 5.04. Trustee May File Proofs of Claim. In case of
the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Securities shall then be
due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,

                   (i) to file and prove a claim for the whole amount of
         principal (and premium, if any) and interest owing and unpaid in
         respect of the Securities and to file such other papers or documents as
         may be necessary or advisable in order to have the claims of the
         Trustee (including any claim for the reasonable compensation, expenses,
         disbursements and advances of the Trustee, its agents and counsel and
         all other amounts due the Trustee under Section 6.07) and of the
         Holders allowed in such judicial proceeding, and

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

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.07.

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

                   SECTION 5.05. Trustee May Enforce Claims Without Possession
of Securities. All rights of action and claims under this Indenture or the
Securities or Coupons, if any, may be prosecuted and enforced by the Trustee
without the possession of any of the Securities or Coupons or the production
thereof in any proceeding relating thereto, and any such proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel and all other amounts due the Trustee under Section 6.07,
be for the ratable benefit of the Holders of the Securities and Coupons, if any,
in respect of which such judgment has been recovered.

                   SECTION 5.06. Application of Money Collected. Any money
collected by the Trustee pursuant to this Article shall be applied in the
following order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal (or premium, if any) or
interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:

                   FIRST:        to the payment of all amounts due the Trustee
                   under Section 6.07;

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

                   THIRD:        the balance, if any, to the Person or Persons
                   entitled thereto.

                   SECTION 5.07. Limitation on Suits.
                                 -------------------
      No Holder of any series shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment
of a receiver or trustee, or for any other remedy
hereunder, unless

                   (1) an Event of Default with respect to Securities of such
         series shall have occurred and be continuing and such Holder has
         previously given written notice to the Trustee of such continuing Event
         of Default;

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

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

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

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

it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture (including without limitation the provisions of Section 5.12)
to affect, disturb or prejudice the rights of any other of such Holders, or to
obtain or to seek to obtain priority or preference over any other of such
Holders or to enforce any right under this Indenture, except in the manner
herein provided and for the equal and ratable benefit of all of such Holders.

SECTION 5.08. Unconditional Right of Holders To Receive Principal. Premium and
Interest. Notwithstanding any other provision in this Indenture, the Holder of
any Security or any Coupon shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any) and
(subject to Section 3.07) interest on such Security or Coupon on the Stated
Maturity or Maturities expressed in such Security (or, in the case of
redemption, on the Redemption Date) and to institute suit for the enforcement of
any such payment, and such rights shall not be impaired without the consent of
such Holder.

                   SECTION 5.09. Restoration of Rights and Remedies. If the
Trustee or any Holder has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or to
such Holder, then and in every such case, subject to any determination in such
proceeding, the Company, the Trustee and the Holders shall be restored severally
and respectively to their former positions hereunder and thereafter all rights
and remedies of the Trustee and the Holders shall). continue as though no such
proceeding had been instituted.

                   SECTION 5.10. Rights and Remedies Cumulative. Except as
otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities in the last paragraph of Section 3.06, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

                   SECTION 5.11. Delay or Omission Not Waiver. No delay or
omission of the Trustee or of any Holder of any Securities to exercise any right
or remedy accruing upon any Event of Default shall impair any such right or
remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article or by law to the Trustee
or to the Holders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Holders, as the case may be.

                   SECTION 5.12. Control by Holders. The Holders of not less
than a majority in principal amount of the Outstanding Securities of any series
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee, with respect to the Securities of such series;
provided that

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

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

                   (3) subject to the provisions of Section 6.01, the Trustee
         shall have the right to decline to follow any such direction if the
         Trustee in good faith shall, by a Responsible Officer or Officers of
         the Trustee, determine that the action so directed would involve the
         Trustee in personal liability.

                   SECTION 5.13. Waiver of Past Defaults. The Holders of not
less than a majority in principal amount of the Outstanding Securities of any
series may on behalf of the Holders of all the Securities of such series waive
any past default hereunder with respect to such series and its consequences,
except a default

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

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

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

                  SECTION 5.14. Undertaking for Costs. All parties to this
Indenture agree, and each Holder by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken, suffered or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Company, to any suit instituted by the Trustee, to any
suit instituted by any Holder, or group of Holders, holding in the aggregate
more than 10% in principal amount of the Outstanding Securities of any series,
or to any suit instituted by any Holder for the enforcement of the payment of
the principal of (or premium, if any) or interest on any Security or the payment
of any Coupon on or after the Stated Maturity or Maturities expressed in such
Security (or, in the case of redemption, on or after the Redemption Date)

                   SECTION 5.15. Waiver of Stay or Extension Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.





                                         ARTICLE SIX

                                         The Trustee

                   SECTION 6.01. Certain Duties and Responsibilities.
                                 -----------------------------------
(a) Except during the continuance of an Event of Default with
respect to any series:

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

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

                   (b) In case an Event of Default has occurred and is
continuing with respect to any series, the Trustee shall exercise such of the
rights and powers vested in it by this Indenture with respect to such series,
and use the same degree of care and skill in their exercise, as oa prudent man
would exercise or use under the circumstances in the conduct of his own affairs.

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

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

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

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

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

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

                   SECTION 6.02. Notice of Defaults. Within 90 days after the
occurrence of any default hereunder with respect to the Securities of any
series, the Trustee shall transmit notice of such default hereunder known to the
Trustee to the Holders of such Securities as provided in Section 7.03(d), unless
such default shall have been cured or waived; provided, however, that, except in
the case of a default in the payment of the principal of (or premium, if any) or
interest on any Security of such series or in the payment of any sinking fund
installment with respect to Securities of such series, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors or Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interest of the Holders of Securities of such series; provided
further, that in the case of any default of the character specified in Section
5.01(4) with respect to Securities of such series, no such notice to Holders
shall be given until at least 30 days after the occurrence thereof. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to Securities of such series.

                   SECTION 6.03. Certain Rights of Trustee.
                                  -------------------------
Subject to the provisions of Section 6.01:


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

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

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

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

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

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

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

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

                  SECTION 6.04. Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. Neither the Trustee nor any Authenticating Agent
shall be accountable for the use or application by the Company of Securities or
the proceeds thereof.

                  SECTION 6.05. May Hold Securities. The Trustee, any
Authenticating Agent, any Paying Agent, any Security Registrar or any other
agent of the Company, in its individual or any other capacity, may become the
owner or pledgee of Securities or warrants to purchase Securities and, subject
to Sections 6.08 and 6.13, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Paying Agent, Security Registrar or
such other agent.

                  SECTION 6.06. Money Held in Trust. Except as provided in
Section 1.14, money held by the Trustee or any Paying Agent in trust hereunder
need not be segregated from other funds except to the extent required by law.
The Trustee or any Paying Agent shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Company.

                  SECTION 6.07. Compensation and Reimbursement.
                                ------------------------------
The Company agrees


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

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

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

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

                  SECTION 6.08. Disqualification; Conflicting Interests. (a) If
the Trustee has or shall acquire any conflicting interest, as defined in this
Section, with respect to the Securities and Coupons, if any, of any series, it
shall, within 90 days after ascertaining that it has such conflicting interest,
either eliminate such conflicting interest or resign with respect to the
Securities and Coupons, if any, of that series in the manner and with the effect
hereinafter specified in this Article.

                  (b) In the event that the Trustee shall fail to comply with
the provisions of Subsection (a) of this Section with respect to the Securities
of any series, the Trustee shall, within 10 days after the expiration of such
90-day period, transmit notice pursuant to Section 1.06, of such failure, to all
Holders of such series.

                  (c) For the purposes of this Section, the Trustee shall be
deemed to have a conflicting interest with respect to the Securities of any
series if

                  (1) the Trustee is trustee under this Indenture with respect
         to the Outstanding Securities of any series other than that series or
         is trustee under another indenture under which any other securities, or
         certificates of interest or participation in any other securities, of
         the Company are outstanding, unless such other indenture is a
         collateral trust indenture under which the only collateral consists of
         Securities issued under this Indenture; provided that there shall be
         excluded from the operation of this paragraph the Indentures dated as
         of June 1, 1988, August 15, 1977, February 15, 1970 and August 1, 1967,
         under which the Medium-Term Notes, Series A, 8.20% Sinking Fund
         Debentures Due 2002, 8.80% Sinking Fund Debentures Due 2000 and 6.15%
         Sinking Fund Debentures Due 1992 of the Company are respectively
         outstanding and this Indenture with respect to the Securities of any
         series other than that series or any indenture or indentures under
         which other securities, or certificates of interest or participation in
         other securities, of the Company are outstanding, if

                          (i) this Indenture and such other indenture or
                  indentures are wholly unsecured and such other indenture or
                  indentures are hereafter qualified under the Trust Indenture
                  Act, unless the Commission shall have found and declared by
                  order pursuant to Section 3.05(b) or Section 3.07(c) of the
                  Trust Indenture Act that differences exist between the
                  provisions of this Indenture with respect to Securities of
                  that series and one or more other series or the provisions of
                  such other indenture or indentures which are so likely to
                  involve a material conflict of interest as to make it
                  necessary in the public interest or for the protection of
                  investors to disqualify the Trustee from acting as such under
                  this Indenture with respect to the Securities of that series
                  and such other series or under such other indenture or
                  indentures, or

                          (ii) the Company shall have sustained the burden of
                  proving, on application to the Commission and after
                  opportunity for hearing thereon, that trusteeship under this
                  Indenture with respect to the Securities of that series and
                  such other series or such other indenture or indentures is not
                  so likely to involve a material conflict of interest as to
                  make it necessary in the public interest or for the protection
                  of investors to disqualify the Trustee from acting as such
                  under this Indenture with respect to the Securities of that
                  series and such other series or under much other indenture or
                  indentures;

                  (2)     the Trustee or any of its directors or executive
         officers is an obligor upon the Securities or an
         underwriter for the Company;

                  (3) the Trustee directly or indirectly controls or is directly
         or indirectly controlled by or is under direct or indirect common
         control with the Company or an underwriter for the Company;

                  (4) the Trustee or any of its directors or executive officers
         is a director, officer partner, employee, appointee or representative
         of the Company, or of an underwriter (other than the Trustee itself)
         for the Company who is currently engaged in the business of
         underwriting, except that (i) one individual may be a director or an
         executive officer, or both, of the Trustee and a director or an
         executive officer, or both, of the Company but may not be at the same
         time an executive officer of both the Trustee and the Company; (ii) if
         and so long as the number of directors of the Trustee in office is more
         than nine, one additional individual may be a director or an executive
         officer, or both, of the Trustee and a director of the Company; and
         (iii) the Trustee may be designated by the Company or by any
         underwriter for the Company to act in the Trustee may be designated by
         the Company or by any underwriter for the Company to act in the
         capacity of transfer agent, registrar, custodian, paying agent, fiscal
         agent, escrow agent or depositary, or in any other similar capacity,
         or, subject to the provisions of paragraph (1) of this Subsection, to
         act as trustee, whether under an indenture or otherwise;

                  (5) 10% or more of the voting securities of the Trustee is
         beneficially owned either by the Company or by any director, partner or
         executive officer thereof, or 20% or more of such voting securities is
         beneficially owned, collectively, by any two or more of such persons;
         or 10% or more of the voting securities of the Trustee is beneficially
         owned either by an underwriter for the Company or by any director,
         partner or executive officer thereof, or is beneficially owned,
         collectively, by any two or more such persons;

                  (6) the Trustee is the beneficial owner of, or holds as
         collateral security for an obligation which is in default (as
         hereinafter in this Subsection defined) (i) 5% or more of the voting
         securities, or 10% or more of any other class of security, of the
         Company not including the Securities issued under this Indenture and
         securities issued under any other indenture under which the Trustee is
         also trustee, or (ii) 10% or more of any class of security of an
         underwriter for the Company;

                  (7) the Trustee is the beneficial owner of, or holds as
         collateral security for an obligation which is in default (as
         hereinafter in this Subsection defined) 5% or more of the voting
         securities of any person who, to the knowledge of the Trustee, owns 10%
         or more of the voting securities of, or controls directly or indirectly
         or is under direct or indirect common control with, the Company;

                  (8) the Trustee is the beneficial owner of, or holds as
         collateral security for an obligation which is in default (as
         hereinafter in this Subsection defined), 10% or more of any class of
         security of any person who, to the knowledge of the Trustee, owns 50%
         or more of the voting securities of the Company; or

                  (9) the Trustee owns, on May 15 in any calendar year, in the
         capacity of executor, administrator, testamentary or inter vivos
         trustee, guardian, committee or conservator, or in any other similar
         capacity, an aggregate of 25% or more of the voting securities, or of
         any class of security, of any person, the beneficial ownership of a
         specified percentage of which would have constituted a conflicting
         interest under paragraph (6), (7) or (8) of this Subsection. As to any
         such securities of which the Trustee acquired ownership through
         becoming executor, administrator or testamentary trustee of an estate
         which included them, the provisions of the preceding sentence shall not
         apply, for a period of two years from the date of such acquisition, to
         the extent that such securities included in such estate do not exceed
         25% of such voting securities or 25% of any such class of security.
         Promptly after May 15 in each calendar year, the Trustee shall make a
         check of its holdings of such securities in any of the above-mentioned
         capacities as of such May 15. If the Company fails to make payment in
         full of the principal of (or premium, if any) or interest on any of the
         Securities when and as the same becomes due and payable, and such
         failure continues for 30 days thereafter, the Trustee shall make a
         prompt check of its holdings of such securities in any of the
         above-mentioned capacities as of the date of the expiration of such
         30-day period, and after such date, notwithstanding the foregoing
         provisions of this paragraph, all such securities so held by the
         Trustee, with sole or joint control over such securities vested in it,
         shall, but only so long as such failure shall continue, be considered
         as though beneficially owned by the Trustee for the purposes of
         paragraphs (6), (7) and (8) of this Subsection.

                  The specification of percentages in paragraphs (5) to (9),
inclusive, of this Subsection shall not be construed as indicating that the
ownership of such percentages of the securities of a person is or is not
necessary or sufficient to constitute direct or indirect control for the
purposes of paragraph (3) or (7) of this Subsection.

                  For the purposes of paragraphs (6), (7), (8) and (9) of this
Subsection only, (i) the terms "security" and "securities" shall include only
such securities as are generally known as corporate securities, but shall not
include any note or other evidence of indebtedness issued to evidence an
obligation to repay moneys lent to a person by one or more banks, trust
companies or banking firms, or any certificate of interest or participation in
any such note or evidence of indebtedness; (ii) an obligation shall be deemed to
be "in default" when a default in payment of principal shall have continued for
30 days or more and shall not have been cured; and (iii) the Trustee shall not
be deemed to be the owner or holder of (A) any security which it holds as
collateral security, as trustee or otherwise, for an obligation which is not in
default as defined in clause (ii) above, or (B) any security which it holds as
collateral security under this Indenture, irrespective of any default hereunder,
or (C) any security which it holds as agent for collection, or as custodian,
escrow agent or depositary, or in any similar representative capacity.

                  (d)     For the purposes of this Section:

                  (1) The term "underwriter", when used with reference to the
         Company, means every person who, within three years prior to the time
         as of which the determination is made, has purchased from the Company
         with a view to, or has offered or sold for the Company in connection
         with, the distribution of any security of the Company outstanding at
         such time, or has participated or has had a direct or indirect
         participation in any such undertaking, or has participated or has had a
         participation in the direct or indirect underwriting of any such
         undertaking, but such term shall not include a person whose interest
         was limited to a commission from an underwriter or dealer not in excess
         of the usual and customary distributors' or sellers' commission.

                  (2) The term "director" means any director of a corporation or
         any individual performing similar functions with respect to any
         organization, whether incorporated or unincorporated.

                  (3) The term "person" means an individual, a corporation, a
         partnership, an association, a joint stock company, a trust, an
         unincorporated organization or a government or political subdivision
         thereof. As used in this paragraph, the term "trust" shall include only
         a trust where the interest or interests of the beneficiary or
         beneficiaries are evidenced by a security.

                  (4) The term "voting security" means any security presently
         entitling the owner or holder thereof to vote in the direction or
         management of the affairs of a person, or any security issued under or
         pursuant to any trust, agreement or arrangement whereby a trustee or
         trustees or agent or agents for the owner or holder of such security
         are presently entitled to vote in the direction or management of the
         affairs of a person.

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

                  (6) The term "executive officer" means the president, every
         vice president, every trust officer, the cashier, the secretary and the
         treasurer of a corporation, and any individual customarily performing
         similar functions with respect to any organization whether incorporated
         or unincorporated, but shall not include the chairman of the board of
         directors.

                  (e) The percentages of voting securities and other securities
specified in this Section shall be calculated in accordance with the following
provisions:

                  (1) A specified percentage of the voting securities of the
         Trustee, the Company or any other person referred to in this Section
         (each of whom is referred to as a "person" in this paragraph) means
         such amount of the outstanding voting securities of such person as
         entitled the holder or holders thereof to cast such specified
         percentage of the aggregate votes which the holders of all the
         outstanding voting securities of such person are entitled to cast in
         the direction or management of the affairs of such person.

                   (2) A specified percentage of a class of securities of a
         person means such percentage of the aggregate amount of securities of
         the class outstanding.

                  (3) The term "amount", when used in regard to securities,
         means the principal amount if relating to evidences of indebtedness,
         the number of shares if relating to capital shares and the number of
         units if relating to any other kind of security.

                  (4) The term "outstanding" means issued and not held by or for
         the account of the issuer. The following securities shall not be deemed
         outstanding within the meaning of this definition:

                          (i)     securities of an issuer held in a sinking
         fund relating to securities of the issuer of the same
                  class;

                          (ii) securities of an issuer held in a sinking fund
                  relating to another class of securities of the issuer, if the
                  obligation evidenced by such other class of securities is not
                  in default as to principal or interest or otherwise;

                         (iii) securities pledged by the issuer thereof as
         security for an obligation of the issuer not in default as
                  to principal or interest or otherwise; and

                          (iv) securities held in escrow if placed in escrow
 by the issuer thereof;

         provided, however, that any voting securities of an issuer shall be
         deemed outstanding if any person other than the issuer is entitled to
         exercise the voting rights thereof.

                  (5) A security shall be deemed to be of the same class as
         another security if both securities confer upon the holder or holders
         thereof substantially the same rights and privileges; provided,
         however, that, in the case of secured evidences of indebtedness, all of
         which are issued under a single indenture, differences in the interest
         rates or maturity dates of various series thereof shall not be deemed
         sufficient to constitute such series different classes; and provided
         further that, in the case of unsecured evidences of indebtedness,
         differences in the interest rates or maturity dates thereof shall not
         be deemed sufficient to constitute them securities of different
         classes, whether or not they are issued under a single indenture.

                  SECTION 6.09. Corporate Trustee Required; Eligibility. There
shall at all times be a Trustee hereunder which shall be a Corporation organized
and doing business under the laws of the United States of America, any State
thereof or the District of Columbia, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000, subject to supervision or examination by Federal or State
authority. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.

                  SECTION 6.10. Resignation and Removal; Appointment of
Successor. (a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.11.

                  (b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 6.11 shall not have been delivered to the resigning Trustee within 30
days after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such series.

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

                  (d) If at any time:

                  (1) the Trustee shall fail to comply with Section 6.08(a)
         after written request therefor by the Company or by any Holder who has
         been a bona fide Holder of a Security for at least six months, or

                  (2) the Trustee for a series shall cease to be eligible under
         Section 6.09 and shall fail to resign after written request therefor by
         the Company or by any Holder of Securities of such series, or

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

then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 5.14, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.

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

                  (f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
by giving notice of such event to all Holders of Securities of such series as
provided by Section 1.06. Each notice shall include the name of the successor
Trustee with respect to the Securities of such series and the address of its
Corporate Trust Office.

                  SECTION 6.11. Acceptance of Appointment by Successor. (a) In
case of the appointment hereunder of a successor Trustee with respect to all
Securities, every such successor Trustee so appointed shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on the request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder.

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

                   (c) Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) or (b) of this Section, as the case may be.

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

                  SECTION 6.12. Merger, Conversion, Consolidation or Succession
to Business. Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.

                  SECTION 6.13. Preferential Collection of Claims Against
Company. (a) Subject to Subsection (b) of this Section, if the Trustee shall be
or shall become a creditor, directly or indirectly, secured or unsecured, of the
Company within four months prior to a default, as defined in Subsection (c) of
this Section, or subsequent to such a default, then, unless and until such
default shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the Holders of the
Securities and Coupons, if any, and the holders of other indenture securities,
as defined in Subsection (c) of this Section:

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

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

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

                  (A) to retain for its own account (i) payments made on account
         of any such claim by any Person (other than the Company) who is liable
         thereon, and (ii) the proceeds of the bona fide sale of any such claim
         by the Trustee to a third-Person, and (iii) distributions made in cash,
         securities or other property in respect of claims filed against the
         Company in bankruptcy or receivership or in proceedings for
         reorganization pursuant to the Federal Bankruptcy Act or applicable
         State law;

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

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

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

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

                  If the Trustee shall be required to account, the funds and
property held in such special account and the proceeds thereof shall be
apportioned among the Trustee, the Holders and the holders of other indenture
securities in such manner that the Trustee, the Holders and the holders of other
indenture securities realize, as a result of payments from such special account
and payments of dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
Bankruptcy Act or applicable State law, the same percentage of their respective
claims, figured before crediting to the claim of the Trustee anything on account
of the receipt by it from the Company of the funds and property in such special
account and before crediting to the respective claims of the Trustee and the
Holders and the holders of other indenture securities dividends on claims filed
against the Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act or applicable State law,
but after crediting thereon receipts on account of the indebtedness represented
by their respective claims from all sources other than from such dividends and
from the funds and property so held in such special account. As used in this
paragraph, with -respect to any claim, the term "dividends" shall include any
distribution with respect to such claim, in bankruptcy or receivership or
proceedings for reorganization pursuant to the Federal Bankruptcy Act or
applicable State law, whether such distribution is made in cash, securities or
other property, but shall not include any such distribution with respect to the
secured portion, if any, of such claim. The court in which such bankruptcy,
receivership or proceedings for reorganization is pending shall have
jurisdiction (i) to apportion among the Trustee, the Holders and the holders of
other indenture securities, in accordance with the provisions of this paragraph,
the funds and property held in such special account and proceeds thereof, or
(ii) in lieu of such apportionment, in whole or in part, to give to the
provisions of this paragraph due consideration in determining the fairness of
the distributions to be made to the Trustee and the Holders and the holders of
other indenture securities with respect to their respective claims, in which
event it shall not be necessary to liquidate or to appraise the value of any
securities or other property held in such special account or as security for any
such claim, or to make a specific allocation of such distributions as between
the secured and unsecured portions of such claims, or otherwise to apply the
provisions of this paragraph as a mathematical formula.



                  Any Trustee which has resigned or been removed after the
beginning of such four-month period shall be subject to the provisions of this
Subsection as though such resignation or removal had not occurred. If any
Trustee has resigned or been removed prior to the beginning of such four-month
period, it shall be subject to the provisions of this Subsection if and only if
the following conditions exist:

                  (i) the receipt of property or reduction of claim, which would
         have given rise to the obligations to account, if such Trustee had
         continued as Trustee, occurred after the beginning of such four-month
         period; and

                  (ii) such receipt of property or reduction of claim occurred
         within four months after such resignation or removal.

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

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

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

                  (3) disbursements made in the ordinary course of business in
         the capacity of trustee under an indenture, transfer agent, registrar,
         custodian, paying agent, fiscal agent or depositary, or other similar
         capacity;

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

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

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

                  (c)     For the purposes of this Section only:

                  (1) the term "default" means any failure to make payment in
         full of the principal of (or premium, if any) or interest on any of the
         Securities or upon the other indenture securities when and as such
         principal or interest becomes due and payable;

                  (2) the term "other indenture securities" means securities
         upon which the Company is an obligor outstanding under any other
         indenture (i) under which the Trustee is also trustee, (ii) which
         contains provisions substantially similar to the provisions of this
         Section and (iii) under which a default exists at the time of the
         apportionment of the funds and property held in such special account;

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

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

                  (5)    the term "Company" means any obligor upon the
Securities; and

                  (6)    the term "Federal Bankruptcy Act" means the
Bankruptcy Act or Title II of the United States Code.

                  SECTION 6.14. Appointment of Authenticating Agent. The Trustee
may appoint an Authenticating Agent or Agents with respect to one or more series
of Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon original issue or upon
exchange, registration of transfer or partial redemption thereof or pursuant to
Section 3.06, and Securities so authenticated shall be entitled to the benefits
of this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication or the delivery of Securities to the
Trustee for authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent and delivery of Securities to the Authenticating Agent on
behalf of the Trustee. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation having a combined capital and
surplus of not less than the equivalent of $50,000,000 and subject to
supervision or examination by Federal or State authority or the equivalent
foreign authority, in the case of an Authenticating Agent who is not organized
and doing business under the laws of the United States of America, any State
thereof or the District of Columbia. If such Authenticating Agent publishes
reports of condition at least annually, pursuant to law or to the requirements
of said supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Authenticating Agent shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time an Authenticating Agent shall
cease to be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section.

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

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

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

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

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

                                        [full name of Trustee]

                                       ---------------------------------
                                             As Trustee

                                       By_____________________________
                                            As Authenticating Age
                                    By_____________________________
                               Authorized Officer

                   If all of the Securities of a series may not be originally
issued at one time, and if the Trustee does not have an office capable of
authenticating Securities upon original issuance located in a Place of Payment
or other place where the Company wishes to have Securities of such series
authenticated upon original issuance, the Trustee, if so requested by the
Company in writing (which writing need not comply with Section 1.02 and need not
be accompanied by an Opinion of Counsel), shall appoint in accordance with this
Section an Authenticating Agent (which may be an Affiliate of the Company if
eligible to be appointed as an Authenticating Agent hereunder) having an office
in such Place of Payment or other place designated by the Company with respect
to such series of Securities, provided that the procedures for the
authentication of such Securities by the Authenticating Agent on original
issuance are acceptable to the Trustee.




<PAGE>


                                  ARTICLE SEVEN

                Holders' Lists and Reports by Trustee and Company
                ---------------------------------------------------------

 SECTION 7.01. Company To Furnish Trustee Names and Addresses
of Holders.
The Company will furnish or cause to be
furnished to the Trustee:

                   (a) semiannually, not later than each Interest Payment Date
         in each year, a list, in such form as the Trustee may reasonably
         require, of the names and addresses of the Holders of each series of
         Registered Securities as of the preceding Regular Record Date, as the
         case may be, and

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

                   (c) such information concerning the Holders of Bearer
         Securities which is known to the Company; provided, however, that the
         Company shall have no obligation to investigate any matter relating to
         any Holder of a Bearer Security or a Coupon:

notwithstanding the foregoing subsections (a) and (b), so long as the Trustee is
the Security Registrar with respect to a particular series of Securities, no
such list shall be required to be furnished in respect of such series.

                   SECTION 7.02. Preservation of Information; Communications to
Holders. (a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of each series (i) contained in
the most recent list furnished to the Trustee as provided in Section 7.01, (ii)
received by the Trustee in its capacity as Security Registrar and (iii) filed
with it within the two preceding years pursuant to Section 7.03(d). The Trustee
may destroy any list furnished to it as provided in Section 7.01 upon receipt of
a new list so furnished.

                   (b) If three or more Holders of any series (herein referred
to as "applicants") apply in writing to the Trustee, and furnish to the Trustee
reasonable proof that each such applicant has owned a Security of such series
for a period of at least six months preceding the date of such application, and
such application states that the applicants desire to communicate with other
Holders of such series with respect to their rights under this Indenture or
under such Securities and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee shall,
within five business days after the receipt of such application, at its
election, either

                   (i)    afford such applicants access to the information
 preserved at the time by the Trustee in accordance with
         Section 7.02(a), or

                   (ii) inform such applicants as to the approximate number of
         Holders of Securities of such series whose names and addresses appear
         in the information preserved at the time by the Trustee in accordance
         with Section 7.02(a), and as to the approximate cost of mailing to such
         Holders the form of proxy or other communication, if any, specified in
         such application.

                   If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder of Securities of such series whose name and
address appear in the information preserved at the time by the Trustee in
accordance with Section 7.02(a) a copy of the form of proxy or other
communication which is specified in such request, with reasonable promptness
after a tender to the Trustee of the material to be mailed and of payment, or
provision for the payment, of the reasonable expenses of mailing, unless within
five days after such tender the Trustee shall mail to such applicants and file
with the Commission, together with a copy of the material to be mailed, a
written statement to the effect that, in the opinion of the Trustee, such
mailing would be contrary to the best interest of the Holders of such series or
would be in violation of applicable law. Such written statement shall specify
the basis of such opinion. If the Commission, after opportunity for a hearing
upon the objections specified in the written statement so filed, shall enter an
order refusing to sustain any of such objections or if, after the entry of an
order sustaining one or more of such objections, the Commission shall find,
after notice and opportunity for hearing, that all the objections so sustained
have been met and shall enter an order so declaring, the Trustee shall mail
copies of such material to all such Holders with reasonable promptness after
the' entry of such order and the renewal of such tender; otherwise the Trustee
shall be relieved of any obligation or duty to such applicants respecting their
application.

                   (c) Every Holder of Securities or Coupons, by receiving and
holding the same, agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any agent of either of them shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Holders in accordance with Section 7.02(b), regardless of
the source from which such information was derived, and that the Trustee shall
not be held accountable by reason of mailing any material pursuant to a request
made under Section 7.02(b).

                   SECTION 7.03. Reports by Trustee. (a) Within 60 days after
June 1 of each year following the first issuance of Securities, the Trustee
shall transmit to the Holders as provided in Section 7.03(d), a brief report
dated as of such date with respect to:

                   (1) its eligibility under Section 6.09 and its qualifications
         under Section 6.08, or in lieu thereof, if to the best of its knowledge
         it has continued to be eligible and qualified under said Sections, a
         written statement to such effect;

                   (2) the character and amount of any advances (and if the
         Trustee elects so to state, the circumstances surrounding the making
         thereof) made by the Trustee (as such) which remain unpaid on the date
         of such report, and for the reimbursement of which it claims or may
         claim a lien or charge, prior to that of the Securities, on any
         property or funds held or collected by it as Trustee, except that the
         Trustee shall not be required (but may elect) to report such advances
         if such advances so remaining unpaid aggregate not more than 1/2 of 1%
         of the principal amount of the Securities Outstanding on the date of
         such report;

                   (3) the amount, interest rate and maturity date of all other
         indebtedness owing by the Company (or by any other obligor on the
         Securities) to the Trustee in its individual capacity, on the date of
         such report, with a brief description of any property held as
         collateral security therefor, except an indebtedness based upon a
         creditor relationship arising in any manner described in Section
         6.l3(b)(2), (3), (4) or (6);

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

                   (5)    any additional issue of Securities which the Trustee
 has not previously reported; and

                   (6) any action taken by the Trustee in the performance of its
         duties hereunder which it has not previously reported and which in its
         opinion materially affects the Securities, except action in respect of
         a default, notice of which has been or is to be withheld by the Trustee
         in accordance with Section 6.02.

                   (b) The Trustee shall transmit by mail to Holders in
accordance with Section 7.03(d), a brief report with respect to the character
and amount of any advances (and if the Trustee elects so to state, the
circumstances surrounding the making thereof) made by the Trustee (as such)
since the date of the last report transmitted pursuant to Subsection (a) of this
Section (or if no such report has yet been so transmitted, since the date of
execution of this instrument) for the reimbursement of which it claims or may
claim a lien or charge, prior to that of the Securities, on property or funds
held or collected by it as Trustee and which it has not previously reported
pursuant to this Subsection, except that the Trustee shall not be required (but
may elect) to report such advances if such advances remaining unpaid at any time
aggregate 10% or less of the principal amount of the Securities Outstanding at
such time, such report to be transmitted within 90 days after such time.

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

                   (d) Reports pursuant to Section 7.03(a) and 7.03(b) shall be
transmitted by mail (i) to all Holders, as their names and address's appear in
the Security Register, (ii) to all Holders as have, within two years preceding
such transmission, filed their names and addresses with the Trustee for such
purpose, and (iii) except in the case of reports pursuant to Section 7.03(b), to
all Holders whose names and addresses have been furnished or received by the
Trustee pursuant to Sections 7.01 and 7.02.

                   SECTION 7.04. Reports by Company. The Company shall:
                                 ------------------

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

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

                   (3) transmit by mail to Holders of Securities, in accordance
         with Section 7.03(d), within 30 days after the filing thereof with the
         Trustee, such summaries of any information, documents and reports
         required to be filed by the Company pursuant to paragraphs (1) and (2)
         of this Section as may be required by rules and regulations prescribed
         from time to time by the Commission.

                                  ARTICLE EIGHT

                    Consolidation. Merger. Sale or Conveyance

                   SECTION 8.01. Company May Consolidate. etc., Only on Certain
Terms. The Company shall not consolidate with or merge into any other
corporation or convey or transfer its properties and assets substantially as an
entirety to any entity (other than a Wholly Owned Subsidiary (as defined below)
except in the event that a Wholly Owned Subsidiary is the surviving corporation
in a consolidation or merger) unless: (i) the corporation formed by such
consolidation or into which the Company is merged or the entity which acquires
by conveyance or transfer the properties and assets of the Company substantially
as an entirety shall be a corporation organized and existing under the laws of
the United States of America or any State or the District of Columbia, and shall
expressly assume, by an indenture supplemental hereto, executed and delivered to
the Trustee, in form satisfactory to the Trustee, the due and punctual payment
of the principal of (and premium, if any) and interest on all the Securities and
the performance of every covenant of this Indenture on the part of the Company
to be performed or observed; (ii) immediately after giving effect to such
transaction, no Event of Default and no event which, after notice or lapse of
time, or both, would become an Event of Default, shall have happened and be
continuing; and (iii) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such consolidation,
merger, conveyance or transfer and such supplemental indenture comply with this
Article and that all conditions precedent herein provided for relating to such
transaction have been complied with. The term "Wholly Owned Subsidiary" means
any Subsidiary all the stock of every class of which (other than directors'
qualifying shares) is owned by the Company either directly or through one or
more Wholly Owned Subsidiaries.

                   SECTION 8.02. Rights and Duties of Successor Corporation. In
case of any such consolidation, merger, sale or conveyance and upon any such
assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Company, with the same effect as if it had
been named herein as the party of the first part and the predecessor corporation
shall be relieved of any further obligation under this Indenture. Such successor
corporation thereupon may cause to be signed, and may issue either in its own
name or in the name of the Company, any or all the Securities issuable hereunder
which theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor corporation, instead of the
Company, and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall deliver any
Securities which previously shall have been signed and delivered by the officers
of the Company to the Trustee for authentication, and any Securities which such
successor corporation thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All the Securities so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all such Securities had been issued at the date of the execution
hereof.

                   In case of any consolidation, merger, sale or conveyance such
changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.

                                  ARTICLE NINE

                             Supplemental Indentures

                   SECTION 9.01. Supplemental Indentures Without Consent of
Holders. Without the consent of any Holders, the Company, when authorized by or
pursuant to a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:

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

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

                   (3) to add any additional Events of Default with respect to
         all or any series of the Securities (and, if such Event of Default is
         applicable to less than all series of Securities specifying the series
         to which -such Event of Default is applicable);

                   (4) to add to or change any of the provisions of this
         Indenture to such extent as shall be necessary to facilitate the
         issuance of Securities in bearer form, registrable or not registrable
         as to principal, and with or without interest coupons; to change or
         eliminate any restrictions on the payment of principal of or any
         premium or interest on Bearer Securities, to permit Bearer Securities
         to be issued in exchange for Registered Securities, to permit Bearer
         Securities to be issued in exchange for Bearer Securities of other
         authorized denominations; provided that any such addition or change
         shall not adversely affect the interests of the Holders of Securities
         of any series or any related Coupons in any material respect;

                   (5) to change or eliminate any of the provisions of this
         Indenture; provided that any such change or elimination shall become
         effective only when there is no Security outstanding of any series
         created prior to the execution of such supplemental indenture which is
         adversely affected by such change in or elimination of such provision;

                   (6)    to establish the form or terms of Securities of any
series as permitted by Sections 2.01 and 3.01;

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

                   (8) if allowed under applicable laws and regulations to
         permit payment in the United States of America (including any of the
         states and the District of Columbia), its territories, its possessions
         and other areas subject to its jurisdiction, of principal, premium or
         interest on Bearer Securities or Coupons, if any;

                   (9)    to provide for the issuance of uncertificated
Securities of one or more series in addition to or in place of
         certificated Securities;

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

                   (11)   to secure the Securities pursuant to Section 10.08
or otherwise.

                   SECTION 9.02. Supplemental Indentures with Consent of
Holders. With the consent of the Holders of not less than 66-2/3% in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by or pursuant to a Board Resolution, and
the Trustee may enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of modifying in any manner the rights
of the Holders of Securities of such series under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Security affected thereby,

                   (1) change the Stated Maturity of the principal of, or any
         installment of principal of or interest on, any Security, or reduce the
         principal amount thereof or the rate of interest thereon or any premium
         payable upon the redemption thereof, or change any obligation of the
         Company to pay additional amounts pursuant to Section 10.06 (except as
         contemplated by Section 8.01(1) and permitted by Section 9.01(1)), or
         reduce the amount of the principal of an original Issue Discount
         Security that would be due and payable upon a declaration of
         acceleration of the Maturity thereof pursuant to Section 5.02, or
         change any Place of Payment where, or the currency, currencies or
         currency unit or units in which, any Security or any premium or the
         interest thereon is payable, or impair the right to institute suit for
         the enforcement of any such payment on or after the Stated Maturity
         thereof (or, in the case of redemption, on or after the Redemption
         Date),

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

                   (3) change any obligation of the Company, with respect to
         outstanding Securities of a series, to maintain an office or agency in
         the places and for the purposes specified in Section 10.02 for such
         series, or

                  (4) modify any of the provisions of this Section, Section 5.13
         or Section 10.05, except to increase any such percentage or to provide
         with respect to any particular series the right to condition the
         effectiveness of any supplemental indenture as to that series on the
         consent of the Holders of a specified percentage of the aggregate
         principal amount of Outstanding Securities of such series (which
         provision may be made pursuant to Section 3.01 without the consent of
         any Holder) or to provide that certain other provisions of this
         Indenture cannot be modified or waived without the consent of the
         Holder of each outstanding Security affected thereby; provided,
         however, that this clause shall not be deemed to require the consent of
         any Holder with respect to changes in the references to "the Trustee"
         and concomitant changes in this Section and Section 10.05, or the
         deletion of this proviso, in accordance with the requirements of
         Sections 6.11(b) and 9.01(7).

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

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

                   SECTION 9.03. Execution of Supplemental Indentures. In
executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 6.01) shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties, immunities or liabilities under this Indenture or
otherwise.

                   SECTION 9.04. Effect of Supplemental Indentures. Upon the
execution of any supplemental indenture under this Article, this Indenture shall
be modified in accordance therewith, and such supplemental indenture shall form
a part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.

                   SECTION 9.05. Conformity with Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect.

                   SECTION 9.06. Reference in Securities to Supplemental
Indentures. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.

                                   ARTICLE TEN

                                    Covenants

                   SECTION 10.01. Payment of Principal. Premium and Interest.
The Company covenants and agrees for the benefit of each series of Securities
and Coupons, if any, that it will duly and punctually pay the principal of (and
premium, if any) and interest on the Securities and Coupons, if any, of that
series in accordance with the terms of the Securities and Coupons, if any, of
such series and this Indenture.

                   SECTION 10.02. Maintenance of Office or Agency. If Securities
of a series are issuable only as Registered Securities, the Company will
maintain in each Place of Payment for such series an office or agency where
Securities of that series may be presented or surrendered for payment, where
Securities of that series may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served. For Securities
having a Place of Payment in the Borough of Manhattan, The City of New York, the
Company hereby appoints as such agent the Trustee, acting through its Corporate
Trust Office. If Securities of a series are issuable as Bearer Securities, the
Company will maintain (A) in the Borough of Manhattan, The City of New York, an
office or agency where any Registered Securities of that series may be presented
or surrendered for payment, where any Registered Securities of that series may
be surrendered for registration of transfer, where Securities of that series may
be surrendered for exchange, where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served and
where Bearer Securities of that series and related Coupons may be presented or
surrendered for payment in the circumstances described in the following
paragraph (and not otherwise) (the foregoing Corporate Trust Office of the
Trustee being hereby so appointed as such agency), (B) subject to any laws or
regulations applicable thereto, in a Place of Payment for that series which is
located outside the United States, an office or agency where Securities of that
series and related Coupons may be presented and surrendered for payment
(including payment of any additional amounts payable on Securities of that
series pursuant to Section 10.06); provided, however, that if the Securities of
that series are listed on The Stock Exchange of the United Kingdom and the
Republic of Ireland, the Luxembourg Stock Exchange or any other stock exchange
located outside the United States and such stock exchange shall so require, the
Company will maintain a Paying Agent for the Securities of that series in
London, Luxembourg or any other required city located outside the United States,
as the case may be, so long as the Securities of that series are listed on such
exchange, and (C) subject to any laws or regulations applicable thereto, in a
Place of Payment for that series located in Europe, an office or agency where
any Registered Securities of that series may be surrendered for registration of
transfer, where Securities of that series may be surrendered for exchange and
where notices and demands to or upon the Company in respect of the Securities of
that series and this Indenture may be served. The Company will give prompt
written notice to the Trustee and the Holders of the location, and any change in
the location, of any such office or agency. If at any time the Company shall
fail to maintain any such required office or agency in respect of any series of
Securities or shall fail to furnish the Trustee with the address thereof, such
presentations and surrenders of Securities of that series may be made and
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, except that Bearer Securities of that series and the related Coupons
may be presented and surrendered for payment (including payment of any
additional amounts payable on Bearer Securities of that series pursuant to
Section 10.06) at the London office of the Trustee (or an agent with a London
office appointed by the Trustee and acceptable to the Company), and the Company
hereby appoints the same as its agent to receive such respective presentations,
surrenders, notices and demands.

No payment of principal, premium or interest on Bearer Securities shall be made
at any office or agency of the Company in the United States or by check mailed
to any address in the United States or by transfer to an account maintained with
a bank located in the United States; provided, however, that, if the Securities
of a series are denominated and payable in Dollars, payment of principal of and
any premium and interest on any Bearer Security (including any additional
amounts payable on Securities of such series pursuant to Section 10.06) shall be
made at the office of the Company's Paying Agent in the Borough of Manhattan,
The City of New York, if (but only if) payment in Dollars of the full amount of
such principal, premium, interest or additional amounts, as the case may be, at
all offices or agencies outside the United States maintained for the purpose by
the Company in accordance with this Indenture is illegal or effectively
precluded by exchange controls or other similar restrictions.

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

                   SECTION 10.03. Money for Securities Payments To Be Held in
Trust. If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.

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

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

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

                   (2) give the Trustee notice of any default by the Company (or
         any other obligor upon the Securities of that series) in making of any
         Payment of principal (and premium, if any) or interest on the
         Securities of that series; and

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

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

                   Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of (and
premium, if any) or interest on any Security of any series and remaining
unclaimed for two years after such principal (and premium, if any) or interest
has become due and payable shall upon written request of the Company be paid to
the Company, or (if then held by the Company) shall be discharged from such
trust; and the Holder of such Security and Coupons, if any, shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease.

                   SECTION 10.04. Statement by Officers as to Default. The
Company will deliver to the Trustee for each series of Securities, within 120
days after the end of each fiscal year of the Company (which as of the date
hereof ends on December 31 of each year) ending after the date hereof so long as
any Security is outstanding hereunder, an Officers' Certificate, stating that in
the course of the performance by the signers of their duties as such officers of
the Company they would normally obtain knowledge of any default by the Company
in the performance or fulfillment of any covenant, agreement or condition
contained in this Indenture, and stating whether or not they have obtained
knowledge of any such default existing on the date of such statement and, if so,
specifying each such default of which the signers have knowledge and the nature
thereof.

                   SECTION 10.05. Waiver of Certain Covenants. The Company may
omit in any particular instance to comply with any term, provision or condition
set forth in Section 10.08, if before the time for such compliance the Holders
of not less than 66-2/3% in principal amount of the Outstanding Securities of
each series affected thereby shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such term,
provision or condition, but no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such term, provision or condition shall remain in
full force and effect.

                   SECTION 10.06. Additional Amounts. If the Securities of a
series provide for the payment of additional amounts, the Company will pay to
the Holder of any Security of such series or any Coupon appertaining thereto
additional amounts as provided therein. Whenever in this Indenture there is
mentioned, in any context, the payment of the principal of or any premium or
interest on, or in respect of, any Security of any series or payment of any
related Coupon or the net proceeds received on the sale or exchange of any
Security of any series, such mention shall be deemed to include mention of the
payment of additional amounts provided for in this Section to the extent that,
in such context, additional amounts are, were or would be payable in respect
thereof pursuant to the provisions of this Section and express mention of the
payment of additional amounts (if applicable) in any provisions hereof shall not
be construed as excluding additional amounts in those provisions hereof where
such express mention is not made.

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

                   SECTION 10.07. No Lien Created. etc. This Indenture and the
                                  --------------------
Securities do not create a Lien, charge or encumbrance on any property of
the Corporation or any Subsidiary.

                   SECTION 10.08. Limitation on Liens. Nothing in this Indenture
or in the Securities shall in any way restrict or prevent the Company or any
Subsidiary from incurring any indebtedness; provided that the Company covenants
and agrees that neither it nor any Subsidiary will issue, assume or guarantee
any notes, bonds, debentures or other similar evidences of indebtedness for
money borrowed (hereinafter called "Debt") secured by a mortgage, lien, pledge
or other encumbrance (hereinafter called "Mortgages") upon any of its property
or any property of such Subsidiary, real or personal, located in the continental
United States of America without effectively providing that the Securities
(together with, if the Company so determines, any other indebtedness or
obligation then existing and any other indebtedness or obligation, thereafter
created, ranking equally with the Securities) shall be secured equally and
ratably with (or, at the option of the Company, prior to) such Debt so long as
such Debt shall be so secured, except that the foregoing provisions shall not
apply to:

                   (a)    Mortgages existing on the date of this Indenture,

                   (b) Mortgages affecting property of a corporation existing at
         the time it becomes a Subsidiary or at the time it is merged into or
         consolidated with the Company or a Subsidiary,

                   (c) Mortgages on property (i) existing at the time of
         acquisition thereof, or (ii) to secure payment of all or part of the
         purchase price thereof, or (iii) to secure Debt incurred prior to, at
         the time of or within 24 months after acquisition thereof for the
         purpose of financing all or part of the purchase price thereof, or (iv)
         assumed or incurred in connection with the acquisition of such
         property,

                   (d) Mortgages on property to secure all or part of the cost
         of repairing, altering, constructing, improving, exploring, drilling or
         developing such property, or to secure Debt incurred to provide funds
         for any such purpose,

                   (e) Mortgages on (i) pipelines, gathering systems, pumping or
         compressor stations, pipeline storage facilities or other related
         facilities, (ii) tank cars, tank trucks, tank vessels, barges, tow
         boats or other vessels or boats, drilling barges, drilling platforms,
         or other movable railway, automotive, aeronautic or marine facilities,
         (iii) office buildings, laboratory and research facilities, retail
         service stations, retail or wholesale sales facilities, terminals, bulk
         plants, warehouses or storage or distribution facilities, (iv)
         manufacturing facilities other than units for the refining of crude
         oil, (v) the equipment of any of the foregoing, or (vi) any "margin
         stock" or "margin security" within the meaning of Regulation U or
         Regulation G of the Board of Governors of the Federal Reserve System as
         amended from time to time,

                   (f) Mortgages on current assets or other personal property
         (other than shares of stock or indebtedness of Subsidiaries) to secure
         loans maturing not more than one year from the date of the creation
         thereof or to secure any renewal thereof for not more than one year at
         any one time,

                   (g)    Mortgages which secure indebtedness owing by a
Subsidiary to the Company or a Subsidiary,

                   (h)    Mortgages on property of any Subsidiary principally
 engaged in a financing or leasing business,

                   (i) Mortgages upon the oil, gas or other minerals produced or
         to be produced (or proceeds thereof) from properties which shall have
         been acquired or shall have become producing subsequent to August 15,
         1977, if, in respect of each such Mortgage it shall have been given to
         secure indebtedness incurred to pay or to reimburse the cost (incurred
         subsequent to the date of the acquisition of such property or August
         15, 1977, whichever shall be later) of drilling or equipping such
         property, and

                   (j) any extension, renewal or replacement (or successive
         extensions, renewals or replacements), in whole or in part, of any
         Mortgage referred to in the foregoing clauses (a) to (i) inclusive or
         of any Debt secured thereby, provided that the principal amount of Debt
         secured thereby shall not exceed the principal amount of Debt so
         secured at the time of such extension, renewal or replacement, and that
         such extension, renewal or replacement Mortgage shall be limited to all
         or part of substantially the same property which secured the Mortgage
         extended, renewed or replaced (plus improvements on such property).

                   Notwithstanding the foregoing provisions of this Section, the
Company and any one or more Subsidiaries may issue, assume or guarantee Debt
secured by Mortgages which would otherwise be subject to the foregoing
restrictions in an aggregate principal amount which, together with the aggregate
outstanding principal amount of all other Debt of the Company and its
Subsidiaries which would otherwise be subject to the foregoing restrictions,
does not at any one time exceed 5% of the stockholders' equity in the Company
and its consolidated subsidiary companies as shown on the audited consolidated
balance sheet contained in the latest annual report to stockholders of the
Company. For this purpose "stockholders' equity" shall mean the aggregate of
(however designated) capital, capital stock, capital surplus, capital in excess
of par value of stock, earned surplus and net income retained for use in the
business, after deducting the cost of shares of the Company held in its
treasury.

                   The following types of transactions, among others, shall not
be deemed to create Debt secured by Mortgages:

                   (1) the sale or other transfer of oil, gas or other minerals
         in place for a period of time until, or in an amount such that, the
         transferee will realize therefrom a specified amount (however
         determined) of money or such minerals, or the sale or other transfer
         o... any other interest in property of the character commonly referred
         to as an oil payment or a production payment, and

                   (2) Mortgages required by any contract or statute in order to
         permit the Company or a subsidiary to perform any contract or
         subcontract made by it with or at the request of the United States, any
         State or any department, agency or instrumentality of either.

                   SECTION 10.09. Limitations on Sale and Lease-Back. The
Company covenants and agrees that neither it nor any Subsidiary will enter into
any arrangement with any bank, insurance company or other lender or investor, or
to which any such lender or investor is a party, providing for the leasing to
the Company or a Subsidiary for a period of more than three years or any real
property located in the continental United States of America (except a lease for
a temporary period not to exceed three years by the end of which it is intended
that the use of such real property by the lessee will be discontinued) which has
been or is to be sold or transferred by the Company or a Subsidiary to such
lender or investor or to any Person or organization to which funds have been or
are to be advanced by such lender or investor on the security of the leased
property (hereinafter called "Sale and Lease-Back Transactions") unless either:

                   (a) the Company or such Subsidiary would be entitled,
         pursuant to the provisions of Section 10.08, to create Debt secured by
         a Mortgage on the property to be leased, without equally and ratably
         securing the Securities, or

                   (b) the Company (and in any such case the Company covenants
         and agrees that it will do so), within four months after the effective
         date of such Sale and Lease-Back Transactions (whether made by the
         Company or a Subsidiary), applies to the retirement of Debt of the
         Company maturing by the terms thereof more than one year after the
         original creation thereof (herein called "Funded Debt") an amount equal
         to the greater of (i) the net proceeds of the sale of the real property
         leased pursuant to such arrangement or (ii) the fair value of the real
         property so leased at the time of entering into such arrangement (as
         determined by the Board of Directors); provided that the amount to be
         applied to the retirement of Funded Debt shall be reduced by an amount
         equal to the sum of (a) the principal amount of Securities delivered,
         within four months after the effective date of such arrangement, to the
         Trustee for retirement and cancellation and (b) the principal amount of
         other Funded Debt voluntarily retired by the Company within such
         four-month period, excluding retirements of Securities and other Funded
         Debt pursuant to mandatory sinking fund or prepayment provisions or by
         payment at maturity. No provision of Article Eleven hereof shall
         restrict the retirement of Funded Debt pursuant to this Section.

                                 ARTICLE ELEVEN

                            Redemption of Securities

                   SECTION 11.01. Applicability of Article. Securities of any
series which are redeemable before their Stated Maturity shall be redeemable in
accordance with their terms and (except as otherwise specified as contemplated
by Section 3.01 for Securities of any series) in accordance with this Article.

                   SECTION 11.02. Selection by Trustee of Securities To Be
Redeemed. If less than all the Securities of any series are to be redeemed, the
Company shall give the Trustee notice not less than 60 days prior to the
Redemption Date (unless a shorter notice shall be satisfactory to the Trustee)
of such Redemption Date and the principal amount of the Securities of such
series to be redeemed and the Trustee shall select the particular Securities to
be redeemed from the outstanding Securities of such series not previously called
for redemption, by such method as the Trustee shall deem fair and appropriate
and which may provide for the selection for redemption of portions (equal to the
minimum authorized denomination for Securities of that series or any integral
multiple thereof) of the principal amount of Securities of such series of a
denomination larger than the minimum authorized denomination for Securities of
that series.

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

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

                   SECTION 11.03. Notice of Redemption. Notice of redemption
shall be given not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, as provided in Section 1.06.

Each such notice of redemption shall specify the Redemption Date, the Redemption
Price, the Place or Places of Payment, that the Securities of such series are
being redeemed at the option of the Company pursuant to provisions contained in
the terms of the Securities of such series or in a supplemental indenture
establishing such series, if such be the case, that on the Redemption Date the
Redemption Price will become due and payable upon each Security redeemed, that
payment will be made upon presentation and surrender of the applicable
Securities, that all Coupons, if any, maturing subsequent to the date fixed for
redemption shall be void, that any interest accrued to the Redemption Date will
be paid as specified in said notice, and that on and after said Redemption Date
any interest thereon or on the portions thereof to be redeemed will cease to
accrue. If less than all the Securities of any series are to be redeemed the
notice of redemption shall specify the numbers of the Securities of such series
to be redeemed, and, if only Bearer Securities of any series are to be redeemed,
and if such Bearer Securities may be exchanged for Registered Securities, the
last date on which exchanges of Bearer Securities for Registered Securities not
subject to redemption may be made. In case any Security of any series is to be
redeemed in part only, the notice of redemption shall state the portion of the
principal amount thereof to redeemed and shall state that on and after the
Redemption Date, upon surrender of such Security and any Coupons appertaining
thereto, a new Security or Securities of such series in principal amount equal
to the unredeemed portion thereof and with appropriate Coupons will be issued.

                   Notice of redemption of Securities and Coupons, if any, to be
redeemed at the election of the Company shall be given by or on behalf of the
Company.

                   SECTION 11.04. Deposit of Redemption Price. On or before (but
at least one Business Day before in the Place of Payment in the case of payments
not in Dollars) the opening of business on any Redemption Date, the Company
shall deposit with the Trustee or with a Paying Agent (or, if the Company is
acting as its own Paying Agent, segregate and hold in trust as provided in
Section 10.03) an amount of money in the relevant currency (or a sufficient
number of currency units, as the case may be) sufficient to pay the Redemption
Price of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued interest on, all the Securities and Coupons, if any, which are to be
redeemed on that date.

                   SECTION 11.05. Securities Payable on Redemption Date. Notice
of redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest and the Coupons for such interest
appertaining to any Bearer Securities so to be redeemed, except to the extent
provided below, shall be void. Upon surrender of any such Security for
redemption in accordance with said notice, together with all Coupons, if any,
appertaining thereto maturing after the Redemption Date, such Security shall be
paid by the Company at the Redemption Price, together with accrued interest to
the Redemption Date; provided, however, that installments of interest on Bearer
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable only at an office or agency located outside the United States (except as
otherwise provided in Section 10.02) and, unless otherwise specified as
contemplated by Section 3.01, only upon presentation and surrender of Coupons
for such interest; and provided further that, unless otherwise specified as
contemplated by Section 3.01, installments of interest on Registered Securities
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 3.07.

                   If any Bearer Security surrendered for redemption shall not
be accompanied by all appurtenant Coupons maturing after the Redemption Date,
such Security may be paid after deducting from the Redemption Price an amount
equal to the face amount of all such missing Coupons, or the surrender of such
missing Coupon or Coupons may be waived by the Company and the Trustee if there
be furnished to them such security or indemnity as they may require to save each
of them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to the Trustee or any Paying Agent any such missing Coupon in
respect of which a deduction shall have been made from the Redemption Price,
such Holder shall be entitled to receive the amount so deducted; provided,
however, that interest represented by Coupons shall be payable only at an office
or agency located outside the United States (except as otherwise provided in
Section 10.02) and, unless otherwise specified as contemplated by Section 3.01,
only upon presentation and surrender of those coupons.

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

                   SECTION 11.06. Securities Redeemed in Part. Any Security
(including any Coupons appertaining thereto) which is to be redeemed only in
part shall be surrendered at a Place of Payment therefor (with, if the Company
or the Trustee so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Company and the Trustee duly executed by,
the Holder thereof or his attorney duly authorized in writing), and the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder of
such Security without service charge, a new Security (including any Coupons
appertaining thereto) or Securities (including any Coupons appertaining thereto)
of the same series and having the same terms and conditions, of any authorized
denomination as requested by such Holder, in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Security
(including any Coupons appertaining thereto) so surrendered.

                   SECTION 11.07. Right To Require Repurchase of Securities by
the Company upon Change in Control and Decline in Debt Rating. (a) In the event
that (i) there shall occur any Change in Control and (ii) the prevailing rating
of the Securities by Standard & Poor's Corporation or its successors ("S&P") or
Moody's Investors Service, Inc. or its successors ("Moody's") or another
nationally recognized rating agency selected by the Company, on any date within
90 days following public notice of the occurrence of such Change in Control
shall be less than the rating of the Securities on the date 60 days prior to the
occurrence of such Change in Control by at least one Full Rating Category
("Rating Decline"), each holder of Securities shall have the right, at such
holder's option, to require the Company to purchase, and upon the exercise of
such right the Company shall purchase, all or any part of such holder's
Securities on the date (the "Repurchase Date") that is 100 days after the last
to occur of (i) public notice of such Change in Control and (ii) the Rating
Decline, at 100% of the principal amount on the Repurchase Date, plus any
accrued and unpaid interest to the Repurchase Date.

                   (b) On or before the 28th day following the last to occur of
(i) public notice of such Change in Control and (ii) the Rating Decline, the
Company shall give notice of a Change in Control and Rating Decline and of the
repurchase right set forth herein arising as a result thereof by first-class
mail, postage prepaid to each holder of Securities at such holder's address
appearing in the Securities Register. The Company shall also cause a copy of
such notice of a repurchase right to be published in an Authorized Newspaper in
the Borough of Manhattan, The City of New York and, if any Bearer Securities are
then Outstanding, in London and such other cities as shall be specified with
respect to such Bearer Securities.

                   Each notice of a repurchase right shall state:

                   (1)    the Repurchase Date,

                   (2)    the date by which the repurchase right must be
exercised,

                   (3)    the price at which the repurchase is to be made, if
the repurchase right is exercised, and

                   (4)    a description of the procedure which a holder of
Securities must follow to exercise a repurchase right.

                   No failure of the Company to give the foregoing notice
 shall limit any holder's right to exercise a repurchase
right.

                   (c) To exercise a repurchase right, a holder of Securities
shall deliver to the Company (or an agent designated by the Company for such
purpose in the notice referred to in (b) above) at least ten days prior to the
Repurchase Date (i) written notice of the holder's exercise of such right, which
notice shall set forth the name of the holder, the principal amount of the
Security or Securities (or portion of a Security) to be repurchased, and a
statement that the option to exercise the repurchase right is being made
thereby, and (ii) the Security with respect to which the repurchase right is
being exercised, duly endorsed for transfer to the Company. Such written notice
shall be irrevocable.

                   (d) In the event a repurchase right shall be exercised in
accordance with the terms hereof, the Company shall pay or cause to be paid the
price payable with respect to the Security or Securities as to which the
repurchase right has been exercised in cash to the holder of such -Security or
Securities, on the Repurchase Date. In the event that a repurchase right is
exercised with respect to less than the entire principal amount of a surrendered
Security, the Company shall execute and deliver to the Trustee and the Trustee
shall authenticate for issuance, against surrender of such surrendered Security,
(x) in the name of the holder a new Security or Securities in the aggregate
principal amount of the unrepurchased portion of such surrendered Security and
(y) in the name of the Company a new Security or Securities in the aggregate
principal amount of the repurchased portion of such surrendered Security.

                   (e)    As used in this Section 11.07:

                   (1) a "Change in Control" shall be deemed to have occurred at
          such time as (i) a "person" or "group" (within the meaning of Section
          13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended)
          becomes the "beneficial owner" (as defined in Rule l3d-3 under such
          Exchange Act) of more than fifty percent (50%) of the then outstanding
          Voting Stock of the Company, otherwise than through a transaction
          consummated with the prior approval of the Board of Directors of the
          Company, or (ii) during any period of two consecutive years,
          individuals who at the beginning of such period constitute the
          Company's Board of Directors (together with any new Director whose
          election by the Company's Board of Directors or whose nomination for
          election by the Company's stockholders was approved by a vote of at
          least two-thirds of the Directors then still in office who either were
          Directors at the beginning of such period or whose election or
          nomination for election was previously so approved) cease f or any
          reason to constitute a majority of the Directors then in office.

                   (2) the term "Full Rating Category" shall mean (i) with
          respect to S&P, any of the following categories: AAA, AA, A, BBB, BB,
          B, CCC, CC and C, (ii) with respect to Moody's, any of the following
          categories: Aaa, Aa, A, Baa, Ba, B, Caa, Ca and C, (iii) the
          equivalent of any such category by S&P or Moody's and (iv) the
          equivalent of such ratings by any other nationally recognized
          securities rating agency selected by the Company. In determining
          whether the rating of the Debt Securities has decreased by the
          equivalent of one full Rating Category, graduations within Full Rating
          Categories (-I- and - S and P; 1, 2 and 3 for Moody's; or the
equivalent
          for S&P or Moody's or any such other rating agency) shall be taken
          into account.

                   (3) the term "public notice" shall, without limitation,
          include any filing or report made in accordance with the requirements
          of the Securities and Exchange Commission or any press release or
          public announcement made by the Company.

                   (f) Notwithstanding anything to the contrary contained in
this Section 11.07, if a Rating Decline shall apply to less than all series of
the Securities, the repurchase rights described herein shall apply only to the
series with respect to which there has been a Rating Decline.

                                 ARTICLE TWELVE

                                  Sinking Funds

                   SECTION 12.01. Applicability of Article. The provisions of
this Article shall be applicable to any sinking fund for the retirement of
Securities of a series except as otherwise specified as contemplated by Section
3.01 for Securities of such series.

                   The minimum amount of any sinking fund payment provided for
by the terms of Securities of any series is herein referred to as a "mandatory
sinking fund payment", and any payment in excess of such minimum amount provided
for by the terms of Securities of any series is herein referred to as an
"optional sinking fund payment". If provided for by the terms of Securities of
any series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 12.02. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.

                  SECTION 12.02. Satisfaction of Sinking Fund Payments with
Securities. The Company (1) may deliver Outstanding Securities (including any
Coupons) of a series (other than any previously called for redemption) and (2)
may apply as a credit Securities of a series which have been redeemed either at
the election of the Company pursuant to the terms of such Securities (including
any Coupons) or through the application of permitted optional sinking fund
payments pursuant to the terms of such Securities, in each case in satisfaction
of all or any part of any sinking fund payment with respect to the Securities of
such series required to be made pursuant to the terms of such Securities as
provided for by the terms of such series; provided that such Securities have not
been previously so credited. Such Securities shall be received and credited for
such purpose by the Trustee at the Redemption Price specified in such Securities
for redemption through operation of the sinking fund and the amount of such
sinking fund payment shall be reduced accordingly.

                  SECTION 12.03. Redemption of Securities for Sinking Fund. Not
less than 60 days prior to each sinking fund payment date for any series of
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivering and crediting Securities (including any Coupons) of that
series pursuant to Section 12.02 and stating the basis for such credit and that
such Securities have not been previously so credited and will also deliver to
the Trustee any Securities (including any coupons) to be so delivered. Not less
than 30 days before each such sinking fund payment date the Trustee shall select
the Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 11.02 and cause notice of the redemption thereof to be
given in the name of and at the expense of the Company in the manner provided in
Section 11.03. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Section
11.05 and 11.06.


                                ARTICLE THIRTEEN

                        Meetings of Holders of Securities

                   SECTION 13.01. Purposes for Which Meetings May Be Called. If
Securities of a series are issuable as Bearer Securities, a meeting of Holders
of Securities of such series may be called at any time and from time to time
pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities of such
series.

                   SECTION 13.02. Call. Notice and Place of Meetings. (a) The
Trustee may at any time call a meeting of Holders of Securities of any such
series for any purpose specified in Section 13.01, to be held at such time and
at such place in the Borough of Manhattan, The City of New York, or in London,
as the Trustee shall determine. Notice of every meeting of Holders of Securities
of any such series, setting forth the time and the place of such meeting and in
general terms the action proposed to be taken at such meeting, shall be given,
in the manner provided in Section 1.06, not less than 21 nor more than 180 days
prior to the date fixed for the meeting.

                   (b) In case at any time the Company, by or pursuant to a
Board Resolution, or the Holders of at least 10% in principal amount of the
Outstanding Securities of any such series shall have requested the Trustee to
call a meeting of the Holders of Securities of such series for any purpose
specified in Section 13.01, by written request setting forth in reasonable
detail the action proposed to be taken at the meeting, and the Trustee shall not
have made the first publication of the notice of such meeting within 21 days
after receipt of such request or shall not thereafter proceed to cause the
meeting to be held as provided herein, then the Company or the Holders of
Securities of such series in the amount above specified, as the case may be, may
determine the time and the place in the Borough of Manhattan, The City of New
York, or in London, for such meeting and may call such meeting for such purposes
by giving notice thereof as provided in subsection (a) of this Section.

                  SECTION 13.03. Persons Entitled To Vote at Meetings. To be
entitled to vote at any meeting of Holders of Securities of any series, a Person
shall be (1) Holder of one or more Outstanding Securities of such series, or (2)
a Person appointed by an instrument in writing as proxy for a Holder or Holders
of one or more Outstanding Securities of such series by such Holder or Holders.
The only Persons who shall be entitled to be present or to speak at any meeting
of Holders of Securities of any series shall be the Persons entitled to vote at
such meeting and their counsel, any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.

                  SECTION 13.04. Quorum; Action. The Persons entitled to vote a
majority in principal amount of the Outstanding Securities of a series shall
constitute a quorum for a meeting of Holders of Securities of such series;
provided, however, that if any action is to be taken at such meeting with
respect to a consent or waiver which this Indenture expressly provides may be
given by the Holders of Securities of not less than 66-2/3/% in principal amount
of Outstanding Securities of a series, the Persons entitled to vote 66-2/3% in
principal amount of the Outstanding Securities of such series shall constitute a
quorum. In the absence of a quorum within 30 minutes of the time appointed for
any such meeting, the meeting shall, if convened at the request of Holders of
Securities of such series, be dissolved. In any other case the meeting may be
adjourned for a period of not less than 10 days as determined by the chairman of
the meeting prior to the adjournment of such meeting. In the absence of a quorum
at any such adjourned meeting, such adjourned meeting may be further adjourned
for a period of not less than 10 days as determined by the chairman of the
meeting prior to the adjournment of such adjourned meeting. Notice of the
reconvening of any adjourned meeting shall be given as provided in Section
13.02(a), except that such notice need be given only once not less than five
days prior to the date on which the meeting is scheduled to be reconvened.
Notice of the reconvening of an adjourned meeting which was adjourned for lack
of a quorum shall state expressly the percentage, as provided above, of the
principal amount of the Outstanding Securities of such series which shall
constitute a quorum.

                   Any resolution with respect to any request, demand,
authorization, direction, notice, consent, waiver or other action which this
Indenture expressly provides may be made, given or taken by the Holders of a
specified percentage in principal amount of the Outstanding Securities of a
series may be adopted at a meeting or an adjourned meeting duly reconvened and
at which a quorum is present as aforesaid by the affirmative vote of the Holders
of such specified percentage in principal amount of the outstanding Securities
of that series.

                   Any resolution passed or decision taken at any meeting of
Holders of Securities of any series duly held in accordance with this Section
shall be binding on all the Holders of Securities of such series and the related
Coupons, whether or not present or represented at the meeting.

                   SECTION 13.05. Determination of Voting Rights; Conduct and
Adjournment of Meetings. (a) Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Holders of Securities of a series in regard to
proof of the holding of Securities of such series and of the appointment of
proxies and in regard to the appointment and duties of inspectors of votes, the
submission and examination of proxies, certificates and other evidence of the
right to vote, and such other matters concerning the conduct of the meeting as
it shall deem appropriate. Except as otherwise permitted or required by any such
regulations, the holding of Securities shall be proved in the manner specified
in Section 1.04 and the appointment of any proxy shall be proved in the manner
specified in Section 1.04 or by having the signature of the person executing the
proxy witnessed or guaranteed by any trust company, bank or banker authorized by
Section 1.04 to certify to the holding of Bearer Securities. Such regulations
may provide that written instruments appointing proxies, regular on their face,
may be presumed valid and genuine without the proof specified in Section 1.04 or
other proof.

                   (b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders of Securities as provided in Section 13.02(b), in
which case the Company or the Holders of Securities of the series calling the
meeting, as the case may be, shall in like manner appoint a temporary chairman.
A permanent chairman and a permanent secretary of the meeting shall be elected
by vote or the Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.

                   (c) At any meeting each Holder of a Security of such series
or proxy shall be entitled to one vote for each $1 (or the equivalent thereof)
principal amount of the Outstanding Securities of such series held or
represented by him; provided, however, that no vote shall be cast or counted at
any meeting in respect of any Security challenged as not Outstanding and ruled
by the chairman of the meeting to be not Outstanding. The chairman of the
meeting shall have no right to vote, except as a Holder of a Security of such
series or proxy.

                  (d) Any Meeting of Holders of Securities of any series duly
called pursuant to Section 13.02 at which a quorum is present may be adjourned
from time to time by Persons entitled to vote a majority in principal amount of
the Outstanding Securities of such series represented at the meeting; and the
meeting may be held as so adjourned without further notice.

                  SECTION 13.06. Counting Votes and Recording -Action of
Meetings. The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 13.02 and, if
applicable, Section 13.04. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.

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

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

                                                    ASHLAND OIL, INC.,
                                                        by

                                            ---------------------------------
                                            Title:   Assistant Treasurer
Attest:

-------------------------------------
Assistant Secretary

                                                    CITIBANK, N.A.,
                                                        by

                              ---------------------------------
                              Title: Vice President

Attest:


-------------------------------------
Assistant Secretary





<PAGE>


                                    EXHIBIT A

                              [FORMS OF CERTIFICATION]

                                   EXHIBIT A.l

                            (FORM OF CERTIFICATE TO BE GIVEN BY
                      PERSON ENTITLED TO RECEIVE BEARER SECURITY]

                                   CERTIFICATE

                               ASHLAND OIL, INC.

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

                  This is to certify that as of the date hereof, and except as
set forth below, the above-captioned Securities held by you for our account (i)
are owned by a person that is not a United States person, (ii) are owned by a
United States person that is (A) the foreign branch of a United States financial
institution (as defined in U.S. Treasury Regulations Section l.165-l2(c)(1)(v))
(a "financial institution") purchasing for its own account or for resale, or (B)
a United States person who acquired the Securities through the foreign branch of
a financial institution and who holds the Securities through the financial
institution on the date hereof (and in either case (A) or (B), the financial
institution hereby agrees to comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and
the regulations thereunder), or (iii) are owned by a financial institution for
purposes of resale during the Restricted Period (as defined in U.S. Treasury
Regulations Section 1.163-5(c) (2) (i) (D) (7)). In addition, financial
institutions described in clause (iii) of the preceding sentence (whether or not
also described in clause (i) or (ii)) certify that they have not acquired the
Securities for purposes of resale directly or indirectly to a United States
person or to a person within the United States or its possessions.

                   As used herein, "United States person" means any citizen or
resident of the United States, any corporation, partnership or other entity
created or organized in or under the laws of the United States or any political
subdivision thereof, or any estate or trust the income taxation of which is
subject to United States Federal income regardless of its source, and "United
States" means the United States of America (including the states and the
District of Columbia), its territories, its possessions, the Commonwealth of
Puerto Rico and other areas subject to its jurisdiction.

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

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


Dated:  __________________ 2001

[To be dated on the earlier of the first Interest Payment Date and the date of
the delivery of the Securities in definitive form]


                           [Name of Person Entitled to
                                                      Receive Bearer Security]


                                               --------------------------------
                                                     (Authorized Signature)
                                      Name:
                                     Title:




















<PAGE>


                                   EXHIBIT A.2

                          [FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR
                              AND CEDEL S.A. IN CONNECTION WITH THE
                     EXCHANGE OF A PORTION OF A TEMPORARY GLOBAL SECURITY]

                                   CERTIFICATE

                                                           ASHLAND OIL, INC.


                                    [Insert title or sufficient description
                                        of Securities to be delivered)

                  This is to certify with respect to $___________ principal
amount of the above-captioned Securities (i) that we have received from each of
the persons appearing in our records as persons entitled to a portion of such
principal amount (our "Qualified Account Holders") a certificate with respect to
such portion substantially in the form attached hereto, and (ii) that we are not
submitting herewith for exchange any portion of the temporary global Security
representing the above-captioned Securities excepted in such certificates.

                  We further certify that as of the date hereof we have not
received any notification from any of our Qualified Account Holders to the
effect that the statements made by such Qualified Account Holders with respect
to any portion of the part submitted herewith for exchange are no longer true
and cannot be relied upon as of the date hereof.

Date:        __________  2001


[To be dated no earlier than the Exchange Date]
 ---------------------------------------------

 [MORGAN GUARANTY TRUST COMPANY OF NEW YORK, BRUSSELS OFFICE, as Operator of the
                                                      Euroclear System]

                                                      [CEDEL S.A.]

                                       by

                                                     (Authorized Signature)
                                                             Name:
                                                            Title:



<PAGE>



                                   EXHIBIT A.3
                     [FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR
                              AND CEDEL S.A. TO OBTAIN
                          INTEREST PRIOR TO AN EXCHANGE DATE)


                                   CERTIFICATE
                                  ASHLAND OIL, INC.

                           [Insert title or sufficient
                           ---------------------------
                           description of Securities]
                           -------------------------

                  We confirm that the interest payable on the Interest Payment
Date on [Insert Date] will be paid to each of the persons appearing in our
records as being entitled to interest payable on such date from whom we have
received a written certification, dated not earlier than such Interest Payment
Date, substantially in the form attached hereto. We undertake to retain
certificates received from our member organizations in connection herewith for
four years from the end of the calendar year in which such certificates are
received.

                  We undertake that any interest received by us and not paid as
provided above shall be returned to the Trustee for the above Securities
immediately prior to the expiration of two years after such Interest Payment
Date in order to be repaid by such Trustee to the above issuer at the end of two
years after such Interest Payment Date.


Date:        ___________  2001 [To be dated on or after the relevant Interest
Payment Date]


                                                      [MORGAN GUARANTY TRUST
                                                      COMPANY OF NEW YORK,
                                                      BRUSSELS OFFICE, as
                                                      Operator of the Euroclear
                                                      System] [CEDEL S.A.]

                                       by

                                                    (Authorized Signature)
                                                            Name:
                                                            Title:







<PAGE>


                                   EXHIBIT A.4
                      [FORM OF CERTIFICATE TO BE GIVEN BY BENEFICIAL OWNERS
                    TO OBTAIN INTEREST PRIOR TO AN EXCHANGE DATE]

                                   CERTIFICATE

                                                           ASHLAND OIL, INC.

                           [Insert title or sufficient

                           description of Securities]

                  This is to certify that as of the Interest Payment Date on
[Insert Date] and except as provided in the third paragraph hereof, the
above-captioned Securities held by you for our account are beneficially owned by
(i) a person that is not a United States person, (ii) a United States person
that is (A) the foreign branch of a United States financial institution (as
defined in U.S. Treasury Regulations Section 1.l65-l2(c)(l)(v)) (a "financial
institution") purchasing for its own account or for resale, or (B) a United
States person who acquired the Securities through the foreign branch of a
financial institution and who holds the Securities through the financial
institution on the date hereof (and in either case (A) or (B), the financial
institution hereby agrees to comply with the requirements of Section 165(j) (3)
(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the
regulations thereunder), or (iii) a financial institution for purposes of resale
during the Restricted Period (as defined in U.S. Treasury Regulations Section
1.163-5(c) (2) (i) (D) (7)). In addition, if the beneficial owner is a financial
institution described in clause (iii) of the preceding sentence (whether or not
also described in clause (i) or (ii)) it certifies that it has not acquired the
Securities for purposes of resale directly or indirectly to a United States
person or to a person within the United States or its possessions.

                  As used herein, "United States person" means any citizen or
resident of the United States, any corporation, partnership or other entity
created or organized in or under the laws of the United States or any political
subdivision thereof, or any estate or trust the income of which is subject to
United States Federal income taxation regardless of its source, and "United
States" means the United States of America (including the states and the
District of Columbia), its territories, its possessions, the Commonwealth of
Puerto Rico and other areas subject to its jurisdiction.

                  This certificate excepts and does not relate to U.S.
$__________ principal amount of the above-captioned Securities appearing in your
books as being held for our account as to which we are not yet able to certify
and as to which we understand interest cannot be credited unless and until we
are able to so certify.

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


Date:             _________ 2001
To be dated on or after the
15th day before the relevant
Interest Payment Date]

                                                  [Name of Person Entitled to
                                                     Receive interest]

                                                  -----------------------------
                                                        (Authorized Signature)

                                      Name:
                                     Title:





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4
<SEQUENCE>5
<FILENAME>inden.txt
<DESCRIPTION>EXHIBIT 4.3
<TEXT>





                                  ASHLAND INC.

                                      and

                         U. S. BANK NATIONAL ASSOCIATION
                                     Trustee

                                    Indenture

                       Dated as of ___________ ____, 2001



                                 Debt Securities


                                  ASHLAND INC.
                         Reconciliation and Tie Between
                         ------------------------------
                         Trust Indenture Act of 1939 and
                         -------------------------------
                            Indenture, dated as of */
                            -------------------------

      Trust Indenture                                         Indenture Section
       Act Section

(S)310 (a)(1) .......................................               6.09
       (a)(2) .......................................               6.09
       (a)(3) .......................................          Not Applicable
       (a)(4) .......................................          Not Applicable
       (b) ..........................................               6.08
                                                                    6.10
(S)311 (a) ..........................................               6.13(a)
       (b) ..........................................               6.13(b)
       (b)(2) .......................................               7.03(a)(2)
                                                                    7.03(b)
(S)312 (a) ..........................................               7.01
                                                                    7.02(a)
       (b) ..........................................               7.02(b)
       (c) ..........................................               7.02(c)
(S)313 (a) ..........................................               7.03(a)
       (b) ..........................................               7.03(b)
       (c) ..........................................               7.03(a)
                                                                    7.03(b)
       (d) ..........................................               7.03(c)
(S)3.14(a) ..........................................               7.04
       (b) ..........................................          Not Applicable
       (c)(1) .......................................               1.02
       (c)(2) .......................................               1.02
       (c)(3) .......................................          Not Applicable
       (d) ..........................................          Not Applicable
       (e) ..........................................               1.02
(S)3.15(a) ..........................................               6.01(a)
       (b) ..........................................               6.02
                                                                    7.03(a)(6)
       (c) ..........................................               6.01(b)
       (d) ..........................................               6.01(c)
       (d)(1) .......................................               6.01(a)(1)
       (d)(2) .......................................               6.01(c)(2)
       (d)(3) .......................................               6.01(c)(3)
       (e) ..........................................               5.14
(S)3.16(a) ..........................................               1.01
       (a)(1)(A) ....................................               5.02
                                                                    5.12
       (a)(1)(B) ....................................               5.13
       (a)(2) .......................................          Not Applicable
       (b) ..........................................               5.08
(S)3.17(a)(1) .......................................               5.03
       (a)(2) .......................................               5.04
       (b) ..........................................              10.03
(S)3.18(a) ..........................................               1.07

*/    This reconciliation and tie shall not, for any purpose, be deemed to be a
--    part of the Indenture.

                                TABLE OF CONTENTS

                                   ARTICLE ONE

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01  DEFINITIONS ................................        1
    Act ..................................................        2
    Affiliate ............................................        2
    Authenticating Agent .................................        2
    Authorized Newspaper .................................        2
    Bearer Security ......................................        2
    Board of Directors ...................................        2
    Board Resolution .....................................        2
    Business Day .........................................        2
    Change in Control ....................................        2
    Commission ...........................................        3
    Company ..............................................        3
    Company Request ......................................        3
    Corporate Trust Office ...............................        3
    Corporation ..........................................        3
    Coupon or coupon .....................................        3
    Defaulted Interest ...................................        3
    Depositary ...........................................        3
    Dollar ...............................................        3
    ECU ..................................................        3
    Euroclear ............................................        3
    European Communities .................................        4
    Event of Default .....................................        4
    Foreign Currency .....................................        4
    Full Rating Category .................................        4
    Global Security ......................................        4
    Holder or holder .....................................        4
    Indenture ............................................        4
    Interest Payment Date ................................        4
    Maturity .............................................        4
    Officers' Certificate ................................        4
    Opinion of Counsel ...................................        4
    Outstanding or outstanding ...........................        4
    Paying Agent .........................................        5
    Person or person .....................................        5
    Place of Payment .....................................        5
    Predecessor Security .................................        5
    Redemption Date ......................................        6
    Redemption Price .....................................        6
    Registered Security ..................................        6
    Regular Record Date ..................................        6
    Required Currency ....................................        6
    Responsible Officer ..................................        6
    Securities ...........................................        6
    Security Register and Security Registrar .............        6
    Special Record Date ..................................        6
    Stated Maturity ......................................        6
    Subsidiary ...........................................        7
    Trustee ..............................................        7
    Trust Indenture Act ..................................        7
    United States ........................................        7
    United States Alien ..................................        7

                                       i


  Vice President ..........................................................    7
  Voting Stock ............................................................    7

SECTION 1.02. COMPLIANCE CERTIFICATES AND OPINIONS ........................    7
SECTION 1.03. FORM OF DOCUMENTS DELIVERED TO TRUSTEE ......................    8
SECTION 1.04. ACTS OF HOLDERS .............................................    8
SECTION 1.05. NOTICES, ETC. TO TRUSTEE AND COMPANY ........................   10
SECTION 1.06. NOTICE TO HOLDERS; WAIVERS ..................................   10
SECTION 1.07. CONFLICT WITH TRUST INDENTURE ACT ...........................   11
SECTION 1.08. EFFECT OF HEADINGS AND TABLE OF CONTENTS ....................   11
SECTION 1.09. SUCCESSORS AND ASSIGNS ......................................   12
SECTION 1.10. SEPARABILITY CLAUSE .........................................   12
SECTION 1.11  BENEFITS OF INDENTURE .......................................   12
SECTION 1.12. GOVERNING LAW ...............................................   12
SECTION 1.13. LEGAL HOLIDAYS ..............................................   12
SECTION 1.14. MONEYS OF DIFFERENT CURRENCIES TO BE SEGREGATED .............   12
SECTION 1.15. PAYMENT TO BE IN PROPER CURRENCY ............................   12
SECTION 1.16. LANGUAGE OF NOTICES, ETC ....................................   13

                                  ARTICLE TWO

                                 SECURITY FORMS

SECTION 2.01  FORMS GENERALLY .............................................   13
SECTION 2.02. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION .............   13
SECTION 2.03. SECURITIES IN GLOBAL FORM ...................................   14

                                 ARTICLE THREE

                                 THE SECURITIES

SECTION 3.01. AMOUNT UNLIMITED, ISSUABLE IN SERIES ........................   14
SECTION 3.02. DENOMINATIONS ...............................................   17
SECTION 3.03. EXECUTION, AUTHENTICATION DELIVERY AND DATING ...............   17
SECTION 3.04. TEMPORARY SECURITIES ........................................   19
SECTION 3.05. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE .........   21
SECTION 3.06. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES ............   25

                                       ii

SECTION 3.07. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED .................26
SECTION 3.08. PERSONS DEEMED OWNERS ..........................................27
SECTION 3.09. CANCELLATION ...................................................28
SECTION 3.10. COMPUTATION OF INTEREST ........................................28
SECTION 3.11. COMPLIANCE WITH CERTAIN LAWS AND REGULATIONS ...................28
SECTION 3.12. MEDIUM-TERM SECURITIES .........................................28

                                  ARTICLE FOUR

                           SATISFACTION AND DISCHARGE

SECTION 4.01. SATISFACTION AND DISCHARGE OF INDENTURE ........................29
SECTION 4.02. APPLICATION OF TRUST MONEY .....................................30
SECTION 4.03. SATISFACTION, DISCHARGE AND DEFEASANCE OF
              SECURITIES OF ANY SERIES .......................................30
SECTION 4.04. REINSTATEMENT ..................................................32
SECTION 4.05. DEFINITIONS ....................................................32

                                  ARTICLE FIVE

                                    REMEDIES

SECTION 5.01. EVENTS OF DEFAULT ..............................................33
SECTION 5.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT .............34
SECTION 5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR
              ENFORCEMENT BY TRUSTEE .........................................35
SECTION 5.04. TRUSTEE MAY FILE PROOFS OF CLAIM ...............................36
SECTION 5.05. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES ....37
SECTION 5.06. APPLICATION OF MONEY COLLECTED .................................37
SECTION 5.07. LIMITATION ON SUITS ............................................37
SECTION 5.08. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL PREMIUM
              AND INTEREST ...................................................38
SECTION 5.09. RESTORATION OF RIGHTS AND REMEDIES .............................38
SECTION 5.10. RIGHTS AND REMEDIES CUMULATIVE .................................38
SECTION 5.11. DELAY OR OMISSION NOT WAIVER ...................................39
SECTION 5.12. CONTROL BY HOLDERS .............................................39
SECTION 5.13. WAIVER OF PAST DEFAULTS ........................................39
SECTION 5.14. UNDERTAKING FOR COSTS ..........................................39

                                      iii



SECTION 5.15. WAIVER OF STAY OR EXTENSION LAWS ............................   40

                                  ARTICLE SIX

                                  THE TRUSTEE

SECTION 6.01. CERTAIN DUTIES AND RESPONSIBILITIES .........................   40
SECTION 6.02. NOTICE OF DEFAULTS ..........................................   41
SECTION 6.03. CERTAIN RIGHTS OF TRUSTEE ...................................   41
SECTION 6.04. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES ......   42
SECTION 6.05. MAY HOLD SECURITIES .........................................   42
SECTION 6.06. MONEY HELD IN TRUST .........................................   43
SECTION 6.07. COMPENSATION AND REIMBURSEMENT ..............................   43
SECTION 6.08. DISQUALIFICATION; CONFLICTING INTERESTS .....................   43
SECTION 6.09. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY .....................   48
SECTION 6.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR ...........   48
SECTION 6.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR ......................   49
SECTION 6.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS..   50
SECTION 6.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY ...........   50
SECTION 6.14. APPOINTMENT OF AUTHENTICATING AGENT .........................   54

                                  ARTICLE SEVEN

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 7.01. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS....   56
SECTION 7.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS ......   56
SECTION 7.03. REPORTS BY TRUSTEE ..........................................   57
SECTION 7.04. REPORTS BY COMPANY ..........................................   58

                                  ARTICLE EIGHT

                    CONSOLIDATION, MERGER, SALE OR CONVEYANCE

SECTION 8.01. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS ........   59
SECTION 8.02. RIGHTS AND DUTIES OF SUCCESSOR CORPORATION ..................   59

                                       iv





                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

SECTION 9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS ...........  60
SECTION 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS ..............  61
SECTION 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES .........................  62
SECTION 9.04. EFFECT OF SUPPLEMENTAL INDENTURES ............................  63
SECTION 9.05. CONFORMITY WITH TRUST INDENTURE ACT ..........................  63
SECTION 9.06. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES ...........  63

                                  ARTICLE TEN

                                   COVENANTS

SECTION 10.01. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST ..................  63
SECTION 10.02. MAINTENANCE OF OFFICE OR AGENCY .............................  63
SECTION 10.03. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST ...........  64
SECTION 10.04. DISQUALIFICATION; CONFLICTING INTERESTS .....................  66
SECTION 10.05. WAIVER OF CERTAIN COVENANTS .................................  66
SECTION 10.06. ADDITIONAL AMOUNTS ..........................................  66
SECTION 10.07. NO LIEN CREATED, ETC ........................................  67
SECTION 10.08. LIMITATION ON LIENS .........................................  67
SECTION 10.09. LIMITATIONS ON SALE AND LEASE-BACK ..........................  69

                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES

SECTION 11.01. APPLICABILITY OF ARTICLE ....................................  70
SECTION 11.02. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED ...........  70
SECTION 11.03. NOTICE OF REDEMPTION ........................................  70
SECTION 11.04. DEPOSIT OF REDEMPTION PRICE .................................  71
SECTION 11.05. SECURITIES PAYABLE ON REDEMPTION DATE .......................  71
SECTION 11.06. SECURITIES REDEEMED IN PART .................................  72
SECTION 11.07. RIGHT TO REQUIRE REPURCHASE OF SECURITIES BY THE COMPANY
UPON CHANGE IN CONTROL AND DECLINE IN DEBT RATING ..........................  72

                                       v



                                 ARTICLE TWELVE

                                  SINKING FUNDS

SECTION 12.01. APPLICABILITY OF ARTICLE .................................   74
SECTION 12.02. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES ....   74
SECTION 12.03. REDEMPTION OF SECURITIES FOR SINKING FUND ................   74

                                ARTICLE THIRTEEN

                       MEETINGS OF HOLDERS OF SECURITIES

SECTION 13.01. PURPOSES FOR WHICH MEETINGS MAY BE CALLED ................   75
SECTION 13.02. CALL, NOTICE AND PLACE OF MEETINGS .......................   75
SECTION 13.03. PERSONS ENTITLED TO VOTE AT MEETINGS .....................   75
SECTION 13.04. QUORUM; ACTION ...........................................   76
SECTION 13.05. DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT
OF MEETINGS .............................................................   76
SECTION 13.06. COUNTING VOTES AND RECORDING ACTION OF MEETINGS ..........   77

                                       vi


                    INDENTURE, dated as of _______________ ___, 2001, between
               ASHLAND INC., a corporation duly organized and existing under the
               laws of the Commonwealth of Kentucky (herein called the
               "Company"), having its principal office at 50 E. RiverCenter
               Blvd., Covington, Kentucky 41011 and U. S. Bank National
               Association, a national banking association duly incorporated and
               existing under the laws of the United States (herein called the
               "Trustee").

                             RECITALS OF THE COMPANY

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

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

          NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

                                   ARTICLE ONE

                        Definitions and Other Provisions
                        --------------------------------
                             of General Application
                             ----------------------

               SECTION 1.01. Definitions. For all purposes of this Indenture,
                             -----------
except as otherwise expressly provided or unless the context otherwise requires:

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

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

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


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

          Certain terms, used solely or principally within an Article of this
Indenture, may be defined in that Article.

          "Act", when used with respect to any Holder, has the meaning specified
in Section 1.04.

          "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,
"controls" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

          "Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
securities of one or more series.

          "Authorized Newspaper" means a newspaper of general circulation in the
place of publication, printed in the English Language or official language of
the country of publication and customarily published on each Business Day,
whether or not published on Saturdays, Sundays or holidays. Whenever successive
weekly publications in an Authorized Newspaper are authorized or required
hereunder, they may be made (unless otherwise expressly provided herein) on the
same or different days of the week and in the same or different Authorized
Newspapers.

          "Bearer Security" means any Security which is not registered in the
Security Register as to principal (including without limitation any Security in
temporary or definitive global bearer form).

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

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

          "Business Day", when used with respect to any Place of Payment or
place of publication, means any day which is not a day on which banking
institutions generally in that Place of Payment or place of publication are
authorized or obligated by or pursuant to law, regulation or executive order to
close or as specified for a series of Securities pursuant to Section 3.01 or as
specified for any Security in such Security.

          "Change in Control" has the meaning specified in Section 11.07.


                                       2

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

          "Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation, and shall also mean any obligor
upon the Securities authenticated and delivered under this Indenture.

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

     "Corporate Trust Office" means the office of the Trustee in Cincinnati,
Ohio, at which at any particular time its corporate trust business shall be
principally administered, which office at the date hereof is located at 425
Walnut Street, 6th Floor, Cincinnati, OH 45202, Attn: Corporate Trust
Department, except that, with respect to presentation of Securities for payment
or registration of transfers and exchanges and the location of the Security
Registrar, such term means the office or agency of the Trustee in said city at
which at any particular time its corporate agency business shall be conducted,
which at the date hereof is located at 425 Walnut Street, 6th Floor, Cincinnati,
OH 45202, Attn: Corporate Trust Department.

          "Corporation" includes corporations, associations, companies and
business trusts.

          "Coupon" or "coupon" means any interest coupon appertaining to a
Bearer Security.

          "Defaulted Interest" has the meaning specified in Section 3.07.

          "Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Global
Securities, the Person designated as Depositary by the Company pursuant to
Section 3.01 until a successor Depositary shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Depositary" shall mean
or include each Person who is then a Depositary hereunder, and if at any time
there is more than one such Person, "Depositary" as used with respect to the
Securities of any such series shall mean the Depositary with respect to the
Securities of that series.

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

          "Euroclear" means the operator of the Euroclear System.

                                       3
          "European Communities" means the European Economic Community, the
European Coal and Steel Community and the European Atomic Energy Community.

          "Event of Default" has the meaning specified in Section 5.01.

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

          "Full Rating Category" has the meaning specified in Section 11.07.

          "Global Security" means a Registered Security or a Bearer Security
evidencing all or part of a series of Securities issued to the Depositary for
such series in accordance with Section 3.03.

          "Holder" or "holder" means, with respect to a Registered Security, the
Person in whose name at the time a particular Registered Security is registered
in the Security Register and, with respect to a Bearer Security and/or Coupon,
the bearer thereof.

          "Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of particular series of Securities established as
contemplated by Section 3.01.

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

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

           "Officers' Certificate" means a certificate signed by the Chairman of
the Board, the Vice Chairman of the Board, the President or any Vice President,
and by the Treasurer, the Controller, the Secretary or any Assistant Treasurer,
Assistant Controller or Assistant Secretary, of the Company, and delivered to
the Trustee. Each such Officers' Certificate shall contain the statements
provided in Section 1.02, if applicable.

          "Opinion of Counsel" means a written opinion of counsel, who may be
counsel for or an employee of the Company and who shall be reasonably acceptable
to the Trustee. Each Opinion of Counsel shall contain the statements provided in
Section 1.02, if applicable.

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

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


                                       4

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

          (iii) Securities which have been paid pursuant to Section 3.06 or in
     exchange for or in lieu of which other Securities have been authenticated
     and delivered pursuant to this Indenture, other than any such Securities in
     respect of which there shall have been presented to the Trustee proof
     satisfactory to it that such Securities are held by a bona fide purchaser
     in whose hands such Securities are valid obligations of the Company;

provided, however, that in determining whether the Holders of the requisite
--------  -------
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or whether a
quorum is present at a meeting of Holders of Outstanding Securities or the
number of votes entitled to be cast by each Holder of a Security in respect of
such security at any such meeting (1) the principal amount of a Security
denominated in a Foreign Currency or currency unit shall be the Dollar
equivalent (as determined by the Company in good faith) as of the date of
original issuance of such Security of the principal amount of such Security and
(ii) Securities owned by the Company or any other obligor upon the Securities or
any Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, or upon any such determination as to the
presence of a quorum, only Securities which the Trustee knows to be so owned
shall be so disregarded. Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledge establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor.

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

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

          "Place of Payment", when used with respect to the Securities of any
series, means the place or places where, subject to the provisions of Section
10.02, the principal of (and premium, if any) and interest on the Securities of
that series are payable as specified in accordance with Section 3.01.

          "Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
Particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.06 in


                                       5

exchange for or in lieu of a mutilated, destroyed, lost or stolen Security or a
Security to which a mutilated, destroyed, lost or stolen coupon appertains shall
be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen
Security or the Security to which the mutilated, destroyed, lost or stolen
coupon appertains, as the case may be.

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

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

          "Registered Security" means any Security (including without limitation
any Security in temporary or definitive global registered form) which is
registered in the Security Register.

          "Regular Record Date" for the interest payable on any Interest Payment
Date on the Registered Securities of any series means the date specified for
that purpose as contemplated by Section 3.01, which date shall be, unless
otherwise specified pursuant to Section 3.01, the fifteenth day preceding such
Interest Payment Date, whether or not such day shall be a Business Day.

          "Required Currency" has the meaning specified in Section 1.15.

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

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

          "Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.05.

          "Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 3.07.

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


                                       6

          "Subsidiary" means any corporation (a) substantially all the property
of which is located, and substantially all the operations of which are
conducted, in the continental United States of America, and (b) of which the
Company, directly or indirectly, owns more than fifty percent (50%) of the
outstanding stock which at the time shall have by the terms thereof ordinary
voting power to elect directors of such corporation, irrespective of whether or
not at the time stock of any other class or classes of such corporation shall
have or might have voting power by reason of the happening of any contingency,
or (c) any such corporation of which such percentage of shares of outstanding
stock of the character described in the foregoing clause (b) shall at the time
be owned, directly or indirectly, by the Company and one or more Subsidiaries as
defined in the foregoing clauses (a) and (b) or by one or more such
Subsidiaries.

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

          "Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed, except as provided
in Section 9.05.

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

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

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

          "Voting Stock" means stock of any class or classes (however
designated) the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of a majority of the directors
(or persons performing similar functions) of the corporation, association or
other business entity in question, even though the right so to vote is at the
time suspended by reasons of the happening of such a contingency.

          SECTION 1.02. Compliance Certificates and Opinions. Except as
                        ------------------------------------
otherwise expressly provided by this Indenture, upon any application or request
by the Company to the Trustee to take any action under any provision of this
Indenture, the Company shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with and an Opinion of
Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have


                                       7

been complied with, except that in the case of any such application or request
as to which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or request,
no additional certificate or opinion need be furnished.

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

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

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

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

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

          SECTION 1.03. Form of Documents Delivered to Trustee. In any case
                        --------------------------------------
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.

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

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

          SECTION 1.04. Acts of Holders. (a) Any request, demand, authorization,
                        ---------------
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by agent duly appointed in writing, or by any


                                       8

Person duly authorized by means of any written certification, proxy or other
authorization furnished by a Depositary. If Securities of a series are issuable
as Bearer Securities, any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders of such the record of Holders of Securities of such series voting in
series may, alternatively, be embodied in and evidenced by the record of Holders
of Securities of such series voting in favor thereof, either in person or by
proxies duly appointed in writing, at any meeting of Holders of Securities of
such series duly called and held in accordance with the provisions of Article
Thirteen, or a combination of such instruments and any such record. Except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments or record are delivered to the Trustee and, where
it is hereby expressly required, to the Company. Such instrument or instruments
or record (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments or so voting at any such meeting or, in the case of the Depositary,
furnishing the written certification, proxy or other authorization pursuant to
which such instrument or instruments are signed. Proof of execution of any such
instrument or of a writing appointing any such agent or authorizing any such
Person or any such written certification or proxy shall be sufficient for any
purpose of this Indenture and (subject to Section 6.01) conclusive in favor of
the Trustee and the Company, if made in the manner provided in this Section. The
record of any meeting of Holders of Securities shall be proved in the manner
provided in Section 13.06.

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

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

          (d) The fact and date of execution of any such instrument or writing
pursuant to clause (c) above, the authority of the Person executing the same and
the principal amount and serial numbers of Bearer Securities held by the Person
so executing such instrument or writing and the date of holding the same may
also be proved in any other manner which the Trustee


                                       9

deems sufficient; and the Trustee may in any instance require further proof with
respect to any of the matters referred to in this clause.

          (e) The principal amount and serial numbers of Registered Securities
held by any Person and the date of holding the same shall be proved by the
Security Register.

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

          (g) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to a Board Resolution, fix in advance a record
date for the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the Company
shall have no obligation to do so. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other Act may be
given before or after such record date, but only the Holders of record at the
close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
Outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the Outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the holders
      --------
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after the
record date.

          SECTION 1.05. Notices, etc. to Trustee and Company. Any request,
                        ------------------------------------
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,

          (1) the Trustee by any Holder or by the Company shall be made, given,
     furnished or filed in writing to or with the Trustee at its Corporate Trust
     Office, Attention: Corporate Trust Administration and unless otherwise
     herein expressly provided, any such document shall be deemed to be
     sufficiently made, given, furnished or filed upon its receipt by a
     Responsible Officer of the Trustee assigned to its Corporate Trust
     Administration, or

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

          SECTION 1.06. Notice to Holders; Waiver. Where this Indenture provides
                        -------------------------
for notice to Holders of any event:

                                       10

                   (i) if any of the Securities affected by such event are
         Registered Securities, such notice shall be sufficiently given (unless
         otherwise herein expressly provided) if in writing and mailed,
         first-class postage prepaid, to each Holder affected by such event, at
         his address as it appears in the Security Register, within the time
         prescribed for the giving of such notice, and

                   (ii) if any of the Securities affected by such event are
         Bearer Securities, such notice shall be sufficiently given (unless
         otherwise herein expressly provided or unless otherwise specified in
         such Securities) if published once in an Authorized Newspaper in New
         York City and London and such other cities as shall be specified with
         respect to such Securities and mailed to such Persons whose names and
         addresses were previously filed with the Trustee within the two
         preceding years pursuant to Section 7.03(d), within the time prescribed
         for the giving of such notice.

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

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

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

                   SECTION 1.07. Conflict with Trust Indenture Act. If any
                                 ---------------------------------
provision hereof limits, qualifies or conflicts with another provision hereof
which is required to be included in this Indenture by any of the provisions of
the Trust Indenture Act, such required provision shall control.

                   SECTION 1.08. Effect of Headings and Table of Contents. The
                                 ----------------------------------------
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.

                                       11

     SECTION 1.09. Successors and Assigns.  All covenants and agreements in this
                   ----------------------
Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.

     SECTION 1.10. Separability Clause. In case any provision in this Indenture
                   -------------------
or in the Securities or Coupons shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

     SECTION 1.11. Benefits of Indenture. Nothing in this Indenture or in the
                   ---------------------
Securities or Coupons, express or implied, shall give to any Person, other than
the parties hereto and their successors hereunder and the Holders, any benefit
or any legal or equitable right, remedy or claim under this Indenture.

     SECTION 1.12. Governing Law.  This Indenture and the Securities and Coupons
                   -------------
shall be governed by and construed in accordance with the laws of the State of
New York.

     SECTION 1.13. Legal Holidays. Except as otherwise specified as contemplated
                   --------------
by Section 3.01, in any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Securities or Coupons, if any) payment of interest or principal (and premium, if
any) need not be made at such Place of Payment on such date, but may be made on
the next succeeding Business Day at such Place of Payment with the same force
and effect as if made on the Interest Payment Date or Redemption Date, or at the
Stated Maturity, and, if so made, no interest shall accrue for the period from
and after such Interest Payment Date, Redemption Date or Stated Maturity, as the
case may be, to the next succeeding Business Day at such Place of Payment.

     SECTION 1.14. Moneys of Different Currencies to be Segregated. The Trustee
                   -----------------------------------------------
shall segregate moneys, funds and accounts held by the Trustee hereunder in one
currency (or unit thereof) from any moneys, funds or accounts in any other
currencies (or units thereof) notwithstanding any provision herein which would
otherwise permit the Trustee to commingle such amounts.

     SECTION 1.15. Payment to be in Proper Currency. In the case of any Security
                   --------------------------------
denominated in any particular currency or currency unit (the "Required
Currency"), except as otherwise provided herein, therein or in or pursuant to
the related Board Resolution or supplemental indenture, the obligation of the
Company to make any payment of principal, premium or interest thereon shall not
be discharged or satisfied by any tender by the Company, or recovery by the
Trustee, in any currency or currency unit other than the Required Currency,
except to the extent that such tender or recovery shall result in the Trustee
timely holding the full amount of the Required Currency then due and payable. If
any such tender or recovery is made in other than the Required Currency, the
Trustee may take such actions as it considers appropriate to exchange such other
currency or currency unit for the Required Currency. The costs and risks of any
such exchange, including without limitation the risks of delay and exchange rate
fluctuation, shall be borne by the Company, the Company shall remain fully
liable for any shortfall or delinquency in the full amount of the Required
Currency then due and payable and in no circumstances shall the Trustee be
liable therefor. The Company hereby waives any defense of payment based upon any
such tender or recovery which is not in the

                                       12

Required Currency, or which, when exchanged for the Required Currency by the
Trustee, is less than the full amount of the Required Currency then due and
payable.

     SECTION 1.16. Language of Notices, etc. Any request, demand, authorization,
                   ------------------------
direction, notice, consent or waiver required or permitted under this Indenture
shall be in the English language, except that any published notice may be in an
official language of the country of publication.

                                   ARTICLE TWO

                                 Security Forms
                                 --------------

     SECTION 2.01. Forms Generally. The Securities of each series and the
                   ---------------
Coupons, if any, to be attached thereto shall be in substantially the forms
(including temporary or definitive global form) as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental hereto,
in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities and Coupons, if any, as evidenced by their
execution of the Securities and Coupons, if any. If the forms of Securities or
Coupons of any series (or any such temporary or definitive Global Security) are
established by, or by action taken pursuant to a Board Resolution, a copy of the
Board Resolution together with an appropriate record of any action taken
pursuant thereto, which Board Resolution or record of such action shall have
attached thereto a true and correct copy of the forms of Security approved by or
pursuant to such Board Resolution, shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Company Order contemplated by Section 3.03 for the
authentication and delivery of such Securities (or any such temporary or
definitive Global Security) or Coupons.

     Unless otherwise specified as contemplated by Section 3.01, Securities in
bearer form shall have interest Coupons attached.

     The definitive Securities and Coupons, if any, shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Securities and
Coupons, if any, as evidenced by their execution of such Securities and Coupons,
if any.

     SECTION 2.02. Form of Trustee's Certificate of Authentication. The
                   -----------------------------------------------
Trustee's certificate of authentication shall be in substantially the following
form:

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



                                                      [full name of Trustee]
                                                      as Trustee

                                       13

                           By _______________________
                               Authorized Officer

                   SECTION 2.03. Securities in Global Form. If Securities of a
                                 -------------------------
series are issuable in global form, as specified as contemplated by Section
3.01, then, notwithstanding clause (8) of Section 3.01 and the provisions of
Section 3.02, such Security shall represent such of the Outstanding Securities
of such series as shall be specified therein and may provide that it shall
represent the aggregate amount of Outstanding Securities from time to time
endorsed thereon and that the aggregate amount of Outstanding Securities
represented thereby may from time to time be reduced to reflect exchanges. Any
endorsement of a Security in global form to reflect the amount, or any increase
or decrease in the amount, of Outstanding Securities represented thereby shall
be made by the Trustee in such manner and upon instructions given by such Person
or Persons as shall be specified therein or in the Company Order to be delivered
to the Trustee pursuant to Section 3.03 or Section 3.04. Subject to the
provisions of Section 3.03 and, if applicable, Section 3.04, the Trustee shall
deliver and redeliver any Security in definitive global bearer form in the
manner and upon written instructions given by the Person or Persons specified
therein or in the applicable Company Order. If a Company Order pursuant to
Section 3.03 or 3.04 has been, or simultaneously is, delivered, any instructions
by the Company with respect to endorsement or delivery or redelivery of a
Security in global form shall be in writing but need not comply with Section
1.02 and need not be accompanied by an Opinion of Counsel. The beneficial owner
of a Note represented by a definitive Global Security in bearer form may, upon
no less than 30 days' written notice to the Trustee, given by the beneficial
owner through a Depositary, exchange its interest in such definitive Global
Security for a definitive Bearer Note or Notes, or a definitive Registered Note
or Notes, of any authorized denomination. No individual definitive Bearer Note
will be delivered in or to the United States.

                   The provisions of the last sentence of the third to the last
paragraph of Section 3.03 shall apply to any Security represented by a Security
in global form if such Security was never issued and sold by the Company and the
Company delivers to the Trustee the Security in global form together with
written instructions (which need not comply with Section 1.02 and need not be
accompanied by an Opinion of Counsel) with regard to the reduction in the
principal amount of Securities represented thereby, together with the written
statement contemplated by the last sentence of the third to the last paragraph
of Section 3.03.

                   Notwithstanding the provisions of Sections 2.01 and 3.07,
unless otherwise specified as contemplated by Section 3.01, payment of principal
of and any premium and any interest on any Security in definitive global form
shall be made to the Person or Persons specified therein.

                                  ARTICLE THREE

                                 The Securities
                                 --------------

                   SECTION 3.01. Amount Unlimited; Issuable in Series.  The
                                 ------------------------------------
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.

                                       14

                   The Securities may be issued in one or more series. Not all
Securities of any one series need be issued at the same time, and, unless
otherwise provided, a series may be reopened for issuances of additional
Securities of such series. There shall be established in or pursuant to a Board
Resolution and set forth in an Officers' Certificate, or established in one or
more indentures supplemental hereto, prior to the issuance of Securities of any
series,

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

                   (2) any limit upon the aggregate principal amount of the
         Securities of the series which may be authenticated and delivered under
         this Indenture (except for Securities authenticated and delivered upon
         registration of transfer of, or in exchange for, or in lieu of, other
         Securities of the series pursuant to Section 3.04, 3.05, 3.06, 9.06 or
         11.06 and except for any Securities which, pursuant to Section 3.03 are
         deemed never to have been authenticated and delivered hereunder);

                   (3) the date or dates on which the principal (and premium, if
         any) of any of the Securities of the series are payable or the method
         of determination thereof;

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

                   (5) the place or places where the principal of (and premium,
         if any) and interest, if any, on any of the Securities and Coupons, if
         any of the series shall be payable and the office or agency for the
         Securities of the series maintained by the Company pursuant to Section
         10.02;

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

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

                   (8) if other than denominations of $1,000, if registered, and
         $5,000, if bearer, and in any integral multiple of the applicable
         denominations for Securities denominated in Dollars, the denominations
         in which the Securities of the series shall be issuable;

                   (9) if other than the principal amount thereof, the portion
         of the principal amount of any of the Securities of the series which
         shall be payable upon declaration of acceleration of the Maturity
         thereof pursuant to Section 5.02;

                                       15

                (10) the application, if any, of Section 4.03, or such other
         means of satisfaction and discharge as may be specified for the
         Securities and Coupons, if any, for a series;

                (11) any deletions or modifications of or additions to the
         Events of Default set forth in Section 5.01 or covenants of the Company
         set forth in Article Ten pertaining to the Securities of the series
         (including without limitation whether the provisions of Section 10.08
         or 10.09 shall not be applicable to the Securities of the series);

                (12) the forms of the Securities and Coupons, if any, of the
         series;

                (13) if other than Dollars, the coin or currency or currencies,
         or currency unit or units, in which payment of the principal of (and
         premium, if any) and interest, if any, on any of the Securities of the
         series shall be payable;

                (14) if the principal of (and premium, if any) or interest, if
         any, on any of the Securities of the series are to be payable at the
         election of the Company or a Holder thereof, or under some or all other
         circumstances, in a coin or currency or currencies, or currency unit or
         units, other than that in which the Securities are denominated, the
         period or periods within which, and the terms and conditions upon
         which, such election may be

                made, or the other circumstances under which any of the
         Securities are to be so payable, and any provision requiring the Holder
         to bear currency exchange costs by deduction from such payments;

                (15) if the amount of payments of principal (and premium, if
         any) or interest, if any, on any of the Securities of the series may be
         determined with reference to an index based on (i) a coin or currency
         or currencies, or currency unit or units other than that in which such
         Securities are stated to be payable or (ii) any method not inconsistent
         with the provisions of this Indenture specified in or pursuant to such
         Board Resolution, then in each case (i) and (ii) the manner in which
         such amounts shall be determined;

                (16) whether the Securities of the series are to be issued as
         Registered Securities or Bearer Securities (with or without Coupons);
         whether Bearer Securities may be exchanged for Registered Securities of
         the series and whether Registered Securities may be exchanged for
         Bearer Securities of the series (if permitted by applicable laws and
         regulations) and the circumstances under which and the place or places
         where any such exchanges, if permitted, may be made; and whether the
         Securities of the series shall be issued in whole or in part in the
         form of one or more Global Securities and, in such case, the Depositary
         for such Global Security or Securities and whether any Global
         Securities of the series are to be issuable initially in temporary form
         and whether any Global Securities of the series are to be issuable in
         definitive form with or without coupons and, if so, whether beneficial
         owners of interests in any such definitive Global Security may exchange
         such interests for Securities of such series and of like tenor of any
         authorized form and denomination and the circumstances under which and
         the place or places where any such exchanges may occur, if other than
         in the manner provided in Section 3.05;

                (17) whether and under what circumstances and with what
         procedures and documentation the Company will pay additional amounts on
         any of the Securities and Coupons, if any, of the series to any Holder
         who is not a U.S. Person (including a

                                       16

     definition of such term), in respect of any tax, assessment or governmental
     charge withheld or deducted and, if so, whether the Company will have the
     option to redeem such Securities rather than pay additional amounts (and
     the terms of any such option);

                   (18) the Person to whom any interest on any Registered
     Security of the series shall be payable, if other than the Person in whose
     name that Security (or one or more Predecessor Securities) is registered at
     the close of business on the Regular Record Date for such interest, the
     manner in which, or the Person to whom, any interest on any Bearer Security
     of the series shall be payable, if otherwise than upon presentation and
     surrender of the Coupons appertaining thereto as they severally mature and
     to the extent to which, or the manner in which, any interest payable on a
     temporary Global Security on an Interest Payment Date will be paid if other
     than in the manner provided in Section 3.04; and

                   (19) any other terms of any of the Securities of the series.

                   All Securities of any one series and the Coupons appertaining
to any Bearer Securities of such series shall be substantially identical except,
in the case of Registered Securities, as to denomination and except as may
otherwise be provided in or pursuant to the Board Resolution referred to above
and (subject to Section 3.03) set forth in the Officers' Certificate referred to
above or in any such indenture supplemental hereto.

                   At the option of the Company, interest on the Registered
Securities of any series that bears interest may be paid by mailing a check to
the address of any Holder as such address shall appear in the Securities
Register.

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

                   SECTION 3.02. Denominations. The Securities of each series
                                 -------------
shall be issuable in such denominations as shall be specified as contemplated by
Section 3.01. In the absence of any such provisions with respect to the
Securities of any series, the Securities of such series denominated in Dollars
shall be issuable in denominations of $1,000, if registered, and $5,000, if
bearer, and in any integral multiple of the applicable denominations. Securities
of each series shall be numbered, lettered or otherwise distinguished in such
manner or in accordance with such plan as the officers of the Company executing
the same may determine with the approval of the Trustee.

                   SECTION 3.03. Execution, Authentication, Delivery and Dating.
                                 ----------------------------------------------
The Securities shall be executed on behalf of the Company by manual or facsimile
signatures of its Chairman, its President or any of its Vice Presidents or its
Treasurer, under its corporate seal reproduced thereon attested by the manual or
facsimile signature of its Secretary or one of its Assistant Secretaries. Any
Coupons shall be executed on behalf of the Company by the manual or facsimile
signature of any such officer of the Company.

                                       17

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

                  At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any series,
together with any Coupons appertaining thereto, executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities; provided, however, that,
                                                      -----------------
in connection with its original issuance, no Bearer Security (including any
temporary Bearer Security issued pursuant to Section 3.04 which is not a Global
Security) shall be mailed or otherwise delivered to any location in the United
States; and provided; further that a Bearer Security may be delivered outside
            -----------------
the United States in connection with its original issuance only if the Person
entitled to receive such Bearer Security (including any temporary Bearer
Security issued pursuant to Section 3.04 which is not a Global Security) shall
have furnished a certificate in the form set forth in Exhibit A.1 to this
Indenture, dated on the earlier of the first Interest Payment Date and the date
of the delivery of the Bearer Security in definitive form. If any Security shall
be represented by a definitive Global Security in bearer form, then, for
purposes of this Section and Section 3.04, the notation of a beneficial owner's
interest therein upon original issuance of such Security or upon exchange of a
portion of a temporary Global Security shall be deemed to be delivery in
connection with its original issuance of such beneficial owner's interest in
such definitive Global Security in bearer form. Except as permitted by Section
3.06, the Trustee shall not authenticate and deliver any Bearer Security unless
all appurtenant Coupons for interest then matured have been detached and
canceled.

                   If the forms or terms of the Securities of the series and any
related Coupons have been established by or pursuant to one or more Board
Resolutions as permitted by Sections 2.01 and 3.01, in authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to Section 6.01) shall be fully protected in relying upon, an Opinion
of Counsel stating:

                   (a) if the forms of such Securities and any Coupons have been
         established by or pursuant to a Board Resolution as permitted by
         Section 2.01, that such forms have been established in conformity with
         the provisions of this Indenture;

                   (b) if the terms of such Securities and any Coupons have been
         or are to be established by or pursuant to a Board Resolution as
         permitted by Section 3.01, that such terms (or in the case of the
         issuance of Securities pursuant to the next paragraph, the procedures
         for determining such terms) have been established in conformity with
         the provisions of this Indenture; and

                   (c) that such Securities, together with any Coupons
         appertaining thereto, when authenticated and delivered by the Trustee
         and issued by the Company in the manner and subject to any conditions
         specified in such Opinion of Counsel, will constitute valid and legally
         binding obligations of the Company, entitled to the benefits of the
         Indenture and enforceable in accordance with their terms, subject, as
         to enforcement, to bankruptcy,

                                       18

         insolvency, reorganization and other laws of general applicability
         relating to or affecting the enforcement of creditors' rights and to
         general equity principles.

If such forms or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee. Without limiting the
generality of the foregoing, the Trustee shall not be required to authenticate
Securities denominated in a Foreign Currency if the Trustee reasonably believes
that it will be unable to perform its duties with respect to such Securities.

                   Each Registered Security shall be dated the date of its
authentication; and each Bearer Security and any Global Security in bearer form
shall be dated as of the date of original issuance of the first Security of such
series to be issued.

                   No Security or Coupon shall be entitled to any benefit under
this Indenture or be valid or obligatory for any purpose unless there appears on
such Security a certificate of authentication substantially in the form provided
for herein executed by the Trustee by manual signature, and such certificate
upon any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder. Notwithstanding
the foregoing, if any Security shall have been duly authenticated and delivered
hereunder but never issued and sold by the Company, and the Company' shall
deliver such Security to the Trustee for cancellation as provided in Section
3.09 together with a written statement (which need not comply with Section 1.02
and need not be accompanied by an Opinion of Counsel) stating that such Security
has never been issued and sold by the Company, for all purposes of this
Indenture such Security shall be deemed never to have been authenticated and
delivered hereunder and shall never be entitled to the benefits of this
Indenture.

                   If the Company shall establish pursuant to Section 3.01 that
the Securities of a series are to be issued in whole or in part in the form of a
Global Security, then the Company shall execute and the Trustee shall in
accordance with this Section and the Company Order with respect to such series,
authenticate and deliver the Global Security that (i) shall represent and shall
be denominated in an aggregate amount equal to the aggregate principal amount of
Outstanding Securities of such series to be represented by the Global Security,
(ii) shall be registered, if in registered form, in the name of the Depositary
for such Global Security or the nominee of such Depositary, and (iii) shall be
delivered by the Trustee to such Depositary or pursuant to such Depositary's
instruction.

                   Each Depositary designated pursuant to Section 3.01 for a
Global Security in registered form must, at the time of its designation and at
all times while it serves as Depositary, be a clearing agency registered under
the Securities Exchange Act of 1934 and any other applicable statute or
regulation.

                   SECTION 3.04. Temporary Securities. Pending the preparation
                                 --------------------
of definitive Securities of any series, the Company may execute, and upon
Company Order the Trustee shall authenticate and deliver, temporary Securities
which are printed, lithographed, typewritten, mimeographed or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued, in registered form or,
if authorized, in

                                       19

bearer form with one or more Coupons or without Coupons, and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Securities may determine, as evidenced conclusively by
their execution of such Securities. Such temporary Securities may be in global
form.

                   Except in the case of temporary Global Securities in bearer
form (which shall be exchanged in accordance with the provisions of the
following paragraphs), if temporary Securities of any series are issued, the
Company will cause definitive Securities of that series to be prepared without
unreasonable delay. After the preparation of definitive Securities of such
series, the temporary Securities of such series shall be exchangeable for
definitive Securities of such series upon surrender of the temporary Securities
of such series at the office or agency of the Company maintained pursuant to
Section 10.02 in a Place of Payment for such series for the purpose of exchanges
of Securities of such series, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities of any series (accompanied
by any unmatured Coupons appertaining thereto) the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a like aggregate
principal amount of definitive Securities of the same series and of like tenor
or authorized denominations and having the same terms and conditions; provided,
                                                                      --------
however, that no definitive Bearer Security shall be delivered in exchange for a
-------
temporary Registered Security; and provided further that a definitive Bearer
                                   -------- -------
Security shall be delivered in exchange for a temporary Bearer Security only in
compliance with the conditions set forth in Section 3.03.

If temporary Global Securities of any series are issued in bearer form, any such
temporary Global Securities in bearer form shall, unless otherwise provided
therein, be delivered to the London office of a Depositary (the "Common
Depositary"), for the benefit of Euroclear and Clearstream Banking, Societe
Anonyme "Clearstream Luxembourg", for credit to the respective accounts of the
beneficial owners of such Securities (or to such other accounts as they may
direct).

                   Without unnecessary delay but not later than the date
specified in, or determined pursuant to the terms of, any such temporary Global
Security (but in any event in the case of definitive Securities to be delivered
in bearer form not before the beneficial owners of interests in the temporary
Global Security have provided the certification set forth in Section 3.03) (the
"Exchange Date"), the Company shall deliver to the Trustee definitive
Securities, in aggregate principal amount equal to the principal amount of such
temporary Global Security, executed by the Company. On or after the Exchange
Date such temporary Global Security shall be surrendered by the Common
Depositary to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Securities
without charge and the Trustee shall authenticate and deliver, in exchange for
each portion of such temporary Global Security, an equal aggregate principal
amount of definitive Securities of the same series of authorized denominations
and of like tenor as the portion of such temporary Global Security to be
exchanged. The definitive Securities to be delivered in exchange for any such
temporary Global Security in bearer form shall be in bearer form, registered
form, definitive global form (registered or bearer), or any combination thereof,
as specified as contemplated by Section 3.01, and, if any combination thereof is
so specified, as requested by the beneficial owner thereof; provided, however,
                                                            --------  -------
that, unless otherwise specified in such temporary Global Security in bearer
form, upon such presentation by the Common Depositary, such temporary Global
Security in bearer form shall be accompanied by a certificate dated the Exchange
Date or a subsequent date and signed by Euroclear as to the portion of such
temporary Global Security in


                                       20

bearer form held for its account then to be exchanged and a certificate dated
the Exchange Date or a subsequent date and signed by Clearstream Luxembourg as
to the portion of such temporary Global Security in bearer form held for its
account then to be exchanged, each in the form set forth in Exhibit A.2 to this
Indenture; and provided further that definitive Bearer Securities shall be
---------------- delivered in exchange for a portion of a temporary Global
Security in bearer form only in compliance with the requirements of Section
3.03.

Unless otherwise specified in such temporary Global Security in bearer form, the
interest of a beneficial owner of Securities of a series in a temporary Global
Security in bearer form shall be exchanged for definitive Securities of the same
series and of like tenor following the Exchange Date when the beneficial owner
instructs Euroclear or Clearstream Luxembourg, as the case may be, to request
such exchange on his behalf and delivers to Euroclear or Clearstream Luxembourg,
as the case may be, a certificate in the form set forth in Exhibit A.1 to this
Indenture, dated on the earlier of the first Interest Payment Date and the date
of delivery of the Securities in definitive form, copies of which certificate in
blank shall be available from the offices of Euroclear, Clearstream Luxembourg,
the Trustee, any Authenticating Agent appointed for such series of Securities
and any Paying Agent appointed for such series of Securities. Unless otherwise
specified in such temporary Global Security in bearer form, any such exchange
shall be made free of charge to the beneficial owners of such temporary Global
Security in bearer form, except that a Person receiving definitive Securities
must bear the cost of insurance, postage, transportation and the like in the
event that such Person does not take delivery of such definitive Securities in
person at the offices of Euroclear or Clearstream Luxembourg. The definitive
Securities in bearer form to be delivered in exchange for any portion of a
temporary Global Security in bearer form shall be delivered only outside the
United States.

Until exchanged in full as hereinabove provided, the temporary Securities of any
series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of the same series and of like tenor
authenticated and delivered hereunder, except that, unless otherwise specified
as contemplated by Section 3.01, interest payable on a temporary Global Security
in bearer form on an Interest Payment Date for Securities of such series
occurring prior to the applicable Exchange Date shall be payable to Euroclear
and Clearstream Luxembourg on such Interest Payment Date upon delivery by
Euroclear and Clearstream Luxembourg to the Trustee of a certificate or
certificates in the form set forth in Exhibit A.3 to this Indenture, for credit
without further interest on or after such Interest Payment Date to the
respective accounts of the Persons who are the beneficial owners of such
temporary Global Security in bearer form (or to such other accounts as they may
direct) on such Interest Payment Date and who have each delivered to Euroclear
or Clearstream Luxembourg, as the case may be, a certificate in the form set
forth in Exhibit A.4 to this Indenture. Any interest so received by Euroclear
and Clearstream Luxembourg and not paid as herein provided shall be returned to
the Trustee immediately prior to the expiration of two years after such Interest
Payment Date in order to be repaid to the Company in accordance with Section
10.03.

          SECTION 3.05. Registration; Registration of Transfer and Exchange. The
                        ---------------------------------------------------
Company shall cause to be kept at an office or agency to be maintained by the
Company in accordance with Section 10.02 a register (the "Security Register") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Registered Securities and the registration
of transfers of Registered Securities. The Trustee is

                                       21

hereby appointed "Security Registrar" for the purpose of registering
Registered Securities and transfers of Registered Securities as herein provided.

          Upon surrender for registration of transfer of any Registered Security
of any series at the office or agency of the Company maintained pursuant to
Section 10.02 for such purpose in a Place of Payment for such series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Registered
Securities of the same series of any authorized denominations and of a like
aggregate principal amount and tenor and having the same terms and conditions.

          The Company may establish pursuant to Section 3.01 that, at the option
of the Holder, Registered Securities of any series may be exchanged for other
Registered Securities of the same series of any authorized denominations and of
a like aggregate principal amount and tenor and having the same terms and
conditions, upon surrender of the Securities to be exchanged at any such office
or agency. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive. Bearer Securities
may not be issued in exchange for Registered Securities.

          At the option of the Holder (if so provided pursuant to Section 3.01)
Bearer Securities of any series may be exchanged for Registered Securities of
the same series of any authorized denominations and of a like aggregate
principal amount and tenor and having the same terms and conditions, upon
surrender of the Bearer Securities to be exchanged at any such office or agency,
with all unmatured Coupons and all matured Coupons in default thereto
appertaining. If the Holder of a Bearer Security is unable to produce any such
unmatured Coupon or Coupons or matured Coupon or Coupons in default, such
exchange may be effected if the Bearer Securities are accompanied by payment in
funds acceptable to the Company in an amount equal to the face amount of such
missing Coupon or Coupons, or the surrender of such missing Coupon or Coupons
may be waived by the Company and the Trustee if there is furnished to them such
security or indemnity as they may require to save each of them and any Paying
Agent harmless. If thereafter the Holder of such Security shall surrender to any
Paying Agent any such missing Coupon in respect of which such a payment shall
have been made, such Holder shall be entitled to receive the amount of such
payment; provided, however, that, except as otherwise provided in Section 10.02,
         --------  -------
interest represented by Coupons shall be payable only upon presentation and
surrender of those Coupons at an office or agency located outside the United
States. Notwithstanding the foregoing, in case a Bearer Security of any series
is surrendered at any such office or agency in exchange for a Registered
Security of the same series and like tenor after the close of Business at such
office or agency on (i) any Regular Record Date and before the opening of
business at such office or agency on the relevant Interest Payment Date, or (ii)
any Special Record Date and before the opening of business at such office or
agency on the related proposed date for payment of Defaulted Interest, such
Bearer Security shall be surrendered without the Coupon relating to such
Interest Payment Date or proposed date for payment, as the case may be, and
interest or Defaulted Interest, as the case may be, will not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such Coupon when due in accordance
with the provisions of this Indenture.

                                       22

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

          Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 3.01, any definitive Global Security in bearer form
shall be exchangeable only as provided in this paragraph. If the beneficial
owners of interests in a definitive Global Security in bearer form are entitled
to exchange such interests for Securities of such series and of like tenor and
principal amount of another authorized form and denomination, as specified as
contemplated by Section 3.01, then without unnecessary delay but in any event
not later than the earliest date on which such interest may be so exchanged, the
Company shall deliver to the Trustee definitive Securities in aggregate
principal amount equal to the principal amount of such definitive Global
Security in bearer form, executed by the Company. On or after the earliest date
on which such interest may be so exchanged, such definitive Global Security in
bearer form shall be surrendered by the Common Depositary or such other
depositary or Common Depositary as shall be specified in the Company Order with
respect thereto to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Securities
without charge and the Trustee shall authenticate and deliver, in exchange for
each portion of such definitive Global Security in bearer form, an equal
aggregate principal amount of definitive Securities of the same series of
authorized denominations and of like tenor as the portion of such definitive
Global Security in bearer form to be exchanged which, unless the Securities of
the series are not issuable both as Bearer Securities and as Registered
Securities, as specified as contemplated by Section 3.01, shall be in the form
of Bearer Securities or Registered Securities, or any combination thereof, as
shall be specified by the beneficial owner thereof; provided, however, that no
                                                    -----------------
such exchanges may occur during a period beginning at the opening of business 15
days before any selection of Securities of that series to be redeemed and ending
on the relevant Redemption Date; and provided further that no Bearer Security
                                     ----------------
delivered in exchange for a portion of a definitive Global Security shall be
mailed or otherwise delivered to any location in the United States. If a
Registered Security is issued in exchange for any portion of a definitive Global
Security in bearer form after the close of business at the office or agency
where such exchange occurs on (i) any Regular Record Date and before the opening
of business at such office or agency on the relevant Interest Payment Date, or
(ii) any Special Record Date and the opening of business at such office or
agency on the related proposed date for payment of Defaulted Interest, interest
or Defaulted Interest, as the case may be, will not be payable on such Interest
Payment Date or proposed date for payment, as the case may be, in respect of
such Registered Security, but will be payable on such Interest Payment Date or
proposed date for payment, as the case may be, only to the Person to whom
interest in respect of such portion of such definitive Global Security in bearer
form is payable in accordance with the provisions of this Indenture.

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

          Every Registered Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee or
any transfer agent) be duly endorsed, or be accompanied by a written instrument
of transfer in form satisfactory to the

                                       23

Company and the Security Registrar or any transfer agent duly executed, by the
Holder thereof or his attorney duly authorized in writing.

          No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.04, 9.06 or 11.06 not involving any transfer.

          The Company shall not be required (i) to issue, register the transfer
of or exchange Securities of any series during a period beginning at the opening
of business 15 days before any selection of Securities of that series to be
redeemed and ending at the close of business on (A) if Securities of the series
are issuable only as Registered Securities, the day of the mailing of the
relevant notice of redemption and (B) if Securities of the series are issuable
as Bearer Securities, the day of the first publication of the relevant notice of
redemption or, if Securities of the series are also issuable as Registered
Securities and there is no publication, the mailing of the relevant notice of
redemption, or (ii) to register the transfer of or exchange of any Registered
Security so selected for redemption, in whole or in part, except the unredeemed
portion of any Security being redeemed in part, or (iii) to exchange any Bearer
Security so selected for redemption except that such a Bearer Security may be
exchanged for a Registered Security of that series and like tenor; provided that
                                                                   --------
such Registered Security shall be simultaneously surrendered for redemption.

          If at any time the Depositary for the Global Securities of a series
notifies the Company that it is unwilling or unable to continue as Depositary
for the Global Securities of such series or if at any time the Depositary for
the Global Securities of such series shall no longer be eligible under Section
3.03, the Company shall appoint a successor Depositary with respect to the
Global Securities of such series. If a successor Depositary for the Global
Securities of such series is not appointed by the Company within 90 days after
the Company receives such notice or becomes aware of such ineligibility, the
Company's election pursuant to Section 3.01 that such Registered Securities be
represented by one or more Global Securities shall no longer be effective with
respect to the Global Securities of such series and the Company will execute,
and the Trustee, upon receipt of a Company Order for the authentication and
delivery of definitive Securities of such series, will authenticate and deliver,
Securities of such series in definitive form in an aggregate principal amount
equal to the principal amount of the Global Security or Securities representing
such series in exchange for such Global Security or Securities.

          If specified by the Company pursuant to Section 3.01 with respect to a
series of Securities, the Company may at any time and in its sole discretion
determine that the Securities of any series issued in the form of one or more
Global Securities shall no longer be represented by such Global Security or
Securities. In such event the Company will execute, and the Trustee, upon
receipt of a Company Order for the authentication and delivery of definitive
Securities of such series, will authenticate and deliver Securities of such
series in definitive form and in an aggregate principal amount equal to the
principal amount of the Global Security or Securities representing such series
in exchange for such Global Security or Securities.

                                       24

          If specified by the Company pursuant to Section 3.01 with respect to a
series of Securities, the Depositary for such series of Securities may at its
option surrender a Global Security for such series of Securities in exchange in
whole or in part for Securities of such series in definitive form on such terms
as are acceptable to the Company and such Depositary. Thereupon, the Company
shall execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of definitive Securities of such series, shall
authenticate and deliver, without charge to the Holders,

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

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

          In any exchange provided for in any of the preceding three paragraphs,
the Company will execute and the Trustee will authenticate and deliver
Securities (a) in definitive registered form in authorized denominations, if the
Securities of such series are issuable as Registered Securities, (b) in
definitive bearer form in authorized denominations, with coupons attached, if
the Securities of such series are issuable as Bearer Securities or (c) as either
Registered or Bearer Securities, if the Securities of such series are issuable
in either form; provided, however, that a definitive Bearer Security shall be
                -----------------
delivered in exchange for a temporary Global Security only in compliance with
the conditions set forth in Section 3.04; and provided further that delivery of
                                              ----------------
a Bearer Security shall occur only outside the United States.

          Upon the exchange of a Global Security for Securities in definitive
form, such Global Security shall be canceled by the Trustee. Registered
Securities issued in exchange for a Global Security pursuant to this Section
shall be registered in such names and in such authorized denominations as the
Depositary for such Global Security, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Registered Securities to the persons in whose names such
Securities are so registered.

          Unless otherwise specified by the Company pursuant to Section 3.01, a
Global Security representing all or a portion of the Securities of a series may
not be transferred except as a whole by the Depositary for such series to a
nominee of such Depositary or by a nominee of such Depositary to such Depositary
or another nominee of such Depositary or by such Depositary or any such nominee
to a successor Depositary for such series or a nominee of such successor
Depositary.

          SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Securities. If any
                        ------------------------------------------------
mutilated Security or Security with a mutilated Coupon appertaining to it is
surrendered to the Trustee, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Security of the same series
and of like tenor and principal amount and with the same terms and conditions
and bearing a number not contemporaneously outstanding with Coupons
corresponding to the Coupons, if any, appertaining to the surrendered Security.

                                       25

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

          In case any such mutilated, destroyed, lost or stolen Security or
Coupon has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security or Coupon pay such Security or
Coupon; provided, however, that principal of (and premium, if any) and any
        -----------------
interest on Bearer Securities shall, except as otherwise provided in Section
10.02, be payable only at an office or agency located outside the United States
and, unless otherwise specified as contemplated by Section 3.01, any interest on
Bearer Securities shall be payable only upon presentation and surrender of the
Coupons appertaining thereto.

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

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

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

          SECTION 3.07. Payment of Interest; Interest Rights Preserved. Unless
                        ----------------------------------------------
otherwise provided as contemplated by Section 3.01 with respect to any series of
Securities, interest on any Registered Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.

          Any interest on any Registered Security of any series which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date (herein called "Defaulted Interest") shall cease to be payable to
the Holder on the relevant Regular Record Date by virtue

                                       26

of having been such Holder, and such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in clause (1) or (2) below:

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

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

          Subject to the foregoing provisions of this Section and Section 3.05,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.

          None of the Company, the Trustee, any Authenticating Agent, any Paying
Agent or the Security Registrar will have any responsibility or liability for
any aspect of the records relating to or payments made on account of any
beneficial ownership interest in a Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interest.

          SECTION 3.08. Persons Deemed Owners. Prior to due presentment of a
                        ---------------------
Registered Security for registration of transfer, the Company, the Trustee and
any agent of the

                                       27

Company or the Trustee may treat the Person in whose name such Registered
Security is registered as the owner of such Registered Security for the purpose
of receiving payment of principal of (and premium, if any) and (subject to
Sections 3.05 and 3.07) interest on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.

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

          SECTION 3.09. Cancellation. All Securities and Coupons surrendered for
                        ------------
payment, redemption, registration of transfer or exchange or for credit against
any sinking fund payment shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee. All Securities and Coupons so delivered
shall be promptly canceled by the Trustee. All Bearer Securities and unmatured
Coupons held by the Trustee pending such cancellation shall be deemed to be
delivered for cancellation for all purposes of this Indenture and the
Securities. The Company may at any time deliver to the Trustee for cancellation
any Securities previously authenticated and delivered hereunder which the
Company may have acquired in any manner whatsoever, and may deliver to the
Trustee (or to any other Person for delivery to the Trustee) for cancellation
any Securities previously authenticated hereunder which the Company has not
issued and sold, and all Securities so delivered shall be promptly canceled by
the Trustee. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Securities and Coupons held by the
Trustee shall be destroyed in a manner selected by the Trustee unless otherwise
directed by a Company Order.

          SECTION 3.10. Computation of Interest. Except as otherwise specified
                        -----------------------
as contemplated by Section 3.01 for Securities of any series, interest on the
Securities of each series shall be computed on the basis of a 360-day year of
twelve 30-day months.

          SECTION 3.11. Compliance with Certain Laws and Regulations. If any
                        --------------------------------------------
Bearer Securities are to be issued in any series of Securities, the Company will
use reasonable efforts to provide for arrangements and procedures designed
pursuant to then applicable laws and regulations, if any, to ensure that such
Bearer Securities are sold or resold, exchanged, transferred and paid only in
compliance with such laws and regulations and without adverse consequences to
the Company, the Holders and the Trustee.

          SECTION 3.12. Medium-Term Securities. Notwithstanding any contrary
                        ----------------------
provision herein, if all Securities of a series are not to be originally issued
at one time, it shall not be necessary to deliver the Company Order, Officers'
Certificate, supplemental indenture or Opinion of Counsel otherwise required
pursuant to Sections 1.02, 3.01, 3.03 and 3.04 at or prior to the time of
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.

                                       28

          An Officers' Certificate or supplemental indenture, delivered pursuant
to this Section 3.12 in the circumstances set forth in the preceding paragraph
may provide that Securities which are the subject thereof will be authenticated
and delivered by the Trustee on original issue from time to time upon the
telephonic or written order of persons designated in such Officers' Certificate
or supplemental indenture (telephonic instructions to be promptly confirmed in
writing by such persons) and that such persons are authorized to determine,
consistent with such Officers' Certificate or any applicable supplemental
indenture such terms and conditions of said Securities as are specified in such
Officers' Certificate or supplemental indenture, provided that the foregoing
procedure is acceptable to the Trustee.

                                  ARTICLE FOUR

                           Satisfaction and Discharge
                           --------------------------

          SECTION 4.01. Satisfaction and Discharge of Indenture. This Indenture
                        ---------------------------------------
shall upon Company Request cease to be of further effect with respect to a
series of Securities (except as to any surviving rights of (as applicable)
registration of transfer or exchange of Securities and Coupons, if any, of such
series herein expressly provided for) and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to such series, when

          (1) either

                    (A) all Securities and Coupons of such series theretofore
          authenticated and delivered (other than (i) Coupons appertaining to
          Bearer Securities surrendered for exchange for Registered Securities
          and maturing after such exchange, whose surrender is not required or
          has been waived as provided in Section 3.05, (ii) Securities and
          Coupons of such series which have been destroyed, lost or stolen and
          which have been replaced or paid as provided in Section 3.06, (iii)
          Coupons appertaining to Securities called for redemption and maturing
          after the relevant Redemption Date, whose surrender has been waived as
          provided in Section 11.06, and (iv) Securities and Coupons of such
          series for whose payment money has theretofore been deposited in trust
          or segregated and held in trust by the Company and thereafter repaid
          to the Company or discharged from such trust, as provided in Section
          10.03) have been delivered to the Trustee for cancellation; or

                    (B) all such Securities and Coupons of such series not
          theretofore delivered to the Trustee for cancellation

                        (i)     have become due and payable, or

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

                        (iii)   are to be called for redemption within one year
                    under arrangements satisfactory to the Trustee for the
                    giving of

                                       29

              notice of redemption by the Trustee in the name, and at the
              expense, of the Company.

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

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

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

          Notwithstanding the satisfaction and discharge of this Indenture with
respect to a series, the obligations of the Company to the Trustee under Section
6.07, the obligations of the Trustee to any Authenticating Agent under Section
6.14 and, if money shall have been deposited with the Trustee pursuant to
subclause (B) of clause (1) of this Section, the obligations of the Trustee
under Section 4.02 and the last paragraph of Section 10.03 shall survive.

          SECTION 4.02. Application of Trust Money. Subject to the provisions of
                        --------------------------
the last paragraph of Section 10.03, all money deposited with the Trustee
pursuant to Sections 4.01 and 4.03 shall be held in trust and applied by it, in
accordance with the provisions of the Securities and Coupons, if any, and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee.

          SECTION 4.03. Satisfaction, Discharge and Defeasance of Securities of
                        -------------------------------------------------------
Any Series. If this Section is specified, as contemplated by Section 3.01, to be
----------
applicable to Securities and Coupons, if any, of any series, at the Company's
option, either

          (a) the Company will be deemed to have been Discharged (as defined
     below) from its obligations with respect to Securities and Coupons, if any,
     of such series or

          (b) the Company will cease to be under any obligation to comply with
     any term, provision or condition set forth in (x) Sections 8.01, 8.02,
     10.08 and 10.09 or (y) the instrument or instruments setting forth the
     terms, provisions or conditions of such series pursuant to Section 3.01
     (provided in case of this subclause (y) that such instrument or instruments
      --------
     specify which terms, provisions or conditions, if any, are subject to this
     clause (b) provided further, however, that no such instrument may specify
                -------------------------
     that the Company may cease to comply with any obligations as to which it
     may not be

                                       30

          Discharged pursuant to the definition of "Discharged"); in each case
          (a) and (b) with respect to the Securities and Coupons, if any, of
          such series on the first day after the applicable conditions set forth
          below in (p) and either (q) or (r) have been satisfied:

                (p) (1) the Company has paid or caused to be paid all other sums
          payable with respect to the Outstanding Securities and Coupons, if
          any, of such series (in addition to any required under (q) or (r));
          and

                (2) the Company has delivered to the Trustee an Officers'
          Certificate and an Opinion of Counsel each stating that all conditions
          precedent herein provided for relating to, as applicable (i) the
          satisfaction and discharge of the entire indebtedness on all
          Outstanding Securities and Coupons, if any, of any such series, or
          (ii) the discharge of the obligations with respect to the Securities
          of such series set forth in (b) above, have been complied with;

                (q) (1) the Company shall have with respect to (a) or (b) above
          deposited or caused to be deposited irrevocably with the Trustee as a
          trust fund specifically pledged as security for, and dedicated solely
          to, the benefit of the Holders of the Securities and Coupons, if any,
          of such series (i) money in an amount (in such currency, currencies or
          currency unit or units in which any Outstanding Securities and
          Coupons, if any, of such series are payable) or (ii) in the case of
          Securities and Coupons, if any, denominated in Dollars, U.S.
          Government Obligations (as defined below) or, in the case of
          Securities and Coupons, if any, denominated in a Foreign Currency,
          Foreign Government Securities (as defined below), which through the
          payment of interest and principal in respect thereof in accordance
          with their terms will provide, not later than one day before the due
          date of any payment of principal (including any premium) and interest,
          if any, under the Securities and Coupons, if any, of such series,
          money in an amount or (iii) a combination of (i) and (ii), sufficient
          (in the opinion with respect to (ii) and (iii) of a nationally
          recognized firm of independent public accountants expressed in a
          written certification thereof delivered to the Trustee) to pay and
          discharge each installment of principal of (including any premium),
          and interest, if any, on, the Outstanding Securities and Coupons, if
          any, of such series on the dates such installments of interest or
          principal (including any premium) are due, in the currency, currencies
          or currency unit or units, in which such Securities and Coupons, if
          any, are payable;

                (2) (i) no Event of Default or event (including such deposit)
          which with notice or lapse of time would become an Event of Default
          shall have occurred and be continuing on the date of such deposit,
          (ii) no Event of Default as defined in clause (5) or (6) of Section
          5.01, or event which with notice or lapse of time or both would become
          an Event of Default under either such clause, shall have occurred
          within 90 days after the date of such deposit and (iii) such deposit
          and the related intended consequence under (a) or (b) will not result
          in any default or event of default under any material indenture,
          agreement or other instrument binding upon the Company or any
          Subsidiary or any of their properties; and

                (3) the Company shall have delivered to the Trustee an Opinion
          of Counsel to the effect that Holders of the Securities and Coupons,
          if any, of such series will not recognize income, gain or loss for
          Federal income tax purposes as a result of the


                                       31

          Company's exercise of its option under this Section 4.03 and will be
          subject to Federal income tax in the same amount, in the same manner
          and at the same times as would have been the case if such option had
          not been exercised;

                (r) the Company has properly fulfilled such other means of
          satisfaction and discharge as is specified, as contemplated by Section
          3.01, to be applicable to the Securities and Coupons, if any, of such
          series.

                Any deposits with the Trustee referred to in clause (q) (1)
above will be made under the terms of an escrow trust agreement in form
satisfactory to the Trustee. If any Outstanding Securities and Coupons, if any,
of such series are to be redeemed prior to their Stated Maturity, whether
pursuant to any mandatory redemption provisions or in accordance with any
mandatory sinking fund requirement, the applicable escrow trust agreement will
provide therefor and the Company will make arrangements for the giving of notice
of redemption by the Trustee in the name, and at the expense, of the Company.

                SECTION 4.04. Reinstatement. If the Trustee is unable to apply
                              -------------
any money, U.S. Government Obligations or Foreign Government Securities in
accordance with Section 4.01 or 4.03 by reason of any legal proceeding or by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company's
obligations under this Indenture and the Securities and Coupons, if any, of such
series shall be revived and reinstated as though no deposit had occurred
pursuant to Section 4.01 or 4.03 until such time as the Trustee is permitted to
apply all such money, U.S. Government Obligations or Foreign Government
Securities in accordance with Section 4.01 or 4.03; provided, however, that if
                                                    --------  -------
the Company has made any payment of interest on or principal of (and premium, if
any) any Securities and Coupons, if any, of such series because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such series of Securities and Coupons, if any, to receive such
payment from the money, U.S. Government Obligations or Foreign Government
Securities held by the Trustee.

                SECTION 4.05. Definitions. The following terms, as used in this
                              -----------
Article Four, shall have the following meanings:

                "Discharged" means that the Company will be deemed to have paid
          and discharged the entire indebtedness represented by, and obligations
          under, the Securities and Coupons, if any, of the series as to which
          this Section is specified as applicable as aforesaid and to have
          satisfied all the obligations under this Indenture relating to the
          Securities and Coupons, if any, of such series (and the Trustee, at
          the expense of the Company, will execute proper instruments
          acknowledging the same), except (A) the rights of Holders thereof to
          receive, from the trust fund described in clause (q) (1) above,
          payment of the principal of (premium, if any) and the interest, if
          any, on such Securities and Coupons, if any, when such payments are
          due, (B) the Company's obligations with respect to such Securities and
          Coupons, if any, under Sections 3.05 and 3.06 (insofar as applicable
          to Securities of such series), 4.02, 10.02 and 10.03 (last paragraph
          only) and the Company's obligations to the Trustee under Sections 6.07
          and 6.10, (C) the rights of Holders of Securities of any series with
          respect to the currency or currency units in which they are to receive
          payments of principal, premium, if any, and interest and (D) the
          rights, powers, trusts, duties and immunities of the Trustee
          hereunder, will survive such

                                       32


         discharge. The Company will reimburse the trust fund for any loss
         suffered by it as a result of any tax, fee or other charge imposed on
         or assessed against deposited U.S. Government Obligations or Foreign
         Government Securities, as the case may be, or any principal or interest
         paid on such obligations, and, subject to the provisions of Section
         6.07, will indemnify the Trustee against any claims made against the
         Trustee in connection with any such loss.

                  "Foreign Government Securities" means, with respect to
         Securities and Coupons, if any, of any series that are denominated in a
         Foreign Currency, securities that are (i) direct obligations of the
         government that issued or caused to be issued such currency for the
         payment of which obligations its full faith and credit is pledged or
         (ii) obligations of a Person controlled or supervised by and acting as
         an agency or instrumentality of such government the timely payment of
         which is unconditionally guaranteed as a full faith and credit
         obligation by such government, which, in either case under clauses (i)
         or (ii), are not callable or redeemable at the option of the issuer
         thereof.

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

                                  ARTICLE FIVE

                                    Remedies
                                    --------

                  SECTION 5.01. Events of Default. "Event of Default", wherever
                                -----------------
used herein with respect to Securities of any series, means any one of the
following events (whatever the reason for such Event of Default and 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), unless it is either inapplicable to
a particular series or it is specifically deleted or modified in or pursuant to
the supplemental indenture or Board Resolution establishing such series of
Securities or in the form of Security for such series:

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

                                       33
                  (2) default in the payment of the principal of (or premium, if
         any, on) any Security of that series at its Maturity; or

                  (3) default in the deposit of any sinking fund payment, when
         and as due by the terms of a Security of that series, and continuance
         of such default for a period of 30 days; or

                  (4) default in the performance, or breach, of any covenant or
         warranty of the Company in this Indenture (other than a covenant or
         warranty a default in the performance or breach of which is elsewhere
         in this Section specifically dealt with or which has expressly been
         included in this Indenture solely for the benefit of a series of
         Securities other than that series) and continuance of such default or
         breach for a period of 60 days after there has been given, by
         registered or certified mail, to the Company by the Trustee or to the
         Company and the Trustee by the Holders of at least 25% in principal
         amount of the Outstanding Securities of that series a written notice
         specifying such default or breach and requiring it to be remedied and
         stating that such notice is a "Notice of Default" hereunder; or

                  (5) the entry by a court having jurisdiction in the premises
         of (A) a decree or order for relief in respect of the Company in an
         involuntary case or proceeding under any applicable Federal or State
         bankruptcy, insolvency, reorganization or other similar law or (B) a
         decree or order adjudging the Company a bankrupt or insolvent, or
         approving as properly filed a petition seeking reorganization,
         arrangement, adjustment or composition of or in respect of the Company
         under any applicable Federal or State law, or appointing a custodian,
         receiver, liquidator, assignee, trustee, sequestrator or other similar
         official of the Company or of any substantial part of its property, or
         ordering the winding up or liquidation of its affairs, and the
         continuance of any such decree or order for relief or any such other
         decree or order unstayed and in effect for a period of 90 consecutive
         days; or

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

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

                  SECTION 5.02. Acceleration of Maturity; Rescission and
                                ----------------------------------------
Annulment. If an Event of Default with respect to Securities of any series at
---------
the time Outstanding occurs and is


                                       34

continuing, then in every such case the Trustee or the Holders of not less than
25% in principal amount of the Outstanding Securities of that series may declare
the principal amount of all of the Securities of that series to be due and
payable immediately, by a notice in writing to the Company (and to the Trustee
if given by Holders) and upon any such declaration such principal amount (or
specified amount) shall become immediately due and payable.

         At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if

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

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

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

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

               (D) in Dollars all sums paid or advanced by the Trustee hereunder
         and the reasonable compensation, expenses, disbursements and advances
         of the Trustee, its agents and counsel and all other amounts due the
         Trustee under Section 6.07;

    and

         (2) all Events of Default with respect to Securities of that series,
     other than the nonpayment of the principal of Securities of that: series
     which have become due solely by such declaration of acceleration, have been
     cured or waived as provided in Section 5.13. No such rescission shall
     affect any subsequent default or impair any right consequent thereon.

         SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
                       -------------------------------------------------------
Trustee. The Company covenants that if
-------

         (1) default is made in the payment of any interest on any Security or
     Coupon when such interest becomes due and payable and such default
     continues for the period of grace provided for with respect to such
     Security,

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

                                       35
         (3) default is made in the deposit of any sinking fund payment, when
     and as due by the terms of a Security,

the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities and Coupons, if any, the whole amount then due and
payable on such Securities and Coupons, if any, for principal (and premium, if
any) and interest and, to the extent that payment of such interest shall be
legally enforceable, interest on any overdue principal (and premium, if any) and
on any overdue interest, at the rate or rates prescribed therefor in such
Securities and Coupons, if any, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel and all other amounts due the Trustee under Section 6.07.

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

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

         SECTION 5.04. Trustee May File Proofs of Claim. In case of the pendency
                       --------------------------------
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee (irrespective
of whether the principal of the Securities shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the payment of overdue
principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise,

         (i)  to file and prove a claim for the whole amount of principal (and
     premium, if any) and interest owing and unpaid in respect of the Securities
     and to file such other papers or documents as may be necessary or advisable
     in order to have the claims of the Trustee (including any claim for the
     reasonable compensation, expenses, disbursements and advances of the
     Trustee, its agents and counsel and all other amounts due the Trustee under
     Section 6.07) and of the Holders allowed in such judicial proceeding, and

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

                                       36

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.07.

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

         SECTION 5.05. Trustee May Enforce Claims Without Possession of
                       ------------------------------------------------
Securities. All rights of action and claims under this Indenture or the
----------
Securities or Coupons, if any, may be prosecuted and enforced by the Trustee
without the possession of any of the Securities or Coupons or the production
thereof in any proceeding relating thereto, and any such proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel and all other amounts due the Trustee under Section 6.07,
be for the ratable benefit of the Holders of the Securities and Coupons, if any,
in respect of which such judgment has been recovered.

         SECTION 5.06. Application of Money Collected. Any money collected by
                       ------------------------------
the Trustee pursuant to this Article shall be applied in the following order, at
the date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal (or premium, if any) or interest, upon
presentation of the Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:

         FIRST: to the payment of all amounts due the Trustee under Section
6.07;

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

         THIRD: the balance, if any, to the Person or Persons entitled thereto.

         SECTION 5.07. Limitation on Suits. No Holder of any series shall have
                       -------------------
any right to institute any proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless

         (1) an Event of Default with respect to Securities of such series shall
     have occurred and be continuing and such Holder has previously given
     written notice to the Trustee of such continuing Event of Default;

                                       37

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

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

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

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

it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture (including without limitation the provisions of Section 5.12)
to affect, disturb or prejudice the rights of any other of such Holders, or to
obtain or to seek to obtain priority or preference over any other of such
Holders or to enforce any right under this Indenture, except in the manner
herein provided and for the equal and ratable benefit of all of such Holders.

                   SECTION 5.08. Unconditional Right of Holders to Receive
                                 -----------------------------------------
Principal Premium and Interest. Notwithstanding any other provision in this
------------------------------
Indenture, the Holder of any Security or any Coupon shall have the right, which
is absolute and unconditional, to receive payment of the principal of (and
premium, if any) and (subject to Section 3.07) interest on such Security or
Coupon on the Stated Maturity or Maturities expressed in such Security (or, in
the case of redemption, on the Redemption Date) and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.

                   SECTION 5.09. Restoration of Rights and Remedies. If the
                                 ----------------------------------
Trustee or any Holder has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or to
such Holder, then and in every such case, subject to any determination in such
proceeding, the Company, the Trustee and the Holders shall be restored severally
and respectively to their former positions hereunder and thereafter all rights
and remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.

                   SECTION 5.10. Rights and Remedies Cumulative. Except as
                                 ------------------------------
otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities in the last paragraph of Section 3.06, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

                                       38

                   SECTION 5.11. Delay or Omission Not Waiver. No delay or
                                 ----------------------------
omission of the Trustee or of any Holder of any Securities to exercise any right
or remedy accruing upon any Event of Default shall impair any such right or
remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article or by law to the Trustee
or to the Holders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Holders, as the case may be.

                   SECTION 5.12. Control by Holders. The Holders of not less
                                 ------------------
than a majority in principal amount of the Outstanding Securities of any series
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee, with respect to the Securities of such series;
provided that
--------

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

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

                   (3) subject to the provisions of Section 6.01, the Trustee
         shall have the right to decline to follow any such direction if the
         Trustee in good faith shall, by a Responsible Officer or Officers of
         the Trustee, determine that the action so directed would involve the
         Trustee in personal liability.

                   SECTION 5.13. Waiver of Past Defaults. The Holders of not
                                 -----------------------
less than a majority in principal amount of the Outstanding Securities of any
series may on behalf of the Holders of all the Securities of such series waive
any past default hereunder with respect to such series and its consequences,
except a default

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

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

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

                   SECTION 5.14. Undertaking for Costs. All parties to this
                                 ---------------------
Indenture agree, and each Holder by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken, suffered or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or


                                       39

defenses made by such party litigant; but the provisions of this Section shall
not apply to any suit instituted by the Company, to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities of
any series, or to any suit instituted by any Holder for the enforcement of the
payment of the principal of (or premium, if any) or interest on any Security or
the payment of any Coupon on or after the Stated Maturity or Maturities
expressed in such Security (or, in the case of redemption, on or after the
Redemption Date).

                   SECTION 5.15. Waiver of Stay or Extension Laws. The Company
                                 --------------------------------
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.

                                   ARTICLE SIX

                                   The Trustee
                                   -----------

                   SECTION 6.01. Certain Duties and Responsibilities. (a) Except
                                 -----------------------------------
during the continuance of an Event of Default with respect to any series:

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

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

                   (b) In case an Event of Default has occurred and is
continuing with respect to any series, the Trustee shall exercise such of the
rights and powers vested in it by this Indenture with respect to such series,
and use the same degree of care and skill in their exercise, as a prudent man
would exercise or use under the circumstances in the conduct of his own affairs.

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

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

                                       40


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

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

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

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

                   SECTION 6.02. Notice of Defaults. Within 90 days after the
                                 ------------------
occurrence of any default hereunder with respect to the Securities of any
series, the Trustee shall transmit notice of such default hereunder known to the
Trustee to the Holders of such Securities as provided in Section 7.03(d), unless
such default shall have been cured or waived; provided, however, that, except in
                                              --------  -------
the case of a default in the payment of the principal of (or premium, if any) or
interest on any Security of such series or in the payment of any sinking fund
installment with respect to Securities of such series, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors or Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interest of the Holders of Securities of such series; provided
                                                                       --------
further, that in the case of any default of the character specified in Section
-------
5.01(4) with respect to Securities of such series, no such notice to Holders
shall be given until at least 30 days after the occurrence thereof. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to Securities of such series.

                   SECTION 6.03. Certain Rights of Trustee.  Subject to the
                                 -------------------------
provisions of Section 6.01:

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

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

                                       41
                   (c) whenever in the administration of this Indenture the
         Trustee shall deem it desirable that a matter be proved or established
         prior to taking, suffering or omitting any action hereunder, the
         Trustee (unless other evidence be herein specifically prescribed) may,
         in the absence of bad faith on its part, rely upon an Officers'
         Certificate;

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

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

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

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

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

                   SECTION 6.04. Not Responsible for Recitals or Issuance of
                                 -------------------------------------------
Securities. The recitals contained herein and in the Securities, except the
----------
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. Neither the Trustee nor any Authenticating Agent
shall be accountable for the use or application by the Company of Securities or
the proceeds thereof.

                   SECTION 6.05. May Hold Securities.  The Trustee, any
                                 -------------------
Authenticating Agent, any Paying Agent, any Security Registrar or any other
agent of the Company, in its individual or any other capacity, may become the
owner or pledgee of Securities or warrants to purchase Securities and, subject
to Sections 6.08 and 6.13, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Paying Agent, Security Registrar or
such other agent.

                                       42
                  SECTION 6.06. Money Held in Trust. Except as provided in
                                -------------------
Section 1.14, money held by the Trustee or any Paying Agent in trust hereunder
need not be segregated from other funds except to the extent required by law.
The Trustee or any Paying Agent shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Company.

                  SECTION 6.07. Compensation and Reimbursement.  The Company
                                ------------------------------
agrees

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

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

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

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

                  SECTION 6.08. Disqualification; Conflicting Interests. (a) If
                                ---------------------------------------
the Trustee has or shall acquire any conflicting interest, as defined in this
Section, with respect to the Securities and Coupons, if any, of any series, it
shall, within 90 days after ascertaining that it has such conflicting interest,
either eliminate such conflicting interest or resign with respect to the
Securities and Coupons, if any, of that series in the manner and with the effect
hereinafter specified in this Article.

                  (b) In the event that the Trustee shall fail to comply with
the provisions of Subsection (a) of this Section with respect to the Securities
of any series, the Trustee shall, within 10 days after the expiration of such
90-day period, transmit notice pursuant to Section 1.06, of such failure, to all
Holders of such series.

                  (c) For the purposes of this Section, the Trustee shall be
deemed to have a conflicting interest with respect to the Securities of any
series if

                  (1) the Trustee is trustee under this Indenture with respect
         to the Outstanding Securities of any series other than that series or
         is trustee under another indenture under

                                       43
         which any other securities, or certificates of interest or
         participation in any other securities, of the Company are outstanding,
         unless such other indenture is a collateral trust indenture under
         which the only collateral consists of Securities issued under this
         Indenture; provided that there shall be excluded from the operation of
                    --------
         this paragraph this Indenture with respect to the Securities of any
         series other than that series or any indenture or indentures under
         which other securities, or certificates of interest or participation
         in other securities, of the Company are outstanding, if

                          (i) this Indenture and such other indenture or
                  indentures are wholly unsecured and such other indenture or
                  indentures are hereafter qualified under the Trust Indenture
                  Act, unless the Commission shall have found and declared by
                  order pursuant to Section 3.05(b) or Section 3.07(c) of the
                  Trust Indenture Act that differences exist between the
                  provisions of this Indenture with respect to Securities of
                  that series and one or more other series or the provisions of
                  such other indenture or indentures which are so likely to
                  involve a material conflict of interest as to make it
                  necessary in the public interest or for the protection of
                  investors to disqualify the Trustee from acting as such under
                  this Indenture with respect to the Securities of that series
                  and such other series or under such other indenture or
                  indentures, or

                          (ii) the Company shall have sustained the burden of
                  proving, on application to the Commission and after
                  opportunity for hearing thereon, that trusteeship under this
                  Indenture with respect to the Securities of that series and
                  such other series or such other indenture or indentures is not
                  so likely to involve a material conflict of interest as to
                  make it necessary in the public interest or for the protection
                  of investors to disqualify the Trustee from acting as such
                  under this Indenture with respect to the Securities of that
                  series and such other series or under much other indenture or
                  indentures;

                  (2) the Trustee or any of its directors or executive officers
         is an obligor upon the Securities or an underwriter for the Company;

                  (3) the Trustee directly or indirectly controls or is directly
         or indirectly controlled by or is under direct or indirect common
         control with the Company or an underwriter for the Company;

                  (4) the Trustee or any of its directors or executive officers
         is a director, officer partner, employee, appointee or representative
         of the Company, or of an underwriter (other than the Trustee itself)
         for the Company who is currently engaged in the business of
         underwriting, except that (i) one individual may be a director or an
         executive officer, or both, of the Trustee and a director or an
         executive officer, or both, of the Company but may not be at the same
         time an executive officer of both the Trustee and the Company; (ii) if
         and so long as the number of directors of the Trustee in office is more
         than nine, one additional individual may be a director or an executive
         officer, or both, of the Trustee and a director of the Company; and
         (iii) the Trustee may be designated by the Company or by any
         underwriter for the Company to act in the capacity of transfer agent,
         registrar, custodian, paying agent, fiscal agent, escrow agent or
         depositary, or in any other similar

                                       44

         capacity, or, subject to the provisions of paragraph (1) of this
         Subsection, to act as trustee, whether under an indenture or otherwise;

                  (5) 10% or more of the voting securities of the Trustee is
         beneficially owned either by the Company or by any director, partner or
         executive officer thereof, or 20% or more of such voting securities is
         beneficially owned, collectively, by any two or more of such persons;
         or 10% or more of the voting securities of the Trustee is beneficially
         owned either by an underwriter for the Company or by any director,
         partner or executive officer thereof, or is beneficially owned,
         collectively, by any two or more such persons;

                  (6) the Trustee is the beneficial owner of, or holds as
         collateral security for an obligation which is in default (as
         hereinafter in this Subsection defined) (i) 5% or more of the voting
         securities, or 10% or more of any other class of security, of the
         Company not including the Securities issued under this Indenture and
         securities issued under any other indenture under which the Trustee is
         also trustee, or (ii) 10% or more of any class of security of an
         underwriter for the Company;

                  (7) the Trustee is the beneficial owner of, or holds as
         collateral security for an obligation which is in default (as
         hereinafter in this Subsection defined) 5% or more of the voting
         securities of any person who, to the knowledge of the Trustee, owns 10%
         or more of the voting securities of, or controls directly or indirectly
         or is under direct or indirect common control with, the Company;

                  (8) the Trustee is the beneficial owner of, or holds as
         collateral security for an obligation which is in default (as
         hereinafter in this Subsection defined), 10% or more of any class of
         security of any person who, to the knowledge of the Trustee, owns 50%
         or more of the voting securities of the Company; or

                  (9) the Trustee owns, on May 15 in any calendar year, in the
         capacity of executor, administrator, testamentary or inter vivos
         trustee, guardian, committee or conservator, or in any other similar
         capacity, an aggregate of 25% or more of the voting securities, or of
         any class of security, of any person, the beneficial ownership of a
         specified percentage of which would have constituted a conflicting
         interest under paragraph (6), (7) or (8) of this Subsection. As to any
         such securities of which the Trustee acquired ownership through
         becoming executor, administrator or testamentary trustee of an estate
         which included them, the provisions of the preceding sentence shall not
         apply, for a period of two years from the date of such acquisition, to
         the extent that such securities included in such estate do not exceed
         25% of such voting securities or 25% of any such class of security.
         Promptly after May 15 in each calendar year, the Trustee shall make a
         check of its holdings of such securities in any of the above-mentioned
         capacities as of such May 15. If the Company fails to make payment in
         full of the principal of (or premium, if any) or interest on any of the
         Securities when and as the same becomes due and payable, and such
         failure continues for 30 days thereafter, the Trustee shall make a
         prompt check of its holdings of such securities in any of the above
         mentioned capacities as of the date of the expiration of such 30-day
         period, and after such date, notwithstanding the foregoing provisions
         of this paragraph, all such securities so held by the Trustee, with
         sole or joint control over such securities vested in it, shall, but

                                       45
         only so long as such failure shall continue, be considered as though
         beneficially owned by the Trustee for the purposes of paragraphs (6),
         (7) and (8) of this Subsection.

                  The specification of percentages in paragraphs (5) to (9),
inclusive, of this Subsection shall not be construed as indicating that the
ownership of such percentages of the securities of a person is or is not
necessary or sufficient to constitute direct or indirect control for the
purposes of paragraph (3) or (7) of this Subsection.

                  For the purposes of paragraphs (6), (7), (8) and (9) of this
Subsection only, (i) the terms "security" and "securities" shall include only
such securities as are generally known as corporate securities, but shall not
include any note or other evidence of indebtedness issued to evidence an
obligation to repay moneys lent to a person by one or more banks, trust
companies or banking firms, or any certificate of interest or participation in
any such note or evidence of indebtedness; (ii) an obligation shall be deemed to
be "in default" when a default in payment of principal shall have continued for
30 days or more and shall not have been cured; and (iii) the Trustee shall not
be deemed to be the owner or holder of (A) any security which it holds as
collateral security, as trustee or otherwise, for an obligation which is not in
default as defined in clause (ii) above, or (B) any security which it holds as
collateral security under this Indenture, irrespective of any default hereunder,
or (C) any security which it holds as agent for collection, or as custodian,
escrow agent or depositary, or in any similar representative capacity.

                  (d) For the purposes of this Section:

                  (1) The term "underwriter", when used with reference to the
         Company, means every person who, within three years prior to the time
         as of which the determination is made, has purchased from the Company
         with a view to, or has offered or sold for the Company in connection
         with, the distribution of any security of the Company outstanding at
         such time, or has participated or has had a direct or indirect
         participation in any such undertaking, or has participated or has had a
         participation in the direct or indirect underwriting of any such
         undertaking, but such term shall not include a person whose interest
         was limited to a commission from an underwriter or dealer not in excess
         of the usual and customary distributors' or sellers' commission.

                  (2) The term "director" means any director of a corporation or
         any individual performing similar functions with respect to any
         organization, whether incorporated or unincorporated.

                  (3) The term "person" means an individual, a corporation, a
         partnership, an association, a joint stock company, a trust, an
         unincorporated organization or a government or political subdivision
         thereof. As used in this paragraph, the term "trust" shall include only
         a trust where the interest or interests of the beneficiary or
         beneficiaries are evidenced by a security.

                  (4) The term "voting security" means any security presently
         entitling the owner or holder thereof to vote in the direction or
         management of the affairs of a person, or any security issued under or
         pursuant to any trust, agreement or arrangement whereby a trustee or
         trustees or agent or agents for the owner or holder of such security
         are presently entitled to vote in the direction or management of the
         affairs of a person.

                                       46
                  (5) The term "Company" means any obligor upon the Securities.

                  (6) The term "executive officer" means the president, every
         vice president, every trust officer, the cashier, the secretary and the
         treasurer of a corporation, and any individual customarily performing
         similar functions with respect to any organization whether incorporated
         or unincorporated, but shall not include the chairman of the board of
         directors.

                  (e) The percentages of voting securities and other securities
specified in this Section shall be calculated in accordance with the following
provisions:

                  (1) A specified percentage of the voting securities of the
         Trustee, the Company or any other person referred to in this Section
         (each of whom is referred to as a "person" in this paragraph) means
         such amount of the outstanding voting securities of such person as
         entitled the holder or holders thereof to cast such specified
         percentage of the aggregate votes which the holders of all the
         outstanding voting securities of such person are entitled to cast in
         the direction or management of the affairs of such person.

                   (2) A specified percentage of a class of securities of a
         person means such percentage of the aggregate amount of securities of
         the class outstanding.

                  (3) The term "amount", when used in regard to securities,
         means the principal amount if relating to evidences of indebtedness,
         the number of shares if relating to capital shares and the number of
         units if relating to any other kind of security.

                  (4) The term "outstanding" means issued and not held by or for
         the account of the issuer. The following securities shall not be deemed
         outstanding within the meaning of this definition:

                      (i)   securities of an issuer held in a sinking fund
                  relating to securities of the issuer of the same class;

                      (ii)  securities of an issuer held in a sinking fund
                  relating to another class of securities of the issuer, if the
                  obligation evidenced by such other class of securities is not
                  in default as to principal or interest or otherwise;

                      (iii) securities pledged by the issuer thereof as security
                  for an obligation of the issuer not in default as to principal
                  or interest or otherwise; and

                      (iv)  securities held in escrow if placed in escrow by the
                  issuer thereof;

         provided, however, that any voting securities of an issuer shall be
         --------  -------
         deemed outstanding if any person other than the issuer is entitled to
         exercise the voting rights thereof.

                  (5) A security shall be deemed to be of the same class as
         another security if both securities confer upon the holder or holders
         thereof substantially the same rights and privileges; provided,
                                                               --------
         however, that, in the case of secured evidences of indebtedness, all
         -------

                                       47

         of which are issued under a single indenture, differences in the
         interest rates or maturity dates of various series thereof shall not be
         deemed sufficient to constitute such series different classes; and
         provided further that, in the case of unsecured evidences of
         ----------------
         indebtedness, differences in the interest rates or maturity dates
         thereof shall not be deemed sufficient to constitute them securities
         of different classes, whether or not they are issued under a single
         indenture.

                  SECTION 6.09. Corporate Trustee Required; Eligibility. There
                                ---------------------------------------
shall at all times be a Trustee hereunder which shall be a Corporation organized
and doing business under the laws of the United States of America, any State
thereof or the District of Columbia, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000, subject to supervision or examination by Federal or State
authority. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.

                  SECTION 6.10. Resignation and Removal; Appointment of
                                ---------------------------------------
Successor. (a) No resignation or removal of the Trustee and no appointment of a
---------
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.11.

                  (b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 6.11 shall not have been delivered to the resigning Trustee within 30
days after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such series.

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

                  (d) If at any time:

                  (1) the Trustee shall fail to comply with Section 6.08(a)
         after written request therefor by the Company or by any Holder who has
         been a bona fide Holder of a Security for at least six months, or

                  (2) the Trustee for a series shall cease to be eligible under
         Section 6.09 and shall fail to resign after written request therefor by
         the Company or by any Holder of Securities of such series, or

                  (3) the Trustee shall become incapable of acting or shall be
         adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
         property shall be appointed or

                                       48

          any public officer shall take charge or control of the Trustee or of
          its property or affairs for the purpose of rehabilitation,
          conservation or liquidation,

then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 5.14, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.

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

                  (f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
by giving notice of such event to all Holders of Securities of such series as
provided by Section 1.06. Each notice shall include the name of the successor
Trustee with respect to the Securities of such series and the address of its
Corporate Trust Office.

                  SECTION 6.11. Acceptance of Appointment by Successor. (a) In
                                --------------------------------------
case of the appointment hereunder of a successor Trustee with respect to all
Securities, every such successor Trustee so appointed shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on the request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder.

                                       49

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

                   (c) Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) or (b) of this Section, as the case may be.

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

                  SECTION 6.12. Merger, Conversion, Consolidation or Succession
                                -----------------------------------------------
to Business. Any corporation into which the Trustee may be merged or converted
-----------
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.

                  SECTION 6.13. Preferential Collection of Claims Against
                                -----------------------------------------
Company. (a) Subject to Subsection (b) of this Section, if the Trustee shall be
-------
or shall become a creditor, directly or


                                       50

indirectly, secured or unsecured, of the Company within four months prior to a
default, as defined in Subsection (c) of this Section, or subsequent to such a
default, then, unless and until such default shall be cured, the Trustee shall
set apart and hold in a special account for the benefit of the Trustee
individually, the Holders of the Securities and Coupons, if any, and the holders
of other indenture securities, as defined in Subsection (c) of this Section:

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

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

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

                  (A) to retain for its own account (i) payments made on account
         of any such claim by any Person (other than the Company) who is liable
         thereon, and (ii) the proceeds of the bona fide sale of any such claim
         by the Trustee to a third Person, and (iii) distributions made in cash,
         securities or other property in respect of claims filed against the
         Company in bankruptcy or receivership or in proceedings for
         reorganization pursuant to the Federal Bankruptcy Act or applicable
         State law;

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

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

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

                  For the purposes of paragraphs (B), (C) and (D), property
substituted after the beginning of such four-month period for property held as
security at the time of such substitution shall, to the extent of the fair value
of the property released, have the same status as the property

                                       51

released, and, to the extent that any claim referred to in any of such
paragraphs is created in renewal of or in substitution for or for the purpose of
repaying or refunding any pre-existing claim of the Trustee as such creditor,
such claim shall have the same status as such pre-existing claim.

                  If the Trustee shall be required to account, the funds and
property held in such special account and the proceeds thereof shall be
apportioned among the Trustee, the Holders and the holders of other indenture
securities in such manner that the Trustee, the Holders and the holders of other
indenture securities realize, as a result of payments from such special account
and payments of dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
Bankruptcy Act or applicable State law, the same percentage of their respective
claims, figured before crediting to the claim of the Trustee anything on account
of the receipt by it from the Company of the funds and property in such special
account and before crediting to the respective claims of the Trustee and the
Holders and the holders of other indenture securities dividends on claims filed
against the Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act or applicable State law,
but after crediting thereon receipts on account of the indebtedness represented
by their respective claims from all sources other than from such dividends and
from the funds and property so held in such special account. As used in this
paragraph, with respect to any claim, the term "dividends" shall include any
distribution with respect to such claim, in bankruptcy or receivership or
proceedings for reorganization pursuant to the Federal Bankruptcy Act or
applicable State law, whether such distribution is made in cash, securities or
other property, but shall not include any such distribution with respect to the
secured portion, if any, of such claim. The court in which such bankruptcy,
receivership or proceedings for reorganization is pending shall have
jurisdiction (i) to apportion among the Trustee, the Holders and the holders of
other indenture securities, in accordance with the provisions of this paragraph,
the funds and property held in such special account and proceeds thereof, or
(ii) in lieu of such apportionment, in whole or in part, to give to the
provisions of this paragraph due consideration in determining the fairness of
the distributions to be made to the Trustee and the Holders and the holders of
other indenture securities with respect to their respective claims, in which
event it shall not be necessary to liquidate or to appraise the value of any
securities or other property held in such special account or as security for any
such claim, or to make a specific allocation of such distributions as between
the secured and unsecured portions of such claims, or otherwise to apply the
provisions of this paragraph as a mathematical formula.

                  Any Trustee which has resigned or been removed after the
beginning of such four-month period shall be subject to the provisions of this
Subsection as though such resignation or removal had not occurred. If any
Trustee has resigned or been removed prior to the beginning of such four-month
period, it shall be subject to the provisions of this Subsection if and only if
the following conditions exist:

                  (i)  the receipt of property or reduction of claim, which
         would have given rise to the obligations to account, if such Trustee
         had continued as Trustee, occurred after the beginning of such
         four-month period; and

                  (ii) such receipt of property or reduction of claim occurred
         within four months after such resignation or removal.

                                       52

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

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

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

                  (3) disbursements made in the ordinary course of business in
         the capacity of trustee under an indenture, transfer agent, registrar,
         custodian, paying agent, fiscal agent or depositary, or other similar
         capacity;

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

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

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

                  (c) For the purposes of this Section only:

                  (1) the term "default" means any failure to make payment in
         full of the principal of (or premium, if any) or interest on any of the
         Securities or upon the other indenture securities when and as such
         principal or interest becomes due and payable;

                  (2) the term "other indenture securities" means securities
         upon which the Company is an obligor outstanding under any other
         indenture (i) under which the Trustee is also trustee, (ii) which
         contains provisions substantially similar to the provisions of this
         Section and (iii) under which a default exists at the time of the
         apportionment of the funds and property held in such special account;

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

                                       53

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

                  (5) the term "Company" means any obligor upon the Securities;
         and

                  (6) the term "Federal Bankruptcy Act" means the Bankruptcy Act
         or Title II of the United States Code.

                  SECTION 6.14. Appointment of Authenticating Agent. The Trustee
                                -----------------------------------
may appoint an Authenticating Agent or Agents with respect to one or more series
of Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon original issue or upon
exchange, registration of transfer or partial redemption thereof or pursuant to
Section 3.06, and Securities so authenticated shall be entitled to the benefits
of this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication or the delivery of Securities to the
Trustee for authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent and delivery of Securities to the Authenticating Agent on
behalf of the Trustee. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation having a combined capital and
surplus of not less than the equivalent of $50,000,000 and subject to
supervision or examination by Federal or State authority or the equivalent
foreign authority, in the case of an Authenticating Agent who is not organized
and doing business under the laws of the United States of America, any State
thereof or the District of Columbia. If such Authenticating Agent publishes
reports of condition at least annually, pursuant to law or to the requirements
of said supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Authenticating Agent shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time an Authenticating Agent shall
cease to be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section.

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

                                       54

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

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

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

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

                                           [full name of Trustee]


                                           _________________________________
                                                     As Trustee

                                           By_____________________________
                                                As Authenticating Agent

                                           By_____________________________
                                                 Authorized Officer

                   If all of the Securities of a series may not be originally
issued at one time, and if the Trustee does not have an office capable of
authenticating Securities upon original issuance located in a Place of Payment
or other place where the Company wishes to have Securities of such series
authenticated upon original issuance, the Trustee, if so requested by the
Company in writing (which writing need not comply with Section 1.02 and need not
be accompanied by an Opinion of Counsel), shall appoint in accordance with this
Section an Authenticating Agent (which may be an Affiliate of the Company if
eligible to be appointed as an Authenticating Agent hereunder) having an office
in such Place of Payment or other place designated by the Company with respect
to such series of Securities, provided that the procedures for the
authentication of such Securities by the Authenticating Agent on original
issuance are acceptable to the Trustee.

                                       55

                                  ARTICLE SEVEN

                Holders' Lists and Reports by Trustee and Company
                -------------------------------------------------

        SECTION 7.01. Company to Furnish Trustee Names and Addresses of Holders.
                      ---------------------------------------------------------

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

        (a)    semiannually, not later than each Interest Payment Date in each
     year, a list, in such form as the Trustee may reasonably require, of the
     names and addresses of the Holders of each series of Registered Securities
     as of the preceding Regular Record Date, as the case may be, and

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

        (c)   such information concerning the Holders of Bearer Securities
     which is known to the Company; provided, however, that the Company shall
                                    --------  -------
     have no obligation to investigate any matter relating to any Holder of a
     Bearer Security or a Coupon:

notwithstanding the foregoing subsections (a) and (b), so long as the Trustee is
the Security Registrar with respect to a particular series of Securities, no
such list shall be required to be furnished in respect of such series.

        SECTION 7.02. Preservation of Information; Communications to Holders.
                      ------------------------------------------------------
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of each series (i) contained in
the most recent list furnished to the Trustee as provided in Section 7.01, (ii)
received by the Trustee in its capacity as Security Registrar and (iii) filed
with it within the two preceding years pursuant to Section 7.03(d). The Trustee
may destroy any list furnished to it as provided in Section 7.01 upon receipt of
a new list so furnished.

        (b)  If three or more Holders of any series (herein referred to as
"applicants") apply in writing to the Trustee, and furnish to the Trustee
reasonable proof that each such applicant has owned a Security of such series
for a period of at least six months preceding the date of such application, and
such application states that the applicants desire to communicate with other
Holders of such series with respect to their rights under this Indenture or
under such Securities and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee shall,
within five business days after the receipt of such application, at its
election, either

        (i)    afford such applicants access to the information preserved at the
     time by the Trustee in accordance with Section 7.02(a), or

        (ii)   inform such applicants as to the approximate number of Holders of
     Securities of such series whose names and addresses appear in the
     information preserved at the time by the Trustee in accordance with Section
     7.02(a), and as to the approximate

                                       56

         cost of mailing to such Holders the form of proxy or other
         communication, if any, specified in such application.

                   If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder of Securities of such series whose name and
address appear in the information preserved at the time by the Trustee in
accordance with Section 7.02(a) a copy of the form of proxy or other
communication which is specified in such request, with reasonable promptness
after a tender to the Trustee of the material to be mailed and of payment, or
provision for the payment, of the reasonable expenses of mailing, unless within
five days after such tender the Trustee shall mail to such applicants and file
with the Commission, together with a copy of the material to be mailed, a
written statement to the effect that, in the opinion of the Trustee, such
mailing would be contrary to the best interest of the Holders of such series or
would be in violation of applicable law. Such written statement shall specify
the basis of such opinion. If the Commission, after opportunity for a hearing
upon the objections specified in the written statement so filed, shall enter an
order refusing to sustain any of such objections or if, after the entry of an
order sustaining one or more of such objections, the Commission shall find,
after notice and opportunity for hearing, that all the objections so sustained
have been met and shall enter an order so declaring, the Trustee shall mail
copies of such material to all such Holders with reasonable promptness after the
entry of such order and the renewal of such tender; otherwise the Trustee shall
be relieved of any obligation or duty to such applicants respecting their
application.

                   (c) Every Holder of Securities or Coupons, by receiving and
holding the same, agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any agent of either of them shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Holders in accordance with Section 7.02(b), regardless of
the source from which such information was derived, and that the Trustee shall
not be held accountable by reason of mailing any material pursuant to a request
made under Section 7.02(b).

                   SECTION 7.03. Reports by Trustee. (a) Within 60 days after
                                 ------------------
June 1 of each year following the first issuance of Securities, the Trustee
shall transmit to the Holders as provided in Section 7.03(d), a brief report
dated as of such date with respect to:

                   (1) its eligibility under Section 6.09 and its qualifications
         under Section 6.08, or in lieu thereof, if to the best of its knowledge
         it has continued to be eligible and qualified under said Sections, a
         written statement to such effect;

                   (2) the character and amount of any advances (and if the
         Trustee elects so to state, the circumstances surrounding the making
         thereof) made by the Trustee (as such) which remain unpaid on the date
         of such report, and for the reimbursement of which it claims or may
         claim a lien or charge, prior to that of the Securities, on any
         property or funds held or collected by it as Trustee, except that the
         Trustee shall not be required (but may elect) to report such advances
         if such advances so remaining unpaid aggregate not more than 1/2 of 1%
         of the principal amount of the Securities Outstanding on the date of
         such report;

                   (3) the amount, interest rate and maturity date of all other
         indebtedness owing by the Company (or by any other obligor on the
         Securities) to the Trustee in its

                                       57

        individual capacity, on the date of such report, with a brief
        description of any property held as collateral security therefor, except
        an indebtedness based upon a creditor relationship arising in any manner
        described in Section 6.l3(b)(2), (3), (4) or (6);

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

                   (5) any additional issue of Securities which the Trustee has
         not previously reported; and

                   (6) any action taken by the Trustee in the performance of its
         duties hereunder which it has not previously reported and which in its
         opinion materially affects the Securities, except action in respect of
         a default, notice of which has been or is to be withheld by the Trustee
         in accordance with Section 6.02.

                   (b) The Trustee shall transmit by mail to Holders in
accordance with Section 7.03(d), a brief report with respect to the character
and amount of any advances (and if the Trustee elects so to state, the
circumstances surrounding the making thereof) made by the Trustee (as such)
since the date of the last report transmitted pursuant to Subsection (a) of this
Section (or if no such report has yet been so transmitted, since the date of
execution of this instrument) for the reimbursement of which it claims or may
claim a lien or charge, prior to that of the Securities, on property or funds
held or collected by it as Trustee and which it has not previously reported
pursuant to this Subsection, except that the Trustee shall not be required (but
may elect) to report such advances if such advances remaining unpaid at any time
aggregate 10% or less of the principal amount of the Securities Outstanding at
such time, such report to be transmitted within 90 days after such time.

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

                   (d) Reports pursuant to Section 7.03(a) and 7.03(b) shall be
transmitted by mail (i) to all Holders, as their names and addresses appear in
the Security Register, (ii) to all Holders as have, within two years preceding
such transmission, filed their names and addresses with the Trustee for such
purpose, and (iii) except in the case of reports pursuant to Section 7.03(b), to
all

                   Holders whose names and addresses have been furnished or
received by the Trustee pursuant to Sections 7.01 and 7.02.

                   SECTION 7.04. Reports by Company.  The Company shall:
                                 ------------------

                   (1) file with the Trustee, within 15 days after the Company
         is required to file the same with the Commission, copies of the annual
         reports and of the information, documents and other reports (or copies
         of such portions of any of the foregoing as the Commission may from
         time to time by rules and regulations prescribe) which the Company may
         be required to file with the Commission pursuant to Section 13 or
         Section 15(d) of the Securities Exchange Act of 1934; or, if the
         Company is not required to file information, documents or reports
         pursuant to either of said Sections, then it shall file

                                       58

         with the Trustee and the Commission, in accordance with rules and
         regulations prescribed from time to time by the Commission, such of the
         supplementary and periodic information, documents and reports which may
         be required pursuant to Section 13 of the Securities Exchange Act of
         1934 in respect of a security listed and registered on a national
         securities exchange as may be prescribed from time to time in such
         rules and regulations;

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

                   (3) transmit by mail to Holders of Securities, in accordance
         with Section 7.03(d), within 30 days after the filing thereof with the
         Trustee, such summaries of any information, documents and reports
         required to be filed by the Company pursuant to paragraphs (1) and (2)
         of this Section as may be required by rules and regulations prescribed
         from time to time by the Commission.

                                  ARTICLE EIGHT

                    Consolidation, Merger, Sale or Conveyance
                    -----------------------------------------

                   SECTION 8.01. Company May Consolidate, etc., Only on Certain
                                 ----------------------------------------------
Terms. The Company shall not consolidate with or merge into any other
-----
corporation or convey or transfer its properties and assets substantially as an
entirety to any entity (other than a Wholly Owned Subsidiary (as defined below)
except in the event that a Wholly Owned Subsidiary is the surviving corporation
in a consolidation or merger) unless: (i) the corporation formed by such
consolidation or into which the Company is merged or the entity which acquires
by conveyance or transfer the properties and assets of the Company substantially
as an entirety shall be a corporation organized and existing under the laws of
the United States of America or any State or the District of Columbia, and shall
expressly assume, by an indenture supplemental hereto, executed and

                   delivered to the Trustee, in form satisfactory to the
Trustee, the due and punctual payment of the principal of (and premium, if any)
and interest on all the Securities and the performance of every covenant of this
Indenture on the part of the Company to be performed or observed; (ii)
immediately after giving effect to such transaction, no Event of Default and no
event which, after notice or lapse of time, or both, would become an Event of
Default, shall have happened and be continuing; and (iii) the Company has
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel each
stating that such consolidation, merger, conveyance or transfer and such
supplemental indenture comply with this Article and that all conditions
precedent herein provided for relating to such transaction have been complied
with. The term "Wholly Owned Subsidiary" means any Subsidiary all the stock of
every class of which (other than directors' qualifying shares) is owned by the
Company either directly or through one or more Wholly Owned Subsidiaries.

                   SECTION 8.02. Rights and Duties of Successor Corporation. In
                                 ------------------------------------------
case of any such consolidation, merger, sale or conveyance and upon any such
assumption by the successor

                                       59

corporation, such successor corporation shall succeed to and be substituted for
the Company, with the same effect as if it had been named herein as the party of
the first part and the predecessor corporation shall be relieved of any further
obligation under this Indenture. Such successor corporation thereupon may cause
to be signed, and may issue either in its own name or in the name of the
Company, any or all the Securities issuable hereunder which theretofore shall
not have been signed by the Company and delivered to the Trustee; and, upon the
order of such successor corporation, instead of the Company, and subject to all
the terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver any Securities which previously shall have
been signed and delivered by the officers of the Company to the Trustee for
authentication, and any Securities which such successor corporation thereafter
shall cause to be signed and delivered to the Trustee for that purpose. All the
Securities so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Securities theretofore or thereafter issued in
accordance with the terms of this Indenture as though all such Securities had
been issued at the date of the execution hereof.

                   In case of any consolidation, merger, sale or conveyance such
changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.

                                  ARTICLE NINE

                             Supplemental Indentures
                             -----------------------

                   SECTION 9.01. Supplemental Indentures Without Consent of
                                 ------------------------------------------
Holders. Without the consent of any Holders, the Company, when authorized by or
-------
pursuant to a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:

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

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

                   (3) to add any additional Events of Default with respect to
         all or any series of the Securities (and, if such Event of Default is
         applicable to less than all series of Securities specifying the series
         to which such Event of Default is applicable);

                   (4) to add to or change any of the provisions of this
         Indenture to such extent as shall be necessary to facilitate the
         issuance of Securities in bearer form, registrable or not registrable
         as to principal, and with or without interest coupons; to change or
         eliminate any restrictions on the payment of principal of or any
         premium or interest on Bearer Securities, to permit Bearer Securities
         to be issued in exchange for Registered Securities, to permit Bearer
         Securities to be issued in exchange for Bearer Securities of other

                                       60

         authorized denominations; provided that any such addition or change
                                   --------
         shall not adversely affect the interests of the Holders of Securities
         of any series or any related Coupons in any material respect;

               (5) to change or eliminate any of the provisions of this
          Indenture; provided that any such change or elimination shall become
          effective only when there is no Security outstanding of any series
          created prior to the execution of such supplemental indenture which is
          adversely affected by such change in or elimination of such provision;

               (6) to establish the form or terms of Securities of any series as
          permitted by Sections 2.01 and 3.01;

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

               (8) if allowed under applicable laws and regulations to permit
          payment in the United States of America (including any of the states
          and the District of Columbia), its territories, its possessions and
          other areas subject to its jurisdiction, of principal, premium or
          interest on Bearer Securities or Coupons, if any;

               (9) to provide for the issuance of uncertificated Securities of
          one or more series in addition to or in place of certificated
          Securities;

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

               (11) to secure the Securities pursuant to Section 10.08 or
          otherwise.

               SECTION 9.02. Supplemental Indentures with Consent of Holders.
                             -----------------------------------------------
With the consent of the Holders of not less than 66-2/3% in principal amount of
the Outstanding Securities of each series affected by such supplemental
indenture, by Act of said Holders delivered to the Company and the Trustee, the
Company, when authorized by or pursuant to a Board Resolution, and the Trustee
may enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
                                                           --------  -------
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,

               (1) change the Stated Maturity of the principal of, or any
          installment of principal of or interest on, any Security, or reduce
          the principal amount thereof or the rate of interest thereon or any
          premium payable upon the redemption thereof, or change any obligation
          of the Company to pay additional amounts pursuant to Section 10.06
          (except


                                       61

         as contemplated by Section 8.01(1) and permitted by Section 9.01(1)),
         or reduce the amount of the principal of an original Issue Discount
         Security that would be due and payable upon a declaration of
         acceleration of the Maturity thereof pursuant to Section 5.02, or
         change any Place of Payment where, or the currency, currencies or
         currency unit or units in which, any Security or any premium or the
         interest thereon is payable, or impair the right to institute suit for
         the enforcement of any such payment on or after the Stated Maturity
         thereof (or, in the case of redemption, on or after the Redemption
         Date),

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

                   (3) change any obligation of the Company, with respect to
         outstanding Securities of a series, to maintain an office or agency in
         the places and for the purposes specified in Section 10.02 for such
         series, or

                  (4) modify any of the provisions of this Section, Section 5.13
         or Section 10.05, except to increase any such percentage or to provide
         with respect to any particular series the right to condition the
         effectiveness of any supplemental indenture as to that series on the
         consent of the Holders of a specified percentage of the aggregate
         principal amount of Outstanding Securities of such series (which
         provision may be made pursuant to Section 3.01 without the consent of
         any Holder) or to provide that certain other provisions of this
         Indenture cannot be modified or waived without the consent of the
         Holder of each outstanding Security affected thereby; provided,
                                                               --------
         however, that this clause shall not be deemed to require the consent of
         -------
         any Holder with respect to changes in the references to "the Trustee"
         and concomitant changes in this Section and Section 10.05, or the
         deletion of this proviso, in accordance with the requirements of
         Sections 6.11(b) and 9.01(7).

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

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

                   SECTION 9.03. Execution of Supplemental Indentures. In
                                 ------------------------------------
executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 6.01) shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties, immunities or liabilities under this Indenture or
otherwise.

                                       62
                   SECTION 9.04. Effect of Supplemental Indentures. Upon the
                                 ---------------------------------
execution of any supplemental indenture under this Article, this Indenture shall
be modified in accordance therewith, and such supplemental indenture shall form
a part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.

                   SECTION 9.05. Conformity with Trust Indenture Act. Every
                                 -----------------------------------
supplemental indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect.

                   SECTION 9.06. Reference in Securities to Supplemental
                                 ---------------------------------------
Indentures. Securities of any series authenticated and delivered after the
----------
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.

                                   ARTICLE TEN

                                    Covenants
                                    ---------

                   SECTION 10.01. Payment of Principal, Premium and Interest.
                                  ------------------------------------------
The Company covenants and agrees for the benefit of each series of Securities
and Coupons, if any, that it will duly and punctually pay the principal of (and
premium, if any) and interest on the Securities and Coupons, if any, of that
series in accordance with the terms of the Securities and Coupons, if any, of
such series and this Indenture.

                   SECTION 10.02. Maintenance of Office or Agency. If Securities
                                  -------------------------------
of a series are issuable only as Registered Securities, the Company will
maintain in each Place of Payment for such series an office or agency where
Securities of that series may be presented or surrendered for payment, where
Securities of that series may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served. For Securities
having a Place of Payment in the Borough of Manhattan, The City of New York, the
Company hereby appoints as such agent the Trustee, acting through its Corporate
Trust Office. If Securities of a series are issuable as Bearer Securities, the
Company will maintain (A) in the Borough of Manhattan, The City of New York, an
office or agency where any Registered Securities of that series may be presented
or surrendered for payment, where any Registered Securities of that series may
be surrendered for registration of transfer, where Securities of that series may
be surrendered for exchange, where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served and
where Bearer Securities of that series and related Coupons may be presented or
surrendered for payment in the circumstances described in the following
paragraph (and not otherwise) (the foregoing Corporate Trust Office of the
Trustee being hereby so appointed as such agency), (B) subject to any laws or
regulations applicable thereto, in a Place of Payment for that series which is
located outside the United States, an office or agency where


                                       63

Securities of that series and related Coupons may be presented and surrendered
for payment (including payment of any additional amounts payable on Securities
of that series pursuant to Section 10.06); provided, however, that if the
                                           --------  -------
Securities of that series are listed on The Stock Exchange of the United Kingdom
and the Republic of Ireland, the Luxembourg Stock Exchange or any other stock
exchange located outside the United States and such stock exchange shall so
require, the Company will maintain a Paying Agent for the Securities of that
series in London, Luxembourg or any other required city located outside the
United States, as the case may be, so long as the Securities of that series are
listed on such exchange, and (C) subject to any laws or regulations applicable
thereto, in a Place of Payment for that series located in Europe, an office or
agency where any Registered Securities of that series may be surrendered for
registration of transfer, where Securities of that series may be surrendered for
exchange and where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served. The Company will
give prompt written notice to the Trustee and the Holders of the location, and
any change in the location, of any such office or agency. If at any time the
Company shall fail to maintain any such required office or agency in respect of
any series of Securities or shall fail to furnish the Trustee with the address
thereof, such presentations and surrenders of Securities of that series may be
made and notices and demands may be made or served at the Corporate Trust Office
of the Trustee, except that Bearer Securities of that series and the related
Coupons may be presented and surrendered for payment (including payment of any
additional amounts payable on Bearer Securities of that series pursuant to
Section 10.06) at the London office of the Trustee (or an agent with a London
office appointed by the Trustee and acceptable to the Company), and the Company
hereby appoints the same as its agent to receive such respective presentations,
surrenders, notices and demands.

                  No payment of principal, premium or interest on Bearer
Securities shall be made at any office or agency of the Company in the United
States or by check mailed to any address in the United States or by transfer to
an account maintained with a bank located in the United States; provided,
                                                                --------
however, that, if the Securities of a series are denominated and payable in
-------
Dollars, payment of principal of and any premium and interest on any Bearer
Security (including any additional amounts payable on Securities of such series
pursuant to Section 10.06) shall be made at the office of the Company's Paying
Agent in the Borough of Manhattan, The City of New York, if (but only if)
payment in Dollars of the full amount of such principal, premium, interest or
additional amounts, as the case may be, at all offices or agencies outside the
United States maintained for the purpose by the Company in accordance with this
Indenture is illegal or effectively precluded by exchange controls or other
similar restrictions.

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

                   SECTION 10.03. Money for Securities Payments to be Held in
                                  -------------------------------------------
Trust. If the Company shall at any time act as its own Paying Agent with respect
-----
to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the



                                       64

Securities of that series, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal (and premium, if
any) or interest so becoming due until such sums shall be paid to such Persons
or otherwise disposed of as herein provided and will promptly notify the Trustee
of its action or failure so to act.

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

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

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

                   (2) give the Trustee notice of any default by the Company (or
         any other obligor upon the Securities of that series) in making of any
         Payment of principal (and premium, if any) or interest on the
         Securities of that series; and

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

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

                   Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of (and
premium, if any) or interest on any Security of any series and remaining
unclaimed for two years after such principal (and premium, if any) or interest
has become due and payable shall upon written request of the Company be paid to
the Company, or (if then held by the Company) shall be discharged from such
trust; and the Holder of such Security and Coupons, if any, shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease.

                                       65
                   SECTION 10.04. Statement by Officers as to Default. The
                                  -----------------------------------
Company will deliver to the Trustee for each series of Securities, within 120
days after the end of each fiscal year of the Company (which as of the date
hereof ends on September 30 of each year) ending after the date hereof so long
as any Security is outstanding hereunder, an Officers' Certificate, stating that
in the course of the performance by the signers of their duties as such officers
of the Company they would normally obtain knowledge of any default by the
Company in the performance or fulfillment of any covenant, agreement or
condition contained in this Indenture, and stating whether or not they have
obtained knowledge of any such default existing on the date of such statement
and, if so, specifying each such default of which the signers have knowledge and
the nature thereof.

                   SECTION 10.05. Waiver of Certain Covenants. The Company may
                                  ---------------------------
omit in any particular instance to comply with any term, provision or condition
set forth in Section 10.08, if before the time for such compliance the Holders
of not less than 66-2/3% in principal amount of the Outstanding Securities of
each series affected thereby shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such term,
provision or condition, but no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such term, provision or condition shall remain in
full force and effect.

                   SECTION 10.06. Additional Amounts. If the Securities of a
                                  ------------------
series provide for the payment of additional amounts, the Company will pay to
the Holder of any Security of such series or any Coupon appertaining thereto
additional amounts as provided therein. Whenever in this Indenture there is
mentioned, in any context, the payment of the principal of or any premium or
interest on, or in respect of, any Security of any series or payment of any
related Coupon or the net proceeds received on the sale or exchange of any
Security of any series, such mention shall be deemed to include mention of the
payment of additional amounts provided for in this Section to the extent that,
in such context, additional amounts are, were or would be payable in respect
thereof pursuant to the provisions of this Section and express mention of the
payment of additional amounts (if applicable) in any provisions hereof shall not
be construed as excluding additional amounts in those provisions hereof where
such express mention is not made.

                   If the Securities of a series provide for the payment of
additional amounts, at least 10 days prior to the first Interest Payment Date
with respect to that series of Securities (or if the Securities of that series
will not bear interest prior to Maturity, the first day on which a payment of
principal and any premium is made), and at least 10 days prior to each date of
payment of principal and any premium or interest if there has been any change
with respect to the matters set forth in the below-mentioned Officers'
Certificate, the Company will furnish the Trustee and the Company's Paying Agent
or Paying Agents, if other than the Trustee, with an Officers' Certificate
instructing the Trustee and such Paying Agent or Paying Agents whether such
payment of principal of and any premium or interest on the Securities of that
series shall be made to Holders of Securities of that series or any related
Coupons who are United States Aliens without withholding for or on account of
any tax, assessment or other governmental charge described in the Securities of
that series. If any such withholding shall be required, then such Officers'
Certificate shall specify by country the amount, if any, required to be withheld
on such payments to such Holders of Securities or Coupons and the Company will
pay to the Trustee or


                                       66

such Paying Agent the additional amounts required by this Section. The Company
covenants to indemnify the Trustee and any Paying Agent for, and to hold them
harmless against, any loss, liability or expense reasonably incurred without
negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by any of them in reliance on any Officers' Certificate
furnished pursuant to this Section.

                  SECTION 10.07.  No Lien Created, etc.  This Indenture and the
                                  --------------------
Securities do not create a Lien, charge or encumbrance on any property of the
Corporation or any Subsidiary.

                   SECTION 10.08. Limitation on Liens. As used herein "Lien"
                                  -------------------
shall mean a lien or security interest (including, but not limited to, a
mortgage, encumbrance, pledge, security agreement; conditional sale or trust
receipt or a lease, consignment or bailment for security purposes securing an
obligation owed to, or a claim by, a Person other than the owner of the
Property, whether such interest is based on the common law, statute or contract,
and whether such obligation or claim is fixed or contingent) securing any notes,
bonds, debentures or other similar evidences of indebtedness for money borrowed
(hereinafter called "Debt"). As used herein, "Property" shall mean any interest
in any kind of property or asset, whether real, personal or mixed, or tangible
or intangible. The Company will not, and will not permit any Subsidiary to,
create, incur, assume or permit to exist any Lien on any Property now owned or
hereafter owned by it except:

                   (a) any Lien on any property or asset of the Company or any
Subsidiary existing on the date hereof;

                   (b) easements, rights-of-way, minor defects or irregularities
in title and other similar encumbrances having no material adverse effect on the
use or value of property or on the conduct of the Company's business;

                   (c) unexercised liens for taxes not delinquent or being
contested in good faith by appropriate proceedings and for which adequate
reserves are being maintained;

                   (d) mechanics, suppliers, materialmen's and similar liens
arising in the ordinary course of business which are being contested in good
faith by appropriate action so long as the execution of such liens has been
stayed;

                   (e) pledges or deposits under environmental laws, workmen's
compensation laws, unemployment insurance laws or similar legislation, or good
faith deposits in connection with bids, tenders, contracts (other than for the
payment of Debt) or leases to which the Company or a Subsidiary is a party, or
deposits to secure public or statutory obligations of the Company or a
Subsidiary or deposits for the payment of rent, in each case incurred in the
ordinary course of business to the extent required by applicable law and not
securing indebtedness;

                   (f) Liens on equipment arising from capital leases;

                   (g) any Lien existing on any property or asset prior to the
acquisition thereof by the Company or any Subsidiary or existing on any property
or asset of any Person that becomes a Subsidiary after the date hereof prior to
the time such Person becomes a



                                       67

         Subsidiary; provided that (i) such Lien is not created in contemplation
                     --------
         of or in connection with such acquisition or such Person becoming a
         Subsidiary, as the case may be, (ii) such Lien shall not apply to any
         other property or assets of the Company or any Subsidiary and (iii)
         such Lien shall secure only those obligations which it secures on the
         date of such acquisition or the date such Person becomes a Subsidiary,
         as the case may be;

               (h) Liens on fixed or capital assets acquired, constructed or
         improved by the Company or any Subsidiary; provided that (i) such
                                                    --------
         security interests and the Debt secured thereby are incurred prior to
         or within 45 days after such acquisition or the completion of such
         construction or improvement and (ii) such security interests shall not
         apply to any other property or assets of the Company or any Subsidiary;

               (i) Liens on office buildings and research facilities;

               (j) Liens which secure Debt owing by a Subsidiary to the Company
         or another Subsidiary;

               (k) Liens in favor of the United States of America or any state
         thereof, or any department, agency or instrumentality or political
         subdivision of the United States of America or any state thereof, or in
         favor of any country, or any political subdivision thereof, to secure
         partial, progress, advance or other payments, or performance of any
         other similar obligations, including, without limitation, Liens to
         secure pollution control bonds or industrial revenue or other similar
         types of bonds;

               (l) any extension, renewal or replacement (or successive
         extensions, renewals or replacements), in whole or in part, of any
         Liens referred to in the foregoing clauses (a), (e), (f), (g), (h),
         (i), (j) and (k), provided that the principal amount of the Debt
         secured thereby shall not exceed the principal amount of the
         Indebtedness so secured at the time of such extension, renewal or
         replacement, and that such extension, renewal or replacement Liens
         shall be limited to all or part of substantially the same property
         which secured the Liens extended, renewed or replaced (plus
         improvements on such property);

               (m) Liens on Excess Margin Stock, if any, with Excess Margin
         Stock determined on the date a Lien on such Excess Margin Stock is
         affixed. As used in this clause (m), "Excess Margin Stock" shall mean
         that amount by which the value of all Margin Stock owned by the Company
         and its Subsidiaries exceeds 25% of the value of all the Property owned
         by the Company and its Subsidiaries subject to this Section 10.08.
         "Margin Stock" shall have the meaning set forth in Regulation U of the
         Board of Governors of the Federal Reserve System as the same may be
         amended or interpreted from time to time;

               (n) Liens incurred in the ordinary course of business to secure
         performance of obligations with respect to statutory or regulatory
         requirements, performance or return-of-money bonds, surety bonds or
         other obligations of a like nature, in each case which are not incurred
         in connection with the borrowing of money, the obtaining of advances or
         credit or the payment of the deferred purchase price of property and
         which do not in the aggregate impair in any material respect the use of
         property in the business of the Company and its Subsidiaries taken as a
         whole;

                                       68
               (o) Liens arising by virtue of any statutory or common law
         provision relating to banker's liens, rights of setoff or similar
         rights and remedies, in each case as to any deposit account or any
         other fund maintained with a creditor depositary institution, provided
         that (i) such deposit account is not a dedicated cash collateral
         account and is not subject to restrictions against access by the
         Company or a Subsidiary in excess of those set forth by regulations
         promulgated by the Federal Reserve Board, and (ii) such deposit account
         is not intended by the Company or Subsidiary to provide collateral to
         the depository institution; and

               (p) in addition to the foregoing, any other Liens securing Debt
         which in the aggregate amount does not exceed an amount equal to 10% of
         Consolidated assets of the Company as at the end of the then most
         recently completed fiscal quarter as reflected on the financial
         statements for such quarter. "Consolidated" refers to the consolidation
         in accordance with generally accepted accounting principles ("GAAP") of
         the accounts of the Company.

               SECTION 10.09. Limitations on Sale and Lease-Back. The Company
                              ----------------------------------
covenants and agrees that neither it nor any Subsidiary will enter into any
arrangement with any bank, insurance company or other lender or investor, or to
which any such lender or investor is a party, providing for the leasing to the
Company or a Subsidiary for a period of more than three years or any real
property located in the continental United States of America (except a lease for
a temporary period not to exceed three years by the end of which it is intended
that the use of such real property by the lessee will be discontinued) which has
been or is to be sold or transferred by the Company or a Subsidiary to such
lender or investor or to any Person or organization to which funds have been or
are to be advanced by such lender or investor on the security of the leased
property (hereinafter called "Sale and Lease-Back Transactions") unless either:

               (a) the Company or such Subsidiary would be entitled, pursuant to
         the provisions of Section 10.08, to create Debt secured by a Lien on
         the property to be leased, without equally and ratably securing the
         Securities, or

               (b) the Company (and in any such case the Company covenants and
         agrees that it will do so), within four months after the effective date
         of such Sale and Lease-Back Transactions (whether made by the Company
         or a Subsidiary), applies to the retirement of Debt of the Company
         maturing by the terms thereof more than one year after the original
         creation thereof (herein called "Funded Debt") an amount equal to the
         greater of (i) the net proceeds of the sale of the real property leased
         pursuant to such arrangement or (ii) the fair value of the real
         property so leased at the time of entering into such arrangement (as
         determined by the Board of Directors); provided that the amount to be
                                                --------
         applied to the retirement of Funded Debt shall be reduced by an amount
         equal to the sum of (a) the principal amount of Securities delivered,
         within four months after the effective date of such arrangement, to the
         Trustee for retirement and cancellation and (b) the principal amount of
         other Funded Debt voluntarily retired by the Company within such
         four-month period, excluding retirements of Securities and other Funded
         Debt pursuant to mandatory sinking fund or prepayment provisions or by
         payment at maturity. No provision of Article Eleven hereof shall
         restrict the retirement of Funded Debt pursuant to this Section.

                                       69
                                 ARTICLE ELEVEN

                            Redemption of Securities
                            ------------------------

                   SECTION 11.01. Applicability of Article. Securities of any
                                  ------------------------
series which are redeemable before their Stated Maturity shall be redeemable in
accordance with their terms and (except as otherwise specified as contemplated
by Section 3.01 for Securities of any series) in accordance with this Article.

                   SECTION 11.02. Selection by Trustee of Securities to be
                                  ----------------------------------------
Redeemed. If less than all the Securities of any series are to be redeemed, the
--------
Company shall give the Trustee notice not less than 60 days prior to the
Redemption Date (unless a shorter notice shall be satisfactory to the Trustee)
of such Redemption Date and the principal amount of the Securities of such
series to be redeemed and the Trustee shall select the particular Securities to
be redeemed from the outstanding Securities of such series not previously called
for redemption, by such method as the Trustee shall deem fair and appropriate
and which may provide for the selection for redemption of portions (equal to the
minimum authorized denomination for Securities of that series or any integral
multiple thereof) of the principal amount of Securities of such series of a
denomination larger than the minimum authorized denomination for Securities of
that series.

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

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

                   SECTION 11.03. Notice of Redemption. Notice of redemption
                                  --------------------
shall be given not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, as provided in Section 1.06.

                  Each such notice of redemption shall specify the Redemption
Date, the Redemption Price, the Place or Places of Payment, that the Securities
of such series are being redeemed at the option of the Company pursuant to
provisions contained in the terms of the Securities of such series or in a
supplemental indenture establishing such series, if such be the case, that on
the Redemption Date the Redemption Price will become due and payable upon each
Security redeemed, that payment will be made upon presentation and surrender of
the applicable Securities, that all Coupons, if any, maturing subsequent to the
date fixed for redemption shall be void, that any interest accrued to the
Redemption Date will be paid as specified in said notice, and that on and after
said Redemption Date any interest thereon or on the portions thereof to be
redeemed will cease to accrue. If less than all the Securities of any series are
to be redeemed the notice of redemption shall specify the numbers of the
Securities of such series to be redeemed, and, if only Bearer Securities of any
series are to be redeemed, and if such Bearer Securities may be exchanged for
Registered Securities, the last date on which exchanges of Bearer Securities for
Registered Securities not subject to redemption may be made. In case any
Security of any series


                                       70

is to be redeemed in part only, the notice of redemption shall state the portion
of the principal amount thereof to redeemed and shall state that on and after
the Redemption Date, upon surrender of such Security and any Coupons
appertaining thereto, a new Security or Securities of such series in principal
amount equal to the unredeemed portion thereof and with appropriate Coupons will
be issued.

        Notice of redemption of Securities and Coupons, if any, to be redeemed
at the election of the Company shall be given by or on behalf of the Company.

        SECTION 11.04. Deposit of Redemption Price. On or before (but at least
                       ---------------------------
one Business Day before in the Place of Payment in the case of payments not in
Dollars) the opening of business on any Redemption Date, the Company shall
deposit with the Trustee or with a Paying Agent (or, if the Company is acting as
its own Paying Agent, segregate and hold in trust as provided in Section 10.03)
an amount of money in the relevant currency (or a sufficient number of currency
units, as the case may be) sufficient to pay the Redemption Price of, and
(except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities and Coupons, if any, which are to be redeemed on
that date.

        SECTION 11.05. Securities Payable on Redemption Date. Notice of
                       -------------------------------------
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest and the Coupons for such interest
appertaining to any Bearer Securities so to be redeemed, except to the extent
provided below, shall be void. Upon surrender of any such Security for
redemption in accordance with said notice, together with all Coupons, if any,
appertaining thereto maturing after the Redemption Date, such Security shall be
paid by the Company at the Redemption Price, together with accrued interest to
the Redemption Date; provided, however, that installments of interest on Bearer
                     --------  -------
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable only at an office or agency located outside the United States (except as
otherwise provided in Section 10.02) and, unless otherwise specified as
contemplated by Section 3.01, only upon presentation and surrender of Coupons
for such interest; and provided further that, unless otherwise specified as
                       -------- -------
contemplated by Section 3.01, installments of interest on Registered Securities
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 3.07.

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

                                       71

provided in Section 10.02) and, unless otherwise specified as contemplated by
Section 3.01, only upon presentation and surrender of those coupons.

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

        SECTION 11.06. Securities Redeemed in Part. Any Security (including any
                       ---------------------------
Coupons appertaining thereto) which is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and deliver to the Holder of such Security
without service charge, a new Security (including any Coupons appertaining
thereto) or Securities (including any Coupons appertaining thereto) of the same
series and having the same terms and conditions, of any authorized denomination
as requested by such Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Security (including
any Coupons appertaining thereto) so surrendered.

        SECTION 11.07. Right to Require Repurchase of Securities by the Company
                       --------------------------------------------------------
upon Change in Control and Decline in Debt Rating. (a) In the event that (i)
-------------------------------------------------
there shall occur any Change in Control and (ii) the prevailing rating of the
Securities by Standard & Poor's Corporation or its successors ("S&P") or Moody's
Investors Service, Inc. or its successors ("Moody's") or another nationally
recognized rating agency selected by the Company, on any date within 90 days
following public notice of the occurrence of such Change in Control shall be
less than the rating of the Securities on the date 60 days prior to the
occurrence of such Change in Control by at least one Full Rating Category
("Rating Decline"), each holder of Securities shall have the right, at such
holder's option, to require the Company to purchase, and upon the exercise of
such right the Company shall purchase, all or any part of such holder's
Securities on the date (the "Repurchase Date") that is 100 days after the last
to occur of (i) public notice of such Change in Control and (ii) the Rating
Decline, at 100% of the principal amount on the Repurchase Date, plus any
accrued and unpaid interest to the Repurchase Date.

        (b) On or before the 28th day following the last to occur of (i) public
notice of such Change in Control and (ii) the Rating Decline, the Company shall
give notice of a Change in Control and Rating Decline and of the repurchase
right set forth herein arising as a result thereof by first-class mail, postage
prepaid to each holder of Securities at such holder's address appearing in the
Securities Register. The Company shall also cause a copy of such notice of a
repurchase right to be published in an Authorized Newspaper in the Borough of
Manhattan, The City of New York and, if any Bearer Securities are then
Outstanding, in London and such other cities as shall be specified with respect
to such Bearer Securities.

        Each notice of a repurchase right shall state:

        (1)  the Repurchase Date,

        (2)  the date by which the repurchase right must be exercised,

                                       72

        (3) the price at which the repurchase is to be made, if the repurchase
     right is exercised, and

        (4) a description of the procedure which a holder of Securities must
     follow to exercise a repurchase right.

        No failure of the Company to give the foregoing notice shall limit any
holder's right to exercise a repurchase right.

        (c) To exercise a repurchase right, a holder of Securities shall deliver
to the Company (or an agent designated by the Company for such purpose in the
notice referred to in (b) above) at least ten days prior to the Repurchase Date
(i) written notice of the holder's exercise of such right, which notice shall
set forth the name of the holder, the principal amount of the Security or
Securities (or portion of a Security) to be repurchased, and a statement that
the option to exercise the repurchase right is being made thereby, and (ii) the
Security with respect to which the repurchase right is being exercised, duly
endorsed for transfer to the Company. Such written notice shall be irrevocable.

        (d) In the event a repurchase right shall be exercised in accordance
with the terms hereof, the Company shall pay or cause to be paid the price
payable with respect to the Security or Securities as to which the repurchase
right has been exercised in cash to the holder of such Security or Securities,
on the Repurchase Date. In the event that a repurchase right is exercised with
respect to less than the entire principal amount of a surrendered Security, the
Company shall execute and deliver to the Trustee and the Trustee shall
authenticate for issuance, against surrender of such surrendered Security, (x)
in the name of the holder a new Security or Securities in the aggregate
principal amount of the unrepurchased portion of such surrendered Security and
(y) in the name of the Company a new Security or Securities in the aggregate
principal amount of the repurchased portion of such surrendered Security.

        (e) As used in this Section 11.07:

        (1) a "Change in Control" shall be deemed to have occurred at such time
     as (i) a "person" or "group" (within the meaning of Section 13(d) and
     14(d)(2) of the Securities Exchange Act of 1934, as amended) becomes the
     "beneficial owner" (as defined in Rule l3d-3 under such Exchange Act) of
     more than fifty percent (50%) of the then outstanding Voting Stock of the
     Company, otherwise than through a transaction consummated with the prior
     approval of the Board of Directors of the Company, or (ii) during any
     period of two consecutive years, individuals who at the beginning of such
     period constitute the Company's Board of Directors (together with any new
     Director whose election by the Company's Board of Directors or whose
     nomination for election by the Company's stockholders was approved by a
     vote of at least two-thirds of the Directors then still in office who
     either were Directors at the beginning of such period or whose election or
     nomination for election was previously so approved) cease for any reason to
     constitute a majority of the Directors then in office.

        (2) the term "Full Rating Category" shall mean (i) with respect to S&P,
     any of the following categories: AAA, AA, A, BBB, BB, B, CCC, CC and C,
     (ii) with respect to Moody's, any of the following categories: Aaa, Aa, A,
     Baa, Ba, B, Caa, Ca and C, (iii)

                                       73

     the equivalent of any such category by S&P or Moody's and (iv) the
     equivalent of such ratings by any other nationally recognized securities
     rating agency selected by the Company. In determining whether the rating of
     the Debt Securities has decreased by the equivalent of one full Rating
     Category, graduations within Full Rating Categories + and - S&P; 1, 2 and 3
     for Moody's; or the equivalent for S&P or Moody's or any such other rating
     agency) shall be taken into account.

        (3) the term "public notice" shall, without limitation, include any
     filing or report made in accordance with the requirements of the Securities
     and Exchange Commission or any press release or public announcement made by
     the Company.

        (f) Notwithstanding anything to the contrary contained in this Section
11.07, if a Rating Decline shall apply to less than all series of the
Securities, the repurchase rights described herein shall apply only to the
series with respect to which there has been a Rating Decline.

                                 ARTICLE TWELVE

                                  Sinking Funds
                                  -------------

        SECTION 12.01. Applicability of Article. The provisions of this Article
                       ------------------------
shall be applicable to any sinking fund for the retirement of Securities of a
series except as otherwise specified as contemplated by Section 3.01 for
Securities of such series.

        The minimum amount of any sinking fund payment provided for by the terms
of Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment". If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 12.02. Each sinking fund payment shall be applied to the redemption
of Securities of any series as provided for by the terms of Securities of such
series.

        SECTION 12.02. Satisfaction of Sinking Fund Payments with Securities.
                       -----------------------------------------------------
The Company (1) may deliver Outstanding Securities (including any Coupons) of a
series (other than any previously called for redemption) and (2) may apply as a
credit Securities of a series which have been redeemed either at the election of
the Company pursuant to the terms of such Securities (including any Coupons) or
through the application of permitted optional sinking fund payments pursuant to
the terms of such Securities, in each case in satisfaction of all or any part of
any sinking fund payment with respect to the Securities of such series required
to be made pursuant to the terms of such Securities as provided for by the terms
of such series; provided that such Securities have not been previously so
                --------
credited. Such Securities shall be received and credited for such purpose by the
Trustee at the Redemption Price specified in such Securities for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly.

        SECTION 12.03. Redemption of Securities for Sinking Fund. Not less than
                       -----------------------------------------
60 days prior to each sinking fund payment date for any series of Securities,
the Company will deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing sinking

                                       74

fund payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting Securities
(including any Coupons) of that series pursuant to Section 12.02 and stating the
basis for such credit and that such Securities have not been previously so
credited and will also deliver to the Trustee any Securities (including any
coupons) to be so delivered. Not less than 30 days before each such sinking fund
payment date the Trustee shall select the Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section 11.02 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 11.03. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Section 11.05 and 11.06.

                                ARTICLE THIRTEEN

                        Meetings of Holders of Securities
                        ---------------------------------

        SECTION 13.01. Purposes for Which Meetings May Be Called. If Securities
                       -----------------------------------------
of a series are issuable as Bearer Securities, a meeting of Holders of
Securities of such series may be called at any time and from time to time
pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities of such
series.

        SECTION 13.02. Call, Notice and Place of Meetings. (a) The Trustee may
                       ----------------------------------
at any time call a meeting of Holders of Securities of any such series for any
purpose specified in Section 13.01, to be held at such time and at such place in
the Borough of Manhattan, The City of New York, or in London, as the Trustee
shall determine. Notice of every meeting of Holders of Securities of any such
series, setting forth the time and the place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be given, in the
manner provided in Section 1.06, not less than 21 nor more than 180 days prior
to the date fixed for the meeting.

        (b) In case at any time the Company, by or pursuant to a Board
Resolution, or the Holders of at least 10% in principal amount of the
Outstanding Securities of any such series shall have requested the Trustee to
call a meeting of the Holders of Securities of such series for any purpose
specified in Section 13.01, by written request setting forth in reasonable
detail the action proposed to be taken at the meeting, and the Trustee shall not
have made the first publication of the notice of such meeting within 21 days
after receipt of such request or shall not thereafter proceed to cause the
meeting to be held as provided herein, then the Company or the Holders of
Securities of such series in the amount above specified, as the case may be, may
determine the time and the place in the Borough of Manhattan, The City of New
York, or in London, for such meeting and may call such meeting for such purposes
by giving notice thereof as provided in subsection (a) of this Section.

        SECTION 13.03. Persons Entitled to Vote at Meetings. To be entitled to
                       ------------------------------------
vote at any meeting of Holders of Securities of any series, a Person shall be
(1) Holder of one or more Outstanding Securities of such series, or (2) a Person
appointed by an instrument in writing as proxy for a Holder or Holders of one or
more Outstanding Securities of such series by such

                                       75

Holder or Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders of Securities of any series shall be the Persons
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Company and its counsel.

        SECTION 13.04. Quorum; Action. The Persons entitled to vote a majority
                       --------------
in principal amount of the Outstanding Securities of a series shall constitute a
quorum for a meeting of Holders of Securities of such series; provided, however,
                                                              --------  -------
that if any action is to be taken at such meeting with respect to a consent or
waiver which this Indenture expressly provides may be given by the Holders of
Securities of not less than 66-2/3% in principal amount of Outstanding
Securities of a series, the Persons entitled to vote 66-2/3% in principal amount
of the Outstanding Securities of such series shall constitute a quorum. In the
absence of a quorum within 30 minutes of the time appointed for any such
meeting, the meeting shall, if convened at the request of Holders of Securities
of such series, be dissolved. In any other case the meeting may be adjourned for
a period of not less than 10 days as determined by the chairman of the meeting
prior to the adjournment of such meeting. In the absence of a quorum at any such
adjourned meeting, such adjourned meeting may be further adjourned for a period
of not less than 10 days as determined by the chairman of the meeting prior to
the adjournment of such adjourned meeting. Notice of the reconvening of any
adjourned meeting shall be given as provided in Section 13.02(a), except that
such notice need be given only once not less than five days prior to the date on
which the meeting is scheduled to be reconvened. Notice of the reconvening of an
adjourned meeting which was adjourned for lack of a quorum shall state expressly
the percentage, as provided above, of the principal amount of the Outstanding
Securities of such series which shall constitute a quorum.

        Any resolution with respect to any request, demand, authorization,
direction, notice, consent, waiver or other action which this Indenture
expressly provides may be made, given or taken by the Holders of a specified
percentage in principal amount of the Outstanding Securities of a series may be
adopted at a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid by the affirmative vote of the Holders of such
specified percentage in principal amount of the outstanding Securities of that
series.

        Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related Coupons,
whether or not present or represented at the meeting.

        SECTION 13.05. Determination of Voting Rights; Conduct and Adjournment
                       -------------------------------------------------------
of Meetings. (a) Notwithstanding any other provisions of this Indenture, the
-----------
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Holders of Securities of a series in regard to proof of the holding
of Securities of such series and of the appointment of proxies and in regard to
the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or required by any such regulations,
the holding of Securities shall be proved in the manner specified in Section
1.04 and the appointment of any proxy shall be proved in the manner specified in
Section 1.04 or by having the signature of the person executing the proxy
witnessed or guaranteed by any trust company, bank or banker authorized by
Section 1.04 to

                                       76

certify to the holding of Bearer Securities. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be presumed
valid and genuine without the proof specified in Section 1.04 or other proof.

        (b) The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Securities as provided in Section 13.02(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote or the Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.

        (c) At any meeting each Holder of a Security of such series or proxy
shall be entitled to one vote for each $1 (or the equivalent thereof) principal
amount of the Outstanding Securities of such series held or represented by him;
provided, however, that no vote shall be cast or counted at any meeting in
--------  -------
respect of any Security challenged as not Outstanding and ruled by the chairman
of the meeting to be not Outstanding. The chairman of the meeting shall have no
right to vote, except as a Holder of a Security of such series or proxy.

        (d) Any Meeting of Holders of Securities of any series duly called
pursuant to Section 13.02 at which a quorum is present may be adjourned from
time to time by Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting; and the
meeting may be held as so adjourned without further notice.

        SECTION 13.06. Counting Votes and Recording Action of Meetings. The vote
                       -----------------------------------------------
upon any resolution submitted to any meeting of Holders of Securities of any
series shall be by written ballots on which shall be subscribed the signatures
of the Holders of Securities of such series or of their representatives by proxy
and the principal amounts and serial numbers of the Outstanding Securities of
such series held or represented by them. The permanent chairman of the meeting
shall appoint two inspectors of votes who shall count all votes cast at the
meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record, at least in duplicate, of the proceedings
of each meeting of Holders of Securities of any series shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was given as
provided in Section 13.02 and, if applicable, Section 13.04. Each copy shall be
signed and verified by the affidavits of the permanent chairman and secretary of
the meeting and one such copy shall be delivered to the Company, and another to
the Trustee to be preserved by the Trustee, the latter to have attached thereto
the ballots voted at the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.

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

                                       77

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

                                      ASHLAND INC.

                                      by


                                      ___________________________________
                                      Title: Treasurer

Attest:


_________________________________
Assistant Secretary

                                      U.S. BANK NATIONAL ASSOCIATION

                                      by


                                      ___________________________________
                                      Title: Vice President

Attest:


_________________________________
Trust Officer

                                       78


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4
<SEQUENCE>6
<FILENAME>rights.txt
<DESCRIPTION>EXHIBIT 4.4
<TEXT>

                                    RIGHTS  AGREEMENT  dated  as of May 16,
                           1996,   between   ASHLAND   INC.,   a   Kentucky
                           corporation  (the  "Company"),  and HARRIS TRUST
                           AND   SAVINGS   BANK,   an   Illinois    banking
                           corporation,   as  Rights   Agent  (the  "Rights
                           Agent").

          The Board of Directors of the Company has authorized and declared
a dividend of one Right (as  hereinafter  defined) for each share of Common
Stock,  par value $1.00 per share,  of the  Company  (the  "Common  Stock")
outstanding  at the Close of Business (as  hereinafter  defined) on May 16,
1996 (the "Record Date"),  and has authorized the issuance of one Right (as
such number may  hereafter be adjusted  pursuant to the  provisions of this
Rights  Agreement)  with  respect to each share of Common  Stock that shall
become  outstanding  between  the  Record  Date  and  the  earliest  of the
Distribution  Date,  the Redemption  Date or the  Expiration  Date (as such
terms are  hereinafter  defined);  PROVIDED,  HOWEVER,  that  Rights may be
issued with respect to shares of Common Stock that shall become outstanding
after the Distribution Date and prior to the earlier of the Redemption Date
or the  Expiration  Date in accordance  with the  provisions of Section 23.
Each Right shall initially  represent the right to purchase  one-thousandth
(1/1,000) of a share of Series A Participating  Cumulative Preferred Stock,
without par value,  of the Company  (the  "Preferred  Shares"),  having the
powers,  rights and  preferences  set forth in the  Articles  of  Amendment
attached as Exhibit A.

          Accordingly,  in  consideration  of the  premises  and the mutual
agreements herein set forth, the parties hereby agree as follows:

          SECTION 1.  CERTAIN  DEFINITIONS.  For  purposes  of this  Rights
Agreement, the following terms have the meanings indicated:

          "ACQUIRING  PERSON" shall mean any Person who or which,  alone or
together with all Affiliates  and  Associates of such Person,  shall be the
Beneficial Owner of more than 15% of the Common Shares then outstanding but
shall not include (a) the  Company,  any  Subsidiary  of the  Company,  any
employee benefit plan of the Company or of any of its Subsidiaries,  or any
Person  holding  Common  Shares  for or  pursuant  to the terms of any such
employee  benefit  plan or

<PAGE>
(b) any such Person who has become and is such a  Beneficial  Owner  solely
because  (i)  of  a  change  in  the  aggregate  number  of  Common  Shares
outstanding  since the last date on which such Person  acquired  Beneficial
Ownership  of any  Common  Shares  or  (ii)  it  acquired  such  Beneficial
Ownership  in the good faith  belief  that such  acquisition  would not (A)
cause such  Beneficial  Ownership  to exceed 15% of the Common  Shares then
outstanding  and  such  Person  relied  in  good  faith  in  computing  the
percentage  of its  Beneficial  Ownership  on  publicly  filed  reports  or
documents  of the  Company  which  are  inaccurate  or  out-of-date  or (B)
otherwise  cause a  Distribution  Date or the  adjustment  provided  for in
Section  11(a)  to  occur.  Notwithstanding  clause  (b)(ii)  of the  prior
sentence,  if any Person that is not an Acquiring Person due to such clause
(b)(ii) does not reduce its  percentage of  Beneficial  Ownership of Common
Shares to 15% or less by the Close of  Business on the fifth  Business  Day
after notice from the Company (the date of notice being the first day) that
such  Person's  Beneficial  Ownership of Common Shares so exceeds 15%, such
Person  shall,  at the end of such  five  Business  Day  period,  become an
Acquiring  Person (and such clause  (b)(ii)  shall no longer  apply to such
Person).  For purposes of this definition,  the  determination  whether any
Person acted in "good faith" shall be conclusively  determined by the Board
of Directors of the Company.

          "AFFILIATE"  and  "ASSOCIATE",  when used with  reference  to any
Person,  shall have the respective  meanings ascribed to such terms in Rule
12b-2 of the General  Rules and  Regulations  under the Exchange Act, as in
effect on the date of this Rights Agreement.

          A Person shall be deemed the "BENEFICIAL  OWNER" of, and shall be
deemed to  "BENEFICIALLY  OWN",  and  shall be  deemed to have  "BENEFICIAL
OWNERSHIP" of, any securities:

               (a) which such Person or any of such Person's  Affiliates or
          Associates is deemed to "beneficially  own" within the meaning of
          Rule  13d-3  of the  General  Rules  and  Regulations  under  the
          Exchange Act, as in effect on the date of this Rights Agreement;

               (b) which  such  Person  or any of such Person's  Affiliates
         or Associates has (i) the right to acquire  (whether such right is
         exercisable  immediately  or  only  after  the  passage  of  time)
         pursuant to any agreement,  arrangement or understanding  (written
         or oral),  or upon the  exercise of  conversion  rights,  exchange
         rights

<PAGE>
          (other than the Company's  rights under  Section  11(b)(1)),
          rights  (other  than  the  Rights),   warrants  or  options,   or
          otherwise;  PROVIDED,  HOWEVER, that a Person shall not be deemed
          the  Beneficial  Owner of,  or to  beneficially  own,  or to have
          Beneficial Ownership of, securities tendered pursuant to a tender
          or  exchange  offer made by or on behalf of such Person or any of
          such  Person's  Affiliates  or  Associates  until  such  tendered
          securities are accepted for purchase or exchange  thereunder,  or
          (ii) the right to vote pursuant to any agreement,  arrangement or
          understanding (written or oral); PROVIDED, HOWEVER, that a Person
          shall not be deemed the Beneficial  Owner of, or to  beneficially
          own, or to have Beneficial  Ownership of, any security if (A) the
          agreement, arrangement or understanding (written or oral) to vote
          such  security  arises  solely from a revocable  proxy or consent
          given to such  Person in  response  to a public  proxy or consent
          solicitation  made  pursuant  to,  and in  accordance  with,  the
          applicable  rules and regulations  under the Exchange Act and (B)
          the  beneficial  ownership  of such  security  is not  also  then
          reportable  on  Schedule  13D  under  the  Exchange  Act  (or any
          comparable or successor report); or

                  (c) which are beneficially owned, directly or indirectly,
         by any other Person with which such Person or any of such Person's
         Affiliates  or  Associates  has  any  agreement,   arrangement  or
         understanding  (written  or oral) for the  purpose  of  acquiring,
         holding,  voting (except  pursuant to a revocable proxy or consent
         as described in clause (b)(ii) of this definition) or disposing of
         any securities of the Company.

Notwithstanding  the foregoing,  nothing contained in this definition shall
cause  a  Person  ordinarily  engaged  in  business  as an  underwriter  of
securities to be the "Beneficial Owner" of, or to "beneficially own", or to
have "Beneficial Ownership" of, any securities acquired in a bona fide firm
commitment  underwriting  pursuant to an  underwriting  agreement  with the
Company.

          "ARTICLES OF  AMENDMENT"  shall mean the Articles of Amendment of
the Second Restated  Articles of Incorporation  of the Company  designating
and establishing the Series A Participating  Cumulative Preferred Stock and
setting  forth the  preferences,  limitations  and relative  rights of such

<PAGE>
series of Preferred  Stock of the  Company,  a copy of which is attached as
Exhibit A.

          "BOOK VALUE", when used with reference to Common Shares issued by
any Person,  shall mean the amount of equity of such Person  applicable  to
each Common Share,  determined (a) in accordance  with  generally  accepted
accounting  principles in effect on the date as of which such Book Value is
to be  determined,  (b)  using  all  the  consolidated  assets  and all the
consolidated  liabilities  of such Person on the date as of which such Book
Value is to be  determined,  except that no value shall be included in such
assets for goodwill  arising from  consummation of a business  combination,
and (c) after giving effect to (i) the exercise of all rights,  options and
warrants to purchase such Common  Shares  (other than the Rights),  and the
conversion of all securities  convertible  into such Common  Shares,  at an
exercise or conversion  price,  per Common  Share,  which is less than such
Book Value before giving effect to such exercise or conversion  (whether or
not  exercisability  or  convertibility is conditioned upon occurrence of a
future event),  (ii) all dividends and other  distributions  on the capital
stock of such Person declared prior to the date as of which such Book Value
is to be determined  and to be paid or made after such date,  and (iii) any
other  agreement,  arrangement  or  understanding  (written  or  oral),  or
transaction  or other  action prior to the date as of which such Book Value
is to be determined which would have the effect of thereafter reducing such
Book Value.

          "BUSINESS  COMBINATION"  shall  have  the  meaning  set  forth in
Section 11(c)(i).

          "BUSINESS  DAY"  shall  mean  each  Monday,  Tuesday,  Wednesday,
Thursday and Friday which is not a day on which banking institutions in the
Borough of Manhattan,  the City of New York, are authorized or obligated by
law or executive order to close.

          "CLOSE OF BUSINESS"  on any given date shall mean 5:00 p.m.,  New
York City time, on such date; PROVIDED,  HOWEVER, that, if such date is not
a Business  Day,  "Close of Business"  shall mean 5:00 p.m.,  New York City
time, on the next succeeding Business Day.

          "COMMON SHARES", when used with reference to the Company prior to
a  Business  Combination,  shall  mean the  shares of  Common  Stock of the
Company or any other shares of
<PAGE>
capital  stock  of the  Company  into  which  the  Common  Stock  shall  be
reclassified or changed.  "Common Shares",  when used with reference to any
Person (other than the Company prior to a Business Combination), shall mean
shares of capital stock of such Person (if such Person is a corporation) of
any class or series,  or units of equity  interests in such Person (if such
Person is not a corporation) of any class or series,  the terms of which do
not limit (as a maximum  amount and not merely in  proportional  terms) the
amount of dividends  or income  payable or  distributable  on such class or
series or the amount of assets  distributable  on such class or series upon
any voluntary or involuntary liquidation, dissolution or winding up of such
Person  and do not  provide  that  such  class  or  series  is  subject  to
redemption at the option of such Person,  or any shares of capital stock or
units of equity interests into which the foregoing shall be reclassified or
changed;  PROVIDED,  HOWEVER, that, if at any time there shall be more than
one such  class or series of  capital  stock or  equity  interests  of such
Person,  "Common  Shares" of such Person shall include all such classes and
series  substantially  in the  proportion  of the total number of shares or
other units of each such class or series outstanding at such time.

          "COMMON   STOCK"   shall  have  the  meaning  set  forth  in  the
introductory paragraph of this Rights Agreement.

          "COMPANY" shall have the meaning set forth in the heading of this
Rights  Agreement;   PROVIDED,   HOWEVER,  that  if  there  is  a  Business
Combination,  "Company"  shall  have  the  meaning  set  forth  in  Section
11(c)(iii).

          The term  "CONTROL"  with  respect to any  Person  shall mean the
power to direct the  management  and policies of such  Person,  directly or
indirectly, by or through stock ownership, agency or otherwise, or pursuant
to or  in  connection  with  an  agreement,  arrangement  or  understanding
(written  or oral)  with one or more  other  Persons  by or  through  stock
ownership,   agency  or  otherwise;   and  the  terms   "controlling"   and
"controlled" shall have meanings correlative to the foregoing.

          "DISTRIBUTION  DATE"  shall have the meaning set forth in Section
3(b).
<PAGE>

          "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
in effect on the date in question, unless otherwise specifically provided.

          "EXCHANGE  CONSIDERATION"  shall  have the  meaning  set forth in
Section 11(b)(i).

          "EXPIRATION  DATE"  shall have the  meaning  set forth in Section
7(a).

          "MAJOR  PART",  when used  with  reference  to the  assets of the
Company and its Subsidiaries as of any date, shall mean assets (a) having a
fair market value aggregating 50% or more of the total fair market value of
all the assets of the Company and its Subsidiaries (taken as a whole) as of
the date in  question,  (b)  accounting  for 50% or more of the total value
(net of depreciation and amortization) of all the assets of the Company and
its Subsidiaries  (taken as a whole) as would be shown on a consolidated or
combined  balance sheet of the Company and its  Subsidiaries as of the date
in question,  prepared in accordance  with  generally  accepted  accounting
principles  then in effect,  or (c) accounting for 50% or more of the total
amount of earnings before interest, taxes, depreciation and amortization or
of the revenues of the Company and its  Subsidiaries  (taken as a whole) as
would be shown on, or derived from, a consolidated or combined statement of
income or operations of the Company and its  Subsidiaries for the period of
12 months ending on the last day of the Company's monthly accounting period
next preceding the date in question,  prepared in accordance with generally
accepted accounting principles then in effect.

          "MARKET VALUE",  when used with reference to Common Shares on any
date,  shall be deemed to be the average of the daily closing  prices,  per
share,  of such Common Shares for the period which is the shorter of (a) 30
consecutive  Trading Days immediately  prior to the date in question or (b)
the  number of  consecutive  Trading  Days  beginning  on the  Trading  Day
immediately  after the date of the first public  announcement  of the event
requiring a determination of the Market Value and ending on the Trading Day
immediately  prior to the record  date of such  event;  PROVIDED,  HOWEVER,
that,  in the event that the Market  Value of such  Common  Shares is to be
determined in whole or in part during a period  following the  announcement
by the issuer of such Common Shares of any action of the type  described in
Section  12(a) that would require an adjustment  thereunder,  then,  and in

<PAGE>
each  such  case,   the  Market  Value  of  such  Common  Shares  shall  be
appropriately  adjusted  to reflect the effect of such action on the market
price of such Common  Shares.  The closing price for each Trading Day shall
be the closing  price  quoted on the  principal  United  States  securities
exchange registered under the Exchange Act (or any recognized foreign stock
exchange) on which such  securities are listed,  or, if such securities are
not listed on any such  exchange,  the average of the closing bid and asked
quotations  with  respect  to a share of such  securities  on any  National
Association of Securities  Dealers,  Inc.  quotations system, or if no such
quotations are  available,  the average of the closing bid and asked prices
as  furnished  by a  professional  market  maker  making a  market  in such
securities  selected by the Board of Directors  of the  Company.  If on any
such Trading Day no market maker is making a market in such securities, the
closing price of such  securities on such Trading Day shall be deemed to be
the fair value of such  securities as determined in good faith by the Board
of Directors of the Company  (whose  determination  shall be described in a
statement  filed with the  Rights  Agent and shall be binding on the Rights
Agent,  the holders of Rights and all other  Persons);  PROVIDED,  HOWEVER,
that for the  purpose of  determining  the closing  price of the  Preferred
Shares for any Trading  Day on which there is no such market  maker for the
Preferred  Shares the closing  price on such Trading Day shall be deemed to
be the Formula  Number (as defined in the Articles of Amendment)  times the
closing price of the Common Shares of the Company on such Trading Day.

          "PERSON"  shall  mean an  individual,  corporation,  partnership,
limited   liability   company,   joint   venture,    association,    trust,
unincorporated organization or other entity.

          "PREFERRED  SHARES"  shall  have  the  meaning  set  forth in the
introductory  paragraph  of this Rights  Agreement.  Any  reference in this
Rights  Agreement  to  Preferred  Shares  shall be  deemed to  include  any
authorized  fraction of a  Preferred  Share,  unless the context  otherwise
requires.

          "PRINCIPAL  PARTY" shall mean the Surviving  Person in a Business
Combination;  PROVIDED, HOWEVER, that, if such Surviving Person is a direct
or indirect  Subsidiary of any other Person,  "Principal  Party" shall mean
the Person which is the ultimate parent of such Surviving  Person and which
is

<PAGE>
not itself a Subsidiary of another Person. In the event ultimate control
of such  Surviving  Person  is shared  by two or more  Persons,  "Principal
Party" shall mean that Person that is immediately controlled by such two or
more Persons.

          "PURCHASE  PRICE" with respect to each Right shall mean $140,  as
such  amount may from time to time be  adjusted  as  provided  herein.  All
references herein to the Purchase Price shall mean the Purchase Price as in
effect at the time in question.

          "RECORD   DATE"   shall  have  the   meaning  set  forth  in  the
introductory paragraph of this Rights Agreement.

          "REDEMPTION  DATE"  shall have the  meaning  set forth in Section
24(a).

          "REDEMPTION PRICE" with respect to each Right shall mean $.01, as
such amount may from time to time be adjusted in  accordance  with  Section
12. All references herein to the Redemption Price shall mean the Redemption
Price as in effect at the time in question.

          "REGISTERED COMMON SHARES" shall mean Common Shares which are, as
of  the  date  of  consummation  of  a  Business   Combination,   and  have
continuously  been  for the 12  months  immediately  preceding  such  date,
registered under Section 12 of the Exchange Act.

          "RIGHT  CERTIFICATE" shall mean a certificate  evidencing a Right
or Rights in substantially the form attached as Exhibit B.

          "RIGHTS" shall mean the rights to purchase  Preferred  Shares (or
other securities) as provided in this Rights Agreement.

          "SECURITIES  ACT" shall mean the  Securities  Act of 1933,  as in
effect on the date in question, unless otherwise specifically provided.

          "SUBSIDIARY"  shall  mean a Person,  at least a  majority  of the
total   outstanding   voting   power   (being  the  power  under   ordinary
circumstances  (and not merely upon the happening of a contingency) to vote
in  the  election  of  directors  of  such  Person  (if  such  Person  is a
corporation) or to participate in the management and control of such Person
(if such  Person  is not a  corporation))  of which is

<PAGE>
owned,  directly or  indirectly,  by another Person or by one or more other
Subsidiaries  of such other  Person or by such other Person and one or more
other Subsidiaries of such other Person.

          "SURVIVING  PERSON"  shall  mean  (a)  the  Person  which  is the
continuing  or  surviving  Person  in a  consolidation  or  merger or share
exchange specified in Section  11(c)(i)(A) or 11(c)(i)(B) or (b) the Person
to which the Major Part of the assets of the Company  and its  Subsidiaries
is sold, leased,  exchanged or otherwise  transferred or disposed of in one
or more transactions specified in Section 11(c)(i)(C);  PROVIDED,  HOWEVER,
that,  if the Major Part of the assets of the Company and its  Subsidiaries
is sold, leased,  exchanged or otherwise  transferred or disposed of in one
or more  transactions  specified  in Section  11(c)(i)(C)  to more than one
Person,  the  "Surviving  Person" in such case  shall mean the Person  that
acquired  assets of the Company and/or its  Subsidiaries  with the greatest
fair market value in such transaction or transactions.

          "TRADING  DAY" shall mean a day on which the  principal  national
securities exchange (or principal recognized foreign stock exchange, as the
case may be) on which any  securities  or  Rights,  as the case may be, are
listed or admitted to trading is open for the  transaction  of business or,
if the  securities  or Rights in  question  are not listed or  admitted  to
trading on any national  securities  exchange (or recognized  foreign stock
exchange, as the case may be), a Business Day.

          SECTION  2.  APPOINTMENT  OF RIGHTS  AGENT.  The  Company  hereby
appoints  the Rights  Agent to act as agent for the  Company in  accordance
with the terms and conditions  hereof,  and the Rights Agent hereby accepts
such  appointment.  The Company  may from time to time  appoint one or more
co-Rights  Agents as it may deem  necessary or desirable upon notice to the
Rights  Agent  (the  term  "Rights  Agent"  being  used  herein  to  refer,
collectively, to the Rights Agent together with any such co-Rights Agents).
In the  event  the  Company  appoints  one or more  co-Rights  Agents,  the
respective duties of the Rights Agent and any co-Rights Agents shall be set
forth in an amendment to this Rights Agreement.

          SECTION 3. ISSUE OF RIGHTS AND RIGHT CERTIFICATES.  (a) One Right
shall be associated with each Common Share  outstanding on the Record Date,
each  additional

<PAGE>
Common Share that shall become outstanding  between the Record Date and the
earliest of the  Distribution  Date, the Redemption  Date or the Expiration
Date and each  additional  Common  Share with which Rights are issued after
the  Distribution  Date but prior to the earlier of the Redemption  Date or
the Expiration Date as provided in Section 23; PROVIDED,  HOWEVER, that, if
the number of  outstanding  Rights are  combined  into a smaller  number of
outstanding  Rights pursuant to Section 12(a),  the appropriate  fractional
Right  determined  pursuant to such Section shall  thereafter be associated
with each such Common Share.

          (b) Until the earlier of (i) such time as the Company learns that
a Person has become an  Acquiring  Person or (ii) the Close of  Business on
such date,  if any, as may be  designated  by the Board of Directors of the
Company  following the  commencement  of, or first public  disclosure of an
intent to commence,  a tender or exchange  offer by any Person  (other than
the Company,  any Subsidiary of the Company,  any employee  benefit plan of
the Company or of any of its  Subsidiaries,  or any Person  holding  Common
Shares for or pursuant to the terms of any such employee  benefit plan) for
outstanding  Common Shares, if upon consummation of such tender or exchange
offer such  Person  could be the  Beneficial  Owner of more than 15% of the
outstanding  Common  Shares  (the Close of  Business on the earlier of such
dates being the "Distribution  Date"),  (x) the Rights will be evidenced by
the   certificates  or  other  evidences  of  ownership  of  Common  Shares
registered  in the names of the holders  thereof and not by separate  Right
Certificates  and (y) the  Rights,  including  the right to  receive  Right
Certificates,  will be transferable only in connection with the transfer of
Common Shares.  As soon as  practicable  after the  Distribution  Date, the
Rights  Agent will send,  by  first-class,  postage-prepaid  mail,  to each
record holder of Common Shares as of the Distribution  Date, at the address
of such holder  shown on the records of the  Company,  a Right  Certificate
evidencing  one whole  Right for each  Common  Share (or for the  number of
Common  Shares with which one whole Right is then  associated if the number
of Rights per Common Share held by such record  holder has been adjusted in
accordance  with the  proviso  in  Section  3(a)).  If the number of Rights
associated  with each Common Share has been adjusted in accordance with the
proviso  in  Section  3(a),  at the  time  of  distribution  of  the  Right
Certificates  the Company may make any necessary and  appropriate  rounding
adjustments so that Right  Certificates  representing only whole numbers of
Rights are distributed and cash is paid in lieu of any fractional  Right in


<PAGE>
accordance with Section 15(a). As of and after the  Distribution  Date, the
Rights will be evidenced solely by such Right Certificates.

          (c) Until the earliest of the  Distribution  Date, the Redemption
Date or the Expiration Date, the Rights associated with Common Shares shall
be evidenced by the evidence of ownership of such Common Shares alone,  the
registered  holders  of the  Common  Shares  shall  also be the  registered
holders of the  associated  Rights,  and the transfer of any Common  Shares
shall also  constitute  the  transfer  of the Rights  associated  with such
Common Shares.

          (d)  Certificates  issued for Common Shares after the Record Date
(including,  without  limitation,  upon transfer or exchange of outstanding
Common  Shares),  but prior to the earliest of the  Distribution  Date, the
Redemption Date or the Expiration  Date,  shall have printed on, written on
or otherwise affixed to or attached to them the following legend:

                    This certificate also evidences and entitles the holder
               hereof to certain Rights as set forth in a Rights  Agreement
               dated as of May 16, 1996,  as it may be amended from time to
               time (the "Rights  Agreement"),  between  Ashland Inc.  (the
               "Company")  and Harris  Trust and  Savings  Bank,  as Rights
               Agent (the  "Rights  Agent"),  the terms of which are hereby
               incorporated  herein by reference  and a copy of which is on
               file at the  principal  executive  offices  of the  Company.
               Under  certain  circumstances,  as set  forth in the  Rights
               Agreement,   such  Rights  will  be  evidenced  by  separate
               certificates  and  will  no  longer  be  evidenced  by  this
               certificate.  The  Rights  Agent  will mail to the holder of
               this  certificate  a copy of the  Rights  Agreement  without
               charge after receipt of a written request  therefor.  Rights
               beneficially  owned by Acquiring Persons or their Affiliates
               or  Associates  (as such  terms are  defined  in the  Rights
               Agreement) and by any  subsequent  holder of such Rights are
               null and void and nontransferable.

          Notwithstanding  this  paragraph  (d),  neither the omission of a
legend nor the  existence of a legend  which  refers to a rights  agreement
other than the Rights Agreement shall affect the enforceability of any part
of this Rights Agreement or the rights of any holder of Rights.

<PAGE>

          SECTION  4. FORM OF RIGHT  CERTIFICATES.  The Right  Certificates
(and the form of election to purchase and form of  assignment to be printed
on the reverse side thereof) shall be in  substantially  the form set forth
as Exhibit B and may have such marks of  identification  or designation and
such legends,  summaries or endorsements printed thereon as the Company may
deem  appropriate and as are not  inconsistent  with the provisions of this
Rights  Agreement,  or as may be required to comply with any applicable law
or with any rule or regulation  made  pursuant  thereto or with any rule or
regulation of any stock  exchange on which the Rights may from time to time
be listed, or to conform to usage. Subject to the provisions of Sections 7,
11 and 23, the Right  Certificates,  whenever issued,  shall be dated as of
the Distribution  Date, and on their face shall entitle the holders thereof
to purchase  such number of Preferred  Shares as shall be set forth therein
for the Purchase Price set forth therein,  subject to adjustment  from time
to time as herein provided.

          SECTION 5. EXECUTION,  COUNTERSIGNATURE AND REGISTRATION. (a) The
Right  Certificates  shall be  executed  on  behalf of the  Company  by the
Chairman of the Board,  the Chief  Executive  Officer,  the President,  the
Chief Operating Officer,  the Chief Financial  Officer,  the Treasurer or a
Vice President  (whether  preceded by any additional title) of the Company,
either  manually or by facsimile  signature,  and have affixed  thereto the
Company's  seal or a  facsimile  thereof  which  shall be  attested  by the
Secretary or an Assistant  Secretary of the Company,  either manually or by
facsimile signature. The Right Certificates shall be manually countersigned
by the Rights  Agent and shall not be valid or  obligatory  for any purpose
unless so countersigned.  In case any officer of the Company who shall have
signed any of the Right  Certificates  shall cease to be such an officer of
the Company  before  countersignature  by the Rights Agent and issuance and
delivery  by the  Company,  such Right  Certificates  may  nevertheless  be
countersigned  by the Rights Agent and issued and  delivered by the Company
with the same force and  effect as though the person who signed  such Right
Certificates  had not ceased to be such an officer of the Company;  and any
Right Certificate may be signed on behalf of the Company by any person who,
at the  actual  date of  execution  of such Right  Certificate,  shall be a
proper officer of the Company to sign such Right  Certificate,  although at
the date of execution of this Rights Agreement any such person was not such
an officer of the Company.


<PAGE>
          (b) Following the  Distribution  Date, the Rights Agent will keep
or cause to be kept, at its principal  office in Chicago,  Illinois,  books
for registration and transfer of the Right  Certificates  issued hereunder.
Such books shall show the names and addresses of the respective  holders of
the Right Certificates, the number of Rights evidenced by each of the Right
Certificates,  the certificate number of each of the Right Certificates and
the date of each of the Right Certificates.

          SECTION 6. TRANSFER, SPLIT-UP,  COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES;  MUTILATED,  DESTROYED,  LOST OR STOLEN  RIGHT  CERTIFICATES;
UNCERTIFICATED  RIGHTS.  (a) Subject to the provisions of Sections 7(e) and
15, at any time after the  Distribution  Date, and at or prior to the Close
of Business on the earlier of the Redemption  Date or the Expiration  Date,
any Right Certificate or Right  Certificates may be transferred,  split-up,
combined or exchanged for another Right  Certificate or Right  Certificates
representing,  in the  aggregate,  the same  number  of Rights as the Right
Certificate  or  Right  Certificates  surrendered  then  represented.   Any
registered holder desiring to transfer,  split-up,  combine or exchange any
Right  Certificate  shall make such  request in  writing  delivered  to the
Rights  Agent  and  shall   surrender  the  Right   Certificate   or  Right
Certificates  to be  transferred,  split- up,  combined or exchanged at the
principal office of the Rights Agent;  PROVIDED,  HOWEVER, that neither the
Rights  Agent  nor the  Company  shall  be  obligated  to take  any  action
whatsoever   with  respect  to  the  transfer  of  any  Right   Certificate
surrendered  for transfer until the registered  holder shall have completed
and signed the  certification  contained in the form of  assignment  on the
reverse  side of such  Right  Certificate  and  shall  have  provided  such
additional  evidence  of the  identity of the  Beneficial  Owner (or former
Beneficial Owner) or Affiliates or Associates  thereof as the Company shall
reasonably request.  Thereupon the Rights Agent shall,  subject to Sections
7(e) and 15, countersign and deliver to the Person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The
Company  may  require  payment  of a sum  sufficient  to  cover  any tax or
governmental  charge that may be imposed in  connection  with any transfer,
split-up, combination or exchange of Right Certificates.

          (b) Upon  receipt by the Company or the Rights  Agent of evidence
reasonably  satisfactory  to  them  of  the  loss,  theft,  destruction  or
mutilation  of a valid Right

<PAGE>
Certificate,  and, in case of loss,  theft or destruction,  of indemnity or
security  reasonably  satisfactory to them, and, at the Company's  request,
reimbursement  to the  Company  and  the  Rights  Agent  of all  reasonable
expenses  incidental  thereto,  and upon  surrender to the Rights Agent and
cancelation of the Right Certificate if mutilated,  the Company will make a
new Right  Certificate of like tenor and deliver such new Right Certificate
to the Rights Agent for  countersignature  and  delivery to the  registered
owner in lieu of the  Right  Certificate  so  lost,  stolen,  destroyed  or
mutilated.

          (c)  Notwithstanding  any other provision hereof, the Company and
the  Rights   Agent  may  amend  this  Rights   Agreement  to  provide  for
uncertificated  Rights in  addition to or in place of Rights  evidenced  by
Right Certificates.

          SECTION 7.  EXERCISE OF RIGHTS;  EXPIRATION  DATE OF RIGHTS.  (a)
Subject to Section 7(e) and except as otherwise  provided herein (including
Section 11), each Right shall entitle the registered  holder thereof,  upon
exercise thereof as provided herein, to purchase for the Purchase Price, at
any time after the Distribution  Date and at or prior to the earlier of (i)
the Close of  Business on the 10th  anniversary  of the date of this Rights
Agreement (the Close of Business on such date being the "Expiration  Date")
or (ii) the Redemption Date, one-thousandth (1/1,000) of a Preferred Share,
subject to adjustment from time to time as provided in Sections 11 and 12.

          (b) The registered  holder of any Right  Certificate may exercise
the Rights evidenced thereby (except as otherwise provided herein) in whole
or in part at any time after the  Distribution  Date, upon surrender of the
Right  Certificate,  with the form of  election  to purchase on the reverse
side thereof duly executed,  to the Rights Agent at the principal office of
the  Rights  Agent in  Chicago,  Illinois,  together  with  payment  of the
Purchase Price for each one-thousandth (1/1,000) of a Preferred Share as to
which the  Rights  are  exercised,  at or prior to the  earlier  of (i) the
Expiration Date or (ii) the Redemption Date.

          (c) Upon receipt of a Right Certificate  representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the  Purchase  Price for the  Preferred  Shares to be  purchased
together  with an amount equal to any  applicable  transfer  tax, in lawful
money of the United  States of America, in
<PAGE>
cash  or  by  certified  check or  money order  payable to the order of the
Company,   the  Rights  Agent  shall  thereupon  (i)  either  (A)  promptly
requisition  from any  transfer  agent  of the  Preferred  Shares  (or make
available,  if the Rights Agent is the transfer agent) certificates for the
number  of  Preferred  Shares  to  be  purchased  and  the  Company  hereby
irrevocably  authorizes its transfer agent to comply with all such requests
or (B) if the Company  shall have elected to deposit the  Preferred  Shares
with  a  depositary   agent  under  a  depositary   arrangement,   promptly
requisition from the depositary agent depositary receipts  representing the
number of thousandths  (1/1,000s) of a Preferred  Share to be purchased (in
which case  certificates for the Preferred Shares to be represented by such
receipts  shall be  deposited  by the  transfer  agent with the  depositary
agent) and the Company will direct the depositary  agent to comply with all
such requests, (ii) when appropriate, promptly requisition from the Company
the amount of cash to be paid in lieu of issuance of  fractional  shares in
accordance   with  Section  15,  (iii)   promptly  after  receipt  of  such
certificates or depositary  receipts,  cause the same to be delivered to or
upon  the  order  of the  registered  holder  of  such  Right  Certificate,
registered  in such name or names as may be  designated  by such holder and
(iv) when appropriate,  after receipt promptly deliver such cash to or upon
the order of the registered holder of such Right Certificate.

          (d) In case the registered  holder of any Right Certificate shall
exercise  fewer  than  all  the  Rights  evidenced  thereby,  a  new  Right
Certificate   evidencing   Rights   equivalent  to  the  Rights   remaining
unexercised shall be countersigned by the Rights Agent and delivered to the
registered  holder  of such  Right  Certificate  or to his duly  authorized
assigns, subject to the provisions of Section 15.

          (e)  Notwithstanding  anything  in this Rights  Agreement  to the
contrary,  any  Rights  that  are  at any  time  beneficially  owned  by an
Acquiring Person or any Affiliate or Associate of an Acquiring Person shall
be null and void and  nontransferable,  and any  holder  of any such  Right
(including  any purported  transferee or subsequent  holder) shall not have
any right to exercise or transfer any such Right.

          (f)  Notwithstanding  anything  in this Rights  Agreement  to the
contrary,  neither the Rights  Agent nor the Company  shall be obligated to
undertake  any  action  with  respect to a  registered  holder of any Right
Certificates
<PAGE>
upon the occurrence of any purported  exercise as set forth in this Section
7 unless such  registered  holder shall have (i)  completed  and signed the
certificate  contained in the form of election to purchase set forth on the
reverse side of the Right  Certificate  surrendered  for such  exercise and
(ii) provided such  additional  evidence of the identity of the  Beneficial
Owner (or former Beneficial  Owner) or Affiliates or Associates  thereof as
the Company shall reasonably request.

          (g) The Company may temporarily suspend, for a period of time not
to exceed 90 calendar days after the Distribution  Date, the exercisability
of the Rights in order to prepare and file a registration  statement  under
the Securities  Act, on an appropriate  form, with respect to the Preferred
Shares purchasable upon exercise of the Rights and permit such registration
statement to become effective;  PROVIDED,  HOWEVER, that no such suspension
shall remain  effective  after,  and the Rights  shall  without any further
action by the Company or any other Person  become  exercisable  immediately
upon,  the  effectiveness  of such  registration  statement.  Upon any such
suspension,  the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended and shall issue
a further public  announcement  at such time as the suspension is no longer
in effect. Notwithstanding any provision herein to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification
under the blue sky or securities laws of such  jurisdiction  shall not have
been  obtained or the exercise of the Rights  shall not be permitted  under
applicable law.

          SECTION 8. CANCELATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right  Certificates  surrendered  or presented for the purpose of exercise,
transfer,   split-up,   combination  or  exchange  shall,   and  any  Right
Certificate  representing  Rights  that  have  become  null  and  void  and
nontransferable  pursuant to Section 7(e)  surrendered or presented for any
purpose shall,  if surrendered or presented to the Company or to any of its
agents,  be delivered to the Rights  Agent for  cancelation  or in canceled
form,  or, if  surrendered  or  presented  to the  Rights  Agent,  shall be
canceled by it, and no Right  Certificates  shall be issued in lieu thereof
except as expressly  permitted by this Rights Agreement.  The Company shall
deliver to the Rights Agent for cancelation and retirement,  and the Rights
Agent  shall so cancel  and  retire,  any Right  Certificate  purchased  or
acquired by the Company.  The Rights Agent shall deliver all
<PAGE>
canceled Right  Certificates  to the Company so that the Company is able to
maintain  such  certificates  for such period of time as may be required by
law, or shall, at the written request of the Company, destroy such canceled
Right  Certificates,  and in such  case  shall  deliver  a  certificate  of
destruction thereof to the Company.

          SECTION 9. RESERVATION AND AVAILABILITY OF PREFERRED SHARES.  (a)
The Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued  Preferred  Shares,  free from
preemptive  rights or any  right of first  refusal,  a number of  Preferred
Shares  sufficient to permit the exercise pursuant to Section 7 or exchange
pursuant to Section 11 in full of all outstanding Rights.

          (b) In the event that there  shall not be  sufficient  authorized
but unissued  Preferred Shares to permit the exercise or exchange of Rights
in  accordance  with Section 11, the Company  covenants  and agrees that it
will  take all such  action as may be  necessary  to  authorize  additional
Preferred  Shares for  issuance  upon the  exercise  or  exchange of Rights
pursuant to Section 11; PROVIDED, HOWEVER, that if the Company is unable to
cause the authorization of additional  Preferred  Shares,  then the Company
shall,  or in lieu of seeking any such  authorization,  the Company may, to
the extent  necessary and permitted by applicable law and any agreements or
instruments  in  effect  prior  to the  Distribution  Date to which it is a
party,  (i) upon surrender of a Right, pay cash equal to the Purchase Price
in lieu of issuing Preferred Shares and requiring  payment  therefor,  (ii)
upon due  exercise  of a Right and payment of the  Purchase  Price for each
Preferred  Share  as  to  which  such  Right  is  exercised,  issue  equity
securities  having a value equal to the value of the Preferred Shares which
otherwise  would have been  issuable  pursuant to Section  11,  which value
shall be  determined  by a nationally  recognized  investment  banking firm
selected  by the  Board of  Directors  of the  Company  or  (iii)  upon due
exercise of a Right and payment of the  Purchase  Price for each  Preferred
Share as to which such Right is  exercised,  distribute  a  combination  of
Preferred Shares, cash and/or other equity and/or debt securities having an
aggregate value equal to the value of the Preferred  Shares which otherwise
would have been  issuable  pursuant  to Section  11,  which  value shall be
determined by a nationally  recognized  investment banking firm selected by
the Board of  Directors  of the  Company.  To the extent  that any legal or
contractual
<PAGE>
restrictions  (pursuant to agreements or instruments in effect prior to the
Distribution Date to which it is party) prevent the Company from paying the
full amount payable in accordance with the foregoing sentence,  the Company
shall pay to holders of the Rights as to which such payments are being made
all  amounts  which  are not then  restricted  on a pro rata  basis as such
payments become  permissible  under such legal or contractual  restrictions
until such payments have been paid in full.

          (c) The Company  covenants  and agrees that it will take all such
action as may be necessary to ensure that all  Preferred  Shares  delivered
upon exercise or exchange of Rights  shall,  at the time of delivery of the
certificates  for such Preferred Shares (subject to payment of the Purchase
Price),  be duly and  validly  authorized  and  issued  and fully  paid and
nonassessable shares.

          (d) So long as the Preferred Shares issuable upon the exercise or
exchange of Rights are to be listed on any  national  securities  exchange,
the Company covenants and agrees to use its best efforts to cause, from and
after such time as the  Rights  become  exercisable  or  exchangeable,  all
Preferred Shares reserved for such issuance to be listed on such securities
exchange upon official notice of issuance upon such exercise or exchange.

          (e) The  Company  further  covenants  and agrees that it will pay
when due and  payable  any and all  Federal  and state  transfer  taxes and
charges  which may be payable in respect of the  issuance  or  delivery  of
Right  Certificates  or of any  Preferred  Shares or Common Shares or other
securities  upon the exercise or exchange of the Rights.  The Company shall
not,  however,  be required to pay any transfer tax which may be payable in
respect of any transfer or delivery of Right Certificates to a Person other
than,  or in respect of the issuance or delivery of  certificates  or other
evidences of ownership of the  Preferred  Shares or Common  Shares or other
securities,  as the  case  may  be,  in a name  other  than  that  of,  the
registered  holder of the Right Certificate  evidencing Rights  surrendered
for exercise or exchange or to issue or deliver any  certificates  or other
evidences  of  ownership  of  Preferred  Shares or  Common  Shares or other
securities, as the case may be, upon the exercise or exchange of any Rights
until any such tax shall have been paid (any such tax being  payable by the
holder of such Right  Certificate at the time of surrender) or until it has
been
<PAGE>
established to the Company's satisfaction that no such tax is due.

          SECTION 10.  PREFERRED  SHARES RECORD DATE.  Each Person in whose
name any certificate or other evidence of ownership of Preferred  Shares or
Common  Shares or other  securities is issued upon the exercise or exchange
of Rights  shall for all  purposes  be deemed to have  become the holder of
record of the Preferred Shares or Common Shares or other securities, as the
case may be, represented thereby on, and such certificate or other evidence
of  ownership  shall be dated,  the date upon  which the Right  Certificate
evidencing  such Rights was duly  surrendered  and payment of any  Purchase
Price (and any  applicable  transfer  taxes) was made;  PROVIDED,  HOWEVER,
that,  if the date of such  surrender  and payment is a date upon which the
transfer books of the Company for the Preferred  Shares or Common Shares or
other  securities,  as the case may be, are closed,  such  Person  shall be
deemed to have become the record holder of such Preferred  Shares or Common
Shares or other securities, as the case may be, on, and such certificate or
other  evidence  of  ownership  shall be dated as of,  the next  succeeding
Business Day on which the transfer  books of the Company for the  Preferred
Shares or Common Shares or other securities, as the case may be, are open.

          SECTION 11.  ADJUSTMENTS  IN RIGHTS  AFTER THERE IS AN  ACQUIRING
PERSON;  EXCHANGE OF RIGHTS FOR SHARES;  BUSINESS COMBINATIONS.  (a) Upon a
Person becoming an Acquiring Person, proper provision shall be made so that
each  holder  of a  Right,  except  as  provided  in  Section  7(e),  shall
thereafter have a right to receive,  upon exercise thereof for the Purchase
Price in accordance with the terms of this Rights Agreement, such number of
thousandths  (1/1,000s)  of a  Preferred  Share as shall  equal the  result
obtained by multiplying the Purchase Price by a fraction,  the numerator of
which is the number of  thousandths  (1/1,000s)  of a  Preferred  Share for
which a Right is then  exercisable  and the  denominator of which is 50% of
the Market Value of the Common Shares on the date on which a Person becomes
an  Acquiring  Person.  As soon as  practicable  after a Person  becomes an
Acquiring  Person  (provided the Company shall not have elected to make the
exchange  permitted by Section  11(b)(i) for all outstanding  Rights),  the
Company covenants and agrees to use its best efforts to:

                  (i) prepare and file a registration  statement  under the
         Securities  Act,  on an  appropriate  form,  with

<PAGE>
         respect  to the Preferred Shares purchasable upon exercise of the
         Rights;

                  (ii) cause such registration statement to become effective
         as soon as practicable after such filing;

                  (iii)  cause  such   registration   statement  to  remain
         effective (with a prospectus at all times meeting the requirements
         of the Securities Act) until the Expiration Date; and

                  (iv) qualify or register the Preferred Shares purchasable
         upon exercise of the Rights under the blue sky or securities  laws
         of such jurisdictions as may be necessary or appropriate.

          (b)(i) The Board of  Directors of the Company may, at its option,
at any  time  after a  Person  becomes  an  Acquiring  Person,  mandatorily
exchange all or part of the then outstanding and exercisable  Rights (which
shall  not  include  Rights  that  shall  have  become  null  and  void and
nontransferable   pursuant  to  the   provisions   of  Section   7(e))  for
consideration per Right consisting of either (x) one-half of the securities
that  would be  issuable  at such  time upon the  exercise  of one Right in
accordance with Section 11(a) or, if applicable,  Section 9(b)(ii) or (iii)
or, (y) if applicable,  the cash consideration specified in Section 9(b)(i)
(the  consideration  issuable per Right  pursuant to this Section  11(b)(i)
being the "Exchange Consideration").  The Board of Directors of the Company
may, at its option,  issue, in substitution  for Preferred  Shares,  Common
Shares in an amount per  Preferred  Share equal to the  Formula  Number (as
defined in the Articles of  Amendment) if there are  sufficient  authorized
but unissued Common Shares. If the Board of Directors of the Company elects
to  exchange  all or part of the  Rights  for  the  Exchange  Consideration
pursuant to this Section 11(b)(i) prior to the physical distribution of the
Rights   Certificates,   the   Corporation   may  distribute  the  Exchange
Consideration in lieu of distributing Right Certificates, in which case for
purposes of this Rights Agreement holders of Rights shall be deemed to have
simultaneously  received and surrendered for exchange Right Certificates on
the date of such distribution.

          (ii) Any action of the Board of Directors of the Company ordering
the  exchange  of  any  Rights  pursuant  to  Section   11(b)(i)  shall  be
irrevocable and, immediately upon the taking of such action and without any
further action and

<PAGE>
without  any  notice,  the right to  exercise  any such Right  pursuant  to
Section 11(a) shall terminate and the only right  thereafter of a holder of
such Right shall be to receive the Exchange  Consideration  in exchange for
each such Right held by such holder or, if the Exchange Consideration shall
not have been paid or  issued,  to  exercise  any such  Right  pursuant  to
Section 11(c)(i). The Company shall promptly give public notice of any such
exchange;  PROVIDED,  HOWEVER,  that the failure to give, or any defect in,
such notice  shall not affect the  validity of such  exchange.  The Company
promptly  shall mail a notice of any such  exchange  to all holders of such
Rights at their last  addresses as they appear upon the  registry  books of
the Rights Agent or, prior to the Distribution  Date, on the registry books
of the transfer agent for the Common Shares.  Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice.  Each such notice of exchange will state the method by
which the  exchange of the Rights for the  Exchange  Consideration  will be
effected  and, in the event of any partial  exchange,  the number of Rights
which will be exchanged.  Any partial  exchange  shall be effected pro rata
based on the number of Rights  (other than  Rights  which shall have become
null and void and  nontransferable  pursuant to the  provisions  of Section
7(e)) held by each holder of Rights.

          (c)(i) In the event that, following a Distribution Date, directly
or indirectly,  any transactions specified in the following clause (A), (B)
or (C) of this  Section  11(c)  (each such  transaction  being a  "Business
Combination") shall be consummated:

                  (A) the Company shall  consolidate  with,  merge with and
         into, or enter into a share exchange with any Acquiring  Person or
         any Affiliate or Associate of an Acquiring Person;

                  (B) any Acquiring Person or any Affiliate or Associate of
         an  Acquiring  Person  shall  merge  with and into or enter into a
         share  exchange  with the  Company  and, in  connection  with such
         merger or share  exchange,  all or part of the Common Shares shall
         be changed into or exchanged for capital stock or other securities
         of  the  Company  or of  any  Acquiring  Person  or  Affiliate  or
         Associate of an Acquiring Person or cash or any other property; or
<PAGE>

                  (C) the Company shall sell, lease,  exchange or otherwise
         transfer or dispose of (or one or more of its  Subsidiaries  shall
         sell, lease, exchange or otherwise transfer or dispose of), in one
         or more transactions,  the Major Part of the assets of the Company
         and its Subsidiaries (taken as a whole) to any Acquiring Person
         or any Affiliate or Associate of an Acquiring Person;

then, in each such case, proper provision shall be made so that each holder
of a Right,  except as provided in Section 7(e),  shall thereafter have the
right to  receive,  upon the  exercise  thereof for the  Purchase  Price in
accordance  with  the  terms  of  this  Rights  Agreement,  the  securities
specified below (or, at such holder's option,  the securities  specified in
Section 11(a)):

         (x) if the  Principal  Party  in  such  Business  Combination  has
         Registered Common Shares outstanding,  each Right shall thereafter
         represent the right to receive,  upon the exercise thereof for the
         Purchase  Price  in  accordance  with  the  terms  of this  Rights
         Agreement,  such  number  of  Registered  Common  Shares  of  such
         Principal  Party,  free and clear of all  liens,  encumbrances  or
         other  adverse  claims,  as shall have an  aggregate  Market Value
         equal to the result  obtained by multiplying the Purchase Price by
         two; or

         (y) if the Principal  Party involved in such Business  Combination
         does not have  Registered  Common Shares  outstanding,  each Right
         shall thereafter represent the right to receive, upon the exercise
         thereof for the  Purchase  Price in  accordance  with the terms of
         this Rights Agreement, at the election of the holder of such Right
         at the time of the exercise thereof, any of:

                  (1) such number of Common Shares of the Surviving  Person
         in such Business Combination as shall have an aggregate Book Value
         immediately after giving effect to such Business Combination equal
         to the result obtained by multiplying the Purchase Price by two;

                  (2) such number of Common Shares of the  Principal  Party
         in such Business  Combination  (if the Principal Party is not also
         the Surviving  Person in such Business  Combination) as shall have
         an aggregate  Book Value  immediately  after giving effect to such
         Business  Combination  equal to the result obtained by multiplying
         the Purchase Price by two; or
<PAGE>

                  (3) if the Principal  Party in such Business  Combination
         is an Affiliate of one or more Persons which has Registered Common
         Shares  outstanding,  such number of  Registered  Common Shares of
         whichever of such Affiliates of the Principal Party has Registered
         Common Shares with the greatest aggregate Market Value on the date
         of  consummation  of such  Business  Combination  as shall have an
         aggregate  Market Value on the date of such  Business  Combination
         equal to the result  obtained by multiplying the Purchase Price by
         two.

          (ii) The Company shall not  consummate  any Business  Combination
unless each issuer of Common Shares for which Rights may be  exercised,  as
set forth in this Section 11(c),  shall have sufficient  authorized  Common
Shares that have not been issued or reserved for issuance (and which shall,
when issued upon exercise thereof in accordance with this Rights Agreement,
be validly  issued,  fully paid and  nonassessable  and free of  preemptive
rights, rights of first refusal or any other restrictions or limitations on
the  transfer or  ownership  thereof) to permit the exercise in full of the
Rights in accordance with this Section 11(c) and unless prior thereto:

                  (A) a registration  statement under the Securities Act on
         an  appropriate  form,  with  respect to the Rights and the Common
         Shares of such  issuer  purchasable  upon  exercise of the Rights,
         shall be effective under the Securities Act; and

                  (B) the Company and each such issuer shall have:

                           (1) executed and delivered to the Rights Agent a
                  supplemental  agreement  providing for the  assumption by
                  such issuer of the  obligations set forth in this Section
                  11(c)  (including  the obligation of such issuer to issue
                  Common  Shares upon the exercise of Rights in  accordance
                  with  the  terms  set  forth  in  Sections  11(c)(i)  and
                  11(c)(iii))  and further  providing that such issuer,  at
                  its own expense, will use its best efforts to:

                                    (x)  cause  a  registration   statement
                           under the Securities Act on an appropriate form,
                           with respect to the Rights and the Common Shares
                           of such issuer  purchasable upon exercise of the
                           Rights,  to remain  effective
<PAGE>
                           (with a prospectus  at  all  times  meeting  the
                           requirements  of the Securities Act)  until  the
                           Expiration Date;

                                    (y) qualify or register  the Rights and
                           the  Common  Shares of such  issuer  purchasable
                           upon  exercise of the Rights  under the blue sky
                           or securities laws of such  jurisdictions as may
                           be necessary or appropriate; and

                                    (z)  list  the  Rights  and the  Common
                           Shares of such issuer  purchasable upon exercise
                           of  the  Rights  on  each  national   securities
                           exchange on which the Common  Shares were listed
                           prior  to  the   consummation  of  the  Business
                           Combination  or, if the Common  Shares  were not
                           listed on a national  securities  exchange prior
                           to the consummation of the Business Combination,
                           on a national securities exchange;

                           (2)  furnished  to the  Rights  Agent a  written
                  opinion  of   independent   counsel   stating  that  such
                  supplemental   agreement   is  a   valid,   binding   and
                  enforceable agreement of such issuer; and

                           (3) filed with the Rights Agent a certificate of
                  a nationally  recognized firm of independent  accountants
                  setting  forth the number of Common Shares of such issuer
                  which may be  purchased  upon the  exercise of each Right
                  after the consummation of such Business Combination.

          (iii) After consummation of any Business  Combination and subject
to the  provisions of Section  11(c)(ii),  (A) each issuer of Common Shares
for which Rights may be exercised as set forth in this Section  11(c) shall
be liable for, and shall assume,  by virtue of such  Business  Combination,
all the  obligations  and duties of the  Company  pursuant  to this  Rights
Agreement,  (B) the term "Company"  shall  thereafter be deemed to refer to
such issuer,  (C) each such issuer shall take such steps in connection with
such  consummation as may be necessary to assure that the provisions hereof
(including the provisions of Sections 11(a) and 11(c)) shall  thereafter be
applicable,  as nearly as  reasonably  may be, in  relation  to its  Common
Shares  thereafter  deliverable upon the exercise of the Rights and (D) the
number of Common  Shares of each such
<PAGE>
issuer thereafter receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as nearly  equivalent
as  practicable  to the provisions of Sections 11 and 12 and the provisions
of Section 7, 9 and 10 with respect to the Preferred Shares shall apply, as
nearly as reasonably may be, on like terms to any such Common Shares.

          SECTION 12.  CERTAIN  ADJUSTMENTS.  (a) To preserve the actual or
potential  economic  value of the Rights,  if at any time after the date of
this Rights Agreement there shall be any change in the Common Shares or the
Preferred  Shares,  whether  by reason of share  dividends,  share  splits,
recapitalizations,  mergers,  consolidations,  combinations or exchanges of
securities, split-ups, split-offs,  spin-offs,  liquidations, other similar
changes in  capitalization,  any distribution or issuance of cash,  assets,
evidences of indebtedness or  subscription  rights,  options or warrants to
holders of Common  Shares or  Preferred  Shares,  as the case may be (other
than  distribution  of the Rights or regular  quarterly cash  dividends) or
otherwise,  then,  in each such event the Board of Directors of the Company
shall make such  appropriate  adjustments in the number of Preferred Shares
(or the number and kind of other securities) issuable upon exercise of each
Right,  the Purchase Price and Redemption  Price in effect at such time and
the  number of Rights  outstanding  at such time  (including  the number of
Rights or fractional  Rights  associated  with each Common Share) such that
following  such  adjustment  such  event  shall not have had the  effect of
reducing or limiting  the benefits the holders of the Rights would have had
absent such event.

          (b) If, as a result of an  adjustment  made  pursuant  to Section
12(a), the holder of any Right  thereafter  exercised shall become entitled
to receive any  securities  other than  Preferred  Shares,  thereafter  the
number of such securities so receivable upon exercise of any Right shall be
subject to adjustment  from time to time in a manner and on terms as nearly
equivalent as  practicable  to the provisions of Sections 11 and 12 and the
provisions  of Sections 7, 9 and 10 with  respect to the  Preferred  Shares
shall  apply,  as nearly as  reasonably  may be, on like  terms to any such
other securities.

          (c) All Rights originally issued by the Company subsequent to any
adjustment  made to the  amount of  Preferred  Shares  or other  securities
relating to a Right shall
<PAGE>
evidence the right to purchase, for the Purchase Price, the adjusted number
and  kind of  securities  purchasable  from  time to  time  hereunder  upon
exercise  of the  Rights,  all  subject to further  adjustment  as provided
herein.

          (d)  Irrespective  of any  adjustment  or change in the  Purchase
Price  or the  number  of  Preferred  Shares  or  number  or kind of  other
securities issuable upon the exercise of the Rights, the Right Certificates
theretofore  and thereafter  issued may continue to express the terms which
were expressed in the initial Right Certificates issued hereunder.

          (e) In any case in which action taken  pursuant to Section  12(a)
requires  that an  adjustment  be made  effective as of a record date for a
specified  event,  the Company may elect to defer until the  occurrence  of
such  event the  issuing to the  holder of any Right  exercised  after such
record date the Preferred Shares and/or other securities,  if any, issuable
upon such  exercise  over and  above  the  Preferred  Shares  and/or  other
securities,  if any,  issuable  before  giving  effect to such  adjustment;
PROVIDED, HOWEVER, that the Company shall deliver to such holder a due bill
or other appropriate  instrument  evidencing such holder's right to receive
such additional  securities upon the occurrence of the event requiring such
adjustment.

          SECTION 13. CERTIFICATE OF ADJUSTMENT.  Whenever an adjustment is
made as  provided  in  Section  11 or 12, the  Company  shall (a)  promptly
prepare a certificate  setting forth such  adjustment and a brief statement
of the facts  accounting  for such  adjustment,  (b) promptly file with the
Rights Agent and with each transfer  agent for the Preferred  Shares a copy
of such  certificate and (c) mail a brief summary thereof to each holder of
a Right  Certificate  (or,  prior to the  Distribution  Date, of the Common
Shares) in  accordance  with  Section  25. The Rights  Agent shall be fully
protected in relying on any such certificate and on any adjustment  therein
contained.

          SECTION 14. ADDITIONAL  COVENANTS.  (a) Notwithstanding any other
provision  of  this  Rights  Agreement,  no  adjustment  to the  number  of
Preferred  Shares (or fractions of a share) or other securities for which a
Right is exercisable or the number of Rights outstanding or associated with
each Common  Share or any similar or other  adjustment  shall be made or be
effective if such adjustment  would have the effect of reducing or limiting
the  benefits  the  holders
<PAGE>
of the Rights  would have had absent such  adjustment,  including,  without
limitation, the benefits under Sections 11 and 12, unless the terms of this
Rights Agreement are amended so as to preserve such benefits.

          (b) The Company covenants and agrees that, after the Distribution
Date,  except as  permitted  by Section 26, it will not take (or permit any
Subsidiary of the Company to take) any action if at the time such action is
taken it is intended or reasonably foreseeable that such action will reduce
or  otherwise  limit the  benefits the holders of the Rights would have had
absent such action,  including,  without  limitation,  the  benefits  under
Sections 11 and 12. Any action taken by the Company during any period after
any Person becomes an Acquiring Person but prior to the  Distribution  Date
shall be null and void unless such action could be taken under this Section
14(b)  from  and  after  the  Distribution  Date.  The  Company  shall  not
consummate  any  Business  Combination  if any issuer of Common  Shares for
which Rights may be exercised after such Business Combination in accordance
with  Section  11(c) shall have taken any action that  reduces or otherwise
limits the  benefits  the holders of the Rights  would have had absent such
action, including,  without limitation,  the benefits under Sections 11 and
12.

          SECTION 15.  FRACTIONAL  RIGHTS AND  FRACTIONAL  SHARES.  (a) The
Company may,  but shall not be required  to,  issue  fractions of Rights or
distribute Right Certificates which evidence  fractional Rights. In lieu of
such fractional  Rights,  the Company may pay to the registered  holders of
the Right  Certificates  with regard to which such fractional  Rights would
otherwise  be issuable an amount in cash equal to the same  fraction of the
current market value of a whole Right.  For purposes of this Section 15(a),
the current market value of a whole Right shall be the closing price of the
Rights (as  determined  pursuant to the second and third  sentences  of the
definition  of Market  Value  contained  in Section 1) for the  Trading Day
immediately  prior to the date on which such  fractional  Rights would have
been otherwise issuable.

          (b)  The  Company  may,  but  shall  not be  required  to,  issue
fractions  of Preferred  Shares upon  exercise or exchange of the Rights or
distribute certificates which evidence fractional Preferred Shares. In lieu
of  fractional  Preferred  Shares,  the  Company may elect to (i) utilize a
depository  arrangement as provided by the terms of the
<PAGE>
Preferred  Shares or (ii) in the case of a fraction  of a  Preferred  Share
(other than  one-thousandth  (1/1,000) of a Preferred Share or any integral
multiple  thereof),  pay to the registered holders of Right Certificates at
the time such  Rights are  exercised  or  exchanged  as herein  provided an
amount in cash equal to the same  fraction of the current  market  value of
one Preferred  Share,  if any are  outstanding  and publicly traded (or the
Formula  Number  times the current  market value of one Common Share if the
Preferred Shares are not outstanding and publicly traded).  For purposes of
this  Section  15(b),  the current  market  value of a Preferred  Share (or
Common  Share) shall be the closing  price of a Preferred  Share (or Common
Share) (as  determined  pursuant to the second and third  sentences  of the
definition  of Market  Value  contained  in Section 1) for the  Trading Day
immediately prior to the date of such exercise or exchange. If, as a result
of an adjustment  made pursuant to Section  12(a),  the holder of any Right
thereafter  exercised shall become entitled to receive any securities other
than Preferred Shares, the provisions of this Section 15(b) shall apply, as
nearly as reasonably may be, on like terms to such other securities.

          (c)  The  Company  may,  but  shall  not be  required  to,  issue
fractions  of Common  Shares upon  exchange  of Rights  pursuant to Section
11(b), or to distribute  certificates or other evidences of ownership which
evidence  fractional  Common  Shares.  In lieu of  such  fractional  Common
Shares,  the  Company  may  pay  to the  registered  holders  of the  Right
Certificates  with  regard to which such  fractional  Common  Shares  would
otherwise  be issuable an amount in cash equal to the same  fraction of the
current  Market  Value of one Common Share as of the date on which a Person
became an Acquiring Person.

          (d)  The  holders  of  Rights  by the  acceptance  of  the  Right
Certificates  (or,  prior to the  Distribution  Date, of the Common Shares)
expressly  waives  the  right  to  receive  any  fractional  Rights  or any
fractional  shares  upon  exercise  of a Right  except as  provided in this
Section 15.

          SECTION 16. RIGHTS OF ACTION. (a) All rights of action in respect
of this Rights Agreement are vested in the respective registered holders of
the Right Certificates (and, prior to the Distribution Date, the registered
holders  of the  Common  Shares);  and any  registered  holder of any Right
Certificate  (or, prior to the  Distribution  Date, of the Common  Shares),
without the consent of the Rights Agent
<PAGE>
or of  the  holder  of  any  other  Right  Certificate  (or,  prior  to the
Distribution Date, of the Common Shares) may, in his own behalf and for his
own benefit,  enforce,  and may institute and maintain any suit,  action or
proceeding against the Company to enforce,  or otherwise act in respect of,
his right to exercise the Rights evidenced by such Right Certificate in the
manner  provided in such Right  Certificate  and in this Rights  Agreement.
Without limiting the foregoing or any remedies  available to the holders of
Rights,  it is specifically  acknowledged  that the holders of Rights would
not have an adequate remedy at law for any breach of this Rights  Agreement
and shall be entitled to specific  performance  of the  obligations  of any
Person under, and injunctive relief against actual or threatened violations
of the obligations of any Person subject to, this Rights Agreement.

          (b) Any holder of Rights who prevails in an action to enforce the
provisions  of this  Rights  Agreement  shall be  entitled  to recover  the
reasonable costs and expenses,  including attorneys' fees, incurred in such
action.

          SECTION  17.   TRANSFER   AND   OWNERSHIP  OF  RIGHTS  AND  RIGHT
CERTIFICATES.  (a)  Prior to the  Distribution  Date,  the  Rights  will be
transferable  only in connection with the transfer of the Common Shares and
the  Rights  associated  with the  Common  Shares  shall  be  automatically
transferred upon the transfer of the Common Shares.

          (b) After the Distribution  Date, the Right  Certificates will be
transferable,  subject to Section 7(e),  only on the registry  books of the
Rights Agent if  surrendered  at the principal  office of the Rights Agent,
duly endorsed or accompanied by a proper instrument of transfer.

          (c) The  Company  and the  Rights  Agent  may deem and  treat the
Person in whose name a Right  Certificate  (or,  prior to the  Distribution
Date, the  associated  certificate or other evidence of ownership of Common
Shares) is  registered  as the  absolute  owner  thereof  and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on
the Right  Certificates or the associated  certificate or other evidence of
ownership  of Common  Shares  made by anyone  other than the Company or the
Rights Agent) for all purposes whatsoever,  and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary.

<PAGE>
          SECTION 18. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder,  as such,  of any Right  Certificate  shall be  entitled to vote or
receive  dividends  or be  deemed,  for  any  purpose,  the  holder  of the
Preferred Shares or of any other securities of the Company which may at any
time be  issuable on the  exercise  or  exchange of the Rights  represented
thereby, nor shall anything contained herein or in any Right Certificate be
construed to confer upon the holder of any Right Certificate,  as such, any
of  the  rights  of  a  shareholder  of  the  Company,  including,  without
limitation,  any right to vote for the  election of  directors  or upon any
matter  submitted to  shareholders  at any meeting  thereof,  or to give or
withhold consent to any corporate  action, or to receive notice of meetings
or other actions affecting  shareholders,  or to receive dividends or other
distributions  or  subscription  rights,  or otherwise,  until the Right or
Rights  evidenced by such Right  Certificate  shall have been  exercised or
exchanged in accordance with the provisions hereof.

          SECTION 19.  CONCERNING THE RIGHTS AGENT.  (a) The Company agrees
to pay  to the  Rights  Agent  reasonable  compensation  for  all  services
rendered by it hereunder from time to time and its reasonable  expenses and
counsel fees and other  disbursements  incurred in the  administration  and
execution of this Rights  Agreement and the exercise and performance of its
duties hereunder.

          (b) The  Rights  Agent  shall be  protected  and  shall  incur no
liability for or in respect of any action taken,  suffered or omitted by it
in connection with its  administration of this Rights Agreement in reliance
upon any Right Certificate or certificate or other evidence of ownership of
the Common  Shares or for other  securities  of the Company,  instrument of
assignment or transfer, power of attorney, endorsement,  affidavit, letter,
notice,  direction,  consent,  certificate,  statement,  or other  paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons.

          SECTION 20.  MERGER OR  CONSOLIDATION  OR CHANGE OF RIGHTS AGENT.
(a) Any  corporation  into which the Rights Agent or any  successor  Rights
Agent  may  be  merged  or  with  which  it  may  be  consolidated,  or any
corporation  resulting from any merger or consolidation to which the Rights
Agent or any successor  Rights Agent shall be a party,  or any  corporation
succeeding to the stock transfer or corporate
<PAGE>
trust business of the Rights Agent or any successor Rights Agent,  shall be
the successor to the Rights Agent under this Rights  Agreement  without the
execution  or filing of any paper or any  further act on the part of any of
the parties hereto;  PROVIDED that such  corporation  would be eligible for
appointment as a successor Rights Agent under the provisions of Section 22.
In case,  at the time such  successor  Rights  Agent  shall  succeed to the
agency  created by this  Rights  Agreement,  any of the Right  Certificates
shall have been countersigned but not delivered,  any such successor Rights
Agent may adopt the  countersignature  of the predecessor  Rights Agent and
deliver such Right Certificates so countersigned; and, in case at that time
any of the  Right  Certificates  shall  not have  been  countersigned,  any
successor  Rights Agent may countersign such Right  Certificates  either in
the name of the  predecessor  Rights Agent or in the name of the  successor
Rights Agent; and in all such cases such Right  Certificates shall have the
full force provided in the Right Certificates and in this Rights Agreement.

          (b) In case at any  time the name of the  Rights  Agent  shall be
changed  and at such time any of the  Right  Certificates  shall  have been
countersigned   but  not   delivered,   the  Rights  Agent  may  adopt  the
countersignature  under its prior name and deliver  Right  Certificates  so
countersigned;  and,  in case at that  time any of the  Right  Certificates
shall not have been  countersigned,  the Rights Agent may countersign  such
Right Certificates  either in its prior name or in its changed name; and in
all such cases such Right  Certificates  shall have the full force provided
in the Right Certificates and in this Rights Agreement.

          SECTION 21. DUTIES OF RIGHTS AGENT.  The Rights Agent  undertakes
the  duties  and  obligations  imposed by this  Rights  Agreement  upon the
following terms and conditions, by all of which the Company and the holders
of Right  Certificates  (or, prior to the Distribution  Date, of the Common
Shares), by their acceptance thereof, shall be bound:

          (a) The Rights Agent may consult with legal counsel  satisfactory
to it (who may be legal counsel for the  Company),  and the opinion of such
counsel  shall be full and complete  authorization  and  protection  to the
Rights  Agent as to any  action  taken,  suffered  or omitted by it in good
faith and in accordance with such opinion.

          (b) Whenever in the  performance  of its duties under this Rights
Agreement  the Rights Agent shall deem it
<PAGE>
necessary  or  desirable  that  any  fact  or  matter  (including,  without
limitation,  the identity of any Acquiring Person) be proved or established
by the Company  prior to taking,  refraining  from taking or suffering  any
action  hereunder,  such fact or matter  (unless other  evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and  established by a certificate  signed by any one of the Chairman
of the  Board,  the  Chief  Executive  Officer,  the  President,  the Chief
Operating  Officer,  the Chief Financial Officer, a Vice President (whether
preceded by any  additional  title),  the Treasurer or the Secretary of the
Company and delivered to the Rights Agent;  and such  certificate  shall be
full  authorization to the Rights Agent for any action taken or suffered in
good faith by it under the provisions of this Rights  Agreement in reliance
upon such certificate.

          (c) The Rights Agent shall be liable  hereunder  only for its own
negligence, bad faith or wilful misconduct.

          (d) The Rights  Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Rights Agreement or
in the Right Certificates (except as to its countersignature thereof) or be
required to verify the same,  but all such  statements and recitals are and
shall be deemed to have been made by the Company only.

          (e) The Rights  Agent  shall not be under any  responsibility  in
respect of the  validity  of this Rights  Agreement  or the  execution  and
delivery hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Right  Certificate  (except its
countersignature  thereof);  nor shall it be responsible  for any breach by
the Company of any covenant or condition contained in this Rights Agreement
or in any  Right  Certificate;  nor shall it have any  responsibility  with
respect to any of exercise of Rights by an Acquiring  Person in whose hands
the Rights are null and void and  nontransferable  unless the Company shall
have given  actual  notice to the Rights  Agent of the identity of any such
Acquiring Person;  nor shall it be responsible for any adjustment  required
under the  provisions  of Section 11 or 12 or  responsible  for the manner,
method  or  amount  of  any  such  adjustment  or the  ascertaining  of the
existence  of facts that would  require any such  adjustment  (except  with
respect to the  exercise of Rights  evidenced by Right  Certificates  after
actual notice of any such adjustment); nor shall it by
<PAGE>
any act  hereunder be deemed to make any  representation  or warranty as to
the  authorization  or reservation of any Preferred Shares or Common Shares
to be issued pursuant to this Rights Agreement or any Right  Certificate or
as to whether any Preferred  Shares or Common Shares will,  when so issued,
be validly authorized and issued, fully paid and nonassessable.

          (f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed,  acknowledged and delivered
all  such  further  and  other  acts,  instruments  and  assurances  as may
reasonably  be  required  by the  Rights  Agent  for  the  carrying  out or
performing by the Rights Agent of the provisions of this Rights Agreement.

          (g) The Rights Agent is hereby  authorized and directed to accept
instructions  with respect to the performance of its duties  hereunder from
any one of the  Chairman of the Board,  the Chief  Executive  Officer,  the
President, the Chief Operating Officer, the Chief Financial Officer, a Vice
President  (whether preceded by any additional title), the Secretary or the
Treasurer  of the  Company,  and to apply to such  officers  for advice and
instructions  in connection  with its duties and it shall not be liable for
any action taken or suffered to be taken by it in good faith in  accordance
with instructions of any such officer.

          (h) The  Rights  Agent and any  shareholder,  director,  officer,
employee or affiliate  of the Rights Agent may buy,  sell or deal in any of
the  Rights  or other  securities  of the  Company  or  become  pecuniarily
interested in any  transaction in which the Company may be  interested,  or
contract  with or lend money to the Company or  otherwise  act as fully and
freely as though it were not the Rights Agent under this Rights  Agreement.
Nothing  herein  shall  preclude  the Rights Agent from acting in any other
capacity for the Company or for any other legal entity.

          (i) The Rights  Agent may execute and  exercise any of the rights
or powers hereby vested in it or perform any duty  hereunder  either itself
or by or through its  attorneys or agents and the Rights Agent shall not be
answerable or accountable  for any act,  default,  neglect or misconduct of
any such attorneys or agents or for any loss to the Company  resulting from
any such act, default,  neglect or misconduct  provided reasonable care was
exercised in the selection and continued employment thereof.

<PAGE>
          (j) The Company  agrees to indemnify and to hold the Rights Agent
harmless  against  any  loss,  liability,   damage  or  expense  (including
reasonable  fees and expenses of legal  counsel) which the Rights Agent may
incur  resulting  from its actions as Rights Agent  pursuant to this Rights
Agreement;   PROVIDED,   HOWEVER,  that  the  Rights  Agent  shall  not  be
indemnified  or held  harmless  with  respect to any such loss,  liability,
damage or expense  incurred by the Rights  Agent as a result of, or arising
out of,  its own  negligence,  bad faith or wilful  misconduct.  The Rights
Agent shall  notify the  Company,  by letter or by  facsimile  confirmed by
letter, of the assertion of any action,  proceeding,  suit or claim against
the Rights Agent,  promptly after the Rights Agent shall have notice of any
such assertion of an action, proceeding,  suit or claim or have been served
with the summons or other first legal process giving  information as to the
nature and basis of the  action,  proceeding,  suit or claim.  The  Company
shall not be liable with  respect to any such action,  proceeding,  suit or
claim to the  extent  that any  failure  of the  Rights  Agent so to notify
promptly the Company  prejudices  the rights of the Company with respect to
such  action,  proceeding,  suit or  claim.  The  Company  shall at its own
expense assume the defense of any such action,  proceeding,  suit or claim.
In the event that the Company  assumes such defense,  the Company shall not
thereafter  be liable for the fees and expenses of any  additional  counsel
retained by the Rights Agent,  so long as the Company shall retain  counsel
satisfactory  to the  Rights  Agent,  in  the  exercise  of its  reasonable
judgment,  to defend such action,  proceeding,  suit or claim. In the event
the Company  fails so to defend,  the Rights Agent agrees not to settle any
litigation in connection  with any action,  proceeding,  suit or claim with
respect to which it may seek  indemnification  from the Company without the
prior written consent of the Company.

          (k) The Rights  Agent shall be under no  obligation  to institute
any action,  suit or legal proceeding or to take any other action likely to
involve  expense  unless the Company or one or more  registered  holders of
Right  Certificates  shall  furnish  the  Rights  Agent with  security  and
indemnity  to its  satisfaction  for any  costs and  expenses  which may be
incurred.

          (l) The Rights  Agent  shall not be liable for failure to perform
any duties except as specifically set forth herein and no implied covenants
or obligations  shall be read into this Agreement against the Rights Agent,
whose
<PAGE>
duties and obligations  are  ministerial and shall be determined  solely by
the express provisions hereof.

          SECTION  22.  CHANGE OF RIGHTS  AGENT.  The  Rights  Agent or any
successor  Rights Agent may resign and be discharged  from its duties under
this Rights Agreement upon 30 days' notice in writing mailed to the Company
and to each transfer agent of the Common Shares and the Preferred Shares by
registered or certified mail, and to the holders of the Right  Certificates
(or, prior to the  Distribution  Date, of the Common Shares) by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent
upon 30 days'  notice in writing,  mailed to the Rights  Agent or successor
Rights Agent,  as the case may be, and to each transfer agent of the Common
Shares and the Preferred Shares by registered or certified mail, and to the
holders of the Right  Certificates (or, prior to the Distribution  Date, of
the Common Shares) by first-class mail. If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent.  If the Company shall fail to make
such  appointment  within a period of 30 days after  giving  notice of such
removal or after it has been  notified  in writing of such  resignation  or
incapacity by the resigning or incapacitated  Rights Agent or by the holder
of a Right  Certificate (or, prior to the Distribution  Date, of the Common
Shares) who shall,  with such  notice,  submit his Right  Certificate  (or,
prior to the  Distribution  Date,  the  certificate  or other  evidence  of
ownership of his Common  Shares) for  inspection  by the Company,  then the
registered  holder of any Right  Certificate (or, prior to the Distribution
Date,  of  the  Common   Shares)  may  apply  to  any  court  of  competent
jurisdiction  for the  appointment  of a new Rights  Agent.  Any  successor
Rights Agent, whether appointed by the Company or by such a court, shall be
a  corporation  organized and doing  business  under the laws of the United
States or of any state of the United  States,  in good  standing,  having a
principal office in the United States,  which is authorized under such laws
to exercise  stock  transfer or  corporate  trust  powers and is subject to
supervision or  examination by Federal or state  authority and which has at
the time of its appointment as Rights Agent a combined  capital and surplus
of at least $50,000,000; PROVIDED that the principal transfer agent for the
Common Shares shall in any event be qualified to be the Rights Agent. After
appointment,  the  successor  Rights  Agent  shall be vested  with the same
powers,  rights,  duties and  responsibilities as if it had been originally
named as Rights  Agent  without  further act or deed;  but the  predeces-
<PAGE>
sor Rights Agent shall deliver and transfer to the  successor  Rights Agent
any property at the time held by it hereunder,  and execute and deliver any
further assurance,  conveyance,  act or deed necessary for the purpose. Not
later than the effective  date of any such  appointment,  the Company shall
file notice thereof in writing with the  predecessor  Rights Agent and each
transfer  agent of the Common Shares and the Preferred  Shares,  and mail a
notice  thereof  in  writing  to  the  registered   holders  of  the  Right
Certificates  (or, prior to the  Distribution  Date, of the Common Shares).
Failure to give any notice provided for in this Section 22, however, or any
defect therein shall not affect the legality or validity of the resignation
or removal of the Rights Agent or the  appointment of the successor  Rights
Agent, as the case may be.

          SECTION 23. ISSUANCE OF ADDITIONAL RIGHTS AND RIGHT CERTIFICATES.
Notwithstanding  any of the  provisions of this Rights  Agreement or of the
Rights to the  contrary,  the Company  may, at its option,  issue new Right
Certificates evidencing Rights in such form as may be approved by its Board
of Directors to reflect any  adjustment or change made in  accordance  with
the provisions of this Rights  Agreement.  In addition,  in connection with
the issuance or sale of Common Shares following the  Distribution  Date and
prior to the earlier of the Redemption  Date and the  Expiration  Date, the
Company (a) shall, with respect to Common Shares so issued or sold pursuant
to the exercise of stock options or under any employee plan or arrangement,
or upon the  exercise,  conversion  or  exchange  of  securities,  notes or
debentures issued by the Company, and (b) may, in any other case, if deemed
necessary or  appropriate  by the Board of Directors of the Company,  issue
Rights and  distribute  Right  Certificates  representing  the  appropriate
number of Rights  in  connection  with  such  issuance  or sale;  PROVIDED,
HOWEVER,  that (x) no such  Rights  shall be issued  if,  and to the extent
that,  the Company  shall be advised by counsel  that such  issuance  would
create a  significant  risk of  material  adverse tax  consequences  to the
Company or the Person to whom such Rights would be issued,  and (y) no such
Rights shall be issued if, and to the extent that,  appropriate  adjustment
shall otherwise have been made in lieu of the issuance thereof.

          SECTION  24.  REDEMPTION  AND  TERMINATION.   (a)  The  Board  of
Directors  of the  Company  may,  at its  option,  at any time prior to the
earlier of (i) such time as a Person  becomes an Acquiring  Person and (ii)
the Expiration  Date,
<PAGE>
order the  redemption of all, but not fewer than all, the then  outstanding
Rights  at the  Redemption  Price  (the date of such  redemption  being the
"Redemption  Date"), and the Company, at its option, may pay the Redemption
Price either in cash or Common  Shares or other  securities  of the Company
deemed by the Board of  Directors  of the  Company,  in the exercise of its
sole  discretion,  to be at least  equivalent  in  value to the  Redemption
Price.

          (b) Immediately  upon the action of the Board of Directors of the
Company  ordering  the  redemption  of the Rights,  and without any further
action and  without  any  notice,  the right to  exercise  the Rights  will
terminate  and the only right  thereafter of the holders of Rights shall be
to receive the Redemption  Price.  Within 10 Business Days after the action
of the Board of Directors of the Company  ordering  the  redemption  of the
Rights,  the Company shall give notice of such redemption to the holders of
the then  outstanding  Rights by mailing such notice to all such holders at
their last  addresses as they appear upon the registry  books of the Rights
Agent or, prior to the  Distribution  Date,  on the  registry  books of the
transfer agent for the Common Shares.  Each such notice of redemption  will
state the method by which payment of the Redemption Price will be made. The
notice,  if mailed in the manner  herein  provided,  shall be  conclusively
presumed  to have  been duly  given,  whether  or not the  holder of Rights
receives such notice. In any case,  failure to give such notice by mail, or
any defect in the  notice,  to any  particular  holder of Rights  shall not
affect the sufficiency of the notice to other holders of Rights.

          SECTION 25.  NOTICES.  Subject to the  provisions  of Section 22,
notices or demands  authorized by this Agreement to be given or made by the
Rights  Agent or by the  holder of a Right  Certificate  (or,  prior to the
Distribution  Date,  of the Common  Shares) to or on the  Company  shall be
sufficiently  given or made if sent by first-class  mail,  postage prepaid,
addressed (until another address is filed in writing with the Rights Agent)
as follows:

                  Ashland Inc.
                  P.O. Box 391
                  Ashland, KY 41114
                  Attention of General Counsel

Subject to the provisions of Section 22, any notice or demand authorized by
this Rights  Agreement  to be given or
<PAGE>
made by the Company or by the holder of a Right  Certificate  (or, prior to
the  Distribution  Date,  of the Common  Shares) to or on the Rights  Agent
shall be sufficiently  given or made if sent by first-class  mail,  postage
prepaid,  addressed  (until  another  address is filed in writing  with the
Company) as follows:

                   Harris Trust and Savings Bank
                   311 West Monroe
                   P.O. Box 755
                   Chicago, IL 60606
                   Attention:  Tod C. Shafer

Notices or demands  authorized by this Rights Agreement to be given or made
by the  Company  or the Rights  Agent to any holder of a Right  Certificate
(or,  prior  to the  Distribution  Date,  of the  Common  Shares)  shall be
sufficiently  given or made if sent by first-class  mail,  postage prepaid,
addressed  to such  holder at the  address  of such  holder as shown on the
registry books of the Rights Agent or, prior to the  Distribution  Date, on
the registry books of the transfer agent for the Common Shares.

          SECTION 26. SUPPLEMENTS AND AMENDMENTS.  At any time prior to the
Distribution  Date and subject to the last sentence of this Section 26, the
Company  may,  and the  Rights  Agent  shall  if the  Company  so  directs,
supplement  or amend any  provision  of this Rights  Agreement  (including,
without limitation,  the date on which the Distribution Date shall occur or
the time during  which the Rights may be  redeemed  pursuant to Section 24)
and the  Company  may amend any  provision  of the  Articles  of  Amendment
without  the  approval  of any  holder  of the  Rights.  From and after the
Distribution  Date and subject to applicable  law, the Company may, and the
Rights Agent shall if the Company so directs,  amend this Rights  Agreement
without the approval of any holders of Right  Certificates  (a) to cure any
ambiguity or to correct or supplement any provision  contained herein which
may be defective or  inconsistent  with any other  provision of this Rights
Agreement  or (b) to make any other  provisions  in regard  to  matters  or
questions  arising  hereunder  which  the  Company  may deem  necessary  or
desirable and which shall not adversely affect the interests of the holders
of Right  Certificates  (other than an Acquiring  Person or an Affiliate or
Associate of an Acquiring  Person).  Any  supplement  or amendment  adopted
during any period after any Person has become an Acquiring Person but prior
to the  Distribution  Date shall be null and void unless such
<PAGE>
supplement  or  amendment  could   have  been   adopted  under  the   prior
sentence from and after the Distribution  Date. Any supplement or amendment
to this Rights  Agreement  duly approved by the Company that does not amend
Sections  19, 20, 21 or 22 in a manner  adverse to the Rights  Agent  shall
become effective immediately upon execution by the Company,  whether or not
also executed by the Rights Agent. In addition, notwithstanding anything to
the contrary contained in this Rights Agreement, no supplement or amendment
to this Rights  Agreement  shall be made which (x)  reduces the  Redemption
Price (except as required by Section 12(a)), or (y) provides for an earlier
Expiration  Date or (z)  charges  the rights or duties of the Rights  Agent
without the consent of the Rights Agent.

          SECTION 27. SUCCESSORS.  All the covenants and provisions of this
Rights  Agreement  by or for the benefit of the Company or the Rights Agent
shall bind and inure to the  benefit  of their  respective  successors  and
assigns hereunder.

          SECTION 28.  BENEFITS  OF RIGHTS  AGREEMENT;  DETERMINATIONS  AND
ACTIONS  BY THE  BOARD  OF  DIRECTORS,  ETC.  (a)  Nothing  in this  Rights
Agreement  shall be construed to give to any Person other than the Company,
the Rights Agent and the registered holders of the Right Certificates (and,
prior  to the  Distribution  Date,  of the  Common  Shares)  any  legal  or
equitable  right,  remedy or claim  under this Rights  Agreement;  but this
Rights  Agreement  shall  be for the  sole  and  exclusive  benefit  of the
Company,  the  Rights  Agent  and  the  registered  holders  of  the  Right
Certificates (and, prior to the Distribution Date, of the Common Shares).

          (b)  Except  as  explicitly  otherwise  provided  in this  Rights
Agreement,  the Board of Directors of the Company  shall have the exclusive
power and authority to administer this Rights Agreement and to exercise all
rights and powers  specifically  granted to the Board of  Directors  of the
Company or to the  Company,  or as may be  necessary  or  advisable  in the
administration of this Rights Agreement, including, without limitation, the
right and power to (i)  interpret the  provisions of this Rights  Agreement
and (ii) make all  determinations  deemed  necessary or  advisable  for the
administration of this Rights Agreement (including,  without limitation,  a
determination  to redeem or not redeem  the Rights or to amend this  Rights
Agreement and whether there is an Acquiring Person).

<PAGE>
          (c) Nothing contained in this Rights Agreement shall be deemed to
be in derogation of the obligation of the Board of Directors of the Company
to exercise its fiduciary  duty.  Without  limiting the foregoing,  nothing
contained  herein  shall be construed to suggest or imply that the Board of
Directors shall not be entitled to reject any tender offer, or to recommend
that holders of Common Shares reject any tender offer, or to take any other
action  (including,  without  limitation,  the  commencement,  prosecution,
defense or settlement of any litigation and the submission of additional or
alternative  offers or other  proposals)  with  respect to any tender offer
that the Board of Directors  believes is necessary  or  appropriate  in the
exercise of such fiduciary duty.

          SECTION 29.  SEVERABILITY.  If any term,  provision,  covenant or
restriction  of this  Rights  Agreement  is held  by a court  of  competent
jurisdiction or other authority to be invalid,  void or unenforceable,  the
remainder of the terms,  provisions,  covenants  and  restrictions  of this
Rights  Agreement shall remain in full force and effect and shall in no way
be affected, impaired or invalidated.

          SECTION 30.  GOVERNING LAW. This Rights  Agreement and each Right
Certificate  issued  hereunder  shall be deemed to be a contract made under
the law of the  Commonwealth  of  Kentucky  and for all  purposes  shall be
governed  by and  construed  in  accordance  with  the  law of  such  State
applicable  to  contracts  to be made and  performed  entirely  within such
State.

          SECTION 31.  COUNTERPARTS;  EFFECTIVENESS.  This Rights Agreement
may be executed in any number of counterparts and each of such counterparts
shall  for  all  purposes  be  deemed  to  be an  original,  and  all  such
counterparts  shall together  constitute  but one and the same  instrument.
This Rights Agreement shall be effective as of the Close of Business on the
date hereof.

          SECTION 32.  DESCRIPTIVE  HEADINGS.  Descriptive  headings of the
several Sections of this Rights Agreement are inserted for convenience only
and shall not control or
<PAGE>

affect the meaning or  construction  of any of the provisions of this Rights
Agreement.

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

                                   ASHLAND INC.,

                                     by   /s/  Paul W. Chellgren
                                     ------------------------------
                                   Name:  Paul W. Chellgren
                                   Title: President, Chief Operating Officer

                                   HARRIS TRUST AND SAVINGS BANK,
                                     as Rights Agent,

                                     by   /s/  Tod C. Shafer
                                     ------------------------------
                                   Name:  Tod C. Shafer
                                   Title: Vice President


<PAGE>
EXHIBIT A

                              ARTICLES OF AMENDMENT

                                       TO

                    SECOND RESTATED ARTICLES OF INCORPORATION

                                       OF

                                  ASHLAND INC.

                                 AMENDMENT NO. 5

Pursuant to the provisions of Section  271B.10-060 of the Kentucky Business
Corporation Act, the undersigned  corporation adopts the following articles
of amendment to set forth the preferences,  limitations and relative rights
of a series of shares of its Cumulative Preferred Stock, without par value,
under Article IV of its Second Restated Articles of Incorporation.


     FIRST: The name of the Corporation is Ashland Inc.

     SECOND: The text of the amendment  determining the terms of the series
of shares of the Cumulative Preferred Stock is as follows:

     I.  DESIGNATION  AND NUMBER OF SHARES.  This series of the  Cumulative
Preferred Stock shall be designated as "Series A  Participating  Cumulative
Preferred  Stock" (the  "Series A Preferred  Stock").  The number of shares
initially  issuable  as the  Series A  Preferred  Stock  shall be  500,000;
provided, however, that, if more than a total of 500,000 shares of Series A
Preferred  Stock  shall  be  issuable  upon the  exercise  of  Rights  (the
"Rights") issued pursuant to the Rights Agreement dated as of May 16, 1996,
between the  Corporation and Harris Trust and Savings Bank, as Rights Agent
(the  "Rights  Agreement"),  the  Board of  Directors  of the  Corporation,
pursuant to Section  271B.10-060 of the Kentucky Business  Corporation Act,
shall direct by resolution or resolutions that Articles of Amendment of the
Articles of Incorporation of the Corporation be properly executed and filed
with the  Secretary of State of Kentucky  providing for the total number of
shares  issuable as Series A Preferred Stock to be increased (to the extent
that the Articles of  Incorporation  then permit) to the largest  number of
whole  shares  (rounded  up to the  nearest  whole  number)  issuable  upon
exercise of such Rights.

     II. DIVIDENDS OR DISTRIBUTIONS.  (a) Subject to the prior and superior
rights of the holders of shares of any other series of  Preferred  Stock or
other class of capital stock of the Corporation  ranking prior and superior
to the shares of Series A Preferred  Stock with respect to  dividends,  the
holders of shares of the Series A  Preferred  Stock  shall be  entitled  to
receive,  when,  as and if declared by the Board of  Directors,  out of the
assets  of  the  Corporation  legally  available  therefor,  (i)  quarterly
dividends  payable in cash on the last day of each  fiscal  quarter in each
year,  or such other  dates as the Board of  Directors  of the  Corporation
shall  approve  (each such date being  referred  to herein as a  "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment
Date after the first issuance of a share or a fraction of a share of Series
A Preferred  Stock,  in the amount of $.01 per whole share  (rounded to the
nearest cent), less the amount of all cash dividends declared on the Series
A  Preferred  Stock  pursuant  to  the  following  clause  (ii)  since  the
immediately  preceding  Quarterly Dividend Payment Date or, with respect to
the first Quarterly  Dividend Payment Date, since the first issuance of any
share or  fraction  of a share of Series A  Preferred  Stock  (the total of
which  shall  not,  in any  event,  be less than  zero) and (ii)  dividends
payable in cash on the payment date for each cash dividend  declared on the
Common  Stock in an amount per whole share  (rounded  to the nearest  cent)
equal to the Formula Number (as  hereinafter  defined) then in effect times
the cash  dividends  then to be paid on each  share  of  Common  Stock.  In
addition,   if  the  Corporation   shall  pay  any  dividend  or  make  any
distribution  on the Common Stock  payable in assets,  securities  or other
forms of non-cash  consideration  (other than  dividends  or  distributions
solely in shares of Common Stock), then, in each such case, the Corporation
shall  simultaneously pay or make on each outstanding whole share of Series
A  Preferred  Stock a dividend  or  distribution  in like kind equal to the
Formula Number then in effect times such dividend or  distribution  on each
share of the Common Stock.  As used herein,  the "Formula  Number" shall be
1,000;  PROVIDED,  HOWEVER,  that,  if at any time after May 16, 1996,  the
Corporation  shall (x)  declare or pay any  dividend  on the  Common  Stock
payable in shares of Common  Stock or make any  distribution  on the Common
Stock in  shares  of  Common  Stock,  (y)  subdivide  (by a stock  split or
otherwise) the  outstanding  shares of Common Stock into a larger number of
shares of Common Stock or (z) combine (by a

<PAGE>
reverse stock split or otherwise)  the  outstanding  shares of Common Stock
into a smaller number of shares of Common Stock,  then, in each such event,
the Formula Number shall be adjusted to a number  determined by multiplying
the Formula Number in effect immediately prior to such event by a fraction,
the  numerator  of which is the  number of shares of Common  Stock that are
outstanding  immediately  after such event and the  denominator of which is
the number of shares of Common Stock that are outstanding immediately prior
to such event (and  rounding the result to the nearest whole  number);  and
PROVIDED FURTHER,  that, if at any time after May 16, 1996, the Corporation
shall issue any shares of its capital  stock in a merger,  share  exchange,
reclassification,  or change  of the  outstanding  shares of Common  Stock,
then,  in each  such  event,  the  Formula  Number  shall be  appropriately
adjusted to reflect such merger, share exchange, reclassification or change
so  that  each  share  of  Preferred  Stock  continues  to be the  economic
equivalent  of a Formula  Number of  shares of Common  Stock  prior to such
merger, share exchange, reclassification or change.

     (b) The  Corporation  shall declare a dividend or  distribution on the
Series A Preferred Stock as provided in Section 2(a)  immediately  prior to
or at the same time it  declares a dividend or  distribution  on the Common
Stock  (other  than a dividend or  distribution  solely in shares of Common
Stock);  PROVIDED,  HOWEVER, that, in the event no dividend or distribution
(other than a dividend or  distribution  in shares of Common  Stock)  shall
have been  declared  on the Common  Stock  during the  period  between  any
Quarterly Dividend Payment Date and the next subsequent  Quarterly Dividend
Payment Date, a dividend of $.01 per share on the Series A Preferred  Stock
shall nevertheless be payable on such subsequent Quarterly Dividend Payment
Date. The Board of Directors may fix a record date for the determination of
holders  of  shares of  Series A  Preferred  Stock  entitled  to  receive a
dividend or distribution  declared thereon,  which record date shall be the
same as the record date for any  corresponding  dividend or distribution on
the Common Stock.

     (c) Dividends  shall begin to accrue and be cumulative on  outstanding
shares of Series A Preferred  Stock from and after the  Quarterly  Dividend
Payment Date next  preceding  the date of original  issue of such shares of
Series A Preferred Stock; PROVIDED,  HOWEVER, that dividends on such shares
that are originally  issued after the record date for the  determination of
holders  of  shares of  Series A  Preferred  Stock  entitled  to  receive a
quarterly  dividend  and on or  prior  to  the  next  succeeding  Quarterly
Dividend  Payment  Date shall  begin to accrue and be  cumulative  from and
after such Quarterly Dividend Payment Date.  Notwithstanding the foregoing,
dividends on shares of Series A Preferred Stock that are originally  issued
prior to the  record  date for the  determination  of  holders of shares of
Series A Preferred  Stock  entitled to receive a quarterly  dividend on the
first Quarterly  Dividend Payment Date shall be calculated as if cumulative
from and after the last day of the fiscal  quarter next  preceding the date
of original issuance of such shares. Accrued but unpaid dividends shall not
bear interest.  Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such  dividends at the time accrued
and payable on such shares shall be allocated pro rata on a  share-by-share
basis among all such shares at the time outstanding and entitled to receive
such dividends.

     (d) So  long  as any  shares  of the  Series  A  Preferred  Stock  are
outstanding, no dividends or other distributions shall be declared, paid or
distributed, or set aside for payment or distribution, on the Common Stock,
unless,  in each  case,  the  dividend  required  by this  Section  2 to be
declared on the Series A Preferred Stock shall have been declared and paid.

     (e) The holders of the shares of Series A Preferred Stock shall not be
entitled  to  receive  any  dividends  or other  distributions,  except  as
provided herein.

     III. VOTING RIGHTS.  The holders of shares of Series A Preferred Stock
shall have the following voting rights:

     (a) Each  holder of Series A  Preferred  Stock  shall be entitled to a
number of votes equal to the Formula Number then in effect,  for each share
of Series A Preferred  Stock held of record on each matter on which holders
of the  Common  Stock  or  shareholders  generally  are  entitled  to vote,
multiplied by the maximum number of votes per share which any holder of the
Common  Stock or  shareholders  generally  then have with  respect  to such
matter (assuming any holding period or other  requirement to vote a greater
number of shares is satisfied).

     (b) Except as  otherwise  provided  herein or by  applicable  law, the
holders of shares of Series A Preferred

<PAGE>
Stock  and  the  holders  of  shares of Common Stock shall vote together as
one voting group for the election of  directors of the  Corporation  and on
all other matters submitted to a vote of shareholders of the Corporation.

     (c) If, at the time of any  annual  meeting  of  shareholders  for the
election of directors,  the equivalent of six quarterly  dividends (whether
or not  consecutive)  payable on any share or shares of Series A  Preferred
Stock are in default,  the number of  directors  constituting  the Board of
Directors  of the  Corporation  shall be  increased  by two. In addition to
voting  together with the holders of Common Stock for the election of other
directors  of the  Corporation,  the  holders  of  record  of the  Series A
Preferred  Stock,  voting  separately as a voting group to the exclusion of
the  holders  of  Common  Stock,  shall  be  entitled  at said  meeting  of
shareholders  (and at each  subsequent  annual  meeting  of  shareholders),
unless all  dividends  in arrears  have been paid or declared and set apart
for payment prior thereto, to vote for the election of two directors of the
Corporation,  the holders of any Series A Preferred Stock being entitled to
cast a number of votes per share of Series A  Preferred  Stock equal to the
Formula  Number.  Until the  default  in  payments  of all  dividends  that
permitted the election of said directors shall cease to exist, any director
who shall have been so elected pursuant to the next preceding  sentence may
be  removed  at any  time,  either  with  or  without  cause,  only  by the
affirmative  vote of the holders of the shares of Series A Preferred  Stock
at the time  entitled to cast such  number of votes as are  required by law
for the election of any such director at a special  meeting of such holders
called for that purpose, and any vacancy thereby created may be filled only
by the vote of such holders. If and when such default shall cease to exist,
the  holders of the  Series A  Preferred  Stock  shall be  divested  of the
foregoing special voting rights,  subject to revesting in the event of each
and every  subsequent  like  default in  payments  of  dividends.  Upon the
termination of the foregoing special voting rights,  the terms of office of
all persons who may have been  elected  directors  pursuant to said special
voting rights shall forthwith terminate to the extent permitted by law, and
the  number  of  directors  constituting  the Board of  Directors  shall be
reduced by two. The voting rights  granted by this Section 3(c) shall be in
addition to any other voting rights  granted to the holders of the Series A
Preferred Stock in this Section 3.

     (d) Except as provided  herein,  in Section 11 or by  applicable  law,
holders of Series A Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled
to vote with holders of Common Stock as set forth  herein) for  authorizing
or taking any corporate action.

     IV. CERTAIN  RESTRICTIONS.  (a) Whenever quarterly  dividends or other
dividends  or  distributions  payable  on the Series A  Preferred  Stock as
provided in Section 2 are in arrears,  thereafter and until all accrued and
unpaid dividends and distributions,  whether or not declared,  on shares of
Series A  Preferred  Stock  outstanding  shall have been paid in full,  the
Corporation shall not

                  (i)  declare  or  pay   dividends   on,  make  any  other
         distributions  on, or redeem or purchase or otherwise  acquire for
         consideration  any shares of stock  ranking  junior  (either as to
         dividends or upon  liquidation,  dissolution or winding up) to the
         Series A Preferred Stock;

                  (ii)  declare  or pay  dividends  on or  make  any  other
         distributions  on any shares of stock ranking on a parity  (either
         as to dividends or upon  liquidation,  dissolution  or winding up)
         with the Series A Preferred  Stock,  except dividends paid ratably
         on the Series A Preferred Stock and all such parity stock on which
         dividends  are  payable or in arrears in  proportion  to the total
         amounts to which the holders of all such shares are then entitled;

                  (iii)  redeem  or  purchase  or  otherwise   acquire  for
         consideration  shares of any stock ranking on a parity  (either as
         to dividends or upon liquidation,  dissolution or winding up) with
         the Series A Preferred Stock; PROVIDED that the Corporation may at
         any time redeem,  purchase or otherwise acquire shares of any such
         parity   stock  in  exchange  for  shares  of  any  stock  of  the
         Corporation  ranking  junior  (either  as  to  dividends  or  upon
         dissolution,  liquidation or winding up) to the Series A Preferred
         Stock; or

                  (iv) purchase or otherwise  acquire for consideration any
         shares of Series A Preferred Stock, or any shares of stock ranking
         on  a  parity  with  the  Series  A  Preferred  Stock,  except  in
         accordance with a purchase offer made in writing or by publication
         (as  determined  by the Board of Directors) to all holders of such
         shares  upon  such  terms  as  the  Board  of   Directors,   after
         consideration  of the respective  annual  dividend rates

<PAGE>
         and  other  relative  rights  and  preferences  of the  respective
         series and classes,  shall  determine  in  good faith will  result
         in fair and equitable treatment among  the  respective  series  or
         classes.

     (b) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise  acquire for  consideration any shares of stock of
the Corporation  unless the Corporation  could, under paragraph (a) of this
Section 4,  purchase or  otherwise  acquire such shares at such time and in
such manner.

     V. LIQUIDATION RIGHTS. Upon the liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary, no distribution shall
be made (a) to the holders of shares of stock ranking  junior (either as to
dividends or upon  liquidation,  dissolution or winding up) to the Series A
Preferred Stock,  unless,  prior thereto, the holders of shares of Series A
Preferred  Stock  shall have  received  an amount  equal to the accrued and
unpaid dividends and distributions thereon, whether or not declared, to the
date of such  payment,  plus an amount equal to the greater of (i) $.01 per
whole  share or (ii) an  aggregate  amount per share  equal to the  Formula
Number then in effect  times the  aggregate  amount to be  distributed  per
share to holders of Common Stock or (b) to the holders of stock  ranking on
a parity  (either  as to  dividends  or upon  liquidation,  dissolution  or
winding up) with the Series A Preferred Stock,  except  distributions  made
ratably on the Series A Preferred  Stock and all other such parity stock in
proportion to the total amounts to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding up.

     VI.  CONSOLIDATION,  MERGER,  ETC. In case the Corporation shall enter
into  any  consolidation,  merger,  share  exchange,  combination  or other
transaction  in which  the  shares of Common  Stock  are  exchanged  for or
changed into other stock or securities,  cash or any other property,  then,
in any such case, the then  outstanding  shares of Series A Preferred Stock
shall at the same time be similarly exchanged or changed into an amount per
share equal to the Formula Number then in effect times the aggregate amount
of stock, securities,  cash or any other property (payable in kind), as the
case may be,  into  which  or for  which  each  share  of  Common  Stock is
exchanged or changed. In the event both this Section 6 and Section 2 appear
to apply to a transaction, this Section 6 will control.

     VII.  NO  REDEMPTION;  NO  SINKING  FUND.  (a) The  shares of Series A
Preferred Stock shall not be subject to redemption by the Corporation or at
the option of any holder of Series A Preferred  Stock;  provided,  however,
that the Corporation may purchase or otherwise acquire  outstanding  shares
of Series A Preferred Stock in the open market or by offer to any holder or
holders of shares of Series A Preferred Stock.

     (b) The shares of Series A Preferred  Stock shall not be subject to or
entitled to the operation of a retirement or sinking fund.

         VIII.  Ranking.  The Series A Preferred  Stock shall rank junior to all
other  series  of  Preferred  Stock  of the  Corporation,  unless  the  Board of
Directors  shall  specifically   determine   otherwise  in  fixing  the  powers,
preferences  and relative,  participating,  optional and other special rights of
the shares of such series and the  qualifications,  limitations and restrictions
thereof.

     IX. FRACTIONAL  SHARES. The Series A Preferred Stock shall be issuable
upon  exercise of the Rights  issued  pursuant to the Rights  Agreement  in
whole shares or in any fraction of a share that is one-thousandth (1/1,000)
of a share or any integral  multiple of such  fraction  which shall entitle
the holder,  in proportion to such holder's  fractional  shares, to receive
dividends,  exercise voting rights,  participate in distributions  and have
the benefit of all other rights of holders of Series A Preferred  Stock. In
lieu of fractional shares, the Corporation,  prior to the first issuance of
a share or a fraction of a share of Series A Preferred Stock, may elect (a)
to make a cash payment as provided in the Rights Agreement for fractions of
a share  other than  one-thousandth  (1/1,000)  of a share or any  integral
multiple  thereof  or (b) to  issue  depository  receipts  evidencing  such
authorized  fraction of a share of Series A Preferred  Stock pursuant to an
appropriate  agreement between the Corporation and a depository selected by
the  Corporation;  PROVIDED  that such  agreement  shall  provide  that the
holders of such depository  receipts shall have all the rights,  privileges
and  preferences  to which  they are  entitled  as  holders of the Series A
Preferred Stock.

<PAGE>

     X. REACQUIRED SHARES. Any shares of Series A Preferred Stock purchased
or otherwise  acquired by the Corporation in any manner whatsoever shall be
retired and  canceled  promptly  after the  acquisition  thereof.  All such
shares shall upon their  cancelation  become authorized but unissued shares
of Preferred Stock, without par value, of the Corporation,  undesignated as
to series,  and may  thereafter be reissued as part of a new series of such
Preferred Stock as permitted by law.

     XI.  AMENDMENT.   None  of  the  powers,   preferences  and  relative,
participating,  optional and other special rights of the Series A Preferred
Stock as  provided  herein or in the  Articles  of  Incorporation  shall be
amended in any manner that would  alter or change the powers,  preferences,
rights or  privileges  of the holders of Series A Preferred  Stock so as to
affect such holders  adversely  without the affirmative vote of the holders
of at least 66-2/3% of the outstanding  shares of Series A Preferred Stock,
voting  as a  separate  voting  group;  PROVIDED,  HOWEVER,  that  no  such
amendment  approved by the holders of at least  66-2/3% of the  outstanding
shares of Series A Preferred  Stock shall be deemed to apply to the powers,
preferences,  rights  or  privileges  of any  holder  of shares of Series A
Preferred Stock  originally  issued upon exercise of a Right after the time
of such approval without the approval of such holder.

     THIRD:  This  amendment  was duly adopted by the Board of Directors of
the Corporation  without  shareholder  action on May 16, 1996.  Shareholder
action was not required.


     IN WITNESS  WHEREOF,  the  undersigned  has executed these Articles of
Amendment as of this 16th day of May, 1996.

                                     ASHLAND INC.

                                  by
                                     ----------------------------------



<PAGE>
COMMONWEALTH OF KENTUCKY)
COUNTY OF GREENUP       )


     The foregoing  instrument was acknowledged  before me this 16th day of
May, 1996, by , of ASHLAND INC., a Kentucky  corporation,  on behalf of the
corporation.

                                      ----------------------------------
                                              Notary Public

Prepared by Thomas L. Feazell
1000 Ashland Drive
Russell, Kentucky 41114


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



<PAGE>
EXHIBIT B

                              [Form of Right Certificate]

Certificate No. [R]-

                  ___________         Rights

                  NOT  EXERCISABLE  AFTER  MAY 16,  2006,  OR  EARLIER,  IF
                  REDEEMED OR  MANDATORILY  EXCHANGED BY THE  COMPANY.  THE
                  RIGHTS ARE  SUBJECT TO  REDEMPTION,  AT THE OPTION OF THE
                  COMPANY, AT $.01 PER RIGHT, ON THE TERMS SET FORTH IN THE
                  RIGHTS  AGREEMENT.   RIGHTS   BENEFICIALLY  OWNED  BY  AN
                  ACQUIRING  PERSON  OR AN  AFFILIATE  OR  ASSOCIATE  OF AN
                  ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
                  AGREEMENT)  AND BY ANY  SUBSEQUENT  HOLDER OF SUCH RIGHTS
                  ARE NULL AND VOID AND NONTRANSFERABLE.

                                Right Certificate

                                  ASHLAND INC.

     This certifies that                                    , or registered
assigns,  is the registered  owner of the number of Rights set forth above,
each of which entitles the owner thereof,  subject to the terms, provisions
and  conditions  of the  Rights  Agreement  dated as of May 16,  1996  (the
"Rights  Agreement"),  between  Ashland Inc., a Kentucky  corporation  (the
"Company"),  and  Harris  Trust  and  Savings  Bank,  an  Illinois  banking
corporation,  as Rights  Agent  (the  "Rights  Agent"),  unless  the Rights
evidenced  hereby  shall  have  been  previously  redeemed  or  mandatorily
exchanged  by the Company,  to purchase  from the Company at any time after
the  Distribution  Date (as defined in the Rights  Agreement)  and prior to
5:00 p.m.,  New York City time, on the 10th  anniversary of the date of the
Rights  Agreement (the "Expiration  Date"),  at the principal office of the
Rights Agent,  or its  successors as Rights  Agent,  in Chicago,  Illinois,
one-thousandth  (1/1,000) of a fully paid,  nonassessable share of Series A
Participating Cumulative Preferred Stock, without par value, of the Company
(the "Preferred Shares"), at a purchase price per one-thousandth  (1/1,000)
of a share  equal to $140 (the  "Purchase  Price"),  payable in cash,  upon
presentation and surrender of this
<PAGE>


                                                                        2

Right Certificate with the Form of Election to Purchase duly executed.

     The  Purchase  Price and the  number  and kind of shares  which may be
purchased upon exercise of each Right evidenced by this Right  Certificate,
as set forth  above,  are the  Purchase  Price and the  number  and kind of
shares which may be so  purchased  as of May 16,  1996.  As provided in the
Rights  Agreement,  the  Purchase  Price and the  number and kind of shares
which may be purchased  upon the  exercise of each Right  evidenced by this
Right  Certificate  are subject to  modification  and  adjustment  upon the
happening of certain events.

     If the  Rights  evidenced  by this Right  Certificate  are at any time
beneficially  owned by an Acquiring  Person or an Affiliate or Associate of
an  Acquiring  Person (as such terms are defined in the Rights  Agreement),
such Rights  shall be null and void and  nontransferable  and the holder of
any such Right  (including any purported  transferee or subsequent  holder)
shall not have any right to exercise or transfer any such Right.

     This Right  Certificate  is subject to all the terms,  provisions  and
conditions of the Rights Agreement,  which terms, provisions and conditions
are hereby  incorporated  herein by reference  and made a part hereof,  and
reference to the Rights  Agreement is hereby made for a full description of
the  rights,  limitations  of rights,  obligations,  duties and  immunities
hereunder  of the Rights  Agent,  the  Company and the holders of the Right
Certificates.   Copies  of  the  Rights   Agreement  are  on  file  at  the
above-mentioned  office of the Rights Agent and are also available from the
Company upon written request.

     This Right Certificate, with or without other Right Certificates, upon
surrender at the principal  stock transfer or corporate trust office of the
Rights  Agent,  may be exchanged  for another  Right  Certificate  or Right
Certificates of like tenor and date evidencing  Rights entitling the holder
to  purchase  a like  aggregate  number  and kind of shares  as the  Rights
evidenced by the Right Certificate or Right Certificates  surrendered shall
have entitled such holder to purchase.  If this Right  Certificate shall be
exercised in part,  the holder shall be entitled to receive upon  surrender
hereof another Right  Certificate or Right  Certificates  for the number of
whole Rights not exercised.


<PAGE>

                                                                       3


     Subject  to  the  provisions  of  the  Rights  Agreement,  the  Rights
evidenced by this Right  Certificate  may be redeemed by the Company at its
option at a  redemption  price (in cash or shares of Common  Stock or other
securities  of the Company  deemed by the Board of Directors to be at least
equivalent  in value) of $.01 per Right  (which  amount shall be subject to
adjustment  as provided in the Rights  Agreement)  at any time prior to the
earlier of (a) such time as a Person  becomes an  Acquiring  Person and (b)
the Expiration Date.

     The Company  may,  but shall not be required  to,  issue  fractions of
Preferred  Shares or distribute  certificates  which evidence  fractions of
Preferred Shares upon the exercise of any Right or Rights evidenced hereby.
In lieu of issuing  fractional shares, the Company may elect to make a cash
payment as provided in the Rights  Agreement for fractions of a share other
than  one-thousandth  (1/1,000) of a share or any integral multiple thereof
or to issue certificates or to utilize a depositary arrangement as provided
in the terms of the Rights Agreement and the Preferred Shares.

     No holder  of this  Right  Certificate  shall be  entitled  to vote or
receive  dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other  securities  of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such,
any of the  rights of a  shareholder  of the  Company,  including,  without
limitation,  any right to vote for the  election of  directors  or upon any
matter  submitted to  shareholders  at any meeting  thereof,  or to give or
withhold consent to any corporate  action, or to receive notice of meetings
or other actions affecting  shareholders  (except as provided in the Rights
Agreement),  or to receive dividends or other distributions or subscription
rights,  or  otherwise,  until the Right or Rights  evidenced by this Right
Certificate  shall have been  exercised as provided in accordance  with the
provisions of the Rights Agreement.


<PAGE>
                                                                        4


     This  Right  Certificate  shall  not be  valid or  obligatory  for any
purpose until it shall have been countersigned by the Rights Agent.

     WITNESS the facsimile  signature of the proper officers of the Company
and its corporate seal.

Dated as of:

                                 ASHLAND INC.,

                                   by
                                   -----------------------------------------
                                       Name:
                                       Title:

Attest:

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

Countersigned:

HARRIS TRUST AND SAVINGS BANK,
as Rights Agent,

  by
    ---------------------
      Authorized Officer


<PAGE>


                                                                           5

                       [On Reverse Side of Right Certificate]

                             FORM OF ELECTION TO PURCHASE
                             ----------------------------

                      (To be executed by the registered holder if
                      such holder desires to exercise the Rights
                      represented by this Right Certificate.)

To the Rights Agent:

     The undersigned hereby irrevocably elects to exercise ________________
Rights  represented  by this Right  Certificate  to purchase the  Preferred
Shares (or other  shares)  issuable  upon the  exercise  of such Rights and
requests that certificates for such shares be issued in the name of:

Please insert social security
or other identifying number

- ---------------------------------------------------------------------------
                           (Please print name and address)

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


     If such number of Rights shall not be all the Rights evidenced by this
Right  Certificate,  a new Right  Certificate for the balance  remaining of
such Rights shall be registered in the name of and delivered to:

<PAGE>
                                                                         6

Please insert social security
or other identifying number

- ----------------------------------------------------------------------------
                         (Please print name and address)

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

Dated:____________,____

                                           ---------------------------------
                                           Signature


Signature Guaranteed:

                             FORM OF ASSIGNMENT

                (To be  executed by the  registered  holder if
                such  holder  desires  to  transfer  the  Right
                Certificate.)

     FOR  VALUE  RECEIVED ________________________________   hereby  sells,
assigns and transfers unto

- ---------------------------------------------------------------------------
                 (Please print name and address of transferee)

- ---------------------------------------------------------------------------
this  Right  Certificate,  together  with all  right,  title  and  interest
therein, and does hereby irrevocably  constitute and appoint ______________
Attorney,  to transfer  the within  Right  Certificate  on the books of the
within-named Corporation, with full power of substitution.

Dated:  ____________, ____

                                       ------------------------------
                                       Signature

Signature Guaranteed:

     The undersigned hereby certifies that (a) the Rights evidenced by this
Right  Certificate  are not being sold,  assigned or  transferred  by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate or


<PAGE>


                                                                        7

Associate thereof (as such terms are defined in the Rights Agreement),  (b)
this Rights Certificate is not being sold, assigned or transferred to or on
behalf of any such Acquiring Person,  Affiliate or Associate, and (c) after
inquiry and to the best knowledge of the  undersigned,  the undersigned did
not acquire the Rights evidenced by this Right  Certificate from any Person
who is or was an Acquiring Person or an Affiliate or Associate  thereof (as
such terms are defined in the Rights Agreement).



                                          ------------------------------
                                          Signature

                                   NOTICE
                                   ------

     The signature on the foregoing Form of Election to Purchase or Form of
Assignment  must  correspond  to the name as written  upon the face of this
Right Certificate in every particular, without alteration or enlargement or
any change whatsoever.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>7
<FILENAME>salary.txt
<DESCRIPTION>EXHIBIT 10.5
<TEXT>
                                                           Exhibit 10.5

                              ASHLAND OIL INC.
                          SALARY CONTINUATION PLAN


     The Ashland Oil, Inc. Salary Continuation Plan (the "Plan"), effective
July 21, 1988, is an employee benefit plan which provides eligible salaried
employees  of  Ashland  Oil,  Inc.  and  its  majority-owned   subsidiaries
(collectively  referred to herein as the "Company") with certain  severance
benefits if the  individual's  employment  with the  Company is  terminated
under defined circumstances after a "change in control of the Company." The
details and purpose of the Plan are more fully explained below.

SECTION 1.            PURPOSE

     The  purpose  of the Plan is to  reduce  employee  concerns  about the
possibility  of a "change in control of the Company." It is important  that
each employee be able to focus his or her full  attention and energy toward
the goals and  objectives  of the  Company.  The Plan is also  designed  to
permit  the  Company to retain its high  quality  work force by  increasing
stability and improving moral and productivity.  In addition, the Plan will
allow the Company to attract and retain new qualified employees.

SECTION 2.            ADMINISTRATION

     Ashland Oil,  Inc.  ("Ashland")  shall be the Plan  Administrator  and
shall  administer  the Plan.  Any  determinations  by the Vice President of
Corporate Human Resources in carrying out,  administering,  or interpreting
this  Plan  shall  be  final  and  binding  for all  purposes  and upon all
interested   persons   and   their   heirs,   successors,    and   personal
representatives.  All costs  associated with the Plan shall be borne by the
Company.

SECTION 3.  ELIGIBILITY

     An  employee  who is  classified  on the  records of the  Company as a
regular,  full-time  salaried  employee,  whether  exempt or  nonexempt  as
specified in the Fair Labor  Standards  Act, as from time to time  amended,
(excluding  hourly employees;  employees  covered by collective  bargaining
agreements;  employees of subsidiaries,  entities, or partnerships in which
the  Company  has a 50%  or  less  ownership  interest;  and  international
employees,  except foreign nationals who are located in Canada or those who
are  U.S.  expatriates)  will  be  entitled  to  participate  in the  Plan,
regardless of length of service. Employees who have entered into employment
contracts with the Company will not be eligible to participate in the Plan.

     At any time prior to a "change in control of the  Company"  as defined
in Section 4(b), Ashland reserves, in its complete discretion, the right to
amend the eligible classes of employees.

SECTION 4.  CONDITIONS FOR BENEFIT PAYMENTS

     (a) A participant shall not be entitled to receive benefits under this
Plan prior to a "change in control of the Company," as hereinafter defined.
Participation in the Plan does not create a contract of employment  between
the Company and its employees.  The Company reserves the right to terminate
employees at any time for any reason,  just as employees  have the right to
terminate their employment at any time for any reason.

     (b) For purposes of the Plan, a change in control of Ashland Oil, Inc.
(herein a  "change  in  control  of the  Company")  shall be deemed to have
occurred if:

     (i)  there  shall  be  consummated  (A) any  consolidation  or  merger
involving  the  Company  in which  the  Company  is not the  continuing  or
surviving  corporation or pursuant to which shares of the Company's  common
stock would be converted into cash,  securities,  or other property,  other
than a  merger  of the  Company  in which  the  individual  holders  of the
Company's  common  stock  immediately  prior  to the  merger  have the same
proportionate  ownership  of  common  stock  of the  surviving  corporation
immediately after the merger, or (B) any sale, lease, exchange, or transfer
(in  one  transaction  or a  series  of  related  transactions)  of  all or
substantially all the assets of the Company; or

     (ii)  the  shareholders  of the  Company  shall  approve  any  plan or
proposal for the liquidation or dissolution of the Company; or

     (iii) any "person"  (as such term is used in Sections  13(d) and 14(d)
(2) of the  Securities  Exchange  Act of 1934,  as amended  (the  "Exchange
Act"),  other than the  Company  or a  subsidiary  thereof or any  employee
benefit plan sponsored by the Company or a subsidiary thereof, shall become
the  beneficial  owner (within the meaning of Rule 13d-3 under the Exchange
Act) of  securities  of Ashland  representing  50% or more of the  combined
voting power of Ashland's then outstanding securities ordinarily (and apart
from rights accruing in special  circumstances) having the right to vote in
the election of directors,  as a result of a tender or exchange offer, open
market purchases, privately-negotiated purchases or otherwise; or

     (iv) at any time during a period of two consecutive years, individuals
who at the beginning of such period  constituted  the Board of Directors of
Ashland shall cease for any reason to constitute at least a majority

     thereof,  unless  the  election  or the  nomination  for  election  by
Ashland's shareholders of each new director during such two-year period was
approved by a vote of at least  two-thirds of the  directors  then still in
office who were directors at the beginning of such two-year period.


SECTION 5.            AMOUNT OF BENEFITS

     Following  a "change in control of the  Company"  and a  participant's
termination of employment within two (2) years thereafter  without "cause,"
a  participant  shall be entitled to  receiver  benefits  under the Plan as
described below:

     (a) A participant shall be entitled to be paid in an undiscounted lump
sum within ten (10) business days after such  participant's  termination of
employment  without "cause," an amount equal to a specified  portion of his
or her current base compensation  (excluding any bonus  compensation) based
upon such  participant's  aggregate years and months of service (whether or
not continuous) with the Company as follows:

         Length of Service                           Payment

Up to 5 full years                        3 months base compensation
More than 5 and up to 10 full years       6 months base compensation
More than 10 and up to 15 full years      1 year's base compensation
More than 15 and up to 20 full years      1-1/2 years base compensation
More than 0 full years                    2 years base compensation

     (b) At the  sole  expense  of the  Company,  a  participant  shall  be
entitled to the continuation of his or her medical,  dental, and group life
benefits  in  effect  at the  time of  such  participant's  termination  of
employment  without  "cause" for a period of six (6) months  following such
participant's termination of employment.

     (c) A participant  shall be reimbursed  for any legal fees or expenses
incurred by the  participant to enforce the payment of Plan benefits within
ten (10)  business days of providing  copies of applicable  invoices to the
Company.

     (d) A  participant  shall be entitled to interest on the amount of any
payments due under the plan (but not timely  paid) in an amount  equivalent
to the prime  rate of  interest  (quoted  by  Citibank,  N.A.  as its prime
commercial  lending rate) on the latest date practicable  prior to the date
such payments should have been made, to and including the date it is made.

     (e) Within ten (10) business days of the participant's  termination of
employment  following  a "change in control of the  Company,"  the  Company
shall provide, at no cost to the participant, individual outside assistance
in finding  other  employment.  Such  obligation  may be  fulfilled  by the
Company  through  the  retention  of an  outplacement  service  for  use by
individual participants.

     (f) Participants shall be entitled to receive any pension, disability,
workers' compensation, other Company benefit plan distribution, payment for
vacation accrued but not taken,  statutory employment  termination benefit,
or  any  other  compensation  plan  payment  otherwise  independently  due;
however,  in no event shall a  participant  who receives  benefit under the
Plan be  entitled to  additional  severance  payment  pursuant to any other
existing severance policy of the Company.

SECTION 6.  ACCEPTANCE OF BENEFITS

     If a  participant  receives and accepts all of the  benefits  provided
under  Section 5 of the Plan,  he or she  shall be deemed  thereby  to have
waived any right or cause of action  against the Company and its directors,
officers,  or employees  arising from the termination of the  participant's
employment.

SECTION 7.  CLAIMS PROCEDURE

     (a) Following a "change in control of the Company" and a participant's
termination of employment,  the benefits described in Section 5 of the Plan
shall be paid as described  therein without any required action on the part
of such participant.

     (b) If any participant believes that he or she is entitled to benefits
provided under the Plan and has not received such benefits  within the time
prescribed  by the Plan,  such  participant  may submit a written claim for
payment of such  benefits  to the  Company.  If such claim for  benefits is
wholly or partially denied, the Company shall,  within thirty (30) business
days after receipt of the claim,  notify the  participant  of the denial of
the claim.  Such  notice of denial (i) shall be in  writing,  (ii) shall be
written in a manner  calculated to be understood  by the  participant,  and
(iii) shall  contain (A) the  specific  reason or reasons for denial of the
claim, (B) a specific reference to the pertinent Plan provisions upon which
the  denial is based,  (C) a  description  of any  additional  material  or
information  necessary to perfect the claim,  along with an  explanation of
why such material or  information  is necessary,  and (D) an explanation of
the claim review  procedure,  in  accordance  with the  provisions  of this
Section 7.

     (c)  Within  sixty  (60)  business  days  after  the  receipt  by  the
participant of a written notice of denial of the claim,  or such later time
as shall be deemed reasonable taking into account the nature of the benefit
subject to the claim and any other attendant circumstances, the participant
may file a written request with the Company that it conduct a full and fair
review of the denial of the claim for benefits.  As a part of such full and
fair  review,  the  participant  (or  such  participant's  duly  authorized
representative) may review and photocopy pertinent documents (including but
not limited to the  participant's  personal history file) and submit issues
and  comments  to the  Company  in  writing.  The  Company  shall  make its
determination  in accordance with the documents  governing the Plan insofar
as such  documents  are  consistent  with the  provisions  of the  Employee
Retirement Income Security Act of 1974 (herein "ERISA").

     The Company  shall  promptly  deliver to the  participant  its written
decision  on the claim (in no even later than  thirty  (30)  business  days
after the receipt of the aforesaid request for review, except that if there
are special circumstances (such as a conference with the participant or his
or her  representative)  which require an extension of time,  the aforesaid
thirty (30) business day period shall be extended to a reasonable period of
time not to exceed sixty (60) business  days).  Such decision  shall (i) be
written in a manner  calculated to be understood by the  participant,  (ii)
include the specific reason or reasons for the decision,  and (iii) contain
a  specific  reference  to the  pertinent  Plan  provisions  upon which the
decision is based.  If the decision on review is not  furnished  within the
time  prescribed by this Section 7(c), the claim shall be deemed granted on
review.

SECTION 8.  AMENDMENTS AND TERMINATIONS

     Ashland's  Board  of  Directors   shall  have  plenary   authority  to
terminate,  modify,  or amend this Plan in such  respects  as it shall deem
advisable  at any time prior to a "change in  control  of the  Company"  as
defined in Section 4(b).

SECTION 9.  SUCCESSORS BINDING AGREEMENT

     (i)  The  Company  will  require  any  successor  (whether  direct  or
indirect,  by  purchase,  merger,  consolidation  or  otherwise)  to all or
substantially  all  of the  business  and/or  assets  of  the  Company,  by
agreement  in form and  substance  satisfactory  to eligible  participants,
expressly to assume and agree to provide benefits  pursuant to this Plan in
the same manner and to the same  extent that the Company  would be required
to perform its  obligations  under the Plan if no such succession had taken
place.  Failure  of the  Company  to  obtain  such  agreement  prior to the
effectiveness  of any such succession shall be a violation of this Plan and
shall entitle eligible participants to compensation from the Company in the
same  amount and on the same  terms as the  participant  would be  entitled
pursuant  to  Section 5,  except  that for  purposes  of  implementing  the
foregoing, the date on which any such succession becomes effective shall be
deemed the date of the  participant's  termination  of  employment  without
"cause."  As used  in this  Plan,  "Company"  shall  mean  the  Company  as
hereinbefore  defined and any  successor to its business  and/or  assets as
aforesaid  which  executes and delivers the agreement  provided for in this
Section 9 or which otherwise  becomes bound by all the terms and provisions
of this Plan by operation of law.

     (ii) This Plan shall inure to the benefit of and be  enforceable  by a
participant's personal or legal representatives, executors, administrators,
successors,  heirs, distributees,  devisees, and legatees. If a participant
should die while any amounts would still be payable to him or her hereunder
if he or she had  continued to live,  all such  amounts,  unless  otherwise
provided herein, shall be paid in accordance with the terms of this Plan to
such participant's  devisee,  legatee, or other designee or, if there be no
such designee, to his or her estate.

SECTION 10.  WITHHOLDING TAXES

     The Company is  authorized to withhold any tax required to be withheld
from the amounts  payable to a participant  pursuant to this Plan which are
considered taxable compensation to the participant.

SECTION 11.  GOVERNING LAW

     The  Plan  shall  be  governed  by the  laws  of the  Commonwealth  of
Kentucky.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>8
<FILENAME>boydagmt.txt
<DESCRIPTION>EXHIBIT 10.7
<TEXT>
                                                                    Exhibit 10.7

                    SEPARATION AGREEMENT AND GENERAL RELEASE


     THIS SEPARATION  AGREEMENT AND GENERAL RELEASE  ("Agreement")  is made
and entered into this ____day of _______________, 2002 by and between James
R.  Boyd (the  "Employee")  and  Ashland  Inc.  (herein  the  "Company"  or
"Ashland").

W I T N E S S E T H:

     WHEREAS,  Employee has been  employed by the Company from December 31,
1981 to the present; and

     WHEREAS,  Employee and the Company  desire to settle fully and finally
all matters between them,  including,  but in no way limited to, any issues
that might arise out of Employee's  employment with and retirement from the
Company;

     NOW,  THEREFORE,  in  consideration  of  the  mutual  promises  herein
contained, Employee and the Company agree as follows:

     1. This  Separation  Agreement and General  Release (the  "Agreement")
shall not in any way be  construed  as an  admission by the Company that it
has acted wrongfully with respect to Employee or any other person,  or that
Employee has any rights  whatsoever  against the  Company,  and the Company
specifically  disclaims any liability to or wrongful acts against  Employee
or any other person, on the part of itself, its employees or its agents.

     2. Employee  represents,  understands,  and agrees that on January 31,
2002  ("Release  Date"),  he will be released from active  employment  with
Ashland  Inc.   His   employment   will   terminate  on  January  31,  2004
("Termination Date"), and he will be eligible to retire from the Company on
February 1, 2004 ("Retirement Date").

     3. Employee represents that he has not filed any complaints or charges
or lawsuits against the Company with any governmental  agency or any court,
and that he will not do so at any time hereafter;  provided,  however, this
shall not limit  Employee  from  filing a lawsuit  for the sole  purpose of
enforcing Employee's rights under this Agreement.

     4. In order to assist Employee in the transition into other endeavors,
and as mutual consideration for the covenants expressed herein, the Company
will provide  Employee with the Severance  Benefits more fully described in
Attachment  I  (Summary  of  Benefits),  which is  hereby  incorporated  by
reference.

     5. Employee  understands and agrees that the  consideration  described
above is more  than  Employee  would  otherwise  be  entitled  to under the
Company's existing policies and any current agreement with Employee.

                                                 Employee Initials:________
                                                                     Page 1
<PAGE>


     6. Employee  understands and agrees that,  effective as of his Release
Date, he is no longer  authorized to incur any expenses or  obligations  or
liabilities  on behalf of the Company.  However,  Ashland may, from time to
time during the Payroll  Continuation  Period (as defined in Attachment I),
request  Employee to perform  services of the nature and type he  performed
during his service with  Ashland,  and  Employee  will be  responsive  on a
reasonable basis to the requests of Ashland.

     7. As of his  Release  Date,  Employee  will return to the Company all
Company  Information  and related  reports,  maps,  files,  memoranda,  and
records;  credit cards, cardkey passes; door and file keys; computer access
codes;  software;  and other  physical or personal  property which Employee
received or prepared or helped prepare in connection  with his  employment.
Employee  has not  retained  and will not  retain any  copies,  duplicates,
reproductions,  or excerpts thereof. The term "Company Information" as used
in this Agreement means (a)  confidential  information  including,  without
limitation,  information  received from third  parties  under  confidential
conditions;  and (b) other technical,  business, or financial  information,
the use or disclosure of which might reasonably be construed to be contrary
to the interests of the Company.

     8. Employee  agrees that during the course of his employment  with the
Company he has  acquired  Company  Information  as defined in  Paragraph 7.
Employee  understands  and agrees that such  Company  Information  has been
disclosed  to Employee  in  confidence  and for Company use only.  Employee
understands  and  agrees  that he (i) will  keep such  Company  Information
confidential at all times during and after his employment with the Company,
(ii) will not  disclose or  communicate  Company  Information  to any third
party, and (iii) will not make use of Company Information on Employee's own
behalf,  or on  behalf  of any  third  party.  In  view  of the  nature  of
Employee's  employment and the nature of Company Information which Employee
has received during the course of his employment,  Employee agrees that any
unauthorized  disclosure to third parties of Company  Information  or other
violation,   or  threatened  violation,   of  this  Agreement  would  cause
irreparable damage to the trade secret status of Company Information and to
the Company.  When Company  Information  becomes generally available to the
public other than by Employee's acts or omissions,  it is no longer subject
to these restrictions.  However, Company Information shall not be deemed to
come under this  exception  merely  because it is embraced by more  general
information  that is or becomes  generally  available to the public.  It is
understood  that,  if  requested  by  Employee,  the Company may review and
approve  the  Employee's  resume to assure  there is no  violation  of this
Paragraph 8, which approval shall not be unreasonably withheld.

     9. During the Payroll Continuation Period and for a period of one year
after Employee's  Termination  Date (the  "non-compete  period"),  Employee
shall not, without  Ashland's prior written consent,  accept a directorship
or employment  with,  engage in consulting for or otherwise render services
for,  make  investments  in, or  otherwise  engage  in any  other  business
activity with, any corporation, partnership, firm or other form of business
enterprise which competes, both as to the type of activity and geographical
location, with any business of the Company. However,  Employee's

                                                 Employee Initials:________
                                                                     Page 2

<PAGE>


     ownership,  directly or indirectly, of issued and outstanding stock or
debt  obligations  of any  corporation,  which  are  regularly  traded on a
national securities exchange or in the  over-the-counter  market, shall not
be deemed to be a violation  of this  Agreement  so long as such  ownership
does not,  directly or indirectly,  permit Employee to control the business
and  affairs of such  corporation.  Employee  further  agrees  that for the
non-compete  period,  Employee  will  not  interfere  with or  disrupt  the
relationship,  contractual  or  otherwise,  with respect to the business or
employment relationship between the Company or its successors and any other
party, including other employees of the Company or its successors. Employee
agrees  that  these  restrictions  are  reasonable,  and  that  they do not
unreasonably    preclude   Employee   from   being   gainfully    employed.
Notwithstanding,   Employee  shall  also  be  subject  to  the  non-compete
provisions of paragraph  4.04 of Ashland's  Supplemental  Early  Retirement
Plan.



     10. This Agreement shall  immediately and  automatically  terminate if
(a)  Employee  breaches the  confidentiality  provisions  of paragraph  (8)
above,  (b)  Employee  engages  in  competitive  activity  as set  forth in
paragraph (9) above,  or (c) Employee  takes any other action  inconsistent
with this Agreement. In the case of such termination of this Agreement, the
Company may cease further payments and benefits to Employee, and may recoup
previous amounts paid to Employee, and other damages, under this Agreement.
The covenants set forth in paragraphs  (8), (9), and (15) shall survive the
term of this Agreement.

     11. Employee acknowledges and agrees that the remedy of the Company at
law for any breach of the  covenants and  agreements of paragraphs  (8) and
(9) of this  Agreement  will be  inadequate,  and that the Company  will be
entitled to injunctive  relief  against any such breach or any  threatened,
imminent, probable or possible breach.

     12. The provisions of this Agreement are severable, and if any part of
it is found to be  unenforceable,  the other  paragraphs shall remain fully
valid and enforceable.

     13. Employee represents and agrees that he will keep the terms of this
Agreement completely confidential,  and that he will not hereafter disclose
any  information  concerning  this Agreement to anyone except his immediate
family,  financial advisor and attorney;  provided, they agree to keep said
information confidential and not disclose it to others.

     14.  Employee  represents  and agrees that he has  carefully  read and
fully  understands  all of the  provisions  of this  Agreement,  that he is
voluntarily  entering into this  Agreement,  and that he has had sufficient
time before signing this Agreement to consult with counsel.

     15.  As a  material  inducement  to the  Company  to enter  into  this
Agreement,   Employee  hereby  irrevocably  and  unconditionally  releases,
acquits,  and forever  discharges Company and each of the Company's owners,
stockholders,   predecessors,   successors,   assigns,  agents,  directors,
officers, employees,  representatives,  attorneys,

                                                 Employee Initials:________
                                                                     Page 3
<PAGE>


     divisions,  subsidiaries,  affiliates,  and  all  persons  acting  by,
through, under, or in concert with any of them (collectively  "Releasees"),
jointly and  individually,  from any and all charges,  complaints,  claims,
liabilities,  obligations,  promises, agreements,  controversies,  damages,
actions,  causes of action, suits, rights,  demands,  costs, losses, debts,
and expenses (including attorneys' fees and costs actually incurred) of any
nature  whatsoever,  including,  but not limited to, any claims of wrongful
discharge or any other claim related to Employee's employment or to acts or
omissions of the Company  involving  Employee or of rights  under  federal,
state,  or local laws  prohibiting  age or other  forms of  discrimination,
claims  growing  out  of any  legal  restrictions  on  Company's  right  to
terminate its employees ("Claim" or "Claims") arising out of any actions or
events  occurring  before the date of Employee's  execution of this Release
against each or any of the Releasees.  Examples of such federal,  state, or
local law, rule, or regulation  regarding  discrimination  include, but are
not limited to, any claims  arising under Title VII of the Civil Rights Act
of  1964,  42  U.S.C.  Section  2000e et seq.,  the Age  Discrimination  in
Employment Act, 29 U.S.C.  Section 621 et seq., or the Workers'  Adjustment
and  Retraining  Notification  (WARN) Act, 29 U.S.C.  Section  2101 et seq.
These examples  shall not limit the scope of this Release.  This Release is
intended to be a broad release and shall apply to any relief, no matter how
denominated,  including,  but not limited to, claims for future employment,
rights or causes of action for  wages,  backpay,  front  pay,  compensatory
damages, or punitive damages. Employee also agrees that he will not file or
permit to be filed on his behalf any such claim and Employee  hereby agrees
to   indemnify   and  hold   Releasees   harmless   from  any  such  claim.
Notwithstanding  anything to the contrary in this  paragraph  15,  Employee
does not release any claim he may have under any  employee  benefit plan in
which he was a participant  during his employment  with the Company for the
payment of a benefit thereunder to which he would be entitled in accordance
with its terms in the ordinary  course of the  administration  of the Plan.
Further,  Employee  does not  release  any  rights  of  indemnification  as
provided under the Company's By-laws or policies.


     16. As a further material inducement to the Company to enter into this
Agreement, Employee hereby agrees to indemnify and hold each and all of the
Releasees  harmless from and against any and all loss, costs,  damages,  or
expenses,  including,  without  limitation,  attorneys'  fees  incurred  by
Releasees,  or any of them,  arising out of any breach of this Agreement by
Employee or the fact that any  representation  made herein by Employee  was
false when made,  except that this provision shall not apply to any alleged
breach due to a challenge  of the  validity  of the ADEA  waiver  contained
herein.

     17.  Employee  understands  and agrees  that  Employee  has been given
through  February  8,  2002  (the  "Review  Period"),  which  is  at  least
twenty-one (21) days, to review and consider this General Release. Employee
understands that Employee may use as much or as little of the Review Period
as Employee wishes to prior to reaching a decision regarding the signing of
this  General  Release.   However,  Employee  acknowledges  that  under  no
circumstances  may  Employee  sign and date this General  Release  prior to
Employee's Release Date. Accordingly, Employee understands that if Employee
does not sign, date, and return this General Release during that portion of

                                                 Employee Initials:________
                                                                     Page 4
<PAGE>

     the Review Period falling after  Employee's  Release Date and prior to
the expiration of the Review Period,  the General Release will not be valid
and  Employee  will not receive the special  severance  benefits  under the
terms of this special severance offer.

     18. In accordance with federal law, Employee may revoke this Agreement
at any time within seven (7) calendar  days of the date of execution  noted
below. To be effective,  the revocation must be in writing and delivered to
Philip W. Block,  Administrative  Vice President,  Human  Resources,  50 E.
RiverCenter Boulevard, Covington, either by hand or mail within a seven (7)
day period following Employee's  execution of this Agreement.  If delivered
by mail, the rescission must be:

         1.       Postmarked within the seven (7) day period;
         2.       Properly addressed as noted above; and
         3.       Sent by Certified Mail, Return Receipt Requested.

     This Agreement  shall not become  effective or enforceable  until this
7-day revocation period has expired.

     19.  This  Agreement  constitutes  the  full,  complete,   and  entire
agreement  between the parties and supercedes all prior agreements  between
the parties and Employee's  signature indicates that he has not relied upon
any statements or  representations  or other matters from the Company,  its
agents,  officers, or employees.  Any future alteration,  modification,  or
waiver,  to be binding  on the  parties,  must be  reduced  to writing  and
attached hereto.

     20. Upon execution by both parties, this Agreement shall terminate all
prior  employment  and  severance  agreements  between the Employee and the
Company and its divisions or subsidiaries.

     21. This Agreement may be executed in one or more  counterparts,  each
of which shall be deemed to be an original but all of which  together  will
constitute one and the same instrument.

     22. It is agreed that this  Separation  Agreement and Release shall be
interpreted in accordance with the laws of the State of Kentucky.

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

                                                 Employee Initials:________
                                                                     Page 5


<PAGE>


                                IMPORTANT NOTICE

     BY SIGNING THIS  AGREEMENT,  YOU, JAMES R. BOYD,  AFFIRM THAT YOU HAVE
READ  AND  UNDERSTAND  THIS  AGREEMENT;  THAT YOU  HAVE  HAD A  MINIMUM  OF
TWENTY-ONE  (21) DAYS TO CONSIDER  THE  AGREEMENT  AND USED AS MUCH OF THIS
21-DAY PERIOD AS YOU WISHED PRIOR TO SIGNING;  THAT YOU HAVE NOT SIGNED AND
DATED THIS AGREEMENT  BEFORE YOUR RELEASE DATE;  THAT YOU UNDERSTAND  FULLY
ITS FINAL AND BINDING EFFECT;  THAT THE ONLY PROMISES MADE TO INDUCE YOU TO
SIGN THIS  AGREEMENT  ARE THOSE STATED HEREIN AND THAT YOU ARE SIGNING THIS
AGREEMENT VOLUNTARILY WITH THE FULL INTENT OF RELEASING THE COMPANY AND ALL
ASSOCIATED  ENTITIES  AND  INDIVIDUALS  FROM ANY AND ALL  CLAIMS,  KNOWN OR
UNKNOWN,  RELATING TO OR ARISING OUT OF YOUR EMPLOYMENT WITH ASHLAND;  THAT
YOU HAVE BEEN ADVISED THAT IT IS IN YOUR BEST INTEREST TO HAVE AN ATTORNEY,
HIRED BY YOU,  LOOK AT THE AGREEMENT AND GIVE YOU ADVICE ABOUT IT; THAT YOU
WERE  GIVEN A CHANCE TO REFUSE  TO SIGN  THIS  AGREEMENT;  AND THAT YOU ARE
AWARE THAT YOU HAVE AN  ADDITIONAL  SEVEN (7) DAYS IN WHICH TO REVOKE  YOUR
ACCEPTANCE OF THIS AGREEMENT.

                                                     ASHLAND INC.


                                            By:      __________________________

                                            Title:   __________________________



                                                     --------------------------
                                                     JAMES R. BOYD


                                                     --------------------------
                                                     Date of Execution


                                                 Employee Initials:________
                                                                     Page 6

<PAGE>


Name:  JAMES R. BOYD
Date of Presentation:

Attachment 1

                               RETIREMENT ELIGIBLE
                    SUMMARY OF PAYROLL CONTINUATION BENEFITS,
                 EMPLOYEE BENEFITS AND MISCELLANEOUS PROVISIONS

SPECIAL PAYROLL CONTINUATION BENEFITS

     On January 31, 2002 (your "Release Date"), your active employment will
end and you will become an employee without regularly assigned duties.

     After  your  Release  Date,  you  will  receive  payroll  continuation
payments  based on your  current rate of base pay  commencing  on the first
regularly  scheduled  pay date of  Ashland  employees  occurring  after the
effective  date of this  Agreement,  and ending on January  31,  2004 (your
Termination  Date). You will then be eligible to retire on February 1, 2004
(your "Retirement Date").

     The  length of your  payroll  continuation  payments  is  called  your
"Payroll Continuation Period."

     During your Payroll  Continuation  Period you will  receive  bi-weekly
payments of your base pay, less  applicable  withholding of taxes,  etc. If
you should die during  this  period,  all  remaining  payroll  continuation
payments  will be made in a lump sum to your  estate.  During your  Payroll
Continuation  Period,  your participation in the Company's employee benefit
plans  (except as otherwise  stated  herein) will continue as if you were a
regular, active employee. Your employment termination date will be the last
day of your Payroll Continuation Period (your "Termination Date").

     The following  provisions  summarize  the terms and  conditions of the
employee  benefit plans  available to you during your Payroll  Continuation
Period.  The actual terms of these plans are in their plan  documents.  You
should refer to the relevant  summary plan description for more information
on a particular plan.

SEPARATION AGREEMENT AND GENERAL RELEASE

     Program benefits will not begin until you have executed the Separation
Agreement  and  Release  and it becomes  valid.  If you do not  execute the
Separation  Agreement  and  Release,  you  will  not  receive  any  payroll
continuation  payments and your  Termination  Date from employment with the
company will be your Release Date.

                                                 Employee Initials:________
                                                                     Page 7
<PAGE>


PENSION PLAN

     Your rights  under the Pension Plan will be  determined  based on your
age,  years  of  plan  participation,  and  final  average  salary  on your
Termination  Date.  Therefore,  you will receive service credit during your
Payroll  Continuation  Period  and this  service  will  count  towards  the
computation of your pension benefit.  You will be eligible for an immediate
pension benefit commencing as of the first day of the month coincident with
or next following your Termination Date if either of the following applies:
on your  Termination  Date you are at least age 55; or on your  Termination
Date the sum of your age and years of  continuous  service  is at least 80.
Payment  of  your  pension   benefit   cannot  begin  before  your  Payroll
Continuation Period ends.

LIFE INSURANCE

     If you have not  waived  your  coverage,  your  non-contributory  life
insurance (equal to your annual base salary rate on your Release Date) will
continue during your payroll  continuation  period. If you waived your life
insurance  coverage  before your Release Date, you will continue to receive
the credit for waiving that  coverage  through  your  Payroll  Continuation
Period. You will not be allowed to reinstate your non-contributory coverage
should an annual enrollment occur during your Payroll  Continuation Period.
If you are in this  situation,  you will not be  eligible  for  group  life
coverage as a retiree.

     The level of your contributory life coverage in effect on your Release
Date will also  continue  during your  payroll  continuation  period at the
contribution rate for active employees of your age. You will not be allowed
to increase the level of your  contributory  life coverage.  If you did not
have  contributory  life coverage  before your Release Date you will not be
allowed to elect any such coverage after your Release Date.

     The level of any spouse and dependent  child life  insurance  coverage
you had on your  Release  Date  will  also  continue  during  your  payroll
continuation  period at the contribution  rate for active employees of your
age.  You will not be  allowed  to  increase  the  level of such  spouse or
dependent child life insurance  coverage.  You also will not be able to add
any spouse or dependent  child life coverage after your Release Date if you
did not have that coverage before your Release Date.

     You also have accidental  death and  dismemberment  insurance equal to
the amount of non-contributory  and contributory life insurance during your
payroll continuation period.

     If you  want to  decrease  or  cancel  your  contributory,  spouse  or
dependent child coverage,  call the Benefits  Counselors at (800) 782-4669.
You can make this kind of change within 45 days of your Release  Date.  You
can reduce your coverage as previously  described at other times if allowed
under the terms of the plan.

     If you  are at  least  age 55 or the  sum of your  age  and  years  of
continuous service is at least 80, you have 5 years of service, and you had
plan  coverage  on  your  Termination

                                                 Employee Initials:________
                                                                     Page 8
<PAGE>

     Date,  you will be eligible for  company-paid  retiree  life  coverage
equal to $10,000.  Contributory coverage, spouse coverage,  dependent child
coverage  and  accidental  death  and  dismemberment  coverage  end at your
Termination Date.

MEDICAL AND DENTAL

     If you are  enrolled  in the  Medical or Dental  plan on your  Release
Date,  you will be  eligible  to continue  your  participation  during your
Payroll  Continuation  Period at the same contribution rates which apply to
regular,  active  employees.  If you waived your medical or dental coverage
before your  Release  Date,  you will  continue  to receive the  applicable
credit for waiving that coverage through your Payroll  Continuation Period.
You will be allowed to enroll in the plan or plans for which you had waived
coverage  during your Payroll  Continuation  Period on the same basis as an
active employee. This could happen if an annual enrollment occurred and you
were still on Payroll  Continuation  during the next year.  This could also
occur if you  experience  an election  change  event  during  your  Payroll
Continuation  Period.  You  should  refer  to  the  relevant  summary  plan
description for more information.

     If you  are at  least  age 55 or the  sum of your  age  and  years  of
continuous  service is at least 80, and you have 5 years of service on your
Termination  Date,  you may be  eligible  for  retiree  coverage  under the
Medical Plan and the Dental Plan. Dental coverage during retirement is only
available if you were covered by the plan on your  Termination  Date.  Your
dental  coverage  during  retirement  also  must end on the last day of the
month in which you attain age 65.  Medical  coverage  during  retirement is
generally  only  available  if  you  were  covered  by  the  plan  on  your
Termination  Date. The exceptions to this general rule are described in the
summary plan description.

     If you  elect  retiree  coverage,  it  would  begin at the end of your
Payroll Continuation Period. Your retiree contributions would be determined
using your service to your Termination Date.

     Although you may be eligible to elect  retiree  coverage,  federal law
requires that COBRA  continuation  coverage also be offered for the plan or
plans in which you were covered.  If the amount you have to pay for retiree
coverage is greater  than what you paid for the same  coverage as an active
employee,  you can choose to elect the COBRA continuation  coverage instead
of the  retiree  coverage.  You will  receive  a  written  summary  of your
options. If you choose the COBRA continuation coverage you need to be aware
of two items.  First,  coverage  during your  Payroll  Continuation  Period
counts towards your maximum period of continued  coverage under COBRA. That
maximum period is 18 months for a reduction in working hours, which is what
occurred on your Release  Date.  Therefore,  if your  Payroll  Continuation
Period  is  equal  to or  greater  than 18  months,  you  will not have the
opportunity to elect COBRA. Second, elected COBRA coverage is for a limited
duration,  while  retiree  medical  coverage  may last for life and retiree
dental  coverage may last until the end of the month in which you reach age
65.

                                                 Employee Initials:________
                                                                     Page 9
<PAGE>


REIMBURSABLE ACCOUNTS PLAN

     During your Payroll  Continuation  Period you may  participate in both
the Dependent Day and Health Care Accounts under the Reimbursable  Accounts
Plan on the same  basis as an  active  employee.  Your  participation  only
continues for the remainder of the calendar year in which your Release Date
occurs. Your participation will end earlier if your Termination Date occurs
before the end of that calendar  year. In that event,  though,  you will be
eligible to elect COBRA  continuation  coverage  for the  remainder of that
calendar year. A COBRA  continuation of coverage  election may only be made
with respect to a Health Care Account election.

     Any amount you have remaining in the Dependent Care Account and/or the
Health Care  Account is available  to  reimburse  you for covered  services
incurred  before  the end of the  month in which  your  coverage  under the
particular  account ends. Claims for services performed after this time are
not eligible for  reimbursement.  Claims for reimbursement must be filed by
June 30 in the calendar year  following  your Release Date.  Any amounts in
your accounts that are not used will be forfeited according to IRS rules.


SAVINGS PLAN

     During  your  Payroll  Continuation  Period,  to the  extent  you  are
eligible, you may continue participation in the Savings Plan as if you were
an active  employee.  You may continue to contribute to the Plan by payroll
deduction and continue to receive Company matching contributions  according
to Plan rules.

     Upon your Termination  Date, you have a number of withdrawal  options.
If you have an unpaid loan, you may continue to make monthly payments after
your  Termination  Date.  Fidelity  will  send  you  payment   instructions
approximately 4 weeks following your  Termination  Date. To receive Savings
Plan information, call Fidelity Investments at (800) 827-4526. You may also
access  Savings Plan  information  on the  Internet by clicking  "Access My
Account" under NetBenefits at www.401k .com.

                                                 Employee Initials:_________
                                                                     Page 10
<PAGE>


LESOP

     During   your   Payroll   Continuation   Period   you  will   continue
participation  in the  LESOP as if you were an  active  employee.  The last
allocation  under the LESOP occurred on March 31, 1996.  Therefore,  if you
were  not a  participant  in the  LESOP at that  time,  you do not have any
benefit in that plan. Upon your Termination  Date, you may elect to receive
a  distribution  of your  entire  LESOP  account in cash or shares (if your
spouse  consents)  or you may elect to transfer  50% of your account to the
Pension Plan and receive the  remaining  50% in shares.  If there are fewer
than 100 shares in your account after the  transfer,  then you may elect to
have them distributed in cash. LESOP  distributions are usually made 3 to 4
weeks from the Friday that the Employee Benefits Department  processes your
withdrawal form.

LONG TERM DISABILITY

     You are not eligible to participate in the Long Term  Disability  Plan
during your Payroll Continuation Period. Therefore, if you were enrolled in
that plan, your coverage ends on your Release Date.

VOLUNTARY AD&D

     If  enrolled,  you will  continue to be eligible  for  voluntary  AD&D
coverage during your Payroll  Continuation  Period. Your participation will
end on your Termination Date.

     The level of your coverage on your Release Date will  continue  during
your  payroll  continuation  period  at the  contribution  rate for  active
employees of your age. You will not be allowed to increase the coverage. If
you did not have this  coverage  before your  Release  Date you will not be
allowed to elect any such coverage after your Release Date.

     You may decrease or cancel your coverage as allowed under the terms of
the plan.

OCCUPATIONAL ACCIDENTAL DEATH AND DISMEMBERMENT AND TRAVEL ACCIDENT INSURANCE
PLAN

     Your   coverage   under   the   Occupational   Accidental   Death  and
Dismemberment  Plan and the  Travel  Accident  Insurance  Plan ends on your
Release Date.

VISION COST ASSISTANCE PLAN

     You will remain  eligible  for the Vision  Plan  during  your  Payroll
Continuation Period. If you are enrolled for this coverage,  it will end on
your Termination Date, although you may be able to elect COBRA continuation
of coverage at that time. The COBRA  qualifying  event is the occurrence of
your  Release  Date,  which  constitutes  a  reduction  in  working  hours.
Therefore,  coverage during your Payroll Continuation Period counts towards
your maximum period of continued  coverage under COBRA. That maximum

                                                 Employee Initials:_________
                                                                     Page 11
<PAGE>

     period is 18 months for a reduction in working  hours.  Therefore,  if
your Payroll Continuation Period is equal to or greater than 18 months, you
will not have the opportunity to elect COBRA.
LEGAL PLAN

     You  remain  eligible  for the  Legal  Plan for the  remainder  of the
calendar  year that contains your Release Date if you were enrolled in that
plan at the time of your Release  Date.  You may retain your  enrollment or
initiate  enrollment  during an annual  enrollment  effective  for the next
calendar year if your Payroll  Continuation  Period  extends into that next
calendar year. Your participation ends on your Termination Date. You may be
eligible for coverage for covered  legal  matters that are not completed as
of your  Termination  Date.  Consult  your  summary  plan  description  for
details.

GROUP AUTO AND HOMEOWNERS INSURANCE; LONG TERM CARE

     You will remain  eligible for the group auto and homeowners  insurance
and the long term care insurance during your Payroll  Continuation  Period.
You may continue the relevant  coverage after your  Termination Date on the
same basis as any other former employee.  Continuing that coverage, though,
is strictly between you and the applicable  insurance company that provides
the coverage.


ADOPTION ASSISTANCE PROGRAM

     You remain  eligible for the Adoption  Assistance  Program during your
Payroll  Continuation  Period.   Expenses  that  arise  on  or  after  your
Termination Date are not covered.

GROUP FINANCIAL SERVICES

     You remain eligible for the group financial  services in which you are
enrolled  during  your  Payroll  Continuation  Period.  You may retain your
enrollment or initiate enrollment during an annual enrollment effective for
the next calendar  year if your Payroll  Continuation  Period  extends into
that next calendar year. If you are enrolled for these services at the time
of your  Termination  Date,  you may continue them for the remainder of the
calendar  year if you make  appropriate  arrangements  with the provider to
make any required payments then remaining for the services.

                                                Employee Initials:__________
                                                                     Page 12
<PAGE>


                            MISCELLANEOUS PROVISIONS

UNUSED VACATION/SICK PAY

     You  will be paid  for any  unused  earned  and  accrued  vacation  in
bi-weekly  payments  following your Release Date based on the amount earned
and  accrued  as of your  Release  Date.  You will not  receive  additional
vacation or sick pay accruals during your Payroll  Continuation  Period and
you will not be paid for any unused sick pay.

CREDIT UNION

     If you are  currently  a member,  you will  continue to be eligible to
fully  participate  in the Credit Union  during your  Payroll  Continuation
Period.  Upon your Termination Date, you will be eligible to participate in
the Credit Union to the same extent as other retirees.

EDUCATIONAL REIMBURSEMENT

     If the  course  has  been  approved  for  reimbursement  prior to your
Release Date and will be completed  within six months of your Release Date,
you will be reimbursed  for approved costs provided you complete the course
within policy guidelines.

To be reimbursed, you must provide the following:

1.   Your name, social security number, complete mailing address
and phone number;

2.   An itemized receipt for tuition and fees issued by the
educational institution;  and

3.  A grade report from the educational institution.

     All of the above  information  should be sent to:  Employee  Services,
Corporate Human Resources, Ashland Inc., 3499 Blazer Parkway, Lexington, KY
40509.

ASHLAND SCHOLARS PROGRAM

     You are eligible to participate in the Ashland Scholars Program during
your  Payroll  Continuation  Period  and  after  your  Termination  Date in
accordance with the program.

SERVICE AWARDS

     If at the time of your  Release  Date you are  within 6 months  of the
date on which you would have  received a Service  Award,  the Service Award
will be provided to you on your regularly scheduled date.

                                                Employee Initials:__________
                                                                     Page 13
<PAGE>

MATCHING GIFTS

     You are eligible to  participate  in the Matching Gifts Program during
your  Payroll  Continuation  Period  and  after  your  Termination  Date in
accordance with the program.

FITNESS CENTER

     During the Payroll  Continuation  Period, you are eligible to continue
to access the facility. Upon your Termination Date, you will be eligible to
continue to access the facility and participate to the same extent as other
retirees.

UNEMPLOYMENT COMPENSATION

     State laws control  whether you are  eligible to receive  unemployment
compensation.  If you  decide to file for  unemployment  compensation,  the
Company is obligated to inform the state's  unemployment  commission of the
nature of your termination.

EXPENSES

     If you  have  incurred  any  expenses  that  are  reimbursable  by the
Company,  you should submit an approved Expense Report, along with required
receipts, to your supervisor prior to your Release Date.

VERIFICATION OF EMPLOYMENT

     The Company will only verify dates of  employment  and last job title,
department  and  work  location.   The  Company  will  only  release  other
information  concerning  your  employment as required by Company  policy or
law.

EMPLOYEE ASSISTANCE PROGRAM

     Family  Enterprises,  Inc.  will continue to be available for personal
counseling  through your Payroll  Continuation  Period  should you have the
need. They can be contacted by calling (800) 522-6330.

FUTURE CORRESPONDENCE

     Any future  information  from the Company  will be sent to the address
you currently have on file (i.e. employee benefit information, W-2's, etc.)
Should your address change in the near future you should contact  Corporate
Human Resources at (800) 782-4669.

                                                Employee Initials:__________
                                                                     Page 14



                        IMPORTANT NOTE ABOUT THIS SUMMARY


     DETAILS ON THE BENEFITS  FROM THE  EMPLOYEE  BENEFIT  PLANS  DISCUSSED
ABOVE ARE PROVIDED IN THE SUMMARY PLAN  DESCRIPTION  BOOKLET FOR EACH PLAN.
IN ALL EVENTS,  THE RIGHTS AND  OBLIGATIONS  OF THE COMPANY AND ALL COVERED
EMPLOYEES,  BENEFICIARIES  OR OTHER  CLAIMANTS  ARE GOVERNED  SOLELY BY THE
TERMS OF THE OFFICIAL DOCUMENTS UNDER WHICH EACH PARTICULAR PLAN, POLICY OR
PROGRAM IS OPERATED.




                                                Employee Initials:_________
                                                                    Page 15

<PAGE>


                                  ASHLAND INC.
                         ADDENDUM TO RETIREMENT ELIGIBLE
                    SUMMARY OF PAYROLL CONTINUATION BENEFITS,
                 EMPLOYEE BENEFITS AND MISCELLANEOUS PROVISIONS


STOCK OPTIONS

     Your Ashland Inc.  stock options  shall  continue to vest through your
Payroll Continuation Period. Upon your Termination Date, all vested options
may be exercised for the remaining term of the options.

INCENTIVE COMPENSATION

     You will be eligible to earn incentive  compensation under the Ashland
Inc.  Incentive  Compensation  Plan through your Release  Date. If and when
payments  are  made,  you shall  receive  payment  in cash of any  pro-rata
portion  of  Ashland's  incentive  compensation  bonus  based on  Ashland's
performance through the fiscal year and your current individual performance
rating.

PUP/LTIP

     If and when payments are made, if eligible,  you shall receive payment
in cash of any pro-rata  portion of the  amount(s)  you would have received
under Ashland's  performance  unit/share plans for the 1999-2002 cycle, and
the Long Term  Incentive  Plan for the  2001-2003  cycle and the  2002-2004
cycle.  Payments shall be pro-rated through your Release Date, and based on
actual  Ashland Inc.  measures  (as  specified in the plans and your awards
under  the  plans)  through  the  entire  three or  four-year  plan  cycles
(including adjustments for unusual items).

Deferred Compensation

     During your Payroll  Continuation Period, you may continue to elect to
defer your salary and any IC, PUP, LTIP and ERISA  forfeiture  payments (if
applicable).  Please note fiscal  year 2003 and 2004  salary  payments  and
ERISA  forfeiture  payments will be deferred in accordance with your fiscal
year 2002 deferred compensation plan ("DCP") elections.

     Upon your  Termination  Date, you shall receive  distribution  of your
"DCP"  account(s)  in  accordance  with your DCP  election(s).  Any changes
regarding  the  distribution  of your  DCP  account(s)  must be made by the
earlier  of (i) six  months  prior to the first day of the month  following
your  Termination  Date; or (ii) December 31 preceding the first day of the
month following your Termination Date.

                                                Employee Initials:__________
                                                                     Page 16


<PAGE>


Financial Planning

     You shall be  reimbursed  for eligible  financial  planning  expenses,
including  eligible expenses for services provided by ACO, incurred through
the end of calendar year 2004.

OUTPLACEMENT ASSISTANCE

     You shall be  eligible  to receive  outplacement  assistance  from Lee
Hecht Harrison as provided in Attachment II to this Agreement.

Administrative ASSISTANCE

     During the Payroll  Continuation  Period,  and for a three year period
thereafter, you will receive an annual payment of Thirty-Thousand ($30,000)
Dollars for your use in securing  office space,  equipment and personnel as
you deem appropriate for your personal and professional use. These payments
shall be in lieu of any such space, equipment or administrative  assistance
being provided to you directly by the Company.

Executive Physicals

     You shall be eligible for an Executive  Physical during calendar years
2002 and 2003.

Pension Plan, Non-qualified Pension Plan and SERP

     If eligible,  you shall receive  benefits  under these plans as if you
remained  actively  employed  up through  the earlier of your death or your
Termination  Date.  For purposes of  determining  your  benefits  under the
Pension  Plan  or,  if  approved,  the  Non-qualified  Pension  Plan,  your
compensation  history will be determined as of your  Termination  Date. For
purposes of  determining  your benefits  under the SERP, if approved,  your
compensation history will be determined as of your Release Date.


                                                Employee Initials:__________
                                                                     Page 17
<PAGE>












</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>9
<FILENAME>indem.txt
<DESCRIPTION>EXHIBIT 10.8
<TEXT>


                         INDEMNIFICATION AGREEMENT

     This  Agreement  is made this  _____ day of  ______,  _______  between
ASHLAND  INC.,  a Kentucky  corporation  ("Company"),  and the  undersigned
individual ("Director").

                                WITNESSETH:

     WHEREAS, Director is a member of the Board of Directors of Company and
in such capacity is performing a valuable service for Company; and

     WHEREAS, Article X of the Second Restated Articles of Incorporation of
Company  (the  "Article")  authorizes  Company to  indemnify  directors  of
Company to the maximum extent permitted by law; and

     WHEREAS,  the Article  authorizes Company to enter into contracts with
members of its Board of Directors with respect to  indemnification  of such
directors; and

     WHEREAS,  recent  developments  with respect to the  applications  and
enforcement of indemnification provisions and the availability of insurance
to protect  directors against  liabilities  generally have raised questions
concerning  the  adequacy and  reliability  of the  protection  afforded to
directors thereby; and

     WHEREAS, to provide greater certainty with respect to Director's right
to indemnification and the payment thereof,  and thereby induce Director to
serve as a member  of the  Board  of  Directors  of  Company,  Company  has
determined and agreed to enter into this Agreement with Director.

     Now, THEREFORE, in consideration of Director's agreement to serve as a
Director  after the date of this  Agreement,  Company and Director agree as
follows:

     1. INDEMNITY OF DIRECTOR.  Subject only to the exclusions set forth in
Sections 2 and 12 of this Agreement, Company hereby agrees to hold harmless
and indemnify  Director  against any and all reasonable  costs and expenses
(including,  but not  limited  to,  attorneys'  fees)  and any  liabilities
(including, but not limited to, judgments,  fines, penalties and reasonable
settlements)  paid by or on behalf  of, or  imposed  against,  Director  in
connection with any threatened, pending or completed claim, action, suit or
proceeding,   whether   civil,   criminal,   administrative,   legislative,
investigative or other (including any appeal relating  thereto) and whether
made or  brought  by or in the  right of  Company  or  otherwise,  in which
Director  is,  was or at  any  time  becomes  a  party  or  witness,  or is
threatened to be made a party or witness,  or  otherwise,  by reason of the
fact that  Director  is, was or at any time  becomes a  director,  officer,
employee  or agent of Company or a  director,  officer,  partner,  trustee,
employee or agent of an Affiliate of Company,  as hereafter defined, or any
employee  benefit plan  maintained by Company or any Affiliates of Company.
As used in this Agreement,  an Affiliate of Company means any  corporation,
partnership  or other entity which,  directly or indirectly,  controls,  is
controlled by or is under common control with Company.

     2.  LIMITATIONS  ON INDEMNITY.  No indemnity  pursuant to Section 1 of
this Agreement shall be paid by Company:

     A. if a court of competent  jurisdiction  renders a final adjudication
on the merits,  in an action,  suit or  proceeding  in which  Director is a
party, that such indemnification is prohibited by law; or

     B. in connection with any transaction with respect to which a court of
competent  jurisdiction  renders a final  adjudication on the merits, in an
action,  suit  or  proceeding  in  which  Director  is a  party,  [i]  that
Director's  personal  financial interest was in conflict with the financial
interests of Company or its shareholders,  or [ii] that Director derived an
improper personal benefit; or

     C. on account of acts or  omissions  of Director to the extent a court
of competent jurisdiction renders a final adjudication on the merits, in an
action,  suit or proceeding in which Director is a party, that such acts or
omissions  [i]  were  not in  good  faith,  or  [ii]  involved  intentional
misconduct, or [iii] were known to Director to be a violation of law; or

     D. in respect of any  liability  to Company to the extent that a court
of competent jurisdiction renders a final adjudication on the merits, in an
action,  suit or  proceeding  in  which  Director  is a  party,  that  such
liability to Company  arises under any federal or state  statute  providing
for liability directly to Company by reason of the fact that Director is or
was a director of Company, including, by way of example and not limitation,
liability  under Section 16(b) of the  Securities  Exchange Act of 1934, as
amended (the "Exchange Act"); or

     E. to the  extent and only to the  extent  that,  prior to a Change of
Control,  as hereinafter  defined,  a majority of the Board of Directors of
Company or a duly designated  committee thereof,  in either case consisting
of directors who are not at the time parties to the claim,  action, suit or
proceeding against Director,  determines that the amount of expenses and/or
settlements for which indemnification is sought is unreasonable; or

     F. in connection  with any claim,  suit,  action or proceeding  [i] if
such claim,  action, suit or proceeding was initiated by Director or his or
her  personal  or  legal   representative,   or  involved   the   voluntary
solicitation  or  intervention  by Director or his or her personal or legal
representative (other than an action to enforce  indemnification  rights or
an  action  initiated  with the  approval  of a  majority  of the  Board of
Directors),  or  [ii]  to the  extent  that  such  claim,  action,  suit or
proceeding  arose as a result of acts or  omissions  of Director  occurring
prior to the date of this Agreement.

     For purposes of this Agreement,  a "Change in Control" shall be deemed
to have  occurred  if [i] any  "person"  (as such term is used in  Sections
13(d)  and  14(d) of the  Exchange  Act),  other  than a  trustee  or other
fiduciary holding securities under an employee benefit plan of Company or a
corporation owned,  directly or indirectly,  by the shareholders of Company
in  substantially  the  same  proportions  as their  ownership  of stock of
Company,  is or becomes  the  "beneficial  owner" (as defined in Rule 13d-3
under the Exchange  Act),  directly or  indirectly of securities of Company
representing  20% or more of the combined  voting  power of Company's  then
outstanding  voting  securities;  or [ii] during any period of  twenty-four
(24) consecutive months (not including any period prior to the date of this
Agreement), individuals who at the beginning of such period constituted the
Board of Directors  of Company and any new director  (other than a director
designated  by a person who has entered into an  agreement  with Company to
effect a transaction  described in clauses [ii or [iii] of this  Paragraph)
whose  election by the Board of  Directors  or  nomination  for election by
Company's  shareholders was approved by a vote of at least two-thirds (2/3)
of the  directors  then still in office who either  were  directors  at the
beginning of the period or whose  election or  nomination  for election was
previously  so approved,  cease for any reason to  constitute a majority of
the Board of  Directors  or [iii] the  shareholders  of  Company  approve a
merger or consolidation of Company with any other corporation, other than a
merger or  consolidation  which would  result in the voting  securities  of
Company  outstanding or by being  converted  into voting  securities of the
surviving  entity) at least 70% of the combined  voting power of the voting
securities  of Company or such  surviving  entity  outstanding  immediately
after such merger of  consolidation;  or [iv] the  shareholders  of Company
approve a plan of complete  liquidation  of Company or an agreement for the
sale or  disposition by Company of all or  substantially  all of the assets
owned by Company, whether directly or indirectly.

     3.  CONTINUATION  OF INDEMNITY.  All  agreements  and  obligations  of
Company  contained  in this  Agreement  shall  continue  during  the period
Director serves in any capacity entitling Director to indemnification under
this Agreement and shall  continue  thereafter so long as Director shall be
subject to any possible claim or threatened,  pending or completed  action,
suit or proceeding, whether civil, criminal, administrative, legislative or
investigative, or other, arising as a result of acts or omissions occurring
during the period Director served as a director of Company.

     4.  NOTIFICATION  OF  CLAIM.  It shall  be a  condition  precedent  to
indemnification under this Agreement that, within twenty days after receipt
by Director of actual notice that  Director is or will be a party,  witness
or  otherwise  involved  in any  threatened  or  pending  action,  suit  or
proceeding  described in Section 1 of this  Agreement,  Director shall have
notified Company in writing of the assertion or commencement  thereof;  but
the omission to so notify  Company  will not relieve it from any  liability
which it may have to Director otherwise than under this Agreement.

     5. ADVANCEMENT OF COSTS AND EXPENSES.  The costs and expenses incurred
by Director in  investigating,  defending or appealing  any  threatened  or
pending  claim or any  threatened  or pending  action,  suit or  proceeding
described in Section 1 of this Agreement  shall,  at the written request of
Director,  be paid by Company in advance of final  judgment  or  settlement
with the  understanding,  undertaking and agreement hereby made and entered
into by Director and Company,  that  Director  shall,  if it is  ultimately
determined  in  accordance  with  Section 2 or  pursuant to Section 12 that
Director is not entitled to be indemnified, or was not entitled to be fully
indemnified,  repay to Company  such  amount,  or the  appropriate  portion
thereof,  so paid or  advanced.  Such  advancements  shall be made at least
quarterly.

     6.  ENFORCEMENT.  If a claim for payment  under this  Agreement is not
paid in full by Company  within ninety days after a written demand has been
delivered by Director to Company, or within thirty days after delivery of a
written  demand by Director to Company based upon a final and  unappealable
judgment of a court of  competent  jurisdiction,  Director  may at any time
thereafter  bring suit against  Company to recover the unpaid amount of the
claim  and,  if  successful  in whole or in part,  Director  shall  also be
entitled to be paid all costs and  expenses  (including  but not limited to
attorneys' fees) incurred by Director in prosecuting such suit. In any suit
brought by Director to enforce this Agreement, the burden of proof shall be
on Company to establish  that Director is not entitled to the relief sought
under this Agreement.


     7.  ESTABLISHMENT  OF SECURITY.  In the event of a Potential Change in
Control,  as hereafter  defined,  Company  shall,  upon written  request of
Director,  obtain an  irrevocable  letter of credit  issued by a commercial
bank,  satisfactory  to  Director,  which  letter of credit shall be in the
amount of $10,000,000, shall have a term of ten years, shall name Director,
and  Director's  spouse,  heirs and personal and legal  representatives  as
beneficiary and shall permit  Director,  and Director's  heirs and personal
and legal representatives to draw thereunder from time to time such amounts
as are due and owing to Director under this Agreement,  whether in the form
of an  advancement  or  indemnification  or  otherwise,  upon  delivery  of
Director's  certificate  to the effect that Director is entitled to be paid
such  amounts  pursuant to the terms of this  Agreement.  The issuer of the
letter of credit  shall be chosen by Director  and all  expenses,  fees and
other   disbursements   incurred  in  connection   with  the  issuance  and
enforcement of such letter of credit shall be paid by Company.  Obtaining a
letter of credit shall not relieve Company of any of its obligations  under
this Agreement.

     The parties  acknowledge that Director will have no adequate remedy at
law if Company  breaches  its  obligations  under this Section 7, and agree
that, in addition to any other  remedies  which may be available,  Director
shall be entitled to the equitable  remedy of specific  performance  in the
event of a breach  or  threatened  breach  by  Company  of its  obligations
hereunder.

     For purposes of this Agreement,  a "Potential Change in Control" shall
be deemed to have  occurred if [i] Company  enters into an  agreement,  the
consummation  of which  would  result  in the  occurrence  of a  Change  in
Control; [i] any person (including Company) publicly announces an intention
to  take  or to  consider  taking  actions  which,  if  consummated,  would
constitute a Change in Control;  [iii] any person,  other than a trustee or
other  fiduciary  holding  securities  under an  employee  benefit  plan of
Company or a corporation owned, directly or indirectly, by the stockholders
of Company in  substantially  the same  proportions  as their  ownership of
stock of Company,  who is on the date  hereof,  or hereafter  becomes,  the
beneficial  owner,  directly  or  indirectly,   of  securities  of  Company
representing  9.5% or more of the combined  voting power of Company's  then
outstanding voting securities, hereafter or thereafter increases Director's
beneficial  ownership of such securities by one-half  percent (.5%) or more
over the  percentage  so owned by such  person on the date hereof or on the
date of becoming such a beneficial owner; or [iv] the Board of Directors of
Company  adopts a  resolution  to the effect  that,  for  purposes  of this
Agreement, a Potential Change in Control has occurred.

     8.  CONTRIBUTION.  If the full indemnity provided in Section 1 of this
Agreement may not be paid to Director because of any exclusion in Section 2
of this  Agreement,  then in  respect of any  actual or  threatened  claim,
action, suit or proceeding in which Company is jointly liable with Director
(or would be if joined  in such  claim)  Company  shall  contribute  to the
amount of expenses and liabilities  incurred by Director in such proportion
as is appropriate to reflect [i] the relative  benefits received by Company
on the one hand and  Director on the other hand from the acts or  omissions
from  which  such  claim,  action,  suit or  proceeding  arose and [ii] the
relative fault of Company, including its other directors, officers, agents,
employees and other representatives, on the one hand and of Director on the
other hand in connection  with the acts or omissions which resulted in such
claim, action, suit or proceeding,  as well as any other relevant equitable
considerations.   The  relative  fault  of  Company,  including  its  other
directors,  officers,  agents, employees and other representatives,  on the
one hand and of Director on the other hand shall be determined by reference
to, among other things, the parties' relative intent, knowledge,  access to
information  and  opportunity  to  correct  or  prevent  the  circumstances
resulting in such claim, action, suit or proceeding. Company agrees that it
would not be just and equitable if contribution  pursuant to this Section 8
were  determined  by pro rata  allocation or any other method of allocation
which does not take into account the foregoing equitable considerations.

     9. PARTIAL  INDEMNITY.  If Director is entitled under any provision of
this Agreement to  indemnification  by Company for some or a portion of the
costs,   expenses,   judgments,   fines,  penalties  and  amounts  paid  in
settlement,   but  not  for  the  total  amount   thereof,   Company  shall
nevertheless  indemnify  Director for the portion thereof to which Director
is entitled.

     10. NON-EXCLUSIVITY. The rights of Director under this Agreement shall
be in  addition  to any other  rights  Director  may have  under the Second
Restated Articles of Incorporation or By-laws of Company,  both as amended,
agreement,  vote of shareholders or disinterested directors, as a matter of
law or otherwise.

     11.  SUBROGATION.  In the event of any payment  under this  Agreement,
Company  shall be  subrogated  to the extent of such  payment to all of the
rights of recovery of Director,  who shall execute all papers  required and
shall do everything that may be necessary to secure such rights,  including
the execution of such documents  necessary to enable Company effectively to
bring suit to enforce such rights.

     12. NO DUPLICATION OF PAYMENTS. Company shall not be liable under this
Agreement to make any payment to the extent Director has otherwise actually
received payment (under any insurance  policy,  By-law or otherwise) of the
amounts otherwise  payable by Company under this Agreement.  Director shall
use best  efforts to collect from all third  parties any amounts  otherwise
payable by Company under this Agreement. If Director is entitled to but has
not  received  payment from a third party  (under any  insurance  policy or
otherwise)  of  amounts   otherwise  payable  by  the  Company  under  this
Agreement,  Company shall  nevertheless  pay Director such amounts with the
understanding,  undertaking  and agreement  hereby made and entered into by
Director  and Company that  Director  will repay to Company such amounts to
the extent they are ultimately paid to Director by such third party.

     13. BINDING EFFECT.  This Agreement shall be binding upon and inure to
the  benefit  of and  be  enforceable  by  the  parties  hereto  and  their
respective  successors  and  assigns,  including  any  direct  or  indirect
successor  by  purchase,  merger,  consolidation  or  otherwise  to  all or
substantially  all of the business  and/or  assets of Company,  heirs,  and
personal and legal representatives;  provided, however, that this Agreement
is  personal  to  Director  and may not be  transferred  or  encumbered  by
Director in any way.

     14. SEVERABILITY.  The provisions of this Agreement shall be severable
in the event that any of the  provisions  hereof  (including  any provision
within a single  section,  paragraph  or  sentence)  are held by a court of
competent jurisdiction to be invalid, void or otherwise unenforceable,  and
the remaining  provisions  shall remain  enforceable  to the fullest extent
permitted by law.

     15. GOVERNING LAW; AMENDMENT.

     A. This Agreement shall be interpreted and enforced in accordance with
the laws of the  Commonwealth of Kentucky.

     B. No amendment,  modification,  termination or  cancellation  of this
Agreement  shall be  effective  unless in  writing  signed by both  parties
hereto.

     16.  NOTICES.  Any notice to Company or Director  under this Agreement
shall be in writing and shall be delivered  personally or sent by overnight
courier service or certified mail:

        If to Company:                       Ashland Inc.
                                             50 E. RiverCenter Blvd.
                                             P.O. Box 391
                                             Covington, Kentucky 41012-0391
                                             Attn: Secretary

        If to Director:
                                            -------------------------------
                                            -------------------------------
                                            -------------------------------



     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the day and year first above written.

                                            ASHLAND INC.

                                            By:
                                               ---------------------------------

                                            Title:  Chairman of the Board and
                                                     Chief Executive Officer


                                            Director:

                                            ------------------------------------
                                           [Director Name]


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12
<SEQUENCE>10
<FILENAME>comprati.txt
<DESCRIPTION>EXHIBIT 12
<TEXT>

EXHIBIT 12
                                  ASHLAND INC.
               COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
                   AND EARNINGS TO COMBINED FIXED CHARGES AND
                            PREFERRED STOCK DIVIDENDS
                                  (In millions)
<TABLE>
<CAPTION>



                                                                                    Years Ended September 30
                                                                  -------------------------------------------------------------
                                                                    1997        1998         1999         2000         2001
                                                                  ----------  ----------   ----------   ----------   ----------
<S>                                                               <C>         <C>          <C>          <C>          <C>
EARNINGS
--------

Income from continuing operations                                 $    169    $    178     $    291     $    292     $    406
Income taxes                                                           125         114          193          191          275
Interest expense                                                       148         133          141          189          160
Interest portion of rental expense                                      48          40           35           39           41
Amortization of deferred debt expense                                    1           1            1            2            2
Undistributed earnings of unconsolidated affiliates                     (6)        (62)         (11)        (112)         (90)
Earnings of significant affiliates*                                      7           -            -            -            -
                                                                  ----------  ----------   ----------   ----------   ----------
                                                                  $    492    $    404     $    650     $    601     $    794
                                                                  ==========  ==========   ==========   ==========   ==========


FIXED CHARGES
-------------

Interest expense                                                  $    148    $    133     $    141     $    189     $    160
Interest portion of rental expense                                      48          40           35           39           41
Amortization of deferred debt expense                                    1           1            1            2            2
Capitalized interest                                                     1           -            -            -            -
Fixed charges of significant affiliates*                                 5           -            -            -            -
                                                                  ----------  ----------   ----------   ----------   ----------
                                                                  $    203    $    174     $    177     $    230     $    203
                                                                  ==========  ==========   ==========   ==========   ==========


COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
-------------------------

Preferred dividend requirements                                   $      9    $      -     $      -     $      -     $      -
Ratio of pretax to net income**                                       1.74           -            -            -            -
                                                                  ----------  ----------   ----------   ----------   ----------
Preferred dividends on a pretax basis                                   17           -            -            -            -
Fixed charges                                                          203         174          177          230          203
                                                                  ----------  ----------   ----------   ----------   ----------
                                                                  $    220    $    174     $    177     $    230     $    203
                                                                  ==========  ==========   ==========   ==========   ==========


RATIO OF EARNINGS TO FIXED CHARGES                                    2.42        2.32         3.67         2.61         3.91

RATIO OF EARNINGS TO COMBINED FIXED
CHARGES AND PREFERRED STOCK DIVIDENDS                                 2.24        2.32         3.67         2.61         3.91

</TABLE>

*        Significant  affiliates are companies  accounted for on the equity
         method  that are 50% or greater  owned or whose  indebtedness  has
         been  directly  or   indirectly   guaranteed  by  Ashland  or  its
         consolidated subsidiaries.

**       Computed as income from continuing  operations before income taxes
         divided  by  income  from  continuing  operations,  which  adjusts
         dividends on preferred stock to a pretax basis.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13
<SEQUENCE>11
<FILENAME>mda.txt
<DESCRIPTION>EXHIBIT 13
<TEXT>
Ashland Inc. and Consolidated Subsidiaries
MANAGEMENT'S DISCUSSION AND ANALYSIS

Years Ended September 30
<TABLE>
<CAPTION>
(In millions)                                                               2001                         2000               1999
<S>                                                                       <C>                          <C>                <C>
SALES AND OPERATING REVENUES
APAC                                                                      $2,624                       $2,505             $1,678
Ashland Distribution                                                       2,849                        3,214              2,925
Ashland Specialty Chemical                                                 1,248                        1,283              1,263
Valvoline                                                                  1,092                        1,077              1,059
Intersegment sales                                                           (94)                        (118)              (124)
                                                                        ---------------------------------------------------------
                                                                          $7,719                       $7,961             $6,801
                                                                        =========================================================
OPERATING INCOME (1)
APAC                                                                      $   55                       $  140             $  108
Ashland Distribution                                                          35                           70                 37
Ashland Specialty Chemical                                                    58                           95                107
Valvoline                                                                     81                           78                 74
Refining and Marketing(2)                                                    707                          361                323
Corporate                                                                    (85)                         (73)               (24)
                                                                        ---------------------------------------------------------
                                                                          $  851                       $  671             $  625
                                                                        =========================================================

OPERATING INFORMATION
APAC
    Construction backlog at September 30 (millions)                       $1,629                       $1,397             $  948
    Hot-mix asphalt production (million tons)                               36.7                         35.0               25.8
    Aggregate production (million tons)                                     28.7                         27.8               20.7
    Ready-mix concrete production (thousand cubic yards)                   2,262                        2,620              1,412
Ashland Distribution(3)
    Sales per shipping day (millions)                                     $ 11.2                       $ 12.8             $ 11.6
    Gross profit as a percent of sales                                      15.9%                        15.6%              16.0%
Ashland Specialty Chemical(3)
    Sales per shipping day (millions)                                     $  5.0                       $  5.1             $  5.0
    Gross profit as a percent of sales                                      33.8%                        34.7%              35.9%
Valvoline lubricant sales (thousand barrels per day)                        11.9                         12.3               12.6
Refining and Marketing(4)
    Crude oil refined (thousand barrels per day)                             912                          892                898
    Refined products sold (thousand barrels per day)(5)                    1,302                        1,309              1,231
    Refining and wholesale marketing margin (per barrel)(6)               $ 5.17                       $ 2.63             $ 1.57
    Speedway SuperAmerica (SSA)(7)
         Retail outlets at September 30                                    2,145                        2,288              2,178
         Gasoline and distillate sales (millions of gallons)               3,587                        3,742              3,604
         Gross margin - gasoline and distillates (per gallon)             $.1218                       $.1284             $.1346
         Merchandise sales (millions)                                     $2,186                       $2,143             $1,857
         Merchandise margin (as a percent of sales)                         23.3%                        24.5%              26.2%
                                                                        =========================================================


</TABLE>
(1)      See Page 29 for a discussion of unusual items.
(2)      Includes  Ashland's equity income from Marathon Ashland  Petroleum
         LLC (MAP), amortization of Ashland's excess investment in MAP, and
         other activities associated with refining and marketing.
(3)      Sales are defined as sales and operating revenues. Gross profit is
         defined as sales and  operating  revenues,  less cost of sales and
         operating expenses, less depreciation and amortization relative to
         manufacturing assets.
(4)      Amounts represent 100% of MAP's operations,  in which Ashland owns
         a 38% interest.
(5)      Total average  daily volume of all refined  product sales to MAP's
         wholesale, branded and retail (SSA) customers.
(6)      Sales revenue less cost of refinery inputs, purchased products and
         manufacturing expenses, including depreciation.
(7)      Excludes  travel centers  contributed to Pilot Travel Centers LLC.
         Periods prior to September 1, 2001, have been restated.


/28/

<PAGE>


RESULTS OF OPERATIONS

Ashland's net income  amounted to $417 million in 2001, $70 million in 2000
and  $290  million  in 1999.  Such  earnings  include  unusual  items  that
significantly affected year-to-year comparisons.  The following table shows
the effects of unusual items on Ashland's operating and net income for each
of the last three years.
<TABLE>
<CAPTION>
                                                         Operating income                               Net income
                                                ------------------------------------           ----------------------------------
(In millions)                                   2001           2000             1999           2001          2000            1999
<S>                                             <C>            <C>              <C>            <C>           <C>             <C>
INCOME BEFORE UNUSUAL ITEMS                     $851           $671             $496           $406          $292            $217
Discontinued operations                            -              -                -             19          (218)             (1)
Reversal of inventory market valuation reserve     -              -              117              -             -              71
Environmental insurance recoveries                 -              -               43              -             -              26
Asset impairment charges                           -              -              (21)             -             -             (17)
Severance and relocation charges                   -              -              (10)             -             -              (6)
Extraordinary loss on early retirement
    of debt                                        -              -                -             (3)           (4)              -
Cumulative effect of accounting change             -              -                -             (5)            -               -
                                                ----------------------------------------------------------------------------------
INCOME AS REPORTED                              $851           $671             $625           $417          $ 70            $290
                                                ==================================================================================
</TABLE>
UNUSUAL ITEMS

During  2000,  Ashland  spun-off  the  majority  of its shares of Arch Coal
common  stock to  Ashland's  shareholders.  Ashland  subsequently  sold its
remaining  Arch Coal  shares in a public  offering  during  February  2001.
Accordingly,  net income (loss)  associated with Arch Coal (including costs
of the spin-off)  are shown as  discontinued  operations.  The loss of $218
million in 2000  associated with Arch Coal included $203 million related to
asset  impairment and  restructuring  costs. The net gain of $19 million in
2001  represents  an after tax gain of $33  million on the sale of the Arch
Coal shares, less after-tax charges of $14 million from reserves related to
other discontinued operations.

When Marathon Ashland Petroleum LLC (MAP) was formed,  MAP valued its crude
oil and  petroleum  product  inventories  at the  lower  of LIFO  (last-in,
first-out)  cost or market,  and  recorded an  inventory  market  valuation
reserve to reduce the LIFO carrying costs to their net  realizable  values.
MAP reviews its reserve and makes quarterly  adjustments as necessary based
on changes in the values of refined products. During 1999, MAP reversed its
remaining  reserve  resulting  in an increase of $117  million in Ashland's
equity  income.  No reserves  have been  required  since  1999,  as the net
realizable  values of MAP's  inventories  have been well in excess of their
carrying costs.

During 1999, Ashland entered into settlement agreements with certain of its
insurance  carriers over the coverage  provided under historical  insurance
policies   with   respect  to   environmental   liabilities.   Under  those
settlements,  the carriers paid lump sum amounts to Ashland in exchange for
releases  of  their  present  and  future   obligations   associated   with
environmental  liabilities.  As a  result  of  those  settlements,  Ashland
recorded pretax income of $43 million.

Ashland  recognized  impairment  charges of $21 million in 1999 principally
for  goodwill  write-downs  related to its European  plastics  distribution
operations.  Results from these operations consistently had been well below
the levels that were expected when they were  acquired,  necessitating  the
impairment review and resulting write-downs.

As discussed in Note G to the Consolidated Financial Statements,  Ashland's
early retirement of certain  long-term debt resulted in after tax losses of
$3  million in 2001 and $4 million in 2000.  In  addition,  the  cumulative
effect of the change in the method of  accounting  for  derivatives  by MAP
resulted  in an after tax charge for  Ashland of $5 million  (see Note A to
the Consolidated Financial Statements).

The following  table  compares  operating  income  before  unusual items by
segment for the three years ended September 30, 2001.
<TABLE>
<CAPTION>

(In millions)                                             2001                2000            1999
<S>                                                       <C>                 <C>             <C>
OPERATING INCOME BEFORE UNUSUAL ITEMS
APAC                                                       $55                $140            $108
Ashland Distribution                                        35                  70              58
Ashland Specialty Chemical                                  58                  95             107
Valvoline                                                   81                  78              74
Refining and Marketing                                     707                 361             216
Corporate                                                  (85)                (73)            (67)
                                                        -------------------------------------------
                                                          $851                $671            $496
                                                        ===========================================
</TABLE>

/29/
<PAGE>
APAC

Operating  income  from the APAC  construction  companies  amounted  to $55
million in 2001,  compared to $140  million in 2000.  The decline  resulted
principally  from  unusually  severe  winter  weather  in  most  of  APAC's
operating regions, weak construction margins and a charge of $18 million to
correct  improper  recognition  of  construction  contract  earnings at its
Manassas,  Virginia  division.  Net construction job revenue (total revenue
less subcontract costs) was about flat, while production of hot-mix asphalt
and  aggregate  were both up modestly.  The sale of certain  operations  in
September  2000  resulted  in a  decline  in the  production  of  ready-mix
concrete.  More  important  than the levels of  construction  activity  and
material production,  however, was that the conditions under which the work
took place  (extreme  cold and  precipitation)  made the  processes  highly
inefficient.  Construction  contract  margins  were also  depressed as many
low-margin  jobs  obtained  through  recent  acquisitions  worked their way
through the backlog,  and the level of higher-margin  private work declined
as a result of the economic slowdown.

During an internal investigation of financial activities at APAC's Manassas
division in the March 2001 quarter,  it was discovered  that the division's
earnings had been  intentionally  overstated,  and local  management of the
division  was  replaced.  Independent  investigations  confirmed  that  the
problems  related  primarily  to the improper  recognition  of revenues and
failure to  recognize  certain  costs over a period of about two years.  No
evidence of any impact on, or involvement by, outside parties, customers or
suppliers was  discovered.  APAC is  evaluating  and  implementing  various
recommendations for improvement in overall business  processes,  accounting
controls and procedures.

(APAC OPERATING INCOME BAR CHART)

APAC achieved record results in 2000 with operating income of $140 million,
compared to $108  million in 1999.  Reflecting  the  acquired  construction
operations  of  Superfos,  as  well  as  significant  growth  in its  prior
operations,  net construction job revenue increased 52%. Similarly,  APAC's
production of construction  materials continued to expand with increases in
hot-mix asphalt (up 36%), crushed aggregate (up 34%) and ready-mix concrete
(up 86%). The improvement in operating  income also reflected a $21 million
reduction in depreciation  expense  resulting from changes in the estimated
useful lives and salvage values of APAC's construction  equipment,  as well
as a gain of $7 million on the sale of certain  concrete block  operations.
Operating  income for 2000 would have been even  greater if it had not been
for the significantly  higher costs of liquid asphalt,  fuel and power that
APAC incurred  during the year.  APAC's costs of liquid  asphalt  increased
from  $117 a ton in 1999 to $156 a ton in 2000,  while  its fuel and  power
costs were up 14%.

ASHLAND DISTRIBUTION

Operating income from Ashland Distribution amounted to $35 million in 2001,
compared to $70 million in 2000.  Overall sales  declined 11%,  principally
reflecting  the  challenging  economic  environment  and a slowdown  in key
customer markets.  However, a "quality of business"  initiative designed to
either  improve  gross  profits or forgo  sales to marginal  accounts  also
contributed  to  the  reduction  in  revenues.   The  unfavorable  economic
conditions  also led to higher credit  losses,  particularly  for the North
American plastics distribution and energy services divisions.  However, the
effects of these  declines were partially  offset by expense  reduction and
various  margin  improvement  efforts,  such as the  "quality of  business"
initiative.   Such  efforts   resulted  in  higher   earnings   from  three
distribution  business units - industrial  chemicals,  fine ingredients and
European plastics  distribution.  Results of Ashland  Distribution for 2001
reflect a goodwill  write-off  of $6  million  and other  asset  impairment
charges, the combination of which was largely offset by the proceeds from a
favorable litigation settlement.

(ASHLAND DISTRIBUTION OPERATING INCOME BAR CHART)

Ashland Distribution generated operating income of $70 million during 2000,
compared to $58 million in 1999,  excluding  unusual items. The improvement
was led by better results from the European plastics  distribution business
and higher sales of fiber-reinforced  plastics and fine ingredients.  These
improvements  more than  offset a decline  from the  chemical  distribution
business, which was adversely affected by rising hydrocarbon costs. Results
of Ashland Distribution for 2000 also reflected a gain of $3 million on the
sale of its plastics compounding business in Italy.

ASHLAND SPECIALTY CHEMICAL

Ashland  Specialty  Chemical's  operating income amounted to $58 million in
2001,  compared  to $95  million in 2000.  Earnings  from  marine and water
treatment  chemicals were up, but these  improvements were more than offset
by significant  declines in other business units that are more sensitive to
a weak economy,  including foundry products,  specialty  adhesives,  maleic
anhydride and polyester  resins.  Profits from  electronic  chemicals  also
deteriorated  sharply  as the year  progressed,  reflecting  the  worldwide
downturn in the semiconductor  manufacturing  industry.  Results of Ashland
Specialty Chemical for 2001 reflect a goodwill write-down of $4 million and
minor asset impairment charges.

(ASHLAND SPECIALTY CHEMICAL OPERATING INCOME BAR CHART)


/30/
<PAGE>
Operating income from Ashland Specialty Chemical declined from $107 million
in 1999 to $95 million in 2000. Stronger fundamentals led to record results
from electronic chemicals, adhesives and the water treatment businesses, as
well as higher  earnings  from  marine  chemicals.  However,  significantly
higher  styrene and other raw material  costs led to margin  compression in
the polyester  resins  business,  which is the largest  specialty  chemical
business.  Maleic  anhydride  also felt the adverse  effects on its margins
from  significant  increases  in the cost of  butane.  Results  of  Ashland
Specialty  Chemical for 2000 also included charges of $8 million associated
with the closing of two manufacturing facilities.

VALVOLINE

Valvoline's  operating  income  increased  from $78  million in 2000 to $81
million in 2001.  Results from the core  lubricants  business and Eagle One
were up, offsetting declines from other businesses. Although domestic sales
of  Valvoline  branded  motor oil were  comparable  to last year,  sales of
premium  motor oils,  such as MaxLife,  continued  to grow at a rapid rate.
Sales of Eagle One products were up 16%, and its operating  income amounted
to more than 10% of its  revenues.  Results from  international  operations
were down as sales  volumes  fell,  with  Europe  experiencing  the largest
decline.  Results from Valvoline  Instant Oil Change (VIOC) improved during
the September  2001 quarter,  but were down slightly from last year,  which
included  gains  on the  sale of  certain  company-owned  service  centers.
Earnings  from  automotive  chemicals  and  antifreeze  suffered from lower
margins.

(VALVOLINE OPERATING INCOME BAR CHART)

At September 30, 2001,  VIOC operated 364  company-owned  service  centers,
compared to 358 centers in 2000 and 377 centers in 1999.  The net reduction
since 1999 resulted from sales of company-owned centers to franchisees,  as
well as the closing of certain  unprofitable  centers. The VIOC franchising
program  continues to expand,  with 311 centers open at September 30, 2001,
compared  to 272  centers in 2000 and 207  centers in 1999.  VIOC's  future
growth  will  continue  to focus  principally  on  expanding  the number of
franchised rather than company-owned centers.

Operating  income from  Valvoline was $78 million in 2000,  compared to $74
million in 1999.  The  improvement  reflected  record results from VIOC and
significantly better results from international operations.  VIOC's results
reflected  increased  franchising  royalties,  better  car  counts,  higher
revenues per car  serviced  and gains on the sale of certain  company-owned
service  centers.   The  lubricant  operations  performed  well  despite  a
difficult  market.  Multiple base stock cost  increases  were incurred that
were difficult to pass through,  resulting in margin compression.  However,
the adverse  effects of that  compression  were largely offset by stringent
controls over advertising and other costs. In addition,  antifreeze margins
suffered from a price spike in ethylene  glycol,  the chief raw material in
antifreeze.

REFINING AND MARKETING

Operating income from Refining and Marketing,  which consists  primarily of
equity income from Ashland's 38% ownership  interest in MAP,  amounted to a
record $707 million in 2001,  compared to $361  million in 2000.  Ashland's
equity income from MAP's refining and wholesale marketing operations was up
$404 million,  reflecting  the net effects of strong  refining  margins,  a
slight  reduction  in  refined  product  sales  and  higher  operating  and
administrative  expenses.  The increase of $2.54 a barrel in MAP's refining
and wholesale marketing margin reflected tight product supplies during much
of the year in its primary  Midwest  market.  However,  equity  income from
MAP's retail operations  declined by $40 million.  The decline  principally
reflects  lower  product  margins  and  volumes,   reduced   earnings  from
merchandise sales and higher operating expenses.

(REFINING AND MARKETING OPERATING INCOME BAR CHART)

Operating income from Refining and Marketing totaled $361 million for 2000,
compared to $216 million in 1999 before unusual  items.  MAP's refining and
wholesale marketing  operations were responsible for an improvement of $186
million in Ashland's equity income. MAP's refining margins improved $1.06 a
barrel from their depressed  levels in 1999.  However,  retail markets were
not nearly as favorable as retail  gasoline prices failed to keep pace with
the higher level of wholesale gasoline costs.  Ashland's equity income from
SSA  declined  $24  million,  reflecting  the net  effects of lower  retail
margins,  increased  product  sales and higher  earnings  from  merchandise
sales.  Merchandise sales were up 15%, in part reflecting MAP's acquisition
of certain Michigan retail properties in December 1999.

CORPORATE

Excluding unusual items,  Corporate  expenses were $85 million in 2001, $73
million  in  2000  and  $67  million  in  1999.  The  increase  since  1999
principally reflects higher incentive and deferred compensation costs.



/31/
<PAGE>
NET INTEREST AND OTHER FINANCIAL COSTS

Net interest and other  financial  costs  amounted to $170 million in 2001,
$188 million in 2000 and $140 million in 1999. The fluctuations in interest
costs resulted  principally from changes in debt levels over the three-year
period.  Debt levels  increased $380 million during 2000,  principally as a
result  of  the  indebtedness   associated  with  the  acquisition  of  the
construction  operations  of  Superfos.  Reflecting  strong cash flows from
operations, debt levels were reduced by $355 million during 2001.

FINANCIAL POSITION

LIQUIDITY

Ashland's  financial  position  has  enabled it to obtain  capital  for its
financing needs and to maintain investment grade ratings on its senior debt
of Baa2  from  Moody's  and BBB from  Standard  & Poor's.  Ashland  has two
revolving credit agreements providing for up to $425 million in borrowings,
neither of which has been used.  Under a shelf  registration,  Ashland  can
also issue an additional $600 million in debt and equity  securities should
future  opportunities  or needs arise.  Furthermore,  Ashland has access to
various uncommitted lines of credit and commercial paper markets. While the
revolving  credit  agreements  contain a covenant  limiting new  borrowings
based  on its  stockholders'  equity,  Ashland  could  have  increased  its
borrowings  (including any borrowings under these agreements) by up to $1.5
billion at  September  30,  2001.  Additional  permissible  borrowings  are
increased  (decreased)  by 150% of any increases  (decreases)  in Ashland's
stockholders' equity.

Cash flows from operations, a major source of Ashland's liquidity, amounted
to $829  million in 2001,  $484  million in 2000 and $383  million in 1999.
Such amounts include after tax cash flows from Ashland's  investment in MAP
of $501  million in 2001,  $225  million in 2000 and $255  million in 1999.
Cash flows from operations for 2001 also include the favorable effects of a
reduction of $111 million in operating  assets and  liabilities,  while the
amount  for  2000  includes  an  increase  of $150  million  from  sales of
receivables  (reflected  as part of the  change  in  operating  assets  and
liabilities).  Those sales were under a program that  provides for the sale
of  up to a  $200  million  undivided  interest  in a  designated  pool  of
receivables. Since 1998, cash flows from operations have exceeded Ashland's
capital  requirements  for net property  additions  and dividends by nearly
$900  million,  providing  additional  funds  for  debt  repayments,  stock
purchases and acquisitions.

Earnings before interest,  taxes, depreciation and amortization (EBITDA) is
a widely accepted  financial  indicator of a company's ability to incur and
service debt.  Ashland's  EBITDA,  which  represents  operating income plus
depreciation,  depletion and amortization  (each excluding  unusual items),
amounted to $1.1 billion in 2001,  $908 million in 2000 and $705 million in
1999.  EBITDA should not be considered in isolation or as an alternative to
net income, operating income, cash flows from operations, or a measure of a
company's profitability,  liquidity or performance under generally accepted
accounting principles.

At September 30, 2001, working capital (excluding debt due within one year)
amounted to $801  million,  compared  to $759  million at the end of fiscal
2000.  Ashland's  working capital is affected by its use of the LIFO method
of  inventory  valuation.   That  method  valued  inventories  below  their
replacement  costs by $70 million at September 30, 2001, and $71 million at
September  30, 2000.  Liquid assets (cash,  cash  equivalents  and accounts
receivable)  amounted to 95% of current  liabilities at September 30, 2001,
compared to 77% at the end of fiscal 2000.

CAPITAL RESOURCES

Property additions amounted to $685 million during the last three years and
are summarized in the Information by Industry  Segment on Page 55. For that
period,  APAC accounted for 43% of Ashland's  capital  expenditures,  while
Ashland  Specialty  Chemical  accounted for an additional 31%. Capital used
for acquisitions (including assumed debt and companies acquired through the
issuance of common  stock)  amounted to $852 million  during the last three
years,  of which  $774  million  was  invested  in APAC and $78  million in
Ashland Specialty Chemical.  A summary of the capital employed in Ashland's
continuing operations at the end of the last three fiscal years follows.
<TABLE>
<CAPTION>
(In millions)                                      2001                2000                 1999
<S>                                               <C>                 <C>                  <C>
CAPITAL EMPLOYED
APAC                                             $1,047              $1,156                 $663
Ashland Distribution                                470                 574                  527
Ashland Specialty Chemical                          612                 597                  566
Valvoline                                           389                 333                  346
Refining and Marketing                            1,654               1,679                1,646
                                                -------------------------------------------------
                                                 $4,172              $4,339               $3,748
                                                =================================================
</TABLE>
Capital  employed in APAC increased  considerably  since 1999, as Ashland's
acquisitions were principally focused in the construction business. Capital
employed in Ashland's  wholly owned  businesses  increased  from 56% of the
total at the end of fiscal 1999 to 60% at September 30, 2001.


/32/
<PAGE>
Long-term  borrowings provided cash flows of nearly $1.2 billion during the
last three years, including the issuance of $600 million in debt related to
the acquisition of the construction operations of Superfos and $552 million
of medium-term  notes.  The proceeds from these  long-term  borrowings were
used in part to retire $903 million of long-term  debt,  including the $600
million of  Superfos-related  debt.  Debt  retirements  included  scheduled
maturities,  as well as prepayments or refundings to reduce interest costs.
Cash flows were  supplemented  as necessary  by the issuance of  short-term
notes and commercial paper.

Reflecting  strong cash flows from  operations,  Ashland  reduced its total
debt by $355 million to $1.9 billion at  September  30, 2001.  In addition,
stockholders'  equity  increased  by $261  million  during the year to $2.2
billion.  As a result,  debt as a percent of capital  employed  was reduced
from 53% at the end of fiscal 2000 to 46% at September 30, 2001.

At September 30, 2001,  Ashland's  long-term  debt included $139 million of
floating-rate  obligations,  and the interest  rates on an  additional  $60
million of  fixed-rate,  medium-term  notes were  effectively  converted to
floating  rates  through  interest  rate  swap  agreements.   In  addition,
Ashland's costs under its sale of receivables program and various operating
leases are based on the  floating-rate  interest  costs on $258  million of
third-party debt underlying those  transactions.  As a result,  Ashland was
exposed to  fluctuations  in short-term  interest  rates on $457 million of
debt obligations at September 30, 2001.

From time to time, Ashland's Board of Directors has authorized the purchase
of shares of Ashland  common  stock in the open market.  At  September  30,
2001,  Ashland  could  purchase  an  additional  3.9 million  shares  under
previous authorizations.  The number of shares ultimately purchased and the
prices  Ashland  will pay for its stock are subject to  periodic  review by
management.

During fiscal 2002,  Ashland expects capital  expenditures of approximately
$270  million,  with nearly 80% of the increase  over capital  expenditures
during  2001  invested  in APAC.  Ashland  anticipates  meeting its capital
requirements  during 2002 for property  additions,  dividends and scheduled
debt repayments of $85 million from internally  generated  funds.  However,
external  financing may be necessary to provide funds for  acquisitions  or
purchases of common stock.

ENVIRONMENTAL MATTERS

Federal, state and local laws and regulations relating to the protection of
the  environment  have  resulted  in higher  operating  costs  and  capital
investments  by the  industries in which Ashland  operates.  Because of the
continuing   trends  toward  greater   environmental   awareness  and  ever
increasing   regulations,    Ashland   believes   that   expenditures   for
environmental  compliance will continue to have a significant effect on its
businesses.  Although  it cannot  accurately  predict  how such trends will
affect  future  operations  and earnings,  Ashland  believes the nature and
significance of its ongoing compliance costs will be comparable to those of
its competitors.

Environmental   remediation  reserves  are  subject  to  numerous  inherent
uncertainties  that affect  Ashland's  ability to estimate its share of the
ultimate costs of required remediation efforts.  Such uncertainties involve
the nature and extent of contamination at each site, the extent of required
cleanup efforts under existing  environmental  regulations,  widely varying
costs of alternate cleanup methods,  changes in environmental  regulations,
the potential effect of continuing  improvements in remediation technology,
and the number and  financial  strength  of other  potentially  responsible
parties  at  multiparty   sites.   Reserves  are   regularly   adjusted  as
environmental remediation continues.

Ashland does not believe that any liability  resulting  from  environmental
matters, after taking into consideration expected recoveries from insurers,
contributions  by other  responsible  parties and amounts already  provided
for,  will have a material  adverse  effect on its  consolidated  financial
position, cash flows or liquidity. Although environmental remediation could
have a  material  effect on results  of  operations  if a series of adverse
developments  occurs  in a  particular  quarter  or  fiscal  year,  Ashland
believes that the chance of such developments occurring in the same quarter
or fiscal year is remote.

DERIVATIVE INSTRUMENTS

Ashland  regularly uses  commodity-based  and foreign  currency  derivative
instruments to manage its exposure to price  fluctuations  associated  with
the  purchase and sale of natural gas in its energy  services  business and
certain  transactions  denominated  in  foreign  currencies.  In  addition,
Ashland  opportunistically  enters into  petroleum  crackspread  futures to
economically  hedge or enhance its equity  earnings and cash  distributions
from Refining and Marketing. Although certain of these instruments could be
designated as qualifying for hedge  accounting  treatment,  Ashland has not
elected to do so. Therefore,  the fair value of the derivatives is recorded
on the  balance  sheet,  with the  offsetting  gain or loss  recognized  in
earnings   during  the  period  of  change.   The  potential  loss  from  a
hypothetical  10% adverse  change in commodity  prices or foreign  currency
rates on Ashland's open  commodity-based  and foreign  currency  derivative
instruments at September 30, 2001, would not significantly affect Ashland's
consolidated  financial  position,  results  of  operations,  cash flows or
liquidity.



/33/
<PAGE>
Ashland  selectively  uses  unleveraged  interest  rate swap  agreements to
obtain greater access to the lower  borrowing  costs normally  available on
floating-rate debt, while minimizing refunding risk through the issuance of
long-term,   fixed-rate   debt.   Ashland's   intent  is  to  maintain  its
floating-rate  exposure  between  25%  and  45% of  total  interest-bearing
obligations.  At  September  30,  2001,  Ashland  had  interest  rate swaps
outstanding that effectively convert $60 million of fixed-rate, medium-term
notes to  floating  rates.  The swaps  have been  designated  as fair value
hedges,  and because the  critical  terms of the debt  instruments  and the
swaps  match,  the hedges are assumed to be perfectly  effective,  with the
changes in fair value of the debt and swaps offsetting.

MAP uses commodity-based futures, forwards, swaps and options to reduce the
effects of price  fluctuations  related to the  purchase  and sale of crude
oil,  natural gas and refined  products.  MAP has not elected to  designate
these derivative  instruments as qualifying for hedge accounting treatment.
As a result,  the changes in fair value of these derivatives are recognized
in earnings during the period of change,  impacting Ashland's equity income
from MAP accordingly.

OUTLOOK

Currently,  the  economic  and  energy  outlook  is  uncertain.  A  slowing
worldwide  economy has put downward  pressure on energy prices and the U.S.
economy has stalled. Although it is unlikely to match its record results of
2001, Ashland still expects its earnings for 2002 will be good.

At  September  30,  2001,  APAC's  construction  backlog  amounted  to $1.6
billion,  compared to $1.4 billion at the end of fiscal 2000.  Such backlog
includes a 21% increase in public sector work from $1.22 billion at the end
of last fiscal year to $1.48  billion at September  30, 2001.  In addition,
the public  funding  outlook is positive  because  infrastructure  spending
historically rises during economic downturns,  there is a well-demonstrated
need for infrastructure  construction and repair, and expected increases in
highway  travel should  generate  higher  dedicated  tax revenues.  Private
contract work in the backlog  declined from $179 million at the end of last
year to $149 million this year,  reflecting the weaker economy. On balance,
APAC is expected to have a much better year in 2002.  Many  low-margin jobs
obtained  through recent  acquisitions  have been working their way through
the backlog,  and the internal  restructuring  and improvement  initiatives
that are underway should result in improved margins. While the construction
business has many uncertainties due to factors such as weather,  energy and
asphalt costs,  competition  and economic  conditions,  APAC is expected to
generate  operating  income in the range of $150 million to $170 million in
2002.  This  estimate  includes  a $25  million  positive  impact  from the
adoption of Financial  Accounting  Standards  Board  Statement No. 142 (FAS
142),  "Goodwill and Other Intangible  Assets," under which amortization of
goodwill will be discontinued.

Earnings from Ashland  Distribution and Ashland  Specialty  Chemical should
rebound as the economy recovers. Although the outlook remains uncertain for
industrial  production,  the key driver for Ashland's chemical  businesses,
they are well positioned and improving their relative competitive strength.
Ashland   Distribution  is  consolidating   operations,   and  focusing  on
e-commerce  and  service-related  areas  that are less  capital  intensive.
Ashland Specialty Chemical is aggressively  seeking to develop new markets,
both  geographically  and in terms of product  applications,  for  existing
product lines. The acquisition  during 2001 of the former business of Neste
Polyester,  a producer of gelcoats that compliments the composite  polymers
business, was an example of that strategy.

Valvoline's profits should be comparable with or perhaps slightly below its
strong performance during 2001. Valvoline generated gross profit of roughly
$14 million in each of the last three years from sales of R-12 refrigerant.
Based on its  remaining  inventories,  Valvoline's  gross  profit from R-12
refrigerant is expected to be around half of that amount in 2002 before its
inventories are depleted.

While MAP should have another strong year in 2002,  Ashland does not expect
MAP's  earnings  to equal the record  results it  achieved  in 2001.  U. S.
petroleum demand is lower as a result of the slowing  economy,  and product
supply is currently  ample. As a result,  refining  margins are expected to
soften and  approximate the average levels  experienced  during the 1998 to
2000 timeframe.  However,  MAP should benefit from recent  profit-enhancing
projects,  including the October  start-up of a new coker at its Garyville,
Louisiana   refinery  and  the  travel  center  joint  venture  with  Pilot
Corporation  that was formed in  September.  The  combined  impact of these
projects should  contribute at least $100 million to MAP's operating income
in 2002.

Ashland  adopted FAS 142 as of October 1, 2001, the beginning of its fiscal
2002. Application of the nonamortization  provisions of FAS 142 is expected
to increase  Ashland's  operating  income in 2002 by about $43 million ($35
million  after  income  taxes).  Amortization  recognized  by  each  of the
divisions should be reduced to some extent, with expected reductions of $25
million  for APAC,  $1 million  for  Ashland  Distribution,  $6 million for
Ashland  Specialty  Chemical,  $1 million for Valvoline and $10 million for
Refining and Marketing.  Because most of the goodwill  amortization was not
deductible for income tax purposes,  Ashland's effective income tax rate is
expected  to decline  from an average of 40% during the last three years to
about 38.5% in 2002.  During  2002,  Ashland will also perform the first of
the required  impairment tests on goodwill as of October 1, 2001.  Although
those  tests and other  transitional  issues  have not yet been  finalized,
Ashland does not believe  that the initial  adoption of FAS 142 will have a
significant  effect on its  consolidated  financial  position or results of
operations.




/34/

<PAGE>

Ashland's  sales and  operating  revenues are normally  subject to seasonal
variations.  Although  APAC tends to enjoy a relatively  long  construction
season,  most of its operating  income is generated during the construction
period of May to October. In addition, MAP experiences demand increases for
gasoline  during the summer  driving  season,  for propane  and  distillate
during the winter heating  season and for asphalt  during the  construction
season.  The following table compares operating income before unusual items
by quarter for the three years ended  September  30, 2001 (amounts for each
quarter do not necessarily total to results for the year due to rounding).
<TABLE>
<CAPTION>
(In millions)                                                           2001            2000         1999
<S>                                                                     <C>             <C>          <C>
QUARTERLY OPERATING INCOME BEFORE UNUSUAL ITEMS
December 31                                                             $144            $111         $109
March 31                                                                  87              90           44
June 30                                                                  369             268          173
September 30                                                             251             203          170
                                                                        =================================
</TABLE>
CONVERSION TO THE EURO

On January 1, 1999,  certain members of the European  Economic and Monetary
Union (EMU)  established  fixed  conversion  rates between  their  existing
currencies  and the  EMU's  common  currency,  the  Euro.  Entities  in the
participating  countries  can conduct their  business  operations in either
their  currencies or the Euro until December 31, 2001. After that date, all
non-cash  transactions  will be conducted in Euros and  circulation of Euro
notes and coins for cash  transactions  will  commence.  National notes and
coins will be withdrawn no later than June 30, 2002.

Ashland  conducts  business in most of the  participating  countries and is
addressing the issues  associated with the Euro. The more important  issues
include converting information technology systems and processing accounting
and tax records.  Based on the progress to date,  Ashland believes that its
conversion to the Euro will be accomplished  successfully  and that the use
of the Euro will not have a  significant  impact on the  manner in which it
does business and processes its accounting records. Accordingly, the use of
the  Euro  is  not  expected  to  have  a  material   effect  on  Ashland's
consolidated  financial  position,  results  of  operations,  cash flows or
liquidity.

EFFECTS OF INFLATION AND CHANGING PRICES

Ashland's  financial  statements are prepared on the historical cost method
of accounting  and, as a result,  do not reflect  changes in the purchasing
power of the U.S. dollar.  Although annual inflation rates have been low in
recent  years,  Ashland's  results  are still  affected  by the  cumulative
inflationary trend from prior years.

In the capital-intensive industries in which Ashland operates,  replacement
costs for its properties  would generally  exceed their  historical  costs.
Accordingly,  depreciation,  depletion  and  amortization  expense would be
greater if it were  based on  current  replacement  costs.  However,  since
replacement facilities would reflect technological improvements and changes
in  business  strategies,  such  facilities  would be  expected  to be more
productive  than  existing  facilities,  mitigating  part of the  increased
expense.

Ashland  uses  the  LIFO  method  to  value a  substantial  portion  of its
inventories  to provide a better  matching of revenues with current  costs.
However, LIFO values such inventories below their replacement costs.

Monetary  assets (such as cash, cash  equivalents and accounts  receivable)
lose purchasing power as a result of inflation,  while monetary liabilities
(such as accounts payable and indebtedness)  result in a gain, because they
can be settled  with  dollars of  diminished  purchasing  power.  Ashland's
monetary  liabilities  exceed its  monetary  assets,  which  results in net
purchasing  power gains and provides a hedge  against the effects of future
inflation.

FORWARD-LOOKING STATEMENTS

Management's  Discussion  and  Analysis  (MD&A)  contains   forward-looking
statements, within the meaning of Section 27A of the Securities Act of 1933
and Section 21E of the  Securities  Exchange  Act of 1934,  with respect to
various information in the sections entitled Capital Resources,  Derivative
Instruments,  Outlook and Conversion to the Euro. Estimates as to operating
performance  and earnings are based on a number of  assumptions,  including
those  mentioned  in MD&A.  Such  estimates  are also based  upon  internal
forecasts and analyses of current and future market  conditions and trends,
management  plans  and  strategies,  weather,  operating  efficiencies  and
economic  conditions,  such as prices,  supply and demand,  and cost of raw
materials.   Although  Ashland  believes  its  expectations  are  based  on
reasonable assumptions, it cannot assure the expectations reflected in MD&A
will  be  achieved.  This  forward-looking  information  may  prove  to  be
inaccurate  and  actual  results  may  differ   significantly   from  those
anticipated  if one or more of the underlying  assumptions or  expectations
proves to be inaccurate or is unrealized, or if other unexpected conditions
or events occur. Other factors and risks affecting Ashland are contained in
Risks and Uncertainties in Note A to the Consolidated  Financial Statements
and in Ashland's  Form 10-K for the fiscal year ended  September  30, 2001.
Ashland  undertakes no obligation  to  subsequently  update or revise these
forward-looking statements.



/35/


<PAGE>


Ashland Inc. and Consolidated Subsidiaries
STATEMENTS OF CONSOLIDATED INCOME

Years Ended September 30
<TABLE>
<CAPTION>
(In millions except per share data)                                2001                     2000                       1999
<S>                                                              <C>                      <C>                        <C>
REVENUES
Sales and operating revenues                                     $7,719                   $7,961                     $6,801
Equity income - Note F                                              754                      394                        351
Other income                                                         74                       81                        101
                                                                ------------------------------------------------------------
                                                                  8,547                    8,436                      7,253
COSTS AND EXPENSES
Cost of sales and operating expenses                              6,319                    6,434                      5,346
Selling, general and administrative expenses                      1,127                    1,094                      1,054
Depreciation, depletion and amortization                            250                      237                        228
                                                                ------------------------------------------------------------
                                                                  7,696                    7,765                      6,628
                                                                ------------------------------------------------------------
OPERATING INCOME                                                    851                      671                        625
Net interest and other financial costs - Note G                    (170)                    (188)                      (140)
                                                                ------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES               681                      483                        485
Income taxes - Note E                                              (275)                    (191)                      (194)
                                                                ------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS                                   406                      292                        291
Results from discontinued operations
     (net of income taxes) - Note B                                  19                     (218)                        (1)
                                                                ------------------------------------------------------------
INCOME BEFORE EXTRAORDINARY LOSS AND
     CUMULATIVE EFFECT OF ACCOUNTING CHANGE                         425                       74                        290
Extraordinary loss on early retirement of debt
     (net of income taxes) - Note G                                  (3)                      (4)                         -
Cumulative effect of accounting change
     (net of income taxes) - Note A                                  (5)                       -                          -
                                                                ------------------------------------------------------------
NET INCOME                                                      $   417                   $   70                     $  290
                                                                ============================================================
EARNINGS PER SHARE - NOTE A
Basic
       Income from continuing operations                        $  5.83                   $ 4.11                     $ 3.95
       Results from discontinued operations                         .27                    (3.07)                      (.01)
       Extraordinary loss                                          (.04)                    (.05)                         -
       Cumulative effect of accounting change                      (.07)                       -                          -
                                                                ------------------------------------------------------------
       Net income                                               $  5.99                   $  .99                     $ 3.94
                                                                ============================================================
Diluted
       Income from continuing operations                        $  5.77                   $ 4.10                     $ 3.90
       Results from discontinued operations                         .26                    (3.07)                      (.01)
       Extraordinary loss                                          (.04)                    (.05)                         -
       Cumulative effect of accounting change                      (.06)                       -                          -
                                                                ------------------------------------------------------------
       Net income                                               $  5.93                   $  .98                     $ 3.89
                                                                ============================================================

See Notes to Consolidated Financial Statements.
</TABLE>
/37/
<PAGE>

Ashland Inc. and Consolidated Subsidiaries
CONSOLIDATED BALANCE SHEETS

September 30
<TABLE>
<CAPTION>

(In millions)                                                                     2001                            2000
<S>                                                                              <C>                             <C>

ASSETS
CURRENT ASSETS
Cash and cash equivalents                                                       $  236                          $   67
Accounts receivable (less allowances for doubtful accounts of
      $34 million in 2001 and $25 million in 2000)                               1,185                           1,243
Inventories - Note A                                                               495                             488
Deferred income taxes - Note E                                                     126                             135
Other current assets                                                               171                             198
                                                                                ---------------------------------------
                                                                                 2,213                           2,131
INVESTMENTS AND OTHER ASSETS
Investment in Marathon Ashland Petroleum LLC (MAP) - Note F                      2,387                           2,295
Goodwill (less accumulated amortization of $142 million in 2001
      and $101 million in 2000)                                                    528                             537
Investment in Arch Coal - discontinued operations - Note B                           -                              35
Other noncurrent assets                                                            377                             351
                                                                                ---------------------------------------
                                                                                 3,292                           3,218
PROPERTY, PLANT AND EQUIPMENT
Cost
      APAC                                                                       1,290                           1,220
      Ashland Distribution                                                         359                             356
      Ashland Specialty Chemical                                                   887                             835
      Valvoline                                                                    374                             354
      Corporate                                                                    120                             114
                                                                                ---------------------------------------
                                                                                 3,030                           2,879
Accumulated depreciation, depletion and amortization                            (1,590)                         (1,457)
                                                                                ---------------------------------------
                                                                                 1,440                           1,422
                                                                                ---------------------------------------
                                                                                $6,945                          $6,771
                                                                                =======================================
</TABLE>
See Notes to Consolidated Financial Statements.


/38/
<PAGE>

<TABLE>
<CAPTION>
(In millions)                                                                                    2001                    2000
<S>                                                                                             <C>                     <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Debt due within one year
     Notes payable to financial institutions                                                  $     -                 $   180
     Commercial paper                                                                               -                      65
     Current portion of long-term debt                                                             85                      82
Trade and other payables                                                                        1,392                   1,330
Income taxes                                                                                       20                      42
                                                                                            ----------------------------------
                                                                                                1,497                   1,699
NONCURRENT LIABILITIES
Long-term debt (less current portion) - Note G                                                  1,786                   1,899
Employee benefit obligations - Note O                                                             412                     383
Deferred income taxes - Note E                                                                    440                     288
Reserves of captive insurance companies                                                           173                     179
Other long-term liabilities and deferred credits                                                  411                     358
Commitments and contingencies - Notes J and M
                                                                                            ----------------------------------
                                                                                                3,222                   3,107
STOCKHOLDERS' EQUITY - Notes G, K and L
Preferred stock, no par value, 30 million shares authorized

Common stockholders' equity
   Common stock, par value $1.00 per share
        Authorized - 300 million shares
        Issued - 69 million shares in 2001 and 70 million shares in 2000                           69                      70
     Paid-in capital                                                                              363                     388
     Retained earnings                                                                          1,920                   1,579
     Accumulated other comprehensive loss                                                        (126)                    (72)
                                                                                            ----------------------------------
                                                                                                2,226                   1,965
                                                                                            ----------------------------------
                                                                                               $6,945                  $6,771
                                                                                            ==================================
</TABLE>
/39/



<PAGE>


Ashland Inc. and Consolidated Subsidiaries

STATEMENTS OF CONSOLIDATED STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>

                                                                                                       Accumulated
                                                                                                             other
                                                      Common          Paid-in         Retained       comprehensive
(In millions)                                          stock          capital         earnings                loss         Total
<S>                                                     <C>             <C>            <C>                   <C>         <C>

BALANCE AT OCTOBER 1, 1998                               $76             $602           $1,501                $(42)       $2,137
Total comprehensive income(1)                                                              290                  (4)          286
Cash dividends, $1.10 per common share                                                     (81)                              (81)
Issued common stock under
    Stock incentive plans                                                   7                                                  7
    Acquisitions of other companies                        2               77                                                 79
Repurchase of common stock                                (6)            (222)                                              (228)
                                                        -------------------------------------------------------------------------
BALANCE AT SEPTEMBER 30, 1999                             72              464            1,710                 (46)        2,200
Total comprehensive income(1)                                                               70                 (26)           44
Dividends
    Cash, $1.10 per common share                                                           (78)                              (78)
    Spin-off of Arch Coal shares                                                          (123)                             (123)
Issued common stock under
    Stock incentive plans                                                   8                                                  8
    Acquisitions of other companies                                         3                                                  3
Repurchase of common stock                                (2)             (87)                                               (89)
                                                        -------------------------------------------------------------------------
BALANCE AT SEPTEMBER 30, 2000                             70              388            1,579                 (72)        1,965
Total comprehensive income(1)                                                              417                 (54)          363
Cash dividends, $1.10 per common share                                                     (76)                              (76)
Issued common stock under
    stock incentive plans                                  1               22                                                 23
Repurchase of common stock                                (2)             (47)                                               (49)
                                                        -------------------------------------------------------------------------
BALANCE AT SEPTEMBER 30, 2001                            $69             $363           $1,920               $(126)       $2,226
                                                        =========================================================================

(1)      Reconciliations  of  net  income  to  total  comprehensive  income
         follow.

(In millions)                                                          2001            2000             1999

NET INCOME                                                             $417             $70             $290
Minimum pension liability adjustment                                    (57)              2               13
    Related tax benefit (expense)                                        22              (1)              (5)
Unrealized translation losses                                           (21)            (37)             (11)
    Related tax benefit                                                   2              10                3
Unrealized losses on securities                                           -               -               (6)
    Related tax benefit                                                   -               -                2
                                                                     ---------------------------------------------
TOTAL COMPREHENSIVE INCOME                                             $363             $44             $286
                                                                     =============================================

</TABLE>

At September 30, 2001, the accumulated other comprehensive loss of $126
million (after tax) was comprised of net unrealized translation losses of
$83 million and a minimum pension liability of $43 million.

See Notes to Consolidated Financial Statements.

/40/
<PAGE>
Ashland Inc. and Consolidated Subsidiaries
STATEMENTS OF CONSOLIDATED CASH FLOWS
<TABLE>
<CAPTION>
Years Ended September 30

(In millions)                                                               2001                2000               1999
<S>                                                                        <C>                 <C>                <C>

CASH FLOWS FROM OPERATIONS
Income from continuing operations                                           $406                $292              $ 291
Expense (income) not affecting cash
   Depreciation, depletion and amortization                                  250                 237                228
   Deferred income taxes                                                     152                 111                103
   Equity income from affiliates                                            (754)               (394)              (351)
   Distributions from equity affiliates                                      664                 282                339
   Other items                                                                 -                 (19)                (2)
Change in operating assets and liabilities(1)                                111                 (25)              (225)
                                                                            --------------------------------------------
                                                                             829                 484                383
CASH FLOWS FROM FINANCING
Proceeds from issuance of long-term debt                                      52                 988                150
Proceeds from issuance of common stock                                        15                   5                  4
Repayment of long-term debt                                                 (169)               (675)               (59)
Repurchase of common stock                                                   (49)                (89)              (228)
Increase (decrease) in short-term debt                                      (245)                 63                 98
Dividends paid                                                               (76)                (78)               (81)
                                                                            --------------------------------------------
                                                                            (472)                214               (116)
CASH FLOWS FROM INVESTMENT
Additions to property, plant and equipment                                  (205)               (232)              (248)
Purchase of operations - net of cash acquired                                (91)               (590)               (67)
Proceeds from sale of operations                                               9                  50                 24
Other - net                                                                   13                  71                 98
                                                                            --------------------------------------------
                                                                            (274)               (701)              (193)
                                                                            --------------------------------------------
CASH PROVIDED (USED) BY CONTINUING OPERATIONS                                 83                  (3)                74
Cash provided (used) by discontinued operations                               86                 (40)                 2
                                                                            --------------------------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                             169                 (43)                76
Cash and cash equivalents - beginning of year                                 67                 110                 34
                                                                            --------------------------------------------
CASH AND CASH EQUIVALENTS - END OF YEAR                                     $236                $ 67              $ 110
                                                                            ============================================
DECREASE (INCREASE) IN OPERATING ASSETS(1)
Accounts receivable                                                         $ 82                $ 68              $ (90)
Inventories                                                                    5                   -                (25)
Deferred income taxes                                                          5                 (25)                 1
Other current assets                                                          30                 (28)               (20)
Investments and other assets                                                 (55)               (101)               (53)
INCREASE (DECREASE) IN OPERATING LIABILITIES(1)
Trade and other payables                                                      43                 105                (79)
Income taxes                                                                   4                 (11)                 2
Noncurrent liabilities                                                        (3)                (33)                39
                                                                           ---------------------------------------------
CHANGE IN OPERATING ASSETS AND LIABILITIES                                  $111                $(25)             $(225)
                                                                           =============================================
</TABLE>

(1)      Excludes changes resulting from operations acquired or sold.


See Notes to Consolidated Financial Statements.

/41/

<PAGE>
Ashland Inc. and Consolidated Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A - SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated  financial  statements include the accounts of Ashland and
its majority owned  subsidiaries.  Investments in joint ventures and 20% to
50% owned affiliates are accounted for on the equity method.

RISKS AND UNCERTAINTIES

The  preparation  of  Ashland's   consolidated   financial   statements  in
conformity  with  accounting  principles  generally  accepted in the United
States requires Ashland's management to make estimates and assumptions that
affect the reported amounts of assets, liabilities,  revenues and expenses,
and the disclosures of contingent assets and liabilities. Significant items
subject to such  estimates and  assumptions  include the carrying  value of
long-lived  and  intangible  assets,  inventory  and  receivable  valuation
allowances, environmental, self-insurance and litigation reserves, employee
benefit obligations,  income recognized under construction  contracts,  and
the ultimate  realization  of deferred  tax assets.  Actual  results  could
differ from the estimates and assumptions used.

Ashland's results, including those of Marathon Ashland Petroleum LLC (MAP),
are   affected  by  domestic   and   international   economic,   political,
legislative,  regulatory and legal actions,  as well as weather conditions.
Economic conditions,  such as recessionary trends, inflation,  interest and
monetary exchange rates, and changes in the prices of crude oil,  petroleum
products and  petrochemicals,  can have a significant effect on operations.
Political  actions may include changes in the policies of the  Organization
of  Petroleum  Exporting  Countries  or  other  developments  involving  or
affecting oil-producing countries,  including military conflict, embargoes,
internal  instability  or actions or  reactions of the U.S.  government  in
anticipation of, or in response to, such actions.  While Ashland  maintains
reserves  for  anticipated   liabilities  and  carries  various  levels  of
insurance,  Ashland  could be affected by civil,  criminal,  regulatory  or
administrative  actions,  claims or proceedings relating to the environment
or other matters. In addition, climate and weather can significantly affect
Ashland's   results  from  several  of  its  operations,   such  as  APAC's
construction  activities  and MAP's sales  volumes of asphalt,  propane and
heating oil.

INVENTORIES
<TABLE>
<CAPTION>

(In millions)                                                                   2001           2000

<S>                                                                             <C>            <C>
Chemicals and plastics                                                          $374           $375
Construction materials                                                            74             80
Petroleum products                                                                54             52
Other products                                                                    57             45
Supplies                                                                           6              7
Excess of replacement costs over LIFO carrying values                            (70)           (71)
                                                                                --------------------
                                                                                $495           $488
                                                                                ====================
</TABLE>

Chemicals,  plastics,  petroleum  products and supplies  with a replacement
cost of $330 million at September  30, 2001,  and $327 million at September
30, 2000,  are valued  using the  last-in,  first-out  (LIFO)  method.  The
remaining  inventories are stated generally at the lower of cost (using the
first-in, first-out [FIFO] or average cost method) or market.

LONG-LIVED AND INTANGIBLE ASSETS

The cost of plant and equipment is depreciated by the straight-line  method
over the estimated useful lives of the assets.  Through September 30, 2001,
goodwill was amortized by the  straight-line  method over periods generally
ranging from 15 to 40 years,  with an average  remaining  life of 16 years.
Long-lived   and   intangible   assets  are   periodically   reviewed   for
recoverability when impairment indicators are present. Recorded values that
are not expected to be recovered through undiscounted future cash flows are
written down to current  fair value,  which is  generally  determined  from
estimated  discounted  future net cash flows  (assets  held for use) or net
realizable value (assets held for sale).

Goodwill  amortization amounted to $42 million in 2001, $29 million in 2000
and $34 million in 1999.  Such amounts  included  charges of $10 million in
2001 and $19 million in 1999 for  goodwill  write-downs  related to certain
operations.  Results from these operations consistently had been well below
the levels that were expected when they were  acquired,  necessitating  the
impairment review and resulting write-downs.  In addition to these amounts,
equity  income  includes  the  amortization  of  the  excess  of  Ashland's
investment  over  its  underlying  equity  in the net  assets  of  MAP.  At
September 30, 2001,  such excess  amounted to $359  million.  Straight-line
amortization of this excess, which includes a goodwill component,  amounted
to $26 million in 2001 and 2000 and $27 million in 1999.

In June 2001, the Financial Accounting Standards Board issued Statement No.
142 (FAS  142),  "Goodwill  and Other  Intangible  Assets."  Under FAS 142,
goodwill  and  intangible  assets with  indefinite  lives will no longer be
amortized but will be subject to annual impairment tests.  Other intangible
assets will continue to be amortized over their useful lives. As permitted,
Ashland  adopted the statement as of October 1, 2001, the beginnning of its
fiscal year.  Application of the  nonamortization  provisions of FAS 142 is
expected  to increase  Ashland's  net income by  approximately  $35 million
($.50 per share) each year. During 2002,  Ashland will perform the first of
the required



/42/

<PAGE>



impairment tests of goodwill and indefinite  lived intangible  assets as of
October 1, 2001.  Although those tests and other  transitional  issues have
not yet been finalized,  Ashland does not believe that the initial adoption
of FAS 142 will have a  significant  effect on its  consolidated  financial
position or results of operations.

ENVIRONMENTAL COSTS

Accruals for environmental  costs are recognized when it is probable that a
liability  has  been  incurred  and the  amount  of that  liability  can be
reasonably  estimated.  Such costs are charged to expense if they relate to
the remediation of conditions caused by past operations or are not expected
to mitigate or prevent  contamination from future operations.  Accruals are
recorded at  undiscounted  amounts  based on  experience,  assessments  and
current  technology,  without regard to any third-party  recoveries and are
regularly  adjusted as  environmental  assessments and remediation  efforts
continue.

EARNINGS PER SHARE

The  following  table  sets  forth the  computation  of basic  and  diluted
earnings per share (EPS) from continuing operations.
<TABLE>
<CAPTION>

(In millions except per share data)                                                  2001              2000           1999
<S>                                                                                 <C>               <C>            <C>

NUMERATOR
Numerator for basic and diluted EPS - Income from
     continuing operations                                                         $  406             $ 292          $ 291
                                                                                =============================================
DENOMINATOR
Denominator for basic EPS - Weighted average
     common shares outstanding                                                         69                71             74
Common shares issuable upon
     exercise of stock options                                                          1                 -              1
                                                                                ---------------------------------------------
Denominator for diluted EPS - Adjusted weighted
     average shares and assumed conversions                                            70                71             75
                                                                                =============================================
BASIC EPS FROM CONTINUING OPERATIONS                                                $5.83             $4.11          $3.95
DILUTED EPS FROM CONTINUING OPERATIONS                                              $5.77             $4.10          $3.90
                                                                                =============================================
</TABLE>


DERIVATIVE INSTRUMENTS

In June 1998, the Financial Accounting Standards Board issued Statement No.
133  (FAS  133),   "Accounting  for  Derivative   Instruments  and  Hedging
Activities."  FAS 133 was amended by two other  statements and was required
to be adopted in years beginning after June 15, 2000.  Because of Ashland's
minimal use of  derivatives,  FAS 133 did not have a significant  effect on
Ashland's  consolidated financial position or results of operations when it
was  adopted on October 1, 2000.  MAP's  adoption  of FAS 133 on January 1,
2001,  resulted in a $20 million pretax loss from the cumulative  effect of
this accounting  change.  Ashland's share of the pretax loss amounted to $8
million which, net of income tax benefits of $3 million, resulted in a loss
of $5 million from the cumulative effect of this accounting change.

In  accordance  with  FAS 133,  Ashland  recognizes  all of its  derivative
instruments as either current assets or current  liabilities on the balance
sheet at fair value.  The  accounting  for changes in the fair value (i.e.,
gains or losses) of a derivative  instrument depends on whether it has been
designated and qualifies as part of a hedging  relationship and further, on
the type of  hedging  relationship.  For  derivative  instruments  that are
designated and qualify as a fair value hedge (i.e., hedging the exposure to
changes in the fair value of an asset or liability that is  attributable to
a particular risk), the gain or loss on the derivative instrument,  as well
as the  offsetting  loss or gain on the  hedged  item  attributable  to the
hedged risk are  recognized in earnings  during the period of the change in
fair  values.   For  derivative   instruments  not  designated  as  hedging
instruments,  the gain or loss on the  derivative is recognized in earnings
during the period of change.

Ashland  selectively  uses  unleveraged  interest  rate swap  agreements to
obtain greater access to the lower  borrowing  costs normally  available on
floating-rate debt, while minimizing refunding risk through the issuance of
long-term,   fixed-rate   debt.   Ashland's   intent  is  to  maintain  its
floating-rate  exposure  between  25%  and  45% of  total  interest-bearing
obligations.  In 2001,  Ashland  executed  two  interest  rate  swaps  that
effectively  convert  $60  million  of  fixed-rate,  medium-term  notes  to
floating rates based upon three-month LIBOR. The swaps have been designated
as fair value hedges,  and since the critical terms of the debt instruments
and the swaps match, the hedges are assumed to be perfectly effective, with
the changes in fair value of the debt and swaps offsetting.

Ashland  regularly uses  commodity-based  and foreign  currency  derivative
instruments to manage its exposure to price  fluctuations  associated  with
the  purchase and sale of natural gas in its energy  services  business and
certain  transactions  denominated  in  foreign  currencies.  In  addition,
Ashland  opportunistically  enters into  petroleum  crackspread  futures to
economically  hedge or enhance its equity  earnings and cash  distributions
from Refining and Marketing. Although certain of these instruments could be
designated as qualifying for hedge  accounting  treatment,  Ashland has not
elected to do so. Therefore,  the fair value of the derivatives is recorded
on the  balance  sheet,  with the  offsetting  gain or loss  recognized  in
earnings during the period of change.


/43/

<PAGE>
NOTE A - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

DERIVATIVE INSTRUMENTS (CONTINUED)

MAP uses commodity-based futures, forwards, swaps and options to reduce the
effects of price  fluctuations  related to the  purchase  and sale of crude
oil,  natural gas and refined  products.  MAP has not elected to  designate
these derivative  instruments as qualifying for hedge accounting treatment.
As a result,  the changes in fair value of these derivatives are recognized
in earnings during the period of change,  impacting Ashland's equity income
from MAP accordingly.

STOCK INCENTIVE PLANS

Ashland  accounts for its stock options  using the  intrinsic  value method
prescribed  by  Accounting  Principles  Board  Opinion  No.  25  (APB  25),
"Accounting  for Stock Issued to Employees,"  and related  Interpretations.
The  disclosure   requirements  of  Financial  Accounting  Standards  Board
Statement No. 123 (FAS 123), "Accounting for Stock-Based Compensation," are
included in Note L.

OTHER

Cash equivalents  include highly liquid  investments  maturing within three
months after purchase.

Income  related to  construction  contracts is generally  recognized by the
units-of-production    method,    which    is   a    variation    of    the
percentage-of-completion  method.  Any anticipated losses on such contracts
are charged against operations as soon as such losses are estimable.

Research and  development  costs are  expensed as incurred  ($36 million in
2001, $33 million in 2000 and $30 million in 1999).

Effective  October 1, 1999,  APAC  changed the  estimated  useful lives and
salvage values for its construction  equipment,  resulting in a decrease in
depreciation expense of approximately $21 million in 2000.

Certain  prior year  amounts  have been  reclassified  in the  consolidated
financial   statements  and   accompanying   notes  to  conform  with  2001
classifications.

NOTE B - DISCONTINUED OPERATIONS

On March 16, 2000, Ashland's Board of Directors approved a spin-off of 17.4
million shares of its Arch Coal Common Stock to Ashland's  shareholders  of
record on March 24,  2000,  in the form of a taxable  dividend.  The shares
were  distributed  on the basis of .246097 of a share of Arch Coal for each
Ashland share  outstanding.  The spin-off  resulted in a charge to retained
earnings of $123 million,  with no gain or loss recorded.  Ashland sold its
remaining 4.7 million Arch Coal shares in a public offering during February
2001 for $86 million (after underwriting commissions). Ashland's net income
(loss)  associated  with Arch Coal and other  discontinued  operations  are
summarized in the following table.

<TABLE>
<CAPTION>

(In  millions)                                                                  2001          2000           1999
<S>                                                                            <C>           <C>            <C>

INCOME (LOSS) FROM DISCONTINUED OPERATIONS
Arch Coal
     Equity loss                                                                $  -         $(246)(1)        $(2)
     Administrative expenses                                                       -            (1)            (1)
Reserves related to other discontinued operations                                (23)            -              -
GAIN (LOSS) ON DISPOSAL OF ARCH COAL
Gain on sale of stock                                                             49             -              -
Costs related to the spin-off                                                      -            (5)             -
                                                                                ----------------------------------
INCOME (LOSS) BEFORE INCOME TAXES                                                 26          (252)            (3)
INCOME TAXES
Income (loss) from discontinued operations                                         9            32              2
Gain (loss) on disposal of Arch Coal                                             (16)            2              -
                                                                                ----------------------------------
RESULTS FROM DISCONTINUED OPERATIONS                                             $19         $(218)           $(1)
                                                                                ==================================
</TABLE>

(1)      Includes a net loss of $203  million  related to asset  impairment
         and restructuring  costs,  largely due to the write-down of assets
         at Arch's Dal-Tex and Hobet 21 mining  operations and certain coal
         reserves in central Appalachia.

/44/


<PAGE>
NOTE C - INFORMATION BY INDUSTRY SEGMENT

Ashland's  operations are conducted  primarily in the United States and are
managed along industry segments,  which include APAC, Ashland Distribution,
Ashland  Specialty  Chemical,   Valvoline,   and  Refining  and  Marketing.
Information by industry segment is shown on Pages 54 and 55.

The APAC group of companies  performs contract  construction  work, such as
paving, repairing and resurfacing highways, streets, airports,  residential
and commercial  developments,  sidewalks,  and driveways;  grading and base
work; and excavation and related  activities in the construction of bridges
and  structures,  drainage  facilities  and  underground  utilities  in  14
southern and midwestern  states.  APAC also produces and sells construction
materials,  such as hot-mix asphalt and ready-mix  concrete,  crushed stone
and other aggregate.

Ashland Distribution distributes chemicals,  plastics, fiber reinforcements
and fine ingredients in North America and plastics in Europe.

Ashland Specialty  Chemical  manufactures and supplies  specialty  chemical
products and services to industries  including the  adhesives,  automotive,
composites, foundry, merchant marine, paint, paper, plastics, semiconductor
fabrication, watercraft and water treatment industries.

Valvoline is a marketer of premium-branded  automotive and industrial oils,
automotive chemicals,  appearance products and services, with sales in more
than 140 countries.  Valvoline is engaged in the "fast oil change" business
through owned and franchised  service centers operating under the Valvoline
Instant Oil Change name.

The  Refining  and  Marketing  segment  includes  Ashland's  38%  ownership
interest  in  Marathon  Ashland  Petroleum  LLC (MAP) and other  activities
associated  with refining and  marketing.  MAP was formed  January 1, 1998,
combining the major elements of the refining,  marketing and transportation
operations  of Ashland and Marathon Oil Company.  MAP has seven  refineries
with a combined crude oil refining  capacity of 935,000 barrels per day, 91
light  products and asphalt  terminals in the Midwest and Southeast  United
States,  more  than  5,900  retail  marketing  outlets  in  18  states  and
significant  pipeline  holdings.  Ashland  accounts for its interest in MAP
using the equity method.

Information  about  Ashland's  domestic  and  foreign  operations  follows.
Ashland has no material operations in any individual foreign country.
<TABLE>
<CAPTION>

                                                                                      Property, plant
                                      Revenues from external customers                  and equipment
                                    ----------------------------------             ----------------------
(In millions)                          2001           2000        1999                2001          2000
<S>                                   <C>            <C>         <C>                 <C>           <C>

United States                        $7,526         $7,348      $6,185              $1,299        $1,300
Foreign                               1,021          1,088       1,068                 141           122
                                    ---------------------------------------------------------------------
                                     $8,547         $8,436      $7,253              $1,440        $1,422
                                    =====================================================================

</TABLE>


NOTE D - RELATED PARTY TRANSACTIONS

Ashland sells  chemicals and lubricants to Marathon  Ashland  Petroleum LLC
(MAP) and purchases  petroleum  products from MAP. Such transactions are in
the ordinary course of business at negotiated prices comparable to those of
transactions  with other  customers  and  suppliers.  In addition,  Ashland
leases  certain  facilities  to  MAP,  and  provides  certain   information
technology and administrative services to MAP. For the year ended September
30, 2001,  Ashland's  sales to MAP amounted to $22 million,  its  purchases
from MAP amounted to $258 million, and its costs charged to MAP amounted to
$6 million.  Comparable amounts for the year ended September 30, 2000, were
$15 million, $261 million, and $8 million, and for the year ended September
30,  1999,  were $8  million,  $185  million,  and $16  million.  Ashland's
transactions   with  other   affiliates   and  related   parties  were  not
significant.

Ashland  has  entered  into  revolving  credit  agreements   providing  for
short-term loans, at Ashland's  discretion,  to and from MAP at competitive
rates. Under MAP's borrowing agreement, Ashland may loan up to $190 million
to MAP. Under Ashland's borrowing agreement,  MAP could invest up to 38% of
its surplus cash  balances with Ashland.  No loans were  outstanding  under
either agreement at September 30, 2001, and 2000.  Under these  agreements,
Ashland paid  interest  expense to MAP of $4 million in 2001, $5 million in
2000 and $3  million in 1999.  Interest  income  received  from MAP was not
significant.

/45/


<PAGE>
NOTE E - INCOME TAXES

A  summary  of  the  provision  for  income  taxes  related  to  continuing
operations follows.
<TABLE>
<CAPTION>

(In millions)                      2001        2000           1999
<S>                               <C>         <C>            <C>

Current(1)
    Federal                        $ 90        $ 57           $ 63
    State                            14           6             17
    Foreign                          19          17             11
                                  ---------------------------------
                                    123          80             91
Deferred                            152         111            103
                                  ---------------------------------
                                   $275        $191           $194
                                  =================================
</TABLE>

(1)      Income tax payments amounted to $103 million in 2001, $114 million
         in 2000 and $142 million in 1999.

Deferred income taxes are provided for income and expense items  recognized
in different  years for tax and  financial  reporting  purposes.  Temporary
differences  that  give  rise  to  significant   deferred  tax  assets  and
liabilities follow.
<TABLE>
<CAPTION>

(In millions)                                                        2001          2000
<S>                                                                  <C>           <C>

Employee benefit obligations                                         $177          $167
Environmental, self-insurance and litigation reserves                 148           140
Compensation accruals                                                  61            58
Uncollectible accounts receivable                                      20            13
Other items                                                            59            78
                                                                    ---------------------
Total deferred tax assets                                             465           456
                                                                    ---------------------
Property, plant and equipment                                         173           156
Investment in unconsolidated affiliates                               606           453
                                                                    ---------------------
Total deferred tax liabilities                                        779           609
                                                                    ---------------------
Net deferred tax liability                                           $314          $153
                                                                    =====================
</TABLE>

The U.S. and foreign components of income from continuing operations before
income taxes and a reconciliation  of the statutory federal income tax with
the provision for income taxes follow.
<TABLE>
<CAPTION>

(In millions)                                                        2001       2000         1999
<S>                                                                  <C>       <C>          <C>
Income from continuing operations before income taxes
   United States                                                     $617       $428         $461
   Foreign                                                             64         55           24
                                                                     -------------------------------
                                                                     $681       $483         $485
                                                                     ===============================
Income taxes computed at U.S. statutory rate (35%)                   $238       $169         $169
Increase (decrease) in amount computed resulting from
   State income taxes                                                  22         14           17
   Net impact of foreign results                                        3          -            6
   Nondeductible goodwill amortization                                 12          7            2
   Other items                                                          -          1            -
                                                                     -------------------------------
Income taxes                                                         $275       $191         $194
                                                                     ===============================
</TABLE>

/46/


<PAGE>


NOTE F - UNCONSOLIDATED AFFILIATES

Affiliated  companies  accounted for on the equity method include  Marathon
Ashland  Petroleum LLC (MAP) and various other companies.  See Note C for a
description  of MAP.  Summarized  financial  information  reported by these
affiliates and a summary of the amounts recorded in Ashland's  consolidated
financial  statements  follow.  MAP is  organized  as a  limited  liability
company  that has  elected  to be taxed as a  partnership.  Therefore,  the
parents are responsible for income taxes applicable to their share of MAP's
taxable income. The net income reflected below for MAP does not include any
provision  for  income  taxes  that will be  incurred  by its  parents.  At
September 30, 2001,  Ashland's  retained  earnings included $169 million of
undistributed earnings from unconsolidated  affiliates accounted for on the
equity method.

<TABLE>
<CAPTION>

                                                                                Other
(In millions)                                                  MAP         affiliates            Total
<S>                                                           <C>         <C>                    <C>

SEPTEMBER 30, 2001
Financial position
    Current assets                                         $ 3,485               $ 80
    Current liabilities                                     (2,214)               (55)
                                                          ----------------------------
    Working capital                                          1,271                 25
    Noncurrent assets                                        4,431                 77
    Noncurrent liabilities                                    (364)               (15)
                                                         -----------------------------
    Stockholders' equity                                   $ 5,338               $ 87
                                                         =============================
Results of operations
    Sales and operating revenues                           $28,865               $207
    Income from operations                                   2,042                 21
    Net income                                               2,022                 12
Amounts recorded by Ashland
    Investments and advances                                 2,387(1)              45           $2,432
    Equity income                                              749                  5              754
    Distributions received                                     658                  6              664
                                                         =============================================

SEPTEMBER 30, 2000
Financial position
    Current assets                                         $ 3,641               $ 82
    Current liabilities                                     (2,249)               (48)
                                                         -----------------------------
    Working capital                                          1,392                 34
    Noncurrent assets                                        3,974                 92
    Noncurrent liabilities                                    (310)               (22)
                                                         -----------------------------
    Stockholders' equity                                   $ 5,056               $104
                                                         =============================
Results of operations
    Sales and operating revenues                           $27,657               $181
    Income from operations                                   1,084                 21
    Net income                                               1,092                 13
Amounts recorded by Ashland
    Investments and advances                                 2,295                 57           $2,352
    Equity income                                              389                  5              394
    Distributions received                                     279                  3              282
                                                          ============================================

SEPTEMBER 30, 1999
Results of operations
    Sales and operating revenues                           $18,965               $163
    Income from operations                                     976                 23
    Net income                                                 977                 13
Amounts recorded by Ashland
    Equity income                                              345                  6           $  351
    Distributions received                                     333                  6              339
                                                          ============================================
</TABLE>


(1)      At  September  30,  2001,   Ashland's   investment   exceeded  its
         underlying  equity  in the  net  assets  of MAP by  $359  million.
         Straight-line  amortization  of this excess  against equity income
         amounted  to $26 million in 2001 and 2000 and $27 million in 1999.
         Amortization of the portion of this excess  representing  goodwill
         (approximately  $10 million  annually)  ceased on October 1, 2001,
         when Ashland adopted FAS 142 (see Note A).



/47/


<PAGE>


NOTE G - LONG-TERM DEBT
<TABLE>
<CAPTION>

(In millions)                                                                              2001          2000
<S>                                                                                       <C>           <C>
Medium-term notes, due 2002-2025, interest at a weighted
    average rate of 7.6% at September 30, 2001 (3.2% to 10.4%)                           $  845        $  917
8.80% debentures, due 2012                                                                  250           250
7.83% medium-term notes, Series J, due 2005                                                 229           250
Pollution control and industrial revenue bonds, due
    2002-2022, interest at a weighted average rate of 5.8%
    at September 30, 2001 (2.2% to 7.2%)                                                    201           217
6.86% medium-term notes, Series H, due 2009                                                 150           150
6.625% senior notes, due 2008                                                               150           150
Other                                                                                        46            47
                                                                                        ---------------------
                                                                                          1,871         1,981
Current portion of long-term debt                                                           (85)          (82)
                                                                                        ---------------------

                                                                                         $1,786        $1,899
                                                                                        =====================
</TABLE>


Aggregate  maturities  of  long-term  debt are $85  million  in 2002,  $191
million in 2003, $68 million in 2004,  $396 million in 2005 and $60 million
in 2006.  Certain  floating-rate  pollution control and industrial  revenue
bonds  amounting  to $38 million are  subject to early  redemptions  at the
holders'  option,  but not  before  October 1,  2002.  These  bonds are due
between  2003 and  2009,  and are  included  in  maturities  based on their
ultimate due date.

Ashland  has  two  revolving  credit  agreements  providing  for up to $425
million  in  borrowings,  neither  of which has been  used.  The  agreement
providing  for $250  million in  borrowings  expires  on June 2, 2004.  The
agreement providing for $175 million in borrowings expires on May 28, 2002.
Both  agreements  contain a  covenant  limiting  new  borrowings.  Based on
Ashland's financial position at September 30, 2001,  borrowings  (including
any  borrowings  under these  agreements)  could be increased by up to $1.5
billion.  Additional  permissible  borrowings are increased  (decreased) by
150% of any increases (decreases) in stockholders' equity.

Interest  payments on all  indebtedness  amounted to $167  million in 2001,
$189  million  in 2000  and $136  million  in 1999.  The  weighted  average
interest rate on short-term  borrowings  outstanding  was 6.8% at September
30, 2000. No short-term borrowings were outstanding at September 30, 2001.

NET INTEREST AND OTHER FINANCIAL COSTS
<TABLE>
<CAPTION>

(In millions)                                                                        2001              2000              1999
<S>                                                                                  <C>               <C>               <C>
Interest expense                                                                     $162              $191              $141
Expenses on sales of accounts receivable (see Note H)                                   8                 6                 -
Other financial costs                                                                   2                 1                 -
Interest income                                                                        (2)              (10)               (1)
                                                                                     ----------------------------------------
                                                                                     $170              $188              $140
                                                                                     ========================================
</TABLE>


EXTRAORDINARY LOSS

During 2001, Ashland repurchased $71 million of Series J medium-term notes.
The repurchase premium and write-off of unamortized  deferred debt issuance
expenses  resulted  in pretax  charges  totaling $5 million  which,  net of
income tax  benefits of $2 million,  resulted in an  extraordinary  loss on
early retirement of debt of $3 million.

During 2000,  Ashland  refunded $36 million of  pollution  control  revenue
bonds and  prepaid  $600  million  of  floating-rate  debt used to fund the
acquisition  of the U.S.  construction  operations  of  Superfos  a/s.  The
write-off of unamortized  deferred debt issuance  expenses and a redemption
premium on the bonds resulted in pretax charges  totaling $6 million which,
net of income tax benefits of $2 million, resulted in an extraordinary loss
on early retirement of debt of $4 million.


/48/


<PAGE>


NOTE H - SALE OF ACCOUNTS RECEIVABLE

On March 15, 2000,  Ashland entered into a five-year  agreement to sell, on
an ongoing  basis and  without  recourse,  up to a $200  million  undivided
interest in a designated  pool of accounts  receivable.  Under the terms of
the agreement, new receivables are added to the pool and collections reduce
the pool. Since inception,  interests  totaling $150 million have been sold
on a continuous basis. The proceeds from the initial sale were reflected as
a reduction of accounts  receivable on Ashland's  balance sheet and as cash
flows  from  operations   (included  in  change  in  operating  assets  and
liabilities) on Ashland's cash flow statement. The costs of these sales are
based on the buyer's  short-term  borrowing rates and approximated  3.5% at
September 30, 2001, and 6.9% at September 30, 2000.

NOTE I - FINANCIAL INSTRUMENTS

DERIVATIVE INSTRUMENTS

Ashland uses interest rate swaps and  commodity-based  and foreign currency
derivative  instruments  as  described  in Note A. The  fair  value of open
contracts was not significant at September 30, 2001, and 2000.

FAIR VALUES

The  carrying  amounts and fair values of Ashland's  significant  financial
instruments  at September  30, 2001,  and 2000,  are shown below.  The fair
values  of cash and cash  equivalents,  investments  of  captive  insurance
companies,  notes payable to financial  institutions  and commercial  paper
approximate their carrying  amounts.  The fair values of long-term debt are
based on quoted market prices or, if market prices are not  available,  the
present  values  of the  underlying  cash  flows  discounted  at  Ashland's
incremental borrowing rates.
<TABLE>
<CAPTION>

                                                                         2001                                     2000
                                                          -------------------------------           -------------------------------
                                                           Carrying                 Fair               Carrying               Fair
(In millions)                                                amount                value                 amount              value
<S>                                                       <C>                     <C>                 <C>                   <C>
Assets
    Cash and cash equivalents                                $  236               $  236                 $   67             $   67
    Investments of captive insurance companies(1)                20                   20                     28                 28
Liabilities
    Notes payable to financial institutions                       -                    -                    180                180
    Commercial paper                                              -                    -                     65                 65
    Long-term debt (including current portion)                1,871                2,025                  1,981              2,014
                                                          =========================================================================
</TABLE>

(1)      Included in other noncurrent  assets in the  Consolidated  Balance
         Sheets.

NOTE J - LEASES

Ashland  and  its  subsidiaries   are  lessees  in  noncancelable   leasing
agreements  for office  buildings,  warehouses,  transportation  equipment,
storage  facilities,  retail  outlets,  manufacturing  facilities and other
equipment and properties which expire at various dates.  Capitalized  lease
obligations are not significant and are included in long-term debt.  Future
minimum  rental  payments at September 30, 2001,  and rental  expense under
operating leases follow.
<TABLE>
<CAPTION>

(In millions)

Future minimum rental payments                    Rental expense                  2001                  2000                1999
------------------------------------              -------------------------------------------------------------------------------
<C>                          <C>                  <C>                             <C>                   <C>                 <C>
2002                         $  46
2003                            40                Minimum rentals
2004                            32                  (including rentals under
2005                            28                  short-term leases)            $119                  $115                $103
2006                            21                Contingent rentals                 5                     5                   5
Later years                    103                Sublease rental income            (2)                   (2)                 (3)
------------------------------------              -------------------------------------------------------------------------------
                              $270                                                $122                  $118                 $105
====================================              ===============================================================================

</TABLE>
/49/


<PAGE>


NOTE K - CAPITAL STOCK

From time to time, Ashland's Board of Directors has authorized the purchase
of shares of Ashland  common stock in the open market.  As of September 30,
2001,  Ashland  could  purchase  an  additional  3.9 million  shares  under
previous authorizations.

Under Ashland's  Shareholder  Rights Plan, each common share is accompanied
by one right to purchase  one-thousandth share of preferred stock for $140.
Each one-thousandth  share of preferred stock will be entitled to dividends
and to vote on an equivalent  basis with one common  share.  The rights are
neither  exercisable  nor  separately  transferable  from the common shares
unless a party  acquires or tenders for more than 15% of  Ashland's  common
stock.  If any party  acquires  more than 15% of Ashland's  common stock or
acquires  Ashland in a business  combination,  each right (other than those
held by the acquiring party) will entitle the holder to purchase  preferred
stock of Ashland or the acquiring  company at a substantial  discount.  The
rights expire on May 16, 2006,  and Ashland's  Board of Directors can amend
certain  provisions  of the Plan or redeem  the rights at any time prior to
their becoming exercisable.

At September 30, 2001,  500,000  shares of cumulative  preferred  stock are
reserved for potential  issuance under the Shareholder  Rights Plan and 6.7
million  common shares are reserved for issuance  under  outstanding  stock
options.

NOTE L - STOCK INCENTIVE PLANS

Ashland has stock  incentive  plans under which key  employees or directors
can purchase shares of common stock under stock options or restricted stock
awards. Stock options are granted to employees at a price equal to the fair
market value of the stock on the date of grant and become  exercisable over
periods of one to four years.  Unexercised options lapse 10 years after the
date of grant.  Restricted  stock awards entitle  employees or directors to
purchase  shares at a nominal  cost, to vote such shares and to receive any
dividends  thereon.  However,  such shares are subject to  forfeiture  upon
termination of service before the restriction period ends.

As discussed in Note A, Ashland  accounts for its stock  incentive plans in
accordance with APB 25. Ashland has not recognized compensation expense for
stock options,  because the exercise price of the options equals the market
price  of  the  underlying  stock  on  the  date  of  grant,  which  is the
measurement  date.  If the  alternative  method  of  accounting  for  stock
incentive  plans  prescribed  by FAS 123 had been  followed,  Ashland's net
income and  earnings  per share  would  have been  reduced to the pro forma
amounts shown in the following  table.  The weighted  average fair value of
options granted was determined using the Black-Scholes option pricing model
with the indicated assumptions.
<TABLE>
<CAPTION>
                                                                      2001                2000              1999
<S>                                                                  <C>                <C>                <C>
Pro forma
   Net income (in millions)                                          $ 414               $  66             $ 286
   Basic earnings per share                                           5.94                 .93              3.88
   Diluted earnings per share                                         5.88                 .92              3.84
                                                                    --------------------------------------------
Weighted average fair value per share of options granted             $7.38               $7.26             $7.97
                                                                    --------------------------------------------
Assumptions (weighted average)
   Risk-free interest rate                                             4.1%                6.1%              6.0%
   Expected dividend yield                                             3.0%                3.3%              3.0%
   Expected volatility                                                24.4%               22.9%             21.0%
   Expected life (in years)                                            5.0                 5.0               5.0
                                                                     ============================================
</TABLE>

A progression of activity and various other information relative to stock
options is presented in the following table.
<TABLE>
<CAPTION>
                                                   2001                       2000                          1999
                                         -----------------------      ---------------------       --------------------------
                                                   Weighted avg.              Weighted avg.                    Weighted avg.
                                         Common     option price       Common  option price       Common        option price
(In thousands except per share data)     shares        per share       shares     per share       shares           per share
<S>                                       <C>            <C>          <C>           <C>           <C>                <C>

Outstanding - beginning of year(1)        6,380           $38.01        6,381        $38.34        4,965              $38.82
Granted                                   1,001            36.38          506         32.96        1,590               36.97
Exercised                                  (572)           30.06         (195)        30.75         (120)              34.55
Canceled                                    (74)           41.04         (312)        41.26          (54)              49.75
                                        ------------------------------------------------------------------------------------
Outstanding - end of year(1)              6,735           $38.41        6,380        $38.01        6,381              $38.34
                                        ====================================================================================
Exercisable - end of year                 4,803           $39.36        4,684        $38.53        4,348              $37.65
                                        ====================================================================================
</TABLE>


(1)      Shares of common stock  available  for future grants of options or
         awards  amounted to 4,812,000 at September 30, 2001, and 3,670,000
         at  September  30,  2000.  Exercise  prices per share for  options
         outstanding  at September  30, 2001,  ranged from $23.88 to $33.88
         for 1,745,000 shares,  from $35.88 to $43.13 for 3,704,000 shares,
         and from  $48.00 to $53.38  for  1,286,000  shares.  The  weighted
         average remaining contractual life of the options was 6.4 years.


/50/


<PAGE>


NOTE M - LITIGATION, CLAIMS AND CONTINGENCIES

Ashland is subject to various federal,  state and local  environmental laws
and  regulations  that  require  environmental  assessment  or  remediation
efforts (collectively  environmental remediation) at multiple locations. At
September 30, 2001, such locations  included 99 waste treatment or disposal
sites where Ashland has been identified as a potentially  responsible party
under Superfund or similar state laws, approximately 130 current and former
operating  facilities  (including certain operating  facilities conveyed to
MAP) and about 1,200 service  station  properties.  Ashland's  reserves for
environmental  remediation  amounted to $176 million at September 30, 2001,
and $163 million at  September  30, 2000.  Such amounts  reflect  Ashland's
estimates of the most likely  costs that will be incurred  over an extended
period  to  remediate  identified   conditions  for  which  the  costs  are
reasonably estimable, without regard to any third-party recoveries.

Environmental   remediation  reserves  are  subject  to  numerous  inherent
uncertainties  that affect  Ashland's  ability to estimate its share of the
ultimate  costs of the required  remediation  efforts.  Such  uncertainties
involve the nature and extent of  contamination at each site, the extent of
required cleanup efforts under existing environmental  regulations,  widely
varying  costs of  alternate  cleanup  methods,  changes  in  environmental
regulations, the potential effect of continuing improvements in remediation
technology,  and the number and  financial  strength  of other  potentially
responsible parties at multiparty sites. Reserves are regularly adjusted as
environmental remediation continues.

None of the remediation  locations is  individually  material to Ashland as
its  largest  reserve  for any  site is under  $10  million.  As a  result,
Ashland's  exposure to adverse  developments with respect to any individual
site is not expected to be material,  and these sites are in various stages
of the ongoing environmental  remediation process.  Although  environmental
remediation  could have a material  effect on  results of  operations  if a
series of adverse  developments  occurs in a  particular  quarter or fiscal
year,  Ashland believes that the chance of such  developments  occurring in
the same quarter or fiscal year is remote.

During 1999, Ashland entered into settlement agreements with certain of its
insurance  carriers over the coverage  provided under historical  insurance
policies   with   respect  to   environmental   liabilities.   Under  those
settlements,  the carriers paid lump sum amounts to Ashland in exchange for
releases  of  their  present  and  future   obligations   associated   with
environmental  liabilities.  As  a  result  of  those  agreements,  Ashland
recorded pretax income of $43 million.

In addition to the environmental matters described above, there are pending
or  threatened  against  Ashland and its  current  and former  subsidiaries
various claims, lawsuits and administrative  proceedings.  Such actions are
with  respect  to  commercial  matters,   product  liability,   toxic  tort
liability, numerous asbestos claims, and other environmental matters, which
seek remedies or damages some of which are for substantial  amounts.  While
these actions are being  contested,  their outcome is not predictable  with
assurance and could be material to results of operations in the period they
are  recognized.  However,  Ashland  does not  believe  that any  liability
resulting  from these actions and  environmental  remediation  after taking
into  consideration  expected  recoveries from insurers,  contributions  by
other  responsible  parties and amounts  already  provided for, will have a
material adverse effect on its consolidated financial position,  cash flows
or liquidity.

NOTE N - ACQUISITIONS AND DIVESTITURES

ACQUISITIONS

In October  1999,  Ashland  completed  its tender offer for Superfos a/s, a
Denmark  based  industrial  company.  In  November  1999,  in a  series  of
transactions,  Ashland sold the businesses of Superfos, other than its U.S.
construction operations,  to a unit of Industri Kapital, a European private
equity  fund.  Ashland's  net cost for the U.S.  construction  business  of
Superfos was approximately $533 million, of which $315 million was assigned
to goodwill and was being amortized on a straight-line basis over a 20-year
period through  September 30, 2001. Prior to Ashland's  acquisition,  these
operations  generated  sales and  operating  revenues  of $557  million and
operating  income of $30 million during the year ended  September 30, 1999.
In addition,  several  smaller  acquisitions  were made by APAC and Ashland
Specialty  Chemical  in 2000,  two of which  included  the  issuance  of $3
million in Ashland common stock.

During  2001,   Ashland  Specialty   Chemical  acquired  Neste  Polyester's
unsaturated  polyester  resins and gelcoats  business and assets from Dynea
Oy. Several  smaller  acquisitions  were also completed by APAC and Ashland
Specialty  Chemical in 2001.  During 1999,  APAC  acquired 14  construction
businesses,  six of which  included  the issuance of $79 million in Ashland
common stock.  These  acquisitions  were accounted for as purchases and did
not  have  a  significant  effect  on  Ashland's   consolidated   financial
statements.

DIVESTITURES

During  2001,  APAC  sold  certain   grading  and  utilities   construction
operations.  During 2000,  APAC sold certain  concrete and block plants and
Ashland  Distribution sold its plastics  compounding  business in Italy. In
1999,  Valvoline  sold  its  used oil  collection  business.  None of these
divestitures had a significant effect on Ashland's  consolidated  financial
statements.


/51/


<PAGE>


NOTE O - EMPLOYEE BENEFIT PLANS

PENSION AND OTHER POSTRETIREMENT PLANS

Ashland  and its  subsidiaries  sponsor  noncontributory,  defined  benefit
pension plans that cover substantially all employees.  Benefits under these
plans are generally based on employees'  years of service and  compensation
during the years immediately preceding their retirement. For certain plans,
50% of employees'  leveraged employee stock ownership plan (LESOP) accounts
are  coordinated  with and used to fund  their  pension  benefits.  Ashland
determines  the level of  contributions  to its pension plans  annually and
contributes  amounts  within the  limitations  imposed by Internal  Revenue
Service regulations.

Ashland and its subsidiaries also sponsor unfunded  postretirement  benefit
plans,  which provide health care and life insurance  benefits for eligible
employees who retire or are disabled.  Retiree  contributions  to Ashland's
health care plans are adjusted  periodically,  and the plans  contain other
cost-sharing features, such as deductibles and coinsurance.  Life insurance
plans are  generally  noncontributory  for base level  coverage,  and fully
contributory  for any  additional  coverage  elected by employees.  Ashland
funds the costs of benefits as they are paid.

Summaries  of the  changes  in the  benefit  obligations  and  plan  assets
(primarily  listed stocks and debt  securities) and of the funded status of
the plans follow.
<TABLE>
<CAPTION>

                                                                 Pension benefits
                                            ------------------------------------------------------
                                                     2001                        2000                        Other postretirement
                                            ------------------------    --------------------------                 benefits
                                            Qualified   Nonqualified    Qualified    Nonqualified          -----------------------
(In millions)                                   plans          plans        plans           plans           2001             2000
<S>                                              <C>           <C>           <C>             <C>            <C>              <C>

CHANGE IN BENEFIT OBLIGATIONS
Benefit obligations at October 1                 $595           $ 87         $529             $88           $269             $262
Service cost                                       35              2           35               2             11                9
Interest cost                                      46              7           40               7             22               19
Retiree contributions                               -              -            -               -              7                5
Benefits paid                                     (28)            (5)         (24)             (7)           (28)             (25)
Other-primarily actuarial loss (gain)              67             12           15              (3)            52               (1)
                                            -------------------------------------------------------------------------------------
Benefit obligations at September 30              $715           $103         $595             $87           $333             $269
                                            =====================================================================================

CHANGE IN PLAN ASSETS
Value of plan assets at October 1                $506           $  -         $429             $ -           $  -             $  -
Actual return on plan assets                      (40)             -           50               -              -                -
Employer contributions                             76              5           46               7             21               20
Retiree contributions                               -              -            -               -              7                5
Benefits paid                                     (28)            (5)         (24)             (7)           (28)             (25)
Other                                               4              -            5               -              -                -
                                             ------------------------------------------------------------------------------------
Value of plan assets at September 30             $518           $  -         $506             $ -           $  -             $  -
                                             ====================================================================================

FUNDED STATUS OF THE PLANS
Under (over) funded accumulated
     obligation                                  $ 53           $ 91         $(29)            $73           $333             $269
Provision for future salary increases             144             12          118              14              -                -
                                             ------------------------------------------------------------------------------------
Excess of obligations over plan assets            197            103           89              87            333              269
Unrecognized actuarial loss                      (186)           (44)         (35)            (27)           (56)              (6)
Unrecognized prior service
     credit (cost)                                 (3)             -           (4)              -             24               31
                                             ------------------------------------------------------------------------------------
Net liability recognized                         $  8           $ 59          $50             $60           $301             $294
                                             ====================================================================================

BALANCE SHEET LIABILITIES (ASSETS)
Prepaid benefit costs                                   $ (4)                        $ (3)                  $  -             $  -
Accrued benefit liabilities                              144                          127                    301              294
Intangible assets                                         (2)                           -                      -                -
Accumulated other
     comprehensive loss                                  (71)                         (14)                     -                -
                                             ------------------------------------------------------------------------------------
Net liability recognized                                $ 67                         $110                   $301             $294
                                             ====================================================================================

ASSUMPTIONS AS OF SEPTEMBER 30
Discount rate                                           7.25%                        7.75%                  7.25%            7.75%
Rate of compensation increase                           5.00                         5.00                   5.00             5.00
Expected return on plan assets                          9.00                         9.00                      -                -
                                             ====================================================================================
</TABLE>



/52/


<PAGE>


The  following   table   details  the   components  of  pension  and  other
postretirement benefit costs.
<TABLE>
<CAPTION>
                                              Pension benefits                               Other postretirement benefits
                                      -----------------------------------               ---------------------------------------
(In millions)                          2001          2000           1999                2001              2000             1999
<S>                                   <C>           <C>            <C>                 <C>               <C>              <C>

Service cost                            $37           $37            $34                 $11               $ 9              $ 8
Interest cost                            53            47             41                  22                19               18
Expected return on plan assets          (48)          (39)           (34)                  -                 -                -
Other amortization and deferral           4             5              5                  (6)               (9)              (7)
                                       ------------------------------------------------------------------------------------------
                                        $46           $50            $46                 $27               $19              $19
                                       ==========================================================================================
</TABLE>

Ashland  amended  nearly all of its  retiree  health  care plans in 1992 to
place a cap on its contributions  and to adopt a cost-sharing  method based
upon years of service. The cap limits Ashland's  contributions to base year
per capita  costs,  plus  annual  increases  of up to 4.5% per year.  These
amendments  reduced  Ashland's  obligations  under its retiree  health care
plans, with the reduction  amortized to income over approximately 12 years.
The remaining  credit at September 30, 2001,  amounted to $22 million,  and
will be amortized over approximately  three years in declining amounts from
$8 million in 2002 to $6 million in 2004.

OTHER PLANS

Ashland sponsors a qualified  savings plan to assist eligible  employees in
providing for  retirement or other future needs.  Under that plan,  Ashland
contributes  up to 4.2% of a  participating  employee's  earnings.  Company
contributions  amounted to $16 million in 2001 and $15 million in both 2000
and 1999.

NOTE P - QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The following table presents quarterly financial information and per share
data relative to Ashland's common stock.
<TABLE>
<CAPTION>

Quarters ended                                    December 31            March 31            June 30            September 30
                                               ----------------      ----------------   -----------------    ------------------
(In millions except per share data)              2000      1999        2001      2000     2001       2000      2001        2000
<S>                                            <C>       <C>         <C>       <C>      <C>        <C>       <C>         <C>
Sales and operating revenues                   $1,878    $1,897      $1,659    $1,822   $2,053     $2,103    $2,129      $2,140
Operating income                                  144       111          87        90      369        268       251         203

Income from continuing operations              $   59    $   40      $   26    $   25   $  197     $  129    $  125      $   97
Results from discontinued operations                -      (206)         25       (12)       -          -        (6)          -
Extraordinary loss                                  -         -           -        (2)       -          -        (3)         (1)
Cumulative effect of accounting change              -         -          (5)        -        -          -         -           -
                                               --------------------------------------------------------------------------------
Net income (loss)                              $   59    $ (166)     $   46    $   11   $  197     $  129    $  116      $   96

Basic earnings (loss) per share
    Continuing operations                      $  .84    $  .56      $  .37    $  .35   $ 2.82     $ 1.83    $ 1.79      $ 1.38
    Discontinued operations                         -     (2.88)        .35      (.16)       -          -      (.09)          -
    Extraordinary loss                              -         -           -      (.03)       -          -      (.04)       (.02)
    Cumulative effect of accounting change          -         -        (.06)        -        -          -         -           -
                                               --------------------------------------------------------------------------------
    Net income (loss)                          $  .84    $(2.32)     $  .66    $  .16   $ 2.82     $ 1.83    $ 1.66      $ 1.36

Diluted earnings (loss) per share
    Continuing operations                      $  .84    $  .55      $  .37    $  .35   $ 2.79     $ 1.83    $ 1.77      $ 1.38
    Discontinued operations                         -     (2.87)        .35      (.16)       -          -      (.09)          -
    Extraordinary loss                              -         -           -      (.03)       -          -      (.04)       (.02)
    Cumulative effect of accounting change          -         -        (.06)        -        -          -         -           -
                                               --------------------------------------------------------------------------------
    Net income (loss)                          $  .84    $(2.32)     $  .66    $  .16   $ 2.79     $ 1.83    $ 1.64      $ 1.36

Common cash dividends per share                $ .275    $ .275      $ .275    $ .275   $ .275     $ .275    $ .275      $ .275

Market price per common share
    High                                        36.24     35.94       41.35     35.63    44.25      37.06     44.05       37.19
    Low                                         30.63     30.31       34.39     28.63    37.15      31.19     35.53       31.44
                                               ================================================================================
</TABLE>



/53/


<PAGE>


Ashland Inc. and Consolidated Subsidiaries
INFORMATION BY INDUSTRY SEGMENT

Years Ended September 30
<TABLE>
<CAPTION>

(In millions)                                                        2001                    2000                   1999
<S>                                                                <C>                     <C>                    <C>
REVENUES
Sales and operating revenues
    APAC                                                           $2,624                  $2,505                 $1,678
    Ashland Distribution                                            2,849                   3,214                  2,925
    Ashland Specialty Chemical                                      1,248                   1,283                  1,263
    Valvoline                                                       1,092                   1,077                  1,059
    Intersegment sales(1)
        Ashland Distribution                                          (26)                    (38)                   (35)
        Ashland Specialty Chemical                                    (66)                    (78)                   (84)
        Valvoline                                                      (2)                     (2)                    (5)
                                                                   -----------------------------------------------------
                                                                    7,719                   7,961                  6,801
Equity income
    Ashland Specialty Chemical                                          4                       4                      5
    Valvoline                                                           1                       1                      1
    Refining and Marketing                                            749                     389                    345
                                                                   -----------------------------------------------------
                                                                      754                     394                    351
Other income
    APAC                                                               13                      21                     12
    Ashland Distribution                                               15                       9                      6
    Ashland Specialty Chemical                                         27                      30                     19
    Valvoline                                                           6                       7                      6
    Refining and Marketing                                              7                       6                      8
    Corporate                                                           6                       8                     50
                                                                   -----------------------------------------------------
                                                                       74                      81                    101
                                                                   -----------------------------------------------------
                                                                   $8,547                  $8,436                 $7,253
                                                                   =====================================================

OPERATING INCOME
APAC                                                               $   55                  $  140                 $  108
Ashland Distribution                                                   35                      70                     37 (2)
Ashland Specialty Chemical                                             58                      95                    107
Valvoline                                                              81                      78                     74
Refining and Marketing(3)                                             707                     361                    206 (4)
    Inventory valuation adjustments(5)                                  -                       -                    117
Corporate                                                             (85)                    (73)                   (24)(6)
                                                                   -----------------------------------------------------
                                                                   $  851                  $  671                 $  625
                                                                   =====================================================

ASSETS
APAC                                                               $1,574                  $1,654                 $  996
Ashland Distribution                                                  961                   1,047                    917
Ashland Specialty Chemical                                            944                     888                    878
Valvoline                                                             642                     573                    561
Refining and Marketing                                              2,452                   2,352                  2,229
Corporate(7)                                                          372                     257                    843
                                                                   -----------------------------------------------------
                                                                   $6,945                  $6,771                 $6,424
                                                                   =====================================================
</TABLE>
/54/
<PAGE>
<TABLE>
<CAPTION>
(In millions)                                                          2001                   2000                    1999
<S>                                                                   <C>                    <C>                     <C>

INVESTMENT IN EQUITY AFFILIATES
APAC                                                                 $    -                 $   10                  $   10
Ashland Specialty Chemical                                               36                     40                      33
Valvoline                                                                 9                      7                       6
Refining and Marketing                                                2,387                  2,295                   2,172
                                                                     -----------------------------------------------------
                                                                     $2,432                 $2,352                  $2,221
                                                                     =====================================================
EXPENSE (INCOME) NOT AFFECTING CASH
Depreciation, depletion and amortization
    APAC                                                             $  133                 $  129                  $   89
    Ashland Distribution                                                 27                     23                      44(8)
    Ashland Specialty Chemical                                           56                     49                      53
    Valvoline                                                            23                     23                      26
    Corporate                                                            11                     13                      16
                                                                     -----------------------------------------------------
                                                                        250                    237                     228
Other noncash items(9)
    APAC                                                                 14                      9                       -
    Ashland Distribution                                                 (1)                    (3)                     (6)
    Ashland Specialty Chemical                                            5                      3                       8
    Valvoline                                                             4                      -                      (1)
    Refining and Marketing                                               21                    (17)                     93
    Corporate                                                            19                    (12)                     (5)
                                                                     -----------------------------------------------------
                                                                         62                    (20)                     89
                                                                     -----------------------------------------------------
                                                                     $  312                 $  217                  $  317
                                                                     =====================================================
ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT
APAC                                                                 $   92                 $   98                  $  104
Ashland Distribution                                                     15                     18                      30
Ashland Specialty Chemical                                               57                     82                      70
Valvoline                                                                29                     25                      26
Corporate                                                                12                      9                      18
                                                                     -----------------------------------------------------
                                                                     $  205                 $  232                  $  248
                                                                     =====================================================
</TABLE>
(1)      Intersegment  sales are accounted  for at prices that  approximate
         market value.
(2)      Includes  a $21  million  charge for asset  impairment  related to
         European plastics distribution operations.
(3)      Includes  Ashland's  equity  income  from  MAP,   amortization  of
         Ashland's   excess   investment  in  MAP,  and  other   activities
         associated with refining and marketing.
(4)      Includes  a $10  million  charge  for  severance  and other  costs
         related to the formation of MAP.
(5)      Represents Ashland's share of inventory adjustments due to changes
         in MAP's inventory market valuation reserve.  The reserve reflects
         the excess of the LIFO cost of MAP's crude oil and refined product
         inventories over their net realizable values.
(6)      Includes $43 million in environmental insurance recoveries.
(7)      Includes  principally  cash,  cash  equivalents,   investments  of
         captive   insurance   companies  and  investment  in  discontinued
         operations.
(8)      Includes a charge of $19 million to write down goodwill related to
         European plastics distribution operations.
(9)      Includes  deferred  taxes,  equity income from  affiliates  net of
         distributions, and other items not affecting cash.

/55/


<PAGE>


Ashland Inc. and Consolidated Subsidiaries
FIVE-YEAR SELECTED FINANCIAL INFORMATION

Years Ended September 30
<TABLE>
<CAPTION>

(In millions except per share data)                         2001             2000               1999            1998           1997
<S>                                                       <C>               <C>                <C>             <C>            <C>
SUMMARY OF OPERATIONS
Revenues
     Sales and operating revenues
      (including excise taxes)                            $7,719           $7,961             $6,801          $6,534        $12,833
     Equity income                                           754              394                351             304             14
     Other income                                             74               81                101              70             89
Costs and expenses
     Cost of sales and operating expenses                 (6,319)          (6,434)            (5,346)         (5,299)        (9,810)
     Excise taxes on products and merchandise                  -                -                  -               -           (992)
     Selling, general and administrative expenses         (1,127)          (1,094)            (1,054)         (1,006)        (1,350)
     Depreciation, depletion and amortization               (250)            (237)              (228)           (181)          (348)
                                                          -------------------------------------------------------------------------
Operating income                                             851              671                625             422            436
Net interest and other financial costs                      (170)            (188)              (140)           (130)          (142)
                                                          -------------------------------------------------------------------------
Income from continuing operations
     before income taxes                                     681              483                485             292            294
Income taxes                                                (275)            (191)              (194)           (114)          (125)
                                                          -------------------------------------------------------------------------
Income from continuing operations                            406              292                291             178            169
Results from discontinued operations                          19             (218)                (1)             25            119
                                                          -------------------------------------------------------------------------
Income before extraordinary loss and
     cumulative effect of accounting change                  425               74                290             203            288
Extraordinary loss on early retirement of debt                (3)              (4)                 -               -             (9)
Cumulative effect of accounting change                        (5)               -                  -               -              -
                                                          -------------------------------------------------------------------------
Net income                                                $  417           $   70             $  290          $  203        $   279
                                                          =========================================================================
BALANCE SHEET INFORMATION
Working capital
     Current assets                                       $2,213           $2,131             $2,059          $1,828        $ 2,720
     Current liabilities                                   1,497            1,699              1,396           1,361          2,028
                                                          -------------------------------------------------------------------------
                                                          $  716           $  432             $  663          $  467        $   692
                                                          -------------------------------------------------------------------------
Total assets                                              $6,945           $6,771             $6,424          $6,082        $ 6,462
                                                          -------------------------------------------------------------------------
Capital employed
     Debt due within one year                             $   85           $  327             $  219          $  125        $    49
     Long-term debt (less current portion)                 1,786            1,899              1,627           1,507          1,356
     Stockholders' equity                                  2,226            1,965              2,200           2,137          2,024
                                                          -------------------------------------------------------------------------
                                                          $4,097           $4,191             $4,046          $3,769        $ 3,429
                                                          =========================================================================
CASH FLOW INFORMATION
Cash flows from operations                                $  829           $  484             $  383          $  354        $   552
Additions to property, plant and equipment                   205              232                248             274            356
Cash dividends                                                76               78                 81              84             86
                                                          =========================================================================
COMMON STOCK INFORMATION
Diluted earnings per share
     Income from continuing operations                    $ 5.77           $ 4.10             $ 3.90          $  2.31       $  2.23
     Net income                                             5.93              .98               3.89             2.63          3.64
Cash dividends per share                                    1.10             1.10               1.10             1.10          1.10
                                                          =========================================================================
</TABLE>



/56/


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>12
<FILENAME>subs.txt
<DESCRIPTION>EXHIBIT 21
<TEXT>
                                                      EXHIBIT 21

LIST OF SUBSIDIARIES

     Subsidiaries of Ashland Inc.  ("AI") at October 1, 2001,  included the
companies  listed below.  Ashland has numerous  unconsolidated  affiliates,
which are primarily  accounted for on the equity method, and majority-owned
consolidated  subsidiaries in addition to the companies listed below.  Such
affiliates  and  subsidiaries  are not  listed  below  since they would not
constitute a significant subsidiary considered in the aggregate as a single
entity.
<TABLE>
<CAPTION>
                                                                Jurisdiction of                     Immediate
                        Company                                  Incorporation                       Parent*
                        -------                                  -------------                     -----------
<S>                                                                 <C>                                <C>
APAC-Alabama, Inc.........................................          Delaware                           AHI
APAC-Arkansas, Inc........................................          Delaware                           AHI
APAC-Carolina, Inc........................................          Delaware                           AHI
APAC-Florida, Inc.........................................          Delaware                           AHI
APAC-Georgia, Inc.........................................           Georgia                           AHI
APAC Holdings, Inc. ("AHI")...............................          Delaware                           AI
APAC-Kansas, Inc..........................................          Delaware                           AHI
APAC-Mississippi, Inc.....................................          Delaware                           AHI
APAC-Missouri, Inc........................................          Delaware                           AHI
APAC-Oklahoma, Inc........................................          Delaware                           AHI
APAC-Tennessee, Inc.......................................          Delaware                           AHI
APAC-Texas, Inc...........................................          Delaware                           AHI
APAC-Virginia, Inc........................................          Delaware                           AHI
ASH GP LLC ("ASH GP").....................................          Delaware                          AIHI
Ashland Canada Corp. .....................................     Nova Scotia, Canada                    ACHBV
Ashland Canada Holdings B.V. ("ACHBV")....................         Netherlands                        AHBV
Ashland Chemical Hispania, S.L............................            Spain                            AI
Ashland France SAS........................................           France                    AHBV 99% -  ASBV 1%
Ashland Holdings B.V. ("AHBV")............................         Netherlands                        ATCV
Ashland International Holdings, Inc. ("AIHI").............          Delaware                           AI
Ashland Italia S.p.A......................................            Italy                    ATCV 95% - AOCV 5%
Ashland Nederland B.V.....................................         Netherlands                        AHBV
Ashland Services B.V. ("ASBV")............................         Netherlands                        AHBV
Ashland UK Limited........................................       United Kingdom                       AHBV
Ashmont Insurance Company, Inc. ..........................           Vermont                           AI
AshOne C.V. ("AOCV") .....................................         Netherlands            AI 10% - AIHI 89% - ASH GP 1%
AshTwo C.V. ("ATCV")......................................         Netherlands             AIHI 10% - AOCV 89% - ASH GP 1%
Marathon Ashland Petroleum LLC............................          Delaware                         AI 38%
Valvoline (Australia) Pty. Ltd............................          Australia                         AHBV
---------------
</TABLE>
   *100% of the voting securities are owned by the immediate parent except as
    otherwise indicated.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>13
<FILENAME>eycon.txt
<DESCRIPTION>EXHIBIT 23.1
<TEXT>
                                                                   Exhibit 23.1


                         CONSENT OF INDEPENDENT AUDITORS



     We consent  to the  incorporation  by  reference  in the  Registration
Statement (Form S-8 No. 33-52125)  pertaining to the Ashland Inc.  Deferred
Compensation  and Stock Incentive Plan for Non-Employee  Directors,  in the
Registration  Statement  (Form S-8 No.  2-95022)  pertaining to the Ashland
Inc.  Amended Stock Incentive Plan for Key Employees,  in the  Registration
Statement (Form S-8 No. 33-32612)  pertaining to the Ashland Inc.  Employee
Savings  Plan,  in the  Registration  Statement  (Form  S-8  No.  33-26101)
pertaining  to  the  Ashland  Inc.   Long-Term   Incentive   Plan,  in  the
Registration  Statement (Form S-8 No.  33-55922)  pertaining to the Ashland
Inc. 1993 Stock Incentive Plan, in the Registration Statement (Form S-8 No.
33-49907) pertaining to the Ashland Inc. Leveraged Employee Stock Ownership
Plan, in the Registration  Statement (Form S-8 No. 33-62901)  pertaining to
the Ashland Inc. Deferred Compensation Plan, in the Registration  Statement
(Form  S-8  No.  333-33617)  pertaining  to the  Ashland  Inc.  1997  Stock
Incentive  Plan, in the  Registration  Statement  (Form S-3 No.  333-78675)
pertaining  to the  registration  of 68,925  shares of Ashland Inc.  Common
Stock, in the Registration Statement (Form S-3 No. 333-36842) pertaining to
the  registration  of 96,600 shares of Ashland Inc.  Common  Stock,  in the
Registration   Statement  (Form  S-3  No.  333-54762)   pertaining  to  the
registration  of 149,300  shares of Ashland  Inc.  Common  Stock and in the
Registration  Statement (Form S-3 No. 333-69138) pertaining to the offering
of $600,000,000 of Debt  Securities,  Preferred Stock,  Depository  Shares,
Common Stock and/or  Warrants of Ashland  Inc., of our report dated October
31,  2001,  with  respect  to the  consolidated  financial  statements  and
schedule of Ashland Inc.  and  consolidated  subsidiaries  included in this
Annual Report (Form 10-K) for the year ended September 30, 2001.





Cincinnati, Ohio
November 28, 2001



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24
<SEQUENCE>14
<FILENAME>bdpower.txt
<DESCRIPTION>EXHIBIT 24
<TEXT>
                                                               Exhibit 24

                                ASHLAND INC.

                     Certificate of Assistant Secretary


     The undersigned hereby certifies that she is an Assistant Secretary of
Ashland  Inc., a Kentucky  corporation  (the  "Corporation"),  and that, as
such,  she is  authorized  to  execute  this  Certificate  on behalf of the
Corporation and further certifies that:

     (a)  Attached  hereto as  Exhibit A is a true and  correct  copy of an
excerpt  from the minutes of the meeting of the Board of  Directors  of the
Corporation  held on November 1, 2001,  setting forth certain actions taken
at such meeting,  and the powers and authorities  granted  pursuant to such
actions  have  at all  times  been in  effect  without  amendment,  waiver,
rescission or modification since November 1, 2001.

     IN WITNESS  WHEREOF,  I have hereunto set my hand and affixed the seal
of the Corporation on this 30th day of November, 2001.


                                                          /s/ Linda L. Foss
                                     --------------------------------------
                                                              Linda L. Foss
                                                        Assistant Secretary

[SEAL]


<PAGE>


                                 Exhibit A

                         Annual Report on Form 10-K

     RESOLVED,  that the Corporation's  Annual Report to the Securities and
Exchange  Commission (the "SEC") on Form 10-K (the "Form 10-K") in the form
previously  circulated to the Board in preparation for this meeting be, and
it hereby is,  approved with such changes as the Chief  Executive  Officer,
any Vice President, the Secretary or the Corporation's counsel ("Authorized
Persons") shall approve, the execution and filing of the Form 10-K with the
SEC to be conclusive  evidence of such approval;  provided,  however,  that
without  derogating  from the binding effect of the above, it is understood
that an Authorized Person shall cause the distribution  prior to the filing
with the SEC, of a copy of such Form 10-K to the directors in substantially
that form  which is to be filed with the SEC and that each  director  shall
have the  opportunity  to review with and comment to an  Authorized  Person
prior to such filing;

     FURTHER  RESOLVED,  that the  Authorized  Persons be, and each of them
hereby is, authorized to file with the SEC the Form 10-K and any amendments
thereto on Form 10-K/A and/or any other applicable form; and

     FURTHER  RESOLVED,  that the  Authorized  Persons be, and each of them
hereby is, authorized to take all such further actions as in their judgment
may be necessary or advisable to  accomplish  the purposes of the foregoing
resolutions.


<PAGE>




                             POWER OF ATTORNEY

     KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned Directors
and  Officers of ASHLAND  INC., a Kentucky  corporation,  which is about to
file an  Annual  Report  on Form  10-K  with the  Securities  and  Exchange
Commission under the provisions of the Securities  Exchange Act of 1934, as
amended,  hereby  constitutes  and  appoints  PAUL W.  CHELLGREN,  DAVID L.
HAUSRATH  and LINDA L. FOSS,  and each of them,  his or her true and lawful
attorneys-in-fact  and agents, with full power to act without the others to
sign and file such Annual  Report and the exhibits  thereto and any and all
other documents in connection  therewith,  and any such amendments thereto,
with the Securities and Exchange Commission,  and to do and perform any and
all acts and things  requisite and necessary to be done in connection  with
the  foregoing  as fully as he or she might or could do in  person,  hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any
of them, may lawfully do or cause to be done by virtue hereof.

Dated:  November 1, 2001



 /s/ Paul W. Chellgren              /s/ Roger W. Hale
----------------------------        -----------------------------
Paul W. Chellgren,                  Roger W. Hale, Director
Chairman of the Board
and Chief Executive Officer


/s/ J. Marvin Quin                  /s/ Bernadine P. Healy
----------------------------        -----------------------------
J. Marvin Quin,                     Bernadine P. Healy, Director
Senior Vice President
and Chief Financial Officer


/s/ Kenneth L. Aulen               /s/ Mannie L. Jackson
----------------------------       ------------------------------
Kenneth L. Aulen,                  Mannie L. Jackson, Director
Administrative Vice President,
Controller and
Principal Accounting Officer


/s/ Samuel C. Butler              /s/ Patrick F. Noonan
----------------------------      -------------------------------
Samuel C. Butler, Director        Patrick F. Noonan, Director


/s/ Frank C. Carlucci             /s/ Jane C. Pfeiffer
----------------------------      -------------------------------
Frank C. Carlucci, Director       Jane C. Pfeiffer, Director


/s/ Ernest H. Drew                /s/ William L. Rouse
----------------------------      -------------------------------
Ernest H. Drew, Director          William L. Rouse, Jr., Director


/s/ James B. Farley               /s/ Theodore M. Solso
----------------------------      -------------------------------
James B. Farley, Director         Theodore M. Solso, Director


/s/ Ralph E. Gomory               /s/ Michael J. Ward
----------------------------      -------------------------------
Ralph E. Gomory, Director         Michael J. Ward, Director



</TEXT>
</DOCUMENT>
</SUBMISSION>
