As filed with the Securities and Exchange Commission on December __, 1995

                           Registration No. 33-62779
    
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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   ----------

                                 AMENDMENT NO. 1
                                       TO
                                    FORM S-3
    
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933
                                   ----------
                                ALEXANDER'S, INC.
             (Exact name of registrant as specified in its charter)

     Delaware                                          51-01-00517
(State or other jurisdiction of             (IRS employer identification number)
 incorporation or organization)             

             Park 80 West, Plaza II, Saddle Brook, New Jersey 07663
                                 (201) 587-8541
          (Address, including zip code, and telephone number, including
            area code, of registrant's principal executive offices)

                                  Joseph Macnow
                             Chief Financial Officer
                                Alexander's, Inc.
             Park 80 West, Plaza II, Saddle Brook, New Jersey 07663
                                 (201) 587-8541
       (Name, address, including zip code, and telephone number, including
                        area code, of agent for service)

                                    Copy to:

                            Douglas P. Bartner, Esq.
                               Shearman & Sterling
                              599 Lexington Avenue
                          New York, New York 10022-6069

Approximate  date of commencement  of proposed sale to the public:  From time to
time after the effective  date of this  Registration  Statement as determined by
market conditions.

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

         If any of the  securities  being  registered  on  this  Form  are to be
offered  on a  delayed  or  continuous  basis  pursuant  to Rule 415  under  the
Securities Act of 1933,  other than  securities  offered only in connection with
dividend or interest reinvestment plans, check the following box. |X|

         If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list  the  Securities  Act  registration  statement  number  of the  earlier
effective registration statement for the same offering. |_|

         If this  Form is a  post-effective  amendment  filed  pursuant  to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act  registration   statement  number  of  the  earlier  effective  registration
statement for the same offering. |_|

         If delivery of the  prospectus  is expected to be made pursuant to Rule
434, please check the following box. |X|
       
                                   ----------

         The Registrant hereby amends this  Registration  Statement on such date
or dates as may be necessary to delay its  effective  date until the  Registrant
shall file a further amendment which specifically  states that this Registration
Statement shall  thereafter  become effective in accordance with Section 8(a) of
the Securities  Act of 1933 or until this  Registration  Statement  shall become
effective on such date as the Commission,  acting pursuant to said Section 8(a),
may determine.

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

                  SUBJECT TO COMPLETION, DATED _________, 1995
                            [Alexander's, Inc. Logo]

Prospectus

           Debt Securities, Preferred Stock, Depositary Shares, Common

                             Stock and Debt Warrants

                                   ----------

         Alexander's, Inc. (the "Company") may offer from time to time, together
or separately,  in one or more series (i) debt securities  ("Debt  Securities"),
which may be either senior debt  securities  (the "Senior Debt  Securities")  or
subordinated debt securities (the "Subordinated  Debt Securities"),  (ii) shares
of  preferred  stock,  $1.00 par value per  share,  of the  Company  ("Preferred
Stock"),  which may be issued in the form of depositary  shares (the "Depositary
Shares") evidenced by depositary  receipts,  (iii) shares of common stock, $1.00
par value per share,  of the  Company  ("Common  Stock")  and (iv)  warrants  to
purchase debt securities of the Company as shall be designated by the Company at
the time of the offering (the "Debt Warrants") (the Debt  Securities,  Preferred
Stock,  Common  Stock and Debt  Warrants  are  collectively  referred  to as the
"Securities"),  at an  aggregate  initial  offering  price  not to  exceed  U.S.
$250,000,000, in amounts, at prices and on terms to be determined at the time of
sale. The Debt Securities,  Preferred Stock,  Common Stock and Debt Warrants may
be offered separately or together,  in separate series in amounts, at prices and
on terms to be set  forth in a  supplement  to this  Prospectus  (a  "Prospectus
Supplement").

         The  accompanying  Prospectus  Supplement will set forth with regard to
the particular Securities in respect of which this Prospectus is being delivered
(i) in the case of Debt  Securities,  the  title,  aggregate  principal  amount,
denominations  (which may be in United States dollars, or in any other currency,
currencies or currency unit,  including the European  Currency Unit),  maturity,
rate, if any (which may be fixed or variable), or method of calculation thereof,
time of payment of any interest,  any terms for  redemption at the option of the
Company or the Holder, any terms for sinking fund payments, rank, any conversion
or exchange rights, any listing on a securities exchange, and the initial public
offering  price and any other terms in connection  with the offering and sale of
such Debt  Securities,  (ii) in the case of Preferred Stock, the specific title,
the aggregate amount and the stated value, any dividend (including the method of
calculating  the  payment of  dividend),  liquidation,  redemption,  conversion,
voting or other rights and the initial public offering price,  (iii) in the case
of Common  Stock,  the number of shares of Common  Stock,  the initial  offering
price  and the  terms  of the  offering  thereof  and  (iv) in the  case of Debt
Warrants, the duration, purchase price, exercise price and detachability of such
Debt Warrants.  The Prospectus  Supplement will also contain,  as applicable,  a
discussion  of the material  United  States  federal  income tax  considerations
relating  to the  Securities  in  respect  of  which  this  Prospectus  is being
delivered to the extent not contained herein.

         The shares of Common  Stock of the  Company  are listed on the New York
Stock Exchange ("NYSE") under the symbol "ALX".

         The  Company  intends  to  qualify as a real  estate  investment  trust
("REIT") for federal income tax purposes for the year ending December 31, 1995.

         See "Risk  Factors"  beginning  on page 5 herein  for a  discussion  of
certain factors that should be carefully considered by prospective  investors in
the Securities.
                                   ----------
            THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
               THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
                SECURITIES COMMISSION NOR HAS THE SECURITIES AND
                   EXCHANGE COMMISSION OR ANY STATE SECURITIES
                     COMMISSION PASSED UPON THE ACCURACY OR
                        ADEQUACY OF THIS PROSPECTUS. ANY
                         REPRESENTATION TO THE CONTRARY
                             IS A CRIMINAL OFFENSE.
                                   ----------
          THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED
                 ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY
                   REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
                                   ----------
         The Company may sell  Securities to or through  underwriters,  and also
may sell  Securities  directly  to  other  purchasers  or  through  agents.  The
accompanying  Prospectus Supplement will set forth the names of any underwriters
or agents  involved  in the sale of the  Securities  in  respect  of which  this
Prospectus  is  being  delivered,  the  amounts  of  Securities,  if any,  to be
purchased by underwriters and the compensation,  if any, of such underwriters or
agents. See "Plan of Distribution" herein.

              The date of this Prospectus is _______________, 1995.

     No  person  has  been  authorized  to give any  information  or to make any
representations  other than those contained or incorporated by reference in this
Prospectus or the  accompanying  Prospectus  Supplement  in connection  with the
offer contained in this Prospectus and the  accompanying  Prospectus  Supplement
and, if given or made, such  information or  representations  must not be relied
upon as having been  authorized  by the Company or any  underwriters,  agents or
dealers.  This  Prospectus  and the  accompanying  Prospectus  Supplement do not
constitute an offer to sell or solicitation of an offer to buy securities in any
jurisdiction  to any  person  to  whom it is  unlawful  to make  such  offer  or
solicitation.  Neither the  delivery  of this  Prospectus  and the  accompanying
Prospectus  Supplement nor any sale of or offer to sell the  Securities  offered
hereby shall, under any circumstances, create an implication that there has been
no  change  in the  affairs  of the  Company  and  its  subsidiaries  since  the
respective dates of this Prospectus and the accompanying  Prospectus  Supplement
or that  the  information  contained  in  this  Prospectus  or the  accompanying
Prospectus  Supplement is correct as of any time  subsequent  to the  respective
dates of this Prospectus and the accompanying Prospectus Supplement.

                              AVAILABLE INFORMATION

     The Company is subject to the informational  requirements of the Securities
Exchange  Act of 1934,  as  amended  (the  "Exchange  Act"),  and in  accordance
therewith  files  reports,  proxy  statements  and  other  information  with the
Securities  and Exchange  Commission  (the  "Commission").  The  reports,  proxy
statements and other information filed by the Company with the Commission can be
inspected and copied at the Commission at Room 1024,  Judiciary Plaza, 450 Fifth
Street, N.W.,  Washington,  D.C. 20549, and at the following regional offices of
the Commission:  7 World Trade Center,  13th Floor, New York, New York 10048 and
Citicorp  Center,  500  West  Madison  Street,  Suite  1400,  Chicago,  Illinois
60661-2511. Copies of such information can be obtained from the Public Reference
Section of the Commission,  450 Fifth Street, N.W.,  Washington,  D.C. 20549, at
prescribed  rates.  The  Company's  Common Stock is listed on the New York Stock
Exchange  ("NYSE") and similar  information  can be inspected  and copied at the
NYSE, 20 Broad Street, 17th Floor, New York, New York 10005.

     This Prospectus  constitutes a part of a registration statement on Form S-3
(the  "Registration  Statement")  filed by the Company with the Commission under
the Securities Act of 1933, as amended (the  "Securities  Act"). As permitted by
the rules and  regulations of the Commission,  this Prospectus  omits certain of
the information contained in the Registration  Statement and reference is hereby
made to the Registration  Statement and related exhibits for further information
with  respect to the  Company  and the  Securities  offered  hereby.  Statements
contained herein  concerning the provisions of any documents filed as an exhibit
to the  Registration  Statement or otherwise  filed with the  Commission are not
necessarily complete, and in each instance reference is made to the copy of such
document so filed.  Each such  statement  is  qualified  in its entirety by such
reference.

                 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

     The Company's (i) Annual Report on Form 10-K and Form 10-K/A for the fiscal
year ended December 31, 1994, (ii) Quarterly  Report on Form 10-Q and 10-Q/A for
the quarterly  period ended March 31, 1995,  (iii) Quarterly Report on Form 10-Q
and Form 10-Q/A for the  quarterly  period ended June 30, 1995,  (iv)  Quarterly
Report on Form 10-Q and Form 10-Q/A for the quarterly period ended September 30,
1995 and (v) Current Reports on Form 8-K dated January 4, 1995, February 6, 1995
and September 18, 1995,  have been filed by the Company with the  Commission and
are hereby  incorporated by reference into this Prospectus.  All other documents
and reports filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange
Act  from the  date of this  Prospectus  and  prior  to the  termination  of the
offering  of the  Securities  shall be deemed to be  incorporated  by  reference
herein  and shall be deemed to be a part  hereof  from the date of the filing of
such reports and documents (provided,  however, that the information referred to
in item  402(a)(8)  of  Regulation  S-K of the  Commission  shall  not be deemed
specifically incorporated by reference herein).

                                       -2-

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

     The Company  will provide  without  charge to each person to whom a copy of
this Prospectus is delivered,  on written or oral request of such person, a copy
of any or  all  documents  which  are  incorporated  herein  by  reference  (not
including the exhibits to such documents,  unless such exhibits are specifically
incorporated by reference in the document which this  Prospectus  incorporates).
Requests should be directed to the Secretary of the Company, Park 80 West, Plaza
II, Saddle Brook, New Jersey 07663, telephone number (201) 587-8541.

                                TABLE OF CONTENTS

AVAILABLE INFORMATION........................................................  2

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE..............................  2

THE COMPANY..................................................................  4

RISK FACTORS.................................................................  5

USE OF PROCEEDS.............................................................. 12

CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES.............................. 12

CONDENSED CONSOLIDATED PRO FORMA FINANCIAL INFORMATION....................... 13

DESCRIPTION OF DEBT SECURITIES............................................... 14

DESCRIPTION OF CAPITAL STOCK................................................. 22

DESCRIPTION OF DEBT WARRANTS................................................. 33

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS.................................... 34

PLAN OF DISTRIBUTION......................................................... 44

EXPERTS...................................................................... 45

VALIDITY OF THE SECURITIES................................................... 45

                                       -3-

                                  THE COMPANY

     The  Company  is a  real  estate  company  engaged  in  leasing,  managing,
developing and  redeveloping  properties,  focusing  primarily on the properties
where its  department  stores were formerly  located.  These  department  stores
ceased  operating  in 1992 and are on  properties  located  in New York City and
Bergen County,  New Jersey (the "New York Area").  The Company believes that its
properties offer advantageous retail opportunities, principally because of their
size  and  location  in areas  where  comparable  store  sites  are not  readily
available.

     The  Company   seeks  to  increase  its  income  and  property   values  by
strategically renovating, expanding and developing its properties. The Company's
general  strategy  is to lease  each of its  properties  to  large-space  users,
typically  national  or  large  regional   retailers,   under  long-term  leases
(generally  20 years or longer)  which  provide the Company with fixed rents and
also with periodic rent  increases  (generally  every five years).  These leases
also generally  require the tenant to pay, or reimburse the Company,  for common
area charges (including roof and structure costs), real estate taxes,  insurance
costs and certain capital expenditures.

     The  Company's  real  estate  portfolio  consists  of  the  following  nine
properties,  four of which are currently operating (the "Operating  Properties")
and five of which are currently being or will be redeveloped (the "Redevelopment
Properties"):

     Property                   Location        Leasable Building Square Footage
     --------                   --------        --------------------------------
Operating Properties:
     Fordham Road               Bronx, NY                    303,000
     Flushing                   Queens, NY                   177,000
     Third Avenue               Bronx, NY                    173,000
     Kings Plaza Mall (1)       Brooklyn, NY                 427,000

Redevelopment Properties:
     Rego Park I                Queens, NY                   359,000
     Rego Park II               Queens, NY                  ---(2)---
     Kings Plaza Store          Brooklyn, NY                 320,000
     Paramus                    Paramus, NJ                 ---(3)---
     Lexington Avenue (4)       New York, NY                 418,000

- ----------
(1)  The  Company  owns a 50%  interest  in this  property.  

(2)  This  property   consists  of  287,500   square  feet  of  vacant  land  in
     approximately  one and one-half  square blocks  adjacent to the Rego Park I
     Property.  

(3)  This  property  consists  of  approximately  39 acres.  A  portion  of this
     property  is subject  to  condemnation.  See "Risk  Factors--  Real  Estate
     Investment  Risks." 

(4)  The Company  owns the general  partnership  interest and 92% of the limited
     partnership  interests in this property.  

     The Fordham Road Property and the Flushing  Property are 100% leased to The
Caldor Corporation  ("Caldor") and the Third Avenue Property is 100% leased to a
subsidiary of Conway Stores, Inc. The Kings Plaza Mall is 88% leased to over 100
tenants. The Rego Park I Property has been entirely pre-leased to Sears, Roebuck
& Company,  Marshalls,  Inc. and Caldor and the  commencement  of such  tenants'
leases is conditioned upon the completion of certain improvements by the Company
which are under construction and are expected to be completed by March 1996. The
Company  is  in  discussions   with   prospective   tenants  for  the  remaining
Redevelopment Properties. See "Risk Factors -- Bankruptcy of a Major Tenant" and
"Risk Factors -- Real Estate Investment Risks -- Dependence on Rental Income and
Concentration  of Rental  Income with  Certain  Lessees;  Bankruptcy  of a Major
Tenant."

     Vornado Realty Trust ("Vornado"),  a NYSE-listed REIT and major stockholder
of the Company,  manages the properties and business  affairs of the Company and
acts as the Company's  exclusive  leasing agent pursuant to agreements  with the
Company.  Steven Roth, Chief Executive Officer and a director of the Company, is
also the 

                                       -4-

Chairman  and  Chief  Executive  Officer  of  Vornado.   See  "Risk  Factors  --
Control-Related Risks; Possible Conflicts of Interest."

     In May 1992,  at a time when the  Company's  business  consisted  of retail
store  operations,  the Company and its subsidiaries  filed petitions for relief
under  Chapter  11 of the United  States  Bankruptcy  Code in the United  States
Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court").
In  September   1993,  the  Bankruptcy   Court   confirmed  the  Joint  Plan  of
Reorganization (the "Plan"),  pursuant to which the Company and its subsidiaries
reorganized their business as a real estate company. The Company has consummated
the Plan and has complied with all of its  obligations  thereunder.  Pursuant to
the Plan, (i) all holders of allowed general unsecured claims were paid in full,
together  with accrued  interest in respect of their claims and (ii) all holders
of allowed  secured claims  received one hundred percent of their claims through
the  issuance  of new  secured  debt  instruments  or by  payment  in  cash or a
combination thereof.  The Bankruptcy Court has retained  jurisdiction to resolve
the remaining disputed claims and for other limited purposes.

     As of September 30, 1995,  the Company and its  subsidiaries  had aggregate
indebtedness  outstanding  of  $173,613,000.  The Company  currently  expects to
borrow  and  expend,  through  the first  quarter of 1996,  up to an  additional
$20,000,000 to complete the Rego Park I redevelopment.

     The  Company  is  a  Delaware   corporation   whose  earliest   predecessor
corporation was organized in 1928. The Company intends to file, with its federal
income  tax  return  for  1995,  an  election  to be  treated  as a real  estate
investment  trust  under the  Internal  Revenue  Code of 1986,  as amended  (the
"Code"), effective for 1995.

     The  Company's  principal  executive  offices  are located at Park 80 West,
Plaza II, Saddle Brook, New Jersey 07663; telephone (201) 587-8541.

                                  RISK FACTORS

     Prospective  purchasers of the  Securities  should  consider  carefully the
factors set forth below,  as well as any other  applicable risk factors that may
be set forth in the accompanying  Prospectus  Supplement,  before purchasing the
Securities offered hereby.

Adverse  Consequences  of Financial  Leverage;  Deficiency  of Earnings to Fixed
Charges; Effect of Encumbrances; Covenant Restrictions

     The Company has significant debt service obligations.  The Company borrowed
$138,425,000  during  the nine  months  ended  September  30,  1995  (the  "1995
Financings")  and at  September  30,  1995,  the  Company's  long-term  debt was
$173,613,000.  For the nine months  ended  September  30,  1995,  the  Company's
deficiency of earnings to cover fixed charges was $12,605,000.  The Company also
had a  deficiency  in net assets of  $28,203,000  at  September  30,  1995.  The
Company's  ability to operate as a viable real estate company will depend on the
successful  and  timely  completion  of the  redevelopment  and  leasing  of the
Redevelopment Properties,  which will materially affect the Company's ability to
meet its debt service requirements.

     Under the 1995 Financings, the Company granted certain lenders mortgages on
all of the  Company's  assets  and/or  pledges  of the  stock  of the  Company's
subsidiaries  owning  assets  and/or  guarantees  of such  subsidiaries  and the
Company.  If  the  Company  becomes  insolvent  or  is  liquidated,  or  if  its
indebtedness  is  accelerated,  the lenders  under the 1995  Financings  will be
entitled  to payment in full from the  proceeds of their  security  prior to the
payment to Holders of Securities. In such event, it is possible that there would
be no assets  remaining  from which  claims of Holders  of  Securities  could be
satisfied or, if any assets remain,  such assets may be  insufficient to satisfy
fully such claims.

                                       -5-

     The 1995 Financing  documents contain certain restrictive  covenants.  Such
restrictions affect, and in many respects significantly limit or prohibit, among
other  things,  the ability of the Company  and certain of its  subsidiaries  to
incur  indebtedness,  make prepayments of certain  indebtedness,  pay dividends,
make investments,  engage in transactions with affiliates, issue or sell capital
stock of subsidiaries,  create liens, sell assets,  acquire or transfer property
and engage in mergers and consolidations.  The covenants may significantly limit
the Company's (and such subsidiaries')  operating and financial  flexibility and
there can be no assurance that such  restrictions  will not adversely affect the
Company's  (and such  subsidiaries')  ability to finance  future  operations  or
capital needs or to engage in other business  activities which may be beneficial
to the Company.  Additional restrictive covenants may be created with respect to
a  particular  series  of  Securities  and will be set  forth in the  applicable
Prospectus Supplement.

     The Company  believes that it and its  subsidiaries  will be able to comply
with such covenants and other restrictions;  however,  there can be no assurance
of  such  compliance.  In  the  event  of a  default  under  the  terms  of  any
indebtedness  of the  Company,  the  obligees  thereunder  would be permitted to
accelerate  the maturity of such  obligations,  which may cause  defaults  under
other obligations of the Company,  including  Securities issued pursuant to this
Registration Statement. In such circumstances, Holders of such Securities may be
forced to accelerate the maturity of such  Securities to protect their interests
at a time when it would not  otherwise be in their  interest to do so.  Further,
such  defaults  could be expected to delay or preclude  payment of  principal of
and/or interest on such Debt Securities.

Lack of Profitability

     Because  the Company is in the  development  stage,  its current  operating
properties (four of its nine properties) do not generate sufficient cash flow to
pay all of its expenses. The Company's five non-operating  properties (Rego Park
I, Rego Park II, Lexington  Avenue,  Paramus,  and the Kings Plaza Store) are in
various  stages of  redevelopment.  A portion of the rents under the Rego Park I
project  are  scheduled  to commence in March  1996.  As rents  commence  from a
portion of the remaining Redevelopment Properties, the Company expects that cash
flow will become positive.  However,  there can be no assurance that the Company
will attain profitable operations.

Need for Additional Financing

     The  Company  estimates  that  its  capital  expenditure  requirements  for
projects  other  than  Rego  Park I and  Rego  Park  II  will  include  (i)  the
redevelopment of the Paramus Property estimated to cost between  $55,000,000 and
$60,000,000 (ii) the subdivision of the existing space and other improvements at
the Kings  Plaza  Store  Property  estimated  to cost  between  $10,000,000  and
$15,000,000,  and (iii) the renovation of the existing Lexington Avenue building
estimated  to cost  between  $20,000,000  and  $25,000,000.  While  the  Company
anticipates  that financing  will be available  after tenants have been obtained
for these redevelopment projects,  there can be no assurance that such financing
will be obtained, or if obtained,  that such financing will be on terms that are
acceptable  to the  Company.  In  addition,  it is  uncertain  as to when  these
projects will commence.  The Company may also require additional  financing as a
result of its lack of profitability. See "-- Lack of Profitability" above.

Bankruptcy of a Major Tenant

     On  September  18, 1995,  Caldor  filed for relief under  Chapter 11 of the
United  States  Bankruptcy  Code.  Property  rentals  from  leases  with  Caldor
represented  approximately  63% of the Company's  consolidated  revenues for the
year ended December 31, 1994 and approximately 54% of the Company's consolidated
revenues for the nine months ended September 30, 1995. Caldor is also the lessee
of a portion of the Rego Park I Property  under a lease  scheduled  to  commence
after the completion of the  redevelopment  of this property.  Caldor,  which is
responsible  for the  construction  of its store,  ceased such  construction  in
September  1995. The Company  believes that the loss of Caldor as a tenant would
have a material adverse effect on the Company.  Caldor's filing under Chapter 11
may lead to the termination of, or default under, such leases with Caldor.

                                       -6-

   
     Additionally, under the terms of a $25,000,000 loan to the Company, secured
by a  mortgage  on the  Fordham  Road  Property,  the  failure of Caldor to meet
certain  financial  tests may result in the Company being required to escrow net
cash flow of  approximately  $500,000 per annum from the Fordham  Road  Property
into an account of the lender as a reserve  against  future  payments  under the
loan.

Holding Company Structure

     Since  substantially  all of the Company's  operations are  conducted,  and
substantially  all of the Company's assets are owned, by its  subsidiaries,  the
Securities  will   effectively  be  subordinated  to  all  existing  and  future
liabilities  of  the  Company's   subsidiaries,   including  the   subsidiaries'
guarantees of indebtedness  incurred under the 1995 Financings.  As of September
30,  1995,  the  Company's   subsidiaries  and  the  Seven  Thirty  One  Limited
Partnership,  of which  the  Company  owns a 92.36%  interest,  had  outstanding
$103,410,000 of liabilities (including trade payables and indebtedness) and also
had guarantees of $75,000,000  of Company  indebtedness  incurred under the 1995
Financings.  Any right of the Company to participate in any  distribution of the
assets of any of the Company's subsidiaries upon the liquidation, reorganization
or insolvency of such subsidiary (and any consequent right of the Holders of the
Securities to  participate in those assets) will be subject to the claims of the
creditors  (including  trade creditors) and preferred  stockholders,  if any, of
such  subsidiary,  except to the extent the  Company  has a claim  against  such
subsidiary  as  a  creditor  of  such  subsidiary.  The  Company  has  expressly
subordinated certain of its claims against its subsidiaries to the subsidiaries'
guarantees of indebtedness  incurred under the 1995 Financings.  In addition, in
the  event  that  claims  of the  Company  as a  creditor  of a  subsidiary  are
recognized,  such claims would be  subordinate  to any security  interest in the
assets of such subsidiary and any indebtedness of such subsidiary senior to that
held by the Company.

     The Company's ability to make required principal and interest payments with
respect  to its  indebtedness,  including  any Debt  Securities,  depends on the
earnings  of its  subsidiaries  and on its  ability to  receive  funds from such
subsidiaries  through  dividends or other  payments.  Since the  Securities  are
obligations of the Company only, the Company's subsidiaries are not obligated or
required  to pay any amounts due  pursuant  to the  Securities  or to make funds
available therefor in the form of dividends or advances to the Company.

Limited  Financial  and  Operating   History;   Noncomparability   of  Financial
Information

     Prior to May 1992, the Company operated a retail department store business.
Accordingly,  the  Company  has a limited  operating  history  as a real  estate
company  upon  which   prospective   investors  may  evaluate  its  performance.
Information  reflecting the results of operations and financial condition of the
Company for periods subsequent to May 1992 are not comparable to information for
the  periods  prior to such  date due to (i) the  termination  of the  Company's
retail operations, including the sale of the Company's retail inventory, and the
Company's transition to real estate operations and (ii) the Company's bankruptcy
case,  including the costs and expenses relating to the administration  thereof,
and the payment of the Company's  liabilities as a result thereof.  In addition,
because the Company is in the development phase of its real estate business, the
results of  operations  since May 1992 may not be  indicative  of the  Company's
future performance.

Control-Related Risks; Possible Conflicts of Interest

     Vornado,  an  unincorporated  Maryland  business  trust,  owns 29.3% of the
outstanding  Common Stock of the  Company,  including  27.1%  purchased in March
1995. Interstate  Properties,  a New Jersey general partnership  ("Interstate"),
which owns an additional  27.1% of the outstanding  Common Stock of the Company,
owns 27.7% of the outstanding  common shares of beneficial  interest of Vornado.
Steven Roth,  Chief  Executive  Officer and a Director of the  Company,  is also
Chairman of the Board and Chief Executive  Officer of Vornado,  and the Managing
General Partner of Interstate.  Mr. Roth, David Mandelbaum,  Richard R. West and
Russell B. Wight, members of the Company's Board of Directors, are also Trustees
of  Vornado.  Messrs.  Roth,  Mandelbaum  and Wight are the  three  partners  of
Interstate.  Messrs.  Roth,  Mandelbaum  and Wight and  Interstate  own,  in the
aggregate,  32.6% of the  outstanding  Common Shares of  beneficial  interest of
Vornado. Further, Vornado has provided the Company

                                       -7-

   
with a loan to finance its  operations  in the principal  amount of  $45,000,000
(the  subordinate  portion of a $75,000,000  facility,  the balance of which was
provided by an unaffiliated bank). The loan is secured by liens on substantially
all of the Company's properties.

     Based  on the  foregoing,  Mr.  Roth,  Interstate  Properties  and  Vornado
(collectively,  the "Principal  Stockholders") may have substantial influence on
the  Company  and on the  outcome  of any  matters  submitted  to the  Company's
stockholders  for  approval.  In  addition,  certain  decisions  concerning  the
operations  or  financial  structure  of the Company may  present  conflicts  of
interest  between the Principal  Stockholders and the Holders of the Securities.
For example, if the Company encounters financial  difficulties,  or is unable to
pay its debts as they mature, the interests of the Principal  Stockholders might
conflict with those of the Holders of the Securities. In addition, the Principal
Stockholders  may  have an  interest  in  pursuing  acquisitions,  divestitures,
financings or other  transactions  that, in their judgment,  could enhance their
equity  investment,  even though such  transactions  might  involve  risk to the
Holders of the Securities. Interstate Properties, Vornado and Mr. Roth engage in
a wide variety of  activities  in the real estate  business  which may result in
conflicts of interest  with respect to certain  matters  affecting  the Company,
such as potential business opportunities, business dealings between the Company,
Interstate  Properties and Vornado and their affiliates,  demands on the time of
Mr. Roth and certain of the executive  officers of Vornado,  changes of existing
arrangements  between Mr. Roth,  the Company and Vornado (such as the Management
and  Development  Agreement,   dated  February  6,  1995  (the  "Management  and
Development  Agreement") and the Retention  Agreement,  dated July 20, 1992 (the
"Retention  Agreement")),  potential  competition  between  business  activities
conducted,  or sought to be conducted,  by the Company,  Vornado and  Interstate
Properties  (including   competition  for  properties  and  tenants),   possible
corporate  transactions,  and other strategic decisions affecting the Company in
the future.  Neither Mr. Roth nor Vornado is obligated to present to the Company
any particular  investment  opportunity which comes to their attention,  even if
such opportunity is of a character which might be suitable for investment by the
Company.

Real Estate Investment Risks Applicable to the Company

     General

     Real  property  investments  are  subject to varying  degrees of risk.  The
Company's  success will be affected by, among other  factors,  the trends of the
national and local economies,  the financial  condition and operating results of
current and prospective tenants, the availability and cost of capital,  interest
rate levels,  construction and renovation costs,  income tax laws,  governmental
regulations  and  legislation,  population  trends,  the market for real  estate
properties in the New York Area,  competition from other available space, zoning
laws,  potential liability under environmental and other laws and the ability of
the Company to lease or sublease its properties at profitable levels.

     Dependence on Rental Income and Concentration of Rental Income with Certain
Lessees; Bankruptcy of a Major Tenant

     As  substantially  all of the  Company's  income is derived from rentals of
real property, the Company's results of operations will depend on its ability to
lease space in its real estate properties on economically favorable terms.

     Although none of the Company's  leases are  cancelable by the lessee in the
event of default by such lessee,  the Company may experience delays in enforcing
its rights as lessor or sublessor and may incur  substantial costs in protecting
its  investment if the lessee  defaults  under its lease.  In addition,  certain
significant  expenditures  associated  with  real  estate  investments  (such as
mortgage  payments,  real estate taxes and maintenance  costs) are generally not
reduced when  circumstances  (such as  vacancies or the  inability of tenants to
meet their obligations) cause a reduction in income from the investment.  Should
such  events  occur,  the  Company's  income and cash flows  would be  adversely
affected.   The  Company's   properties  are  mortgaged  to  secure  payment  of
indebtedness, and if

                                       -8-

the Company were unable to meet its mortgage payments, a loss could be sustained
as a result of a foreclosure on its property by the mortgagee.

     The  Company's  income  and cash flows  would be  adversely  affected  if a
significant  number  of the  Company's  lessees  (or a lessee  accounting  for a
significant  portion of the Company's  rental  income) were unable to meet their
obligations  to the  Company.  Property  rentals from leases with Caldor and the
Conway affiliate  represented  approximately 63% and 13%,  respectively,  of the
Company's  consolidated  revenues  for the  year  ended  December  31,  1994 and
approximately 54% and 11%, respectively,  of the Company's consolidated revenues
for the nine months ended September 30, 1995. The Company believes that the loss
of either of these tenants would have a material  adverse effect on the Company.
Caldor's  filing of petitions  for relief under  Chapter 11 of the United States
Bankruptcy Code on September 18, 1995 may lead to the termination of, or default
under, such leases with Caldor.

     Limited Number of Properties; Geographic Concentration

     The Company  concentrates on the redevelopment and leasing of its nine real
estate  properties,  which are  located in the New York Area and are  subject to
fluctuations  in the real estate market of, and economic  conditions  particular
to, the New York Area.  As a result,  the Company's  results of  operations  are
dependent upon the success of a limited number of properties and upon the demand
for  retail  space in its  market  area.  There can be no  assurance  that local
economic  conditions will be favorable to the Company's  operations.  An adverse
development  affecting any one of the Company's properties could have a material
adverse effect on the Company's financial condition or results of operations.

     Condemnation

     The State of New Jersey  has  notified  the  Company  of its  intention  to
condemn  approximately  ten acres or 25% of the Paramus  Property in  connection
with the  redesign  of a highway  intersection.  The New  Jersey  Department  of
Transportation ("DOT") has recently made an offer to the Company to purchase the
land which is the subject of the condemnation  proceeding for $15,400,000  based
on an appraisal  performed on the DOT's behalf. The Company expects to negotiate
with the DOT to attempt to reach  agreement on the value.  In the event that the
Company and the DOT do not reach  agreement on the value,  a formal process will
be  initiated  by the DOT,  pursuant to which,  among other  things,  a group of
independent  commissioners will be appointed by a court to determine fair market
value. If the condemnation  occurs,  the Company would be required to change its
redevelopment plans, and the time and cost to redevelop the Paramus Property may
materially increase.

     In  addition,  the  Company  believes  that,  along  with a number of other
locations, a portion of the Lexington Avenue Property is being considered by the
Port Authority of New York and New Jersey (the "Port Authority") for the site of
the  terminus for a rail link from  midtown  Manhattan to LaGuardia  and Kennedy
Airports.  Approvals  of  numerous  Federal,  New York  State  and New York City
agencies are required before  construction  could begin. If the project proceeds
and the Port Authority  selects a portion of the Lexington  Avenue  Property for
such use and can establish  that it is needed to serve a public use,  benefit or
purpose, the Port Authority, after conducting the requisite public hearings, may
acquire such portion of the Lexington Avenue Property  pursuant to its powers of
eminent domain.  Since the nature and scope of any plans being considered by the
Port Authority, and whether any such plans would ultimately affect the Lexington
Avenue  Property,  cannot be fully  assessed by the Company at this time,  it is
impossible to determine the ultimate  effect that a taking,  or any  uncertainty
with respect  thereto,  would have on the Company's use or  redevelopment of the
Lexington Avenue Property.

     Environmental Matters

     Under various federal, state and local laws, ordinances and regulations, an
owner or  operator  of real  property  may be liable for the costs of removal or
remediation of hazardous substances located on, under or in such property.  Such
laws often impose liability whether or not the owner or operator knew of, or was
responsible for,

                                       -9-

the  presence  of such  hazardous  or toxic  substances  and the  liability  may
continue after the sale or other disposition of the contaminated property. Other
federal   and   state   laws   require   the   removal   or   encapsulation   of
asbestos-containing   material  in  the  event  of  remodeling,   renovation  or
demolition.  Other statutes may require the removal of underground storage tanks
that  are  out of  service  or  out  of  compliance.  Although  compliance  with
applicable provisions of federal,  state and local laws regulating the discharge
of materials into the environment or otherwise relating to the protection of the
environment has not had a material effect on the Company's  financial  condition
or results of operations,  there can be no assurance that such  compliance  will
not have such an effect in the future.

     In September 1993, the Company had Phase I environmental assessments (which
generally  involve  site and  records  inspection  without  soil or  groundwater
sampling)  performed  by an  environmental  engineering  firm  on  each  of  its
properties.  The results of the assessments at the Kings Plaza Shopping Center's
("Center") property show that certain adjacent properties owned by third parties
have experienced petroleum hydrocarbon  contamination.  Based on this assessment
and preliminary  investigation of the Center's property and its history there is
a potential for contamination on the property.  If contamination is found on the
property,  the  Center  may be  required  to engage in  remediation  activities;
management is unable to estimate the financial impact of potential contamination
if any is discovered in the future. If further  investigations reveal that there
is contamination on its site, since the Center believes such contamination would
have resulted from activities of third parties, the Center intends to pursue all
available remedies against any of these third parties.

     In addition, there can be no assurance that the identification of new areas
of contamination,  changes in the known scope of contamination, the discovery of
additional  sites,  or  changes  in  cleanup  requirements  would not  result in
material  costs to the Company.  The process of  investigating  and  remediating
environmental  contamination  is lengthy  and  subject to the  uncertainties  of
changing  legal  requirements,  developing  technology  and  the  allocation  of
liability among potentially  liable parties.  The presence of contamination,  or
the failure to properly remediate  contamination,  may also adversely affect the
Company's  ability to borrow money using such real  property as collateral or to
sell such property.

     Uninsured Loss

     The Company carries commercial  liability,  fire, flood,  extended coverage
and rental  loss  insurance  with  respect  to its  properties  and with  policy
specifications  and  insured  limits and  deductibles  customarily  carried  for
similar  properties.  There  are,  however,  certain  types of  losses  that are
generally not insured  either because they are  uninsurable or not  economically
insurable.  Should an  uninsured  loss occur,  the  Company  could lose both its
invested capital in and anticipated profits from the property and would continue
to be obligated to repay any mortgage  indebtedness  on the  property.  Any such
loss could adversely affect the profitability and cash flow of the Company.  The
Company  believes its  properties  are  adequately  insured in  accordance  with
industry standards.

Reliance on Key Personnel and Agreements with Vornado

     The  Company  believes  that the  continued  services of Steven  Roth,  the
Company's  Chief  Executive  Officer,  are  important  to the  Company's  future
success.  Although Mr. Roth has a significant ownership interest in the Company,
there is no  assurance  that he will remain with the Company.  In addition,  the
Company  has  retained  Vornado  pursuant  to  the  Management  and  Development
Agreement,  to manage all of the  Company's  business  affairs and to manage and
develop the Company's  properties,  and pursuant to the Retention Agreement,  to
act  as  the  Company's  exclusive  leasing  agent  with  respect  to all of the
Company's  properties.  If, for any reason, Mr. Roth and Vornado do not continue
to be active in the  Company's  management,  the Company's  operations  could be
adversely affected.

Changes in Operating or Investment Strategy

     The  Company's  operating  and  investment  strategy and its policies  with
respect  to  certain  other  activities,   including   growth,   capitalization,
distributions  and REIT status,  will be determined by the Board of Directors of
the Company. The Board of Directors may amend or revise these policies from time
to time at their discretion without a vote of the stockholders of the Company.

                                      -10-

   
Adverse Consequences of the Failure to Qualify or Remain Qualified as a REIT

     The Board of  Directors  of the  Company  has  determined  that the Company
should take the  necessary  actions to qualify as a REIT for federal  income tax
purposes under the Code.  Although  management believes that the Company will be
organized  and will operate in such a manner as to so qualify,  no assurance can
be given that it will qualify or remain so qualified.  Future economic,  market,
legal, tax or other  considerations may cause management to determine that it is
in the best  interest  of the Company  and its  stockholders  to revoke the REIT
election.  Qualification as a REIT for federal income tax purposes  involves the
application of highly  technical and complex Code provisions for which there are
only limited judicial or administrative  interpretations,  and the determination
of various factual matters and  circumstances not entirely within the control of
the  Company  may affect its  ability to  qualify  as a REIT.  In  addition,  no
assurance  can  be  given  that  legislation,  new  regulations,  administrative
interpretations  or court decisions will not  significantly  change the tax laws
with  respect to the  requirements  for  qualification  as a REIT or the federal
income tax  consequences of such  qualification.  The Company,  however,  is not
aware  of any  proposal  to amend  the tax laws  that  would  significantly  and
adversely  affect  its  ability  to  operate in such a manner as to qualify as a
REIT.

     In order to qualify and  maintain its  qualification  as a REIT for federal
income  tax  purposes,  the  Company  is  required,   among  other  distribution
requirements,  to  distribute  as  dividends  on shares of Common  Stock  and/or
Preferred  Stock at least  95% of its  "real  estate  investment  trust  taxable
income." As of December 31, 1994,  the Company had reported net  operating  loss
("NOL")  carryovers of  approximately  $110 million,  which  generally  would be
available to offset the amount of real estate  investment  trust taxable  income
that the Company  otherwise would be required to distribute.  However,  the NOLs
reported on the  Company's  tax returns are not binding on the Internal  Revenue
Service  (the  "IRS") and are  subject to  adjustment  as a result of future IRS
audits. In addition, under Section 382 of the Code, the Company's ability to use
its NOL  carryovers  could be limited  if,  generally,  there  were  significant
changes in the ownership of its outstanding stock. Since its reorganization as a
REIT, the Company has not paid regular dividends and, unless otherwise  provided
in an  applicable  Prospectus  Supplement,  does  not  believe  that  it will be
required to and may not pay regular  dividends,  until its NOL  carryovers  have
been fully  utilized,  on any Common Stock or Preferred Stock issued pursuant to
this  Prospectus  except for  dividends on  Preferred  Stock as described in any
applicable Prospectus Supplement.

Anti-Takeover Effects of Provisions of the Certificate of Incorporation and 
By-laws

     Certain  provisions of the Certificate of Incorporation  and the By-laws of
the Company may be deemed to have  anti-takeover  effects and may  discourage or
make more difficult a takeover attempt that a stockholder  might consider in its
best  interest.  The  Certificate  of  Incorporation  provides that the Board of
Directors  of the  Company  be  divided  into three  classes  serving  staggered
three-year  terms  and that the  number of  directors  will be no  greater  than
seventeen or less than three.  The classes of  directors  are as nearly equal in
number as possible. Accordingly,  approximately one-third of the Company's Board
of Directors will be elected each year.  The By-laws  provide that any vacancies
on the Board of Directors may only be filled by the remaining  directors and not
by  the  stockholders.  This  precludes  stockholders  from  removing  incumbent
directors  without  cause and filling  the  resulting  vacancies  with their own
nominees.  These  provisions,  among  other  things,  limit the  ability  of the
stockholders  to amend or  repeal  the  By-laws  or  certain  provisions  of the
Certificate of Incorporation.

     Additionally, for the Company to qualify as a REIT under the Code, not more
than  50% of the  value of the  outstanding  stock  may be  owned,  directly  or
indirectly,  by five or fewer  individuals  (as  defined  in the Code to include
certain  entities)  during the last half of a taxable year and the stock must be
beneficially  owned by 100 or more persons during at least 335 days of a taxable
year of 12 months (or during a  proportionate  part of a shorter  taxable year).
Accordingly,  the Certificate of Incorporation contains provisions that restrict
the  ownership  and  transfer of shares of capital  stock.  The  Certificate  of
Incorporation also contains  provisions that restrict the ownership and transfer
of shares of capital stock to reduce the risk that the Company's  ability to use
its NOLs would be limited.

                                      -11-

       

                                 USE OF PROCEEDS

     Except as otherwise provided in the applicable Prospectus  Supplement,  the
Company anticipates that the net proceeds of the sales of the Securities will be
used for general  corporate  purposes  which may  include,  without  limitation,
redevelopment  of  the  Company's  Redevelopment  Properties  and  repayment  of
outstanding indebtedness.

                 CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES

     For purposes of calculating the following  ratios,  (i) earnings  represent
income from continuing  operations before income taxes, plus fixed charges,  and
(ii)  fixed  charges  represent   interest  expense  on  all  indebtedness  from
continuing  operations (including the Company's 50% share of interest expense in
the Kings Plaza Mall and  amortization  of deferred debt issuance costs) and the
portion of operating lease rental expense that is representative of the interest
factor (deemed to be one-third of operating lease rentals). There were no shares
of Preferred  Stock  outstanding  during any of the periods below  indicated and
therefore the ratio of earnings to combined  fixed  charges and preferred  share
dividend requirements would have been the same as the ratio of earnings to fixed
charges for each period indicated.

                          Nine Months                              Five Months
                             Ended            Year Ended            Ended(1)                         Fiscal Year Ended
                             -----            ----------            --------                         -----------------
                           Sept. 30,    Dec. 31,    Dec. 31,        Dec. 31,      July 31,       July 25,     July 27,     July 28,
                             1995         1994       1993(1)          1993         1993(2)         1992         1991         1990
                             ----         ----       -------          ----         -------         ----         ----         ----
                                                                                                     
Ratio of earnings to
fixed charges:                --           1.39        4.68           2.49        21.89(3)         --              --        2.35

Deficiency in earnings
available to cover
fixed charges:            $12,605,000       --          --            --             --          $14,630,000     $300,000     --

- ----------
(1)  In November 1993, the Company changed to a calendar year from a fiscal year
     ending on the last Saturday in July.  The ratio for the year ended December
     31, 1993 is included for comparative purposes only.

(2)  Includes 53 weeks.

(3)  This amount includes a gain on the sale of leases of  $28,779,000,  without
     which the Company  would have had a  deficiency  in earnings to cover fixed
     charges of $1,628,000.

    

                                      -12-

   

             CONDENSED CONSOLIDATED PRO FORMA FINANCIAL INFORMATION

     The unaudited pro forma  information set forth below presents the condensed
consolidated  statements of operations for the Company for the nine months ended
September  30, 1995 and the year ended  December 31,  1994,  as if on January 1,
1994, the Company  executed the Management  Agreement with Vornado Realty Trust,
issued $75,000,000 of new debt at a blended rate of 13.8% and repaid $39,552,000
of other debt outstanding.

                                  Nine Months Ended September 30, 1995        Year Ended December 31, 1994
                                  ------------------------------------        ----------------------------
                               Historical      Adjustments    Pro Forma   Historical  Adjustments   Pro Forma
                               ----------      -----------    ---------   ----------  -----------   ---------
                                                         (in thousands except per share amounts)
                                                                                   
Real estate operating
     revenue                    $  7,985                      $  7,985    $ 10,853(1)                $ 10,853
Equity in income of
     unconsolidated joint
     venture                       2,131                         2,131       1,821                      1,821
                                --------                      --------    --------                   --------
Total revenue                     10,116                        10,116      12,674                     12,674
                                --------                      --------    --------                   --------

Expenses:
     Operating, general and                                                                                                
         administrative            5,683       $    500(2)       6,183       4,697(1) $  3,000(2)       7,697
     Depreciation and
         amortization              1,393                         1,393       1,821                      1,821
     Reorganization costs          1,938                         1,938       3,721                      3,721
                                --------       --------       --------    --------    --------       -------- 
Total expenses                     9,014            500          9,514      10,239       3,000         13,239
                                --------       --------       --------    --------    --------       -------- 
Operating income (loss)            1,102           (500)           602       2,435      (3,000)          (565)
Interest and debt expense        (10,208)        (1,149)(3)    (11,487)     (3,331)     (5,431)(3)     (9,762)
                                                   (130)(4)                             (1,000)(4)
Interest and other income,
     net                           1,070                         1,070       4,768                      4,768
Gain on sale of real estate                                                    161                        161
                                --------       --------       --------    --------    --------       -------- 
(Loss) income before reversal
     of deferred taxes            (8,036)        (1,779)        (9,815)      4,033      (9,431)        (5,398)
Reversal of deferred taxes         1,406                         1,406
                                --------       --------       --------    --------    --------       -------- 

Net (Loss) Income               $ (6,630)      $ (1,779)      $ (8,409)   $  4,033    $ (9,431)      $ (5,398)
                                ========       ========       ========    ========    ========       ======== 

Net (Loss) Income Per
     Share                      $  (1.33)                     $   (1.68)  $    .81                   $  (1.08)
                                ========                      =========   ========                   ======== 

- ---------- 

(1)  Tenant  reimbursement  of  expenses  previously  offset  against  operating
     expenses,  is included in real estate  operating  revenue to conform to the
     current year's presentation.

(2)  Reflects  management  fees  payable to Vornado  pursuant to the  Management
     Agreement.

(3)  Reflects an increase in interest  expense from the issuance of  $75,000,000
     of new debt on March  15,  1995,  offset  by (i) the  effect  of the use of
     proceeds  to  repay  $39,552,000  of  outstanding  funded  debt,  and  (ii)
     additional interest capitalized on properties under redevelopment.

(4)  Reflects the amortization of $1,875,000 of debt issuance costs.

    

                                      -13-

                         DESCRIPTION OF DEBT SECURITIES

     The Debt  Securities may be issued from time to time in one or more series.
The particular terms of each series of Debt Securities offered by any Prospectus
Supplement or Prospectus  Supplements will be described therein. The Senior Debt
Securities are to be issued under an Indenture (the "Senior  Indenture") between
the Company and State Street Bank & Trust Company, N.A., as trustee (the "Senior
Trustee").  The  Subordinated  Debt Securities are to be issued under a separate
Indenture (the  "Subordinated  Indenture")  between the Company and State Street
Bank & Trust Company, N.A, as trustee (the "Subordinated  Trustee").  The Senior
Indenture and the Subordinated  Indenture are sometimes referred to collectively
as the  "Indentures"  and  the  Senior  Trustee  and  Subordinated  Trustee  are
sometimes referred to collectively as the "Trustees."

     The  following   summaries  of  certain   provisions  of  the  Senior  Debt
Securities,  the  Subordinated  Debt  Securities,  the Senior  Indenture and the
Subordinated  Indenture,  as modified or superseded by any applicable Prospectus
Supplement, are brief summaries of certain provisions thereof, do not purport to
be complete and are subject,  and are qualified in their  entirety by reference,
to all the provisions of the Indenture applicable to a particular series of Debt
Securities.  Wherever  particular  Sections,  Articles  or defined  terms of the
Indentures are referred to herein or in a Prospectus Supplement,  such Sections,
Articles or defined terms are incorporated herein or therein by reference.

General

     Unless otherwise  specified in the applicable  Prospectus  Supplement,  the
Debt  Securities  will be general  unsecured  obligations  of the  Company.  The
Indentures do not limit the  aggregate  amount of Debt  Securities  which may be
issued  thereunder,  and Debt  Securities may be issued  thereunder from time to
time in separate series up to the aggregate  amount from time to time authorized
by the Company for each series.  Unless  otherwise  specified in the  Prospectus
Supplement,  the Senior  Debt  Securities  when  issued  will be  unsubordinated
obligations  of the  Company and will rank  equally  and ratably  with all other
unsecured and unsubordinated  indebtedness of the Company. The Subordinated Debt
Securities  when  issued will be  subordinated  in right of payment to the prior
payment in full of all Senior Debt (as defined in the Subordinated Indenture) of
the Company as described  below under "--  Subordination  of  Subordinated  Debt
Securities"  and in the  Prospectus  Supplement  applicable  to an  offering  of
Subordinated Debt Securities.

     The  applicable  Prospectus  Supplement  or  Prospectus   Supplements  will
describe  the  following  terms of the series of Debt  Securities  in respect of
which this Prospectus is being delivered: (1) the title of such Debt Securities;
(2) any limit on the aggregate principal amount of such Debt Securities; (3) the
person to whom any interest on any Debt  Security of the series shall be payable
if other than the person in whose name the Debt  Security is  registered  on the
regular  record date; (4) the date or dates on which such Debt  Securities  will
mature; (5) the rate or rates of interest,  if any, or the method of calculation
thereof,  which such Debt Securities will bear, the date or dates from which any
such interest will accrue, the interest payment dates on which any such interest
on such Debt  Securities  will be payable  and the  regular  record date for any
interest payable on any interest payment date; (6) the place or places where the
principal  of,  premium,  if any, and interest on such Debt  Securities  will be
payable;  (7) the period or periods within which, the events upon the occurrence
of which, and the price or prices at which,  such Debt Securities may,  pursuant
to any optional or mandatory provisions,  be redeemed or purchased,  in whole or
in part, by the Company and any terms and conditions  relevant thereto;  (8) the
obligations of the Company, if any, to redeem or repurchase such Debt Securities
pursuant to any sinking fund  provision or analogous  provision or at the option
of the Holders and the period or periods  within which,  and the other terms and
conditions  upon  which,  such  Debt  Securities  shall be  redeemed,  repaid or
repurchased,  in  whole  or in  part,  pursuant  to  such  obligations;  (9) the
denominations in which any such Debt Securities will be issuable,  if other than
denominations  of $1,000 and any integral  multiple  thereof;  (10) any index or
formula used to determine the amount of payments of principal of and any premium
and interest on such Debt Securities; (11) the currency,  currencies or currency
unit or units of payment of  principal  of and any premium and  interest on such
Debt  Securities  if other  than  U.S.  dollars;  (12) if the  principal  of, or
premium,  if any, or interest on such Debt  Securities is to be payable,  at the
election  of the  Company  or a Holder  thereof,  in one or more  currencies  or
currency units other than that or those in which such Debt Securities are stated
to be payable, the currency, currencies or currency units in

                                      -14-

which  payment  of the  principal  of and  any  premium  and  interest  on  Debt
Securities  of such  series as to which such  election is made shall be payable,
and the  periods  within  which and the terms and  conditions  upon  which  such
election is to be made;  (13) if other than the principal  amount  thereof,  the
portion of the principal amount of such Debt Securities of the series which will
be payable upon  acceleration  of the maturity  thereof;  (14) if the  principal
amount of any Debt Securities which will be payable at the maturity thereof will
not be determinable as of any date prior to such maturity, the amount which will
be deemed to be the outstanding  principal amount of such Debt Securities;  (15)
the  applicability of any provisions  described below under  "Defeasance";  (16)
whether any of such Debt Securities are to be issuable in permanent  global form
("Global  Security")  and, if so, the terms and  conditions,  if any, upon which
interests in such  Securities  in global form may be  exchanged,  in whole or in
part,  for  the  individual  Debt  Securities   represented  thereby;  (17)  the
applicability  of any  covenant  with  respect to such Debt  Securities  and the
applicability  of any provisions  described  below under "Events of Default" and
any  additional  Events  of  Default  applicable  thereto;  (18)  any  covenants
applicable  to such Debt  Securities;  (19) the terms  and  conditions,  if any,
pursuant to which the Debt  Securities  are  convertible  or  exchangeable  into
shares of Common  Stock or other  securities;  and (20) any other  terms of such
Debt Securities not inconsistent with the provisions of the Indentures. (Section
301) Debt  Securities may also be issued under the Indentures  upon the exercise
of Debt Warrants. See "Description of Debt Warrants."

     Debt  Securities may be issued at a discount from their  principal  amount.
United States federal income tax considerations and other special considerations
applicable to any such original issue discount  Securities  will be described in
the applicable Prospectus Supplement.

     If the purchase  price of any of the Debt  Securities is  denominated  in a
foreign  currency or  currencies  or a foreign  currency unit or units or if the
principal  of and any premium and interest on any series of Debt  Securities  is
payable in a foreign currency or currencies or a foreign currency unit or units,
the  restrictions,  elections,  general tax  considerations,  specific terms and
other  information  with  respect to such issue of Debt  Securities  will be set
forth in the applicable Prospectus Supplement.

     Since the  Company is a holding  company,  the rights of the  Company,  and
hence the right of  creditors  of the  Company  (including  the  Holders of Debt
Securities),  to participate in any distribution of the assets of any subsidiary
upon its liquidation or  reorganization  or otherwise is necessarily  subject to
the prior claims of creditors of any such subsidiary,  except to the extent that
claims of the Company itself as a creditor of the subsidiary may be recognized.

     The  Indentures  do not contain  any  provisions  that limit the  Company's
ability to incur  indebtedness.  Except as may be  indicated  in the  applicable
Prospectus  Supplement with respect to a particular  series of Debt  Securities,
Holders of Debt Securities  will not have the benefit of any specific  covenants
or provisions in the applicable  Indenture or Debt Securities that would protect
them in the event the  Company  engages  in or becomes  the  subject of a highly
leveraged  transaction,  and the  limitations  on  mergers,  consolidations  and
transfers of  substantially  all of the  Company's  properties  and assets as an
entirety to any person as described  below under "--  Consolidation,  Merger and
Sale of Assets." Such  covenants may not be waived or modified by the Company or
its Board of  Directors,  although  Holders of Debt  Securities  could  waive or
modify such covenants as more fully described below under "--  Modification  and
Waiver."

     The applicable  Prospectus Supplement with respect to any particular series
of Debt  Securities  that provide for the  optional  redemption,  prepayment  or
conversion of such Debt  Securities upon the occurrence of certain events (i.e.,
a change of control),  will  describe the  following:  (1) the effects that such
provisions  may  have in  deterring  certain  mergers,  tender  offers  or other
takeover attempts,  as well as that there may be possible adverse effects on the
market price of the  Company's  securities or ability to obtain  financing;  (2)
that the Company  will comply with the  requirements  of  applicable  securities
laws, including Rules 14e-1 and 13e-4 under the Exchange Act, in connection with
such  provisions  and  any  related  offers  by the  Company;  (3)  whether  the
occurrence  of the  specified  events may give rise to  cross-defaults  on other
indebtedness such that payment on the offered Debt Securities may be effectively
subordinated;  (4)  limitations  on the Company's  financial or legal ability to
repurchase  the offered Debt  Securities  upon the  triggering  of an event risk
provision requiring such a repurchase or offer to repurchase; (5) the impact, if
any, under the governing instrument of failure to repurchase,  including whether
such  failure  to make any  required  repurchases  in the  event of a change  of
control  will  create an event of  default  with  respect  to the  offered  Debt
Securities or will become an event of

                                      -15-

   
default only after the  continuation  of such failure for a specified  period of
time  after  written  notice is given to the  Company  by the  Trustee or to the
Company and the Trustee by the holders of a specified  percentage  in  aggregate
principal  amount of the debt  outstanding;  (6) that there can be no  assurance
that  sufficient  funds will be  available at the time of the  triggering  of an
event risk provision to make any required repurchases;  (7) if such offered Debt
Securities  are to be  subordinated  to other  obligations of the Company or its
subsidiaries  that  would be  accelerated  upon the  triggering  of a change  in
control or similar  event,  the  material  effect  thereof on such  acceleration
provision and such offered Debt Securities;  and (8) to the extent that there is
a definition of "change of control" in a supplemental indenture relating to such
offered Debt Securities that includes the concept of "all or substantially all,"
the  established  meaning of such phrase under New York law,  including  whether
such a Change of Control  will be  triggered  if there is a change of control of
the Board of Directors as a result of a proxy contest involving the solicitation
of revocable proxies.

Conversion or Exchange of Debt Securities

     If so indicated in the applicable  Prospectus  Supplement with respect to a
particular  series  of Debt  Securities,  such  series  will be  convertible  or
exchangeable  into shares of Common Stock or other  securities  on the terms and
conditions set forth therein.  Such terms shall include provisions as to whether
conversion  is  mandatory,  at the  option of the Holder or at the option of the
Company,  and may include  provisions  pursuant to which the number of shares of
Common Stock or other securities of the Company to be received by the Holders of
Debt Securities would be calculated  according to the market price of the Common
Stock or other  securities of the Company as of a time stated in the  Prospectus
Supplement.   The  applicable   Prospectus   Supplement  will  indicate  certain
restrictions  on  ownership  which  may apply in the  event of a  conversion  or
exchange.  See "Description of Preferred Stock -- Restrictions on Ownership" and
"Description of Common Stock -- Restrictions on Ownership."

Form, Exchange, Registration, Conversion, Transfer and Payment

     Unless otherwise  indicated in the applicable  Prospectus  Supplement,  the
Debt Securities will be issued only in fully registered form in denominations of
$1,000 or integral multiples thereof.  (Section 302) Unless otherwise  indicated
in the applicable Prospectus Supplement,  payment of principal, premium, if any,
and  interest  on the  Debt  Securities  will  be  payable,  and  the  exchange,
conversion and transfer of Debt Securities will be  registerable,  at the office
or agency of the Company maintained for such purposes and at any other office or
agency  maintained  for such  purpose.  (Sections  301, 305 and 1002) No service
charge  will be made for any  registration  of  transfer or exchange of the Debt
Securities, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge imposed in connection therewith. (Section 305)

     All  monies  paid by the  Company  to a Paying  Agent  for the  payment  of
principal  of and any  premium or  interest on any Debt  Security  which  remain
unclaimed for two years after such principal, premium or interest has become due
and payable may be repaid to the Company and  thereafter the Holder of such Debt
Security may look only to the Company for payment thereof. (Section 1003)

Book-Entry Debt Securities

     The Debt  Securities  of a series  may be issued in whole or in part in the
form of one or more Global  Securities that will be deposited with, or on behalf
of, a depositary  (the "Global  Depositary")  or its nominee  identified  in the
applicable Prospectus Supplement.  In such a case, one or more Global Securities
will be issued in a denomination or aggregate  denomination equal to the portion
of the aggregate  principal  amount of Outstanding Debt Securities of the series
to be represented by such Global Security or Securities.  Unless and until it is
exchanged in whole or in part for Debt  Securities in registered  form, a Global
Security may not be registered for transfer or exchange except as a whole by the
Global  Depositary  for  such  Global  Security  to a  nominee  of  such  Global
Depositary or by a nominee of such Global  Depositary to such Global  Depositary
or another nominee of such Global Depositary or by such Global Depositary or any
nominee to a successor  Global  Depositary or a nominee of such successor Global
Depositary  and  except  in  the  circumstances   described  in  the  applicable
Prospectus Supplement. (Sections 204 and 305)

                                      -16-

     The  specific  terms of the  depositary  arrangement  with  respect  to any
portion of a series of Debt  Securities to be represented  by a Global  Security
will be described in the applicable Prospectus  Supplement.  The Company expects
that the following provisions will apply to depositary arrangements, although no
assurance can be given that such will be the case.

     Unless otherwise specified in the applicable  Prospectus  Supplement,  Debt
Securities which are to be represented by a Global Security to be deposited with
or on behalf of a Global  Depositary  will be represented  by a Global  Security
registered  in the  name of such  Global  Depositary  or its  nominee.  Upon the
issuance of such Global  Security,  and the deposit of such Global Security with
or on behalf of the  Global  Depositary  for such  Global  Security,  the Global
Depositary will credit, on its book-entry  registration and transfer system, the
respective  principal amounts of the Debt Securities  represented by such Global
Security to the accounts of  institutions  that have  accounts  with such Global
Depositary or its nominee ("participants").  The accounts to be credited will be
designated by the underwriters or agents for the sale of such Debt Securities or
by the Company,  if such Debt  Securities  are offered and sold  directly by the
Company.  Ownership  of  beneficial  interest  in such Global  Security  will be
limited to participants or Persons that may hold interests through participants.
Ownership of beneficial  interests by  participants in such Global Security will
be shown on, and the transfer of that  ownership  interest will be effected only
through,  records  maintained  by the Global  Depositary or its nominee for such
Global  Security.  Ownership of beneficial  interests in such Global Security by
Persons  that hold  through  participants  will be shown on, and the transfer of
such ownership  interests within such participant will be effected only through,
records maintained by such participant.  The laws of some jurisdictions  require
that certain  purchasers of securities take physical delivery of such securities
in  certificated  form. The foregoing  limitations  and such laws may impair the
ability to transfer beneficial interests in such Global Securities.

     So long as the Global Depositary for a Global Security,  or its nominee, is
the registered  owner of such Global  Security,  such Global  Depositary or such
nominee,  as the case may be, will be considered the sole owner or Holder of the
Securities  represented  by such  Global  Security  for all  purposes  under the
applicable  Indenture.  Except as set forth below, unless otherwise specified in
the applicable  Prospectus  Supplement,  owners of beneficial  interests in such
Global  Security  will not be  entitled  to have Debt  Securities  of the series
represented by such Global Security  registered in their names, will not receive
or be entitled to receive physical delivery of Debt Securities of such series in
certificated  form  and will  not be  considered  the  Holders  thereof  for any
purposes under the  applicable  Indenture.  (Sections 204 and 305)  Accordingly,
each Person  owning a beneficial  interest in such Global  Security must rely on
the  procedures  of  the  Global  Depositary  and,  if  such  Person  is  not  a
participant, on the procedures of the participant through which such Person owns
its interest, to exercise any rights of a Holder under the applicable Indenture.
The Company understands that under existing industry  practices,  if the Company
requests  any  action of Holders or an owner of a  beneficial  interest  in such
Global  Security  desires  to give any  notice  or take any  action a Holder  is
entitled to give or take under the applicable  Indenture,  the Global Depositary
would authorize the  participants  to give such notice or take such action,  and
participants would authorize  beneficial owners owning through such participants
to give  such  notice  or take  such  action  or  would  otherwise  act upon the
instructions of beneficial owners owning through them.

     If the Global  Depositary  for Debt  Securities  of a series is at any time
unwilling, unable or ineligible to continue as Global Depositary and a successor
Global  Depositary is not appointed by the Company within 90 days or an Event of
Default  under the  applicable  Indenture  has occurred and is  continuing,  the
Company will issue Debt Securities of such series in definitive form in exchange
for the Global Security or Securities  representing  the Debt Securities of such
series.  In  addition,  the Company may at any time and in its sole  discretion,
subject to any limitations  described in the applicable  Prospectus  Supplement,
determine not to have any Debt Securities of a series represented by one or more
Global  Securities and, in such event, will issue Debt Securities of such series
in  definitive   form  in  exchange  for  the  Global   Security  or  Securities
representing  such Debt  Securities.  Further,  if the Company so specifies with
respect to the Debt Securities of a series, an owner of a beneficial interest in
a Global  Security  representing  Debt  Securities  of such series may, on terms
acceptable to the Company and the Global  Depositary  for such Global  Security,
receive Debt  Securities of such series in definitive  form in exchange for such
beneficial  interests,  subject to any  limitations  described in the applicable
Prospectus Supplement relating to such Debt Securities. In any such instance, an
owner of a beneficial interest in a Global Security will be entitled to physical
delivery in definitive form of Debt Securities of the series represented

                                      -17-

by such Global Security equal in principal  amount to such  beneficial  interest
and to have such Debt Securities  registered in its name (if the Debt Securities
of such series are issuable as registered securities).

     Principal  of and any premium and  interest  on a Global  Security  will be
payable in the manner described in the applicable Prospectus Supplement.

Certain Covenants of the Company

     If so indicated in the applicable  Prospectus  Supplement with respect to a
particular  series  of Debt  Securities,  the  Company  will be  subject  to the
covenants described therein.

Events of Default

     The following are Events of Default  under the  Indentures  with respect to
Debt  Securities of any series:  (a) failure to pay principal of or premium,  if
any,  on any Debt  Security  of that  series  when due;  (b)  failure to pay any
interest on any Debt  Security of that series when due,  continued  for 30 days;
(c) failure in the deposit of any  sinking  fund  payment in respect of any Debt
Security  of that  series;  (d)  failure to perform  any other  covenant  of the
Company in the  Indentures  (other than a covenant  included  in the  applicable
Indenture  solely for the benefit of a series of Debt Securities other than that
series),  continued for 60 days after written  notice to the Company as provided
in the  applicable  Indenture;  (e) the  acceleration  of, or  failure to pay at
maturity  (including any applicable  grace period),  any  indebtedness for money
borrowed  by  the  Company  with  at  least   $50,000,000  in  principal  amount
outstanding,  which  acceleration or failure to pay is not rescinded or annulled
or such  indebtedness  paid, in each case within 10 days after the date on which
written notice thereof shall have first been given to the Company as provided in
the  applicable  Indenture;  (f) certain  events of  bankruptcy,  insolvency  or
reorganization; and (g) any other Event of Default provided with respect to Debt
Securities of that series. (Section 501)

     If an Event of Default with respect to Outstanding  Debt  Securities of any
series  shall  occur and be  continuing,  either the  applicable  Trustee or the
Holders  of not less  than  25% in  principal  amount  of the  Outstanding  Debt
Securities  of that series by notice as provided in the  Indentures  may declare
the  principal  amount (or, if the Debt  Securities  of that series are Original
Issue  Discount  Securities,  such  portion  of the  principal  amount as may be
specified in the terms of that series) of all Debt  Securities of that series to
be due and payable  immediately.  However,  at any time after a  declaration  of
acceleration  with respect to Debt  Securities of any series has been made,  but
before a judgment or decree based on such  acceleration  has been obtained,  the
Holders of a majority in principal  amount of the Outstanding Debt Securities of
that  series  may,   under  certain   circumstances,   rescind  and  annul  such
acceleration.  (Section 502) For  information as to waiver or defaults,  see "--
Modification and Waiver" below.

     The Indentures  provide that, subject to the duty of the applicable Trustee
thereunder during an Event of Default to act with the required standard of care,
such Trustee will be under no obligation to exercise any of its rights or powers
under  the  applicable  Indenture  at the  request  or  direction  of any of the
Holders,  unless such  Holders  shall have  offered to such  Trustee  reasonable
security or  indemnity.  (Sections  601 and 603) Subject to certain  provisions,
including  those  requiring  security or  indemnification  of the Trustees,  the
Holders of a majority in principal  amount of the Outstanding Debt Securities of
any  series  will  have the  right to  direct  the  time,  method  and  place of
conducting  any  proceeding  for  any  remedy  available  to  the  Trustees,  or
exercising any trust or power  conferred on such  Trustees,  with respect to the
Debt Securities of that series. (Section 512)

     No Holder of a Debt Security of any series will have any right to institute
any  proceeding  with respect to the  Indentures  or for any remedy  thereunder,
unless (i) such Holder shall have  previously  given to the  applicable  Trustee
written  notice of a continuing  Event of Default (as  defined)  with respect to
Debt  Securities  of that  series;  (ii) the  Holders  of not  less  than 25% in
aggregate principal amount of the Outstanding Debt Securities of the same series
shall have made  written  request,  and  offered  reasonable  indemnity,  to the
applicable Trustee to institute  proceedings in respect of such Event of Default
in its own name as trustee  under the  applicable  Indenture;  (iii) the Trustee
shall have failed to institute

                                      -18-

such  proceedings  within 60 days;  and (iv) the Trustee shall not have received
from the Holders of a majority in aggregate  principal amount of the outstanding
Debt  Securities of the same series a direction  inconsistent  with such request
(Section 507); provided,  however,  that such limitations do not apply to a suit
instituted  by a Holder of a Debt  Security  for  enforcement  of payment of the
principal of and any premium and interest on such Debt  Security on or after the
respective  due  dates  expressed  in  such  Debt  Security,  or in the  case of
convertible Debt Securities, for enforcement of a right of conversion.  (Section
508)

     The  Company  will be  required  to  furnish  to the  Trustees  annually  a
statement  as to the  performance  by the Company of its  obligations  under the
Indentures and as to any default in such performance. (Section 1004)

Modification and Waiver

     Without  the  consent of any Holder of  Outstanding  Debt  Securities,  the
Company  and the  applicable  Trustee  may amend or  supplement  the  applicable
Indenture or Debt Securities to cure any ambiguity, defect or inconsistency,  or
to make any change that does not materially  adversely  affect the rights of any
Holder of Debt Securities.  (Section 901) Other  modifications and amendments of
the Indentures  may be made by the Company and the applicable  Trustee only with
the consent of the Holders of not less than a majority  in  aggregate  principal
amount of the  Outstanding  Debt  Securities  of each series  affected  thereby;
provided,  however,  that no such  modification  or amendment  may,  without the
consent of the Holder of each Outstanding Debt Security  affected  thereby:  (a)
change the Stated  Maturity of the principal of, or any installment of principal
of, or interest on, any Debt Security;  (b) reduce the principal  amount of, the
rate of interest on, or the premium,  if any,  payable  upon the  redemption  or
repurchase  of, any Debt  Security;  (c) reduce  the amount of  principal  of an
Original  Issue  Discount  Security  payable upon  acceleration  of the Maturity
thereof;  (d)  change the place or  currency  of  payment  of  principal  of, or
premium,  if any,  or  interest  on any Debt  Security;  (e) impair the right to
institute suit for the enforcement of any payment on or with respect to any Debt
Security on or after the Stated Maturity or Redemption Date thereof;  (f) modify
the conversion  provisions applicable to convertible Debt Securities in a manner
adverse  to  the  Holders  thereof;  (g)  modify  the  subordination  provisions
applicable to any series of Debt  Securities in a manner  adverse to the Holders
thereof;  or (h) reduce the percentage in principal  amount of Outstanding  Debt
Securities  of any series,  the consent of the Holders of which is required  for
modification  or amendment of the  Indentures or for waiver of  compliance  with
certain  provisions  of the  applicable  Indenture  or  for  waiver  of  certain
defaults. (Section 902)

     The Holders of at least a majority  in  aggregate  principal  amount of the
Outstanding  Debt  Securities  of any series may on behalf of the Holders of all
Debt  Securities  of that series  waive,  insofar as that  series is  concerned,
compliance  by the Company with certain  covenants of the  Indentures.  (Section
1008)  The  Holders  of not less  than a  majority  in  principal  amount of the
Outstanding  Debt  Securities of any series may, on behalf of the Holders of all
Debt  Securities  of that series,  waive any past default  under the  applicable
Indenture  with respect to that  series,  except a default in the payment of the
principal  of, or premium,  if any, or  interest  on, any Debt  Security of that
series or in respect of a provision which under such applicable Indenture cannot
be  modified or amended  without  the consent of the Holder of each  Outstanding
Debt Security of that series affected. (Section 513)

Consolidation, Merger and Sale of Assets

     The  Company,  without  the  consent  of any  Holders of  outstanding  Debt
Securities,  may consolidate with or merge into, or transfer or lease its assets
substantially  as  an  entirety  to,  any  Person,  and  any  other  Person  may
consolidate with or merge into, or transfer or lease its assets substantially as
an entirety  to, the  Company,  provided  that (a) the Person (if other than the
Company)  formed by such  consolidation  or into which the  Company is merged or
which acquires or leases the assets of the Company  substantially as an entirety
assumes the Company's obligations on the Debt Securities and under the Indenture
relating  thereto and (b) 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.  (Article  Eight) A
Prospectus  Supplement  may set  forth any  additional  provisions  regarding  a
consolidation with, merger

                                      -19-

into,  or transfer or lease of its assets  substantially  as an entirety to, any
Person (or of such Person with, into or to the Company).

Defeasance

     If so indicated in the applicable Prospectus Supplement with respect to the
Debt Securities of a series,  the Company,  at its option (i) will be discharged
from any and all  obligations  in respect of the Debt  Securities of such series
(except for certain  obligations  to register  the  transfer or exchange of Debt
Securities of such series, to replace destroyed,  stolen, lost or mutilated Debt
Securities of such series, and to maintain an office or agency in respect of the
Debt  Securities  and hold moneys for payment in trust) or (ii) will be released
from its  obligations  to comply with any covenants that may be specified in the
applicable  Prospectus  Supplement  with respect to the Debt  Securities of such
series,  and the occurrence of an event described in clause (d) under "Events of
Default"  above with  respect to any  defeased  covenants  shall no longer be an
Event of Default,  if in either case the Company  irrevocably  deposits with the
applicable Trustee, in trust, money or U.S. Government  Obligations that through
the payment of interest  thereon and principal  thereof in accordance with their
terms will provide money in an amount  sufficient to pay all of the principal of
and premium,  if any, and any interest on the Debt  Securities of such series on
the dates such payments are due (which may include one or more redemption  dates
designated by the Company) in accordance with the terms of such Debt Securities.
Such a trust may only be  established  if, among other  things,  (a) no Event of
Default  or event  which  with the  giving of notice or lapse of time,  or both,
would  become an Event of  Default  under the  applicable  Indenture  shall have
occurred and be continuing on the date of such deposit,  (b) no Event of Default
described  under clause (e) under "Events of Default"  above or event which with
the giving of notice or lapse of time, or both, would become an Event of Default
described  under such clause (e) shall have  occurred and be  continuing  at any
time during the period  ending on the 91st day  following  such date of deposit,
and (c) the  Company  shall have  delivered  an Opinion of Counsel to the effect
that the  Holders of the Debt  Securities  will not  recognize  gain or loss for
United  States  federal  income  tax  purposes  as a result of such  deposit  or
defeasance  and will be subject to United States  federal income tax in the same
manner as if such deposit and  defeasance  had not  occurred,  which  Opinion of
Counsel,  in the case of a deposit and defeasance of such Indenture with respect
to the Debt Securities of any series as described under clause (i) above,  shall
be based on either (A) a ruling to such effect  that the  Company  has  received
from,  or that has been  published  by, the  Internal  Revenue  Service or (B) a
change in the applicable federal income tax law, occurring after the date of the
applicable  Indenture,  to such effect. In the event the Company omits to comply
with its remaining  obligations  under such Indenture after a defeasance of such
Indenture with respect to the Debt  Securities of any series as described  under
clause (ii) above and the Debt  Securities  of such series are  declared due and
payable because of the occurrence of any undefeased Event of Default, the amount
of money and U.S. Government  Obligations on deposit with the applicable Trustee
may be  insufficient to pay amounts due on the Debt Securities of such series at
the time of the acceleration resulting from such Event of Default.  However, the
Company will remain liable for such payments. (Article Thirteen)

Subordination of Subordinated Debt Securities

     Unless  otherwise  indicated in the  Prospectus  Supplement,  the following
provisions will apply to the Subordinated Debt Securities.

     The  Subordinated  Debt  Securities  will,  to the  extent set forth in the
Subordinated  Indenture, be subordinate in right of payment to the prior payment
in full of all Senior  Debt,  including  the Senior  Debt  Securities.  Upon any
payment  or   distribution   of  assets  to  creditors  upon  any   liquidation,
dissolution,   winding  up,  reorganization,   assignment  for  the  benefit  of
creditors,   marshalling  of  assets  or  any   bankruptcy,   insolvency,   debt
restructuring  or similar  proceedings  in  connection  with any  insolvency  or
bankruptcy  proceeding of the Company,  the holders of Senior Debt will first be
entitled to receive  payment in full of principal of (and  premium,  if any) and
interest,  if any, on such  Senior  Debt before the holders of the  Subordinated
Debt  Securities will be entitled to receive or retain any payment in respect of
the principal of (and premium, if any) or interest,  if any, on the Subordinated
Debt Securities. (Article Fifteen of the Subordinated Indenture)

                                      -20-

     By reason of such subordination, in the event of liquidation or insolvency,
creditors of the Company who are not holders of Senior Debt or Subordinated Debt
Securities  may  recover  less,  ratably,  than  holders of Senior  Debt and may
recover more, ratably, than the holders of the Subordinated Debt Securities.

     In the event of the acceleration of the maturity of any  Subordinated  Debt
Securities,  the  holders of all  Senior  Debt  outstanding  at the time of such
acceleration  will first be entitled  to receive  payment in full of all amounts
due  thereon  before the holders of the  Subordinated  Debt  Securities  will be
entitled to receive any payment upon the  principal  of (or premium,  if any) or
interest, if any, on the Subordinated Debt Securities.

     No payments on account of principal  (or premium,  if any) or interest,  if
any, in respect of the  Subordinated  Debt Securities may be made if there shall
have  occurred and be continuing a default in any payment with respect to Senior
Debt,  or an event of default with  respect to any Senior Debt  resulting in the
acceleration of the maturity  thereof,  or if any judicial  proceeding  shall be
pending with  respect to any such  default.  For  purposes of the  subordination
provisions,  the payment,  issuance and delivery of cash, property or securities
(other than stock and  certain  subordinated  securities  of the  Company)  upon
conversion of a Subordinated Debt Security will be deemed to constitute  payment
on account of the principal of such Subordinated Debt Security.

     "Senior Debt" is defined to mean the principal of (and premium, if any) and
interest  (including interest accruing on or after the filing of any petition in
bankruptcy  or for  reorganization  relating  to the  Company to the extent such
claim  for  post-petition  interest  is  allowed  in  such  proceeding)  on  all
indebtedness of the Company (including  indebtedness of others guaranteed by the
Company), other than the Subordinated Debt Securities whether outstanding on the
date of the Subordinated  Indenture or thereafter created,  incurred or assumed,
which is: (i) for money borrowed, (ii) evidenced by a note or similar instrument
given in connection with the acquisition of any businesses, properties or assets
of any kind or (iii)  obligations of the Company as lessee under leases required
to be  capitalized on the balance sheet of the lessee under  generally  accepted
accounting  principles  or leases of property or assets made as part of any sale
and  lease-back   transaction  to  which  the  Company  is  a  party,  including
amendments,  renewals,  extensions,  modifications  and  refundings  of any such
indebtedness  or obligation,  unless in any case in the  instrument  creating or
evidencing any such  indebtedness or obligation or pursuant to which the same is
outstanding it is provided that such  indebtedness or obligation is not superior
in right of payment to the Subordinated Debt Securities.

     The  Subordinated  Indenture  does not limit or prohibit the  incurrence of
additional  Senior Debt,  which may include  indebtedness  that is senior to the
Subordinated  Debt  Securities,  but  subordinate  to other  obligations  of the
Company.  The Senior Debt Securities, when issued, will constitute Senior Debt.

     The  Prospectus   Supplement  will  set  forth  the  aggregate   amount  of
outstanding  indebtedness  as of the most  recent  practicable  date that by the
terms of such  indebtedness  and the  terms  of the  offered  Subordinated  Debt
Securities  would  rank  senior to or pari  passu  with such  Subordinated  Debt
Securities and any limitation on the issuance of additional senior or pari passu
indebtedness.  The Prospectus Supplement may further describe the provisions, if
any,  applicable to the  subordination of the Subordinated  Debt Securities of a
particular series.

Governing Law

     The Indentures and the Debt  Securities  will be governed by, and construed
in accordance with, the laws of the State of New York. (Section 112)

Regarding the Trustees

     The Company  and  certain of its  subsidiaries  in the  ordinary  course of
business  maintain  general  banking  relations  with State  Street Bank & Trust
Company,  N.A.  Pursuant to the  provisions of the Trust  Indenture Act of 1939,
upon a default under either the Senior Indenture or the Subordinated  Indenture,
State Street Bank & Trust Company, N.A.

                                      -21-

may be deemed to have a conflicting interest by virtue of its acting as both the
Senior  Trustee  and the  Subordinated  Trustee  requiring  it to resign  and be
replaced by a successor trustee in one of such positions.

                          DESCRIPTION OF CAPITAL STOCK

     The  following   descriptions  and  the   descriptions   contained  in  "--
Description  of Preferred  Stock" and "--  Description  of Common  Stock" do not
purport to be complete and are subject to, and  qualified  in their  entirety by
reference to, the more complete  descriptions thereof set forth in the following
documents:  (i) the Company's Amended and Restated  Certificate of Incorporation
(the  "Certificate  of  Incorporation"),  which is filed  as an  exhibit  to the
Registration  Statement of which this Prospectus is a part and (ii) its By-laws,
which is incorporated by reference to the  Registration  Statement of which this
Prospectus is a part.

     For the  Company to qualify as a REIT under the Code,  not more than 50% of
the value of the outstanding stock may be owned, directly or indirectly, by five
or fewer individuals (as defined in the Code to include certain entities) during
the last half of a taxable year and the stock must be beneficially  owned by 100
or more  persons  during at least 335 days of a  taxable  year of 12 months  (or
during  a  proportionate  part of a  shorter  taxable  year).  Accordingly,  the
Certificate of Incorporation contains provisions that restrict the ownership and
transfer of shares of capital  stock.  The  Certificate  of  Incorporation  also
contains  provisions  that  restrict  the  ownership  and  transfer of shares of
capital  stock to reduce  the risk that the  Company's  ability  to use its NOLs
would be limited.

     The  Certificate  of  Incorporation   authorizes  the  issuance  of  up  to
26,000,000  shares of capital stock,  consisting of 10,000,000  shares of Common
Stock,  $1.00 par value per share  (the  "Common  Stock"),  3,000,000  shares of
preferred  stock,  $1.00  par  value  per share  (the  "Preferred  Stock"),  and
13,000,000  shares of excess  stock,  $1.00  par  value per share  (the  "Excess
Stock"). As of August 4, 1995,  5,000,850 shares of Common Stock were issued and
outstanding.  No shares of Preferred  Stock or shares of Excess Stock are issued
and outstanding.

Description of Preferred Stock

     The following is a description  of certain  general terms and provisions of
the Preferred  Stock. The particular terms of any series of Preferred Stock will
be  described  in the  applicable  Prospectus  Supplement.  If so indicated in a
Prospectus  Supplement,  the terms of any such  series may differ from the terms
set forth below.

     The summary of terms of the  Company's  Preferred  Stock  contained in this
Prospectus  does not purport to be complete and is subject to, and  qualified in
its entirety by, the  provisions of the  Certificate  of  Incorporation  and the
certificate of designations  relating to each series of the Preferred Stock (the
"Certificate  of  Designation"),  which  will  be  filed  as  an  exhibit  to or
incorporated by reference in the Registration Statement of which this Prospectus
is a part at or prior to the time of issuance  of such  series of the  Preferred
Stock.

     The  Certificate  of  Incorporation  authorizes  the  issuance of 3,000,000
shares of Preferred  Stock.  No shares of Preferred  Stock are outstanding as of
the date of this  Prospectus.  The Preferred Stock authorized by the Certificate
of  Incorporation  may be issued from time to time in one or more series in such
amounts and with such  designations,  preferences,  conversion  or other rights,
voting powers,  restrictions,  limitations as to dividends,  qualifications  and
terms and  conditions  of  redemption as may be fixed by the Board of Directors.
Under  certain  circumstances,  the issuance of  Preferred  Stock could have the
effect of delaying,  deferring or  preventing a change of control of the Company
and may  adversely  affect the voting and other  rights of the Holders of Common
Stock. See "Risk Factors--Anti-takeover Effects of Provisions of the Certificate
of Incorporation  and By-laws." The Certificate of Incorporation  authorizes the
Board of Directors to classify or  reclassify  any unissued  shares of Preferred
Stock by setting or changing the designations,  preferences, conversion or other
rights,   voting  powers,   restrictions,   limitations  as  to   distributions,
qualifications and terms and conditions of redemption of such Preferred Stock.

                                      -22-

     The Preferred  Stock shall have the dividend,  liquidation,  redemption and
voting  rights  set forth  below  unless  otherwise  described  in a  Prospectus
Supplement  relating  to  a  particular  series  of  the  Preferred  Stock.  The
applicable Prospectus Supplement will describe the following terms of the series
of Preferred Stock in respect of which this Prospectus is being  delivered:  (1)
the title of such  Preferred  Stock and the  number of shares  offered;  (2) the
amount of  liquidation  preference per share;  (3) the initial  public  offering
price at which shares of such Preferred  Stock will be issued;  (4) the dividend
rate (or method of  calculation),  the dates on which dividends shall be payable
and the dates from which dividends  shall commence to cumulate,  if any; (5) any
redemption or sinking fund  provisions;  (6) any conversion or exchange  rights;
(7) any additional voting, dividend,  liquidation,  redemption, sinking fund and
other rights,  preferences,  privileges,  limitations and restrictions;  (8) any
listing of such Preferred Stock on any securities exchange;  (9) a discussion of
federal income tax  considerations  applicable to such Preferred Stock; (10) the
relative  ranking and  preferences of such Preferred Stock as to dividend rights
and rights  upon  liquidation,  dissolution  or winding up of the affairs of the
Company;  (11) any  limitations  on  issuance of any series of  Preferred  Stock
ranking  senior to or on a parity  with such  series  of  Preferred  Stock as to
dividend  rights and rights upon  liquidation,  dissolution or winding up of the
affairs of the Company;  (12) any limitations on direct or beneficial  ownership
and restrictions on transfer, in each case as may be appropriate to preserve the
status of the Company as a REIT; and (13) any other specific terms,  preferences
or rights of, or limitations or restrictions on, such Preferred Stock.

     General

     The shares of Preferred  Stock offered hereby will be issued in one or more
series.  Shares of Preferred  Stock,  upon issuance  against full payment of the
purchase price therefor,  will be fully paid and nonassessable.  The liquidation
preference is not indicative of the price at which the shares of Preferred Stock
will actually trade on or after the date of issuance.

     Rank

     The Preferred Stock shall,  with respect to dividend rights and rights upon
liquidation, dissolution and winding up of the Company, rank prior to the Common
Stock and Excess  Stock  (other than certain  Excess  Stock  resulting  from the
conversion  of  Preferred  Stock) and to all other  classes and series of equity
securities  of the Company now or hereafter  authorized,  issued or  outstanding
(the  Common  Stock and such  other  classes  and  series  of equity  securities
collectively  may be referred to herein as the "Junior  Stock"),  other than any
classes  or series of equity  securities  of the  Company  which by their  terms
specifically  provide  for a ranking on a parity  with (the  "Parity  Stock") or
senior to (the "Senior  Stock") the  Preferred  Stock as to dividend  rights and
rights upon liquidation, dissolution or winding up of the Company. The Preferred
Stock shall be junior to all  outstanding  debt of the  Company.  The  Preferred
Stock  shall be subject to  creation of Senior  Stock,  Parity  Stock and Junior
Stock  to  the  extent  not   expressly   prohibited  by  the   Certificate   of
Incorporation.

     Dividends

     Holders of shares of Preferred Stock shall be entitled to receive, when, as
and if declared by the Board of Directors  out of assets of the Company  legally
available for payment,  dividends,  or distributions in cash,  property or other
assets of the Company or in  Securities  of the Company or from any other source
as the Board of Directors in their  discretion shall determine and at such dates
and at such rates per share per annum as described in the applicable  Prospectus
Supplement.  Such rate may be fixed or variable or both. Each declared  dividend
shall be payable to Holders of record as they appear at the close of business on
the books of the Company on such record  dates,  not more than 90 calendar  days
preceding  the  payment  dates  therefor,  as are  determined  by the  Board  of
Directors (each of such dates, a "Record Date").

     Such  dividends  may be cumulative  or  noncumulative,  as described in the
applicable  Prospectus  Supplement.  If dividends on a series of Preferred Stock
are  noncumulative  and if the Board of Directors fails to declare a dividend in
respect of a dividend period with respect to such series, then Holders of shares
of such Preferred Stock will have no

                                      -23-

right to receive a dividend in respect of such dividend period,  and the Company
will have no  obligation  to pay the dividend  for such  period,  whether or not
dividends  are  declared  payable  on any  future  dividend  payment  dates.  If
dividends of a series of Preferred Stock are  cumulative,  the dividends on such
shares  will  accrue  from  and  after  the date  set  forth  in the  applicable
Prospectus Supplement.

     No full  dividends  shall be  declared  or paid or set apart for payment on
Preferred  Stock of any series  ranking,  as to  dividends,  on a parity with or
junior to the series of Preferred  Stock  offered by the  applicable  Prospectus
Supplement  for any period unless full dividends for the  immediately  preceding
dividend period on such Preferred Stock  (including any  accumulation in respect
of unpaid dividends for prior dividend  periods,  if dividends on such Preferred
Stock are cumulative)  have been or  contemporaneously  are declared and paid or
declared  and a sum  sufficient  for the  payment  thereof is set apart for such
payment.  When  dividends are not so paid in full (or a sum  sufficient for such
full  payment is not so set apart) upon such shares of  Preferred  Stock and any
other  Preferred  Stock of the Company  ranking on a parity as to dividends with
the Preferred  Stock,  dividends upon such Preferred Stock and dividends on such
other  Preferred  Stock  ranking on a parity with the  Preferred  Stock shall be
declared  pro rata so that the amount of  dividends  declared  per share on such
Preferred  Stock and such other  Preferred  Stock  ranking on a parity  with the
Preferred  Stock  shall in all  cases  bear to each  other the same  ratio  that
accrued  dividends  for the  then-current  dividend  period  per  share  on such
Preferred Stock  (including any  accumulation in respect of unpaid dividends for
prior dividend periods, if dividends on such Preferred Stock are cumulative) and
accrued  dividends,  including required or permitted  accumulations,  if any, on
shares of such other Preferred Stock, bear to each other. No interest, or sum of
money  in  lieu of  interest,  shall  be  payable  in  respect  of any  dividend
payment(s) on Preferred Stock which may be in arrears.  Unless full dividends on
the series of Preferred  Stock offered by the applicable  Prospectus  Supplement
have  been  declared  and paid or set  apart  for  payment  for the  immediately
preceding  dividend  period  (including  any  accumulation  in respect of unpaid
dividends for prior dividend  periods,  if dividends on such Preferred Stock are
cumulative),  (a) no cash  dividend  or  distribution  (other  than in shares of
Junior Stock) may be declared,  set aside or paid on the Junior  Stock,  (b) the
Company may not, directly or indirectly, repurchase, redeem or otherwise acquire
any shares of its Junior  Stock (or pay any monies  into a sinking  fund for the
redemption  of any shares)  except by  conversion  into or  exchange  for Junior
Stock, and (c) the Company may not, directly or indirectly,  repurchase,  redeem
or otherwise acquire any Preferred Stock or Parity Stock (or pay any monies into
a sinking  fund for the  redemption  of any shares of any such stock)  otherwise
than pursuant to pro rata offers to purchase or a concurrent  redemption of all,
or a pro rata portion,  of the shares of outstanding  Preferred Stock and shares
of Parity Stock (except by conversion into or exchange for Junior Stock).

     Any dividend  payment  made on a series of  Preferred  Stock shall first be
credited  against the earliest  accrued but unpaid  dividend due with respect to
shares of such series.

     Redemption

     The terms,  if any, on which shares of Preferred Stock of any series may be
redeemed will be set forth in the applicable Prospectus Supplement.

     Liquidation

     In the event of a voluntary  or  involuntary  liquidation,  dissolution  or
winding up of the affairs of the  Company,  the Holders of a series of Preferred
Stock  will be  entitled,  subject to the  rights of  creditors,  but before any
distribution or payment to the Holders of Common Stock, Excess Stock (other than
certain Excess Stock  resulting  from the conversion of Preferred  Stock) or any
Junior  Stock on  liquidation,  dissolution  or  winding up of the  Company,  to
receive a liquidating  distribution in the amount of the liquidation  preference
per share as set forth in the applicable  Prospectus Supplement plus accrued and
unpaid   dividends  for  the   then-current   dividend  period   (including  any
accumulation  in respect of unpaid  dividends  for prior  dividend  periods,  if
dividends  on such series of  Preferred  Stock are  cumulative).  If the amounts
available for  distribution  with respect to the  Preferred  Stock and all other
outstanding  Parity  Stock are not  sufficient  to satisfy the full  liquidation
rights of all the outstanding  shares of Preferred Stock and Parity Stock,  then
the  Holders  of each  series  of such  stock  will  share  ratably  in any such
distribution of assets in proportion to the full

                                      -24-

respective preferential amount (which in the case of Preferred Stock may include
accumulated  dividends)  to which they are  entitled.  After payment of the full
amount of the liquidation distribution,  the Holders of Preferred Stock will not
be entitled to any further  participation  in any  distribution of assets by the
Company.

     Voting

     Except as set forth in the Prospectus  Supplement  relating to a particular
series of Preferred  Stock or except as expressly  required by  applicable  law,
Holders of shares of Preferred Stock will have no voting rights.

     No Other Rights

     The shares of a series of  Preferred  Stock will not have any  preferences,
voting  powers or  relative,  participating,  optional or other  special  rights
except  as set  forth  above or in the  applicable  Prospectus  Supplement,  the
Certificate of Incorporation and in the applicable Certificate of Designation or
as otherwise required by law.

     Transfer Agent and Registrar

     The transfer agent for each series of Preferred  Stock will be described in
the related Prospectus Supplement.

     Restrictions on Ownership

     As  discussed  below,  for the Company to qualify as a REIT under the Code,
not more than 50% in value of its  outstanding  shares of  capital  stock may be
owned,  directly or constructively,  by five or fewer individuals (as defined in
the Code to include  certain  entities)  during the last half of a taxable year,
and the  shares  of  capital  stock  must be  beneficially  owned by 100 or more
persons  during at least 335 days of a taxable  year of 12 months  (or  during a
proportionate  part of a shorter  taxable year).  Therefore,  the Certificate of
Incorporation  contains,  and the  Certificate of Designation for each series of
Preferred Stock may contain,  provisions  restricting the ownership and transfer
of the Preferred Stock.

     In order to prevent any Company stockholder from owning shares in an amount
which  would cause more than 50% of the value of the  outstanding  shares of the
Company  to  be  held  by  five  or  fewer   individuals,   the  Certificate  of
Incorporation  contains a limitation  that restricts  stockholders  from owning,
under the applicable  attribution  rules of the Code,  more than that percentage
(which generally should not exceed 9.9%) of the outstanding  shares of Preferred
Stock of any series as is  established  by the Board of Directors at the time it
authorizes  the  issuance  of  such  series  (the  "Preferred  Stock  Beneficial
Ownership Limit").  The attribution rules which apply for purposes of the Common
Stock  Beneficial  Ownership Limit (as defined below) also apply for purposes of
the Preferred Stock Beneficial Ownership Limit. See "Description of Common Stock
- --  Restrictions on Ownership."  Stockholders  should be aware that events other
than a purchase or other  transfer of Preferred  Stock may result in  ownership,
under the applicable attribution rules of the Code, of Preferred Stock in excess
of the Preferred Stock  Beneficial  Ownership  Limit.  Stockholders are urged to
consult their own tax advisors  concerning the  application  of the  attribution
rules of the Code in their particular circumstances.

     Holders of Preferred Stock are also subject to the  Constructive  Ownership
Limit (as defined  below in  "Description  of Common  Stock --  Restrictions  on
Ownership"),  which restricts them from owning, under the applicable attribution
rules of the Code, more than 9.9% of the  outstanding  shares of Preferred Stock
of  any  series.   The  attribution  rules  which  apply  for  purposes  of  the
Constructive  Ownership  Limit  differ from those that apply for purposes of the
Preferred Stock Beneficial  Ownership Limit. See "Description of Common Stock --
Restrictions on Ownership."  Stockholders should be aware that events other than
a purchase or other transfer of Preferred  Stock may result in ownership,  under
the applicable  attribution  rules of the Code, of Preferred  Stock in excess of
the Constructive  Ownership  Limit.  Stockholders are urged to consult their own
tax advisors  concerning the application of the attribution rules of the Code in
their particular circumstances.

                                      -25-

     The  Certificate  of  Incorporation  provides  that a transfer of shares of
Preferred Stock that would otherwise  result in ownership,  under the applicable
attribution  rules of the Code,  of Preferred  Stock in excess of the  Preferred
Stock Beneficial  Ownership Limit or the Constructive  Ownership Limit, or which
would cause the shares of capital stock of the Company to be beneficially  owned
by fewer than 100 persons,  will be null and void and the  purported  transferee
will  acquire  no  rights or  economic  interest  in such  Preferred  Stock.  In
addition,  Preferred Stock that would  otherwise be owned,  under the applicable
attribution  rules of the  Code,  in excess of the  Preferred  Stock  Beneficial
Ownership  Limit  or the  Constructive  Ownership  Limit  will be  automatically
exchanged for shares of Excess Stock that will be  transferred,  by operation of
law,  to the  Company  as  trustee  of a trust for the  exclusive  benefit  of a
beneficiary designated by the purported transferee or purported Holder. While so
held in trust,  the  trustee  shall vote the shares of Excess  Stock in the same
proportion as the Holders of the Common Stock and Preferred Stock, respectively,
shall vote and such shares of Excess  Stock are not entitled to  participate  in
any  dividends  or  distributions   made  by  the  Company.   Any  dividends  or
distributions  received by the purported transferee or other purported Holder of
such  Excess  Stock  prior to the  discovery  by the  Company  of the  automatic
exchange for shares of Excess Stock shall be repaid to the Company upon demand.

     If the  purported  transferee  or  purported  Holder  elects to designate a
beneficiary of an interest in the trust with respect to such Excess Stock,  only
a person  whose  ownership  of the shares will not violate the  Preferred  Stock
Beneficial   Ownership  Limit  or  the  Constructive   Ownership  Limit  may  be
designated,  at which  time the  shares of Excess  Stock  will be  automatically
exchanged for shares of Preferred Stock of the same class as the Preferred Stock
which were  originally  exchanged  for such Excess  Stock.  The  Certificate  of
Incorporation   contains  provisions  designed  to  ensure  that  the  purported
transferee  or other  purported  Holder of the Excess  Stock may not  receive in
return for such a transfer  an amount  that  reflects  any  appreciation  in the
shares of Preferred  Stock for which such shares of Excess Stock were  exchanged
during the period that such  shares of Excess  Stock were  outstanding  but will
bear the burden of any decline in value during such period.  Any amount received
by  a  purported   transferee  or  other  purported  Holder  for  designating  a
beneficiary in excess of the amount permitted to be received must be turned over
to the Company.  The Certificate of Incorporation  provides that the Company may
purchase any shares of Excess Stock that have been  automatically  exchanged for
shares of  Preferred  Stock as a result of a purported  transfer or other event.
The price at which the Company may purchase  such Excess Stock shall be equal to
the  lesser  of (i) in the case of  shares  of  Excess  Stock  resulting  from a
purported transfer for value, the price per share in the purported transfer that
resulted in the automatic exchange for shares of Excess Stock or, in the case of
Excess Stock resulting from some other event,  the market price of the shares of
Preferred  Stock  exchanged on the date of the automatic  exchange for shares of
Excess  Stock  and (ii)  the  market  price of the  shares  of  Preferred  Stock
exchanged  for such shares of Excess Stock on the date that the Company  accepts
the deemed offer to sell such Excess Stock.  The Company's  purchase  right with
respect to Excess Stock shall exist for 90 days,  beginning on the date that the
automatic  exchange for shares of Excess  Stock  occurred or, if the Company did
not receive a notice  concerning  the  purported  transfer  that resulted in the
automatic  exchange  for  shares  of Excess  Stocks,  the date that the Board of
Directors  determines  in good  faith  that an  exchange  for  Excess  Stock has
occurred.

     The Board of Directors may in its discretion  exempt  certain  persons from
the Preferred Stock  Beneficial  Ownership Limit or the  Constructive  Ownership
Limit if evidence  satisfactory  to the Board of Directors is presented  showing
that such exemption will not jeopardize the Company's status as a REIT under the
Code.  As a condition of such  exemption,  the Board of Directors  may require a
ruling  from  the  Internal   Revenue  Service  and/or  an  opinion  of  counsel
satisfactory to it and/or  representations  and undertakings  from the applicant
with respect to preserving the REIT status of the Company.

     The Board of  Directors  may,  at any time,  determine  that the  foregoing
restrictions on ownership and transfer shall no longer apply.

     Sections  382 and 383 of the  Internal  Revenue  Code of 1986,  as amended,
impose  limitations  upon the utilization of a corporation's  net operating loss
and credit carryforwards and certain other tax attributes, following significant
changes in the corporation's stock ownership. In order to preserve the Company's
ability to use its net operating loss

                                      -26-

carryforwards  to reduce its taxable income,  the  Certificate of  Incorporation
also contains,  and the  Certificate of Designation for each series of Preferred
Stock may contain,  additional provisions restricting the ownership of Preferred
Stock (the  "Section 382  Ownership  Restrictions").  The Section 382  Ownership
Restrictions merely reduce the risk of certain occurrences that could cause such
a limitation  to arise.  It is still  possible  that,  due to transfers  (either
directly or indirectly) of the Company's  outstanding  shares, the Company could
become subject to a limitation under Sections 382 and 383.

     The Certificate of Incorporation  provides, in general, that subject to the
exceptions described in the next paragraph,  no person may acquire shares of the
Company  (or options or  warrants  to acquire  such  shares) if as a result such
person (or another  person to which such shares were  attributed  under  certain
complex  attribution  rules,  which differ in certain  respects  from those that
apply for purposes of the  Preferred  Stock  Beneficial  Ownership  Limit or the
Constructive  Ownership  Limit)  would own,  directly or under such  attribution
rules, 5% or more of the class of such  outstanding  shares  (hereinafter,  such
person's  "Ownership  Interest  Percentage").   In  addition,   subject  to  the
exceptions  described in the next paragraph,  no person whose Ownership Interest
Percentage  of a class of shares  exceeds 5% can acquire or transfer such shares
(or options or warrants to acquire  such  shares).  The  foregoing  restrictions
apply independently to each class of the Company's outstanding stock.

     The foregoing  restrictions do not apply to (i)  acquisitions and transfers
of Common Stock by certain  persons (or affiliates of persons),  whose Ownership
Interest  Percentage of Common Stock on September 21, 1993 was 5% or more,  (ii)
transfers  of shares  pursuant  to an  offering  by the  Company,  to the extent
determined  by the Board of  Directors,  and  (iii)  other  transfers  of shares
specifically approved by the Company's Board of Directors.

     Transfers  of shares,  options or warrants in  violation of the Section 382
Ownership Restrictions would be void, and the transferee would acquire no rights
in such shares,  options or warrants.  Thus, a purported  acquiror would have no
right to vote such shares or to receive dividends.  Moreover, upon demand by the
Company, a purported  acquiror of shares,  options or warrants would be required
to transfer them to an agent  designated by the Company.  The agent,  generally,
would sell such shares,  options or warrants,  remit the proceeds thereof to the
purported acquiror to the extent of such person's purchase price for such shares
and, to the extent possible,  remit the balance of the proceeds to such person's
transferor.  A similar  procedure would be applied to any dividends paid to, and
to the proceeds of any resale of shares,  options or warrants by, the  purported
acquiror.

     The Board of  Directors  has the  authority to designate a date as of which
the Section 382 Ownership Restrictions will no longer apply.

     All certificates  representing shares of Preferred Stock will bear a legend
referring to the restrictions described above.

     All persons who own,  directly or by virtue of the  applicable  attribution
rules of the Code, more than 2% of the outstanding Preferred Stock of any series
must give a written notice to the Company  containing the information  specified
in the  Certificate  of  Incorporation  by January 30 of each year. In addition,
each  stockholder  shall upon demand be required to disclose to the Company such
information as the Company may request, in good faith, in order to determine the
Company's  status as a REIT or to comply with Treasury  Regulations  promulgated
under the REIT provisions of the Code.

Depositary Shares

     The description set forth below and in any Prospectus Supplement of certain
provisions of the Deposit  Agreement and of the Depositary Shares and Depositary
Receipts  (each as defined below) does not purport to be complete and is subject
to and qualified in its entirety by reference to the forms of Deposit  Agreement
and  Depositary  Receipts  relating to each series of the Preferred  Stock which
have been or will be filed  with the  Commission  at or prior to the time of the
offering of such series of the Preferred  Stock. If so indicated in a Prospectus
Supplement,  the terms of any series of  Depositary  Shares may differ  from the
terms set forth herein.

                                      -27-

     General

     The Company  may, at its option,  elect to offer  receipts  for  fractional
interests  ("Depositary  Shares") in shares of Preferred Stock, rather than full
shares of Preferred Stock. In such event, receipts  ("Depositary  Receipts") for
Depositary  Shares,  each of which will represent a fraction (to be set forth in
the Prospectus Supplement relating to a particular series of Preferred Stock) of
a share of a particular  series of Preferred Stock,  will be issued as described
below.

     The shares of any  series of  Preferred  Stock  represented  by  Depositary
Shares will be deposited  under a Deposit  Agreement  (the "Deposit  Agreement")
between the Company and the depositary (the "Depositary").  Subject to the terms
of the Deposit Agreement,  each owner of a Depositary Share will be entitled, in
proportion to the applicable  fraction of a share of Preferred Stock represented
by such  Depositary  Share,  to all the rights and  preferences of the Preferred
Stock represented thereby (including dividend, voting, redemption,  subscription
and liquidation rights).

     Dividends and Other Distributions

     The   Depositary   will   distribute  all  cash  dividends  or  other  cash
distributions  received in respect of the Preferred  Stock to the record Holders
of Depositary Shares relating to such shares of Preferred Stock in proportion to
the numbers of such Depositary Shares owned by such Holders.

     In the event of a  distribution  other than in cash,  the  Depositary  will
distribute property received by it to the record Holders of Depositary Shares in
an equitable manner, unless the Depositary determines that it is not feasible to
make such distribution,  in which case the Depositary may sell such property and
distribute the net proceeds from such sale to such Holders.

     Withdrawal of Preferred Stock

     Upon surrender of Depositary  Receipts at the corporate trust office of the
Depositary (unless the related Depositary Shares have previously been called for
redemption or converted  into Excess Shares or otherwise),  the holders  thereof
will be entitled to delivery at such office,  to or upon such holder's order, of
the  number of whole or  fractional  shares of the class or series of  Preferred
Shares and any money or other  property  represented  by the  Depositary  Shares
evidenced by such Depositary  Receipts.  Holders of Depository  Receipts will be
entitled to receive whole or fractional shares of the related class or series of
Preferred Shares on the basis of the proportion of Preferred Shares  represented
by each Depositary Share as specified in the applicable  Prospectus  Supplement,
but holders of such Preferred  Shares will not thereafter be entitled to receive
Depositary Shares thereof.  If the Depositary  Receipts  delivered by the holder
evidence a number of  Depositary  Shares in excess of the  number of  Depositary
Shares  representing  the number of shares of Preferred  Shares to be withdrawn,
the  Depositary  will  deliver to such holder at the same time a new  Depositary
Receipt evidencing such excess number of Depositary Shares.

     Redemption of Depositary Shares

     If a series of Preferred Stock  represented by Depositary Shares is subject
to redemption, the Depositary Shares will be redeemed from the proceeds received
by the Depositary  resulting from the  redemption,  in whole or in part, of such
series of  Preferred  Stock held by the  Depositary.  The  redemption  price per
Depositary  Share will be equal to the  applicable  fraction  of the  redemption
price per share  payable  with  respect to such series of the  Preferred  Stock.
Whenever the Company  redeems shares of Preferred  Stock held by the Depositary,
the  Depositary  will  redeem  as of the  same  redemption  date the  number  of
Depositary  Shares  representing  the shares of Preferred Stock so redeemed.  If
fewer than all the Depositary  Shares are to be redeemed,  the Depositary Shares
to be  redeemed  will be  selected  by lot,  pro rata or by any other  equitable
method as may be determined by the Depositary.

                                      -28-

     Voting the Preferred Stock

     Upon receipt of notice of any meeting at which the Holders of the Preferred
Stock are entitled to vote, the Depositary will mail the  information  contained
in such  notices  of meeting to the  record  Holders  of the  Depositary  Shares
relating to such Preferred Stock.  Each record Holder of such Depositary  Shares
on the  record  date  (which  will be the same date as the  record  date for the
Preferred  Stock) will be entitled to instruct the Depositary as to the exercise
of the voting rights pertaining to the amount of the Preferred Stock represented
by such Holder's  Depositary  Shares.  The Depositary will endeavor,  insofar as
practicable,  to vote the  amount of the  Preferred  Stock  represented  by such
Depositary  Shares in accordance  with such  instructions,  and the Company will
agree to take  all  reasonable  action  which  may be  deemed  necessary  by the
Depositary  in order to enable  the  Depositary  to do so. The  Depositary  will
abstain  from  voting  the  Preferred  Stock to the  extent it does not  receive
specific  instructions  from the Holder of Depositary  Shares  representing such
Preferred Stock.

     Amendment and Termination of the Deposit Agreement

     The form of Depositary  Receipt  evidencing the  Depositary  Shares and any
provision  of the  Deposit  Agreement  may at any time be amended  by  agreement
between the Company and the Depositary.  However, any amendment which materially
and adversely alters the rights of the Holders of Depositary  Shares will not be
effective  unless such  amendment has been approved by the Holders of at least a
majority of the Depositary Shares then  outstanding.  The Deposit Agreement will
only terminate if (i) all  outstanding  Depositary  Shares have been redeemed or
(ii) there has been a final  distribution  in respect of the Preferred  Stock in
connection  with any  liquidation,  dissolution or winding up of the Company and
such distribution has been distributed to the Holders of the related  Depositary
Shares.

     Charges of Depositary

     The Company will pay all transfer and other taxes and governmental  charges
arising  solely from the existence of the depositary  arrangements.  The Company
will pay charges of the Depositary in connection with the initial deposit of the
Preferred  Stock  and  issuance  of  Depositary  Receipts,  all  withdrawals  of
Preferred  Stock by  owners  of  Depositary  Shares  and any  redemption  of the
Preferred  Stock.  Holders of Depositary  Receipts  will pay other  transfer and
other taxes and  governmental  charges and such other  charges as are  expressly
provided in the Deposit Agreement to be for their accounts.

     Resignation and Removal of Depositary

     The  Depositary  may resign at any time by delivering to the Company notice
of its election to do so, and the Company may at any time remove the Depositary,
any such  resignation  or  removal  to take  effect  upon the  appointment  of a
successor  Depositary  and its  acceptance of such  appointment.  Such successor
Depositary  must be  appointed  within 60 days after  delivery  of the notice of
resignation  or removal and must be a bank or trust company having its principal
office in the United  States and having a  combined  capital  and  surplus of at
least $50,000,000.

     Restrictions on Ownership

     In order to  safeguard  the  Company  against an  inadvertent  loss of REIT
status,  the Deposit Agreement will contain  provisions  similar to those in the
Certificate  of   Incorporation   restricting  the  ownership  and  transfer  of
Depositary Shares.
Such restrictions will be described in the applicable Prospectus Supplement.

     Miscellaneous

     The Depositary will forward all reports and communications from the Company
which are  delivered  to the  Depositary  and which the  Company is  required or
otherwise determines to furnish to the Holders of the Preferred Stock.

                                      -29-

     Neither the Depositary nor the Company will be liable if it is prevented or
delayed  by law  or any  circumstance  beyond  its  control  in  performing  its
obligations under the Deposit Agreement.  The obligations of the Company and the
Depositary  under the Deposit  Agreement  will be limited to performance in good
faith of their duties  thereunder and they will not be obligated to prosecute or
defend any legal  proceeding  in respect of any  Depositary  Shares or Preferred
Stock unless  satisfactory  indemnity is  furnished.  They may rely upon written
advice of counsel or accountants,  or information provided by persons presenting
Preferred  Stock for  deposit,  Holders of  Depositary  Shares or other  persons
believed to be competent and on documents believed to be genuine.

Description of Common Stock

     As of November 2, 1995,  5,000,850  shares of Common  Stock were issued and
outstanding.  The  Common  Stock of the  Company is listed on the NYSE under the
symbol "ALX".

     The Holders of Common Stock are entitled to receive  dividends when, if and
as declared  by the Board of  Directors  of the  Company  out of assets  legally
available  therefor,  provided that if any shares of Preferred  Stock are at the
time   outstanding,   the  payment  of   dividends  on  Common  Stock  or  other
distributions  (including  purchases  of Common  Stock)  may be  subject  to the
declaration  and  payment  of full  cumulative  dividends,  and the  absence  of
arrearages in any mandatory sinking fund, on outstanding Preferred Stock.

     The Holders of Common  Stock are entitled to one vote for each share on all
matters voted on by stockholders,  including elections of directors. There is no
cumulative voting in the election of directors,  which means that the Holders of
a majority of the  outstanding  Common Stock can elect all of the directors then
standing for election.  The Holders of Common Stock do not have any  conversion,
redemption or preemptive  rights to subscribe to any  securities of the Company.
In the event of the  dissolution,  liquidation  or winding up, Holders of Common
Stock  are  entitled  to  share  ratably  in  any  assets  remaining  after  the
satisfaction in full of the prior rights of creditors,  including holders of the
Company's  indebtedness,   and  the  aggregate  liquidation  preference  of  any
Preferred Stock then outstanding.

     The Common Stock has equal  dividend,  distribution,  liquidation and other
rights,  and  shall  have no  preference,  appraisal  or  exchange  rights.  All
outstanding  shares of Common Stock are, and any shares of Common Stock  offered
by  a  Prospectus   Supplement,   upon   issuance,   will  be,  fully  paid  and
non-assessable.

     The transfer  agent for the Common Stock is Chemical  Bank,  New York,  New
York.

     Restrictions on Ownership

     The  Certificate  of  Incorporation  contains a number of provisions  which
restrict  the  ownership  and  transfer  of shares  and which  are  designed  to
safeguard the Company  against an inadvertent  loss of REIT status.  In order to
prevent any Company  stockholder  from  owning  shares in an amount  which would
cause  more than 50% in value of the  outstanding  shares of the  Company  to be
owned by five or fewer individuals,  the Certificate of Incorporation contains a
limitation that restricts,  with certain  exceptions,  stockholders from owning,
under  the  applicable  attribution  rules of the  Code,  more  than 4.9% of the
outstanding  shares of Common  Stock (the  "Common  Stock  Beneficial  Ownership
Limit"). In certain circumstances,  the Board of Directors may reduce the Common
Stock  Beneficial  Ownership  Limit to as low as 2%,  but only if any person who
would own shares in excess of such new limit could  continue to do so. The Board
of  Directors  has,  subject to certain  conditions  and  limitations,  exempted
Vornado and certain of its affiliates from the Common Stock Beneficial Ownership
Limitation.

     Stockholders  should be aware that  events  other than a purchase  or other
transfer  of  Common  Stock  can  result  in  ownership,  under  the  applicable
attribution  rules of the Code,  of Common  Stock in excess of the Common  Stock
Beneficial  Ownership Limit.  For instance,  if two  stockholders,  each of whom
owns, under the applicable  attribution  rules of the Code 3% of the outstanding
Common Stock, were to marry,  then after their marriage both stockholders  would
own, under the applicable  attribution  rules of the Code, 6% of the outstanding
shares of Common Stock, which is in

                                      -30-

   
excess  of  the  Common  Stock  Beneficial  Ownership  Limit.  Similarly,  if  a
stockholder who owns, under the applicable  attribution rules of the Code, 4% of
the  outstanding  Common Stock were to purchase a 50% interest in a  corporation
which owns 3% of the outstanding  Common Stock,  then the stockholder would own,
under the  applicable  attribution  rules of the Code,  5.5% of the  outstanding
shares of Common Stock. Stockholders are urged to consult their own tax advisers
concerning  the  application  of the  attribution  rules  of the  Code in  their
particular circumstances.

     Under the Code,  rental income received by a REIT from persons in which the
REIT is treated, under the applicable attribution rules of the Code, as owning a
10% or greater  interest does not constitute  qualifying  income for purposes of
the income requirements that REITs must satisfy.  For these purposes,  a REIT is
treated as owning any stock owned, under the applicable attribution rules of the
Code, by a person that owns 10% or more of the value of the  outstanding  shares
of the REIT.  Therefore,  in order to ensure that  rental  income of the Company
will not be treated as nonqualifying  income under the rule described above, and
thus to ensure  that there will not be an  inadvertent  loss of REIT status as a
result  of the  ownership  of  shares of a  tenant,  or a person  that  holds an
interest  in a  tenant,  the  Certificate  of  Incorporation  also  contains  an
ownership  limit that  restricts,  with certain  exceptions,  stockholders  from
owning, under the applicable  attribution rules of the Code (which are different
from those  applicable  with  respect to the Common Stock  Beneficial  Ownership
Limit), more than 9.9% of the outstanding shares of any class (the "Constructive
Ownership Limit").

     Stockholders  should be aware that  events  other than a purchase  or other
transfer of shares can result in  ownership,  under the  applicable  attribution
rules of the Code, of shares in excess of the  Constructive  Ownership Limit. As
the  attribution  rules that apply with  respect to the  Constructive  Ownership
Limit differ from those that apply with  respect to the Common Stock  Beneficial
Ownership  Limit,  the events other than a purchase or other  transfer of shares
which can  result in share  ownership  in excess of the  Constructive  Ownership
Limit can differ from those which can result in share ownership in excess of the
Common Stock Beneficial  Ownership Limit.  Stockholders should consult their own
tax advisers  concerning the application of the attribution rules of the Code in
their particular circumstances.

     The  Certificate  of  Incorporation  provides  that a transfer of shares of
Common Stock that would  otherwise  result in  ownership,  under the  applicable
attribution  rules of the Code,  of Common  Stock in excess of the Common  Stock
Beneficial  Ownership Limit or the Constructive  Ownership Limit, or which would
cause the shares of beneficial  interest of the Company to be beneficially owned
by fewer than 100 persons,  will be null and void and the  purported  transferee
will acquire no rights or economic  interest in such Common Stock.  In addition,
Common Stock that would  otherwise be owned,  under the  applicable  attribution
rules of the Code, in excess of the Common Stock  Beneficial  Ownership Limit or
the Constructive  Ownership Limit will be automatically  exchanged for shares of
Excess  Stock that will be  transferred,  by operation of law, to the Company as
trustee of a trust for the exclusive benefit of a beneficiary  designated by the
purported  transferee or purported  Holder.  While so held in trust, the trustee
shall vote the shares of Excess Stock in the same  proportion  as the Holders of
the Common Stock and Preferred Stock,  respectively,  shall vote and such shares
of  Excess  Stock  are  not  entitled  to   participate   in  any  dividends  or
distributions  made by the Company.  Any dividends or distributions  received by
the purported transferee or other purported Holder of such Excess Stock prior to
the discovery by the Company of the automatic exchange for Excess Stock shall be
repaid to the Company upon demand.

     If the  purported  transferee  or  purported  Holder  elects to designate a
beneficiary of an interest in the trust with respect to such Excess Stock,  only
a person  whose  ownership  of the shares  will not  violate  the  Common  Stock
Beneficial   Ownership  Limit  or  the  Constructive   Ownership  Limit  may  be
designated,  at which  time the  shares of Excess  Stock  will be  automatically
exchanged for shares of Common Stock. The Certificate of Incorporation  contains
provisions  designed to ensure that the purported  transferee or other purported
Holder of shares of Excess  Stock may not  receive in return for such a transfer
an amount that reflects any appreciation in the shares of Common Stock for which
such shares of Excess Stock were exchanged during the period that such shares of
Excess Stock were  outstanding  but will bear the burden of any decline in value
during such  period.  Any amount  received by a  purported  transferee  or other
purported Holder for designating a beneficiary in excess of the amount permitted
to be  received  must  be  turned  over  to  the  Company.  The  Certificate  of
Incorporation  provides that the Company may purchase any shares of Excess Stock
that have been automatically exchanged for shares of Common Stock as a result of
a purported transfer or other event. The

                                      -31-

price at which the Company may purchase  such Excess Stock shall be equal to the
lesser of (i) in the case of Excess Stock  resulting  from a purported  transfer
for value,  the price per share in the  purported  transfer that resulted in the
automatic  exchange for Excess  Stock or, in the case of Excess Stock  resulting
from some other event,  the market  price of the Common  Stock  exchanged on the
date of the automatic exchange for Excess Stock and (ii) the market price of the
Common  Stock  exchanged  for such  Excess  Stock on the date  that the  Company
accepts the deemed offer to sell such Excess Stock. The Company's purchase right
with respect to Excess Stock shall exist for 90 days, beginning on the date that
the  automatic  exchange for shares of Excess Stock  occurred or, if the Company
did not receive a notice concerning the purported  transfer that resulted in the
automatic  exchange  for  shares  of  Excess  Stock,  the date that the Board of
Directors  determines  in good  faith  that an  exchange  for  Excess  Stock has
occurred.

     The Board of Directors of the Company may in its discretion  exempt certain
persons from the Common Stock  Beneficial  Ownership  Limit or the  Constructive
Ownership Limit, if evidence satisfactory to the Board of Directors is presented
showing that such exemption  will not jeopardize the Company's  status as a REIT
under the Code.  As a condition of such  exemption,  the Board of Directors  may
require a ruling from the Internal  Revenue Service and/or an opinion of counsel
satisfactory to it and/or  representations  and undertakings  from the applicant
with respect to preserving the REIT status of the Company.

     The Board of Directors has, subject to certain  conditions and limitations,
exempted  Vornado and certain of its affiliates from the Common Stock Beneficial
Ownership  Limitation.  As a result,  it is  unlikely as  practical  matter that
another Holder of Common Stock could obtain an exemption.

     The Board of  Directors  may,  at any time,  determine  that the  foregoing
restrictions on ownership and transfer shall no longer apply.

     Sections  382 and 383 of the  Internal  Revenue  Code of 1986,  as amended,
impose  limitations  upon the utilization of a corporation's  net operating loss
and credit carryforwards and certain other tax attributes, following significant
changes in the corporation's stock ownership. In order to preserve the Company's
ability  to use its net  operating  loss  carryforwards  to reduce  its  taxable
income,  the Certificate of Incorporation  also contains  additional  provisions
restricting the ownership of the Company's  outstanding shares (the "Section 382
Ownership  Restrictions").  The Section 382 Ownership Restrictions merely reduce
the risk of certain  occurrences that could cause such a limitation to arise. It
is still possible that, due to transfers  (either directly or indirectly) of the
Company's  outstanding  shares, the Company could become subject to a limitation
under Sections 382 and 383.

     The Certificate of Incorporation  provides, in general, that subject to the
exceptions described in the next paragraph,  no person may acquire shares of the
Company  (or options or  warrants  to acquire  such  shares) if as a result such
person (or another  person to which such shares were  attributed  under  certain
complex  attribution  rules,  which differ in certain  respects  from those that
apply  for  purposes  of the  Common  Stock  Beneficial  Ownership  Limit or the
Constructive  Ownership  Limit)  would own,  directly or under such  attribution
rules, 5% or more of the class of such  outstanding  shares  (hereinafter,  such
person's  "Ownership  Interest  Percentage").   In  addition,   subject  to  the
exceptions  described in the next paragraph,  no person whose Ownership Interest
Percentage  of a class of shares  exceeds 5% can acquire or transfer such shares
(or options or warrants to acquire  such  shares).  The  foregoing  restrictions
apply independently to each class of the Company's outstanding stock.

     The foregoing  restrictions do not apply to (i)  acquisitions and transfers
of shares of Common Stock by certain  persons (or affiliates of persons),  whose
Ownership  Interest  Percentage  of Common Stock on September 21, 1993 was 5% or
more,  (ii) transfers of shares  pursuant to an offering by the Company,  to the
extent determined by the Board of Directors, and (iii) other transfers of shares
specifically approved by the Company's Board of Directors.

     Transfers  of shares,  options or warrants in  violation of the Section 382
Ownership Restrictions would be void, and the transferee would acquire no rights
in such shares,  options or warrants.  Thus, a purported  acquiror would have no
right to vote such shares or to receive dividends.  Moreover, upon demand by the
Company, a purported acquiror of

                                      -32-

shares,  options or warrants  would be  required  to  transfer  them to an agent
designated by the Company. The agent, generally, would sell such shares, options
or warrants,  remit the proceeds thereof to the purported acquiror to the extent
of such  person's  purchase  price for such shares and, to the extent  possible,
remit  the  balance  of the  proceeds  to such  person's  transferor.  A similar
procedure  would be applied to any dividends paid to, and to the proceeds of any
resale of shares, options or warrants by, the purported acquiror.

     The Board of  Directors  has the  authority to designate a date as of which
the Section 382 Ownership Restrictions will no longer apply.

     All persons who own,  directly or by virtue of the  applicable  attribution
rules of the Code,  more than 2% of the shares of outstanding  Common Stock must
give a written notice to the Company containing the information specified in the
Certificate  of  Incorporation  by January 31 of each year.  In  addition,  each
stockholder  shall upon demand be  required  to  disclose  to the  Company  such
information as the Company may request, in good faith, in order to determine the
Company's  status as a REIT or to comply with Treasury  Regulations  promulgated
under the REIT provisions of the Code.

     The  ownership   restrictions  described  above  may  have  the  effect  of
precluding acquisition of control of the Company.

                          DESCRIPTION OF DEBT WARRANTS

     The Company may issue Debt  Warrants to  purchase  Debt  Securities  ("Debt
Warrants").  Debt Warrants may be issued independently or together with any Debt
Securities  and may be attached to or separate  from such Debt  Securities.  The
Debt  Warrants  are to be  issued  under  warrant  agreements  (each a  "Warrant
Agreement")  to be entered into between the Company and a bank or trust company,
as  warrant  agent  (the  "Warrant  Agent"),  all as shall  be set  forth in the
Prospectus  Supplement relating to Debt Warrants being offered pursuant thereto.
If so indicated in a Prospectus  Supplement,  the terms of any Debt Warrants may
differ from the terms set forth below.

     The  applicable  Prospectus  Supplement  will  describe  the  terms of Debt
Warrants offered thereby,  the Warrant Agreement  relating to such Debt Warrants
and the debt warrant certificates representing such Debt Warrants, including the
following: (1) the title of such Debt Warrants; (2) the aggregate number of such
Debt  Warrants;  (3) the  price or prices at which  such Debt  Warrants  will be
issued  and the  procedures  for  adjusting  such  price;  (4) the  currency  or
currencies, including composite currencies or currency units, in which the price
of such Debt Warrants may be payable;  (5) the designation,  aggregate principal
amount and terms of the Debt Securities  purchasable  upon exercise of such Debt
Warrants,  and the procedures  and  conditions  relating to the exercise of such
Debt Warrants; (6) the designation and terms of any related Debt Securities with
which such Debt Warrants are issued, and the number of such Debt Warrants issued
with  each  such  Debt  Security;  (7) the  currency  or  currencies,  including
composite  currencies or currency  units, in which the principal of (or premium,
if any), or interest,  if any, on the Debt Securities  purchasable upon exercise
of such Debt Warrants will be payable;  (8) the date, if any, on and after which
such  Debt  Warrants  and  the  related  Debt   Securities  will  be  separately
transferable;  (9) the  principal  amount of Debt  Securities  purchasable  upon
exercise  of each  Debt  Warrant,  and the  price  at  which  and the  currency,
including composite currency or currency unit, in which such principal amount of
Debt Securities may be purchased upon such exercise;  (10) the date on which the
right to exercise such Debt Warrants shall commence,  and the date on which such
right shall  expire;  (11) the maximum or minimum  number of such Debt  Warrants
which may be exercised at any time; (12) a discussion of material federal income
tax  considerations,  if any; and (13) any other terms of such Debt Warrants and
terms,  procedures  and  limitations  relating  to the  exercise  of  such  Debt
Warrants.

     Debt  warrant  certificates  will  be  exchangeable  for new  debt  warrant
certificates  of different  denominations  and Debt Warrants may be exercised at
the corporate trust office of the Warrant Agent or any other office indicated in
the Prospectus Supplement. Prior to the exercise of their Debt Warrants, Holders
of Debt Warrants will not have any of

                                      -33-

the rights of Holders of the Debt Securities  purchasable upon such exercise and
will not be  entitled  to  payments  of  principal  of (or  premium,  if any) or
interest, if any, on the Debt Securities purchasable upon such exercise.

Exercise of Debt Warrants

     Each Debt  Warrant will entitle the Holder of such Debt Warrant to purchase
for cash such  principal  amount of Debt  Securities at such  exercise  price as
shall in each  case be set forth in,  or be  determinable  as set forth in,  the
Prospectus  Supplement  relating  to the Debt  Warrants  offered  thereby.  Debt
Warrants  may be  exercised  at any  time up to the  close  of  business  on the
expiration  date set forth in the  Prospectus  Supplement  relating  to the Debt
Warrants  offered  thereby.  After the close of business on the expiration date,
unexercised Debt Warrants will become void.

     Debt  Warrants may be exercised as set forth in the  Prospectus  Supplement
relating to the Debt Warrants offered  thereby.  Upon receipt of payment and the
warrant certificate  properly completed and duly executed at the corporate trust
office of the Warrant  Agent or any other  office  indicated  in the  Prospectus
Supplement,  the  Company  will,  as  soon  as  practicable,  forward  the  Debt
Securities purchasable upon such exercise. If less than all of the Debt Warrants
represented by such warrant certificate are exercised, a new warrant certificate
will be issued for the remaining Debt Warrants.

                    CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

     The  following is a summary of the taxation of the Company and the material
federal income tax consequences to Holders of the Securities. The summary of the
material  federal income tax  consequences to Holders of the Securities is based
upon the  opinion  of  Shearman &  Sterling,  counsel  to the  Company.  The tax
treatment  of a Holder of  Securities  will  vary  depending  upon the  Holder's
particular  situation,  and this  discussion  addresses  only  Holders that hold
Securities  as capital  assets and does not  purport to deal with all aspects of
taxation that may be relevant to particular  Holders in light of their  personal
investment  or tax  circumstances,  or to certain  types of  Holders  (including
dealers in securities  or  currencies,  banks,  tax-exempt  organizations,  life
insurance  companies,  persons that hold Securities that are a hedge or that are
hedged  against  currency  risks or that are part of a  straddle  or  conversion
transaction)  subject to special  treatment  under the federal  income tax laws.
This  summary  is based on the  Code,  its  legislative  history,  existing  and
proposed regulations thereunder,  published rulings and court decisions,  all as
currently  in  effect  and all  subject  to change  at any  time,  perhaps  with
retroactive effect.

INVESTORS  ARE URGED TO  CONSULT  WITH  THEIR  OWN TAX  ADVISORS  REGARDING  THE
SPECIFIC TAX  CONSEQUENCES  TO THEM OF THE  ACQUISITION,  OWNERSHIP  AND SALE OF
SECURITIES,  INCLUDING THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF
SUCH  ACQUISITION,  OWNERSHIP  AND SALE IN THEIR  PARTICULAR  CIRCUMSTANCES  AND
POTENTIAL CHANGES IN APPLICABLE LAWS.

Taxation of the Company as a REIT

     General

     The Company believes that, commencing with its taxable year ending December
31, 1995, it has been  organized and has operated in such a manner as to qualify
for taxation as a REIT under  Sections 856 through 860 of the Code.  The Company
intends  to  continue  to  qualify to be taxed as a REIT,  but no  assurance  of
continued qualification can be given.

     The  sections  of the Code  applicable  to REITs are highly  technical  and
complex. The material aspects thereof are summarized below.

                                      -34-

     As a REIT, the Company  generally will not be subject to federal  corporate
income taxes on its net income that is currently  distributed  to  stockholders.
This treatment substantially  eliminates the "double taxation" (at the corporate
and  stockholder  levels) that  generally  results from  investment in a regular
corporation.  However,  the  Company  will be subject  to federal  income tax as
follows.  First,  the Company  will be taxed at regular  corporate  rates on any
undistributed   real  estate   investment   trust  taxable   income,   including
undistributed  net capital  gains.  Second,  under  certain  circumstances,  the
Company  may be subject  to the  "alternative  minimum  tax" on its items of tax
preference.  Third,  if the  Company  has (i) net income  from the sale or other
disposition  of  "foreclosure  property"  which  is held  primarily  for sale to
customers in the ordinary course of business or (ii) other non-qualifying income
from foreclosure  property,  it will be subject to tax at the highest  corporate
rate on such  income.  Fourth,  if the Company  has net income from  "prohibited
transactions"  (which are, in general,  certain sales or other  dispositions  of
property,  other than foreclosure property, held primarily for sale to customers
in the ordinary course of business),  such income will be subject to a 100% tax.
Fifth,  if the Company  should fail to satisfy the 75% gross  income test or the
95% gross income test (as discussed below),  but has nonetheless  maintained its
qualification  as a REIT because  certain other  requirements  have been met, it
will be  subject  to a 100%  tax on an  amount  equal  to (a) the  gross  income
attributable  to the greater of the amount by which the Company fails the 75% or
95% test,  multiplied  by (b) a  fraction  intended  to  reflect  the  Company's
profitability.  Sixth,  if the  Company  should fail to  distribute  during each
calendar  year at least the sum of (i) 85% of its real estate  investment  trust
ordinary  income for such year,  (ii) 95% of its real  estate  investment  trust
capital  gain net  income  for such year,  and (iii) any  undistributed  taxable
income from prior  periods,  the Company  would be subject to a 4% excise tax on
the excess of such required  distribution over the amounts actually distributed.
Seventh,  if during the 10-year period (the "Recognition  Period")  beginning on
the first day of the first  taxable  year for which the Company  qualified  as a
REIT, the Company  recognizes  gain on the  disposition of any asset held by the
Company as of the beginning of the  Recognition  Period,  then, to the extent of
the excess of (a) fair  market  value of such asset as of the  beginning  of the
Recognition Period over (b) the Company's adjusted basis in such asset as of the
beginning of the  Recognition  Period (the "Built-in  Gain"),  such gain will be
subject to tax at the  highest  regular  corporate  rate  pursuant  to  Treasury
regulations that have not been promulgated;  provided, however, that the Company
shall not be subject to tax on  recognized  Built-in Gain with respect to assets
held as of the  first  day of the  Recognition  Period  to the  extent  that the
aggregate  amount of such  recognized  Built-in  Gain exceeds the net  aggregate
amount  of the  Company's  unrealized  Built-in  Gain as of the first day of the
Recognition  Period.  Eighth,  if  the  Company  acquires  any  asset  from  a C
corporation (i.e.,  generally a corporation subject to full corporate-level tax)
in  certain  transactions  in which  the  basis of the asset in the hands of the
Company  is  determined  by  reference  to the  basis of the asset (or any other
property) in the hands of the C corporation,  and the Company recognizes gain on
the  disposition of such asset during the  Recognition  Period  beginning on the
date on which such asset was  acquired  by the  Company,  then,  pursuant to the
Treasury  regulations  that have not yet been  issued  and to the  extent of the
Built-in Gain, such gain will be subject to tax at the highest regular corporate
rate.

     Requirements for Qualification

     The Code defines a REIT as a corporation, trust or association (1) which is
managed by one or more trustees or directors,  (2) the  beneficial  ownership of
which is evidenced by transferable  shares,  or by transferable  certificates of
beneficial  interest,  (3)  which  would  otherwise  be  taxable  as a  domestic
corporation,  but for Sections 856 through 859 of the Code, (4) which is neither
a financial  institution nor an insurance company subject to certain  provisions
of the  Code,  (5) the  beneficial  ownership  of  which  is held by 100 or more
persons,  (6) during the last half of each  taxable  year,  not more than 50% in
value of the outstanding stock of which is owned, directly or constructively, by
five or fewer  individuals (as defined in the Code to include certain  entities)
and (7) which meets certain other tests,  described below,  regarding the nature
of its income and assets.  The Code provides that  conditions (1) to (4) must be
met during the entire  taxable year and that condition (5) must be met during at
least 335 days of a taxable year of 12 months, or during a proportionate part of
a taxable year of less than 12 months. Conditions (5) and (6) do not apply until
after the first  taxable  year for  which an  election  is made to be taxed as a
REIT.

     The Company  has  satisfied  condition  (5) and  believes  that it has also
satisfied condition (6). In addition, the Company's Certificate of Incorporation
provides for restrictions regarding the ownership and transfer of the Company's

                                      -35-

shares,  which  restrictions are intended to assist the Company in continuing to
satisfy the share  ownership  requirements  described in (5) and (6) above.  The
ownership and transfer restrictions pertaining to the Common Stock are described
above under the headings "Description of Capital Stock--Description of Preferred
Stock--Restrictions on Ownership" and "Description of Capital Stock--Description
of Common Stock-Restrictions on Ownership."

     The Company owns and operates a number of properties  through  wholly-owned
subsidiaries.  Code  Section  856(i)  provides  that a  corporation  which  is a
"qualified REIT subsidiary" shall not be treated as a separate corporation,  and
all  assets,  liabilities,  and  items of  income,  deduction,  and  credit of a
"qualified  REIT  subsidiary"  shall be treated as assets,  liabilities and such
items (as the case may be) of the  REIT.  Thus,  in  applying  the  requirements
described herein,  the Company's  "qualified REIT subsidiaries" will be ignored,
and all assets,  liabilities and items of income,  deduction, and credit of such
subsidiaries will be treated as assets,  liabilities and such items (as the case
may be) of the  Company.  The  Company  believes  that  all of its  wholly-owned
subsidiaries are "qualified REIT subsidiaries."

     In  the  case  of a REIT  that  is a  partner  in a  partnership,  Treasury
regulations  provide that the REIT will be deemed to own its proportionate share
of the assets of the partnership and will be deemed to be entitled to the income
of the partnership attributable to such share. In addition, the character of the
assets and gross income of the partnership will retain the same character in the
hands of the REIT for purposes of Section 856 of the Code,  including satisfying
the gross income tests and the asset tests.  Thus,  the Company's  proportionate
share of the assets, liabilities and items of income of any partnership in which
the  Company is a partner  will be treated as assets,  liabilities  and items of
income of the  Company  for  purposes of  applying  the  requirements  described
herein.

     Income Tests.  In order to maintain  qualification  as a REIT,  the Company
annually must satisfy three gross income  requirements.  First,  at least 75% of
the Company's gross income (excluding gross income from prohibited transactions)
for each taxable year must be derived  directly or indirectly  from  investments
relating to real property or mortgages on real property  (including  "rents from
real  property"--which  term generally includes expenses of the Company that are
paid or reimbursed by tenants--and, in certain circumstances,  interest) or from
certain types of temporary  investments.  Second,  at least 95% of the Company's
gross income  (excluding  gross income from  prohibited  transactions)  for each
taxable year must be derived  from such real  property  investments,  dividends,
interest and gain from the sale or  disposition  of stock or securities (or from
any combination of the foregoing). Third, short-term gain from the sale or other
disposition of stock or securities,  gain from prohibited  transactions and gain
on the sale or other  disposition of real property held for less than four years
(apart from  involuntary  conversions  and sales of  foreclosure  property) must
represent less than 30% of the Company's  gross income  (including  gross income
from prohibited transactions) for each taxable year.

     Rents received by the Company will qualify as "rents from real property" in
satisfying  the gross income  requirements  for a REIT  described  above only if
several conditions are met. First, the amount of rent must not be based in whole
or in part on the income or profits of any person.  However,  an amount received
or  accrued  generally  will not be  excluded  from the terms  "rents  from real
property"  solely by reason of being based on a fixed  percentage or percentages
of receipts or sales.  Second,  the Code  provides  that rents  received  from a
tenant will not qualify as "rents from real  property" in  satisfying  the gross
income tests if the REIT,  directly or under the applicable  attribution  rules,
owns a 10% or greater interest in such tenant (a "Related Party Tenant"). Third,
if rent  attributable to personal  property leased in connection with a lease of
real  property is greater than 15% of the total rent  received  under the lease,
then the portion of rent attributable to such personal property will not qualify
as "rents from real property".  Finally, for rents received to qualify as "rents
from real  property," the REIT generally must not operate or manage the property
or furnish  or render  services  to the  tenants  of such  property,  other than
through  an  independent  contractor  from  whom the REIT  derives  no  revenue;
provided,  however,  that the  Company  is not  required  to use an  independent
contractor  to  perform  certain  services  that  are  "usually  or  customarily
rendered" in connection  with the rental of space for occupancy only and are not
otherwise  considered  "rendered to the occupant" of the  property.  The Company
does not and will not charge rent for any  property to a Related  Party  Tenant,
and the  Company  does not and will not derive  rental  income  attributable  to
personal  property  (other than personal  property leased in connection with the
lease of real  property,  the amount of which is less than 15% of the total rent
received under the lease). The Company does not believe that any of the

                                      -36-

services  that are  performed  for its  tenants  will  cause  its  gross  income
attributable  to  such  tenants  to fail  to be  treated  as  "rents  from  real
property."

     The term  "interest"  generally  does not  include  any amount  received or
accrued  (directly or indirectly) if the determination of such amount depends in
whole or in part on the  income or  profits of any  person.  However,  an amount
received  or accrued  generally  will not be excluded  from the term  "interest"
solely by reason of being based on a fixed percentage or percentages of receipts
or sales.

     If the Company  fails to satisfy one or both of the 75% or 95% gross income
tests for any taxable year, it may nevertheless  qualify as a REIT for such year
if it is entitled to relief under certain  provisions of the Code.  These relief
provisions  will  generally be available if the  Company's  failure to meet such
tests was due to reasonable  cause and not due to willful  neglect,  the Company
attaches a schedule  of the  sources  of its  income to its  federal  income tax
return, and any incorrect  information on the schedule was not due to fraud with
intent to evade  tax.  It is not  possible,  however,  to state  whether  in all
circumstances  the Company  would be  entitled  to the  benefit of these  relief
provisions.  As  discussed  above  under  "--  General,"  even if  these  relief
provisions apply, a tax would be imposed with respect to the excess net income.

     Asset Tests. The Company, at the close of each quarter of its taxable year,
must also satisfy three tests  relating to the nature of its assets.  First,  at
least 75% of the value of the Company's total assets must be represented by real
estate assets (including (i) real estate assets held by the Company's  qualified
REIT  subsidiaries and the Company's  allocable share of real estate assets held
by  partnerships  in which the  Company  owns an  interest,  (ii)  stock or debt
instruments  held for not more than one year  purchased  with the  proceeds of a
stock  offering or long-term  (at least five years) debt offering of the Company
and (iii)  stock  issued by  another  REIT),  cash,  cash  items and  government
securities.  Second,  not more than 25% of the  Company's  total  assets  may be
represented by securities other than those in the 75% asset class. Third, of the
investments  included  in the 25% asset  class,  the  value of any one  issuer's
securities  (other than securities  issued by another REIT) owned by the Company
may not exceed 5% of the value of the Company's total assets and the Company may
not own more than 10% of any one issuer's outstanding voting securities.

     Annual  Distribution  Requirements.  The Company,  in order to qualify as a
REIT, is required to distribute dividends (other than capital gain dividends) to
its  stockholders  in an amount at least  equal to (A) the sum of (i) 95% of the
Company's "real estate investment trust taxable income" (computed without regard
to the dividends paid deduction and the Company's net capital gain) and (ii) 95%
of the net income (after tax), if any, from  foreclosure  property minus (B) the
sum of certain items of non-cash income. In addition, if the Company disposes of
any asset during its Recognition Period, the Company will be required,  pursuant
to Treasury  regulations which have not yet been  promulgated,  to distribute at
least  95%  of  the  Built-in  Gain  (after  tax),  if  any,  recognized  on the
disposition of such asset. Such  distributions  must be paid in the taxable year
to which they relate,  or in the following  taxable year if declared  before the
Company  timely  files its tax return for such year and if paid on or before the
first regular  dividend payment after such  declaration.  To the extent that the
Company does not  distribute all of its net capital gain or distributes at least
95%, but less than 100%, of its "real estate  investment  trust taxable income,"
as adjusted,  it will be subject to tax thereon at regular  ordinary and capital
gain corporate tax rates. Furthermore,  if the Company should fail to distribute
during each calendar year at least the sum of (i) 85% of its ordinary income for
such year,  (ii) 95% of its capital gain net income for such year, and (iii) any
undistributed taxable income from prior periods, the Company would be subject to
a 4% excise tax on the excess of such  required  distribution  over the  amounts
actually  distributed.  The Company  intends to satisfy the annual  distribution
requirements.

     As of December  31,  1994,  the Company had  reported  net  operating  loss
("NOL") carryovers aggregating  approximately $110 million. These NOL carryovers
expire in 2005,  2006,  2007,  2008 and 2009.  Under the Code, the Company's NOL
carryovers  generally  would be available to offset the amount of the  Company's
"real estate  investment  trust taxable income" that otherwise would be required
to be distributed to its stockholders. As a result, until the NOL carryovers are
utilized,  the Company does not expect to be required to pay  dividends  (except
with respect to any recognized Built-in Gain) in order to continue to qualify as
a REIT. However, the NOLs reported on the Company's

                                      -37-

tax returns are not binding on the Internal  Revenue Service (the "IRS") and are
subject to  adjustment  as a result of future IRS  audits of the  Company's  tax
returns.  In addition,  under Section 382 of the Code, the Company's  ability to
use its NOL carryovers  could be limited if,  generally,  there were significant
changes in the ownership of its outstanding stock.

     If the Company is required to make a distribution to its  stockholders,  it
is possible that the Company may not have sufficient cash or other liquid assets
to  meet  the  95%  distribution  requirements  due  to  various  circumstances,
including debt amortization  requirements or timing differences  between (i) the
actual receipt of income and actual payment of deductible  expenses and (ii) the
inclusion of such income and  deduction of such  expenses in arriving at taxable
income of the Company. In the event that such insufficiency  occurs, in order to
meet the 95%  distribution  requirements,  the Company may find it  necessary to
arrange for short-term, or possibly long-term, borrowings or to pay dividends in
the form of taxable stock dividends or subordinated notes.

     Under certain  circumstances,  the Company may be able to rectify a failure
to meet the distribution requirement for a year by paying "deficiency dividends"
to  stockholders  in a  later  year,  which  may be  included  in the  Company's
deduction for dividends paid for the earlier year. Thus, the Company may be able
to avoid being taxed on amounts  distributed as deficiency  dividends;  however,
the  Company  will be  required  to pay  interest  based  upon the amount of any
deduction taken for deficiency dividends.

     Failure to Qualify

     If the Company fails to qualify for taxation as a REIT in any taxable year,
and the relief  provisions  do not  apply,  the  Company  will be subject to tax
(including  any  applicable  alternative  minimum tax) on its taxable  income at
regular corporate rates.  Distributions to stockholders in any year in which the
Company  fails to qualify will not be deductible by the Company nor will they be
required  to be made.  In such event,  to the extent of current and  accumulated
earnings and  profits,  all  distributions  to  stockholders  will be taxable as
ordinary  income  and,  subject to certain  limitations  of the Code,  corporate
distributees  may be  eligible  for the  dividends  received  deduction.  Unless
entitled to relief under specific statutory provisions, the Company will also be
disqualified  from taxation as a REIT for the four taxable  years  following the
year during which qualification was lost. It is not possible to state whether in
all circumstances the Company would be entitled to such statutory relief.

Taxation of Holders of Debt Securities

     As used herein,  the term "U.S.  Holder"  means a holder of a Debt Security
who (for United States federal income tax purposes) is (i) a citizen or resident
of the United States, (ii) a domestic  corporation or (iii) otherwise subject to
United States  federal  income  taxation on a net income basis in respect of the
Debt Security and "U.S. Alien Holder" means a holder of a Debt Security who (for
United States federal income tax purposes) is (i) a nonresident alien individual
or (ii) a foreign  corporation,  partnership  or  estate  or trust  which is not
subject to United States  federal income tax on a net income basis in respect of
income or gain from the Debt Security.

     U.S. Holders

     Payments of Interest. Interest on a Debt Security will be taxable to a U.S.
Holder as ordinary  income at the time it is received or accrued,  depending  on
the holder's method of accounting for tax purposes.

     Purchase,  Sale and Retirement of the Debt Securities.  A U.S. Holder's tax
basis in a Debt Security will generally be its U.S. dollar cost  (including,  in
the case of a Debt  Security  acquired  through the exercise of a Debt  Warrant,
both the cost of the Debt  Warrant  and the amount  paid on exercise of the Debt
Warrant).  A U.S.  Holder will  generally  recognize gain or loss on the sale or
retirement  of a Debt  Security  equal  to the  difference  between  the  amount
realized on the sale or retirement  and the U.S.  Holder's tax basis in the Debt
Security. Except to the extent attributable to accrued but unpaid interest, gain
or loss  recognized on the sale or retirement of a Debt Security will be capital
gain or loss and will be long-term capital gain or loss if the Debt Security was
held for more than one year.

                                      -38-

     U.S. Alien Holders

     This discussion  assumes that the Debt Security is not subject to the rules
of Section  871(h)(4)(A)  of the Code  (relating to interest  payments  that are
determined by reference to the income, profits, changes in the value of property
or other attributes of the debtor or a related party).

     Under present  United States federal income and estate tax law, and subject
to the discussion of backup withholding below:

     (i) payments of principal,  premium (if any) and interest by the Company or
any of its paying agents to any holder of a Debt  Security that is a U.S.  Alien
Holder will not be subject to United States federal  withholding  tax if, in the
case of interest (a) the beneficial owner of the Debt Security does not actually
or  constructively  own 10% or more of the total  combined  voting  power of all
classes of stock of the Company  entitled to vote, (b) the  beneficial  owner of
the Debt Security is not a controlled foreign corporation that is related to the
Company through stock ownership,  and (c) either (A) the beneficial owner of the
Debt Security certifies to the Company or its agent, under penalties of perjury,
that  it is not a U.S.  person  and  provides  its  name  and  address  or (B) a
securities clearing organization, bank or other financial institution that holds
customers'  securities  in the  ordinary  course  of its  trade or  business  (a
"financial institution") and holds the Debt Security certifies to the Company or
its agent under  penalties of perjury that such statement has been received from
the  beneficial  owner by it or by a  financial  institution  between it and the
beneficial owner and furnishes the payor with a copy thereof;

     (ii) a U.S.  Alien Holder of a Debt  Security will not be subject to United
States federal withholding tax on any gain realized on the sale or exchange of a
Debt Security; and

     (iii) a Debt Security  held by an individual  who at death is not a citizen
or resident  of the United  States will not be  includible  in the  individual's
gross estate for purposes of the United States federal estate tax as a result of
the individual's  death if (a) the individual did not actually or constructively
own 10% or more of the total  combined  voting  power of all classes of stock of
the Company  entitled to vote and (b) the income on the Debt Security  would not
have been  effectively  connected  with a United States trade or business of the
individual at the time of the individual's death.

     Information Reporting and Backup Withholding

     U.S. Holders. In general,  information reporting requirements will apply to
payments  of  principal,  any premium and  interest on a Debt  Security  and the
proceeds of the sale of a Debt Security before maturity within the United States
to non-corporate  U.S. Holders,  and "backup  withholding" at a rate of 31% will
apply to such payments if the U.S. Holder fails to provide an accurate  taxpayer
identification  number or to report all  interest and  dividends  required to be
shown on its federal income tax returns.

     U.S. Alien Holders.  Information  reporting and backup withholding will not
apply to  payments  of  principal,  premium  (if any) and  interest  made by the
Company  or a paying  agent to a U.S.  Alien  Holder on a Debt  Security  if the
certification  described in clause (i)(c) under "U.S.  Alien  Holders"  above is
received, provided that the payor does not have actual knowledge that the holder
is a U.S. person.

     Payments of the  proceeds  from the sale by a U.S.  Alien  Holder of a Debt
Security made to or through a foreign  office of a broker will not be subject to
information reporting or backup withholding, except that if the broker is a U.S.
person,  a controlled  foreign  corporation for United States federal income tax
purposes or a foreign  person 50% or more of whose gross  income is  effectively
connected  with a United  States  trade or business  for a specified  three-year
period,  information  reporting  may  apply to such  payments.  Payments  of the
proceeds from the sale of a Debt Security to or through the United States office
of a broker is subject to information  reporting and backup  withholding  unless
the holder or beneficial  owner certifies as to its non-United  States status or
otherwise  establishes  an  exemption  from  information  reporting  and  backup
withholding.

                                      -39-

     The  applicable  Prospectus  Supplement  will contain a  discussion  of any
special United States  federal income tax rules with respect to Debt  Securities
that are  issued at a discount  or  premium or as a unit with other  Securities,
have a maturity of one year or less, provide for conversion  rights,  contingent
payments,  early redemption or payments that are denominated in or determined by
reference  to a currency  other  than the U.S.  dollar or  otherwise  subject to
special United States federal income tax rules.

Taxation of Holders of Debt Warrants

     Sale or Expiration

     Generally,  a holder of a Debt Warrant will recognize gain or loss upon the
sale or other disposition of a Debt Warrant in an amount equal to the difference
between the amount  realized on such sale or other  disposition and the holder's
tax  basis  in the  Debt  Warrant.  A  holder  of a Debt  Warrant  that  expires
unexercised  will  generally  recognize loss in an amount equal to such holder's
tax basis in the Debt  Warrant.  Gain or loss  resulting  from the  sale,  other
disposition  or expiration  of a Debt Warrant will  generally be capital gain or
loss and will be long-term if the Debt Warrant was held for more than one year.

     Exercise

     The exercise of a Debt  Warrant  with cash will not be a taxable  event for
the exercising  holder.  Such holder's basis in the Debt Securities  received on
exercise of the Debt  Warrant  will equal the sum of such  holder's tax basis in
the  exercised  Debt Warrant and the  exercise  price of the Debt  Warrant.  The
holding  period in a Debt  Security  received on exercise of a Debt Warrant will
not include the period during which the Debt Warrant was held.

     The  applicable  Prospectus  Supplement  will contain a  discussion  of any
special  United  States  federal  income tax rules with respect to Debt Warrants
that are issued as a unit with other Securities.

Taxation of Holders of Common Stock or Preferred Stock

     U.S. Stockholders

     As used herein, the term "U.S.  Stockholder" means a holder of Common Stock
or Preferred Stock ("Stock") who (for United States federal income tax purposes)
is  (i) a  citizen  or  resident  of the  United  States,  (ii)  a  corporation,
partnership  or other  entity  created or  organized in or under the laws of the
United States or of any  political  subdivision  thereof,  or (iii) an estate or
trust the income of which is subject to United States  federal  income  taxation
regardless of its source.

     As long as the  Company  qualifies  as a  REIT,  distributions  made by the
Company  out of its  current  or  accumulated  earnings  and  profits  (and  not
designated as capital gain dividends) will constitute  dividends  taxable to its
taxable U.S.  Stockholders as ordinary income.  Such  distributions  will not be
eligible for the  dividends-received  deduction in the case of U.S. Stockholders
that are  corporations.  Distributions  made by the  Company  that are  properly
designated  by the  Company as capital  gain  dividends  will be taxable to U.S.
Stockholders  as long-term  capital gains (to the extent that they do not exceed
the Company's  actual net capital gain for the taxable  year) without  regard to
the period for which a U.S.  Stockholder has held his shares. U.S.  Stockholders
that are corporations  may,  however,  be required to treat up to 20% of certain
capital gain dividends as ordinary income.

     To the extent that the  Company  makes  distributions  (not  designated  as
capital gain  dividends) in excess of its current and  accumulated  earnings and
profits,  such  distributions  will be  treated  first as a  tax-free  return of
capital to each U.S.  Stockholder,  reducing the adjusted  basis which such U.S.
Stockholder  has  in  his  shares  for  tax  purposes  by  the  amount  of  such
distribution  (but not  below  zero),  with  distributions  in  excess of a U.S.
Stockholder's  adjusted basis in his shares  taxable as capital gains  (provided
that the shares have been held as a capital asset).  For purposes of determining
the

                                      -40-

portion of  distributions on separate classes of Stock that will be treated as a
dividends for federal income tax purposes,  current and accumulated earnings and
profits will be allocated to  distributions  resulting  from priority  rights of
Preferred  Stock  before  being  allocated  to  other  distributions.  Dividends
declared  by the  Company in  October,  November,  or  December  of any year and
payable to a stockholder  of record on a specified  date in any such month shall
be  treated as both paid by the  Company  and  received  by the  stockholder  on
December 31 of such year,  provided  that the  dividend is actually  paid by the
Company on or before January 31 of the following calendar year. Stockholders may
not include in their own income tax returns any net operating  losses or capital
losses of the Company.

     Distributions  made by the  Company  and  gain  arising  from  the  sale or
exchange by a U.S. Stockholder of shares of Stock will not be treated as passive
activity income, and, as a result, U.S. Stockholders  generally will not be able
to apply any "passive losses" against such income or gain. Distributions made by
the Company (to the extent they do not constitute a return of capital or capital
gain dividends)  generally will be treated as investment  income for purposes of
computing the investment  interest deduction  limitation.  Gain arising from the
sale or other  disposition of shares of Stock,  however,  will not be treated as
investment income unless the U.S. Stockholder elects to reduce the amount of his
total net capital gain  eligible for the 28% maximum  capital  gains rate by the
amount of such gain with respect to the Stock.

     Upon any sale or other  disposition of shares of Stock, a U.S.  Stockholder
will  recognize  gain or loss for federal income tax purposes in an amount equal
to the  difference  between (i) the amount of cash and the fair market  value of
any property received on such sale or other  disposition,  and (ii) the holder's
adjusted  basis in the shares of Stock for tax purposes.  Such gain or loss will
be capital gain or loss if the shares have been held by the U.S. Stockholders as
a capital asset,  and will be long-term gain or loss if such Stock has been held
for more than one year. In general,  any loss  recognized by a U.S.  Stockholder
upon the sale or other  disposition of shares of the Company that have been held
for six months or less (after  applying  certain  holding  period rules) will be
treated as a long-term capital loss, to the extent of distributions  received by
such U.S.  Stockholder  from the  Company  which were  required to be treated as
long-term capital gains.

     Backup  Withholding.  The Company will report to its U.S.  Stockholders and
the Internal  Revenue  Service  (the "IRS") the amount of dividends  paid during
each calendar  year,  and the amount of tax withheld,  if any.  Under the backup
withholdings  rules, a stockholder  may be subject to backup  withholding at the
rate  of 31%  with  respect  to  dividends  paid  unless  such  holder  (a) is a
corporation or comes within certain other exempt  categories and, when required,
demonstrates  this  fact,  or (b)  provides a  taxpayer  identification  number,
certifies  as to no loss of exemption  from backup  withholding,  and  otherwise
complies with applicable  requirements of the backup  withholding  rules. A U.S.
Stockholder  that  does  not  provide  the  Company  with his  correct  taxpayer
identification  number may also be subject to penalties  imposed by the IRS. Any
amount paid as backup  withholding will be creditable  against the stockholder's
income tax  liability.  In  addition,  the Company may be required to withhold a
portion of capital gain  distributions  to any  stockholders who fail to certify
their non-foreign status to the Company.

     Taxation of Tax-Exempt Stockholders.  Generally, a tax-exempt investor that
is exempt from tax on its investment  income,  such as an individual  retirement
account (IRA) or a 401(k) plan, that holds shares of Stock as an investment will
not be  subject  to tax on  dividends  paid  by the  Company.  However,  if such
tax-exempt  investor is treated as having  purchased  its shares  with  borrowed
funds, some or all of its dividends will be subject to tax.

     Non-U.S. Stockholders

     The rules governing  United States federal income taxation of the ownership
and  dispositions  of shares of Stock by persons  that are, for purposes of such
taxation,   nonresident  alien  individuals,   foreign   corporations,   foreign
partnerships   or   foreign   estates   or   trusts   (collectively,   "Non-U.S.
Stockholders") are complex, and no attempt is made herein to provide more than a
brief summary of such rules.  Accordingly,  the discussion  does not address all
aspects of United States  federal  income  taxation and does not address  state,
local or foreign tax consequences that may be relevant to a Non-U.S. Stockholder
in light of its particular circumstances.  In addition, this discussion is based
on current law, which

                                      -41-

   
is subject to change,  and assumes that the Company  qualifies for taxation as a
REIT. Prospective Non-U.S.  Stockholders are urged to consult with their own tax
advisers to determine the impact of federal, state, local and foreign income tax
laws  with  regard  to  an   investment   in  stock,   including  any  reporting
requirements.

     Distributions.  Distributions by the Company to a Non-U.S. Stockholder that
are  neither  attributable  to gain from sales or  exchanges  by the  Company of
United States real property interests nor designated by the Company as a capital
gains  dividends  will be treated as dividends of ordinary  income to the extent
that they are made out of current or  accumulated  earnings  and  profits of the
Company. Such distributions  ordinarily will be subject to withholding of United
States federal tax on a gross basis (that is,  without  allowance of deductions)
at a 30% rate or such lower rate as may be specified by an applicable income tax
treaty,  unless the  dividends  are treated as  effectively  connected  with the
conduct  by the  Non-U.S.  Stockholder  of a United  States  trade or  business.
Dividends that are  effectively  connected with such a trade or business will be
subject  to tax on a net basis  (that is,  after  allowance  of  deductions)  at
graduated  rates,  in the same  manner as domestic  stockholders  are taxed with
respect to such dividends and are generally not subject to withholding. Any such
dividends  received by a Non-U.S.  Stockholder that is a corporation may also be
subject to an additional  branch profits tax at a 30% rate or such lower rate as
may be specified by an applicable income tax treaty.

     Pursuant to current Treasury regulations, dividends paid to an address in a
country  outside  the  United  States  are  generally  presumed  to be paid to a
resident  of such  country for  purposes of  determining  the  applicability  of
withholding  discussed above and the  applicability  of a tax treaty rate. Under
proposed Treasury  regulations,  which are not currently in effect,  however,  a
Non-U.S.  Stockholder  who wished to claim the benefit of an  applicable  treaty
rate would be required to satisfy certain  certification and other requirements.
Under  certain  treaties,   lower  withholding  rates  generally  applicable  to
dividends do not apply to dividends  from a REIT,  such as the Company.  Certain
certification  and disclosure  requirements  must be satisfied to be exempt from
withholding under the effectively connected income exemption discussed above.

     Distributions  in excess of current or accumulated  earnings and profits of
the  Company  will not be taxable to a Non-U.S.  Stockholder  to the extent that
they do not exceed the adjusted basis of the stockholder's  shares of Stock, but
rather will  reduce the  adjusted  basis of such stock.  To the extent that such
distributions exceed the adjusted basis of a Non-U.S.  Stockholder's stock, they
will give rise to gain from the sale or exchange of his stock, the tax treatment
of which is described below. For withholding  purposes,  the Company is required
to treat all distributions as if made out of current or accumulated earnings and
profits.  However,  amounts thus  withheld  are  generally  refundable  if it is
subsequently  determined  that  such  distribution  was,  in fact,  in excess of
current or accumulated earnings and profits of the Company.

     Distributions to a Non-U.S.  Stockholder that are designated by the Company
at the time of distribution as capital gains dividends (other than those arising
from the disposition of a United States real property  interest)  generally will
not be  subject  to  United  States  federal  income  taxation,  unless  (i) the
investment  in the shares of Stock is  effectively  connected  with the Non-U.S.
Stockholder's  United  States  trade or  business,  in which  case the  Non-U.S.
Stockholder will be subject to the same treatment as domestic  stockholders with
respect to such gain (except that a  stockholder  that is a foreign  corporation
may also be subject to the 30% branch profits tax, as discussed  above), or (ii)
the Non-U.S. Stockholder is a nonresident alien individual who is present in the
United  States for 183 or more days during the taxable year and has a "tax home"
in the United States,  in which case the  nonresident  alien  individual will be
subject to a 30% tax on the individual's capital gains.

     Distributions to a Non-U.S.  Stockholder that are attributable to gain from
sales or exchanges by the Company of United States real property  interests will
cause the Non-U.S.  Stockholder to be treated as recognizing such gain as income
effectively  connected  with  a  United  States  trade  or  business.   Non-U.S.
Stockholders  would  thus  generally  be taxed at the same rates  applicable  to
domestic  stockholders (subject to a special alternative minimum tax in the case
of nonresident  alien  individuals).  The Company is required to withhold 35% of
any  such   distribution.   That  amount  is  creditable  against  the  Non-U.S.
Stockholder's   United  States  federal  income  tax   liability.   Also,   such
distribution  may be  subject  to a 30%  branch  profits  tax in the  hands of a
Non-U.S. Stockholder that is a corporation, as discussed above.

                                      -42-

     Sale of Stock.  Gain recognized by a Non-U.S.  Stockholder upon the sale or
exchange  of shares of Stock  generally  will not be  subject  to United  States
taxation unless the Stock  constitutes a "United States real property  interest"
within the meaning of the Foreign  Investment  in Real  Property Tax Act of 1980
("FIRPTA").  The Stock  will not  constitute  a  "United  States  real  property
interest"  so  long  as the  Company  is a  "domestically  controlled  REIT."  A
"domestically  controlled  REIT"  is a REIT  in  which  at all  times  during  a
specified testing period less than 50% in value of its stock is held directly or
indirectly by Non-U.S.  Stockholders.  Notwithstanding the foregoing,  gain from
the sale or exchange of Stock not otherwise subject to FIRPTA will be taxable to
a  Non-U.S.  Stockholder  (i) if the  investment  in the  Stock  is  effectively
connected with the Non-U.S.  Stockholder's U.S. trade or business, in which case
the  Non-U.S.  Stockholder  will be subject to the same  treatment  as  domestic
stockholders with respect to such gain, or (ii) if the Non-U.S. Stockholder is a
nonresident alien individual who is present in the United States for 183 days or
more during the taxable year and has a "tax home" in the United States, in which
case, the  nonresident  alien  individual will be subject to a 30% United States
withholding tax in the amount of such individual's gain.

     If the  Company  is not or ceases to be a  "domestically-controlled  REIT,"
whether  gain  arising  from the sale or exchange by a Non-U.S.  Stockholder  of
shares of Stock would be subject to United  States  taxation  under  FIRPTA as a
sale of a "United  States  real  property  interest"  will depend on whether the
shares are "regularly traded" (as defined by applicable Treasury regulations) on
an established  securities market (e.g., the New York Stock Exchange) and on the
size of the selling Non-U.S.  Stockholder's  interest in the Company. If gain on
the sale or exchange of shares of Stock was  subject to taxation  under  FIRPTA,
the Non-U.S.  Stockholder  would be subject to regular  United States income tax
with respect to such gain in the same manner as a U.S.  Stockholder  (subject to
any applicable  alternative minimum tax and a special alternative minimum tax in
the case of nonresident alien  individuals) and the purchaser of the Stock would
be required to withhold and remit to the IRS 10% of the purchase price.

     Backup Withholding and Information Reporting. Backup withholding tax (which
generally is a withholding tax imposed at the rate of 31% on certain payments to
persons  that  fail to  furnish  certain  information  under the  United  States
information reporting requirements) and information reporting will generally not
apply to distributions paid to Non-U.S.  Stockholders  outside the United States
that are  treated as (i)  dividends  subject to the 30% (or lower  treaty  rate)
withholding  tax  discussed  above,   (ii)  capital  gains  dividends  or  (iii)
distributions  attributable  to gain from the sale or exchange by the Company of
United States real property interests.  As a general matter,  backup withholding
and information  reporting will not apply to a payment of the proceeds of a sale
of  shares  of Stock  by or  through  a  foreign  office  of a  foreign  broker.
Information  reporting (but not backup  withholding) will apply,  however,  to a
payment of the  proceeds of a sale of Stock by or through a foreign  office of a
broker that (a) is a U.S.  person,  (b) derives 50% or more of its gross  income
for certain periods from the conduct of a trade or business in the United States
or (c) is a "controlled foreign corporation"  (generally,  a foreign corporation
controlled by United States  stockholders)  for United States federal income tax
purposes,  unless the broker has  documentary  evidence in its records  that the
holder is a Non-U.S.  Stockholder  and certain other  conditions are met, or the
stockholder otherwise  establishes an exemption.  Payment to or through a United
States  office  of a broker  of the  proceeds  of a sale of  shares  of Stock is
subject  to  both  backup  withholding  and  information  reporting  unless  the
stockholder  certifies  under  penalties  of perjury that the  stockholder  is a
Non-U.S.   Stockholder,  or  otherwise  establishes  an  exemption.  A  Non-U.S.
Stockholder  may  obtain a refund  of any  amounts  withheld  under  the  backup
withholding rules by filing the appropriate claim for refund with the IRS.

     Estate Tax.  Shares of Stock owned by an individual who is not a citizen or
resident of the United States (as determined for purposes of U.S. federal estate
tax law) at the time of death will generally be includible in such  individual's
gross estate for federal  estate tax purposes  unless an  applicable  estate tax
treaty provides otherwise.

Other Tax Consequences

     The Company and its  stockholders may be subject to state or local taxation
in various  state or local  jurisdictions,  including  those in which it or they
transact  business or reside.  The state and local tax  treatment of the Company
and its  stockholders  may not  conform to the federal  income tax  consequences
discussed above. Consequently, prospective

                                      -43-

   
stockholders are urged to consult their own tax advisors regarding the effect of
state and local tax laws on an investment in the Company.

                              PLAN OF DISTRIBUTION

     The Company may sell the Securities to one or more  underwriters for public
offering and sale by them or may sell the  Securities  to investors  directly or
through agents.  Any such underwriter or agent involved in the offer and sale of
the Securities will be named in the related Prospectus  Supplement.  The Company
has reserved the right to sell the  Securities  directly to investors on its own
behalf in those jurisdictions where it is authorized to do so.

     Underwriters  may offer and sell the  Securities at a fixed price or prices
that may be changed or at negotiated  prices. The Company also may, from time to
time,  authorize dealers,  acting as the Company's agents, to offer and sell the
Securities upon such terms and conditions as set forth in the related Prospectus
Supplement.  In connection  with the sale of the  Securities,  underwriters  may
receive  compensation from the Company in the form of underwriting  discounts or
commissions and may also receive  commissions  from purchasers of the Securities
for whom  they may act as  agent.  Underwriters  may sell the  Securities  to or
through  dealers,  and such  dealers  may  receive  compensation  in the form of
discounts,  concession or commissions from the underwriters  and/or  commissions
(which may be changed from time to time) from the  purchasers  for whom they may
act as agents.

     Any underwriting compensation paid by the Company to underwriters or agents
in  connection  with  the  offering  of  the  Securities,   and  any  discounts,
concessions or commissions  allowed by  underwriters to  participating  dealers,
will be set forth in the  related  Prospectus  Supplement.  Dealers  and  agents
participating  in  the  distribution  of the  Securities  may  be  deemed  to be
underwriters,  and any discounts and commissions received by them and any profit
realized by them on resale of the  Securities  may be deemed to be  underwriting
discounts and commissions  under the Securities Act.  Underwriters,  dealers and
agents may be entitled,  under  agreements  entered  into with the  Company,  to
indemnification  against and  contribution  towards  certain civil  liabilities,
including any liabilities under the Securities Act.

     If so  indicated  in the related  Prospectus  Supplement,  the Company will
authorize  dealers  acting as the  Company's  agents to  solicit  agreements  by
certain  institutions  to purchase the Securities from the Company at the public
offering  price set  forth in the  related  Prospectus  Supplement  pursuant  to
delayed delivery contracts  ("Contracts")  providing for payment and delivery on
the date or dates stated in a Prospectus  Supplement.  Each Contract will be for
an amount specified in the applicable Prospectus Supplement.  Institutions, with
whom  Contracts,  when  authorized,  may be made include  commercial and savings
banks, insurance companies, pension funds, investment companies, educational and
charitable institutions and other institutions, but will in all cases be subject
to the approval of the Company.  Contracts will not be subject to any conditions
except that (i) the  purchase by an  institution  of the  Securities  covered by
Contracts  will not at the time of delivery be prohibited  under the laws of any
jurisdiction in the United States to which such  institution is subject and (ii)
if the Securities are being sold to underwriters, the Company shall have sold to
such underwriters such amount specified in the applicable Prospectus Supplement.

     Any  Securities  issued  hereunder  (other than  Common  Stock) will be new
issues of securities  with no established  trading market.  Any  underwriters or
agents to or through  whom such  Securities  are sold by the  Company for public
offering and sale may make a market in such Securities, but such underwriters or
agents will not be obligated to do so and may discontinue any such market making
at any time without notice. No assurance can be given as to the liquidity of the
trading market for any such Securities.

     Certain of the  underwriters,  dealers or agents and their  associates  may
engage in transactions  with, and perform  services for, the Company and certain
of its affiliates in the ordinary course of business.

                                      -44-

                                     EXPERTS

     The  consolidated   financial   statements  and  the  related  consolidated
financial statement schedules  incorporated in this Prospectus by reference from
the  Company's  Annual  Report on Form 10-K [and Form  10K-A] for the year ended
December  31,  1994 have been  audited  by  Deloitte & Touche  LLP,  independent
auditors,  as stated in their report which expresses an unqualified  opinion and
includes  explanatory  paragraphs  relating  to (i) the  Company's  adoption  of
Statement  of  Financial   Accounting   Standards  No.  106  -  Accounting   for
Postretirement  Benefits  and  (ii)  the  Company's  need to  borrow  to pay its
expenses, is incorporated herein by reference,  and have been so incorporated in
reliance  upon the report of such firm given upon their  authority as experts in
accounting and auditing.

                           VALIDITY OF THE SECURITIES

     The validity of the Securities issued hereunder will be passed upon for the
Company by Shearman & Sterling,  New York, New York, counsel to the Company. The
validity  of any  Securities  issued  hereunder  will  be  passed  upon  for any
underwriters by the counsel named in the applicable Prospectus Supplement.

                                      -45-

                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14.  Other Expenses of Issuance and Distribution.

     The estimated  expenses in connection with the issuance and distribution of
the securities being registered,  other than Underwriting  Compensation,  are as
follows:

SEC registration fee..........................................  $     86,207
Printing and engraving expenses...............................       100,000
Legal fees and disbursements..................................       200,000
Accounting fees and disbursements.............................        60,000
Transfer Agent's, Depositary's and Trustee's fees 
  and disbursements . ........................................        20,000
Blue Sky fees and expenses....................................        67,785
Miscellaneous (including listing fees, if applicable, and
  rating agency fees).........................................        66,008
                                                                ------------

Total                                                           $    600,000
                                                                ============

Item 15.  Indemnification of Directors and Officers.

     Section 145 of the Delaware General  Corporation Law empowers a corporation
to indemnify its directors and officers or former  directors and officers and to
purchase  insurance  with respect to liability  arising out of their capacity or
status as directors and officers under certain circumstances.  Such law provides
further  that the  indemnification  permitted  thereunder  shall  not be  deemed
exclusive  of any other  rights  to which  the  directors  and  officers  may be
entitled under a corporation's Certificate of Incorporation,  By-laws, agreement
or otherwise.

     The  Company's  Certificate  of  Incorporation  provides that the Company's
officers and directors will be  indemnified  to the fullest extent  permitted by
Delaware law. The Company shall be liable to the Company or the stockholders for
monetary  damages for breach of the director's  fiduciary  duty.  Such provision
does  not  limit a  director's  liability  to the  Company  or its  stockholders
resulting  from: (i) any breach of the director's duty of loyalty to the Company
or its  stockholders,  (ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) unlawful payments of
dividends or unlawful  stock  repurchases  or redemptions as provided in section
174 of the Delaware  General  Corporation Law or (iv) any transaction from which
the director derived an improper personal benefit.

     The Company's Certificate of Incorporation  provides that the Company shall
pay the  expenses  incurred  by an  officer  or a  director  of the  Company  in
defending  a civil or  criminal  action,  suit,  or  proceeding  involving  such
person's  acts or  omissions  as an officer or a director of the Company if such
person acted in good faith and in a manner he or she  reasonably  believed to be
in or not opposed to the best interests of the Company or its stockholders  and,
with respect to a criminal action or proceeding, if the person had no reasonable
cause to believe  his or her conduct was  unlawful.  Unless  ordered by a court,
indemnification of an officer shall be made by the Company only as authorized in
a specific case upon the determination  that  indemnification  of the officer or
director  is  proper  under  the  circumstances  because  he or she  has met the
applicable standard of conduct. Such determination shall be made (i) by majority
vote of the directors of the Company who are not parties to the action,  suit or
proceeding,  (ii) by independent legal counsel in a written opinion, or (iii) by
the  stockholders  of the Company.  The Company's  Certificate of  Incorporation
authorizes the Company to pay the expenses  incurred by an officer or a director
in defending a civil or criminal  action,  suit, or proceeding in advance of the
final  disposition  thereof,  upon receipt of an  undertaking by or on behalf of
such person to repay the expenses if it is ultimately determined that the person
is not entitled to be indemnified by the Company.

                                      II-1

     The Company has the power to purchase and  maintain  insurance on behalf of
any person who is or was a director,  officer, employee, or agent of the Company
or is liable as a director of the Company,  or is or was serving, at the request
of  the  Company,  as  a  director,  officer,  employee,  or  agent  of  another
corporation,  partnership, joint venture, trust or other enterprise, against any
liability  asserted  against  him and  incurred  by him in any such  capacity or
arising out of his status as such,  regardless of whether the Company would have
power to indemnify him against such liability.

     The Company has  purchased a policy of directors'  and officers'  insurance
that insures both the Company and its officers and  directors  against  expenses
and  liabilities  of the type  normally  insured  against  under such  policies,
including the expense of the indemnifications described above.

     Pursuant to the form of  Underwriting  Agreement,  to be filed by amendment
hereto  or by  Form  8-K,  the  underwriters  will  agree,  subject  to  certain
conditions, to indemnify the Company, its directors, certain of its officers and
persons  who control the  Company  within the meaning of the  Securities  Act of
1933, as amended (the "Securities Act"), against certain liabilities.

Item 16.  Exhibits.

     Exhibit
     Number                  Description
     ------                  -----------

     1.1**   Form of Underwriting Agreement (for Common Stock)

     1.2**   Form of Underwriting Agreement (for Preferred Stock)

     1.3**   Form of Underwriting Agreement (for Debt Securities)

     3.1*    Amended and Restated Certificate of Incorporation of the Company

     3.2*    By-laws of the Company  (incorporated  by reference to Exhibit 3(B)
             to the  Company's  Annual  Report on Form  10-K,  filed on July 27,
             1991)

     4.1**   Specimen certificate representing Common Stock

     4.2     Form of Indenture for Senior Debt Securities

     4.3     Form of Senior Debt Security (included in Exhibit 4.2)

     4.4     Form of Indenture for Subordinated Debt Securities

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

     4.6**   Form of Deposit Agreement

     4.7**   Form of Depositary Receipt (included in Exhibit 4.6)

     5.1**   Opinion of Shearman & Sterling

     8.1**   [Tax Opinion of Shearman & Sterling]

- --------
*    Filed previously.
**   To be filed by amendment or 8-K.

                                      II-2

   
     12.1*   Statement Regarding  Computation of Consolidated Ratios of Earnings
             to Fixed Charges

     23.1    Consent of Deloitte & Touche LLP

     23.2**  Consent of Shearman & Sterling  (included  in its opinion  filed as
             Exhibit 5.1)

     24.1*   Powers of Attorney (included on signature page)

     25.1    Statement of Eligibility of Senior Trustee on Form T-1

     25.2    Statement of Eligibility of Subordinated Trustee on Form T-1

- -------------
*    Filed previously.
**   To be filed by amendment or 8-K.

Item 17.  Undertakings.

     (a) The undersigned registrant hereby undertakes:

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

         (i)   To include any  prospectus  required  by Section  10(a)(3) of the
               Securities Act of 1933;

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

         (iii) To include any material  information  with respect to the plan of
               distribution   not  previously   disclosed  in  the  registration
               statement  or any  material  change  to such  information  in the
               registration  statement.   Notwithstanding  the  foregoing,   any
               increase  or  decrease  in volume of  securities  offered (if the
               total dollar value of  securities  offered  would not exceed that
               which was  registered) and any deviation from the low or high end
               of the estimated  maximum  offering range may be reflected in the
               form of  prospectus  filed with the  Commission  pursuant to Rule
               424(b)  if, in the  aggregate,  the  changes  in volume and price
               represent  no more  than a 20%  change in the  maximum  aggregate
               offering price set forth in the "Calculation of Registration Fee"
               table in the effective registration statement;

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

     (2) That, for the purpose of determining any liability under the Securities
         Act of 1933, each such post-effective amendment shall be deemed to be a
         new registration  statement relating to the securities offered therein,
         and the offering of such  securities at that time shall be deemed to be
         the initial bona fide offering thereof.

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

                                      II-3

     (b) The  undersigned  registrant  hereby  undertakes  that, for purposes of
determining  any liability  under the Securities Act of 1933, each filing of the
registrant's  annual  report  pursuant to Section  13(a) or Section 15(d) of the
Securities  Exchange  Act of 1934  (and,  where  applicable,  each  filing of an
employee  benefit  plan's  annual  report  pursuant  to  section  15(d)  of  the
Securities  Exchange  Act of 1934)  that is  incorporated  by  reference  in the
registration  statement  shall  be  deemed  to be a new  registration  statement
relating to the securities offered therein,  and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

     (c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors,  officers and controlling  persons of
the  registrant  pursuant  to  the  foregoing  provisions,   or  otherwise,  the
registrant  has been advised that in the opinion of the  Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore,  unenforceable. In the event that a claim for indemnification
against such  liabilities  (other than the payment by the registrant of expenses
incurred or paid by a director,  officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director,  officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been  settled by  controlling  precedent,  submit to a court of  appropriate
jurisdiction the question whether such  indemnification  by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

                                      II-4

   
                                 Exhibit Index

Exhibit No.

     4.2     Form of Indenture for Senior Debt Securities

     4.3     Form of Senior Debt Security (included in Exhibit 4.2)

     4.4     Form of Indenture for Subordinated Debt Securities

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

     23.1    Consent of Deloitte & Touche LLP

     25.1    Statement of Eligibility of Senior Trustee on Form T-1

     25.2    Statement of Eligibility of Subordinated Trustee on Form T-1

                                   SIGNATURES

     Pursuant to the  requirements  of the Securities Act of 1933,  Alexander's,
Inc.  certifies that it has  reasonable  grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this Amendment No. 1
to its  Registration  Statement  on Form S-3 to be signed  on its  behalf by the
undersigned, thereunto duly authorized, in the City of Saddle Brook and State of
New Jersey, on December 8, 1995.

                                          ALEXANDER'S, INC.

                                          By  /s/ Joseph Macnow
                                              ____________________________
                                              Joseph Macnow
                                              Chief Financial Officer

     Pursuant to the  requirements of the Securities Act of 1933, this Amendment
No. 1 to the  Registration  Statement  has been  signed  below by the  following
persons in the capacities and on the date indicated.

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

                                Chief Executive Officer         December 8, 1995
*_____________________________
        Steven Roth
                                Chairman of the Board of        December 8, 1995
*_____________________________   Directors
        Stephen Mann
                                Director                        December 8, 1995
*_____________________________
        David Mandelbaum
                                Director                        December 8, 1995
*_____________________________
        Thomas R. DiBenedetto
                                Director                        December 8, 1995
*_____________________________
        Richard R. West
                                Director                        December 8, 1995
*_____________________________
        Arthur I. Sonnenblick
                                Director                        December 8, 1995
*_____________________________
        Russell B. Wight, Jr.
                                Director                        December 8, 1995
*_____________________________
        Neil Underberg
                                               
/s/ Joseph Macnow
______________________________  Chief Financial Officer and     December 8, 1995
        Joseph Macnow           principal accounting officer

* By:  /s/ Joseph Macnow                                        December 8, 1995
      ________________________
       Joseph Macnow
       Attorney-in-Fact

                                                                     EXHIBIT 4.2
================================================================================

                                ALEXANDER'S, INC.

                                       to

                       STATE STREET BANK & TRUST CO. N.A.

                                                                         Trustee

                                   ----------

                                    Indenture

                              Dated as of ___, 1995

                                   ----------

                             SENIOR DEBT SECURITIES

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

    .........................................................................
    Certain Sections of this Indenture relating to Sections 310 through 318,
                 inclusive, of the Trust Indenture Act of 1939:

Trust Indenture
Act Section                                                   Indenture Section

ss. 310(a)(1)       ........................................   609
       (a)(2)       ........................................   609
       (a)(3)       ........................................   Not Applicable
       (a)(4)       ........................................   Not Applicable
       (b)          ........................................   608
                    ........................................   610
ss. 311(a)          ........................................   613
       (b)          ........................................   613
ss. 312(a)          ........................................   701
                    ........................................   702
       (b)          ........................................   702
       (c)          ........................................   702
ss. 313(a)          ........................................   703
       (b)          ........................................   703
       (c)          ........................................   703
       (d)          ........................................   703
ss. 314(a)          ........................................   704
       (a)(4)       ........................................   101
                    ........................................   1004
       (b)          ........................................   Not Applicable
       (c)(1)       ........................................   102
       (c)(2)       ........................................   102
       (c)(3)       ........................................   Not Applicable
       (d)          ........................................   Not Applicable
       (e)          ........................................   102
ss. 315(a)          ........................................   601
       (b)          ........................................   602
       (c)          ........................................   601
       (d)          ........................................   601
       (e)          ........................................   514
ss. 316(a)          ........................................   101
       (a)(1)(A)    ........................................   502
                    ........................................   512
       (a)(1)(B)    ........................................   513
       (a)(2)       ........................................   Not Applicable
       (b)          ........................................   508
       (c)          ........................................   104

Trust Indenture
   Act Section                                                 Indenture Section

ss. 317(a)(1)       ........................................   503
       (a)(2)       ........................................   504
       (b)          ........................................   1003
ss. 318(a)          ........................................   107

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

                                TABLE OF CONTENTS

                                                                           Page
                                                                           ----

Parties....................................................................  1
Recitals of the Company....................................................  1

ARTICLE ONE

                        DEFINITIONS AND OTHER PROVISIONS
                             OF GENERAL APPLICATION

          Section 101.  Definitions........................................  1
                  Act      ................................................  2
                  Affiliate................................................  2
                  Authenticating Agent.....................................  2
                  Board of Directors.......................................  2
                  Board Resolution.........................................  2
                  Business Day.............................................  2
                  Commission...............................................  3
                  Common Shares............................................  3
                  Company  ................................................  3
                  Company Request..........................................  3
                  Corporate Trust Office...................................  3
                  corporation..............................................  3
                  Covenant Defeasance......................................  3
                  Defaulted Interest.......................................  3
                  Defeasance...............................................  3
                  Depositary...............................................  3
                  Event of Default.........................................  3
                  Exchange Act.............................................  3
                  Expiration Date..........................................  3
                  Global Security..........................................  4
                  Holder   ................................................  4
                  Indenture................................................  4
                  interest ................................................  4
                  Interest Payment Date....................................  4
                  Investment Company Act...................................  4
                  Maturity ................................................  4
                  Notice of Default........................................  4
                  Officers' Certificate....................................  4
                  Opinion of Counsel.......................................  4
                  Original Issue Discount Security.........................  5
                  Outstanding..............................................  5

                                       ii

                                                                           Page
                                                                           ----

                  Paying Agent.............................................  6
                  Person   ................................................  6
                  Place of Payment.........................................  6
                  Predecessor Security.....................................  6
                  Redemption Date..........................................  6
                  Redemption Price.........................................  6
                  Regular Record Date......................................  6
                  Responsible Officer......................................  6
                  Securities...............................................  7
                  Securities Act...........................................  7
                  Security Register........................................  7
                  Security Registrar.......................................  7
                  Special Record Date......................................  7
                  Stated Maturity..........................................  7
                  Subsidiary...............................................  7
                  Trust Indenture Act......................................  7
                  Trustee  ................................................  7
                  U.S. Government Obligation...............................  8
                  Vice President...........................................  8
         Section 102.  Compliance Certificates and Opinions................  8
         Section 103.  Form of Documents Delivered to Trustee..............  8
         Section 104.  Acts of Holders; Record Dates.......................  9
         Section 105.  Notices, Etc., to Trustee and Company............... 11
         Section 106.  Notice to Holders; Waiver........................... 12
         Section 107.  Conflict with Trust Indenture Act................... 12
         Section 108.  Effect of Headings and Table of Contents............ 12
         Section 109.  Successors and Assigns.............................. 13
         Section 110.  Separability Clause................................. 13
         Section 111.  Benefits of Indenture............................... 13
         Section 112.  Governing Law....................................... 13
         Section 113.  Legal Holidays...................................... 13

                                   ARTICLE TWO

                                 SECURITY FORMS

         Section 201.  Forms Generally..................................... 14
         Section 202.  Form of Face of Security............................ 14
         Section 203.  Form of Reverse of Security......................... 16
         Section 204.  Form of Legend for Global Securities................ 20

                                       iii

                                                                           Page
                                                                           ----

         Section 205.  Form of Trustee's Certificate of Authentication...... 20

                                  ARTICLE THREE

                                 THE SECURITIES

         Section 301.  Amount Unlimited; Issuable in Series................. 20
         Section 302.  Denominations........................................ 23
         Section 303.  Execution, Authentication, Delivery and Dating....... 23
         Section 304.  Temporary Securities................................. 25
         Section 305.  Registration, Registration of Transfer and Exchange.. 25
         Section 306.  Mutilated, Destroyed, Lost and Stolen Securities..... 27
         Section 307.  Payment of Interest; Interest Rights Preserved....... 28
         Section 308.  Persons Deemed Owners................................ 29
         Section 309.  Cancellation......................................... 30
         Section 310.  Computation of Interest.............................. 30
         Section 311.  CUSIP Numbers........................................ 30

                                  ARTICLE FOUR

                           SATISFACTION AND DISCHARGE

         Section 401.  Satisfaction and Discharge of Indenture.............. 31
         Section 402.  Application of Trust Money........................... 32

                                  ARTICLE FIVE

                                    REMEDIES

         Section 501.  Events of Default.................................... 32
         Section 502.  Acceleration of Maturity; Rescission and Annulment... 34
         Section 503.  Collection of Indebtedness and Suits for Enforcement 
                       by Trustee .......................................... 36
         Section 504.  Trustee May File Proofs of Claim..................... 36
         Section 505.  Trustee May Enforce Claims Without Possession of 
                       Securities........................................... 37
         Section 506.  Application of Money Collected....................... 37
         Section 507.  Limitation on Suits.................................. 37
         Section 508.  Unconditional Right of Holders to Receive Principal,
                       Premium and Interest................................. 38
         Section 509.  Restoration of Rights and Remedies................... 38
         Section 510.  Rights and Remedies Cumulative....................... 39

                                       iv

                                                                           Page
                                                                           ----

         Section 511.  Delay or Omission Not Waiver......................... 39
         Section 512.  Control by Holders................................... 39
         Section 513.  Waiver of Past Defaults.............................. 39
         Section 514.  Undertaking for Costs................................ 40
         Section 515.  Waiver of Usury, Stay or Extension Laws.............. 40

                                   ARTICLE SIX

                                   THE TRUSTEE

         Section 601.  Certain Duties and Responsibilities.................. 40
         Section 602.  Notice of Defaults................................... 41
         Section 603.  Certain Rights of Trustee............................ 41
         Section 604.  Not Responsible for Recitals or Issuance of 
                       Securities .......................................... 42
         Section 605.  May Hold Securities.................................. 42
         Section 606.  Money Held in Trust.................................. 43
         Section 607.  Compensation and Reimbursement....................... 43
         Section 608.  Disqualification; Conflicting Interests.............. 44
         Section 609.  Corporate Trustee Required; Eligibility.............. 44
         Section 610.  Resignation and Removal; Appointment of Successor.... 44
         Section 611.  Acceptance of Appointment by Successor............... 46
         Section 612.  Merger, Conversion, Consolidation or Succession to 
                       Business............................................. 47
         Section 613.  Preferential Collection of Claims Against Company.... 47
         Section 614.  Appointment of Authenticating Agent.................. 47

                                  ARTICLE SEVEN

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

         Section 701.  Company to Furnish Trustee Names and Addresses 
                       of Holders........................................... 49
         Section 702.  Preservation of Information; Communications 
                       to Holders........................................... 50
         Section 703.  Reports by Trustee................................... 50
         Section 704.  Reports by Company................................... 50
         Section 705.  Notice of Default.................................... 51

                                        v

                                                                           Page
                                                                           ----

                                  ARTICLE EIGHT

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

         Section 801.  Company May Consolidate, Etc., Only on Certain 
                       Terms ............................................... 51
         Section 802.  Successor Substituted................................ 52

                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

         Section 901.  Supplemental Indentures Without Consent of Holders... 52
         Section 902.  Supplemental Indentures with Consent of Holders...... 54
         Section 903.  Execution of Supplemental Indentures................. 55
         Section 904.  Effect of Supplemental Indentures.................... 55
         Section 905.  Conformity with Trust Indenture Act.................. 55
         Section 906.  Reference in Securities to Supplemental Indentures... 56

                                   ARTICLE TEN

                                    COVENANTS

         Section 1001.  Payment of Principal, Premium and Interest.......... 56
         Section 1002.  Maintenance of Office or Agency..................... 56
         Section 1003.  Money for Securities Payments to Be Held in Trust... 57
         Section 1004.  Statement by Officers as to Default................. 58
         Section 1005.  Existence........................................... 58
         Section 1006.  Maintenance of Properties........................... 58
         Section 1007.  Payment of Taxes and Other Claims................... 59
         Section 1008.  Waiver of Certain Covenants......................... 59
         Section 1009.  Calculation of Original Issue Discount.............. 59

                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES

         Section 1101.  Applicability of Article............................ 59
         Section 1102.  Election to Redeem; Notice to Trustee............... 60
         Section 1103.  Selection by Trustee of Securities to Be Redeemed... 60
         Section 1104.  Notice of Redemption................................ 61

                                       vi

                                                                           Page
                                                                           ----
         Section 1105.  Deposit of Redemption Price......................... 61
         Section 1106.  Securities Payable on Redemption Date............... 62
         Section 1107.  Securities Redeemed in Part......................... 62

                                 ARTICLE TWELVE

                                  SINKING FUNDS

         Section 1201.  Applicability of Article............................ 63
         Section 1202.  Satisfaction of Sinking Fund Payments with 
                        Securities ......................................... 63
         Section 1203.  Redemption of Securities for Sinking Fund........... 63

                                ARTICLE THIRTEEN

                       DEFEASANCE AND COVENANT DEFEASANCE

         Section 1301.  Company's Option to Effect Defeasance or 
                        Covenant Defeasance................................. 64
         Section 1302.  Defeasance and Discharge............................ 64
         Section 1303.  Covenant Defeasance................................. 65
         Section 1304.  Conditions to Defeasance or Covenant Defeasance..... 65
         Section 1305.  Deposited Money and U.S. Government Obligations to 
                        Be Held in Trust; Miscellaneous Provisions.......... 67
         Section 1306.  Reinstatement....................................... 68

Testimonium................................................................. 69
Signatures and Seals........................................................ 69
Acknowledgements............................................................ 69

                  INDENTURE, dated as of _________, 199_, between Alexander's,
Inc., a corporation duly organized and existing under the laws of the State of
Delaware (herein called the "Company"), having its principal office at Park 80
West, Plaza II, Saddle Brook, New Jersey 07662, and State Street Bank & Trust 
Co. N.A., as Trustee (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 in this Indenture provided.

                  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 101.  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,

                                        2

         except as otherwise herein expressly provided, the term "generally
         accepted accounting principles" with respect to any computation
         required or permitted hereunder shall mean such accounting principles
         as are generally accepted in the United States of America at the date
         of such computation;

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

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

                  "Act", when used with respect to any Holder, has the meaning
specified in Section 104.

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

                  "Authenticating Agent" means any Person authorized by the
Trustee pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.

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

                                        3

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

                  "Common Shares" means the shares of common stock, $1.00 par
value per share, of the Company.

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

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

                  "Corporate Trust Office" means the principal office of the
Trustee in [the City of New York] at which at any particular time its corporate
trust business shall be administered, which office at the date hereof is located
at ______________________.

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

                  "Covenant Defeasance" has the meaning specified in Section
1303.

                  "Defaulted Interest" has the meaning specified in Section 307.

                  "Defeasance" has the meaning specified in Section 1302.

                  "Depositary" means, with respect to Securities of any series
issuable in whole or in part in the form of one or more Global Securities, a
clearing agency registered under the Exchange Act that is designated to act as
Depositary for such Securities as contemplated by Section 301.

                  "Event of Default" has the meaning specified in Section 501.

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

                  "Expiration Date" has the meaning specified in Section 104.

                                        4

                  "Global Security" means a Security that evidences all or part
of the Securities of any series and bears the legend set forth in Section 204
(or such legend as may be specified as contemplated by Section 301 for such
Securities).

                  "Holder" means a Person in whose name a Security is registered
in the Security Register.

                  "Indenture" means this instrument as originally executed and
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,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 301.

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

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

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

                  "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.

                  "Notice of Default" means a written notice of the kind
specified in Section 501(4) or 501(5).

                  "Officers' Certificate" means a certificate signed by the
Chairman of the Board, a Vice Chairman of the Board, the President or a Vice
President, and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary, of the Company, and delivered to the Trustee. One of the
officers signing an Officers' Certificate given pursuant to Section 1004 shall
be the principal executive, financial or accounting officer of the Company.

                  "Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Company, and who shall be acceptable to the Trustee.

                                        5

                  "Original Issue Discount Security" means any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 502.

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

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

                  (2) Securities for whose payment or redemption money in the
         necessary amount has been theretofore deposited with the Trustee or any
         Paying Agent (other than the Company) in trust or set aside and
         segregated in trust by the Company (if the Company shall act as its own
         Paying Agent) for the Holders of such 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;

                  (3) Securities as to which Defeasance has been effected
         pursuant to Section 1302; and

                  (4) Securities which have been paid pursuant to Section 306 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, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, (A) the principal amount of an Original Issue
Discount Security which shall be deemed to be Outstanding shall be the amount of
the principal thereof which would be due and payable as of such date upon
acceleration of the Maturity thereof to such date pursuant to Section 502, (B)
if, as of such date, the principal amount payable at the Stated Maturity of a
Security is not determinable, the principal amount of such Security which shall
be deemed to be Outstanding shall be the amount as specified or determined as
contemplated by Section 301, (C) the principal amount of a Security denominated
in one or more foreign currencies or currency units which shall be deemed to be
Outstanding shall be the U.S. dollar equivalent, determined as of such date in
the manner provided as contemplated by Section 301, of the principal amount of
such Security (or, in the case of a Security described in Clause (A) or (B)
above, of the amount

                                        6

determined as provided in such Clause), and (D) 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, waiver or other
action, 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 pledgee 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 or any premium or interest on any Securities on behalf of
the Company.

                  "Person" means any individual, corporation, partnership, joint
venture, 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 the principal of and any premium
and interest on the Securities of that series are payable as specified as
contemplated by Section 301.

                  "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 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.

                  "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 at which it is to be redeemed pursuant to this
Indenture.

                  "Regular Record Date" for the interest payable on any Interest
Payment Date on the Securities of any series means the date specified for that
purpose as contemplated by Section 301.

                  "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, the
secretary, any assistant secretary, the treasurer, any

                                        7

assistant treasurer, the cashier, any assistant cashier, any trust officer or
assistant trust officer, the controller or any assistant controller or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.

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

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

                  "Security Register" and "Security Registrar" have the
respective meanings specified in Section 305.

                  "Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 307.

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

                  "Subsidiary" means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries. For the purposes of this definition, "voting stock" means
stock which ordinarily has voting power for the election of directors, whether
at all times or only so long as no senior class of stock has such voting power
by reason of any contingency.

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

                  "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.

                                        8

                  "U.S. Government Obligation" has the meaning specified in
Section 1304.

                  "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".

                  Section 102.  Compliance Certificates and Opinions.

                  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 such certificates and opinions as may be required under
the Trust Indenture Act. Each such certificate or opinion shall be given in the
form of an Officers' Certificate, if to be given by an officer of the Company,
or an Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.

                  Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (except for certificates
provided for in Section 1004) 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 103.  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

                                        9

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 104.  Acts of Holders; Record Dates.

                  Any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 601) conclusive in favor of
the Trustee and the Company, if made in the manner provided in this Section.

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

                                       10

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

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

                  The Company may, in the circumstances permitted by the Trust
Indenture Act, set any day as a record date for the purpose of determining the
Holders of Outstanding Securities of any series entitled to give, make or take,
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given, made or taken by
Holders of Securities of such series, provided that the Company may not set a
record date for, and the provisions of this paragraph shall not apply with
respect to, the giving or making of any notice, declaration, request or
direction referred to in the next paragraph. If any record date is set pursuant
to this paragraph, the Holders of Outstanding Securities of the relevant series
on such record date, and no other Holders, shall be entitled to take the
relevant action, whether or not such Holders remain Holders after such record
date; provided that no such action shall be effective hereunder unless taken on
or prior to the applicable Expiration Date by Holders of the requisite principal
amount of Outstanding Securities of such series on such record date. Nothing in
this paragraph shall be construed to prevent the Company from setting a new
record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite principal amount of Outstanding
Securities of the relevant series on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Company, at its own
expense, shall cause notice of such record date, the proposed action by Holders
and the applicable Expiration Date to be given to the Trustee in writing and to
each Holder of Securities of the relevant series in the manner set forth in
Section 106.

                  The Trustee may set any day as a record date for the purpose
of determining the Holders of Outstanding Securities of any series entitled to
join in the giving or making of (i) any Notice of Default, (ii) any declaration
of acceleration referred to in Section 502, (iii) any request to institute
proceedings referred to in Section 507(2) or (iv) any direction referred to in
Section 512, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding

                                       11

Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Company's expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Company in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 106.

                  With respect to any record date set pursuant to this Section,
the party hereto which sets such record dates may designate any day as the
"Expiration Date" and from time to time may change the Expiration Date to any
earlier or later day; provided that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto in
writing, and to each Holder of Securities of the relevant series in the manner
set forth in Section 106, on or prior to the existing Expiration Date. If an
Expiration Date is not designated with respect to any record date set pursuant
to this Section, the party hereto which set such record date shall be deemed to
have initially designated the 180th day after such record date as the Expiration
Date with respect thereto, subject to its right to change the Expiration Date as
provided in this paragraph. Notwithstanding the foregoing, no Expiration Date
shall be later than the 180th day after the applicable record date.

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

                  Section 105.  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
         sufficient for every purpose hereunder if made, given, furnished or
         filed in writing to or with the Trustee at its Corporate Trust Office,
         Attention: [Corporate Trust Trustee 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

                                       12

         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, Attention: __________, or at any other address
         previously furnished in writing to the Trustee by the Company.

                  Section 106.  Notice to Holders; Waiver.

                  Where this Indenture provides for notice to Holders of any
event, 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, not later than the latest date (if any), and not earlier than the
earliest date (if any), prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.

                  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 by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.

                  Section 107.  Conflict with Trust Indenture Act.

                  If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.

                  Section 108.  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.

                                       13

                  Section 109.  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 110.  Separability Clause.

                  In case any provision in this Indenture or in the Securities
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 111.  Benefits of Indenture.

                  Nothing in this Indenture or in the Securities, 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 112.  Governing Law.

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

                  Section 113.  Legal Holidays.

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

                                       14

                                   ARTICLE TWO

                                 SECURITY FORMS

                  Section 201.  Forms Generally.

                  The Securities of each series shall be in substantially the
form set forth in this Article, or in such other 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 Depositary therefor or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution thereof. If the form of Securities of any series is established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery of such
Securities.

                  The definitive Securities 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, as evidenced by their
execution of such Securities.

                  Section 202.  Form of Face of Security.

                  [Insert any legend required by the Internal Revenue Code and
the regulations thereunder.]

                                ALEXANDER'S, INC.

                      ____________________________________

No. _____                                                                 $____
                                                                CUSIP No.______

                  ALEXANDER'S, INC., a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to_____________________________________, 
or registered assigns, the principal sum of _________________________________ 
Dollars on _________________________________, and to pay interest 
thereon from the most recent

                                       15

Interest Payment Date to which interest has been paid or duly provided for,
semiannually on ________ and ________in each year, commencing as of the date, at
the rate of ___% per annum, until the principal hereof is paid or made available
for payment, provided that any principal and premium, and any such installment
of interest, which is overdue shall bear interest at the rate of ___% per annum
(to the extent that the payment of such interest shall be legally enforceable),
from the dates such amounts are due until they are paid or made available for
payment, and such interest shall be payable on demand. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the _________ or
_________ (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture.

                  [If the Security is not to bear interest prior to Maturity,
insert -- The principal of this Security shall not bear interest except in the
case of a default in payment of principal upon acceleration, upon redemption or
at Stated Maturity and in such case the overdue principal and any overdue
premium shall bear interest at the rate of ___% per annum (to the extent that
the payment of such interest shall be legally enforceable), from the dates such
amounts are due until they are paid or made available for payment. Interest on
any overdue principal or premium shall be payable on demand. Any such interest
on any overdue principal or premium which is not so paid on demand shall bear
interest at the rate of ____% per annum (to the extent that the payment of such
interest shall be legally enforceable), from the dates such amounts are due
until they are paid or made available for payment. Interest on any overdue
interest shall be payable on demand.]

                  Payment of the principal of (and premium, if any) and [if
applicable, insert --any such] interest on this Security will be made at the
office or agency of the Company maintained for that purpose in ___________, in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts; provided, however, that
at the option of the Company payment of interest may be made by check mailed to
the address of the Person entitled thereto as such address shall appear in the
Security Register.

                                       16

                  Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.

                  Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.

                  IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.

                                             ALEXANDER'S, INC.

                                             By _____________________________

Attest:

_____________________________

                  Section 203.  Form of Reverse of Security.

                  This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in one
or more series under an Indenture, dated as of __________ (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and State Street Bank & Trust Co. N.A., as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), and reference is hereby made to the Indenture and all
indentures supplemental thereto for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is one
of the series designated on the face hereof [if applicable, insert -- limited or
aggregate principal amount to $_______].

                  [If applicable, insert -- The Securities of this series are
subject to redemption upon not less than 30 days' nor more than 60 days' notice
by mail, [if applicable, insert -- (1) on _____ in any year commencing with the
year ____ and ending with the year ____ through operation of the sinking fund
for this series at a Redemption Price equal to 100% of

                                       17

the principal amount, and (2)] at any time [if applicable, insert -- on or after
______, 19__], as a whole or in part, at the election of the Company, at the
following Redemption Prices (expressed as percentages of the principal amount):
If redeemed during the 12-month period beginning _________ of the years
indicated,

                    Redemption                                    Redemption
   Year               Price                  Year                    Price
   ----               -----                  ----                    -----

and thereafter at a Redemption Price equal to ___% of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.

                  [If applicable, insert -- The sinking fund for this series
provides for the redemption on ________ in each year beginning with the year
______ and ending with the year ______ of [if applicable, insert -- not less
than $______ ("mandatory sinking fund") and not more than] $______ aggregate
principal amount of Securities of this series. Securities of this series
acquired or redeemed by the Company otherwise than through [if applicable,
insert -- mandatory] sinking fund payments may be credited against subsequent
[if applicable, insert -- mandatory] sinking fund payments otherwise required to
be made [if applicable, insert -- , in the inverse order in which they become
due].]

                  [If the Security is subject to redemption of any kind, insert
- -- In the event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.]

                  [If applicable, insert -- The Indenture contains provisions
for defeasance at any time of the entire indebtedness of this Security and
Events of Default with respect to this Security, in each case upon compliance
with certain conditions set forth in the Indenture.]

                  [If the Security is not an Original Issue Discount Security,
insert -- If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.]

                                       18

                  [If the Security is an Original Issue Discount Security,
insert -- If an Event of Default with respect to Securities of this series shall
occur and be continuing, an amount of principal of the Securities of this series
may be declared due and payable in the manner and with the effect provided in
the Indenture. Such amount shall be equal to -- insert formula for determining
the amount. Upon payment (i) of the amount of principal so declared due and
payable and (ii) of interest on any overdue principal, premium and interest (in
each case to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the payment of the
principal of and premium and interest, if any, on the Securities of this series
shall terminate.]

                  The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in principal amount of
the Securities at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.

                  As provided in and subject to the provisions of the Indenture,
the Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.

                  No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and

                                       19

unconditional, to pay the principal of and any premium and interest on this
Security at the times, place and rate, and in the coin or currency, herein
prescribed.

                  As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the principal
of and any premium and interest on this Security are payable, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.

                  The Securities of this series are issuable only in registered
form without coupons in denominations of $______ and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series and of like tenor of a different
authorized denomination, as requested by the Holder surrendering the same.

                  No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.

                  Prior to due presentment of this 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 this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.

                  [If applicable, insert -- Interest on the principal balance of
this Security shall be calculated on the basis of a [365- or 366-day year, as
appropriate, for the actual number of days elapsed) [360-day year of twelve
30-day months].]

                  THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS LAWS.

                  All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.

                                       20

                  Section 204.  Form of Legend for Global Securities.

                  Unless otherwise specified as contemplated by Section 301 for
the Securities evidenced thereby, every Global Security authenticated and
delivered hereunder shall bear a legend in substantially the following form:

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

                  Section 205.  Form of Trustee's Certificate of Authentication.

                  The Trustee's certificates 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.

Dated:                                      STATE STREET BANK & TRUST CO. N.A.,
                                                                    As Trustee

                                              By ____________________________
                                                     Authorized Signatory

                                  ARTICLE THREE

                                 THE SECURITIES

                  Section 301.  Amount Unlimited; Issuable in Series.

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

                                       21

                  The Securities may be issued in one or more series. There
shall be established in or pursuant to a Board Resolution and, subject to
Section 303, set forth, or determined in the manner provided, in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series;

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

                  (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 304, 305, 306, 906 or 1107
         and except for any Securities which, pursuant to Section 303, are
         deemed never to have been authenticated and delivered hereunder);

                  (3) the Person to whom any interest on a 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;

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

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

                  (6) the place or places where the principal of and any premium
         and interest on any Securities of the series shall be payable;

                  (7) the period or periods within which, the price or prices at
         which and the terms and conditions upon which any Securities of the
         series may be redeemed, in whole or in part, at the option of the
         Company and, if other than by a Board Resolution, the manner in which
         any election by the Company to redeem the Securities shall be
         evidenced;

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

                                       22

                  (9) if other than denominations of $1,000 and any integral
         multiple thereof, the denominations in which any Securities of the
         series shall be issuable;

                  (10) if the amount of principal of or any premium or interest
         on any Securities of the series may be determined with reference to an
         index or pursuant to a formula, the manner in which such amounts shall
         be determined;

                  (11) if other than the currency of the United States of
         America, the currency, currencies or currency units in which the
         principal of or any premium or interest on any Securities of the series
         shall be payable and the manner of determining the equivalent thereof
         in the currency of the United States of America for any purpose,
         including for purposes of the definition of "Outstanding" in Section
         101;

                  (12) if the principal of or any premium or interest on any
         Securities of the series is to be payable, at the election of the
         Company or the Holder thereof, in one or more currencies or currency
         units other than that or those in which such Securities are stated to
         be payable, the currency, currencies or currency units in which the
         principal of or any premium or interest on such Securities as to which
         such election is made shall be payable, the periods within which and
         the terms and conditions upon which such election is to be made and the
         amount so payable (or the manner in which such amount shall be
         determined);

                  (13) if other than the entire principal amount thereof, the
         portion of the principal amount of any Securities of the series which
         shall be payable upon declaration of acceleration of the Maturity
         thereof pursuant to Section 502;

                  (14) if the principal amount payable at the Stated Maturity of
         any Securities of the series will not be determinable as of any one or
         more dates prior to the Stated Maturity, the amount which shall be
         deemed to be the principal amount of such Securities as of any such
         date for any purpose thereunder or hereunder, including the principal
         amount thereof which shall be due and payable upon any Maturity other
         than the Stated Maturity or which shall be deemed to be Outstanding as
         of any date prior to the Stated Maturity (or, in any such case, the
         manner in which such amount deemed to be the principal amount shall be
         determined);

                  (15) if applicable, that the Securities of the series, shall
         be subject to either or both of Defeasance or Covenant Defeasance as
         provided in Article Thirteen;

                  (16) if applicable, that any Securities of the series shall be
         issuable in whole or in part in the form of one or more Global
         Securities and, in such case, the respective Depositaries for such
         Global Securities, the form of any legend or legends which shall be
         borne by any such Global Security in addition to or in lieu of that set

                                       23

         forth in Section 204 and any circumstances in addition to or in lieu of
         those set forth in Clause (2) of the last paragraph of Section 305 in
         which any such Global Security may be exchanged in whole or in part for
         Securities registered, and any transfer of such Global Security in
         whole or in part may be registered, in the name or names of Persons
         other than the Depositary for such Global Security or a nominee
         thereof;

                  (17) any addition to or change in the Events of Default which
         applies to any Securities of the series and any change in the right of
         the Trustee or the requisite Holders of such Securities to declare the
         principal amount thereof due and payable pursuant to Section 502;

                  (18) any addition to or change in the covenants set forth in
         Article Ten which applies to Securities of the series; and

                  (19) any other terms of the series (which terms shall not be
         inconsistent with the provisions of this Indenture, except as permitted
         by Section 901(5)).

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

                  If any of the terms of the series are established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by 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 302.  Denominations.

                  The Securities of each series shall be issuable only in
registered form without coupons and only in such denominations as shall be
specified as contemplated by Section 301. In the absence of any such specified
denomination with respect to the Securities of any series, the Securities of
such series shall be issuable in denominations of $1,000 and any integral
multiple thereof.

                  Section 303.  Execution, Authentication, Delivery and Dating.

                  The Securities shall be executed on behalf of the Company by
its Chairman of the Board, its Vice Chairman of the Board, its President or one
of its Vice Presidents, under its corporate seal reproduced thereon attested by
its Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.

                                       24

                  Securities 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
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. If the form or terms of the Securities of the series have been
established by or pursuant to one or more Board Resolutions as permitted by
Sections 201 and 301, 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 601) shall be
fully protected in relying upon, an Opinion of Counsel stating,

                  (1) if the form of such Securities has been established by or
         pursuant to Board Resolution as permitted by Section 201, that such
         form has been established in conformity with the provisions of this
         Indenture;

                  (2) if the terms of such Securities have been established by
         or pursuant to Board Resolution as permitted by Section 301, that such
         terms have been established in conformity with the provisions of this
         Indenture; and

                  (3) that such Securities, when authenticated and delivered by
         the Trustee and issued by the Company in the manner and subject to any
         conditions specified in such Opinion of Counsel, will constitute valid
         and legally binding obligations of the Company enforceable in
         accordance with their terms, subject to bankruptcy, insolvency,
         fraudulent transfer, reorganization, moratorium and similar laws of
         general applicability relating to or affecting creditors' rights and to
         general equity principles.

                  If such form 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.

                  Notwithstanding the provisions of Section 301 and of the
preceding paragraph, if all Securities of a series are not to be originally
issued at one time, it shall not be necessary to deliver the Officers'
Certificate otherwise required pursuant to Section 301 or the Company Order and
Opinion of Counsel otherwise required pursuant to such preceding paragraph at or
prior to the 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.

                                       25

                  Each Security shall be dated the date of its authentication.

                  No Security 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 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
309, 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.

                  Section 304.  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 and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.

                  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 in a Place of Payment for
that series, without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Securities of any series, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor one or more
definitive Securities of the same series, of any authorized denominations and of
like tenor and aggregate principal amount. Until so exchanged, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of such series and tenor.

                  Section 305.  Registration, Registration of Transfer and 
Exchange.

                  The Company shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such office and in
any other office or agency of the Company in a Place of Payment being herein
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Securities and of transfers of Securities. The

                                       26

Trustee is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.

                  Upon surrender for registration of transfer of any Security of
a series at the office or agency of the Company in a Place of Payment for that
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 Securities of the same series, of any authorized denominations and of like
tenor and aggregate principal amount.

                  At the option of the Holder, Securities of any series may be
exchanged for other Securities of the same series, of any authorized
denominations and of like tenor and aggregate principal amount, upon surrender
of the Securities to be exchanged at 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.

                  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 Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar 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 304, 906 or 1107 not involving any transfer.

                  If the Securities of any series (or of any series and
specified tenor) are to be redeemed in part, the Company shall not be required
(A) to issue, register the transfer of or exchange any Securities of that series
(or of that series and specified tenor, as the case may be) during a period
beginning at the opening of business 15 days before the day of the mailing of a
notice of redemption of any such Securities selected for redemption under
Section 1103 and ending at the close of business on the day of such mailing, or
(B) to register the transfer of or exchange any Security so selected for
redemption in whole or in part, except the unredeemed portion of any Security
being redeemed in part.

                                       27

                  The provisions of Clauses (1), (2), (3) and (4) below shall
apply only to Global Securities:

                  (1) Each Global Security authenticated under this Indenture
         shall be registered in the name of the Depositary designated for such
         Global Security or a nominee thereof and delivered to such Depositary
         or a nominee thereof or custodian therefor, and each such Global
         Security shall constitute a single Security for all purposes of this
         Indenture.

                  (2) Notwithstanding any other provision in this Indenture, no
         Global Security may be exchanged in whole or in part for Securities
         registered, and no transfer of a Global Security in whole or in part
         may be registered, in the name of any Person other than the Depositary
         for such Global Security or a nominee thereof unless (A) such
         Depositary (i) has notified the Company that it is unwilling or unable
         to continue as Depositary for such Global Security or (ii) has ceased
         to be a clearing agency registered under the Exchange Act, and in
         either case a successor Depositary is not appointed within 90 days by
         the Company, (B) there shall have occurred and be continuing an Event
         of Default with respect to such Global Security or (C) there shall
         exist such circumstances, if any, in addition to or in lieu of the
         foregoing as have been specified for this purpose as contemplated by
         Section 301.

                  (3) Subject to Clause (2) above, any exchange of a Global
         Security for other Securities may be made in whole or in part, and all
         Securities issued in exchange for a Global Security or any portion
         thereof shall be registered in such names as the Depositary for such
         Global Security shall direct.

                  (4) Every Security authenticated and delivered upon
         registration of transfer of, or in exchange for or in lieu of, a Global
         Security or any portion thereof, whether pursuant to this Section,
         Section 304, 306, 906 or 1107 or otherwise, shall be authenticated and
         delivered in the form of, and shall be, a Global Security, unless such
         Security is registered in the name of a Person other than the
         Depositary for such Global Security or a nominee thereof.

                  Section 306.  Mutilated, Destroyed, Lost and Stolen 
Securities.

                  If any mutilated Security 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 bearing a number not contemporaneously outstanding.

                  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
and (ii) such security or indemnity

                                       28

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 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, a new Security of the same series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.

                  In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.

                  Upon the issuance of any new Security 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 of any series issued pursuant to this
Section in lieu of any destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Company, whether or not the
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 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.

                  Section 307.  Payment of Interest; Interest Rights Preserved.

                  Except as otherwise provided as contemplated by Section 301
with respect to any series of Securities, interest on any 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 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 forthwith 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 Securities of such series
         (or their respective

                                       29

         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
         given to each Holder of Securities of such series in the manner set
         forth in Section 106, 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 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, 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.

                  Section 308.  Persons Deemed Owners.

                  Prior to due presentment of a 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 Security is registered as the owner of
such Security for the purpose of receiving payment of principal of and any
premium and (subject to Section 307) any interest on such Security and for all
other purposes whatsoever, whether or not such Security be overdue, and neither
the

                                       30

Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.

                  Section 309.  Cancellation.

                  All Securities 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 and shall be promptly cancelled by it. 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 cancelled by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Securities held by the Trustee shall be disposed of in
a manner customary to the Trustee as directed by a Company Order.

                  Section 310.  Computation of Interest.

                  Except as otherwise specified as contemplated by Section 301
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 311.  CUSIP Numbers.

                  The Company in issuing the Securities may use "CUSIP" numbers
(if then generally in use), and, if so, the Trustee shall us "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.

                                       31

                                  ARTICLE FOUR

                           SATISFACTION AND DISCHARGE

                  Section 401.  Satisfaction and Discharge of Indenture.

                  This Indenture shall upon Company Request cease to be of
further effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when

                  (1)      either

                           (A) all Securities theretofore authenticated and
                  delivered (other than (i) Securities which have been
                  destroyed, lost or stolen and which have been replaced or paid
                  as provided in Section 306 and (ii) Securities 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 1003) have been delivered to the Trustee
                  for cancellation; or

                           (B) all such Securities 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 money in an amount sufficient to pay and discharge the
         entire indebtedness on such Securities not theretofore delivered to the
         Trustee for cancellation, for principal and any premium and interest to
         the date of such deposit (in the case of Securities which have become
         due and payable) or to the Stated Maturity or Redemption Date, as the
         case may be;

                                       32

                  (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, the obligations of the Company to the Trustee under Section 607, the
obligations of the Trustee to any Authenticating Agent under Section 614 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 402 and
the last paragraph of Section 1003 shall survive.

                  Section 402.  Application of Trust Money.

                  Subject to the provisions of the last paragraph of Section
1003, all money deposited with the Trustee pursuant to Section 401 shall be held
in trust and applied by it, in accordance with the provisions of the Securities
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 any premium and
interest for whose payment such money has been deposited with the Trustee.

                                  ARTICLE FIVE

                                    REMEDIES

                  Section 501.  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):

                  (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 any premium,
         if any, on any Security of that series; or

                                       33

                  (3) default in the deposit of any sinking fund payment, when
         and as due by the terms of a Security of that series; 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 whose performance or whose breach is elsewhere in
         this Section specifically dealt with or which has expressly been
         included in this Indenture solely for the benefit of 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 10% 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) a default under any bond, debenture, note or other
         evidence of indebtedness for money borrowed by the Company (including a
         default with respect to Securities of any series other than that
         series) having an aggregate principal amount outstanding of at least
         $50,000,000, or under any mortgage, indenture or instrument (including
         this Indenture) under which there may be issued or by which there may
         be secured or evidenced any indebtedness for money borrowed by the
         Company having an aggregate principal amount outstanding of at least
         $50,000,000, whether such indebtedness now exists or shall hereafter be
         created, which default (A) shall constitute a failure to pay any
         portion of the principal of such indebtedness when due and payable
         after the expiration of any applicable grace period with respect
         thereto or (B) shall have resulted in such indebtedness becoming or
         being declared due and payable prior to the date on which it would
         otherwise have become due and payable, without, in the case of Clause
         (A), such indebtedness having been discharged or without, in the case
         of Clause (B), such indebtedness having been discharged or such
         acceleration having been rescinded or annulled, in each such case
         within a period of 10 days after there shall have 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 10% in principal
         amount of the Outstanding Securities of that series a written notice
         specifying such default and requiring the Company to cause such
         indebtedness to be discharged or cause such acceleration to be
         rescinded or annulled, as the case may be, and stating that such notice
         is a "Notice of Default' hereunder; provided, however, that, subject to
         the provisions of Sections 601 and 602, the Trustee shall not be deemed
         to have knowledge of such default unless either (A) a Responsible
         Officer of the Trustee shall have knowledge of such default or (B) the
         Trustee shall have received written notice thereof from the Company,
         from any Holder, from the holder of any such indebtedness or from the
         trustee under any such mortgage, indenture or other instrument; or

                                       34

                  (6) 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 60 consecutive
         days; or

                  (7) 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 other 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

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

                  Section 502.  Acceleration of Maturity; Rescission and 
Annulment.

                  If an Event of Default (other than an Event of Default
specified in Section 501(6) or 501(7)) with respect to Securities of any series
at the time Outstanding occurs and is continuing, then in every such case the
Trustee, upon receipt of a request from the Holders of not less than 25% in
principal amount of the Outstanding Securities of that series, shall 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 the Securities of that
series (or, if any Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such Securities as may be
specified by the terms thereof) 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

                                       35

payable. If an Event of Default specified in Section 501(6) or 501(7) with
respect to Securities of any series at the time Outstanding occurs, the
principal amount of all the Securities of that series (or, if any Securities of
that series are Original Issue Discount Securities, such portion of the
principal amount of such Securities as may be specified by the terms thereof)
shall automatically, and without any declaration or other action on the part of
the Trustee or any Holder, 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 any 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) all sums paid or advanced by the Trustee
                  hereunder and the reasonable compensation, expenses,
                  disbursements and advances of the Trustee, its agents and
                  counsel;

                  and

                  (2) all Events of Default with respect to Securities of that
         series, other than the non-payment 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 513.

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

                                       36

                  Section 503.  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 when such interest becomes due and payable and such default
         continues for a period of 30 days, or

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

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

                  If an Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities 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 504.  Trustee May File Proofs of Claim.

                  In case of any judicial proceeding relative to the Company (or
any other obligor upon the Securities), its property or its creditors, the
Trustee shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized 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 607.

                                       37

                  No provision of this Indenture 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;
provided, however, that the Trustee may, on behalf of the Holders, vote for the
election of a trustee in bankruptcy or similar official and be a member of a
creditors' or other similar committee.

                  Section 505.  Trustee May Enforce Claims Without Possession 
of Securities.

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

                  Section 506.  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 any premium 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 607; and

                  Second: To the payment of the amounts then due and unpaid for
         principal of and any premium 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 any
         premium and interest, respectively.

                  Section 507.  Limitation on Suits.

                  No Holder of any Security 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) such Holder has previously given written notice to the
         Trustee of a continuing Event of Default with respect to the Securities
         of that series;

                                       38

                  (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 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 508.  Unconditional Right of Holders to Receive 
Principal, Premium and Interest.

                  Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of and any premium and
(subject to Section 307) interest on such Security on the respective Stated
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 509.  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.

                                       39

                  Section 510.  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 306, 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 511.  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 512.  Control by Holders.

                  The Holders of 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, and

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

                  Section 513.  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 any premium or
         interest on any Security of such series, or

                                       40

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

                  Section 514.  Undertaking for Costs.

                  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, a court may require any party litigant in
such suit to file an undertaking to pay the costs of such suit, and may assess
costs against any such party litigant, in the manner and to the extent provided
in the Trust Indenture Act. The provisions of this Section shall not apply to
any suit instituted by the Trustee, to any suit instituted by the Company, to
any suit instituted by any Holder, or group of Holders of an aggregate more than
10 percent in principal amount of the Securities then outstanding, or to any
suit instituted by any Holder for the enforcement of the payment of the
principal of or interest on any Security, on or after the respective due dates
expressed in such Security.

                  Section 515.  Waiver of Usury, Stay or Extension Laws.

                  The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any usury, stay or
extension law wherever enacted, now or at any time hereafter in force, 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 601.  Certain Duties and Responsibilities.

                  The duties and responsibilities of the Trustee shall be as
provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision
of this Indenture shall require the

                                       41

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. 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 602.  Notice of Defaults.

                  If a default occurs hereunder with respect to Securities of
any series, the Trustee shall give the Holders of Securities of such series
notice of such default as and to the extent provided by the Trust Indenture Act;
provided, however, that in the case of any default of the character specified in
Section 501(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 603.  Certain Rights of Trustee.

                  Subject to the provisions of Section 601:

                  (1) 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 or 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;

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

                  (3) 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;

                  (4) the Trustee may consult with counsel of its selection and
         the advice of such counsel (to be confirmed in writing) 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;

                                       42

                  (5) 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;

                  (6) 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;

                  (7) 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

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

                  Section 604.  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 neither the Trustee nor any Authenticating Agent assumes any
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 605.  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 and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.

                                       43

                  Section 606.  Money Held in Trust.

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

                  Section 607.  Compensation and Reimbursement.

                  The Company agrees

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

                  (2) except as otherwise expressly provided herein, to
         reimburse the Trustee upon 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 and any predecessor Trustee for,
         and to hold it harmless against, any loss, liability or expense
         incurred without negligence or bad faith on its part, arising out of or
         in connection with the acceptance or administration of 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.

                  The Trustee shall have a lien prior to the Securities as to
all property and funds held by it hereunder for any amount owing it or any
predecessor Trustee pursuant to this Section 607 except with respect to funds
held in trust for the benefit of the Holders of particular Securities. When the
Trustee incurs expenses or renders services in connection with an Event of
Default specified in Section 501(6) or Section 501(7), the expenses (including
the reasonable charges and expenses of its counsel) and the compensation for the
services are intended to constitute expenses of administration under any
applicable Federal or state bankruptcy, insolvency or other similar law.

                  The provisions of this Section shall survive the termination
of this Indenture.

                                       44

                  Section 608.  Disqualification; Conflicting Interests.

                  If the Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Indenture. To
the extent permitted by such Act, the Trustee shall not be deemed to have a
conflicting interest by virtue of being a trustee under this Indenture with
respect to Securities of more than one series.

                  Section 609.  Corporate Trustee Required; Eligibility.

                  There shall at all times be one (and only one) Trustee
hereunder with respect to the Securities of each series, which may be Trustee
hereunder for Securities of one or more other series. Each Trustee shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000. If any such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of its supervising or examining authority, then for the purposes of
this Section and to the extent permitted by the Trust Indenture Act, the
combined capital and surplus of such Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee with respect to the Securities of any
series 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 610.  Resignation and Removal; Appointment of 
Successor.

                  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 611.

                  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.

                  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.

                  If at any time:

                  (1) the Trustee shall fail to comply with Section 608 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

                                       45

                  (2) the Trustee shall cease to be eligible under Section 609
         and shall fail to resign after written request therefor by the Company
         or by any such Holder, or

                  (3) the Trustee shall become incapable of acting or 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, (A) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (B) subject to Section 514, 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.

                  If the instrument of acceptance by a successor Trustee
required by Section 611 shall not have been delivered to the Trustee within 30
days after the giving of such notice of resignation or removal, the Trustee
resigning or being removed may petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.

                  If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, 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 611. 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 Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
611, 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 611, the retiring Trustee or 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.

                                       46

                  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
to all Holders of Securities of such series in the manner provided in Section
106. 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 611.  Acceptance of Appointment by Successor.

                  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.

                  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 co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any

                                       47

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.

                  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 the first or second preceding paragraph, as the case may be.

                  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 612.  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 613.  Preferential Collection of Claims Against 
Company.

                  If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall be subject
to the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).

                  Section 614.  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 and upon exchange, registration of transfer, or partial
redemption thereof or pursuant to Section 306, 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

                                       48

Trustee or the Trustee's certificate of 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. Each Authenticating Agent shall be
acceptable to the Company and shall at all times 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 act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. 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 Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an 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 the 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 give notice of such
appointment in the manner provided in Section 106 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. 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 Trustee agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section, and
the Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.

                                       49

                  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.

                                             STATE STREET BANK & TRUST CO. N.A.,
                                                                      As Trustee

                                             By_________________________________
                                                         As Authenticating Agent

                                             By_________________________________
                                                              Authorized Officer

                                  ARTICLE SEVEN

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

                  Section 701.  Company to Furnish Trustee Names and Addresses 
of Holders.

                  The Company will furnish or cause to be furnished to the 
Trustee

                  (1) semi-annually, not later than March 15 and September 15 in
         each year, a list, in such form as the Trustee may reasonably require,
         of the names and addresses of the Holders of Securities of each series
         as of the preceding March 1 or September 1, as the case may be, and

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

excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.

                                       50

                  Section 702.  Preservation of Information; Communications to 
Holders.

                  The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 701 and the names
and addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.

                  The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee shall be as provided by the
Trust Indenture Act.

                  Every Holder of Securities, 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 any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.

                  Section 703.  Reports by Trustee.

                  The Trustee shall transmit to Holders such reports concerning
the Trustee and its actions under this Indenture as may be required pursuant to
the Trust Indenture Act at the time and in the manner provided pursuant thereto.
Reports so required to be transmitted at stated intervals of not more than 12
months shall be transmitted within 60 days after the first date of issuance of
Securities and on each anniversary of such date.

                  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 promptly notify the Trustee when any Securities are listed on any
stock exchange.

                  Section 704.  Reports by Company.

                  The Company shall file with the Trustee and the Commission,
and transmit to Holders such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.

                  Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained

                                       51

therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).

                  Section 705.  Notice of Default.

                  The Company shall file with the Trustee written notice of the
occurrence of any Event of Default within five Business Days of its becoming
aware of any such Event of Default.

                                  ARTICLE EIGHT

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

                  Section 801.  Company May Consolidate, Etc., Only on Certain 
Terms.

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

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

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

                                       52

                  (3) if, as a result of any such consolidation or merger or
         such conveyance, transfer or lease, properties or assets of the Company
         would become subject to a mortgage, pledge, lien, security interest or
         other encumbrance which would not be permitted by this Indenture, the
         Company or such successor Person, as the case may be, shall take such
         steps as shall be necessary effectively to secure the Securities
         equally and ratably with (or prior to) all indebtedness secured
         thereby; and

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

                  Section 802.  Successor Substituted.

                  Upon any consolidation of the Company with, or merger of the
Company into, any other Person or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety in accordance
with Section 801, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except in
the case of a lease, the predecessor Person shall be relieved of all obligations
and covenants under this Indenture and the Securities.

                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

                  Section 901.  Supplemental Indentures Without Consent of 
Holders.

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

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

                                       53

                  (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; or

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

                  (4) to add to or change any of the provisions of this
         Indenture to such extent as shall be necessary to permit or facilitate
         the issuance of Securities in bearer form, registrable or not
         registrable as to principal, and with or without interest coupons, or
         to permit or facilitate the issuance of Securities in uncertificated
         form; or

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

                  (6) to secure the Securities; or

                  (7) to establish the form or terms of Securities of any series
         as permitted by Sections 201 and 301; or

                  (8) 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 611; or

                  (9) 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 that such
         action pursuant to this Clause (9) shall not adversely affect the
         interests of the Holders of Securities of any series in any material
         respect.

                                       54

                  Section 902.  Supplemental Indentures with Consent of Holders.

                  With the consent of the Holders of not less than a majority 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 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 reduce the amount of the
         principal of an Original Issue Discount Security or any other Security
         which would be due and payable upon a declaration of acceleration of
         the Maturity thereof pursuant to Section 502, or change any Place of
         Payment where, or the coin or currency in which, any Security or any
         premium or 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), or

                  (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, or

                  (3) modify any of the provisions of this Section, Section 513
         or Section 1008, except to increase any such percentage or to provide
         that certain other provisions of this Indenture cannot be modified or
         waived without the consent of the Holder of each Outstanding 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 1008, or the deletion of this proviso, in accordance with
         the requirements of Sections 611 and 901(8).

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

                                       55

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.

                  The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Persons entitled to consent to any
indenture supplemental hereto. If a record date is fixed, the Holders on such
record date, or their duly designated proxies, and only such Persons, shall be
entitled to consent to such supplemental indenture, whether or not such Holders
remain Holders after such record date; provided that unless such consent shall
have become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
cancelled and of no further effect.

                  Section 903.  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 601) 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 or immunities under this Indenture or
otherwise.

                  Section 904.  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 905.  Conformity with Trust Indenture Act.

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

                                       56

                  Section 906.  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 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 1001.  Payment of Principal, Premium and Interest.

                  The Company covenants and agrees for the benefit of each
series of Securities that it will duly and punctually pay the principal of and
any premium and interest on the Securities of that series in accordance with the
terms of the Securities and this Indenture.

                  Section 1002.  Maintenance of Office or Agency.

                  The Company will maintain in each Place of Payment for any
series of Securities 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. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.

                  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 each Place of Payment for Securities of any series for
such purposes. The Company will give prompt written notice to the Trustee of any

                                       57

such designation or rescission and of any change in the location of any such 
other office or agency.

                  Section 1003.  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 or any premium 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 any premium and 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, prior to each due date of the principal of or
any premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay such amount, such sum to be held as provided by
the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so to act.

                  The Company will cause each Paying Agent 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) comply with the
provisions of the Trust Indenture Act applicable to it as a Paying Agent and (2)
during the continuance of any default by the Company (or any other obligor upon
the Securities of that series) in the making of any payment in respect of the
Securities of that series, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent for payment in
respect of the Securities of that series.

                  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 or any
premium or interest on any Security of any series and remaining unclaimed for
two years after such principal, premium or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for

                                       58

payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in New York, New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.

                  Section 1004.  Statement by Officers as to Default.

                  The Company will deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate, stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance and observance of
any of the terms, provisions and conditions of this Indenture (without regard to
any period of grace or requirement of notice provided hereunder) and, if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.

                  Section 1005.  Existence.

                  Subject to Article Eight, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.

                  Section 1006.  Maintenance of Properties.

                  The Company will cause all properties used or useful in the
conduct of its business or the business of any Subsidiary to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.

                                       59

                  Section 1007.  Payment of Taxes and Other Claims.

                  The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all taxes, assessments
and governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and (2)
all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a lien upon the property of the Company or any Subsidiary; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.

                  Section 1008.  Waiver of Certain Covenants.

                  Except as otherwise specified as contemplated by Section 301
for Securities of such series, the Company may, with respect to the Securities
of any series, omit in any particular instance to comply with any term,
provision or condition set forth in any covenant provided pursuant to Section
301(18), 901(2) or 901(7) for the benefit of the Holders of such series if
before the time for such compliance the Holders of at least a majority in
principal amount of the Outstanding Securities of such series 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 1009.  Calculation of Original Issue Discount.

                  The Company shall file with the Trustee promptly at the end of
each calendar year a written notice specifying the amount of original issue
discount (including daily rates and accrual periods) accrued on Outstanding
Securities as of the end of such year.

                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES

                  Section 1101.  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 301 for such Securities) in
accordance with this Article.

                                       60

                  Section 1102.  Election to Redeem; Notice to Trustee.

                  The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution or in another manner specified as contemplated
by Section 301 for such Securities. In case of any redemption at the election of
the Company of less than all the Securities of any series (including any such
redemption affecting only a single Security), the Company shall, at least 60
days prior to the Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee of such Redemption
Date, of the principal amount of Securities of such series to be redeemed and,
if applicable, of the tenor of the Securities to be redeemed. In the case of any
redemption of Securities prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or elsewhere in this
Indenture, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction.

                  Section 1103.  Selection by Trustee of Securities to Be 
Redeemed.

                  If less than all the Securities of any series are to be
redeemed (unless all the Securities of such series and of a specified tenor are
to be redeemed or unless such redemption affects only a single Security), the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, 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 a portion of the principal amount of any Security of such series,
provided that the unredeemed portion of the principal amount of any Security
shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security. If less than all the Securities of
such series and of a specified tenor are to be redeemed (unless such redemption
affects only a single Security), the particular Securities to be redeemed shall
be selected not more than 60 days prior to the Redemption Date by the Trustee,
from the Outstanding Securities of such series and specified tenor not
previously called for redemption in accordance with the preceding sentence.

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

                  The provisions of the two preceding paragraphs shall not apply
with respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.

                                       61

                  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 1104.  Notice of Redemption.

                  Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at his address
appearing in the Security Register.

                  All notices of redemption shall state, including CUSP number,
if any:

                  (1) the Redemption Date,

                  (2) the Redemption Price,

                  (3) if less than all the Outstanding Securities of any series
         consisting of more than a single Security are to be redeemed, the
         identification (and, in the case of partial redemption of any such
         Securities, the principal amounts) of the particular Securities to be
         redeemed and, if less than all the Outstanding Securities of any series
         consisting of a single Security are to be redeemed, the principal
         amount of the particular Security to be redeemed,

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

                  (5) the place or places where each such Security is to be
         surrendered for payment of the Redemption Price, and

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

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

                  Section 1105.  Deposit of Redemption Price.

                  Prior to any Redemption Date, the Company shall deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) an amount
of money sufficient to pay the

                                       62

Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date) accrued interest on, all the Securities which are to be redeemed
on that date.

                  Section 1106.  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. Upon surrender
of any such Security for redemption in accordance with said notice, such
Security shall be paid by the Company at the Redemption Price, together with
accrued interest to the Redemption Date; provided, however, that, unless
otherwise specified as contemplated by Section 301, installments of interest
whose Stated Maturity is on or prior to the Redemption Date will 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 307.

                  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 1107.  Securities Redeemed in Part.

                  Any Security 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 or Securities of the same series and of
like tenor, 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 so surrendered.

                                       63

                                 ARTICLE TWELVE

                                  SINKING FUNDS

                  Section 1201.  Applicability of Article.

                  The provisions of this Article shall be applicable to any
sinking fund for the retirement of Securities of any series except as otherwise
specified as contemplated by Section 301 for such Securities.

                  The minimum amount of any sinking fund payment provided for by
the terms of any Securities 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 such Securities is herein referred to as an "optional sinking fund
payment". If provided for by the terms of any Securities, the cash amount of any
sinking fund payment may be subject to reduction as provided in Section 1202.
Each sinking fund payment shall be applied to the redemption of Securities as
provided for by the terms of such Securities.

                  Section 1202.  Satisfaction of Sinking Fund Payments with 
Securities.

                  The Company (1) may deliver Outstanding Securities 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 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 any Securities of such series required to be made
pursuant to the terms of such Securities as and to the extent provided for by
the terms of such Securities; provided that the Securities to be so credited
have not been previously so credited. The Securities to be so credited shall be
received and credited for such purpose by the Trustee at the Redemption Price,
as specified in the Securities so to be redeemed, for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.

                  Section 1203.  Redemption of Securities for Sinking Fund.

                  Not less than 60 days prior to each sinking fund payment date
for any Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
such Securities pursuant to the terms of such Securities, 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 pursuant to
Section 1202 and will also deliver to the Trustee any Securities to be so
delivered. Not less than 30 nor more than 45 days prior to each such sinking
fund payment date, the Trustee shall

                                       64

select the Securities to be redeemed upon such sinking fund payment date in the
manner specified in Section 1103 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 1104. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections
1106 and 1107.

                                ARTICLE THIRTEEN

                       DEFEASANCE AND COVENANT DEFEASANCE

                  Section 1301.  Company's Option to Effect Defeasance or 
Covenant Defeasance.

                  If applicable to a particular series of Securities, the
Company may elect, at its option at any time, to have Section 1302 or Section
1303 applied to any such series of Securities or any Securities of such series,
as the case may be, designated pursuant to Section 301 as being defeasible
pursuant to such Section 1302 or 1303, in accordance with any applicable
requirements provided pursuant to Section 301 and upon compliance with the
conditions set forth below in this Article. Any such election shall be evidenced
by a Board Resolution or in another manner specified as contemplated by Section
301 for such Securities.

                  Section 1302.  Defeasance and Discharge.

                  Upon the Company's exercise of its option (if any) to have
this Section applied to any applicable series of Securities or any Securities of
such series, as the case may be, the Company shall be deemed to have been
discharged from its obligations with respect to such Securities as provided in
this Section on and after the date the conditions set forth in Section 1304 are
satisfied (hereinafter called "Defeasance"). For this purpose, such Defeasance
means that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by such Securities and to have satisfied all its other
obligations under such Securities and this Indenture insofar as such Securities
are concerned (and the Trustee, at the expense of the Company, shall execute
proper instruments acknowledging the same), subject to the following which shall
survive until otherwise terminated or discharged hereunder: (1) the rights of
Holders of such Securities to receive, solely from the trust fund described in
Section 1304 and as more fully set forth in such Section, payments in respect of
the principal of and any premium and interest on such Securities when payments
are due (2) the Company's obligations with respect to such Securities under
Sections 304, 305, 306, 1002 and 1003, (3) the rights, powers, trusts, duties
and immunities of the Trustee hereunder and (4) this Article. Subject to
compliance with this Article, the Company may exercise its option (if any) to
have this Section applied to any applicable Securities notwithstanding the prior
exercise of its option (if any) to have Section 1303 applied to such Securities.

                                       65

                  Section 1303.  Covenant Defeasance.

                  Upon the Company's exercise of its option (if any) to have
this Section applied to any applicable series of Securities or any Securities of
such series, as the case may be, (1) the Company shall be released from its
obligations under Section 801(3), Sections 1005 through 1007, inclusive, and any
covenants provided pursuant to Section 301(18), 901(2) or 901(7) for the benefit
of the Holders of such Securities and (2) the occurrence of any event specified
in Sections 501(4) (with respect to any of Section 801(3), Sections 1005 through
1007, inclusive, and any such covenants provided pursuant to Section 301(18),
901(2) or 901(7)), 501(5) and 501(8) shall be deemed not to be or result in an
Event of Default, in each case with respect to such Securities as provided in
this Section on and after the date the conditions set forth in Section 1304 are
satisfied (hereinafter called "Covenant Defeasance"). For this purpose, such
Covenant Defeasance means that, with respect to such Securities, the Company may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such specified Section (to the extent
so specified in the case of Section 501(4)), whether directly or indirectly by
reason of any reference elsewhere herein to any such Section or by reason of any
reference in any such Section to any other provision herein or in any other
document, but the remainder of this Indenture and such Securities shall be
unaffected thereby.

                  Section 1304.  Conditions to Defeasance or Covenant 
Defeasance.

                  The following shall be the conditions to the application of
Section 1302 or Section 1303 to any applicable series of Securities or any
Securities of such series, as the case may be:

                  (1) The Company shall irrevocably have deposited or caused to
         be deposited with the Trustee (or another trustee which satisfies the
         requirements contemplated by Section 609 and agrees to comply with the
         provisions of this Article applicable to it) as trust funds in trust
         for the purpose of making the following payments, specifically pledged
         as security for, and dedicated solely to, the benefits of the Holders
         of such Securities, (A) money in an amount, or (B) U.S. Government
         Obligations which through the scheduled payment of principal and
         interest in respect thereof in accordance with their terms will
         provide, not later than one day before the due date of any payment,
         money in an amount, or (C) a combination thereof, in each case
         sufficient, in the opinion of a nationally recognized firm of
         independent public accountants expressed in a written certification
         thereof delivered to the Trustee, to pay and discharge, and which shall
         be applied by the Trustee (or any such other qualifying trustee) to pay
         and discharge, the principal of and any premium and interest on such
         Securities on the respective Stated Maturities, in accordance with the
         terms of this Indenture and such Securities. As used herein, "U.S.
         Government Obligation" means (x) any security which is (i) a direct
         obligation of the United States of America for the payment of

                                       66

         which the full faith and credit of the United States of America is
         pledged or (ii) an obligation of a Person controlled or supervised by
         and acting as an agency or instrumentality of the United States of
         America the payment of which is unconditionally guaranteed as a full
         faith and credit obligation by the United States of America, which, in
         either case (i) or (ii), is not callable or redeemable at the option of
         the issuer thereof, and (y) any depositary receipt issued by a bank (as
         defined in Section 3(a)(2) of the Securities Act) as custodian with
         respect to any U.S. Government Obligation which is specified in Clause
         (x) above and held by such bank for the account of the holder of such
         depositary receipt, or with respect to any specific payment of
         principal of or interest on any U.S. Government Obligation which is so
         specified and held, 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 depositary receipt from any amount
         received by the custodian in respect of the U.S. Government Obligation
         or the specific payment of principal or interest evidenced by such
         depositary receipt.

                  (2) In the event of an election to have Section 1302 apply to
         any applicable series of Securities or any Securities of such series,
         as the case may be, the Company shall have delivered to the Trustee an
         Opinion of Counsel stating that (A) the Company has received from, or
         there has been published by, the Internal Revenue Service a ruling or
         (B) since the date of this instrument, there has been a change in the
         applicable Federal income tax law, in either case (A) or (B) to the
         effect that, and based thereon such opinion shall confirm that, the
         Holders of such Securities will not recognize gain or loss for Federal
         income tax purposes as a result of the deposit, Defeasance and
         discharge to be effected with respect to such Securities and will be
         subject to Federal income tax on the same amount, in the same manner
         and at the same times as would be the case if such deposit, Defeasance
         and discharge were not to occur.

                  (3) In the event of an election to have Section 1303 apply to
         any applicable series of Securities or any Securities of such series,
         as the case may be, the Company shall have delivered to the Trustee an
         Opinion of Counsel to the effect that the Holders of such Securities
         will not recognize gain or loss for Federal income tax purposes as a
         result of the deposit and Covenant Defeasance to be effected with
         respect to such Securities and will be subject to Federal income tax on
         the same amount, in the same manner and at the same times as would be
         the case if such deposit and Covenant Defeasance were not to occur.

                  (4) The Company shall have delivered to the Trustee an
         Officer's Certificate to the effect that neither such Securities nor
         any other Securities of the same series, if then listed on any
         securities exchange, will be delisted as a result of such deposit.

                                       67

                  (5) No event which is, or after notice or lapse of time or
         both would become, an Event of Default with respect to such Securities
         or any other Securities shall have occurred and be continuing at the
         time of such deposit or, with regard to any such event specified in
         Sections 501(6) and (7), at any time on or prior to the 90th day after
         the date of such deposit (it being understood that this condition shall
         not be deemed satisfied until after such 90th day).

                  (6) Such Defeasance or Covenant Defeasance shall not cause the
         Trustee to have a conflicting interest within the meaning of the Trust
         Indenture Act (assuming all Securities are in default within the
         meaning of such Act).

                  (7) Such Defeasance or Covenant Defeasance shall not result in
         a breach or violation of, or constitute a default under, any other
         agreement or instrument to which the Company is a party or by which it
         is bound.

                  (8) Such Defeasance or Covenant Defeasance shall not result in
         the trust arising from such deposit constituting an investment company
         within the meaning of the Investment Company Act unless such trust
         shall be registered under such Act or exempt from registration
         thereunder.

                  (9) The Company shall have delivered to the Trustee an
         Officer's Certificate and an Opinion of Counsel, each stating that all
         conditions precedent with respect to such Defeasance or Covenant
         Defeasance have been complied with.

                  Section 1305.  Deposited Money and U.S. Government Obligations
to Be Held in Trust; Miscellaneous Provisions.

                  Subject to the provisions of the last paragraph of Section
1003, all money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee or other qualifying trustee (solely for purposes of
this Section and Section 1306, the Trustee and any such other trustee are
referred to collectively as the "Trustee") pursuant to Section 1304 in respect
of any Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any such Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
such Securities, of all sums due and to become due thereon in respect of
principal and any premium and interest, but money so held in trust need not be
segregated from other funds except to the extent required by law.

                  The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 1304 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of Outstanding Securities.

                                       68

                  Anything in this Article to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 1304 with respect to any Securities which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect the
Defeasance or Covenant Defeasance, as the case may be, with respect to such
Securities.

                  Section 1306.  Reinstatement.

                  If the Trustee or the Paying Agent is unable to apply any
money in accordance with this Article with respect to any Securities by reason
of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the obligations
under this Indenture and such Securities from which the Company has been
discharged or released pursuant to Section 1302 or 1303 shall be revived and
reinstated as though no deposit had occurred pursuant to this Article with
respect to such Securities, until such time as the Trustee or Paying Agent is
permitted to apply all money held in trust pursuant to Section 1305 with respect
to such Securities in accordance with this Article; provided, however, that if
the Company makes any payment of principal of or any premium or interest on any
such Security following such reinstatement of its obligations, the Company shall
be subrogated to the rights (if any) of the Holders of such Securities to
receive such payment from the money so held in trust.

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

                                      ALEXANDER'S, INC.

                                      By____________________________________

Attest:

_________________

                                      STATE STREET BANK & TRUST CO. N.A.
                                      Trustee:

                                       69

                                      By____________________________________

Attest:

_________________

STATE OF NEW YORK                     )
                                      )  ss.:
COUNTY OF NEW YORK                    )

                  On the ____ day of ________, ____, before me personally came
___________, to me known, who, being by me duly sworn, did depose and say that
he is ____________ of ________________, one of the corporations described in and
which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation; and that he signed his name thereto by like authority.

                                                      __________________________

STATE OF NEW YORK                     )
                                      )  ss.:
COUNTY OF NEW YORK                    )

                  On the ____ day of ________, ____, before me personally came
___________, to me known, who, being by me duly sworn, did depose and say that
he is ____________ of ________________, one of the corporations described in and
which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation; and that he signed his name thereto by like authority.

                                                      __________________________

                                                                     EXHIBIT 4.4

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

                                ALEXANDER'S INC.

                                       to

                       STATE STREET BANK & TRUST CO. N.A.
                                                              Trustee

                                   ----------

                                    Indenture

                             Dated as of _____, 1995

                                   ----------

                          SUBORDINATED DEBT SECURITIES

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

       ..............................................................
                 Certain Sections of this Indenture relating to
                   Sections 310 through 318, inclusive, of the
                          Trust Indenture Act of 1939:

 Trust Indenture
   Act Section                                              Indenture Section

ss.310   (a)(1)        .....................................   609
         (a)(2)        .....................................   609
         (a)(3)        .....................................   Not Applicable
         (a)(4)        .....................................   Not Applicable
         (b)           .....................................   608
                                                               610
ss.311   (a)           .....................................   613
         (b)           .....................................   613
ss.312   (a)           .....................................   701
                                                               702
         (b)           .....................................   702
         (c)           .....................................   702
ss.313   (a)           .....................................   703
         (b)           .....................................   703
         (c)           .....................................   703
         (d)           .....................................   703
ss.314   (a)           .....................................   704
         (a)(4)        .....................................   101
                                                               1004
         (b)           .....................................   Not Applicable
         (c)(1)        .....................................   102
         (c)(2)        .....................................   102
         (c)(3)        .....................................   Not Applicable
         (d)           .....................................   Not Applicable
         (e)           .....................................   102
ss.315   (a)           .....................................   601
         (b)           .....................................   602
         (c)           .....................................   601
         (d)           .....................................   601
         (e)           .....................................   514
ss.316   (a)           .....................................   101
         (a)(1)(A)     .....................................   502
                                                               512
         (a)(1)(B)     .....................................   513
         (a)(2)        .....................................   Not Applicable
         (b)           .....................................   508
         (c)           .....................................   104
ss.317   (a)(1)        .....................................   503
         (a)(2)        .....................................   504
         (b)           .....................................   1003
ss.318   (a)           .....................................   107

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

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

                                TABLE OF CONTENTS

                                   ----------
                                                                          Page

PARTIES..................................................................   1
RECITALS OF THE COMPANY..................................................   1

                                   ARTICLE ONE

                        DEFINITIONS AND OTHER PROVISIONS
                             OF GENERAL APPLICATION

    101.  Definitions.....................................................  1
    102.  Compliance Certificates and Opinions............................  8
    103.  Form of Documents Delivered to Trustee..........................  9
    104.  Acts of Holders, Record Dates................................... 10
    105.  Notices, Etc., to Trustee and Company........................... 12
    106.  Notice to Holders; Waiver....................................... 12
    107.  Conflict with Trust Indenture Act............................... 13
    108.  Effect of Headings and Table of Contents........................ 13
    109.  Successors and Assigns.......................................... 13
    110.  Separability Clause............................................. 13
    111.  Benefits of Indenture........................................... 13
    112.  Governing Law................................................... 14
    113.  Legal Holidays.................................................. 14

                                   ARTICLE TWO

                                 SECURITY FORMS

    201.  Forms Generally................................................. 14
    202.  Form of Face of Security........................................ 15
    203.  Form of Reverse of Security..................................... 17
    204.  Form of Legend for Global Securities............................ 23
    205.  Form of Trustee's Certificate of Authentication................. 23

                                  ARTICLE THREE

                                 THE SECURITIES

    301.  Amount Unlimited; Issuable in Series............................ 23
    302.  Denominations................................................... 26

                                      (ii)
                                                                         Page

    303.  Execution, Authentication, Delivery and Dating.................. 27
    304.  Temporary Securities............................................ 28
    305.  Registration, Registration of Transfer and Exchange............. 29
    306.  Mutilated, Destroyed, Lost and Stolen Securities................ 31
    307.  Payment of Interest; Interest Rights Preserved.................. 32
    308.  Persons Deemed Owners........................................... 33
    309.  Cancellation.................................................... 33
    310.  Computation of Interest......................................... 34
    311.  CUSIP Numbers................................................... 34

                                  ARTICLE FOUR

                           SATISFACTION AND DISCHARGE

    401.  Satisfaction and Discharge of Indenture......................... 34
    402.  Application of Trust Money...................................... 35

                                  ARTICLE FIVE

                                    REMEDIES

    501.  Events of Default............................................... 36
    502.  Acceleration of Maturity; Rescission and Annulment.............. 38
    503.  Collection of Indebtedness and Suits for Enforcement by
             Trustee...................................................... 39
    504.  Trustee May File Proofs of Claim................................ 40
    505.  Trustee May Enforce Claims Without Possession of
             Securities................................................... 40
    506.  Application of Money Collected.................................. 41
    507.  Limitation on Suits............................................. 41
    508.  Unconditional Right of Holders to Receive Principal,
             Premium and Interest and to Convert.......................... 42
    509.  Restoration of Rights and Remedies.............................. 42
    510.  Rights and Remedies Cumulative.................................. 42
    511.  Delay or Omission Not Waiver.................................... 43
    512.  Control by Holders.............................................. 43
    513.  Waiver of Past Defaults......................................... 43
    514.  Undertaking for Costs........................................... 44
    515.  Waiver of Usury, Stay or Extension Laws......................... 44

                                      (iii)
                                                                         Page

                                   ARTICLE SIX

                                   THE TRUSTEE

    601.  Certain Duties and Responsibilities............................. 44
    602.  Notice of Defaults.............................................. 45
    603.  Certain Rights of Trustee....................................... 45
    604.  Not Responsible for Recitals or Issuance of Securities.......... 46
    605.  May Hold Securities............................................. 46
    606.  Money Held in Trust............................................. 47
    607.  Compensation and Reimbursement.................................. 47
    608.  Disqualification; Conflicting Interests......................... 48
    609.  Corporate Trustee Required, Eligibility......................... 48
    610.  Resignation and Removal; Appointment of Successor............... 48
    611.  Acceptance of Appointment by Successor.......................... 50
    612.  Merger, Conversion, Consolidation or Succession to
             Business..................................................... 51
    613.  Preferential Collection of Claims Against Company............... 51
    614.  Appointment of Authenticating Agent............................. 51

                                  ARTICLE SEVEN

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

    701.  Company to Furnish Trustee Names and Addresses of
             Holders...................................................... 53
    702.  Preservation of Information; Communications to Holders.......... 54
    703.  Reports by Trustee.............................................. 54
    704.  Reports by Company.............................................. 54
    705.  Notice of Default............................................... 55

                                  ARTICLE EIGHT

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

    801.  Company May Consolidate, Etc., Only on Certain Terms............ 55
    802.  Successor Substituted........................................... 56

                                      (iv)
                                                                         Page

                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

    901.  Supplemental Indentures Without Consent of Holders.............. 57
    902.  Supplemental Indentures With Consent of Holders................. 58
    903.  Execution of Supplemental Indentures............................ 59
    904.  Effect of Supplemental Indentures............................... 60
    905.  Conformity with Trust Indenture Act............................. 60
    906.  Reference in Securities to Supplemental Indentures.............. 60

                                   ARTICLE TEN

                                    COVENANTS

    1001.  Payment of Principal, Premium and Interest..................... 60
    1002.  Maintenance of Office or Agency................................ 61
    1003.  Money for Securities Payments to Be Held in Trust.............. 61
    1004.  Statement by Officers as to Default............................ 62
    1005.  Existence...................................................... 63
    1006.  Maintenance of Properties...................................... 63
    1007.  Payment of Taxes and Other Claims.............................. 63
    1008.  Waiver of Certain Covenants.................................... 63
    1009.  Calculation of Original Issue Discount......................... 64

                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES

    1101.  Applicability of Article....................................... 64
    1102.  Election to Redeem; Notice to Trustee.......................... 64
    1103.  Selection by Trustee of Securities to Be Redeemed.............. 64
    1104.  Notice of Redemption........................................... 65
    1105.  Deposit of Redemption Price.................................... 66
    1106.  Securities Payable on Redemption Date.......................... 67
    1107.  Securities Redeemed in Part.................................... 67

                                       (v)
                                                                         Page

                                 ARTICLE TWELVE

                                  SINKING FUNDS

    1201.  Applicability of Article....................................... 68
    1202.  Satisfaction of Sinking Fund Payments with Securities.......... 68
    1203.  Redemption of Securities for Sinking Fund...................... 68

                                ARTICLE THIRTEEN

                       DEFEASANCE AND COVENANT DEFEASANCE

    1301.  Company's Option to Effect Defeasance or Covenant
             Defeasance................................................... 69
    1302.  Defeasance and Discharge....................................... 69
    1303.  Covenant Defeasance............................................ 70
    1304.  Conditions to Defeasance or Covenant Defeasance................ 70
    1305.  Deposited Money and U.S. Government Obligations to Be
             Held in Trust; Miscellaneous Provisions...................... 72
    SECTION 1306.  Reinstatement.......................................... 73

                                ARTICLE FOURTEEN

                            CONVERSION OF SECURITIES

    1401.  Applicability; Conversion Privilege and Conversion Price....... 74
    1402.  Exercise of Conversion Privilege............................... 74
    1403.  Fractions of Shares............................................ 75
    1404.  Adjustment of Conversion Price................................. 76
    1405.  Notice of Adjustments of Conversion Price...................... 80
    1406.  Notice of Certain Corporate Action............................. 80
    1407.  Company to Reserve Shares...................................... 81
    1408.  Taxes on Conversions........................................... 82
    1409.  Covenant as to Shares.......................................... 82
    1410.  Cancellation of Converted Securities........................... 82
    1411.  Provisions in Case of Reclassification, Consolidation,
             Merger or Sale of Assets..................................... 82
    1412.  Responsibility of Trustee and Conversion Agent................. 83

                                      (vi)
                                                                         Page

                                 ARTICLE FIFTEEN

                           SUBORDINATION OF SECURITIES

    1501.  Securities Subordinate to Senior Debt.......................... 84
    1502.  Payment Over of Proceeds upon Dissolution, Etc................. 84
    1503.  Prior Payment to Senior Debt upon Acceleration of
             Securities................................................... 85
    1504.  No Payment when Senior Debt in Default......................... 86
    1505.  Payment Permitted in Certain Situations........................ 87
    1506.  Subrogation to Rights of Holders of Senior Debt................ 87
    1507.  Provisions Solely to Define Relative Rights.................... 87
    1508.  Trustee to Effectuate Subordination............................ 88
    1509.  No Waiver of Subordination Provisions.......................... 88
    1510.  Notice to Trustee.............................................. 89
    1511.  Reliance on Judicial Order or Certificate of Liquidating
             Agent........................................................ 89
    1512.  Trustee Not Fiduciary for Holders of Senior Debt............... 90
    1513.  Rights of Trustee as Holder of Senior Debt,
             Preservation of Trustee's Rights............................. 90
    1514.  Article Applicable to Paying Agents............................ 90
    1515.  Certain Conversions Deemed Payment............................. 90

                  INDENTURE, dated as of ____________, 199_, between Alexander's
Inc., a corporation duly organized and existing under the laws of the State of
Delaware (herein called the "Company"), having its principal office at Park 80
West, Plaza II, Saddle Brook, New Jersey 07662, and State Street Bank & Trust 
Co. N.A., as Trustee (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 in this Indenture provided.

                  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 101.  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;

                                        2

                  (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 in the United
         States of America at the date of such computation;

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

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

                  "Act", when used with respect to any Holder, has the meaning
specified in Section 104.

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

                  "Authenticating Agent" means any Person authorized by the
Trustee pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.

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

                                        3

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

                  "Common Shares" means the shares of common stock, $1.00 par
value per share, of the Company.

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

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

                  "Corporate Trust Office" means the principal office of the
Trustee in the City of New York at which at any particular time its corporate
trust business shall be administered, which office at the date hereof is located
at [ ].

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

                  "Covenant Defeasance" has the meaning specified in Section
1303.

                  "Defaulted Interest" has the meaning specified in Section 307.

                  "Defeasance" has the meaning specified in Section 1302.

                  "Depositary" means, with respect to Securities of any series
issuable in whole or in part in the form of one or more Global Securities, a
clearing agency registered under the Exchange Act that is designated to act as
Depositary for such Securities as contemplated by Section 301.

                  "Event of Default" has the meaning specified in Section 501.

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

                  "Expiration Date" has the meaning specified in Section 104.

                                        4

                  "Global Security" means a Security that evidences all or part
of the Securities of any series and bears the legend set forth in Section 204
(or such legend as may be specified as contemplated by Section 301 for such
Securities).

                  "Holder" means a Person in whose name a Security is registered
in the Security Register

                  "Indenture" means this instrument as originally executed and
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,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 301.

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

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

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

                  "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.

                  "Notice of Default" means a written notice of the kind
specified in Section 501(4) or 501(5).

                  "Officers' Certificate" means a certificate signed by the
Chairman of the Board, a Vice Chairman of the Board, the President or a Vice
President, and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary, of the Company, and delivered to the Trustee. One of the
officers signing an Officers' Certificate given pursuant to Section 1004 shall
be the principal executive, financial or accounting officer of the Company.

                  "Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Company, and who shall be acceptable to the Trustee.

                                        5

                  "Original Issue Discount Security" means any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 501.

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

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

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

                  (3)  Securities  as to  which  Defeasance  has  been  effected
         pursuant to Section 1302;

                  (4) Securities which have been paid pursuant to Section 306 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; and

                  (5)  Securities  which have been  delivered to the Trustee for
         conversion pursuant to Article Fourteen;

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, (A) the principal amount of an Original Issue
Discount Security which shall be deemed to be Outstanding shall be the amount of
the principal thereof which would be due and payable as of such date upon
acceleration of the Maturity thereof to such date pursuant to Section 502, (B)
if, as of such date, the principal amount payable at the Stated Maturity of a
Security is not determinable, the principal amount of such Security which shall
be deemed to be Outstanding shall be the amount as specified or determined as
contemplated by Section 301, (C) the principal amount of a Security denominated
in one or more foreign currencies or currency units which shall be

                                        6

deemed to be Outstanding shall be the U.S. dollar equivalent, determined as of
such date in the manner provided as contemplated by Section 301, of the
principal amount of such Security (or, in the case of a Security described in
Clause (A) or (B) above, of the amount determined as provided in such Clause),
and (D) 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, waiver or other action, 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 pledgee 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 or any premium or interest on any Securities on behalf of
the Company.

                  "Person" means any individual, corporation, partnership, joint
venture, 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 the principal of and any premium
and interest on the Securities of that series are payable as specified as
contemplated by Section 301.

                  "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 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.

                  "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 at which it is to be redeemed pursuant to this
Indenture.

                  "Regular Record Date" for the interest payable on any Interest
Payment Date on the Securities of any series means the date specified for that
purpose as contemplated by Section 301.

                                        7

                  "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, the
secretary, any assistant secretary, the treasurer, any assistant treasurer, the
cashier, any assistant cashier, any trust officer or assistant trust officer,
the controller or any assistant controller or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.

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

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

                  "Security Register" and "Security Registrar" have the
respective meanings specified in Section 301.

                  "Senior Debt" means be principal of (and premium, if any) and
interest (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company to the extent that such
claim for past-petition interest is allowed in such proceeding) on all
indebtedness of the Company (including indebtedness of others guaranteed by the
Company), other than the Securities, whether outstanding on the date of this
Indenture or thereafter created, incurred or assumed, which is (i) for money
borrowed, (ii) evidenced by a note or similar instrument given in connection
with the acquisition of any businesses, properties or assets of any kind or
(iii) obligations of the Company as lessee under leases required to be
capitalized on the balance sheet of the lessee under generally accepted
accounting principles or leases of property or assets made as part of any sale
and lease-back transaction to which the Company is a party, including
amendments, renewals, extensions, modifications and refundings of any such
indebtedness or obligation, unless in any case in the instrument creating or
evidencing any such indebtedness or obligation or pursuant to which the same is
outstanding it is provided that such indebtedness or obligation is not superior
in right of payment to the Securities.

                  "Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 307.

                  "Stated Maturity", when used with respect to any Security or
any installment of principal thereof or interest thereon, means the date
specified in such Security as the fixed

                                        8

date on which the principal of such Security or such installment of principal or
interest is due and payable.

                  "Subsidiary" means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries. For the purposes of this definition, "voting stock" means
stock which ordinarily has voting power for the election of directors, whether
at all times or only so long as no senior class of stock has such voting power
by reason of any contingency.

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

                  "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.

                  "U.S. Government Obligation" has the meaning specified in
Section 1304.

                  "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".

                  SECTION 102.  Compliance Certificates and Opinions.

                  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 such certificates and opinions as may be required under
the Trust Indenture Act. Each such certificate or opinion shall be given in the
form of an Officers' Certificate, if to be given by an officer of the Company,
or an Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.

                  Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (except for certificates
provided for in Section 1004) shall include,

                                        9

                  (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 103.  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.

                                       10

                  SECTION 104.  Acts of Holders, Record Dates.

                  Any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 601) conclusive in favor of
the Trustee and the Company, if made in the manner provided in this Section.

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

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

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

                  The Company may, in the circumstances permitted by the Trust
Indenture Act, set any day as a record date for the purpose of determining the
Holders of Outstanding Securities of any series entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given, made or taken by
Holders of Securities of such series, provided that the Company may not set a
record date for, and the provisions of this paragraph shall not apply with
respect to, the giving or making of any notice, declaration, request or
direction referred to in the next paragraph. If any record date is set pursuant
to this paragraph, the Holders of

                                       11

Outstanding Securities of the relevant series on such record date, and no other
Holders, shall be entitled to take the relevant action, whether or not such
Holders remain Holders after such record date; provided that no such action
shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Company from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Company, at its own expense, shall cause notice
of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Trustee in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 106.

                  The Trustee may set any day as a record date for the purpose
of determining the Holders of Outstanding Securities of any series entitled to
join in the giving or making of (i) any Notice of Default, (ii) any declaration
of acceleration referred to in Section 502, (iii) any request to institute
proceedings referred to in Section 507(2) or (iv) any direction referred to in
Section 512, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Company's expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Company in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 106.

                  With respect to any record date set pursuant to this Section,
the party hereto which sets such record dates may designate any day as the
"Expiration Date" and from time to time may change the Expiration Date to any
earlier or later day; provided that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto in
writing, and to each Holder of Securities of the relevant series in the manner
set forth in Section 106, on or prior to the existing Expiration Date. If an
Expiration

                                       12

Date is not designated with respect to any record date set pursuant to this
Section, the party hereto which set such record date shall be deemed to have
initially designated the 180th day after such record date as the Expiration Date
with respect thereto, subject to its right to change the Expiration Date as
provided in this paragraph. Notwithstanding the foregoing, no Expiration Date
shall be later than the 180th day after the applicable record date.

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

                  SECTION 105.  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
         sufficient  for every purpose  hereunder if made,  given,  furnished or
         filed in writing to or with the Trustee at its Corporate  Trust Office,
         Attention: Corporate Trust Trustee 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, Attention:
         _______________, or at any other address previously furnished in
         writing to the Trustee by the Company.

                  SECTION 106.  Notice to Holders; Waiver.

                  Where this Indenture provides for notice to Holders of any
event, 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, not later than the latest date (if any), and not earlier than the
earliest date (if any), prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. 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

                                       13

by Holders shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.

                  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 by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.

                  SECTION 107.  Conflict with Trust Indenture Act.

                  If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.

                  SECTION 108.  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 109.  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 110.  Separability Clause.

                  In case any provision in this Indenture or in the Securities
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 111.  Benefits of Indenture.

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

                                       14

                  SECTION 112.  Governing Law.

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

                  SECTION 113.  Legal Holidays.

                  In any case where any Interest Payment Date, Redemption Date,
Conversion Date or Stated Maturity of any Security or the last date on which a
Holder has the right to convert a Security at a particular conversion price
shall not be a Business Day at any Place of Payment, then (notwithstanding any
other provision of this Indenture or of the Securities (other than a provision
of any Security which specifically states that such provision shall apply in
lieu of this Section)) payment of interest or principal (and premium, if any) or
conversion 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, Redemption Date or
Conversion Date, or at the Stated Maturity, provided that no interest shall
accrue with respect to such payment for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may be.

                                   ARTICLE TWO

                                 SECURITY FORMS

                  SECTION 201.  Forms Generally.

                  The Securities of each series shall be in substantially the
form set forth in this Article, or in such other 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 Depositary therefor or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution thereof. If the form of Securities of any series is established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery of such
Securities.

                                       15

                  The definitive Securities 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, as evidenced by their
execution of such Securities.

                  SECTION 202.  Form of Face of Security.

                  [Insert any legend required by the Internal Revenue Code and
the regulations thereunder.]

                                ALEXANDER'S INC.

                                   ----------

No. __________                                                 $_______________
                                                      CUSIP No. _______________

                  ALEXANDER'S INC., a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to _________________________, or
registered assigns, the principal sum of _________________________ Dollars on
____________________________, and to pay interest thereon from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semiannually on __________ and __________ in each year, commencing as of the
date, at the rate of [_____%] per annum, until the principal hereof is paid or
made available for payment, provided that any principal and premium, and any
such installment of interest, which is overdue shall bear interest at the rate
of [___%] per annum (to the extent that the payment of such interest shall be
legally enforceable), from the dates such amounts are due until they are paid or
made available for payment, and such interest shall be payable on demand. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, which shall be
the __________ or __________ (whether or not a Business Day), as the case may
be, next preceding such Interest Payment Date. Any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities

                                       16

exchange on which the Securities of this series may be listed, and upon such
notice as may be required by such exchange, all as more fully provided in said
Indenture.

                  [If the Security is not to bear interest prior to Maturity,
insert--The principal of this Security shall not bear interest except in the
case of a default in payment of principal upon acceleration, upon redemption or
at Stated Maturity and in such case the overdue principal and any overdue
premium shall bear interest at the rate of __% per annum (to the extent that the
payment of such interest shall be legally enforceable), from the dates such
amounts are due until they are paid or made available for payment. Interest on
any overdue principal or premium shall be payable on demand. Any such interest
on any overdue principal or premium which is not so paid on demand shall bear
interest at the rate of _____% per annum (to the extent that the payment of such
interest shall be legally enforceable), from the dates such amounts are due
until they are paid or made available for payment. Interest on any overdue
interest shall be payable on demand.]

                  Payment of the principal of (and premium, if any) and [if
applicable, insert in any such] interest on this Security will be made at the
office or agency of the Company maintained for that purpose in [__________], in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts; provided, however, that
at the option of the Company payment of interest may be made by check mailed to
the address of the Person entitled thereto as such address shall appear in the
Security Register.

                  Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.

                  Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.

                  IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.

                                                    ALEXANDER'S INC.

                                                    By:______________________
Attest:

_______________________

                                       17

                  SECTION 203.  Form of Reverse of Security.

                  This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in one
or more series under an Indenture, dated as of __________ (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and State Street Bank & Trust Co. N.A., as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), and reference is hereby made to the Indenture and all
indentures supplemental thereto for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is one
of the series designated on the face hereof [if applicable, insert -- limited or
aggregate principal amount to $_______________].

                  [If applicable, insert -- Subject to and upon compliance with
the provisions of the Indenture, the Holder of this Security is entitled, at his
option, at any time on or before the close of business on _______________, or in
case this Security or a portion hereof is called for redemption, then in respect
of this Security or such portion hereof until and including, but (unless the
Company defaults in making the payment due upon redemption) not after, the close
of business on the date prior to the Redemption Date, to convert this Security
(or any portion of the principal amount hereof which is $1,000 or an integral
multiple thereof), at the principal amount hereof, or of such portion, into
fully paid and nonassessable shares (calculated as to each conversion to the
nearest 1/100 of a share) of Common Shares of the Company at a conversion price
per Common Share equal to $__________ per Common Share (or at the current
adjusted conversion price if an adjustment has been made as provided in the
Indenture) by surrender of this Security, duly endorsed or assigned to the
Company or in blank, to the Company at its office or agency in _____________,
accompanied by written notice to the Company that the Holder hereof elects to
convert this Security, or if less than the entire principal amount hereof is to
be converted the portion hereof to be converted and, in case such surrender
shall be made during the period from the close of business on any Regular Record
Date next preceding any Interest Payment Date to the opening of business on such
Interest Payment Date (unless this Security or the portion hereof being
converted has been called for redemption on a Redemption Date within such
period), also accompanied by payment in New York Clearing House or other funds
acceptable to the Company of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of this Security then being
converted. Subject to the aforesaid requirement for payment and, in the case of
a conversion after the Regular Record Date next preceding any Interest Payment
Date and on or before such Interest Payment Date, to the right of the Holder of
this Security (or any Predecessor Security) of record at such Regular Record
Date to receive an installment of interest (with certain exceptions provided in
the Indenture), no payment or adjustment is to be made on conversion for
interest accrued hereon or for dividends on the Common Shares issued on
conversion. No fractions of shares

                                       18

or scrip representing fractions of shares will be issued on conversion, but
instead of any fractional interest the Company shall pay a cash adjustment as
provided in the Indenture. The conversion price is subject to adjustment as
provided in the Indenture. In addition, the Indenture provides that in case of
certain consolidations or mergers to which the Company is a party or the
transfer of substantially all of the assets of the Company, the Indenture shall
be amended, without the consent of any Holders of Securities, so that this
Security, if then outstanding, will be convertible thereafter, during the period
this Security shall be convertible as specified above, only into the kind and
amount of securities, cash and other property receivable upon the consolidation,
merger or transfer by a holder of the number of Common Shares into which this
Security might have been converted immediately prior to such consolidation,
merger or transfer (assuming such holder of Common Shares failed to exercise any
rights of election and received per share the kind and amount received per share
by a plurality of non-electing shares).]

                  [If applicable, insert -- The Securities of this series are
subject to redemption upon not less than 30 days' nor more than 60 days' notice
by mail, [if applicable, insert -- (1) on __________ in any year commencing with
the year _____ and ending with the year _____ through operation of the sinking
fund for this series at a Redemption Price equal to 100% of the principal
amount, and (2)] at any time [if applicable, insert -- on or after __________,
19___], as a whole or in part, at the election of the Company, at the following
Redemption Prices (expressed as percentages of the principal amount): If
redeemed during the 12-month period beginning __________ of the years indicated,

===========================================================================
                      Redemption                               Redemption
      Year              Price             Year                   Price
- ---------------------------------------------------------------------------

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

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

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

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

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

and thereafter at a Redemption Price equal to _____% of the principal amount,
together in the case of any such redemption [(whether through operation of the
sinking fund or otherwise)] with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.

                                       19

                  [If applicable, insert -- The sinking fund for this series
provides for the redemption on _______________ in each year beginning with the
year _____ and ending with the year _____ of [if applicable, insert -- not less
than $__________ ("mandatory sinking fund") and not more than] $__________
aggregate principal amount of Securities of this series. Securities of this
series acquired or redeemed by the Company otherwise than through [if
applicable, insert -- mandatory] sinking fund payments may be credited against
subsequent [if applicable, insert -- mandatory] sinking fund payments otherwise
required to be made [if applicable, insert -- , in the inverse order in which
they become due].]

                  [If the Security is subject to redemption of any kind, insert
- -- In the event of redemption [if applicable, insert -- or conversion] of this
Security in part only, a new Security or Securities of this series and of like
tenor for the unredeemed [if applicable, insert -- or unconverted] portion
hereof will be issued in the name of the Holder hereof upon the cancellation
hereof.]

                  The Company covenants and agrees, and each Holder of a
Security, by his acceptance thereof, likewise covenants and agrees, that to the
extent and in the manner set forth in Article Fifteen of the Indenture, the
indebtedness represented by the Securities and the payment of principal (and
premium, if any) and interest on each and all of the Securities are hereby
expressly made subordinate and subject in right of payment to the prior payment
in full of all Senior Debt.

                  [If applicable, insert -- The Indenture contains provisions
for defeasance at any time of the entire indebtedness of this Security and
Events of Default with respect to this Security, in each case upon compliance
with certain conditions set forth in the Indenture.]

                  [If the Security is not an Original Issue Discount Security,
insert -- If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.]

                  [If the Security is an Original Issue Discount Security,
insert -- If an Event of Default with respect to Securities of this series shall
occur and be continuing, an amount of principal of the Securities of this series
may be declared due and payable in the manner and with the effect provided in
the Indenture. Such amount shall be equal to -- insert formula for determining
the amount. Upon payment (i) of the amount of principal so declared due and
payable and (ii) of interest on any overdue principal, premium and interest (in
each case to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the payment of the
principal of and premium and interest, if any, on the Securities of this series
shall terminate.]

                                       20

                  The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in principal amount of
the Securities at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.

                  As provided in and subject to the provisions of the Indenture,
the Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.

                  Subject to the rights of holders of Senior Debt, as set forth
in the Indenture, no other reference herein to the Indenture and no provision of
this Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and any
premium and interest on this Security at the times, place and rate, and in the
coin or currency, herein prescribed [if applicable, insert -- or to convert this
security as provided in the Indenture].

                  As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the principal
of and any premium and interest on this Security are payable, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly

                                       21

authorized in writing, and thereupon one or more new Securities of this series
and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.

                  The Securities of this series are issuable only in registered
form without coupons in denominations of $__________ and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series and of like tenor of a different
authorized denomination, as requested by the Holder surrendering the same.

                  No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.

                  Prior to due presentment of this 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 this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.

                  [If applicable, insert -- Interest on the principal balance of
this Security shall be calculated on the basis of a [365- or 366-day year, as
appropriate, for the actual number of days elapsed] [360-day year of twelve
30-day months].]

                  THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

                  All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.

                  [If applicable, insert  --

                           [FORM OF CONVERSION NOTICE]

To:  ALEXANDER'S INC.

                  The undersigned owner of this Security hereby irrevocably
exercises the option to convert this Security, or portion hereof (which is
$1,000 or an integral multiple thereof) below designated, into Common Shares in
accordance with the terms of the Indenture referred to in this Security, and
directs that the shares issuable and deliverable upon the

                                       22

conversion, together with any check in payment for fractional shares and any
Securities, representing any unconverted principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below. If shares are to be issued in the name of a person other than
the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto. Any amount required to be paid by the undersigned on account of
interest accompanies this Security.

Dated:

Fill in for registration of shares of
  Common Shares and Securities if to
  be issued otherwise than to the
  registered holder.

                                                     Principal Amount to
                                                     be converted
                                                     (in an integral
                                                     multiple of $1,000,
                                                     if less than all):

_____________________________________
                  Name

_____________________________________
                  Address

_____________________________________            ______________________________
(Please print name and address,                             Signature
 including zip code number)

SOCIAL SECURITY OR OTHER
  TAXPAYER IDENTIFYING
  NUMBER

                           [SIGNATURE GUARANTEED -- required only if Common
                           Shares and Securities are to be issued and delivered
                           to other than the registered holder]

                           ____________________________________________]

                                       23

                  SECTION 204.  Form of Legend for Global Securities.

                  Unless otherwise specified as contemplated by Section 301 for
the Securities evidenced thereby, every Global Security authenticated and
delivered hereunder shall bear a legend in substantially the following form:

         THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

                  SECTION 205.  Form of Trustee's Certificate of Authentication.

                  The Trustee's certificates 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.

Dated:                                       STATE STREET BANK & TRUST CO. N.A.
                                                            As Trustee

                                By:_____________________________________________
                                                Authorized Signatory

                                  ARTICLE THREE

                                 THE SECURITIES

                  SECTION 301.  Amount Unlimited; Issuable in Series.

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

                                       24

                  The Securities may be issued in one or more series. There
shall be established in or pursuant to a Board Resolution and, subject to
Section 303, set forth, or determined in the manner provided, in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series,

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

                  (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 304, 305, 306, 906 or 1107
         and except for any Securities which, pursuant to Section 303, are
         deemed never to have been authenticated and delivered hereunder);

                  (3) the Person to whom any interest on a 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;

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

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

                  (6) the place or places where the principal of and any premium
         and interest on any Securities of the series shall be payable;

                  (7) the period or periods within which, the price or prices at
         which and the terms and conditions upon which any Securities of the
         series may be redeemed, in whole or in part, at the option of the
         Company and, if other than by a Board Resolution, the manner in which
         any election by the Company to redeem the Securities shall be
         evidenced;

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

                                       25

                  (9) if other than denominations of $1,000 and any integral
         multiple thereof, the denominations in which any Securities of the
         series shall be issuable;

                  (10) if the amount of principal of or any premium or interest
         on any Securities of the series may be determined with reference to an
         index or pursuant to a formula, the manner in which such amounts shall
         be determined;

                  (11) if other than the currency of the United States of
         America, the currency, currencies or currency units in which the
         principal of or any premium or interest on any Securities of the series
         shall be payable and the manner of determining the equivalent thereof
         in the currency of the United States of America for any purpose,
         including for purposes of the definition of "Outstanding" in Section
         101;

                  (12) if the principal of or any premium or interest on any
         Securities of the series is to be payable, at the election of the
         Company or the Holder thereof, in one or more currencies or currency
         units other than that or those in which such Securities are stated to
         be payable, the currency, currencies or currency units in which the
         principal of or any premium or interest on such Securities as to which
         such election is made shall be payable, the periods within which and
         the terms and conditions upon which such election is to be made and the
         amount so payable (or the manner in which such amount shall be
         determined);

                  (13) if other than the entire principal amount thereof, the
         portion of the principal amount of any Securities of the series which
         shall be payable upon declaration of acceleration of the Maturity
         thereof pursuant to Section 502;

                  (14) if the principal amount payable at the Stated Maturity of
         any Securities of the series will not be determinable as of any one or
         more dates prior to the Stated Maturity, the amount which shall be
         deemed to be the principal amount of such Securities as of any such
         date for any purpose thereunder or hereunder, including the principal
         amount thereof which shall be due and payable upon any Maturity other
         than the Stated Maturity or which shall be deemed to be Outstanding as
         of any date prior to the Stated Maturity (or, in any such case, the
         manner in which such amount deemed to be the principal amount shall be
         determined);

                  (15) if applicable, that the Securities of the series shall be
         subject to either or both of Defeasance or Covenant Defeasance as
         provided in Article Thirteen; provided that no series of Securities
         that is convertible into or exchangeable for Common Shares or other
         securities pursuant to Section 301(19) shall be subject to Defeasance
         pursuant to Section 1302;

                                       26

                  (16) if applicable, that any Securities of the series shall be
         issuable in whole or in part in the form of one or more Global
         Securities and, in such case, the respective Depositaries for such
         Global Securities, the form of any legend or legends which shall be
         borne by any such Global Security in addition to or in lieu of that set
         forth in Section 204 and any circumstances in addition to or in lieu of
         those set forth in Clause (2) of the last paragraph of Section 305 in
         which any such Global Security may be exchanged in whole or in part for
         Securities registered, and any transfer of such Global Security in
         whole or in part may be registered, in the name or names of Persons
         other than the Depositary for such Global Security or a nominee
         thereof;

                  (17) any addition to or change in the Event of Default which
         applies to any Securities of the series and any change in the right of
         the Trustee or the requisite Holders of such Securities to declare the
         principal amount thereof due and payable pursuant to Section 502;

                  (18) any addition to or change in the covenants set forth in
         Article Ten which applies to Securities of the series;

                  (19) the terms and conditions, if any, pursuant to which the
         Securities are convertible into or exchangeable for Common Shares or
         other securities; and

                  (20) any other terms of the series (which terms shall not be
         inconsistent with the provisions of this Indenture, except as permitted
         by Section 901(5)).

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

                  If any of the terms of the series are established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by 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 302.  Denominations.

                  The Securities of each series shall be issuable only in
registered form without coupons and only in such denominations as shall be
specified as contemplated by Section 301. In the absence of any such specified
denomination with respect to the Securities of any series, the Securities of
such series shall be issuable in denominations of $1,000 and any integral
multiple thereof.

                                       27

                  SECTION 303.  Execution, Authentication, Delivery and Dating.

                  The Securities shall be executed on behalf of the Company by
its Chairman of the Board, its Vice Chairman of the Board, its President or one
of its Vice Presidents, under its corporate seal reproduced thereon attested by
its Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.

                  Securities 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
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. If the form or terms of the Securities of the series have been
established by or pursuant to one or more Board Resolutions as permitted by
Sections 201 and 301, 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 601) shall be
fully protected in relying upon, an Opinion of Counsel stating,

                  (1) if the form of such Securities has been established by or
         pursuant to Board Resolution as permitted by Section 201, that such
         form has been established in conformity with the provisions of this
         Indenture;

                  (2) if the terms of such Securities have been established by
         or pursuant to Board Resolution as permitted by Section 301, that such
         terms have been established in conformity with the provisions of this
         Indenture; and

                  (3) that such Securities, when authenticated and delivered by
         the Trustee and issued by the Company in the manner and subject to any
         conditions specified in such Opinion of Counsel, will constitute valid
         and legally binding obligations of the Company enforceable in
         accordance with their terms, subject to bankruptcy, insolvency,
         fraudulent transfer, reorganization, moratorium and similar laws of
         general applicability relating to or affecting creditors' rights and to
         general equity principles.

                  If such form 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

                                       28

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.

                  Notwithstanding the provisions of Section 301 and of the
preceding paragraph, if all Securities of a series are not to be originally
issued at one time, it shall not be necessary to deliver the Officers'
Certificate otherwise required pursuant to Section 301 or the Company Order and
Opinion of Counsel otherwise required pursuant to such preceding paragraph at or
prior to the 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.

                  Each Security shall be dated the date of its authentication.

                  No Security 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 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
309, 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.

                  SECTION 304.  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 and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.

                  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 in a Place of Payment for
that series, without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Securities of any series, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor one or more
definitive Securities of the same

                                       29

series, of any authorized denominations and of like tenor and aggregate
principal amount. Until so exchanged, the temporary Securities of any series
shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities of such series and tenor.

                  SECTION 305.  Registration, Registration of Transfer and

Exchange.

                  The Company shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such office and in
any other office or agency of the Company in a Place of Payment being herein
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Securities and of transfers of Securities. The Trustee
is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.

                  Upon surrender for registration of transfer of any Security of
a series at the office or agency of the Company in a Place of Payment for that
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 Securities of the same series, of any authorized denominations and of like
tenor and aggregate principal amount.

                  At the option of the Holder, Securities of any series may be
exchanged for other Securities of the same series, of any authorized
denominations and of like tenor and aggregate principal amount, upon surrender
of the Securities to be exchanged at 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.

                  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 Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar 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

                                       30

transfer or exchange of Securities, other than exchanges pursuant to Section
304, 906 or 1107 not involving any transfer.

                  If the Securities of any series (or of any series and
specified tenor) are to be redeemed in part, the Company shall not be required
(A) to issue, register the transfer of or exchange any Securities of that series
(or of that series and specified tenor, as the case may be) during a period
beginning at the opening of business 15 days before the day of the mailing of a
notice of redemption of any such Securities selected for redemption under
Section 1103 and ending at the close of business on the day of such mailing, or
(B) to register the transfer of or exchange any Security so selected for
redemption in whole or in part, except the unredeemed portion of any Security
being redeemed in part.

                  The provisions of Clauses (1), (2), (3) and (4) below shall
apply only to Global Securities:

                  (1) Each Global Security authenticated under this Indenture
         shall be registered in the name of the Depositary designated for such
         Global Security or a nominee thereof and delivered to such Depositary
         or a nominee thereof or custodian therefor, and each such Global
         Security shall constitute a single Security for all purposes of this
         Indenture.

                  (2) Notwithstanding any other provision in this Indenture, no
         Global Security may be exchanged in whole or in part for Securities
         registered, and no transfer of a Global Security in whole or in part
         may be registered, in the name of any Person other than the Depositary
         for such Global Security or a nominee thereof unless (A) such
         Depositary (i) has notified the Company that it is unwilling or unable
         to continue as Depositary for such Global Security or (ii) has ceased
         to be a clearing agency registered under the Exchange Act, and in
         either case a successor Depositary is not appointed within 90 days by
         the Company, (B) there shall have occurred and be continuing an Event
         of Default with respect to such Global Security or (C) there shall
         exist such circumstances, if any, in addition to or in lieu of the
         foregoing as have been specified for this purpose as contemplated by
         Section 301.

                  (3) Subject to Clause (2) above, any exchange of a Global
         Security for other Securities may be made in whole or in part, and all
         Securities issued in exchange for a Global Security or any portion
         thereof shall be registered in such names as the Depositary for such
         Global Security shall direct.

                  (4) Every Security authenticated and delivered upon
         registration of transfer of, or in exchange for or in lieu of, a Global
         Security or any portion thereof, whether pursuant to this Section,
         Section 304, 306, 906 or 1107 or otherwise, shall be authenticated and
         delivered in the form of, and shall be, a Global Security, unless

                                       31

         such Security is registered in the name of a Person other than the
         Depositary for such Global Security or a nominee thereof.

                  SECTION 306.  Mutilated, Destroyed, Lost and Stolen 
Securities.

                  If any mutilated Security 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 bearing a number not contemporaneously outstanding.

                  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
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 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, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.

                  In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.

                  Upon the issuance of any new Security 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 of any series issued pursuant to this
Section in lieu of any destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Company, whether or not the
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 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.

                                       32

                  SECTION 307.  Payment of Interest; Interest Rights Preserved.

                  Except as otherwise provided as contemplated by Section 301
with respect to any series of Securities, interest on any 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 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 forthwith 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 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 given to each Holder of Securities
         of such series in the manner set forth in Section 106, 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 Securities of any series in any other lawful manner not
         inconsistent with the

                                       33

         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, 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.

                  Subject to the provisions of Section 1402, in case of any
Security which is converted after any Regular Record Date and on or prior to the
next succeeding Interest Payment Date, interest whose Stated Maturity is on such
Interest Payment Date shall be payable on such Interest Payment Date
notwithstanding such conversion, and such interest (whether or not punctually
paid or duly provided for) 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 such Regular Record Date. Except as otherwise expressly provided in
the immediately preceding sentence in the case of any Security which is
converted, interest whose Stated Maturity is after the date of conversion of
such Security shall not be payable.

                  SECTION 308.  Persons Deemed Owners.

                  Prior to due presentment of a 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 Security is registered as the owner of
such Security for the purpose of receiving payment of principal of and any
premium and (subject to Section 307) any 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.

                  SECTION 309.  Cancellation.

                  All Securities surrendered for payment, redemption,
registration of transfer or exchange or conversion or for credit against any
sinking fund payment shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any 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 cancelled by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this

                                       34

Indenture.  All cancelled Securities held by the Trustee shall be disposed of in
a manner customary to the Trustee as directed by a Company Order.

                  SECTION 310.  Computation of Interest.

                  Except as otherwise specified as contemplated by Section 301
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 311.  CUSIP Numbers.

                  The Company in issuing the Securities may use "CUSIP" numbers
(if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.

                                  ARTICLE FOUR

                           SATISFACTION AND DISCHARGE

                  SECTION 401.  Satisfaction and Discharge of Indenture.

                  This Indenture shall upon Company Request cease to be of
further effect (except as to any surviving rights of conversion, registration of
transfer or exchange of Securities herein expressly provided for), and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when

                  (1)      either

                           (A) all Securities theretofore authenticated and
                  delivered (other than (i) Securities which have been
                  destroyed, lost or stolen and which have been replaced or paid
                  as provided in Section 306 and (ii) Securities 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 1003) have been delivered to the Trustee
                  for cancellation and/or conversion; or

                                       35

                           (B)      all such Securities 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 money in an amount sufficient to pay and discharge the
         entire indebtedness on such Securities not theretofore delivered to the
         Trustee for cancellation, for principal and any premium and interest to
         the date of such deposit (in the case of Securities 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, the obligations of the Company to the Trustee under Section 607, the
obligations of the Trustee to any Authenticating Agent under Section 614 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 402 and
the last paragraph of Section 1003 shall survive.

                  SECTION 402.  Application of Trust Money.

                  Subject to the provisions of the last paragraph of Section
1003, all money deposited with the Trustee pursuant to Section 401 shall be held
in trust and applied by it, in accordance with the provisions of the Securities
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 any premium and
interest for whose payment such money has been deposited with the Trustee.

                                       36

Money deposited pursuant to this section not in violation of this Indenture
shall not be subject to claims of the holders of Senior Debt under Article
Fifteen.

                                  ARTICLE FIVE

                                    REMEDIES

                  SECTION 501.  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 occasioned by the
provisions of Article Fifteen or 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):

                  (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 any premium,
         if any, on any Security of that series; or

                  (3) default in the deposit of any sinking fund payment, when
         and as due by the terms of a Security of that series; 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 whose performance or whose breach is elsewhere in
         this Section specifically dealt with or which has expressly been
         included in this Indenture solely for the benefit of 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 10% 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) a default under any bond, debenture, note or other
         evidence of indebtedness for money borrowed by the Company (including a
         default with respect to Securities of any series other than that
         series) having an aggregate principal amount outstanding of at least
         $50,000,000, or under any mortgage, indenture or instrument

                                       37

         (including this Indenture) under which there may be issued or by which
         there may be secured or evidenced any indebtedness for money borrowed
         by the Company having an aggregate principal amount outstanding of at
         least $50,000,000, whether such indebtedness now exists or shall
         hereafter be created, which default (A) shall constitute a failure to
         pay any portion of the principal of such indebtedness when due and
         payable after the expiration of any applicable grace period with
         respect thereto or (B) shall have resulted in such indebtedness
         becoming or being declared due and payable prior to the date on which
         it would otherwise have become due and payable, without, in the case of
         Clause (A), such indebtedness having been discharged or without, in the
         case of Clause (B), such indebtedness having been discharged or such
         acceleration having been rescinded or annulled, in each such case
         within a period of 10 days after there shall have 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 10% in principal
         amount of the Outstanding Securities of that series a written notice
         specifying such default and requiring the Company to cause such
         indebtedness to be discharged or cause such acceleration to be
         rescinded or annulled, as the case may be, and stating that such notice
         is a "Notice of Default' hereunder; provided, however, that, subject to
         the provisions of Sections 601 and 602, the Trustee shall not be deemed
         to have knowledge of such default unless either (A) a Responsible
         Officer of the Trustee shall have knowledge of such default or (B) the
         Trustee shall have received written notice thereof from the Company,
         from any Holder, from the holder of any such indebtedness or from the
         trustee under any such mortgage, indenture or other instrument; or

                  (6) 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 60 consecutive
         days; or

                  (7) 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

                                       38

         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 other 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

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

                  SECTION 502. Acceleration of Maturity; Rescission and
Annulment.

                  If an Event of Default (other than an Event of Default
specified in Section 501(6) or 501(7)) with respect to Securities of any series
at the time Outstanding occurs and is continuing, then in every such case the
Trustee, upon receipt of a request from the Holders of not Less than tan 25% in
principal amount of the Outstanding Securities of that series, shall, 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 the Securities of that
series (or, if any Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such Securities as may be
specified by the terms thereof) 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. If an Event of Default specified in Section 501(6)
or 501(7) with respect to Securities of any series at the time Outstanding
occurs, the principal amount of all the Securities of that series (or, if any
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount of such Securities as may be specified by the terms
thereof) shall automatically, and without any declaration or other action on the
part of the Trustee or any Holder, 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

                                       39

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

         and

                  (2) all Events of Default with respect to Securities of that
         series, other than the non-payment 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 513.

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

                  SECTION 503. 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 when such interest becomes due and payable and such default
         continues for a period of 30 days, or

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

the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the

                                       40

reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.

                  If an Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series by such appropriate judicial proceedings as the Trustee shall deem
most effective 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 504.  Trustee May File Proofs of Claim.

                  In case of any judicial proceeding relative to the Company (or
any other obligor upon the Securities), its property or its creditors, the
Trustee shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized 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 sequesteror 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 607.

                  No provision of this Indenture 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;
provided, however, that the Trustee may, on behalf of the Holders, vote for the
election of a trustee in bankruptcy or similar official and be a member of a
creditors' or other similar committee.

                  SECTION 505. Trustee May Enforce Claims Without Possession of
Securities.

                  All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities 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,

                                       41

disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.

                  SECTION 506.  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 any premium 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 607; and

                  SECOND: To the payment of the amounts then due and unpaid for
         principal of and any premium 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 any
         premium and interest, respectively.

                  SECTION 507.  Limitation on Suits.

                  No Holder of any Security 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) such Holder has previously given written notice to the
         Trustee of a continuing Event of Default with respect to the Securities
         of that series;

                  (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

                                       42

                  (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 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 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest and to Convert.

                  Notwithstanding any other provision in this Indenture, but
subject to Article Fifteen of this Indenture, the Holder of any Security shall
have the right, which is absolute and unconditional, to receive payment of the
principal of and any premium and (subject to Section 307) interest on such
Security on the respective Stated Maturities expressed in such Security (or, in
the case of redemption, on the Redemption Date) and to convert such Security in
accordance with Article Fourteen and to institute suit for the enforcement of
any such payment or such right of conversion, and such rights shall not be
impaired without the consent of such Holder.

                  SECTION 509.  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 510.  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 306, 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

                                       43

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 511.  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 512.  Control by Holders.

                  The Holders of 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, and

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

                  SECTION 513.  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 any, premium 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, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this

                                       44

Indenture; but no such waiver shall extend to any subsequent or other default or
impair any right consequent thereon.

                  SECTION 514.  Undertaking for Costs.

                  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, a court may require any party litigant in
such suit to file an undertaking to pay the costs of such suit, and may assess
costs against any such party litigant, in the manner and to the extent provided
in the Trust Indenture Act. The provisions of this Section shall not apply to
any suit instituted by the Trustee, to any suit instituted by the Company, to
any suit instituted by any Holder, or group of Holders of an aggregate more than
10 percent in principal amount of the Securities then outstanding, or to any
suit instituted by any Holder for the enforcement of the payment of the
principal of or interest on any Security, on or after the respective due dates
expressed in such Security.

                  SECTION 515.  Waiver of Usury, Stay or Extension Laws.

                  The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any usury, stay or
extension law wherever enacted, now or at any time hereafter in force, 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 601.  Certain Duties and Responsibilities.

                  The duties and responsibilities of the Trustee shall be as
provided by the Trust Indenture Act. Notwithstanding the foregoing, 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.
Whether or not therein expressly so provided, every provision of this Indenture
relating to the conduct or

                                       45

affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.

                  SECTION 602.  Notice of Defaults.

                  If a default occurs hereunder with respect to Securities of
any series, the Trustee shall give the Holders of Securities of such series
notice of such default as and to the extent provided by the Trust Indenture Act;
provided, however, that in the case of any default of the character specified in
Section 501(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 603.  Certain Rights of Trustee.

                  Subject to the provisions of Section 601:

                  (1) 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;

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

                  (3) 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;

                  (4) the Trustee may consult with counsel of its selection and
         the advice of such counsel (to be confirmed in writing) 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;

                  (5) 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

                                       46

         reasonable security or indemnity against the costs, expenses and
         liabilities which might be incurred by it in compliance with such
         request or direction;

                  (6) 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;

                  (7) 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

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

                  SECTION 604. 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 neither the Trustee nor any Authenticating Agent assumes any
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 605.  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 and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.

                                       47

                  SECTION  606.  Money Held in Trust.

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

                  SECTION 607.  Compensation and Reimbursement.

                  The Company agrees

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

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

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

                  The Trustee shall have a lien prior to the Securities as to
all property and funds held by it hereunder for any amount owing it or any
predecessor Trustee pursuant to this Section 607, except with respect to funds
held in trust for the benefit of the Holders of particular Securities.

                  When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 501(6) or Section
501(7), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable Federal or state bankruptcy,
insolvency or other similar law.

                  The provisions of this Section shall survive the termination
of this Indenture.

                                       48

                  SECTION 608.  Disqualification; Conflicting Interests.

                  If the Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Indenture. To
the extent permitted by such Act, the Trustee shall not be deemed to have a
conflicting interest by virtue of being a trustee under this Indenture with
respect to Securities of more than one series.

                  SECTION 609.  Corporate Trustee Required, Eligibility.

                  There shall at all times be one (and only one) Trustee
hereunder with respect to the Securities of each series, which may be Trustee
hereunder for Securities of one or more other series. Each Trustee shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000. If any such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of its supervising or examining authority, then for the purposes of
this Section and to the extent permitted by the Trust Indenture Act, the
combined capital and surplus of such Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee with respect to the Securities of any
series 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 610. Resignation and Removal; Appointment of
Successor.

                  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 611.

                  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.

                  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.

                  If at any time:

                  (1) the Trustee shall fail to comply with Section 608 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

                                       49

                  (2) the Trustee shall cease to be eligible under Section 609
         and shall fail to resign after written request therefor by the Company
         or by any such Holder, or

                  (3) the Trustee shall become incapable of acting or 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, (A) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (B) subject to Section 514, 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.

                  If the instrument of acceptance by a successor Trustee
required by Section 611 shall not have been delivered to the Trustee within 30
days after the giving of such notice of resignation or removal, the Trustee
resigning or being removed may petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.

                  If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, 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 611. 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 Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
611, 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 611, the retiring Trustee or 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.

                                       50

                  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
to all Holders of Securities of such series in the manner provided in Section
106. 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 611.  Acceptance of Appointment by Successor.

                  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.

                  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 co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor

                                       51

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.

                  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 the first or second preceding paragraph, as the case may be.

                  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 612. 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 613. Preferential Collection of Claims Against
Company.

                  If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall be subject
to the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).

                  SECTION 614.  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 and upon exchange, registration of transfer, partial conversion
or partial redemption thereof or pursuant to Section 306, and Securities so
authenticated shall be entitled to the benefits of this Indenture

                                       52

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, 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. Each Authenticating Agent shall be acceptable to the
Company and shall at all times 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 act as Authenticating Agent,
having a combined capital and surplus of not less than $50,000,000 and subject
to supervision or examination by Federal or State authority. 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 Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an 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 the 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 give notice of such
appointment in the manner provided in Section 106 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. 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.

                                       53

                  The Trustee agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section, and
the Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.

                  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.

                                             STATE STREET BANK & TRUST CO. N.A.,
                                                                  As  Trustee

                                           By___________________________________
                                                    As  Authenticating Agent

                                           By___________________________________
                                                           Authorized Officer

                                  ARTICLE SEVEN

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

                  SECTION 701. Company to Furnish Trustee Names and Addresses of
Holders.

                  The Company will furnish or cause to be furnished to the
Trustee

                  (1) semi-annually, not later than March 15 and September 15 in
         each year, a list, in such form as the Trustee may reasonably require,
         of the names and addresses of the Holders of Securities of each series
         as of the preceding March 1 or September 1, as the case may be, and

                  (2) 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

                                       54

         content as of a date not more than 15 days prior to the time such list
         is furnished; excluding from any such list names and addresses received
         by the Trustee in its capacity as Security Registrar.

                  SECTION 702. Preservation of Information; Communications to
Holders.

                  The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 701 and the names
and addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.

                  The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by the
Trust Indenture Act.

                  Every Holder of Securities, 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 any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.

                  SECTION 703.  Reports by Trustee.

                  The Trustee shall transmit to Holders such reports concerning
the Trustee and its actions under this Indenture as may be required pursuant to
the Trust Indenture Act at the times and in the manner provided pursuant
thereto. Reports so required to be transmitted at stated intervals of not more
than 12 months shall be transmitted within 60 days after the first date of
issuance of Securities and on each anniversary of such date.

                  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 promptly notify the Trustee when any Securities are listed on any
stock exchange.

                  SECTION 704.  Reports by Company.

                  The Company shall file with the Trustee and the Commission,
and transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be

                                       55

filed with the Trustee within 15 days after the same is so required to be filed
with the Commission.

              Delivery of such reports, information and documents to the Trustee
is for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).

                  SECTION 705.  Notice of Default.

                  The Company shall file with the Trustee written notice of the
occurrence of any Event of Default within five Business Days of its becoming
aware of any such Event of Default.

                                  ARTICLE EIGHT

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

                  SECTION 801. Company May Consolidate, Etc., Only on Certain
Terms.

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

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

                                       56

         in accordance with Section 1411 with respect to each series of
         Securities afforded conversion thereunder;

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

                  (3) if, as a result of any such consolidation or merger or
         such conveyance, transfer or lease, properties or assets of the Company
         would become subject to a mortgage, pledge, lien, security interest or
         other encumbrance which would not be permitted by this Indenture, the
         Company or such successor Person, as the case may be, shall take such
         steps as shall be necessary effectively to secure the Securities
         equally and ratably with (or prior to) all indebtedness secured
         thereby; and

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

                  SECTION 802.  Successor Substituted.

                  Upon any consolidation of the Company with, or merger of the
Company into, any other Person or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety in accordance
with Section 801, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except in
the case of a lease, the predecessor Person shall be relieved of all obligations
and covenants under this Indenture and the Securities.

                                       57

                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

                  SECTION 901. Supplemental Indentures Without Consent of
Holders.

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

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

                  (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; or

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

                  (4) to add to or change any of the provisions of this
         Indenture to such extent as shall be necessary to permit or facilitate
         the issuance of Securities in bearer form, registrable or not
         registrable as to principal, and with or without interest coupons, or
         to permit or facilitate the issuance of Securities in uncertificated
         form; or

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

                  (6)      to secure the Securities; or

                                       58

                  (7) to establish the form or terms of Securities of any series
         as permitted by Sections 201 and 301; or

                  (8) 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 611; or

                  (9) to make provision with respect to the conversion of
         Holders pursuant to the requirements of Article Fourteen; or

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

                  SECTION 902.  Supplemental Indentures With Consent of Holders.

                  With the consent of the Holders of not less than a majority 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 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 reduce the amount of the
         principal of an Original Issue Discount Security or any other Security
         which would be due and payable upon a declaration of acceleration of
         the Maturity thereof pursuant to Section 502, or change any Place of
         Payment where, or the coin or currency in which, any Security or any
         premium or 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), or modify the provisions of this Indenture with
         respect to the conversion of the Securities in a manner adverse to the
         Holders, or modify the

                                       59

         provisions of this Indenture with respect to the subordination of the
         Securities in a manner adverse to the Holders, or

                  (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, or

                  (3) modify any of the provisions of this Section, Section 513
         or Section 1008, except to increase any such percentage or to provide
         that certain other provisions of this Indenture cannot be modified or
         waived without the consent of the Holder of each Outstanding 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 1008, or the deletion of this proviso, in accordance with
         the requirements of Sections 611 and 901(8).

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.

                  The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Persons entitled to consent to any
indenture supplemental hereto. If a record date is fixed, the Holders on such
record date, or their duly designated proxies, and only such Persons, shall be
entitled to consent to such supplemental indenture, whether or not such Holders
remain Holders after such record date; provided, that unless such consent shall
have become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
cancelled and of no further effect.

                  SECTION 903.  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

                                       60

Indenture, the Trustee shall be entitled to receive, and (subject to Section
601) 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 or
immunities under this Indenture or otherwise.

                  SECTION 904.  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 905.  Conformity with Trust Indenture Act.

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

                  SECTION 906. 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 1001.  Payment of Principal, Premium and Interest.

                  The Company covenants and agrees for the benefit of each
series of Securities that it will duly and punctually pay the principal of and
any premium and interest on the Securities of that series in accordance with the
terms of the Securities and this Indenture.

                                       61

                  SECTION 1002.  Maintenance of Office or Agency.

                  The Company will maintain in each Place of Payment for any
series of Securities 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 or surrendered for
conversion 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 of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.

                  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 each Place of Payment for Securities of any series for
such purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.

                  SECTION 1003. 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 or any premium 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 any premium and 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, prior to each due date of the principal of or
any premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay such amount, such sum to be held as provided by
the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so to act.

                  The Company will cause each Paying Agent for any series of
Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying

                                       62

Agent shall agree with the Trustee, subject to the provisions of this Section,
that such Paying Agent will (1) comply with the provisions of the Trust
Indenture Act applicable to it as a Paying Agent and (2) during the continuance
of any default by the Company (or any other obligor upon the Securities of that
series) in the making of any payment in respect of the Securities of that
series, upon the written request of the Trustee, forthwith pay to the Trustee
all sums held in trust by such Paying Agent for payment in respect of the
Securities of that series.

                  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 or any
premium or interest on any Security of any series and remaining unclaimed for
two years after such principal, premium or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in New York, New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.

                  SECTION 1004.  Statement by Officers as to Default.

                  The Company will deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate, stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance and observance of
any of the terms, provisions and conditions of this Indenture (without regard to
any period of grace or requirement of notice provided hereunder) and, if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.

                                       63

                  SECTION 1005.  Existence.

                  Subject to Article Eight, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.

                  SECTION 1006.  Maintenance of Properties.

                  The Company will cause all properties used or useful in the
conduct of its business or the business of any Subsidiary to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.

                  SECTION 1007.  Payment of Taxes and Other Claims.

                  The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all taxes, assessments
and governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and (2)
all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a lien upon the property of the Company or any Subsidiary; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.

                  SECTION 1008.  Waiver of Certain Covenants.

                  Except as otherwise specified as contemplated by Section 301
for Securities of such series, the Company may, with respect to the Securities
of any series, omit in any particular instance to comply with any term,
provision or condition set forth in any covenant provided pursuant to Section
301(18), 901(2) or 901(7) for the benefit of the Holders of such series if
before the time for such compliance the Holders of at least a majority in
principal amount of the Outstanding Securities of such series shall, by Act of
such Holders, either waive such compliance in such instance or generally waive
compliance with such term,

                                       64

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 1009.  Calculation of Original Issue Discount.

                  The Company shall file with the Trustee promptly at the end of
each calendar year a written notice specifying the amount of original issue
discount (including daily rates and accrual periods) accrued on Outstanding
Securities as of the end of such year.

                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES

                  SECTION 1101.  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 301 for such Securities) in
accordance with this Article.

                  SECTION 1102.  Election to Redeem; Notice to Trustee.

                  The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution or in another manner specified as contemplated
by Section 301 for such Securities. In case of any redemption at the election of
the Company of less than all the Securities of any series (including any such
redemption affecting only a single Security), the Company shall, at least 60
days prior to the Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee of such Redemption
Date, of the principal amount of Securities of such series to be redeemed and,
if applicable, of the tenor of the Securities to be redeemed. In the case of any
redemption of Securities prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or elsewhere in this
Indenture, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction.

                  SECTION 1103. Selection by Trustee of Securities to Be
Redeemed.

                  If less than all the Securities of any series are to be
redeemed (unless all the Securities of such series and of a specified tenor are
to be redeemed or unless such redemption affects only a single Security), the
particular Securities to be redeemed shall be

                                       65

selected not more than 60 days prior to the Redemption Date by the Trustee, 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 a portion of the principal amount of
any Security of such series, provided that the unredeemed portion of the
principal amount of any Security shall be in an authorized denomination (which
shall not be less than the minimum authorized denomination) for such Security.
If less than all the Securities of such series and of a specified tenor are to
be redeemed (unless such redemption affects only a single Security), the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series and specified tenor not previously called for redemption in
accordance with the preceding sentence.

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

                  The provisions of the two preceding paragraphs shall not apply
with respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.

                  If any Security selected for partial redemption is converted
in part before termination of the conversion right with respect to the portion
of the Security so selected, the converted portion of such Security shall be
deemed (so far as may be) to be the portion selected for redemption. Securities
which have been converted during a selection of Securities to be redeemed shall
be treated by the Trustee as Outstanding for the purpose of such selection.

                  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 1104.  Notice of Redemption.

                  Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at his address
appearing in the Security Register.

                  All notices of redemption shall state, including CUSIP number,
if any:

                                       66

                  (1)      the Redemption Date,

                  (2)      the Redemption Price,

                  (3) if less than all the Outstanding Securities of any series
         consisting of more than a single Security are to be redeemed, the
         identification (and, in the case of partial redemption of any such
         Securities, the principal amounts) of the particular Securities to be
         redeemed and, if less than all the Outstanding Securities of any series
         consisting of a single Security are to be redeemed, the principal
         amount of the particular Security to be redeemed,

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

                  (5) in the case of any Securities that are convertible
         pursuant to Article Fourteen, the conversion price, the date on which
         the right to convert the principal of the Securities to be redeemed
         will terminate and the place or places where such Securities may be
         surrendered for conversion,

                  (6) the place or places where each such Security is to be
         surrendered for payment of the Redemption Price, and

                  (7) that the redemption is for a sinking fund, if such is the
         case.

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

                  SECTION 1105.  Deposit of Redemption Price.

                  Prior to any Redemption Date, the Company shall deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) an amount
of money sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on, all the
Securities which are to be redeemed on that date other than any Securities
called for redemption on that date which have been converted prior to the date
of such deposit.

                  If any Security called for redemption is converted, any money
deposited with the Trustee or with any Paying Agent or so segregated and held in
trust for the redemption of such Security shall (subject to any right of the
Holder of such Security or any Predecessor

                                       67

Security to receive interest as provided in the last paragraph of Section 307)
be paid to the Company upon Company Request or, if then held by the Company,
shall be discharged from such trust.

                  SECTION 1106.  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. Upon surrender
of any such Security for redemption in accordance with said notice, such
Security shall be paid by the Company at the Redemption Price, together with
accrued interest to the Redemption Date; provided, however, that, unless
otherwise specified as contemplated by Section 301, installments of interest
whose Stated Maturity is on or prior to the Redemption Date will 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 307.

                  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 1107.  Securities Redeemed in Part.

                  Any Security 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 or Securities of the same series and of
like tenor, 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 so surrendered.

                                       68

                                 ARTICLE TWELVE

                                  SINKING FUNDS

                  SECTION 1201.  Applicability of Article.

                  The provisions of this Article shall be applicable to any
sinking fund for the retirement of Securities of any series except as otherwise
specified as contemplated by Section 301 for such Securities.

                  The minimum amount of any sinking fund payment provided for by
the terms of any Securities 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 such Securities is herein referred to as an "optional sinking fund
payment". If provided for by the terms of any Securities, the cash amount of any
sinking fund payment may be subject to reduction as provided in Section 1202.
Each sinking fund payment shall be applied to the redemption of Securities as
provided for by the terms of such Securities.

                  SECTION 1202. Satisfaction of Sinking Fund Payments with
Securities.

                  The Company (1) may deliver Outstanding Securities of a series
(other than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been converted pursuant to Article Fourteen of
this Indenture or which have been redeemed either at the election of the Company
pursuant to the terms of such Securities 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 any Securities of such series required to be made pursuant to the terms of
such Securities as and to the extent provided for by the terms of such
Securities; provided that the Securities to be so credited have not been
previously so credited. The Securities to be so credited shall be received and
credited for such purpose by the Trustee at the Redemption Price, as specified
in the Securities so to be redeemed, for redemption through operation of the
sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.

                  SECTION 1203.  Redemption of Securities for Sinking Fund.

                  Not less than 60 days prior to each sinking fund payment date
for any Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
such Securities pursuant to the terms of such Securities, the portion thereof,
if any, which is to be satisfied by payment of cash and

                                       69

the portion thereof, if any, which is to be satisfied by delivering and
crediting Securities pursuant to Section 1202 and will also deliver to the
Trustee any Securities to be so delivered. Not less than 30 nor more than 45
days prior to 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 1103 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 1104. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections
1106 and 1107.

                                ARTICLE THIRTEEN

                       DEFEASANCE AND COVENANT DEFEASANCE

                  SECTION 1301. Company's Option to Effect Defeasance or
Covenant Defeasance.

                  If applicable to a particular series of Securities, the
Company may elect, at its option at any time, to have Section 1302 or Section
1303 applied to any such series of Securities or any Securities of such series,
as the case may be, designated pursuant to Section 301 as being defeasible
pursuant to such Section 1302 or 1303, in accordance with any applicable
requirements provided pursuant to Section 301 and upon compliance with the
conditions set forth below in this Article. Any such election shall be evidenced
by a Board Resolution or in another manner specified as contemplated by Section
301 for such Securities.

                  SECTION 1302.  Defeasance and Discharge.

                  Upon the Company's exercise of its option (if any) to have
this Section applied to any applicable series of Securities or any Securities of
such series, as the case may be, the Company shall be deemed to have been
discharged from its obligations with respect to such Securities as provided in
this Section on and after the date the conditions set forth in Section 1304 are
satisfied (hereinafter called "Defeasance"). For this purpose, such Defeasance
means that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by such Securities and to have satisfied all its other
obligations under such Securities and this Indenture insofar as such Securities
are concerned (and the Trustee, at the expense of the Company, shall execute
proper instruments acknowledging the same), subject to the following which shall
survive until otherwise terminated or discharged hereunder: (1) the rights of
Holders of such Securities to receive, solely from the trust fund described in
Section 1304 and as more fully set forth in such Section, payments in respect of
the principal of and any premium and interest on such Securities when payments
are due, (2) the

                                       70

Company's obligations with respect to such Securities under Sections 304, 305,
306, 1002 and 1003, (3) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (4) this Article. Subject to compliance with this Article,
the Company may exercise its option (if any) to have this Section applied to any
applicable Securities notwithstanding the prior exercise of its option (if any)
to have Section 1303 applied to such Securities.

                  SECTION 1303.  Covenant Defeasance.

                  Upon the Company's exercise of its option (if any) to have
this Section applied to any applicable series of Securities or any Securities of
such series, as the case may be, (1) the Company shall be released from its
obligations under Section 801(3), Sections 1005 through 1007, inclusive, and any
covenants provided pursuant to Section 301(18), 901(2) or 901(7) for the benefit
of the Holders of such Securities and (2) the occurrence of any event specified
in Sections 501(4) (with respect to any of Section 801(3), Sections 1005 through
1007, inclusive, and any such covenants provided pursuant to Section 301(18),
901(2) or 901(7)), 501(5) and 501(8) shall be deemed not to be or result in an
Event of Default, in each case with respect to such Securities as provided in
this Section on and after the date the conditions set forth in Section 1304 are
satisfied (hereinafter called "Covenant Defeasance"). For this purpose, such
Covenant Defeasance means that, with respect to such Securities, the Company may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such specified Section (to the extent
so specified in the case of Section 501(4)), whether directly or indirectly by
reason of any reference elsewhere herein to any such Section or by reason of any
reference in any such Section to any other provision herein or in any other
document, but the remainder of this Indenture and such Securities shall be
unaffected thereby.

                  SECTION 1304.  Conditions to Defeasance or Covenant 
Defeasance.

                  The following shall be the conditions to the application of
Section 1302 or Section 1303 to any applicable series of Securities or any
Securities of such series, as the case may be:

                  (1) The Company shall irrevocably have deposited or caused to
         be deposited with the Trustee (or another trustee which satisfies the
         requirements contemplated by Section 609 and agrees to comply with the
         provisions of this Article applicable to it) as trust funds in trust
         for the purpose of making the following payments, specifically pledged
         as security for, and dedicated solely to, the benefits of the Holders
         of such Securities, (A) money in an amount, or (B) U.S. Government
         Obligations which through the scheduled payment of principal and
         interest in respect thereof in accordance with their terms will
         provide, not later than one day before the due date of any payment,
         money in an amount, or (C) a combination thereof, in each case
         sufficient, in the opinion of a nationally recognized firm of
         independent public

                                       71

         accountants expressed in a written certification thereof delivered to
         the Trustee, to pay and discharge, and which shall be applied by the
         Trustee (or any such other qualifying trustee) to pay and discharge,
         the principal of and any premium and interest on such Securities on the
         respective Stated Maturities, in accordance with the terms of this
         Indenture and such Securities. As used herein, "U.S. Government
         Obligation" means (x) any security which is (i) a direct obligation of
         the United States of America for the payment of which the full faith
         and credit of the United States of America is pledged or (ii) an
         obligation of a Person controlled or supervised by and acting as an
         agency or instrumentality of the United States of America the payment
         of which is unconditionally guaranteed as a full faith and credit
         obligation by the United States of America, which, in either case (i)
         or (ii), is not callable or redeemable at the option of the issuer
         thereof, and (y) any depositary receipt issued by a bank (as defined in
         Section 3(a)(2) of the Securities Act) as custodian with respect to any
         U.S. Government Obligation which is specified in Clause (x) above and
         held by such bank for the account of the holder of such depositary
         receipt, or with respect to any specific payment of principal of or
         interest on any U.S. Government Obligation which is so specified and
         held, 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 depositary receipt from any amount received by the custodian in
         respect of the U.S. Government Obligation or the specific payment of
         principal or interest evidenced by such depositary receipt.

                  (2) In the event of an election to have Section 1302 apply to
         any applicable series of Securities or any Securities of such series,
         as the case may be, the Company shall have delivered to the Trustee an
         Opinion of Counsel stating that (A) the Company has received from, or
         there has been published by, the Internal Revenue Service a ruling or
         (B) since the date of this instrument, there has been a change in the
         applicable Federal income tax law, in either case (A) or (B) to the
         effect that, and based thereon such opinion shall confirm that, the
         Holders of such Securities will not recognize gain or loss for Federal
         income tax purposes as a result of the deposit, Defeasance and
         discharge to be effected with respect to such Securities and will be
         subject to Federal income tax on the same amount, in the same manner
         and at the same times as would be the case if such deposit, Defeasance
         and discharge were not to occur.

                  (3) In the event of an election to have Section 1303 apply to
         any applicable series of Securities or any Securities of such series,
         as the case may be, the Company shall have delivered to the Trustee an
         Opinion of Counsel to the effect that the Holders of such Securities
         will not recognize gain or loss for Federal income tax purposes as a
         result of the deposit and Covenant Defeasance to be effected with
         respect to such Securities and will be subject to Federal income tax on
         the same

                                       72

         amount, in the same manner and at the same times as would be the case
         if such deposit and Covenant Defeasance were not to occur.

                  (4) The Company shall have delivered to the Trustee an
         Officer's Certificate to the effect that neither such Securities nor
         any other Securities of the same series, if then listed on any
         securities exchange, will be delisted as a result of such deposit.

                  (5) No event which is, or after notice or lapse of time or
         both would become, an Event of Default with respect to such Securities
         or any other Securities shall have occurred and be continuing at the
         time of such deposit or, with regard to any such event specified in
         Sections 501(6) and (7), at any time on or prior to the 90th day after
         the date of such deposit (it being understood that this condition shall
         not be deemed satisfied until after such 90th day).

                  (6) Such Defeasance or Covenant Defeasance shall not cause the
         Trustee to have a conflicting interest within the meaning of the Trust
         Indenture Act (assuming all Securities are in default within the
         meaning of such Act).

                  (7) Such Defeasance or Covenant Defeasance shall not result in
         a breach or violation of, or constitute a default under, any other
         agreement or instrument to which the Company is a party or by which it
         is bound.

                  (8) Such Defeasance or Covenant Defeasance shall not result in
         the trust arising from such deposit constituting an investment company
         within the meaning of the Investment Company Act unless such trust
         shall be registered under such Act or exempt from registration
         thereunder.

                  (9) The Company shall have delivered to the Trustee an
         Officer's Certificate and an Opinion of Counsel, each stating that all
         conditions precedent with respect to such Defeasance or Covenant
         Defeasance have been complied with.

                  SECTION 1305. Deposited Money and U.S. Government Obligations
to Be Held in Trust; Miscellaneous Provisions.

                  Subject to the provisions of the last paragraph of Section
1003, all money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee or other qualifying trustee (solely for purposes of
this Section and Section 1306, the Trustee and any such other trustee are
referred to collectively as the "Trustee") pursuant to Section 1304 in respect
of any Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any such Paying Agent (including the Company
acting as its own Paying Agent) as

                                       73

the Trustee may determine, to the Holders of such Securities, of all sums due
and to become due thereon in respect of principal and any premium and interest,
but money so held in trust need not be segregated from other funds except to the
extent required by law.

                  The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 1304 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of Outstanding Securities.

                  Anything in this Article to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 1304 with respect to any Securities which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect the
Defeasance or Covenant Defeasance, as the case may be, with respect to such
Securities.

                  SECTION 1306.  Reinstatement.

                  If the Trustee or the Paying Agent is unable to apply any
money in accordance with this Article with respect to any Securities by reason
of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the obligations
under this Indenture and such Securities from which the Company has been
discharged or released pursuant to Section 1302 or 1303 shall be revived and
reinstated as though no deposit had occurred pursuant to this Article with
respect to such Securities, until such time as the Trustee or Paying Agent is
permitted to apply all money held in trust pursuant to Section 1305 with respect
to such Securities in accordance with this Article; provided, however, that if
the Company makes any payment of principal of or any premium or interest on any
such Security following such reinstatement of its obligations, the Company shall
be subrogated to the rights (if any) of the Holders of such Securities to
receive such payment from the money so held in trust.

                                       74

                                ARTICLE FOURTEEN

                            CONVERSION OF SECURITIES

                  SECTION 1401. Applicability; Conversion Privilege and
Conversion Price.

                  Securities of any series which are convertible into Common
Shares shall be convertible in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any series)
in accordance with this Article.

                  Subject to and upon compliance with the provisions of this
Article, at the option of the Holder thereof, any Security or any portion of the
principal amount thereof which is an integral multiple of the authorized
denomination thereof may be converted at the principal amount thereof, or of
such portion thereof, into fully paid and nonassessable shares (calculated as to
each conversion to the nearest 1/100 of a share) of Common Shares, at the
conversion price, determined as hereinafter provided, in effect at the time of
conversion. Such conversion right shall expire at the close of business on the
date specified for Securities of such series. In case a Security or portion
thereof is called for redemption, such conversion right in respect of the
Security or portion so called shall expire at the close of business on the date
prior to the Redemption Date, unless the Company defaults in making the payment
due upon redemption.

                  The price at which shares of Common Shares shall be delivered
upon conversion (herein called the "conversion price,") shall be the price
specified in relation to Securities of such series pursuant to Section 301. The
conversion price shall be adjusted in certain instances as provided in Section
1404.

                  SECTION 1402.  Exercise of Conversion Privilege.

                  In order to exercise the conversion privilege, the Holder of
any Security to be converted shall surrender such Security, duly endorsed or
assigned to the Company or in blank, at any office or agency of the Company
maintained for that purpose pursuant to Section 1002, accompanied by written
notice to the Company (which shall be substantially in the form set forth in
Section 203) at such office or agency or, if applicable, by notice in accordance
with the procedures of the Depositary that the Holder elects to convert such
Security or, if less than the entire principal amount thereof is to be
converted, the portion thereof to be converted. Securities surrendered for
conversion during the period from the close of business on any Regular Record
Date next preceding any Interest Payment Date to the opening of business on such
Interest Payment Date shall (except in the case of Securities or portions
thereof which have been called for redemption on a Redemption Date within such
period) be accompanied by payment in New York Clearing House funds or other
funds

                                       75

acceptable to the Company of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of Securities being surrendered
for conversion; provided, however, that a Security surrendered for conversion on
an Interest Payment Date need not be accompanied by a payment and interest on
the principal amount of the Security being converted will be paid on such
Interest Payment Date to the Holder of such Security on the immediately
preceding Record Date. Except as provided in the Securities and subject to the
last paragraph of Section 307, no payment or adjustment shall be made upon any
conversion on account of any interest accrued on the Securities surrendered for
conversion or on account of any dividends on the Common Shares issued upon
conversion.

                  Securities shall be deemed to have been converted immediately
prior to the close of business on the day of surrender of such Securities for
conversion in accordance with the foregoing provisions, and at such time the
rights of the Holders of such Securities as Holders shall cease, and the Person
or Persons entitled to receive the Common Shares issuable upon conversion shall
be treated for all purposes as the record holder or holders of such Common
Shares at such time. As promptly as practicable on or after the conversion date,
the Company shall issue and shall deliver at such office or agency a certificate
or certificates for the number of full Common Shares issuable upon conversion,
together with payment in lieu of any fraction of a share, as provided in Section
1403.

                  In the case of any Security which is converted in part only,
upon such conversion the Company shall execute and the Trustee shall
authenticate and deliver to the Holder thereof, at the expense of the Company, a
new Security or Securities of authorized denominations in aggregate principal
amount equal to the unconverted portion of the principal amount of such
Security.

                  SECTION 1403.  Fractions of Shares.

                  No fractional Common Shares shall be issued upon conversion of
Securities. If more than one Security shall be surrendered for conversion at one
time by the same Holder, the number of full shares which shall be issuable upon
conversion thereof shall be computed on the basis of the aggregate principal
amount of the Securities (or specified portions thereof) so surrendered. Instead
of any fractional Common Share which would otherwise be issuable upon conversion
of any Security or Securities (or specified portions thereof), the Company shall
pay a cash adjustment in respect of such fraction in an amount equal to the same
fraction of the market price per Common Share (as determined by the Board of
Directors or in any manner prescribed by the Board of Directors) at the close of
business on the day prior to the day of conversion.

                                       76

                  SECTION 1404. Adjustment of Conversion Price.

                  The conversion price shall be subject to adjustment from time
to time as follows:

                  (1) In case the Company shall pay or make a dividend or other
         distribution on its Common Shares, the conversion price in effect at
         the opening of business or, the day following the date fixed for the
         determination of stockholders entitled to receive such dividend or
         other distribution shall be reduced by multiplying such conversion
         price by a fraction of which (x) the numerator shall be the number of
         Common Shares outstanding at the close of business on the date fixed
         for such determination and (y) the denominator shall be the sum of such
         number of shares and the total number of shares constituting such
         dividend or other distribution, such reduction to become effective
         immediately after the opening of business on the day following the date
         fixed for such determination. For the purposes of this paragraph (1),
         the number of Common Shares at any time outstanding shall not include
         shares held in the treasury of the Company but shall include shares
         issuable in respect of scrip certificates issued in lieu of fractions
         of Common Shares. The Company will not pay any dividend or make any
         distribution on Common Shares held in the treasury of the Company.

                  (2) In case the Company shall issue rights or warrants (which
         rights or warrants expire within 45 days and are not available on an
         equivalent basis to Holders of the Securities convertible pursuant to
         this Article Fourteen upon conversion) to all holders of its Common
         Shares entitling them to subscribe for or purchase shares of Common
         Shares at a price per share less than the current market price per
         share (determined as provided in paragraph (6) of this Section) of the
         Common Shares on the date fixed for the determination of stockholders
         entitled to receive such rights or warrants, the conversion price in
         effect at the opening of business on the day following the date fixed
         for such determination shall be reduced by multiplying such conversion
         price by a fraction of which the numerator shall be the number of
         shares of Common Shares outstanding at the close of business on the
         date fixed for such determination plus the number of Common Shares
         which the aggregate of the offering price of the total number of Common
         Shares so offered for subscription or purchase would purchase at such
         current market price and the denominator shall be the number of Common
         Shares outstanding at the close of business on the date fixed for such
         determination plus the number of Common Shares so offered for
         subscription or purchase, such reduction to become effective
         immediately after the opening of business on the day following the date
         fixed for such determination; provided, however, that to the extent
         that Common Shares are not delivered after the expiration of such
         rights or warrants, the conversion price shall be readjusted (but only
         with respect to Securities converted after such expiration) to the
         conversion price that

                                       77

         would then be in effect had the adjustments made upon the issuance of
         such rights or warrants been made upon the basis of delivery of only
         the number of Common Shares actually issued. In determining whether any
         rights or warrants entitle the holders of Common Shares to subscribe
         for or purchase Common Shares at less than fair market value, there
         shall be taken into account any consideration received by the Company
         upon issuance and upon exercise of such rights or warrants, the value
         of such consideration, if other than cash, to be determined by the
         Board of Directors (whose determination shall be conclusive and
         described in a Board Resolution). For the purposes of this paragraph
         (2), the number of Common Shares any time outstanding shall not include
         shares held in the treasury of the Company but shall include shares
         issuable in respect of scrip certificates issued in lieu of fractions
         of Common Shares. The Company will not issue any rights or warrants in
         respect of Common Shares held in the treasury of the Company.

                  (3) In case outstanding Common Shares shall be subdivided into
         a greater number of Common Shares, the conversion price in effect at
         the opening of business on the day following the day upon which such
         subdivision becomes effective shall be proportionately reduced, and,
         conversely, in case outstanding Common Shares shall each be combined
         into a smaller number of Common Shares, the conversion price in effect
         at the opening of business on the day following the day upon which such
         combination becomes effective shall be proportionately increased, such
         reduction or increase, as the case may be, to become effective
         immediately after the opening of business on the day following the day
         upon which such subdivision or combination becomes effective.

                  (4) In case the Company shall, by dividend or otherwise, at
         any time distribute Excess Cash to all holders of its Common Shares,
         the conversion price shall be reduced so that the owner shall equal the
         price determined by multiplying the conversion price in effect
         immediately prior to the effectiveness of the conversion price
         reduction contemplated by this paragraph (4) by a fraction of which the
         numerator shall be the current market price per share (determined as
         provided in paragraph (6) of this Section) of the Common Shares on such
         date less the amount of Excess Cash so distributed applicable to one
         Common Share and the denominator shall be such current market price per
         share of the Common Shares, such reduction to become effective
         immediately prior to the opening of business on the day following the
         date fixed for the determination of stockholders entitled to receive
         such cash dividend. "Excess Cash" shall mean any dividend or
         distribution (excluding, in all events, any dividend or distribution
         described in paragraph (5) of this Section) consisting exclusively of
         cash and declared with respect to Common Shares to the extent such
         dividend or distribution when added to all other dividends or
         distributions on Common Shares consisting exclusively of cash and made
         during the immediately preceding 12 months (applicable to one
         outstanding Common Share) exceeds 15% of

                                       78

         the current market price per share of the Common Shares immediately
         preceding the date fixed for the determination of stockholders entitled
         to receive such cash dividend.

                  (5) In case the Company shall, by dividend or otherwise,
         distribute to all holders of its Common Shares evidences of its
         indebtedness or assets or rights or warrants to subscribe for or
         purchase any of its securities (including securities, but excluding any
         dividend or distribution referred to in paragraph (1) of this Section,
         any rights or warrants referred to in paragraph (2) of this Section,
         any subdivision or combination referred to in paragraph (3) of this
         Section, and any dividend or distribution payable in cash (other than
         cash or distributions made out of Excess Cash as provided in paragraph
         (4) of this Section, which shall be treated under such paragraph (4)),
         the conversion price shall be adjusted so that the same shall equal the
         price determined by multiplying the conversion price in effect
         immediately prior to the close of business on the date fixed for the
         determination of stockholders entitled to receive such distribution by
         a fraction of which the numerator shall be the current market price per
         share (determined as provided in paragraph (6) of this Section) of the
         Common Shares on the date fixed for such determination less the then
         fair market value (as determined by the Board of Directors, whose
         determination shall be conclusive and described in a Board Resolution
         filed with the Trustee) of the portion of the assets or evidences of
         indebtedness so distributed applicable to one Common Share and the
         denominator shall be such current market price per share of the Common
         Shares, such adjustment to become effective immediately prior to the
         opening of business on the day following the date fixed for the
         determination of stockholders entitled to receive such distribution.
         For the purposes of this paragraph (5), the distribution of a security
         which is distributed not only to the holders of the Common Shares on
         the date fixed for the distribution of such security, but also is
         distributed with each Common Share delivered to a Holder exercising the
         conversion privilege subsequent to such distribution date, shall not
         require an adjustment of the conversion price pursuant to this
         paragraph (5); provided that on the date, if any, on which a Holder
         exercising the conversion privilege would no longer be entitled to
         receive such security with a Common Share (other than as a result of
         the termination of all such securities), a distribution of such
         securities shall be deemed to have occurred and the conversion price
         shall be adjusted as provided in this paragraph (5) (and such day shall
         be deemed to be "the date fixed for the determination of the
         stockholders entitled to receive such distribution," and "the date
         fixed for such determination" within the meaning of the immediately
         preceding sentence).

                  (6) For the purpose of any computation under paragraphs (2),
         (4) and (5) of this Section, the current market price per Common Share
         on any date shall be deemed to be the average of the daily closing
         prices for the five consecutive Business Days selected by the Company
         commencing not more than 20 Business Days before, and ending not later
         than, the earlier of the day in question and the day before the

                                       79

         "ex" date with respect to the issuance or distribution requiring such
         computation. The closing price for each day shall be the last reported
         sales price regular way or, in case no such reported sale takes place
         on such day, the average of the reported closing bid and asked prices
         regular way, in either case on the New York Stock Exchange or, if the
         Common Shares are not listed or admitted to trading on such Exchange,
         on the principal national securities exchange on which the Common
         Shares are listed or admitted to trading or, if not listed or admitted
         to trading on any national securities exchange, on the National
         Association of Securities Dealers Automated Quotations National Market
         System or, if the Common Shares are not listed or admitted to trading
         on any national securities exchange or quoted on such National Market
         System, the average of the closing bid and asked prices in the
         over-the-counter market as furnished by any New York Stock Exchange
         member firm selected from time to time by the Company for that purpose.
         For purposes of this paragraph, the term "`ex' date", when used with
         respect to any issuance or distribution, means the first date on which
         the Common Shares trade in a regular way on such exchange or in such
         market without the right to receive such issuance or distribution.

                  (7) The Company may make such reductions in the conversion
         price, in addition to those required by paragraphs (1) through (5) of
         this Section, as it considers to be advisable in order that any event
         treated for Federal income tax purposes as a dividend of stock or stock
         rights shall not be taxable to the recipients.

                  (8) Notwithstanding any provision of this Indenture to the
         contrary, no adjustment in the conversion price shall be required
         unless such adjustment would require an increase or decrease of at
         least one percent in such price; provided, however, that any
         adjustments which by reason of this paragraph (8) are not required to
         be made shall be carried forward and taken into account in any
         subsequent adjustment. All calculations under this Article shall be
         made to the nearest cent or to the nearest one-hundredth of a share, as
         the case may be.

                  (9) The Company from time to time (by action of the Board of
         Directors) may decrease the conversion price by any amount for any
         period of time if the period is at least twenty days, the decrease is
         irrevocable during the period and the Board of Directors in its sole
         discretion shall have made a determination that such decrease would be
         in the best interests of the Company, which determination shall be
         conclusive and evidenced by a Board Resolution filed with the Trustee.
         Whenever the conversion price is decreased pursuant to the preceding
         sentence, the Company shall mail to holders of record of the Securities
         a notice of the decrease at least fifteen days prior to the date such
         decrease takes effect, and such notice shall state the decreased
         conversion price and the period it will be in effect.

                                       80

                  (10) Notwithstanding any provision of this Indenture to the
         contrary, no adjustment in the conversion price will be made for the
         issuance of shares of capital stock to directors, employees or
         independent contractors pursuant to the Company's or any of its
         Subsidiaries' stock option, stock ownership or other benefit plans or
         arrangements or trusts related thereto or for issuance of any Common
         Shares interest pursuant to any plan providing for the reinvestment of
         dividends or interest payable on securities of the Company and the
         investment of additional optional amounts in Common Shares under such
         plan.

                  (11) If the Company shall take any action affecting the Common
         Shares, other than action described in this Section 1404, that in the
         sole discretion of the Board of Directors would materially adversely
         affect the conversion rights of the holders of the Securities, the
         Company may, but shall not be obligated to, adjust the conversion price
         for the Securities, to the extent permitted by law, in such manner, and
         at such time, as the Board of Directors, in its sole discretion, may
         determine to be equitable in the circumstances.

                  SECTION 1405.  Notice of Adjustments of Conversion Price.

                  Whenever the conversion price is adjusted as herein provided:

                  (a) the Company shall compute the adjusted conversion price in
         accordance with Section 1404 and shall prepare a certificate signed by
         the Treasurer or Director of Treasury of the Company setting forth the
         adjusted conversion price and showing in reasonable detail the facts
         upon which such adjustment is based, and such certificate shall
         forthwith be filed at the Corporate Trust Office of the Trustee and at
         each office or agency maintained for the purpose of conversion of
         Securities pursuant to Section 1002; and

                  (b) a notice stating that the conversion price has been
         adjusted and setting forth the adjusted conversion price shall
         forthwith be required, and as soon as practicable after it is required,
         such notice shall be mailed by the Company to all Holders at their last
         addresses as they shall appear in the Security Register.

                  SECTION 1406.  Notice of Certain Corporate Action.

                  In case:

                  (a) the Company shall declare a dividend (or any other
         distribution) on its Common Shares payable otherwise than in cash out 
         of its retained earnings; or

                                                        81

                  (b) the Company shall authorize the granting to the holders of
         its Common Shares of rights or warrants to subscribe for or purchase
         any shares of capital stock of any class or of any other rights; or

                  (c) the Company shall declare a dividend out of Excess Cash; 
         or

                  (d) of any reclassification of the Common Shares of the
         Company (other than a subdivision or combination of its outstanding
         shares of Common Shares), or of any consolidation or merger to which
         the Company is a party and for which approval of any stockholders of
         the Company is required, or of the sale or transfer of all or
         substantially all of the assets of the Company; or

                  (e) of the voluntary or involuntary dissolution, liquidation
         or winding up of the Company;

then the Company shall cause to be filed at the Corporate Trust Office of the
Trustee and at each office or agency maintained for the purpose of conversion of
Securities pursuant to Section 1002, and shall cause to be mailed to all Holders
at their last addresses as they shall appear in the Security Register, at least
15 days (or 10 days in any case specified in clause (a) or (b) above) prior to
the applicable record, effective or expiration date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution, rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Shares of record to be
entitled to such dividend, distribution, rights or warrants are to be
determined, or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that holders of Common
Shares of record shall be entitled to exchange their Common Shares for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up.
Neither the failure to give any such notice nor any defect therein shall affect
the legality or validity of any action described in clauses (a) through (f) of
this Section 1406.

                  SECTION 1407.  Company to Reserve Shares.

                  The Company shall at all times reserve and keep available,
free from preemptive rights, out of its authorized but unissued Common Shares,
for the purpose of effecting the conversion of Securities, the full number of
Common Shares then issuable upon the conversion of all Outstanding Securities.

                                       82

                  SECTION 1408.  Taxes on Conversions.

                  The Company will pay any and all taxes that may be payable in
respect of the issue or delivery of Common Shares on conversion of Securities
pursuant hereto. The Company shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the issue and
delivery of Common Shares in a name other than that of the Holder of the
Security or Securities to be converted, and no such issue or delivery shall be
made unless and until the Person requesting such issue has paid to the Company
the amount of any such tax, or has established to the satisfaction of the
Company that such tax has been paid.

                  SECTION 1409.  Covenant as to Shares.

                  The Company covenants that all Common Shares which may be
issued upon conversion of Securities will upon issue be fully paid and
nonassessable.

                  SECTION 1410.  Cancellation of Converted Securities.

                  All Securities delivered for conversion shall be delivered to
the Trustee to be cancelled by or at the direction of the Trustee, which shall
dispose of the same as provided in Section 309.

                  SECTION 1411. Provisions in Case of Reclassification,
Consolidation, Merger or Sale of Assets.

                  In case of any capital reorganization or reclassification of
the capital stock of the Company (other than solely a change in par value, or
from par value to no par value) or any consolidation of the Company with, or
merger of the Company into, any other Person, any merger of another Person into
the Company (other than a merger which does not result in any reclassification,
conversion, exchange or cancellation of outstanding Common Shares or preferred
shares of beneficial interest of the Company) or any sale or transfer of all or
substantially all of the assets of the Company, the Holder of each Security then
outstanding shall have the right thereafter, during the period such Security
shall be convertible as specified in Section 1401, to convert such Security only
into the kind and amount of securities, cash and other property receivable upon
such reorganization, recapitalization, consolidation, merger, sale or transfer
by a holder of the number of Common Shares into which such Security might have
been converted immediately prior to such reorganization, consolidation, merger,
sale or transfer, assuming such holder of Common Shares (i) is not a Person with
which the Company consolidated or into which the Company merged or which merged
into the Company or to which such sale or transfer was made, as the case may be
("constituent Person"), or an Affiliate of a constituent Person and (ii) failed
to exercise his rights of election, if any, as to the kind or amount of
securities, cash and other property

                                       83

receivable upon such consolidation, merger, sale or transfer (provided that if
the kind or amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer is not the same for each Common Share
held immediately prior to such consolidation, merger, sale or transfer by others
than a constituent Person or an Affiliate thereof and in respect of which such
rights of election shall not have been exercised ("non-electing share"), then
for the purpose of this Section the kind and amount of securities, cash and
other property receivable upon such consolidation, merger, sale or transfer by
each non-electing share shall be deemed to be the kind and amount so receivable
per share by a plurality of the non-electing shares). The Company shall not
effect any consolidation, merger, sale or transfer unless, prior to or
simultaneously with the consummation thereof the Person formed by such
consolidation or resulting from such merger or which acquires such assets, as
the case may be, shall execute and deliver to the Trustee a supplemental
indenture pursuant to which such Person assumes the obligation to deliver to the
Holder of each Security such securities, cash and other property as such Holder
may be entitled to in accordance with the provisions of this Section 1411. Such
supplemental indenture shall provide for adjustments which, for events
subsequent to the effective date of such supplemental indenture, shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Article. The Trustee shall not be under any responsibility to determine the
correctness of any provision contained in such supplemental indenture relating
to either the kind or amount of shares of stock or securities or cash or
property receivable by Holders upon the conversion of their Securities after any
such consolidation, merger, sale or transfer. The above provisions of this
Section shall similarly apply to successive consolidations, mergers, sales or
transfers.

                  SECTION 1412.  Responsibility of Trustee and Conversion Agent.

                  Neither the Trustee nor any agent appointed to effect
conversions shall at any time be under any duty or responsibility to any Holder
of Securities to determine whether any facts exist which may require any
adjustment of the conversion price, or with respect to the nature or extent of
any such adjustment when made, or with respect to the method employed, or herein
or in any supplemental indenture provided to be employed, in making the same.
Neither the Trustee nor any such conversion agent shall be accountable with
respect to the validity or value (or the kind or amount) of any Common Shares or
of any securities or property which may at any time be issued or delivered upon
the conversion of any Security; and neither the Trustee nor any such conversion
agent makes any representation with respect thereto. Neither the Trustee nor any
such conversion agent shall be responsible for any failure of the Company to
issue, transfer or deliver any Common Shares or stock certificates or other
securities or property or to make any cash payment upon the delivery of any
Security for the purpose of conversion or to comply with any of the covenants
contained in this Article.

                                       84

                                 ARTICLE FIFTEEN

                           SUBORDINATION OF SECURITIES

                  SECTION 1501.  Securities Subordinate to Senior Debt.

                  The Company covenants and agrees, and each Holder of a
Security, by his acceptance thereof, likewise covenants and agrees, that, to the
extent and in the manner hereinafter set forth in this Article, the indebtedness
represented by the Securities and the payment of the principal of (and premium,
of any) and interest on each and all of the Securities are hereby expressly made
subordinate and subject in right of payment to the prior payment in full of all
Senior Debt.

                  SECTION 1502.  Payment Over of Proceeds upon Dissolution, Etc.

                  In the event of (a) any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding in connection therewith, relative to the Company or to its
creditors, as such, or to its assets, or (b) any liquidation, dissolution or
other winding up of the Company, whether voluntary or involuntary and whether or
not involving insolvency or bankruptcy, or (c) any assignment for the benefit of
creditors or any other marshalling of assets and liabilities of the Company,
then and in any such event the holders of Senior Debt shall be entitled to
receive payment in full of all amounts due or to become due on or in respect of
all Senior Debt, or provision shall be made for such payment in cash, before the
Holders of the Securities are entitled to receive any payment on account of
principal of (or premium, if any) or interest on the Securities, and to that end
the holders of Senior Debt shall be entitled to receive, for application to the
payment thereof, any payment or distribution of any kind or character, whether
in cash, property or securities, including any such payment or distribution
which may be payable or deliverable by reason of the payment of any other
indebtedness of the Company being subordinated to the payment of the Securities,
which may be payable or deliverable in respect of the Securities in any such
case, proceeding, dissolution, liquidation or other winding up event.

                  In the event that, notwithstanding the foregoing provisions of
this Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, including any such payment or
distribution which may be payable or deliverable by reason of the payment of any
other indebtedness of the Company being subordinated to the payment of the
Securities, before all Senior Debt is paid in full or payment thereof provided
for, and if such fact shall, at or prior to the time of such payment or
distribution, have been made known to the Trustee or, as the case may be, such
Holder, then and in such event such

                                       85

payment or distribution shall be paid over or delivered forthwith to the trustee
in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or
other Person making payment or distribution of assets of the Company for
application to the payment of all Senior Debt remaining unpaid, to the extent
necessary to pay all Senior Debt in full, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Debt. Any taxes that
have been withheld or deducted from any payment or distribution in respect of
the Securities, or any taxes that ought to have been withheld or deducted from
any such payment or distribution that have been remitted to the relevant taxing
authority, shall not be considered to an amount that the Trustee or the Holder
of any Security receives for purposes of this Section.

                  For purposes of this Article only, the words "cash, property
or securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment which are subordinated
in right of payment to all Senior Debt which may at the time be outstanding to
substantially the same extent as, or to a greater extent than, the Securities
are so subordinated as provided in this Article. The consolidation of the
Company with, or the merger of the Company into, another Person or the
liquidation or dissolution of the Company following the conveyance or transfer
of its properties and assets substantially as an entirety to another Person upon
the terms and conditions set forth in Article Eight shall not be deemed a
dissolution, winding up, liquidation, reorganization, assignment for the benefit
of creditors or marshalling of assets and liabilities of the Company for the
purposes of this Section if the Person formed by such consolidation or into
which the Company is merged or the Person which acquires by conveyance or
transfer such properties and assets substantially as an entirety, as the case
may be, shall, as a part of such consolidation, merger, conveyance or transfer,
comply with the conditions set forth in Article Eight.

                  SECTION 1503. Prior Payment to Senior Debt upon Acceleration
of Securities.

                  In the event that any Securities are declared due and payable
before their Stated Maturity, then and in such event the holders of Senior Debt
shall be entitled to receive payment in full of all amounts due or to become due
on or in respect of all Senior Debt or provision shall be made for such payment
in cash, before the Holders of the Securities are entitled to receive any
payment (including any payment which may be payable by reason of the payment of
any other indebtedness of the Company being subordinated to the payment of the
Securities) by the Company on account of the principal of (or premium, if any)
or interest on the Securities or on account of the purchase or other acquisition
of Securities; provided, however, that nothing in this Section shall prevent the
satisfaction of any sinking fund payment in accordance with Article Twelve by
delivering and crediting pursuant to

                                       86

Section 1202 Securities which have been acquired (upon redemption or otherwise)
prior to such declaration of acceleration or which have been converted pursuant
to Article 14.

                  In the event that, notwithstanding the foregoing, the Company
shall make any payment to the Trustee or the Holder of any Security prohibited
by the foregoing provisions of this Section, and if such fact shall, at or prior
to the time of such payment, have been made known to the Trustee or, as the case
may be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company.

                  The provisions of this Section shall not apply to any payment
with respect to which Section 1402 would be applicable.

                  SECTION 1504.  No Payment when Senior Debt in Default.

                  (a) In the event and during the continuation of any default in
the payment of principal of (or premium, if any) or interest on any Senior Debt
beyond any applicable grace period with respect thereto, or in the event that
any event of default with respect to any Senior Debt shall have occurred and be
continuing permitting the holders of such Senior Debt (or a trustee on behalf of
the holders thereof) to declare such Senior Debt due and payable prior to the
date on which it would otherwise have become due and payable, unless and until
such event of default shall have been cured or waived or shall have ceased to
exist and such acceleration shall have been rescinded or annulled, or (b) in the
event any judicial proceeding shall be pending with respect to any such default
in payment or event of default, then no payment (including any payment which may
be payable by reason of the payment of any other indebtedness of the Company
being subordinated to the payment of the Securities) shall be made by the
Company on account of principal of (or premium, if any) or interest on the
Securities or on account of the purchase or other acquisition of Securities;
provided, however, that nothing in this Section shall prevent the satisfaction
of any sinking fund payment in accordance with Article Twelve by delivering and
crediting pursuant to Section 1202 Securities which have been acquired (upon
redemption or otherwise) prior to such default in payment or event of default or
which have been converted pursuant to Article 14.

                  In the event that, notwithstanding the foregoing, the Company
shall make any payment to the Trustee or the Holder of any Security prohibited
by the foregoing provisions of this Section, and if such fact shall, at or prior
to the time of such payment, have been made known to the Trustee or, as the case
may be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company.

                  The provisions of this Section shall not apply to any payment
with respect to which Section 1402 would be applicable.

                                       87

                  SECTION 1505.  Payment Permitted in Certain Situations.

                  Nothing contained in this Article or elsewhere in this
Indenture or in any of the Securities shall prevent (a) the Company, at any time
except during the pendency of any case, proceeding, dissolution, liquidation or
other winding up, assignment for the benefit of creditors or other marshalling
of assets and liabilities of the Company referred to in Section 1402 or under
the conditions described in Section 1403 or 1404, from making payments at any
time of principal of (and premium, if any) or interest on the Securities, or (b)
the application by the Trustee of any money deposited with it hereunder to the
payment of or on account of the principal of (and premium, if any) or interest
on the Securities or the retention of such payment by the holders, if, at the
time of such application by the Trustee, it did not have knowledge that such
payment would have been prohibited by the provisions of this Article.

                  SECTION 1506.  Subrogation to Rights of Holders of Senior 
Debt.

                  Subject to the payment in full of all Senior Debt or the
provision for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Debt, the Holders of the Securities shall
be subrogated to the extent of the payments or distributions made to the holders
of such Senior Debt pursuant to the provisions of this Article (equally and
ratably with the holders of indebtedness of the Company which by its express
terms is subordinated to indebtedness of the Company to substantially the same
extent as the Securities are subordinated to the Senior Debt and is entitled to
like rights of subrogation) to the rights of the holders of such Senior Debt to
receive payments and distributions of cash, property and securities applicable
to the Senior Debt until the principal of (and premium, if any) and interest on
the Securities shall be paid in full. For purposes of such subrogation, no
payments or distributions to the holders of the Senior Debt of any cash,
property or securities to which the Holders of the Securities or the Trustee
would be entitled except for the provisions of this Article, and no payments
over pursuant to the provisions of this Article to the holders of Senior Debt by
Holders of the Securities or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Debt and the Holders of the Securities,
be deemed to be a payment or distribution by the Company to or on account of the
Senior Debt.

                  SECTION 1507.  Provisions Solely to Define Relative Rights.

                  The provisions of this Article are and are intended solely for
the purpose of defining the relative rights of the Holders of the Securities on
the one hand and the holders of Senior Debt on the other hand. Nothing contained
in this Article or elsewhere in this Indenture or in the Securities is intended
to or shall (a) impair, as among the Company, its creditors other than holders
of Senior Debt and the Holders of the Securities, the

                                       88

obligation of the Company, which is absolute and unconditional (and which,
subject to the rights under this Article of the holders of Senior Debt, is
intended to rank equally with all other general obligations of the Company), to
pay to the Holders of the Securities the principal of (and premium, if any) and
interest on the Securities as and when the same shall become due and payable in
accordance with their terms; or (b) affect the relative rights against the
Company of the Holders of the Securities and creditors of the Company other than
the holders of Senior Debt; or (c) prevent the Trustee or the Holder of any
Security from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article
of the holders of Senior Debt to receive cash, property and securities otherwise
payable or deliverable to the Trustee or such Holder.

                  SECTION 1508.  Trustee to Effectuate Subordination.

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

                  SECTION 1509.  No Waiver of Subordination Provisions.

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

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

                                       89

                  SECTION 1510.  Notice to Trustee.

                  The Company shall give prompt written notice to the Trustee of
any fact known to the Company which would prohibit the making of any payment to
or by the Trustee in respect of the Securities. Notwithstanding the provisions
of this Article or any other provision of this Indenture, the Trustee shall not
be charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from the
Company or a holder of Senior Debt or from any trustee therefor; and, prior to
the receipt of any such written notice, the Trustee, subject to the provisions
of Section 601, shall be entitled in all respects to assume that no such facts
exist.

                  Subject to the provisions of Section 601, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Debt (or a trustee therefor) to
establish that such notice has been given by a holder of Senior Debt (or a
trustee therefor). In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any Person as a holder
of Senior Debt to participate in any payment or distribution pursuant to this
Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Debt held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article, and if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment.

                  SECTION 1511. Reliance on Judicial Order or Certificate of
Liquidating Agent.

                  Upon any payment or distribution of assets of the Company
referred to in this Article, the Trustee, subject to the provisions of Section
601, and the Holders of the Securities shall be entitled to rely upon any order
or decree entered by any court of competent jurisdiction in which such
insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution,
winding up or similar case or proceeding is pending, or a certificate of the
trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for
the benefit of creditors, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Holders of Securities, for the
purpose of ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Debt and other indebtedness of the Company,
the amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article.

                                       90

                  SECTION 1512. Trustee Not Fiduciary for Holders of Senior
Debt.

                  The Trustee shall not be deemed to owe any fiduciary duty to
the holders of Senior Debt and shall not be liable to any such holders or
creditors if it shall in good faith pay over or distribute to Holders of
Securities or to the Company or to any other Person cash, property or securities
to which any holders of Senior Debt shall be entitled by virtue of this Article
or otherwise.

                  SECTION 1513. Rights of Trustee as Holder of Senior Debt,
Preservation of Trustee's Rights.

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

                  Nothing in this Article shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 607.

                  SECTION 1514.  Article Applicable to Paying Agents.

                  In case at any time any Paying Agent other than the Trustee
shall have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee; provided,
however, that Section 1413 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.

                  SECTION 1515.  Certain Conversions Deemed Payment.

                  For the purposes of this Article only, (1) the issuance and
delivery of junior securities upon conversion of Securities in accordance with
Article Fourteen shall not be deemed to constitute a payment or distribution on
account of the principal of or premium or interest on Securities or on account
of the purchase or other acquisition of Securities, and (2) the payment,
issuance or delivery of cash, property or securities (other than junior
securities) upon conversion of a Security shall be deemed to constitute payment
on account of the principal of such Security. For the purposes of this Section,
the term "junior securities" means (a) shares of any stock of any class of the
Company and (b) securities of the Company which are subordinated in right of
payment to all Senior Debt which may be outstanding at the time of issuance or
delivery of such securities to substantially the same extent as, or to a greater
extent than, the Securities are so subordinated as provided in this Article.
Nothing

                                       91

contained in this Article or elsewhere in this Indenture or in the Securities is
intended to or shall impair, as among the Company, its creditors other than
holders of Senior Debt and the Holders of the Securities, the right, which is
absolute and unconditional, of the Holder of any Security to convert such
Security in accordance with Article Fourteen.

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

                                            ALEXANDER'S INC.

                                            By__________________________________

Attest:

_____________________________________
                                            STATE STREET BANK & TRUST CO. N.A.
                                            Trustee:

                                            By__________________________________

Attest:

_____________________________________

                                       92

STATE OF NEW YORK                     )
                                      )   ss.:
COUNTY OF NEW YORK                    )

                  On the ....... day of ....................., ........., before
me personally came ..........................., to me known, who, being by me
duly sworn, did depose and say that he is ....................
of.................................., one of the corporations described in and
which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation; and that he signed his name thereto by like authority.

                                         _______________________________________

STATE OF NEW YORK                     )
                                      )   ss.:
COUNTY OF NEW YORK                    )

                  On the ....... day of ....................., ........., before
me personally came ..........................., to me known, who, being by me
duly sworn, did depose and say that he is ....................
of.................................., one of the corporations described in and
which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation; and that he signed his name thereto by like authority.

                                         _______________________________________

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this Amendment No. 1 to the
Registration Statement of Alexander's, Inc. on Form S-3 of (i) our report dated
March 29, 1995 (which expresses an unqualified opinion and includes explanatory
paragraphs relating to the need for additional borrowings and to a change in the
method of accounting for postretirement healthcare benefits) related to
Alexander's, Inc. for the year ended December 31, 1994 and (ii) our report dated
September 15, 1995 related to the Kings Plaza Shopping Center and Marina for the
year ended June 30, 1995, both appearing in the Annual Report on Form 10-K/A of
Alexander's, Inc. for the year ended December 31, 1994, and to the reference to
us under the heading "Experts" in the Prospectus, which is part of this
Amendment No. 1 to the Registration Statement.

DELOITTE & TOUCHE LLP

New York, New York
December 6, 1995

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    ---------

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

                Check if an Application to Determine Eligibility
                  of a Trustee Pursuant to Section 305(b)(2) __

                       STATE STREET BANK AND TRUST COMPANY
               (Exact name of trustee as specified in its charter)

              Massachusetts                                    04-1867445
    (Jurisdiction of incorporation or                       (I.R.S. Employer
organization if not a U.S. national bank)                 Identification No.)

                225 Franklin Street, Boston, Massachusetts 02110
               (Address of principal executive offices) (Zip Code)

       John R. Towers, Esq. Senior Vice President and Corporate Secretary
                225 Franklin Street, Boston, Massachusetts 02110
                                  (617)654-3253
            (Name, address and telephone number of agent for service)

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

                                ALEXANDER'S, INC.
               (Exact name of obligor as specified in its charter)

            Delaware                                          51-01-00517
(State or other jurisdiction of                             (I.R.S. Employer
 incorporation or organization)                           Identification No.)

                             Park 80 West, Plaza II
                         Saddle Brook, New Jersey 07663
               (Address of principal executive offices) (Zip Code)

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

                        Subordinated Debt Securities due
                         (Title of indenture securities)

                                     GENERAL

Item 1.  General Information.

         Furnish the following information as to the trustee:

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

                  Department of Banking and Insurance of The Commonwealth of
                  Massachusetts, 100 Cambridge Street, Boston, Massachusetts.

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

Item 2.  Affiliations with Obligor.

         If the Obligor is an affiliate of the trustee, describe each such
         affiliation.

                  The obligor is not an affiliate of the trustee or of its
                  parent, State Street Boston Corporation.

                  (See note on page 6.)

Item 3. through Item 15.   Not applicable.

Item 16. List of Exhibits.

         List below all exhibits filed as part of this statement of eligibility.

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

                  A copy of the Articles of Association of the trustee, as now
                  in effect, is on file with the Securities and Exchange
                  Commission as Exhibit 1 to Amendment No. 1 to the Statement of
                  Eligibility and Qualification of Trustee (Form T-1) filed with
                  the Registration Statement of Morse Shoe, Inc. (File No.
                  22-17940) and is incorporated herein by reference thereto.

         2. A copy of the certificate of authority of the trustee to commence
         business, if not contained in the articles of association.

                  A copy of a Statement from the Commissioner of Banks of
                  Massachusetts that no certificate of authority for the trustee
                  to commence business was necessary or issued is on file with
                  the Securities and Exchange Commission as Exhibit 2 to
                  Amendment No. 1 to the Statement of Eligibility and
                  Qualification of Trustee (Form T-1) filed with the
                  Registration Statement of Morse Shoe, Inc. (File No. 22-17940)
                  and is incorporated herein by reference thereto.

         3. A copy of the authorization of the trustee to exercise corporate
         trust powers, if such authorization is not contained in the documents
         specified in paragraph (1) or (2), above.

                  A copy of the authorization of the trustee to exercise
                  corporate trust powers is on file with the Securities and
                  Exchange Commission as Exhibit 3 to Amendment No. 1 to the
                  Statement of Eligibility and Qualification of Trustee (Form
                  T-1) filed with the Registration Statement of Morse Shoe, Inc.
                  (File No. 22-17940) and is incorporated herein by reference
                  thereto.

         4. A copy of the existing by-laws of the trustee, or instruments
         corresponding thereto.

                  A copy of the by-laws of the trustee, as now in effect, is on
                  file with the Securities and Exchange Commission as Exhibit 4
                  to the Statement of Eligibility and Qualification of Trustee
                  (Form T-1) filed with the Registration Statement of Eastern
                  Edison Company (File No. 33-37823) and is incorporated herein
                  by reference thereto.

                                        1

         5. A copy of each indenture referred to in Item 4. if the obligor is in
         default.

                  Not applicable.

         6. The consents of United States institutional trustees required by
         Section 321(b) of the Act.

                  The consent of the trustee required by Section 321(b) of the
                  Act is annexed hereto as Exhibit 6 and made a part hereof.

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

                  A copy of the latest report of condition of the trustee
                  published pursuant to law or the requirements of its
                  supervising or examining authority is annexed hereto as
                  Exhibit 7 and made a part hereof.

                                      NOTES

         In answering any item of this Statement of Eligibility and
Qualification which relates to matters peculiarly within the knowledge of the
obligor or any underwriter for the obligor, the trustee has relied upon
information furnished to it by the obligor and the underwriters, and the trustee
disclaims responsibility for the accuracy or completeness of such information.

         The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.

                                    SIGNATURE

         Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts, has
duly caused this statement of eligibility and qualification to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of Boston
and The Commonwealth of Massachusetts, on the 4th day of December, 1995.

                                     STATE STREET BANK AND TRUST COMPANY

                                     By:  ______________________________________
                                                Michael J. D'Angelico
                                                Vice President

                                        2

                                    EXHIBIT 6

                             CONSENT OF THE TRUSTEE

         Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issuance by
Alexander's, Inc. of its Subordinated Debt Securities, we hereby consent that
reports of examination by Federal, State, Territorial or District authorities
may be furnished by such authorities to the Securities and Exchange Commission
upon request therefor.

                                       STATE STREET BANK AND TRUST COMPANY

                                       By:  ___________________________________
                                                    Michael J. D'Angelico
                                                    Vice President

Dated:  December 4,  1995

                                        3

                                    EXHIBIT 7

Consolidated Report of Condition of State Street Bank and Trust Company of
Boston, Massachusetts and foreign and domestic subsidiaries, a state banking
institution organized and operating under the banking laws of this commonwealth
and a member of the Federal Reserve System, at the close of business December
31, 1994, published in accordance with a call made by the Federal Reserve Bank
of this District pursuant to the provisions of the Federal Reserve Act and in
accordance with a call made by the Commissioner of Banks under General Laws,
Chapter 172, Section 22(a).

                                                                    Thousands of
ASSETS                                                              Dollars

Cash and balances due from depository institutions:
         Noninterest-bearing balances and currency and coin .......      942,661
         Interest-bearing balances ................................    4,843,628
Securities ........................................................    8,410,339
Federal funds sold and securities purchased
         under agreements to resell in domestic offices
         of the bank and its Edge subsidiary ......................    2,240,374
Loans and lease financing receivables:
         Loans and leases, net of unearned income ....  3,257,795
         Allowance for loan and lease losses .........     58,184
         Loans and leases, net of unearned income and allowances ..    3,199,611
Assets held in trading accounts ...................................      825,549
Premises and fixed assets .........................................      375,086
Other real estate owned ...........................................        4,359
Investments in unconsolidated subsidiaries ........................       25,051
Customers' liability to this bank on acceptances outstanding ......       55,358
Intangible assets .................................................       34,862
Other assets ......................................................      653,750
                                                                      ----------

Total assets ......................................................   21,610,628
                                                                      ==========

LIABILITIES

Deposits:
         In domestic offices ......................................    5,946,262
                  Noninterest-bearing ................  4,175,167
                  Interest-bearing ...................  1,771,095
         In foreign offices and Edge subsidiary ...................    8,147,182
                  Noninterest-bearing ................     44,817
                  Interest-bearing ...................  8,102,365
Federal funds purchased and securities sold under
         agreements to repurchase in domestic offices of
         the bank and of its Edge subsidiary ......................    4,912,704
Demand notes issued to the U.S. Treasury and Trading Liabilities ..      423,324
Other borrowed money ..............................................      386,049
Bank's liability on acceptances executed and outstanding ..........       55,621
Other liabilities .................................................      530,536
                                                                      ----------

Total liabilities .................................................   20,401,678
                                                                      ----------

EQUITY CAPITAL
Common stock ......................................................       28,043
Surplus ...........................................................      177,736
Undivided profits .................................................    1,003,171
                                                                      ----------

Total equity capital ..............................................    1,208,950
                                                                      ----------

Total liabilities and equity capital ..............................   21,610,628
                                                                      ==========

                                        4

I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.

                                 Rex S. Schuette

We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.

                                 David A. Spina
                                 Marshall N. Carter
                                 Charles F. Kaye

                                        5
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    ---------

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

                Check if an Application to Determine Eligibility
                  of a Trustee Pursuant to Section 305(b)(2) __

                       STATE STREET BANK AND TRUST COMPANY
               (Exact name of trustee as specified in its charter)

              Massachusetts                                  04-1867445
    (Jurisdiction of incorporation or                     (I.R.S. Employer
organization if not a U.S. national bank)               Identification No.)

                225 Franklin Street, Boston, Massachusetts 02110
               (Address of principal executive offices) (Zip Code)

       John R. Towers, Esq. Senior Vice President and Corporate Secretary
                225 Franklin Street, Boston, Massachusetts 02110
                                  (617)654-3253
            (Name, address and telephone number of agent for service)

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

                                ALEXANDER'S, INC.
               (Exact name of obligor as specified in its charter)

             Delaware                                     51-01-00517
 (State or other jurisdiction of                        (I.R.S. Employer
  incorporation or organization)                      Identification No.)

                             Park 80 West, Plaza II
                         Saddle Brook, New Jersey 07663
               (Address of principal executive offices) (Zip Code)

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

                           Senior Debt Securities due
                         (Title of indenture securities)

                                     GENERAL

Item 1.  General Information.

         Furnish the following information as to the trustee:

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

                  Department of Banking and Insurance of The Commonwealth of
                  Massachusetts, 100 Cambridge Street, Boston, Massachusetts.

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

Item 2.  Affiliations with Obligor.

         If the Obligor is an affiliate of the trustee, describe each such
         affiliation.

                  The obligor is not an affiliate of the trustee or of its
                  parent, State Street Boston Corporation.

                  (See note on page 6.)

Item 3. through Item 15.   Not applicable.

Item 16. List of Exhibits.

         List below all exhibits filed as part of this statement of eligibility.

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

                  A copy of the Articles of Association of the trustee, as now
                  in effect, is on file with the Securities and Exchange
                  Commission as Exhibit 1 to Amendment No. 1 to the Statement of
                  Eligibility and Qualification of Trustee (Form T-1) filed with
                  the Registration Statement of Morse Shoe, Inc. (File No.
                  22-17940) and is incorporated herein by reference thereto.

         2. A copy of the certificate of authority of the trustee to commence
         business, if not contained in the articles of association.

                  A copy of a Statement from the Commissioner of Banks of
                  Massachusetts that no certificate of authority for the trustee
                  to commence business was necessary or issued is on file with
                  the Securities and Exchange Commission as Exhibit 2 to
                  Amendment No. 1 to the Statement of Eligibility and
                  Qualification of Trustee (Form T-1) filed with the
                  Registration Statement of Morse Shoe, Inc. (File No. 22-17940)
                  and is incorporated herein by reference thereto.

         3. A copy of the authorization of the trustee to exercise corporate
         trust powers, if such authorization is not contained in the 
         documents specified in paragraph (1) or (2), above.

                  A copy of the authorization of the trustee to exercise
                  corporate trust powers is on file with the Securities and
                  Exchange Commission as Exhibit 3 to Amendment No. 1 to the
                  Statement of Eligibility and Qualification of Trustee (Form
                  T-1) filed with the Registration Statement of Morse Shoe, Inc.
                  (File No. 22-17940) and is incorporated herein by reference
                  thereto.

         4. A copy of the existing by-laws of the trustee, or instruments
         corresponding thereto.

                  A copy of the by-laws of the trustee, as now in effect, is on
                  file with the Securities and Exchange Commission as Exhibit 4
                  to the Statement of Eligibility and Qualification of Trustee
                  (Form T-1) filed with the Registration Statement of Eastern
                  Edison Company (File No. 33-37823) and is incorporated herein
                  by reference thereto.

                                        1

         5. A copy of each indenture referred to in Item 4. if the obligor is in
         default.

                  Not applicable.

         6. The consents of United States institutional trustees required by
         Section 321(b) of the Act.

                  The consent of the trustee required by Section 321(b) of the
                  Act is annexed hereto as Exhibit 6 and made a part hereof.

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

                  A copy of the latest report of condition of the trustee
                  published pursuant to law or the requirements of its
                  supervising or examining authority is annexed hereto as
                  Exhibit 7 and made a part hereof.

                                      NOTES

         In answering any item of this Statement of Eligibility and
Qualification which relates to matters peculiarly within the knowledge of the
obligor or any underwriter for the obligor, the trustee has relied upon
information furnished to it by the obligor and the underwriters, and the trustee
disclaims responsibility for the accuracy or completeness of such information.

         The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.

                                    SIGNATURE

         Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts, has
duly caused this statement of eligibility and qualification to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of Boston
and The Commonwealth of Massachusetts, on the 4th day of December, 1995.

                                        STATE STREET BANK AND TRUST COMPANY

                                        By:  __________________________________
                                                   Michael J. D'Angelico
                                                   Vice President

                                        2

                                    EXHIBIT 6

                             CONSENT OF THE TRUSTEE

         Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issuance by
Alexander's, Inc. of its Senior Debt Securities, we hereby consent that reports
of examination by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.

                                     STATE STREET BANK AND TRUST COMPANY

                                      By:  _____________________________________
                                                 Michael J. D'Angelico
                                                 Vice President

Dated:  December 4,  1995

                                       3

                                    EXHIBIT 7

Consolidated Report of Condition of State Street Bank and Trust Company of
Boston, Massachusetts and foreign and domestic subsidiaries, a state banking
institution organized and operating under the banking laws of this commonwealth
and a member of the Federal Reserve System, at the close of business December
31, 1994, published in accordance with a call made by the Federal Reserve Bank
of this District pursuant to the provisions of the Federal Reserve Act and in
accordance with a call made by the Commissioner of Banks under General Laws,
Chapter 172, Section 22(a).

                                                                    Thousands of
ASSETS                                                              Dollars

Cash and balances due from depository institutions:
         Noninterest-bearing balances and currency and coin .......      942,661
         Interest-bearing balances ................................    4,843,628
Securities ........................................................    8,410,339
Federal funds sold and securities purchased
         under agreements to resell in domestic offices
         of the bank and its Edge subsidiary ......................    2,240,374
Loans and lease financing receivables:
         Loans and leases, net of unearned income ...  3,257,795
         Allowance for loan and lease losses ........     58,184
         Loans and leases, net of unearned income and allowances ..    3,199,611
Assets held in trading accounts ...................................      825,549
Premises and fixed assets .........................................      375,086
Other real estate owned ...........................................        4,359
Investments in unconsolidated subsidiaries ........................       25,051
Customers' liability to this bank on acceptances outstanding ......       55,358
Intangible assets .................................................       34,862
Other assets ......................................................      653,750
                                                                      ----------

Total assets ......................................................   21,610,628
                                                                      ==========

LIABILITIES

Deposits:
         In domestic offices ......................................    5,946,262
                  Noninterest-bearing ...............   4,175,167
                  Interest-bearing ..................   1,771,095
         In foreign offices and Edge subsidiary ...................    8,147,182
                  Noninterest-bearing ...............      44,817
                  Interest-bearing ..................   8,102,365
Federal funds purchased and securities sold under
         agreements to repurchase in domestic offices of
         the bank and of its Edge subsidiary ......................    4,912,704
Demand notes issued to the U.S. Treasury and Trading Liabilities ..      423,324
Other borrowed money ..............................................      386,049
Bank's liability on acceptances executed and outstanding ..........       55,621
Other liabilities .................................................      530,536
                                                                      ----------

Total liabilities .................................................   20,401,678
                                                                      ----------

EQUITY CAPITAL
Common stock ......................................................       28,043
Surplus ...........................................................      177,736
Undivided profits .................................................    1,003,171
                                                                      ----------

Total equity capital ..............................................    1,208,950
                                                                      ----------

Total liabilities and equity capital ..............................   21,610,628
                                                                      ==========

                                       4

I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.

                                 Rex S. Schuette

We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.

                                 David A. Spina
                                 Marshall N. Carter
                                 Charles F. Kaye

                                       5