<PAGE>   1
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                          AMERICAN CLASSIC VOYAGES CO.

                                       TO


                              THE BANK OF NEW YORK
                                     TRUSTEE



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

                                    INDENTURE

                            DATED AS OF _____________

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

                          SUBORDINATED DEBT SECURITIES

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


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



<PAGE>   2



                            AMERICAN CLASSIC VOYAGES

                 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

Section 310 (a)(1)          6.9
            (a)(2)        6.9
            (a)(3)  Not Applicable
            (a)(4)    Not Applicable
            (b)      6.8; 6.10
Section 311 (a)       6.13
            (b)       6.13
Section 312 (a)       7.1; 7.2
            (b)       7.2
            (c)       7.2
Section 313 (a)       7.3
            (b)       7.3
            (c)       7.3
            (d)       7.3
Section 314 (a)       7.4
            (a)(4)      1.4; 10.4
            (b)  Not Applicable
            (c)(1)       1.1
            (c)(2)       1.1; 1.2
            (c)(3)  Not Applicable
            (d)  Not Applicable
            (e)           1.2
Section 315 (a)        6.1
            (b)        6.2
            (c)        6.1
            (d)           6.1
            (e)        5.14
Section 316 (a)        1.1
            (a)(1)(A)     5.2; 5.12
            (a)(1)(B)       5.13
            (a)(2)  Not Applicable
            (b)       5.8
            (c)       1.4
Section 317 (a)(1)       5.3
            (a)(2)       5.4
            (b)        10.3
Section 318 (a)          1.7

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


<PAGE>   3



                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                            PAGE
                                                                            ----
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION..............1
<S>                                                                         <C>
     SECTION 1.1  Definitions..................................................1
     SECTION 1.2  Compliance Certificates and Opinions.........................8
     SECTION 1.3  Form of Documents Delivered to Trustee.......................8
     SECTION 1.4  Acts of Holders; Record Dates................................9
     SECTION 1.5  Notices, Etc., to Trustee and Company.......................10
     SECTION 1.6  Notice to Holders; Waiver...................................10
     SECTION 1.7  Conflict with Trust Indenture Act...........................11
     SECTION 1.8  Effect of Headings and Table of Contents....................11
     SECTION 1.9  Successors and Assigns......................................11
     SECTION 1.10 Separability Clause.........................................11
     SECTION 1.11 Benefits of Indenture.......................................12
     SECTION 1.12 Governing Law...............................................12
     SECTION 1.13 Legal Holidays..............................................12
     SECTION 1.14 Language of Notices, Etc....................................12
     SECTION 1.15 Incorporators, Stockholders, Officers and Directors of the
                  Company Exempt from Individual Liability....................12

ARTICLE II SECURITY FORMS.....................................................13
     SECTION 2.1  Forms Generally.............................................13
     SECTION 2.2  Form of Face of Security....................................13
     SECTION 2.3  Form of Reverse of Security.................................16
     SECTION 2.4  Global Securities...........................................21
     SECTION 2.5  Form of Trustee's Certificate and Authorization.............22

ARTICLE III THE SECURITIES....................................................22
     SECTION 3.1  Amount Unlimited; Issuable in Series........................22
     SECTION 3.2  Denominations...............................................25
     SECTION 3.3  Execution, Authentication, Delivery and Dating..............26
     SECTION 3.4  Temporary Securities........................................27
     SECTION 3.5  Registration, Registration of Transfer and Exchange.........28
     SECTION 3.6  Mutilated, Destroyed, Lost and Stolen Securities............30
     SECTION 3.7  Payment of Interest; Interest Rights Preserved..............31
     SECTION 3.8  Persons Deemed Owners.......................................32
     SECTION 3.9  Cancellation................................................32
     SECTION 3.10 Computation of Interest.....................................33
     SECTION 3.11 CUSIP Numbers...............................................33

ARTICLE IV SATISFACTION AND DISCHARGE.........................................33
</TABLE>

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<TABLE>

<S>                                                                          <C>
     SECTION 4.1  Satisfaction and Discharge of Indenture.....................33
     SECTION 4.2  Application of Trust Money..................................35

ARTICLE V REMEDIES............................................................35
     SECTION 5.1  Events of Default...........................................35
     SECTION 5.2  Acceleration of Maturity; Rescission and Annulment..........36
     SECTION 5.3  Collection of Indebtedness and Suits for Enforcement
                  by Trustee..................................................37
     SECTION 5.4  Trustee May File Proofs of Claim............................38
     SECTION 5.5  Trustee May Enforce Claims Without Possession of
                  Securities..................................................38
     SECTION 5.6  Application of Money Collected..............................38
     SECTION 5.7  Limitation on Suits.........................................39
     SECTION 5.8  Unconditional Right of Holders to Receive Principal,
                  Premium and Interest........................................39
     SECTION 5.9  Restoration of Rights and Remedies..........................40
     SECTION 5.10 Rights and Remedies Cumulative..............................40
     SECTION 5.11 Delay or Omission Not Waiver................................40
     SECTION 5.12 Control by Holders..........................................40
     SECTION 5.13 Waiver of Past Defaults.....................................41
     SECTION 5.14 Undertaking for Costs.......................................41
     SECTION 5.15 Waiver of Usury, Stay or Extension Laws.....................41

ARTICLE VI THE TRUSTEE........................................................42
     SECTION 6.1  Certain Duties and Responsibilities.........................42
     SECTION 6.2  Notice of Defaults..........................................42
     SECTION 6.3  Certain Rights of Trustee...................................42
     SECTION 6.4  Not Responsible for Recitals or Issuance of
                  Securities..................................................43
     SECTION 6.5  May Hold Securities.........................................44
     SECTION 6.6  Money Held in Trust.........................................44
     SECTION 6.7  Compensation and Reimbursement..............................44
     SECTION 6.8  Disqualification; Conflicting Interests.....................45
     SECTION 6.9  Corporate Trustee Required; Eligibility.....................45
     SECTION 6.10 Resignation and Removal; Appointment of Successor...........45
     SECTION 6.11 Acceptance of Appointment by Successor......................47
     SECTION 6.12 Merger, Conversion, Consolidation or Succession to
                  Business....................................................48
     SECTION 6.13 Preferential Collection of Claims Against Company...........48
     SECTION 6.14 Appointment of Authenticating Agent.........................48

ARTICLE VII HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY.................50
     SECTION 7.1  Company to Furnish Trustee Names and Addresses of
                  Holders.....................................................50
     SECTION 7.2  Preservation of Information; Communications to
                  Holders.....................................................50
     SECTION 7.3  Reports by Trustee..........................................51
     SECTION 7.4  Reports by Company..........................................51
     SECTION 8.1  Company May Consolidate, Etc, Only on Certain
                  Terms.......................................................52
     SECTION 8.2  Successor Substituted.......................................52
</TABLE>
<PAGE>   5
<TABLE>

<S>                                                                         <C>
ARTICLE IX SUPPLEMENTAL INDENTURES............................................53
     SECTION 9.1  Supplemental Indentures Without Consent of Holders..........53
     SECTION 9.2  Supplemental Indentures with Consent of Holders.............54
     SECTION 9.3  Execution of Supplemental Indentures........................55
     SECTION 9.4  Effect of Supplemental Indentures...........................55
     SECTION 9.5  Conformity with Trust Indenture Act.........................55
     SECTION 9.6  Reference in Securities to Supplemental Indentures..........55

ARTICLE X COVENANTS...........................................................56
     SECTION 10.1 Payment of Principal, Premium and Interest..................56
     SECTION 10.2 Maintenance of Office or Agency.............................56
     SECTION 10.3 Money for Securities Payments to Be Held in Trust...........56
     SECTION 10.4 Statement by Officers as to Default.........................58
     SECTION 10.5 Existence...................................................58
     SECTION 10.6 Waiver of Certain Covenants.................................58

ARTICLE XI REDEMPTION OF SECURITIES...........................................59
     SECTION 11.1 Applicability of Article....................................59
     SECTION 11.2 Election to Redeem; Notice to Trustee.......................59
     SECTION 11.3 Selection by Trustee of Securities to Be Redeemed...........59
     SECTION 11.4 Notice of Redemption........................................60
     SECTION 11.5 Deposit of Redemption Price.................................60
     SECTION 11.6 Securities Payable on Redemption Date.......................60
     SECTION 11.7 Securities Redeemed in Part.................................61

ARTICLE XII SINKING FUNDS.....................................................61
     SECTION 12.1 Applicability of Article....................................61
     SECTION 12.2 Satisfaction of Sinking Fund Payments with Securities.......62
     SECTION 12.3 Redemption of Securities for Sinking Fund...................62

ARTICLE XIII DEFEASANCE.......................................................62
     SECTION 13.1 Applicability of Article....................................62
     SECTION 13.2 Legal Defeasance............................................62
     SECTION 13.3 Covenant Defeasance.........................................64
     SECTION 13.4 Application by Trustee of Funds Deposited for
                  Payment of Sec..............................................65
     SECTION 13.5 Repayment to Company........................................65

ARTICLE XIV SUBORDINATION OF SECURITIES.......................................66
     SECTION 14.1 Agreement to Subordinate....................................66
     SECTION 14.2 Distribution on Dissolution, Liquidation and
                  Reorganization; Subrogation of Securities...................66
     SECTION 14.3 No Payment on Securities in Event of Default on
                  Senior Debt.................................................68
     SECTION 14.4 Payments on Securities Permitted............................68
     SECTION 14.5 Authorization of Holders of Securities to Trustee
                  to Effect...................................................68
     SECTION 14.6 Notices to Trustee..........................................68
     SECTION 14.7 Trustee as Holder of Senior Debt............................69
     SECTION 14.8 Modification of Terms of Senior Debt........................69
</TABLE>
<PAGE>   6


        INDENTURE dated as of ________, ____, between AMERICAN CLASSIC VOYAGES
CO., a corporation duly organized and existing under the laws of Delaware (the
"Company"), having its principal office at Two North Riverside Plaza, Chicago,
Illinois 60606, and THE BANK OF NEW YORK, a New York banking corporation, as
Trustee (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
subordinated debentures, notes or other evidences of indebtedness (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.

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

        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 any series thereof,
as follows:

                                    ARTICLE I

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 1.1 Definitions.

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

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

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

            (c) 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 at the date of such computation;


<PAGE>   7

            (d) 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; and

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

        "Act", when used with respect to any Holder, has the meaning specified
in Section 1.4.

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

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

        "Authorized Newspaper" means a newspaper, in the English language or in
an official language of the country of publication, customarily published on
each Business Day, whether or not published on Saturdays, Sundays or holidays,
and of general circulation in the place in connection with which the term is
used or in the financial community of such place.

        "Bankruptcy Law," means Title 11, U.S. Code, or any similar federal or
state law for the relief of debtors.

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

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

        "Business Day", when used with respect to any Place of Payment or other
location, means, except as otherwise provided as contemplated by Section 3.1
with respect to any series of Securities, each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in that
Place of Payment or other location are authorized or obligated by law, executive
order or regulation to close.

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


<PAGE>   8

the Trust Indenture Act, then the body performing such duties at such time.

        "Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor 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 Chief
Executive Officer, its President, any of its Vice Presidents or any other
authorized officer of the Company or a person duly authorized by any of them,
and delivered to the Trustee.

        "Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which at the date hereof is ____________________, New York, New York _______.

        "Corporation" includes corporations, associations, partnerships, limited
liability companies, joint-stock companies and business trusts.

        "Covenant Defeasance" has the meaning specified in Section 13.3.

        "Custodian" means any receiver, trustee, assignee, liquidator or similar
official under any Bankruptcy Law.

        "Debt" means any obligation created or assumed by any Person for the
repayment of money borrowed and any purchase money obligation created or assumed
by such Person.

        "Default" means, with respect to a series of Securities, 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.

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

        "Defeasance" has the meaning specified in Section 13.2.

        "Definitive Security" means a Security other than a Global Security or a
temporary Security.

        "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 3.1, until a successor Depositary
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter shall mean or include each Person which is then a Depositary
hereunder, and if at any time there is more than one such Person, shall be a
collective reference to such Persons.



<PAGE>   9

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

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

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

        "Global Security" means a Security in global form that evidences all or
part of the Securities of any series and is authenticated and delivered to, and
registered in the name of, the Depositary for such Securities or a nominee
thereof.

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

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

        "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.

        "Lien" means any mortgage, pledge, security interest, charge, lien or
other encumbrance of any kind, whether or not filed, recorded or perfected under
applicable law.

        "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 5.1(c).

        "Officer's Certificate" means a certificate signed by the Chairman of
the Board, the Chief Executive Officer, the President, any Vice President or any
other authorized officer of the Company or a person duly authorized by any of
them, and delivered to the Trustee. The officer signing an Officer's Certificate
given pursuant to Section 10.4 shall be the principal executive, financial or
accounting officer of the Company.

        "Opinion of Counsel" means a written opinion of legal counsel, who may
be an employee


<PAGE>   10

of or counsel for the Company and who shall be reasonably acceptable to
the Trustee.

        "Original Issue Discount Security" means any Security which provides for
an amount less than the stated principal amount thereof to be due and payable
upon a declaration of acceleration of the Maturity thereof pursuant to Section
5.2.

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

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

            (b) 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, however, 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;

            (c) Securities which have been paid pursuant to Section 3.6 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

            (d) Securities, except to the extent provided in Sections 13.2 and
13.3, with respect to which the Company has effected defeasance or covenant
defeasance as provided in Article Thirteen.

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (A) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon acceleration of the Maturity
thereof on such date pursuant to Section 5.2, (B) the principal amount of a
Security denominated in one or more currencies or currency units other than U.S.
dollars shall be the U.S. dollar equivalent of such currencies or currency
units, determined in the manner provided as contemplated by Section 3.1 on the
date of original issuance of such Security, of the principal amount (or, in the
case of an Original Issue Discount Security, the U.S. dollar equivalent (as so
determined) on the date of original issuance of such Security, of the amount
determined as provided in Clause (A) above) of such Security, and (C) Securities
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or of such other obligor shall be disregarded and deemed not to
be outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which the Trustee knows to be so
owned shall be so disregarded. Securities so owned as


<PAGE>   11

described in Clause (C) above 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.

        "Periodic Offering" means an offering of Securities of a series from
time to time, the specific terms of which Securities, including, without
limitation, the rate or rates of interest or formula for determining the rate or
rates of interest thereon, if any, the Stated Maturity or Stated Maturities
thereof, the original issue date or dates thereof, the redemption provisions, if
any, with respect thereto, and any other terms specified as contemplated by
Section 3.1 with respect thereto, are to be determined by the Company upon the
issuance of such Securities.

        "Person" means any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust, other
entity, 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, unless otherwise specifically provided for with respect to such
series as contemplated by Section 3.1, the office or agency of the Company in
The City of New York and such other place or places where, subject to the
provisions of Section 10.2, the principal of and any premium and interest on the
Securities of that series are payable as specified as contemplated by Section
3.1.

        "Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.6 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 3.1.

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

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


<PAGE>   12

        "Senior Debt" means any Debt of the Company, except for such Debt that
is by its terms subordinated to or pari passu with the Securities.

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

        "Stated Maturity", when used with respect to any 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, except as otherwise
provided in Section 9.5, provided, however, that if 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 each Trustee with respect to Securities of that series.

        "U.S. Government Obligations" means securities which are (i) direct
obligations of the United States for the payment of which its full faith and
credit is pledged, or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States, the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States, each of which are not callable or redeemable at the option of the
issuer thereof.

        "Vice President", when used with respect to the Company or 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 1.2 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 or opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall


<PAGE>   13

be given in the form of an Officer's 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 10.4) shall include:

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

            (b) 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;

            (c) 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

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

SECTION 1.3 Form of Documents Delivered to Trustee.

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

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

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

SECTION 1.4 Acts of Holders; Record Dates.


<PAGE>   14

        Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed (either physically or by means of a facsimile
or an electronic transmission, provided that such electronic transmission is
transmitted through the facilities of a Depositary) 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 (either physically or by means of a facsimile or an electronic
transmission, provided that such electronic transmission is transmitted through
the facilities of a Depositary) 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 3.15 of the
Trust Indenture Act) 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, principal amount and serial numbers of Securities held by
any Person, and the date of commencement of such Person's holding the same,
shall be proved by the Security Register.

        Any request, demand, authorization, direction, notice, consent, waiver
or other action to 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.

        Without limiting the foregoing, a Holder entitled hereunder to give or
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 different part of such principal amount.

        The Company may set any day as the record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to give
or take any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given or taken by
Holders of Securities of such series, but the Company shall have


<PAGE>   15

no obligation to do so. With regard to any record date set pursuant to this
paragraph, the Holders of Outstanding Securities of the relevant series on such
record date (or their duly appointed agents), and only such Persons, shall be
entitled to give or take the relevant action, whether or not such Holders remain
Holders after such record date.

SECTION 1.5 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,

            (a) 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 Trustee
Administration Department, or

            (b) 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 Two North Riverside Plaza, Chicago, Illinois 60606, to the attention of the
Corporate Secretary, or at any other address previously furnished in writing to
the Trustee by the Company.

SECTION 1.6 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 (if international mail, by
air mail), 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. Any notice mailed to a Holder in the manner herein prescribed
shall be conclusively deemed to have been received by such Holder, whether or
not such Holder actually receives such notice.

        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.


<PAGE>   16

SECTION 1.7 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 excluded, as the case may be.

SECTION 1.8 Effect of Headings and Table of Contents.

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

SECTION 1.9 Successors and Assigns.

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

SECTION 1.10 Separability Clause.

        In case any provision in this Indenture or in the 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 1.11 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 1.12 Governing Law.

        This Indenture and the Securities shall be governed by and construed in
accordance with the law of the State of New York.

SECTION 1.13 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 the Securities of any series 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 for the period from and after such Interest


<PAGE>   17

Payment Date, Redemption Date or Stated Maturity, as the case may be.

SECTION 1.14 Language of Notices, Etc.

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

SECTION 1.15 Incorporators, Stockholders, Officers and Directors of the Company
     Exempt from Individual Liability.

        No recourse under or upon any obligation, covenant or agreement of or
contained in this Indenture or of or contained in any Security, or for any claim
based thereon or otherwise in respect thereof, or in any Security, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, officer or director, as such, past, present or
future, of the Company or any successor Person, either directly or through the
Company or any successor Person, whether by virtue of any constitution, statute
or rule of law, or by the enforcement of any assessment or penalty or otherwise;
it being expressly understood that all such liability is hereby expressly waived
and released as a condition of, and as a part of the consideration for, the
execution of this Indenture and the issue of the Securities.

                                   ARTICLE II

                                 SECURITY FORMS

SECTION 2.1 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 as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
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. 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 an authorized officer or other authorized
person on behalf of the Company and delivered to the Trustee at or prior to the
delivery of the Company Order contemplated by Section 3.3 for the authentication
and delivery of such Securities.


<PAGE>   18

SECTION 2.2 Form of Face of Security.
            ------------------------

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

        [If a Global Security,--insert legend required by Section 2.4 of the
Indenture] [If applicable, insert--UNLESS THIS SECURITY IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY). ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]

                          AMERICAN CLASSIC VOYAGES CO.

                               [TITLE OF SECURITY]

NO. _____________
U.S.$_________
[CUSIP NO. _______________]


        AMERICAN CLASSIC VOYAGES CO., a corporation duly incorporated and
existing under the laws 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 __________ United States Dollars on _______________ [if the
Security is to bear interest prior to Maturity, insert--, and to pay interest
thereon from ______________________, or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, semiannually on
___________________ and _________________ in each year, commencing
____________________, at the rate of _______% per annum, until the principal
hereof is paid or made available for payment [if applicable, insert--, and at
the rate of _____% per annum on any overdue principal and premium and on any
overdue installment of interest]. 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


<PAGE>   19

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 of which 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 such 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 of this Security shall bear
interest at the rate of ____% per annum, which shall accrue from the date of
such default in payment to the date payment of such principal has been made or
duly provided for. Interest on any overdue principal shall be payable on demand.
Any such interest on any overdue principal that is not so paid on demand shall
bear interest at the rate of ______% per annum, which shall accrue from the date
of such demand for payment to the date payment of such interest has been made or
duly provided for, and such interest shall also be payable on demand.]

        [If a Global Security, insert-- Payment of the principal of [(and
premium, if any)] and [if applicable, insert -- any such] interest on this
Security will be made by transfer of immediately available funds to a bank
account in _______________ designated by the Holder 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 [state other currency].]

        [If a Definitive Security, insert -- 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] [state other currency] [or subject to any laws or regulations
applicable thereto and to the right of the Company (as provided in the
Indenture) to rescind the designation of any such Paying Agent, at the [main]
offices of _________________ in __________________ and ______________ in
__________________, or at such other offices or agencies as the Company may
designate, by [United States Dollar] [state other currency] check drawn on, or
transfer to a [United States Dollar] account maintained by the payee with, a
bank in The City of New York [______________] (so long as the applicable Paying
Agent has received proper transfer instructions in writing at least [_____] days
prior to the payment date)] [if applicable, insert--: provided, however, that
payment of interest may be made at the option of the Company by [United States
Dollar] [state other currency] check mailed to the addresses of the Persons
entitled thereto as such addresses shall appear in the Security Register] [or by
wire transfer in immediately available funds to a [United States Dollar] [state
other currency] account maintained by the payee with a bank in The City of New
York [state other Place of Payment] (so long as the applicable Paying Agent has
received proper transfer instructions in writing by the Record Date prior to the
applicable Interest Payment Date)].]

        Reference is hereby made to the further provisions of this Security set
forth on the reverse


<PAGE>   20

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.





<PAGE>   21


        IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

Dated:


                                           AMERICAN CLASSIC VOYAGES CO.



                                           By:  __________________________
                                           [Title]


SECTION 2.3 Form of Reverse of Security.
            ---------------------------

        This Security is one of a duly authorized issue of securities of the
Company (the "Securities"), issued and to be issued in one or more series under
an Indenture dated as of , (the "Indenture"), between the Company and The Bank
of New York, as Trustee (the "Trustee", which term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, obligations, 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. As
provided in the Indenture, the Securities may be issued in one or more series,
which different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest, if any, at different rates, may be
subject to different redemption provisions, if any, may be subject to different
sinking, purchase or analogous funds, if any, may be subject to different
covenants and Events of Default and may otherwise vary as in the Indenture
provided or permitted. This Security is one of the series designated on the face
hereof [if applicable, insert--, limited in aggregate principal amount to
U.S.$_________].

        [If applicable, insert-- The Securities of this series are subject to
redemption upon not less than 30 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 ______________________],
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 [if applicable, insert--on or before ______________, ____% and if
redeemed] during the 12-month period beginning ____________ of the years
indicated,

                                             REDEMPTION           REDEMPTION
         YEAR              PRICE                YEAR                 PRICE
         ----              -----             -----------          -----------





<PAGE>   22
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 Securities of this series are subject to
redemption upon not less than 30 nor more than 60 days' notice by mail, (1) on
____________ in any year commencing with the year ______ and ending with the
year ______________ through operation of the sinking fund for this series at the
Redemption Prices for redemption through operation of the sinking fund
(expressed as percentages of the principal amount) set forth in the table below,
and (2) at any time [if applicable, insert -- on or after _______________], as a
whole or in part, at the election of the Company, at the Redemption Prices for
redemption otherwise than through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below: If redeemed
during the 12-month period beginning _______________________ of the years
indicated,


                                               REDEMPTION THROUGH REDEMPTION
YEAR          REDEMPTION PRICE FOR          PRICE FOR REDEMPTION OTHERWISE THAN
FUND    OPERATION OF THE SINKING FUND        THROUGH OPERATION OF THE SINKING
----    -----------------------------       -----------------------------------





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.]

        [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, -- 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,--mandatory] sinking fund payments may be credited against subsequent
[if applicable,--mandatory] sinking fund payments otherwise required to be made
[if applicable,--in the inverse order in which they become due].)

        [If the Security is subject to redemption in part of any kind,
insert--In the event of


<PAGE>   23

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 Securities of this series are not redeemable
prior to Stated Maturity.]

        [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 and overdue interest, all of the
Company's obligations in respect of the payment of the principal of 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 aggregate principal amount of the
Outstanding Securities of all series to be affected (voting as one class). The
Indenture also contains provisions permitting the Holders of a majority in
aggregate principal amount of the Outstanding Securities of all affected series
(voting as one class), on behalf of the Holders of all Securities of such
series, to waive compliance by the Company with certain provisions of the
Indenture. The Indenture permits, with certain exceptions as therein provided,
the Holders of a majority in principal amount of Securities of any series then
Outstanding to waive past defaults under the Indenture with respect to such
series 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 here for 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


<PAGE>   24

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

        [If a Global Security, insert--This Global Security or portion hereof
may not be exchanged for Definitive Securities of this series except in the
limited circumstances provided in the Indenture.

        The holders of beneficial interests in this Global Security will not be
entitled to receive physical delivery of Definitive Securities except as
described in the Indenture and will not be considered the Holders thereof for
any purpose under the Indenture.]

        [If a Definitive Security, insert--As provided in the Indenture and
subject to certain limitations therein set forth, the transfer of this Security
is registerable in the Security Register, upon surrender of this Security for
registration of transfer at the office or agency of the Company in [if
applicable, insert--any place where the principal of and any premium and
interest on this Security are payable] [if applicable, insert --The City of New
York[, or, subject to any laws or regulations applicable thereto and to the
right of the Company (limited as provided in the Indenture) to rescind the
designation of any such transfer agent, at the [main] offices of ____________in
____________ and ____________ in ________________ or at such other offices or
agencies as the Company may designate]], 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 U.S.$________ 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


<PAGE>   25

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.

        This Security is subordinated in right of payment to Senior Debt, to the
extent provided in the Indenture.

        No recourse under or upon any obligation, covenant or agreement of or
contained in the Indenture or of or contained in any Security, or for any claim
based thereon or otherwise in respect thereof, or in any Security, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, officer or director, as such, past, present or
future, of the Company or of any successor Person, either directly or through
the Company or any successor Person, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment, penalty or
otherwise; it being expressly understood by each Holder that all such liability
is hereby expressly waived and released by the acceptance hereof and as a
condition of, and as part of the consideration for, issuance of the Securities
and the execution of the Indenture.

        The Indenture contains provisions that relieve the Company from the
obligation to comply with certain restrictive covenants in the Indenture and for
satisfaction and discharge at any time of the entire indebtedness upon
compliance by the Company with certain conditions set forth in the Indenture.

        This Security shall be governed by and construed in accordance with the
laws of the State of New York.

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

        [If a Definitive Security, insert as a separate page--

        FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
            (Please Print or Typewrite Name and Address of Assignee)

the within instrument of AMERICAN CLASSIC VOYAGES CO. and does hereby
irrevocably constitute and appoint __________________________ Attorney to
transfer said instrument on the books of the within-named Company, with full
power of substitution in the premises.

        Please Insert Social Security or
        other Identifying Number of Assignee:  ________________________


Dated: _______________                              ____________________________
                                                             Signature


<PAGE>   26

NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever.]

SECTION 2.4 Global Securities.

        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
            TRANSFERRED TO, OR REGISTERED OR EXCHANGED FOR SECURITIES REGISTERED
            IN THE NAME OF, ANY PERSON OTHER THAN THE DEPOSITARY OR A NOMINEE
            THEREOF AND NO SUCH TRANSFER MAY BE REGISTERED, EXCEPT IN THE
            LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. EVERY SECURITY
            AUTHENTICATED AND DELIVERED UPON REGISTRATION OF TRANSFER OF, OR IN
            EXCHANGE FOR OR IN LIEU OF, THIS SECURITY SHALL BE A GLOBAL SECURITY
            SUBJECT TO THE FOREGOING, EXCEPT IN SUCH LIMITED CIRCUMSTANCES.

        If Securities of a series are issuable in whole or in part in the form
of one or more Global Securities, as specified as contemplated by Section 3.1,
then, notwithstanding Clause (i) of Section 3.1 and the provisions of Section
3.2, any Global Security shall represent such of the Outstanding Securities of
such series as shall be specified therein and may provide that it shall
represent the aggregate amount of Outstanding Securities from time to time
endorsed thereon and that the aggregate amount of Outstanding Securities
represented thereby may from time to time be reduced or increased, as the case
may be, to reflect exchanges. Any endorsement of a Global Security to reflect
the amount, or any reduction or increase in the amount, of Outstanding
Securities represented thereby shall be made in such manner and upon
instructions given by such Person or Persons as shall be specified therein or in
a Company Order. Subject to the provisions of Sections 3.3, 3.4 and 3.5, the
Trustee shall deliver and redeliver any Global Security in the manner and upon
instructions given by the Person or Persons specified therein or in the
applicable Company Order. Any instructions by the Company with respect to
endorsement or delivery or redelivery of a Global Security shall be in a Company
Order (which need not comply with Section 1.2 and need not be accompanied by an
Opinion of Counsel).

        The provisions of the last sentence of Section 3.3 shall apply to any
security represented by a Global Security if such Security was never issued and
sold by the Company and the Company delivers to the Trustee the Global Security
together with a Company Order (which need not comply with Section 1.2 and need
not be accompanied by an Opinion of Counsel) with regard to the reduction or
increase, as the case may be, in the principal amount of Securities represented
thereby, together with the written statement contemplated by the last sentence
of Section 3.3.



<PAGE>   27

SECTION 2.5     Form of Trustee's Certificate and Authorization.

        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.

                                           THE BANK OF NEW YORK,
                                                 As Trustee


                                           By: __________________________
                                           Authorized Officer

                                   ARTICLE III

                                 THE SECURITIES

SECTION 3.1 Amount Unlimited; Issuable in Series.

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

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

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

            (b) any limit upon the aggregate principal amount of the Securities
of the series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities of the series pursuant
to Section 3.4, 3.5, 3.6, 9.6 or 11.7 and except for any Securities which,
pursuant to Section 3.3, are deemed never to have been authenticated and
delivered hereunder);

            (c) 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;

            (d) the date or dates on which the principal of the Securities of
the series is payable or the method of determination thereof;


<PAGE>   28

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

            (f) the place or places where, subject to the provisions of Section
10.2, the principal of and any premium and interest on Securities of the series
shall be payable, Securities of the series may be surrendered for registration
of transfer, Securities of the series may be surrendered for exchange and
notices, and demands to or upon the Company in respect of the Securities of the
series and this Indenture may be served;

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

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

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

            (j) whether payment of principal of and premium, if any, and
interest, if any, on the Securities of the series shall be without deduction for
taxes, assessments or governmental charges paid by Holders of the series;

            (k) the currency, currencies or currency units in which payment of
the principal of and any premium and interest on any Securities of the series
shall be payable if other than the currency of the United States of America and
the manner of determining the equivalent thereof in the currency of the United
States of America for purposes of the definition of "Outstanding" in Section
1.1;

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

            (m) 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 a Holder
thereof, in one or more currencies or currency units other than that or those in
which the Securities are stated to be payable, the currency, currencies or
currency units in which payment of the principal of and any premium and interest
on 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;


<PAGE>   29

            (n) the right, if any, of the Company to defer payments of interest
by extending the interest payment periods and specify the duration of such
extension, the Interest Payment Dates on which such interest shall be payable
and whether and under what circumstances additional interest on amounts deferred
shall be payable;

            (o) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 5.2 or
the method of determination thereof;

            (p) if and as applicable, that the 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 Depositary or Depositaries for such Global Security or Global
Securities and any circumstances other than those set forth in Section 3.5 in
which any such Global Security may be transferred to, and registered and
exchanged for Securities registered in the name of, a Person other than the
Depositary for such Global Security or a nominee thereof and in which any such
transfer may be registered;

            (q) any deletions from, modifications of or additions to the Events
of Default set forth in Section 5.1 or the covenants of the Company set forth in
Article X pertaining to the Securities of the series;

            (r) if and the terms and conditions upon which any Securities of the
series may be converted into or exchanged for securities, which may include,
without limitation, capital stock, of any class or series of the Company or any
other issuer;

            (s) if other than as provided in Sections 13.2 and 13.3, the means
of defeasance or covenant defeasance as may be specified for the Securities of
the series;

            (t) if other than the Trustee, the identity of the Security
Registrar and any Paying Agent; and

            (u) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 9.1(d)).

        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 3.3) set forth, or
determined in the manner provided, in the Officer's Certificate referred to
above or in any such indenture supplemental hereto.

        All Securities of any one series need not be issued at the same time
and, unless otherwise provided, a series may be reopened, without the consent of
the Holders, for increases in the aggregate principal amount of such series of
Securities and issuances of additional Securities of such series or for the
establishment of additional terms with respect to the Securities of such series.


<PAGE>   30

         If any of the terms of the series are established by action taken by or
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by an authorized officer or other authorized person on behalf
of the Company and delivered to the Trustee at or prior to the delivery of the
Officer's Certificate setting forth, or providing the manner for determining,
the terms of the series.

        With respect to Securities of a series subject to a Periodic Offering,
such Board Resolution or Officer's Certificate may provide general terms for
Securities of such series and provide either that the specific terms of
particular Securities of such series shall be specified in a Company Order or
that such terms shall be determined by the Company, or one or more of the
Company's agents designated in an Officer's Certificate, in accordance with a
Company Order.

SECTION 3.2 Denominations.

        The Securities of each series shall be issuable only in registered form
without coupons in such denominations as shall be specified as contemplated by
Section 3.1. 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 3.3 Execution, Authentication, Delivery and Dating.

        The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Chief Executive Officer, its Chief Financial Officer,
its President or any Vice President and need not be attested. 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; provided,
however, that in the case of Securities offered in a Periodic Offering, the
Trustee shall authenticate and deliver such Securities from time to time in
accordance with such other procedures (including, without limitation, the
receipt by the Trustee of oral or electronic instructions from the Company or
its duly authorized agents, thereafter promptly confirmed in writing) acceptable
to the Trustee as may be specified by or pursuant to a Company Order delivered
to the Trustee prior to the time of the first authentication of Securities of
such series. If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Sections 2.1 and 3.1, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and (subject to Section 6.1) shall be
fully


<PAGE>   31

protected in relying upon, an Opinion of Counsel stating,

            (a) if the form or forms of such Securities have been established by
or pursuant to Board Resolution as permitted by Section 2.1, that such form or
forms have been established in conformity with the provisions of this Indenture;

            (b) if the terms of such Securities have been, or in the case of
Securities of a series offered in a Periodic Offering, will be, established by
or pursuant to a Board Resolution as permitted by Section 3.1, that such terms
have been, or in the case of Securities of a series offered in a Periodic
Offering, will be, established in conformity with the provisions of this
Indenture, subject, in the case of Securities of a series offered in a Periodic
Offering, to any conditions specified in such Opinion of Counsel, and

            (c) 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 forms or terms have been so established, the Trustee
shall not be required to authenticate such Securities if the issue of such
Securities pursuant to this Indenture will affect the Trustee's own rights,
duties or immunities under the Securities and this Indenture or otherwise in a
manner which is not reasonably acceptable to the Trustee.

        Notwithstanding the provisions of Section 3.1 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 Officer's Certificate otherwise
required pursuant to Section 3.1 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the time
of authentication of each Security of such series if such documents are
delivered at or prior to the authentication upon original issuance of the first
Security of such series to be issued.

        With respect to Securities of a series offered in a Periodic Offering,
the Trustee may rely, as to the authorization by the Company of any of such
Securities, the form or forms and terms thereof and the legality, validity,
binding effect and enforceability thereof, upon the Opinion of Counsel and the
other documents delivered pursuant to Sections 2.1 and 3.1 and this Section, as
applicable, in connection with the first authentication of Securities of such
series.

        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 of an authorized officer, 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


<PAGE>   32

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 3.9 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 3.4 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 maintained pursuant to Section 10.2 for the
purpose of exchanges of Securities of such series, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Securities of any
series 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 a like aggregate principal amount and tenor.
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 3.5 Registration, Registration of Transfer and Exchange.

        The Company shall cause to be kept at an office or agency of the Company
in The City of New York a register (the register maintained in such office or in
any other office or agency of the Company in a Place of Payment being herein
sometimes referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfer of Securities. The Company will prior
to the issuance of any Securities hereunder, appoint the Trustee as the initial
"Security Registrar" for the purpose of registering Securities and transfers of
Securities as herein provided and its corporate trust office which, at the date
hereof, is located at ____________________, New York, New York _____ as the
initial office or agency in The City of New York where the Security Register
will be maintained. The Company may at any time replace such Security Registrar,
change such office or agency or act as its own Security Registrar. The Company
will give prompt written notice to the Trustee of any change of the Security
Registrar or of the location of such office or agency.

        Upon surrender for registration of transfer of any Security of any
series at the office or agency of the Company maintained pursuant to Section
10.2 for such purpose, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or


<PAGE>   33

transferees, one or more new Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and tenor.

        At the option of the Holder, Securities of any series (except a Global
Security) may be exchanged for other Securities of the same series, of any
authorized denominations and of a like aggregate principal amount and tenor,
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 3.4, 9.6 or 11.7 not involving any transfer.

        The Company shall not be required (1) to issue, register the transfer of
or exchange Securities of any series during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 11.3 and ending
at the close of business on the day of such mailing, or (2) 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.

        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.

        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.

        If at any time the Depositary for the Securities notifies the Company
that it is unwilling or unable to continue as Depositary for the Securities or
if at any time the Depositary for the Securities shall no longer be qualified to
serve as the Depositary, the Company shall appoint a successor Depositary with
respect to the Securities. If a successor Depositary for the Securities is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such ineligibility, the Company will execute, and the
Trustee, upon receipt of a Company


<PAGE>   34

Order for the authentication and delivery of definitive Securities, will
authenticate and deliver Securities of like tenor and terms in definitive form
in an aggregate principal amount equal to the principal amount of the Global
Security or Securities in exchange for such Global Security or Securities.

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

        Notwithstanding any other provision in this Indenture, no Global
Security may be transferred to, or registered or exchanged for Securities
registered in the name of, any Person other than the Depositary for such Global
Security or any nominee thereof, and no such transfer may be registered, unless
(1) such Depositary (A) notifies the Company that it is unwilling or unable to
continue as Depositary for such Global Security or (B) ceases to be qualified to
serve as Depositary, (2) the Company executes and delivers to the Trustee a
Company Order that such Global Security shall be so transferable, registrable
and exchangeable, and such transfers shall be registrable, or (3) there shall
have occurred and be continuing an Event of Default. Notwithstanding any other
provision in this Indenture, a Global Security to which the restriction set
forth in the preceding sentence shall have ceased to apply may be transferred
only to, and may be registered and exchanged for Securities registered only in
the name or names of, such Person or Persons as the Depositary for such Global
Security shall have directed and no transfer thereof other than such a transfer
may be registered.

        Every Security authenticated and delivered upon registration of
transfer, or in exchange for or in lieu, of a Global Security to which the
restriction set forth in the first sentence of the preceding paragraph shall
apply, whether pursuant to this Section, Sections 3.4, 3.6 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 3.6 Mutilated, Destroyed, Lost and Stolen Securities.

        If any mutilated Security is surrendered to the Trustee, together with,
in proper cases, such security or indemnity as may be required by the Company or
the Trustee to save each of them and any agent of either of them harmless, 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


<PAGE>   35

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
exchange for any mutilated Security or in lieu of any destroyed, lost or stolen
Security shall constitute an original additional contractual obligation of the
Company, whether or not the mutilated, destroyed, lost or stolen Security shall
be at any time enforceable by anyone, and shall be entitled to all the benefits
of this Indenture equally and proportionately with any and all other Securities
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 3.7 Payment of Interest; Interest Rights Preserved.

        Except as otherwise provided as contemplated by Section 3.1 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 (a) or (b) below:

            (a) 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


<PAGE>   36

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

            (b) 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 and Section 3.5,
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 3.8 Persons Deemed Owners.

        Except as otherwise provided as contemplated by Section 3.1 with respect
to any series of Securities, 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 Sections 3.5 and 3.7) 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.

        No holder of any beneficial interest in any Global Security held on its
behalf by a Depositary shall have any rights under this Indenture with respect
to such Global Security, and such Depositary may be treated by the Company, the
Trustee, and any agent of the Company or the Trustee as the owner of such Global
Security for all purposes whatsoever. None of the Company, the Trustee nor any
agent of the Company or the Trustee will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial

<PAGE>   37

ownership interests of a Global Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.

SECTION 3.9 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 accordance with its
customary procedures, and the Trustee shall thereafter deliver to the Company a
certificate with respect to such disposition.

SECTION 3.10 Computation of Interest.

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

SECTION 3.11 CUSIP Numbers.

        The Company in issuing the Securities may use "CUSIP" numbers (in
addition to the other identification numbers printed on the Securities), and, if
so, the Trustee shall use "CUSIP" numbers in notices of redemption as a
convenience to Holders; provided, however, that any such notice may state that
no representation is made as to the correctness of such "CUSIP" 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 "CUSIP" numbers.

                                   ARTICLE IV

                           SATISFACTION AND DISCHARGE

SECTION 4.1 Satisfaction and Discharge of Indenture.

        This Indenture shall upon Company Request cease to be of further effect
with respect to Securities of any series (except as to any surviving rights of
registration of transfer or exchange of such Securities herein expressly
provided for), and the Trustee, at the expense of the Company,


<PAGE>   38

shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture with respect to such Securities, when

            (a) either

                (i)    all such Securities theretofore authenticated and
        delivered (other than (1) such Securities which have been destroyed,
        lost or stolen and which have been replaced or paid as provided in
        Section 3.6, and (2) such 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 10.3) have been delivered to the Trustee
        for cancellation; or

                (ii)   all such Securities not theretofore delivered to the
        Trustee for cancellation

                       (A) have become due and payable, or

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

                       (C) 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 (A), (B) or (C)
            above, has deposited or caused to be deposited with the Trustee as
            trust funds in trust for the purpose an amount of money in the
            currency or currency units in which such Securities are payable
            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;

            (b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company with respect to such Securities; and

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

        Notwithstanding the satisfaction and discharge of this Indenture with
respect to Securities of any series, (x) the obligations of the Company to the
Trustee under Section 6.7, the obligations of the Trustee to any Authenticating
Agent under Section 6.14 and the right of the Trustee to resign under Section
6.10 shall survive, and (y) if money shall have been deposited with the Trustee
pursuant to subclause (ii) of Clause (a) of this Section, the obligations of the
Company and/or the Trustee under Sections 4.2, 6.6, 7.1 and 10.2 and the last
paragraph of Section 10.3


<PAGE>   39

shall survive.

SECTION 4.2 Application of Trust Money.

        Subject to the provisions of the last paragraph of Section 10.3, all
money deposited with the Trustee pursuant to Section 4.1 shall be held in trust
and applied by it, in accordance with the provisions of the 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 V

                                    REMEDIES

SECTION 5.1 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):

            (a) 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 (whether or not such payment is prohibited by the provisions
of Article XIV hereof); or

            (b) default in the payment of the principal of (or premium, if any,
on) any Security of that series at its Maturity (whether or not such payment is
prohibited by the provisions of Article XIV hereof); or

            (c) default in the performance, or breach, of any term, covenant or
warranty of the Company in this Indenture (other than a term, 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 25% in
principal amount of the Outstanding Securities of that series a written notice
specifying such default or breach and requiring it to be remedied and stating
that such notice is a "Notice of Default" hereunder; or

            (d) the Company pursuant to or within the meaning of any Bankruptcy
Law (A) commences a voluntary case, (B) consents to the entry of any order for
relief against it in an involuntary case, (C) consents to the appointment of a
Custodian of it or for all or substantially all of its property, or (D) makes a
general assignment for the benefit of its creditors; or


<PAGE>   40

            (e) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that (A) is for relief against the Company in an
involuntary case, (B) appoints a Custodian of the Company or for all or
substantially all of its property, or (C) orders the liquidation of the Company;
and the order or decree remains unstayed and in effect for 90 days; or

            (f) any other Event of Default provided as contemplated by Section
3.1 with respect to Securities of that series.

SECTION 5.2 Acceleration of Maturity; Rescission and Annulment.

        If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case the Trustee
or the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if any of the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount of such Securities as may be specified in the terms
thereof) of all of the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
amount) shall become immediately due and payable.

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

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

                (i)    all overdue interest on all Securities of that series;

                (ii)   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;

                (iii)  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

                (iv)   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

            (b) all Events of Default with respect to Securities of that series,
other than the nonpayment of the principal of Securities of that series which
have become due solely by such declaration of acceleration, have been cured or
waived as provided in Section 5.13.


<PAGE>   41

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

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

        The Company covenants that if

            (a) 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 (whether or not such payment is prohibited by the provisions
of Article XIV hereof), or

            (b) default is made in the payment of the principal of (or premium,
if any, on) any Security at the Maturity thereof (whether or not such payment is
prohibited by the provisions of Article XIV hereof), 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 the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities, wherever
situated.

        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 5.4 Trustee May File Proofs of Claim.

        In case of any judicial proceeding relative to the Company or any other
obligor upon the Securities, their property or their 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

<PAGE>   42

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

        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 be a member of a creditors' or
other similar committee.

SECTION 5.5 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 5.6 Application of Money Collected.

        Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal 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 6.7;

        SECOND: Subject to Article XIV, 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; and

        THIRD: The balance, if any, to the Company.

SECTION 5.7 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


<PAGE>   43

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

            (b) 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;

            (c) 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;

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

            (e) 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 5.8 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 Sections 3.5 and
3.7) 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 5.9 Restoration of Rights and Remedies.

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

SECTION 5.10 Rights and Remedies Cumulative.


<PAGE>   44

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

SECTION 5.11 Delay or Omission Not Waiver.

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

SECTION 5.12 Control by Holders.

        The Holders of a majority in aggregate 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, however, that

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

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

            (c) subject to the provisions of Section 6.1, the Trustee shall have
the right to decline to follow any such direction if the Trustee in good faith
shall determine that the proceeding so directed would involve the Trustee in
personal liability.

SECTION 5.13 Waiver of Past Defaults.

        The Holders of a majority in aggregate 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) a continuing default in the payment of the principal of or any
premium or interest on any Security of such series, or


<PAGE>   45

            (b) a default in respect of a covenant or provision hereof which
under Article IX 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 5.14 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; provided, however, that neither this Section nor the Trust
Indenture Act shall be deemed to authorize any court to require such an
undertaking or to make such an assessment in any suit instituted by the Company.

SECTION 5.15 Waiver of Usury, Stay or Extension Laws.

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

                                   THE TRUSTEE

SECTION 6.1 Certain Duties and Responsibilities.

        The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. 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
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.

SECTION 6.2 Notice of Defaults.


<PAGE>   46

        If a Default occurs and is continuing with respect to the Securities of
any series, the Trustee shall, within 90 days after it occurs, transmit, in the
manner and to the extent provided in Section 313(c) of the Trust Indenture Act,
notice of all uncured or unwaived Defaults known to it; provided, however, that,
except in the case of a Default in payment on the Securities of any series, the
Trustee may withhold the notice if and so long as the board of directors, the
executive committee or a trust committee of its directors and/or its duly
authorized officers in good faith determines that withholding such notice is in
the interests of Holders of Securities of such series; provided further,
however, that, in the case of any default or breach of the character specified
in Section 5.1(c) with respect to the Securities of such series, no such notice
to Holders shall be given until at least 60 days after the occurrence thereof.

SECTION 6.3 Certain Rights of Trustee.

        Subject to the provisions of Section 6.1:

            (a) the Trustee may rely on 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 reasonably
believed by it to be genuine and to have been signed or presented by the proper
party or parties;

            (b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or Company Order
(other than delivery of any Security to the Trustee for authentication and
delivery pursuant to Section 3.3, which shall be sufficiently evidenced as
provided therein) and any resolution of the Board of Directors shall be
sufficiently evidenced by a Board Resolution;

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

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

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

            (f) the Trustee shall not be bound to make any investigation into
the


<PAGE>   47

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;

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

            (h) the Trustee may request that the Company deliver an Officer's
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officer's Certificate may be signed by any person authorized to sign an
Officer's Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.

SECTION 6.4 Not Responsible for Recitals or Issuance of Securities.

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

SECTION 6.5 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
6.8 and 6.13, 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.

SECTION 6.6 Money Held in Trust.

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

SECTION 6.7 Compensation and Reimbursement.

        The Company agrees:


<PAGE>   48

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

            (b) 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

            (c) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
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, except those attributable
to its negligence or bad faith.

        The obligations of the Company under this Section to compensate the
Trustee and to pay or reimburse the Trustee for expenses, disbursements and
advances shall constitute additional indebtedness hereunder. Such additional
indebtedness shall be secured by a lien prior to that of the Securities upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the benefit of the Holders of particular Securities.

        Without limiting any rights available to the Trustee under applicable
law, when the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 5.1(d) or Section 5.1(e), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for such services are intended to constitute expenses of
administration under any applicable Bankruptcy Law.

        The provisions of this Section shall survive the satisfaction and
discharge of this Indenture and the defeasance of the Securities.

SECTION 6.8 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.

SECTION 6.9 Corporate Trustee Required; Eligibility.

        There shall at all times be one or more Trustees hereunder with respect
to the Securities of each series, at least one of which shall be a Person that
is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus required by the Trust Indenture Act. If such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of a supervising or examining authority, then for the purposes of
this Section, the


<PAGE>   49

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 shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.

SECTION 6.10 Resignation and Removal; Appointment of Successor.

        No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.11.

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

        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:

            (a) the Trustee shall fall to comply with Section 6.8 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

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

            (c) 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 may remove
the Trustee with respect to all Securities, or (B) subject to Section 5.14, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.

        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 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


<PAGE>   50

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

        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 1.6. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.

SECTION 6.11 Acceptance of Appointment by Successor.

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

            (b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be


<PAGE>   51

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 as 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 successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.

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

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

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

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

SECTION 6.13 Preferential Collection of Claims Against Company.

        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 6.14 Appointment of Authenticating Agent.

        The Trustee (upon notice to the Company) may appoint an Authenticating
Agent or


<PAGE>   52

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 (in accordance with procedures acceptable to
the Trustee) and upon exchange, registration of transfer or partial redemption
thereof or pursuant to Section 3.6, and Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, 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 all or substantially all of
the corporate agency or corporate trust business of such Authenticating Agent,
shall continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or such Authenticating
Agent.

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

        Except with respect to an Authenticating Agent appointed at the request
of the Company,


<PAGE>   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 by the Company for such payments, subject to
the provisions of Section 6.7.

        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.

                                            The Bank of New York,
                                            As Trustee


                                            By:______________________________
                                                  As Authenticating Agent


                                            By:_______________________________
                                                  Authorized Officer


                                   ARTICLE VII

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

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

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

            (a) semi-annually, not later than May 15 and November 15 in each
year, a list for each series of Securities, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders of Securities of
such series as of the preceding April 30 or October 31, as the case may be, and

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

provided, however, that if and so long as the Trustee shall be the Security
Registrar for Securities of a series, no such list need be furnished with
respect to such series of Securities.

SECTION 7.2 Preservation of Information; Communications to Holders.


<PAGE>   54

        The Trustee shall comply with the obligations imposed upon it pursuant
to Section 3.12 of the Trust Indenture Act.

        The rights of the 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 the names and addresses of Holders made pursuant
to the Trust Indenture Act.

SECTION 7.3 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 no later than _______ in each calendar year
with respect to the 12-month period ending on the previous _________, commencing
_______, _____.

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

SECTION 7.4 Reports by Company.

        The Company shall:

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

            (b) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by the
Company with the conditions and


<PAGE>   55

covenants of this Indenture as may be required from time to time by such rules
and regulations; and

            (c) transmit by mail to all Holders, as their names and addresses
appear in the Security Register, within 30 days after the filing thereof with
the Trustee, such summaries of any information, documents and reports required
to be filed by the Company pursuant to paragraphs (a) and (b) of this Section as
may be required by rules and regulations prescribed from time to time by the
Commission.

                                  ARTICLE VIII

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

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

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

            (a) the Person formed by or surviving any such consolidation or any
merger (if other than the Company), or to which such transfer or lease shall
have been made, is a corporation organized and existing under the laws of the
United States, any State thereof or the District of Columbia;

            (b) (A) in the case of a merger, the Company is the surviving
entity, or (B) the Person formed by such consolidation or into which the Company
is merged or the Person which acquires by sale or transfer, or which leases, the
properties and assets of the Company as, or substantially as, an entirety shall
expressly assume, by an indenture supplemental hereto, executed and delivered to
the Trustee, in form reasonably 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 and condition of
this Indenture on the part of the Company to be performed or observed;

            (c) immediately after giving effect to such transaction, no Default
or Event of Default exists; and

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

SECTION 8.2  Successor Substituted.

        Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any sale, transfer or lease of the properties and
assets of the Company as, or



<PAGE>   56



substantially as, an entirety in accordance with Section 8.1, the successor
Person formed by such consolidation or into which the Company is merged or to
which such sale, 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 originally as
the Company herein, and hereafter, 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 IX

                             SUPPLEMENTAL INDENTURES

SECTION 9.1  Supplemental Indentures Without Consent of Holders.

        Without the consent of any Holders, the Company 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:

            (a) to secure the Securities; or

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

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

            (d) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities; provided, however,
that any such addition, change or elimination shall become effective only when
there is no Security Outstanding of any series created prior to the execution of
such supplemental indenture which is entitled to the benefit of such provision;
or

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

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

            (g) to evidence and provide for the acceptance of appointment


<PAGE>   57



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

            (h) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualification of this
Indenture under the Trust Indenture Act or under any similar federal statute
subsequently enacted, and to add to this Indenture such other provisions as may
be expressly required under the Trust Indenture Act.

SECTION 9.2  Supplemental Indentures with Consent of Holders.

        With the consent of the Holders of a majority in aggregate principal
amount of the Outstanding Securities of all series affected by such supplemental
indenture (voting as one class), by Act of said Holders delivered to the Company
and the Trustee, the Company 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,

            (a) change the Stated Maturity of the principal of, or any
installment of principal of or interest, if any, on, any Security, or reduce the
principal amount thereof or premium, if any, on or the rate of interest thereon
or modify the provisions of this Indenture with respect to the subordination of
the Securities in a manner adverse to the Holders or adversely affect any right
to convert or exchange any Security into any other security, or

            (b) 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

            (c) change any obligation of the Company, with respect to
Outstanding Securities of a series, to maintain an office or agency in the
places and for the purposes specified in Section 10.2 for such series, or

            (d) modify any of the provisions of this Section, Section 5.13 or
Section 10.6, 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, or the deletion of this proviso, in
accordance with the requirements of Sections 6.11 and 9.1(g).


<PAGE>   58



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

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

SECTION 9.3  Execution of Supplemental Indentures.

        In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. 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 9.4  Effect of Supplemental Indentures.

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


SECTION 9.5  Conformity with Trust Indenture Act.

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

SECTION 9.6  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 X



<PAGE>   59


                                    COVENANTS

SECTION 10.1  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 10.2  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 such
designation or rescission and of any change in the location of any such other
office or agency.

        Except as otherwise specified with respect to a series of Securities as
contemplated by Section 3.1, the Company hereby initially designates as the
Place of Payment for each series of Securities The City and State of New York,
and initially appoints the Trustee at its Corporate Trust Office as the
Company's office or agency for each such purpose in such city.

SECTION 10.3  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, on or prior to each due date of the principal of
or any premium or interest on any



<PAGE>   60


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) hold all sums held by it for
the payment of the principal of (and premium, if any) or interest, if any, on
Securities of that series in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed of
as herein provided; (2) give the Trustee notice of any default by the Company
(or any other obligor upon the Securities of that series) in the making of any
payment of principal (and premium, if any) or interest, if any, on the
Securities of that series; and (3) during the continuance of any such default,
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 an Authorized Newspaper in each Place of Payment with
respect to such series, 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 10.4  Statement by Officers as to Default.

        The Company will deliver to the Trustee, within 150 days after the end
of each fiscal year of the Company ending after the date hereof, an Officer's
Certificate, stating whether or not to the best knowledge of the signer 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.

<PAGE>   61

SECTION 10.5  Existence.

        Subject to Article Eight, the Company will do or cause to be done all
the 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 it shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Company.

SECTION 10.6  Waiver of Certain Covenants.

        The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Section 10.5, with respect to the
Securities of any series if before the time for such compliance the Holders of
at least a majority in aggregate principal amount of the Outstanding Securities
of all affected series (voting as one class) 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.

        A waiver which changes or eliminates any term, provision or condition
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 term, provision or
condition, shall be deemed not to affect the rights under this Indenture of the
Holders of Securities of any other series.

<PAGE>   62



                                   ARTICLE XI

                            REDEMPTION OF SECURITIES

SECTION 11.1  Applicability of Article.

        Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 3.1 for Securities of any series)
in accordance with this Article.

SECTION 11.2  Election to Redeem; Notice to Trustee.

        The election of the Company to redeem any Securities shall be evidenced
by a Board Resolution. The Company shall, at least 45 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 (1) prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, or (2)
pursuant to an election of the Company which is subject to a condition specified
in the terms of such Securities, the Company shall furnish the Trustee with an
Officer's Certificate evidencing compliance with such restriction or condition.

SECTION 11.3  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), the particular Securities to be redeemed shall be selected not more
than 45 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 portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series.

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

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




<PAGE>   63


SECTION 11.4  Notice of Redemption.

        Notice of redemption shall be given by first-class mail (if
international mail, by air 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:

            (a) the Redemption Date,

            (b) the Redemption Price,

            (c) if less than all the Outstanding Securities of any series and of
a specified tenor are to he redeemed, the identification (and, in the case of
partial redemption of any Securities, the principal amounts) of the particular
Securities to be redeemed,

            (d) 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,

            (e) the place or places where such Securities are to be surrendered
for payment of the Redemption Price, and

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

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

SECTION 11.5  Deposit of Redemption Price.

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

SECTION 11.6  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



<PAGE>   64


3.1, installments of interest whose Stated Maturity is on or prior to the
Redemption Date shall be payable to the Holders of such Securities, or one or
more Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
3.7.

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

SECTION 11.7  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.

                                   ARTICLE XII

                                  SINKING FUNDS

SECTION 12.1  Applicability of Article.

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

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

        Each sinking fund payment shall be applied to the redemption of
Securities of any series as provided for by the terms of Securities of such
series.

SECTION 12.2  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



<PAGE>   65


Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
series; provided that such Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.

SECTION 12.3  Redemption of Securities for Sinking Fund.

        Not less than 45 days prior to each sinking fund payment date for any
series of Securities (unless a shorter period shall be satisfactory to the
Trustee), the Company will deliver to the Trustee an Officer's Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, 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 of that series pursuant to
Section 12.2 and stating the basis for such credit and that such Securities have
not been previously so credited, and will also deliver to the Trustee any
Securities to be so delivered. Not less than 30 days before each such sinking
fund payment date the Trustee shall select the Securities to be redeemed upon
such sinking fund payment date in the manner specified in Section 11.3 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 11.4. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 11.6 and 11.7.

                                  ARTICLE XIII

                                   DEFEASANCE

SECTION 13.1  Applicability of Article.

        The provisions of this Article shall be applicable to each series of
Securities except as otherwise specified as contemplated by Section 3.1 for
Securities of such series.

SECTION 13.2  Legal Defeasance.

        In addition to discharge of the Indenture pursuant to Section 4.1, the
Company shall be deemed to have paid and discharged the entire indebtedness on
all the Securities of such a series on the 91st day after the date of the
deposit referred to in Clause (a) below, and the provisions of

this Indenture with respect to the Securities of such series shall no longer be
in effect (except as to (1) rights of registration of transfer and exchange of
Securities of such series and the Company's right of optional redemption, if
any, (2) substitution of mutilated, destroyed, lost or stolen Securities, (3)
rights of holders of Securities to receive payments of principal thereof and
interest thereon, upon the original stated due dates therefor or on the
specified redemption dates therefor (but not upon acceleration), and remaining
rights of the holders to receive mandatory sinking fund payments, if any, (4)
the rights, obligations, duties and immunities of the Trustee hereunder, (5) the
rights, if any, to convert or exchange the Securities of such series, (6) the
rights of the holders



<PAGE>   66


of Securities of such series as beneficiaries hereof with respect to the
property so deposited with the Trustee payable to all or any of them, and (7)
the obligations of the Company under Section 10.2), and the Trustee, at the
expense of the Company, shall, upon a Company Request, execute proper
instruments acknowledging the same, if the conditions set forth below are
satisfied (hereinafter, "defeasance"):

            (a) The Company has irrevocably deposited or caused to be deposited
with the Trustee as trust funds in trust, for the purposes of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of the Securities of such series (i) cash in an
amount, or (ii) in the case of any series of Securities the payments on which
may only be made in legal coin or currency of the United States, U.S. Government
Obligations, maturing as to principal and interest at such times and in such
amounts as will insure the availability of cash, or (iii) a combination thereof,
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 (A) the principal and interest and premium, if any, on all
Securities of such series on each date that such principal, interest or premium,
if any, is due and payable or on any Redemption Date established pursuant to
Clause (c) below, and (B) any mandatory sinking fund payments on the dates on
which such payments are due and payable in accordance with the terms of the
Indenture and the Securities of such series;

            (b) The Company has delivered to the Trustee an Opinion of Counsel
based on the fact that (x) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling, or (y) since the date
hereof, there has been a change in the applicable federal income tax law, in
either case to the effect that, and such opinion shall confirm that, the holders
of the Securities of such series will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and defeasance and will
be subject to federal income tax on the same amount and in the same manner and
at the same times, as would have been the case if such deposit and defeasance
had not occurred;

            (c) If the Securities are to be redeemed prior to Stated Maturity
(other than from mandatory sinking fund payments or analogous payments), notice
of such redemption shall have been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee shall have been made;

            (d) No Event of Default or event which with notice or lapse of time
or both would become an Event of Default shall have occurred and be continuing
on the date of such deposit; and

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

            For this purpose, such defeasance means that the Company and any
other obligor upon the Securities of such series shall be deemed to have paid
and discharged the entire debt represented by the Securities of such series,
which shall thereafter be deemed to be "Outstanding" only for the



<PAGE>   67


purposes of Section 13.4 and the rights and obligations referred to in Clauses
(1) through (7), inclusive, of the first paragraph of this Section, and to have
satisfied all its other obligations under the Securities of such series and this
Indenture insofar as the Securities of such series are concerned.

SECTION 13.3  Covenant Defeasance.

        The Company and any other obligor, if any, shall be released on the
91st day after the date of the deposit referred to in Clause (a) below from its
obligations under Sections 7.4., 8.1 and 10.5 with respect to the Securities of
any series on and after the date the conditions set forth below are satisfied
(hereinafter, "covenant defeasance"), and the Securities of such series shall
thereafter be deemed to be not "Outstanding" for the purposes of any request,
demand, authorization, direction, notice, waiver, consent or declaration or
other action or Act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed Outstanding for
all other purposes hereunder. For this purpose, such covenant defeasance means
that, with respect to the Securities of such series, 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 Section, whether directly or indirectly by
reason of any reference elsewhere herein to such Section or by reason of any
reference in such Section to any other provision herein or in any other document
and such omission to comply shall not constitute a Default or an Event of
Default under Section 5.1, but, except as specified above, the remainder of this
Indenture and the Securities of such series shall be unaffected thereby. The
following shall be the conditions to application of this Section 13.3:

            (a) The Company has irrevocably deposited or caused to be deposited
with the Trustee as trust funds in trust for the purpose of making the following
payments, specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of the Securities of such series, (i) cash in an amount,
or (ii) in the case of any series of Securities the payments on which may only
be made in legal coin or currency of the United States, U.S. Government
Obligations, maturing as to principal and interest at such times and in such
amounts as will insure the availability of cash, or (iii) a combination thereof,
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 (A) the principal and interest and premium, if any, on all
Securities of such series on each date that such principal, interest or premium,
if any, is due and payable or on any Redemption Date established pursuant to
Clause (b) below, and (B) any mandatory sinking fund payments on the day on
which such payments are due and payable in accordance with the terms of the
Indenture and the Securities of such series;

            (b) If the Securities are to be redeemed prior to Stated Maturity
(other than from mandatory sinking fund payments or analogous payments), notice
of such redemption shall have been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee shall have been made;

            (c) No Event of Default or event which with notice or lapse of time
or both would become an Event of Default shall have occurred and be continuing
on the date of such



<PAGE>   68



deposit;

            (d) The Company shall have delivered to the Trustee an Opinion of
Counsel which shall confirm that the holders of the Securities of such series
will not recognize income, gain or loss for federal income tax purposes as a
result of such deposit and covenant defeasance and will be subject to federal
income tax on the same amount and in the same manner and at the same time as
would have been the case if such deposit and covenant defeasance had not
occurred; and

            (e) The Company shall have delivered to the Trustee an Officer's
Certificate stating that all conditions precedent provided for relating to the
covenant defeasance contemplated by this provision have been complied with.

SECTION 13.4 Application by Trustee of Funds Deposited for Payment of
Securities.

        Subject to the provisions of the last paragraph of Section 10.3, all
moneys or U.S. Government Obligations deposited with the Trustee pursuant to
Section 13.2 are 13.3 (and all funds earned on such moneys or U.S. Government
Obligations) shall be held in trust and applied by it to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent), to the Holders of the particular Securities of such series for
the payment or redemption of which such moneys have been deposited with the
Trustee, of all sums due and to become due thereon for principal and interest
but such money need not be segregated from other funds except to the extent
required by law. Subject to Sections 13.2 and 13.3, the Trustee promptly shall
pay to the Company upon request any excess moneys held by it at any time.

SECTION 13.5  Repayment to Company.

        The Trustee and any Paying Agent promptly shall pay or return to the
Company upon Company Request any money and U.S. Government Obligations held by
them at any time that are not required for the payment of the principal of and
any interest on the Securities of any series for which money or U.S. Government
Obligations have been deposited pursuant to Section 13.2 or 13.3.

        The provisions of the last paragraph of Section 10.3 shall apply to any
money held by the Trustee or any Paying Agent under this Article that remains
unclaimed for two years after the Maturity of any series of Securities for which
money or U.S. Government Obligations have been deposited pursuant to Section
13.2 or 13.3.

                                   ARTICLE XIV

                           SUBORDINATION OF SECURITIES

SECTION 14.1  Agreement to Subordinate.



<PAGE>   69


        The Company, for itself, its successors and assigns, covenants and
agrees, and each Holder of Securities, by his acceptance thereof, likewise
covenants and agrees, that the payment of the principal of (and premium, if
any), interest on each and all of the Securities is hereby expressly
subordinated, to the extent and in the manner hereinafter set forth, in right of
payment to the prior payment in full of all Senior Debt.

SECTION 14.2  Distribution on Dissolution, Liquidation and Reorganization;
              Subrogation of Securities.

        Upon any distribution of assets of the Company upon any dissolution,
winding up, liquidation or reorganization of the Company, whether in bankruptcy,
insolvency, reorganization or receivership proceedings or upon an assignment for
the benefit of creditors or any other marshalling of the assets and liabilities
of the Company or otherwise (subject to the power of a court of competent
jurisdiction to make other equitable provision reflecting the rights conferred
in this Indenture upon the Senior Debt and the holders thereof with respect to
the Securities and the Holders thereof by a lawful plan or reorganization under
applicable bankruptcy law),

            (a) the holders of all Senior Debt shall be entitled to receive
payment in full of the principal thereof, premium, if any, interest, and any
interest thereon, due thereon before the Holders of the Securities are entitled
to receive any payment upon the principal, premium, interest of or on the
Securities or interest on overdue amounts thereof; and

            (b) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, to which the Holders of
the Securities or the Trustee would be entitled except for the provisions of
this Article XIV shall be paid by the liquidating trustee or agent or other
person making such payment or distribution, whether a trustee in bankruptcy, a
receiver or liquidating trustee or otherwise, directly to the holders of Senior
Debt or their representative or representatives or to the trustee or trustees
under anyindenture under which any instruments evidencing any of such Senior
Debt may have been issued, ratably according to the aggregate amounts remaining
unpaid on account of the principal of, premium, if any, interest, and any
interest thereon, on the Senior Debt held or represented by each, to the extent
necessary to make payment in full of all Senior Debt remaining unpaid, after
giving effect to any concurrent payment or distribution to the holders of such
Senior Debt; and

            (c) in the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, shall be received by the Trustee or the Holders of the
Securities before all Senior Debt is paid in full, such payment or distribution
shall be paid over to the holders of such Senior Debt or their representative or
representatives or to the trustee or trustees under any indenture under which
any instruments evidencing any of such Senior Debt may have been issued, ratably
as aforesaid, for application to the payment of all Senior Debt remaining unpaid
until all such Senior Debt shall have been paid in full, after giving effect to
any concurrent payment or distribution to the holders of such Senior Debt.

        Subject to the payment in full of all Senior Debt, the Holders of the
Securities shall be


<PAGE>   70


subrogated to the rights of the holders of Senior Debt to receive payments or
distributions of cash, property or securities of the Company applicable to
Senior Debt until the principal, premium, interest, and any interest thereon, of
or on the Securities shall be paid in full and no such payments or distributions
to the Holders of the Securities of cash, property or securities otherwise
distributable to the Senior Debt shall, as between the Company, its creditors
other than the holders of Senior Debt, and the Holders of the Securities, be
deemed to be a payment by the Company to or on account of the Securities. It is
understood that the provisions of this Article XIV 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 XIV or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as between the Company, its creditors
other than the holders of Senior Debt, and the Holders of the Securities, the
obligation of the Company, which is unconditional and absolute, to pay to the
Holders of the Securities the principal, premium, interest, and any interest
thereon, of or on the Securities as and when the same shall become due and
payable in accordance with their terms, or to affect the relative rights of the
Holders of the Securities and creditors of the Company other than the holders of
Senior Debt, nor shall anything herein or in the Securities 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 XIV of the holders of Senior Debt in respect of cash,
property or securities of the Company received upon the exercise of any such
remedy. Upon any payment or distribution of assets of the Company referred to in
this Article XIV, the Trustee shall be entitled to conclusively rely upon a
certificate of the liquidating trustee or agent or other person making any
distribution to the Trustee for the purpose of ascertaining the persons entitled
to participate in such 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 XIV.

The Trustee, however, shall not be deemed to owe any fiduciary duty to
the holders of Senior Debt. The Trustee shall not be liable to any such holder
if it shall pay over or distribute to or on behalf of Holders of Securities or
the Company moneys or assets to which any holder of Senior Debt shall be
entitled by virtue of this Article XIV. The rights and claims of the Trustee
under Section 6.7 shall not be subject to the provisions of this Article XIV.

         If the Trustee or any Holder of Securities does not file a proper claim
or proof of debt in the form required in any proceeding referred to above prior
to 30 days before the expiration of the time to file such claim in such
proceeding, then the holder of any Senior Debt is hereby authorized, and has the
right, to file an appropriate claim or claims for or on behalf of such Holder of
Securities.

SECTION 14.3  No Payment on Securities in Event of Default on Senior Debt.

         No payment by the Company on account of principal, premium, interest or
other amounts, and any interest thereon, of or on the Securities shall be made
unless full payment of amounts then due for principal, premium, if any, sinking
funds, and interest or other amounts on Senior Debt has been made or duly
provided for in money or money's worth.



<PAGE>   71



        SECTION 14.4  Payments on Securities Permitted.

        Nothing contained in this Indenture or in any of the Securities shall
(a) affect the obligation of the Company to make, or prevent the Company from
making, at any time except as provided in Sections 14.2 and 14.3, payments of
principal, premium, interest, and any interest thereon, of or on the Securities
or (b) prevent the application by the Trustee of any moneys deposited with it
hereunder to the payment of or on account of the principal, premium, interest or
other amounts, and any interest thereon, of or on the Securities unless the
Trustee shall have received at its Corporate Trust Office written notice of any
event prohibiting the making of such payment Business Days (i) prior to the date
fixed for such payment, (ii) prior to the execution of an instrument to satisfy
and discharge this Indenture based upon the deposit of funds under Section
4.1(a)(ii), (iii) prior to the execution of an instrument acknowledging the
defeasance of such Securities pursuant to Section 13.2 or (iv) prior to any
deposit pursuant to clause (a) of Section 13.3 with respect to such Securities.

SECTION 14.5  Authorization of Holders of Securities to Trustee to Effect
              Subordination.

        Each Holder of Securities 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 as provided in this Article XIV and
appoints the Trustee his attorney-in-fact for any and all such purposes.

SECTION 14.6  Notices to Trustee.

        The Company shall give prompt written notice to a Responsible Officer
of the Trustee located at the Corporate Trust Office of the Trustee of any fact
known to the Company which would prevent the making of any payment to or by the
Trustee in respect of the Securities. Notwithstanding the provisions of this
Article XIV or any other provisions of this Indenture, neither the Trustee nor
any Paying Agent (other than the Company) shall be charged with knowledge of the
existence of any Senior Debt or of any event which would prohibit the making of
any payment of moneys to or by the Trustee or such Paying Agent, unless and
until the Trustee or such Paying Agent shall have received (in the case of the
Trustee, at its Corporate Trust Office) written notice thereof from the Company
or from the holder of any Senior Debt or from the trustee for or representative
of any Senior Debt together with proof satisfactory to the Trustee of such
holding of Senior Debt or of the authority of such trustee or representative;
provided, however, that if at least two Business Days prior to the date upon
which by the terms hereof any such moneys may become payable for any purpose
(including, without limitation, the payment of the principal, premium, interest,
of or on any Security, or any interest thereon) or the date on which the Trustee
shall execute an instrument acknowledging satisfaction and discharge of this
Indenture or the defeasance of Securities pursuant to Section 13.2 or the date
on which a deposit pursuant to clause (a) of Section 13.3 is made, the Trustee
shall not have received with respect to such moneys or the moneys deposited with
it as a condition to such satisfaction and discharge or defeasance the notice
provided for in this Section 14.6, then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such moneys and to apply the same to the purpose for which they were
received, and shall not be affected by
<PAGE>   72


any notice to the contrary, which may be received by it on or after such two
Business Days prior to such date. The Trustee shall be entitled to conclusively
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 or representative on behalf of such
holder) to establish that such a notice has been given by a holder of Senior
Debt or a trustee or representative on behalf of any such holder. 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 Fourteen, 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 XIV 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 14.7  Trustee as Holder of Senior Debt.

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

SECTION 14.8  Modification of Terms of Senior Debt.

Any renewal or extension of the time of payment of any Senior Debt or
the exercise by the holders of Senior Debt of any of their rights under any
instrument creating or evidencing Senior Debt, including without limitation the
waiver of default thereunder, may be made or done all without notice to or
assent from Holders of the Securities or the Trustee.

         No compromise, alteration, amendment, modification, extension, renewal
or other change of, or waiver, consent or other action in respect of, any
liability or obligation under or in respect of, or of any of the terms,
covenants or conditions of any indenture or other instrument under which any
Senior Debt is outstanding or of such Senior Debt, whether or not such release
is in accordance with the provisions of any applicable document, shall in any
way alter or affect any of the provisions of this Article XIV or of the
Securities relating to the subordination thereof.

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

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



<PAGE>   73



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

                                       AMERICAN CLASSIC VOYAGES CO.


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


                                       THE BANK OF NEW YORK


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