Exhibit 4.1

                              PHARMOS CORPORATION,
                                     Issuer

                                       AND

                            [                          ],
                                     Trustee

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

                                    INDENTURE

                           Dated as of [        ], 2002

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

                             Senior Debt Securities


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                            CROSS-REFERENCE TABLE(1)

     Section of
 Trust Indenture Act                                         Section of
 of 1939, as amended                                         Indenture
 -------------------                                         ----------

 310(a) ...............................................      7.09
 310(b) ...............................................      7.08
                                                             7.10
 310(c) ...............................................      Inapplicable
 311(a) ...............................................      7.13(a)
 311(b) ...............................................      7.13(b)
 311(c) ...............................................      Inapplicable
 5.02(a)
 312(b) ...............................................      5.02(b)
 312(c) ...............................................      5.02(c)
 313(a) ...............................................      5.04(a)
 313(b) ...............................................      5.04(b)
 313(c) ...............................................      5.04(a)
                                                             5.04(b)
 313(d) ...............................................      5.04(c)
 314(a) ...............................................      5.03
 314(b) ...............................................      Inapplicable
 314(c) ...............................................      13.06
 314(d) ...............................................      Inapplicable
 314(e) ...............................................      13.06
 314(f) ...............................................      Inapplicable
 315(a) ...............................................      7.01(a)
                                                             7.02
 315(b) ...............................................      6.07
 315(c) ...............................................      7.01
 315(d) ...............................................      7.01(b)
                                                             7.01(c)
 315(e) ...............................................      6.07
 316(a) ...............................................      6.06
                                                             8.04
 316(b) ...............................................      6.04
 316(c) ...............................................      8.01
 317(a) ...............................................      6.02
 317(b) ...............................................      4.03
 318(a) ...............................................      13.08

----------
(1)   This Cross-Reference Table does not constitute part of the Indenture and
      shall not have any bearing on the interpretation of any of its terms or
      provisions.


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<PAGE>


                             TABLE OF CONTENTS(1)

                                                                          Page
                                                                          ----
PARTIES ................................................................   1

RECITALS ...............................................................   1

                                    ARTICLE I

                                   DEFINITIONS

SECTION 1.01 Definitions of Terms ......................................   1
             Affiliate .................................................   2
             Authenticating Agent ......................................   2
             Bankruptcy Law ............................................   2
             Board of Directors ........................................   2
             Board Resolution ..........................................   2
             Business Day ..............................................   2
             Certificate ...............................................   2
             Company ...................................................   2
             Corporate Trust Office ....................................   2
             Custodian .................................................   2
             Default ...................................................   3
             Depositary ................................................   3
             Event of Default ..........................................   3
             Global Security ...........................................   3
             Governmental Obligations ..................................   3
             "herein", "hereof" and "hereunder .........................   3
             Indenture .................................................   3
             Interest Payment Date .....................................   3
             Officers' Certificate .....................................   4
             Opinion of Counsel ........................................   4
             Outstanding ...............................................   4
             Person ....................................................   4
             Predecessor Security ......................................   4
             Responsible Officer .......................................   4
             Securities ................................................   5
             Securityholder ............................................   5
             Subsidiary ................................................   5
             Trustee ...................................................   5
             Trust Indenture Act .......................................   5
             Voting Stock ..............................................   5


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                                   ARTICLE II

               ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION
                           AND EXCHANGE OF SECURITIES

SECTION 2.01  Designation and Terms of Securities ..........................   5
SECTION 2.02  Form of Securities and Trustee's Certificate .................   7
SECTION 2.03  Denominations:  Provisions for Payment .......................   8
SECTION 2.04  Execution and Authentications ................................   9
SECTION 2.05  Registration of Transfer and Exchange ........................  10
SECTION 2.06  Temporary Securities .........................................  11
SECTION 2.07  Mutilated, Destroyed, Lost or Stolen Securities ..............  12
SECTION 2.08  Cancellation .................................................  13
SECTION 2.09  Benefits of Indenture ........................................  13
SECTION 2.10  Authenticating Agent .........................................  13
SECTION 2.11  Global Securities ............................................  14

                                   ARTICLE III

              REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS

SECTION 3.01  Redemption ...................................................  15
SECTION 3.02  Notice of Redemption .........................................  15
SECTION 3.03  Payment Upon Redemption ......................................  16
SECTION 3.04  Sinking Fund .................................................  17
SECTION 3.05  Satisfaction of Sinking Fund Payments with
                Securities .................................................  17
SECTION 3.06  Redemption of Securities for Sinking Fund ....................  17

                                   ARTICLE IV

SECTION 4.01  Payment of Principal, Premium and Interest ...................  18
SECTION 4.02  Maintenance of Office or Agency ..............................  18
SECTION 4.03  Paying Agents ................................................  18
SECTION 4.04  Appointment to Fill Vacancy in Office of Trustee .............  20
SECTION 4.05  Compliance with Consolidation Provisions .....................  20

                                    ARTICLE V

                       SECURITYHOLDERS' LISTS AND REPORTS
                         BY THE COMPANY AND THE TRUSTEE

SECTION 5.01  Company to Furnish Trustee Names and Addresses of
                Securityholders ............................................  20
SECTION 5.02  Preservation Of Information; Communications With
                Securityholders ............................................  20
SECTION 5.03  Reports by the Company .......................................  21
SECTION 5.04  Reports by the Trustee .......................................  21

                                   ARTICLE VI

                   REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
                               ON EVENT OF DEFAULT

SECTION 6.01  Events of Default ...........................................   22
SECTION 6.02  Collection of Indebtedness and Suits for
                Enforcement by Trustee ....................................   24


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SECTION 6.03  Application of Moneys Collected ..............................  25
SECTION 6.04  Limitation on Suits ..........................................  26
SECTION 6.05  Rights and Remedies Cumulative; Delay or
                Omission Not Waiver ........................................  27
SECTION 6.06  Control by Securityholders ...................................  27
SECTION 6.07  Undertaking to Pay Costs .....................................  28

                                   ARTICLE VII

                             CONCERNING THE TRUSTEE

SECTION 7.01  Certain Duties and Responsibilities of Trustee ...............  28
SECTION 7.02  Certain Rights of Trustee ....................................  29
SECTION 7.03  Trustee Not Responsible for Recitals or Issuance
                or Securities ..............................................  31
SECTION 7.04  May Hold Securities ..........................................  31
SECTION 7.05  Moneys Held in Trust .........................................  31
SECTION 7.06  Compensation and Reimbursement ...............................  31
SECTION 7.07  Reliance on Officers' Certificate ............................  32
SECTION 7.08  Disqualification; Conflicting Interests ......................  32
SECTION 7.09  Corporate Trustee Required; Eligibility ......................  32
SECTION 7.10  Resignation and Removal; Appointment of Successor ............  33
SECTION 7.11  Acceptance of Appointment By Successor .......................  34
SECTION 7.12  Merger, Conversion, Consolidation or Succession
                to Business ................................................  35
SECTION 7.13  Preferential Collection of Claims Against the
                Company ....................................................  36

                                  ARTICLE VIII

                         CONCERNING THE SECURITYHOLDERS

SECTION 8.01  Evidence of Action by Securityholders ........................  36
SECTION 8.02  Proof of Execution by Securityholders ........................  37
SECTION 8.03  Who May be Deemed Owners .....................................  37
SECTION 8.04  Certain Securities Owned by Company Disregarded ..............  37
SECTION 8.05  Actions Binding on Future Securityholders ....................  38

                                   ARTICLE IX

                             SUPPLEMENTAL INDENTURES

SECTION 9.01  Supplemental Indentures Without the Consent of
                Securityholders ............................................  38
SECTION 9.02  Supplemental Indentures With Consent of
                Securityholders ............................................  39
SECTION 9.03  Effect of Supplemental Indentures ............................  40
SECTION 9.04  Securities Affected by Supplemental Indentures ...............  40
SECTION 9.05  Execution of Supplemental Indentures .........................  40

                                    ARTICLE X

                              SUCCESSOR CORPORATION

SECTION 10.01 Company May Consolidate, Etc ................................   41
SECTION 10.02 Successor Corporation Substituted ...........................   41


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SECTION 10.03 Evidence of Consolidation, Etc. to Trustee ..................   42

                                   ARTICLE XI

                           SATISFACTION AND DISCHARGE

SECTION 11.01 Satisfaction and Discharge of Indenture .....................   42
SECTION 11.02 Discharge of Obligations ....................................   43
SECTION 11.03 Deposited Moneys to be Held in Trust ........................   43
SECTION 11.04 Payment of Moneys Held by Paying Agents .....................   43
SECTION 11.05 Repayment to Company ........................................   43

                                   ARTICLE XII

                    IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
                             OFFICERS AND DIRECTORS

SECTION 12.01 No Recourse .................................................   44

                                  ARTICLE XIII

                            MISCELLANEOUS PROVISIONS

SECTION 13.01 Effect on Successors and Assigns ............................   44
SECTION 13.02 Actions by Successor ........................................   45
SECTION 13.03 Surrender of Company Powers .................................   45
SECTION 13.04 Notices .....................................................   45
SECTION 13.05 Governing Law ...............................................   45
SECTION 13.06 Treatment of Securities as Debt .............................   46
SECTION 13.07 Compliance Certificates and Opinions ........................   46
SECTION 13.08 Payments on Business Days ...................................   46
SECTION 13.09 Conflict with Trust Indenture Act ...........................   46
SECTION 13.10 Counterparts ................................................   47
SECTION 13.11 Separability ................................................   47
SECTION 13.12 Assignment ..................................................   47

----------
(1)   This Table of Contents does not constitute part of the Indenture and shall
      not have any bearing upon the interpretation of any of its terms or
      provisions.


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<PAGE>


INDENTURE, dated as of [ ], 2002, among Pharmos Corporation, a Nevada
corporation (the "Company"), and [ ], as trustee (the "Trustee"):

WHEREAS, for its lawful corporate purposes, the Company has duly authorized the
execution and delivery of this Indenture to provide for the issuance of
unsecured debt securities (hereinafter referred to as the "Securities"), in an
unlimited aggregate principal amount to be issued from time to time in one or
more series as in this Indenture provided, as registered Securities without
coupons, to be authenticated by the certificate of the Trustee;

WHEREAS, to provide the terms and conditions upon which the Securities are to be
authenticated, issued and delivered, the Company has duly authorized the
execution of this Indenture; and

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

NOW, THEREFORE, in consideration of the premises and the purchase of the
Securities by the holders thereof, it is mutually covenanted and agreed as
follows for the equal and ratable benefit of the holders of Securities:

                                    ARTICLE I

                                   DEFINITIONS

                       SECTION 1.01 Definitions of Terms.

The terms defined in this Section (except as in this Indenture otherwise
expressly provided or unless the context otherwise requires) for all purposes of
this Indenture and of any indenture supplemental hereto shall have the
respective meanings specified in this Section and shall include the plural as
well as the singular. All other terms used in this Indenture that are defined in
the Trust Indenture Act of 1939, as amended, or that are by reference in such
Act defined in the Securities Act of 1933, as amended (except as herein
otherwise expressly provided or unless the context otherwise requires), shall
have the meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of the execution of this instrument.

"Affiliate" means, with respect to a specified Person, (a) any Person directly
or indirectly owning, controlling or holding with power to vote 10% or more of
the outstanding voting securities or other ownership interests of the specified
Person, (b) any Person 10% or more of whose outstanding voting securities or
other ownership interests are directly or indirectly owned, controlled or held
with power to vote by the specified Person, (c) any Person directly or
indirectly controlling, controlled by, or under common control with the
specified Person, (d) a partnership in which the specified Person is a general
partner, (e) any officer or director of the specified Person, and (f) if the
specified Person is an


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individual, any entity of which the specified Person is an officer, director or
general partner.

"Authenticating Agent" means an authenticating agent with respect to all or any
of the series of Securities appointed with respect to all or any series of the
Securities by the Trustee pursuant to Section 2.10.

      "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 any
duly authorized committee of such Board.

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

"Business Day" means, with respect to any series of Securities, any day other
than a day on which Federal or State banking institutions in the Borough of
Manhattan, The City of New York, are authorized or obligated by law, executive
order or regulation to close.

"Certificate" means a certificate signed by the principal executive officer, the
principal financial officer or the principal accounting officer of the Company.
The Certificate need not comply with the provisions of Section 13.07.

      "Company" means Pharmos Corporation, a corporation duly organized and
existing under the laws of the State of Nevada, and, subject to the provisions
of Article Ten, shall also include its successors and assigns.

"Corporate Trust Office" means the office of the Trustee at which, at any
particular time, its corporate trust business shall be principally administered,
which office at the date hereof is located at [ ], except that whenever a
provision herein refers to an office or agency of the Trustee in the Borough of
Manhattan, The City of New York, such office is located, at the date hereof, at
[ ].

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

      "Default" means any event, act or condition that with notice or lapse of
time, or both, would constitute an Event of Default.

"Depositary" means, with respect to Securities of any series, for which the
Company shall determine that such Securities will be issued as a Global
Security, The Depository Trust Company, New York, New York, another clearing
agency, or any successor registered as a clearing agency under the Securities
and Exchange Act of 1934, as amended (the "Exchange Act"), or other applicable
statute or regulation, which, in each case, shall be designated by the Company
pursuant to either Section 2.01 or 2.11.

      "Event of Default" means, with respect to Securities of a particular
series any event specified in Section 6.01, continued for the period of time, if
any, therein designated.

      "Global Security" means, with respect to any series of Securities, a
Security executed by the Company and delivered by the Trustee to the Depositary
or pursuant to the Depositary's instruction, all in accordance with the
Indenture, which shall be registered in the name of the Depositary or its
nominee.

"Governmental Obligations" means securities that are (i) direct obligations of
the United States of America for the payment of which its full faith and credit
is pledged or (ii) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of America, the
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America that, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act of 1933, as amended) as custodian with respect to any such
Governmental Obligation or a specific payment of principal of or interest on any
such Governmental Obligation held by such custodian for the account of the
holder of such depositary receipt; provided, however, that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depositary receipt from any amount received by the
custodian in respect of the Governmental Obligation or the specific payment of
principal of or interest on the Governmental Obligation evidenced by such
depositary receipt.

"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.

"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 in accordance with the terms hereof.

      "Interest Payment Date", when used with respect to any installment of
interest on a Security of a particular series, means the date specified in such
Security or in a Board Resolution or in an indenture supplemental hereto with
respect to such series as the fixed date on which an installment of interest
with respect to Securities of that series is due and payable.

"Officers' Certificate" means a certificate signed by the President or a Vice
President and by the Treasurer or an Assistant Treasurer or the Controller or an
Assistant Controller or the Secretary or an Assistant Secretary of the Company
that is delivered to the Trustee in accordance with the terms hereof. Each such
certificate shall include the statements provided for in Section 13.07, if and
to the extent required by the provisions thereof.

"Opinion of Counsel" means an opinion in writing of legal counsel, who may be an
employee of or counsel for the Company that is delivered to the Trustee in
accordance with the terms hereof. Each such opinion shall include the statements
provided for in Section 13.07, if and to the extent required by the provisions
thereof.

      "Outstanding", when used with reference to Securities of any


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series, means, subject to the provisions of Section 8.04, as of any particular
time, all Securities of that series theretofore authenticated and delivered by
the Trustee under this Indenture, except (a) Securities theretofore canceled by
the Trustee or any paying agent, or delivered to the Trustee or any paying agent
for cancellation or that have previously been canceled; (b) Securities or
portions thereof for the payment or redemption of which moneys or Governmental
Obligations in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or shall have been set
aside and segregated in trust by the Company (if the Company shall act as its
own paying agent); provided, however, that if such Securities or portions of
such Securities are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as in Article Three provided, or provision
satisfactory to the Trustee shall have been made for giving such notice; and (c)
Securities in lieu of or in substitution for which other Securities shall have
been authenticated and delivered pursuant to the terms of Section 2.07.

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

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

"Responsible Officer" when used with respect to the Trustee means the Chairman
of the Board of Directors, the President, any Vice President, the Secretary, the
Treasurer, any trust officer, any corporate trust officer or any other officer
or assistant officer of the Trustee customarily performing functions similar to
those performed by the Persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because of his
or her knowledge of and familiarity with the particular subject.

      "Securities" means the debt Securities authenticated and delivered under
this Indenture.

"Securityholder", "holder of Securities", "registered holder", or other similar
term, means the Person or Persons in whose name or names a particular Security
shall be registered on the books of the Company kept for that purpose in
accordance with the terms of this Indenture.

"Subsidiary" means, with respect to any Person, (i) any corporation at least a
majority of whose outstanding Voting Stock shall at the time be owned, directly
or indirectly, by such Person or by one or more of its Subsidiaries or by such
Person and one or more of its Subsidiaries, (ii) any general partnership, joint
venture or similar entity, at least a majority of whose outstanding partnership
or similar interests shall at the time be owned by such Person, or by one or
more of its Subsidiaries, or by such Person and one or more of its Subsidiaries
and (iii) any limited partnership of which such Person or any of its
Subsidiaries is a general partner.


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"Trustee" means [ ], and, subject to the provisions of Article Seven, shall also
include its successors and assigns, and, if at any time there is more than one
Person acting in such capacity hereunder, "Trustee" shall mean each such Person.
The term "Trustee" as used with respect to a particular series of the Securities
shall mean the trustee with respect to that series.

"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended, subject
to the provisions of Sections 9.01, 9.02, and 10.01, as in effect at the date of
execution of this instrument.

"Voting Stock", as applied to stock of any Person, means shares, interests,
participations or other equivalents in the equity interest (however designated)
in such Person having ordinary voting power for the election of a majority of
the directors (or the equivalent) of such Person, other than shares, interests,
participations or other equivalents having such power only by reason of the
occurrence of a contingency.

                                   ARTICLE II

                      ISSUE, DESCRIPTION, TERMS, EXECUTION,
                     REGISTRATION AND EXCHANGE OF SECURITIES

                SECTION 2.01 Designation and Terms of Securities.

(a) The aggregate principal amount of Securities that may be authenticated and
delivered under this Indenture is unlimited. The Securities may be issued in one
or more series up to the aggregate principal amount of Securities of that series
from time to time authorized by or pursuant to a Board Resolution of the Company
or pursuant to one or more indentures supplemental hereto. Prior to the initial
issuance of Securities of any series, there shall be established in or pursuant
to a Board Resolution of the Company, and set forth in an Officers' Certificate
of the Company, or established in one or more indentures supplemental hereto:

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

            (2) any limit upon the aggregate principal amount of the Securities
      of that series that 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 that series);

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

            (4) the rate or rates at which the Securities of the series shall
      bear interest or the manner of calculation of such rate or rates, if any;

            (5) the date or dates from which such interest shall accrue, the
      Interest Payment Dates on which such interest will be payable or the
      manner of determination of such Interest Payment Dates and the record date
      for the determination of holders to whom interest is payable on any such
      Interest Payment Dates;


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            (6) the right, if any, to extend the interest payment periods and
      the duration of such extension;

            (7) 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;

            (8) the obligation, if any, of the Company to redeem or purchase
      Securities of the series pursuant to any sinking fund or analogous
      provisions (including payments made in cash in participation of future
      sinking fund obligations) 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;

            (9) the form of the Securities of the series including the form of
      the Certificate of Authentication for such series;

            (10) if other than denominations of one thousand U.S. dollars
      ($1,000) or any integral multiple thereof, the denominations in which the
      Securities of the series shall be issuable;

            (11) any and all other terms with respect to such series (which
      terms shall not be inconsistent with the terms of this Indenture)
      including any terms which may be required by or advisable under United
      States laws or regulations or advisable in connection with the marketing
      of Securities of that series;

            (12) whether the Securities are issuable as a Global Security and,
      in such case, the identity for the Depositary for such series;

            (13) whether the Securities will be convertible into shares of
      common stock or other securities of the Company and, if so, the terms and
      conditions upon which such Securities will be so convertible, including
      the conversion price and the conversion period;

            (14) 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
      6.01; and

            (15) any additional or different Events of Default or restrictive
      covenants provided for with respect to the Securities of the series.

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 any such
Board Resolution or in any indentures supplemental hereto.

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


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terms of the series.

Securities of any particular series may be issued at various times, with
different dates on which the principal or any installment of principal is
payable, with different rates of interest, if any, or different methods by which
rates of interest may be determined, with different dates on which such interest
may be payable and with different redemption dates.

      SECTION 2.02 Form of Securities and Trustee's Certificate.

The Securities of any series and the Trustee's certificate of authentication to
be borne by such Securities shall be substantially of the tenor and purport as
set forth in one or more indentures supplemental hereto or as provided in a
Board Resolution of the Company and as set forth in an Officers' Certificate of
the Company and the and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Indenture, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which Securities of that series
may be listed, or to conform to usage.

      SECTION 2.03 Denominations: Provisions for Payment.

The Securities shall be issuable as registered Securities and in the
denominations of one thousand U.S. dollars ($1,000) or any integral multiple
thereof, subject to Section 2.01(11). The Securities of a particular series
shall bear interest payable on the dates and at the rate specified with respect
to that series. The principal of and the interest on the Securities of any
series, as well as any premium thereon in case of redemption thereof prior to
maturity, shall be payable in the coin or currency of the United States of
America that at the time is legal tender for public and private debt, at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, the City and State of New York. Each Security shall be dated the date
of its authentication. Interest on the Securities shall be computed on the basis
of a 360-day year composed of twelve 30-day months.

The interest installment on any Security that is payable, and is punctually paid
or duly provided for, on any Interest Payment Date for Securities of that series
shall be paid to the Person in whose name said Security (or one or more
Predecessor Securities) is registered at the close of business on the regular
record date for such interest installment. In the event that any Security of a
particular series or portion thereof is called for redemption and the redemption
date is subsequent to a regular record date with respect to any Interest Payment
Date and prior to such Interest Payment Date, interest on such Security will be
paid upon presentation and surrender of such Security as provided in Section
3.03.

Any interest on any Security that is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date for Securities of the same series
(herein called "Defaulted Interest") shall forthwith cease to be payable to the
registered holder on the relevant regular record date by virtue of having been
such holder; and such Defaulted Interest shall be paid by the Company, at its
election, as


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provided in clause (1) or clause (2) below:

            (1) The Company may make payment of any Defaulted Interest on
      Securities to the Persons in whose names such Securities (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 such Security and the date of the proposed payment, and at the
      same time the Company shall deposit with the Trustee an amount of money
      equal to the aggregate amount proposed to be paid in respect of such
      Defaulted Interest or shall make arrangements satisfactory to the Trustee
      for such deposit prior to the date of the proposed payment, such money
      when deposited to be held in trust for the benefit of the Persons entitled
      to such Defaulted Interest as in this clause provided. Thereupon the
      Trustee shall fix a special record date for the payment of such Defaulted
      Interest which shall not be more than 15 nor 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 Securityholder at his or
      her address as it appears in the Security Register (as hereinafter
      defined), 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 mailed as aforesaid, such Defaulted Interest
      shall be paid to the Persons in whose names such Securities (or their
      respective Predecessor Securities) are registered on such special record
      date and shall be no longer payable pursuant to the following clause (2).

            (2) The Company may make payment of any Defaulted Interest on any
      Securities 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.

Unless otherwise set forth in a Board Resolution of the Company or one or more
indentures supplemental hereto establishing the terms of any series of
Securities pursuant to Section 2.01 hereof, the term "regular record date" as
used in this Section with respect to a series of Securities with respect to any
Interest Payment Date for such series shall mean either the fifteenth day of the
month immediately preceding the month in which an Interest Payment Date
established for such series pursuant to Section 2.01 hereof shall occur, if such
Interest Payment Date is the first day of a month, or the last day of the month
immediately preceding the month in which an Interest Payment Date established
for such series pursuant to Section 2.01 hereof shall occur, if such Interest
Payment Date is the fifteenth day of a month, whether or not such date is a
Business Day.

Subject to the foregoing provisions of this Section, each Security of a series
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Security of such series shall carry


                                     II-18
<PAGE>


the rights to interest accrued and unpaid, and to accrue, that were carried by
such other Security.

      SECTION 2.04 Execution and Authentications.

The Securities shall be signed on behalf of the Company by its President, or one
of its Vice Presidents, or its Treasurer, or one of its Assistant Treasurers, or
its Secretary, or one of its Assistant Secretaries, under its corporate seal
attested by its Secretary or one of its Assistant Secretaries. Signatures may be
in the form of a manual or facsimile signature. The Company may use the
facsimile signature of any Person who shall have been a President or Vice
President thereof, or of any Person who shall have been a Secretary or Assistant
Secretary thereof, notwithstanding the fact that at the time the Securities
shall be authenticated and delivered or disposed of such Person shall have
ceased to be the President or a Vice President, or the Secretary or an Assistant
Secretary, of the Company. The seal of the Company may be in the form of a
facsimile of such seal and may be impressed, affixed, imprinted or otherwise
reproduced on the Securities. The Securities may contain such notations, legends
or endorsements required by law, stock exchange rule or usage. Each Security
shall be dated the date of its authentication by the Trustee.

A Security shall not be valid until authenticated manually by an authorized
signatory of the Trustee, or by an Authenticating Agent. Such signature shall be
conclusive evidence that the Security so authenticated has been duly
authenticated and delivered hereunder and that the holder is entitled to the
benefits of this Indenture.

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 written order of the
Company for the authentication and delivery of such Securities, signed by its
President or any Vice President and its Secretary or any Assistant Secretary,
and the Trustee in accordance with such written order shall authenticate and
deliver such Securities.

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 7.01) shall be fully protected in
relying upon, an Opinion of Counsel stating that the form and terms thereof have
been established in conformity with the provisions of this Indenture.

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 that is not reasonably acceptable to the Trustee.

      SECTION 2.05 Registration of Transfer and Exchange.

(a) Securities of any series may be exchanged upon presentation thereof at the
office or agency of the Company designated for such purpose in the Borough of
Manhattan, the City and State of New York, for other Securities of such series
of authorized denominations, and for a like aggregate principal amount, upon
payment of a sum sufficient to cover any


                                     II-19
<PAGE>


tax or other governmental charge in relation thereto, all as provided in this
Section. In respect of any Securities so surrendered for exchange, the Company
shall execute, the Trustee shall authenticate and such office or agency shall
deliver in exchange therefor the Security or Securities of the same series that
the Securityholder making the exchange shall be entitled to receive, bearing
numbers not contemporaneously outstanding.

(b) The Company shall keep, or cause to be kept, at its office or agency
designated for such purpose in the Borough of Manhattan, the City and State of
New York, or such other location designated by the Company a register or
registers (herein referred to as the "Security Register") in which, subject to
such reasonable regulations as it may prescribe, the Company shall register the
Securities and the transfers of Securities as in this Article provided and which
at all reasonable times shall be open for inspection by the Trustee. The
registrar for the purpose of registering Securities and transfer of Securities
as herein provided shall be appointed as authorized by Board Resolution (the
"Security Registrar").

Upon surrender for transfer of any Security at the office or agency of the
Company designated for such purpose, the Company shall execute, the Trustee
shall authenticate and such office or agency shall deliver in the name of the
transferee or transferees a new Security or Securities of the same series as the
Security presented for a like aggregate principal amount.

All Securities presented or surrendered for exchange or registration of
transfer, as provided in this Section, shall be accompanied (if so required by
the Company or the Security Registrar) by a written instrument or instruments of
transfer, in form satisfactory to the Company or the Security Registrar, duly
executed by the registered holder or by such holder's duly authorized attorney
in writing.

(c) No service charge shall be made for any exchange or registration of transfer
of Securities, or issue of new Securities in case of partial redemption of any
series, but the Company may require payment of a sum sufficient to cover any tax
or other governmental charge in relation thereto, other than exchanges pursuant
to Section 2.06, the second paragraph of Section 3.03 and Section 9.04 not
involving any transfer.

(d) The Company shall not be required (i) to issue, exchange or register the
transfer of any Securities during a period beginning at the opening of business
15 days before the day of the mailing of a notice of redemption of less than all
the Outstanding Securities of the same series and ending at the close of
business on the day of such mailing, nor (ii) to register the transfer of or
exchange any Securities of any series or portions thereof called for redemption.
The provisions of this Section 2.05 are, with respect to any Global Security,
subject to Section 2.11 hereof.

      SECTION 2.06 Temporary Securities.

Pending the preparation of definitive Securities of any series, the Company may
execute, and the Trustee shall authenticate and deliver, temporary Securities
(printed, lithographed or typewritten) of any authorized denomination. Such
temporary Securities shall be substantially in the form of the definitive
Securities in lieu of which they are issued, but with such omissions, insertions
and variations as may be appropriate


                                     II-20
<PAGE>


for temporary Securities, all as may be determined by the Company. Every
temporary Security of any series shall be executed by the Company and be
authenticated by the Trustee upon the same conditions and in substantially the
same manner, and with like effect, as the definitive Securities of such series.
Without unnecessary delay the Company will execute and will furnish definitive
Securities of such series and thereupon any or all temporary Securities of such
series may be surrendered in exchange therefor (without charge to the holders),
at the office or agency of the Company designated for the purpose in the Borough
of Manhattan, the City and State of New York, and the Trustee shall authenticate
and such office or agency shall deliver in exchange for such temporary
Securities an equal aggregate principal amount of definitive Securities of such
series, unless the Company advises the Trustee to the effect that definitive
Securities need not be executed and furnished until further notice from the
Company. Until so exchanged, the temporary Securities of such series shall be
entitled to the same benefits under this Indenture as definitive Securities of
such series authenticated and delivered hereunder.

      SECTION 2.07 Mutilated, Destroyed, Lost or Stolen Securities.

In case any temporary or definitive Security shall become mutilated or be
destroyed, lost or stolen, the Company (subject to the next succeeding sentence)
shall execute, and upon the Company's request the Trustee (subject as aforesaid)
shall authenticate and deliver, a new Security of the same series, bearing a
number not contemporaneously outstanding, in exchange and substitution for the
mutilated Security, or in lieu of and in substitution for the Security so
destroyed, lost or stolen. In every case the applicant for a substituted
Security shall furnish to the Company and the Trustee such security or indemnity
as may be required by them to save each of them harmless, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Company and
the Trustee evidence to their satisfaction of the destruction, loss or theft of
the applicant's Security and of the ownership thereof. The Trustee may
authenticate any such substituted Security and deliver the same upon the written
request or authorization of any officer of the Company. Upon the issuance of any
substituted Security, 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. In case any Security that has matured or is about to mature
shall become mutilated or be destroyed, lost or stolen, the Company may, instead
of issuing a substitute Security, pay or authorize the payment of the same
(without surrender thereof except in the case of a mutilated Security) if the
applicant for such payment shall furnish to the Company and the Trustee such
security or indemnity as they may require to save them harmless, and, in case of
destruction, loss or theft, evidence to the satisfaction of the Company and the
Trustee of the destruction, loss or theft of such Security and of the ownership
thereof.

Every replacement Security issued pursuant to the provisions of this Section
shall constitute an additional contractual obligation of the Company whether or
not the mutilated, destroyed, lost or stolen Security shall be found at any
time, or be enforceable by anyone, and shall be entitled to all the benefits of
this Indenture equally and proportionately with any and all other Securities of
the same series duly issued hereunder. All Securities shall be held and owned
upon the express condition that the foregoing provisions are exclusive with
respect to the replacement or


                                     II-21
<PAGE>


payment of mutilated, destroyed, lost or stolen Securities, and shall preclude
(to the extent lawful) any and all other rights or remedies, notwithstanding any
law or statute existing or hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other securities without
their surrender.

      SECTION 2.08 Cancellation.

      All Securities surrendered for the purpose of payment, redemption,
exchange or registration of transfer shall, if surrendered to the Company or any
paying agent, be delivered to the Trustee for cancellation, or, if surrendered
to the Trustee, shall be cancelled by it, and no Securities shall be issued in
lieu thereof except as expressly required or permitted by any of the provisions
of this Indenture. On request of the Company at the time of such surrender, the
Trustee shall deliver to the Company canceled Securities held by the Trustee. In
the absence of such request the Trustee may dispose of canceled Securities in
accordance with its standard procedures and deliver a certificate of disposition
to the Company. If the Company shall otherwise acquire any of the Securities,
however, such acquisition shall not operate as a redemption or satisfaction of
the indebtedness represented by such Securities unless and until the same are
delivered to the Trustee for cancellation.

      SECTION 2.09 Benefits of Indenture.

Nothing in this Indenture or in the Securities, express or implied, shall give
or be construed to give to any Person, other than the parties hereto and the
holders of the Securities any legal or equitable right, remedy or claim under or
in respect of this Indenture, or under any covenant, condition or provision
herein contained; all such covenants, conditions and provisions being for the
sole benefit of the parties hereto and of the holders of the Securities.

      SECTION 2.10 Authenticating Agent.

So long as any of the Securities of any series remain Outstanding there may be
an Authenticating Agent for any or all such series of Securities which the
Trustee shall have the right to appoint. Said Authenticating Agent shall be
authorized to act on behalf of the Trustee to authenticate Securities of such
series issued upon exchange, transfer or partial redemption thereof, 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. All references in this Indenture to the authentication of
Securities by the Trustee shall be deemed to include authentication by an
Authenticating Agent for such series. Each Authenticating Agent shall be
acceptable to the Company and shall be a corporation that has a combined capital
and surplus, as most recently reported or determined by it, sufficient under the
laws of any jurisdiction under which it is organized or in which it is doing
business to conduct a trust business, and that is otherwise authorized under
such laws to conduct such business and is subject to supervision or examination
by Federal or State authorities. If at any time any Authenticating Agent shall
cease to be eligible in accordance with these provisions, it shall resign
immediately.

      Any Authenticating Agent may at any time resign by giving written notice
of resignation to the Trustee and to the Company. The Trustee may


                                     II-22
<PAGE>


at any time (and upon request by the Company shall) terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint an
eligible successor Authenticating Agent acceptable to the Company. Any successor
Authenticating Agent, upon acceptance of its appointment hereunder, shall become
vested with all the rights, powers and duties of its predecessor hereunder as if
originally named as an Authenticating Agent pursuant hereto.

      SECTION 2.11 Global Securities.

(a) If the Company shall establish pursuant to Section 2.01 that the Securities
of a particular series are to be issued as a Global Security, then the Company
shall execute and the Trustee shall, in accordance with Section 2.04,
authenticate and deliver, a Global Security that (i) shall represent, and shall
be denominated in an amount equal to the aggregate principal amount of, all of
the Outstanding Securities of such series, (ii) shall be registered in the name
of the Depositary or its nominee, (iii) shall be delivered by the Trustee to the
Depositary or pursuant to the Depositary's instruction and (iv) shall bear a
legend substantially to the following effect: "Except as otherwise provided in
Section 2.11 of the Indenture, this Security may be transferred, in whole but
not in part, only to another nominee of the Depositary or to a successor
Depositary or to a nominee of such successor Depositary."

(b) Notwithstanding the provisions of Section 2.05, the Global Security of a
series may be transferred, in whole but not in part and in the manner provided
in Section 2.05, only to another nominee of the Depositary for such series, or
to a successor Depositary for such series selected or approved by the Company or
to a nominee of such successor Depositary.

(c) If at any time the Depositary for a series of the Securities notifies the
Company that it is unwilling or unable to continue as Depositary for such series
or if at any time the Depositary for such series shall no longer be registered
or in good standing under the Exchange Act, or other applicable statute or
regulation, and a successor Depositary for such series is not appointed by the
Company within 90 days after the Company receives such notice or becomes aware
of such condition, as the case may be, this Section 2.11 shall no longer be
applicable to the Securities of such series and the Company will execute, and
subject to Section 2.05, the Trustee will authenticate and deliver the
Securities of such series in definitive registered form without coupons, in
authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Security of such series in exchange for such
Global Security. In addition, the Company may at any time determine that the
Securities of any series shall no longer be represented by a Global Security and
that the provisions of this Section 2.11 shall no longer apply to the Securities
of such series. In such event the Company will execute and subject to Section
2.05, the Trustee, upon receipt of an Officers' Certificate evidencing such
determination by the Company, will authenticate and deliver the Securities of
such series in definitive registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Security of such series in exchange for such Global
Security. Upon the exchange of the Global Security for such Securities in
definitive registered form without coupons,


                                     II-23
<PAGE>


in authorized denominations, the Global Security shall be canceled by the
Trustee. Such Securities in definitive registered form issued in exchange for
the Global Security pursuant to this Section 2.11(c) shall be registered in such
names and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Securities to the
Depositary for delivery to the Persons in whose names such Securities are so
registered.

                                   ARTICLE III

              REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS

      SECTION 3.01 Redemption.

The Company may redeem the Securities of any series issued hereunder on and
after the dates and in accordance with the terms established for such series
pursuant to Section 2.01 hereof.

      SECTION 3.02 Notice of Redemption.

(a) In case the Company shall desire to exercise such right to redeem all or, as
the case may be, a portion of the Securities of any series in accordance with
the right reserved so to do, the Company shall, or shall cause the Trustee to,
give notice of such redemption to holders of the Securities of such series to be
redeemed by mailing, first class postage prepaid, a notice of such redemption
not less than 30 days and not more than 90 days before the date fixed for
redemption of that series to such holders at their last addresses as they shall
appear upon the Security Register unless a shorter period is specified in the
Securities to be redeemed. Any notice that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
the registered holder receives the notice. In any case, failure duly to give
such notice to the holder of any Security of any series designated for
redemption in whole or in part, or any defect in the notice, shall not affect
the validity of the proceedings for the redemption of any other Securities of
such series or any other series. In the case of any redemption of Securities
prior to the expiration of any restriction on such redemption provided in the
terms of such Securities or elsewhere in this Indenture, the Company shall
furnish the Trustee with an Officers' Certificate evidencing compliance with any
such restriction.

Each such notice of redemption shall specify the date fixed for redemption and
the redemption price at which Securities of that series are to be redeemed, and
shall state that payment of the redemption price of such Securities to be
redeemed will be made at the office or agency of the Company in the Borough of
Manhattan, the City and State of New York, upon presentation and surrender of
such Securities, that interest accrued to the date fixed for redemption will be
paid as specified in said notice, that from and after said date interest will
cease to accrue and that the redemption is for a sinking fund, if such is the
case. If less than all the Securities of a series are to be redeemed, the notice
to the holders of Securities of that series to be redeemed in whole or in part
shall specify the particular Securities to be so redeemed. In case any Security
is to be redeemed in part only, the notice that relates to such Security shall
state the portion of the principal amount thereof to be redeemed, and shall
state that on and after the redemption date, upon surrender of such Security, a


                                     II-24
<PAGE>


new Security or Securities of such series in principal amount equal to the
unredeemed portion thereof will be issued.

(b) If less than all the Securities of a series are to be redeemed, the Company
shall give the Trustee at least 45 days' notice in advance of the date fixed for
redemption as to the aggregate principal amount of Securities of the series to
be redeemed, and thereupon the Trustee shall select, by lot or in such other
manner as it shall deem appropriate and fair in its discretion and that may
provide for the selection of a portion or portions (equal to one thousand U.S.
dollars ($1,000) or any integral multiple thereof) of the principal amount of
such Securities of a denomination larger than $1,000, the Securities to be
redeemed and shall thereafter promptly notify the Company in writing of the
numbers of the Securities to be redeemed, in whole or in part.

The Company may, if and whenever it shall so elect, by delivery of instructions
signed on its behalf by its President or any Vice President, instruct the
Trustee or any paying agent to call all or any part of the Securities of a
particular series for redemption and to give notice of redemption in the manner
set forth in this Section, such notice to be in the name of the Company or its
own name as the Trustee or such paying agent may deem advisable. In any case in
which notice of redemption is to be given by the Trustee or any such paying
agent, the Company shall deliver or cause to be delivered to, or permit to
remain with, the Trustee or such paying agent, as the case may be, such Security
Register, transfer books or other records, or suitable copies or extracts
therefrom, sufficient to enable the Trustee or such paying agent to give any
notice by mail that may be required under the provisions of this Section.

      SECTION 3.03 Payment Upon Redemption.

(a) If the giving of notice of redemption shall have been completed as above
provided, the Securities or portions of Securities of the series to be redeemed
specified in such notice shall become due and payable on the date and at the
place stated in such notice at the applicable redemption price, together with
interest accrued to the date fixed for redemption and interest on such
Securities or portions of Securities shall cease to accrue on and after the date
fixed for redemption, unless the Company shall default in the payment of such
redemption price and accrued interest with respect to any such Security or
portion thereof. On presentation and surrender of such Securities on or after
the date fixed for redemption at the place of payment specified in the notice,
said Securities shall be paid and redeemed at the applicable redemption price
for such series, together with interest accrued thereon to the date fixed for
redemption (but if the date fixed for redemption is an interest payment date,
the interest installment payable on such date shall be payable to the registered
holder at the close of business on the applicable record date pursuant to
Section 2.03).

(b) Upon presentation of any Security of such series that is to be redeemed in
part only, the Company shall execute and the Trustee shall authenticate and the
office or agency where the Security is presented shall deliver to the holder
thereof, at the expense of the Company, a new Security of the same series of
authorized denominations in principal amount equal to the unredeemed portion of
the Security so presented.


                                     II-25
<PAGE>


      SECTION 3.04 Sinking Fund.

The provisions of Sections 3.04, 3.05 and 3.06 shall be applicable to any
sinking fund for the retirement of Securities of a series, except as otherwise
specified as contemplated by Section 2.01 for Securities of such series.

The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment". If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 3.05. 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 3.05 Satisfaction of Sinking Fund Payments with Securities.

The Company (i) may deliver Outstanding Securities of a series (other than any
Securities previously called for redemption) and (ii) may apply as a credit
Securities of a series that have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to 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 3.06 Redemption of Securities for Sinking Fund.

Not less than 45 days prior to each sinking fund payment date for any series of
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of the series, the portion thereof, if any, that is to be
satisfied by delivering and crediting Securities of that series pursuant to
Section 3.05 and the basis for such credit and will, together with such
Officers' Certificate, 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 3.02 and cause notice of the redemption
thereof to be given in the name of and at the expense of the Company in the
manner provided in Section 3.02. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Section 3.03.

                                   ARTICLE IV

      SECTION 4.01 Payment of Principal, Premium and Interest.


                                     II-26
<PAGE>


The Company will duly and punctually pay or cause to be paid the principal of
(and premium, if any) and interest on the Securities of that series at the time
and place and in the manner provided herein and established with respect to such
Securities.

      SECTION 4.02 Maintenance of Office or Agency.

So long as any series of the Securities remain Outstanding, the Company agrees
to maintain an office or agency in the Borough of Manhattan, the City and State
of New York, with respect to each such series and at such other location or
locations as may be designated as provided in this Section 4.02, where (i)
Securities of that series may be presented for payment, (ii) Securities of that
series may be presented as hereinabove authorized for registration of transfer
and exchange, and (iii) notices and demands to or upon the Company in respect of
the Securities of that series and this Indenture may be given or served, such
designation to continue with respect to such office or agency until the Company
shall, by written notice signed by its President or a Vice President and
delivered to the trustee, designate some other office or agency for such
purposes or any of them. 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, 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, notices and demands.

      SECTION 4.03 Paying Agents.

(a) If the Company shall appoint one or more paying agents for all or any series
of the Securities, other than the Trustee, the Company will cause each such
paying agent to execute and deliver to the Trustee an instrument in which such
agent shall agree with the Trustee, subject to the provisions of this Section:

            (1) that it will hold all sums held by it as such agent for the
      payment of the principal of (and premium, if any) or interest on the
      Securities of that series (whether such sums have been paid to it by the
      Company or by any other obligor of such Securities) in trust for the
      benefit of the Persons entitled thereto;

            (2) that it will give the Trustee notice of any failure by the
      Company (or by any other obligor of such Securities) to make any payment
      of the principal of (and premium, if any) or interest on the Securities of
      that series when the same shall be due and payable;

            (3) that it will, at any time during the continuance of any failure
      referred to in the preceding paragraph (a)(2) above, upon the written
      request of the Trustee, forthwith pay to the Trustee all sums so held in
      trust by such paying agent; and

            (4) that it will perform all other duties of paying agent as set
      forth in this Indenture.

(b) If the Company shall act as its own paying agent with respect to any series
of the Securities, it will on or before each due date of the principal of (and
premium, if any) or interest on Securities of that series, set aside, segregate
and hold in trust for the benefit of the


                                     II-27
<PAGE>


Persons entitled thereto a sum sufficient to pay such principal (and premium, if
any) or interest so becoming due on Securities of that series until such sums
shall be paid to such Persons or otherwise disposed of as herein provided and
will promptly notify the Trustee of such action, or any failure (by it or any
other obligor on such Securities) to take such action. Whenever the Company
shall have one or more paying agents for any series of Securities, it will,
prior to each due date of the principal of (and premium, if any) or interest on
any Securities of that series, deposit with the paying agent a sum sufficient to
pay the principal (an premium, if any) or interest so becoming due, such sum to
be held in trust for the benefit of the Persons entitled to such principal,
premium or interest, and (unless such paying agent is the Trustee) the Company
will promptly notify the Trustee of this action or failure so to act.

(c) Notwithstanding anything in this Section to the contrary, (i) the agreement
to hold sums in trust as provided in this Section is subject to the provisions
of Section 11.05, and (ii) 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 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 terms and conditions 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.

      SECTION 4.04 Appointment to Fill Vacancy in Office of Trustee.

The Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 7.10, a Trustee, so
that there shall at all times be a Trustee hereunder.

      SECTION 4.05 Compliance with Consolidation Provisions.

The Company will not, while any of the Securities remain Outstanding,
consolidate with, or merge into, or merge into itself, or sell or convey all or
substantially all of its property to any other company unless the provisions of
Article Ten hereof are complied with.

                                    ARTICLE V

                       SECURITYHOLDERS' LISTS AND REPORTS
                         BY THE COMPANY AND THE TRUSTEE

      SECTION 5.01 Company to Furnish Trustee Names and Addresses of
Securityholders.

The Company will furnish or cause to be furnished to the Trustee (a) on a
monthly basis on each regular record date (as defined in Section 2.03) a list,
in such form as the Trustee may reasonably require, of the names and addresses
of the holders of each series of Securities as of such regular record date,
provided that the Company shall not be obligated to furnish or cause to furnish
such list at any time that the list shall not differ in any respect from the
most recent list furnished to the Trustee by the Company 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


                                     II-28
<PAGE>


days prior to the time such list is furnished; provided, however, that, in
either case, no such list need be furnished for any series for which the Trustee
shall be the Security Registrar.

      SECTION 5.02 Preservation Of Information; Communications With
Securityholders.

(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of
Securities contained in the most recent list furnished to it as provided in
Section 5.01 and as to the names and addresses of holders of Securities received
by the Trustee in its capacity as Security Registrar (if acting in such
capacity).

(b) The Trustee may destroy any list furnished to it as provided in Section 5.01
upon receipt of a new list so furnished.

(c) Securityholders may communicate as provided in Section 312(b) of the Trust
Indenture Act with other Securityholders with respect to their rights under this
Indenture or under the Securities.

      SECTION 5.03 Reports by the Company.

(a) The Company covenants and agrees to 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) that 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 such sections, then to file with the Trustee and
the Commission, in accordance with the rules and regulations prescribed from
time to time by the Commission, such of the supplementary and periodic
information, documents and reports that 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) The Company covenants and agrees to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from to time
by the Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants provided
for in this Indenture as may be required from time to time by such rules and
regulations.

(c) The Company covenants and agrees to transmit by mail, first class postage
prepaid, or reputable over-night delivery service that provides for evidence of
receipt, to the Securityholders, as their names and addresses appear upon 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 subsections (a) and (b) of this Section as may be
required by rules and regulations prescribed from time to time by the
Commission.


                                     II-29
<PAGE>


      SECTION 5.04 Reports by the Trustee.

(a) On or before July 15 in each year in which any of the Securities are
Outstanding, the Trustee shall transmit by mail, first class postage prepaid, to
the Securityholders, as their names and addresses appear upon the Security
Register, a brief report dated as of the preceding May 15, if and to the extent
required under Section 313(a) of the Trust Indenture Act.

(b) The Trustee shall comply with Section 313(b) and 313(c) of the Trust
Indenture Act.

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

                                   ARTICLE VI

                   REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
                               ON EVENT OF DEFAULT

      SECTION 6.01 Events of Default.

(a) Whenever used herein with respect to Securities of a particular series,
"Event of Default" means any one or more of the following events that has
occurred and is continuing:

            (1) the Company defaults in the payment of any installment of
      interest upon any of the Securities of that series, as and when the same
      shall become due and payable, and continuance of such default for a period
      of 90 days; provided, however, that a valid extension of an interest
      payment period by the Company in accordance with the terms of any
      indenture supplemental hereto, shall not constitute a default in the
      payment of interest for this purpose;

            (2) the Company defaults in the payment of the principal of (or
      premium, if any, on) any of the Securities of that series as and when the
      same shall become due and payable whether at maturity, upon redemption, by
      declaration or otherwise, or in any payment required by any sinking or
      analogous fund established with respect to that series; provided, however,
      that a valid extension of the maturity of such Securities in accordance
      with the terms of any indenture supplemental hereto shall not constitute a
      default in the payment of principal or premium, if any;

            (3) the Company fails to observe or perform any other of its
      covenants or agreements with respect to that series contained in this
      Indenture or otherwise established with respect to that series of
      Securities pursuant to Section 2.01 hereof (other than a covenant or
      agreement that has been expressly included in this Indenture solely for
      the benefit of one or more series of Securities other than such series)
      for a period of 90 days after the date on which written notice of such
      failure, requiring the same to be remedied and stating that such notice is
      a "Notice of Default" hereunder, shall have been given to the Company by
      the Trustee, by registered or certified mail, or to the Company and the
      Trustee by the holders of at least 25% in principal amount of the
      Securities of that series at the time


                                     II-30
<PAGE>


Outstanding;

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

            (5) a court of competent jurisdiction enters an order under any
      Bankruptcy Law that (i) is for relief against the Company in an
      involuntary case, (ii) appoints a Custodian of the Company for all or
      substantially all of their respective property, or (iii) orders the
      liquidation of the Company, and the order or decree remains unstayed and
      in effect for 90 days.

(b) In each and every such case, unless the principal of all the Securities of
that series shall have already become due and payable, either the Trustee or the
holders of not less than 25% in aggregate principal amount of the Securities of
that series then Outstanding hereunder, by notice in writing to the Company (and
to the Trustee if given by such Securityholders), may declare the principal of
all the Securities of that series to be due and payable immediately, and upon
any such declaration the same shall become and shall be immediately due and
payable, notwithstanding anything contained in this Indenture or in the
Securities of that series or established with respect to that series pursuant to
Section 2.01 to the contrary.

(c) At any time after the principal of the Securities of that series shall have
been so declared due and payable, and before any judgment or decree for the
payment of the moneys due shall have been obtained or entered as hereinafter
provided, the holders of a majority in aggregate principal amount of the
Securities of that series then Outstanding hereunder, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if: (i) the Company has paid or deposited with the Trustee a sum
sufficient to pay all matured installments of interest upon all the Securities
of that series and the principal of (and premium, if any, on) any and all
Securities of that series that shall have become due otherwise than by
acceleration (with interest upon such principal and premium, if any, and, to the
extent that such payment is enforceable under applicable law, upon overdue
installments of interest, at the rate per annum expressed in the Securities of
that series to the date of such payment or deposit) and the amount payable to
the Trustee under Section 7.06, and (ii) any and all Events of Default under the
Indenture with respect to such series, other than the nonpayment of principal on
Securities of that series that shall not have become due by their terms, shall
have been remedied or waived as provided in Section 6.06.

      No such rescission and annulment shall extend to or shall affect any
subsequent default or impair any right consequent thereon.

(d) In case the Trustee shall have proceeded to enforce any right with respect
to Securities of that series under this Indenture and such proceedings shall
have been discontinued or abandoned because of such rescission or annulment or
for any other reason or shall have been determined adversely to the Trustee,
then and in every such case the


                                     II-31
<PAGE>


Company, and the Trustee shall be restored respectively to their former
positions and rights hereunder, and all rights, remedies and powers of the
Company and the Trustee shall continue as though no such proceedings had been
taken.

      SECTION 6.02 Collection of Indebtedness and Suits for Enforcement by
Trustee.

(a) The Company covenants that (1) in case it shall default in the payment of
any installment of interest on any of the Securities of a series, or any payment
required by any sinking or analogous fund established with respect to that
series as and when the same shall have become due and payable, and such default
shall have continued for a period of 90 Business Days, or (2) in case it shall
default in the payment of the principal of (or premium, if any, on) any of the
Securities of a series when the same shall have become due and payable, whether
upon maturity of the Securities of a series or upon redemption or upon
declaration or otherwise, then, upon demand of the Trustee, the Company will pay
to the Trustee, for the benefit of the holders of the Securities of that series,
the whole amount that then shall have been become due and payable on all such
Securities for principal (and premium, if any) or interest, or both, as the case
may be, with interest upon the overdue principal (and premium, if any) and (to
the extent that payment of such interest is enforceable under applicable law)
upon overdue installments of interest at the rate per annum expressed in the
Securities of that series; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, and the
amount payable to the Trustee under Section 7.06.

(b) If the Company shall fail to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, shall be
entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or other obligor upon the
Securities of that series and collect the moneys adjudged or decreed to be
payable in the manner provided by law out of the property of the Company or
other obligor upon the Securities of that series, wherever situated.

(c) In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, readjustment, arrangement, composition or judicial proceedings
affected the Company, or its creditors or property, the Trustee shall have power
to intervene in such proceedings and take any action therein that may be
permitted by the court and shall (except as may be otherwise provided by law) be
entitled to file such proofs of claim and other papers and documents as may be
necessary or advisable in order to have the claims of the Trustee and of the
holders of Securities of such series allowed for the entire amount due and
payable by the Company under the Indenture at the date of institution of such
proceedings and for any additional amount that may become due and payable by the
Company after such date, and to collect and receive any moneys or other property
payable or deliverable on any such claim, and to distribute the same after the
deduction of the amount payable to the Trustee under Section 7.06; and any
receiver, assignee or trustee in bankruptcy or reorganization is hereby
authorized by each of the holders of Securities of such series to make such
payments to the Trustee, and, in the event that the Trustee shall consent to the
making of such payments directly to such Securityholders, to pay to


                                     II-32
<PAGE>


the Trustee any amount due it under Section 7.06.

(d) All rights of action and of asserting claims under this Indenture, or under
any of the terms established with respect to Securities of that series, may be
enforced by the Trustee without the possession of any of such Securities, or the
production thereof at any trial or other proceeding relative thereto, and any
such suit or 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 payment to the Trustee of any amounts due under Section 7.06, be
for the ratable benefit of the holders of the Securities of such series.

In case of an Event of Default hereunder, the Trustee may in its discretion
proceed to protect and enforce the rights vested in it by this Indenture by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any of such rights, either at law or in equity or in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in the Indenture or in aid of the exercise of any power
granted in this Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.

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

      SECTION 6.03 Application of Moneys Collected.

Any moneys collected by the Trustee pursuant to this Article with respect to a
particular series of Securities shall be applied in the following order, at the
date or dates fixed by the Trustee and, in case of the distribution of such
moneys on account of principal (or premium, if any) or interest, upon
presentation of the Securities of that series, and notation thereon the payment,
if only partially paid, and upon surrender thereof if fully paid:

            FIRST: To the payment of costs and expenses of collection and of all
      amounts payable to the Trustee under Section 7.06; and

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

      SECTION 6.04 Limitation on Suits.

No holder of any Security of any series shall have any right by virtue or by
availing of any provision of this Indenture to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Indenture
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless (i) such holder previously shall have given to the Trustee
written notice of an Event of Default and of the


                                     II-33
<PAGE>


continuance thereof with respect to the Securities of such series specifying
such Event of Default, as hereinbefore provided; (ii) the holders of not less
than 25% in aggregate principal amount of the Securities of such series then
Outstanding shall have made written request upon the Trustee to institute such
action, suit or proceeding in its own name as trustee hereunder; (iii) such
holder or holders shall have offered to the Trustee such reasonable indemnity as
it may require against the costs, expenses and liabilities to be incurred
therein or thereby; and (iv) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity, shall have failed to institute any such
action, suit or proceeding and (v) during such 60 day period, the holders of a
majority in principal amount of the Securities of that series do not give the
Trustee a direction inconsistent with the request.

Notwithstanding anything contained herein to the contrary, any other provisions
of this Indenture, the right of any holder of any Security to receive payment of
the principal of (and premium, if any) and interest on such Security, as therein
provided, on or after the respective due dates expressed in such Security (or in
the case of redemption, on the redemption date), or to institute suit for the
enforcement of any such payment on or after such respective dates or redemption
date, shall not be impaired or affected without the consent of such holder and
by accepting a Security hereunder it is expressly understood, intended and
covenanted by the taker and holder of every Security of such series with every
other such taker and holder and the Trustee, that no one or more holders of
Securities of such series shall have any right in any manner whatsoever by
virtue or by availing of any provision of this Indenture to affect, disturb or
prejudice the rights of the holders of any other of such Securities, or to
obtain or seek to obtain priority over or preference to any other such holder,
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal, ratable and common benefit of all holders of
Securities of such series. For the protection and enforcement of the provisions
of this Section, each and every Securityholder and the Trustee shall be entitled
to such relief as can be given either at law or in equity.

      SECTION 6.05 Rights and Remedies Cumulative; Delay or Omission Not Waiver.

(a) Except as otherwise provided in Section 2.07, all powers and remedies given
by this Article to the Trustee or to the Securityholders shall, to the extent
permitted by law, be deemed cumulative and not exclusive of any other powers and
remedies available to the Trustee or the holders of the Securities, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture or otherwise established
with respect to such Securities.

(b) No delay or omission of the Trustee or of any holder of any of the
Securities to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power, or
shall be construed to be a waiver of any such default or on acquiescence
therein; and, subject to the provisions of Section 6.04, every power and remedy
given by this Article or by law to the Trustee or the Securityholders may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Securityholders.


                                     II-34
<PAGE>


      SECTION 6.06 Control by Securityholders.

The holders of a majority in aggregate principal amount of the Securities of any
series at the time Outstanding, determined in accordance with Section 8.04,
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 such series; provided, however,
that such direction shall not be in conflict with any rule of law or with this
Indenture or be unduly prejudicial to the rights of holders of Securities of any
other series at the time Outstanding determined in accordance with Section 8.04.
Subject to the provisions of Section 7.01, the Trustee shall have the right to
decline to follow any such direction if the Trustee in good faith shall, by a
Responsible Officer or Officers of the Trustee, determine that the proceeding so
directed would involve the Trustee in personal liability. The holders of a
majority in aggregate principal amount of the Securities of any series at the
time Outstanding affected thereby, determined in accordance with Section 8.04,
may on behalf of the holders of all of the Securities of such series waive any
past default in the performance of any of the covenants contained herein or
established pursuant to Section 2.01 with respect to such series and its
consequences, except a default in the payment of the principal of, or premium,
if any, or interest on, any of the Securities of that series as and when the
same shall become due by the terms of such Securities otherwise than by
acceleration (unless such default has been cured and a sum sufficient to pay all
matured installments of interest and principal and any premium has been
deposited with the Trustee (in accordance with Section 6.01(c)). Upon any such
waiver, the default covered thereby shall be deemed to be cured for all purposes
of this Indenture and the Company, the Trustee and the holders of the Securities
of such series shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other default
or impair any right consequent thereon.

      SECTION 6.07 Undertaking to Pay Costs.

All parties to this Indenture agree, and each holder of any Securities by such
holder's acceptance thereof shall be deemed to have agreed, that any court may
in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any action
taken or omitted by it as Trustee, the filing by any party litigant in such suit
of an undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Securityholder, or group of
Securityholders, holding more than 10% in aggregate principal amount of the
Outstanding Securities of any series, or to any suit instituted by any
Securityholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Security of such series, on or after the
respective due dates expressed in such Security or established pursuant to this
Indenture.

                                   ARTICLE VII

                             CONCERNING THE TRUSTEE

     SECTION 7.01 Certain Duties and Responsibilities of Trustee.


                                     II-35
<PAGE>


(a) The Trustee, prior to the occurrence of an Event of Default with respect to
the Securities of a series and after the curing of all Events of Default with
respect to the Securities of that series that may have occurred, shall undertake
to perform with respect to the Securities of such series such duties and only
such duties as are specifically set forth in this Indenture, and no implied
covenants shall be read into this Indenture against the Trustee. In case an
Event of Default with respect to the Securities of a series has occurred (that
has not been cured or waived), the Trustee shall exercise with respect to
Securities of that series such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.

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

            (1) prior to the occurrence of an Event of Default with respect to
      the Securities of a series and after the curing or waiving of all such
      Events of Default with respect to that series that may have occurred:

                  (i) the duties and obligations of the Trustee shall with
            respect to the Securities of such series be determined solely by the
            express provisions of this Indenture, and the Trustee shall not be
            liable with respect to the Securities of such series except for the
            performance of such duties and obligations as are specifically set
            forth in this Indenture, and no implied covenants or obligations
            shall be read into this Indenture against the Trustee; and

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

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

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


                                     II-36
<PAGE>


      the Securities of that series; and

            (4) None of the provisions contained in this Indenture shall require
      the Trustee to expend or risk its own funds or otherwise incur personal
      financial liability in the performance of any of its duties or in the
      exercise of any of its rights or powers, if there is reasonable ground for
      believing that the repayment of such funds or liability is not reasonably
      assured to it under the terms of this Indenture or adequate indemnity
      against such risk is not reasonably assured to it.

      SECTION 7.02 Certain Rights of Trustee.

      Except as otherwise provided in Section 7.01:

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

(b) Any request, direction, order or demand of the Company mentioned herein
shall be sufficiently evidenced by a Board Resolution or an instrument signed in
the name of the Company, by the President or any Vice President and by the
Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer
thereof (unless other evidence in respect thereof is specifically prescribed
herein);

(c) 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 or suffered or omitted hereunder in
good faith and in reliance thereon;

(d) The Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Indenture at the request, order or direction of any
of the Securityholders, pursuant to the provisions of this Indenture, unless
such Securityholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities that may be incurred
therein or thereby; nothing contained herein shall, however, relieve the Trustee
of the obligation, upon the occurrence of an Event of Default with respect to a
series of the Securities (that has not been cured or waived) to exercise with
respect to Securities of that series such of the rights and powers vested in it
by this Indenture, and to use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs;

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

(f) The Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond, security, or other
papers or documents, unless requested in writing so to do by the holders of not
less than a majority in principal amount of


                                     II-37
<PAGE>


the Outstanding Securities of the particular series affected thereby (determined
as provided in Section 8.04); provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it by
the terms of this Indenture, the Trustee may require reasonable indemnity
against such costs, expenses or liabilities as a condition to so proceeding. The
reasonable expense of every such examination shall be paid by the Company or, if
paid by the Trustee, shall be repaid by the Company upon demand; and

(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.

      SECTION 7.03 Trustee Not Responsible for Recitals or Issuance or
Securities.

(a) The recitals contained herein and in the Securities shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for the
correctness of the same.

(b) The Trustee makes no representations as to the validity or sufficiency of
this Indenture or of the Securities.

(c) The Trustee shall not be accountable for the use or application by the
Company of any of the Securities or of the proceeds of such Securities, or for
the use or application of any moneys paid over by the Trustee in accordance with
any provision of this Indenture or established pursuant to Section 2.01, or for
the use or application of any moneys received by any paying agent other than the
Trustee.

      SECTION 7.04 May Hold Securities.

The Trustee or any paying agent or Security Registrar, in its individual or any
other capacity, may become the owner or pledgee of Securities with the same
rights it would have if it were not Trustee, paying agent or Security Registrar.

      SECTION 7.05 Moneys Held in Trust.

Subject to the provisions of Section 11.05, all moneys received by the Trustee
shall, until used or applied as herein provided, be held in trust for the
purposes for which they were received, but 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 moneys received by it hereunder except such as it
may agree with the Company to pay thereon.

      SECTION 7.06 Compensation and Reimbursement.

(a) The Company covenants and agrees to pay to the Trustee, and the Trustee
shall be entitled to, such reasonable compensation (which shall not be limited
by any provision of law in regard to the compensation of a trustee of an express
trust), as the Company, and the Trustee may from time to time agree in writing,
for all services rendered by it in the execution


                                     II-38
<PAGE>


of the trusts hereby created and in the exercise and performance of any of the
powers and duties hereunder of the Trustee, and, except as otherwise expressly
provided herein, the Company will pay or reimburse the Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any of the provisions of this Indenture (including
the reasonable compensation and the expenses and disbursements of its counsel
and of all Persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith. The
Company also covenants to indemnify the Trustee (and its officers, agents,
directors and employees) for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on the part of the
Trustee and arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim of liability in the premises.

(b) The obligations of the Company under this Section to compensate and
indemnify 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.

      SECTION 7.07 Reliance on Officers' Certificate.

Except as otherwise provided in Section 7.01, whenever in the administration of
the provisions of this Indenture the Trustee shall deem it necessary or
desirable that a matter be proved or established prior to taking or suffering or
omitting to take any action hereunder, such matter (unless other evidence in
respect thereof be herein specifically prescribed) may, in the absence of
negligence or bad faith on the part of the Trustee, be deemed to be conclusively
proved and established by an Officers' Certificate delivered to the Trustee and
such certificate, in the absence of negligence or bad faith on the part of the
Trustee, shall be full warrant to the Trustee for any action taken, suffered or
omitted to be taken by it under the provisions of this Indenture upon the faith
thereof.

      SECTION 7.08 Disqualification; Conflicting Interests.

If the Trustee has or shall acquire any "conflicting interest" within the
meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the
Company shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act.

      SECTION 7.09 Corporate Trustee Required; Eligibility.

There shall at all times be a Trustee with respect to the Securities issued
hereunder which shall at all times be a corporation organized and doing business
under the laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or other Person permitted to
act as trustee by the Commission, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least 50
million U.S. dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial, or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the


                                     II-39
<PAGE>


requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. The Company may not, nor may any Person
directly or indirectly controlling, controlled by, or under common control with
the Company, serve as Trustee. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 7.10.

      SECTION 7.10 Resignation and Removal; Appointment of Successor.

(a) The Trustee or any successor hereafter appointed, may at any time resign
with respect to the Securities of one or more series by giving written notice
thereof to the Company and by transmitting notice of resignation by mail, first
class postage prepaid, to the Securityholders of such series, as their names and
addresses appear upon the Security Register. Upon receiving such notice of
resignation, the Company shall promptly appoint a successor trustee with respect
to Securities of such series by written instrument, in duplicate, executed by
order of the Board of Directors, one copy of which instrument shall be delivered
to the resigning Trustee and one copy to the successor trustee. If no successor
trustee shall have been so appointed and have accepted appointment within 30
days after the mailing 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 Securities of such series, or any Securityholder of that
series who has been a bona fide holder of a Security or Securities for at least
six months may on behalf of himself and all others similarly situated, petition
any such court for the appointment of a successor trustee. Such court may
thereupon after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.

      (b) In case at any time any one of the following shall occur:

            (1) the Trustee shall fail to comply with the provisions of Section
      7.08 after written request therefor by the Company or by any
      Securityholder who has been a bona fide holder of a Security or Securities
      for at least six months; or

            (2) the Trustee shall cease to be eligible in accordance with the
      provisions of Section 7.09 and shall fail to resign after written request
      therefor by the Company or by any such Securityholder; or

            (3) the Trustee shall become incapable of acting, or shall be
      adjudged a bankrupt or insolvent, or commence a voluntary bankruptcy
      proceeding, or a receiver of the Trustee or of its property shall be
      appointed or consented to, 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, the
      Company may remove the Trustee with respect to all Securities and appoint
      a successor trustee by written instrument, in duplicate, executed by order
      of the Board of Directors, one copy of which instrument shall be delivered
      to the Trustee so removed and one copy to the successor trustee, or,
      unless the Trustee's duty to resign is stayed as provided herein, any
      Securityholder who has been a bona fide holder of a Security or Securities
      for at least six months may,


                                     II-40
<PAGE>


      on behalf of that holder and all others similarly situated, petition any
      court of competent jurisdiction for the removal of the Trustee and the
      appointment of a successor trustee. Such court may thereupon after such
      notice, if any, as it may deem proper and prescribe, remove the Trustee
      and appoint a successor trustee.

(c) The holders of a majority in aggregate principal amount of the Securities of
any series at the time Outstanding may at any time remove the Trustee with
respect to such series by so notifying the Trustee and the Company and may
appoint a successor Trustee for such series with the consent of the Company.

(d) Any resignation or removal of the Trustee and appointment of a successor
trustee with respect to the Securities of a series pursuant to any of the
provisions of this Section shall become effective upon acceptance of appointment
by the successor trustee as provided in Section 7.11.

(e) Any successor trustee appointed pursuant to this Section may be appointed
with respect to the Securities of one or more series or all of such series, and
at any time there shall be only one Trustee with respect to the Securities of
any particular series.

      SECTION 7.11 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) shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring Trustee is not
retiring shall continue to be vested in the retiring Trustee, and (3) shall add
to or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees


                                     II-41
<PAGE>


co-trustees of the same trust, 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 that no Trustee shall be responsible
for any act or failure to act on the part of any other Trustee hereunder; 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, such retiring Trustee shall with respect to the Securities of that or
those series to which the appointment of such successor trustee relates have no
further responsibility for the exercise of rights and powers or for the
performance of the duties and obligations vested in the Trustee under this
Indenture, 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, to the extent contemplated by
such supplemental indenture, the 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.

(e) Upon acceptance of appointment by a successor trustee as provided in this
Section, the Company shall transmit notice of the succession of such trustee
hereunder by mail, first class postage prepaid, to the Securityholders, as their
names and addresses appear upon the Security Register. If the Company fails to
transmit such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be
transmitted at the expense of the Company.

      SECTION 7.12 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 the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided that such corporation shall be
qualified under the provisions of Section 7.08 and eligible under the provisions
of Section 7.09, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding. 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.


                                     II-42
<PAGE>


      SECTION 7.13 Preferential Collection of Claims Against the Company.

The Trustee shall comply with Section 311(a) of the Trust Indenture Act,
excluding any creditor relationship described in Section 311(b) of the Trust
Indenture Act. A Trustee who has resigned or been removed shall be subject to
Section 311(a) of the Trust Indenture Act to the extent included therein.

                                  ARTICLE VIII

                         CONCERNING THE SECURITYHOLDERS

      SECTION 8.01 Evidence of Action by Securityholders.

Whenever in this Indenture it is provided that the holders of a majority or
specified percentage in aggregate principal amount of the Securities of a
particular series may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the taking of any other
action), the fact that at the time of taking any such action the holders of such
majority or specified percentage of that series have joined therein may be
evidenced by any instrument or any number of instruments of similar tenor
executed by such holders of Securities of that series in Person or by agent or
proxy appointed in writing.

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

      SECTION 8.02 Proof of Execution by Securityholders.

Subject to the provisions of Section 7.01, proof of the execution of any
instrument by a Securityholder (such proof will not require notarization) or his
agent or proxy and proof of the holding by any Person of any of the Securities
shall be sufficient if made in the following manner:

      (a) The fact and date of the execution by any such Person of any
instrument may be proved in any reasonable manner acceptable to the


                                     II-43
<PAGE>


Trustee.

(b) The ownership of Securities shall be proved by the Security Register of such
Securities or by a certificate of the Security Registrar thereof.

      (c) The Trustee may require such additional proof of any matter referred
to in this Section as it shall deem necessary.

      SECTION 8.03 Who May be Deemed Owners.

Prior to the due presentment for registration of transfer of any Security, the
Company, the Trustee, any paying agent and any Security Registrar may deem and
treat the Person in whose name such Security shall be registered upon the books
of the Company as the absolute owner of such Security (whether or not such
Security shall be overdue and notwithstanding any notice of ownership or writing
thereon made by anyone other than the Security Registrar) for the purpose of
receiving payment of or on account of the principal of, premium, if any, and
(subject to Section 2.03) interest on such Security and for all other purposes;
and neither the Company nor the Trustee nor any paying agent nor any Security
Registrar shall be affected by any notice to the contrary.

      SECTION 8.04 Certain Securities Owned by Company Disregarded.

In determining whether the holders of the requisite aggregate principal amount
of Securities of a particular series have concurred in any direction, consent of
waiver under this Indenture, the Securities of that series that are owned by the
Company or any other obligor on the Securities of that series or by any Person
directly or indirectly controlling or controlled by or under common control with
the Company or any other obligor on the Securities of that series shall be
disregarded and deemed not to be Outstanding for the purpose of any such
determination, except that for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, consent or waiver, only
Securities of such series that the Trustee actually knows are so owned shall be
so disregarded. The Securities so owned that have been pledged in good faith may
be regarded as Outstanding for the purposes of this Section, if the pledgee
shall establish to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not a Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company or any such other obligor. In case of a dispute as to
such right, any decision by the Trustee taken upon the advice of counsel shall
be full protection to the Trustee.

      SECTION 8.05 Actions Binding on Future Securityholders.

At any time prior to (but not after) the evidencing to the Trustee, as provided
in Section 8.01, of the taking of any action by the holders of the majority or
percentage in aggregate principal amount of the Securities of a particular
series specified in this Indenture in connection with such action, any holder of
a Security of that series that is shown by the evidence to be included in the
Securities the holders of which have consented to such action may, by filing
written notice with the Trustee, and upon proof of holding as provided in
Section 8.02, revoke such action so far as concerns such Security. Except as
aforesaid any such action taken by the holder of any Security shall be
conclusive and binding upon


                                     II-44
<PAGE>


such holder and upon all future holders and owners of such Security, and of any
Security issued in exchange therefor, on registration of transfer thereof or in
place thereof, irrespective of whether or not any notation in regard thereto is
made upon such Security. Any action taken by the holders of the majority or
percentage in aggregate principal amount of the Securities of a particular
series specified in this Indenture in connection with such action shall be
conclusively binding upon the Company, the Trustee and the holders of all the
Securities of that series.

                                   ARTICLE IX

                             SUPPLEMENTAL INDENTURES

      SECTION 9.01 Supplemental Indentures Without the Consent of
Securityholders.

In addition to any supplemental indenture otherwise authorized by this
Indenture, the Company and the Trustee may from time to time and at any time
enter into an indenture or indentures supplemental hereto (which shall conform
to the provisions of the Trust Indenture Act as then in effect), without the
consent of the Securityholders, for one or more of the following purposes:

      (a) to cure any ambiguity, defect, or inconsistency herein, in the
Securities of any series;

      (b) to comply with Article Ten;

      (c) to provide for uncertificated Securities in addition to or in place of
certificated Securities;

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

      (e) to add to, delete from, or revise the conditions, limitations, and
restrictions on the authorized amount, terms, or purposes of issue,
authentication, and delivery of Securities, as herein set forth;

      (f) to make any change that does not adversely affect the rights of any
Securityholder in any material respect; or

(g) to provide for the issuance of and establish the form and terms and
conditions of the Securities of any series as provided in Section 2.01, to
establish the form of any certifications required to be furnished pursuant to
the terms of this Indenture or any series of Securities, or to add to the rights
of the holders of any series of Securities.

The Trustee is hereby authorized to join with the Company in the execution of
any such supplemental indenture, and to make any further appropriate agreements
and stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into any such supplemental indenture that affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.


                                     II-45
<PAGE>


Any supplemental indenture authorized by the provisions of this Section may be
executed by the Company and the Trustee without the consent of the holders of
any of the Securities at the time Outstanding, notwithstanding any of the
provisions of Section 9.02.

      SECTION 9.02 Supplemental Indentures With Consent of Securityholders.

With the consent (evidenced as provided in Section 8.01) of the holders of not
less than a majority in aggregate principal amount of the Securities of each
series affected by such supplemental indenture or indentures at the time
Outstanding, the Company, when authorized by Board Resolutions, and the Trustee
may from time to time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act as then in effect) for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
of any supplemental indenture or of modifying in any manner not covered by
Section 9.01 the rights of the holders of the Securities of such series under
this Indenture; provided, however, that no such supplemental indenture shall,
without the consent of the holders of each Security then Outstanding and
affected thereby, (i) extend the fixed maturity of any Securities of any series,
or reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any premium payable upon the redemption
thereof or (ii) reduce the aforesaid percentage of Securities, the holders of
which are required to consent to any such supplemental indenture.

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

      SECTION 9.03 Effect of Supplemental Indentures.

Upon the execution of any supplemental indenture pursuant to the provisions of
this Article or of Section 10.01, this Indenture shall, with respect to such
series, be and be deemed to be modified and amended in accordance therewith and
the respective rights, limitations of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Company and the holders of Securities
of the series affected thereby shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and amendments,
and all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Indenture for any and
all purposes.

      SECTION 9.04 Securities Affected by Supplemental Indentures.

Securities of any series, affected by a supplemental indenture, authenticated
and delivered after the execution of such supplemental indenture pursuant to the
provisions of this Article or of Section 10.01, may bear a notation in form
approved by the Company, provided such form meets the requirements of any
exchange upon which such series may be listed, as to any matter provided for in
such supplemental indenture. If the Company shall so determine, new Securities
of that series so modified


                                     II-46
<PAGE>


as to conform, in the opinion of the Board of Directors of the Company, to any
modification of this Indenture contained in any such supplemental indenture may
be prepared by the Company, authenticated by the Trustee and delivered in
exchange for the Securities of that series then Outstanding.

      SECTION 9.05 Execution of Supplemental Indentures.

Upon the request of the Company, accompanied by its Board Resolutions
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Securityholders required
to consent thereto as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion but shall not be
obligated to enter into such supplemental indenture. The Trustee, subject to the
provisions of Section 7.01, may receive an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant to this Article is
authorized or permitted by, and conforms to, the terms of this Article and that
it is proper for the Trustee under the provisions of this Article to join in the
execution thereof; provided, however, that such Opinion of Counsel need not be
provided in connection with the execution of a supplemental indenture that
establishes the terms of a series of Securities pursuant to Section 2.01 hereof.

Promptly after the execution by the Company and the Trustee of any supplemental
indenture pursuant to the provisions of this Section, the Trustee shall transmit
by mail, first class postage prepaid, a notice, setting forth in general terms
the substance of such supplemental indenture, to the Securityholders of all
series affected thereby as their names and addresses appear upon the Security
Register. Any failure of the Trustee to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture.

                                    ARTICLE X

                              SUCCESSOR CORPORATION

      SECTION 10.01 Company May Consolidate, Etc.

Nothing contained in this Indenture or in any of the Securities shall prevent
any consolidation or merger of the Company with or into any other corporation or
corporations (whether or not affiliated with the Company) or successive
consolidations or mergers in which the Company or its successor or successors
shall be a party or parties, or shall prevent any sale, conveyance, transfer or
other disposition of the property of the Company or its successor or successors
as an entirety, or substantially as an entirety, to any other corporation
(whether or not affiliated with the Company or its successor or successors)
authorized to acquire and operate the same; provided, however, the Company
hereby covenants and agrees that, upon any such consolidation, merger, sale,
conveyance, transfer or other disposition, the due and punctual payment of the
principal of (premium, if any) and interest on all of the Securities of all
series in accordance with the terms of each series, according to their tenor and
the due and punctual performance and observance of all the covenants and
conditions of this Indenture with respect to each series or established with
respect to such series pursuant to Section 2.01 to be kept or performed by the
Company


                                     II-47
<PAGE>


shall be expressly assumed, by supplemental indenture (which shall conform to
the provisions of the Trust Indenture Act, as then in effect) satisfactory in
form to the Trustee executed and delivered to the Trustee by the entity formed
by such consolidation, or into which the Company shall have been merged, or by
the entity which shall have acquired such property.

      SECTION 10.02 Successor Corporation Substituted.

(a) In case of any such consolidation, merger, sale, conveyance, transfer or
other disposition and upon the assumption by the successor corporation, by
supplemental indenture, executed and delivered to the Trustee and satisfactory
in form to the Trustee, of the due and punctual payment of the principal of,
premium, if any, and interest on all of the Securities of all series Outstanding
and the due and punctual performance of all of the covenants and conditions of
this Indenture or established with respect to each series of the Securities
pursuant to Section 2.01 to be performed by the Company with respect to each
series, such successor corporation shall succeed to and be substituted for the
Company with the same effect as if it had been named as the Company herein, and
thereupon the predecessor corporation shall be relieved of all obligations and
covenants under this Indenture and the Securities.

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

(c) Nothing contained in this Indenture or in any of the Securities shall
prevent the Company from merging into itself or acquiring by purchase or
otherwise all or any part of the property of any other Person (whether or not
affiliated with the Company).

      SECTION 10.03 Evidence of Consolidation, Etc. to Trustee.

The Trustee, subject to the provisions of Section 7.01, may receive an Opinion
of Counsel as conclusive evidence that any such consolidation, merger, sale,
conveyance, transfer or other disposition, and any such assumption, comply with
the provisions of this Article.

                                   ARTICLE XI

                           SATISFACTION AND DISCHARGE

      SECTION 11.01 Satisfaction and Discharge of Indenture.

If at any time: (a) the Company shall have delivered to the Trustee for
cancellation all Securities of a series theretofore authenticated (other than
any Securities that shall have ben destroyed, lost or stolen and that shall have
been replaced or paid as provided in Section 2.07) and Securities for whose
payment money or Governmental Obligations have theretofore been deposited in
trust or segregated and held in trust by the Company (and thereupon repaid to
the Company or discharged from such trust, as provided in Section 11.05); or (b)
all such Securities of a particular series not theretofore delivered to the
Trustee for cancellation shall have become due and payable, or are by their
terms to become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the


                                     II-48
<PAGE>


giving of notice of redemption, and the Company shall deposit or cause to be
deposited with the Trustee as trust funds the entire amount in moneys or
Governmental Obligations sufficient or 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 at
maturity or upon redemption all Securities of that series not theretofore
delivered to the Trustee for cancellation, including principal (and premium, if
any) and interest due or to become due to such date of maturity or date fixed
for redemption, as the case may be, and if the Company shall also pay or cause
to be paid all other sums payable hereunder with respect to such series by the
Company then this Indenture shall thereupon cease to be of further effect with
respect to such series except for the provisions of Sections 2.03, 2.05, 2.07,
4.01, 4.02, 4.03 and 7.10, that shall survive until the date of maturity or
redemption date, as the case may be, and Sections 7.06 and 11.05, that shall
survive to such date and thereafter, and the Trustee, on demand of the Company
and at the cost and expense of the Company shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture with respect to
such series.

      SECTION 11.02 Discharge of Obligations.

If at any time all such Securities of a particular series not heretofore
delivered to the Trustee for cancellation or that have not become due and
payable as described in Section 11.01 shall have been paid by the Company by
depositing irrevocably with the Trustee as trust funds moneys or an amount of
Governmental Obligations sufficient to pay at maturity or upon redemption all
such Securities of that series not theretofore delivered to the Trustee for
cancellation, including principal (and premium, if any) and interest due or to
become due to such date of maturity or date fixed for redemption, as the case
may be, and if the Company shall also pay or cause to be paid all other sums
payable hereunder by the Company with respect to such series, then after the
date such moneys or Governmental Obligations, as the case may be, are deposited
with the Trustee the obligations of the Company under this Indenture with
respect to such series shall cease to be of further effect except for the
provisions of Sections 2.03, 2.05, 2.07, 4,01, 4.02, 4,03, 7.06, 7.10 and 11.05
hereof that shall survive until such Securities shall mature and be paid.
Thereafter, Sections 7.06 and 11.05 shall survive.

      SECTION 11.03 Deposited Moneys to be Held in Trust.

All moneys or Governmental Obligations deposited with the Trustee pursuant to
Sections 11.01 or 11.02 shall be held in trust and shall be available for
payment as due, either directly or through any paying agent (including the
Company acting as its own paying agent), to the holders of the particular series
of Securities for the payment or redemption of which such moneys or Governmental
Obligations have been deposited with the Trustee.

      SECTION 11.04 Payment of Moneys Held by Paying Agents.

In connection with the satisfaction and discharge of this Indenture all moneys
or Governmental Obligations then held by any paying agent under the provisions
of this Indenture shall, upon demand of the Company, be paid to the Trustee and
thereupon such paying agent shall be released from all further liability with
respect to such moneys or


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<PAGE>


Governmental Obligations.

      SECTION 11.05 Repayment to Company.

Any moneys or Governmental Obligations deposited with any paying agent or the
Trustee, or then held by the Company, in trust for payment of principal of or
premium or interest on the Securities of a particular series that are not
applied but remain unclaimed by the holders of such Securities for at least two
years after the date upon which the principal of (and premium, if any) or
interest on such Securities shall have respectively become due and payable,
shall be repaid to the Company on May 31 of each year or (if then held by the
Company) shall be discharged from such trust; and thereupon the paying agent and
the Trustee shall be released from all further liability with respect to such
moneys or Governmental Obligations, and the holder of any of the Securities
entitled to receive such payment shall thereafter, as an unsecured general
creditor, look only to the Company for the payment thereof.

                                   ARTICLE XII

                IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
                                  AND DIRECTORS

      SECTION 12.01 No Recourse.

No recourse under or upon any obligation, covenant or agreement of this
Indenture, or of any Security, or for any claim based thereon or otherwise in
respect thereof, shall be had against any incorporator, stockholder, officer or
director, past, present or future as such, of the Company or of any predecessor
or successor corporation, either directly or through the Company or any such
predecessor or successor corporation, 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 this Indenture and the obligations
issued hereunder are solely corporate obligations, and that no such personal
liability whatever shall attach to, or is or shall be incurred by, the
incorporators, stockholders, officers or directors as such, of the Company or of
any predecessor or successor corporation, or any of them, because of the
creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Securities or implied therefrom; and that any and all such personal
liability of every name and nature, either at common law or in equity or by
constitution or statute, of, and any and all such rights and claims against,
every such incorporator, stockholder, officer or director as such, because of
the creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Securities or implied therefrom, are hereby expressly waived and released as
a condition of, and as a consideration for, the execution of this Indenture and
the issuance of such Securities.

                                  ARTICLE XIII

                            MISCELLANEOUS PROVISIONS

      SECTION 13.01 Effect on Successors and Assigns.

      All the covenants, stipulations, promises and agreements in this Indenture
contained by or on behalf of the Company shall bind their respective successors
and assigns, whether so expressed or not.

      SECTION 13.02 Actions by Successor.

Any act or proceeding by any provision of this Indenture authorized or required
to be done or performed by any board, committee or officer of the Company shall
and may be done and performed with like force and effect by the corresponding
board, committee or officer of any corporation that shall at the time be the
lawful sole successor of the Company.

      SECTION 13.03 Surrender of Company Powers.

The Company by instrument in writing executed by authority of 2/3 (two-thirds)
of its Board of Directors and delivered to the Trustee may surrender any of the
powers reserved to the Company, and thereupon such power so surrendered shall
terminate both as to the Company and as to any successor corporation.

      SECTION 13.04 Notices.

Except as otherwise expressly provided herein any notice or demand that by any
provision of this Indenture is required or permitted to be given or served by
the Trustee or by the holders of Securities to or on the Company may be given or
served by being deposited first class postage


                                     II-50
<PAGE>


prepaid in a post-office letterbox addressed (until another address is filed in
writing by the Company with the Trustee), as follows: Pharmos Corporation, 99
Wood Avenue South, Suite 311, Iselin, New Jersey 08830. Any notice, election,
request or demand by the Company or any Securityholder to or upon the Trustee
shall be deemed to have been sufficiently given or made, for all purposes, if
given or made in writing at the Corporate Trust Office of the Trustee.

      SECTION 13.05 Governing Law.

This Indenture and each Security shall be deemed to be a contract made under the
internal laws of the State of New York, and for all purposes shall be construed
in accordance with the laws of said State.

      SECTION 13.06 Treatment of Securities as Debt.

      It is intended that the Securities will be treated as indebtedness and not
as equity for federal income tax purposes. The provisions of this Indenture
shall be interpreted to further this intention.

      SECTION 13.07 Compliance Certificates and Opinions.

(a) Upon any application or demand by the Company to the Trustee to take any
action under any of the provisions of this Indenture, the Company, shall furnish
to the Trustee an Officers' Certificate stating that all conditions precedent
provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent have been complied with, except that in
the case of any such application or demand as to which the furnishing of such
documents is specifically required by any provision of this Indenture relating
to such particular application or demand, no additional certificate or opinion
need be furnished.

(b) Each certificate or opinion provided for in this Indenture and delivered to
the Trustee with respect to compliance with a condition or covenant in this
Indenture shall include (1) a statement that the Person making such certificate
or opinion has read such covenant or condition; (2) a brief statement as to the
nature and scope of the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are based; (3) a statement
that, in the opinion of such Person, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to
whether or not such covenant or condition has been complied with; and (4) a
statement as to whether or not, in the opinion of such Person, such condition or
covenant has been complied with.

      SECTION 13.08 Payments on Business Days.

Except as provided pursuant to Section 2.01 pursuant to a Board Resolution, and
as set forth in an Officers' Certificate, or established in one or more
indentures supplemental to this Indenture, in any case where the date of
maturity of interest or principal of any Security or the date of redemption of
any Security shall not be a Business Day, then payment of interest or principal
(and premium, if any) may be made on the next succeeding Business Day with the
same force and effect as if made on the nominal date of maturity or redemption,
and no interest shall accrue for the period after such nominal date.

      SECTION 13.09 Conflict with Trust Indenture Act.

If and to the extent that any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by Sections 310 to 317, inclusive, of the
Trust Indenture Act, such imposed duties shall control.

      SECTION 13.10 Counterparts.

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

      SECTION 13.11 Separability.

In case any one or more of the provisions contained in this Indenture or in the
Securities of any series shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Indenture or of such Securities,
but this Indenture and such Securities shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein or therein.

      SECTION 13.12 Assignment.

The Company will have the right at all times to assign any of its rights or
obligations under this Indenture to a direct or indirect wholly- owned
Subsidiary of the Company, provided that, in the event of any such assignment,
the Company, will remain liable for all such obligations. Subject to the
foregoing, the Indenture is binding upon and inures to the benefit of the
parties thereto and their respective successors and assigns. This Indenture may
not otherwise be assigned by the parties thereto.


                                     II-51
<PAGE>


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

                       PHARMOS CORPORATION


                       By:______________________________
                        Name:
                        Title:

                       [                             ],
                       as Trustee


                       By:______________________________
                        Name:
                        Title:


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