<PAGE>
                                                                     EXHIBIT 4.8

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


                       VALERO LOGISTICS OPERATIONS, L.P.,



                                     ISSUER



                                  VALERO L.P.,



                                    GUARANTOR



                                       AND



                              THE BANK OF NEW YORK,



                                     TRUSTEE

                                    ---------



                                    INDENTURE



                       DATED AS OF [________] [__], [____]



                                    ---------



                          SUBORDINATED DEBT SECURITIES

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


<PAGE>


                        VALERO LOGISTICS OPERATIONS, L.P.

     RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939, AS AMENDED,
               AND INDENTURE, DATED AS OF _________________, 200_



<Table>
<Caption>
TRUST INDENTURE
  ACT SECTION                                                  INDENTURE SECTION
---------------                                                -----------------
<S>                                                            <C>
Section 310 (a)(1)    .......................................  609
            (a)(2)    .......................................  609
            (a)(3)    .......................................  Not Applicable
            (a)(4)    .......................................  Not Applicable
            (b)       .......................................  608; 610
Section 311 (a)       .......................................  613
            (b)       .......................................  613
Section 312 (a)       .......................................  701; 702
            (b)       .......................................  702
            (c)       .......................................  702
Section 313 (a)       .......................................  703
            (b)       .......................................  *
            (c)       .......................................  *
            (d)       .......................................  703
Section 314 (a)       .......................................  704
            (a)(4)    .......................................  104; 1004
            (b)       .......................................  Not Applicable
            (c)(1)    .......................................  101
            (c)(2)    .......................................  101; 102
            (c)(3)    .......................................  Not Applicable
            (d)       .......................................  Not Applicable
            (e)       .......................................  102
Section 315 (a)       .......................................  601
            (b)       .......................................  602
            (c)       .......................................  601
            (d)       .......................................  601
            (e)       .......................................  514
Section 316 (a)       .......................................  101
            (a)(1)(A) .......................................  502; 512
            (a)(1)(B) .......................................  513
            (a)(2)    .......................................  Not Applicable
            (b)       .......................................  508
            (c)       .......................................  104
Section 317 (a)(1)    .......................................  503
            (a)(2)    .......................................  504
            (b)       .......................................  1003
Section 318 (a)       .......................................  107
</Table>

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

     *Deemed included pursuant to Section 318 (c) of the Trust Indenture Act


<PAGE>


                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                        PAGE
<S>                                                                                                     <C>
ARTICLE I Definitions And Other Provisions Of General Application

     SECTION 101.  Definitions............................................................................1
     SECTION 102.  Incorporation by Reference of Trust Indenture Act.....................................11
     SECTION 103.  Compliance Certificates and Opinions..................................................12
     SECTION 104.  Form of Documents Delivered to Trustee................................................12
     SECTION 105.  Acts of Holders; Record Dates.........................................................13
     SECTION 106.  Notices, Etc., to Trustee, Partnership or Guarantor...................................14
     SECTION 107.  Notice to Holders; Waiver.............................................................14
     SECTION 108.  Conflict with Trust Indenture Act.....................................................15
     SECTION 109.  Effect of Headings and Table of Contents..............................................15
     SECTION 110.  Successors and Assigns................................................................15
     SECTION 111.  Separability Clause...................................................................15
     SECTION 112.  Benefits of Indenture.................................................................15
     SECTION 113.  Governing Law.........................................................................16
     SECTION 114.  Legal Holidays........................................................................16
     SECTION 115.  Securities in a Composite Currency, Currency Unit or Foreign Currency.................16
     SECTION 116.  Judgment Currency.....................................................................17
     SECTION 117.  Language of Notices, Etc..............................................................17
     SECTION 118.  Non-Recourse to the General Partner; No Personal Liability of Officers,
                   Directors, Employees or Partners......................................................17

ARTICLE II Security Forms

     SECTION 201.  Forms Generally.......................................................................18
     SECTION 202.  Form of Face of Security..............................................................18
     SECTION 203.  Form of Reverse of Security...........................................................21
     SECTION 204.  Global Securities.....................................................................26
     SECTION 205.  Form of Trustee's Certificate of Authentication.......................................27

ARTICLE III The Securities

     SECTION 301.  Amount Unlimited; Issuable in Series..................................................28
     SECTION 302.  Denominations.........................................................................31
     SECTION 303.  Execution, Authentication, Delivery and Dating........................................31
     SECTION 304.  Temporary Securities..................................................................33
     SECTION 305.  Registration, Registration of Transfer and Exchange...................................33
     SECTION 306.  Mutilated, Destroyed, Lost and Stolen Securities......................................36
     SECTION 307.  Payment of Interest; Interest Rights Preserved........................................37
     SECTION 308.  Persons Deemed Owners.................................................................38
     SECTION 309.  Cancellation..........................................................................38
</Table>


                                       i
<PAGE>


<Table>
<Caption>
                                                                                                        PAGE
<S>                                                                                                     <C>
     SECTION 310.  Computation of Interest...............................................................39
     SECTION 311.  CUSIP Numbers.........................................................................39

ARTICLE IV Satisfaction And Discharge

     SECTION 401.  Satisfaction and Discharge of Indenture...............................................39
     SECTION 402.  Application of Trust Money............................................................40

ARTICLE V Remedies

     SECTION 501.  Events of Default.....................................................................41
     SECTION 502.  Acceleration of Maturity; Rescission and Annulment....................................42
     SECTION 503.  Collection of Indebtedness and Suits for Enforcement by Trustee.......................43
     SECTION 504.  Trustee May File Proofs of Claim......................................................43
     SECTION 505.  Trustee May Enforce Claims Without Possession of Securities...........................44
     SECTION 506.  Application of Money Collected........................................................44
     SECTION 507.  Limitation on Suits...................................................................45
     SECTION 508.  Unconditional Right of Holders to Receive Principal, Premium and Interest.............45
     SECTION 509.  Restoration of Rights and Remedies....................................................46
     SECTION 510.  Rights and Remedies Cumulative........................................................46
     SECTION 511.  Delay or Omission Not Waiver..........................................................46
     SECTION 512.  Control by Holders....................................................................46
     SECTION 513.  Waiver of Past Defaults...............................................................47
     SECTION 514.  Undertaking for Costs.................................................................47
     SECTION 515.  Waiver of Usury, Stay or Extension Laws...............................................47

ARTICLE VI The Trustee

     SECTION 601.  Certain Duties and Responsibilities...................................................48
     SECTION 602.  Notice of Defaults....................................................................49
     SECTION 603.  Certain Rights of Trustee.............................................................49
     SECTION 604.  Not Responsible for Recitals or Issuance of Securities................................50
     SECTION 605.  May Hold Securities...................................................................51
     SECTION 606.  Money Held in Trust...................................................................51
     SECTION 607.  Compensation and Reimbursement........................................................51
     SECTION 608.  Disqualification; Conflicting Interests...............................................52
     SECTION 609.  Corporate Trustee Required; Eligibility...............................................52
     SECTION 610.  Resignation and Removal; Appointment of Successor.....................................52
     SECTION 611.  Acceptance of Appointment by Successor................................................54
     SECTION 612.  Merger, Conversion, Consolidation or Succession to Business...........................55
</Table>


                                       ii
<PAGE>


<Table>
<Caption>
                                                                                                        PAGE
<S>                                                                                                     <C>
     SECTION 613.  Preferential Collection of Claims Against Partnership.................................55
     SECTION 614.  Appointment of Authenticating Agent...................................................55

ARTICLE VII Holders' Lists And Reports By Trustee And Partnership

     SECTION 701.  Partnership to Furnish Trustee Names and Addresses of Holders.........................57
     SECTION 702.  Preservation of Information; Communications to Holders................................57
     SECTION 703.  Reports by Trustee....................................................................58
     SECTION 704.  Reports by Partnership................................................................59

ARTICLE VIII Consolidation, Merger, Conveyance, Transfer Or Lease

     SECTION 801.  Partnership May Consolidate, Etc., Only on Certain Terms..............................60
     SECTION 802.  Successor Substituted.................................................................60

ARTICLE IX Supplemental Indentures

     SECTION 901.  Supplemental Indentures Without Consent of Holders....................................61
     SECTION 902.  Supplemental Indentures with Consent of Holders.......................................62
     SECTION 903.  Execution of Supplemental Indentures..................................................63
     SECTION 904.  Effect of Supplemental Indentures.....................................................64
     SECTION 905.  Conformity with Trust Indenture Act...................................................64
     SECTION 906.  Reference in Securities to Supplemental Indentures....................................64

ARTICLE X Covenants

     SECTION 1001. Payment of Principal, Premium and Interest............................................64
     SECTION 1002. Maintenance of Office or Agency.......................................................64
     SECTION 1003. Money for Securities Payments to Be Held in Trust.....................................65
     SECTION 1004. Statement by Officers as to Default...................................................66
     SECTION 1005. Existence.............................................................................66
     SECTION 1006. Waiver of Certain Covenants...........................................................67
     SECTION 1007. Additional Amounts....................................................................67
     SECTION 1008. Calculation of Original Issue Discount................................................68

ARTICLE XI Redemption Of Securities

     SECTION 1101.  Applicability of Article.............................................................68
     SECTION 1102.  Election to Redeem; Notice to Trustee................................................68
     SECTION 1103.  Selection by Trustee of Securities to be Redeemed....................................69
     SECTION 1104.  Notice of Redemption.................................................................69
</Table>

                                      iii
<PAGE>

<Table>
<Caption>
                                                                                                        PAGE
<S>                                                                                                     <C>
     SECTION 1105.  Deposit of Redemption Price...........................................................70
     SECTION 1106.  Securities Payable on Redemption Date.................................................70
     SECTION 1107.  Securities Redeemed in Part...........................................................70

ARTICLE XII Sinking Funds

     SECTION 1201.  Applicability of Article..............................................................71
     SECTION 1202.  Satisfaction of Sinking Fund Payments with Securities.................................71
     SECTION 1203.  Redemption of Securities for Sinking Fund.............................................71

ARTICLE XIII Defeasance

     SECTION 1301.  Applicability of Article..............................................................72
     SECTION 1302.  Legal Defeasance......................................................................72
     SECTION 1303.  Covenant Defeasance...................................................................74
     SECTION 1304.  Application by Trustee of Funds Deposited for Payment of Securities...................75
     SECTION 1305.  Repayment to Partnership..............................................................76

ARTICLE XIV Guarantee of Securities

     SECTION 1401.  Unconditional Guarantee...............................................................76
     SECTION 1402.  Execution and Delivery of Notation of Guarantees......................................78
     SECTION 1403.  Subordination of Guarantees...........................................................79

ARTICLE XV Subordination of Securities

     SECTION 1501.  Securities Subordinated to Senior Debt................................................79
     SECTION 1502.  Distribution on Dissolution, Liquidation and Reorganization; Subrogation
                    of Securities.........................................................................80
     SECTION 1503.  Payments on Securities Permitted......................................................82
     SECTION 1504.  Authorization of Holders of Securities to Trustee to Effect Subordination.............82
     SECTION 1505.  Notices to Trustee....................................................................82
     SECTION 1506.  Trustee as Holder of Senior Debt......................................................83
     SECTION 1507.  Modification of Terms of Senior Debt..................................................83
</Table>


                                       iv
<PAGE>


                                    INDENTURE

                                    PARTIES:

         INDENTURE, dated as of [________] [__], [____], among VALERO LOGISTICS
OPERATIONS, L.P., a Delaware limited partnership (herein called the
"Partnership"), having its principal office at One Valero Place, San Antonio,
Texas 78212, VALERO L.P., a Delaware limited partnership (the "Guarantor"), and
THE BANK OF NEW YORK, a New York banking corporation, as trustee (herein called
the "Trustee").

                          RECITALS OF THE PARTNERSHIP:

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

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

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

         Now, Therefore, This Indenture Witnesseth:

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

                                   ARTICLE I

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 101. Definitions.

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

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

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

                  (3) all accounting terms not otherwise defined herein have the
         meanings assigned to them in accordance with generally accepted
         accounting principles in the United States, and, except as otherwise
         herein expressly provided, the term "generally


<PAGE>


         accepted accounting principles" with respect to any computation
         required or permitted hereunder shall mean such accounting principles
         as are generally accepted in the United States at the date of such
         computation;

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

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

                  (6) the word "includes" and its derivatives means "includes,
         but is not limited to" and its corresponding derivative definitions.

         Certain terms, used principally in Article VI, are defined in that
Article.

         "Act," when used with respect to any Holder, has the meaning specified
in Section 105.

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

         "Authenticating Agent" means any Person authorized by the Trustee to
act on behalf of the Trustee to authenticate Securities.

         "Banking Day" means, with respect to any city, any date on which
commercial banks are open for business in that city.

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


                                       2
<PAGE>


         "Board of Directors" means the board of directors of the General
Partner, or the executive or any other committee of that board duly authorized
to act in respect thereof. If the Partnership shall change its form of entity to
other than a limited partnership, the references to officers or the Board of
Directors of the General Partner shall mean the officers or the Board of
Directors (or other comparable governing body), respectively, of the
Partnership.

         "Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the General Partner, the principal
financial officer of the General Partner or any other authorized officer of the
General Partner or a person duly authorized by any of them, to have been duly
adopted by the Board of Directors and to be in full force and effect on the date
of such certification, and delivered to the Trustee. Where any provision of this
Indenture refers to action to be taken pursuant to a Board Resolution (including
the establishment of any series of the Securities and the forms and terms
thereof), such action may be taken by any committee, officer or employee of the
Partnership authorized to take such action by the Board of Directors as
evidenced by a Board Resolution.

         "Business Day," when used with respect to any Place of Payment or other
location, means, except as otherwise provided as contemplated by Section 301
with respect to any series of Securities, each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in that
Place of Payment or other location are authorized or obligated by law, executive
order or regulation to close.

         "Capital Interests" means any and all shares, interests,
participations, rights or other equivalents (however designated) of capital
stock, including, without limitation, with respect to partnerships, partnership
interests (whether general or limited) and any other interest or participation
that confers on a Person the right to receive a share of the profits and losses
of, or distributions of assets of, such partnership.

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

         "Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered in the Borough of Manhattan, The City of New York, and which, at
the date hereof is 5 Penn Plaza, 13th Floor, New York, New York 10001.


                                       3
<PAGE>


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

         "covenant defeasance" has the meaning specified in Section 1303.

         "CUSIP" means the Committee on Uniform Securities Identification
Procedures.

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

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

         "Default" means, with respect to a series of Securities, any event that
is, or after notice or lapse of time or both would be, an Event of Default.

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

         "defeasance" has the meaning specified in Section 1302.

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

         "Depositary" means, with respect to Securities of any series issuable
or issued in whole or in part in the form of one or more Global Securities, a
clearing agency registered under the Exchange Act that is designated to act as
Depositary for such Securities as contemplated by Section 301, until a successor
Depositary shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter shall mean or include each Person which is then a
Depositary hereunder, and if at any time there is more than one such Person,
shall be a collective reference to such Persons.

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

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

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

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

         "GAAP" means generally accepted accounting principles in the United
States set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, as in effect from time to time.


                                       4
<PAGE>


         "General Partner" means the person serving as such under the
Partnership Agreement, which, on the date hereof, is Valero GP, Inc., a Delaware
corporation.

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

         "Guarantee" has the meaning specified in Section 1401.

         "Guarantor" means the Person named as the "Guarantor" in the first
paragraph of this instrument until a successor Guarantor shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Guarantor" shall mean or include each Person who is then a Guarantor hereunder.

         "Guarantor Senior Debt" of the Guarantor, unless otherwise provided
with respect to the Securities of a series as contemplated by Section 301, means
(1) all Debt of the Guarantor, whether currently outstanding or hereafter
issued, unless, by the terms of the instrument creating or evidencing such Debt,
it is provided that such Debt is not superior in right of payment to the
Securities or to other Debt which is pari passu with or subordinated to the
Securities, and (2) any modifications, refunding, deferrals, renewals or
extensions of any such Debt or securities, notes or other evidence of Debt
issued in exchange for such Debt; provided that in no event shall "Guarantor
Senior Debt" include (a) Debt of the Guarantor owed or owing to any Subsidiary
of the Guarantor or any officer, director or employee of the Guarantor or any
Subsidiary of the Guarantor, (b) Debt to trade creditors or (c) any liability
for taxes owed or owing by the Guarantor.

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

         "Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument, and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" also shall include the terms of particular
series of Securities established as contemplated by Section 301.

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

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

         "Issue Date" means, with respect to any series of Debt Securities
issued under this Indenture, the date on which Debt Securities of that series
are initially issued.



                                       5
<PAGE>


         "mandatory sinking fund payment" has the meaning specified in
Section 1201.

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

         "Notice of Default" means a written notice of the kind specified in
Section 501(3).

         "Officers' Certificate" means a certificate signed by any two officers
of the General Partner (or if the Partnership shall change its form of entity to
other than a limited partnership, by Persons or officers, members, agents and
the like positions comparable to those of the foregoing nature, as applicable),
and delivered to the Trustee. One of the officers or such other Persons (as
applicable) signing an Officers' Certificate given pursuant to Section 1004
shall be the principal executive, financial or accounting officer of the General
Partner (or if the Partnership shall change its form of entity to other than a
limited partnership, by Persons or officers, members, agents and the like
positions comparable to those of the foregoing nature, as applicable).

         "Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Partnership, the Guarantor, the General Partner
or an Affiliate of the General Partner.

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

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

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

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

                  (3) Securities which have been paid pursuant to Section 306 or
         in exchange for or in lieu of which other Securities have been
         authenticated and delivered pursuant to this Indenture, other than any
         such Securities in respect of which there shall have been presented to
         the Trustee proof satisfactory to it that such Securities are held by a
         bona fide purchaser in whose hands such Securities are valid
         obligations of the Partnership; and


                                       6
<PAGE>


                  (4) Securities, except to the extent provided in Sections 1302
         and 1303, with respect to which the Partnership has effected defeasance
         or covenant defeasance as provided in Article XIII which continues in
         effect;

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (A) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon acceleration of the Maturity
thereof on such date pursuant to Section 502, (B) the principal amount of a
Security denominated in one or more currencies or currency units other than U.S.
dollars shall be the U.S. dollar equivalent of such currencies or currency
units, determined in the manner provided as contemplated by Section 301 on the
date of original issuance of such Security or by Section 115, if not otherwise
so provided pursuant to Section 301, of the principal amount (or, in the case of
an Original Issue Discount Security, the U.S. dollar equivalent (as so
determined) on the date of original issuance of such Security, of the amount
determined as provided in clause (A) above) of such Security, and (C) Securities
owned by the Partnership, the Guarantor or any other obligor upon the Securities
or any Affiliate of the Partnership or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which a
Responsible Officer of the Trustee knows to be so owned shall be so disregarded.
Securities so owned as described in clause (C) of the immediately preceding
sentence which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Securities and that the pledgee is not the
Partnership, the Guarantor or any other obligor upon the Securities or any
Affiliate of the Partnership or of such other obligor.

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

         "Partnership Agreement" means the Agreement of Limited Partnership of
the Partnership as in effect from time to time.

         "Partnership Request" or "Partnership Order" means a written request or
order delivered to the Trustee and signed in the name of the Partnership by any
two officers of the General Partner, or if the Partnership shall change its form
of entity to other than a limited partnership, by Persons or officers, members,
agents and the like positions comparable to those of the foregoing nature, as
applicable.

         "Paying Agent" means any Person authorized by the Partnership to pay
the principal of and any premium or interest on any Securities on behalf of the
Partnership.


                                       7
<PAGE>


         "Periodic Offering" means an offering of Securities of a series from
time to time, the specific terms of which Securities, including, without
limitation, the rate or rates of interest or formula for determining the rate or
rates of interest thereon, if any, the Stated Maturity or Stated Maturities
thereof, the original issue date or dates thereof, the redemption provisions, if
any, with respect thereto, and any other terms specified as contemplated by
Section 301 with respect thereto, are to be determined by the Partnership upon
the issuance of such Securities.

                                       8
<PAGE>

         "Person" means any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust, other
entity, unincorporated organization or government, or any agency or political
subdivision thereof.

         "Place of Payment," when used with respect to the Securities of any
series, means, unless otherwise specifically provided for with respect to such
series as contemplated by Section 301, the office or agency of the Partnership
in The City of New York and such other place or places where, subject to the
provisions of Section 1002, the principal of and any premium and interest on the
Securities of that series are payable as contemplated by Section 301.

         "Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same Debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

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

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


                                       9
<PAGE>


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

         "Responsible Officer," when used with respect to the Trustee, means any
officer of the Trustee within the corporate trust department, including any Vice
President, assistant secretary, assistant treasurer, trust officer or assistant
trust officer assigned to the Corporate Trust Office, or any other officer of
the Trustee customarily performing functions similar to those performed by any
of the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer of the Trustee to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject, and who shall have direct responsibility for the administration of this
Indenture.

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

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

         "Senior Debt" of the Partnership, unless otherwise provided with
respect to the Securities of a series as contemplated by Section 301, means (1)
all Debt of the Partnership, whether currently outstanding or hereafter issued,
unless, by the terms of the instrument creating or evidencing such Debt, it is
provided that such Debt is not superior in right of payment to the Securities or
to other Debt which is pari passu with or subordinated to the Securities, and
(2) any modifications, refunding, deferrals, renewals or extensions of any such
Debt or securities, notes or other evidence of Debt issued in exchange for such
Debt; provided that in no event shall "Senior Debt" include (a) Debt of the
Partnership owed or owing to any Subsidiary of the Partnership or any officer,
director or employee of the Partnership or any Subsidiary of the Partnership,
(b) Debt to trade creditors or (c) any liability for taxes owed or owing by the
Partnership.

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

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

         "Subsidiary" of any Person means (i) any partnership of which more than
50% of the Capital Interests (considering all partners' Capital Interests as a
single class) is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of such Person or
combination thereof, or (ii) any corporation, association or other business
entity of which more than 50% of the total voting power of the Capital Interests
entitled (without


                                       10
<PAGE>


regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other Subsidiaries
of such Person or combination thereof.

         "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed, except as otherwise
provided in Section 905; provided, however, that if the Trust Indenture Act of
1939 is amended after such date, "Trust Indenture Act" means, to the extent
required by any such amendment, the Trust Indenture Act of 1939 as so amended.

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

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

         "Vice President," when used with respect to the Partnership, means any
vice president of the General Partner, or when used with respect to the Trustee,
means any vice president of the Trustee.

SECTION 102. Incorporation by Reference of Trust Indenture Act.

         Whenever this Indenture refers to a provision of the Trust Indenture
Act, the provision is incorporated by reference in and made a part of this
Indenture. The following Trust Indenture Act terms used in this Indenture have
the following meanings:

         "commission" means the Commission.

         "indenture securities" means the Securities.

         "indenture security holder" means a Holder.

         "indenture to be qualified" means this Indenture.

         "indenture trustee" or "institutional trustee" means the Trustee.

         "obligor" on the indenture securities means the Partnership, the
Guarantor or any other obligor on the indenture securities.


                                       11
<PAGE>


         All terms used in this Indenture that are defined by the Trust
Indenture Act, defined by a Trust Indenture Act reference to another statute or
defined by a Commission rule under the Trust Indenture Act have the meanings so
assigned to them.

SECTION 103. Compliance Certificates and Opinions.

         Upon any application or request by the Partnership to the Trustee to
take any action under any provision of this Indenture, the Partnership shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished except as required under
Section 314(c) of the Trust Indenture Act.

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

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

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

                  (3) a statement that, in the opinion of each such individual,
         he has made such examination or investigation as is necessary to enable
         him to express an informed opinion as to whether such covenant or
         condition has been complied with; and

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

SECTION 104. Form of Documents Delivered to Trustee.

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

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


                                       12
<PAGE>


officers of the Partnership or the General Partner stating that the information
with respect to such factual matters is in the possession of the Partnership or
the General Partner, unless such counsel knows that the certificate or opinion
or representations with respect to such matters are erroneous.

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

SECTION 105. Acts of Holders; Record Dates.

         Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed (either physically or by means of a facsimile
or an electronic transmission, provided that such electronic transmission is
transmitted through the facilities of a Depositary) by such Holders in person or
by an agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered (either physically or by means of a facsimile or an electronic
transmission, provided that such electronic transmission is transmitted through
the facilities of a Depositary) to the Trustee and, where it is hereby expressly
required, to the Partnership. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 315 of the
Trust Indenture Act) conclusive in favor of the Trustee and the Partnership, if
made in the manner provided in this Section 105.

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

         The ownership, principal amount and serial numbers of Securities held
by any Person, and the date of commencement of such Person's holding the same,
shall be proved by the Security Register.

         Any request, demand, authorization, direction, notice, consent, waiver
or other action of the Holder of any Security shall bind every future Holder of
the same Security and the Holder of every Security issued upon the registration
of transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Partnership
in reliance thereon, regardless of whether notation of such action is made upon
such Security.


                                       13
<PAGE>


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

         The Partnership may set any day as the record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to give
or take any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given or taken by
Holders of Securities of such series, but the Partnership shall have no
obligation to do so. With regard to any record date set pursuant to this
paragraph, the Holders of Outstanding Securities of the relevant series on such
record date (or their duly appointed agents), and only such Persons, shall be
entitled to give or take the relevant action, regardless of whether such Holders
remain Holders after such record date.

SECTION 106. Notices, Etc., to Trustee, Partnership or Guarantor.

         Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,

                  (1) the Trustee by any Holder, the Guarantor or by the
         Partnership shall be sufficient for every purpose hereunder if made,
         given, furnished or filed in writing (which may be via facsimile) to or
         with the Trustee at its Corporate Trust Office, Attention: Corporate
         Trust Administration, or

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

                  (3) the Guarantor by the Partnership, the Trustee or by any
         Holder shall be sufficient for every purpose hereunder if in writing
         and mailed, first-class postage prepaid, to the Guarantor addressed to:
         Valero L.P., One Valero Place, San Antonio, Texas 78212, Attention:
         Corporate Secretary, or at any other address previously furnished in
         writing to the Trustee by the Guarantor.

SECTION 107. Notice to Holders; Waiver.

         Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid (if international mail, by
air mail), to each Holder affected by such event, at his address as it appears
in the Security Register, not later than the latest date (if any), and not
earlier than the earliest date (if any), prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect


                                       14
<PAGE>


to other Holders. Any notice mailed to a Holder in the manner herein prescribed
shall be conclusively deemed to have been received by such Holder, whether or
not such Holder actually receives such notice.

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

         In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.

SECTION 108. Conflict with Trust Indenture Act.

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

SECTION 109. Effect of Headings and Table of Contents.

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

SECTION 110. Successors and Assigns.

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

SECTION 111. Separability Clause.

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

SECTION 112. Benefits of Indenture.

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


                                       15
<PAGE>


SECTION 113. Governing Law.

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

SECTION 114. Legal Holidays.

         In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of the Securities of any series that specifically states
that such provision shall apply in lieu of this Section 114)) payment of
interest or principal (and any premium) need not be made at such Place of
Payment on such date, but may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on the Interest
Payment Date or Redemption Date, or at the Stated Maturity, provided that no
interest shall accrue for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be.

SECTION 115. Securities in a Composite Currency, Currency Unit or Foreign
             Currency.

         Unless otherwise specified in an Officer's Certificate delivered
pursuant to Section 301 of this Indenture with respect to a particular series of
Securities, whenever for purposes of this Indenture any action may be taken by
the Holders of a specified percentage in aggregate principal amount of
Securities of all series or all series affected by a particular action at the
time Outstanding and, at such time, there are Outstanding Securities of any
series which are denominated in a coin, currency or currencies other than
Dollars (including, but not limited to, any composite currency, currency units
or Foreign Currency), then the principal amount of Securities of such series
which shall be deemed to be Outstanding for the purpose of taking such action
shall be that amount of Dollars that could be obtained for such amount at the
Market Exchange Rate. For purposes of this Section 115, the term "Market
Exchange Rate" shall mean the noon Dollar buying rate in The City of New York
for cable transfers of such currency or currencies as published by the Federal
Reserve Bank of New York, as of the most recent available date. If such Market
Exchange Rate is not so available for any reason with respect to such currency,
the Trustee shall use, in its sole discretion and without liability on its part,
such quotation of the Federal Reserve Bank of New York as of the most recent
available date, or quotations or rates of exchange from one or more major banks
in The City of New York or in the country of issue of the currency in question,
which for purposes of euros shall be Brussels, Belgium, or such other quotations
or rates of exchange as the Trustee shall deem appropriate. The provisions of
this paragraph shall apply in determining the equivalent principal amount in
respect of Securities of a series denominated in a currency other than Dollars
in connection with any action taken by Holders of Securities pursuant to the
terms of this Indenture.

         All decisions and determinations of the Trustee regarding the Market
Exchange Rate or any alternative determination provided for in the preceding
paragraph shall be in its sole discretion and shall, in the absence of manifest
error, be conclusive to the extent permitted by law for all purposes and
irrevocably binding upon the Issuer and all Holders.


                                       16
<PAGE>


SECTION 116. Judgment Currency.

         The Company agrees, to the fullest extent that it may effectively do so
under applicable law, that (a) if for the purpose of obtaining judgment in any
court it is necessary to convert the sum due in respect of the principal of or
interest on the Securities of any series (the "Required Currency") into a
currency in which a judgment will be rendered (the "Judgment Currency"), the
rate of exchange used shall be the rate at which in accordance with normal
banking procedures the Trustee could purchase in The City of New York the
Required Currency with the Judgment Currency on the day on which final
unappealable judgment is entered, unless such day is not a Banking Day, then, to
the extent permitted by applicable law, the rate of exchange used shall be the
rate at which in accordance with normal banking procedures the Trustee could
purchase in The City of New York the Required Currency with the Judgment
Currency on the Banking Day next preceding the day on which final unappealable
judgment is entered and (b) its obligations under this Indenture to make
payments in the Required Currency (i) shall not be discharged or satisfied by
any tender, or any recovery pursuant to any judgment (whether or not entered in
accordance with subsection (a)), in any currency other than the Required
Currency, except to the extent that such tender or recovery shall result in the
actual receipt, by the payee, of the full amount of the Required Currency
expressed to be payable in respect of such payments, (ii) shall be enforceable
as an alternative or additional cause of action for the purpose of recovering in
the Required Currency the amount, if any, by which such actual receipt shall
fall short of the full amount of the Required Currency so expressed to be
payable and (iii) shall not be affected by judgment being obtained for any other
sum due under this Indenture.

SECTION 117. Language of Notices, Etc.

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

SECTION 118. Non-Recourse to the General Partner; No Personal Liability of
             Officers, Directors, Employees or Partners.

         Obligations of the Partnership and the Guarantor under this Indenture
and the Securities hereunder are non-recourse to the General Partner, and its
Affiliates (other than the Partnership and the Guarantor), and payable only out
of cash flow and assets of the Partnership or the Guarantor, as the case may be.
The Trustee, and each Holder of a Security by its acceptance thereof, will be
deemed to have agreed in this Indenture that (1) neither the General Partner nor
its assets (nor any of its Affiliates other than the Partnership and the
Guarantor, nor their respective assets) shall be liable for any of the
obligations of the Partnership and the Guarantor under this Indenture or such
Securities, and (2) no director, officer, employee, stockholder or unitholder,
as such, of the Partnership, the Guarantor, the Trustee, the General Partners or
any Affiliate of any of the foregoing entities shall have any personal liability
in respect of the obligations of the Partnership and the Guarantor under this
Indenture or such Securities by reason of his, her or its status.


                                       17
<PAGE>


                                   ARTICLE II

                                 SECURITY FORMS

SECTION 201. Forms Generally.

         The Securities of each series and any notations thereon relating to the
Guarantees shall be in substantially the form set forth in this Article II, or
in such other form or forms as shall be established by or pursuant to a Board
Resolution or in one or more indentures supplemental hereto, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon
as may be required to comply with the rules of any securities exchange or
automated quotation system on which the Securities of such series may be listed
or traded or Depositary therefor or as may, consistently herewith, be determined
by the officers executing such Securities, as evidenced by their execution of
the Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by an authorized officer or other authorized Person on
behalf of the Partnership and delivered to the Trustee at or prior to the
delivery of the Partnership Order contemplated by Section 303 for the
authentication and delivery of such Securities.

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

         The forms of Global Securities of any series shall have such provisions
and legends as are customary for Securities of such series in global form,
including without limitation any legend required by the Depositary for the
Securities of such series.

SECTION 202. Form of Face of Security.

         [If the Security is an Original Issue Discount Security, insert-FOR
PURPOSES OF SECTION 1275 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS
AMENDED, THE AMOUNT OF THE ORIGINAL ISSUE DISCOUNT IS . . . . . . . ., THE ISSUE
DATE IS . . . . . ., 20. . . [AND] [,] THE YIELD TO MATURITY IS . . . . . . . .
[,] [AND THE ORIGINAL ISSUE DISCOUNT FOR THE SHORT ACCRUAL PERIOD IS . . . . . .
.. . AND THE METHOD USED TO DETERMINE THE YIELD THEREFOR IS . . . . .]]

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

         [If a Global Security, insert legend required by Section 204 of the
Indenture.]

         [If applicable, insert -- UNLESS THIS SECURITY IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION, TO THE PARTNERSHIP OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS IS


                                       18
<PAGE>


REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

                        VALERO LOGISTICS OPERATIONS, L.P.

                               [TITLE OF SECURITY]

No. __________                                                  U.S. $__________

[CUSIP No. [__________]]

         VALERO LOGISTICS OPERATIONS, L.P., a Delaware limited partnership
(herein called the "Partnership," which term includes any successor Person under
the Indenture hereinafter referred to), for value received, hereby promises to
pay to _____________________, or registered assigns, the principal sum of
_____________ United States Dollars on _______________ [if the Security is to
bear interest prior to Maturity, insert --, and to pay interest thereon from
______________, or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, semi-annually on ________ __ and ________ __
in each year, commencing ________ __, ____, at the rate of ___% per annum, until
the principal hereof is paid or made available for payment [if applicable,
insert --, and at the rate of ___% per annum on any overdue principal and
premium and on any overdue installment of interest]. [If applicable, insert --
The amount of interest payable for any period shall be computed on the basis of
twelve 30-day months and a 360-day year. The amount of interest payable for any
partial period shall be computed on the basis of a 360-day year of twelve 30-day
months and the days elapsed in any partial month. In the event that any date on
which interest is payable on this Security is not a Business Day, then a payment
of the interest payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other payment in respect of
any such delay) with the same force and effect as if made on the date the
payment was originally payable. A "Business Day" shall mean, when used with
respect to any Place of Payment, each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in that Place of Payment
are authorized or obligated by law, executive order or regulation to close.] The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, which shall be
the ________ __ or ________ __ (whether or not a Business Day), as the case may
be, next preceding such Interest Payment Date. Any such interest not so
punctually paid or duly provided for shall forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not inconsistent with
the

                                       19
<PAGE>


requirements of any securities exchange or automated quotation system on which
the Securities of this series may be listed or traded, and upon such notice as
may be required by such exchange or automated quotation system, all as more
fully provided in such Indenture].

         [If the Security is not to bear interest prior to Maturity, insert --
The principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal of this Security shall bear
interest at the rate of ___% per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of such
default in payment to the date payment of such principal has been made or duly
provided for. Interest on any overdue principal shall be payable on demand. Any
such interest on any overdue principal that is not so paid on demand shall bear
interest at the rate of ___% per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of such
demand for payment to the date payment of such interest has been made or duly
provided for, and such interest shall also be payable on demand.]

         [If a Global Security, insert -- Payment of the principal of [(and
premium, if any)] and [if applicable, insert -- any such] interest on this
Security will be made by transfer of immediately available funds to a bank
account in _______________ designated by the Holder in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts [state other currency].]

         [If a Definitive Security, insert -- Payment of the principal of [(and
premium, if any)] and [if applicable, insert -- any such] interest on this
Security will be made at the office or agency of the Partnership maintained for
that purpose in _______________, [in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts] [state other currency] [or subject to any laws or regulations
applicable thereto and to the right of the Partnership (as provided in the
Indenture) to rescind the designation of any such Paying Agent, at the [main]
offices of _______________ in _______________ and _______________ in
_______________, or at such other offices or agencies as the Partnership may
designate, by [United States Dollar] [state other currency] check drawn on, or
transfer to a [United States Dollar] account maintained by the payee with, a
bank in The City of New York (so long as the applicable Paying Agent has
received proper transfer instructions in writing at least [__] days prior to the
payment date)] [if applicable, insert -- ; provided, however, that payment of
interest may be made at the option of the Partnership by [United States Dollar]
[state other currency] check mailed to the addresses of the Persons entitled
thereto as such addresses shall appear in the Security Register] [or by transfer
to a [United States Dollar] [state other currency] account maintained by the
payee with a bank in The City of New York [state other Place of Payment] (so
long as the applicable Paying Agent has received proper transfer instructions in
writing by the Record Date prior to the applicable Interest Payment Date)].]

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


                                       20
<PAGE>


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

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

Dated: ______________
                                             VALERO LOGISTICS OPERATIONS, L.P.,

                                             By: Valero GP, Inc.
                                                 Its General Partner

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

SECTION 203. Form of Reverse of Security.

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

         This Security is the subordinated unsecured obligation of the
Partnership and is guaranteed pursuant to a guarantee (the "Guarantee") by
Valero L.P., a Delaware limited partnership (the "Guarantor"). The Guarantee is
the subordinated unsecured obligation of the Guarantor.

         [If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 nor more than 60 days' notice by mail, [if
applicable, insert -- (1) on ________________ in any year commencing with the
year ____ and ending with the year ____ through operation of the sinking fund
for this series at a Redemption Price equal to 100% of the principal amount, and
(2)] at any time [if applicable, insert -- on or after ________, ________], as a
whole or in part, at the election of the Partnership, at the following
Redemption Prices


                                       21
<PAGE>


(expressed as percentages of the principal amount): If redeemed [if applicable,
insert -- on or before ______________, ___%, and if redeemed] during the
12-month period beginning of the years indicated,

<Table>
<Caption>
         Year          Redemption Price          Year          Redemption Price
<S>                    <C>                       <C>           <C>

</Table>

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

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

<Table>
<Caption>
                                                         REDEMPTION PRICE FOR
                       REDEMPTION PRICE FOR            REDEMPTION OTHERWISE THAN
                   REDEMPTION THROUGH OPERATION         THROUGH OPERATION OF THE
      YEAR             OF THE SINKING FUND                    SINKING FUND
      ----         ----------------------------        -------------------------
<S>                <C>                                 <C>

</Table>


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

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


                                       22
<PAGE>


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

         [If applicable, insert -- The Securities of this series are not
redeemable prior to Stated Maturity.]

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

         [If the Security is an Original Issue Discount Security, insert -- If
an Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- insert formula for determining the
amount. Upon payment (1) of the amount of principal so declared due and payable,
and (2) of interest on any overdue principal and overdue interest (in each case
to the extent that the payment of such interest shall be legally enforceable),
all of the Partnership's obligations in respect of the payment of the principal
of and interest, if any, on the Securities of this series shall terminate.]

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Partnership and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Partnership and the Trustee with
the consent of the Holders of a majority in principal amount of the Securities
at the time Outstanding of all series to be affected (voting as one class). The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to waive
compliance by the Partnership or the Guarantor with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, regardless of whether notation of such consent or
waiver is made upon this Security.

         As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of


                                       23
<PAGE>


such notice, request and offer of indemnity. The foregoing shall not apply to
any suit instituted by the Holder of this Security for the enforcement of any
payment of principal hereof or [any premium or] interest hereon on or after the
respective due dates expressed herein.

         No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Partnership,
which is absolute and unconditional, to pay the principal of and [any premium
and] interest on this Security at the times, place(s) and rate, and in the coin
or currency, herein prescribed.

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

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

         [If a Definitive Security, insert -- As provided in the Indenture and
subject to certain limitations therein set forth, the transfer of this Security
is registerable in the Security Register, upon surrender of this Security for
registration of transfer at the office or agency of the Partnership in [if
applicable, insert -- any place where the principal of and any premium and
interest on this Security are payable] [if applicable, insert -- The City of New
York [, or, subject to any laws or regulations applicable thereto and to the
right of the Partnership (limited as provided in the Indenture) to rescind the
designation of any such transfer agent, at the [main] offices of _______________
____________ in __________________ and _________________ in ______________ or at
such other offices or agencies as the Partnership may designate]], duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Partnership and the Security Registrar duly executed by, the Holder hereof
or his attorney duly authorized in writing, and thereupon one or more new
Securities of this series and of like tenor, of authorized denominations and for
the same aggregate principal amount, will be issued to the designated transferee
or transferees.]

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

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

         Prior to due presentment of this Security for registration of transfer,
the Partnership, the Trustee and any agent of the Partnership or the Trustee may
treat the Person in whose name this Security is registered as the owner hereof
for all purposes, regardless of whether this Security is overdue, and neither
the Partnership, the Trustee nor any such agent shall be affected by notice to
the contrary.


                                       24
<PAGE>


         The Security is subordinated in right of payment to Senior Debt and the
Guarantee is subordinated in right of payment to Guarantor Senior Debt, to the
extent provided in the Indenture.

         Obligations of the Partnership under the Indenture and the Securities
thereunder, including this Security, are non-recourse to Valero GP, Inc. (the
"General Partner") and its Affiliates (other than the Partnership and the
Guarantor), and payable only out of cash flow and assets of the Partnership or
the Guarantor. The Trustee, and each Holder of a Security by its acceptance
hereof, will be deemed to have agreed in the Indenture that (1) neither the
General Partner nor its assets (nor any of its Affiliates other than the
Partnership and the Guarantor, nor their respective assets) shall be liable for
any of the obligations of the Partnership or the Guarantor under the Indenture
or such Securities, including this Security, and (2) no director, officer,
employee, stockholder or unitholder, as such, of the Partnership, the Guarantor,
the Trustee, the General Partner or any Affiliate of any of the foregoing
entities shall have any personal liability in respect of the obligations of the
Partnership or the Guarantor under the Indenture or such Securities by reason of
his, her or its status.

         The Indenture provides that the Partnership and the Guarantor (a) will
be discharged from any and all obligations in respect of the Securities (except
for certain obligations described in the Indenture), or (b) need not comply with
certain restrictive covenants of the Indenture, in each case if the Partnership
or the Guarantor deposits, in trust, with the Trustee money or U.S. Government
Obligations (or a combination thereof) which through the payment of interest
thereon and principal thereof in accordance with their terms will provide money,
in an amount sufficient to pay all the principal of and interest on the
Securities, but such money need not be segregated from other funds except to the
extent required by law.

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

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

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

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________ ___________________ (Please Print or Typewrite
Name and Address of Assignee) the within instrument of VALERO LOGISTICS
OPERATIONS, L.P. and does hereby irrevocably constitute and appoint
________________________ Attorney to transfer said instrument on the books of
the within-named Partnership, with full power of substitution in the premises.


                                       25
<PAGE>


Please Insert Social Security or Other Identifying Number of Assignee:



Dated:                               (Signature):
      --------------------------

Signature                                                             Guarantee:

--------------------------------------------------------------------------------
                     (Participant in a Recognized Signature
                           Guaranty Medallion Program)

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

                          FORM OF NOTATION ON SECURITY
                              RELATING TO GUARANTEE

         The Guarantor (which term includes any successor Person in such
capacity under the Indenture), has fully, unconditionally and absolutely
guaranteed on a subordinated basis, to the extent set forth in the Indenture and
subject to the provisions in the Indenture, the due and punctual payment of the
principal of, and premium, if any, and interest on the Securities and all other
amounts due and payable under the Indenture and the Securities by the
Partnership.

         The obligations of the Guarantor to the Holders of Securities and to
the Trustee pursuant to the Guarantees and the Indenture are expressly set forth
in Article XIV of the Indenture and reference is hereby made to the Indenture
for the precise terms of the Guarantee.

                                           Guarantor:

                                           VALERO L.P.

                                           By: Riverwalk Logistics, L.P.,
                                               Its General Partner

                                               By: Valero GP, LLC,
                                                   Its General Partner

                                                   By:
                                                      --------------------------
SECTION 204. Global Securities.

         Every Global Security authenticated and delivered hereunder shall bear
a legend in substantially the following form:

         THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
         HEREINAFTER REFERRED TO AND IS


                                       26
<PAGE>


         REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS
         SECURITY MAY NOT BE TRANSFERRED TO, OR REGISTERED OR EXCHANGED FOR
         SECURITIES REGISTERED IN THE NAME OF, ANY PERSON OTHER THAN THE
         DEPOSITARY OR A NOMINEE THEREOF AND NO SUCH TRANSFER MAY BE REGISTERED,
         EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. EVERY
         SECURITY AUTHENTICATED AND DELIVERED UPON REGISTRATION OF TRANSFER OF,
         OR IN EXCHANGE FOR OR IN LIEU OF, THIS SECURITY SHALL BE A GLOBAL
         SECURITY SUBJECT TO THE FOREGOING, EXCEPT IN SUCH LIMITED
         CIRCUMSTANCES.

         If Securities of a series are issuable in whole or in part in the form
of one or more Global Securities, as specified as contemplated by Section 301,
then, notwithstanding clause (9) of Section 301 and the provisions of Section
302, any Global Security shall represent such of the Outstanding Securities of
such series as shall be specified therein and may provide that it shall
represent the aggregate amount of Outstanding Securities from time to time
endorsed thereon and that the aggregate amount of Outstanding Securities
represented thereby may from time to time be reduced or increased, as the case
may be, to reflect exchanges. Any endorsement of a Global Security to reflect
the amount, or any reduction or increase in the amount, of Outstanding
Securities represented thereby shall be made in such manner and upon
instructions given by such Person or Persons as shall be specified therein or in
a Partnership Order. Subject to the provisions of Sections 303, 304 and 305, the
Trustee shall deliver and redeliver any Global Security in the manner and upon
instructions given by the Person or Persons specified therein or in the
applicable Partnership Order. Any instructions by the Partnership with respect
to endorsement or delivery or redelivery of a Global Security shall be in a
Partnership Order (which need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel).

         The provisions of the last sentence of Section 303 shall apply to any
Security represented by a Global Security if such Security was never issued and
sold by the Partnership and the Partnership delivers to the Trustee the Global
Security together with a Partnership Order (which need not comply with Section
102 and need not be accompanied by an Opinion of Counsel) with regard to the
reduction or increase, as the case may be, in the principal amount of Securities
represented thereby, together with the written statement contemplated by the
last sentence of Section 303.

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

         The Trustee's certificate of authentication shall be in substantially
the following form:

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



                                             -----------------------------------
                                             The Bank of New York, as Trustee

                                             By:
                                                --------------------------------
                                                      Authorized Signatory

                                             Dated:
                                                   -----------------------------

                                       27
<PAGE>


                                  ARTICLE III

                                 THE SECURITIES

SECTION 301. Amount Unlimited; Issuable in Series.

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

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

                  (1) the title of the Securities of the series including CUSIP
         numbers (which shall distinguish the Securities of the series from all
         other Securities and which may be a part of a series of Securities
         previously issued);

                  (2) any limit upon the aggregate principal amount of the
         Securities of the series which may be authenticated and delivered under
         this Indenture (except for Securities authenticated and delivered upon
         registration of transfer of, or in exchange for, or in lieu of, other
         Securities of the series pursuant to Sections 304, 305, 306, 906 or
         1107 and except for any Securities which, pursuant to Section 303, are
         deemed never to have been authenticated and delivered hereunder);

                  (3) the Person to whom any interest on a Security of the
         series shall be payable, if other than the Person in whose name that
         Security (or one or more Predecessor Securities) is registered at the
         close of business on the Regular Record Date for such interest;

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

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


                                       28
<PAGE>


                  (6) the place or places where, subject to the provisions of
         Section 1002, the principal of and any premium and interest on
         Securities of the series shall be payable, Securities of the series may
         be surrendered for registration of transfer, Securities of the series
         may be surrendered for exchange and notices, and demands to or upon the
         Partnership in respect of the Securities of the series and this
         Indenture may be served;

                  (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 Partnership;

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

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

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

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

                  (12) if other than the currency of the United States of
         America, the currency or currencies, including composite currencies,
         currency units or Foreign Currency, in which payment of the principal
         of and any premium and interest on the Securities of the series shall
         be payable, and, if other than as specified in Section 115, the manner
         of determining the equivalent thereof in the currency of the United
         States of America for purposes of the determination of "Outstanding" in
         Section 101;

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

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

                  (15) the right, if any, of the Partnership to defer payments
         of interest by extending the interest payment periods and the duration
         of such extension, the


                                       29
<PAGE>


         Interest Payment Dates on which such interest shall be payable and
         whether and under what circumstances additional interest on amounts
         deferred shall be payable;

                  (16) if and as applicable, that the Securities of the series
         shall be issuable in whole or in part in the form of one or more Global
         Securities and, in such case, the Depositary or Depositaries for such
         Global Security or Global Securities and any circumstances other than
         those set forth in Section 305 in which any such Global Security may be
         transferred to, and registered and exchanged for Securities registered
         in the name of, a Person other than the Depositary for such Global
         Security or a nominee thereof and in which any such transfer may be
         registered;

                  (17) any deletions from, modifications of or additions to the
         Events of Default set forth in Section 501 or the covenants of the
         Partnership set forth in Article X with respect to the Securities of
         such series;

                  (18) whether and under which circumstances the Partnership
         will pay additional amounts on the Securities of the series held by a
         Person who is not a U.S. person in respect of any tax, assessment or
         governmental charge withheld or deducted, and, if so, whether the
         Partnership will have the option to redeem the Securities of the series
         rather than pay such additional amounts;

                  (19) if the Securities of the series are to be issuable in
         definitive form (whether upon original issue or upon exchange of a
         temporary Security of such series) only upon receipt of certain
         certificates or other documents or satisfaction of other conditions,
         the form and terms of such certificates, documents or conditions;

                  (20) if the Securities of the series are convertible into or
         exchangeable for any other security or property of the Partnership,
         including, without limitation, securities of another Person held by the
         Partnership or its Affiliates and, if so, the terms thereof;

                  (21) if other than as provided in Sections 1302 and 1303, the
         means of defeasance or covenant defeasance as may be specified for the
         Securities of the series;

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

                  (23) any other terms of the Securities of the series (which
         terms shall not be inconsistent with the provisions of this Indenture).

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

         All Securities of any one series need not be issued at the same time
and, unless otherwise provided, a series may be reopened, without the consent of
the Holders, for increases in the


                                       30
<PAGE>


aggregate principal amount of such series of Securities and issuances of
additional Securities of such series or for the establishment of additional
terms with respect to the Securities of such series.

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

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

SECTION 302. Denominations.

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

SECTION 303. Execution, Authentication, Delivery and Dating.

         The Securities shall be executed on behalf of the Partnership by the
Chief Executive Officer, Chief Financial Officer, President or any Vice
President of the General Partner and need not be attested. The signature of any
of these officers on the Securities may be manual or facsimile.

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

         At any time and from time to time after the execution and delivery of
this Indenture, the Partnership may deliver Securities of any series executed by
the Partnership to the Trustee for authentication, together with a Partnership
Order for the authentication and delivery of such Securities, and the Trustee in
accordance with the Partnership Order shall authenticate and deliver such
Securities; provided, however, that in the case of Securities offered in a
Periodic Offering, the Trustee shall authenticate and deliver such Securities
from time to time in accordance with such other procedures (including, without
limitation, the receipt by the Trustee of oral or electronic instructions from
the Partnership or its duly authorized agents, thereafter promptly confirmed in
writing) acceptable to the Trustee as may be specified by or pursuant to a
Partnership Order delivered to the Trustee prior to the time of the first
authentication of Securities of such series. If the form or terms of the
Securities of the series have been established in or pursuant to one or more
Board Resolutions as permitted by Sections 201 and 301, in


                                       31
<PAGE>


authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive such documents as it may reasonably request. The Trustee
shall also be entitled to receive, and (subject to Section 601) shall be fully
protected in relying upon, an Opinion of Counsel stating,

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

                  (2) if the terms of such Securities have been, or in the case
         of Securities of a series offered in a Periodic Offering, will be,
         established in or pursuant to a Board Resolution as permitted by
         Section 301, that such terms have been, or in the case of Securities of
         a series offered in a Periodic Offering, will be, established in
         conformity with the provisions of this Indenture, subject, in the case
         of Securities of a series offered in a Periodic Offering, to any
         conditions specified in such Opinion of Counsel; and

                  (3) that such Securities, when authenticated and delivered by
         the Trustee and issued by the Partnership in the manner and subject to
         any conditions and assumptions specified in such Opinion of Counsel,
         will constitute valid and legally binding obligations of the
         Partnership enforceable in accordance with their terms, subject to the
         following limitations: (i) bankruptcy, insolvency, moratorium,
         reorganization, liquidation, fraudulent conveyance or transfer and
         other similar laws of general applicability relating to or affecting
         the enforcement of creditors' rights, or to general equity principles,
         (ii) the availability of equitable remedies being subject to the
         discretion of the court to which application therefor is made; (iii)
         with reference to Securities stated to be payable in a currency other
         than Dollars said counsel may note that (x) a New York statute provides
         that a judgment rendered by a court of the State of New York in respect
         of an obligation denominated in any such other currency would be
         rendered in such other currency and would be converted into Dollars at
         the rate of exchange prevailing on the date of entry of the judgment,
         and (y) a judgment rendered by a Federal court sitting in the State of
         New York in respect of an obligation denominated in any such other
         currency may be expressed in Dollars, but said counsel need express no
         opinion as to the rate of exchange such Federal court would apply; and
         (iv) such other usual and customary matters as shall be specified in
         such Opinion of Counsel.

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

         Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Partnership Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the time
of authentication of each Security of such series if such documents are
delivered at or prior to the authentication upon original issuance of the first
Security of such series to be issued.


                                       32
<PAGE>

         With respect to Securities of a series offered in a Periodic Offering,
the Trustee may rely, as to the authorization by the Partnership of any of such
Securities, the form or forms and terms thereof and the legality, validity,
binding effect and enforceability thereof, upon the Opinion of Counsel and the
other documents delivered pursuant to Sections 201 and 301 and this Section 303,
as applicable, in connection with the first authentication of Securities of such
series.

         Each Security shall be dated as of the date of its authentication.

         No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature of an authorized officer, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered hereunder
and is entitled to the benefits of this Indenture.

         Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the
Partnership, and the Partnership shall deliver such Security to the Trustee for
cancellation as provided in Section 309 for all purposes of this Indenture, such
Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.

SECTION 304. Temporary Securities.

         Pending the preparation of Definitive Securities of any series, the
Partnership may execute, and upon Partnership Order the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the Definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.

         If temporary Securities of any series are issued, the Partnership will
cause Definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of Definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for Definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Partnership maintained pursuant to Section
1002 for the purpose of exchanges of Securities of such series, without charge
to the Holder. Upon surrender for cancellation of any one or more temporary
Securities of any series the Partnership shall execute and the Trustee shall
authenticate and deliver in exchange therefor Definitive Securities of the same
series and tenor, of any authorized denominations and of a like aggregate
principal amount. Until so exchanged the temporary Securities of any series
shall in all respects be entitled to the same benefits under this Indenture as
Definitive Securities of such series and tenor.

SECTION 305. Registration, Registration of Transfer and Exchange.

         The Partnership shall cause to be kept at the office or agency of the
Partnership in the Borough of Manhattan, the City of New York (or in any other
office or agency of the Partnership in a Place of Payment required by Section
1002) a register (the register maintained in such office





                                       33
<PAGE>

being herein sometimes referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Partnership shall
provide for the registration of Securities and of transfers of Securities. The
Trustee is hereby appointed as the initial "Security Registrar" for the purpose
of registering Securities and transfers of Securities as herein provided and its
corporate trust office which, at the date hereof, is located at 5 Penn Plaza,
13th Floor, New York, New York 10001, as the initial office or agency in the
Borough of Manhattan, The City of New York where the Security Register will be
maintained. The Partnership may at any time replace such Security Registrar,
change such office or agency or act as its own Security Registrar. The
Partnership will give prompt written notice to the Trustee of any change of the
Security Registrar or of the location of such office or agency.

         Upon surrender for registration of transfer of any Security of any
series at the office or agency of the Partnership maintained pursuant to Section
1002 for such purpose, the Partnership shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of the same series and tenor, of any
authorized denominations and of a like aggregate principal amount.

         At the option of the Holder, Securities of any series (except a Global
Security) may be exchanged for other Securities of the same series and tenor, of
any authorized denominations and of a like aggregate principal amount, upon
surrender of the Securities to be exchanged at such office or agency. Whenever
any Securities are so surrendered for exchange, the Partnership shall execute,
and the Trustee shall authenticate and deliver, the Securities which the Holder
making the exchange is entitled to receive.

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

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

         No service charge shall be imposed for any registration of transfer or
exchange of Securities, but the Partnership may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.

         Neither the Trustee nor the Partnership shall be required (1) to issue,
register the transfer of or exchange Securities of any series during a period
beginning at the opening of business 15 days before the day of mailing of a
notice of redemption of Securities of that series selected for redemption under
Section 1103 and ending at the close of business on the day of such mailing, or
(2) to register the transfer of or exchange any Security so selected for
redemption in whole or in part, except the unredeemed portion of any Security
being redeemed in part.




                                       34
<PAGE>

         Notwithstanding any other provisions of this Indenture and except as
otherwise specified with respect to any particular series of Securities as
contemplated by Section 301, a Global Security representing all or a portion of
the Securities of a series may not be transferred, except as a whole by the
Depositary for such series to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or by
such Depositary or any such nominee to a successor Depositary for such series or
a nominee of such successor Depositary. Every Security authenticated and
delivered upon registration or transfer of or in exchange for or in lieu of, a
Global Security shall be a Global Security except as provided in the two
paragraphs immediately following.

         If at any time the Depositary for any Securities of a series
represented by one or more Global Securities notifies the Partnership that it is
unwilling or unable to continue as Depositary for such Securities or if at any
time the Depositary for such Securities shall no longer be eligible to continue
as Depositary under Section 101 or ceases to be a clearing agency registered
under the Exchange Act, the Partnership shall appoint a successor Depositary
with respect to such Securities. If a successor Depositary for such Securities
is not appointed by the Partnership within 90 days after the Partnership
receives such notice or becomes aware of such ineligibility, the Partnership's
election pursuant to Section 301 that such Securities be represented by one or
more Global Securities shall no longer be effective and the Partnership will
execute, and the Trustee, upon receipt of a Partnership Order for the
authentication and delivery of Definitive Securities of such series, will
authenticate and deliver, Securities of such series in definitive registered
form without coupons, in any authorized denominations, in an aggregate principal
amount equal to the principal amount of the Global Security or Securities
representing such Securities in exchange for such Global Security or Securities
registered in the names of such Persons as the Depository shall direct.

         The Partnership may at any time and in its sole discretion determine
that the Securities of any series issued in the form of one or more Global
Securities shall no longer be represented by a Global Security or Securities. In
such event the Partnership will execute, and the Trustee, upon receipt of a
Partnership Order for the authentication and delivery of the Definitive
Securities of such series, will authenticate and deliver, Securities of such
series in definitive registered form without coupons, in any authorized
denominations, in an aggregate principal amount equal to the principal amount of
the Global Security or Securities representing such Securities in exchange for
such Global Security or Securities registered in the names of such Persons as
the Depository shall direct.

         If specified by the Partnership pursuant to Section 301 with respect to
Securities represented by a Global Security, the Depositary for such Global
Security may surrender such Global Security in exchange in whole or in part for
Securities of the same series and tenor in definitive registered form on such
terms as are acceptable to the Partnership and such Depositary. Thereupon, the
Partnership shall execute, and the Trustee, upon receipt of a Partnership Order
for the authentication and delivery of Securities in definitive registered form,
shall authenticate and deliver, without service charge,

                  (1) to the Person specified by such Depositary a new Security
         or Securities of the same series and tenor, of any authorized
         denominations as requested by such Person,





                                       35
<PAGE>

         in an aggregate principal amount equal to and in exchange for such
         Person's beneficial interest in the Global Security; and

                  (2) to such Depositary a new Global Security in a denomination
         equal to the difference, if any, between the principal amount of the
         surrendered Global Security and the aggregate principal amount of
         Securities authenticated and delivered pursuant to clause (1) above.

         Every Person who takes or holds any beneficial interest in a Global
Security agrees that:

                           (a) the Partnership and the Trustee may deal with the
                  Depositary as sole owner of the Global Security and as the
                  authorized representative of such Person;

                           (b) such Person's rights in the Global Security shall
                  be exercised only through the Depositary and shall be limited
                  to those established by law and agreement between such Person
                  and the Depositary and/or direct and indirect participants of
                  the Depositary;

                           (c) the Depositary and its participants may make
                  book-entry transfers of beneficial ownership among, and
                  receive and transmit distributions of principal and interest
                  on the Global Securities to, such Persons in accordance with
                  their own procedures; and

                           (d) none of the Partnership, the Trustee nor any
                  agent of the Partnership or the Trustee will have any
                  responsibility or liability for any aspect of the records
                  relating to or payments made on account of beneficial
                  ownership interests of a Global Security or for maintaining,
                  supervising or reviewing any records relating to such
                  beneficial ownership interests.

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

         If any mutilated Security is surrendered to the Trustee, together with
such security or indemnity as may be required by the Partnership, the Guarantor
or the Trustee to save each of them and any agent of either of them harmless,
the Partnership shall execute and the Trustee shall authenticate and deliver in
exchange therefor a new Security, with an endorsement of the Guarantee executed
by the Guarantor, of the same series and of like tenor and principal amount and
bearing a number not contemporaneously Outstanding.

         If there shall be delivered to the Partnership, the Guarantor and the
Trustee (1) evidence to their satisfaction of the destruction, loss or theft of
any Security and (2) such security or indemnity as may be required by them to
save each of them and any agent of either of them harmless, then, in the absence
of notice to the Partnership, the Guarantor or the Trustee that such Security
has been acquired by a bona fide purchaser, the Partnership shall execute and
the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost
or stolen Security, a new Security, with an endorsement of the Guarantee
executed by the Guarantor, of the same series and of like tenor and principal
amount and bearing a number not contemporaneously Outstanding.




                                       36
<PAGE>

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

         Upon the issuance of any new Security under this Section 306, the
Partnership may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section 306 in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Partnership and the Guarantor, whether or not the
mutilated, destroyed, lost or stolen Security shall be at any time enforceable
by anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Securities of that series duly issued
hereunder.

         The provisions of this Section 306 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.

SECTION 307. Payment of Interest; Interest Rights Preserved.

         Except as otherwise provided as contemplated by Section 301 with
respect to any series of Securities, interest on any Security which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date shall
be paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.

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

                  (1) The Partnership may elect to make payment of any Defaulted
         Interest to the Persons in whose names the Securities of such series
         (or their respective Predecessor Securities) are registered at the
         close of business on a Special Record Date for the payment of such
         Defaulted Interest, which shall be fixed in the following manner. The
         Partnership shall notify the Trustee in writing of the amount of
         Defaulted Interest proposed to be paid on each Security of such series
         and the date of the proposed payment, and at the same time the
         Partnership shall deposit with the Trustee an amount of money equal to
         the aggregate amount proposed to be paid in respect of such Defaulted
         Interest or shall make arrangements satisfactory to the Trustee for
         such deposit prior to the date of the proposed payment, such money when
         deposited to be held in trust for the benefit of the Persons entitled
         to such Defaulted Interest as in this clause provided. Thereupon, the
         Trustee shall fix a Special Record Date for the payment of such
         Defaulted Interest which shall be not more than 15 days and not less
         than 10 days prior to the date of the proposed payment and not less
         than 10 days after the receipt by the Trustee of the notice of the
         proposed payment. The Trustee shall promptly notify the Partnership of
         such Special






                                       37
<PAGE>

         Record Date and, in the name and at the expense of the Partnership,
         shall cause notice of the proposed payment of such Defaulted Interest
         and the Special Record Date therefor to be mailed, first-class postage
         prepaid, to each Holder of Securities of such series at his address as
         it appears in the Security Register, not less than 10 days prior to
         such Special Record Date. Notice of the proposed payment of such
         Defaulted Interest and the Special Record Date therefor having been so
         mailed, such Defaulted Interest shall be paid to the Persons in whose
         names the Securities of such series (or their respective Predecessor
         Securities) are registered at the close of business on such Special
         Record Date and shall no longer be payable pursuant to the following
         clause (2).

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

         Subject to the foregoing provisions of this Section 307 and Section
305, each Security delivered under this Indenture upon registration of transfer
of or in exchange for or in lieu of any other Security, shall carry the rights
to interest accrued and unpaid, and to accrue, which were carried by such other
Security.

SECTION 308. Persons Deemed Owners.

         Except as otherwise provided as contemplated by Section 301 with
respect to any series of Securities, prior to due presentment of a Security for
registration of transfer, the Partnership, the Guarantor, the Trustee and any
agent of the Partnership, the Guarantor, or the Trustee may treat the Person in
whose name such Security is registered as the owner of such Security for the
purpose of receiving payment of principal of and any premium and (subject to
Sections 305 and 307) any interest on such Security and for all other purposes
whatsoever, whether or not such Security is overdue, and neither the
Partnership, the Guarantor, the Trustee nor any agent of the Partnership, the
Guarantor, or the Trustee shall be affected by notice to the contrary.

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

SECTION 309. Cancellation.

         All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the






                                       38
<PAGE>

Trustee, be delivered to the Trustee and shall be promptly canceled by it. The
Partnership or the Guarantor may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Partnership or the Guarantor may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Partnership has not issued and sold, and all Securities so
delivered shall be promptly canceled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section 309, except as expressly permitted by this Indenture. All
canceled Securities held by the Trustee shall be disposed of in accordance with
its customary practices, and the Trustee shall thereafter deliver to the
Partnership a certificate with respect to such disposition.

SECTION 310. Computation of Interest.

         Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months and interest on
the Securities of each series for any partial period shall be computed on the
basis of a 360-day year of twelve 30-day months and the number of days elapsed
in any partial month.

SECTION 311. CUSIP Numbers.

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

                                   ARTICLE IV

                           SATISFACTION AND DISCHARGE

SECTION 401. Satisfaction and Discharge of Indenture.

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

                  (1) either

                           (a) all such Securities theretofore authenticated and
                  delivered (other than (i) such Securities which have been
                  destroyed, lost or stolen and






                                       39
<PAGE>

                  which have been replaced or paid as provided in Section 306,
                  and (ii) such Securities for whose payment money has
                  theretofore been deposited in trust or segregated and held in
                  trust by the Partnership and thereafter repaid to the
                  Partnership or discharged from such trust, as provided in
                  Section 1003) have been delivered to the Trustee for
                  cancellation; or

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

                                    (i) have become due and payable,

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

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

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

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

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

         Notwithstanding the satisfaction and discharge of this Indenture with
respect to Securities of any series, (x) the obligations of the Partnership to
the Trustee under Section 607, the obligations of the Trustee to any
Authenticating Agent under Section 614 and the right of the Trustee to resign
under Section 610 shall survive, and (y) if money shall have been deposited with
the Trustee pursuant to subclause (b) of clause (1) of this Section 401, the
obligations of the Partnership and/or the Trustee under Sections 402, 606, 701
and 1002 and the last paragraph of Section 1003 shall survive such satisfaction
and discharge.

SECTION 402. Application of Trust Money.

         Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any






                                       40
<PAGE>

Paying Agent (including the Partnership acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal and any
premium and interest for whose payment such money has been deposited with the
Trustee.

                                   ARTICLE V

                                    REMEDIES

SECTION 501. Events of Default.

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

                  (1) default in the payment of any interest upon any Security
         of that series when it becomes due and payable, and continuance of such
         default for a period of 30 days (whether or not such payment is
         prohibited by the provisions of Article XV); or

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

                  (3) default in the performance, or breach, of any term,
         covenant or warranty of the Partnership in this Indenture (other than a
         term, covenant or warranty a default in whose performance or whose
         breach is elsewhere in this Section 501 specifically dealt with or
         which has expressly been included in this Indenture solely for the
         benefit of series of Securities other than that series), and
         continuance of such default or breach for a period of 60 days after
         there has been given, by registered or certified mail, to the
         Partnership by the Trustee or to the Partnership and the Trustee by the
         Holders of at least 25% in principal amount of the Outstanding
         Securities of that series a written notice specifying such default or
         breach and requiring it to be remedied and stating that such notice is
         a "Notice of Default" hereunder; or

                  (4) failure to pay any Debt of the Partnership in excess of
         $25 million whether at final maturity (after the expiration of any
         applicable grace periods) or upon acceleration of the maturity
         thereof, if such indebtedness is not discharged, or such acceleration
         is not annulled, within 10 days after there has been given, by
         registered or certified mail, to the Partnership by the Trustee or to
         the Partnership and the Trustee by the Holders of at least 25% in
         principal amount of the Outstanding Securities of that series a written
         notice specifying such default or breach and requiring it to be
         remedied and stating that such notice is a "Notice of Default"
         hereunder; or

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





                                       41
<PAGE>

                  (6) a court of competent jurisdiction enters an order or
         decree under any Bankruptcy Law that (A) is for relief against the
         Partnership in an involuntary case, (B) appoints a Custodian of the
         Partnership or for all or substantially all of its property, or (C)
         orders the liquidation of the Partnership; and the order or decree
         remains unstayed and in effect for 60 days; or

                  (7) any other Event of Default provided with respect to
         Securities of that series in accordance with Section 301.

SECTION 502. Acceleration of Maturity; Rescission and Annulment.

         If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case the Trustee
or the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount of (or, if any of the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount of such Securities as may be specified in the terms
thereof), and accrued but unpaid interest, if any, on all of the Securities of
that series to be due and payable immediately, by a notice in writing to the
Partnership (and to the Trustee if given by Holders), and upon any such
declaration such principal amount (or specified amount) shall become immediately
due and payable. Notwithstanding the foregoing, if an Event of Default specified
in clause (5) or (6) of Section 501 occurs, the Securities of any series at the
time Outstanding shall be due and payable immediately without further action or
notice.

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

                  (1) the Partnership or the Guarantor has paid or deposited
         with the Trustee a sum sufficient to pay:

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

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

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

                           (d) all sums paid or advanced by the Trustee
                  hereunder and the reasonable compensation, expenses,
                  disbursements and advances of the Trustee, its agents and
                  counsel; and




                                       42
<PAGE>

                  (2) all Events of Default with respect to Securities of that
         series, other than the non-payment of the principal of Securities of
         that series which have become due solely by such declaration of
         acceleration, have been cured or waived as provided in Section 513.

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

SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.

         The Partnership covenants that if

                  (1) default is made in the payment of any installment of
         interest on any Security when such interest becomes due and payable and
         such default continues for a period of 30 days (whether or not such
         payment is prohibited by the provisions of Article XV), or

                  (2) default is made in the payment of the principal of (or
         premium, if any, on) any Security at the Maturity thereof (whether or
         not such payment is prohibited by the provisions of Article XV),

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

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

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

SECTION 504. Trustee May File Proofs of Claim.

         In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the






                                       43
<PAGE>

Partnership or any other obligor upon the Securities, their property or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Partnership for the payment of overdue principal or interest) shall be
entitled and empowered, by intervention in such proceeding or otherwise,

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

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

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.

         No provision of this Indenture shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding; provided,
however, that the Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and be a member of a creditors'
or other similar committee.

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

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

SECTION 506. Application of Money Collected.

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





                                       44
<PAGE>

         FIRST:   To the payment of all amounts due the Trustee under Section
                  607;

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

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

SECTION 507. Limitation on Suits.

         No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture
(including the Guarantee), or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless

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

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

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

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

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

it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.

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

         Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and any premium and (subject to Sections 305
and 307) interest on such Security on the respective Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption, on the





                                       45
<PAGE>

Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.

SECTION 509. Restoration of Rights and Remedies.

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

SECTION 510. Rights and Remedies Cumulative.

         Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 306, no right or remedy herein conferred upon or reserved to the Trustee
or to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

SECTION 511. Delay or Omission Not Waiver.

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

SECTION 512. Control by Holders.

         The Holders of a majority in aggregate principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with respect
to the Securities of such series; provided, however, that

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

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





                                       46
<PAGE>

                  (3) subject to the provisions of Section 601, the Trustee
         shall have the right to decline to follow any such direction if the
         Trustee in good faith shall determine that the proceeding so directed
         would involve the Trustee in personal liability.

SECTION 513. Waiver of Past Defaults.

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

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

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

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

SECTION 514. Undertaking for Costs.

         All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant, other
than the Trustee, 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 and expenses, 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 514 shall not
apply to any suit instituted by the Partnership, to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities of
any series, or to any suit instituted by any Holder for the enforcement of the
payment of the principal of, or premium, if any, or interest on any Security on
or after the Stated Maturity or Maturities expressed in such Security (or, in
the case of redemption, on or after the Redemption Date).

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

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





                                       47
<PAGE>

                                   ARTICLE VI

                                   THE TRUSTEE

SECTION 601. Certain Duties and Responsibilities.

                  (a) Except during the continuance of an Event of Default,

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

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

                  (b) In case an Event of Default has occurred and is
         continuing, the Trustee shall exercise 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.

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

                           (1) this Subsection shall not be construed to limit
                  the effect of Subsection (a) of this Section 601;

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

                           (3) the Trustee shall not be liable with respect to
                  any action taken or omitted to be taken by it in good faith in
                  accordance with the direction of the Holders of a majority in
                  principal amount of the Outstanding Securities of any series,
                  given pursuant to Section 512, relating to the time, method
                  and place of conducting any proceeding for any remedy
                  available to the Trustee, or exercising any trust or power
                  conferred upon the Trustee, under this Indenture with respect
                  to the Securities of such series; and




                                       48
<PAGE>

                           (4) no provision of this Indenture shall require the
                  Trustee to expend or risk its own funds or otherwise incur any
                  financial liability in the performance of any of its duties
                  hereunder, or in the exercise of any of its rights or powers.

                  (d) Whether or not therein expressly so provided, every
         provision of this Indenture relating to the conduct or affecting the
         liability of or affording protection to the Trustee shall be subject to
         the provisions of this Section 601.

SECTION 602. Notice of Defaults.

         Within 90 days after the occurrence of any default hereunder with
respect to the Securities of any series, the Trustee shall transmit by mail to
all Holders of Securities of such series, as their names and addresses appear in
the Security Register, notice of such default hereunder known to the Trustee,
unless such Default shall have been cured or waived; provided, however, that,
except in the case of a Default in the payment of the principal of or any
premium or interest on any Security of such series or in the payment of any
sinking fund installment with respect to Securities of such series, the Trustee
shall be protected in withholding such notice if and so long as a trust
committee of directors and/or Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interest of the Holders
of Securities of such series; and, provided, further, that in the case of any
Default of the character specified in Section 501(3) with respect to Securities
of such series, no such notice to Holders shall be given until at least 60 days
after the occurrence thereof.

SECTION 603. Certain Rights of Trustee.

         Subject to the provisions of Section 601:

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

                  (b) any request or direction of the Partnership mentioned
         herein shall be sufficiently evidenced by a Partnership Request or
         Partnership Order (other than delivery of any Security to the Trustee
         for authentication and delivery pursuant to Section 303, which shall be
         sufficiently evidenced as provided therein) and any resolution of the
         Board of Directors may be sufficiently evidenced by a Board Resolution;

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

                  (d) the Trustee may consult with counsel and the advice of
         such counsel or any Opinion of Counsel shall be full and complete
         authorization and protection in respect






                                       49
<PAGE>

         of any action taken, suffered or omitted by it hereunder in good faith
         and in reliance thereon;

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

                  (f) the Trustee shall not be bound to make any investigation
         into the facts or matters stated in any resolution, certificate,
         statement, instrument, opinion, report, notice, request, direction,
         consent, order, bond, debenture, note, other evidence of indebtedness
         or other paper or document, but the Trustee, in its discretion, may
         make such further inquiry or investigation into such facts or matters
         as it may see fit, and, if the Trustee shall determine to make such
         further inquiry or investigation, it shall be entitled to examine the
         books, records and premises of the Partnership, personally or by agent
         or attorney at the expense of the Partnership and shall incur no
         liability of any kind by reason of such inquiry or investigation;

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

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

                  (i) the Trustee shall be entitled to the rights and
         protections afforded to the Trustee pursuant to this Article in acting
         as a Paying Agent or Security Registrar hereunder.

SECTION 604. Not Responsible for Recitals or Issuance of Securities.

         The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Partnership, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. Neither the Trustee nor any Authenticating
Agent makes any representations as to the validity or sufficiency of this
Indenture or of the Securities. Neither the Trustee nor any Authenticating Agent
shall be accountable for the use or application by the Partnership of Securities
or the proceeds thereof.




                                       50
<PAGE>

SECTION 605. May Hold Securities.

         The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Partnership, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
310(b) and 311 of the Trust Indenture Act and Sections 608, 609 and 613 hereof,
may otherwise deal with the Partnership with the same rights it would have if it
were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such
other agent.

SECTION 606. Money Held in Trust.

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

SECTION 607. Compensation and Reimbursement.

         The Partnership agrees

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

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

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

         As security for the performance of the obligations of the Partnership
under this Section 607 the Trustee shall have a lien prior to the Securities
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for the payment of principal of (and premium, if any) or
interest on particular Securities.

         Without limiting any rights available to the Trustee under applicable
law, when the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 501(5) or Section 501(6), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services of the Trustee are intended to constitute expenses
of administration under any applicable Bankruptcy Law.





                                       51
<PAGE>

         The provisions of this Section 607 shall survive the satisfaction and
discharge of this Indenture, the resignation or removal of the Trustee and the
defeasance of the Securities.

SECTION 608. Disqualification; Conflicting Interests.

         Reference is made to Section 310(b) of the Trust Indenture Act. There
shall be excluded from the operation of Section 310(b)(1) of the Trust Indenture
Act this Indenture with respect to the Securities of more than one series.

SECTION 609. Corporate Trustee Required; Eligibility.

         There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
required by the Trust Indenture Act, subject to supervision or examination by
Federal or State authority. If such corporation publishes reports of condition
at least annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section 609, 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 Trustee shall not be an obligor upon the Securities or an
Affiliate thereof. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 609, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.

SECTION 610. Resignation and Removal; Appointment of Successor.

                  (a) No resignation or removal of the Trustee and no
         appointment of a successor Trustee pursuant to this Article shall
         become effective until the acceptance of appointment by the successor
         Trustee in accordance with the applicable requirements of Section 611.

                  (b) The Trustee may resign at any time with respect to the
         Securities of one or more series by giving written notice thereof to
         the Partnership. If the instrument of acceptance by a successor Trustee
         required by Section 611 shall not have been delivered to the Trustee
         within 30 days after the giving of such notice of resignation, the
         resigning Trustee may petition at the expense of the Partnership any
         court of competent jurisdiction for the appointment of a successor
         Trustee with respect to the Securities of such series.

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

                  (d) If at any time:

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





                                       52
<PAGE>

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

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

         then, in any such case, (i) the Partnership by a Board Resolution may
         remove the Trustee with respect to all Securities, or (ii) subject to
         Section 514, any Holder who has been a bona fide Holder of a Security
         for at least six months may, on behalf of himself and all others
         similarly situated, petition any court of competent jurisdiction for
         the removal of the Trustee with respect to all Securities and the
         appointment of a successor Trustee or Trustees.

                  (e) If the Trustee shall resign, be removed or become
         incapable of acting, or if a vacancy shall occur in the office of
         Trustee for any cause, with respect to the Securities of one or more
         series, the Partnership, by a Board Resolution, shall promptly appoint
         a successor Trustee or Trustees with respect to the Securities of that
         or those series (it being understood that any such successor Trustee
         may be appointed with respect to the Securities of one or more or all
         of such series and that at any time there shall be only one Trustee
         with respect to the Securities of any particular series) and shall
         comply with the applicable requirements of Section 611. If, within one
         year after such resignation, removal or incapability, or the occurrence
         of such vacancy, a successor Trustee with respect to the Securities of
         any series shall be appointed by Act of the Holders of a majority in
         principal amount of the Outstanding Securities of such series delivered
         to the Partnership and the retiring Trustee, the successor Trustee so
         appointed shall, forthwith upon its acceptance of such appointment in
         accordance with the applicable requirements of Section 611, become the
         successor Trustee with respect to the Securities of such series and to
         that extent supersede the successor Trustee appointed by the
         Partnership. If no successor Trustee with respect to the Securities of
         any series shall have been so appointed by the Partnership or the
         Holders and accepted appointment in the manner required by Section 611,
         any Holder who has been a bona fide Holder of a Security of such series
         for at least six months may, on behalf of himself and all others
         similarly situated, petition any court of competent jurisdiction for
         the appointment of a successor Trustee with respect to the Securities
         of such series.

                  (f) The Partnership shall give notice of each resignation and
         each removal of the Trustee with respect to the Securities of any
         series and each appointment of a successor Trustee with respect to the
         Securities of any series to all Holders of Securities of such series in
         the manner provided in Section 107. Each notice shall include the name
         of the successor Trustee with respect to the Securities of such series
         and the address of its Corporate Trust Office.




                                       53
<PAGE>

SECTION 611. 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 Partnership 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
         Partnership 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 Partnership, the retiring Trustee and each successor
         Trustee with respect to the Securities of one or more series shall
         execute and deliver an indenture supplemental hereto wherein each
         successor Trustee shall accept such appointment and which (1) shall
         contain such provisions as shall be necessary or desirable to transfer
         and confirm to, and to vest in, each successor Trustee all the rights,
         powers, trusts and duties of the retiring Trustee with respect to the
         Securities of that or those series to which the appointment of such
         successor Trustee relates, (2) if the retiring Trustee is not retiring
         with respect to all Securities, shall contain such provisions as shall
         be deemed necessary or desirable to confirm that all the rights,
         powers, trusts and duties of the retiring Trustee with respect to the
         Securities of that or those series as to which the retiring Trustee is
         not retiring shall continue to be vested in the retiring Trustee, and
         (3) shall add to or change any of the provisions of this Indenture as
         shall be necessary to provide for or facilitate the administration of
         the trusts hereunder by more than one Trustee, it being understood that
         nothing herein or in such supplemental indenture shall constitute such
         Trustees co-trustees of the same trust and that each such Trustee shall
         be trustee of a trust or trusts hereunder separate and apart from any
         trust or trusts hereunder administered by any other such Trustee; and
         upon the execution and delivery of such supplemental indenture the
         resignation or removal of the retiring Trustee shall become effective
         to the extent provided therein and each such successor Trustee, without
         any further act, deed or conveyance, shall become vested with all the
         rights, powers, trusts and duties of the retiring Trustee with respect
         to the Securities of that or those series to which the appointment of
         such successor Trustee relates; but, on request of the Partnership or
         any successor Trustee, such retiring Trustee shall duly assign,
         transfer and deliver to such successor Trustee all property and money
         held by such retiring Trustee hereunder with respect to the Securities
         of that or those series to which the appointment of such successor
         Trustee relates.

                  (c) Upon request of any such successor Trustee, the
         Partnership 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 611, as the case may be.




                                       54
<PAGE>

                  (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 and the Trust Indenture Act.

SECTION 612. Merger, Conversion, Consolidation or Succession to Business.

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

SECTION 613. Preferential Collection of Claims Against Partnership.

         Reference is made to Section 311 of the Trust Indenture Act. For
purposes of Section 311(b) of the Trust Indenture Act,

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

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

SECTION 614. Appointment of Authenticating Agent.

         The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon exchange,
registration of transfer or partial redemption thereof or pursuant to Section
306, and Securities so authenticated shall be entitled to the benefits of this
Indenture and shall be valid and obligatory for all purposes as if authenticated
by the Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an






                                       55
<PAGE>

Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Partnership and shall at all times be a corporation organized
and doing business under the laws of the United States of America, any State
thereof or the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and subject to supervision or examination by Federal or State
authority. If such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section 614, the combined
capital and surplus of such Authenticating Agent shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time an Authenticating Agent shall cease to be eligible
in accordance with the provisions of this Section 614, such Authenticating Agent
shall resign immediately in the manner and with the effect specified in this
Section 614.

         Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate agency or corporate trust business of an Authenticating Agent,
shall continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section 614, without the execution or filing of
any paper or any further act on the part of the Trustee or the Authenticating
Agent.

         An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Partnership. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Partnership. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 614, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Partnership and shall mail
written notice of such appointment by first-class mail, postage prepaid, to all
Holders of Securities of the series with respect to which such Authenticating
Agent will serve, as their names and addresses appear in the Security Register.
Any successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section 614.

         Except with respect to an Authenticating Agent appointed at the request
of the Partnership, the Trustee agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section 614,
and the Trustee shall be entitled to be reimbursed by the Partnership for such
payments, subject to the provisions of Section 607.

         If an appointment with respect to one or more series is made pursuant
to this Section 614, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:

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






                                       56
<PAGE>

                                                                            ,
                                  ------------------------------------------
                                                  As Trustee


                                  By:
                                     ----------------------------------------
                                            As Authenticating Agent


                                  By:
                                     ----------------------------------------
                                              Authorized Officer


                                  ARTICLE VII

              HOLDERS' LISTS AND REPORTS BY TRUSTEE AND PARTNERSHIP

SECTION 701. Partnership to Furnish Trustee Names and Addresses of Holders.

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

                  (a) semi-annually, not more than 15 days after each Regular
         Record Date for a series of Securities, a list for such series of
         Securities, in such form as the Trustee may reasonably require, of the
         names and addresses of the Holders of Securities of such series as of
         such Regular Record Date, and

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

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

SECTION 702. Preservation of Information; Communications to Holders.

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

                  (b) If three or more Holders (herein referred to as
         "applicants") apply in writing to the Trustee, and furnish to the
         Trustee reasonable proof that each such applicant has owned a Security
         for a period of at least six months preceding the date of such
         application, and such application states that the applicants desire to
         communicate with other Holders with respect to their rights under this
         Indenture or under the Securities






                                       57
<PAGE>

         and is accompanied by a copy of the form of proxy or other
         communication which such applicants propose to transmit, then the
         Trustee shall, within five business days after the receipt of such
         application, at its election, either

                                    (i) afford such applicants access to the
                           information preserved at the time by the Trustee in
                           accordance with Section 702(a), or

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

                  If the Trustee shall elect not to afford such applicants
         access to such information, the Trustee shall, upon the written request
         of such applicants, mail to each Holder whose name and address appear
         in the information preserved at the time by the Trustee in accordance
         with Section 702(a) a copy of the form of proxy or other communication
         which is specified in such request, with reasonable promptness after a
         tender to the Trustee of the material to be mailed and of payment, or
         provision for the payment, of the reasonable expenses of mailing,
         unless within five days after such tender the Trustee shall mail to
         such applicants and file with the Commission, together with a copy of
         the material to be mailed, a written statement to the effect that, in
         the opinion of the Trustee, such mailing would be contrary to the best
         interest of the Holders or would be in violation of applicable law.
         Such written statement shall specify the basis of such opinion. If the
         Commission, after opportunity for a hearing upon the objections
         specified in the written statement so filed, shall enter an order
         refusing to sustain any of such objections or if, after the entry of an
         order sustaining one or more of such objections, the Commission shall
         find, after notice and opportunity for hearing, that all the objections
         so sustained have been met and shall enter an order so declaring, the
         Trustee shall mail copies of such material to all such Holders with
         reasonable promptness after the entry of such order and the renewal of
         such tender; otherwise the Trustee shall be relieved of any obligation
         or duty to such applicants respecting their application.

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

SECTION 703. Reports by Trustee.

         Any Trustee's report required pursuant to Section 313(a) of the Trust
Indenture Act shall be dated as of May 15, and shall be transmitted within 60
days after May 15 of each year, commencing with the year 2003, by mail to all
Holders, as their names and addresses appear in






                                       58
<PAGE>

the Security Register. A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange or
automated quotation system, as applicable, upon which any Securities are listed
or traded, with the Commission and with the Partnership. The Partnership will
notify the Trustee when any Securities are listed or de-listed on any stock
exchange or traded on any automated quotation system.

SECTION 704. Reports by Partnership.

         The Partnership shall:

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

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

                  (c) transmit by mail to all Holders, as their names and
         addresses appear in the Security Register, within 30 days after the
         filing thereof with the Trustee, such summaries of any information,
         documents and reports required to be filed by the Partnership pursuant
         to clauses (a) and (b) of this Section 704 as may be required by rules
         and regulations prescribed from time to time by the Commission; and

                  (d) delivery of such reports, information and documents to the
         Trustee is for informational purposes only and the Trustee's receipt of
         such shall not constitute constructive notice of any information
         contained therein or determinable from information contained therein,
         including the Partnership compliance with any of its covenants
         hereunder (as to which the Trustee is entitled to rely exclusively on
         Officers' Certificates).





                                       59
<PAGE>

                                  ARTICLE VIII

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE


SECTION 801. Partnership May Consolidate, Etc., Only on Certain Terms.

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

                  (1) (A) in the case of a merger, the Partnership is the
         surviving entity, or (B) the Person formed by such consolidation or
         into which the Partnership is merged or the Person which acquires by
         sale or transfer, or which leases, the properties and assets of the
         Partnership as, or substantially as, an entirety expressly assumes, by
         an indenture supplemental hereto, executed and delivered to the
         Trustee, in form reasonably satisfactory to the Trustee, the due and
         punctual payment of the principal of and any premium and interest on
         all the Securities and the performance or observance of every covenant
         of this Indenture on the part of the Partnership to be performed or
         observed and shall have expressly provided for conversion rights in
         respect of any series of Outstanding Securities with conversion rights;

                  (2) the surviving entity or successor Person is a Person
         organized and existing under the laws of the United States of America,
         any state thereof or the District of Columbia;

                  (3) immediately after giving effect to such transaction, no
         Default or Event of Default shall have occurred and be continuing; and

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

SECTION 802. Successor Substituted.

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




                                       60
<PAGE>

                                   ARTICLE IX

                             SUPPLEMENTAL INDENTURES

SECTION 901. Supplemental Indentures Without Consent of Holders.

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

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

                  (2) to evidence the succession of another Person to the
         Guarantor and the assumption by any such successor of the Guarantee of
         the Guarantor herein and in the Securities; or

                  (3) to add to the covenants of the Partnership such further
         covenants, restrictions, conditions or provisions as the Partnership
         shall consider to be appropriate for the benefit of the Holders of all
         or any series of Securities (and if such covenants, restrictions,
         conditions or provisions 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 Partnership and to make the
         occurrence, or the occurrence and continuance, of a Default in any such
         additional covenants, restrictions, conditions or provisions an Event
         of Default permitting the enforcement of all or any of the several
         remedies provided in this Indenture as herein set forth; provided, that
         in respect of any such additional covenant, restriction, condition or
         provision such supplemental indenture may provide for a particular
         period of grace after default (which period may be shorter or longer
         than that allowed in the case of other defaults) or may provide for an
         immediate enforcement upon such an Event of Default or may limit the
         remedies available to the Trustee upon such an Event of Default or may
         limit the right of the Holders of a majority in aggregate principal
         amount of the Securities of such series to waive such an Event of
         Default; or

                  (4) to add any additional Defaults or Events of Default in
         respect of all or any series of Securities; or

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

                  (6) to change or eliminate any of the provisions of this
         Indenture, provided that any such change or elimination shall become
         effective only when there is no Security






                                       61
<PAGE>

         Outstanding of any series created prior to the execution of such
         supplemental indenture which is entitled to the benefit of such
         provision; or

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

                  (8) to evidence and provide for the acceptance of appointment
         hereunder by a successor Trustee with respect to the Securities of one
         or more series and to add to or change any of the provisions of this
         Indenture as shall be necessary to provide for or facilitate the
         administration of the trusts hereunder by more than one Trustee,
         pursuant to the requirements of Section 611(b); or

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

                  (10) to comply with the rules or regulations of any securities
         exchange or automated quotation system on which any of the Securities
         may be listed or traded; or

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

The Trustee is hereby authorized to join with the Partnership in the execution
of any such supplemental indenture, to make any further appropriate agreements
and stipulations which may be therein contained and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder, but the
Trustee shall not be obligated to enter into any such supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.

SECTION 902. Supplemental Indentures with Consent of Holders.

         With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities of all series affected
by such supplemental indenture, by Act of said Holders delivered to the
Partnership and the Trustee, the Partnership, when authorized by a Board
Resolution, the Guarantor and the Trustee may enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
of modifying in any manner the rights of the Holders of Securities of such
series under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby,





                                       62
<PAGE>
                 (1) change the Stated Maturity of the principal of, or any
         installment of principal of or interest on, any Security, or reduce the
         principal amount thereof or the rate of interest thereon or any premium
         payable upon the redemption thereof, or change the Redemption Date for
         any Security, or reduce the amount of the principal of an Original
         Issue Discount Security that would be due and payable upon a
         declaration of acceleration of the Maturity thereof pursuant to Section
         502, or change any Place of Payment where, or the coin or currency in
         which, any Security or any premium or the interest thereon is payable,
         or impair the right to institute suit for the enforcement of any such
         payment on or after the Stated Maturity thereof (or, in the case of
         redemption, on or after the Redemption Date), or

                  (2) modify the provisions of this Indenture in a manner
         adversely affecting any right to convert or exchange any Security into
         another security, or

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

                  (4) modify any of the provisions of this Section 902, Section
         513 or Section 1006, except to increase any such percentage or to
         provide that certain other provisions of this Indenture cannot be
         modified or waived without the consent of the Holder of each
         Outstanding Security affected thereby, provided, however, that this
         clause (4) shall not be deemed to require the consent of any Holder
         with respect to changes in the references to "the Trustee" and
         concomitant changes in this Section 902, or the deletion of this
         proviso, in accordance with the requirements of Sections 611(b) and
         901(8).

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

         It shall not be necessary for any Act of Holders under this Section 902
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.

SECTION 903. Execution of Supplemental Indentures.

         In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.





                                       63
<PAGE>

SECTION 904. Effect of Supplemental Indentures.

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

SECTION 905. Conformity with Trust Indenture Act.

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

SECTION 906. Reference in Securities to Supplemental Indentures.

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

                                   ARTICLE X

                                    COVENANTS

SECTION 1001. Payment of Principal, Premium and Interest.

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

SECTION 1002. Maintenance of Office or Agency.

         The Partnership will maintain in the Borough of Manhattan, The City of
New York, and in each other Place of Payment for any series of Securities an
office or agency where Securities of that series may be presented or surrendered
for payment, where Securities of that series may be surrendered for registration
of transfer or exchange and where notices and demands to or upon the Partnership
in respect of the Securities of that series and this Indenture may be served.
The Partnership will give prompt written notice to the Trustee of the location,
and any change in the location, of such office or agency. If at any time the
Partnership shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Partnership hereby appoints the Trustee as its
agent to receive all such presentations, surrenders, notices and demands.

         The Partnership may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or







                                       64
<PAGE>

all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Partnership of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York, and in each other Place of Payment for
Securities of any series for such purposes. The Partnership will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.

         Except as otherwise specified with respect to a series of Securities as
contemplated by Section 301, the Partnership hereby initially designates as the
Place of Payment for each series of Securities The City and State of New York,
and initially appoints the Trustee at its Corporate Trust Office as the
Partnership's office or agency for each such purpose in such city.

SECTION 1003. Money for Securities Payments to Be Held in Trust.

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

         Whenever the Partnership shall have one or more Paying Agents for any
series of Securities, it will, on or prior to each due date of the principal of
and any premium or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay the principal and any premium 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 Partnership will promptly notify the Trustee of its action
or failure so to act. For purposes of this Section 1003, should a due date for
principal of and any premium or interest on, or sinking fund payment with
respect to any series of Securities not be on a Business Day, such payment shall
be due on the next Business Day without any interest for the period from the due
date until such Business Day.

         The Partnership will cause each Paying Agent for any series of
Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section 1003, that such Paying Agent will:

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

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

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




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<PAGE>

         The Partnership and the Guarantor may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or for any other
purpose, pay, or by Partnership Order direct any Paying Agent to pay, to the
Trustee all sums held in trust by the Partnership or such Paying Agent, such
sums to be held by the Trustee upon the same trusts as those upon which such
sums were held by the Partnership 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.

         Subject to any applicable escheat or abandoned property laws, any money
deposited with the Trustee or any Paying Agent, or then held by the Partnership,
in trust for the payment of the principal of and any premium or interest on any
Security of any series and remaining unclaimed for one year after such principal
and any premium or interest has become due and payable shall be paid to the
Partnership on Partnership Request, or (if then held by the Partnership) shall
be discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Partnership for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Partnership as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Partnership cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in the Borough of Manhattan, The City of New York, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be repaid to the Partnership.

SECTION 1004. Statement by Officers as to Default.

         Annually, within 150 days after the close of each fiscal year beginning
with the fiscal year ending December 31, 2002, the Partnership will deliver to
the Trustee a brief certificate (which need not include the statements set forth
in Section 103) from the principal executive officer, principal financial
officer or principal accounting officer of the General Partner of the
Partnership as to his or her knowledge of the Partnership's compliance (without
regard to any period of grace or requirement of notice provided herein) with all
conditions and covenants under the Indenture and, if the Partnership shall be in
Default, specifying all such Defaults and the nature and status thereof of which
such officer has knowledge. The Partnership shall deliver to the Trustee, as
soon as possible and in any event within five days after the Partnership becomes
aware of the occurrence of any Event of Default or an event which, with notice
or the lapse of time or both, would constitute an Event of Default, an Officers'
Certificate setting forth the details of such Event of Default or default and
the action which the Company proposes to take with respect thereto.

SECTION 1005. Existence.

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




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<PAGE>
SECTION 1006. Waiver of Certain Covenants.

         The Partnership may omit in any particular instance to comply with any
term, provision or condition set forth in Section 1005 with respect to the
Securities of any series if before the time for such compliance the Holders of
at least a majority in aggregate principal amount of the Outstanding Securities
of all affected series (voting as one class) shall, by Act of such Holders,
either waive such compliance in such instance or generally waive compliance with
such term, provision or condition, but no such waiver shall extend to or affect
such term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Partnership and
the duties of the Trustee in respect of any such term, provision or condition
shall remain in full force and effect.

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

SECTION 1007. Additional Amounts.

         If the Securities of a series provide for the payment of additional
amounts (as provided in Section 301(18)), at least 10 days prior to the first
Interest Payment Date with respect to that series of Securities and at least 10
days prior to each date of payment of principal of, premium, if any, or interest
on the Securities of that series if there has been a change with respect to the
matters set forth in the below-mentioned Officers' Certificate, the Partnership
shall furnish to the Trustee and the principal paying agent, if other than the
Trustee, an Officers' Certificate instructing the Trustee and such paying agent
whether such payment of principal of, premium, if any, or interest on the
Securities of that series shall be made to holders of the Securities of that
series without withholding or deduction for or on account of any tax, assessment
or other governmental charge described in the Securities of that series. If any
such withholding or deduction shall be required, then such Officers' Certificate
shall specify by country the amount, if any, required to be withheld or deducted
on such payments to such holders and shall certify the






                                       67
<PAGE>

fact that additional amounts will be payable and the amounts so payable to each
holder, and the Partnership shall pay to the Trustee or such paying agent the
additional amounts required to be paid by this Section 1007. The Partnership
covenants to indemnify the Trustee and any paying agent for, and to hold them
harmless against, any loss, liability or expense reasonably incurred without
negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by any of them in reliance on any Officers' Certificate
furnished pursuant to this Section 1007.

         Whenever in this Indenture there is mentioned, in any context, the
payment of the principal of or any premium, interest or any other amounts on, or
in respect of, any Securities of any series, such mention shall be deemed to
include mention of the payment of additional amounts provided by the terms of
such series established hereby or pursuant hereto to the extent that, in such
context, additional amounts are, were or would be payable in respect thereof
pursuant to such terms, and express mention of the payment of additional amounts
(if applicable) in any provision hereof shall not be construed as excluding the
payment of additional amounts in those provisions hereof where such express
mention is not made.

SECTION 1008. Calculation of Original Issue Discount.

         The Partnership shall file with the Trustee promptly at the end of each
calendar year (i) a written notice specifying the amount of original issue
discount (including daily rates and accrual periods) accrued on Outstanding
Securities as of the end of such year and (ii) such other specific information
relating to such original issue discount as may then be relevant under the
Internal Revenue Code of 1986, as amended from time to time.

                                   ARTICLE XI

                            REDEMPTION OF SECURITIES

SECTION 1101. Applicability of Article.

         Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any series)
in accordance with this Article.

SECTION 1102. Election to Redeem; Notice to Trustee.

         The election of the Partnership to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Partnership of less than all the Securities of any series, the Partnership
shall, not less than 30 nor more than 60 days prior to the Redemption Date fixed
by the Partnership (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date, of the principal amount of
Securities of such series to be redeemed and, if applicable, of the tenor of the
Securities to be redeemed. In the case of any redemption of Securities (1) prior
to the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture, or (2) pursuant to an election
of the Partnership which is subject to a condition specified in the terms of




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<PAGE>

such Securities, the Partnership shall furnish the Trustee with an Officers'
Certificate evidencing compliance with such restriction or condition.

SECTION 1103. Selection by Trustee of Securities to be Redeemed.

         If less than all the Securities of any series are to be redeemed
(unless all the Securities of such series and of a specified tenor are to be
redeemed), the particular Securities to be redeemed shall be selected not more
than 45 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series not previously called for redemption, by lottery or
any other manner the Trustee deems fair and equitable for redemption of portions
(equal to the minimum authorized denomination for Securities of that series or
any integral multiple thereof) of the principal amount of Securities of such
series of a denomination larger than the minimum authorized denomination for
Securities of that series.

         The Trustee shall promptly notify the Partnership in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed. If the
Securities of any series to be redeemed consist of Securities having different
dates on which the principal is payable or different rates of interest, or
different methods by which interest may be determined or have any other
different tenor or terms, then the Partnership may, by written notice to the
Trustee, direct that the Securities of such series to be redeemed shall be
selected from among the groups of such Securities having specified tenor or
terms and the Trustee shall thereafter select the particular Securities to be
redeemed in the manner set forth in the preceding paragraph from among the group
of such Securities so specified.

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

SECTION 1104. Notice of Redemption.

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

         All notices of redemption shall state:

                  (1) the Redemption Date,

                  (2) the Redemption Price,

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




                                       69
<PAGE>

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

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

                  (6) applicable CUSIP numbers, and

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

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

SECTION 1105. Deposit of Redemption Price.

         On or prior to any Redemption Date, the Partnership shall deposit with
the Trustee or with a Paying Agent (or, if the Partnership is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) an amount
of money sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on, all the
Securities which are to be redeemed on that date.

SECTION 1106. Securities Payable on Redemption Date.

         Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Partnership shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Partnership at the Redemption Price, together with accrued
interest to the Redemption Date; provided, however, that, unless otherwise
specified as contemplated by Section 301, installments of interest whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Securities, or one or more Predecessor Securities, registered as such at
the close of business on the relevant Record Dates according to their terms and
the provisions of Section 307.

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

SECTION 1107. Securities Redeemed in Part.

         Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Partnership or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Partnership and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Partnership shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new Security or Securities of the same series
and of like tenor, of any





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<PAGE>

authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.

                                  ARTICLE XII

                                  SINKING FUNDS

SECTION 1201. Applicability of Article.

         The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 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 1202. 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 1202. Satisfaction of Sinking Fund Payments with Securities.

         The Partnership (1) may deliver Outstanding Securities of a series
(other than any previously called for redemption), and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Partnership 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 1203. Redemption of Securities for Sinking Fund.

         Not less than 45 days prior to each sinking fund payment date for any
series of Securities (unless a shorter period shall be satisfactory to the
Trustee), the Partnership will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivering and crediting Securities of that series pursuant to
Section 1202 and stating the basis for such credit and that such Securities have
not been previously so credited, and will also deliver to the Trustee any
Securities to be so delivered. Not less than 30 days before each such sinking
fund payment date the Trustee shall select the Securities to be redeemed upon
such sinking fund payment date in the manner specified in Section 1103 and cause
notice of the redemption thereof





                                       71
<PAGE>

to be given in the name of and at the expense of the Partnership in the manner
provided in Section 1104. Such notice having been duly given, the redemption of
such Securities shall be made upon the terms and in the manner stated in
Sections 1106 and 1107.

                                  ARTICLE XIII

                                   DEFEASANCE

SECTION 1301. Applicability of Article.

         The provisions of this Article shall be applicable to each series of
Securities except as otherwise specified as contemplated by Section 301 for
Securities of such series.

SECTION 1302. Legal Defeasance.

         In addition to discharge of this Indenture pursuant to Section 401, the
Partnership shall be deemed to have paid and discharged the entire indebtedness
on all the Securities of such a series on the 91st day after the date of the
deposit referred to in clause (1) below, and the provisions of this Indenture
with respect to the Securities of such series shall no longer be in effect
(except as to (i) rights of registration of transfer and exchange of Securities
of such series and the Partnership's right of optional redemption, if any, (ii)
substitution of mutilated, destroyed, lost or stolen Securities, (iii) rights of
Holders of Securities to receive, solely from the trust fund described in
Section 1304 and as more fully set forth in such Section, payments of principal
thereof and interest thereon, upon the original stated due dates therefor or on
the specified redemption dates therefor (but not upon acceleration), and
remaining rights of the holders to receive mandatory sinking fund payments, if
any, (iv) the rights, obligations, duties and immunities of the Trustee
hereunder, and the Partnership's obligations in connection therewith (including,
but not limited to, Section 607), (v) the rights, if any, to convert or exchange
the Securities of such series, (vi) the rights of the Holders of Securities of
such series as beneficiaries hereof with respect to the property so deposited
with the Trustee payable to all or any of them, and (vii) the obligations of the
Partnership under Section 1002), and the Trustee, at the expense of the
Partnership, shall, upon a Partnership Request, execute proper instruments
acknowledging the same, if the conditions set forth below are satisfied
(hereinafter, "defeasance"):

                  (1) The Partnership has irrevocably deposited or caused to be
         deposited with the Trustee as trust funds in trust, for the purposes of
         making the following payments, specifically pledged as security for,
         and dedicated solely to, the benefit of the Holders of the Securities
         of such series (A) cash in an amount, or (B) in the case of any series
         of Securities the payments on which may only be made in legal coin or
         currency of the United States, U.S. Government Obligations, maturing as
         to principal and interest at such times and in such amounts as will
         insure the availability of cash in an amount, or (C) a combination
         thereof, certified to be 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 (i) the
         principal and interest and premium, if any, on all Securities of such
         series on each date that such principal, interest or premium, if any,
         is due and payable or on any Redemption Date established pursuant to
         clause (3) below, and (ii) any mandatory sinking fund payments on the
         dates on which such payments are





                                       72
<PAGE>

         due and payable in accordance with the terms of this Indenture and the
         Securities of such series;

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

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

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

                  (5) Such defeasance shall not cause the Trustee to have a
         conflicting interest within the meaning of the Trust Indenture Act
         (assuming all Securities are in default within the meaning of such
         Act);

                  (6) Such defeasance shall not result in a breach or violation
         of, or constitute a default under, any other agreement or instrument to
         which the Partnership is a party or by which it is bound;

                  (7) Such defeasance shall not result in the trust arising from
         such deposit constituting an "investment company" within the meaning of
         the Investment Company Act of 1940, as amended, unless such trust shall
         be registered under such Act or exempt from registration thereunder;
         and

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

         For this purpose, such defeasance means that the Partnership, the
Guarantor and any other obligor upon the Securities of such series shall be
deemed to have paid and discharged the entire debt represented by the Securities
of such series, which shall thereafter be deemed to be "Outstanding" only for
the purposes of Section 1304 and the rights and obligations referred to in
clauses (i) through (vii), inclusive, of the first paragraph of this Section
1302, and to have satisfied all its other obligations under the Securities of
such series and this Indenture insofar as the Securities of such series are
concerned.




                                       73
<PAGE>

         Notwithstanding the foregoing, if an Event of Default specified in
Section 501(5) or 501(6), or an event which with lapse of time would become such
an Event of Default, shall occur during the period ending on the 91st day after
the date of the deposit referred to in clause (1) or, if longer, ending on the
day following the expiration of the longest preference period applicable to the
Partnership in respect of such deposit, then, effective upon such occurrence,
the defeasance pursuant to this Section 1302 and such deposit shall be rescinded
and annulled, and the Partnership, the Trustee and the Holders of the Securities
of such series shall be restored to their former positions.

SECTION 1303. Covenant Defeasance.

         The Partnership and any other obligor shall be released on the 91st day
after the date of the deposit referred to in clause (1) below from its
obligations under Sections 704, 801 and 1005 with respect to the Securities of
any series on and after the date the conditions set forth below are satisfied
(hereinafter, "covenant defeasance"), and the Securities of such series shall
thereafter be deemed to be not "Outstanding" for the purposes of any request,
demand, authorization, direction, notice, waiver, consent or declaration or
other action or Act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed Outstanding for
all other purposes hereunder. For this purpose, such covenant defeasance means
that, with respect to the Securities of such series, the Partnership may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such Section, whether directly or indirectly by
reason of any reference elsewhere herein to such Section or by reason of any
reference in such Section to any other provision herein or in any other document
and such omission to comply shall not constitute a Default or an Event of
Default under Section 501, but, except as specified above, the remainder of this
Indenture and the Securities of such series shall be unaffected thereby. The
following shall be the conditions to application of this Section 1303:

                  (1) The Partnership has irrevocably deposited or caused to be
         deposited with the Trustee as trust funds in trust for the purpose of
         making the following payments, specifically pledged as security for,
         and dedicated solely to, the benefit of the Holders of the Securities
         of such series, (A) cash in an amount, or (B) in the case of any series
         of Securities the payments on which may only be made in legal coin or
         currency of the United States, U.S. Government Obligations, maturing as
         to principal and interest at such times and in such amounts as will
         insure the availability of cash in a amount, or (C) 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 (i) the principal and interest
         and premium, if any, on all Outstanding Securities of such series on
         each date that such principal, interest or premium, if any, is due and
         payable or on any Redemption Date established pursuant to clause (2)
         below, and (ii) any mandatory sinking fund payments on the day on which
         such payments are due and payable in accordance with the terms of this
         Indenture and the Securities of such series;

                  (2) If the Securities are to be redeemed prior to Stated
         Maturity (other than from mandatory sinking fund payments or analogous
         payments), notice of such





                                       74
<PAGE>

         redemption shall have been duly given pursuant to this Indenture or
         provision therefor satisfactory to the Trustee shall have been made;

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

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

                  (5) Such covenant defeasance shall not cause the Trustee to
         have a conflicting interest within the meaning of the Trust Indenture
         Act (assuming all Securities are in default within the meaning of such
         Act);

                  (6) Such covenant defeasance shall not result in a breach or
         violation of, or constitute a default under, any other agreement or
         instrument to which the Partnership is a party or by which it is bound;

                  (7) Such covenant defeasance shall not result in the trust
         arising from such deposit constituting an "investment company" within
         the meaning of the Investment Company Act of 1940, as amended, unless
         such trust shall be registered under such Act or exempt from
         registration thereunder; and

                  (8) The Partnership has delivered to the Trustee an Officers'
         Certificate stating that all conditions precedent provided for relating
         to the covenant defeasance contemplated by this provision have been
         complied with.

         Notwithstanding the foregoing, if an Event of Default specified in
Section 501(5) or 501(6), or an event which with lapse of time would become such
an Event of Default, shall occur during the period ending on the 91st day after
the date of the deposit referred to in clause (1) or, if longer, ending on the
day following the expiration of the longest preference period applicable to the
Partnership in respect of such deposit, then, effective upon such occurrence,
the defeasance pursuant to this Section 1303 and such deposit shall be rescinded
and annulled, and the Partnership, the Trustee and the Holders of the Securities
of such series shall be restored to their former positions.

SECTION 1304. Application by Trustee of Funds Deposited for Payment of
Securities.

         Subject to the provisions of the last paragraph of Section 1003, all
moneys or U.S. Government Obligations (including proceeds thereof) deposited
with the Trustee pursuant to Section 1302 or 1303 (and all funds earned on such
moneys or U.S. Government Obligations) shall be held in trust and applied by it,
in accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Partnership
acting as its own Paying Agent), to the Holders of the particular Securities of
such





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<PAGE>

series for the payment or redemption of which such moneys have been deposited
with the Trustee, of all sums due and to become due thereon for principal and
any premium and interest; but such money need not be segregated from other funds
except to the extent required by law. Subject to Sections 1302 and 1303, the
Trustee shall promptly pay to the Partnership upon request any excess moneys
held by it at any time.

SECTION 1305. Repayment to Partnership.

         The Trustee and any Paying Agent promptly shall pay or return to the
Partnership upon Partnership Request any money and U.S. Government Obligations
held by them at any time that are not required for the payment of the principal
of, premium, if any, and any interest on the Securities of any series for which
money or U.S. Government Obligations have been deposited pursuant to Section
1302 or 1303.

         The provisions of the last paragraph of Section 1003 shall apply to any
money held by the Trustee or any Paying Agent under this Article that remains
unclaimed for one year after the Maturity of any series of Securities for which
money or U.S. Government Obligations have been deposited pursuant to Section
1302 or 1303.

                                  ARTICLE XIV

                            GUARANTEE OF SECURITIES

SECTION 1401. Unconditional Guarantee.

         For value received, the Guarantor hereby fully, irrevocably,
unconditionally and absolutely guarantees to the Holders and to the Trustee the
due and punctual payment of the principal of, and premium, if any, and interest
on the Securities and all other amounts due and payable under this Indenture and
the Securities by the Partnership (including, without limitation, all costs and
expenses (including reasonable legal fees and disbursements) incurred by the
Trustee or the Holders in connection with the enforcement of this Indenture and
the Guarantees) (collectively, the "Indenture Obligations"), when and as such
principal, premium, if any, and interest and such other amounts shall become due
and payable, whether at the Stated Maturity, upon redemption or by declaration
of acceleration or otherwise, according to the terms of the Securities and this
Indenture. The guarantees by the Guarantor set forth in this Article XIV are
referred to herein as the "Guarantees." Without limiting the generality of the
foregoing, the Guarantor's liability shall extend to all amounts that constitute
part of the Indenture Obligations and would be owed by the Partnership under
this Indenture and the Securities but for the fact that they are unenforceable,
reduced, limited, impaired, suspended or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the Partnership.

         Failing payment when due of any amount guaranteed pursuant to the
Guarantees, for whatever reason, the Guarantor will be obligated (to the fullest
extent permitted by applicable law) to pay the same immediately to the Trustee,
without set-off or counterclaim or other reduction whatsoever (whether for
taxes, withholding or otherwise). Each Guarantee hereunder is intended to be a
general, unsecured, subordinated obligation of the Guarantor and will be
subordinated in right of payment with all Guarantor Senior Debt of the
Guarantor. The






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 Guarantor hereby agrees that to the fullest extent permitted by applicable law,
its obligations hereunder shall be full, irrevocable, unconditional and
absolute, irrespective of the validity, regularity or enforceability of the
Securities, the Guarantees or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder with respect to any
provisions hereof or thereof, the recovery of any judgment against the
Partnership, any action to enforce the same or any other circumstance which
might otherwise constitute a legal or equitable discharge or defense of the
Guarantor. The Guarantor hereby agrees that in the event of a default in payment
of the principal of, or premium, if any, or interest on the Securities of any
series or any other amounts payable under this Indenture and the Securities by
the Partnership, whether at the Stated Maturity, upon redemption or by
declaration of acceleration or otherwise, legal proceedings may be instituted by
the Trustee on behalf of the Holders or, subject to Section 507 hereof, by the
Holders, on the terms and conditions set forth in this Indenture, directly
against the Guarantor to enforce the Guarantees without first proceeding against
the Partnership.

         To the fullest extent permitted by applicable law, the obligations of
the Guarantor under this Article XIV shall be as aforesaid full, irrevocable,
unconditional and absolute and shall not be impaired, modified, discharged,
released or limited by any occurrence or condition whatsoever, including,
without limitation, (i) any compromise, settlement, release, waiver, renewal,
extension, indulgence or modification of, or any change in, any of the
obligations and liabilities of the Partnership or the Guarantor contained in any
of the Securities or this Indenture, (ii) any impairment, modification, release
or limitation of the liability of the Partnership, the Guarantor or any of their
estates in bankruptcy, or any remedy for the enforcement thereof, resulting from
the operation of any present or future provision of any applicable Bankruptcy
Law, as amended, or other statute or from the decision of any court, (iii) the
assertion or exercise by the Partnership, the Guarantor or the Trustee of any
rights or remedies under any of the Securities or this Indenture or their delay
in or failure to assert or exercise any such rights or remedies, (iv) the
assignment or the purported assignment of any property as security for any of
the Securities, including all or any part of the rights of the Partnership or
the Guarantor under this Indenture, (v) the extension of the time for payment by
the Partnership or the Guarantor of any payments or other sums or any part
thereof owing or payable under any of the terms and provisions of any of the
Securities or this Indenture or of the time for performance by the Partnership
or the Guarantor of any other obligations under or arising out of any such terms
and provisions or the extension or the renewal of any thereof, (vi) the
modification or amendment (whether material or otherwise) of any duty, agreement
or obligation of the Partnership or the Guarantor set forth in this Indenture,
(vii) the voluntary or involuntary liquidation, dissolution, sale or other
disposition of all or substantially all of the assets, marshaling of assets and
liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of, or other
similar proceeding affecting, the Partnership or any of the Guarantor or any of
their respective assets, or the disaffirmance of any of the Securities, the
Guarantees or this Indenture in any such proceeding, (viii) the release or
discharge of the Partnership or the Guarantor from the performance or observance
of any agreement, covenant, term or condition contained in any of such
instruments by operation of law, (ix) the unenforceability of any of the
Securities, the Guarantees or this Indenture, (x) any change in the name,
business, capital structure, corporate existence, or ownership of the
Partnership or the Guarantor, or (xi) any other circumstance which might
otherwise constitute a defense available to, or a legal or equitable discharge
of, a surety or the Guarantor.




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<PAGE>
         To the fullest extent permitted by applicable law, the Guarantor hereby
(i) waives diligence, presentment, demand of payment, notice of acceptance,
filing of claims with a court in the event of the merger, insolvency or
bankruptcy of the Partnership or the Guarantor, and all demands and notices
whatsoever, (ii) acknowledges that any agreement, instrument or document
evidencing the Guarantees may be transferred and that the benefit of its
obligations hereunder shall extend to each holder of any agreement, instrument
or document evidencing the Guarantees without notice to them and (iii) covenants
that its Guarantee will not be discharged except by complete performance of the
Guarantees. The Guarantor further agrees that to the fullest extent permitted
by applicable law, if at any time all or any part of any payment theretofore
applied by any Person to any Guarantee is, or must be, rescinded or returned for
any reason whatsoever, including without limitation, the insolvency, bankruptcy
or reorganization of the Guarantor, such Guarantee shall, to the extent that
such payment is or must be rescinded or returned, be deemed to have continued in
existence notwithstanding such application, and the Guarantees shall continue to
be effective or be reinstated, as the case may be, as though such application
had not been made.

         The Guarantor shall be subrogated to all rights of the Holders and the
Trustee against the Partnership in respect of any amounts paid by the Guarantor
pursuant to the provisions of this Indenture; provided, however, that the
Guarantor shall not be entitled to enforce or to receive any payments arising
out of, or based upon, such right of subrogation with respect to any of the
Securities until all of the Securities and the Guarantees thereof shall have
been indefeasibly paid in full or discharged.

         A director, officer, employee or stockholder, as such, of the Guarantor
shall not have any liability for any obligations of the Guarantor under this
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation.

         No failure to exercise and no delay in exercising, on the part of the
Trustee or the Holders, any right, power, privilege or remedy under this Article
XIV and the Guarantees shall operate as a waiver thereof, nor shall any single
or partial exercise of any rights, power, privilege or remedy preclude any other
or further exercise thereof, or the exercise of any other rights, powers,
privileges or remedies. The rights and remedies herein provided for are
cumulative and not exclusive of any rights or remedies provided in law or
equity. Nothing contained in this Article XIV shall limit the right of the
Trustee or the Holders to take any action to accelerate the maturity of the
Securities pursuant to Article V or to pursue any rights or remedies hereunder
or under applicable law.

SECTION 1402. Execution and Delivery of Notation of Guarantees.

         To further evidence the Guarantees, the Guarantor hereby agrees that a
notation of such Guarantees shall be endorsed on each Security authenticated and
delivered by the Trustee and executed by either manual or facsimile signature of
an officer of the Guarantor provided that failure to include such notation on
the Security shall not affect the validity of the Guarantees.

         The Guarantor hereby agrees that its Guarantees shall remain in full
force and effect notwithstanding any failure to endorse on each Security a
notation relating to the Guarantee thereof.




                                       78
<PAGE>

         If an officer of a Guarantor whose signature is on this Indenture or a
Security no longer holds that office at the time the Trustee authenticates such
Security or at any time thereafter, the Guarantor's Guarantee of such Security
shall be valid nevertheless.

         The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Guarantee set forth in
this Indenture on behalf of the Guarantor.

SECTION 1403. Subordination of Guarantees.

         The obligations of the Guarantor under its Guarantee pursuant to this
Article XIV shall be junior and subordinated to the prior payment in full in
cash of all Senior Debt and Guarantor Senior Debt (including interest after the
commencement of any proceeding of the type described in Section 1401 with
respect to such Guarantor at the rate specified in the applicable Guarantor
Senior Debt, whether or not such interest would be an allowed claim in such
proceeding) of such Guarantor, in each case on the same basis as the Securities
are junior and subordinated to Senior Debt, as set forth in Article XV mutatis
mutandis. For the purposes of the foregoing sentence, the Trustee and the
Holders shall have the right to receive and/or retain payments by the Guarantor
only at such times as they may receive and/or retain payments and distributions
in respect of the Securities pursuant to this Indenture, including Article XV
hereof.

                                   ARTICLE XV

                           SUBORDINATION OF SECURITIES

SECTION 1501. Securities Subordinated to Senior Debt.

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

                  (2) If (A) the Partnership shall default in the payment of any
         principal of, premium, if any, or interest, if any, on any Senior Debt
         of the Partnership when the same becomes due and payable, whether at
         maturity or at a date fixed for prepayment or by declaration of
         acceleration or otherwise, or (B) any other default shall occur with
         respect to Senior Debt of the Partnership and the maturity of such
         Senior Debt has been accelerated in accordance with its terms, then,
         upon written notice of such default to the Partnership and the Trustee
         by the holders of Senior Debt of the Partnership or any trustee
         therefor, unless and until, in either case, the default has been cured
         or waived or has ceased to exist, or, any such acceleration has been
         rescinded or such Senior Debt has been paid in full, no direct or
         indirect payment (in cash, property, securities, by set-off or
         otherwise) shall be made or agreed to be made on account of the
         principal of, premium, if any, or interest, if any, on any of the
         Securities, or in respect of any redemption,





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<PAGE>

         retirement, purchase or other acquisition of any of the Securities
         other than those made in capital stock of the Partnership (or cash in
         lieu of factional shares thereof).

                  (3) If any default occurs under the Senior Debt of the
         Partnership, pursuant to which the maturity thereof may be accelerated
         immediately without further notice (except such notice as may be
         required to effect such acceleration) or at the expiration of any
         applicable grace periods (a "Senior Nonmonetary Default"), then, upon
         the receipt by the Partnership and the Trustee of written notice
         thereof (a "Payment Blockage Notice") from or on behalf of holders of
         such Senior Debt of the Partnership specifying an election to prohibit
         such payment and other action by the Partnership in accordance with the
         following provisions of this paragraph (3), the Partnership may not
         make any payment or take any other action that would be prohibited by
         paragraph (2) of this Section 1501 during the period (the "Payment
         Blockage Period") commencing on the date of receipt of such Payment
         Blockage Notice and ending on the earlier of (A) the date, if any, on
         which the holders of such Senior Debt or their representative notifies
         the Trustee that such Senior Nonmonetary Default is cured or waived or
         ceases to exist or the Senior Debt to which such Senior Nonmonetary
         Default relates is discharged or (B) the 179th day after the date of
         receipt of such Payment Blockage Notice. Notwithstanding the provisions
         described in the immediately preceding sentence, the Partnership may
         resume payments on the Securities following such Payment Blockage
         Period.

SECTION 1502. Distribution on Dissolution, Liquidation and Reorganization;
              Subrogation of Securities.

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

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

                  (2) any payment or distribution of assets of the Partnership
         of any kind or character, whether in cash, property or securities, to
         which the Holders of the Securities or the Trustee (on behalf of the
         Holders) would be entitled except for the provisions of this Article
         shall be paid by the liquidating trustee or agent or other person
         making such payment or distribution, whether a trustee in bankruptcy, a
         receiver or liquidating trustee or otherwise, directly to the holders
         of Senior Debt of the Partnership or their representative or
         representatives or to the trustee or trustees under any indenture under
         which any instruments evidencing any of such Senior Debt may have been
         issued, ratably





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<PAGE>

         according to the aggregate amounts remaining unpaid on account of the
         principal of, premium, if any, interest, and any interest thereon, on
         the Senior Debt of the Partnership held or represented by each, to the
         extent necessary to make payment in full of all Senior Debt of the
         Partnership remaining unpaid, after giving effect to any concurrent
         payment or distribution to the holders of such Senior Debt; and

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

         Subject to the payment in full of all Senior Debt of the Partnership,
the Holders of the Securities shall be subrogated to the rights of the holders
of such Senior Debt to receive payments or distributions of cash, property or
securities of the Partnership applicable to Senior Debt of the Partnership until
the principal, premium, interest, and any interest thereon, of or on the
Securities shall be paid in full and no such payments or distributions to the
Holders of the Securities of cash, property or securities otherwise
distributable to the Senior Debt of the Partnership shall, as between the
Partnership, its creditors other than the holders of Senior Debt of the
Partnership, and the Holders of the Securities, be deemed to be a payment by the
Partnership to or on account of the Securities. It is understood that the
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of the Securities, on the one hand,
and the holders of Senior Debt of the Partnership, on the other hand. Nothing
contained in this Article or elsewhere in this Indenture or in the Securities is
intended to or shall impair, as between the Partnership, its creditors other
than the holders of Senior Debt of the Partnership, and the Holders of the
Securities, the obligation of the Partnership, which is unconditional and
absolute, to pay to the Holders of the Securities the principal, premium,
interest, and any interest thereon, of or on the Securities as and when the same
shall become due and payable in accordance with their terms, or to affect the
relative rights of the Holders of the Securities and creditors of the
Partnership other than the holders of Senior Debt of the Partnership, nor shall
anything herein or in the Securities prevent the Trustee or the Holder of any
Security from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article
of the holders of such Senior Debt in respect of cash, property or securities of
the Partnership received upon the exercise of any such remedy. Upon any payment
or distribution of assets of the Partnership referred to in this Article, the
Trustee shall be entitled to conclusively rely upon a certificate of the
liquidating trustee or agent or other person making any distribution to the
Trustee for the purpose of ascertaining the persons entitled to participate in
such distribution, the holders of Senior Debt of the Partnership and other
indebtedness of the Partnership, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon, and all other facts pertinent
thereto or to this Article.





                                       81
<PAGE>

         The Trustee, however, shall not be deemed to owe any fiduciary duty to
the holders of Senior Debt of the Partnership. The Trustee shall not be liable
to any such holder if it shall pay over or distribute to or on behalf of Holders
of Securities or the Partnership moneys or assets to which any holder of Senior
Debt of the Partnership shall be entitled by virtue of this Article. The rights
and claims of the Trustee under Section 607 shall not be subject to the
provisions of this Article.

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

SECTION 1503. Payments on Securities Permitted.

         Nothing contained in this Indenture or in any of the Securities shall
(1) affect the obligation of the Partnership to make, or prevent the Partnership
from making, at any time except as provided in Sections 1501 and 1502, payments
of principal, premium, interest, and any interest thereon, of or on the
Securities or (2) prevent the application by the Trustee of any moneys deposited
with it hereunder to the payment of or on account of the principal, premium,
interest or other amounts, and any interest thereon, of or on the Securities
unless the Trustee shall have received at its Corporate Trust Office written
notice of any event prohibiting the making of such payment two Business Days (A)
prior to the date fixed for such payment, (B) prior to the execution of an
instrument to satisfy and discharge this Indenture based upon the deposit of
funds under Section 401(1)(a), (C) prior to the execution of an instrument
acknowledging the defeasance of such Securities pursuant to Section 1302 or (D)
prior to any deposit pursuant to clause (1) of Section 1303 with respect to such
Securities.

SECTION 1504. Authorization of Holders of Securities to Trustee to Effect
              Subordination.

         Each Holder of Securities by his acceptance thereof, whether upon
original issue or upon transfer or assignment, authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article and appoints the
Trustee his attorney-in-fact for any and all such purposes.

SECTION 1505. Notices to Trustee.

         The Partnership shall give prompt written notice to a Responsible
Officer of the Trustee located at the Corporate Trust Office of the Trustee of
any fact known to the Partnership which would prevent the making of any payment
to or by the Trustee in respect of the Securities. Notwithstanding the
Provisions of this Article or any other provisions of this Indenture, neither
the Trustee nor any Paying Agent (other than the Partnership) shall be charged
with knowledge of the existence of any Senior Debt of the Partnership or of any
event which would prohibit the making of any payment of moneys to or by the
Trustee or such Paying Agent, unless and until the Trustee or such Paying Agent
shall have received (in the case of the Trustee, at its Corporate Trust Office)
written notice thereof from the Partnership or from the holder of any Senior
Debt of the Partnership or from the trustee for or representative of any Senior
Debt of the Partnership



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<PAGE>


together with proof satisfactory to the Trustee of such holding of such Senior
Debt or of the authority of such trustee or representative; provided, however,
that if at least two Business Days prior to the date upon which by the terms
hereof any such moneys may become payable for any purpose (including, without
limitation, the payment of the principal, premium, interest, of or on any
Security, or any interest thereon) or the date on which the Trustee shall
execute an instrument acknowledging satisfaction and discharge of this Indenture
or the defeasance of Securities pursuant to Section 1302 or the date on which a
deposit pursuant to clause (1) of Section 1303 is made, the Trustee shall not
have received with respect to such moneys or the moneys deposited with it as a
condition to such satisfaction and discharge or defeasance the notice provided
for in this Section 1505, then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
moneys and to apply the same to the purpose for which they were received, and
shall not be affected by any notice to the contrary, which may be received by it
on or after such two Business Days prior to such date. The Trustee shall be
entitled to conclusively rely on the delivery to it of a written notice by a
person representing himself to be a holder of Senior Debt of the Partnership (or
a trustee or representative on behalf of such holder) to establish that such a
notice has been given by a holder of Senior Debt of the Partnership or a trustee
or representative on behalf of any such holder. In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Debt of the Partnership to participate
in any payment or distribution pursuant to this Article, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of Senior Debt of the Partnership held by such Person, the extent
to which such Person is entitled to participate in such payment or distribution
and any other facts pertinent to the rights of such Person under this Article
and, if such evidence is not furnished, the Trustee may defer any payment to
such Person pending judicial determination as to the right of such Person to
receive such payment.

SECTION 1506. Trustee as Holder of Senior Debt.

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

SECTION 1507. Modification of Terms of Senior Debt.

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

         No compromise, alteration, amendment, modification, extension, renewal
or other change of, or waiver, consent or other action in respect of, any
liability or obligation under or in respect of, or of any of the terms,
covenants or conditions of any indenture or other instrument under which any
Senior Debt of the Partnership is outstanding or of such Senior Debt, whether or
not such release is in accordance with the provisions of any applicable
document, shall in any way





                                       83
<PAGE>

alter or affect any of the provisions of this Article or of the Securities
relating to the subordination thereof.

                                      * * *

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




                                       84
<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.

                            VALERO LOGISTICS OPERATIONS, L.P.

                            By:      Valero GP, Inc.,
                                     Its General Partner


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

                            VALERO  L.P.

                            By:      Riverwalk Logistics, L.P.,
                                     Its General Partner

                                     By:      Valero GP, LLC,
                                              Its General Partner


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


                            THE BANK OF NEW YORK, as Trustee



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



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