Exhibit No. 4.1




                              FLORES & RUCKS, INC.

                              SUBSIDIARY GUARANTORS

                                  Named Herein

                                       AND

                               FLEET NATIONAL BANK

                                     Trustee

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

                                    Indenture


                         Dated as of September 26, 1996

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


                                  $160,000,000



                    9 3/4% Senior Subordinated Notes due 2006


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






<PAGE>



                         TABLE OF CONTENTS
<TABLE>
<CAPTION>                                                                                                      
ARTICLE I - DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION                                             Page
<S>     <C>                  <C>                                                                                <C>    
         Section 1.1         Definitions..........................................................................2
         Section 1.2         Other Definitions...................................................................29
         Section 1.3         Incorporation by Reference of Trust Indenture Act...................................29
         Section 1.4         Rules of Construction...............................................................30
</TABLE>

<TABLE>
<CAPTION>
ARTICLE II - SECURITY FORMS
<S>     <C>                  <C>                                                                                <C> 
         Section 2.1         Forms Generally.....................................................................30
         Section 2.2         Form of Face of Security............................................................31
         Section 2.3         Form of Reverse of Security.........................................................33
         Section 2.4         Form of Notation Relating to Subsidiary Guarantees..................................37
         Section 2.5         Form of Trustee's Certificate of Authentication.....................................39
</TABLE>

<TABLE>
<CAPTION>
ARTICLE III - THE SECURITIES
<S>     <C>                  <C>                                                                                <C> 
         Section 3.1         Title and Terms.....................................................................39
         Section 3.2         Denominations.......................................................................40
         Section 3.3         Execution, Authentication, Delivery and Dating......................................40
         Section 3.4         Temporary Securities................................................................41
         Section 3.5         Registration, Registration of Transfer and Exchange.................................41
         Section 3.6         Book-Entry Provisions for Global Security...........................................42
         Section 3.7         Mutilated, Destroyed, Lost and Stolen Securities....................................43
         Section 3.8         Payment of Interest; Interest Rights Preserved......................................44
         Section 3.9         Persons Deemed Owners...............................................................45
         Section 3.10        Cancellation........................................................................45
         Section 3.11        Computation of Interest.............................................................45
</TABLE>

<TABLE>
<CAPTION>
ARTICLE IV - SATISFACTION AND DISCHARGE
<S>     <C>                  <C>                                                                                <C> 
         Section 4.1         Satisfaction and Discharge of Indenture.............................................46
         Section 4.2         Application of Trust Money..........................................................47
</TABLE>

<TABLE>
<CAPTION>
ARTICLE V - REMEDIES
<S>     <C>                  <C>                                                                                <C> 
         Section 5.1         Events of Default...................................................................47
         Section 5.2         Acceleration of Maturity; Rescission and Annulment..................................49
         Section 5.3         Collection of Indebtedness and Suits for Enforcement by Trustee......... ...........51
</TABLE>
                                      -i-

<PAGE>

<TABLE>
<S>      <C>                 <C>                                                                                 <C>
         Section 5.4         Trustee May File Proofs of Claim....................................................52
         Section 5.5         Trustee May Enforce Claims Without Possession of Securities.........................52
         Section 5.6         Application of Money Collected......................................................52
         Section 5.7         Limitation on Suits.................................................................53
         Section 5.8         Unconditional Right of Holders to Receive Principal, Premium and Interest
                                                                                                                 53
         Section 5.9         Restoration of Rights and Remedies..................................................54
         Section 5.10        Rights and Remedies Cumulative......................................................54
         Section 5.11        Delay or Omission Not Waiver........................................................54
         Section 5.12        Control by Holders..................................................................54
         Section 5.13        Waiver of Past Defaults.............................................................54
         Section 5.14        Waiver of Stay, Extension or Usury Laws.............................................55
</TABLE>

<TABLE>
<CAPTION>
ARTICLE VI - THE TRUSTEE
<S>     <C>                  <C>                                                                                <C> 
         Section 6.1         Notice of Defaults..................................................................55
         Section 6.2         Certain Rights of Trustee...........................................................55
         Section 6.3         Trustee Not Responsible for Recitals or Issuance of Securities......................56
         Section 6.4         May Hold Securities.................................................................57
         Section 6.5         Money Held in Trust.................................................................57
         Section 6.6         Compensation and Reimbursement......................................................57
         Section 6.7         Corporate Trustee Required; Eligibility.............................................58
         Section 6.8         Conflicting Interests...............................................................58
         Section 6.9         Resignation and Removal; Appointment of Successor...................................58
         Section 6.10        Acceptance of Appointment by Successor..............................................59
         Section 6.11        Merger, Conversion, Consolidation or Succession to Business.........................59
         Section 6.12        Preferential Collection of Claims Against Company...................................60
</TABLE>

<TABLE>
<CAPTION>
ARTICLE VII - HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
<S>     <C>                  <C>                                                                                <C> 
         Section 7.1         Disclosure of Names and Addresses of Holders........................................60
         Section 7.2         Reports By Trustee..................................................................60
         Section 7.3         Reports by Company..................................................................60
</TABLE>

<TABLE>
<CAPTION>
ARTICLE VIII - CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
<S>     <C>                  <C>                                                                                <C> 
         Section 8.1         Company May Consolidate, etc., Only on Certain Terms................................61
         Section 8.2         Successor Substituted...............................................................63
</TABLE>

<TABLE>
<CAPTION>
ARTICLE IX - SUPPLEMENTAL INDENTURES
<S>     <C>                  <C>                                                                                <C> 
         Section 9.1         Supplemental Indentures Without Consent of Holders..................................63
         Section 9.2         Supplemental Indentures with Consent of Holders.....................................64

</TABLE>
                                      -ii-


<PAGE>

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

         Section 9.3         Execution of Supplemental Indentures................................................65
         Section 9.4         Effect of Supplemental Indentures...................................................65
         Section 9.5         Conformity with Trust Indenture Act.................................................65
         Section 9.6         Reference in Securities to Supplemental Indentures..................................65
         Section 9.7         Notice of Supplemental Indentures...................................................65
</TABLE>

<TABLE>
<CAPTION>
ARTICLE X - COVENANTS
<S>      <C>                 <C>                                                                          <C>   
         Section 10.1        Payment of Principal, Premium, if any, and Interest.................................66
         Section 10.2        Maintenance of Office or Agency.....................................................66
         Section 10.3        Money for Security Payments to Be Held in Trust.....................................66
         Section 10.4        Corporate Existence.................................................................67
         Section 10.5        Payment of Taxes and Other Claims...................................................68
         Section 10.6        Maintenance of Properties...........................................................68
         Section 10.7        Insurance...........................................................................68
         Section 10.8        Statement by Officers as to Default.................................................68
         Section 10.9        Provision of Financial Information..................................................69
         Section 10.10       Limitation on Restricted Payments...................................................69
         Section 10.11       Limitation on Indebtedness..........................................................73
         Section 10.12       Limitation on Guarantees of Indebtedness by Subsidiaries............................73
         Section 10.13       Limitation on Issuances and Sale of Capital Stock by Restricted Subsidiaries
                              ...................................................................................74
         Section 10.14       Limitation on Liens.................................................................74
         Section 10.15       Purchase of Securities Upon Change of Control.......................................74
         Section 10.16       Disposition of Proceeds of Asset Sales..............................................76
         Section 10.17       Limitation on Transactions with Affiliates..........................................78
         Section 10.18       Limitation on Dividends and Other Payment Restrictions Affecting
                             Restricted Subsidiaries.............................................................79
         Section 10.19       Limitation on Conduct of Business...................................................79
         Section 10.20       Waiver of Certain Covenants.........................................................79
</TABLE>

<TABLE>
<CAPTION>
ARTICLE XI - REDEMPTION OF SECURITIES
<S>     <C>                  <C>                                                                                <C> 
         Section 11.1        Right of Redemption.................................................................80
         Section 11.2        Applicability of Article............................................................80
         Section 11.3        Election to Redeem; Notice to Trustee...............................................80
         Section 11.4        Selection by Trustee of Securities to Be Redeemed...................................80
         Section 11.5        Notice of Redemption................................................................80
         Section 11.6        Deposit of Redemption Price.........................................................81
         Section 11.7        Securities Payable on Redemption Date...............................................81
         Section 11.8        Securities Redeemed in Part.........................................................82

</TABLE>

                                      -iii-


<PAGE>

<TABLE>
<CAPTION>
ARTICLE XII - DEFEASANCE AND COVENANT DEFEASANCE
<S>      <C>                 <C>                                                                                <C>
         Section 12.1        Company's Option to Effect Defeasance or Covenant Defeasance........................82
         Section 12.2        Defeasance and Discharge............................................................82
         Section 12.3        Covenant Defeasance.................................................................82
         Section 12.4        Conditions to Defeasance or Covenant Defeasance.....................................83
         Section 12.5        Deposited Money and U.S. Government Obligations to Be Held in Trust;
                             Other Miscellaneous Provisions......................................................84
         Section 12.6        Reinstatement.......................................................................85

</TABLE>

<TABLE>
<CAPTION>
ARTICLE XIII - GUARANTEES
<S>     <C>                  <C>                                                                                <C> 

         Section 13.1        Unconditional Guarantee.............................................................85
         Section 13.2        Subsidiary Guarantors May Consolidate, etc., on Certain Terms.......................86
         Section 13.3        Release of a Subsidiary Guarantor...................................................87
         Section 13.4        Limitation of Subsidiary Guarantor's Liability......................................87
         Section 13.5        Contribution........................................................................88
         Section 13.6        Execution and Delivery of Notation of Subsidiary Guarantee..........................88
         Section 13.7        Severability........................................................................89
         Section 13.8        Subsidiary Guarantees Subordinated to Guarantor Senior Indebtedness
                              ...................................................................................89
         Section 13.9        Subsidiary Guarantors Not to Make Payments with Respect to Subsidiary
                             Guarantees in Certain Circumstances.................................................89
         Section 13.10       Subsidiary Guarantees Subordinated to Prior Payment of All Guarantor
                             Senior Indebtedness upon Dissolution, etc...........................................90
         Section 13.11       Holders to be Subrogated to Rights of Holders of Guarantor Senior
                             Indebtedness........................................................................91
         Section 13.12       Obligations of the Subsidiary Guarantors Unconditional..............................92
         Section 13.13       Trustee Entitled to Assume Payments Not Prohibited in Absence of
                             Notice..............................................................................92
         Section 13.14       Application by Trustee of Money Deposited with it...................................93
         Section 13.15       Subordination Rights Not Impaired by Acts or Omissions of Subsidiary
                             Guarantors or Holders of Guarantor Senior Indebtedness..............................93
         Section 13.16       Holders Authorize Trustee to Effectuate Subordination of Subsidiary
                             Guarantees..........................................................................94
         Section 13.17       Right of Trustee to Hold Guarantor Senior Indebtedness..............................94
         Section 13.18       Article XIII Not to Prevent Events of Default.......................................94
         Section 13.19       Payment.............................................................................94
</TABLE>

<TABLE>
<CAPTION>

ARTICLE XIV - SUBORDINATION OF SECURITIES
<S>     <C>                  <C>                                                                                <C> 
         Section 14.1        Securities Subordinate to Senior Indebtedness.......................................94
         Section 14.2        Payment Over of Proceeds upon Dissolution, etc......................................95
</TABLE>

                                      -iv-


<PAGE>

<TABLE>
<S>     <C>                  <C>                                                                                <C>
         Section 14.3        Suspension of Payment When Senior Indebtedness in Default...........................96
         Section 14.4        Trustee's Relation to Senior Indebtedness...........................................97
         Section 14.5        Subrogation to Rights of Holders of Senior Indebtedness.............................97
         Section 14.6        Provisions Solely To Define Relative Rights.........................................98
         Section 14.7        Trustee To Effectuate Subordination.................................................98
         Section 14.8        No Waiver of Subordination Provisions...............................................98
         Section 14.9        Notice to Trustee...................................................................99
         Section 14.10       Reliance on Judicial Order or Certificate of Liquidating Agent.....................100
         Section 14.11       Rights of Trustee as Holder of Senior Indebtedness; Preservation of
                             Trustee's Rights...................................................................100
         Section 14.12       Article Applicable to Paying Agents................................................100
         Section 14.13       No Suspension of Remedies..........................................................100
</TABLE>

<TABLE>
<CAPTION>
ARTICLE XV - MISCELLANEOUS
<S>     <C>                  <C>                                                                                <C> 
         Section 15.1        Compliance Certificates and Opinions...............................................100
         Section 15.2        Form of Documents Delivered to Trustee.............................................101
         Section 15.3        Acts of Holders....................................................................101
         Section 15.4        Notices, etc. to Trustee, Company and Subsidiary Guarantors........................102
         Section 15.5        Notice to Holders; Waiver..........................................................103
         Section 15.6        Effect of Headings and Table of Contents...........................................103
         Section 15.7        Successors and Assigns.............................................................103
         Section 15.8        Separability Clause................................................................104
         Section 15.9        Benefits of Indenture..............................................................104
         Section 15.10       Governing Law; Trust Indenture Act Controls........................................104
         Section 15.11       Legal Holidays.....................................................................104
         Section 15.12       No Recourse Against Others.........................................................105
         Section 15.13       Duplicate Originals................................................................105
         Section 15.14       No Adverse Interpretation of Other Agreements......................................105

</TABLE>




          NOTE: THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE
                      DEEMED TO BE A PART OF THE INDENTURE.

                                       -v-


<PAGE>



               Reconciliation and tie between Trust Indenture Act
               of 1939 and Indenture, dated as of __________, 1996

Trust Indenture                                          Indenture
  Act Section                                             Section

Section 310(a)(1)        .................................   6.7
           (a)(2)        .................................   6.7
           (b)           .................................   6.7, 6.8
Section 312(c)           .................................   7.1
Section 313              .................................   7.2
Section 314(a)           .................................   7.3
        (a)(4)           .................................  10.8(a)
        (c)(1)           .................................  15.1
        (c)(2)           .................................  15.1
        (e)              .................................  15.1
Section 315(b)           .................................   6.1
Section 316(a) (last
        sentence)        .................................   1.1 ("Outstanding")
        (a)(1)(A)        .................................   5.2, 5.12
        (a)(1)(B)        .................................   5.13
        (b)              .................................   5.8
        (c)              .................................  15.3(d)
Section (317)(a)(1)      .................................   5.3
        (a)(2)           .................................   5.4
        (b)              .................................  10.3
Section 318(a)           .................................  15.10(b)












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

                                      -vi-


<PAGE>



         INDENTURE, dated as of September 26, 1996 between FLORES & RUCKS, INC.,
a Delaware  corporation  (hereinafter  called  the  "Company"),  the  SUBSIDIARY
GUARANTORS  (as  defined   hereinafter)   and  FLEET   NATIONAL  BANK,   trustee
(hereinafter called the "Trustee").


                             RECITALS OF THE COMPANY

         The  Company  has duly  authorized  the  creation of an issue of 9 3/4%
Senior Subordinated Notes due 2006 (herein, as amended or supplemented from time
to time in  accordance  with the terms  hereof,  called  the  "Securities"),  of
substantially  the  tenor and  amount  hereinafter  set  forth,  and to  provide
therefor  the Company has duly  authorized  the  execution  and delivery of this
Indenture.

         The Company owns beneficially and of record all of the equity ownership
of the outstanding  Voting Stock of the initial  Subsidiary  Guarantor,  and the
initial Subsidiary Guarantor is a member of the Company's  consolidated group of
companies  that are  engaged  in  related  businesses.  The  initial  Subsidiary
Guarantor  will derive  direct and  indirect  benefit  from the  issuance of the
Securities;  accordingly,  the initial  Subsidiary  Guarantor has authorized its
guarantee of the Company's  obligations under this Indenture and the Securities,
and to provide therefor the initial Subsidiary Guarantor has duly authorized the
execution and delivery of this Indenture.

         This Indenture is subject to the provisions of the Trust  Indenture Act
of 1939, as amended,  that are required to be part of this  Indenture and shall,
to the extent applicable, be governed by such provisions.

         All  things  necessary  have  been  done to make the  Securities,  when
executed by the Company  and  authenticated  and  delivered  hereunder  and duly
issued  by the  Company,  the  valid  obligations  of the  Company,  to make the
Subsidiary  Guarantee,  when  executed by the  Subsidiary  Guarantor,  the valid
obligation  of the  Subsidiary  Guarantor  and to make  this  Indenture  a valid
agreement  of  the  Company,  the  Subsidiary  Guarantor  and  the  Trustee,  in
accordance with their and its terms.

         NOW, THEREFORE, THIS INDENTURE WITNESSETH:

         For  and in  consideration  of the  premises  and the  purchase  of the
Securities  (together  with the  related  Subsidiary  Guarantee)  by the Holders
thereof,  it is mutually  covenanted and agreed, for the equal and proportionate
benefit of all Holders of the Securities  (together with the related  Subsidiary
Guarantee), as follows:



                                       -1-


<PAGE>



                                    ARTICLE I

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

         Section 1.1       Definitions.
                           ------------

         "Acquired  Indebtedness"  means Indebtedness of a Person (a) assumed in
connection with an Asset  Acquisition  from such Person,  (b) outstanding at the
time such  Person  becomes a  Subsidiary  of any other  Person  (other  than any
Indebtedness  incurred in connection  with, or in  contemplation  of, such Asset
Acquisition  or such Person  becoming  such a  Subsidiary)  or (c) any renewals,
extensions,  substitutions,  refinancings or replacements (each, for purposes of
this clause,  a "refinancing")  by the Company of any Indebtedness  described in
clause (a) or (b) of this definition,  including any successive refinancings, so
long as (i) any such new  Indebtedness  shall be in a principal amount that does
not exceed the  principal  amount (or,  if such  Indebtedness  being  refinanced
provides  for an amount  less than the  principal  amount  thereof to be due and
payable upon a declaration of acceleration thereof, such lesser amount as of the
date of  determination) so refinanced plus the amount of any premium required to
be paid in  connection  with  such  refinancing  pursuant  to the  terms  of the
Indebtedness  refinanced or the amount of any premium  reasonably  determined by
the Company as  necessary to  accomplish  such  refinancing,  plus the amount of
expenses of the Company incurred in connection with such  refinancing,  and (ii)
in  the  case  of  any  refinancing  of  Subordinated  Indebtedness,   such  new
Indebtedness  is made  subordinate to the Securities at least to the same extent
as the  Indebtedness  being  refinanced and (iii) such new  Indebtedness  has an
Average Life longer than the Average Life of the  Securities  and a final Stated
Maturity later than the final Stated Maturity of the Securities.

          "Act," when used with respect to any Holder, has the meaning specified
in Section 15.3.

         "Adjusted    Consolidated   Net   Tangible   Assets"   means   (without
duplication),  as of the date of  determination,  (a) the sum of (i)  discounted
future net  revenues  from  proved oil and gas  reserves  of the Company and its
Restricted  Subsidiaries calculated in accordance with SEC guidelines before any
state or federal income taxes,  as estimated by a nationally  recognized firm of
independent  petroleum  engineers in a reserve report  prepared as of the end of
the Company's  most recently  completed  fiscal year, as increased by, as of the
date of  determination,  the estimated  discounted  future net revenues from (A)
estimated  proved oil and gas reserves  acquired since the date of such year-end
reserve  report,  and (B) estimated oil and gas reserves  attributable to upward
revisions of  estimates  of proved oil and gas  reserves  since the date of such
year-end  reserve  report  due  to  exploration,   development  or  exploitation
activities, in each case calculated in accordance with SEC guidelines (utilizing
the prices utilized in such year-end  reserve  report),  and decreased by, as of
the date of determination, the estimated discounted future net revenues from (C)
estimated proved oil and gas reserves  produced or disposed of since the date of
such year-end reserve report and (D) estimated oil and gas reserves attributable
to downward revisions of estimates of proved oil and gas reserves since the date
of such year-end reserve report due to changes in geological conditions or other
factors which would, in accordance with standard industry  practice,  cause such
revisions, in 
                                       -2-


<PAGE>



each case  calculated in accordance  with SEC  guidelines  (utilizing the prices
utilized in such year-end reserve report); provided that, in the case of each of
the determinations  made pursuant to clauses (A) through (D), such increases and
decreases shall be as estimated by the Company's petroleum engineers,  unless in
the event  that  there is a  Material  Change as a result of such  acquisitions,
dispositions or revisions,  then the discounted future net revenues utilized for
purposes of this clause  (a)(i)  shall be  confirmed  in writing by a nationally
recognized firm of independent  petroleum engineers,  (ii) the capitalized costs
that  are  attributable  to oil  and  gas  properties  of the  Company  and  its
Restricted   Subsidiaries   to  which  no  proved  oil  and  gas   reserves  are
attributable,  based on the Company's  books and records as of a date no earlier
than the date of the Company's latest annual or quarterly financial  statements,
(iii)  the  Net  Working  Capital  on a date no  earlier  than  the  date of the
Company's latest annual or quarterly  financial  statements and (iv) the greater
of (I) the net book  value on a date no earlier  than the date of the  Company's
latest annual or quarterly financial  statements or (II) the appraised value, as
estimated  by  independent  appraisers,  of other  tangible  assets  (including,
without duplication,  Investments in unconsolidated  Restricted Subsidiaries) of
the Company and its Restricted Subsidiaries,  as of the date no earlier than the
date of the Company's latest audited financial statements,  minus (b) the sum of
(i) minority  interests,  (ii) any gas balancing  liabilities of the Company and
its Restricted  Subsidiaries reflected in the Company's latest audited financial
statements,  (iii) to the extent included in (a)(i) above, the discounted future
net revenues, calculated in accordance with SEC guidelines (utilizing the prices
utilized in the Company's  year-end  reserve  report),  attributable to reserves
which are  required  to be  delivered  to third  parties  to fully  satisfy  the
obligations  of the  Company and its  Restricted  Subsidiaries  with  respect to
Volumetric  Production  Payments on the schedules specified with respect thereto
and (iv) the discounted  future net revenues,  calculated in accordance with SEC
guidelines,  attributable to reserves subject to  Dollar-Denominated  Production
Payments  which,  based on the  estimates of  production  and price  assumptions
included in determining the discounted  future net revenues  specified in (a)(i)
above,  would be  necessary  to fully  satisfy  the payment  obligations  of the
Company  and its  Restricted  Subsidiaries  with  respect to  Dollar-Denominated
Production  Payments on the schedules  specified  with respect  thereto.  If the
Company  changes  its  method of  accounting  from the full  cost  method to the
successful  efforts  method  or  a  similar  method  of  accounting,   "Adjusted
Consolidated  Net Tangible  Assets"  will  continue to be  calculated  as if the
Company was still using the full cost method of accounting.

         "Adjusted Net Assets" of a Subsidiary  Guarantor at any date shall mean
the  amount  by  which  the  fair  value of the  Properties  of such  Subsidiary
Guarantor   exceeds  the  total  amount  of  liabilities,   including,   without
limitation,  contingent  liabilities (after giving effect to all other fixed and
contingent  liabilities  incurred  or  assumed  on  such  date),  but  excluding
liabilities under the Subsidiary Guarantee, of such Subsidiary Guarantor at such
date.

         "Affiliate"  means,  with respect to any  specified  Person,  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 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 

                                       -3-


<PAGE>



"controlled"  have meanings  correlative to the foregoing.  For purposes of this
definition,  beneficial ownership of 10% or more of the voting common equity (on
a fully diluted  basis) or options or warrants to purchase such equity (but only
if  exercisable  at the date of  determination  or within 60 days  thereof) of a
Person shall be deemed to constitute control of such Person.

         "Asset  Acquisition"  means (a) an  Investment  by the  Company  or any
Restricted  Subsidiary  in any other Person  pursuant to which such Person shall
become a Restricted Subsidiary or any Restricted Subsidiary shall be merged with
or into the Company or any other Restricted Subsidiary or (b) the acquisition by
the Company or any  Restricted  Subsidiary of the Properties of any Person which
constitute  all or  substantially  all of the  Properties  of such Person or any
division or line of business of such Person.

         "Asset Sale" means any sale, issuance,  conveyance,  transfer, lease or
other  disposition to any Person other than the Company or any of its Restricted
Subsidiaries  (including,  without  limitation,  by  means  of a  Sale/Leaseback
Transaction or by way of merger or consolidation) (collectively, for purposes of
this definition,  a "transfer"),  directly or indirectly,  in one or a series of
related transactions, of (a) any Capital Stock of any Restricted Subsidiary held
by the Company or any Restricted Subsidiary; (b) all or substantially all of the
Properties  of any  division  or line of  business  of the Company or any of its
Restricted  Subsidiaries;  or (c) any other  Properties of the Company or any of
its Restricted  Subsidiaries  other than a disposition of  hydrocarbons or other
mineral  products in the ordinary  course of business.  For the purposes of this
definition,  the term  "Asset  Sale"  shall  not  include  (i) any  transfer  of
Properties  which is governed by, and made in accordance with, the provisions of
Article  VIII  hereof;  (ii)  any  transfer  of  Properties  to an  Unrestricted
Subsidiary, if permitted under Section 10.10 hereof; (iii) any trade or exchange
by the Company or any  Restricted  Subsidiary of oil and gas  Properties  (other
than  Properties   constituting  all  or  substantially   all  of  the  Original
Properties)  for other oil and gas Properties  owned or held by another  Person,
provided that (x) the Fair Market Value of the Properties traded or exchanged by
the  Company  or  such  Restricted   Subsidiary  (including  any  cash  or  Cash
Equivalents, not to exceed 15% of such Fair Market Value, to be delivered by the
Company or such  Restricted  Subsidiary)  is  reasonably  equivalent to the Fair
Market Value of the Properties (together with any cash or Cash Equivalents,  not
to exceed 15% of such Fair  Market  Value) to be received by the Company or such
Restricted  Subsidiary  as  determined  in good faith by (i) any  officer of the
Company if such fair market  value is less than $5 million and (ii) the Board of
Directors of the Company as certified by a certified resolution delivered to the
Trustee  if such  fair  market  value is equal to or in  excess  of $5  million;
provided that if such resolution  indicates that such fair market value is equal
to or in excess of $10 million such resolution shall be accompanied by a written
appraisal by a nationally  recognized investment banking firm or appraisal firm,
in each case  specializing or having a specialty in oil and gas Properties,  and
(y) such  exchange is approved by a majority of the  Disinterested  Directors of
the Company;  or (iv) any transfer of  Properties  having a Fair Market Value of
less than $2,000,000.

         "Attributable Indebtedness" means, with respect to any particular lease
under  which any  Person is at the time  liable  and at any date as of which the
amount thereof is to be determined, the present value of the total net amount of
rent  required to be paid by such Person under the lease 
                                       -4-


<PAGE>



during the primary term  thereof,  without  giving effect to any renewals at the
option of the lessee,  discounted  from the respective due dates thereof to such
date of determination at the rate of interest per annum implicit in the terms of
the lease. As used in the preceding sentence, the "net amount of rent" under any
lease  for any such  period  shall  mean the sum of rental  and  other  payments
required  to be paid  with  respect  to such  period by the  lessee  thereunder,
excluding  any  amounts  required  to be paid  by  such  lessee  on  account  of
maintenance and repairs, insurance,  taxes, assessments,  water rates or similar
charges. In the case of any lease which is terminable by the lessee upon payment
of a penalty,  such net amount of rent  shall  also  include  the amount of such
penalty, but no rent shall be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated.

         "Average Life" means, with respect to any Indebtedness,  as at any date
of determination,  the quotient obtained by dividing (a) the sum of the products
of (i)  the  number  of  years  (and  any  portion  thereof)  from  the  date of
determination  to the  date or  dates  of each  successive  scheduled  principal
payment (including, without limitation, any sinking fund or mandatory redemption
payment requirements) of such Indebtedness multiplied by (ii) the amount of each
such principal payment by (b) the sum of all such principal payments.

          "Bank Agent" means The Chase  Manhattan Bank, N.A. or any successor or
replacement agent under the Credit Agreement.

         "Board of  Directors"  means,  with respect to the Company,  either the
board of directors of the Company or any duly authorized committee of such board
of directors,  and, with respect to any Restricted Subsidiary,  either the board
of directors of such Restricted  Subsidiary or any duly authorized  committee of
that board.

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

         "Business  Day" means each  Monday,  Tuesday,  Wednesday,  Thursday and
Friday  which is not a day on  which  banking  institutions  in the  Borough  of
Manhattan,  The City of New York,  New York,  or the city in which the Trustee's
Corporate  Trust  Office is  located,  are  authorized  or  obligated  by law or
executive order to close.

         "Capital Stock" means, with respect to any Person,  any and all shares,
interests,  participations,  rights  in  or  other  equivalents  in  the  equity
interests  (however  designated) in such Person, and any rights (other than debt
securities convertible into an equity interest), warrants or options exercisable
for,  exchangeable  for or  convertible  into  such an equity  interest  in such
Person.


                                       -5-


<PAGE>



         "Capitalized  Lease  Obligation"  means any  obligation  to pay rent or
other amounts under a lease of (or other  agreement  conveying the right to use)
any Property (whether real, personal or mixed) that is required to be classified
and accounted for as a capital lease obligation under GAAP, and, for the purpose
of this  Indenture,  the  amount  of such  obligation  at any date  shall be the
capitalized amount thereof at such date, determined in accordance with GAAP.

         "Cash  Equivalents"  means  (i) any  evidence  of  Indebtedness  with a
maturity of 365 days or less issued or directly and fully  guaranteed or insured
by the  United  States  of  America  or any  agency or  instrumentality  thereof
(provided  that the full  faith and  credit of the  United  States of America is
pledged in support  thereof);  (ii) demand and time deposits and certificates of
deposit  or  acceptances  with a maturity  of 365 days or less of any  financial
institution  that is a member of the  Federal  Reserve  System  having  combined
capital and surplus and undivided profits of not less than  $500,000,000;  (iii)
commercial  paper with a maturity  of 365 days or less  issued by a  corporation
that is not an Affiliate  of the Company and is organized  under the laws of any
state of the United States or the District of Columbia and rated at least A-1 by
S&P or at least P-1 by Moody's;  (iv) repurchase  obligations with a term of not
more than seven days for underlying  securities of the types described in clause
(i) above entered into with any commercial  bank meeting the  specifications  of
clause (ii) above;  and (v) overnight bank deposits and bankers'  acceptances at
any commercial bank meeting the qualifications specified in clause (ii) above.

         "Change  of  Control"  means  the  occurrence  of any of the  following
events:  (a) any  "person" or "group" (as such terms are used in Sections  13(d)
and 14(d) of the Exchange Act), other than the F&R Interests,  is or becomes the
"beneficial  owner" (as defined in Rule 13d-3 under the Exchange Act),  directly
or  indirectly,  of more than 50% of the total Voting Stock of the Company;  (b)
the  Company is merged with or into or  consolidated  with  another  Person and,
immediately  after giving effect to the merger or  consolidation,  (A) less than
50% of the total voting power of the  outstanding  Voting Stock of the surviving
or resulting  Person is then  "beneficially  owned"  (within the meaning of Rule
13d-3 under the Exchange  Act) in the aggregate by (x) the  stockholders  of the
Company  immediately prior to such merger or  consolidation,  or (y) if a record
date has been set to determine the  stockholders of the Company entitled to vote
on such  merger or  consolidation,  the  stockholders  of the Company as of such
record date and (B) any  "person" or "group" (as defined in Section  13(d)(3) or
14(d)(2) of the  Exchange  Act),  other than the F&R  Interests,  has become the
direct or  indirect  "beneficial  owner" (as  defined  in Rule  13d-3  under the
Exchange  Act) of more than 50% of the total voting power of the Voting Stock of
the surviving or resulting Person;  (c) the Company,  either  individually or in
conjunction with one or more Restricted Subsidiaries,  sells, conveys, transfers
or leases, or the Restricted  Subsidiaries sell, convey,  transfer or lease, all
or  substantially  all of the  Properties  of the  Company  and  the  Restricted
Subsidiaries, taken as a whole (either in one transaction or a series of related
transactions),  including Capital Stock of the Restricted  Subsidiaries,  to any
Person  (other than the Company or a Wholly Owned  Restricted  Subsidiary);  (d)
during any consecutive two-year period, individuals who at the beginning of such
period  constituted the Board of Directors of the Company (together with any new
directors  whose  election by such Board of  Directors or whose  nomination  for
election by the  stockholders of the Company was approved by a vote of 662/3% of
the directors then still in office who were either directors at the beginning of
such

                                       -6-


<PAGE>



period or whose  election or nomination for election was previously so approved)
cease for any reason to  constitute  a majority of the Board of Directors of the
Company then in office; or (e) the liquidation or dissolution of the Company.

         "Code" shall mean the Internal Revenue Code of 1986, as amended, as now
or   hereafter  in  effect,   together   with  all   regulations,   rulings  and
interpretations thereof or thereunder issued by the Internal Revenue Service.

         "Commission" or "SEC" 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 Indenture  such  Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.

         "Common  Stock" of any Person means  Capital  Stock of such Person that
does not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation,  dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.

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

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

         "Consolidated  Fixed Charge Coverage Ratio" means, for any period,  the
ratio of (a) the sum of Consolidated Net Income,  Consolidated Interest Expense,
Consolidated  Income Tax Expense and  Consolidated  Non-cash Charges deducted in
computing Consolidated Net Income, in each case, for such period, of the Company
and its  Restricted  Subsidiaries  on a  consolidated  basis,  all determined in
accordance  with  GAAP,   decreased  (to  the  extent  included  in  determining
Consolidated Net Income) by the sum of (x) the amount of deferred  revenues that
are  amortized  during such  period and are  attributable  to reserves  that are
subject to Volumetric Production Payments and (y) amounts recorded in accordance
with GAAP as repayments of principal and interest pursuant to Dollar-Denominated
Production  Payments,  to (b) the sum of such Consolidated  Interest Expense for
such period;  provided  that (i) in making such  computation,  the  Consolidated
Interest  Expense  attributable to interest on any  Indebtedness  required to be
computed on a pro forma  basis in  accordance  with clause (x) of Section  10.11
hereof and bearing a floating  interest rate shall be computed as if the rate in
effect on the date of computation  had been the  applicable  rate for the entire
period,  (ii) in making such  computation,  the  Consolidated  Interest  Expense
attributable to interest on any  Indebtedness  under a revolving credit facility
required to be computed  on a pro forma basis in  accordance  with clause (x) of
Section  10.11 hereof shall be computed  based upon the average daily balance of
such Indebtedness during the applicable period, provided that such average daily
balance shall be reduced

                                       -7-


<PAGE>



by the amount of any repayment of Indebtedness under a revolving credit facility
during  the  applicable  period,   which  repayment   permanently   reduced  the
commitments or amounts  available to be reborrowed  under such  facility,  (iii)
notwithstanding  clauses (i) and (ii) of this proviso,  interest on Indebtedness
determined  on a  fluctuating  basis,  to the extent such interest is covered by
agreements relating to Interest Rate Protection Obligations,  shall be deemed to
have  accrued  at the  rate per  annum  resulting  after  giving  effect  to the
operation of such agreements and (iv) in making such  calculation,  Consolidated
Interest  Expense  shall exclude  interest  attributable  to  Dollar-Denominated
Production Payments.

         "Consolidated  Income Tax Expense" means, for any period, the provision
for  federal,  state,  local and  foreign  income  taxes of the  Company and its
Restricted Subsidiaries for such period as determined on a consolidated basis in
accordance with GAAP.

         "Consolidated   Interest  Expense"  means,  for  any  period,   without
duplication,  the  sum of (i)  the  interest  expense  of the  Company  and  its
Restricted Subsidiaries for such period as determined on a consolidated basis in
accordance with GAAP,  including,  without  limitation,  (a) any amortization of
debt  discount,  (b) the net cost under  Interest  Rate  Protection  Obligations
(including  any  amortization  of  discounts),  (c) the interest  portion of any
deferred payment obligation,  (d) all commissions,  discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance financing
and (e) all accrued  interest,  in each case to the extent  attributable to such
period,  (ii) to the  extent any  Indebtedness  of any  Person  (other  than the
Company  or a  Restricted  Subsidiary)  is  guaranteed  by  the  Company  or any
Restricted Subsidiary,  the aggregate amount of interest paid or accrued by such
other Person during such period  attributable to any such Indebtedness,  in each
case to the extent  attributable to that period,  (iii) the aggregate  amount of
the interest  component of Capitalized Lease  Obligations  paid,  accrued and/or
scheduled to be paid or accrued by the Company and its  Restricted  Subsidiaries
during such period as determined on a consolidated basis in accordance with GAAP
and (iv) the aggregate amount of dividends paid or accrued on Redeemable Capital
Stock or Preferred Stock of the Company and its Restricted Subsidiaries,  to the
extent such  Redeemable  Capital  Stock or  Preferred  Stock is owned by Persons
other than Restricted Subsidiaries.

         "Consolidated  Net Income" means, for any period,  the consolidated net
income (or loss) of the Company and its Restricted  Subsidiaries for such period
as determined in accordance  with GAAP,  adjusted by excluding (a) net after-tax
extraordinary gains or losses (less all fees and expenses relating thereto), (b)
net  after-tax  gains or losses  (less all fees and expenses  relating  thereto)
attributable  to Asset  Sales,  (c) the net  income  (or net loss) of any Person
(other than the  Company or any of its  Restricted  Subsidiaries),  in which the
Company or any of its Restricted Subsidiaries has an ownership interest,  except
to the extent of the amount of dividends or other distributions actually paid to
the Company or its Restricted  Subsidiaries  in cash by such other Person during
such  period  (regardless  of  whether  such cash  dividends,  distributions  or
interest on  indebtedness  is  attributable  to net income (or net loss) of such
Person  during such period or during any prior  period),  (d) net income (or net
loss)  of any  Person  combined  with  the  Company  or  any  of its  Restricted
Subsidiaries on a "pooling of interests" basis  attributable to any period prior
to the date of combination,  (e) the 

                                       -8-


<PAGE>



net income of any  Restricted  Subsidiary to the extent that the  declaration or
payment of dividends or similar  distributions by that Restricted  Subsidiary is
not at the date of determination permitted, directly or indirectly, by operation
of the terms of its  charter or any  agreement,  instrument,  judgment,  decree,
order,  statute,  rule or governmental  regulation applicable to that Restricted
Subsidiary or its  stockholders,  (f) income  resulting from transfers of assets
received  by the  Company  or any  Restricted  Subsidiary  from an  Unrestricted
Subsidiary and (g) any writedowns of non-current assets, provided, however, that
any  ceiling  limitation  writedowns  under SEC  guidelines  shall be treated as
capitalized costs, as if such writedowns had not occurred.

         "Consolidated   Net  Worth"  means,  at  any  date,  the   consolidated
stockholders' equity of the Company less the amount of such stockholders' equity
attributable  to Redeemable  Capital Stock or treasury  stock of the Company and
its Restricted Subsidiaries, as determined in accordance with GAAP.

         "Consolidated  Non-cash  Charges" means, for any period,  the aggregate
depreciation, depletion, amortization and other non-cash expenses of the Company
and its  Restricted  Subsidiaries  reducing  Consolidated  Net  Income  for such
period,  determined on a consolidated  basis in accordance  with GAAP (excluding
any such  non-cash  charge  which  requires  an accrual  of or reserve  for cash
charges for any future period).

         "Corporate Trust Office" means the principal  corporate trust office of
the Trustee,  at which at any particular time its corporate trust business shall
be  administered,  which office at the date of  execution  of this  Indenture is
located at 777 Main  Street,  Hartford,  CT 06115,  Attention:  Corporate  Trust
Administration,  except that with  respect to  presentation  of  Securities  for
payment or for  registration  of transfer or exchange,  such term shall mean the
office or agency of the Trustee at which, at any particular  time, its corporate
agency business shall be conducted.

         "Credit  Agreement"  means the Credit Agreement dated as of December 7,
1994 among the Company and The Chase  Manhattan  Bank,  N.A., as Agent,  as such
agreement may be amended, modified,  supplemented,  extended, restated, replaced
(including  replacement after the termination of such agreement),  restructured,
increased,  renewed  or  refinanced  from  time to  time  in one or more  credit
agreements,  loan agreements,  instruments or similar agreements, as such may be
further amended, modified, supplemented, extended, restated, replaced (including
replacement after the termination of such agreement),  restructured,  increased,
renewed or refinanced  from time to time, in each case in accordance with and as
permitted by the Indenture.

         "Credit Agreement  Obligations" means all monetary obligations of every
nature of the Company or a Restricted Subsidiary,  including without limitation,
obligations  to pay  principal  and interest,  reimbursement  obligations  under
letters of credit, fees, expenses and indemnities, from time to time owed to the
lenders or any agent under or in respect of the Credit Agreement.

         "Default" means any event, act or condition the occurrence of which is,
or after notice or passage of time or both would be, an Event of Default.


                                       -9-

<PAGE>



         "Defaulted Interest" has the meaning specified in Section 3.8 hereof.

         "Depository" means The Depository Trust Company, its nominees and their
respective successors.

         "Designated  Guarantor Senior  Indebtedness"  means,  with respect to a
Subsidiary  Guarantor,  (i) all Guarantor Senior Indebtedness of such Subsidiary
Guarantor  under the Credit  Agreement  Obligations,  (ii) all Guarantor  Senior
Indebtedness of such Subsidiary  Guarantor under the Senior Note Obligations and
(iii)  any  other  Guarantor  Senior  Indebtedness  which  (a)  at the  time  of
incurrence equals or exceeds  $10,000,000 in aggregate  principal amount and (b)
is  specifically  designated  by such  Subsidiary  Guarantor  in the  instrument
evidencing such Guarantor  Senior  Indebtedness as "Designated  Guarantor Senior
Indebtedness" for purposes of this Indenture.

         "Designated  Senior  Indebtedness"  means (i) all  Senior  Indebtedness
under the Credit Agreement  Obligations (ii) all Senior  Indebtedness  under the
Senior Note Obligations and (iii) any other Senior Indebtedness which (a) at the
time of incurrence equals or exceeds  $10,000,000 in aggregate  principal amount
and (b) is specifically  designated by the Company in the instrument  evidencing
such Senior Indebtedness as "Designated Senior Indebtedness" for purpose of this
Indenture.

         "Disinterested  Director"  means,  with respect to any  transaction  or
series of transactions in respect of which the Board of Directors of the Company
is required to deliver a Board  Resolution  hereunder,  a member of the Board of
Directors  of the  Company  who does not have any  material  direct or  indirect
financial  interest  (other than an interest  arising solely from the beneficial
ownership  of  Capital  Stock  of  the  Company)  in or  with  respect  to  such
transaction or series of transactions.

         "Dollar-Denominated   Production  Payments"  means  production  payment
obligations  recorded as liabilities in accordance with GAAP,  together with all
undertakings and obligations in connection therewith.

         "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as  amended  from  time  to  time,  and  all  rules,  regulations,  rulings  and
interpretations thereof issued by the Internal Revenue Service or the Department
of Labor thereunder.

         "ERISA  Affiliate"  shall  mean any  subsidiary  or  trade or  business
(whether or not incorporated)  which is a member of a group of which the Company
is a member and which is under common  control within the meaning of Section 414
of the Code (such rules and regulations shall also be deemed to apply to foreign
corporations and entities).

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

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

                                      -10-


<PAGE>



         "Fair  Market  Value"  means  the  fair  market  value  of  a  Property
(including shares of Capital Stock) or Redeemable Capital Stock as determined by
a Board  Resolution of the Company  adopted in good faith,  which  determination
shall be conclusive  for purposes of this  Indenture;  provided,  however,  that
unless  otherwise  specified  herein,  the Board of Directors  shall be under no
obligation  to obtain any valuation or assessment  from any  investment  banker,
appraiser or other third party.

         "Federal  Bankruptcy  Code" means the United States  Bankruptcy Code of
Title 11 of the United States Code, as amended from time to time.

         "F&R Interests" means, collectively,  William W. Rucks, IV and James C.
Flores,   together  with  their  respective  spouses,   lineal  descendants  and
ascendents,  heirs,  executors  or other  legal  representatives  and any trusts
established  for the benefit of the foregoing,  or any other Person in which the
Persons referred to in the foregoing are at the time of determination the direct
record and beneficial owners of all of the outstanding Capital Stock.

         "GAAP" means generally  accepted  accounting  principles,  consistently
applied, that are 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 of America,  which are
applicable as of the date of this Indenture.

         "Guarantee" means, as applied to any obligation, (i) a guarantee (other
than by  endorsement  of negotiable  instruments  for collection in the ordinary
course of business),  direct or indirect,  in any manner,  of any part or all of
such  obligation  and (ii) an  agreement,  direct  or  indirect,  contingent  or
otherwise,  the practical effect of which is to assure in any way the payment or
performance  (or payment of damages in the event of  non-performance)  of all or
any part of such  obligation,  including,  without  limiting the foregoing,  the
payment  of  amounts  drawn  down by  letters  of  credit.  When used as a verb,
"guarantee" shall have a corresponding meaning.

          "Guarantor"  means any Restricted  Subsidiary that incurs a Subsidiary
Guarantee.

         "Guarantor Senior  Indebtedness" means all Indebtedness of a Subsidiary
Guarantor (present and future) created,  incurred, assumed or guaranteed by such
Subsidiary   Guarantor  (and  all  renewals,   substitutions,   refinancings  or
replacements  thereof)  (including  the  principal  of,  interest  on and  fees,
premiums,  expenses  (including  costs of  collection),  indemnities  and  other
amounts payable in connection  with such  Indebtedness)  (and including,  in the
case of the Credit  Agreement  and any  guarantees  related to the Senior Notes,
interest  accruing after the filing of a petition by or against such  Subsidiary
Guarantor  under  any  bankruptcy  law,  in  accordance  with  and at the  rate,
including any default rate, specified with respect to such indebtedness, whether
or not a claim for such  interest is allowed as a claim after such filing in any
proceeding  under such  bankruptcy  law),  unless the instrument  governing such
Indebtedness expressly provides that such Indebtedness is not senior in right of
payment to its Subsidiary  Guarantee.  Notwithstanding the foregoing,  Guarantor
Senior

                                      -11-


<PAGE>



Indebtedness of a Subsidiary Guarantor will not include (i) Indebtedness of such
Subsidiary Guarantor evidenced by its Subsidiary Guarantee, (ii) Indebtedness of
such  Subsidiary  Guarantor that is expressly  subordinate or junior in right of
payment to any Guarantor Senior Indebtedness of such Subsidiary Guarantor or its
Subsidiary  Guarantee,  (iii)  Indebtedness  which,  when  incurred  and without
respect to any election under Section 1111(b) of Title 11 United States Code, is
by its terms without recourse to such Subsidiary Guarantor, (iv) any repurchase,
redemption or other  obligation  in respect of Redeemable  Capital Stock of such
Subsidiary Guarantor,  (v) to the extent it might constitute  Indebtedness,  any
liability  for  federal,  state,  local  or  other  taxes  owed or owing by such
Subsidiary  Guarantor,  (vi)  Indebtedness of such  Subsidiary  Guarantor to the
Company or any of the Company's other Subsidiaries or any other Affiliate of the
Company or any of such Affiliate's  Subsidiaries,  and (vii) that portion of any
Indebtedness  of such  Subsidiary  Guarantor  which at the time of  issuance  is
issued in violation of the Indenture (but, as to any such Indebtedness,  no such
violation  shall be deemed to exist for  purposes  of this  clause  (vii) if the
holder(s)  of such  Indebtedness  or  their  representative  or such  Subsidiary
Guarantor shall have furnished to the Trustee an opinion of counsel  unqualified
in all material respects of independent legal counsel,  addressed to the Trustee
(which legal counsel may, as to matters of fact, rely upon a certificate of such
Subsidiary  Guarantor) to the effect that the  incurrence  of such  Indebtedness
does not violate the provisions of such Indenture);  provided that the foregoing
exclusions shall not affect the priorities of any Indebtedness arising solely by
operation of law in any case or proceeding or similar event  described in clause
(a), (b) or (c) of the definition of Insolvency or Liquidation Proceeding.

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

         "Indebtedness" means, with respect to any Person,  without duplication,
(i) all  liabilities  of such  Person  for  borrowed  money or for the  deferred
purchase price of Property or services, excluding any trade accounts payable and
other accrued current  liabilities  incurred in the ordinary course of business,
but including, without limitation, all obligations,  contingent or otherwise, of
such Person in  connection  with any letters of credit,  bankers'  acceptance or
other  similar  credit  transaction  and in  connection  with any  agreement  to
purchase,  redeem, exchange,  convert or otherwise acquire for value any Capital
Stock of such Person, or any warrants, rights or options to acquire such Capital
Stock, now or hereafter outstanding, if, and to the extent, any of the foregoing
would  appear as a liability  upon a balance  sheet of such  Person  prepared in
accordance  with GAAP, (b) all  obligations  of such Person  evidenced by bonds,
notes,  debentures or other similar  instruments,  if, and to the extent, any of
the  foregoing  would appear as a liability  upon a balance sheet of such Person
prepared in accordance with GAAP, (c) all Indebtedness of such Person created or
arising  under any  conditional  sale or other title  retention  agreement  with
respect to Property  acquired by such Person (even if the rights and remedies of
the seller or lender under such agreement in the event of default are limited to
repossession  or sale of such Property),  but excluding  trade accounts  payable
arising  in  the  ordinary  course  of  business,   (d)  all  Capitalized  Lease
Obligations of such Person, (e) the Attributable  Indebtedness (in excess of any
related Capitalized Lease Obligations) related to any Sale/Leaseback Transaction
of such Person,  (f) all  Indebtedness  referred to in the preceding  clauses of
other  Persons  and all  dividends  of other  Persons,  the  payment of which is
secured by (or for which the holder of such  Indebtedness has an existing right,
contingent or otherwise, to be secured by) any

                                      -12-


<PAGE>



Lien upon Property (including, without limitation, accounts and contract rights)
owned by such Person,  even though such Person has not assumed or become  liable
for the payment of such Indebtedness (the amount of such obligation being deemed
to be the lesser of the value of such  Property or the amount of the  obligation
so secured),  (g) all guarantees by such Person of  Indebtedness  referred to in
this  definition  (including,  with  respect  to  any  Production  Payment,  any
warranties or guaranties of production or payment by such Person with respect to
such  Production  Payment but excluding  other  contractual  obligations of such
Person with respect to such  Production  Payment),  (h) all  Redeemable  Capital
Stock of such  Person  valued at the  greater of its  voluntary  or  involuntary
maximum fixed  repurchase price plus accrued  dividends,  (i) all obligations of
such Person under or in respect of currency exchange contracts and Interest Rate
Protection  Obligations  and  (j)  any  amendment,   supplement,   modification,
deferral, renewal, extension or refunding of any liability of such Person of the
types  referred to in clauses (a) through (i) above.  For purposes  hereof,  the
"maximum fixed repurchase price" of any Redeemable  Capital Stock which does not
have a fixed  repurchase  price shall be calculated in accordance with the terms
of such  Redeemable  Capital  Stock as if such  Redeemable  Capital  Stock  were
purchased on any date on which  Indebtedness  shall be required to be determined
pursuant to this Indenture, and if such price is based upon, or measured by, the
Fair Market Value of such Redeemable Capital Stock, such Fair Market Value shall
be  determined  in good  faith by the board of  directors  of the issuer of such
Redeemable  Capital Stock,  provided,  however,  that if such Redeemable Capital
Stock  is  not  at  the  date  of  determination  permitted  or  required  to be
repurchased,  the "maximum  fixed  repurchase  price" shall be the book value of
such  Redeemable  Capital Stock.  Subject to clause (g) of the first sentence of
this definition,  neither Dollar-Denominated  Production Payments nor Volumetric
Production Payments shall be deemed to be Indebtedness.

         "Indenture" means this instrument as originally  executed and as it may
from  time  to  time  be  supplemented  or  amended  by one or  more  indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.

         "Insolvency  or  Liquidation  Proceeding"  means,  with  respect to any
Person, (a) an insolvency or bankruptcy case or proceeding, or any receivership,
liquidation,  reorganization  proceeding  or other  similar case or  proceeding,
relative to such Person or to its creditors,  as such, or its assets, or (b) any
liquidation,  dissolution or reorganization  proceeding of such Person,  whether
voluntary or involuntary and whether or not involving  insolvency or bankruptcy,
or (c) any  general  assignment  for  the  benefit  of  creditors  or any  other
marshalling of assets and liabilities of such Person.

          "Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.

         "Interest Rate  Protection  Obligations"  means the  obligations of any
Person  pursuant to any arrangement  with any other Person whereby,  directly or
indirectly,  such  person is  entitled  to  receive  from time to time  periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional  amount in exchange for periodic  payments made by such Person
calculated  by  applying  a fixed or a  floating  rate of  interest  on the same
notional amount and shall
                                      -13-


<PAGE>



include,  without  limitation,  interest rate swaps, caps,  floors,  collars and
similar  agreements or  arrangements  designed to protect against or manage such
Person's  and any of its  Subsidiaries'  exposure  to  fluctuations  in interest
rates.

         "Investment"  means, with respect to any Person, any direct or indirect
advance,  loan guarantee of Indebtedness or other extension of credit or capital
contribution to (by means of any transfer of cash or other Property to others or
any payment for Property or services  for the account or use of others),  or any
purchase  or  acquisition  by such Person of any Capital  Stock,  bonds,  notes,
debentures  or  other  securities   (including   derivatives)  or  evidences  of
Indebtedness issued by, any other Person. In addition,  the Fair Market Value of
the net assets of any  Restricted  Subsidiary  at the time that such  Restricted
Subsidiary  is designated an  Unrestricted  Subsidiary  shall be deemed to be an
"Investment" made by the Company in such  Unrestricted  Subsidiary at such time.
"Investments"  shall  exclude (a)  extensions  of trade  credit on  commercially
reasonable  terms in accordance with normal trade  practices,  (b) Interest Rate
Protection  Obligations  entered into in the  ordinary  course of business or as
required  by  any  Permitted   Indebtedness  or  any  Indebtedness  incurred  in
compliance  with Section 10.11 hereof,  but only to the extent that the notional
principal  amount of such Interest Rate Protection  Obligations  does not exceed
105% of the principal  amount of such  Indebtedness  to which such Interest Rate
Protection  Obligations  relate  and  (c)  bonds,  notes,  debentures  or  other
securities  received as a result of Asset Sales  permitted  under  Section 10.16
hereof.

         "Lien" means any mortgage,  charge,  pledge, lien (statutory or other),
security interest, hypothecation,  assignment for security, claim, or preference
or  priority  or  other   encumbrance  or  similar   agreement  or  preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
agreement to give or grant a Lien or any lease,  conditional sale or other title
retention agreement having  substantially the same economic effect as any of the
foregoing)  upon or with  respect to any Property of any kind. A Person shall be
deemed to own subject to a Lien any  Property  which such Person has acquired or
holds subject to the interest of a vendor or lessor under any  conditional  sale
agreement, capital lease or other title retention agreement.

         "Material Change" means an increase or decrease (excluding changes that
result  solely from changes in prices) of more than 50% during a fiscal  quarter
in the  estimated  discounted  future  net cash  flows  from  proved oil and gas
reserves  of  the  Company  and  its  Restricted  Subsidiaries,   calculated  in
accordance  with clause (a)(i) of the  definition of Adjusted  Consolidated  Net
Tangible Assets; provided, however, that the following will be excluded from the
calculation of Material Change:  (i) any acquisitions  during the quarter of oil
and gas reserves  that have been  estimated by a nationally  recognized  firm of
independent  petroleum engineers and on which a report or reports exist and (ii)
any  disposition  of  Properties  existing at the beginning of such quarter that
have been disposed of as provided in Section 10.16 hereof.

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

                                      -14-


<PAGE>



         "Moody's" means Moody's Investors Service, Inc. and its successors.

         "Multiemployer  Plan" shall mean a  "multiemployer  plan" as defined in
Section  4001(a)(3) of ERISA,  Section 414 of the Code or Section 3(37) of ERISA
(or any similar  type of plan  established  or  regulated  under the laws of any
foreign  country)  to which  the  Company  or any ERISA  Affiliate  is making or
accruing or has made or accrued an obligation to make contributions.

         "Multiple  Employer  Plan" shall mean any employee  benefit plan within
the meaning of Section 3(3) of ERISA,  other than a Multiemployer  Plan, subject
to Title IV of  ERISA,  to which  the  Company  or any  ERISA  Affiliate  and an
employer  other than an ERISA  Affiliate or the Company  contribute and which is
subject to Section 4064 of ERISA.

         "Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds
thereof in the form of cash or Cash Equivalents including payments in respect of
deferred  payment  obligations  when  received  in the  form  of  cash  or  Cash
Equivalents  (except to the extent that such  obligations  are  financed or sold
with recourse to the Company or any Restricted Subsidiary), net of (i) brokerage
commissions  and other fees and expenses  (including  fees and expenses of legal
counsel and investment  banks) related to such Asset Sale,  (ii)  provisions for
all taxes payable as a result of such Asset Sale,  (iii) amounts  required to be
paid to any Person (other than the Company or any Restricted  Subsidiary) owning
a  beneficial  interest  in the  Property  subject  to the  Asset  Sale and (iv)
appropriate amounts to be provided by the Company or any Restricted  Subsidiary,
as the case may be, as a reserve  required in accordance with GAAP  consistently
applied against any liabilities  associated with such Asset Sale and retained by
the Company or any Restricted  Subsidiary,  as the case may be, after such Asset
Sale, including,  without limitation,  pension and other post-employment benefit
liabilities,  liabilities related to environmental matters and liabilities under
any  indemnification  obligations  associated  with  such  Asset  Sale,  all  as
reflected  in an  Officers'  Certificate  delivered  to the  Trustee;  provided,
however,   that  any  amounts  remaining  after  adjustments,   revaluations  or
liquidations of such reserves shall constitute Net Cash Proceeds.

         "Net Working  Capital"  means (i) all current assets of the Company and
its Restricted  Subsidiaries,  minus (ii) all current liabilities of the Company
and  its  Restricted  Subsidiaries,   except  current  liabilities  included  in
Indebtedness,  in each case as set forth in financial  statements of the Company
prepared in accordance with GAAP.

         "Non-payment  Default" means,  for purposes of Article XIV hereof,  any
event (other than a Payment  Default) the  occurrence  of which  entitles one or
more  persons  to act to  accelerate  the  maturity  of  any  Designated  Senior
Indebtedness.

         "Non-Recourse  Indebtedness"  means  Indebtedness  or that  portion  of
Indebtedness  of the Company  incurred in connection with the acquisition by the
Company of any  Property  and as to which (a) the  holders of such  Indebtedness
agree that they will look solely to the Property so acquired  and securing  such
Indebtedness  for  payment  on or in  respect  of such  Indebtedness  and (b) no
default with respect to such Indebtedness  would permit (after notice or passage
of time or both),
                                      -15-

<PAGE>



according to the terms thereof, any holder of any Indebtedness of the Company or
a Restricted  Subsidiary to declare a default on such  Indebtedness or cause the
payment thereof to be accelerated or payable prior to its stated maturity.

         "Officer" means, with respect to any Person, the Chairman of the Board,
the President,  any Vice President, the Chief Financial Officer or the Treasurer
of such Person.

         "Officers' Certificate" means a certificate signed by the Chairman, the
President or a Vice President, and by the Treasurer, an Assistant Treasurer, the
Secretary  or an  Assistant  Secretary  of the  Company,  and  delivered  to the
Trustee.

         "Oil  and  Gas  Business"  means  (i)  the  acquisition,   exploration,
development,  operation  and  disposition  of  interests  in oil,  gas and other
hydrocarbon Properties,  (ii) the gathering,  marketing,  treating,  processing,
storage,  refining,  selling  and  transporting  of  any  production  from  such
interests  or  Properties,  (iii)  any  business  relating  to or  arising  from
exploration  for or development,  production,  treatment,  processing,  storage,
refining,  transportation  or  marketing  of oil,  gas and  other  minerals  and
products  produced in association  therewith,  and (iv) any activity  necessary,
appropriate or incidental to the activities  described in the foregoing  clauses
(i) through (iii) of this definition.

         "Opinion of  Counsel"  means a written  opinion of counsel,  who may be
counsel for the Company (or any Subsidiary Guarantor, if applicable),  including
an employee of the Company (or any Subsidiary Guarantor, if applicable), and who
shall be reasonably acceptable to the Trustee.

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

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

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

               (iii) Securities,  except to the extent provided in Sections 12.2
          and 12.3  hereof,  with  respect  to which the  Company  has  effected
          defeasance  and/or  covenant  defeasance  as  provided  in Article XII
          hereof; and

               (iv)  Securities  which have been paid  pursuant  to Section  3.7
          hereof 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

                                      -16-


<PAGE>



         to the Trustee proof  satisfactory  to it that such Securities are held
         by a bona  fide  purchaser  in whose  hands  the  Securities  are valid
         obligations of the Company;

provided,  however,  that in  determining  whether the Holders of the  requisite
principal  amount of  Outstanding  Securities  have given any  request,  demand,
authorization,  direction,  consent,  notice  or waiver  hereunder,  and for the
purpose of making the calculations required by TIA Section 313, Securities owned
by the  Company,  any  Subsidiary  Guarantor,  or any  other  obligor  upon  the
Securities or any Affiliate of the Company,  any Subsidiary  Guarantor,  or such
other  obligor shall be  disregarded  and deemed not to be  Outstanding,  except
that,  in  determining  whether the Trustee  shall be  protected  in making such
calculation  or  in  relying  upon  any  such  request,  demand,  authorization,
direction, consent, notice or waiver, only Securities which the Trustee knows to
be so owned shall be so disregarded. Securities so owned which have been pledged
in good faith may be regarded as Outstanding  if the pledgee  establishes to the
satisfaction  of the Trustee the pledgee's  right so to act with respect to such
Securities and that the pledgee is not the Company, any Subsidiary Guarantor, or
any other  obligor upon the  Securities  or any  Affiliate  of the Company,  any
Subsidiary Guarantor, or such other obligor.

         "Pari Passu Indebtedness" means any Indebtedness of the Company that is
pari passu in right of payment to the Securities.

         "Paying Agent" means any Person (including the Company acting as Paying
Agent)  authorized by the Company to pay the principal of (and premium,  if any,
on) or interest on any Securities on behalf of the Company.

         "Payment Default" means any default in the payment when due (whether at
Stated Maturity,  upon scheduled  repayment,  upon acceleration or otherwise) of
principal  of or premium,  if any, or interest  on, or of  unreimbursed  amounts
under drawn letter of credit or fees relating to letter of credit  constituting,
any Designated Senior Indebtedness.

         "PBGC" shall mean the Pension Benefit Guaranty Corporation.

         "PBGC Plan" shall mean any employee  pension benefit plan as defined in
Section 3(2) of ERISA sponsored by the Company or an ERISA Affiliate  (excluding
any  Multiemployer  Plan and any Multiple Employer Plan) and which is subject to
Title IV of ERISA or Section 412 of the Code.

         "Permitted  Guarantor  Junior  Securities"  means  with  respect to any
Subsidiary  Guarantor,  so long as the effect of any  exclusion  employing  this
definition is not to cause such  Subsidiary  Guarantee to be treated in any case
or  proceeding  or similar  event  described  in clause  (a),  (b) or (c) of the
definition of Insolvency or Liquidation  Proceeding as part of the same class of
claims as Guarantor  Senior  Indebtedness  of such  Subsidiary  Guarantor or any
class of claims pari passu with, or senior to, Guarantor Senior  Indebtedness of
such  Subsidiary  Guarantor,  for any  payment or  distribution,  debt or equity
securities of such Subsidiary  Guarantor or any successor  corporation  provided
for or by a plan of  reorganization  or  readjustment  that are  subordinated at
least to the same 

                                      -17-


<PAGE>



extent that such  Subsidiary  Guarantee  is  subordinated  to the payment of all
Guarantor  Senior  Indebtedness of such Subsidiary  Guarantor when  outstanding;
provided  that (i) if a new  corporation  results  from such  reorganization  or
readjustment, such corporation assumes any Guarantor Senior Indebtedness of such
Subsidiary  Guarantor not paid in full in cash or cash equivalents in connection
with such  reorganization  or readjustment and (ii) the rights of the holders of
such Guarantor Senior Indebtedness are not, without the consent of such holders,
altered by such reorganization or readjustment.

         "Permitted Indebtedness" means any of the following:

                  (i)  Indebtedness of the Company under one or more bank credit
         or revolving credit facilities in an aggregate  principal amount at any
         one time  outstanding not to exceed the greater of (A) $100 million and
         (B) an  amount  equal  to the  sum of (x)  $30  million  and (y) 20% of
         Adjusted  Consolidated Net Tangible Assets determined as of the date of
         the incurrence of such Indebtedness (such greater amount being referred
         to as the "Adjusted  Maximum  Credit  Amount")  (plus interest and fees
         payable  under such  facilities),  less any amounts  derived from Asset
         Sales  and  applied  to the  required  permanent  reduction  of  Senior
         Indebtedness  (and a permanent  reduction of the related  commitment to
         lend in the case of a  revolving  credit  facility)  under such  credit
         facilities as contemplated by Section  10.17(b)(i) hereof (the "Maximum
         Credit  Amount")  (with the Maximum  Credit  Amount to be an  aggregate
         maximum  amount  for  the  Company  and  all  Restricted  Subsidiaries,
         pursuant  to clause  (i) of the  definition  of  "Permitted  Subsidiary
         Indebtedness"), and any renewals, amendments, extensions,  supplements,
         modifications,  deferrals,  refinancings  or  replacements  (each,  for
         purposes  of this  clause,  a  "refinancing")  thereof by the  Company,
         including any successive  refinancings  thereof by the Company, so long
         as the  aggregate  principal  amount  of  any  such  new  Indebtedness,
         together with the aggregate  principal amount of all other Indebtedness
         outstanding  pursuant  to  this  clause  (i)  (and  clause  (i)  of the
         definition of "Permitted Subsidiary Indebtedness") shall not at any one
         time exceed the Maximum Credit Amount;

                  (ii)     Indebtedness of the Company under the Securities;

                  (iii)  Indebtedness of the Company  outstanding on the date of
         this  Indenture  (and not repaid or defeased  with the  proceeds of the
         offering of the Securities and the concurrent  offering of Common Stock
         by the Company;

                  (iv)  obligations  of the Company  pursuant  to Interest  Rate
         Protection Obligations,  but only to the extent such obligations do not
         exceed the aggregate  principal amount of the  Indebtedness  covered by
         such Interest Rate Protection  Obligations;  obligations under currency
         exchange contracts entered into in the ordinary course of business; and
         hedging  arrangements  that the  Company  enters  into in the  ordinary
         course of business for the purpose of protecting its production against
         fluctuations in oil or natural gas prices;


                                      -18-


<PAGE>



               (v) Indebtedness of the Company to any Restricted Subsidiaries;

               (vi) in-kind obligations  relating to net gas balancing positions
          arising in the ordinary  course of business and  consistent  with past
          practice;

               (vii) Indebtedness in respect of bid, performance or surety bonds
          issued for the account of the Company or any Restricted  Subsidiary in
          the ordinary course of business,  including  guarantees and letters of
          credit supporting such bid, performance, surety or other reimbursement
          obligations  (in each  case  other  than for an  obligation  for money
          borrowed);

                  (viii) any renewals, extensions,  substitutions,  refinancings
         or replacements (each, for purposes of this clause, a "refinancing") by
         the Company of any Indebtedness of the Company other than  Indebtedness
         incurred pursuant to clauses (iv), (vii) and (viii) of this definition,
         including any successive  refinancings  by the Company,  so long as (A)
         any such new Indebtedness  shall be in a principal amount that does not
         exceed the principal amount (or, if such Indebtedness  being refinanced
         provides for an amount less than the principal amount thereof to be due
         and payable upon a declaration  of  acceleration  thereof,  such lesser
         amount as of the date of  determination)  so refinanced plus the amount
         of any premium  required to be paid in connection with such refinancing
         pursuant to the terms of the  Indebtedness  refinanced or the amount of
         any  premium  reasonably  determined  by the  Company as  necessary  to
         accomplish such refinancing, plus the amount of expenses of the Company
         incurred in connection  with such  refinancing,  (B) in the case of any
         refinancing of Subordinated Indebtedness, such new Indebtedness is made
         subordinate  to the  Securities  at  least to the  same  extent  as the
         Indebtedness  being  refinanced  and (C) such new  Indebtedness  has an
         Average  Life  equal  to  or  longer  than  the  Average  Life  of  the
         Indebtedness  being  refinanced and a final Stated Maturity equal to or
         later  than  the  final  Stated  Maturity  of  the  Indebtedness  being
         refinanced;

                  (ix)     Non-Recourse Indebtedness; and

                  (x)  other  Indebtedness  of the  Company  and the  Restricted
         Subsidiaries that are Subsidiary  Guarantors in an aggregate  principal
         amount not in excess of $25,000,000 at any one time outstanding.

         "Permitted Investments" means any of the following:  (i) Investments in
Cash  Equivalents;  (ii)  Investments  in the  Company or any of its  Restricted
Subsidiaries;  (iii)  Investments in an amount not to exceed  $10,000,000 at any
one time  outstanding;  (iv) Investments by the Company or any of its Restricted
Subsidiaries in another Person, if as a result of such Investment (A) such other
Person becomes a Restricted  Subsidiary of the Company; or (B) such other Person
is  merged  or  consolidated  with or  into,  or  transfers  or  conveys  all or
substantially all of its assets to, the Company or a Restricted Subsidiary;  (v)
entry into operating agreements, joint ventures, partnership agreements, working
interests,  royalty interests,  mineral leases, processing agreements,  farm-out
agreements,  contracts  for the  sale,  transportation  or  exchange  of oil and
natural gas, unitization

                                      -19-


<PAGE>



agreements,  pooling  arrangements,  area of mutual interest agreements or other
similar  or  customary  agreements,   transactions,   properties,  interests  or
arrangements,  and  Investments  and  expenditures  in  connection  therewith or
pursuant  thereto,  in each case made or entered into in the ordinary  course of
the Oil and Gas Business,  excluding,  however, Investments in corporations;  or
(vi) entry into any hedging  arrangements in the ordinary course of business for
the  purpose  of  protecting  the  Company's  or  any  Restricted   Subsidiary's
production against fluctuations in oil or natural gas prices.

         "Permitted  Junior  Securities"  means,  so long as the  effect  of any
exclusion employing this definition is not to cause the Securities to be treated
in any case or proceeding  or similar event  described in clause (a), (b) or (c)
of the  definition of Insolvency or  Liquidation  Proceeding as part of the same
class of claims as Senior  Indebtedness  or any class of claims pari passu with,
or senior to,  Senior  Indebtedness,  for any payment or  distribution,  debt or
equity securities of the Company or any successor corporation provided for or by
a plan of  reorganization  or readjustment that are subordinated at least to the
same extent that the  Securities are  subordinated  to the payment of all Senior
Indebtedness  when outstanding;  provided that (i) if a new corporation  results
from such  reorganization or readjustment,  such corporation  assumes any Senior
Indebtedness  not paid in full in cash or cash  equivalents  in connection  with
such  reorganization  or readjustment and (ii) the rights of the holders of such
Senior  Indebtedness  are not,  without the consent of such holders,  altered by
such reorganization or readjustment.

         "Permitted Liens" means the following types of Liens:

                  (a)      Liens existing as of the date the Securities are 
                           first issued;

                  (b)      Liens securing the Securities;

                  (c)      Liens in favor of the Company or a Restricted
                           Subsidiary that is a Subsidiary Guarantor;
         
                  (d)      Liens securing Senior Indebtedness or Guarantor
                           Senior Indebtedness;

                  (e) Liens for taxes,  assessments and governmental  charges or
         claims  either (i) not  delinquent  or (ii)  contested in good faith by
         appropriate  proceedings  and as to which the Company or its Restricted
         Subsidiaries  shall have set aside on its books such reserves as may be
         required pursuant to GAAP;

                  (f)  statutory  Liens of  landlords  and  Liens  of  carriers,
         warehousemen,  mechanics, suppliers,  materialmen,  repairmen and other
         Liens  imposed by law incurred in the  ordinary  course of business for
         sums not delinquent or being  contested in good faith,  if such reserve
         or other  appropriate  provision,  if any, as shall be required by GAAP
         shall have been made in respect thereof;


                                      -20-

<PAGE>



                  (g) Liens incurred or deposits made in the ordinary  course of
business in connection with workers'  compensation,  unemployment  insurance and
other  types of social  security,  or to secure the  payment or  performance  of
tenders,  statutory or regulatory  obligations,  surety and appeal bonds,  bids,
leases,  government contracts and leases,  performance and return of money bonds
and other  similar  obligations  (exclusive  of  obligations  for the payment of
borrowed  money but including  lessee or operator  obligations  under  statutes,
governmental  regulations or instruments  related to the ownership,  exploration
and  production  of oil, gas and minerals on state,  Federal or foreign lands or
waters);

                  (h)  judgment  Liens not giving rise to an Event of Default so
long as any appropriate legal proceedings which may have been duly initiated for
the review of such judgment shall not have been finally terminated or the period
within which such proceeding may be initiated shall not have expired;

                  (i) easements, rights-of-way, restrictions and other similar
          charges or encumbrances  not interfering in any material  respect with
          the  ordinary  conduct of the  business  of the  Company or any of its
          Restricted Subsidiaries;

                  (j) any interest or title of a lessor under any Capitalized 
          Lease Obligation or operating lease;

                  (k) Liens  resulting  from the deposit of funds or evidences
          of Indebtedness in trust for the purpose of defeasing  Indebtedness of
          the Company or any of the Subsidiaries;

                  (l) Liens securing  obligations under hedging  agreements that
          the Company or any Restricted  Subsidiary  enters into in the ordinary
          course of  business  for the  purpose  of  protecting  its  production
          against fluctuations in oil or natural gas prices;

                  (m) Liens upon specific  items of inventory or other goods and
          proceeds of any Person  securing such Person's  obligations in respect
          of  bankers'  acceptances  issued or created  for the  account of such
          Person  to  facilitate  the  purchase,  shipment  or  storage  of such
          inventory or other goods;

                  (n) Liens securing  reimbursement  obligations with respect to
         commercial  letters  of  credit  which  encumber  documents  and  other
         Property  relating to such  letters of credit and products and proceeds
         thereof;

                  (o) Liens encumbering Property under construction arising from
         progress  or  partial  payments  by a  customer  of the  Company or its
         Restricted Subsidiaries relating to such Property;


                                      -21-


<PAGE>



                    (p) Liens  encumbering  deposits made to secure  obligations
          arising   from   statutory,   regulatory,   contractual   or  warranty
          requirements  of the  Company or any of its  Restricted  Subsidiaries,
          including rights of offset and set-off;

                    (q) Liens  securing  Interest  Rate  Protection  Obligations
          which Interest Rate Protection Obligations relate to Indebtedness that
          is secured by Liens otherwise permitted under this Indenture;

                    (r) Liens on, or  related  to,  Properties  to secure all or
          part of the costs incurred in the ordinary  course of business for the
          exploration, drilling, development or operation thereof;

                    (s) Liens on pipeline or pipeline facilities which arise out
          of operation of law;

                    (t) Liens arising under operating agreements,  joint venture
          agreements,  partnership  agreements,  oil  and gas  leases,  farm-out
          agreements, division orders, contracts for the sale, transportation or
          exchange of oil and natural gas,  unitization and pooling declarations
          and  agreements,   area  of  mutual  interest   agreements  and  other
          agreements which are customary in the Oil and Gas Business;

                    (u) Liens  reserved in oil and gas mineral  leases for bonus
          or rental payments and for compliance with the terms of such leases;

                    (v)  Liens  constituting  survey  exceptions,  encumbrances,
          easements or reservations of, or rights to others for,  rights-of-way,
          zoning or other  restrictions  as to the use of real  properties,  and
          minor  defects of title  which,  in the case of any of the  foregoing,
          were not  incurred or created to secure the payment of borrowed  money
          or the deferred  purchase  price of Property or  services,  and in the
          aggregate do not materially  adversely affect the value of Property of
          the  Company and the  Restricted  Subsidiaries,  taken as a whole,  or
          materially impair the use of such Properties for the purposes of which
          such   Properties   are  held  by  the   Company  or  any   Restricted
          Subsidiaries; and

                    (w)  Liens  securing  Non-Recourse  Indebtedness;  provided,
          however,  that the  related  Non-Recourse  Indebtedness  shall  not be
          secured by any  Property of the Company or any  Restricted  Subsidiary
          other than the  Property  acquired by the Company with the proceeds of
          such Non-Recourse Indebtedness;

Notwithstanding anything in clauses (a) through (w) of this definition, the term
"Permitted  Liens"  does not  include  any Liens  resulting  from the  creation,
incurrence,  issuance,  assumption or guarantee of any Production Payments other
than  Production  Payments  that  are  created,  incurred,  issued,  assumed  or
guaranteed  in connection  with the financing of, and within 30 days after,  the
acquisition of the Properties that are subject thereto.


                                      -22-


<PAGE>



         "Permitted Subsidiary Indebtedness" means any of the following:

                    (i)  Indebtedness of any Restricted  Subsidiary under one or
          more bank credit or revolving  credit  facilities (and  "refinancings"
          thereof)  in an amount at any one time  outstanding  not to exceed the
          Maximum   Credit  Amount  (in  the   aggregate   for  all   Restricted
          Subsidiaries and the Company, pursuant to clause (i) of the definition
          of "Permitted Indebtedness");

                    (ii) Indebtedness of any Restricted  Subsidiary  outstanding
          on the date of this Indenture;
         
                    (iii) obligations of any Restricted  Subsidiary  pursuant to
          Interest  Rate  Protection  Obligations,  but only to the extent  such
          obligations  do not  exceed  the  aggregate  principal  amount  of the
          Indebtedness covered by such Interest Rate Protection Obligations; and
          hedging arrangements that any Restricted Subsidiary enters into in the
          ordinary  course  of  business  for  the  purpose  of  protecting  its
          production against fluctuations in oil or natural gas prices;

                    (iv) the Subsidiary  Guarantees of the Securities and Senior
          Notes (and any assumptions of the obligations guaranteed thereby);

                    (v)  Indebtedness of any Restricted  Subsidiary  relating to
          guarantees by such  Restricted  Subsidiary of the  Indebtedness of the
          Company  under any bank credit  facility  that  constitutes  Permitted
          Indebtedness  pursuant to clause (i) of the  definition  of "Permitted
          Indebtedness;"

                    (vi) Indebtedness of any Restricted  Subsidiary to any other
          Restricted Subsidiary or to the Company;

                    (vii) Indebtedness  relating to guarantees of any Restricted
          Subsidiary  permitted to be incurred pursuant to Section 10.12 hereof;
          and

                    (viii) any renewals, extensions, substitutions, refinancings
          or replacements  (each,  for purposes of this clause, a "refinancing")
          by any Restricted  Subsidiary of any  Indebtedness  of such Restricted
          Subsidiary,  including any successive  refinancings by such Restricted
          Subsidiary,  so long as (x) any  such new  Indebtedness  shall be in a
          principal  amount  that does not exceed the  principal  amount (or, if
          such  Indebtedness  being refinanced  provides for an amount less than
          the principal  amount thereof to be due and payable upon a declaration
          of  acceleration  thereof,  such  lesser  amount  as of  the  date  of
          determination)  so refinanced plus the amount of any premium  required
          to be paid in connection with such  refinancing  pursuant to the terms
          of the Indebtedness refinanced or the amount of any premium reasonably
          determined  by such  Restricted  Subsidiary as necessary to accomplish
          such  refinancing,  plus the  amount of  expenses  of such  Subsidiary
          incurred in connection with such refinancing and

                                      -23-


<PAGE>



                    (y) such new  Indebtedness  has an Average  Life equal to or
          longer than the Average Life of the Indebtedness  being refinanced and
          a final  Stated  Maturity  equal to or later  than  the  final  Stated
          Maturity of the Indebtedness being refinanced.

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

         "Predecessor  Security" of any particular Security means every previous
Security  evidencing all or a portion of the same debt as that evidenced by such
particular  Security;  and,  for the purposes of this  definition,  any Security
authenticated and delivered under Section 3.7 hereof in exchange for a mutilated
security or in lieu of a lost,  destroyed or stolen  Security shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Security.

         "Preferred  Stock"  means,  with  respect  to any  Person,  any and all
shares,  interests,  participations or other equivalents (however designated) of
such Person's  preferred or preference stock,  whether now outstanding or issued
after the date of this Indenture, including, without limitation, all classes and
series or preferred or preference stock of such Person.

          "Production   Payments"   means,   collectively,    Dollar-Denominated
Production Payments and Volumetric Production Payments.

         "Property"  means,  with  respect to any Person,  any  interest of such
Person in any kind of property or asset,  whether  real,  personal or mixed,  or
tangible or  intangible,  including,  without  limitation,  Capital Stock in any
other Person.

         "Qualified Capital Stock" of any Person means any and all Capital Stock
of such Person other than Redeemable Capital Stock.

         "Redeemable  Capital  Stock" means any class or series of Capital Stock
that,  either  by its  terms,  by the  terms of any  security  into  which it is
convertible  or  exchangeable  or by  contract  or  otherwise,  is,  or upon the
happening of an event or passage of time would be, required to be redeemed prior
to the final Stated Maturity of the Securities or is redeemable at the option of
the  holder  thereof  at any time prior to such  final  Stated  Maturity,  or is
convertible  into or exchangeable  for debt securities at any time prior to such
final Stated Maturity.

         "Redemption  Date,"  when  used  with  respect  to any  Security  to be
redeemed,  in whole or in part,  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.


                                      -24-


<PAGE>



         "Regular Record Date" for the interest  payable on any Interest Payment
Date  means the  _________________  or  ____________________  (whether  or not a
Business Day), as the case may be, next preceding such Interest Payment Date.

         "Reportable  Event"  shall mean any event  described  in  Section  4043
(excluding  subsections  (b)(7) and (b)(9)) of ERISA and the regulations  issued
thereunder  (other  than a  Reportable  Event not subject to the  provision  for
thirty-day notice to the PBGC under such regulations).

         "Responsible Officer," when used with respect to the Trustee, means any
officer in the Corporate  Trust  Administration  Department of the Trustee,  and
also means,  with  respect to a particular  corporate  trust  matter,  any other
officer  to whom  such  matter  is  referred  because  of his  knowledge  of and
familiarity with the particular subject.

         "Restricted  Subsidiary"  means any Subsidiary of the Company,  whether
existing on or after the date of this  Indenture,  unless such Subsidiary of the
Company  is an  Unrestricted  Subsidiary  or is  designated  as an  Unrestricted
Subsidiary pursuant to the terms of this Indenture.

         "S&P" means Standard and Poor's Corporation and its successors.

         "Sale/Leaseback  Transaction"  means,  with respect to any Person,  any
direct  or  indirect  arrangement  pursuant  to  which  Properties  are  sold or
transferred  by such Person or a  Subsidiary  of such Person and are  thereafter
leased back from the  purchaser or  transferee  thereof by such Person or one of
its Subsidiaries.

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

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

         "Senior  Indebtedness"  means the  principal of,  premium,  if any, and
interest  on any  Indebtedness  of the  Company  (including,  in the case of the
Credit Agreement and the Senior Notes,  interest  accruing after the filing of a
petition by or against the Company under any bankruptcy  law, in accordance with
and at the rate,  including  any default  rate,  specified  with respect to such
indebtedness,  whether  or not a claim for such  interest  is allowed as a claim
after  such  filing  in any  proceeding  under  such  bankruptcy  law),  whether
outstanding  on the date of the  Indenture or  thereafter  created,  incurred or
assumed,  unless,  in the case of any  particular  Indebtedness,  the instrument
creating or  evidencing  the same or  pursuant to which the same is  outstanding
expressly  provides  that  such  Indebtedness  shall  not be  senior in right of
payment to the Notes. Notwithstanding the foregoing, "Senior Indebtedness" shall
not include (a) Indebtedness  evidenced by the Notes,  (b) Indebtedness  that is
expressly  subordinate or junior in right of payment to any Senior  Indebtedness
of the Company, (c) Indebtedness which, when incurred and without respect to any
election  under Section  1111(b) of Title 11 United States Code, is by its terms
without recourse 

                                      -25-


<PAGE>



to the Company, (d) any repurchase, redemption or other obligation in respect of
Redeemable  Capital Stock of the Company,  (e) to the extent it might constitute
Indebtedness,  any  liability for federal,  state,  local or other taxes owed or
owing by the Company,  (f)  Indebtedness  of the Company to a Subsidiary  of the
Company  or any  other  Affiliate  of the  Company  or any of  such  Affiliate's
Subsidiaries,  and (g) that portion of any  Indebtedness of the Company which at
the time of issuance is issued in violation  of the  Indenture  (but,  as to any
such  Indebtedness,  no such violation  shall be deemed to exist for purposes of
this clause (g) if the holder(s) of such Indebtedness or their representative or
the  Company  shall  have  furnished  to  the  Trustee  an  opinion  of  counsel
unqualified in all material respects of independent legal counsel,  addressed to
the  Trustee  (which  legal  counsel  may,  as to matters  of fact,  rely upon a
certificate  of  the  Company)  to  the  effect  that  the  incurrence  of  such
Indebtedness  does not violate the provisions of such Indenture);  provided that
the foregoing  exclusions  shall not affect the  priorities of any  Indebtedness
arising  solely by operation of law in any case or  proceeding  or similar event
described  in  clause  (a),  (b)  or  (c) of the  definition  of  Insolvency  or
Liquidation Proceeding.

         "Senior  Notes"  means the 13 1/2% Senior Notes due 2004 of the Company
issued  pursuant to the  Indenture,  dated as of  December 1, 1994,  between the
Company,  as issuer, FRI Louisiana,  as subsidiary  guarantor,  and Shawmut Bank
Connecticut,  National  Association  (now  known as  Fleet  National  Bank),  as
trustee.

         "Senior  Note  Obligations"  means all  monetary  obligations  of every
nature of the Company or a Restricted Subsidiary,  including without limitation,
obligations to pay principal and interest, fees, expenses and indemnities,  from
time to time owed to the holders or the trustee in respect of the Senior Notes.

         "Senior   Representative"   means   the  Bank   Agent   or  any   other
representatives designated in writing to the Trustee of the holders of any class
or issue of Designated Senior  Indebtedness;  provided that, in the absence of a
representative  of the type described above, any holder or holders of a majority
of the principal amount  outstanding of any class or issue of Designated  Senior
Indebtedness  may collectively  act as Senior  Representative  for such class or
issue,  subject to the provisions of any agreements  relating to such Designated
Senior Indebtedness.

         "Senior Subordinated Note Obligations" means any principal of, premium,
if any, and interest on, and any other amounts  (including,  without limitation,
any payment  obligations with respect to the Securities as a result of any Asset
Sale,  Change of Control or  redemption)  owing in  respect  of, the  Securities
payable  pursuant  to the  terms  of the  Securities  or the  Indenture  or upon
acceleration of the Securities.

         "Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.8 hereof.

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

                                      -26-


<PAGE>



Security or such installment of interest is due and payable, and, when used with
respect to any  otherIndebtedness or any installment of interest thereon,  means
the date specified in the instrument  evidencing or governing such  Indebtedness
as the  fixed  date  on  which  the  principal  of  such  Indebtedness  or  such
installment of interest is due and payable.

         "Subordinated  Indebtedness" means Indebtedness of the Company which is
expressly subordinated in right of payment to the Securities.

         "Subsidiary"  means,  with respect to any Person,  (i) a  corporation a
majority of whose Voting Stock is at the time, directly or indirectly,  owned by
such Person,  by one or more  Subsidiaries  of such Person or by such Person and
one or more  Subsidiaries  thereof  or  (ii)  any  other  Person  (other  than a
corporation),  including,  without  limitation,  a joint venture,  in which such
Person,  one or  more  Subsidiaries  thereof  or  such  Person  and  one or more
Subsidiaries  thereof,  directly  or  indirectly,  at the date of  determination
thereof,  has at  least  majority  ownership  interest  entitled  to vote in the
election of directors,  managers or trustees thereof (or other Person performing
similar functions).

         "Subsidiary Guarantee" has the meaning specified in Section 13.1
hereof.

         "Subsidiary  Guarantor"  means (i) Flores & Rucks,  Inc.,  a  Louisiana
corporation,  (ii) each of the Company's Restricted  Subsidiaries that becomes a
guarantor of the  Securities in compliance  with the provisions of Section 10.12
or Section 13.1 hereof and (iii) each of the Company's  Subsidiaries executing a
supplemental  indenture in which such Subsidiary agrees to be bound by the terms
of this Indenture and to guarantee on an unsubordinated basis the payment of the
Securities pursuant to the provisions of Article XIII hereof.

         "Trust  Indenture Act" or "TIA" means the Trust  Indenture Act of 1939,
as amended  and in force at the date as of which this  Indenture  was  executed,
except as provided in Section 9.5 hereof.

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

         "Unrestricted  Subsidiary" means (i) any Subsidiary of the Company that
at the time of  determination  will be designated an Unrestricted  Subsidiary by
the Board of Directors of the Company as provided  below and (ii) any Subsidiary
of an  Unrestricted  Subsidiary.  The  Board of  Directors  of the  Company  may
designate any Subsidiary of the Company as an Unrestricted Subsidiary so long as
(a) neither the Company nor any Restricted  Subsidiary is directly or indirectly
liable  pursuant to the terms of any  Indebtedness  of such  Subsidiary;  (b) no
default with respect to any  Indebtedness of such Subsidiary  would permit (upon
notice,  lapse of time or otherwise) any holder of any other Indebtedness of the
Company  or any  Restricted  Subsidiary  to  declare  a  default  on such  other
Indebtedness  or cause the payment thereof to be accelerated or payable prior to
its stated maturity;  (c) neither the Company nor any Restricted  Subsidiary has
made an Investment in such  Subsidiary  unless such Investment was made pursuant
to, and in accordance with,  Section 
 
                                      -27-
<PAGE>

10.10 hereof (other than Investments of the type described in clause (iv) of the
definition of Permitted Investments);  and (d) such designation shall not result
in the  creation  or  imposition  of any  Lien on any of the  Properties  of the
Company or any Restricted  Subsidiary (other than any Permitted Lien or any Lien
the creation or imposition  of which shall have been in compliance  with Section
10.14 hereof);  provided,  however, that with respect to clause (a), the Company
or a Restricted  Subsidiary may be liable for  Indebtedness  of an  Unrestricted
Subsidiary  if (x)  such  liability  constituted  a  Permitted  Investment  or a
Restricted  Payment  permitted by Section 10.10 hereof, in each case at the time
of incurrence,  or (y) the liability would be a Permitted Investment at the time
of  designation  of such  Subsidiary  as an  Unrestricted  Subsidiary.  Any such
designation  by the Board of Directors of the Company  shall be evidenced to the
Trustee by filing a Board  Resolution  with the  Trustee  giving  effect to such
designation.   The  Board  of  Directors  of  the  Company  may   designate  any
Unrestricted  Subsidiary as a Restricted Subsidiary if, immediately after giving
effect to such  designation,  (i) no  Default  or Event of  Default  shall  have
occurred and be  continuing,  (ii) the Company  could incur $1.00 of  additional
Indebtedness  (not  including the  incurrence of Permitted  Indebtedness)  under
Section 10.11(a) hereof and (iii) if any of the Properties of the Company or any
of its Restricted Subsidiaries would upon such designation become subject to any
Lien (other than a Permitted  Lien),  the  creation or  imposition  of such Lien
shall have been in compliance with Section 10.14 hereof.

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

         "Volumetric  Production  Payments" means production payment obligations
recorded  as  deferred  revenue  in  accordance  with  GAAP,  together  with all
undertakings and obligations in connection therewith.

         "Voting  Stock" means any class or classes of Capital Stock pursuant to
which  the  holders  thereof  have  the  general  voting  power  under  ordinary
circumstances  to elect at least a majority of the board of directors,  managers
or trustees of any Person (irrespective of whether or not, at the time, stock of
any other class or classes shall have, or might have,  voting power by reason of
the happening of any contingency).

         "Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary to
the  extent  all of the  Capital  Stock or  other  ownership  interests  in such
Restricted  Subsidiary,  other than any directors  qualifying shares mandated by
applicable law, is owned directly or indirectly by the Company.

                                      -28-

 <PAGE>

   Section 1.2      Other Definitions.
                                                                    Defined
   Term                                                            in Section
   ----                                                            ----------

   "Agent Members.................................................  3.6
   "Change of Control Notice".....................................  10.15(c)
   "Change of Control Offer"......................................  10.15(a)
   "Change of Control Purchase Date"..............................  10.15(c)
   "Change of Control Purchase Price".............................  10.15(a)
   "Defaulted Interest"...........................................  3.8
   "Global Security"..............................................  2.1
   "Funding Guarantor"............................................  13.5
   "Excess Proceeds"..............................................  10.16(b)
   "Net Proceeds Deficiency"......................................  10.16(c)
   "Net Proceeds Offer"...........................................  10.16(c)
   "Net Proceeds Payment Date"....................................  10.16(c)
   "Offered Price"................................................  10.16(c)
   "Pari Passu Indebtedness Amount"...............................  10.16(c)
   "Pari Passu Offer".............................................  10.16(c)
   "Payment Amount"...............................................  10.16(b)
   "Payment Blockage Notice"......................................  14.3(b)
   "Payment Blockage Period" .....................................  14.3(b)
   "Physical Securities"..........................................  2.1
   "Permitted Payments"...........................................  10.10(b)
   "Purchase Notice"..............................................  10.16(c)
   "Restricted Payment"...........................................  10.10(a)
   "Subsidiary Guarantor Non-payment Default".....................  13.9(b)
   "Subsidiary Guarantor Payment Default".........................  13.9(a)
   "Subsidiary Guarantor Payment Notice"..........................  13.9(b)
   "Surviving Entity".............................................  8.1(a)
   "Trigger Date".................................................  10.16(c)
   "U.S. Government Obligations"..................................  12.4(a)

          Section  1.3  Incorporation  by  Reference  of  Trust  Indenture  Act.
Whenever  this  Indenture  refers to a provision  of the TIA,  the  provision is
incorporated  by reference in and made a part of this  Indenture.  The following
TIA terms used in this Indenture have the following meanings:

    "indenture securities" means the Securities,

    "indenture security holder" means a Holder,

   
                                      -29-


<PAGE>

    "indenture to be qualified" means this Indenture,

    "indenture trustee" or "institutional trustee" means the Trustee, and

    "obligor" on the indenture securities means the Company or any other 
obligor on the Securities.

          All other TIA terms  used in this  Indenture  that are  defined by the
TIA,  defined by TIA reference to another  statute or defined by Commission rule
and not otherwise defined herein have the meanings assigned to them therein.

          Section 1.4 Rules of Construction. For all purposes of this Indenture,
except as otherwise expressly provided or unless the context otherwise requires:

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

               (b) all  accounting  terms not otherwise  defined herein have the
          meanings assigned to them in accordance with GAAP;

               (c) 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;

               (d) unless the context otherwise  requires,  the word "or" is not
          exclusive;

               (e) provisions apply to successive events and transactions; and

               (f)  references  to  agreements  and  other  instruments  include
          subsequent   amendments  and  waivers  but  only  to  the  extent  not
          prohibited by this Indenture.


                                   ARTICLE II

                                 SECURITY FORMS

                  Section 2.1 Forms Generally.  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  or  notations  of  Subsidiary  Guarantees,  as the case  may be,  as
evidenced by their  execution  of such  Securities  or  notations of  Subsidiary
Guarantees, as the case may be.

                                      -30-

<PAGE>

                  Securities  (including the notations  thereon  relating to the
Subsidiary Guarantees and the Trustees certificate of authentication) bought and
sold  shall be  issued  initially  in the form of one or more  permanent  global
Securities  substantially  in the form set forth in  Sections  2.2  through  2.5
hereof (the "Global Security")  deposited with the Trustee, as custodian for the
Depositary,  duly  executed by the Company and  authenticated  by the Trustee as
hereinafter  provided.  Subject to the  limitation set forth in Section 3.1, the
principal  amount of the Global  Securities  may be increased or decreased  from
time to time by adjustments  made on the records of the Trustee as custodian for
the Depository, as hereinafter provided.

                  Securities  (including the notations  thereon  relating to the
Subsidiary  Guarantees and the Trustees  certificate of authentication)  offered
and sold other than as described in the preceding  paragraph  shall be issued in
the  form  of  permanent   certificated   Securities  in   registered   form  in
substantially  the for set forth in Sections  2.2 through 2.5 hereto  ("Physical
Securities").

                  The  Securities,   the  notations   thereon  relating  to  the
Subsidiary  Guarantees and the Trustee's  certificate of authentication shall be
in  substantially  the forms set forth in this  Article,  with such  appropriate
insertions,  omissions,  substitutions  and other  variations as are required or
permitted by this Indenture,  and may have such letters,  numbers or other marks
of  identification  and such legends or  endorsements  placed  thereon as may be
required  to  comply  with  the  rules  of any  securities  exchange  or as may,
consistently  herewith,  be determined by the officers executing such Securities
or notations of Subsidiary Guarantees, as the case may be, as evidenced by their
execution of the Securities or notations of Subsidiary  Guarantees,  as the case
may be. Any portion of the text of any  Security may be set forth on the reverse
thereof,  with an appropriate  reference thereto on the face of the Security. In
addition to the  requirements  of Section 2.3, the  Securities may also have set
forth on the  reverse  side  thereof  a form of  assignment  and  forms to elect
purchase by the Company pursuant to Sections 10.15 and 10.16 hereof.

                  Section 2.2       Form of Face of Security.

                              FLORES & RUCKS, INC.

                    9 3/4% Senior Subordinated Note due 2006

No. _____                                                           $__________
                                                          CUSIP No. 34039C AB 3

                  Flores & Rucks,  Inc., a Delaware  corporation  (herein called
the  "Company,"  which term  includes any  successor  Person under the Indenture
hereinafter  referred  to),  for  value  received,  hereby  promises  to  pay to
________________________   or   registered   assigns   the   principal   sum  of
_______________  Dollars  on  October  1,  2006,  at the office or agency of the
Company referred to below, and to pay interest  thereon,  commencing on April 1,
1997 and continuing  semiannually  thereafter,  on April 1 and October 1 in each
year, from September 26, 1996, or from the most recent Interest  Payment Date to
which  interest  has been paid or duly  provided  for,  at the rate of 9.75% per

                                      -31-

<PAGE>  

annum,  until the  principal  hereof is paid or duly  provided  for, and (to the
extent  lawful) to pay on demand  interest on any  overdue  interest at the rate
borne by the  Securities  from the date on which such overdue  interest  becomes
payable to the date payment of such interest has been made or duly provided for.
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 March 15 or September 15 (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 such defaulted  interest,
and (to the extent lawful) interest on such defaulted interest at the rate borne
by the Securities, may 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  not less
than 10 days prior to such Special  Record  Date,  or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities  may be listed,  and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture.

                  Payment of the  principal  of (and  premium,  if any,  on) and
interest  on this  Security  will be made at the office or agency of the Company
maintained  for that purpose in The City of New York, or at such other office or
agency of the Company as may be  maintained  for such  purpose,  in such coin or
currency  of the  United  States of  America  as at the time of payment is legal
tender for payment of public and private debts;  provided however,  that payment
of interest  may be made at the option of the Company (i) by check mailed to the
address  of the Person  entitled  thereto as such  address  shall  appear on the
Security  Register or (ii) with respect to any Holder  owning  Securities in the
principal amount of $500,000 or more, by wire transfer to an account  maintained
by the Holder located in the United States,  as specified in a written notice to
the  Trustee  by any  such  Holder  requesting  payment  by  wire  transfer  and
specifying the account to which transfer is requested.

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

                  Unless the certificate of authentication  hereon has been duly
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.

                 
                                      -32-


<PAGE>

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

                                            FLORES & RUCKS, INC.


                                            By:
                                               --------------------------------
                                                     Chairman of the Board

Attest:


-----------------------------
Secretary

 

                 Section 2.3 Form of Reverse of Security.  This Security is one
of a duly authorized issue of securities of the Company designated as its 9 3/4%
Senior  Notes due 2006  (herein  called the  "Securities"),  limited  (except as
otherwise  provided in the Indenture  referred to below) in aggregate  principal
amount to  $160,000,000,  which may be issued under an indenture  (herein called
the  "Indenture")  dated as of  September  26,  1996  between the  Company,  the
Subsidiary  Guarantors and Fleet  National  Bank, as trustee  (herein called 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,  duties,
obligations and immunities thereunder of the Company, the Subsidiary Guarantors,
the Trustee and the Holders of the  Securities,  and of the terms upon which the
Securities are, and are to be, authenticated and delivered.

                  The Indebtedness evidenced by the Securities is, to the extent
and in the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all Senior  Indebtedness  (as defined in
the  Indenture)  and this Security is issued  subject to such  provisions.  Each
Holder of this Security, by accepting the same, (i) agrees to and shall be bound
by such  provisions,  (ii)  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 the Indenture and (iii) appoints the Trustee as his
attorney-in-fact for such purpose.

                  The Securities are subject to redemption, at the option of the
Company,  in whole or in part, at any time on or after October 1, 2001, upon not
less than 30 or more than 60 days'  notice at the  following  Redemption  Prices
(expressed  as  percentages  of  principal  amount)  set forth below if redeemed
during the 12-month period beginning October 1 of the years indicated below:

                                      -33-

<PAGE>      


                                                             Redemption
      Year                                                      Price
      ----                                                   ----------
      2001...............................................     104.875%
      2002...............................................     103.250%
      2003...............................................     101.625%
      2004 and thereafter ...............................         100%

together in the case of any such redemption with accrued and unpaid interest, if
any, to the  Redemption  Date  (subject to the right of Holders of record on the
relevant Regular Record Date to receive interest due on an Interest Payment Date
that is on or prior to the Redemption Date), all as provided in the Indenture.

                 In  the  case  of  any  redemption  of   Securities,   interest
installments whose Stated Maturity is on or prior to the Redemption Date will be
payable  to  the  Holders  of  such  Securities,  or  one  or  more  Predecessor
Securities,  of record at the close of  business  on the  relevant  Record  Date
referred to on the face  hereof.  Securities  (or  portions  thereof)  for whose
redemption and payment  provision is made in accordance with the Indenture shall
cease to bear  interest  from and after  the  Redemption  Date.  In the event of
redemption  or  purchase  of this  Security  in part  only,  a new  Security  or
Securities for the  unredeemed or unpurchased  portion hereof shall be issued in
the name of the Holder hereof upon the cancellation hereof.

                  The  Securities  do not have the benefit of any  sinking  fund
obligations.

                  In the  event of a  Change  of  Control  of the  Company,  and
subject to certain  conditions and  limitations  provided in the Indenture,  the
Company will be  obligated  to make an offer to purchase,  on a Business Day not
more  than 70 or less  than 30 days  following  the  occurrence  of a Change  of
Control of the Company,  all of the then  outstanding  Securities  at a purchase
price equal to 101% of the principal  amount thereof,  together with accrued and
unpaid  interest to the Change of Control  Purchase Date, all as provided in the
Indenture.

                  In the event of Asset Sales, under certain circumstances,  the
Company  will be  obligated  to make a Net  Proceeds  Offer to purchase all or a
specified portion of each Holder's  Securities at a purchase price equal to 100%
of the  principal  amount of the  Securities,  together  with accrued and unpaid
interest to the Net Proceeds Payment Date.

                  As  set  forth  in the  Indenture,  an  Event  of  Default  is
generally (i) failure to pay principal  upon  maturity,  redemption or otherwise
(including  pursuant to a Change of Control Offer or a Net Proceeds Offer); (ii)
default  for 30 days in  payment of  interest  on any of the  Securities;  (iii)
default in the performance of agreements relating to mergers, consolidations and
sales of all or substantially  all assets or the failure to make or consummate a
Change of Control Offer or a Net Proceeds Offer;  (iv) failure for 30 days after
notice to comply with any other  covenants in the  Indenture or the  Securities;
(v) certain payment defaults under,  the acceleration  prior to the maturity of,
and the  exercise  of  certain  enforcement  rights  with  respect  to,  certain
Indebtedness  of  the  

                                      -34-

<PAGE>

Company or any Subsidiary  Guarantor in an aggregate  principal amount in excess
of $5,000,000;  (vi) the failure of any Subsidiary Guarantee to be in full force
and  effect  or  otherwise  to  be  enforceable  (except  as  permitted  by  the
Indenture);  (vii) certain events giving rise to ERISA liability; (viii) certain
final judgments against any Subsidiary Guarantor or other Restricted  Subsidiary
in an aggregate amount of $5,000,000 or more which remain unsatisfied and either
become subject to commencement or enforcement proceedings or remain unstayed for
a period of 60 days;  and (ix)  certain  events  of  bankruptcy,  insolvency  or
reorganization of the Company,  any Subsidiary Guarantor or any other Restricted
Subsidiary. If any Event of Default occurs and is continuing, the Trustee or the
holders  of at  least  25% in  aggregate  principal  amount  of the  Outstanding
Securities may declare the principal  amount of all the Securities to be due and
payable immediately,  except that (i) in the case of an Event of Default arising
from certain events of bankruptcy,  insolvency or  reorganization of the Company
or any Restricted Subsidiary, the principal amount of the Securities will become
due and payable  immediately  without further action or notice,  and (ii) in the
case  of an  Event  of  Default  which  relates  to  certain  payment  defaults,
acceleration  or the  exercise of certain  enforcement  rights  with  respect to
certain  Indebtedness,  any acceleration of the Securities will be automatically
rescinded if any such  Indebtedness is repaid or if the default relating to such
Indebtedness is cured or waived and if the holders thereof have accelerated such
Indebtedness  then such holders have rescinded their declaration of acceleration
or if in certain  circumstances  the  proceedings  or  enforcement  action  with
respect  to the  Indebtedness  that is the  subject  of such Event of Default is
terminated  or  rescinded.  No Holder may pursue any remedy under the  Indenture
unless the Trustee  shall have failed to act after notice of an Event of Default
and  written  request  by  Holders  of at least 25% in  principal  amount of the
Outstanding  Securities,  and the offer to the Trustee of  indemnity  reasonably
satisfactory to it; however, such provision does not affect the right to sue for
enforcement of any overdue payment on a Security by the Holder thereof.  Subject
to  certain  limitations,  Holders  of a  majority  in  principal  amount of the
Outstanding  Securities  may direct the Trustee in its  exercise of any trust or
power.  The Trustee may withhold from Holders notice of any  continuing  default
(except  default in payment of principal,  premium or interest) if it determines
in good faith that withholding the notice is in the interest of the Holders. The
Company is required to file quarterly reports with the Trustee as to the absence
or existence of defaults.

                  The Indenture  contains  provisions for defeasance at any time
of (i) the entire  indebtedness of the Company on this Security and (ii) certain
restrictive  covenants  and the related  Defaults  and Events of  Default,  upon
compliance  by the Company  with certain  conditions  set forth  therein,  which
provisions apply to this Security.

                  The  Indenture  permits,  with certain  exceptions  as therein
provided,  the  amendment  thereof  and  the  modification  of  the  rights  and
obligations of the Company and the  Subsidiary  Guarantors and the rights of the
Holders  under  the  Indenture  at any  time  by  the  Company,  the  Subsidiary
Guarantors  and the  Trustee  with the  consent of the  Holders of a majority in
aggregate  principal  amount  of the  Securities  at the time  Outstanding.  The
Indenture  also  contains   provisions   permitting  the  Holders  of  specified
percentages  in  aggregate  principal  amount  of the  Securities  at  the  time
Outstanding, on behalf of the Holders of all the Securities, to waive compliance
by the Company  with  certain  provisions  of the  Indenture  and  certain  past
defaults under the Indenture and

                                      -35-

<PAGE>


their consequences.  Any such consent or waiver by or on behalf of the Holder of
this  Security  shall be  conclusive  and binding  upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of  transfer  hereof or in  exchange  herefor or in lieu  hereof  whether or not
notation  of such  consent  or waiver is made upon this  Security.  Without  the
consent of any Holder,  the Company,  the Subsidiary  Guarantors and the Trustee
may amend or supplement  the Indenture or the  Securities to cure any ambiguity,
defect or inconsistency, to provide for uncertificated Securities in addition to
or in place of  certificated  Securities  and to make  certain  other  specified
changes and other changes that do not adversely affect the rights of any Holder.

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

                 As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registerable on the Security
Register of the Company,  upon  surrender of this Security for  registration  of
transfer at the office or agency of the Company  maintained  for such purpose in
The City of New York,  duly endorsed by, or accompanied by a written  instrument
of transfer in form satisfactory to the Company and the Security  Registrar duly
executed by, the Holder hereof or his attorney duly  authorized in writing,  and
thereupon one or more new Securities,  of authorized  denominations  and for the
same aggregate principal amount, will be issued to the designated  transferee or
transferees.

                  The  Securities  are issuable only in registered  form without
coupons  in  denominations  of $1,000  and any  integral  multiple  thereof.  As
provided in the Indenture and subject to certain  limitations therein set forth,
the  Securities  are  exchangeable  for a like  aggregate  principal  amount  of
Securities of a different  authorized  denomination,  as requested by the Holder
surrendering the same.

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

                  A  director,  officer,  incorporator,  or  stockholder  of the
Company  or any  Subsidiary  Guarantor,  as such,  shall  not have any  personal
liability under this Security or the Indenture by reason of his or its status as
such director, officer,  incorporator or stockholder.  Each Holder, by accepting
this Security with the notation of Subsidiary Guarantee endorsed hereon,  waives
and  releases  all such  liability.  Such  waiver  and  release  are part of the
consideration  for the issuance of this Security with the notation of Subsidiary
Guarantee endorsed hereon.

                  Prior  to the time of due  presentment  of this  Security  for
registration of transfer,  the Company, the Subsidiary  Guarantors,  the Trustee
and any agent of the  Company or the  Trustee may treat the Person in whose name
this Security is registered as the owner hereof for all purposes,

                                      -36-

<PAGE>


whether or not this Security is overdue, and neither the Company, the Subsidiary
Guarantors,  the  Trustee  nor any  agent  shall be  affected  by  notice to the
contrary.

                 All  terms  used in this  Security  which  are  defined  in the
Indenture shall have the meanings assigned to them in the Indenture. The Company
will furnish to any Holder upon written request and without charge a copy of the
Indenture. Requests may be made to the Company at 8440 Jefferson Highway., Suite
420, Baton Rouge, Louisiana 70809.

                 Pursuant to a  recommendation  promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers
to be printed on the  Securities as a  convenience  to the Holders  thereof.  No
representation  is made as to the  accuracy  of such  numbers  as printed on the
Securities and reliance may be placed only on the other identifying  information
printed hereon.

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

                  Section   2.4  Form  of  Notation   Relating   to   Subsidiary
Guarantees.  The form of notation to be set forth on each  Security  relating to
the Subsidiary Guarantees shall be in substantially the following form:


                              SUBSIDIARY GUARANTEE

                  Subject to the  limitations  set forth in the  Indenture,  the
Subsidiary  Guarantors (as defined in the Indenture  referred to in the Security
upon which this  notation  is  endorsed  and each  hereinafter  referred to as a
"Subsidiary   Guarantor,"  which  term  includes  any  successor  or  additional
Subsidiary   Guarantor  under  the  Indenture)  have,   jointly  and  severally,
unconditionally  guaranteed  (a) the due and punctual  payment of the  principal
(and premium,  if any) of and interest on the  Securities,  whether at maturity,
acceleration,  redemption  or  otherwise,  (b) the due and  punctual  payment of
interest on the overdue principal of and interest on the Securities,  if any, to
the extent lawful, (c) the due and punctual performance of all other obligations
of the Company to the Holders or the Trustee,  all in accordance  with the terms
set forth in the Indenture,  and (d) in case of any extension of time of payment
or renewal of any Securities or any of such other obligations,  the same will be
promptly paid in full when due or performed in accordance  with the terms of the
extension or renewal,  whether at Stated Maturity, by acceleration or otherwise.
Capitalized  terms used herein shall have the  meanings  assigned to them in the
Indenture unless otherwise indicated.

                  The  obligations of each  Subsidiary  Guarantor are limited to
the maximum  amount as will,  after giving  effect to all other  contingent  and
fixed  liabilities and after giving effect to any  collections  from or payments
made by or on  behalf  of any  other  Subsidiary  Guarantor  in  respect  of the
obligations of such other Subsidiary Guarantor under its Subsidiary Guarantee or
pursuant to its  contribution  obligations  under the  Indenture,  result in the
obligations of such  Subsidiary  Guarantor


                                      -37-


<PAGE>

under the  Subsidiary  Guarantee  not  constituting  a fraudulent  conveyance or
fraudulent  transfer under federal or state law. Each Subsidiary  Guarantor that
makes a payment or distribution  under a Subsidiary  Guarantee shall be entitled
to a  contribution  from each other  Subsidiary  Guarantor  in a pro rata amount
based on the Adjusted Net Assets of each Subsidiary Guarantor.

                  The obligations of the Subsidiary Guarantors to the Holders or
the Trustee pursuant to the Subsidiary Guarantee and the Indenture are expressly
subordinate  to all  Guarantor  Senior  Indebtedness  to the extent set forth in
Article XIII of the Indenture  and  reference is made to such  Indenture for the
precise terms of such subordination.

                  No stockholder,  officer,  director or incorporator,  as such,
past,  present or future,  of the Subsidiary  Guarantors shall have any personal
liability under the Subsidiary  Guarantee by reason of his or its status as such
stockholder, officer, director or incorporator.

                  Any  Subsidiary  Guarantor may be released from its Subsidiary
Guarantee  upon  the  terms  and  subject  to  the  conditions  provided  in the
Indenture.

                  All terms used in this notation of Subsidiary  Guarantee which
are  defined  in the  Indenture  referred  to in this  Security  upon which this
notation of Subsidiary Guarantee is endorsed shall have the meanings assigned to
them in such Indenture.

                  The Subsidiary Guarantee shall be binding upon each Subsidiary
Guarantor and its  successors  and assigns and shall inure to the benefit of the
Trustee and the  Holders  and, in the event of any  transfer  or  assignment  of
rights by any Holder or the Trustee,  the rights and privileges herein conferred
upon that party shall  automatically  extend to and be vested in such transferee
or  assignee,  all  subject  to  the  terms  and  conditions  hereof  and in the
Indenture.

                  The Subsidiary  Guarantee shall not be valid or obligatory for
any purpose until the certificate of  authentication  on the Security upon which
this Subsidiary Guarantee is noted shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized officers.

                                                      FLORES & RUCKS, INC.



Attest:                                               By:
       ----------------------                            -----------------------
         Secretary                                             President


                                      -38-


<PAGE>


                 Section 2.5 Form of Trustee's  Certificate  of  Authentication.
The  Trustee's  certificate  of  authentication  shall be in  substantially  the
following form:


                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

                  This is one of the 9 3/4% Senior  Subordinated  Notes due 2006
referred to in the within-mentioned Indenture.

                                 Authenticated:

Dated: ------------------        ------------------------------
                                 Fleet National Bank
                                 Trustee



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



                                   ARTICLE III

                                 THE SECURITIES

                  Section 3.1 Title and Terms. The aggregate principal amount of
Securities  which may be  authenticated  and delivered  under this  Indenture is
limited to $160,000,000  except for Securities  authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Securities
pursuant to Section 3.4, 3.5, 3.6, 3.7, 9.6, 10.15, 10.16 or 11.8 hereof.

                  The  Securities  shall be known and  designated as the "9 3/4%
Senior Subordinated Notes Due 2006" of the Company.  Their Stated Maturity shall
be October 1, 2006,  and they shall bear interest at the rate of 9.75% per annum
from September 26, 1996, or from the most recent Interest  Payment Date to which
interest has been paid or duly provided for, payable semiannually on April 1 and
October 1 in each year,  commencing  April 1, 1997, and at said Stated Maturity,
until the principal thereof is paid or duly provided for.

                  The principal of (and premium, if any, on) and interest on the
Securities  shall be payable at the office or agency of the  Company  maintained
for such  purpose in The City of New York,  or at such other office or agency of
the Company as may be maintained for such purpose;  provided,  however, that, at
the option of the Company, interest may be paid (i) by check mailed to addresses
of the Persons  entitled  thereto as such addresses shall appear on the Security
Register,  or (ii) with respect to any Holder owning Securities in the principal
amount of $500,000 or more,  by wire  transfer to an account  maintained  by the
Holder  located in the United  States,  as specified in a written  notice to the
Trustee by any such Holder  requesting  payment by wire transfer and  specifying
the account to which transfer is requested.

              
                                      -39-


<PAGE>
                 The  Securities  shall be  redeemable as provided in Article XI
hereof.

                 The Securities  shall be subject to defeasance at the option of
the Company as provided in Article XII hereof.

                 The Securities shall be guaranteed by the Subsidiary Guarantors
as provided in Article XIII hereof.

                 The  Securities  shall be  subordinated  in right of payment to
Senior Indebtedness as provided in Article XIV hereof.

                 Section 3.2  Denominations.  The  Securities  shall be issuable
only in registered form without coupons and only in  denominations of $1,000 and
any integral multiple thereof.

                 Section 3.3 Execution, Authentication, Delivery and Dating. The
Securities  shall be  executed  on behalf of the  Company by its  Chairman,  its
President  or a  Vice  President  of  the  Company,  under  its  corporate  seal
reproduced  thereon and attested by its  Secretary or an Assistant  Secretary of
the Company.  The signature of any of these  officers on the  Securities  may be
manual or  facsimile  signatures  of the present or any future  such  authorized
officer and may be imprinted or otherwise reproduced on the Securities.

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

                 At any time and  from  time to time  after  the  execution  and
delivery of this Indenture,  the Company may deliver Securities  executed by the
Company  and  having the  notation  of  Subsidiary  Guarantees  executed  by the
Subsidiary Guarantors to the Trustee for authentication, together with a Company
Order for the authentication and delivery of such Securities, and the Trustee in
accordance  with  such  Company  Order  shall   authenticate  and  deliver  such
Securities  with the notation of  Subsidiary  Guarantees  thereon as provided in
this Indenture.

                 Each Security shall be dated the date of its authentication.

                 No  Security  shall  be  entitled  to any  benefit  under  this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication  substantially in the form provided for
herein  duly  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.

                  In  case  the  Company,  pursuant  to and in  compliance  with
Article  VIII  hereof,  shall be  consolidated  or merged with or into any other
Person or shall convey,  transfer,  lease or otherwise dispose of its Properties
substantially  as an entirety to any Person,  and the successor Person resulting
from such  consolidation,  or surviving  such merger,  or into which the Company
shall have been merged,  or the Person which shall have  received a  conveyance,
transfer, lease or other disposition

                                      -40-

<PAGE>


as  aforesaid,  shall have  executed an indenture  supplemental  hereto with the
Trustee pursuant to Article VIII hereof, any of the Securities  authenticated or
delivered prior to such consolidation,  merger,  conveyance,  transfer, lease or
other  disposition  may,  from time to time,  at the  request  of the  successor
Person, be exchanged for other Securities  executed in the name of the successor
Person with such  changes in  phraseology  and form as may be  appropriate,  but
otherwise  in  substance of like tenor as the  Securities  surrendered  for such
exchange and of like principal amount; and the Trustee,  upon Company Request of
the successor Person,  shall authenticate and deliver Securities as specified in
such request for the purpose of such exchange.  If Securities  shall at any time
be authenticated and delivered in any new name of a successor Person pursuant to
this Section in exchange or substitution for or upon registration of transfer of
any Securities,  such successor Person, at the option of the Holders but without
expense to them,  shall  provide for the exchange of all  Securities at the time
Outstanding for Securities authenticated and delivered in such new name.

                  Section 3.4 Temporary  Securities.  Pending the preparation of
definitive  Securities,  the Company may  execute,  and upon  Company  Order the
Trustee shall authenticate and deliver,  temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and having the notations of Subsidiary  Guarantees thereon
and  with  such  appropriate  insertions,  omissions,  substitutions  and  other
variations as the officers executing such Securities and notations of Subsidiary
Guarantees may determine,  as conclusively  evidenced by their execution of such
Securities and notations of Subsidiary Guarantees.

                  If  temporary  Securities  are issued,  the Company will cause
definitive  Securities  to be prepared  without  unreasonable  delay.  After the
preparation  of  definitive  Securities,   the  temporary  Securities  shall  be
exchangeable   for  definitive   Securities  upon  surrender  of  the  temporary
Securities  at the office or agency of the Company  designated  for such purpose
pursuant to Section 10.2 hereof,  without  charge to the Holder.  Upon surrender
for  cancellation  of any one or more  temporary  Securities,  the Company shall
execute and the Trustee shall  authenticate  and deliver in exchange  therefor a
like  principal  amount of definitive  Securities  of  authorized  denominations
having  notations of Subsidiary  Guarantees  thereon.  Until so  exchanged,  the
temporary  Securities  shall in all  respects be  entitled to the same  benefits
under this Indenture as definitive Securities.

                  Section  3.5   Registration,   Registration  of  Transfer  and
Exchange.  The Company  shall cause to be kept at the  Corporate  Trust Office a
register  (the  register  maintained  in such office and in any other  office or
agency  designated  pursuant  to Section  10.2  hereof  being  herein  sometimes
referred to as the  "Security  Register") in which,  subject to such  reasonable
regulations as it may prescribe,  the Company shall provide for the registration
of Securities and of transfers of Securities.  The Security Register shall be in
written  form or any other form  capable of being  converted  into  written form
within a reasonable  time. At all  reasonable  times and during normal  business
hours,  the Security  Register  shall be open to inspection by the Trustee.  The
Trustee is hereby  initially  appointed  as security  registrar  (the  "Security
Registrar")  for  the  purpose  of  registering   Securities  and  transfers  of
Securities as herein provided.

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

                                      -41-

<PAGE>


or more new Securities of any authorized denomination or denominations of a like
aggregate principal amount, each such Security having notation of the Subsidiary
Guarantees thereon.

                  Furthermore,  any  Holder of the  Global  Security  shall,  by
acceptance of such Global Security,  agree that transfers of beneficial interest
in such  Global  Security  may be  effected  only  through a  book-entry  system
maintained  by the  Holder of such  Global  Security  (or its  agent),  and that
ownership  of a  beneficial  interest  in the  Security  shall be required to be
reflected in a book entry.

                  At the option of the Holder,  Securities  may be exchanged for
other  Securities  of  any  authorized  denomination  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
Company shall execute,  the  Subsidiary  Guarantors  shall execute  notations of
Subsidiary  Guarantees on, and the Trustee shall  authenticate and deliver,  the
Securities which the Holder making the exchange is entitled to receive.

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

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

                  No  service  charge  shall  be made  for any  registration  of
transfer or exchange or  redemption of  Securities,  but the Company may require
payment of a sum sufficient to cover any tax or other  governmental  charge that
may be imposed in connection  with any  registration  of transfer or exchange of
Securities, other than exchanges pursuant to Section 3.4, 9.6 or 11.8 hereof not
involving any transfer.

                  Neither the Trustee,  the Security  Registrar  nor the Company
shall be  required  (i) to issue,  register  the  transfer  of or  exchange  any
Security during a period beginning at the opening of business 15 days before the
mailing of a notice of redemption of Securities  selected for  redemption  under
Section  11.4  hereof  and  ending at the close of  business  on the day of such
mailing of the relevant  notice of redemption,  or (ii) 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.

                  Section 3.6       Book-Entry Provisions for Global Security.

                  (a) The Global  Security  initially shall be registered in the
name  of the  Depository  for  such  Global  Security  or the  nominee  of  such
Depository and be delivered to the Trustee as custodian for such Depository.

                  Members  of,  or  participants  in,  the  Depository   ("Agent
Members")  shall have no rights under this  Indenture with respect to any Global
Security  held  on  their  behalf  by the

                                      -42-

<PAGE>


Depository,  or the Trustee as its custodian,  or under the Global Security, and
the Depository  may be treated by the Company,  the Trustee and any agent of the
Company or the Trustee as the  absolute  owner of such Global  Security  for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee or any agent of the Company or the Trustee, from giving
effect to any written certification,  proxy or other authorization  furnished by
the Depository or shall impair, as between the Depository and its Agent Members,
the operation of customary  practices  governing the exercise of the rights of a
holder of any Security.

                  (b)  Transfers  of the  Global  Security  shall be  limited to
transfers of such Global Security in whole,  but not in part, to the Depository,
its successors or their respective  nominees.  Interests of beneficial owners in
the  Global  Security  may be  transferred  in  accordance  with the  rules  and
procedures of the Depository.  Physical  Securities  shall be transferred to all
beneficial  owners in  exchange  for their  beneficial  interests  in the Global
Security if, and only if, either (1) the Depository notifies the Company that it
is unwilling or unable to continue as Depository  for the Global  Security and a
successor  Depository  is not  appointed  by the Company  within 90 days of such
notice,  (2) an Event of Default has occurred and is continuing and the Security
Registrar  has  received  a  request  from  the  Depository  to  issue  Physical
Securities in lieu of all or a portion of the Global Security (in which case the
Company shall deliver Physical Securities within 30 days of such request) or (3)
the  Company  determines  not to have  the  Securities  represented  by a Global
Security.

                  (c) In  connection  with  any  transfer  of a  portion  of the
beneficial  interest in the Global  Security to  beneficial  owners  pursuant to
subsection  (b) of this Section,  the  Registrar  shall reflect on its books and
records the date and a decrease in the principal  amount of the Global  Security
in an amount equal to the  principal  amount of the  beneficial  interest in the
Global  Security to be  transferred,  and the  Company  shall  execute,  and the
Trustee shall authenticate and deliver,  one or more Physical Securities of like
tenor and amount.

                  (d) In  connection  with the  transfer  of the  entire  Global
Security to beneficial  owners  pursuant to subsection (b) of this Section,  the
Global   Security  shall  be  deemed  to  be  surrendered  to  the  Trustee  for
cancellation,  and the Company shall execute, and the Trustee shall authenticate
and deliver,  to each beneficial  owner identified by the Depository in exchange
for its beneficial interest in the Global Security, an equal aggregate principal
amount of Physical Securities of authorized denominations.

                  (e) The  registered  holder of the Global  Security  may grant
proxies and otherwise authorize any person,  including Agent Members and persons
that may hold interests through Agent Members, to take any action which a Holder
is entitled to take under this Indenture or the Securities.

                  Section 3.7 Mutilated,  Destroyed, Lost and Stolen Securities.
If (i) any mutilated  Security is surrendered to the Trustee or (ii) the Company
and the Trustee receive evidence to their satisfaction of the destruction,  loss
or theft of any Security,  and there is delivered to the Company and the Trustee
such  security  or  indemnity  as may be  required  by them to save each of them
harmless, then, in the absence of notice to the Company or the Trustee that such
Security has been acquired by a bona fide purchaser,  the Company shall execute,
the Subsidiary Guarantors shall execute the notations of Subsidiary  Guarantees,
and upon Company Order the Trustee shall  authenticate and deliver,  in exchange
for any such mutilated Security or in lieu of any such


                                      -43-



<PAGE>

destroyed,  lost or stolen Security,  a new Security of like tenor and principal
amount,  having the notations of Subsidiary  Guarantees thereon bearing a number
not contemporaneously outstanding.

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

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

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

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

                  Section 3.8 Payment of Interest;  Interest  Rights  Preserved.
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 such Security (or one or more Predecessor  Securities) is registered at the
close of business on the Regular  Record Date for such interest at the office or
agency of the Company  maintained  for such  purpose  pursuant  to Section  10.2
hereof.

                  Any  interest on any  Security  which is  payable,  but is not
punctually  paid or duly  provided  for,  on any  Interest  Payment  Date  shall
forthwith cease to be payable to the Holder on the Regular Record Date by virtue
of having  been such  Holder,  and such  defaulted  interest  and (to the extent
lawful) interest on such defaulted  interest at the rate borne by the Securities
(such  defaulted  interest  and  interest  thereon  herein  collectively  called
"Defaulted  Interest") may be paid by the Company, at its election in each case,
as provided in clause (a) or (b) below:

                  (a) The  Company  may elect to make  payment of any  Defaulted
Interest  to the  Persons in whose  names the  Securities  (or their  respective
Predecessor  Securities)  are  registered  at the close of business on a Special
Record Date for the payment of such Defaulted Interest,  which shall be fixed in
the  following  manner.  The Company  shall notify the Trustee in writing of the
amount of Defaulted  Interest  proposed to be paid on each Security and the date
of the proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate  amount proposed to be paid in
respect of such Defaulted  Interest or shall make  arrangements  satisfactory to
the Trustee for such  deposit  prior to the date of the proposed  payment,  such
money  when  deposited  shall 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 

                                      -44-

<PAGE>

Trustee of the notice of the proposed  payment.  The Trustee shall  promptly
notify  the  Company of such  Special  Record  Date,  and in the name and at the
expense of the  Company,  shall  cause  notice of the  proposed  payment of such
Defaulted  Interest  and the  Special  Record  Date  therefor to be given in the
manner provided for in Section 15.5 hereof,  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 given,  such  Defaulted
Interest  shall be paid to the Persons in whose names the  Securities  (or their
respective  Predecessor  Securities)  are registered at the close of business on
such  Special  Record  Date and  shall no  longer  be  payable  pursuant  to the
following clause (b).

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

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

                  Section  3.9  Persons   Deemed   Owners.   Prior  to  the  due
presentment  of a Security  for  registration  of  transfer,  the  Company,  the
Subsidiary Guarantors,  the Security Registrar, the Trustee and any agent of the
Company, the Subsidiary  Guarantors 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 premium,  if any, on) and (subject to
Section  3.8  hereof)  interest  on such  Security  and for all  other  purposes
whatsoever,  whether or not such  Security be overdue,  and none of the Company,
the Subsidiary Guarantors,  the Security Registrar,  the Trustee or any agent of
the  Company,  the  Subsidiary  Guarantors  or the Trustee  shall be affected by
notice to the contrary.

                  Section 3.10  Cancellation.  All  Securities  surrendered  for
payment, redemption,  registration of transfer or exchange shall, if surrendered
to any Person other than the  Trustee,  be delivered to the Trustee and shall be
promptly cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities  previously  authenticated  and delivered  hereunder
which the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall be promptly cancelled by the Trustee.  No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture.  All cancelled
Securities  held by the Trustee shall be destroyed  and a  certificate  of their
destruction delivered to the Company unless by a Company Order the Company shall
direct that cancelled Securities be returned to it.

                  Section  3.11   Computation  of  Interest.   Interest  on  the
Securities  shall be computed on the basis of a 360-day year comprised of twelve
30-day months.

                                      -45-

<PAGE>

                         

                                   ARTICLE IV

                           SATISFACTION AND DISCHARGE

                  Section 4.1  Satisfaction  and  Discharge of  Indenture.  This
Indenture shall upon Company Request cease to be of further effect (except as to
surviving  rights of  registration  of transfer or  exchange of  Securities,  as
expressly provided for in this Indenture) as to all outstanding Securities,  and
the Trustee,  at the expense of the Company,  shall, upon payment of all amounts
due  the  Trustee  under  Section  6.6  hereof,   execute   proper   instruments
acknowledging satisfaction and discharge of this Indenture when

                  (a)      either

                    (1) all Securities  theretofore  authenticated and delivered
               (other than (i) Securities which have been mutilated,  destroyed,
               lost or stolen and which have been  replaced  or paid as provided
               in Section 3.7 hereof and (ii) Securities for whose payment money
               or United States  governmental  obligations of the type described
               in  clause  (i)  of  the  definition  of  Cash   Equivalents  has
               theretofore  been  deposited  in trust  with the  Trustee  or any
               Paying Agent or  segregated  and held in trust by the Company and
               thereafter  repaid to the Company or discharged  from such trust,
               as provided in Section 10.3  hereof)  have been  delivered to the
               Trustee for cancellation, or

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

                                                  
                    (i)  have become due and payable, or

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

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

               and the  Company,  in the case of  (2)(i),  (2)(ii)  or  (2)(iii)
               above,  has irrevocably  deposited or caused to be deposited with
               the  Trustee  as trust  funds in trust for the  purpose an amount
               sufficient to pay and discharge the entire  indebtedness  on such
               Securities   not   theretofore   delivered  to  the  Trustee  for
               cancellation, for principal (and premium, if any) 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,  together with  instructions  from the
               Company irrevocably  directing the Trustee to apply such funds to
               the payment thereof at maturity or redemption, as the case may 
               be; and
         
                    (b) the Company has paid or caused to be paid all other sums
               payable hereunder by the Company.

                                      -46-

<PAGE>

            
                    (c) the Company has  delivered  to the Trustee an  Officers'
               Certificate  and an Opinion of Counsel each  satisfactory in form
               to the Trustee, which, taken together,  state that all conditions
               precedent  herein relating to the  satisfaction  and discharge of
               this Indenture have been complied with.

                  Notwithstanding   the   satisfaction  and  discharge  of  this
Indenture,  the  obligations  of the  Company to the Trustee  under  Section 6.6
hereof  and,  if money shall have been  deposited  with the Trustee  pursuant to
subclause  (ii) of clause (1) of this Section,  the  obligations  of the Trustee
under  Section 4.2 hereof and the last  paragraph  of Section  10.3 hereof shall
survive.

                  Section  4.2  Application  of  Trust  Money.  Subject  to  the
provisions  of the last  paragraph of Section 10.3 hereof,  all money  deposited
with the  Trustee  pursuant  to Section  4.1  hereof  shall be held in trust and
applied by it, in  accordance  with the  provisions of the  Securities  and this
Indenture,  to  the  payment,  either  directly  or  through  any  Paying  Agent
(including  the  Company  acting as its own  Paying  Agent) as the  Trustee  may
determine,  to the Persons entitled thereto,  of the principal (and premium,  if
any) and  interest  for whose  payment  such money has been  deposited  with the
Trustee.


                                    ARTICLE V

                                    REMEDIES

                  Section 5.1 Events of Default.  "Event of  Default,"  wherever
used herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):

                  (a) default in the payment of the principal of or premium,  if
any, on any of the  Securities,  whether such  payment is due at maturity,  upon
redemption,  upon  repurchase  pursuant  to a Change of  Control  Offer or a Net
Proceeds Offer, upon acceleration or otherwise; or

                  (b) default in the payment of any  installment  of interest on
any of the Securities,  when it becomes due and payable,  and the continuance of
such default for a period of 30 days; or

                  (c) default in the  performance or breach of the provisions of
Article VIII hereof, the failure to make or consummate a Change in Control Offer
in  accordance  with the  provisions  of Section 10.15 or the failure to make or
consummate a Net Proceeds  Offer in  accordance  with the  provisions of Section
10.16; or

                  (d) the Company or any Subsidiary  Guarantor in this Indenture
shall fail to perform or observe any other term, covenant or agreement contained
in the  Securities,  any Subsidiary  Guarantee or this  Indenture  (other than a
default  specified  in (a),  (b) or (c)  above)  for a period  of 30 days  after
written  notice of such failure  requiring  the Company to remedy the same shall
have been given (x) to the  Company by the Trustee or (y) to the Company and the
Trustee by the  holders  of at least 25% in  aggregate  principal  amount of the
Securities then Outstanding; or

                  
                                      -47-


<PAGE>

                  (e) the  occurrence  and  continuation  beyond any  applicable
grace period of any default in the payment of the  principal of (or premium,  if
any,  on) or  interest  on any  Indebtedness  of the  Company  (other  than  the
Securities) or any Subsidiary  Guarantor or any other Restricted  Subsidiary for
money  borrowed  when due,  or any other  default  causing  acceleration  of any
Indebtedness of the Company or any Subsidiary  Guarantor or any other Restricted
Subsidiary for money borrowed,  provided, that the aggregate principal amount of
such Indebtedness shall exceed $5,000,000; or

                  (f) the  commencement  of  proceedings,  or the  taking of any
enforcement  action  (including  by way of  set-off),  by any holder of at least
$5,000,000 in aggregate  principal  amount of Indebtedness of the Company or any
Subsidiary Guarantor or any other Restricted  Subsidiary,  after a default under
such Indebtedness,  to retain in satisfaction of such Indebtedness or to collect
or seize, dispose of or apply in satisfaction of such Indebtedness,  Property or
assets of the  Company  or any  Subsidiary  Guarantor  or any  other  Restricted
Subsidiary having a Fair Market Value in excess of $5,000,000 individually or in
the aggregate; or

                  (g) any Subsidiary Guarantee shall for any reason cease to be,
or be asserted by the Company or any Subsidiary Guarantor, as applicable, not to
be, in full force and effect,


enforceable in accordance with its terms (except  pursuant to the release of any
such Subsidiary Guarantee in accordance with this Indenture); or

                  (h) if (i) any material  "accumulated  funding deficiency" (as
defined in Section  302 of ERISA or Section  412 of the Code),  shall exist with
respect to any PBGC Plan or Multiple Employer Plan (unless a waiver or extension
is obtained  under Section 412(d) or (e) of the Code and Sections 303 and 304 of
ERISA),  if such  accumulated  funding  deficiency would give rise to a material
liability  of the Company,  (ii) a Reportable  Event shall occur with respect to
any PBGC Plan or Multiple  Employer Plan,  which  Reportable  Event is likely to
result  in the  termination  of such  PBGC Plan or  Multiple  Employer  Plan for
purposes  of Title IV of ERISA and to give rise to a material  liability  of the
Company, (iii) proceedings to have a trustee appointed, or proceedings to have a
trustee  appointed shall commence,  or a trustee shall be appointed to terminate
or administer a PBGC Plan or Multiple  Employer Plan which  proceeding is likely
to result in the termination of such PBGC Plan or Multiple  Employer Plan and to
give  rise  to a  material  liability  of  the  Company  with  respect  to  such
termination,  (iv) a notice  of  intent to  terminate  a PBGC  Plan or  Multiple
Employer  Plan in a  distress  termination  under  Section  4041(c)  of ERISA is
furnished to participants, (v) any Multiemployer Plan is in reorganization or is
insolvent and the circumstances are such that such  reorganization or insolvency
will  likely  result in a material  liability  to the  Company,  (vi) there is a
complete or partial  withdrawal  from a Multiemployer  Plan under  circumstances
that would likely subject the Company to material liability,  or (vii) any event
or condition  described in (i) through (vi) above (determined  without regard to
whether the event or  condition  taken alone would or could result in a material
liability) shall occur or exist with respect to a PBGC Plan,  Multiple  Employer
Plan or  Multiemployer  Plan which in combination with one or more of any events
described in (i) through (vi) above  (determined  without  regard to whether the
event or condition  taken alone would or could  result in a material  liability)
that has occurred or exists,  would likely  subject the Company,  any Subsidiary
Guarantor or any other  Restricted  Subsidiary to any material  tax,  penalty or
other  liability  (for purposes of this  paragraph (i) the term  "material"  and
"material  liability"  shall  mean any tax,  penalty or  liability  in excess of
$5,000,000); or

              
                                      -48-


<PAGE>

                  (i) final judgments or orders rendered  against the Company or
any Subsidiary Guarantor or any other Restricted Subsidiary that are unsatisfied
and that require the payment in money,  either  individually  or in an aggregate
amount,  that is  more  than  $5,000,000  over  the  coverage  under  applicable
insurance policies and either (i) commencement by any creditor of an enforcement
proceeding upon such judgment (other than a judgment that is stayed by reason of
pending  appeal or otherwise)  or (ii) the  occurrence of a 60-day period during
which  a stay of such  judgment  or  order,  by  reason  of  pending  appeal  or
otherwise, was not in effect; or

                  (j)  the  entry  of  a  decree  or  order  by a  court  having
jurisdiction  in the  premises  (i) for relief in respect of the  Company or any
Subsidiary  Guarantor or any other Restricted  Subsidiary in an involuntary case
or proceeding under the Federal  Bankruptcy Code or any other applicable federal
or state  bankruptcy,  insolvency,  reorganization  or other similar law or (ii)
adjudging  the  Company  or any  Subsidiary  Guarantor  or any other  Restricted
Subsidiary   bankrupt   or   insolvent,   or   approving   a  petition   seeking
reorganization,  arrangement,  adjustment  or  composition  of the  Company or a
Restricted  Subsidiary  under  the  Federal  Bankruptcy  Code or any  applicable
federal or state law, or  appointing  under any such law a custodian,  receiver,
liquidator,  assignee,  trustee,  sequestrator or other similar  official of the
Company or any Subsidiary  Guarantor or any other Restricted  Subsidiary or of a
substantial  part of their  consolidated  assets,  or ordering the winding up or
liquidation  of their affairs,  and the  continuance of any such decree or order
for relief or any such other decree or order unstayed and in effect for a period
of 60 consecutive days; or

                  (k)  the   commencement  by  the  Company  or  any  Subsidiary
Guarantor or any other  Restricted  Subsidiary of a voluntary case or proceeding
under the Federal Bankruptcy Code or any applicable federal or state bankruptcy,
insolvency,  reorganization or other similar law or any other case or proceeding
to be adjudicated a bankrupt or insolvent,  or the consent by the Company or any
Subsidiary Guarantor or any other Restricted Subsidiary to the entry of a decree
or order for relief in  respect  thereof in an  involuntary  case or  proceeding
under the Federal Bankruptcy Code or any applicable federal or state bankruptcy,
insolvency,  reorganization  or other similar law or to the  commencement of any
bankruptcy  or insolvency  case or  proceeding  against it, or the filing by the
Company or any  Subsidiary  Guarantor or any other  Restricted  Subsidiary  of a
petition  or  consent  seeking  reorganization  or relief  under any  applicable
federal or state law,  or the  consent by it under any such law to the filing of
any such petition or to the appointment of or taking  possession by a custodian,
receiver,  liquidator,  assignee,  trustee  or  sequestrator  (or other  similar
official)  of any of  the  Company  or any  Subsidiary  Guarantor  or any  other
Restricted  Subsidiary or of any substantial part of their consolidated  assets,
or the making by it of an assignment for the benefit of creditors under any such
law,  or the  admission  by it in  writing  of its  inability  to pay its  debts
generally as they become due or taking of corporate action by the Company or any
Subsidiary  Guarantor or any other  Restricted  Subsidiary in furtherance of any
such action.

                  Section  5.2   Acceleration   of  Maturity;   Rescission   and
Annulment.  If an Event of Default (other than an Event of Default  specified in
Section  5.1(j) or (k)  hereof)  occurs and is  continuing,  the  Trustee or the
Holders of not less than 25% in  aggregate  principal  amount of the  Securities
then  Outstanding,  by written notice to the Company (and to the Trustee if such
notice is given by the  Holders),  may,  and the Trustee upon the request of the
Holders of not less than 25% in principal  amount of the Outstanding  Securities
shall, by a notice in writing to the Company (and to the Trustee if given by the
Holders), declare all unpaid principal of, premium, if any, and accrued interest
on all the Securities to be due and payable immediately,  upon which declaration
all amounts 

                                      -49-


<PAGE>

payable in respect of the Securities shall be immediately due and payable. If an
Event of  Default  specified  in  Section  5.1(j) or (k)  hereof  occurs  and is
continuing,  the  amounts  described  above  shall  ipso  facto  become  and  be
immediately due and payable without any declaration,  notice or other act on the
part of the Trustee or any Holder.

                  At any time after a declaration of acceleration  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 Securities Outstanding, by written notice to
the Company,  the Subsidiary  Guarantors and the Trustee,  may rescind and annul
such declaration and its consequences if

                  (a)  the  Company  or any  Subsidiary  Guarantor  has  paid or
deposited with the Trustee a sum sufficient to pay,

                    (1) all overdue interest on all Outstanding Securities,

                    (2) all unpaid  principal of (and  premium,  if any, on) any
               Outstanding  Securities  which has become due  otherwise  than by
               such   declaration  of  acceleration   including  any  Securities
               required to have been  purchased on a Change of Control Date or a
               Net Proceeds  Payment Date  pursuant to a Change of Control Offer
               or a Net  Proceeds  Offer,  as  applicable,  and interest on such
               unpaid principal at the rate borne by the Securities,

                    (3) to the extent that  payment of such  interest is lawful,
               interest on overdue  interest  and overdue  principal at the rate
               borne by the Securities  (without  duplication of any amount paid
               or deposited pursuant to clauses (1) and (2) above), and

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

                  (b) the  rescission  would not conflict  with any judgement or
decree of a court of competent  jurisdiction  as certified to the Trustee by the
Company; and

                  (c) all  Events of  Default,  other  than the  non-payment  of
amounts of principal of (or premium, if any, on) or interest on Securities which
have become due solely by such declaration of  acceleration,  have been cured or
waived as provided in Section 5.13 hereof.

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

                  Notwithstanding  the foregoing,  in the event of a declaration
of  acceleration  in  respect of the  Securities  because of an Event of Default
specified in (i) Section  5.1(e) hereof shall have  occurred and be  continuing,
such declaration of acceleration  and any  consequential  acceleration  shall be
automatically rescinded if the Indebtedness that is the subject of such Event of
Default has been  repaid,  or if the default  relating to such  Indebtedness  is
waived or cured and if such Indebtedness has been accelerated,  then the holders
thereof have  rescinded  their  declaration of  acceleration  in respect


                                      -50-


<PAGE>

of such Indebtedness (provided, in each case, that such repayment,  waiver, cure
or rescission is effected  within a period of 10 days from the  continuation  of
such  default  beyond the  applicable  grace  period or the  occurrence  of such
acceleration),  or  (ii)  Section  5.1(f)  hereof  shall  have  occurred  and be
continuing,  such  declaration  and  any  consequential  acceleration  shall  be
automatically rescinded if the proceedings or enforcement action with respect to
the Indebtedness  that is the subject of such Event of Default are terminated or
rescinded,  or such  Indebtedness has been repaid and only so long as the Holder
of such  Indebtedness  shall not have  applied any Property  referenced  in such
Section 5.1(f) hereof in satisfaction of such Indebtedness,  and, in the case of
both (i) and (ii) above, written notice of such repayment, or cure or waiver and
rescission,  as the case may be,  shall  have been  given to the  Trustee by the
Company  and  countersigned  by the holders of such  Indebtedness  or a trustee,
fiduciary  or agent  for such  holders  or other  evidence  satisfactory  to the
Trustee of such events is provided to the Trustee, within 30 days after such
declaration of acceleration in respect of the Securities,  and no other Event of
Default  has  occurred  during such  30-day  period  which has not been cured or
waived during such period,  and so long as such recision of the  declaration  of
acceleration of the Securities does not conflict with any judgement or decree as
certified to the Trustee by the Company.

                  Section  5.3   Collection  of   Indebtedness   and  Suits  for
Enforcement by Trustee. The Company covenants that if

                  (a)  default  is made in the  payment  of any  installment  of
interest on any  Security  when such  interest  becomes due and payable and such
default continues for a period of 30 days, or

                  (b)  default is made in the  payment of the  principal  of (or
premium, if any, on) any Security at the Maturity thereof or with respect to any
Security required to have been purchased by the Company on the Change of Control
Purchase  Date or the Net Proceeds  Payment Date pursuant to a Change of Control
Offer or a Net Proceeds Offer,  as applicable,  the Company will, upon demand of
the  Trustee,  pay to the  Trustee  for  the  benefit  of the  Holders  of  such
Securities,  the  whole  amount  then due and  payable  on such  Securities  for
principal  (and  premium,  if any) and  interest,  and  interest  on any overdue
principal (and premium, if any) and, to the extent that payment of such interest
shall be legally enforceable,  upon any overdue installment of interest,  at the
rate borne by the Securities,  and, in addition thereto,  such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable  compensation,  expenses,  disbursements and advances of the Trustee,
its agents and counsel.

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

                  If an Event of Default occurs and is  continuing,  the Trustee
may in its  discretion  proceed to protect and enforce its rights and the rights
of the Holders by such  appropriate  judicial  proceedings  as the Trustee shall
deem most  effectual  to protect and enforce  any such  rights,  whether 

                                      -51-


<PAGE>

for the specific  enforcement  of any covenant or agreement in this Indenture or
in aid of the  exercise  of any power  granted  herein,  or to enforce any other
proper remedy.

                  Section 5.4  Trustee May File Proofs of Claim.  In case of the
pendency   of   any   receivership,    insolvency,   liquidation,    bankruptcy,
reorganization,   arrangement,   adjustment,   composition   or  other  judicial
proceeding  relative to the  Company,  the  Subsidiary  Guarantors  or any other
obligor  upon the  Securities  or the Property of the  Company,  the  Subsidiary
Guarantors   or  of  such  other  obligor  or  their   creditors,   the  Trustee
(irrespective  of whether the principal of the Securities  shall then be due and
payable as therein  expressed or by declaration or otherwise and irrespective of
whether the Trustee  shall have made any demand on the Company,  the  Subsidiary
Guarantors or such other obligor for the payment of overdue principal,  premium,
if any, or interest)  shall be entitled and empowered,  by  intervention in such
proceeding or otherwise,

                  (a) 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 and take any other actions
including  participation  as a full member of any creditor or other committee 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

                  (b) 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
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 the
Trustee  any  amount  due  to it  for  the  reasonable  compensation,  expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.6 hereof.

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

                  Section 5.5 Trustee May Enforce Claims  Without  Possession of
Securities.  All  rights  of action  and  claims  under  this  Indenture  or the
Securities or the  Subsidiary  Guarantees  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 and as trustee of an express
trust,  and any recovery of judgment  shall,  after provision for the payment of
the  reasonable  compensation,  expenses,  disbursements  and  advances  of  the
Trustee,  its agents and counsel,  be for the ratable  benefit of the Holders of
the Securities in respect of which such judgment has been recovered.

                  Section  5.6  Application  of  Money   Collected.   Any  money
collected  by the  Trustee  pursuant  to this  Article  shall be  applied in the
following  order,  at the date or dates fixed by the 

                                      -52-


<PAGE>


Trustee  and,  in the  case of the  distribution  of such  money on  account  of
principal (or premium, if any) or interest,  upon presentation of the Securities
and the  notation  thereon  of the  payment  if only  partially  paid  and  upon
surrender thereof if fully paid:

                  FIRST:  To the payment of all  amounts  due the Trustee  under
Section 6.6 hereof;

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

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

                  Section 5.7  Limitation on Suits.  No Holder of any Securities
shall have any right to institute any  proceeding,  judicial or otherwise,  with
respect to this Indenture,  or for the appointment of a receiver or trustee,  or
for any other remedy hereunder, unless

                  (a) such Holder has  previously  given  written  notice to the
Trustee of a continuing Event of Default;

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

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

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

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

it being  understood  and intended  that no one or more  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 Holders,
or to obtain or to seek to obtain  priority or preference over any other Holders
or to enforce  any right  under  this  Indenture,  except in the  manner  herein
provided and for the equal and ratable benefit of all the Holders.

                  Section  5.8   Unconditional   Right  of  Holders  to  Receive
Principal,  Premium and Interest.  Notwithstanding  any other  provision in this
Indenture,  the Holder of any Security  shall have the right,  which is absolute
and  unconditional,  to receive  payment,  as  provided  herein  (including,  if
applicable,  Article XII hereof) and in such  Security of the  principal of (and
premium,  if any,  on) and  (subject to Section 3.8  hereof)  interest  on, such
Security on the respective Stated Maturities  expressed in such Security (or, in
the case of redemption,  on the  Redemption  Date) and 

                                      -53-

<PAGE>

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

                  Section 5.9 Restoration of Rights and Remedies. If the Trustee
or any Holder has instituted any proceeding to enforce any right or remedy under
this Indenture and such  proceeding has been  discontinued  or abandoned for any
reason, or has been determined  adversely to the Trustee or to such Holder, then
and in every such case,  subject to any  determination in such  proceeding,  the
Company,  the  Subsidiary  Guarantors,  the  Trustee  and the  Holders  shall be
restored  severally and  respectively  to their former  positions  hereunder and
thereunder  and all rights and  remedies of the  Trustee  and the Holders  shall
continue as though no such proceeding had been instituted.

                  Section  5.10  Rights  and  Remedies  Cumulative.   Except  as
otherwise  provided  with respect to the  replacement  or payment of  mutilated,
destroyed,  lost or stolen  Securities  in the last  paragraph  of  Section  3.7
hereof,  no right or remedy herein  conferred upon or reserved to the Trustee or
to the  Holders is intended to be  exclusive  of any other right or remedy,  and
every right and remedy shall, to the extent  permitted by law, be cumulative and
in addition to every other right and remedy given  hereunder or now or hereafter
existing at law or in equity or  otherwise.  The  assertion or employment of any
right or remedy  hereunder,  or  otherwise,  shall not  prevent  the  concurrent
assertion or employment of any other appropriate right or remedy.

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

                  Section 5.12 Control by Holders.  The Holders of not less than
a majority in  principal  amount of the  Outstanding  Securities  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, provided that

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

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

                  (c) the Trustee need not take any action  which might  involve
it in personal  liability  or be unduly  prejudicial  to the Holders not joining
therein.

                  Section 5.13 Waiver of Past Defaults.  The Holders of not less
than a majority in principal amount of the Outstanding  Securities may on behalf
of the  Holders of all the  Securities  waive any  existing  Default or Event of
Default hereunder and its consequences, except a Default or Event of Default

                                      -54-

<PAGE>


                 (a) in respect of the payment of the principal of (or premium,
if any, on) or interest on any Security, or

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

                  Upon any such waiver,  such Default or Event of Default  shall
cease to exist for every purpose under this Indenture,  but no such waiver shall
extend to any  subsequent  or other  Default  or Event of  Default or impair any
right consequent thereon.

                  Section 5.14 Waiver of Stay,  Extension or Usury Laws. Each of
the Company and the Subsidiary Guarantors covenants (to the extent that each may
lawfully do so) that it will not at any time insist upon, plead or in any manner
whatsoever  claim or take the benefit or advantage of, any stay,  extension,  or
usury law or other law,  which  would  prohibit  or forgive  the  Company or any
Subsidiary  Guarantor  from  paying  all or any  portion  of  the  principal  of
(premium,  if any, on) and/or interest on the Securities as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this  Indenture;  and (to the extent that it may
lawfully  do so)  each of the  Company  and  the  Subsidiary  Guarantors  hereby
expressly  waives all benefit or advantage  of any such law,  and covenant  that
they will not hinder,  delay or impede the execution of any power herein granted
to the Trustee,  but will suffer and permit the execution of every such power as
though no such law had been enacted.

                                   ARTICLE VI

                                   THE TRUSTEE

                  Section  6.1  Notice of  Defaults.  Within  60 days  after the
occurrence of any Default  hereunder,  the Trustee shall  transmit in the manner
and to the  extent  provided  in TIA  Section  313(c),  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 premium,  if any, on) or interest on any  Security,  the
Trustee  shall be  protected  in  withholding  such notice if and so long as the
board of directors,  the executive  committee or a trust  committee of directors
and/or  Responsible  Officers of the Trustee in good faith  determines  that the
withholding  of such notice is in the  interest of the  Holders;  and  provided,
further,  that in the case of any Default of the character  specified in Section
5.1(e)  hereof,  no such notice to Holders shall be given until at least 60 days
after the occurrence thereof.

                  Section  6.2  Certain  Rights  of  Trustee.   Subject  to  the
provisions of TIA Sections 315(a) through 315(d):

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

                 
                                      -55-


<PAGE>


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

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

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

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

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

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

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

                  The Trustee  shall not be required to advance,  expend or risk
its own funds or otherwise  incur any financial  liability in the performance of
any of its duties  hereunder,  or in the exercise of any of its rights or powers
if it shall have  reasonable  grounds for believing that repayment of such funds
or adequate  indemnity against such risk or liability is not reasonably  assured
to it.

                  Section 6.3 Trustee Not Responsible for Recitals or Issuance
of  Securities.  The recitals  contained  herein and in the  Securities  and the
notations  of   Subsidiary   Guarantees   thereon,   except  for  the  Trustee's
certificates of authentication,  shall be taken as the statements of the Company
or the  Subsidiary  Guarantors,  as the case may be, and the Trustee  assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or 

                                      -56-


<PAGE>

sufficiency  of this  Indenture  or of the  Securities,  except that the Trustee
represents  that it is duly  authorized  to execute and deliver this  Indenture,
authenticate the Securities and perform its obligations hereunder,  and that the
statements  made by it in a Statement of Eligibility and  Qualification  on Form
T-1 supplied to the Company are true and accurate, subject to the qualifications
set  forth  herein.  The  Trustee  shall  not  be  accountable  for  the  use or
application by the Company of Securities or the proceeds thereof.

                  Section  6.4 May Hold  Securities.  The  Trustee,  any  Paying
Agent, any Security  Register or any other agent of the Company,  any Subsidiary
Guarantor or of the Trustee, in its individual or any other capacity, may become
the owner or pledgee of Securities and,  subject to TIA Sections 310(b) and 311,
may otherwise deal with the Company and the subsidiary  Guarantors with the same
rights  it  would  have  if it were  not the  Trustee,  Paying  Agent,  Security
Registrar or such other agent.

                  Section 6.5 Money Held in Trust.  Money held by the Trustee in
trust  hereunder  need not be  segregated  from other funds except to the extent
required by law.  The Trustee  shall be under no  liability  for interest on any
money  received by it hereunder  except as otherwise  agreed with the Company or
any Subsidiary Guarantor.



                  Section  6.6  Compensation  and  Reimbursement.   The  Company
agrees:

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

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

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

                  The  obligations  of the  Company  under this  Section  6.6 to
compensate  the  Trustee,   to  pay  or  reimburse  the  Trustee  for  expenses,
disbursements  and advances and to indemnify and hold harmless the Trustee shall
constitute additional  indebtedness hereunder and shall survive the satisfaction
and discharge of this Indenture or any other termination under any Insolvency or
Liquidation  Proceeding.  As security for the performance of such obligations of
the  Company,  the Trustee  shall have a claim and lien prior to the  Securities
upon all property  and funds held or  collected  by the Trustee as such,  except
funds held in trust for payment of  principal  of (and  premium,  if any, on) or
interest on particular Securities.  Such lien shall survive the satisfaction and
discharge of this  Indenture or any other  termination  under any  Insolvency or
Liquidation Proceeding.

                  
                                      -57-


<PAGE>

When the Trustee incurs expenses or renders  services after the occurrence of an
Event of Default  specified  in  paragraphs  (j) or (k) of  Section  5.1 of this
Indenture,  such expenses and the compensation for such services are intended to
constitute  expenses  of  administration  under any  Insolvency  or  Liquidation
Proceeding.

                  Section 6.7 Corporate  Trustee  Required;  Eligibility.  There
shall at all times be a Trustee  hereunder  which  shall be  eligible  to act as
Trustee  under TIA  Section  310(a)(1)  and shall  have a combined  capital  and
surplus  of at least  $50,000,000.  If such  corporation  publishes  reports  of
condition at least annually,  pursuant to law or to the requirements of federal,
state,  territorial or District of Columbia  supervising or examining authority,
then for the purposes of this  Section 6.7, the combined  capital and surplus of
such  corporation  shall be deemed to be its combined capital and surplus as set
forth in its most recent  report of condition so  published.  If at any time the
Trustee  shall cease to be eligible in  accordance  with the  provisions of this
Section,  it  shall  resign  immediately  in the  manner  and  with  the  effect
hereinafter specified in this Article.

                  Section 6.8  Conflicting  Interests.  The Trustee shall comply
with the provisions of Section 310(b) of the Trust Indenture Act.

                  Section 6.9 Resignation and Removal; Appointment of Successor.


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

                  (b) The  Trustee  may  resign  at any time by  giving  written
notice  thereof to the Company.  If the  instrument of acceptance by a successor
Trustee  required by Section  6.10 hereof  shall not have been  delivered to the
Trustee  within 30 days  after the  giving of such  notice of  resignation,  the
resigning  Trustee may  petition  any court of  competent  jurisdiction  for the
appointment of a successor Trustee.

                  (c)  The  Trustee  may be  removed  at any  time by Act of the
Holders  of not less than a  majority  in  principal  amount of the  Outstanding
Securities, delivered to the Trustee and to the Company.

                  (d)      If at any time:

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

                           (2) the  Trustee  shall  cease to be  eligible  under
                  Section  6.7  hereof and shall  fail to resign  after  written
                  request  therefor by the Company or by any Holder who has been
                  a bona fide Holder of a Security for at least six months, or

                           (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 

                                      -58-


<PAGE>

                    or any public  officer  shall take  charge or control of the
                    Trustee or of its  property  or affairs  for the  purpose of
                    rehabilitation, conservation or liquidation,

then, in any such case, (i) the Company,  by a Board Resolution,  may remove the
Trustee,  or (ii) subject to TIA Section 315(e),  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 and the appointment of a successor Trustee.

                  (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,  the  Company,  by a Board  Resolution,  shall  promptly  appoint  a
successor  Trustee.  If,  within  one year after  such  resignation,  removal or
incapability,  or the occurrence of such vacancy,  a successor  Trustee shall be
appointed  by Act of the  Holders  of a  majority  in  principal  amount  of the
Outstanding  Securities  delivered to the Company and the retiring Trustee,  the
successor  Trustee so appointed  shall,  forthwith  upon its  acceptance of such
appointment,  become the successor  Trustee and supersede the successor  Trustee
appointed by the Company.  If no successor  Trustee shall have been so appointed
by the Company or the Holders and accepted appointment in the manner hereinafter
provided,  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 appointment of a successor Trustee.
The  evidence  of such  successorship  may,  but  need  not be,  evidenced  by a
supplemental indenture.

                  (f) The Company shall give notice of each resignation and each
removal  of the  Trustee  and each  appointment  of a  successor  Trustee to the
Holders of  Securities in the manner  provided for in Section 14.5 hereof.  Each
notice shall  include the name of the  successor  Trustee and the address of its
Corporate Trust Office.

                  Section 6.10  Acceptance of  Appointment  by Successor.  Every
successor Trustee appointed hereunder shall execute,  acknowledge and deliver to
the  Company  and  to  the  retiring   Trustee  an  instrument   accepting  such
appointment,  and thereupon the  resignation or removal of the retiring  Trustee
shall become effective and such successor Trustee, without any further act, deed
or  conveyance,  shall  become  vested with all the rights,  powers,  trusts and
duties of the retiring Trustee;  but, on request of the Company or the successor
Trustee,  such retiring Trustee shall,  upon payment of all amounts due it under
Section 6.6  hereof,  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.  Upon  request of any such
successor  Trustee,  the Company shall execute any and all  instruments for more
fully and certainly vesting in and confirming to such successor Trustee all such
rights, powers and trusts.

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

                  Section 6.11 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 of the corporate trust
business  of the  Trustee,  shall be the  successor  of the  Trustee  hereunder,
provided such 
                                      -59-


<PAGE>

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;  and in
case at that time any of the Securities shall not have been  authenticated,  any
successor  Trustee may  authenticate  such Securities  either in the name of any
predecessor  hereunder or in the name of the successor Trustee;  and in all such
cases such  certificates  shall have the full force  which it is anywhere in the
Securities or in this Indenture;  provided, however, that the right to adopt the
certificate of  authentication  of any  predecessor  Trustee or to  authenticate
Securities  in the  name of any  predecessor  Trustee  shall  apply  only to its
successor or successors by merger, conversion or consolidation.

                  Section  6.12   Preferential   Collection  of  Claims  Against
Company.  If and when the  Trustee  shall be or become a creditor of the Company
(or any other obligor under the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company or any such other obligor.

                                   ARTICLE VII

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

                  Section  7.1  Disclosure  of Names and  Addresses  of Holders.
Every Holder of Securities,  by receiving and holding the same,  agrees with the
Company, the Subsidiary Guarantors,  the Security Registrar and the Trustee that
none of the Company,  the Subsidiary  Guarantors,  the Security Registrar or the
Trustee,  or 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 TIA Section 312,  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 TIA Section
312(b).

                  Section 7.2 Reports By Trustee. Within 60 days after May 15 of
each year  commencing  with May 15, 1995,  the Trustee shall transmit by mail to
the Holders,  as their names and addresses  appear in the Security  Register,  a
brief  report  dated as of such  May 15 in  accordance  with  and to the  extent
required  under TIA  Section  313(a).  The  Trustee  shall also  comply with TIA
Sections 313(b) and 313(c).

                  The Company  shall  promptly  notify the Trustee in writing if
the  Securities  become  listed on any stock  exchange  or  automatic  quotation
system.

                  A copy of each Trustee's report, at the time of its mailing to
Holders  of  Securities,  shall be mailed  to the  Company  and  filed  with the
Commission and each stock exchange, if any, on which the Securities are listed.

                  Section  7.3  Reports  by  Company.   The  Company   (and  the
Subsidiary Guarantors, if applicable) shall:

                 
                                      -60-


<PAGE>
                  (a) file with the  Trustee,  within 15 days after the  Company
(and the Subsidiary Guarantors, if applicable) is required to file the same with
the Commission,  copies of the annual reports and of the information,  documents
and other  reports (or copies of such  portions of any of the  foregoing  as the
Commission may from time to time by rules and regulations  prescribe)  which the
Company (and the Subsidiary  Guarantors,  if applicable) may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act;
or,  if the  Company  (and the  Subsidiary  Guarantors,  if  applicable)  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 the rules and  regulations  prescribed from time to time by the Commission,
such of the supplementary and periodic information,  documents and reports which
may be  required  pursuant  to  Section 13 of the  Exchange  Act in respect of a
security  listed and  registered  on a national  securities  exchange  as may be
prescribed from time to time in such rules and regulations;

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

                  (c) transmit by mail to all Holders,  in the manner and to the
extent provided in TIA Section  313(c),  within 30 days after the filing thereof
with Trustee, such summaries of any information,  documents and reports required
to be filed  by the  Company  (and the  Subsidiary  Guarantors,  if  applicable)
pursuant to  paragraphs  (a) and (b) of this Section as may be required by rules
and regulations prescribed from time to time by the Commission.


                                  ARTICLE VIII

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

                  Section  8.1 Company May  Consolidate,  etc.,  Only on Certain
Terms.  The Company shall not, in any single  transaction or a series of related
transactions,  merge or  consolidate  with or into any  other  Person,  or sell,
assign,  convey,  transfer or lease or otherwise dispose of all or substantially
all its Properties to any Person or group of Affiliated Persons, and the Company
shall not  permit  any of its  Restricted  Subsidiaries  to enter  into any such
transaction  or  series  of  transactions  if  such  transaction  or  series  of
transactions, in the aggregate, would result in a sale, assignment,  conveyance,
transfer,  lease  or  other  disposition  of  all  or  substantially  all of the
Properties  of the Company and its  Restricted  Subsidiaries  on a  consolidated
basis to any other Person or group of Affiliated Persons, unless at the time and
after giving affect thereto:

                  (a) either (i) if the  transaction or transactions is a merger
or  consolidation,  the Company shall be the surviving  Person of such merger or
consolidation,  or (ii) the Person (if other  than the  Company)  formed by such
consolidation or into which the Company or such Restricted  Subsidiary is merged
or to which the Properties of the Company or such Restricted Subsidiary,  as the
case may be, are sold,  assigned,  conveyed,  transferred,  leased or  otherwise
disposed of (any such surviving Person or transferee Person being the "Surviving
Entity")  shall be a corporation  organized  and existing  under the laws of the
United  States of America,  any state  thereof or the  District of

                                      -61-


<PAGE>

Columbia and shall, in either case, expressly assume by a supplemental indenture
to this Indenture executed and delivered to the Trustee, in form satisfactory to
the Trustee, all the obligations of the Company for the due and punctual payment
of the principal of (and premium, if any, on) and interest on all the Securities
and the  performance  and  observance of every covenant of this Indenture on the
part of the Company to be performed or observed, and this Indenture shall remain
in full force and effect;

                  (b) immediately  before and immediately after giving effect to
such  transaction or series of  transactions  on a pro forma basis (and treating
any  Indebtedness  not  previously  an  obligation  of the Company or any of its
Restricted  Subsidiaries  which becomes the  obligation of the Company or any of
its  Restricted  Subsidiaries  in  connection  with  or  as  a  result  of  such
transaction  or  transactions  as  having  been  incurred  at the  time  of such
transaction or transactions), no Default or Event of Default shall have occurred
and be continuing;

                  (c) except in the case of the  consolidation  or merger of any
Restricted Subsidiary with or into the Company,  immediately after giving effect
to such  transaction or transactions on a pro forma basis,  the Consolidated Net
Worth  of the  Company  (or  the  Surviving  Entity  if the  Company  is not the
continuing  obligor under this Indenture) is at least equal to the  Consolidated
Net Worth of the Company  immediately  before such  transaction or  transactions
(calculated in each case, in accordance with GAAP);

                  (d) except in the case of the  consolidation  or merger of any
Restricted  Subsidiary  with or into the Company or any Wholly Owned  Restricted
Subsidiary,  immediately  before and after giving effect to such  transaction or
transactions  on a pro forma basis (on the  assumption  that the  transaction or
transactions  occurred  on the  first  day of the  period  of four  full  fiscal
quarters ending  immediately  prior to the  consummation of such  transaction or
transactions with the appropriate adjustments with respect to the transaction or
transactions  being included in such pro forma  calculation) the Company (or the
Surviving  Entity  if the  Company  is not the  continuing  obligor  under  this
Indenture)  could incur $1.00 of additional  Indebtedness  (excluding  Permitted
Indebtedness) under Section 10.11(a) hereof;

                  (e) each  Subsidiary  Guarantor  unless it is the party to the
transactions  described above,  shall have by supplemental  indenture  confirmed
that its Subsidiary  Guarantee  shall apply to such Person's  obligations  under
this Indenture and the Securities;

                  (f)  if any of the  Properties  of the  Company  or any of its
Restricted  Subsidiaries  would  upon such  transaction  or  series  of  related
transactions  become  subject to any Lien  (other than a  Permitted  Lien),  the
creation or imposition  of such Lien shall have been in compliance  with Section
10.14 hereof; and

                  (g) the Company or such  Person  shall have  delivered  to the
Trustee an Officers' Certificate and an Opinion of Counsel in form and substance
reasonably  acceptable  to the Trustee,  each  stating that such  consolidation,
merger, conveyance,  transfer, lease or other disposition and, if a supplemental
indenture is required in connection  with such  transaction,  such  supplemental
indenture, complies with this Indenture and that all conditions precedent herein
relating to such transaction or transactions have been satisfied.

               
                                      -62-


<PAGE>

                  Section 8.2 Successor  Substituted.  Upon any consolidation of
the Company with or merger of the Company with or into any other  corporation or
any sale, assignment, lease, conveyance, transfer or other disposition of all or
substantially  all of the  Properties of the Company to any Person in accordance
with Section 8.1 hereof,  the successor  Person formed by such  consolidation or
into which the Company is merged or to which such sale, assignment,  conveyance,
transfer or other  disposition  (other than by lease) is made shall  succeed to,
and be  substituted  for, and may exercise every right and power of, the Company
under this Indenture  with the same effect as if such successor  Person had been
named as the  Company  herein,  and in the event of any such  sale,  assignment,
lease, conveyance,  transfer or other disposition, the Company (which term shall
for this purpose mean the Person named as the  "Company" in the first  paragraph
of this Indenture or any successor Person which shall theretofore become such in
the manner  described  in Section  8.1  hereof),  except in the case of a lease,
shall be discharged of all  obligations  and covenants  under this Indenture and
the  Securities  and the  Company  may be  dissolved  and  liquidated  and  such
dissolution and liquidation shall not cause a Change of Control under clause (e)
of the definition  thereof to occur unless the merger, or the sale,  assignment,
lease, conveyance,  transfer or other disposition of all or substantially all of
the  Properties  of the Company to any Person  otherwise  results in a Change of
Control.



                                   ARTICLE IX

                             SUPPLEMENTAL INDENTURES

                  Section  9.1  Supplemental   Indentures   Without  Consent  of
Holders.  Without the consent of any Holders, the Company,  when authorized by a
Board  Resolution,  the  Subsidiary  Guarantors,  when  authorized  by  a  Board
Resolution,  and the Trustee,  at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:

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

                  (b) to add to the  covenants of the Company for the benefit of
the  Holders  or to  surrender  any  right or power  herein  conferred  upon the
Company; or

                  (c) to add any additional Events of Default; or

                  (d) to evidence and provide for the  acceptance of appointment
hereunder by a successor  Trustee  pursuant to the  requirements of Sections 6.9
and 6.10 hereof; or

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


                                      -63-


<PAGE>

                  (f) to secure the Securities  pursuant to the  requirements of
Section 10.14 hereof or otherwise; or

                  (g) to add any Person as a Subsidiary Guarantor as provided in
Section  13.1  hereof  or  as  contemplated  by  the  definition  of  "Permitted
Subsidiary  Indebtedness"  to evidence the  succession of another  Person to any
Guarantor  and  the  assumption  by any  such  successor  of the  covenants  and
agreements of such Subsidiary  Guarantor contained herein, in the Securities and
in the Subsidiary Guarantee; or

                  (h) to  release  a  Subsidiary  Guarantor  from its  Guarantee
pursuant to Section 10.12 hereof; or

                  (i) to provide for uncertificated Securities in addition to or
in place of certificated Securities.

                  Section 9.2  Supplemental  Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal  amount
of the Outstanding  Securities,  by Act of said Holders delivered to the Company
and the  Trustee,  the  Company,  when  authorized  by a Board  Resolution,  the
Subsidiary  Guarantors,  when authorized by a Board Resolution,  and the Trustee
may enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions


to or  changing  in any  manner or  eliminating  any of the  provisions  of this
Indenture  or of  modifying  in any manner the rights of the Holders  under this
Indenture; provided, however, that no such supplemental indenture shall, without
the consent of the Holder of each Outstanding Security affected thereby:

                  (a) change the Stated  Maturity  of the  principal  of, or any
installment of 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 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 after the Stated  Maturity  thereof (or, in the
case of redemption, on or after the Redemption Date); or

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

                  (c) modify any of the  provisions  of this Section or Sections
5.13 and 10.20 hereof, 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;

                  (d) modify  Section  10.12  hereof or any  provisions  of this
Indenture  relating  to the  Subsidiary  Guarantees  in a manner  adverse to the
Holders thereof; or

                  (e) amend,  change or modify the  obligation of the Company to
make and  consummate  a Change  of  Control  Offer in the  event of a Change  of
Control,  or to make and 

                                      -64-


<PAGE>

consummate a Net Proceeds  Offer with respect to any Asset Sale or modify any of
the provisions or definitions with respect thereto.

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

                  Section  9.3   Execution  of   Supplemental   Indentures.   In
executing,  or accepting  the  additional  trusts  created by, any  supplemental
indenture  permitted by this Article or the modifications  thereby of the trusts
created by this Indenture,  the Trustee shall be entitled to receive,  and shall
be fully  protected  in relying  upon,  an Opinion of Counsel  stating  that the
execution  of such  supplemental  indenture is  authorized  or permitted by this
Indenture.  The Trustee may, but shall not be obligated  to, enter into any such
supplemental  indenture  which  affects  the  Trustee's  own  rights,  duties or
immunities under this Indenture or otherwise.

                  Section  9.4  Effect  of  Supplemental  Indentures.  Upon  the
execution of any supplemental indenture under this Article, this Indenture shall
be modified in accordance therewith,  and such supplemental indenture shall form
a part of this  Indenture  for all  purposes;  and every  Holder  of  Securities
theretofore or thereafter  authenticated and delivered  hereunder shall be bound
thereby.

                  Section  9.5  Conformity   with  Trust  Indenture  Act.  Every
supplemental  indenture  executed  pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect.

                  Section  9.6   Reference   in   Securities   to   Supplemental
Indentures.  Securities  authenticated  and delivered after the execution of any
supplemental  indenture  pursuant to this  Article may, and shall if required by
the  Trustee,  bear a notation in form  approved by the Trustee as to any matter
provided for in such supplemental  indenture. If the Company shall so determine,
new Securities so modified as to conform,  in the opinion of the Trustee and the
Company, to any such supplemental  indenture may be prepared and executed by the
Company,  with the notations of Subsidiary  Guarantees  thereon  executed by the
Subsidiary  Guarantors,  and  authenticated  and  delivered  by the  Trustee  in
exchange for Outstanding Securities.

                  Section 9.7 Notice of Supplemental Indentures.  Promptly after
the  execution  by the  Company and the  Trustee of any  supplemental  indenture
pursuant to the provisions of Section 9.2 hereof,  the Company shall give notice
thereof to the  Holders of each  Outstanding  Security  affected,  in the manner
provided  for in  Section  15.5  hereof,  setting  forth in  general  terms  the
substance of such supplemental indenture.

                                      -65-

<PAGE>

                                    ARTICLE X

                                    COVENANTS

                  Section  10.1  Payment  of  Principal,  Premium,  if any,  and
Interest.  The Company  covenants and agrees for the benefit of the Holders that
it will duly and punctually  pay the principal of (and premium,  if any, on) and
interest on the  Securities in accordance  with the terms of the  Securities and
this Indenture.

                  Section  10.2  Maintenance  of Office or Agency.  The  Company
shall  maintain in the Borough of Manhattan,  The City of New York, an office or
agency  where  Securities  may be presented or  surrendered  for payment,  where
Securities may be surrendered for registration of transfer or exchange and where
notices  and demands to or upon the  Company in respect of the  Securities,  the
Subsidiary  Guarantees  and this  Indenture  may be served.  The office of Fleet
Natinoal Bank,  located at c/o First Chicago Trust Company,  14 Wall Street, 8th
Floor, Window 2, New York, New York 10005, Attention: Corporate Trust Operations
shall be such  office  or  agency  of the  Company,  unless  the  Company  shall
designate  and  maintain  some  other  office or agency  for one or more of such
purposes.  The  Company  will give prompt  written  notice to the Trustee of any
change in the location of any such office or agency.  If at any time the Company
shall  fail to  maintain  any such  required  office or agency or shall  fail to
furnish the Trustee with the address thereof,  such  presentations,  surrenders,
notices and demands  may be made or served at the  aforementioned  office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.

                  The Company may also from time to time  designate  one or more
other  offices or  agencies  (in or  outside of The City of New York)  where the
Securities may be presented or surrendered  for any or all such purposes and may
from time to time rescind any such designation;  provided, however, that no such
designation  or  rescission  shall in any  manner  relieve  the  Company  of its
obligation to maintain an office or agency in the Borough of Manhattan, The City
of New York for such  purposes.  The Company will give prompt  written notice to
the Trustee of any such designation or rescission and any change in the location
of any such other office or agency.

                  Section 10.3 Money for Security  Payments to Be Held in Trust.
If the Company  shall at any time act as its own Paying Agent,  it shall,  on or
before each due date of the principal of (and  premium,  if any, on) or interest
on any of the  Securities,  segregate  and hold in trust for the  benefit of the
Persons entitled thereto a sum sufficient to pay the principal (and premium,  if
any) or interest so becoming  due until such sums shall be paid to such  Persons
or otherwise disposed of as herein provided and will promptly notify the Trustee
of its action or failure so to act.

                  Whenever the Company  shall have one or more Paying Agents for
the  Securities,  it  will,  on or  before  12:00  noon on each  due date of the
principal of (and premium, if any, on), or interest on, any Securities,  deposit
with a Paying Agent a sum sufficient to pay the principal (and premium,  if any)
or interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the  Trustee)  the Company  shall  promptly  notify the Trustee of such
action or any failure so to act.

                                      -66-

<PAGE>

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

                  (a) hold all sums held by it for the payment of the  principal
of (and premium,  if any, on) or interest on Securities 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;

                  (b) give the Trustee  notice of any default by the Company (or
any other obligor upon the Securities) in the making of any payment of principal
(and premium, if any) or interest; and

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

                  The Company may at any time,  for the purpose of obtaining the
satisfaction  and discharge of this Indenture or for any other purpose,  pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying  Agent,  such sums to be held by the Trustee
upon the same  trusts as those upon which such sums were held by the  Company or
such Paying  Agent;  and,  upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further  liability  with respect to
such sums.
                  Any money  deposited with the Trustee or any Paying Agent,  or
then held by the  Company,  in trust for the  payment of the  principal  of (and
premium, if any, on) or interest on any Security and remaining unclaimed for two
years after such principal (and premium,  if any) or interest has become due and
payable shall be paid to the Company on Company Request, or (if then held by the
Company)  shall be discharged  from such trust;  and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment  thereof,  and all  liability  of the Trustee or such Paying  Agent with
respect  to such  trust  money,  and all  liability  of the  Company  as trustee
thereof,  shall thereupon  cease;  provided,  however,  that the Trustee or such
Paying  Agent,  before  being  required to make any such  repayment,  may at the
expense of the Company cause to be published  once, in a newspaper  published in
the English language,  customarily published on each Business Day and of general
circulation in 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 Company.

                  Section  10.4   Corporate   Existence.   Except  as  expressly
permitted by Article VIII hereof,  Section  10.16 hereof or other  provisions of
this Indenture, the Company shall do or cause to be done all things necessary to
preserve  and keep in full  force and  effect the  corporate  existence,  rights
(charter  and  statutory)  and  franchises  of the Company  and each  Restricted
Subsidiary;  provided,  however,  that the  Company  shall  not be  required  to
preserve any such existence of its Restricted Subsidiaries,  right or franchise,
if the Board of Directors  shall determine that the  preservation  thereof is no
longer  desirable  in  the  conduct  of the  business  of the  Company  and  its
Restricted  Subsidiaries,  taken as a whole  and that  the loss  thereof  is not
disadvantageous in any material respect to the Holders.

                                      -67-

<PAGE>

                  Section  10.5 Payment of Taxes and Other  Claims.  The Company
shall pay or discharge or cause to be paid or discharged,  before the same shall
become delinquent, (a) all taxes, assessments and governmental charges levied or
imposed  upon the  Company  or any  Restricted  Subsidiary  or upon the  income,
profits or  Property  of the Company or any  Restricted  Subsidiary  and (b) all
lawful claims for labor, materials and supplies,  which, if unpaid, might by law
become a Lien upon the  Property  of the Company or any  Restricted  Subsidiary;
provided, however, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax,  assessment,  charge or claim whose
amount,   applicability  or  validity  is  being  contested  in  good  faith  by
appropriate  proceedings  and for which  appropriate  provision has been made in
accordance with GAAP.

                  Section 10.6  Maintenance  of  Properties.  The Company  shall
cause all material Properties owned by the Company or any Restricted  Subsidiary
and used or held for use in the conduct of its  business or the  business of any
Restricted  Subsidiary to be maintained and kept in good  condition,  repair and
working order (ordinary wear and tear  excepted),  all as in the judgment of the
Company may be necessary so that its business may be properly and advantageously
conducted at all times;  provided,  however,  that nothing in this Section shall
prevent the Company from discontinuing the maintenance of any of such Properties
if such  discontinuance  is, in the  judgment of the  Company,  desirable in the
conduct of its business or the  business of any  Restricted  Subsidiary  and not
disadvantageous  in any  material  respect to the Holders.  Notwithstanding  the
foregoing,  nothing  contained in this Section 10.6 shall limit or impair in any
way the right of the Company and its Restricted Subsidiaries to sell, divest and
otherwise  to  engage  in  transactions  that are  otherwise  permitted  by this
Indenture.

                  Section 10.7  Insurance.  The Company  shall at all times keep
all of its and its Restricted Subsidiaries' Properties which are of an insurable
nature insured with insurers, believed by the Company to be responsible, against
loss or damage to the extent that  property of similar  character  is usually so
insured by corporations similarly situated and owning like properties.

                  The Company may adopt such other plan or method of protection,
in  lieu  of  or  supplemental  to  insurance  with  insurers,  whether  by  the
establishment  of an  insurance  fund or reserve to be held and  applied to make
good  losses  from  casualties,  or  otherwise,  conforming  to the  systems  of
self-insurance  maintained by  corporations  similarly  situated and owning like
properties, as may be determined by the Board of Directors.

                  Section 10.8      Statement by Officers as to Default.

                  (a) The Company shall  deliver to the Trustee,  within 90 days
after the end of each  fiscal  year of the Company and within 45 days of the end
of each of the  first,  second and third  quarters  of each  fiscal  year of the
Company, an Officers' Certificate stating that a review of the activities of the
Company and its Subsidiaries during the preceding fiscal quarter or fiscal year,
as applicable,  has been made under the supervision of the signing Officers with
a view to  determining  whether the Company has kept,  observed,  performed  and
fulfilled its obligations under this Indenture,  and further stating, as to each
such  Officer  signing  such  certificate,  that to the  best of such  Officer's
knowledge the Company has kept, observed, performed and fulfilled each and every
covenant contained in this Indenture and is not in default in the performance or
observance  of any of the terms,  provisions  and  conditions  hereof  (or, if a
Default or Event of Default shall have

                                    -68-

<PAGE>

occurred,  describing  all such  Defaults  or Events of  Default  of which  such
Officer may have  knowledge and what action the Company is taking or proposes to
take with respect  thereto).  Such Officers'  Certificate  shall comply with TIA
Section 314(a)(4).  For purposes of this Section 10.8(a),  such compliance shall
be determined  without  regard to any period of grace or  requirement  of notice
under this Indenture.

                  (b) The Company and the Subsidiary  Guarantors  shall, so long
as any of the Securities are outstanding,  deliver to the Trustee forthwith upon
any Officer  becoming aware of any Default or Event of Default or default in the
performance of any covenant, agreement or condition contained in this Indenture,
an Officers'  Certificate  specifying  such Default or Event of Default and what
action the Company or any  Subsidiary  Guarantor  proposes to take with  respect
thereto within 10 days of its occurrence.

                  Section 10.9 Provision of Financial  Information.  The Company
and the Subsidiary  Guarantors  shall file with the Trustee (with  exhibits) and
deliver to each Holder  (without  exhibits),  within 15 days after it files them
with the  Commission,  copies of the annual  and  quarterly  reports  and of the
information,  documents  and other reports (or copies of such portions of any of
the foregoing as the Commission may by rules and  regulations  prescribe)  which
each of the Company and the  Subsidiary  Guarantors is required to file with the
Commission  pursuant to Section 13 or 15(d) of the Exchange  Act. If the Company
is not subject to the  requirements  of Section 13 or 15(d) of the Exchange Act,
the Company shall nonetheless file with the Commission and the Trustee copies of
such annual  reports and such  information,  documents  and other  reports as it
would file if it were subject to the  requirements of Section 13 or 15(d) of the
Exchange  Act. If filing such reports and documents  with the  Commission is not
accepted by the Commission or is prohibited  under the Exchange Act, the Company
shall supply at the  Company's  cost copies of such reports and documents to any
holder of  Securities  promptly  upon  written  request.  The  Company  and each
Subsidiary  Guarantor also shall comply with the other provisions of TIA Section
314(a).

                  Section 10.10     Limitation on Restricted Payments.

                  (a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, take the following actions:

                  (i) declare or pay any dividend  on, or make any  distribution
         to holders of, any shares of the  Company's  Capital  Stock (other than
         dividends  or  distributions  payable  solely in  shares  of  Qualified
         Capital Stock of the Company or in options, warrants or other rights to
         purchase Qualified Capital Stock of the Company);

                  (ii) purchase, redeem or otherwise acquire or retire for value
         any Capital Stock of the Company or any Affiliate  thereof  (other than
         any Wholly Owned Restricted  Subsidiary of the Company) or any options,
         warrants or other rights to acquire such Capital Stock;

                  (iii) make any  principal  payment on or  repurchase,  redeem,
         defease  or  otherwise  acquire  or  retire  for  value,  prior  to any
         scheduled   principal  payment,   scheduled  sinking  fund  payment  or
         maturity, any Subordinated Indebtedness;


                                      -69-

<PAGE>

                  (iv) declare or pay any dividend on, or make any  distribution
         to the  holders  of,  any  shares of  Capital  Stock of any  Restricted
         Subsidiary  of the  Company  (other  than to the  Company or any of its
         Wholly Owned Restricted Subsidiaries) or purchase,  redeem or otherwise
         acquire  or  retire  for  value  any  Capital  Stock of any  Restricted
         Subsidiary or any options, warrants or other rights to acquire any such
         Capital  Stock (other than with respect to any such Capital  Stock held
         by the  Company  or  any  Wholly  Owned  Restricted  Subsidiary  of the
         Company);

                  (v) make any Investment (other than any Permitted Investment);

                  (vi) in connection with the acquisition of any Property by the
         Company  or  its  Restricted   Subsidiaries  after  the  date  of  this
         Indenture,  which Property would secure or be subject to any Production
         Payment obligations of the Company or its Restricted Subsidiaries, make
         any investment (of cash,  Property or other assets) in such Property so
         acquired  in  addition  to  the  amount  of   Indebtedness   (including
         Production  Payment  obligations)   incurred  by  the  Company  or  its
         Restricted Subsidiaries in connection with such acquisition; or

                  (vii) incur,  create,  assume or suffer to exist any guarantee
         of  Indebtedness  of  any  Affiliate  (other  than  (a)  guarantees  of
         Indebtedness  of  any  Restricted  Subsidiary  by  the  Company  or (b)
         guarantees of Indebtedness of the Company by any Restricted Subsidiary,
         in each case in accordance with the terms of this Indenture);

(such payments or other actions described in (but not excluded from) clauses (i)
through (vii) are collectively referred to as "Restricted Payments"),  unless at
the time of and after  giving  effect to the  proposed  Restricted  Payment (the
amount of any such Restricted  Payment,  if other than cash, shall be the amount
determined by the Board of Directors of the Company,  whose  determination shall
be conclusive and evidenced by a Board  Resolution),  (A) no Default or Event of
Default shall have occurred and be continuing, (B) the Company could incur $1.00
of additional Indebtedness (excluding Permitted Indebtedness) in accordance with
Section 10.11 hereof and (C) the  aggregate  amount of all  Restricted  Payments
declared  or made  after the date of this  Indenture  shall not  exceed  the sum
(without duplication) of the following:

                  (1) 50% of the aggregate cumulative Consolidated Net Income of
         the Company accrued on a cumulative  basis during the period  beginning
         on  January 1, 1995 and  ending on the last day of the  Company's  last
         fiscal  quarter  ending prior to the date of such  proposed  Restricted
         Payment (or, if such aggregate cumulative Consolidated Net Income shall
         be a loss, minus 100% of such loss), plus

                  (2) the aggregate net cash proceeds received after the date of
         this Indenture by the Company as capital  contributions  to the Company
         (other than from any Restricted Subsidiary), plus

                  (3) the aggregate net cash proceeds received after the date of
         this  Indenture by the Company from the issuance or sale (other than to
         any of its  Restricted  Subsidiaries)  of shares of  Qualified  Capital
         Stock of the Company or any option, warrants or rights to purchase such
         shares of Qualified Capital Stock of the Company, plus

                                      -70-

<PAGE>

                  (4) the aggregate net cash proceeds received after the date of
         this  Indenture by the Company  (other than from any of its  Restricted
         Subsidiaries)  upon the exercise of any options,  warrants or rights to
         purchase shares of Qualified Capital Stock of the Company, plus

                  (5) the aggregate net cash proceeds received after the date of
         this  Indenture by the Company from the issuance or sale (other than to
         any of its  Restricted  Subsidiaries)  of debt  securities or shares of
         Redeemable Capital Stock that have been converted into or exchanged for
         Qualified  Capital  Stock  of the  Company  to  the  extent  such  debt
         securities were  originally sold for cash,  together with the aggregate
         cash  received  by the  Company  at the  time  of  such  conversion  or
         exchange, plus

                  (6) To the  extent not  otherwise  included  in the  Company's
         Consolidated   Net  Income,   the  net  reduction  in   Investments  in
         Unrestricted  Subsidiaries  resulting  from the payments of interest on
         Indebtedness,  dividends,  repayments  of loans or  advances,  or other
         transfers  of  Properties,  in each case to the Company or a Restricted
         Subsidiary  after  the date of this  Indenture  from  any  Unrestricted
         Subsidiary or from the redesignation of an Unrestricted Subsidiary as a
         Restricted   Subsidiary  (valued  in  each  case  as  provided  in  the
         definition  of   Investment),   not  to  exceed  in  the  case  of  any
         Unrestricted  Subsidiary  the total amount of  Investments  (other than
         Permitted  Investments)  in such  Unrestricted  Subsidiary  made by the
         Company and its Restricted Subsidiaries in such Unrestricted Subsidiary
         after the date of this Indenture, plus

                  (7)      $15,000,000.

                  (b)  Notwithstanding  paragraph (a) above, the Company and its
Restricted  Subsidiaries may take the following  actions so long as (in the case
of clauses (ii), (iii) and (iv) below) no Default or Event of Default shall have
occurred and be continuing:

          (i) the  payment  of any  dividend  within  60 days  after the date of
     declaration  thereof, if at such declaration date such declaration complied
     with the  provisions  of  paragraph  (a) above (and such  payment  shall be
     deemed to have been paid on such date of  declaration  for  purposes of any
     calculation required by the provisions of paragraph (a) above);

          (ii) the repurchase,  redemption or other acquisition or retirement of
     any shares of any class of Capital  Stock of the Company or any  Restricted
     Subsidiary,  in exchange for, or out of the aggregate net cash proceeds of,
     a  substantially  concurrent  issue and sale  (other  than to a  Restricted
     Subsidiary) of shares of Qualified Capital Stock of the Company;

          (iii)  the  purchase,  redemption,   repayment,  defeasance  or  other
     acquisition or retirement for value of any Subordinated Indebtedness (other
     than Redeemable  Capital Stock) in exchange for or out of the aggregate net
     cash proceeds of a substantially concurrent issue and sale (other than to a
     Restricted Subsidiary) of shares of Qualified Capital Stock of the Company;
     and

                                      -71-

<PAGE>

          (iv) the purchase, redemption, repayment, defeasance or other
         acquisition or retirement for value of Subordinated Indebtedness (other
         than Redeemable Capital Stock) in exchange for, or out of the aggregate
         net cash proceeds of a substantially  concurrent incurrence (other than
         to a  Restricted  Subsidiary)  of,  Subordinated  Indebtedness  of  the
         Company so long as (A) the  principal  amount of such new  Indebtedness
         does  not  exceed  the  principal  amount  (or,  if  such  Subordinated
         Indebtedness  being  refinanced  provides  for an amount  less than the
         principal  amount  thereof to be due and payable upon a declaration  of
         acceleration   thereof,   such   lesser   amount  as  of  the  date  of
         determination)  of the  Subordinated  Indebtedness  being so purchased,
         redeemed, repaid, defeased, acquired or retired, plus the amount of any
         premium  required  to be  paid  in  connection  with  such  refinancing
         pursuant to the terms of the  Subordinated  Indebtedness  refinanced or
         the  amount of any  premium  reasonably  determined  by the  Company as
         necessary to accomplish such  refinancing,  plus the amount of expenses
         of the Company incurred in connection with such  refinancing,  (B) such
         new  Subordinated  Indebtedness  is  subordinated  to the Securities at
         least  to  the  same  extent  as  such  Subordinated   Indebtedness  so
         purchased,  redeemed,  repaid, defeased,  acquired or retired, (C) such
         new  Subordinated  Indebtedness  has an Average Life to Stated Maturity
         that is  longer  than  the  Average  Life  to  Stated  Maturity  of the
         Securities and such new Subordinated Indebtedness has a Stated Maturity
         for its  final  scheduled  principal  payment  that is at least 91 days
         later  than the  Stated  Maturity  for the  final  scheduled  principal
         payment of the Securities.

The actions described in clauses (i), (ii) and (iii) of this paragraph (b) shall
be Restricted  Payments  that shall be permitted to be taken in accordance  with
this paragraph (b) but shall reduce the amount that would otherwise be available
for  Restricted  Payments  under clause (C) of paragraph (a) (provided  that any
dividend  paid  pursuant to clause (i) of this  paragraph  (b) shall  reduce the
amount that would  otherwise be available under clause (C) of paragraph (a) when
declared,  but not also when subsequently paid pursuant to such clause (i)), and
the actions  described in clause (iv) of this  paragraph (b) shall be Restricted
Payments that shall be permitted to be taken in accordance  with this  paragraph
and shall not reduce the amount that would otherwise be available for Restricted
Payments under clause (C) of paragraph (a).

                  (c) In computing  Consolidated Net Income of the Company under
paragraph (a) above, (1) the Company shall use audited financial  statements for
the portions of the relevant period for which audited  financial  statements are
available on the date of determination  and unaudited  financial  statements and
other current  financial  data based on the books and records of the Company for
the  remaining  portion of such period and (2) the Company shall be permitted to
rely in good faith on the financial  statements and other financial data derived
from the books and  records of the  Company  that are  available  on the date of
determination.  If the Company makes a Restricted  Payment which, at the time of
the making of such Restricted  Payment would in the good faith  determination of
the  Company  be  permitted  under  the  requirements  of this  Indenture,  such
Restricted  Payment  shall be deemed to have been made in  compliance  with this
Indenture  notwithstanding any subsequent  adjustments made in good faith to the
Company's financial statements affecting  Consolidated Net Income of the Company
for any period.

                                      -72-

<PAGE>  

                  Section 10.11     Limitation on Indebtedness.

                  (a) The Company shall not, and shall not permit any Restricted
Subsidiary to, create,  incur, issue, assume,  guarantee or in any manner become
directly or  indirectly  liable for the payment of  (collectively  "incur")  any
Indebtedness  (including  any  Acquired  Indebtedness),   other  than  Permitted
Indebtedness  and  Permitted  Subsidiary  Indebtedness,  as  the  case  may  be;
provided,  however,  that the Company and its Restricted  Subsidiaries  that are
Subsidiary  Guarantors may incur Indebtedness if (x) the Company's  Consolidated
Fixed  Charge  Coverage  Ratio for the four  full  fiscal  quarters  immediately
preceding the incurrence of such Indebtedness,  taken as one period (at the time
of such  incurrence  and after giving pro forma effect to: (i) the incurrence of
such  Indebtedness  and (if  applicable)  the  application  of the net  proceeds
therefrom,  including to refinance other  Indebtedness,  as if such Indebtedness
was incurred and the  application of such proceeds  occurred at the beginning of
such four-quarter  period;  (ii) the incurrence,  repayment or retirement of any
other  Indebtedness  (including  Permitted  Indebtedness)  by the Company or its
Restricted  Subsidiaries  since  the  first  day  of  such  four-quarter  period
(including any other Indebtedness to be incurred  concurrent with the incurrence
of such Indebtedness) as if such Indebtedness was incurred, repaid or retired at
the beginning of such four-quarter period; and (iii) notwithstanding  clause (d)
of the  definition  of  Consolidated  Net Income,  the  acquisition  (whether by
purchase,  merger or  otherwise)  or  disposition  (whether  by sale,  merger or
otherwise)  of  any  Person  acquired  or  disposed  of by  the  Company  or its
Restricted  Subsidiaries,  as the  case  may be,  since  the  first  day of such
four-quarter  period,  as if such  acquisition  or  disposition  occurred at the
beginning of such four-quarter period), would have been equal to at least 2.5 to
1.0.

                  Section 10.12  Limitation on  Guarantees  of  Indebtedness  by
Subsidiaries.

                  (a) The  Company  shall not permit any  Restricted  Subsidiary
that is not a Subsidiary  Guarantor to guarantee the payment of any Indebtedness
of the Company unless (i) (A) such Restricted Subsidiary simultaneously executes
and  delivers  a  supplemental  indenture  to  this  Indenture  providing  for a
Subsidiary  Guarantee of the  Securities  by such  Restricted  Subsidiary  which
Subsidiary Guarantee shall be subordinated to Guarantor Senior Indebtedness (but
no other  indebtedness)  to the same extent that the Notes are  subordinated  to
Senior  Indebtedness  and (B) with  respect  to any  guarantee  of  Subordinated
Indebtedness   by  a  Restricted   Subsidiary,   any  such  guarantee  shall  be
subordinated to such Restricted  Subsidiary's  Subsidiary  Guarantee at least to
the  same  extent  as such  Subordinated  Indebtedness  is  subordinated  to the
Securities;  (ii) such Restricted  Subsidiary  waives and will not in any manner
whatsoever   claim  or  take  the  benefit  or  advantage   of,  any  rights  of
reimbursement,  indemnity or subrogation or any other rights against the Company
or any other Restricted Subsidiary as a result of any payment by such Restricted
Subsidiary  under its Subsidiary  Guarantee  until such time as the  obligations
guaranteed thereby are paid in full; and (iii) such Restricted  Subsidiary shall
deliver to the Trustee an Opinion of Counsel to the effect that such  Subsidiary
Guarantee has been duly executed and authorized and constitutes a valid, binding
and  enforceable  obligation of such  Restricted  Subsidiary,  except insofar as
enforcement  thereof may be limited by  bankruptcy,  insolvency  or similar laws
(including,  without limitation,  all laws relating to fraudulent transfers) and
except  insofar as  enforcement  thereof is  subject  to general  principles  of
equity;  provided  that  this  paragraph  (a)  shall  not be  applicable  to any
guarantee of any Restricted  Subsidiary that (x) existed at the time such Person
became a  Restricted  Subsidiary  of the  Company  and (y) was not  incurred  in
connection  with,  or in  contemplation  of, such Person  becoming a  Restricted
Subsidiary of the Company.

                                      -73-

<PAGE>


                  (b)  Notwithstanding the foregoing and the other provisions of
this Indenture,  any Subsidiary  Guarantee  incurred by a Restricted  Subsidiary
pursuant  to this  Section  10.12  shall  provide  by its terms that it shall be
automatically  and  unconditionally  released and discharged  upon (i) any sale,
exchange or transfer,  to any Person that is not an Affiliate of the Company, of
all of the Company's  Capital Stock in, or all or substantially all the Property
of,  such  Restricted  Subsidiary  (which  sale,  exchange  or  transfer  is not
prohibited by this  Indenture),  (ii) the merger of such  Restricted  Subsidiary
into the Company or any other  Restricted  Subsidiary  (provided  the  surviving
Restricted  Subsidiary assumes the Subsidiary  Guarantee) or the liquidation and
dissolution  of such  Restricted  Subsidiary  (in each  case to the  extent  not
prohibited  by this  Indenture),  or  (iii)  the  release  or  discharge  of the
guarantee  which  resulted in the creation of such  Subsidiary  Guarantee of the
Securities,  except a  discharge  or release by or as a result of payment  under
such guarantee.

                  Section  10.13  Limitation  on  Issuances  and Sale of Capital
Stock  by  Restricted  Subsidiaries.  The  Company  (a)  shall  not  permit  any
Restricted  Subsidiary to issue any  Preferred  Stock (other than to the Company
and/or  one or more  Wholly  Owned  Restricted  Subsidiaries)  and (b) shall not
permit any Person  (other  than the  Company  and/or  one or more  Wholly  Owned
Restricted  Subsidiaries) to own any Capital Stock of any Restricted Subsidiary;
provided,  however,  that this Section 10.13 shall not prohibit (1) the issuance
and sale of all,  but not less than all, of the issued and  outstanding  Capital
Stock of any Restricted Subsidiary owned by the Company or any of its Restricted
Subsidiaries in compliance with the other  provisions of this Indenture,  or (2)
the ownership by directors of director's  qualifying  shares or the ownership by
foreign nationals of Capital Stock of any Restricted  Subsidiary,  to the extent
mandated by applicable law.

                  Section 10.14  Limitation on Liens. The Company shall not, and
shall not permit any Restricted  Subsidiary to, directly or indirectly,  create,
incur,  assume,  affirm or suffer to exist or become  effective  any Lien of any
kind,  except for Permitted Liens, on any of its or their respective  Properties
(including any intercompany notes),  whether now owned or hereafter acquired, or
any income,  profits or proceeds  therefrom,  or assign or otherwise  convey any
right to receive  income  thereon,  unless (x) in the case of any Lien  securing
Subordinated Indebtedness, the Securities are secured by a Lien on such Property
or  proceeds  that is senior in priority to such Lien and (y) in the case of any
other Lien,  the Securities  are directly  secured  equally and ratably with the
obligation or liability secured by such Lien.

                  Section 10.15 Purchase of Securities Upon Change of Control.

                  (a) Upon the  occurrence  of a Change of Control,  the Company
shall be  obligated  to make an offer to purchase (a "Change of Control  Offer")
all of the then outstanding Securities, in whole or in part, from the Holders of
such  Securities  in  integral  multiples  of $1,000,  at a purchase  price (the
"Change of Control  Purchase  Price") equal to 101% of the  aggregate  principal
amount of such  Securities,  plus  accrued and unpaid  interest,  if any, to the
Change of Control  Purchase  Date (as defined  below),  in  accordance  with the
procedures set forth in paragraphs (b), (c) and (d) of this Section. The Company
shall,  subject to the provisions  described  below, be required to purchase all
Securities properly tendered into the Change of Control Offer and not withdrawn.
The Company will not be required to make a Change of Control Offer upon a Change
of  Control  if a third  party  makes the  Change of  Control  Offer at the same
purchase price,  at the same times and otherwise in substantial  compliance with
the requirements applicable to a Change of Control Offer made by the

                                      -74-

<PAGE>

Company and purchases all Securities  validly  tendered and not withdrawn  under
such Change of Control Offer.

                  (b) The Change of Control Offer is required to remain open for
at least 20 Business Days and until the close of business on the fifth  Business
Day prior to the Change of Control Purchase Date (as defined below).

                  (c) Not  later  than the  30th day  following  any  Change  of
Control, the Company shall give to the Trustee in the manner provided in Section
15.4 and each Holder of the Securities in the manner provided in Section 15.5, a
notice (the "Change of Control Notice") stating:

                         (1) that a Change in Control has occurred and that such
                    Holder has the right to require  the  Company to  repurchase
                    such Holder's Securities,  or portion thereof, at the Change
                    of Control Purchase Price;

                         (2) any  information  regarding  such Change of Control
                    required  to be  furnished  pursuant to Rule 14e-1 under the
                    Exchange Act and any other  securities  laws and regulations
                    thereunder;

                         (3) a purchase  date (the  "Change of Control  Purchase
                    Date")  which shall be on a Business Day and no earlier than
                    30 days nor later  than 70 days from the date the  Change of
                    Control occurred;

                         (4) that  any  Security,  or  portion  thereof,  not or
                    accepted  for  tendered  payment  will  continue  to  accrue
                    interest;

                         (5) that  unless the  Company  defaults  in  depositing
                    money  with the  Paying  Agent in  accordance  with the last
                    paragraph of clause (d) of this Section 10.15, or payment is
                    otherwise  prevented,  any  Security,  or  portion  thereof,
                    accepted for payment pursuant to the Change of Control Offer
                    shall cease to accrue  interest  after the Change of Control
                    Purchase Date; and

                         (6) the  instructions  a Holder must follow in order to
                    have its Securities repurchased in accordance with paragraph
                    (d) of this Section.

                  (d) Holders  electing  to have  Securities  purchased  will be
required to surrender such Securities to the Company at the address specified in
the Change of Control  Notice at least five Business Days prior to the Change of
Control  Purchase  Date.  Holders will be entitled to withdraw their election if
the Company receives,  not later than three Business Days prior to the Change of
Control  Purchase  Date, a telegram,  telex,  facsimile  transmission  or letter
setting forth the name of the Holder,  the  certificate  number(s) and principal
amount of the  Securities  delivered  for purchase by the Holder as to which his
election is to be withdrawn and a statement that such Holder is withdrawing  his
election  to have  such  Securities  purchased.  Holders  whose  Securities  are
purchased only in part will be issued new Securities  equal in principal  amount
to the unpurchased portion of the Securities surrendered.


                                      -75-

<PAGE>


                  On the Change of Control  Purchase Date, the Company shall (i)
accept for payment  Securities or portions thereof tendered pursuant to a Change
of Control Offer, (ii) deposit with the Paying Agent money sufficient to pay the
purchase  price of all  Securities  or portions  thereof so tendered,  and (iii)
deliver or cause to be delivered to the Trustee the Securities so accepted.  The
Paying  Agent shall  promptly  mail or deliver to Holders of the  Securities  so
tendered  payment in an amount equal to the purchase  price for the  Securities,
and the Company will promptly execute and the Trustee will promptly authenticate
and mail or make  available for delivery to such Holders a new Security equal in
principal  amount to any  unpurchased  portion  of the  Security  which any such
Holder did not surrender for purchase. The Company shall announce the results of
a Change of  Control  Offer on or as soon as  practicable  after  the  Change of
Control  Purchase Date. For purposes of this Section 10.15, the Trustee will act
as the Paying Agent.

                  (e) The  Company  shall  comply  with  Rule  14e-1  under  the
Exchange Act and any other  securities  laws and  regulations  thereunder to the
extent such laws and regulations  are applicable,  in the event that a Change of
Control  occurs and the Company is required to purchase  Securities as described
above.

                  Section 10.16     Disposition of Proceeds of Asset Sales.

                  (a) The Company shall not, and will not permit any  Restricted
Subsidiary  to,  engage  in any  Asset  Sale  unless  (i)  the  Company  or such
Restricted Subsidiary, as the case may be, receives consideration at the time of
such Asset Sale at least equal to the Fair Market Value of the  Properties  sold
or otherwise disposed of pursuant to the Asset Sale and (ii) at least 75% of the
consideration received by the Company or the Restricted Subsidiary,  as the case
may be, in respect of such Asset Sale consists of cash, Cash  Equivalents or the
assumption  by  the  purchaser  of   liabilities  of  the  Company  (other  than
liabilities  of  the  Company  that  are  by  their  terms  subordinated  to the
Securities)  or any  Restricted  Subsidiary as a result of which the Company and
its remaining Restricted Subsidiaries are no longer liable.

                  (b) If the Company or any Restricted  Subsidiary engages in an
Asset Sale,  the Company may either (x) apply the Net Cash  Proceeds  thereof to
permanently reduce Senior Indebtedness or to permanently reduce Guarantor Senior
Indebtedness  or (y)  invest all or any part of the Net Cash  Proceeds  thereof,
within  365 days  after  such  Asset  Sale,  in  Properties  which  replace  the
Properties that were the subject of the Asset Sale or in Properties that will be
used in the business of the Company or its Restricted Subsidiaries,  as the case
may be ("Replacement  Assets"). The amount of such Net Cash Proceeds not applied
or invested as provided in this paragraph  shall  constitute  "Excess  Proceeds"
subject to disposition as provided below.

                  (c) When the  aggregate  amount of Excess  Proceeds  equals or
exceeds  $15,000,000  (the "Trigger  Date"),  the Company shall make an offer to
purchase, from all Holders of the Securities and holders of any then outstanding
Pari Passu  Indebtedness  required  to be  repurchased  or repaid on a permanent
basis in  connection  with an Asset  Sale,  an  aggregate  principal  amount  of
Securities and any then outstanding Pari Passu Indebtedness equal to such Excess
Proceeds as follows:

                           (1) Not later than the 30th day following the Trigger
                  Date,  the Company shall (i) give to the Trustee in the manner
                  provided  in  Section  15.4  hereof  and  each 

                                      -76-

<PAGE>


               Holder of the  Securities in the manner  provided in Section 15.5
               hereof,  a notice (a "Purchase  Notice")  offering to purchase (a
               "Net  Proceeds  Offer")  from all Holders of the  Securities  the
               maximum  principal  amount  (expressed as a multiple of $1000) of
               Securities  that may be purchased  out of an amount (the "Payment
               Amount") equal to the product of such Excess Proceeds  multiplied
               by  a  fraction,  the  numerator  of  which  is  the  outstanding
               principal  amount of the Securities and the  denominator of which
               is the sum of the outstanding  principal amount of the Securities
               and any then  outstanding  Pari Passu  Indebtedness  (subject  to
               proration  in the event  such  amount is less than the  aggregate
               Offered  Price  (as   hereinafter   defined)  of  all  Securities
               tendered),   and  (ii)  to  the  extent   required  by  any  then
               outstanding  Pari  Passu  Indebtedness  and  provided  there is a
               permanent  reduction in the  principal  amount of such Pari Passu
               Indebtedness,  the Company  shall make an offer to purchase  such
               Pari Passu  Indebtedness (a "Pari Passu Offer") in an amount (the
               "Pari  Passu  Indebtedness  Amount")  equal to the  excess of the
               Excess Proceeds over the Payment Amount.

                    (2) The offer price for the  Securities  shall be payable in
               cash in an amount  equal to 100% of the  principal  amount of the
               Securities  tendered  pursuant  to a  Net  Proceeds  Offer,  plus
               accrued  and  unpaid  interest,  if any,  to the  date  such  Net
               Proceeds  Offer  is  consummated   (the  "Offered   Price"),   in
               accordance with paragraph (d) of this Section. To the extent that
               the aggregate  Offered Price of the Securities  tendered pursuant
               to a Net Proceeds Offer is less than the Payment Amount  relating
               thereto or the  aggregate  amount of the Pari Passu  Indebtedness
               that is purchased  or repaid  pursuant to the Pari Passu Offer is
               less than the Pari  Passu  Indebtedness  Amount  (such  shortfall
               constituting  a "Net Proceeds  Deficiency"),  the Company may use
               such Net Proceeds  Deficiency,  or a portion thereof, for general
               corporate  purposes,  subject to the limitations of Section 10.10
               hereof.

                    (3) If the aggregate  Offered  Price of  Securities  validly
               tendered and not withdrawn by Holders thereof exceeds the Payment
               Amount, Securities to be purchased will be selected on a pro rata
               basis by the Trustee based on the principal  amount of Securities
               so tendered.  Upon  completion of a Net Proceeds Offer and a Pari
               Passu  Offer,  the  amount of Excess  Proceeds  shall be reset to
               zero.

                    (4) The Purchase Notice shall set forth a purchase date (the
               "Net Proceeds Payment Date"), which shall be on a Business Day no
               earlier  than 30 days nor  later  than 70 days  from the  Trigger
               Date.  The  Purchase  Notice  shall also state (i) that a Trigger
               Date with  respect to one or more Asset  Sales has  occurred  and
               that  such  Holder  has the  right  to  require  the  Company  to
               repurchase such Holders Securities at the Offered Price,  subject
               to the limitations  described in the forgoing paragraph (3), (ii)
               any information  regarding such Net Proceeds Offer required to be
               furnished  pursuant to Rule 14e-1 under the  Exchange Act and any
               other securities laws and regulations thereunder,  (iii) that any
               Security,  or portion  thereof,  not  tendered  or  accepted  for
               payment will continue to accrue interest,  (iv) that,  unless the
               Company  defaults in  depositing  money with the Paying  Agent in
               accordance  with the last paragraph of clause (d) of this Section
               10.16,  or payment  is  otherwise  prevented,  any  Security,  or
               portion  thereof,  accepted  for  payment  pursuant  to  the  Net
               Proceeds  Offer  shall  cease to  accrue  interest  after the Net
               Proceeds  Payment Date,  and (v) the 

                                      -77-

<PAGE>

               instructions a Holder must follow in order to have its Securities
               repurchased in accordance with paragraph (d) of this Section.

                  (d) Holders  electing  to have  Securities  purchased  will be
required to surrender such Securities to the Company at the address specified in
the  Purchase  Notice at least  five  Business  Days  prior to the Net  Proceeds
Payment Date. Holders will be entitled to withdraw their election if the Company
receives,  not later than three Business Days prior to the Net Proceeds  Payment
Date, a telegram, telex, facsimile transmission or letter setting forth the name
of the Holder, the certificate  number(s) and principal amount of the Securities
delivered for purchase by the Holder as to which his election is to be withdrawn
and a  statement  that such  Holder is  withdrawing  his  election  to have such
Securities  purchased.  Holders whose Securities are purchased only in part will
be issued new Securities equal in principal amount to the unpurchased portion of
the Securities surrendered.

                  On the Net Proceeds Payment Date, the Company shall (i) accept
for payment  Securities or portions thereof tendered  pursuant to a Net Proceeds
Offer in an  aggregate  principal  amount  equal to the  Payment  Amount or such
lesser amount of Securities as has been  tendered,  (ii) deposit with the Paying
Agent money  sufficient to pay the purchase  price of all Securities or portions
thereof so tendered in an aggregate principal amount equal to the Payment Amount
or such lesser  amount and (iii) deliver or cause to be delivered to the Trustee
the  Securities so accepted.  The Paying Agent shall promptly mail or deliver to
Holders of the Securities so accepted payment in an amount equal to the purchase
price, and the Company shall execute and the Trustee will promptly  authenticate
and mail or make  available for delivery to such Holders a new Security equal in
principal  amount to any  unpurchased  portion  of the  Security  which any such
Holder did not surrender for purchase.  Any  Securities  not so accepted will be
promptly mailed or delivered to the Holder  thereof.  The Company shall announce
the results of a Net Proceeds Offer on or as soon as  practicable  after the Net
Proceeds  Payment Date. For purposes of this Section 10.16, the Trustee will act
as the Paying Agent.

                  (e) The Company shall not permit any  Subsidiary to enter into
or suffer to exist any agreement  that would place any  restriction  of any kind
(other than pursuant to law or regulation) on the ability of the Company to make
a Net Proceeds  Offer  following any Asset Sale.  The Company  intends to comply
with  Rule  14e-1  under the  Exchange  Act and any  other  securities  laws and
regulations thereunder if applicable, in the event that an Asset Sale occurs and
the Company is required to purchase Securities as described above.

                  Section 10.17 Limitation on Transactions with Affiliates.  The
Company shall not, and shall not permit any Restricted  Subsidiary to,  directly
or  indirectly,  enter  into or  suffer to exist  any  transaction  or series of
related  transactions  (including,   without  limitation,  the  sale,  purchase,
exchange or lease of any Property or the  rendering of any service)  with or for
the benefit of, any  Affiliate  of the Company  (each,  other than a  Restricted
Subsidiary, being an "Interested Person"), unless (i) such transaction or series
of  transactions  are on terms that are no less favorable to the Company or such
Restricted Subsidiary, as the case may be, than those that would be available in
a comparable  arm's length  transaction with unrelated third parties who are not
Interested  Persons,  (ii)  with  respect  to any one  transaction  or series of
transactions  involving aggregate payments in excess of $1,000,000,  the Company
delivers  an  Officer's   Certificate  to  the  Trustee   certifying  that  such
transaction  or series of  transactions  complies with clause (i) above and such
transaction or series of transactions  have been approved by a Board  Resolution
of the Board of  Directors  of the  

                                      -78-

<PAGE>

Company, and (iii) with respect to any one transaction or series of transactions
involving aggregate payments in excess of $10,000,000, the Officer's Certificate
referred to in clause (ii) above also certifies that such  transaction or series
of transactions have been approved by a majority of the Disinterested  Directors
(or, in the event there are no such  Disinterested  Directors,  that the Company
has  obtained  a  written  opinion  from an  independent  nationally  recognized
investment banking firm or appraisal firm, in either case specializing or having
a  specialty  in the type and  subject  matter of the  transaction  or series of
transactions at issue,  which opinion shall be to the effect set forth in clause
(i) above or shall state that such  transaction  or series of  transactions  are
fair  from  a  financial  point  of  view  to the  Company  or  such  Restricted
Subsidiary);  provided,  however,  that this Section 10.17 will not restrict the
Company from (1) paying reasonable and customary  regular  compensation and fees
to  directors  of the  Company  who  are not  employees  of the  Company  or any
Restricted  Subsidiary or (2) paying dividends on, or making  distributions with
respect  to,  shares of Capital  Stock of the Company on a pro rata basis to the
extent permitted by Section 10.10 hereof.

                  Section  10.18  Limitation  on  Dividends  and  Other  Payment
Restrictions Affecting Restricted Subsidiaries. The Company shall not, and shall
not permit any  Restricted  Subsidiary  to,  directly or  indirectly,  create or
otherwise  cause  or  suffer  to  exist  or  become   effective  any  consensual
encumbrance  or  restriction  of any  kind  on  the  ability  of any  Restricted
Subsidiary  to (a) pay  dividends,  in  cash or  otherwise,  or make  any  other
distributions  on or in respect of its Capital Stock to the Company or any other
Restricted Subsidiary, (b) pay any Indebtedness owed to the Company or any other
Restricted  Subsidiary,  (c) make an  Investment  in the  Company  or any  other
Restricted  Subsidiary  or (d) transfer any of its  Properties to the Company or
any other Restricted  Subsidiary,  except for such  encumbrances or restrictions
(i)  pursuant  to an  agreement  in effect or  entered  into on the date of this
Indenture,  (ii) any agreement or other  instrument of a Person  acquired by the
Company  or  any  Restricted  Subsidiary  in  existence  at  the  time  of  such
acquisition (but not created in  contemplation  thereof),  which  encumbrance or
restriction  is not  applicable  to any other Person,  or the  Properties of any
other Person,  other than the Person, or the Property of the Person, so acquired
or (iii) existing under any agreement that extends, renews, refinances or places
the agreements  containing  the  restrictions  in the foregoing  clauses (i) and
(ii),  provided that the terms and conditions of any such  restrictions  are not
materially  less favorable to the Holders of the Securities  than those under or
pursuant to the agreement  evidencing  the  Indebtedness  so extended,  renewed,
refinanced or replaced.

                  Section 10.19  Limitation on Conduct of Business.  The Company
shall not, and shall not permit any of its Restricted Subsidiaries to, engage in
the conduct of any business other than the Oil and Gas Business.

                  Section  10.20  Waiver of Certain  Covenants.  The Company may
omit in any particular instance to comply with any term,  provision or condition
set forth in Sections 10.05 through 10.11, Sections 10.13 and 10.14 and Sections
10.17 through 10.19 hereof if, before or after the time for such compliance, the
Holders of at least a majority in principal amount of the Outstanding Securities
and the Subsidiary  Guarantors,  by Act of such Holders and written agreement of
the  Subsidiary  Guarantors,  waive such  compliance  in such instance with such
term, provision or condition,  but no such waiver shall extend to or affect such
term,  provision or condition  except to the extent so  expressly  waived,  and,
until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term,  provision or condition shall
remain in full force and effect.


                                      -79-

<PAGE>


                                   ARTICLE XI

                            REDEMPTION OF SECURITIES

                  Section  11.1  Right  of  Redemption.  The  Securities  may be
redeemed,  at the  election of the  Company,  as a whole or from time to time in
part, at any time on or after _____________, 2001, upon not less than 30 or more
than 60 days' notice to each Holder of Securities to be redeemed, subject to the
conditions and at the Redemption  Prices  (expressed as percentages of principal
amount)  specified  in the form of  Security,  together  with accrued and unpaid
interest, if any, to the Redemption Date.

                  Section  11.2   Applicability   of  Article.   Redemption   of
Securities at the election of the Company or otherwise, as permitted or required
by any  provision  of this  Indenture,  shall be made in  accordance  with  such
provision and this Article.

                  Section  11.3  Election  to  Redeem;  Notice to  Trustee.  The
election of the Company to redeem any Securities pursuant to Section 11.1 hereof
shall be  evidenced  by a Board  Resolution.  In case of any  redemption  at the
election  of the  Company,  the  Company  shall,  at least 60 days  prior to the
Redemption  Date  fixed  by the  Company  (unless  a  shorter  notice  shall  be
satisfactory to the Trustee),  notify the Trustee of such Redemption Date and of
the  principal  amount of  Securities  to be redeemed  and shall  deliver to the
Trustee such documentation and records as shall enable the Trustee to select the
Securities  to be redeemed  pursuant to Section  11.4  hereof.  Any  election to
redeem  Securities  shall be  revocable  until  the  Company  gives a notice  of
redemption  pursuant to Section 11.5 hereof to the Holders of  Securities  to be
redeemed.

                  Section  11.4   Selection  by  Trustee  of  Securities  to  Be
Redeemed.  If less than all the  Securities  are to be redeemed,  the particular
Securities to be redeemed  shall be selected not less than 30 days nor more than
60 days  prior to the  Redemption  Date by the  Trustee,  from  the  Outstanding
Securities  not  previously  called for  redemption,  pro rata, by lot or by any
other  method  as the  Trustee  shall  deem fair and  appropriate  and which may
provide  for the  selection  for  redemption  of portions  of the  principal  of
Securities;  provided,  however,  that any such partial  redemption  shall be in
integral multiples of $1000.

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

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

                  Section 11.5 Notice of Redemption.  Notice of redemption shall
be given in the manner  provided for in Section 15.5 hereof not less than 30 nor
more than 60 days prior to the Redemption  Date, to each Holder of Securities to
be redeemed.

                                      -80-

<PAGE>


                  All notices of redemption shall state:

                  (a) the Redemption Date;

                  (b) the Redemption Price;

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

                  (d) that on the Redemption Date the Redemption Price (together
with accrued  interest,  if any, to the  Redemption  Date payable as provided in
Section 11.7 hereof) will become due and payable upon each such Security, or the
portion thereof,  to be redeemed,  and that, unless the Company shall default in
the  payment  of the  Redemption  Price  and any  applicable  accrued  interest,
interest thereon will cease to accrue on and after said date; and

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

                  Notice of  redemption  of  Securities  to be  redeemed  at the
election  of the  Company  shall be given by the  Company  or, at the  Company's
request,  by the Trustee in the name and at the expense of the Company.  Failure
to give such notice by mailing to any Holder of Securities or any defect therein
shall not affect the validity of any  proceedings  for the  redemption  of other
Securities.

                  Section 11.6 Deposit of Redemption  Price.  On or before 12:00
noon on any Redemption  Date, the Company shall deposit with the Trustee or with
a Paying Agent (or, if the Company is acting as its own Paying Agent,  segregate
and hold in trust as  provided  in  Section  10.3  hereof)  an  amount  of money
sufficient to pay the Redemption  Price of, and accrued and unpaid  interest on,
all the Securities which are to be redeemed on such Redemption Date.

                  Section 11.7 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  (together with accrued and unpaid  interest,  if any, to the
Redemption Date), and from and after such date (unless the Company shall default
in the payment of the  Redemption  Price and accrued and unpaid  interest)  such
Securities shall cease to bear interest. Upon surrender of any such Security for
redemption in accordance  with said notice,  such Security  shall be paid by the
Company at the Redemption Price,  together with accrued and unpaid interest,  if
any, to the Redemption Date;  provided,  however,  that installments of interest
whose Stated  Maturity is on or prior to the Redemption Date shall be payable to
the  Holders  of  such  Securities,  or  one  or  more  Predecessor  Securities,
registered  as such at the  close  of  business  on the  relevant  Record  Dates
according to their terms and the provisions of Section 3.8 hereof.

                  If any  Security  called for  redemption  shall not be so paid
upon  surrender  thereof for  redemption,  the principal  (and premium,  if any)
shall,  until paid,  bear interest from the Redemption Date at the rate borne by
the Securities.

                                      -81-

<PAGE>


                  Section 11.8  Securities  Redeemed in Part. Any Security which
is to be redeemed only in part shall be  surrendered  at the office or agency of
the Company  maintained for such purpose  pursuant to Section 10.2 hereof (with,
if the  Company or the Trustee so  requires,  due  endorsement  by, or a written
instrument of transfer in form  satisfactory to the Company and the Trustee duly
executed by, the Holder  thereof or such Holder's  attorney  duly  authorized in
writing),  and the Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Security without service charge, a new Security or
Securities,  of any  authorized  denomination  as requested  by such Holder,  in
aggregate  principal amount equal to and in exchange for the unredeemed  portion
of the principal amount of the Security so surrendered.


                                   ARTICLE XII

                       DEFEASANCE AND COVENANT DEFEASANCE

                  Section 12.1 Company's Option to Effect Defeasance or Covenant
Defeasance.  The Company  may, at its option by Board  Resolution,  at any time,
with  respect to the  Securities,  elect to have either  Section 12.2 or Section
12.3 hereof be applied to all  Outstanding  Securities  upon compliance with the
conditions set forth below in this Article XII.

                  Section 12.2  Defeasance  and  Discharge.  Upon the  Company's
exercise  under  Section  12.1 hereof of the option  applicable  to this Section
12.2, the Company shall be deemed to have been  discharged  from its obligations
with respect to all Outstanding  Securities on the date the conditions set forth
in Section 12.4 hereof are satisfied (hereinafter, "legal defeasance"). For this
purpose,  such  legal  defeasance  means  that the  Company  and the  Subsidiary
Guarantors  shall be deemed  (i) to have paid and  discharged  their  respective
obligations  under  the  Outstanding  Securities;  provided,  however  that  the
Securities  shall  continue  to be deemed to be  "Outstanding"  for  purposes of
Section  12.5  hereof and the other  Sections of this  Indenture  referred to in
clauses  (A)  and  (B)  below,  and  (ii)  to have  satisfied  all  their  other
obligations  under such Securities and this Indenture insofar as such Securities
are  concerned  (and the Trustee,  at the expense of the Company,  shall execute
proper instruments acknowledging the same), except for the following which shall
survive until otherwise  terminated or discharged  hereunder:  (A) the rights of
Holders  of  Outstanding  Securities  to  receive,  solely  from the trust  fund
described  in Section  12.4 hereof and as more fully set forth in such  Section,
payments in respect of the principal of (and  premium,  if any, on) and interest
on such Securities when such payments are due (or at such time as the Securities
would be subject to redemption  at the option of the Company in accordance  with
this  Indenture),  (B)  the  respective  obligations  of  the  Company  and  the
Subsidiary  Guarantors  under Sections 3.3, 3.4, 3.5, 3.6, 3.7, 5.8, 5.14,  6.6,
6.9,  6.10,  10.1,  10.2,  10.3,  10.4,  13.1 (to the  extent it  relates to the
Foregoing  Sections  and  Article XII  hereof),  13.4 and 13.5  hereof,  (C) the
rights, powers, trusts, duties and immunities of the Trustee hereunder,  and (D)
the obligations of the Company and the Subsidiary  Guarantors under this Article
XII.  Subject to compliance  with this Article XII, the Company may exercise its
option under this Section 12.2  notwithstanding the prior exercise of its option
under Section 12.3 hereof with respect to the Securities.

                  Section 12.3 Covenant Defeasance.  Upon the Company's exercise
under Section 12.1 hereof of the option  applicable  to this Section  12.3,  the
Company shall be released from its obligations  under any covenant  contained in
Article  VIII and in Sections  10.6  through  10.19  hereof

                                      -82-

<PAGE>


with respect to the Outstanding  Securities on and after the date the conditions
set forth below are  satisfied  (hereinafter,  "covenant  defeasance"),  and the
Securities shall  thereafter be deemed not to be "Outstanding"  for the purposes
of any  direction,  waiver,  consent or  declaration  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 Outstanding
Securities,  the Company may omit to comply with and shall have no  liability in
respect of any term,  condition or  limitation  set forth in any such  covenant,
whether directly or indirectly,  by reason of any reference  elsewhere herein to
any such  covenant  or by reason of any  reference  in any such  covenant 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  Sections  5.1(c) or
5.1(d) hereof,  but, except as specified  above, the remainder of this Indenture
and such Securities shall be unaffected thereby.

                  Section 12.4 Conditions to Defeasance or Covenant  Defeasance.
The following  shall be the  conditions to application of either Section 12.2 or
Section 12.3 hereof to the Outstanding Securities:

                  (a) The Company or any Subsidiary  Guarantor shall irrevocably
have  deposited or caused to be deposited  with the Trustee (or another  trustee
satisfying the requirements of Section 6.7 hereof who shall agree to comply with
the provisions of this Article XII applicable to it) as trust funds in trust for
the purpose of making the following payments,  specifically  pledged as security
for, and dedicated solely to, the benefit of the Holders of such Securities, (A)
cash in U.S.  Dollars in an amount,  or (B) U.S.  Government  Obligations  which
through the scheduled  payment of principal  and interest in respect  thereof in
accordance with their terms will provide,  not later than one day before the due
date  of  any  payment,  money  in an  amount,  or  (C) a  combination  thereof,
sufficient, in the opinion of a nationally recognized firm of independent public
accountants  expressed  in a  written  certification  thereof  delivered  to the
Trustee,  to pay and  discharge,  and which  shall be applied by the Trustee (or
other qualifying  trustee) to pay and discharge,  the principal of (and premium,
if any, on) and interest on the  Outstanding  Securities on the Stated  Maturity
(or Redemption  Date, if applicable) of such principal (and premium,  if any) or
installment of interest;  provided that the Trustee shall have been  irrevocably
instructed in writing by the Company to apply such money or the proceeds of such
U.S.  Government  Obligations  to said payments with respect to the  Securities.
Before such a deposit,  the Company may give to the Trustee,  in accordance with
Section 11.03 hereof,  a notice of its election to redeem all of the Outstanding
Securities at a future date in accordance  with Article XI hereof,  which notice
shall be irrevocable.  Such irrevocable  redemption  notice, if given,  shall be
given effect in applying  the  foregoing.  For this  purpose,  "U.S.  Government
Obligations"  means  securities  that are (x) direct  obligations  of the United
States of America  for the timely  payment of which its full faith and credit is
pledged or (y) obligations of a Person controlled or supervised by and acting as
an agency or  instrumentality of the United States of America the timely payment
of which is unconditionally  guaranteed as a full faith and credit obligation by
the United  States of  America,  which,  in either  case,  are not  callable  or
redeemable  at the  option  of the  issuer  thereof,  and shall  also  include a
depository  receipt  issued by a bank (as  defined  in  Section  3(a)(2)  of the
Securities Act of 1933, as amended),  as custodian with respect to any such U.S.
Government  Obligation or a specific  payment of principal of or interest on any
such U.S.  Government  Obligation  held by such custodian for the account of the
holder of such  depository  receipt,  provided  that (except as required by law)
such  custodian is not  authorized to make any deduction from the amount payable
to the  holder  of such  depository  receipt  from any  amount  received  by the
custodian in respect of the

                                      -83-

<PAGE>

U.S.  Government  Obligation or the specific payment of principal of or interest
on the U.S. Government Obligation evidenced by such
depository receipt.

                  (b) No  Default  or  Event  of  Default  with  respect  to the
Securities shall have occurred and be continuing on the date of such deposit.

                  (c) Such legal  defeasance  or covenant  defeasance  shall not
cause the Trustee to have a  conflicting  interest  under this  Indenture or the
Trust Indenture Act with respect to any securities of the Company.

                  (d) Such legal  defeasance  or covenant  defeasance  shall not
result in a breach or  violation  of, or  constitute  a default  under any other
material  agreement  or  instrument  to  which  the  Company  or any  Subsidiary
Guarantor is a party or by which it is bound,  as evidenced to the Trustee in an
Officer's Certificate delivered to the Trustee concurrently with such deposit.

                  (e) In the case of an election under Section 12.2 hereof,  the
Company shall have  delivered to the Trustee an Opinion of Counsel  stating that
(i) the Company has received  from, or there has been published by, the Internal
Revenue  Service a ruling,  or (ii) since the date of this  Indenture  there has
been a change  in the  applicable  Federal  income  tax  laws;  in  either  case
providing  that the Holders of the  Outstanding  Securities  will not  recognize
income,  gain or loss for federal  income tax purposes as a result of such legal
defeasance and will be subject to federal income tax on the same amounts, in the
same  manner  and at the same  times as would  have been the case if such  legal
defeasance  had not  occurred  (it being  understood  that (x) such  Opinion  of
Counsel shall also state that such ruling or applicable  law is consistent  with
the conclusions  reached in such Opinion of Counsel and (y) the Trustee shall be
under no obligation to investigate the basis of correctness of such ruling).

                  (f) In the case of an election under Section 12.3 hereof,  the
Company shall have  delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of the Outstanding  Securities will not recognize income,  gain
or loss for federal income tax purposes as a result of such covenant  defeasance
and will be  subject  to federal  income  tax on the same  amounts,  in the same
manner  and at the  same  times  as would  have  been the case if such  covenant
defeasance had not occurred.

                  (g)  The  Company  shall  have  delivered  to the  Trustee  an
Officers'  Certificate  and  an  Opinion  of  Counsel,  each  stating  that  all
conditions  precedent provided for relating to either the legal defeasance under
Section 12.2 hereof or the covenant  defeasance  under Section 12.3 (as the case
may be) have been complied with.

                  Section 12.5 Deposited Money and U.S.  Government  Obligations
to Be Held in Trust; Other Miscellaneous  Provisions.  Subject to the provisions
of the last  paragraph  of Section 10.3  hereof,  all money and U.S.  Government
Obligations  (including  the proceeds  thereof)  deposited  with the Trustee (or
other  qualifying  trustee--collectively  for purposes of this Section 12.5, the
"Trustee")  pursuant  to  Section  12.4  hereof in  respect  of the  Outstanding
Securities shall be held in trust and applied by the Trustee, in accordance with
the provisions of such  Securities and this  Indenture,  to the payment,  either
directly or through any Paying Agent  (including  the Company  acting as its own
Paying Agent) as the Trustee may determine, to the Holders of such Securities of

                                      -84-

<PAGE>

all sums due and to become due thereon in respect of principal (and premium,  if
any) and interest, but such money need not be segregated from other funds except
to the extent required by law.

                  The Company shall pay and  indemnify  the Trustee  against any
tax, fee or other charge  imposed on or assessed  against the U.S.  Governmental
Obligations  deposited  pursuant  to Section  12.4 hereof or the  principal  and
interest  received  in respect  thereof  other  than any such tax,  fee or other
charge  which  by law is for  the  account  of the  Holders  of the  Outstanding
Securities.

                  Anything in this Article XII to the contrary  notwithstanding,
the Trustee  shall  deliver or pay to the Company from time to time upon Company
Request  any money or U.S.  Government  Obligations  held by it as  provided  in
Section 12.4 hereof  which,  in the opinion of a nationally  recognized  firm of
independent  public  accountants  expressed in a written  certification  thereof
delivered to the Trustee,  are in excess of the amount  thereof which would then
be required to be deposited to effect an equivalent legal defeasance or covenant
defeasance, as applicable, in accordance with this Article.

                  Section 12.6 Reinstatement. If the Trustee or any Paying Agent
is unable to apply any money in accordance with Section 12.5 hereof by reason of
any  order  or  judgment  of any  court  or  governmental  authority  enjoining,
restraining or otherwise  prohibiting such  application,  then the Company's and
the Subsidiary  Guarantors'  obligations under this Indenture and the Securities
shall be revived and  reinstated  as though no deposit had occurred  pursuant to
Section 12.2 or 12.3 hereof,  as the case may be, until such time as the Trustee
or Paying Agent is permitted to apply all such money in accordance  with Section
12.5 hereof; provided,  however, that if the Company or any Subsidiary Guarantor
makes any payment of principal  of (or  premium,  if any, on) or interest on any
Security  following the  reinstatement of its  obligations,  the Company or such
Subsidiary  Guarantor  shall be  subrogated to the rights of the Holders of such
Securities  to receive such payment from the money held by the Trustee or Paying
Agent.

                                  ARTICLE XIII

                                   GUARANTEES

                  Section  13.1   Unconditional   Guarantee.   Each   Subsidiary
Guarantor hereby unconditionally,  jointly and severally,  guarantees (each such
guarantee to be referred to herein as a  "Subsidiary  Guarantee",  with all such
guarantees  being  referred to herein as the  "Subsidiary  Guarantees")  to each
Holder of  Securities  authenticated  and  delivered  by the  Trustee and to the
Trustee and its successors and assigns,  the full and prompt  performance of the
Company's obligations under this Indenture and the Securities and that:

                  (a) the principal of (premium, if any, on) and interest on the
Securities  will be  promptly  paid in full when due,  whether at  maturity,  by
acceleration,  redemption or otherwise, and interest on the overdue principal of
and  interest on the  Securities,  if any, to the extent  lawful,  and all other
obligations of the Company to the Holders or the Trustee hereunder or thereunder
will be promptly  paid in full or performed,  all in  accordance  with the terms
hereof and thereof; and

                                      -85-

<PAGE>




                  (b) in case of any  extension of time of payment or renewal of
any Securities or of any such other obligations,  the same will be promptly paid
in full when due or performed in  accordance  with the terms of the extension or
renewal, whether at Stated Maturity, by acceleration or otherwise;

subject,  however,  in the case of clauses (a) and (b) above, to the limitations
set forth in Section 13.4
hereof.

                  Failing  payment when due of any amount so  guaranteed  or any
performance so guaranteed for whatever reason, the Subsidiary Guarantors will be
jointly and severally  obligated to pay the same  immediately.  Each  Subsidiary
Guarantor hereby agrees that its obligations  hereunder shall be  unconditional,
irrespective of the validity,  regularity or enforceability of the Securities or
this  Indenture,  the absence of any action to enforce  the same,  any waiver or
consent by any Holder of the Securities with respect to any provisions hereof or
thereof, the recovery of any judgment against the Company, any action to enforce
the same or any other circumstance  which might otherwise  constitute a legal or
equitable discharge or defense of a guarantor.  Each Subsidiary Guarantor hereby
waives diligence,  presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company,  any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenants  that its Subsidiary  Guarantee  will not be discharged  except by
complete  performance  of the  obligations  contained  in the  Securities,  this
Indenture  and in this  Subsidiary  Guarantee.  If any Holder or the  Trustee is
required by any court or  otherwise  to return to the  Company,  any  Subsidiary
Guarantor,  or any  custodian,  trustee,  liquidator or other  similar  official
acting in relation to the Company or any Subsidiary  Guarantor,  any amount paid
by the Company or any Subsidiary  Guarantor to the Trustee or such Holder,  this
Subsidiary Guarantee, to the extent theretofore discharged,  shall be reinstated
in full  force and  effect.  Each  Subsidiary  Guarantor  agrees it shall not be
entitled  to any right of  subrogation  in relation to the Holders in respect of
any  obligations  guaranteed  hereby  until  payment in full of all  obligations
guaranteed  hereby.  Each Subsidiary  Guarantor  further agrees that, as between
each Subsidiary Guarantor,  on the one hand, and the Holders and the Trustee, on
the other hand,  (x) the maturity of the  obligations  guaranteed  hereby may be
accelerated as provided in Article V hereof for the purposes of this  Subsidiary
Guarantee,  notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations  guaranteed  hereby,  and (y) in
the event of any  acceleration  of such  obligations  as  provided  in Article V
hereof, such obligations (whether or not due and payable) shall forthwith become
due and payable by each Subsidiary  Guarantor for the purpose of this Subsidiary
Guarantee.

                  Section 13.2 Subsidiary  Guarantors May Consolidate,  etc., on
Certain Terms.

                  (a) Except as set forth in Articles VIII and X hereof, nothing
contained  in this  Indenture  or in any of the  Securities  shall  prevent  any
consolidation  or merger of a Subsidiary  Guarantor  with or into the Company or
another  Subsidiary  Guarantor or shall  prevent any sale or  conveyance  of the
assets of a Subsidiary Guarantor as an entirety or substantially as an entirety,
to the Company or another Subsidiary Guarantor.

                  (b) Except as set forth in Articles VIII and X hereof, nothing
contained  in this  Indenture  or in any of the  Securities  shall  prevent  any
consolidation or merger of a Subsidiary 

                                      -86-

<PAGE>


Guarantor with or into a corporation or corporations other than the Company or a
Subsidiary Guarantor (whether or not affiliated with the Subsidiary  Guarantor),
or successive  consolidations or mergers in which a Subsidiary  Guarantor or its
successor or successors  shall be a party or parties,  or shall prevent any sale
or  conveyance  of the  Properties  of a Subsidiary  Guarantor as an entirety or
substantially as an entirety, to a corporation other than the Company or another
Subsidiary  Guarantor (whether or not Affiliated with the Subsidiary  Guarantor)
authorized to acquire and operate the same; provided,  however, that, subject to
Sections 13.2(a) and 13.3 hereof,  (i) immediately after such  transaction,  and
giving effect  thereto,  no Default or Event of Default shall have occurred as a
result of such transaction and be continuing,  (ii) such  transaction  shall not
violate any of the covenants in Sections  10.1 through  10.19 hereof,  and (iii)
each  Subsidiary  Guarantor  hereby  covenants  and agrees  that,  upon any such
consolidation,   merger,  sale  or  conveyance,   such  Subsidiary   Guarantor's
Subsidiary  Guarantee  set forth in this  Article  XIII and in a notation to the
Securities,  and the due and punctual  performance  and observance of all of the
covenants and  conditions of this  Indenture to be performed by such  Subsidiary
Guarantor,  shall  be  expressly  assumed  (in the  event  that  the  Subsidiary
Guarantor  is not the  surviving  corporation  in the merger),  by  supplemental
indenture  satisfactory  in form to the Trustee,  executed and  delivered to the
Trustee,  by such corporation  formed by such  consolidation,  or into which the
Subsidiary  Guarantor shall have merged,  or by the corporation  that shall have
acquired  such Property  (except to the extent the following  Section 13.3 would
result in the release of such Subsidiary  Guarantee in which case such surviving
corporation does not have to execute any such  supplemental  indenture).  In the
case  of any  such  consolidation,  merger,  sale or  conveyance  and  upon  the
assumption by the successor corporation,  by supplemental indenture executed and
delivered to the Trustee and  satisfactory in form to the Trustee of the due and
punctual performance of all of the covenants and conditions of this Indenture to
be performed by the  Subsidiary  Guarantor,  such  successor  corporation  shall
succeed to and be substituted for the Subsidiary  Guarantor with the same effect
as if it had been named herein as a Subsidiary Guarantor.

                  Section 13.3 Release of a Subsidiary Guarantor.  Upon the sale
or  disposition  (by merger or otherwise)  of a Subsidiary  Guarantor (or all or
substantially  all of its  Properties)  to a Person  other  than the  Company or
another Subsidiary  Guarantor and pursuant to a transaction that is otherwise in
compliance  with the terms of this  Indenture,  including but not limited to the
provisions of Section 13.2 hereof,  such  Subsidiary  Guarantor  shall be deemed
released from all of its  Subsidiary  Guarantee and related  obligations in this
Indenture;  provided, however, that any such termination shall occur only to the
extent  that all  obligations  of such  Subsidiary  Guarantor  under  all of its
Guarantees  of,  and  under  all of its  pledges  of  assets  or other  security
interests  which secure,  other  Indebtedness  of the Company or any  Restricted
Subsidiary  shall  also  terminate  upon  such sale or other  disposition.  Each
Subsidiary  Guarantor  that  is  designated  as an  Unrestricted  Subsidiary  in
accordance  with the provisions of this Indenture  shall be released from all of
its Subsidiary Guarantee and related obligations set forth in this Indenture for
so long as it remains an Unrestricted  Subsidiary.  The Trustee shall deliver an
appropriate instrument evidencing such release upon receipt of a Company Request
accompanied  by an Officers'  Certificate  and an Opinion of Counsel  certifying
that such sale or other  disposition  was made by the Company in accordance with
the  provisions  of this  Indenture.  Any  Subsidiary  Guarantor not so released
remains liable for the full amount of principal of (and premium, if any, on) and
interest on the Securities as provided in this Article XIII.

                  Section 13.4 Limitation of Subsidiary  Guarantor's  Liability.
Each  Subsidiary  Guarantor,  and by its acceptance  hereof each Holder,  hereby
confirms that it is the intention of all such parties that the Guarantee by such
Subsidiary  Guarantor  pursuant to its  Subsidiary  Guarantee  not  constitute a
fraudulent  transfer or conveyance  for purposes of any federal or state law. To

                                      -87-

<PAGE>


effectuate the foregoing  intention,  the Holders and each Subsidiary  Guarantor
hereby irrevocably agree that the obligations of each Subsidiary Guarantor under
its Subsidiary  Guarantee shall be limited to the maximum amount as will,  after
giving effect to all other contingent and fixed liabilities (including,  but not
limited to,  Guarantor  Senior  Indebtedness)  of such Subsidiary  Guarantor and
after giving effect to any collections  from or payments made by or on behalf of
any other  Subsidiary  Guarantor  in  respect of the  obligations  of such other
Subsidiary  Guarantor under its Subsidiary Guarantee or pursuant to Section 13.5
hereof,  result  in the  obligations  of such  Subsidiary  Guarantor  under  its
Subsidiary  Guarantee  not  constituting  a fraudulent  conveyance or fraudulent
transfer under federal or state law. This Section 13.4 is for the benefit of the
creditors of each Subsidiary Guarantor.

                  Section  13.5  Contribution.  In order to provide for just and
equitable   contribution  among  the  Subsidiary   Guarantors,   the  Subsidiary
Guarantors  agree,  inter se, that in the event any payment or  distribution  is
made by any Subsidiary  Guarantor (a "Funding  Guarantor")  under its Subsidiary
Guarantee,  such Funding Guarantor shall be entitled to a contribution from each
other  Subsidiary  Guarantor (if any) in a pro rata amount based on the Adjusted
Net Assets of each Subsidiary  Guarantor  (including the Funding  Guarantor) for
all  payments,  damages and  expenses  incurred  by that  Funding  Guarantor  in
discharging  the  Company's  obligations  with respect to the  Securities or any
other  Subsidiary  Guarantor's   obligations  with  respect  to  its  Subsidiary
Guarantee.

                  Section 13.6  Execution and Delivery of Notation of Subsidiary
Guarantee.  To  evidence  its  Subsidiary  Guarantee  set forth in Section  13.1
hereof,  each  Subsidiary  Guarantor  hereby  agrees to execute the  notation of
Subsidiary  Guarantee in substantially  the form set forth in Section 2.4 hereof
to be endorsed on each Security ordered to be authenticated and delivered by the
Trustee,  and each  Subsidiary  Guarantor  agrees that this  Indenture  shall be
executed on behalf of each  Subsidiary  Guarantor by its President or one of its
Vice  Presidents  and  attested  to by  one  of  its  Secretaries  or  Assistant
Secretaries.  Each  Subsidiary  Guarantor  hereby  agrees  that  its  Subsidiary
Guarantee set forth in Section 13.1 hereof shall remain in full force and effect
notwithstanding  any  failure  to endorse  on each  Security a notation  of such
Subsidiary Guarantee. Each such notation of Subsidiary Guarantee shall be signed
on behalf of each  Subsidiary  Guarantor by two  Officers,  or an Officer and an
Assistant  Secretary  or one Officer  shall sign and one Officer or an Assistant
Secretary  (each of whom shall,  in each case,  have been duly authorized by all
requisite  corporate  actions)  shall  attest  to such  notation  of  Subsidiary
Guarantee prior to the  authentication  of the Security on which it is endorsed,
and the  delivery of such  Security  by the  Trustee,  after the  authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee set
forth in this Indenture on behalf of the Subsidiary Guarantors.  Such signatures
upon  the  notation  of  Subsidiary  Guarantee  may be by  manual  or  facsimile
signature of such  officers and may be imprinted or otherwise  reproduced on the
Subsidiary  Guarantee,  and in case any such  officer  who shall have signed the
notation  of  Subsidiary  Guarantee  shall cease to be such  officer  before the
Security on which such notation of Subsidiary  Guarantee is endorsed  shall have
been  authenticated  and delivered by the Trustee or disposed of by the Company,
such Security  nevertheless may be authenticated and delivered or disposed of as
though the person who signed the notation of Subsidiary Guarantee had not ceased
to be such officer of the Subsidiary Guarantor.

                                      -88-

<PAGE>


                  Section  13.7  Severability.  In case  any  provision  of this
Subsidiary Guarantee shall be invalid, illegal or unenforceable, that portion of
such provision  that is not invalid,  illegal or  unenforceable  shall remain in
effect,  and  the  validity,  legality,  and  enforceability  of  the  remaining
provisions shall not in any way be affected or impaired thereby.

                  Section 13.8 Subsidiary  Guarantees  Subordinated to Guarantor
Senior  Indebtedness.  Each Subsidiary  Guarantor covenants and agrees, and each
Holder of a Security, by his acceptance of the Subsidiary  Guarantees,  likewise
covenants  and agrees,  for the benefit of the  holders,  from time to time,  of
Guarantor Senior Indebtedness, that the payments by such Subsidiary Guarantor in
respect of its  Subsidiary  Guarantee are  subordinated  and subject in right of
payment,  to the extent and in the manner  provided in this Article XIII, to the
prior payment in full of all Guarantor  Senior  Indebtedness  of such Subsidiary
Guarantor,  whether  outstanding  on the date of this  Indenture  or  thereafter
created, incurred, assumed or guaranteed; provided, however, that the Subsidiary
Guarantee of such Subsidiary Guarantor, the Indebtedness represented thereby and
the payment of the  principal of (and  premium,  if any, on) and the interest on
the Securities pursuant to such Subsidiary  Guarantee in all respects shall rank
pari passu with,  or prior to, all  existing and future  unsecured  indebtedness
(including, without limitation,  Indebtedness) of such Subsidiary Guarantor that
is subordinated to its Guarantor Senior Indebtedness.

                  This Article XIII shall  constitute a continuing  offer to all
Persons who, in reliance upon such provisions, become holders of, or continue to
hold,  Guarantor  Senior  Indebtedness,  and  such  provisions  are made for the
benefit of the holders of Guarantor  Senior  Indebtedness,  and such holders are
made obligees hereunder and any of them may enforce such provisions.

                  Section 13.9  Subsidiary  Guarantors Not to Make Payments with
Respect to Subsidiary Guarantees in Certain Circumstances.

                  (a)  No  payment  or  distribution  of  any  Property  of  any
Subsidiary  Guarantor of any kind or character  (other than Permitted  Guarantor
Junior  Securities) may be made by such  Subsidiary  Guarantor in respect of its
Subsidiary Guarantee upon the happening of any default in respect of the payment
or required prepayment of any of its Guarantor Senior Indebtedness when the same
becomes due and payable (a "Subsidiary  Guarantor Payment Default"),  unless and
until such Subsidiary  Guarantor Payment Default shall have been cured or waived
in writing or shall have ceased to exist or such Guarantor  Senior  Indebtedness
shall  have  been  paid  in full  or  otherwise  discharged,  after  which  such
Subsidiary  Guarantor  shall  resume  making any and all  required  payments  in
respect of its Subsidiary Guarantee, including any missed payments.

                  (b) Upon the  happening  of any event (other than a Subsidiary
Guarantor  Payment Default) the occurrence of which entitles one or more Persons
to accelerate the maturity of any Designated  Guarantor  Senior  Indebtedness (a
"Subsidiary  Guarantor  Non-payment  Default"),  and  receipt by the  applicable
Subsidiary  Guarantor and a Responsible Officer of the Trustee, on behalf of the
Trustee,  of  written  notice  thereof  from one or more of the  holders of such
Designated  Guarantor Senior Indebtedness or their representative (a "Subsidiary
Guarantor  Payment Notice"),  then,  unless and until such Subsidiary  Guarantor
Non-payment  Default  shall  have been  cured or waived in writing or shall have
ceased to exist or such Designated Guarantor Senior Indebtedness is paid in full
or otherwise  discharged or the holders (or a representative  of the holders) of
such Designated  Guarantor Senior  Indebtedness give their written approval,  no
payment or distribution

                                      -89-

<PAGE>


shall  be  made  by such  Subsidiary  Guarantor  in  respect  of its  Subsidiary
Guarantee (other than Permitted Guarantor Junior Securities); provided, however,
that these  provisions  will not prevent the making of any payment for more than
179 days after a Subsidiary Guarantor Payment Notice shall have been given after
which, subject to Section 13.9(a),  such Subsidiary Guarantor will resume making
any and all required payments in respect of its Subsidiary Guarantee,  including
any missed payments. Notwithstanding any other provision of this Indenture, only
one  Subsidiary  Guarantor  Payment  Notice  shall be given with  respect to any
Subsidiary  Guarantee  within any 360  consecutive  day  period.  No  Subsidiary
Guarantor  Non-payment  Default  with  respect to  Designated  Guarantor  Senior
Indebtedness  that  existed  or was  continuing  on the  date of any  Subsidiary
Guarantor  Payment  Notice  with  respect  to the  Designated  Guarantor  Senior
Indebtedness  initiating such Subsidiary  Guarantor  Payment Notice shall be, or
can be, made the basis for the commencement of a subsequent Subsidiary Guarantor
Payment Notice with respect to such Subsidiary Guarantee,  whether or not within
a period of 360 consecutive  days,  unless such default shall have been cured or
waived for a period of not less than 90 consecutive days (it being  acknowledged
that any subsequent action, or any breach of any financial covenant for a period
commencing after the date of commencement of such Subsidiary  Guarantor  Payment
Notice,  that,  in  either  case,  would  give  rise to a  Subsidiary  Guarantor
Non-payment Default pursuant to any provision under which a Subsidiary Guarantor
Non-payment  Default previously existed or was continuing shall constitute a new
Subsidiary Guarantor Non-payment Default for this purpose; provided that, in the
case of a breach of a particular  financial covenant,  such Subsidiary Guarantor
shall have been in compliance  for at least one full 90  consecutive  day period
commencing after the date of commencement of such Subsidiary  Guarantor  Payment
Notice).  In no event shall a Subsidiary  Guarantor Payment Notice extend beyond
179 days from the date of its  receipt and there must be a 181  consecutive  day
period in any 360  consecutive  day period during which no Subsidiary  Guarantor
Payment Notice is in effect with respect to such Subsidiary Guarantee.

                  (c)  In the  event  that,  notwithstanding  the  foregoing,  a
Subsidiary  Guarantor  shall  make any  payment  in  respect  of its  Subsidiary
Guarantee  to the  Trustee  or the  Holder  of any  Security  prohibited  by the
foregoing  provisions of this Section 13.9,  then and in such event such payment
shall be paid over and delivered  forthwith to the Company.  In the event that a
Subsidiary  Guarantor  shall  make any  payment  in  respect  of its  Subsidiary
Guarantee to the Trustee and a Responsible  Officer of the Trustee, on behalf of
the Trustee,  shall receive  written  notice of a Subsidiary  Guarantor  Payment
Default or a Subsidiary  Guarantor  Non-payment  Default from one or more of the
Holders of Guarantor  Senior  Indebtedness  (or their  representative)  prior to
making any payment to Holders in respect of the  Subsidiary  Guarantee and prior
to 11:00 a.m.  Eastern Time on the date which is two Business  Days prior to the
date  upon  which by the terms  hereof  any money  may  become  payable  for any
purpose, such payments shall be paid over by the Trustee and delivered forthwith
to the Company.  Each  Subsidiary  Guarantor shall give prompt written notice to
the Trustee of any default under any of its  Guarantor  Senior  Indebtedness  or
under any agreement pursuant to which its Guarantor Senior Indebtedness may have
been issued.

                  Section  13.10  Subsidiary  Guarantees  Subordinated  to Prior
Payment of All Guarantor Senior  Indebtedness  upon  Dissolution,  etc. Upon any
distribution of Properties of any Subsidiary Guarantor or payment on behalf of a
Subsidiary  Guarantor in the event of any Insolvency or  Liquidation  Proceeding
with respect to such Subsidiary Guarantor:

                                      -90-

<PAGE>


                  (a) the  holders  of  such  Subsidiary  Guarantor's  Guarantor
Senior  Indebtedness  shall  be  entitled  to  receive  payment  in full of such
Guarantor  Senior  Indebtedness,  or  provision  must be made for such  payment,
before the  Holders are  entitled  to receive any direct or indirect  payment or
distribution of any kind or character,  whether in cash,  property or securities
(other than Permitted Guarantor Junior Securities), on account of any payment in
respect of such Subsidiary Guarantor's Subsidiary Guarantee;

                  (b)  any  direct  or  indirect   payment  or  distribution  of
Properties of such  Subsidiary  Guarantor of any kind or  character,  whether in
cash,  property or securities  (other than a payment or distribution in the form
of Permitted Guarantor Junior Securities), by set-off or otherwise, to which the
Holders or the Trustee,  on behalf of the Holders,  would be entitled except for
the provisions of this Article XIII,  shall be paid by the Subsidiary  Guarantor
or by any  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 such Guarantor Senior  Indebtedness or
their  representative or representatives or to the trustee or trustees under any
indenture  under which any instruments  evidencing any of such Senior  Guarantor
Indebtedness may have been issued,  ratably  according to the aggregate  amounts
remaining  unpaid on  account  of such  Guarantor  Senior  Indebtedness  held or
represented by each, to the extent necessary to make payment in full of all such
Guarantor Senior Indebtedness,  after giving effect to any concurrent payment or
distribution to the holders of such Guarantor Senior Indebtedness; and

                  (c)  in  the  event  that,   notwithstanding   the   foregoing
provisions of this Section 13.10, any direct or indirect payment or distribution
of Properties of such Subsidiary Guarantor of any kind or character,  whether in
cash,  property or securities  (other than a payment or distribution in the form
of Permitted Guarantor Junior  Securities),  shall be received by the Trustee or
the Holders before all such  Guarantor  Senior  Indebtedness  is paid in full or
otherwise  discharged,  such Properties  shall be received and held in trust for
and shall be paid over to the  holders  of such  Guarantor  Senior  Indebtedness
remaining  unpaid or their  representatives,  for  application to the payment of
such Guarantor Senior  Indebtedness until all such Guarantor Senior Indebtedness
shall  have  been  paid or  provided  for in full,  after  giving  effect to any
concurrent  payment or  distribution  to the  holders of such  Guarantor  Senior
Indebtedness.

                  The  Company  or a  Subsidiary  Guarantor  shall  give  prompt
written  notice  to a  Responsible  Officer  of the  Trustee,  on  behalf of the
Trustee,  of the  occurrence of any Insolvency or  Liquidation  Proceeding  with
respect to such Subsidiary Guarantor.

                  Section 13.11 Holders to be Subrogated to Rights of Holders of
Guarantor Senior Indebtedness. After the payment in full of all Guarantor Senior
Indebtedness of a Subsidiary Guarantor, the Holders shall be subrogated (equally
and  ratably  with the  holders  of all other  Indebtedness  of such  Subsidiary
Guarantor which by its express terms is  subordinated  to such Guarantor  Senior
Indebtedness to substantially the same extent as such Subsidiary Guarantee is so
subordinated  and which is entitled to like rights of subrogation as a result of
payments  made to the  holders of such  Guarantor  Senior  Indebtedness)  to the
rights of the holders of such Guarantor Senior  Indebtedness to receive payments
or distributions of cash,  property and securities of such Subsidiary  Guarantor
applicable to such Guarantor Senior  Indebtedness until all amounts owing on the
Securities  shall be paid in full,  and for the purpose of such  subrogation  no
payments or distributions  to the holders of such Guarantor Senior  Indebtedness
by or on behalf of such  Subsidiary  Guarantor

                                      -91-

<PAGE>

or by or on behalf of the Holders by virtue of this Article XIII which otherwise
would have been made to the Holders shall, as between such Subsidiary Guarantor,
its creditors other than the holders of Guarantor Senior  Indebtedness,  and the
Holders of the  Securities,  be deemed to be a payment or  distribution  by such
Subsidiary Guarantor to or on account of such Guarantor Senior Indebtedness,  it
being understood that the subordination provisions of this Article XIII are, and
are intended  solely for,  the purpose of defining  the  relative  rights of the
Holders, on the one hand, and the holders of Guarantor Senior  Indebtedness,  on
the other hand.

                  Section  13.12   Obligations  of  the  Subsidiary   Guarantors
Unconditional.  Nothing  contained  in this  Article  XIII or  elsewhere in this
Indenture  or in any  Security  is  intended  to or  shall  impair,  as  between
Subsidiary  Guarantors  and  the  Holders,  the  obligation  of  the  Subsidiary
Guarantors  under the Subsidiary  Guarantees,  or is intended to or shall affect
the relative  rights of the Holders and creditors of the Subsidiary  Guarantors,
nor shall  anything  herein or therein  prevent  the  Trustee or any Holder from
exercising all remedies otherwise permitted by applicable law upon Default under
this  Indenture  subject to the rights,  if any,  under this Article XIII of the
holders  of  Guarantor  Senior  Indebtedness  in respect  of cash,  property  or
securities of any  Subsidiary  Guarantor  received upon the exercise of any such
remedy.  Upon any distribution of Properties of a Subsidiary  Guarantor referred
to in this Article XIII,  the Trustee,  subject to the provisions of Section 6.2
hereof,  and the  Holders of the  Securities  shall be entitled to rely upon any
order or  decree  made by any  court of  competent  jurisdiction  in which  such
dissolution,  winding up, liquidation or reorganization proceedings are pending,
or a certificate  of a trustee in  bankruptcy,  receiver,  liquidating  trustee,
custodian,  assignee  for the  benefit of  creditors,  or agent or other  person
making any distribution to the Trustee or to the Holders of the Securities,  for
the  purpose  of  ascertaining  the  persons  entitled  to  participate  in such
distribution, the holders of the related Guarantor Senior Indebtedness and other
indebtedness  of such  Subsidiary  Guarantor,  the  amount  thereof  or  payable
thereon,  the amount or amounts paid or distributed  thereon and all other facts
pertinent thereto or to this Article XIII.

                  Section  13.13  Trustee   Entitled  to  Assume   Payments  Not
Prohibited  in Absence of Notice.  The Trustee  shall not at any time be charged
with  knowledge of the existence of any facts that would  prohibit the making of
any payment to or by the Trustee,  unless a Responsible  Officer of the Trustee,
on behalf of the  Trustee,  shall have  received at the  Corporate  Trust Office
written notice  thereof from a Subsidiary  Guarantor or from one or more holders
of Guarantor Senior Indebtedness or Designated Guarantor Senior Indebtedness, in
the  case  of  a  Subsidiary   Guarantor   Non-payment   Default,  or  from  any
representative  thereof;  and, prior to the receipt of any such written  notice,
the Trustee, subject to TIA Sections 315(a) through 315(d), shall be entitled to
assume  conclusively  that no such facts exist. The Trustee shall be entitled to
rely on the delivery to it of a written notice by a Person representing  himself
to be a holder of Guarantor Senior  Indebtedness or Designated  Guarantor Senior
Indebtedness,  in the case of a Subsidiary  Guarantor  Non-payment Default (or a
representative on behalf of such holder), to establish that such notice has been
given by a holder of  Guarantor  Senior  Indebtedness  or  Designated  Guarantor
Senior Indebtedness,  in the case of a Subsidiary Guarantor Non-payment Default,
or a representative on behalf of any such holder or holders.

                                      -92-

<PAGE>


                  Section 13.14  Application by Trustee of Money  Deposited with
it.  Except as provided  in Article  XIV,  any deposit of money by a  Subsidiary
Guarantor with the Trustee or any Paying Agent (whether or not in trust) for any
payment in respect of the related  Subsidiary  Guarantee shall be subject to the
provisions of Sections 13.8,  13.9, 13.10 and 13.11 hereof except that, if prior
to 11:00 a.m.  Eastern time on the date which is two Business  Days prior to the
date on which by the terms of this  Indenture any such money may become  payable
for any purpose, the Trustee or, in the case of any such deposit of money with a
Paying  Agent,  the Paying  Agent shall not have  received  with respect to such
money the notice provided for in Section 13.13 hereof,  then the Trustee or such
Paying Agent, as the case may be, shall have full power and authority to receive
such money and to apply the same to the purpose for which it was  received,  and
shall not be affected by any notice to the contrary  which may be received by it
on or after 11:00 a.m.,  Eastern  time,  two Business Days prior to such payment
date.  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
Guarantor  Senior  Indebtedness  to participate  in any payment or  distribution
pursuant to this  Article  XIII,  the Trustee may request such Person to furnish
evidence  to the  reasonable  satisfaction  of the  Trustee  as to the amount of
Guarantor  Senior  Indebtedness  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  XIII,  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.

                  The Trustee, however, shall not be deemed to owe any fiduciary
duty to the holders of Guarantor  Senior  Indebtedness  but shall have only such
obligations to such holders as are expressly set forth in this Article XIII.

                  Section  13.15  Subordination  Rights Not  Impaired by Acts or
Omissions of Subsidiary  Guarantors or Holders of Guarantor Senior Indebtedness.
No right of any present or future holders of any Guarantor  Senior  Indebtedness
of a Subsidiary  Guarantor to enforce  subordination as provided herein shall at
any time in any way be  prejudiced  or  impaired by any act or failure to act on
the part of such  Subsidiary  Guarantor  or by any act or  failure to act by any
such holder, or by any noncompliance by such Subsidiary Guarantor with the terms
of this Indenture, regardless of any knowledge thereof which any such holder may
have or be otherwise charged with.

                  Without in any way limiting the  generality  of the  preceding
paragraph of this Section,  the holders of Guarantor Senior Indebtedness may, at
any time and from time to time,  without the consent of or notice to the Trustee
or the  Holders  of the  Securities,  without  incurring  responsibility  to the
Holders of the Securities and without  impairing or releasing the  subordination
or other benefits provided in this Article, or the obligations  hereunder of the
Holders of the Securities to the holders of Guarantor  Senior  Indebtedness,  do
any one or more of the  following:  (1)  change  the  manner,  place or terms of
payment or extend the time of payment of, or renew, exchange, amend, increase or
alter,  Guarantor Senior  Indebtedness or the term of any instrument  evidencing
the  same  or  any  agreement  under  which  Guarantor  Senior  Indebtedness  is
outstanding  or any  liability  of any  obligor  thereon  (unless  such  change,
extension or alteration  results in such  Indebtedness no longer being Guarantor
Senior Indebtedness as defined in this Indenture);  (2) sell, exchange,  release
or otherwise  deal with any Property  pledged,  mortgaged or otherwise  securing
Guarantor  Senior  Indebtedness;  (3) settle or compromise any Guarantor  Senior
Indebtedness  or any  liability  of any  obligor  thereon

                                      -93-

<PAGE>


or release  any Person  liable in any manner  for the  collection  of  Guarantor
Senior  Indebtedness;  and (4)  exercise or refrain from  exercising  any rights
against the Company and any other Person.

                  Section   13.16  Holders   Authorize   Trustee  to  Effectuate
Subordination of Subsidiary Guarantees.  Each Holder, by his acceptance thereof,
authorizes  and expressly  directs the Trustee on his behalf to take such action
as may be necessary or appropriate to effectuate the  subordination  provided in
this  Article XIII and  appoints  the Trustee as his  attorney-in-fact  for such
purpose,  including,  in the event of any Insolvency or  Liquidation  Proceeding
with respect to any Subsidiary  Guarantor,  the immediate  filing of a claim for
the  unpaid  balance  of  his  Securities  pursuant  to the  related  Subsidiary
Guarantee in the form required in said proceedings and the causing of said claim
to be approved.

                  Section  13.17  Right  of  Trustee  to Hold  Guarantor  Senior
Indebtedness.  The  Trustee  shall be entitled to all of the rights set forth in
this Article XIII in respect of any Guarantor  Senior  Indebtedness  at any time
held  by it to  the  same  extent  as  any  other  holder  of  Guarantor  Senior
Indebtedness,  and nothing in this  Indenture  shall be construed to deprive the
Trustee of any of its rights as such holder.

                  Section 13.18  Article XIII Not to Prevent  Events of Default.
The failure to make a payment on account of the Subsidiary  Guarantees by reason
of any provision in this Article XIII shall not be construed as  preventing  the
occurrence of an Event of Default under this Indenture.

                  Section  13.19  Payment.  For purposes of this Article XIII, a
payment with respect to any Subsidiary Guarantee or with respect to principal of
or interest on any Security or any Subsidiary  Guarantee shall include,  without
limitation, payment of principal of and interest on any Security, any depositing
of funds under  Article IV hereof,  any payment on account of any  repurchase or
redemption of any Security and any payment or recovery on any claim (whether for
rescission or damages and whether based on contract,  tort, duty imposed by law,
or any other theory of liability)  relating to or arising out of the offer, sale
or purchase of any Security.


                                   ARTICLE XIV

                           SUBORDINATION OF SECURITIES

                  Section 14.1  Securities  Subordinate to Senior  Indebtedness.
The  Company  covenants  and  agrees,  and each  Holder  of a  Security,  by his
acceptance  thereof,  likewise  covenants  and  agrees  for the  benefit  of the
holders,  from time to time, of Senior Indebtedness,  that, to the extent and in
the  manner  hereinafter  set  forth  in  this  Article  XIV,  the  Indebtedness
represented by the Securities  and the payment of and  distributions  of or with
respect to the Senior  Subordinated  Note  Obligations are hereby expressly made
subordinate  and subject in right of payment as provided in this  Article to the
prior payment in full in cash or cash  equivalents of all amounts  payable under
all existing and future Senior Indebtedness.

                  This Article XIV shall  constitute  a continuing  offer to all
persons who, in reliance upon such provisions, become holders of, or continue to
hold Senior  Indebtedness;  and such 

                                      -94-


<PAGE>

provisions are made for the benefit of the holders of Senior  Indebtedness;  and
suchholder are made obligees hereunder and they or each of them may enforce such
provisions.

                  Section 14.2 Payment Over of Proceeds upon  Dissolution,  etc.
In the event of an  Insolvency  or  Liquidation  Proceeding  with respect to the
Company:

                              (1) the holders of all Senior  Indebtedness  shall
                    be  entitled  to  receive  payment  in  full in cash or cash
                    equivalents of all Senior Indebtedness before the Holders of
                    the  Securities  are  entitled  to  receive  any  direct  or
                    indirect  payment or  distribution  of any kind or character
                    (excluding  Permitted  Junior  Securities of the Company) on
                    account of Senior Subordinated Note Obligations; and

                              (2) any direct or indirect payment or distribution
                    of assets of the Company of any kind or  character,  whether
                    in cash, property or securities  (excluding Permitted Junior
                    Securities  of the  Company),  by set-off or  otherwise,  to
                    which the Holders or the Trustee  would be entitled  but 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  Indebtedness or their  representative
                    or  representatives  or to the trustee or trustees under any
                    indenture under which any instruments evidencing any of such
                    Senior Indebtedness may have been issued,  ratably according
                    to the aggregate  amounts remaining unpaid on account of the
                    Senior  Indebtedness  held or  represented  by each,  to the
                    extent  necessary  to make  payment  in full in cash or cash
                    equivalents  of all Senior  Indebtedness  remaining  unpaid,
                    after   giving   effect  to  any   concurrent   payment   or
                    distribution to the holders of such Senior Indebtedness; and

                              (3)  in  the  event  that,   notwithstanding   the
                    foregoing  provisions of this Section  14.2,  the Trustee or
                    the Holder of any Note shall have  received  any  payment or
                    distribution  of  properties or assets of the Company of any
                    kind or character,  whether in cash, property or securities,
                    by  set  off  or   otherwise,   in  respect  of  any  Senior
                    Subordinated Note Obligations before all Senior Indebtedness
                    is paid or provided for in full, then and in such event such
                    payment  or   distribution   (excluding   Permitted   Junior
                    Securities  of the Company)  shall be paid over or delivered
                    forthwith   to  the   trustee   in   bankruptcy,   receiver,
                    liquidating  trustee,  custodian,  assignee,  agent or other
                    person  making  payment  or  distribution  of  assets of the
                    Company  for  application  to  the  payment  of  all  Senior
                    Indebtedness  remaining  unpaid,  to the extent necessary to
                    pay all Senior  Indebtedness in full, after giving effect to
                    any concurrent payment or distribution to or for the holders
                    of Senior Indebtedness.

                  The  consolidation  of the Company  with, or the merger of the
Company with or into,  another  person or the  liquidation or dissolution of the
Company following the conveyance, transfer or lease of its properties and assets
substantially as an entirety to another person upon the terms and conditions set
forth in Article  VIII  hereof  shall not be deemed a  dissolution,  winding-up,
liquidation,  reorganization,   assignment  for  the  benefit  of  creditors  or
marshalling  of assets and  liabilities  of the Company for the purposes of this
Article if the person formed by such  consolidation  or the surviving  entity of
such merger or the person which acquires by  conveyance,  transfer or lease such
properties

                                      -95-

<PAGE>


and assets substantially as an entirety, as the case may be, shall, as a part of
such  consolidation,  merger,  conveyance,  transfer  or lease,  comply with the
conditions set forth in such Article VIII hereof to the extent applicable.

                  Section 14.3 Suspension of Payment When Senior Indebtedness in
Default.

                  (a) Unless Section 14.2 hereof shall be  applicable,  upon the
occurrence of a Payment  Default,  no direct or indirect payment or distribution
of any  assets of the  Company of any kind or  character  shall be made by or on
behalf of the Company on account of the Senior  Subordinated Note Obligations or
on account of the  purchase or  redemption  or other  acquisition  of any Senior
Subordinated  Note Obligations  unless and until such Payment Default shall have
been cured or waived or shall have ceased to exist or such  Senior  Indebtedness
shall have been  discharged or paid in full in cash in cash  equivalents,  after
which, subject to Section 14.2 hereof (if applicable),  the Company shall resume
making  any and all  required  payments  in  respect  of the Notes and the other
Senior Subordinated Note Obligations, including any missed payments.

                  (b) Unless Section 14.2 hereof shall be  applicable,  upon (1)
the  occurrence of a  Non-payment  Default and (2) receipt by the Trustee from a
Senior  Representative  of written notice (a "Payment  Blockage Notice") of such
occurrence  stating that such notice is a Payment  Blockage  Notice  pursuant to
this Section 14.3(b) of this Indenture, no payment or distribution of any assets
of the  Company  of any kind or  character  shall be made by or on behalf of the
Company on account of any Senior  Subordinated Note Obligations or on account of
the purchase or  redemption or other  acquisition  of Senior  Subordinated  Note
Obligations for a period ("Payment  Blockage Period")  commencing on the date of
receipt by the Trustee of such  notice  unless and until the earlier to occur of
the  following  events  (subject to any blockage of payments that may then be in
effect under Section 14.2 hereof or subsection  (a) of this Section 14.3 hereof)
(w) 179 days shall have  elapsed  since  receipt of such  written  notice by the
Trustee,  (x) the date,  as set forth in a written  notice to the Company or the
Trustee from the Senior Representative  initiating such Payment Blockage Period,
on which such Non-payment  Default shall have been cured or waived or shall have
ceased to exist (provided that no other Payment  Default or Non-Payment  Default
has occurred and is then continuing after giving effect to such cure or waiver),
(y) such Designated  Senior  Indebtedness  shall have been discharged or paid in
full in cash or cash  equivalents or (z) such Payment Blockage Period shall have
been  terminated by written notice to the Company or the Trustee from the Senior
Representative  initiating such Payment Blockage Period, after which, subject to
Sections 14.2 and 14.3(a)  hereof (if  applicable),  the Company shall  promptly
resume  making  any  and  all  required   payments  in  respect  of  the  Senior
Subordinated  Note Obligations,  including any missed payments.  Notwithstanding
any other provision of this Indenture,  only one Payment  Blockage Period may be
commenced  within any 360  consecutive day period.  No Non-payment  Default with
respect to Designated Senior  Indebtedness that existed or was continuing on the
date of the  commencement  of any Payment  Blockage  Period with  respect to the
Designated Senior Indebtedness initiating such Payment Blockage Period shall be,
or can be,  made the basis for the  commencement  of a second  Payment  Blockage
Period,  whether or not within a period of 360  consecutive  days,  unless  such
default  shall  have  been  cured or  waived  for a period  of not less  than 90
consecutive  days (it being  acknowledged  that any  subsequent  action,  or any
breach  of any  financial  covenant  for a period  commencing  after the date of
commencement of such Payment Blockage  Period,  that, in either case, would give
rise  to  a  Non-payment  Default  pursuant  to  any  provision  under  which  a
Non-payment  Default previously existed or was continuing shall constitute a new
Non-payment Default for this  

                                      -96-

<PAGE>

 
purpose;  provided  that,  in the case of a  breach  of a  particular  financial
covenant,  the Company  shall have been in  compliance  for at least one full 90
consecutive day period commencing after the date of commencement of such Payment
Blockage Period).  In no event shall a Payment Blockage Period extend beyond 179
days from the date of the receipt of the notice referred to in clause (2) hereof
and there must be a 181 consecutive day period in any 360 consecutive day period
during which no Payment  Blockage  Period is in effect  pursuant to this Section
14.3(b).

                  (c) In the event  that,  notwithstanding  the  foregoing,  the
Trustee  or the  Holder of any  Security  shall  have  received  any  payment or
distribution  prohibited by the foregoing  provisions of this Section 14.3, then
and in such event such payment or distribution  shall be paid over and delivered
forthwith to the Senior  Representatives or as a court of competent jurisdiction
shall  direct  for  application  to the  payment  of any due and  unpaid  Senior
Indebtedness,  to the extent  necessary  to pay all such due and  unpaid  Senior
Indebtedness in cash or cash equivalents,  after giving effect to any concurrent
payment to or for the holders of Senior Indebtedness.

                  Section 14.4 Trustee's Relation to Senior  Indebtedness.  With
respect  to the  holders  of  Senior  Indebtedness,  notwithstanding  any  other
provisions  of the  Indenture,  the Trustee  undertakes to perform or to observe
only such of its covenants and obligations as are specifically set forth in this
Article XIV, and no implied covenants or obligations with respect to the holders
of Senior  Indebtedness  shall be read into this Indenture  against the Trustee.
The  Trustee  shall not be deemed to owe any  fiduciary  duty to the  holders of
Senior  Indebtedness and the Trustee shall not be liable to any holder of Senior
Indebtedness if it shall mistakenly pay over or deliver to Holders,  the Company
or any other person moneys or assets to which any holder of Senior  Indebtedness
shall be entitled by virtue of this Article XIV or otherwise.

                  Section  14.5  Subrogation  to  Rights  of  Holders  of Senior
Indebtedness. Upon the payment in full of cash or cash equivalents of all Senior
Indebtedness,  the Holders of the  Securities  shall be subrogated  (equally and
ratably with the holders of all indebtedness of the Company which by its express
terms is subordinated to Senior Indebtedness to substantially the same extent as
the  Securities  are so  subordinated  and which is  entitled  to like rights of
subrogation  as a  result  of  the  payments  made  to  the  holders  of  Senior
Indebtedness)  to the  rights of the  holders  of such  Senior  Indebtedness  to
receive payments and distributions of cash,  property and securities  applicable
to the Senior Indebtedness until the principal of, premium, if any, and interest
on the  Securities  shall  be paid in  full  in  cash or cash  equivalents.  For
purposes of such  subrogation,  no payments or  distributions  to the holders of
Senior  Indebtedness of any cash, property or securities to which the Holders of
the  Securities  or the Trustee would be entitled  except for the  provisions of
this  Article  XIV,  and no payments  over  pursuant to the  provisions  of this
Article XIV to the holders of Senior  Indebtedness  by Holders of the Securities
or the Trustee shall, as among the Company,  its creditors other than holders of
Senior Indebtedness,  and the Holders of the Securities, be deemed to be payment
or distribution by the Company to or on account of the Senior Indebtedness.

                  If any  payment or  distribution  to which the  Holders  would
otherwise  have been  entitled but for the  provisions of this Article XIV shall
have been  applied,  pursuant  to the  provisions  of this  Article  XIV, to the
payment of all amounts payable under the Senior  Indebtedness of the Company and
such  payments  or  distributions  received  by  such  holders  of  such  Senior
Indebtedness  shall be in excess of the  amount  sufficient  to pay all  amounts
payable under or in respect of such Senior  Indebtedness in full in cash or cash
equivalents,  then and in such case the Holders shall be

                                      -97-

<PAGE>


entitled to receive  the amount of such excess from the Company  upon and to the
extent of any return of such excess by the holders of such Senior Indebtedness.

                  Section 14.6 Provisions Solely To Define Relative Rights.  The
provisions  of this Article XIV are and are  intended  solely for the purpose of
defining the relative  rights of the Holders of the  Securities  on the one hand
and the holders of Senior  Indebtedness on the other hand.  Nothing contained in
this Article XIV or elsewhere in this Indenture or in the Securities is intended
to or shall (a) impair,  as among the Company,  its creditors other than holders
of Senior Indebtedness and the Holders of the Securities,  the obligation of the
Company,  which is  absolute  and  unconditional,  to pay to the  Holders of the
Securities the principal of, premium,  if any, and interest on the Securities as
and when the same shall become due and payable in  accordance  with their terms;
or (b) affect the  relative  rights  against  the  Company of the Holders of the
Securities  and  creditors  of the Company  other than the holders of the Senior
Indebtedness;  or (c)  prevent the  Trustee or the Holder of any  Security  from
exercising all remedies otherwise  permitted by applicable law upon a Default or
an Event of Default under this Indenture,  subject to the rights,  if any, under
this Article XIV of the holders of Senior Indebtedness.

                  The  failure  to  make a  payment  on  account  of any  Senior
Subordinated  Note  Obligations  by reason of any  provision of this Article XIV
shall not be construed as preventing  the occurrence of a Default or an Event of
Default hereunder.

                  Section 14.7 Trustee To Effectuate Subordination.  Each Holder
of a Security by his  acceptance  thereof  authorizes and directs the Trustee on
his behalf to take such action as may be necessary or  appropriate to effectuate
the  subordination  provided in this  Article XIV and  appoints  the Trustee his
attorney-in-fact for any and all such purposes,  including,  in the event of any
dissolution, winding-up, liquidation or reorganization of the Company whether in
bankruptcy,  insolvency,  receivership  proceedings,  or  otherwise,  the timely
filing of a claim for the unpaid  balance  of the  Indebtedness  of the  Company
owing to such Holder in the form required in such proceedings and the causing of
such claim to be approved. If the Trustee does not file such a claim prior to 30
days  before the  expiration  of the time to file such a claim,  the  holders of
Senior  Indebtedness,  or any  Senior  Representative,  may file such a claim on
behalf of Holders of the Securities.

                  (a) No right of any  present  or future  holder of any  Senior
Indebtedness  to enforce  subordination  as herein provided shall at any time in
any way be  prejudiced  or  impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith,  by any such holder,
or by any non-compliance by the Company with the terms, provisions and covenants
of this Indenture,  regardless of any knowledge thereof any such holder may have
or be otherwise charged with.

                  (b) Without  limiting the generality of subsection (a) of this
Section 14.8, the holders of Senior  Indebtedness may, at any time and from time
to time,  without  the consent of or notice to the Trustee or the Holders of the
Securities,  without  incurring  responsibility to the Holders of the Securities
and without  impairing or releasing the  subordination  provided in this Article
XIV or the obligations hereunder of the Holders of the Securities to the holders
of Senior  Indebtedness, 

                                      -99-


<PAGE>

do any one or more of the  following:  (1) change the manner,  place or terms of
payment or extend the time of payment of, or renew or alter, Senior Indebtedness
or any  instrument  evidencing  the same or any  agreement  under  which  Senior
Indebtedness is outstanding or any liability of any obligor  thereon;  (2) sell,
exchange,  release or  otherwise  deal with any property  pledged,  mortgaged or
otherwise  securing  Senior  Indebtedness;  (3) settle or compromise  any Senior
Indebtedness  or any  liability  of any  obligor  thereon or release  any person
liable in any manner for the collection or payment of Senior  Indebtedness;  and
(4) exercise or refrain from  exercising  any rights against the Company and any
other person;  provided,  however, that in no event shall any such actions limit
the right of the Holders of the  Securities to take any action to accelerate the
maturity  of the Notes  pursuant  to Article V hereof or to pursue any rights or
remedies  hereunder or under  applicable  laws if the taking of such action does
not otherwise violate the terms of this Indenture.

                  Section 14.9      Notice to Trustee.

                  (a) The  Company  shall  give  prompt  written  notice  to the
Trustee of any fact known to the Company which would  prohibit the making of any
payment to or by the Trustee in respect of the Securities.  Notwithstanding  the
provisions  of this Article XIV or any other  provision of this  Indenture,  the
Trustee shall not be charged with  knowledge of the existence of any facts which
would  prohibit the making of any payment to or by the Trustee in respect of the
Securities,  unless and until a Responsible Officer of the Trustee, on behalf of
the Trustee,  shall have received  written  notice thereof from the Company or a
holder of Senior Indebtedness or from any trustee,  fiduciary or agent therefor;
and, prior to the receipt of any such written  notice,  the Trustee,  subject to
the provisions of this Section 14.9, shall be entitled in all respects to assume
that no such facts exist; provided,  however, that if the Trustee shall not have
received the notice provided for in this Section 14.9 at least two Business days
prior to the date upon which by the terms  hereof  any money may become  payable
for any purpose under this Indenture (including, without limitation, the payment
of the  principal  of,  premium,  if any, or interest  on any  Security),  then,
anything herein contained to the contrary  notwithstanding  but without limiting
the rights and  remedies of the holders of Senior  Indebtedness  or any trustee,
fiduciary or agent  thereof,  the Trustee shall have full power and authority to
receive such money and to apply the same to the purpose for which such money was
received  and shall not be affected by any notice to the  contrary  which may be
received  by it within  two  Business  Days  prior to such  date;  nor shall the
Trustee  be charged  with  knowledge  of the  curing of any such  default or the
elimination of the act or condition preventing any such payment unless and until
the Trustee shall have received an Officers' Certificate to such effect.

                  (b) Subject to TIA Sections 315(a) through 315(d), the Trustee
shall  be  entitled  to rely on the  delivery  to it of a  written  notice  to a
Responsible  Officer  of the  Trustee,  on  behalf of the  Trustee,  by a person
representing  himself  to be a holder  of  Senior  Indebtedness  (or a  trustee,
fiduciary or agent  therefor) to establish  that such notice has been given by a
holder of Senior  Indebtedness (or a trustee,  fiduciary or agent therefor).  In
the event that the Trustee  determines  in good faith that  further  evidence is
required  with  respect  to the  right  of any  person  as a  holder  of  Senior
Indebtedness  to  participate  in any payment or  distribution  pursuant to this
Article  XIV,  the Trustee may  request  such person to furnish  evidence to the
reasonable  satisfaction of the Trustee as to the amount of Senior  Indebtedness
held by such person,  the extent to which such person is entitled to participate
in such payment or  distribution  and any other facts pertinent to the rights of
such person under this Article XIV, and if such evidence is not  furnished,  the
Trustee may defer any 

                                      -99-

<PAGE>


payment to such person pending  judicial  determination  as to the right of such
person to receive such payment.

                  Section 14.10  Reliance on Judicial  Order or  Certificate  of
Liquidating  Agent.  Upon any payment or  distribution  of assets of the Company
referred to in this Article XIV,  the  Trustee,  subject to TIA Sections  315(a)
through  315(d),  and the  Holders,  shall be entitled to rely upon any order or
decree entered by any court of competent  jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation,  reorganization,  dissolution, winding-up
or similar case or  proceeding is pending,  or a  certificate  of the trustee in
bankruptcy,  receiver,  liquidating trustee, custodian, assignee for the benefit
of  creditors,  agent or other  person  making  such  payment  or  distribution,
delivered to the Trustee or to the Holders,  for the purpose of ascertaining the
persons entitled to participate in such payment or distribution,  the holders of
Senior Indebtedness and other Indebtedness of the Company, the amount thereof or
payable thereof, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article XIV.

                  Section   14.11   Rights  of   Trustee  as  Holder  of  Senior
Indebtedness;  Preservation of Trustee's  Rights.  The Trustee in its individual
capacity  shall be entitled to all the rights set forth in this Article XIV with
respect to any Senior  Indebtedness  which may at any time be held by it, to the
same  extent as any other  holder of Senior  Indebtedness,  and  nothing in this
Indenture shall deprive the Trustee of any of its rights as such holder. Nothing
in this Article XIV shall apply to claims of, or payments to, the Trustee  under
or pursuant to Section 6.6 hereof.

                  Section 14.12 Article  Applicable to Paying Agents. In case at
any time any Paying  Agent other than the Trustee  shall have been  appointed by
the Company and be then acting  hereunder,  the term  "Trustee"  as used in this
Article  XIV shall in such case  (unless  the  context  otherwise  requires)  be
construed as extending to and including  such Paying Agent within its meaning as
fully for all  intents and  purposes as if such Paying  Agent were named in this
Article XIV in addition to or in place of the Trustee;  provided,  however, that
Section  14.11  hereof  shall not apply to the Company or any  Affiliate  of the
Company if it or such Affiliate acts as Paying Agent.

                  Section 14.13 No Suspension of Remedies.  Nothing contained in
this  Article  XIV shall  limit  the  right of the  Trustee  or the  Holders  of
Securities  to take any action to  accelerate  the  maturity  of the  Securities
pursuant  to Article V hereof or to pursue any rights or remedies  hereunder  or
under applicable law,  subject to the rights,  if any, under this Article XIV of
the holders, from time to time, of Senior Indebtedness.

                                   ARTICLE XV

                                  MISCELLANEOUS

                  Section 15.1 Compliance  Certificates  and Opinions.  Upon any
application  or request by the Company  and/or any  Subsidiary  Guarantor to the
Trustee to take any action under any  provision of this  Indenture,  the Company
and/or  such  Subsidiary  Guarantor,  as the case may be,  shall  furnish to the
Trustee  such  certificates  and  opinions  as may be  required  under the Trust
Indenture Act or this  Indenture.  Each such  certificate  and each such opinion
shall be in the form of an Officers'  Certificate  or an Opinion of Counsel,  as
applicable, and shall comply with the requirements of this Indenture.

                                     -100-

<PAGE>


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

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

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

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

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

The  certificates  and opinions  provided  pursuant to this Section 15.1 and the
statements  required by this Section 15.1 shall comply in all respects  with TIA
Sections 314(c) and (e).

                  Section  15.2 Form of Documents  Delivered to Trustee.  In any
case where  several  matters are required to be  certified  by, or covered by an
opinion of, any specified  Person,  it is not necessary that all such matters be
certified  by, or covered by the opinion of, only one such Person,  or that they
be so certified or covered by only one document, but one such Person may certify
or give an  opinion  with  respect  to some  matters  and one or more other such
Persons as to other matters,  and any such Person may certify or give an opinion
as to such matters in one or several documents.

                  Any certificate or opinion of an Officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or  representations
with respect to the matters upon which his  certificate  or opinion is based are
erroneous.  Any such  Opinion of Counsel may be based,  insofar as it relates to
factual matters,  upon an Officers' Certificate of an Officer or Officers of the
Company stating that the information  with respect to such factual matters is in
the possession of the Company,  unless such counsel knows, or in the exercise of
reasonable care should know,  that the certificate  with respect to such matters
is 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 15.3      Acts of Holders.

                  (a) Any request,  demand,  authorization,  direction,  notice,
consent,  waiver or other action provided by this Indenture to be given or taken
by Holders  may be  embodied  in and  evidenced  by one or more  instruments  of
substantially  similar  tenor signed by such Holders in person or by

-101-

<PAGE>

agents duly  appointed in writing;  and,  except as herein  otherwise  expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is hereby expressly required,  to the
Company.  Such instrument or instruments  (and the action  embodied  therein and
evidenced  thereby) are herein sometimes referred to as the "Act" of the Holders
signing  such  instrument  or  instruments.  Proof  of  execution  of  any  such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose  of this  Indenture  and  conclusive  in  favor of the  Trustee  and the
Company, if made in the manner provided in this Section.

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

                  (c) The  ownership,  principal  amount and  serial  numbers of
Securities held by any Person, and the date of holding the same, shall be proved
by the Security Register.

                  (d)  If  the  Company   shall  solicit  from  the  Holders  of
Securities  any request,  demand,  authorization,  direction,  notice,  consent,
waiver or other Act, the Company  may, at its option,  by or pursuant to a Board
Resolution,  fix in  advance  a record  date for the  determination  of  Holders
entitled  to  give  such  request,  demand,  authorization,  direction,  notice,
consent, waiver or other Act, but the Company shall have no obligation to do so.
Notwithstanding  TIA Section  316(c),  such record date shall be the record date
specified  in or  pursuant to such Board  Resolution,  which shall be a date not
earlier  than  the date 30 days  prior  to the  first  solicitation  of  Holders
generally in connection  therewith and not later than the date such solicitation
is  completed.   If  such  a  record  date  is  fixed,  such  request,   demand,
authorization,  direction,  notice,  consent,  waiver  or other Act may be given
before or after such record date, but only the Holders of record at the close of
business on such  record date shall be deemed to be Holders for the  purposes of
determining   whether  Holders  of  the  requisite   proportion  of  Outstanding
Securities  have  authorized  or agreed or  consented to such  request,  demand,
authorization,  direction,  notice,  consent,  wavier or other Act, and for that
purpose the  Outstanding  Securities  shall be computed as of such record  date;
provided that no such authorization, agreement or consent by the Holders on such
record date shall be deemed effective unless it shall become effective  pursuant
to the  provisions  of this  Indenture  not later than eleven  months  after the
record date.

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

                  Section 15.4 Notices, etc. to Trustee,  Company and Subsidiary
Guarantors.  Any request,  demand,  authorization,  direction,  notice, consent,
waiver  or Act of  Holders  or other 

                                     -102-

<PAGE>

document  provided or  permitted  by this  Indenture  to be made upon,  given or
furnished to, or filed with,

                           (1) the  Trustee by any  Holder or by the  Company or
                  any Subsidiary Guarantor shall be sufficient for every purpose
                  hereunder  if made,  given,  furnished or filed in writing and
                  delivered in person or mailed by certified or registered  mail
                  (return  receipt  requested)  to the Trustee at its  Corporate
                  Trust Office; or

                           (2) the Company or any  Subsidiary  Guarantor  by the
                  Trustee or by any Holder shall be sufficient for every purpose
                  hereunder (unless  otherwise herein expressly  provided) if in
                  writing  and  delivered  in person or mailed by  certified  or
                  registered  mail  (return  receipt  requested)  to the Company
                  addressed to it or a Subsidiary Guarantor,  as applicable,  at
                  the  Company's  principal  office  located  at 8440  Jefferson
                  Highway,  Suite 420, Baton Rouge,  Louisiana  70809, or at any
                  other address otherwise furnished in writing to the Trustee by
                  the Company.

                  Section 15.5 Notice to Holders;  Waiver.  Where this Indenture
provides for notice of any event to Holders by the Company or the Trustee,  such
notice shall be sufficiently given (unless otherwise herein expressly  provided)
if in writing and mailed,  first-class  postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register,  not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such  notice.  In any case  where  notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any  particular  Holder  shall  affect the  sufficiency  of such  notice with
respect to other  Holders.  Any notice  mailed to a Holder in the manner  herein
prescribed  shall be  conclusively  deemed to have been received by such Holder,
whether or not such Holder actually  receives such notice.  Where this Indenture
provides  for notice in any manner,  such notice may be waived in writing by the
Person  entitled to receive such notice,  either before or after the event,  and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed  with the  Trustee,  but such  filing  shall  not be a  condition
precedent to the validity of any action taken in reliance upon such waiver.

                  In case by reason of the  suspension of or  irregularities  in
regular mail service or by reason of any other cause, it shall be  impracticable
to mail notice of any event to Holders  when such notice is required to be given
pursuant  to any  provision  of this  Indenture,  then any manner of giving such
notice  as  shall  be  satisfactory  to the  Trustee  shall  be  deemed  to be a
sufficient giving of such notice for every purpose hereunder.

                  Section  15.6 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  15.7  Successors  and  Assigns.   All  covenants  and
agreements in this Indenture by the Company and the Subsidiary  Guarantors shall
bind their respective  successors and assigns,  whether so expressed or not. All
agreements of the Trustee in this Indenture shall bind its successor.


                                     -103-

<PAGE>


                  Section 15.8  Separability  Clause.  In case any  provision in
this  Indenture  or in the  Securities  or the  Subsidiary  Guarantees  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,
and a Holder shall have no claim therefore against any party hereto.

                  Section 15.9 Benefits of Indenture.  Nothing in this Indenture
or in the Securities,  express or implied,  shall give to any Person (other than
the  parties  hereto,  any Paying  Agent,  any  Securities  Registrar  and their
successors  hereunder,  the  Holders,  the holders of Senior  Indebtedness,  the
holders of Guarantor Senior Indebtedness and, to the extent set forth in Section
13.4 hereof,  creditors of  Subsidiary  Guarantors)  any benefit or any legal or
equitable right, remedy or claim under this Indenture.

                  Section 15.10     Governing Law; Trust Indenture Act Controls.

                  (a)  THIS  INDENTURE,   THE  SUBSIDIARY   GUARANTEES  AND  THE
SECURITIES  SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
STATE OF NEW YORK,  WITHOUT  REGARD TO  PRINCIPLES  OF  CONFLICTS  OF LAWS.  THE
COMPANY AND EACH SUBSIDIARY  GUARANTOR  IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN THE
BOROUGH OF MANHATTAN,  THE CITY OF NEW YORK IN ANY ACTION OR PROCEEDING  ARISING
OUT OF OR RELATING TO THIS INDENTURE,  THE SECURITIES OR A SUBSIDIARY GUARANTEE,
AND THE COMPANY AND EACH SUBSIDIARY GUARANTOR  IRREVOCABLY AGREE THAT ALL CLAIMS
IN RESPECT OF SUCH ACTION OR PROCEEDING  MAY BE HEARD AND DETERMINED BY ANY SUCH
COURT.

                  (b) This  Indenture is subject to the  provisions of the Trust
Indenture  Act of  1939,  as  amended,  that  are  required  to be  part of this
Indenture and shall, to the extent  applicable,  be governed by such provisions.
If and to the extent that any provision of this Indenture  limits,  qualifies or
conflicts  with the duties  imposed by Sections 310 and 318,  inclusive,  of the
Trust  Indenture  Act,  or  conflicts  with  any  provision  (an   "incorporated
provision")  required by or deemed to be included in this Indenture by operation
of such Trust  Indenture  Act  sections,  such  imposed  duties or  incorporated
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 15.11 Legal  Holidays.  In any case where any Interest
Payment Date,  Redemption  Date, or Stated  Maturity or Maturity of any Security
shall not be a Business Day, then  (notwithstanding  any other provision of this
Indenture or of the Securities or the Subsidiary Guarantees) payment of interest
or principal  (and  premium,  if any) need not be made on such date,  but may be
made on the next  succeeding  Business  Day with the same force and effect as if
made on the Interest Payment Date,  Redemption Date or at the Stated Maturity or
Maturity;  provided that no interest  shall accrue for the period from and after
such Interest Payment Date, Redemption Date, Stated Maturity or Maturity, as the
case may be.

                                     -104-

<PAGE>


                  Section 15.12 No Recourse Against Others. A director, officer,
employee or  stockholder,  as such,  of the Company shall not have any liability
for any obligations of the Company under the Securities or this Indenture or for
any claim  based on, in  respect  of or by reason of such  obligations  or their
creation.  Each Holder, by accepting any of the Securities,  waives and releases
all such liability to the extent permitted by applicable law.

                  Section 15.13  Duplicate  Originals.  The parties may sign any
number of copies or counterparts of this Indenture. Each signed copy shall be an
original, but all of them together represent the same agreement.

                  Section 15.14 No Adverse  Interpretation  of Other Agreements.
This  Indenture  may not be used to interpret  another  indenture,  loan or debt
agreement of the Company or any of its Subsidiaries. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.

                                     -105-

<PAGE>



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


                                        ISSUER:

                                        FLORES & RUCKS, INC.,
                                        a Delaware corporation



                                        By:/s/ Richard G. Zepernick, Jr.
                                           -----------------------------------
                                            Name: Richard G. Zepernick, Jr.
                                            Title:   Chief Operating Officer



                                        SUBSIDIARY GUARANTOR:

                                        FLORES & RUCKS, INC.,
                                        a Louisiana corporation



                                        By:/s/ Richard G. Zepernick, Jr.
                                           -----------------------------------
                                            Name: Richard G. Zepernick, Jr.
                                            Title:   Chief Operating Officer




                                        TRUSTEE:

                                        FLEET NATIONAL BANK,
                                        as Trustee



                                        By:/s/ Elizabeth C Hammer
                                           -----------------------------------
                                            Name: Elizabeth C. Hammer
                                            Title:   Vice President


                                      -106-