SEAGULL ENERGY CORPORATION

                                       AND

                              THE BANK OF NEW YORK






                                Senior Indenture

                          Dated as of September 1, 1997
















<PAGE>




                             CROSS REFERENCE SHEET*


     Provisions  of Trust  Indenture Act of 1939 and Indenture to be dated as of
September 1, 1997 between  SEAGULL ENERGY  CORPORATION and The Bank of New York,
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Trustee:

Section of the Act                                        Section of Indenture

<S>                                                       <C>
310(a)(1), (2) and (5)................................   6.9
310(a)(3) and (4).....................................   Inapplicable
310(b)................................................   6.8 and 6.10(a),
                                                         (b) and (d)
310(c)................................................   Inapplicable
311(a)................................................   6.13(a) and (c)
311(b)................................................   6.13(b) and (c)
311(c)................................................   Inapplicable
312(a)................................................   4.1 and 4.2(a)
312(b)................................................   4.2(a) and (b)(i)
                                                         and (ii)
312(c)................................................   4.2(c)
313(a)................................................   4.4(a)(i), (ii),
                                                         (iii), (iv), (v),
                                                         (vi) and (vii)
313(a)(5).............................................   Inapplicable
313(b)(1).............................................   Inapplicable
313(b)(2).............................................   4.4(b)
313(c)................................................   4.4(c)
313(d)................................................   4.4(d)
314(a)................................................   4.3
314(b)................................................   Inapplicable
314(c)(1) and (2).....................................   11.5
314(c)(3).............................................   Inapplicable
314(d)................................................   Inapplicable
314(e)................................................   11.5
314(f)................................................   Inapplicable
315(a), (c) and (d)...................................   6.1
315(b)................................................   5.8
315(e)................................................   5.9
316(a)(1).............................................   5.7
316(a)(2).............................................   Not required
316(a) (last sentence)................................   7.4
316(b)................................................   5.4
317(a)................................................   5.2
317(b)................................................   3.5(a)
318(a)................................................   11.7

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                                                           ARTICLE ONE
                                                           DEFINITIONS
<S>                                                                                                               <C>
Affiliate.........................................................................................................1
Authenticating Agent..............................................................................................1
Bankruptcy Code...................................................................................................2
Board of Directors................................................................................................2
Board Resolution..................................................................................................2
Business Day......................................................................................................2
Commission........................................................................................................2
Consolidated Net Tangible Assets..................................................................................2
Corporate Trust Office............................................................................................2
Depositary........................................................................................................2
ENSTAR Alaska.....................................................................................................2
Event of Default..................................................................................................2
Global Security...................................................................................................2
Holder............................................................................................................2
Holder of Securities..............................................................................................2
Securityholder....................................................................................................2
Indenture.........................................................................................................2
Interest..........................................................................................................3
Issuer............................................................................................................3
Issuer Order......................................................................................................3
Officers' Certificate.............................................................................................3
Opinion of Counsel................................................................................................3
Original Issue Date...............................................................................................3
Original Issue Discount...........................................................................................3
Original Issue Discount Security..................................................................................3
Outstanding.......................................................................................................3
Periodic Offering.................................................................................................4
Person............................................................................................................4
Place of Payment..................................................................................................4
Principal.........................................................................................................4
Principal Amount..................................................................................................4
Principal Property................................................................................................4
Record Date.......................................................................................................4
Responsible Officer...............................................................................................4
Restricted Subsidiary.............................................................................................4
Sale and Leaseback Transaction....................................................................................5
Secured Debt......................................................................................................5
Security..........................................................................................................5
Securities........................................................................................................5
Subsidiary........................................................................................................5
Trust Indenture Act of 1939.......................................................................................5
Trustee...........................................................................................................5
Unrestricted Subsidiary...........................................................................................5
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<TABLE>
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<S>                                                                                                               <C>
U.S. Government Obligations.......................................................................................5
Vice President....................................................................................................5
Yield to Maturity.................................................................................................5

                                                                ARTICLE TWO
                                                                SECURITIES
                                                                                                                                    
SECTION 2.1       Forms Generally.................................................................................6
SECTION 2.2       Form of Trustee's Certificate of Authentication.................................................6
SECTION 2.3       Amount Unlimited, Issuable in Series............................................................6
SECTION 2.4       Authentication and Delivery of Securities.......................................................8
SECTION 2.5       Execution of Securities........................................................................10
SECTION 2.6       Certificate of Authentication..................................................................10
SECTION 2.7       Denomination and Date of Securities; Payments of Inerest.......................................10
SECTION 2.8       Registration Transfer and Exchange.............................................................11
SECTION 2.9       Mutilated, Defaced, Destroyed, Lost and Stolen Securities......................................12
SECTION 2.10      Cancellation of Securities; Disposition Thereof................................................13
SECTION 2.11      Temporary Securities...........................................................................13
SECTION 2.12      CUSIP Numbers..................................................................................13

                                                              ARTICLE THREE
                                                         COVENANTS OF THE ISSUER

                                                                                                                                    
SECTION 3.1       Payment of Principal and Interest..............................................................14
SECTION 3.2       Offices for Notices and Payments, etc..........................................................14
SECTION 3.3       No Interest Extension..........................................................................14
SECTION 3.4       Appointments to Fill Vacancies in Trustee's Office.............................................14
SECTION 3.5       Provision as to Paying Agent...................................................................14
SECTION 3.6       Restriction on Creation of Secured Debt........................................................15
SECTION 3.7       Restriction on Sale and Leaseback Transactions.................................................16

                                                            ARTICLE FOUR
                                 SECURITYHOLDERS LISTS AND REPORTS BY THEISSUER AND THE TRUSTEE
                                                                                                         
SECTION 4.1       Issuer to Furnish Trustee Information as to Names and Addresses of Securityholders.............17
SECTION 4.2       Preservation and Disclosure of Securityholders Lists...........................................17
SECTION 4.3       Reports by the Issuer..........................................................................18
SECTION 4.4       Reports by the Trustee.........................................................................19

                                                            ARTICLE FIVE
                                 REMEDIES OF THE TRUSTEE AND SECURITY HOLDERSON EVENT OF DEFAULT

SECTION 5.1       Events of Default..............................................................................20
SECTION 5.2       Payment of Securities on Default; Suit Therefor................................................21
SECTION 5.3       Application of Moneys Collected by Trustee.....................................................22
SECTION 5.4       Proceedings by Securityholders.................................................................23
SECTION 5.5       Proceedings by Trustee.........................................................................23
SECTION 5.6       Remedies Cumulative and Continuing.............................................................23
SECTION 5.7       Direction of Proceedings; Waiver of Defaults by Majority of Securityholders....................23
SECTION 5.8       Notice of Defaults.............................................................................24
SECTION 5.9       Undertaking to Pay Costs.......................................................................24
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                                                            ARTICLE SIX
                                                     CONCERNING THE TRUSTEE
<S>                                                                                                             <C>                 
SECTION 6.1       Duties and Responsibilities of the Trustee; During Default; Prior to Default...................24
SECTION 6.2       Certain Rights of the Trustee..................................................................25
SECTION 6.3       Trustee Not Responsible for Recitals, Disposition of Securities or Application of Proceeds
                           Thereof...............................................................................26
SECTION 6.4       Trustee and Agents May Hold Securities; Collections, etc.......................................26
SECTION 6.5       Moneys Held by Trustee.........................................................................26
SECTION 6.6       Compensation and Indemnification of Trustee and Its Prior Claim................................26
SECTION 6.7       Right of Trustee to Rely on Officers' Certificate, etc.........................................27
SECTION 6.8       Qualification of Trustee; Conflicting Interests................................................27
SECTION 6.9       Persons Eligible for Appointment as Trustee....................................................31
SECTION 6.10      Resignation and Removal; Appointment of Successor Trustee......................................31
SECTION 6.11      Acceptance of Appointment by Successor Trustee.................................................32
SECTION 6.12      Merger, Conversion, Consolidation or Succession to Business of Trustee.........................33
SECTION 6.13      Preferential Collection of Claims Against the Issuer...........................................33
SECTION 6.14      Appointment of Authenticating Agent............................................................35

                                                           ARTICLE SEVEN
                                                 CONCERNING THE SECURITYHOLDERS
SECTION 7.1       Evidence of Action Taken by Securityholders....................................................36
SECTION 7.2       Proof of Execution of Instruments and of Holding of Securities.................................36
SECTION 7.3       Holders to be Treated as Owners................................................................36
SECTION 7.4       Securities Owned by Issuer Deemed Not Outstanding..............................................37
SECTION 7.5       Right of Revocation of Action Taken............................................................37
SECTION 7.6       Record Date for Consents and Waivers...........................................................37

                                                            ARTICLE EIGHT 
                                                      SUPPLEMENTAL INDENTURES
SECTION 8.1       Supplemental Indentures Without Consent of Securityholders.....................................37
SECTION 8.2       Supplemental Indentures with Consent of Securityholders........................................38
SECTION 8.3       Effect of Supplemental Indenture...............................................................39
SECTION 8.4       Documents to Be Given to Trustee...............................................................39
SECTION 8.5       Notation on Securities in Respect of Supplemental Indentures...................................39

                                                            ARTICLE NINE
                                CONSOLIDATION, MERGER, SALE, LEASE, EXCHANGE OR DISPOSITION
SECTION 9.1       Issuer May Consolidate, etc....................................................................40
SECTION 9.2       Securities to be Secured in Certain Events.....................................................40
SECTION 9.3       Successor Corporation to be Substituted........................................................40
SECTION 9.4       Opinion of Counsel to be Given Trustee.........................................................41

                                                            ARTICLE TEN
                                  SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
SECTION 10.1      Satisfaction and Discharge of Indenture........................................................41
SECTION 10.2      Application by Trustee of Funds Deposited for Payment of Securities............................43
SECTION 10.3      Repayment of Moneys Held by Paying Agent.......................................................43
SECTION 10.4      Return of Moneys Held by Trustee and Paying Agent Unclaimed for Two Years......................43
SECTION 10.5      Indemnity for U.S. Government Obligations......................................................43
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                                                             ARTICLE ELEVE
                                                      MISCELLANEOUS PROVISIONS
<S>                                                                                                              <C>                
SECTION 11.1      Partners, Incorporators, Stockholders, Officers and Directors of Issuer Exempt from Individual    
                           Liability.............................................................................43
SECTION 11.2      Provisions of Indenture for the Sole Benefit of Parties and Holders of Securities..............44
SECTION 11.3      Successors and Assigns of Issuer Bound by Indenture............................................44
SECTION 11.4      Notices and Demands on Issuer, Trustee and Holders of Securities...............................44
SECTION 11.5      Officers' Certificates and Opinions of Counsel; Statements to Be Contained Therein.............44
SECTION 11.6      Payments Due on Saturdays, Sundays and Holidays................................................45
SECTION 11.7      Conflict of Any Provision of Indenture with Trust Indenture Act of 1939........................45
SECTION 11.8      GOVERNING LAW..................................................................................45
SECTION 11.9      Counterparts...................................................................................45
SECTION 11.10  Effect of Headings................................................................................45

                             ARTICLE TWELVEREDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1      Applicability of Article.......................................................................45
SECTION 12.2      Notice of Redemption; Partial Redemptions......................................................45
SECTION 12.3      Payment of Securities Called for Redemption....................................................46
SECTION 12.4      Exclusion of Certain Securities from Eligibility for Selection for Redemption..................47
SECTION 12.5      Mandatory and Optional Sinking Funds...........................................................47


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<PAGE>




         THIS SENIOR  INDENTURE,  dated as of September 1, 1997 between  SEAGULL
ENERGY  CORPORATION,  a Texas  corporation  (the "Issuer"),  and The Bank of New
York, a New York banking corporation, as trustee (the "Trustee"),


                              W I T N E S S E T H:

         WHEREAS,  the Issuer has duly authorized the issuance from time to time
of its unsecured  debentures,  notes or other  evidences of  indebtedness  to be
issued in one or more series (the  "Securities")  up to such principal amount or
amounts as may from time to time be authorized  in accordance  with the terms of
this Indenture;

         WHEREAS,  the Issuer has duly  authorized the execution and delivery of
this Indenture to provide, among other things, for the authentication,  delivery
and administration of the Securities; and

         WHEREAS,  all things necessary to make this Indenture a valid indenture
and agreement according to its terms have been undertaken and completed;

         NOW, THEREFORE:

         In consideration of the premises and the purchases of the Securities by
the  Holders  (as  hereinafter  defined)  thereof,  the Issuer  and the  Trustee
mutually  covenant  and agree for the equal  and  proportionate  benefit  of the
respective Holders from time to time of the Securities as follows:


                                   ARTICLE ONE
                                   DEFINITIONS

         SECTION 1.1 For all  purposes of this  Indenture  and of any  indenture
supplemental  hereto the  following  terms  shall have the  respective  meanings
specified in this Section 1.1 (except as otherwise  expressly provided or unless
the context otherwise clearly requires).  All other terms used in this Indenture
that are defined in the Trust  Indenture  Act of 1939,  including  terms defined
therein by reference to the Securities  Act of 1933, as amended,  shall have the
meanings  assigned  to  such  terms  in  said  Trust  Indenture  Act and in said
Securities  Act as in force  at the date of this  Indenture  (except  as  herein
otherwise expressly provided or unless the context otherwise clearly requires).

         All accounting  terms used herein and not expressly  defined shall have
the  meanings  assigned  to such terms in  accordance  with  generally  accepted
accounting  principles,  and the term "generally accepted accounting principles"
means such  accounting  principles as are generally  accepted at the time of any
computation.

         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.  The expressions "date of this Indenture",  "date
hereof",  "date as of which this  Indenture is dated" and "date of execution and
delivery of this Indenture" and other expressions of similar import refer to the
effective date of the original  execution and delivery of this  Indenture,  viz.
September 1, 1997.
<PAGE>

         The terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular.

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


     "Authenticating Agent" shall have the meaning set forth in Section 6.14.

     "Bankruptcy Code" means the United States Bankruptcy Code, 11 United States
Codess.ss.101 et seq., or any successor statute thereto.

     "Board of  Directors"  means either the Board of Directors of the Issuer or
any committee of such Board duly authorized to act on its behalf.

     "Board of  Resolution"  means  one or more  resolutions,  certified  by the
secretary or an  assistant  secretary of the Issuer to have been duly adopted or
consented to by the Board of Directors and to be in full force and effect.

     "Business Day" means,  with respect to any Security,  a day that (a) in the
Place of Payment (or in any of the Places of Payment, if more than one) in which
amounts are payable,  as specified in the form of such Security,  and (b) in the
city in which  the  Corporate  Trust  Office is  located,  is not a day on which
banking institutions are authorized or required by law or regulation to close.

     "Commission" means the Securities and Exchange Commission,  as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended,
or, if at any time after the  execution  and  delivery  of this  Indenture  such
Commission  is not existing and  performing  the duties now assigned to it under
the Trust  Indenture Act of 1939,  then the body  performing such duties on such
date.

     "Consolidated  Net Tangible  Assets" means the  aggregate  amount of assets
included on the most  recent  consolidated  balance  sheet of the Issuer and its
Restricted Subsidiaries,  less applicable reserves and other properly deductible
items and after  deducting  therefrom  (a) all current  liabilities  and (b) all
goodwill,  trade  names,  trademarks,  patents,  unamortized  debt  discount and
expense and other like  intangibles,  all in accordance with generally  accepted
accounting principles consistently applied.
<PAGE>


     "Corporate  Trust  Office"  means the  office of the  Trustee  at which the
corporate  trust  business of the Trustee  shall,  at any  particular  time,  be
principally  administered,  which  office  is,  at the  date  as of  which  this
Indenture is dated, located in New York, New York.

     "Depositary"  means,  with respect to the Securities of any series issuable
or issued in the form of one or more Global Securities, the Person designated as
Depositary  by the Issuer  pursuant to Section 2.3 until a successor  Depositary
shall have become such pursuant to the applicable  provisions of this Indenture,
and  thereafter  "Depositary"  shall mean or include  each  Person who is then a
Depositary  hereunder,  and, if at any time there is more than one such  Person,
"Depositary"  as used with  respect to the  Securities  of any such series shall
mean the Depositary with respect to the Global Securities of such series.

     "ENSTAR  Alaska"  means (i) the division of the Issuer known on the date of
this  Indenture as ENSTAR  Natural Gas  Company,  which owns on the date of this
Indenture the gas distribution  system in south-central  Alaska, and (ii) Alaska
Pipeline Company,  an Alaska corporation and a Subsidiary of the Issuer, in each
case together with successors and assigns.

     "Event of Death" means any event or condition  specified as such in Section
5.1.

     "Global Security" means a Security  evidencing all or a part of a series of
Securities  issued to the Depositary for such series in accordance  with Section
2.3 and bearing the legend prescribed in Section 2.4.

     "Holder",  "Holder of Securities",  "Securityholder" or other similar terms
mean,  in the case of any  Security,  the person in whose name such  Security is
registered  in the  security  register  kept by the Issuer  for that  purpose in
accordance with the terms hereof.


     "Indenture" means this instrument as originally  executed and delivered or,
if amended or supplemented as herein provided,  as so amended or supplemented or
both,  including,  for all purposes of this instrument and any such  supplement,
the  provisions of the Trust  Indenture Act of 1939 that are deemed to be a part
of and govern this instrument and any such supplement,  respectively,  and shall
include the forms and terms of particular  series of Securities  established  as
contemplated hereunder.

     The term "interest" means,  when used with respect to non-interest  bearing
Securities (including,  without limitation, any Original Issue Discount Security
that by its terms bears  interest  only after  maturity  or upon  default in any
other payment due on such Security), interest payable after maturity (whether at
stated  maturity,  upon  acceleration  or  redemption or otherwise) or after the
date,  if any,  on which the Issuer  becomes  obligated  to acquire a  Security,
whether upon conversion, by purchase or otherwise.

     "Issurer"  means  (except as  otherwise  provided in Section  6.8)  Seagull
Energy  Corporation,  a Texas  corporation,  and,  subject to Article Nine,  its
successors and assigns.
<PAGE>


     "Issuer  Order" means a written  statement,  request or order of the Issuer
which is  signed in its name by the  chairman  of the  Board of  Directors,  the
president or any vice president of the Issuer.

     "Officer  Certificate",  when  used with  respect  to the  Issuer,  means a
certificate signed by the chairman of the Board of Directors,  the president, or
any  vice  president  and  by  the  treasurer,   any  assistant  treasurer,  the
controller,  any assistant controller,  the secretary or any assistant secretary
of the Issuer.  Each such certificate shall include the statements  provided for
in Section 11.5 if and to the extent  required by the provisions of such Section
11.5.  One of the officers  signing an Officers'  Certificate  given pursuant to
Section 4.3 shall be the principal executive, financial or accounting officer of
the Issuer.

     "Opinion  of  Counsel"  means an  opinion  in  writing  signed by the chief
counsel of the Issuer or by such other  legal  counsel who may be an employee of
or counsel to the Issuer and who shall be satisfactory to the Trustee. Each such
opinion shall include the statements provided for in Section 11.5, if and to the
extent required by the provisions of such Section 11.5.

     The term "orginial  issue date" of any Security (or portion  thereof) means
the earlier of (a) the date of such Security or (b) the date of any Security (or
portion  thereof) for which such Security was issued (directly or indirectly) on
registration of transfer, exchange or substitution.

     The term  "orginal  issue  discount" of any debt  security,  including  any
Original Issue  Discount  Security,  means the difference  between the principal
amount of such debt  security and the initial  issue price of such debt security
(as set forth in the case of an Original Issue Discount  Security on the face of
such Security).

     "Original Issue Discount  Security" means any Security that provides for an
amount  less than the  principal  amount  thereof to be due and  payable  upon a
declaration of acceleration of the maturity thereof pursuant to Section 5.1.

     "Oustanding"  (except as otherwise provided in Section 6.8), when used with
reference to Securities,  shall, subject to the provisions of Section 7.4, mean,
as of any particular  time, all  Securities  authenticated  and delivered by the
Trustee under this Indenture, except:

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

         (b)  Securities  (other than  Securities  of any series as to which the
provisions of Article Ten hereof shall not be applicable),  or portions thereof,
for the payment or redemption of which moneys or U.S. Government Obligations (as
provided for in Section 10.1) in the necessary  amount shall have been deposited
in trust with the  Trustee or with any paying  agent  (other than the Issuer) or
shall  have been set aside,  segregated  and held in trust by the Issuer for the
Holders of such  Securities  (if the Issuer shall act as its own paying  agent),
provided that, if such Securities, or portions thereof, are to be redeemed prior
to the  maturity  thereof,  notice of such  redemption  shall have been given as
herein provided,  or provision  satisfactory to the Trustee shall have been made
for giving such notice; and


<PAGE>

         (c) Securities  which shall have been paid or in substitution for which
other Securities  shall have been  authenticated  and delivered  pursuant to the
terms of Section 2.9 (except with respect to any such Security as to which proof
satisfactory  to the Trustee is presented that such Security is held by a person
in whose hands such  Security is a legal,  valid and binding  obligation  of the
Issuer).

         In determining whether the Holders of the requisite aggregate principal
amount of  Outstanding  Securities  of any or all series have given any request,
demand,  authorization,  direction,  notice,  consent or waiver  hereunder,  the
principal amount of an Original Issue Discount  Security that shall be deemed to
be Outstanding  for such purposes  shall be the portion of the principal  amount
thereof that would be due and payable as of the date of such  determination  (as
certified by the Issuer to the Trustee) upon a declaration  of  acceleration  of
the maturity thereof pursuant to Section 5.1.

     "Periodic  Offering"  means an offering of Securities of a series from time
to time, the specific terms of which Securities,  including, without limitation,
the  rate or  rates  of  interest,  if any,  thereon,  the  stated  maturity  or
maturities thereof and the redemption provisions,  if any, with respect thereto,
are to be  determined  by the Issuer or its  agents  upon the  issuance  of such
Securities.

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

     "Place of Payment", when used with respect to the Securities of any series,
means the place or places where the  principal of and  interest,  if any, on the
Securities of such series are payable as  determined in accordance  with Section
2.3.

     The term "principal" of a debt security,  including any Security, means the
amount (including,  without  limitation,  if and to the extent  applicable,  any
premium and, in the case of an Original  Issue  Discount  Security,  any accrued
original issue discount, but excluding interest) that is payable with respect to
such  debt  security  as of any date  and for any  purpose  (including,  without
limitation,  in  connection  with any sinking fund,  upon any  redemption at the
option of the Issuer,  upon any purchase or exchange at the option of the Issuer
or the holder of such debt security and upon any acceleration of the maturity of
such debt security).

     The term  "principal  amount" of a debt  security,  including any Security,
means the principal amount as set forth on the face of such debt security.

     "Principal   Property"  means  any  real  property,   manufacturing  plant,
processing  plant,  pipeline,  office  building,  warehouse  or  other  physical
facility, or any other like depreciable or depletable asset of the Issuer or any
Restricted  Subsidiary whether owned at September 1, 1997 or thereafter acquired
(other than any  facility  thereafter  acquired  for the control or abatement of

<PAGE>

atmospheric pollutants or contaminants or water, noise, odor or other pollution)
which in the opinion of the Board of Directors is of material  importance to the
total  business  conducted by the Issuer and its Restricted  Subsidiaries,  as a
whole; provided, however, that any such property shall not be deemed a Principal
Property  if such  property  does not have a fair  value in  excess of 3% of the
total  assets  included on a  consolidated  balance  sheet of the Issuer and its
Restricted   Subsidiaries   prepared  in  accordance  with  generally   accepted
accounting principles consistently applied.

         The term "record date" shall have the meaning set forth in Section 2.7.

     "Responsible  Officer",  when used with respect to the  Trustee,  means any
officer assigned by the Trustee to administer its corporate trust matters.

     "Restricted Subisdiary" means (a) any Subsidiary other than an Unrestricted
Subsidiary,  and (b) any  Subsidiary  which was an  Unrestricted  Subsidiary but
which,  subsequent to the date hereof, is designated by the Issuer (by certified
resolution  of  the  Board  of  Directors  delivered  to  the  Trustee)  to be a
Restricted Subsidiary;  provided, however, that the Issuer may not designate any
such Subsidiary to be a Restricted Subsidiary if the Issuer would thereby breach
any  covenant  or  agreement  herein  contained  (on the  assumptions  that  any
outstanding  indebtedness  of such  Subsidiary  was incurred at the time of such
designation and that any Sale and Leaseback Transaction to which such Subsidiary
is then a party was entered into at the time of such designation).

     "Sale  and  Leaseback  Transaction"  shall  have the  meaning  set forth in
Section 3.7.

     "Secured  Debt" means  indebtedness  for money  borrowed by the Issuer or a
Restricted  Subsidiary and any other  indebtedness of the Issuer or a Restricted
Subsidiary on which interest is paid or payable (other than indebtedness owed by
a Restricted  Subsidiary  to the Issuer,  by a Restricted  Subsidiary to another
Restricted Subsidiary or by the Issuer to a Restricted Subsidiary),  that in any
such case is secured by (a) a mortgage or other lien on any  Principal  Property
of the  Issuer  or a  Restricted  Subsidiary,  or (b) a  pledge,  lien or  other
security  interest  on any  shares  of stock  or  indebtedness  of a  Restricted
Subsidiary,  or (c) in the  case  of any  such  indebtedness  of the  Issuer,  a
guaranty by any  Restricted  Subsidiary.  The amount of Secured Debt at any time
outstanding shall be the amount then owing thereon by the Issuer or a Restricted
Subsidiary.

     "Security" or  "Securities"  (except as otherwise  provided in Section 6.8)
has the meaning  stated in the first  recital of this  Indenture or, as the case
may be, Securities that have been  authenticated and delivered  pursuant to this
Indenture.

     "Subsidiary"  means any corporation of which the Issuer,  or the Issuer and
one  or  more  Subsidiaries,  or any  one  or  more  Subsidiaries,  directly  or
indirectly own voting securities entitling any one or more of the Issuer and its
Subsidiaries  to elect a majority of the  directors,  either at all times or, so
long as there is no default or  contingency  which  permits  the  holders of any
<PAGE>


other  class or classes of  securities  to vote for the  election of one or more
directors. 

     "Trust Indenture Act of 1939" (except as otherwise provided in Sections 8.1
and 8.2)  means  the  Trust  Indenture  Act of 1939,  as  amended  by the  Trust
Indenture Reform Act of 1990, as in force at the date as of which this Indenture
is originally executed.

     "Trustee"  means the Person  identified as "Trustee" in the first paragraph
hereof and,  subject to the  provisions  of Article Six,  shall also include any
successor trustee.  "Trustee" shall also mean or include each Person who is then
a trustee  hereunder  and,  if at any time  there is more than one such  Person,
"Trustee"  as used with respect to the  Securities  of any series shall mean the
trustee with respect to the Securities of such series.

     "Unrestricted  Subsidiary"  means (a) any Subsidiary  acquired or organized
after the date hereof,  provided,  however,  that such Subsidiary shall not be a
successor,  directly or indirectly,  to any Restricted  Subsidiary,  and (b) any
Subsidiary  whose  principal  business and assets are located outside the United
States of America,  its territories and possessions and Canada or are located in
Puerto Rico, and (c) any Subsidiary the principal  business of which consists of
financing or assisting in financing the  acquisition  or disposition of products
of the Issuer or a Subsidiary by dealers,  distributors or other customers,  and
(d) any Subsidiary the principal business of which is owning,  leasing,  dealing
in or developing  real property,  and (e) any Subsidiary  substantially  all the
assets  of  which  consist  of  stock or other  securities  of a  Subsidiary  or
Subsidiaries  of the  character  described  in clauses  (a)  through (d) of this
paragraph,  unless and until such Subsidiary  shall have been designated to be a
Restricted  Subsidiary  pursuant to clause (b) of the  definition of "Restricted
Subsidiary".

     "U.S.  Government  Obligations" shall have the meaning set forth in Section
10.1(B).

     The term  "vice  president",  when used with  respect  to the Issuer or the
Trustee, means any vice president,  regardless of whether designated by a number
or a word or words added before or after the title "vice president."

     "Yield to Maturity"  means the yield to maturity on a series of Securities,
calculated  at the time of issuance of such series,  or, if  applicable,  at the
most recent  redetermination  of  interest on such  series,  and  calculated  in
accordance with generally  accepted  financial practice or as otherwise provided
in the terms of such series of Securities.


                                   ARTICLE TWO
                                   SECURITIES

         SECTION 2.1 Forms  Generally.  The  Securities  of each series shall be
substantially  in such form (not  inconsistent  with this Indenture) as shall be
established by or pursuant to one or more Board  Resolutions  (as set forth in a
Board Resolution or, to the extent established pursuant to rather than set forth
in a Board Resolution, an Officers' Certificate detailing such establishment) or
in  one  or  more  indentures  supplemental  hereto,  in  each  case  with  such
appropriate  insertions,  omissions,  substitutions  and other variations as are
required or permitted  by this  Indenture,  and may have  imprinted or otherwise

<PAGE>

reproduced thereon such legend or legends or endorsements, not inconsistent with
the provisions of this  Indenture,  as may be required to comply with any law or
with any  rules  or  regulations  pursuant  thereto,  or with  any  rules of any
securities  exchange or to conform to general usage, all as may be determined by
the officers executing such Securities,  as evidenced by their execution of such
Securities.

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

         SECTION  2.2  Form of  Trustee's  Certificate  of  Authentication.  The
Trustee's certificate of authentication on all Securities shall be substantially
as follows:

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

                                               The Bank of New York, as Trustee



                                               By:____________________________
                                                      Authorized Signatory


         If at any time there shall be an  Authenticating  Agent  appointed with
respect to any series of  Securities,  then the  Securities of such series shall
bear, in addition to the Trustee's  certificate of authentication,  an alternate
Certificate of Authentication which shall be substantially as follows:

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

                                               The Bank of New York, as Trustee

                                               By:____________________________
                                                    as Authenticating Agent


                                               By:____________________________
                                                      Authorized Signatory

         SECTION  2.3  Amount  Unlimited,  Issuable  in  Series.  The  aggregate
principal amount of Securities  which may be  authenticated  and delivered under
this Indenture is unlimited.
<PAGE>

         The  Securities  may be issued in one or more series and the Securities
of each such series  shall rank  equally and pari passu with the  Securities  of
each other series and with all other  unsecured and  unsubordinated  debt of the
Issuer.  There  shall  be  established  in or  pursuant  to  one or  more  Board
Resolutions (and, to the extent established pursuant to rather than set forth in
a Board Resolution, in an Officers' Certificate detailing such establishment) or
established in one or more indentures  supplemental hereto, prior to the initial
issuance of Securities of any series:


               (1) the designation of the Securities of the series,  which shall
          distinguish  the  Securities of such series from the Securities of all
          other series;

                  (2) any  limit  upon the  aggregate  principal  amount  of the
         Securities of the series that may be authenticated  and delivered under
         this Indenture (except for Securities  authenticated and delivered upon
         registration  of transfer of, or in exchange  for, or in lieu of, other
         Securities  of the series  pursuant to Section 2.8, 2.9,  2.11,  8.5 or
         12.3);

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

                  (4) the rate or rates at which the  Securities  of the  series
         shall  bear  interest,  if any,  the date or dates  from which any such
         interest shall accrue,  on which any such interest shall be payable and
         on which a record  shall be taken for the  determination  of Holders to
         whom any such  interest  is payable or the method by which such rate or
         rates or date or dates shall be determined or both;

                  (5) the  place or  places  where  and the  manner in which the
         principal of and interest, if any, on Securities of the series shall be
         payable (if other than as  provided  in Section  3.2) and the office or
         agency  for the  Securities  of the  series  maintained  by the  Issuer
         pursuant to Section 3.2;

                  (6) the right,  if any,  of the Issuer to redeem,  purchase or
         repay Securities of the series,  in whole or in part, at its option and
         the period or periods within which,  the price or prices (or the method
         by which such price or prices  shall be  determined  or both) at which,
         the form or method of  payment  therefor  if other than in cash and any
         terms and  conditions  upon which and the manner in which (if different
         from the provisions of Article Twelve)  Securities of the series may be
         so redeemed,  purchased or repaid, in whole or in part, pursuant to any
         sinking fund or otherwise;

                  (7) the obligation,  if any, of the Issuer to redeem, purchase
         or repay  Securities  of the series in whole or in part pursuant to any
         mandatory  redemption,  sinking fund or analogous  provisions or at the
         option of a Holder  thereof and the period or periods  within which the
         price or prices (or the  method by which such price or prices  shall be
         determined or both) at which, the form or method of payment therefor if
         other  than in cash and any terms  and  conditions  upon  which and the
         manner in which (if different  from the  provisions of Article  Twelve)
         Securities  of the series  shall be redeemed,  purchased or repaid,  in
         whole or in part, pursuant to such obligation;
<PAGE>

               (8) if  other  than  denominations  of  $1,000  and any  integral
          multiple thereof,  the denominations in which Securities of the series
          shall be issuable; (9) if other than the principal amount thereof, the
          portion of the  principal  amount of  Securities  of the series  which
          shall be payable upon acceleration of the maturity thereof;

               (10) whether  Securities of the series will be issuable as Global
          Securities;

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

               (12) any trustees, depositaries, authenticating or paying agents,
          transfer  agents or registrars or any other agents with respect to the
          Securities of such series;

               (13) any  deleted,  modified  or  additional  events of  default,
          remedies or covenants with respect to the Securities of such series;

               (14) whether the provisions of Section 10.1(C) will be applicable
          to Securities of such series;

                  (15) any  provision  relating to the issuance of Securities of
         such  series  at  an  original  issue  discount   (including,   without
         limitation,  the issue price  thereof,  the rate or rates at which such
         original  issue  discount  shall accrue,  if any, and the date or dates
         from or to which or period or periods  during which such original issue
         discount shall accrue at such rate or rates);

                  (16) if the amounts of payments of  principal  of and interest
         on the Securities of such series are to be determined with reference to
         an index, the manner in which such amounts shall be determined; and

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

         All  Securities  of any one series  shall be  substantially  identical,
except as to denomination and except as may otherwise be provided by or pursuant
to the Board  Resolution  or Officers'  Certificate  referred to above or as set
forth in any such  indenture  supplemental  hereto.  All  Securities  of any one
series  need not be issued at the same time and may be issued from time to time,
consistent  with the terms of this  Indenture,  if so provided by or pursuant to
such Board  Resolution,  such  Officers'  Certificate  or in any such  indenture
supplemental hereto.

         Any such Board  Resolution or Officers'  Certificate  referred to above
with respect to Securities of any series filed with the Trustee on or before the
initial  issuance of the Securities of such series shall be incorporated  herein
by reference  with respect to Securities of such series and shall  thereafter be

<PAGE>

deemed to be a part of the Indenture for all purposes  relating to Securities of
such series as fully as if such Board  Resolution or Officers'  Certificate were
set forth herein in full.

         SECTION 2.4 Authentication  and Delivery of Securities.  The Issuer may
deliver  Securities  of any series  executed  by the Issuer to the  Trustee  for
authentication  together with the applicable documents referred to below in this
Section  2.4,  and the Trustee  shall  thereupon  authenticate  and deliver such
Securities  to, or upon the order of, the Issuer  (contained in the Issuer Order
referred to below in this Section 2.4) or pursuant to such procedures acceptable
to the Trustee and to such  recipients as may be specified  from time to time by
an Issuer Order. The maturity date,  original issue date, interest rate, if any,
and any other terms of the  Securities  of such series shall be determined by or
pursuant to such Issuer Order and procedures. If provided for in such procedures
and agreed to by the Trustee, such Issuer Order may authorize authentication and
delivery  pursuant to oral  instructions  from the Issuer or its duly authorized
agent,  which   instructions   shall  be  promptly  confirmed  in  writing.   In
authenticating  the  Securities  of such  series and  accepting  the  additional
responsibilities  under this  Indenture  in  relation  to such  Securities,  the
Trustee shall be entitled to receive (in the case of subparagraphs  (2), (3) and
(4) below only at or before  the time of the first  request of the Issuer to the
Trustee to authenticate  Securities of such series) and (subject to Section 6.1)
shall be fully  protected in relying upon,  unless and until such documents have
been superseded or revoked:

                  (1) an Issuer Order requesting such authentication and setting
         forth delivery instructions if the Securities of such series are not to
         be delivered to the Issuer,  provided that,  with respect to Securities
         of a series subject to a Periodic  Offering,  (a) such Issuer Order may
         be delivered by the Issuer to the Trustee  prior to the delivery to the
         Trustee of such  Securities for  authentication  and delivery,  (b) the
         Trustee shall  authenticate  and deliver  Securities of such series for
         original issue from time to time, in an aggregate  principal amount not
         exceeding the aggregate  principal amount  established for such series,
         pursuant to an Issuer Order or pursuant to procedures acceptable to the
         Trustee as may be specified  from time to time by an Issuer Order,  (c)
         the maturity date or dates, original issue date or dates, interest rate
         or rates,  if any,  and any other  terms of  Securities  of such series
         shall be determined by an Issuer Order or pursuant to such  procedures,
         (d) if provided for in such procedures, such Issuer Order may authorize
         authentication and delivery pursuant to oral or electronic instructions
         from the  Issuer or its duly  authorized  agent or  agents,  which oral
         instructions  shall be promptly  confirmed in writing and (e) after the
         original  issuance  of the first  Security of such series to be issued,
         any  separate  request  by the  Issuer  that the  Trustee  authenticate
         Securities of such series for original  issuance will be deemed to be a
         certification  by  the  Issuer  that  it  is  in  compliance  with  all
         conditions  precedent  provided for in this  Indenture  relating to the
         authentication and delivery of such Securities;

                  (2) the Board  Resolution,  Officers'  Certificate or executed
         supplemental  indenture  referred  to in  Sections  2.1  and  2.3 by or
         pursuant to which the forms and terms of the  Securities of such series
         were established;
<PAGE>

                  (3) an Officers'  Certificate  setting forth the form or forms
         and terms of the Securities stating that the form or forms and terms of
         the Securities have been  established  pursuant to Sections 2.1 and 2.3
         and comply with this  Indenture  and covering such other matters as the
         Trustee may reasonably request; and

                  (4) at the option of the Issuer, either an Opinion of Counsel,
         or a letter from legal counsel  addressed to the Trustee  permitting it
         to rely on an Opinion of Counsel, substantially to the effect that:

                         (a) the form or forms of the  Securities of such series
                    have been duly authorized and established in conformity with
                    the provisions of this Indenture;

                           (b) in the  case  of an  underwritten  offering,  the
                  terms  of  the  Securities  of  such  series  have  been  duly
                  authorized and  established in conformity  with the provisions
                  of this Indenture, and, in the case of an offering that is not
                  underwritten,  certain terms of the  Securities of such series
                  have  been  established  pursuant  to a Board  Resolution,  an
                  Officers'   Certificate   or  a   supplemental   indenture  in
                  accordance with this  Indenture,  and when such other terms as
                  are to be  established  pursuant to procedures set forth in an
                  Issuer Order shall have been established,  all such terms will
                  have been duly  authorized  by the  Issuer  and will have been
                  established   in  conformity   with  the  provisions  of  this
                  Indenture;

                           (c) when the  Securities  of such  series  have  been
                  executed  by the Issuer and  authenticated  by the  Trustee in
                  accordance with the provisions of this Indenture and delivered
                  to and duly paid for by the purchasers thereof, they will have
                  been duly issued  under this  Indenture  and will be valid and
                  legally  binding  obligations  of the Issuer,  enforceable  in
                  accordance with their  respective  terms, and will be entitled
                  to the benefits of this Indenture; and

                           (d) the  execution and delivery by the Issuer of, and
                  the  performance by the Issuer of its obligations  under,  the
                  Securities of such series will not contravene any provision of
                  applicable law or the articles of  incorporation  or bylaws of
                  the Issuer or any agreement or other  instrument  binding upon
                  the Issuer or any of its Subsidiaries  that is material to the
                  Issuer and its Subsidiaries, considered as one enterprise, or,
                  to  such  counsel's  knowledge  after  the  inquiry  indicated
                  therein,  any  judgment,  order or decree of any  governmental
                  agency or any court having jurisdiction over the Issuer or any
                  Subsidiary,  and no consent,  approval or authorization of any
                  governmental body or agency is required for the performance by
                  the Issuer of its  obligations  under the  Securities,  except
                  such as are  specified  and have been obtained and such as may
                  be required by the  securities or blue sky laws of the various
                  states  in   connection   with  the  offer  and  sale  of  the
                  Securities.

         In rendering such opinions, such counsel may qualify any opinions as to
enforceability by stating that such enforceability may be limited by bankruptcy,
insolvency,  reorganization,  liquidation,  moratorium  and other  similar  laws
affecting  the  rights  and  remedies  of  creditors  and is  subject to general

<PAGE>

principles of equity (regardless of whether such enforceability is considered in
a  proceeding  in equity or at law).  Such  counsel may rely,  as to all matters
governed  by the laws of  jurisdictions  other  than the  State of Texas and the
federal law of the United  States,  upon  opinions of other  counsel  (copies of
which  shall be  delivered  to the  Trustee),  who shall be  counsel  reasonably
satisfactory  to the  Trustee,  in which case the opinion  shall state that such
counsel believes that both such counsel and the Trustee are entitled so to rely.
Such  counsel  may also state that,  insofar as such  opinion  involves  factual
matters,  such counsel has relied, to the extent such counsel deems proper, upon
certificates of officers of the Issuer and its  Subsidiaries and certificates of
public officials.

         The Trustee shall have the right to decline to authenticate and deliver
any  Securities  of any series  under this  Section  2.4 if the  Trustee,  being
advised by counsel, determines that such action may not lawfully be taken by the
Issuer or if the  Trustee  in good faith by its board of  directors  or board of
trustees,  executive  committee or a trust committee of directors or trustees or
Responsible  Officers shall  determine that such action would expose the Trustee
to  personal  liability  to  existing  Holders  or would  adversely  affect  the
Trustee's own rights, duties or immunities under the Securities,  this Indenture
or otherwise.

         If the  Issuer  shall  establish  pursuant  to  Section  2.3  that  the
Securities  of a  series  are to be  issued  in the  form of one or more  Global
Securities,  then the Issuer shall execute and the Trustee shall,  in accordance
with  this  Section  2.4 and the  Issuer  Order  with  respect  to such  series,
authenticate and deliver one or more Global  Securities that (i) shall represent
and shall be denominated in an amount equal to the aggregate principal amount of
all of the  Securities  of such  series  to be  issued  in the  form  of  Global
Securities  and not yet  canceled,  (ii) shall be  registered in the name of the
Depositary  for such  Global  Security  or  Securities  or the  nominee  of such
Depositary,  (iii)  shall be  delivered  by the  Trustee to such  Depositary  or
pursuant  to such  Depositary's  instructions,  and  (iv)  shall  bear a  legend
substantially  to the  following  effect:  "Unless and until it is  exchanged in
whole or in part for Securities in definitive registered form, this Security may
not be  transferred  except as a whole by the  Depositary  to the nominee of the
Depositary  or by a nominee  of the  Depositary  to the  Depositary  or  another
nominee  of  the  Depositary  or by the  Depositary  or any  such  nominee  to a
successor Depositary or a nominee of such successor Depositary."

         Each Depositary designated pursuant to Section 2.3 must, at the time of
its  designation  and at all times while it serves as Depositary,  be a clearing
agency registered under the Securities Exchange Act of 1934, as amended, and any
other applicable statute or regulation.

         SECTION 2.5 Execution of Securities.  The Securities shall be signed on
behalf of the Issuer by the chairman of the Board of Directors,  the  president,
any vice  president or the  treasurer of the Issuer,  under its  corporate  seal
which may, but need not, be attested by its  secretary  or one of its  assistant
secretaries.  Such  signatures may be the manual or facsimile  signatures of the
present or any future such  officers.  The seal of the Issuer may be in the form
of a facsimile  thereof and may be  impressed,  affixed,  imprinted or otherwise

<PAGE>

reproduced on the Securities. Typographical and other minor errors or defects in
any such  reproduction  of the seal or any such  signature  shall not affect the
validity or enforceability of any Security that has been duly  authenticated and
delivered by the Trustee.

         In case any  officer of the  Issuer  who shall  have  signed any of the
Securities shall cease to be such officer before the Security so signed shall be
authenticated  and  delivered by the Trustee or disposed of by the Issuer,  such
Security  nevertheless  may be  authenticated  and  delivered  or disposed of as
though the person who signed such  Security had not ceased to be such officer of
the  Issuer;  and any  Security  may be signed  on behalf of the  Issuer by such
persons as, at the actual date of the execution of such  Security,  shall be the
proper  officers  of the  Issuer,  although  at the  date of the  execution  and
delivery of this Indenture any such person was not such an officer.

         SECTION 2.6  Certificate  of  Authentication.  Only such  Securities as
shall bear thereon a certificate  of  authentication  substantially  in the form
hereinbefore recited,  executed by the Trustee by the manual signature of one of
its authorized  signatories,  or its Authenticating  Agent, shall be entitled to
the benefits of this  Indenture or be valid or obligatory  for any purpose.  The
execution of such  certificate by the Trustee or its  Authenticating  Agent upon
any  Security  executed  by the Issuer  shall be  conclusive  evidence  that the
Security so authenticated has been duly  authenticated  and delivered  hereunder
and  that the  Holder  is  entitled  to the  benefits  of this  Indenture.  Each
reference  in  this  Indenture  to   authentication   by  the  Trustee  includes
authentication by an agent appointed pursuant to Section 6.14.

         SECTION 2.7 Denomination and Date of Securities;  Payments of Interest.
The  Securities  of  each  series  shall  be  issuable  in  registered  form  in
denominations established as contemplated by Section 2.3 or, with respect to the
Securities of any series, if not so established,  in denominations of $1,000 and
any integral multiple thereof.  The Securities of each series shall be numbered,
lettered or otherwise  distinguished  in such manner or in accordance  with such
plan as the officers of the Issuer  executing  the same may  determine  with the
approval of the  Trustee,  as  evidenced  by the  execution  and  authentication
thereof.

         Each  Security  shall be  dated  the  date of its  authentication.  The
Securities of each series shall bear  interest,  if any, from the date, and such
interest, if any, shall be payable on the dates,  established as contemplated by
Section 2.3.

         The Person in whose name any  Security of any series is  registered  at
the close of business on any record date applicable to a particular  series with
respect to any  interest  payment  date for such  series  shall be  entitled  to
receive  the  interest,   if  any,   payable  on  such  interest   payment  date
notwithstanding  any  transfer or exchange of such  Security  subsequent  to the
record date and prior to such interest payment date, except if and to the extent
the Issuer shall  default in the payment of the  interest  due on such  interest
payment date for such series,  in which case such  defaulted  interest  shall be
paid to the Persons in whose names  Outstanding  Securities  for such series are
registered (a) at the close of business on a subsequent record date (which shall
be not less  than  five  Business  Days  prior to the  date of  payment  of such
defaulted  interest)  established by notice given by mail by or on behalf of the
Issuer  to the  Holders  of  Securities  not less  than 15 days  preceding  such
subsequent  record  date or (b) as  determined  by such  other  procedure  as is
mutually  acceptable  to the Issuer and the Trustee.  The term "record  date" as
used with  respect to any  interest  payment  date (except a date for payment of
defaulted  interest)  for the  Securities  of any  series  shall  mean  the date

<PAGE>

specified as such in the terms of the  Securities of such series  established as
contemplated  by Section  2.3,  or, if no such date is so  established,  if such
interest payment date is the first day of a calendar month, the fifteenth day of
the next  preceding  calendar  month or, if such  interest  payment  date is the
fifteenth day of a calendar month, the first day of such calendar month, whether
or not such record date is a Business Day.

         SECTION 2.8 Registration Transfer and Exchange. The Issuer will keep at
each  office or agency to be  maintained  for the purpose as provided in Section
3.2 for each series of  Securities a register or registers in which,  subject to
such  reasonable  regulations  as it may  prescribe,  it  will  provide  for the
registration  of Securities of each series and the  registration  of transfer of
Securities of such series.  Each such  register  shall be in written form in the
English  language or in any other form capable of being converted into such form
within a reasonable  time.  At all  reasonable  times such register or registers
shall be open for inspection and available for copying by the Trustee.

         Upon due  presentation  for registration of transfer of any Security of
any  series at any such  office or agency to be  maintained  for the  purpose as
provided  in Section  3.2,  the  Issuer  shall  execute  and the  Trustee  shall
authenticate  and deliver in the name of the  transferee  or  transferees  a new
Security or Securities of the same series, maturity date, interest rate, if any,
and  original  issue  date  in  authorized  denominations  for a like  aggregate
principal amount.

         All  Securities  presented for  registration  of transfer  shall (if so
required by the Issuer or the Trustee) be duly endorsed by, or be accompanied by
a written  instrument or  instruments  of transfer in form  satisfactory  to the
Issuer  and the  Trustee  duly  executed  by, the  Holder or his  attorney  duly
authorized in writing.

         At the option of the Holder  thereof,  Securities  of any series (other
than a Global  Security,  except  as set forth  below)  may be  exchanged  for a
Security or  Securities of such series having  authorized  denominations  and an
equal  aggregate  principal  amount,  upon  surrender of such  Securities  to be
exchanged at the agency of the Issuer that shall be maintained  for such purpose
in accordance with Section 3.2. All Securities  surrendered upon any exchange or
transfer  provided for in this Indenture shall be promptly canceled and returned
to the Issuer.

         The Issuer 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 of Securities.  No service charge shall be made for any
such transaction or for any exchange of Securities of any series as contemplated
by the immediately preceding paragraph.

         The Issuer  shall not be required to exchange or register a transfer of
(a) any  Securities  of any  series for a period of 15 days next  preceding  the
first  mailing or  publication  of notice of  redemption  of  Securities of such
series to be redeemed,  (b) any Securities selected,  called or being called for
redemption,  in whole  or in part,  except,  in the case of any  Security  to be
redeemed in part, the portion  thereof not so to be redeemed or (c) any Security
if the Holder thereof has exercised his right,  if any, to require the Issuer to
repurchase  such  Security  in whole  or in part,  except  the  portion  of such
Security not required to be repurchased.


<PAGE>

         Notwithstanding  any other  provision of this  Section 2.8,  unless and
until  it is  exchanged  in  whole  or in  part  for  Securities  in  definitive
registered form, a Global Security  representing all or a part of the Securities
of a series may not be transferred  except as a whole by the Depositary for such
series to a nominee of such  Depositary  or by a nominee of such  Depositary  to
such  Depositary or another  nominee of such Depositary or by such Depositary or
any such nominee to a successor  Depositary for such series or a nominee of such
successor Depositary.

         If  at  any  time  the  Depositary  for  any  Securities  of  a  series
represented  by one or more  Global  Securities  notifies  the Issuer that it is
unwilling or unable to continue as Depositary  for such  Securities or if at any
time the  Depositary  for such  Securities  shall no  longer be  eligible  under
Section  2.4, the Issuer shall  appoint a successor  Depositary  with respect to
such Securities.  If a successor Depositary for such Securities is not appointed
by the Issuer  within 90 days after the Issuer  receives  such notice or becomes
aware of such ineligibility,  the Issuer's election pursuant to Section 2.3 that
such Securities be represented by one or more Global  Securities shall no longer
be effective and the Issuer shall execute,  and the Trustee,  upon receipt of an
Issuer Order for the  authentication  and delivery of  definitive  Securities of
such  series,  will  authenticate  and  deliver  Securities  of such  series  in
definitive  registered  form, in any authorized  denominations,  in an aggregate
principal  amount  equal to the  principal  amount  of the  Global  Security  or
Securities  representing such Securities in exchange for such Global Security or
Securities.

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

         If  specified  by the Issuer  pursuant to Section  2.3 with  respect to
Securities  represented  by a Global  Security,  the  Depositary for such Global
Security may surrender such Global  Security in exchange in whole or in part for
Securities of the same series in definitive registered form on such terms as are
acceptable  to the  Issuer and such  Depositary.  Thereupon,  the  Issuer  shall
execute, and the Trustee shall authenticate and deliver, without service charge,

                  (i) to the Person specified by such Depositary, a new Security
         or Securities of the same series,  of any authorized  denominations  as
         requested by such Person, in an aggregate principal amount equal to and
         in  exchange  for  such  Person's  beneficial  interest  in the  Global
         Security; and

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

         Upon the exchange of a Global  Security for  Securities  in  definitive
registered  form in  authorized  denominations,  such Global  Security  shall be
canceled by the Trustee or an agent of the Issuer or the Trustee.  Securities in
definitive  registered form issued in exchange for a Global Security pursuant to
this  Section  2.8 shall be  registered  in such  names  and in such  authorized
denominations  as  the  Depositary  for  such  Global   Security,   pursuant  to
instructions  from its  direct or  indirect  participants  or  otherwise,  shall
instruct the Trustee or an agent of the Trustee or the Issuer or an agent of the
Issuer. The Trustee or such agent shall deliver at its office such Securities to
or as directed by the Persons in whose names such Securities are so registered.

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

         SECTION 2.9 Mutilated,  Defaced, Destroyed, Lost and Stolen Securities.
In case any temporary or definitive Security shall become mutilated,  defaced or
be destroyed, lost or stolen, the Issuer in its discretion may execute, and upon
the written request of any officer of the Issuer, the Trustee shall authenticate
and deliver a new Security of the same series,  maturity date, interest rate, if
any, and original issue date,  bearing a number or other  distinguishing  symbol
not  contemporaneously   outstanding,  in  exchange  and  substitution  for  the
mutilated  or  defaced  Security,  or in  lieu  of and in  substitution  for the
Security  so  destroyed,  lost or  stolen.  In every  case the  applicant  for a
substitute Security shall furnish to the Issuer and to the Trustee and any agent
of the Issuer or the Trustee  such  security or  indemnity as may be required by
the  Trustee  or the  Issuer to  indemnify  and  defend  and to save each of the
Trustee  and the Issuer  harmless  and,  in every case of  destruction,  loss or
theft, evidence to their satisfaction of the destruction,  loss or theft of such
Security  and  of  the  ownership  thereof  and in the  case  of  mutilation  or
defacement, shall surrender the Security to the Trustee or such agent.

         Upon the issuance of any  substitute  Security,  the Issuer 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 or its agent) connected therewith.  In case any
Security  which  has  matured  or is about to  mature  or has  been  called  for
redemption in full shall become  mutilated or defaced or be  destroyed,  lost or
stolen,  the  Issuer  may  instead  of  issuing a  substitute  Security,  pay or
authorize the payment of the same (without  surrender thereof except in the case
of a mutilated or defaced  Security),  if the  applicant  for such payment shall
furnish  to the  Issuer  and to the  Trustee  and any agent of the Issuer or the
Trustee  such  security or  indemnity as any of them may require to hold each of
them harmless,  and, in every case of destruction,  loss or theft, the applicant
shall also  furnish to the Issuer and the Trustee and any agent of the Issuer or
the Trustee evidence to the Trustee's  satisfaction of the destruction,  loss or
theft of such Security and of the ownership thereof.

         Every  substitute  Security  of  any  series  issued  pursuant  to  the
provisions  of this  Section  by virtue of the fact  that any such  Security  is
destroyed,  lost or stolen shall constitute an additional contractual obligation
of the Issuer, whether or not the destroyed, lost or stolen Security shall be at

<PAGE>

any time enforceable by anyone and shall be entitled to all the benefits of (but
shall be subject to all the  limitations  of rights set forth in) this Indenture
equally and  proportionately  with any and all other  Securities  of such series
duly  authenticated  and delivered  hereunder.  All Securities shall be held and
owned upon the express  condition  that,  to the extent  permitted  by law,  the
foregoing provisions are exclusive with respect to the replacement or payment of
mutilated,  defaced, destroyed, lost or stolen Securities and shall preclude any
and all other rights or remedies  notwithstanding any law or statute existing or
hereafter  enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.

         SECTION 2.10  Cancellation  of  Securities;  Disposition  Thereof.  All
Securities  surrendered  for payment,  redemption,  registration  of transfer or
exchange, or for credit against any payment in respect of a sinking or analogous
fund, if  surrendered to the Issuer or any agent of the Issuer or the Trustee or
any agent of the  Trustee,  shall be  delivered  to the Trustee or its agent for
cancellation or, if surrendered to the Trustee,  shall be canceled by it; and no
Securities shall be issued in lieu thereof except as expressly  permitted by any
of the  provisions  of this  Indenture.  The Trustee or its agent  shall  return
canceled  Securities to the Issuer. If the Issuer or its agent shall acquire any
of the  Securities,  such  acquisition  shall not  operate  as a  redemption  or
satisfaction of the indebtedness represented by such Securities unless and until
the same are delivered to the Trustee or its agent for cancellation.

         SECTION  2.11  Temporary   Securities.   Pending  the   preparation  of
definitive  Securities  for any  series,  the Issuer may execute and the Trustee
shall  authenticate and deliver  temporary  Securities for such series (printed,
lithographed,  typewritten  or  otherwise  reproduced,  in  each  case  in  form
satisfactory  to the  Trustee).  Temporary  Securities  of any  series  shall be
issuable in any authorized  denomination,  and  substantially in the form of the
definitive  Securities of such series but with such  omissions,  insertions  and
variations  as  may  be  appropriate  for  temporary  Securities,  all as may be
determined by the Issuer with the concurrence of the Trustee as evidenced by the
execution and  authentication  thereof.  Temporary  Securities  may contain such
references to any  provisions  of this  Indenture as may be  appropriate.  Every
temporary  Security shall be executed by the Issuer and be  authenticated by the
Trustee upon the same conditions and in substantially the same manner,  and with
like effect, as the definitive Securities. Without unreasonable delay the Issuer
shall  execute  and shall  furnish  definitive  Securities  of such  series  and
thereupon  temporary  Securities of such series may be  surrendered  in exchange
therefor  without charge at each office or agency to be maintained by the Issuer
for that purpose pursuant to Section 3.2 and the Trustee shall  authenticate and
deliver  in  exchange  for such  temporary  Securities  of such  series an equal
aggregate  principal  amount of definitive  Securities of the same series having
authorized  denominations.  Until so exchanged,  the temporary Securities of any
series shall be entitled to the same benefits under this Indenture as definitive
Securities of such series, unless otherwise established pursuant to Section 2.3.

         SECTION 2.12 CUSIP  Numbers.  The Issuer in issuing the  Securities may
use "CUSIP"  numbers (if then  generally in use),  and, if so, the Trustee shall
use  "CUSIP"  numbers in notices of  redemption  as a  convenience  to  Holders;
provided that any such notice may state that no representation is made as to the
correctness  of such numbers either as printed on the Securities or as contained
in any notice of a redemption  and that reliance may be placed only on the other
identification numbers printed on the Securities,  and any such redemption shall
not be affected by any defect in or omission of such  numbers.  The Issuer shall
notify the Trustee of any change in the "CUSIP" numbers.

<PAGE>

                                  ARTICLE THREE
                             COVENANTS OF THE ISSUER

         SECTION 3.1 Payment of Principal and Interest. The Issuer covenants and
agrees that it will duly and punctually pay or cause to be paid the principal of
and interest,  if any, on each of the Securities at the place, at the respective
times and in the manner provided in the Securities.

         SECTION 3.2 Offices  for Notices and  Payments,  etc. So long as any of
the  Securities  are  Outstanding,  the Issuer  will  maintain  in each Place of
Payment,  an office or agency where the Securities may be presented for payment,
an office or agency where the  Securities may be presented for  registration  of
transfer and for exchange as in this Indenture provided, and an office or agency
where notices and demands to or upon the Issuer in respect of the  Securities or
of this  Indenture  may be served.  In case the Issuer shall at any time fail to
maintain any such office or agency,  or shall fail to give notice to the Trustee
of any change in the location  thereof,  presentation may be made and notice and
demand may be served in respect of the  Securities  or of this  Indenture at the
Corporate  Trust Office.  The Issuer hereby  initially  designates the Corporate
Trust Office for each such  purpose and  appoints  the Trustee as registrar  and
paying  agent and as the agent upon whom  notices and demands may be served with
respect to the Securities.

         SECTION 3.3 No Interest Extension. In order to prevent any accumulation
of claims for interest after maturity  thereof,  the Issuer will not directly or
indirectly extend or consent to the extension of the time for the payment of any
claim for interest on any of the  Securities and will not directly or indirectly
be a party to or approve any such arrangement by the purchase or funding of said
claims or in any other manner;  provided,  however,  that this Section 3.3 shall
not  apply  in any case  where an  extension  shall be made  pursuant  to a plan
proposed  by the Issuer to the  Holders  of all  Securities  of any series  then
Outstanding.

         SECTION 3.4  Appointments  to Fill Vacancies in Trustee's  Office.  The
Issuer,  whenever  necessary  to avoid or fill a  vacancy  in the  office of the
Trustee,  will appoint,  in the manner  provided in Section 6.10, a Trustee,  so
that there shall at all times be a Trustee hereunder.

         SECTION  3.5  Provision  as to Paying  Agent.  (a) If the Issuer  shall
appoint a paying agent other than the  Trustee,  it will cause such paying agent
to execute and deliver to the  Trustee an  instrument  in which such agent shall
agree with the Trustee, subject to the provisions of this Section 3.5,
<PAGE>

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

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

                  (3) that it will,  at any time during the  continuance  of any
         such failure, upon the written request of the Trustee, forthwith pay to
         the Trustee all sums so held in trust by such paying agent.

         (b) If the Issuer  shall act as its own paying  agent,  it will,  on or
before each due date of the principal of or interest, if any, on the Securities,
set aside,  segregate  and hold in trust for the  benefit of the  Holders of the
Securities  a sum  sufficient  to pay such  principal  or  interest,  if any, so
becoming  due and will notify the Trustee of any failure to take such action and
of any failure by the Issuer (or by any other obligor under the  Securities)  to
make any payment of the principal of or interest, if any, on the Securities when
the same shall become due and payable.

         (c) Anything in this Section 3.5 to the contrary  notwithstanding,  the
Issuer  may,  at any time,  for the  purpose of  obtaining  a  satisfaction  and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the  Trustee  all sums held in trust by it, or any paying  agent  hereunder,  as
required  by this  Section  3.5,  such sums to be held by the  Trustee  upon the
trusts herein contained.

         (d) Anything in this Section 3.5 to the contrary  notwithstanding,  any
agreement  of the Trustee or any paying  agent to hold sums in trust as provided
in this Section 3.5 is subject to Sections 10.3 and 10.4.

         (e) Whenever the Issuer shall have one or more paying agents,  it will,
on or before  each due date of the  principal  of or  interest,  if any,  on any
Securities, deposit with a paying agent a sum sufficient to pay the principal or
interest,  if any, so becoming due, such sum to be held in trust for the benefit
of the Persons entitled to such principal or interest,  if any, and (unless such
paying agent is the Trustee) the Issuer will promptly  notify the Trustee of its
action or failure so to act.

         SECTION 3.6  Restriction on Creation of Secured Debt. So long as any of
the Securities are outstanding,  the Issuer shall not at any time create, incur,
assume  or  guarantee,  and  shall not  cause,  suffer  or  permit a  Restricted
Subsidiary  to create,  incur,  assume or  guarantee,  any Secured  Debt without
making  effective  provision (and the Issuer covenants that in such case it will
make or cause to be made such effective  provision)  whereby the Securities then
Outstanding  and any other  indebtedness  of or guaranteed by the Issuer or such
Restricted Subsidiary then entitled thereto, subject to applicable priorities of
payment, shall be secured by such mortgage,  security interest,  pledge, lien or
encumbrance  equally  and  ratably  with  any  and  all  other  obligations  and
indebtedness  thereby  secured,  so  long  as any  such  other  obligations  and

<PAGE>

indebtedness shall be so secured; provided, that if any such mortgage,  security
interest,  pledge,  lien or  encumbrance  securing such  indebtedness  ceases to
exist,  such  equal and  ratable  security  for the  benefit  of the  Holders of
Securities  shall  automatically  cease to exist  without  any  further  action;
provided  further that if such  indebtedness  is expressly  subordinated  to the
Securities,  the  mortgage,  security  interest,  pledge,  lien  or  encumbrance
securing  such  indebtedness  shall be  subordinate  and junior to the mortgage,
security interest,  pledge, lien or encumbrance securing the Securities with the
same  relative  priority  as such  indebtedness  shall have with  respect to the
Securities;  provided  further,  that  the  foregoing  covenants  shall  not  be
applicable to the following:

         (a)(i) Any mortgage,  security interest, pledge, lien or encumbrance on
any  property  hereafter  acquired  (including  acquisition  through  merger  or
consolidation)  or  constructed  by the Issuer or a  Restricted  Subsidiary  and
created  contemporaneously with, or within twelve months after, such acquisition
or the completion of construction to secure or provide for the payment of all or
any part of the  purchase  price of such  property  or the cost of  construction
thereof,  as the case may be; or (ii) any  mortgage on property  (including  any
unimproved portion of partially improved property) of the Issuer or a Restricted
Subsidiary  created within twelve months of completion of  construction of a new
plant or  plants  on such  property  to  secure  all or part of the cost of such
construction if, in the opinion of the Board of Directors, such property or such
portion thereof was prior to such construction  substantially unimproved for the
use intended by the Issuer;  or (iii) the acquisition of property subject to any
mortgage,  security  interest,  pledge,  lien or encumbrance  upon such property
existing  at the time of  acquisition  thereof,  whether  or not  assumed by the
Issuer or such Restricted Subsidiary;  or (iv) any mortgage,  security interest,
pledge,  lien or  encumbrance  existing on the  property  or on the  outstanding
shares  or  indebtedness  of a  corporation  or other  entity  at the time  such
corporation  or other entity shall  become a Restricted  Subsidiary;  or (v) any
mortgage,  security  interest,  pledge,  lien or  encumbrance  on  property of a
corporation  or other  entity  existing  at the time such  corporation  or other
entity is merged into or consolidated with the Issuer or a Restricted Subsidiary
or at the time of a sale,  lease or other  disposition  of the  properties  of a
corporation  or other entity as an entirety or  substantially  as an entirety to
the Issuer or a Restricted Subsidiary; or

         (b)  Mortgages on property of the Issuer or a Restricted  Subsidiary in
favor of the  United  States of  America  or any State  thereof  or any  foreign
government,   or  any  department,   agency  or   instrumentality  or  political
subdivision  of any  thereof,  to secure  partial,  progress,  advance  or other
payments  pursuant  to any  contract  or statute  or to secure any  indebtedness
incurred for the purpose of financing  all or any part of the purchase  price or
the cost of construction of the property subject to such mortgages; or

     (c) Any mortgage,  security interest,  pledge, lien or encumbrance existing
on property owned by the Issuer or any of its  Subsidiaries  on the date of this
Indenture; or

         (d) Any  mortgage,  security  interest,  pledge,  lien  or  encumbrance
created pursuant to the creation of trusts or other  arrangements  funded solely
with cash, cash equivalents or other marketable investments or securities of the
type customarily  subject to such arrangements in customary  financial  practice
with respect to long-term or medium-term  indebtedness  for money borrowed,  the
sole purpose of which is to make  provision for the  retirement  or  defeasance,
without prepayment of indebtedness; or
<PAGE>

     (e) Any mortgage,  security  interest,  pledge,  lien or encumbrance on the
assets or properties of ENSTAR Alaska; or

         (f) Any  mortgage,  security  interest,  pledge,  lien  or  encumbrance
securing  (i) all or  part  of the  cost  of  exploring,  producing,  gathering,
processing,  marketing,  drilling or developing any properties of the Company or
any of its  Subsidiaries,  or securing  indebtedness  incurred to provide  funds
therefor,  or (ii)  indebtedness  incurred to finance all or part of the cost of
acquiring,  constructing,  altering, improving or repairing any such property or
assets, or securing indebtedness incurred to provide funds therefor; or

         (g) Any extension,  renewal or replacement  (or successive  extensions,
renewals  or  replacements)  in  whole  or in  part  of any  mortgage,  security
interest, pledge, lien or encumbrance referred to in the foregoing subparagraphs
(a) through (f);  provided,  however,  that the principal amount of Secured Debt
secured thereby shall not exceed the principal amount outstanding at the time of
such  extension,  renewal or replacement,  and that such  extension,  renewal or
replacement  shall be  limited  to the  property  which  secured  the  mortgage,
security interest,  pledge, lien or encumbrance so extended, renewed or replaced
and additions to such property.

         Notwithstanding  the  foregoing  provisions  of this  Section  3.6, the
Issuer and any one or more Restricted  Subsidiaries may create, incur, assume or
guarantee  Secured  Debt which  would  otherwise  be  subject  to the  foregoing
restrictions in an aggregate amount that, without duplication, together with all
other  Secured Debt of the Issuer and its  Restricted  Subsidiaries  which would
otherwise be subject to the foregoing  restrictions  (not including Secured Debt
permitted  to be secured  under  subparagraphs  (a)  through  (g) above) and the
aggregate  value of the Sale and Leaseback  Transactions  (as defined in Section
3.7) in existence at such time (not  including  Sale and Leaseback  Transactions
the proceeds of which have been or will be applied in accordance with clause (b)
of Section  3.7) does not at the time exceed 10% of  Consolidated  Net  Tangible
Assets  (excluding  ENSTAR  Alaska).  Solely for purposes of  subparagraphs  (a)
through  (g) above,  the term  "mortgage"  shall  include  any  arrangements  in
connection with a production payment or similar financing arrangement.

         SECTION 3.7 Restriction on Sale and Leaseback Transactions.  The Issuer
will not,  and will not permit any  Restricted  Subsidiary  to, sell or transfer
(except to the Issuer or to one or more  Restricted  Subsidiaries,  or both) any
Principal  Property  owned by it and which has been in full  operation  for more
than 120 days prior to such sale or transfer  with the  intention  (i) of taking
back a lease on such property  (other than a lease for a period not exceeding 36
months)  and (ii) that the use by the Issuer or such  Restricted  Subsidiary  of
such property will be  discontinued  on or before the  expiration of the term of
such  lease  (any  such  transaction  being  herein  referred  to as a "Sale and
Leaseback  Transaction"),  unless (a) the Issuer or such  Restricted  Subsidiary
would be entitled,  pursuant to the  provisions of Section 3.6, to incur Secured
Debt equal in amount to the amount  realized or to be realized upon such sale or
transfer  secured by a mortgage on the property to be leased without equally and
ratably  securing the Securities,  or (b) the Issuer or a Restricted  Subsidiary

<PAGE>

shall  apply an  amount  equal to the  value of the  property  so  leased to the
retirement  (other  than  any  mandatory  retirement),  within  120  days of the
effective date of any such  arrangement,  of indebtedness  for money borrowed by
the Issuer or any Restricted  Subsidiary (other than such indebtedness  owned by
the Issuer or any Restricted Subsidiary) which was recorded as funded debt as of
the date of its  creation  and which,  in the case of such  indebtedness  of the
Issuer,  is not  subordinate and junior in right of payment to the prior payment
of the Securities;  provided,  however,  that the amount to be so applied to the
retirement of such indebtedness shall be reduced by (i) the aggregate  principal
amount of any Securities  delivered within 120 days of the effective date of any
such  arrangement to the Trustee for retirement and  cancellation,  and (ii) the
aggregate  principal  amount of such  indebtedness  (other than the  Securities)
retired  by the  Issuer  or a  Restricted  Subsidiary  within  120  days  of the
effective date of any such arrangement.

         The term  "value"  shall  mean,  with  respect to a Sale and  Leaseback
Transaction,  as of any particular  time, the amount equal to the greater of (i)
the net  proceeds of the sale of the property  leased  pursuant to such Sale and
Leaseback  Transaction,  or (ii) the fair value of such  property at the time of
entering into such Sale and Leaseback Transaction, as determined by the Board of
Directors,  in either case divided first by the number of full years of the term
of the  lease  and then  multiplied  by the  number  of full  years of such term
remaining  at the  time of  determination,  without  regard  to any  renewal  or
extension options contained in the lease.




                                  ARTICLE FOUR
                    SECURITYHOLDERS LISTS AND REPORTS BY THE
                             ISSUER AND THE TRUSTEE

         SECTION  4.1  Issuer to  Furnish  Trustee  Information  as to Names and
Addresses of Securityholders. The Issuer and any other obligor on the Securities
covenant  and agree  that  they will  furnish  or cause to be  furnished  to the
Trustee a list in such form as the Trustee may  reasonably  require of the names
and addresses of the Holders of the Securities of each series:

     (a) semiannually and not more than 15 days after each March 1 and September
1, and

     (b) at such other times as the  Trustee  may request in writing,  within 30
days after receipt by the Issuer of any such request,

provided  that if and so long as the  Trustee  shall be the  registrar  for such
series, such list shall not be required to be furnished.

         SECTION 4.2 Preservation and Disclosure of  Securityholders  Lists. (a)
The Trustee shall preserve,  in as current a form as is reasonably  practicable,
all  information  as to the names and addresses of the Holders of each series of
Securities  (i) contained in the most recent list furnished to it as provided in
Section  4.1,  and (ii)  received by it in the  capacity of  registrar or paying
agent for such series, if so acting.  The Trustee may destroy any list furnished
to it as provided in Section 4.1 upon receipt of a new list so furnished.
<PAGE>

         (b) In case three or more Holders of Securities  (hereinafter  referred
to as  "applicants")  apply in writing to the Trustee and furnish to the Trustee
reasonable  proof that each such  applicant has owned a Security for a period of
at least six months preceding the date of such application, and such application
states  that  the  applicants  desire  to  communicate  with  other  Holders  of
Securities of a particular  series (in which case the  applicants  must all hold
Securities  of such  series) or with Holders of all  Securities  with respect to
their rights under this Indenture or under such Securities and such  application
is accompanied by a copy of the form of proxy or other  communication which such
applicants  propose to transmit,  then the Trustee  shall,  within five Business
Days after the receipt of such application, at its election, either

               (i) afford to such applicants access to the information preserved
          at the  time by the  Trustee  in  accordance  with the  provisions  of
          subsection (a) of this Section 4.2, or

               (ii)  inform  such  applicants  as to the  approximate  number of
          Holders of Securities of such series or of all Securities, as the case
          may be, whose names and addresses appear in the information  preserved
          at the time by the  Trustee,  in  accordance  with the  provisions  of
          subsection (a) of this Section 4.2, and as to the approximate  cost of
          mailing   to  such   Securityholders   the  form  of  proxy  or  other
          communication, if any, specified in such application.

         If the Trustee shall elect not to afford to such  applicants  access to
such  information,   the  Trustee  shall,  upon  the  written  request  of  such
applicants,  mail to  each  Securityholder  of such  series  or all  Holders  of
Securities,  as  the  case  may  be,  whose  name  and  address  appears  in the
information  preserved  at the  time  by the  Trustee  in  accordance  with  the
provisions of subsection  (a) of this Section 4.2 a copy of the form of proxy or
other  communication  which  is  specified  in  such  request,  with  reasonable
promptness  after a tender to the  Trustee of the  material  to be mailed and of
payment,  or provision for the payment,  of the reasonable  expenses of mailing,
unless  within  five days  after such  tender,  the  Trustee  shall mail to such
applicants and file with the Commission, together with a copy of the material to
be  mailed,  a written  statement  to the  effect  that,  in the  opinion of the
Trustee,  such mailing would be contrary to the best interests of the Holders of
Securities of such series or of all Securities,  as the case may be, or would be
in violation of applicable  law. Such written  statement shall specify the basis
of such opinion.  If the  Commission,  after  opportunity for a hearing upon the
objections  specified in the written  statement  so filed,  shall enter an order
refusing to sustain any of such  objections  or if,  after the entry of an order
sustaining  one or more of such  objections,  the Commission  shall find,  after
notice and  opportunity  for hearing,  that all the objections so sustained have
been met, and shall enter an order so  declaring,  the Trustee shall mail copies
of such material to all such  Securityholders  with reasonable  promptness after
the entry of such order and the renewal of such  tender;  otherwise  the Trustee
shall be relieved of any obligation or duty to such applicants  respecting their
application.

         (c) Each and every Holder of  Securities,  by receiving and holding the
same,  agrees  with the Issuer and the Trustee  that  neither the Issuer nor the
Trustee nor any agent of the Issuer or the Trustee shall be held  accountable by
reason of the  disclosure of any such  information as to the names and addresses
of the Holders of Securities in accordance with the provisions of subsection (b)

<PAGE>

of this Section 4.2,  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 such subsection (b).

         SECTION 4.3       Reports by the Issuer.  The Issuer covenants:

         (a) to file  with the  Trustee,  within  15 days  after  the  Issuer 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  Issuer  may be  required  to file  with the
Commission  pursuant to Section 13 or Section 15(d) of the  Securities  Exchange
Act of 1934, as amended;  or, if the Issuer is not required to file information,
documents or reports pursuant to either of such Sections,  then to file with the
Trustee and the Commission,  in accordance with 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  Securities  Exchange  Act of 1934,  as  amended,  in  respect  of a debt
security  listed and  registered  on a national  securities  exchange  as may be
prescribed from time to time in such rules and regulations;

         (b) to 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
Issuer with the conditions  and covenants  provided for in this Indenture as may
be required from time to time by such rules and regulations;

         (c) if there are any Original Issue Discount Securities Outstanding, to
file with the Trustee promptly after the end of each calendar year (i) a written
notice  specifying the amount of original issue discount  (including daily rates
and accrual  periods)  accrued on such Securities as of the end of such year and
(ii) such other specific information relating to such original issue discount as
may then be relevant  under the Internal  Revenue Code of 1986,  as amended from
time to time;

         (d) to  transmit by mail to the  Holders of  Securities  within 30 days
after the  filing  thereof  with the  Trustee,  in the  manner and to the extent
provided in Section  4.4(c),  such summaries of any  information,  documents and
reports  required to be filed by the Issuer pursuant to subsections (a), (b) and
(c) of this Section 4.3 as may be required to be  transmitted to such Holders by
rules and regulations prescribed from time to time by the Commission; and

         (e) furnish to the Trustee, not less than annually, a brief certificate
from the principal  executive officer,  principal financial officer or principal
accounting  officer as to his  knowledge  of the  Issuer's  compliance  with all
conditions and covenants under this  Indenture.  For purposes of this subsection
(e), such compliance  shall be determined  without regard to any period of grace
or requirement of notice provided under this Indenture.
<PAGE>

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

         SECTION 4.4 Reports by the Trustee.  (a) Within 60 days after January 1
of each year  commencing  with the year 1998, the Trustee shall transmit by mail
to the Holders of Securities,  as provided in subsection (c) of this Section,  a
brief report  dated as of such  January 1 with  respect to any of the  following
events which may have  occurred  within the last 12 months (but if no such event
has occurred within such period, no report need be transmitted):

               (i) any  change  to its  eligibility  under  Section  6.9 and its
          qualification under Section 6.8;

               (ii) the creation of, or any material  change to, a  relationship
          specified in paragraph (i) through (x) of Section 6.8 (c);

               (iii)  the  character  and  amount  of any  advances  (and if the
          Trustee elects so to state, the  circumstances  surrounding the making
          thereof) made by the Trustee (as such) which remain unpaid on the date
          of such  report  and for the  reimbursement  of which it claims or may
          claim a lien or charge, prior to that of the Securities of any series,
          on any property or funds held or  collected  by it as Trustee,  except
          that the Trustee  shall not be required (but may elect) to report such
          advances if such advances so remaining  unpaid aggregate not more than
          1/2 of 1% of the principal amount of all Securities Outstanding on the
          date of such report;

               (iv) the amount,  interest rate, if any, and maturity date of all
          other indebtedness owing by the Issuer (or by any other obligor on the
          Securities) to the Trustee in its  individual  capacity on the date of
          such  report,  with a  brief  description  of  any  property  held  as
          collateral  security  therefor,  except any indebtedness  based upon a
          creditor  relationship  arising  in any  manner  described  in Section
          6.13(b) (2), (3), (4) or (6);

               (v) any change to the property and funds,  if any,  physically in
          the possession of the Trustee (as such) on the date of such report;

               (vi) any additional issue of Securities which the Trustee has not
          previously reported; and

               (vii) any action taken by the Trustee in the  performance  of its
          duties under this Indenture  which it has not previously  reported and
          which in its opinion materially affects the Securities,  except action
          in respect of a default, notice of which has been or is to be withheld
          by it in accordance with the provisions of Section 5.8.

         (b) The Trustee shall transmit to the  Securityholders  of each series,
as provided in  subsection  (c) of this Section 4.4, a brief report with respect

<PAGE>

to the  character  and amount of any advances  (and if the Trustee  elects so to
state, the circumstances surrounding the making thereof) made by the Trustee, as
such, since the date of the last report  transmitted  pursuant to the provisions
of  subsection  (a) of this  Section  4.4 (or if no such  report has yet been so
transmitted, since the date of this Indenture) for the reimbursement of which it
claims  or may claim a lien or charge  prior to that of the  Securities  of such
series on property or funds held or  collected by it as Trustee and which it has
not previously reported pursuant to this subsection (b), except that the Trustee
shall not be required  (but may elect) to report such  advances if such advances
remaining  unpaid at any time  aggregate 10% or less of the principal  amount of
all Securities Outstanding at such time, such report to be transmitted within 90
days after such time.

         (c)      Reports pursuant to this Section shall be transmitted by mail:

               (i) to all Holders of  Securities,  as the names and addresses of
          such Holders appear upon the registry books of the Issuer; and

               (ii) to all other Persons to whom such reports are required to be
          transmitted  pursuant to Section 313(c) of the Trust  Indenture Act of
          1939.

         (d) A copy of each such report shall, at the time of such  transmission
to Securityholders,  be furnished to the Issuer and be filed by the Trustee with
each stock  exchange  upon which the  Securities  of any  applicable  series are
listed and also with the  Commission.  The Issuer agrees to promptly  notify the
Trustee  with  respect to any series when and as the  Securities  of such series
become admitted to trading on any national  securities exchange or any delisting
from trading thereon.


                                  ARTICLE FIVE
                  REMEDIES OF THE TRUSTEE AND SECURITY HOLDERS
                               ON EVENT OF DEFAULT

         SECTION 5.1 Events of Default. "Event of Default", wherever used herein
with respect to Securities of any series, means any one or more of the following
events  (whatever  the reason for such  Event of  Default),  unless it is either
inapplicable to a particular series or it is specifically deleted or modified in
or pursuant to the Board Resolution or supplemental  indenture establishing such
series of Securities or in the form of Security, for such series:

     (a) default in the payment of any  installment  of interest upon any of the
Securities of such series as and when the same shall become due and payable, and
continuance of such default for a period of 30 days; or

     (b) default in the payment of the  principal of or premium,  if any, of the
Securities  of such  series as and when the same shall  become  due and  payable
either at maturity, upon redemption, by declaration or otherwise; or

     (c) default in the  payment or  satisfaction  of any sinking  fund or other
purchase  obligation with respect to Securities of such series, as and when such
obligation shall become due and payable as in this Indenture expressed; or


<PAGE>

     (d)  failure on the part of the Issuer duly to observe or perform any other
of the covenants or  agreements  on the part of the Issuer in the  Securities of
such  series or in this  Indenture  continued  for a period of 60 days after the
date on which written notice of such failure, requiring the same to be remedied,
shall have been given to the Issuer by the Trustee by  certified  or  registered
mail,  or to the  Issuer  and the  Trustee  by the  Holders  of at least  25% in
aggregate principal amount of the Securities of such series then Outstanding; or

     (e)  without the consent of the Issuer a court  having  jurisdiction  shall
enter an order for relief with respect to the Issuer under the  Bankruptcy  Code
or without the consent of the Issuer a court having  jurisdiction  shall enter a
judgment, order or decree adjudging the Issuer a bankrupt or insolvent, or enter
an order for relief for reorganization,  arrangement,  adjustment or composition
of or in respect of the Issuer under the  Bankruptcy  Code or  applicable  state
insolvency  law and the  continuance  of any such  judgment,  order or decree is
unstayed and in effect for a period of 90 consecutive days; or

     (f) the Issuer shall institute proceedings for entry of an order for relief
with respect to the Issuer under the Bankruptcy  Code or for an  adjudication of
insolvency,  or shall  consent to the  institution  of  bankruptcy or insolvency
proceedings  against it, or shall file a petition seeking, or seek or consent to
reorganization,  arrangement, composition or relief under the Bankruptcy Code or
any applicable  state law, or shall consent to the filing of such petition or to
the  appointment  of  a  receiver,  custodian,  liquidator,  assignee,  trustee,
sequestrator or similar  official of the Issuer or of  substantially  all of its
property,  or the Issuer  shall  make a general  assignment  for the  benefit of
creditors as recognized under the Bankruptcy Code; or

     (g) any other Event of Default  provided with respect to the  Securities of
such series.

         If an Event of Default  with respect to  Securities  of any series then
Outstanding  occurs  and is  continuing,  then and in each and every  such case,
unless the principal of all of the  Securities of such series shall have already
become due and  payable,  either the Trustee or the Holders of not less than 25%
in aggregate principal amount of the Securities of such series then Outstanding,
by  notice  in  writing  to  the  Issuer   (and  to  the  Trustee  if  given  by
Securityholders),  may declare the  principal  (or,  if the  Securities  of such
series are Original  Issue  Discount  Securities,  such portion of the principal
amount as may be specified in the terms of such series) of all the Securities of
such  series and the  interest,  if any,  accrued  thereon to be due and payable
immediately,  and upon any such  declaration  the same shall become and shall be
immediately due and payable,  notwithstanding anything to the contrary contained
in this Indenture or in the Securities of such series. This provision,  however,
is  subject to the  condition  that,  if at any time after the unpaid  principal
amount (or such  specified  amount) of the  Securities of such series shall have
been so  declared  due and  payable  and before any  judgment  or decree for the
payment of the moneys due shall  have been  obtained  or entered as  hereinafter
provided,  the  Issuer  shall  pay or  shall  deposit  with  the  Trustee  a sum
sufficient to pay all matured installments of interest,  if any, upon all of the
Securities  of such series and the  principal of any and all  Securities of such

<PAGE>

series which shall have become due otherwise than by acceleration (with interest
on overdue installments of interest,  if any, to the extent that payment of such
interest is enforceable  under  applicable law and on such principal at the rate
borne by the  Securities  of such series to the date of such payment or deposit)
and the  reasonable  compensation,  disbursements,  expenses and advances of the
Trustee,  and any  and  all  defaults  under  this  Indenture,  other  than  the
nonpayment of such portion of the principal amount of and accrued  interest,  if
any, on Securities  of such series which shall have become due by  acceleration,
shall have been cured or shall have been waived in  accordance  with Section 5.7
or provision deemed by the Trustee to be adequate shall have been made therefor,
then and in every such case the  Holders of a majority  in  aggregate  principal
amount of the Securities of such series then  Outstanding,  by written notice to
the Issuer and to the Trustee,  may rescind and annul such  declaration  and its
consequences;  but no such  rescission  and  annulment  shall extend to or shall
affect any subsequent  default, or shall impair any right consequent thereon. If
any Event of Default with respect to the Issuer  specified in Section  5.1(e) or
5.1(f) occurs,  all unpaid principal amount (or, if the Securities of any series
then  Outstanding  are Original Issue Discount  Securities,  such portion of the
principal  amount as may be  specified  in the terms of each  such  series)  and
accrued  interest on all Securities of each series then  Outstanding  shall ipso
facto become and be immediately due and payable without any declaration or other
act by the Trustee or any Securityholder.

         If the  Trustee  shall have  proceeded  to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such  rescission  or  annulment  or for any other  reason or shall  have been
determined adversely to the Trustee, then and in every such case the Issuer, the
Trustee and the Securityholders  shall be restored respectively to their several
positions  and rights  hereunder,  and all  rights,  remedies  and powers of the
Issuer,  the Trustee and the  Securityholders  shall  continue as though no such
proceeding had been taken.

         Except with respect to an Event of Default pursuant to Section 5.1 (a),
(b) or (c),  the Trustee  shall not be charged  with  knowledge  of any Event of
Default  unless  written  notice  thereof shall have been given to a Responsible
Officer by the Issuer, a paying agent or any Securityholder.

         SECTION 5.2 Payment of Securities on Default; Suit Therefor. The Issuer
covenants that (a) if default shall be made in the payment of any installment of
interest upon any of the  Securities of any series then  Outstanding as and when
the same shall become due and payable, and such default shall have continued for
a period  of 30 days,  or (b) if  default  shall be made in the  payment  of the
principal  of any of the  Securities  of such  series as and when the same shall
have  become due and  payable,  whether at maturity  of the  Securities  of such
series or upon  redemption or by declaration or otherwise,  then, upon demand of
the Trustee,  the Issuer will pay to the Trustee, for the benefit of the Holders
of the Securities,  the whole amount that then shall have become due and payable
on all such  Securities  of such series for  principal or  interest,  if any, or
both, as the case may be, with  interest upon the overdue  principal and (to the
extent that payment of such interest is enforceable  under  applicable law) upon
the  overdue  installments  of  interest,  if  any,  at the  rate  borne  by the
Securities  of such series;  and, in addition  thereto,  such further  amount as
shall be sufficient to cover the costs and expenses of  collection,  including a
reasonable  compensation to the Trustee, its agents,  attorneys and counsel, and
any expenses or liabilities incurred by the Trustee hereunder other than through
its negligence or bad faith.


<PAGE>

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

         If there shall be pending  proceedings  for the  bankruptcy  or for the
reorganization  of the  Issuer or any other  obligor  on the  Securities  of any
series then  Outstanding  under any bankruptcy,  insolvency or other similar law
now or  hereafter  in effect,  or if a receiver  or trustee or similar  official
shall have been  appointed for the property of the Issuer or such other obligor,
or in the case of any other similar judicial  proceedings relative to the Issuer
or other  obligor upon the  Securities  of such series,  or to the  creditors or
property  of the Issuer or such other  obligor,  the  Trustee,  irrespective  of
whether the  principal  of the  Securities  of such series 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  pursuant to the  provisions  of
this  Section  5.2,  shall be entitled and  empowered  by  intervention  in such
proceedings  or  otherwise  to file and  prove a claim or  claims  for the whole
amount of principal  and  interest,  if any,  owing and unpaid in respect of the
Securities  of such series,  and, in case of any judicial  proceedings,  to file
such  proofs of claim  and other  papers or  documents  as may be  necessary  or
advisable in order to have the claims of the Trustee and of the  Securityholders
allowed in such judicial proceedings relative to the Issuer or any other obligor
on the  Securities  of such  series,  its or  their  creditors,  or its or their
property,  and to collect and receive  any moneys or other  property  payable or
deliverable  on any such claims,  and to distribute the same after the deduction
of its charges and expenses,  and any  receiver,  assignee or trustee or similar
official in bankruptcy  or  reorganization  is hereby  authorized by each of the
Securityholders to make such payments to the Trustee,  and, if the Trustee shall
consent to the making of such payments directly to the  Securityholders,  to pay
to the  Trustee  any  amount due it for  compensation  and  expenses,  including
counsel fees and expenses incurred by it up to the date of such distribution. To
the extent that such payment of  reasonable  compensation,  expenses and counsel
fees and expenses out of the estate in any such proceedings  shall be denied for
any reason, payment of the same shall be secured by a lien on, and shall be paid
out of,  any and all  distributions,  dividends,  moneys,  securities  and other
property  which the Holders of the  Securities of such series may be entitled to
receive  in such  proceedings,  whether  in  liquidation  or  under  any plan of
reorganization or arrangement or otherwise.

     All rights of action and of asserting claims under this Indenture, or under
any of the Securities,  may be enforced by the Trustee without the possession of
any  of the  Securities,  or the  production  thereof  at  any  trial  or  other
proceeding relative thereto,  and any such suit or proceeding  instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and any
recovery  of  judgment  shall be for the  ratable  benefit of the Holders of the
Securities of the series in respect of which such judgment has been recovered.


<PAGE>

     SECTION  5.3  Application  of  Moneys  Collected  by  Trustee.  Any  moneys
collected by the Trustee  pursuant to Section 5.2 with respect to  Securities of
any series then Outstanding shall be applied in the order following, at the date
or  dates  fixed  by the  Trustee  for the  distribution  of such  moneys,  upon
presentation of the several  Securities of such series, and stamping thereon the
payment, if only partially paid, and upon surrender thereof, if fully paid:

     FIRST:  To the payment of costs and expenses of collection  and  reasonable
compensation to the Trustee, its agents, attorneys and counsel, and of all other
expenses  and  liabilities  incurred,  and all  advances  made,  by the  Trustee
pursuant to Section 6.6 except as a result of its negligence or bad faith;

     SECOND: If the principal of the Outstanding Securities of such series shall
not have become due and be unpaid,  to the payment of  interest,  if any, on the
Securities of such series,  in the order of the maturity of the  installments of
such interest,  if any, with interest (to the extent that such interest has been
collected by the Trustee) upon the overdue installments of interest,  if any, at
the rate borne by the Securities of such series, such payment to be made ratably
to the Persons entitled thereto;

     THIRD: If the principal of the Outstanding  Securities of such series shall
have become due, by declaration or otherwise, to the payment of the whole amount
then owing and unpaid  upon the  Securities  of such  series for  principal  and
interest, if any, with interest on the overdue principal and (to the extent that
such interest has been  collected by the Trustee) upon overdue  installments  of
interest,  if any, at the rate borne by the  Securities  of such series;  and in
case such moneys shall be  insufficient  to pay in full the whole amounts so due
and unpaid  upon the  Securities  of such  series,  then to the  payment of such
principal and interest, if any, without preference or priority of principal over
interest or of interest over  principal,  or of any installment of interest over
any other  installment of interest,  or of any Security over any other Security,
ratably to the aggregate of such principal and accrued and unpaid interest; and

     FOURTH:  To the payment of any surplus then  remaining  to the Issuer,  its
successors or assigns,  or to whomsoever may be lawfully entitled to receive the
same.

     No claim for interest  which in any manner at or after  maturity shall have
been  transferred  or pledged  separate or apart from the Securities to which it
relates,  or which in any manner shall have been kept alive after maturity by an
extension  (otherwise  than  pursuant to an  extension  made  pursuant to a plan
proposed  by the Issuer to the  Holders  of all  Securities  of any series  then
Outstanding), purchase, funding or otherwise by or on behalf or with the consent
or approval of the Issuer shall be entitled, in case of a default hereunder,  to
any  benefit  of this  Indenture,  except  after  prior  payment  in full of the
principal of all Securities of any series then Outstanding and of all claims for
interest not so transferred, pledged, kept alive, extended, purchased or funded.

     SECTION 5.4 Proceedings by Securityholders.  No Holder of any Securities of
any series then Outstanding  shall have any right by virtue of or by availing of
any provision of this  Indenture to institute any suit,  action or proceeding in
equity  or at law upon or under or with  respect  to this  Indenture  or for the
appointment  of a receiver  or trustee  or  similar  official,  or for any other
remedy hereunder,  unless such Holder previously shall have given to the Trustee
written  notice of  default  and of the  continuance  thereof,  as  hereinbefore
provided,  and unless the  Holders of not less than 25% in  aggregate  principal
amount of the Securities of such series then Outstanding shall have made written
request to the Trustee to institute  such action,  suit or proceeding in its own
name as Trustee  hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require  against the costs,  expenses and  liabilities to be
incurred  therein or  thereby,  and the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity,  shall have neglected or refused to
institute any such action, suit or proceeding, it being understood and intended,
and being  expressly  covenanted by the Holder of every  Security of such series
with every other taker and Holder and the  Trustee,  that no one or more Holders
of  Securities  of such  series  shall have any right in any manner  whatever by
virtue of or by availing of any provision of this Indenture or of the Securities
to  affect,  disturb  or  prejudice  the  rights  of any  other  Holder  of such
Securities  of such  series,  or to obtain or seek to  obtain  priority  over or
preference  as to any other  such  Holder,  or to enforce  any right  under this
Indenture or the  Securities,  except in the manner herein  provided and for the
equal, ratable and common benefit of all Holders of Securities of such series.

     Notwithstanding any other provisions in this Indenture,  however, the right
of any  Holder of any  Security  to  receive  payment  of the  principal  of and
interest,  if any,  on such  Security,  on or after  the  respective  due  dates
expressed in such Security, or to institute suit for the enforcement of any such
payment on or after such  respective  dates  shall not be  impaired  or affected
without the consent of such Holder.

     SECTION  5.5  Proceedings  by  Trustee.  In case  of an  Event  of  Default
hereunder,  the Trustee may in its discretion proceed to protect and enforce the
rights vested in it by this Indenture by such appropriate  judicial  proceedings
as the  Trustee  shall deem most  effectual  to protect  and enforce any of such
rights,  either  by suit in equity  or by  action  at law or by  proceedings  in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement  contained  in this  Indenture  or in aid of the exercise of any power
granted in this  Indenture,  or to enforce  any other legal or  equitable  right
vested in the Trustee by this Indenture or by law.

     SECTION 5.6 Remedies  Cumulative  and  Continuing.  All powers and remedies
given by this Article Five to the Trustee or to the  Securityholders  shall,  to
the extent  permitted  by law, be deemed  cumulative  and not  exclusive  of any
thereof or of any other  powers and  remedies  available  to the  Trustee or the
Securityholders,   by  judicial   proceedings  or  otherwise,   to  enforce  the
performance  or observance of the  covenants  and  agreements  contained in this
Indenture,  and no delay or omission of the Trustee or of any  Securityholder to
exercise any right or power  accruing upon any default  occurring and continuing
as aforesaid shall impair any such right or power, or shall be construed to be a
waiver of any such  default  or an  acquiescence  therein;  and,  subject to the
provisions of Section 5.4,  every power and remedy given by this Article Five or
by law to the Trustee or to the  Securityholders  may be exercised  from time to
time,  and as often  as shall be  deemed  expedient,  by the  Trustee  or by the
Securityholders.


<PAGE>

     SECTION 5.7  Direction  of  Proceedings;  Waiver of Defaults by Majority of
Securityholders.  The Holders of a majority in aggregate principal amount of the
Securities  of any series  then  Outstanding  shall have the right to direct the
time, method, and place of conducting any proceeding for any remedy available to
the  Trustee,  or  exercising  any trust or power  conferred on the Trustee with
respect to Securities of such series;  provided,  however,  that (subject to the
provisions of Section 6.1) the Trustee shall have the right to decline to follow
any such  direction if the Trustee shall  determine  upon advice of counsel that
the action or proceeding so directed may not lawfully be taken or if the Trustee
in good faith by its board of  directors,  its executive  committee,  or a trust
committee of directors or Responsible  Officers or both shall determine that the
action  or  proceeding  so  directed  would  involve  the  Trustee  in  personal
liability.  The  Holders  of a majority  in  aggregate  principal  amount of the
Securities of any series then Outstanding may on behalf of the Holders of all of
the  Securities  of such  series  waive  any past  default  or Event of  Default
hereunder and its consequences  except a default in the payment of interest,  if
any, on, or the  principal  of, the  Securities  of such  series.  Upon any such
waiver the Issuer,  the Trustee and the Holders of the Securities of such series
shall be restored to their former positions and rights hereunder,  respectively;
but no such waiver shall extend to any  subsequent  or other default or Event of
Default or impair any right consequent thereon. Whenever any default or Event of
Default  hereunder shall have been waived as permitted by this Section 5.7, said
default or Event of Default  shall for all purposes of the  Securities  and this
Indenture be deemed to have been cured and to be not continuing.

     SECTION 5.8 Notice of Defaults. The Trustee shall, within 90 days after the
occurrence  of a  default,  with  respect  to  Securities  of  any  series  then
Outstanding,  mail to all Holders of Securities of such series, as the names and
the addresses of such Holders appear upon the Securities register, notice of all
defaults known to the Trustee with respect to such series,  unless such defaults
shall have been cured before the giving of such notice (the term  "defaults" for
the purpose of this Section 5.8 being hereby defined to be the events  specified
in clauses (a),  (b),  (c),  (d), (e), (f) and (g) of Section 5.1, not including
periods of grace, if any, provided for therein and irrespective of the giving of
the written  notice  specified in said clause (d) but in the case of any default
of the character  specified in said clause (d) no such notice to Securityholders
shall be given until at least 60 days after the giving of written notice thereof
to the  Issuer  pursuant  to said  clause  (d),  as the case may be);  provided,
however,  that, except in the case of default in the payment of the principal of
or interest, if any, on any of the Securities, or in the payment or satisfaction
of any sinking fund or other purchase obligation, 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 or Responsible Officers
or both of the Trustee in good faith  determines  that the  withholding  of such
notice is in the best interests of the Securityholders.

     SECTION 5.9 Undertaking to Pay Costs.  All parties to this Indenture agree,
and each Holder of any  Security by his  acceptance  thereof  shall be deemed to
have agreed,  that any court may in its discretion  require, in any suit for the
enforcement of any right or remedy under this Indenture,  or in any suit against
the Trustee for any action taken or omitted by it as Trustee,  the filing by any
party  litigant in such suit of an undertaking to pay the cost of such suit, and
that  such  court  may in its  discretion  assess  reasonable  costs,  including

<PAGE>

reasonable  attorney's  fees and  expenses,  against any party  litigant in such
suit,  having due regard to the merits and good faith of the claims or  defenses
made by such party  litigant;  but the  provisions of this Section 5.9 shall not
apply to any suit  instituted  by the  Trustee,  to any suit  instituted  by any
Securityholder, or group of Securityholders,  holding in the aggregate more than
10% in principal amount of the Securities of any series then Outstanding,  or to
any suit instituted by any Securityholders for the enforcement of the payment of
the principal of or interest,  if any, on any Security  against the Issuer on or
after the due date expressed in such Security.


                                   ARTICLE SIX
                             CONCERNING THE TRUSTEE

     SECTION 6.1 Duties and  Responsibilities  of the Trustee;  During  Default;
Prior to Default. With respect to the Holders of any series of Securities issued
hereunder,  the  Trustee,  prior to the  occurrence  of an Event of Default with
respect to the Securities of a particular series and after the curing or waiving
of all Events of Default  which may have  occurred  with respect to such series,
undertakes to perform such duties and only such duties as are  specifically  set
forth in this  Indenture.  In case an  Event  of  Default  with  respect  to the
Securities  of a series has  occurred  (which has not been cured or waived)  the
Trustee shall  exercise  with respect to such series of  Securities  such of the
rights and powers  vested in it by this  Indenture,  and use the same  degree of
care and skill in their  exercise as a prudent  man would  exercise or use under
the circumstances in the conduct of his own affairs.

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

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

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

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


<PAGE>

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

     (c) the  Trustee  shall not be liable with  respect to any action  taken or
omitted to be taken by it in good faith in accordance  with the direction of the
Holders  pursuant  to  Section  5.7  relating  to the time,  method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under this Indenture.

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

     SECTION 6.2 Certain Rights of the Trustee. Subject to Section 6.1:

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

     (b) any request,  direction, order or demand of the Issuer mentioned herein
shall be  sufficiently  evidenced  by an Officers'  Certificate  or Issuer Order
(unless other evidence in respect  thereof be herein  specifically  prescribed);
and any  resolution of the Board of Directors may be evidenced to the Trustee by
a copy  thereof  certified by the  secretary  or an  assistant  secretary of the
Issuer;

     (c) the Trustee may consult with counsel of its selection and any advice of
such  counsel  promptly   confirmed  in  writing  shall  be  full  and  complete
authorization and protection in respect of any action taken, suffered or omitted
to be taken by it hereunder in good faith and in reliance  thereon in accordance
with such advice or Opinion of Counsel;

     (d) the Trustee  shall be under no obligation to exercise any of the trusts
or powers vested in it by this  Indenture at the request,  order or direction of
any  of the  Securityholders  pursuant  to  the  provisions  of  this  Indenture
(including,   without   limitation,   pursuant  to  Section  5.1),  unless  such
Securityholders  shall  have  offered  to the  Trustee  reasonable  security  or
indemnity  against the costs,  expenses and liabilities  which might be incurred
therein or thereby;

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


<PAGE>

     (f) prior to the occurrence of an Event of Default  hereunder and after the
curing or waiving of all Events of Default,  the  Trustee  shall not be bound to
make any  investigation  into the facts or  matters  stated  in any  resolution,
certificate,  statement,  instrument, opinion, report, notice, request, consent,
order, approval,  appraisal,  bond, debenture,  note, coupon, security, or other
paper or  document  unless  requested  in writing so to do by the Holders of not
less than a majority in  aggregate  principal  amount of the  Securities  of all
series  affected  then  Outstanding;  provided  that,  if the  payment  within a
reasonable time to the Trustee of the costs,  expenses or liabilities  likely to
be incurred by it in the making of such  investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it by
the terms of this  Indenture,  the  Trustee  may  require  reasonable  indemnity
against  such  expenses  or  liabilities  as  a  condition  to  proceeding;  the
reasonable  expenses of every such investigation shall be paid by the Issuer or,
if paid by the Trustee or any predecessor Trustee, shall be repaid by the Issuer
upon demand;

     (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 not  regularly in its employ and the Trustee shall not be  responsible
for any  misconduct  or  negligence  on the part of any such  agent or  attorney
appointed with due care by it hereunder; and

     (h) the Trustee  shall not be deemed to have notice of any Default of Event
of Default  unless a  Responsible  Officer of the Trustee  has actual  knowledge
thereof or unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate  Trust Office of the Trustee,  and such
notice references the Securities and this Indenture.

     SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of Securities
or Application  of Proceeds  SECTION 6.3 Trustee Not  Responsible  for Recitals,
Disposition  of  Securities or  Application  of Proceeds  Thereof.  The recitals
contained  herein and in the  Securities,  except the Trustee's  certificates of
authentication,  shall be taken as the statements of the Issuer, and the Trustee
assumes no responsibility  for the correctness of the same. The Trustee makes no
representation  as to the  validity or  sufficiency  of this  Indenture,  of the
Securities or of any prospectus used to sell the  Securities.  The Trustee shall
not be  accountable  for  the use or  application  by the  Issuer  of any of the
Securities or of the proceeds thereof.

     SECTION 6.4 Trustee and Agents May Hold Securities;  Collections,  etc. The
Trustee  or any agent of the Issuer or the  Trustee,  in its  individual  or any
other  capacity,  may become the owner or  pledgee of  Securities  with the same
rights it would have if it were not the  Trustee  or such agent and,  subject to
Sections 6.8 and 6.13, may otherwise deal with the Issuer and receive,  collect,
hold and retain  collections  from the Issuer with the same rights it would have
if it were not the Trustee or such agent.

     SECTION 6.5 Moneys Held by Trustee.  Subject to the  provisions  of Section
10.4 hereof,  all moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received,
but need not be  segregated  from other funds  except to the extent  required by
mandatory  provisions of law. Neither the Trustee nor any agent of the Issuer or
the Trustee shall be under any liability for interest on any moneys  received by
it hereunder.


<PAGE>

     SECTION  6.6  Compensation  and  Indemnification  of Trustee  and Its Prior
Claim.  The Issuer covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to, such compensation as shall be agreed to in
writing  between the Issuer and the Trustee  (which  shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
and the Issuer  covenants  and agrees to pay or  reimburse  the Trustee and each
predecessor Trustee upon its request for all reasonable expenses,  disbursements
and advances  incurred or made by or on behalf of it in  accordance  with any of
the provisions of this Indenture (including the reasonable  compensation and the
expenses and  disbursements  of its counsel and of all agents and other  persons
not regularly in its employ) except any such expense, disbursement or advance as
may arise  from its  negligence  or bad  faith.  The Issuer  also  covenants  to
indemnify the Trustee and each predecessor  Trustee for, and to hold it harmless
against, any and all loss, liability,  damage, claim or expense, including taxes
(other  than  taxes  based  on the  income  of the  Trustee),  incurred  without
negligence or bad faith on its part,  arising out of or in  connection  with the
acceptance or  administration  of this Indenture or the trusts hereunder and its
duties  hereunder,  including the costs and expenses of defending itself against
or investigating any claim or liability in the premises.  The obligations of the
Issuer under this Section 6.6 to  compensate  and indemnify the Trustee and each
predecessor  Trustee and to pay or  reimburse  the Trustee and each  predecessor
Trustee for expenses,  disbursements  and advances shall  constitute  additional
indebtedness  hereunder and shall survive the satisfaction and discharge of this
Indenture  or the  resignation  or  removal  of  the  Trustee.  Such  additional
indebtedness shall be a senior claim to that of the Securities upon all property
and funds held or collected  by the Trustee as such,  except funds held in trust
for the benefit of the Holders of particular Securities,  and the Securities are
hereby  subordinated  to such senior claim.  When the Trustee incurs expenses or
renders services in connection with an Event of Default specified in Section 5.1
or  in  connection  with  Article  Five  hereof,  the  expenses  (including  the
reasonable  fees and  expenses  of its  counsel)  and the  compensation  for the
service  in  connection   therewith  are  intended  to  constitute  expenses  of
administration under any bankruptcy law.

     SECTION 6.7 Right of Trustee to Rely on Officers' Certificate, etc. Subject
to Sections 6.1 and 6.2,  whenever in the  administration  of the trusts of this
Indenture  the Trustee  shall deem it necessary  or  desirable  that a matter be
proved or  established  prior to taking or  suffering  or  omitting  any  action
hereunder,  such matter  (unless  other  evidence  in respect  thereof be herein
specifically  prescribed)  may, in the absence of negligence or bad faith on the
part of the Trustee,  be deemed to be conclusively  proved and established by an
Officers'  Certificate  delivered to the Trustee,  and such certificate,  in the
absence of  negligence  or bad faith on the part of the  Trustee,  shall be full
warrant to the Trustee for any action taken, suffered or omitted by it under the
provisions of this Indenture upon the faith thereof.

     SECTION 6.8  Qualification of Trustee;  Conflicting  Interests.  (a) If the
Trustee has or shall acquire any conflicting  interest (as defined in subsection
(c)),  then  within  90 days  after  ascertaining  that it has such  conflicting
interest,  and if the  default  (as  defined  in  subsection  (c)) to which such
conflicting  interest  relates  has not been cured or duly  waived or  otherwise
eliminated  before the end of such  90-day  period,  the  Trustee  shall  either
eliminate  such  conflicting  interest or, except as otherwise  provided  below,
resign, and the Issuer shall take prompt steps to have a successor  appointed in
the manner provided in Section 6.10.


<PAGE>

     (b) If the Trustee  shall fail to comply with the  provisions of subsection
(a),  the  Trustee  shall,  within 10 days after the  expiration  of such 90-day
period, transmit notice of such failure to the Securityholders in the manner and
to the extent provided in Section 4.4 and,  subject to the provisions of Section
5.9,  unless  the  Trustee's  duty to resign is stayed as  provided  below,  any
Securityholder  who has been a bona fide Holder of  Securities  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,  if the Trustee fails, after written request thereof
by such Securityholder, to comply with the provisions of subsection (a).

     Except in the case of a  default  in the  payment  of the  principal  of or
interest on any  Security,  or in the  payment of any  sinking or purchase  fund
installment,  the  Trustee  shall not be  required to resign as provided by this
Section  6.8 if the  Trustee  shall have  sustained  the burden of  proving,  on
application to the Commission and after opportunity for hearing thereon, that

               (i) the default under the Indenture may be cured or waived during
          a  reasonable  period  and  under  the  procedures  described  in such
          application, and

               (ii)  a  stay  of  the  Trustee's  duty  to  resign  will  not be
          inconsistent with the interests of Holders of the Securities.

     The filing of such an application shall  automatically stay the performance
of the duty to resign until the Commission orders otherwise.  Any resignation of
the Trustee  shall become  effective  only upon the  appointment  of a successor
trustee in accordance  with the provisions of Section 6.10 and such  successor's
acceptance of such an appointment.

     (c) For the purposes of this  Section  6.8, the Trustee  shall be deemed to
have a  conflicting  interest  with respect to  Securities  of any series if the
Securities of such series are in default (as  determined in accordance  with the
provisions of Section 5.1, but  exclusive of any period of grace or  requirement
of notice) and

               (i) the Trustee is trustee under this  Indenture  with respect to
          the  Outstanding  securities of any other series or is a trustee under
          another indenture under which any other securities, or certificates of
          interest or participation in any other  securities,  of the Issuer are
          outstanding,  unless  such  other  indenture  is  a  collateral  trust
          indenture  under  which the only  collateral  consists  of  Securities
          issued  under this  Indenture;  provided  that there shall be excluded
          from the operation of this  paragraph (i), this Indenture with respect
          to the  Securities  of any other  series  and there  shall  also be so
          excluded  any  other   indenture  or  indentures   under  which  other
          securities,  or  certificates  of interest or  participation  in other
          securities,  of the Issuer are  outstanding  if (x) this  Indenture is
          and, if applicable,  this Indenture and any series issued  pursuant to
          this  Indenture  and such other  indenture  or  indentures  are wholly
          unsecured and rank equally and such other  indenture or indentures are
          hereafter  qualified under the Trust Indenture Act of 1939, unless the
          Commission  shall have found and declared by order pursuant to Section
          305(b)  or  Section  307(c) of the  Trust  Indenture  Act of 1939 that

<PAGE>

          differences  exist  between  the  provisions  of this  Indenture  with
          respect to Securities of such series and one or more other series,  or
          the  provisions  of this  Indenture  and the  provisions of such other
          indenture  or  indentures  which are so likely to  involve a  material
          conflict of interest as to make it necessary in the public interest or
          for the  protection of investors to disqualify the Trustee from acting
          as such under this Indenture with respect to Securities of such series
          and such other series, or under this Indenture or such other indenture
          or  indentures,  or (y) the Issuer shall have  sustained the burden of
          proving,  on application to the Commission and after  opportunity  for
          hearing thereon, that trusteeship under this Indenture with respect to
          Securities  of such  series  and such  other  series,  or  under  this
          Indenture  and such other  indenture or indentures is not so likely to
          involve a material conflict of interest as to make it necessary in the
          public  interest or for the  protection of investors to disqualify the
          Trustee  from  acting as such under  this  Indenture  with  respect to
          Securities  of such  series  and such  other  series,  or  under  this
          Indenture and such other indentures;

               (ii) the Trustee or any of its directors or executive officers is
          an underwriter for the Issuer;

               (iii) the Trustee directly or indirectly  controls or is directly
          or  indirectly  controlled  by or is under  direct or indirect  common
          control with an underwriter for the Issuer;

               (iv) the Trustee or any of its directors or executive officers is
          a director,  officer, partner, employee,  appointee, or representative
          of the Issuer,  or of an underwriter  (other than the Trustee  itself)
          for  the  Issuer  who  is   currently   engaged  in  the  business  of
          underwriting,  except that (x) one  individual may be a director or an
          executive  officer,  or both,  of the  Trustee  and a  director  or an
          executive officer,  or both, of the Issuer, but may not be at the same
          time an executive  officer of both the Trustee and the Issuer;  (y) if
          and so long as the  number of  directors  of the  Trustee in office is
          more than nine,  one  additional  individual  may be a director  or an
          executive  officer,  or both,  of the  Trustee  and a director  of the
          Issuer;  and (z) the Trustee may be designated by the Issuer or by any
          underwriter  for the Issuer to act in the capacity of transfer  agent,
          registrar,  custodian,  paying agent,  fiscal agent,  escrow agent, or
          depositary,  or in any other  similar  capacity,  or,  subject  to the
          provisions of subsection  (c) (i) of this Section,  to act as trustee,
          whether under an indenture or otherwise;

               (v)  10% or more  of the  voting  securities  of the  Trustee  is
          beneficially owned either by the Issuer or by any director, partner or
          executive officer thereof, or 20% or more of such voting securities is
          beneficially owned, collectively,  by any two or more of such persons;
          or 10% or more of the voting securities of the Trustee is beneficially
          owned  either by an  underwriter  for the  Issuer or by any  director,
          partner,  or executive  officer  thereof,  or is  beneficially  owned,
          collectively, by any two or more such persons;

               (vi)  the  Trustee  is the  beneficial  owner  of,  or  holds  as
          collateral  security for an obligation which is in default,  (x) 5% or
          more of the  voting  securities  or 10% or more of any other  class of

<PAGE>

          security of the Issuer, not including the Securities issued under this
          Indenture and securities  issued under any other indenture under which
          the  Trustee  is also  trustee,  or (y) 10% or  more of any  class  of
          security of an underwriter for the Issuer;

               (vii)  the  Trustee  is the  beneficial  owner  of,  or  holds as
          collateral  security for an obligation which is in default, 5% or more
          of the voting  securities  of any person who, to the  knowledge of the
          Trustee,  owns 10% or more of the voting  securities  of, or  controls
          directly or indirectly or is under direct or indirect  common  control
          with, the Issuer;

               (viii)  the  Trustee  is the  beneficial  owner  of,  or holds as
          collateral security for an obligation which is in default, 10% or more
          of any class  security  of any person  who,  to the  knowledge  of the
          Trustee, owns 50% or more of the voting securities of the Issuer;

               (ix) the Trustee  owns on the date of default (as  determined  in
          accordance  with the  provisions  of Section 5.1, but exclusive of any
          period of grace or  requirement  of notice) or on any  anniversary  of
          such default while such default remains  outstanding,  in the capacity
          of  executor,  administrator,  testamentary  or inter  vivos  trustee,
          guardian,  committee or conservator, or in any other similar capacity,
          an aggregate of 25% or more of the voting securities,  or of any class
          of security,  of any Person,  the beneficial  ownership of a specified
          percentage  of which would have  constituted  a  conflicting  interest
          under paragraphs  (vi), (vii) or (viii) of this subsection.  As to any
          such  securities  of which  the  Trustee  acquired  ownership  through
          becoming executor, administrator, or testamentary trustee of an estate
          which included  them,  the provisions of the preceding  sentence shall
          not  apply,  for  a  period  of  two  years  from  the  date  of  such
          acquisition,  to the  extent  that such  securities  included  in such
          estate do not exceed 25% of such voting  securities or 25% of any such
          class of  security.  Promptly  after the dates of any such default and
          annually  in each  succeeding  year  that  the  Securities  remain  in
          default,  the  Trustee  shall  make a check  of its  holdings  of such
          securities in any of the above-mentioned  capacities as of such dates.
          If the  Issuer  fails  to make  payment  in full  of  principal  of or
          interest on any of the Securities when and as the same becomes due and
          payable,  and  such  failure  continues  for 30 days  thereafter,  the
          Trustee  shall make a prompt check of its holdings of such  Securities
          in  any of  the  above-mentioned  capacities  as of  the  date  of the
          expiration of such 30-day period, and after such date, notwithstanding
          the foregoing  provisions of this  paragraph,  all such  Securities so
          held by the Trustee,  with sole or joint control over such  Securities
          vested in it, shall,  but only so long as such failure shall continue,
          be  considered  as though  beneficially  owned by the  Trustee for the
          purposes of paragraphs (vi), (vii) and (viii) of this subsection; or

               (x) except under the  circumstances  described in paragraphs (1),
          (3), (4), (5) or (6) of Section 6.13(b), the Trustee shall be or shall
          become a creditor of the Issuer.

     For purposes of  subsection  (c) (i), the term  "series of  securities"  or
"series"  means a  series,  class  or  group  of  securities  issuable  under an
indenture  pursuant to the terms of which holders of one such series may vote to
direct the Trustee, or otherwise take action pursuant to a vote of such holders,

<PAGE>

separately  from  holders of  another  such  series;  provided  that  "series of
securities"  or "series"  shall not include  any series of  securities  issuable
under an indenture if all such series rank equally and are wholly unsecured.

     The  specification  of percentages in subsections (c) (v) to (ix) inclusive
of this Section 6.8 shall not be construed as  indicating  that the ownership of
such  percentages  of the  securities  of a  person  is or is not  necessary  or
sufficient  to  constitute  direct  or  indirect  control  for the  purposes  of
subsections (c) (iii) or (vii) of this Section.

     For the purposes of subsections (c) (vi),  (vii),  (viii) and (ix), of this
Section 6.8, only,

               (A) the terms "security" and "securities" shall include only such
          securities as are generally known as corporate  securities,  but shall
          not  include  any note or other  evidence  of  indebtedness  issued to
          evidence an obligation to repay moneys lent to a person by one or more
          banks,  trust  companies,  or banking  firms,  or any  certificate  of
          interest   or   participation   in  any  such  note  or   evidence  of
          indebtedness;

               (B) an obligation shall be deemed to be in default when a default
          in payment of principal  shall have  continued for 30 days or more and
          shall not have been cured; and

               (C) the Trustee  shall not be deemed to be the owner or holder of
          (x) any security which it holds as collateral security,  as trustee or
          otherwise,  for an  obligation  which is not in  default as defined in
          clause (B) above,  or (y) any  security  which it holds as  collateral
          security under this Indenture,  irrespective of any default hereunder,
          or (z) any  security  which it holds as agent  for  collection,  or as
          custodian,   escrow   agent,   or   depositary,   or  in  any  similar
          representative capacity.

     Except as provided  above,  the word  "security" or "securities" as used in
this Section 6.8 shall mean any note, stock,  treasury stock,  bond,  debenture,
evidence  of  indebtedness,  certificate  of interest  or  participation  in any
profit-sharing   agreement,   collateral  trust   certificate,   preorganization
certificate or subscription,  transferable share,  investment  contract,  voting
trust certificate,  certificate of deposit for a security,  fractional undivided
interest in oil, gas or other mineral  rights,  or, in general,  any interest or
instrument  commonly  known as a "security",  or any  certificate of interest or
participation in, temporary or interim  certificate for, receipt for,  guarantee
of, or warrant or right to subscribe to or purchase, any of the foregoing.

     (d) For purposes of this Section 6.8:

               (i) the term "underwriter" when used with reference to the Issuer
          shall mean every  person who,  within a one year  period  prior to the
          time as of which the  determination is made, was an underwriter of any
          security of the Issuer outstanding at the time of the determination;

               (ii) the term "director" shall mean any director of a corporation
          or any  individual  performing  similar  functions with respect to any
          organization whether incorporated or unincorporated;


<PAGE>

               (iii) the term "person" shall mean an individual,  a corporation,
          a partnership,  an  association,  a joint-stock  company,  a trust, an
          unincorporated organization,  or a government or political subdivision
          thereof;  as used in this  paragraph,  the term "trust"  shall include
          only a trust where the  interest or interests  of the  beneficiary  or
          beneficiaries are evidenced by a security;

               (iv) the term "voting security" shall mean any security presently
          entitling  the owner or holder  thereof  to vote in the  direction  or
          management of the affairs of a person, or any security issued under or
          pursuant to any trust,  agreement or arrangement  whereby a trustee or
          trustees  or agent or agents for the owner or holder of such  security
          are  presently  entitled to vote in the direction or management of the
          affairs of a person;

               (v) the term "Issuer" shall mean any obligor upon the Securities;
          and

               (vi) the term "executive officer" shall mean the president, every
          vice president,  every trust officer, the cashier, the secretary,  and
          the  treasurer  of  a  corporation,  and  any  individual  customarily
          performing similar functions with respect to any organization  whether
          incorporated or unincorporated,  but shall not include the chairman of
          the board of directors.

     (e) The percentages of voting securities and other securities  specified in
this  Section  6.8  shall  be  calculated  in  accordance   with  the  following
provisions:

               (i) a  specified  percentage  of  the  voting  securities  of the
          Trustee,  the Issuer or any other  person  referred to in this Section
          (each of whom is referred to as a "person"  in this  paragraph)  means
          such amount of the  outstanding  voting  securities  of such person as
          entitles  the  holder  or  holders  thereof  to  cast  such  specified
          percentage  of the  aggregate  votes  which  the  holders  of all  the
          outstanding  voting  securities of such person are entitled to cast in
          the direction or management of the affairs of such person;

               (ii) a specified  percentage of a class of securities of a person
          means such  percentage  of the  aggregate  amount of securities of the
          class outstanding;

               (iii) the term "amount", when used in regard to securities, means
          the  principal  amount if relating to evidences of  indebtedness,  the
          number of shares if  relating  to  capital  shares,  and the number of
          units if relating to any other kind of security;

               (iv) the term  "outstanding"  means issued and not held by or for
          the  account of the  issuer;  the  following  securities  shall not be
          deemed outstanding within the meaning of this definition:

                         (A)  securities  of an issuer  held in a  sinking  fund
                    relating to securities of the issuer of the same class;


<PAGE>

                         (B)  securities  of an issuer  held in a  sinking  fund
                    relating to another class of  securities  of the issuer,  if
                    the  obligation  evidenced by such other class of securities
                    is not in default as to principal or interest or otherwise;

                         (C)  securities   pledged  by  the  issuer  thereof  as
                    security for an  obligation  of the issuer not in default as
                    to principal or interest or otherwise; and

                         (D)  securities  held in  escrow if placed in escrow by
                    the issuer thereof;

                    provided,  that any voting  securities of an issuer shall be
                    deemed  outstanding  if any person  other than the issuer is
                    entitled to exercise the voting rights thereof; and

          (v) a  security  shall be  deemed to be of the same  class as  another
     security  if both  securities  confer  upon the holder or  holders  thereof
     substantially the same rights and privileges;  provided,  that, in the case
     of secured  evidences  of  indebtedness,  all of which are  issued  under a
     single  indenture,  differences  in the interest rates or maturity dates of
     various  series thereof shall not be deemed  sufficient to constitute  such
     series  different  classes  and  provided,  further,  that,  in the case of
     unsecured  evidences of indebtedness,  differences in the interest rates or
     maturity  dates thereof shall not be deemed  sufficient to constitute  them
     securities  of  different  classes,  whether or not they are issued under a
     single indenture.

     SECTION 6.9 Persons  Eligible for  Appointment as Trustee.  The Trustee for
each  series  of  Securities  hereunder  shall  at all  times  be a  corporation
organized and doing  business  under the laws of the United States of America or
of any state or the District of Columbia  having a combined  capital and surplus
of at least  $50,000,000,  and which is  authorized  under such laws to exercise
corporate  trust powers and is subject to supervision or examination by federal,
state or  District of  Columbia  authority,  or a  corporation  or other  Person
permitted to act as trustee by the  Commission.  If such  corporation  publishes
reports of condition at least annually,  pursuant to law or to the  requirements
of the aforesaid  supervising or examining  authority,  then for the purposes of
this  Section,  the combined  capital and surplus of such  corporation  shall be
deemed to be its  combined  capital  and surplus as set forth in its most recent
report  of  condition  so  published.  No  obligor  upon the  Securities  or any
Affiliate of such obligor shall serve as trustee upon the Securities. In case at
any  time  the  Trustee  shall  cease  to be  eligible  in  accordance  with the
provisions  of this  Section 6.9, the Trustee  shall resign  immediately  in the
manner and with the effect specified in Section 6.10.

     SECTION 6.10 Resignation and Removal; Appointment of Successor Trustee. (a)
The Trustee,  or any trustee or trustees  hereafter  appointed,  may at any time
resign with respect to one or more or all series of Securities by giving written
notice of resignation to the Issuer.  Upon receiving such notice of resignation,
the Issuer shall promptly  appoint a successor  trustee or trustees with respect
to the  applicable  series by  written  instrument  in  duplicate,  executed  by
authority  of the  Board of  Directors,  one copy of which  instrument  shall be

<PAGE>

delivered  to the  resigning  Trustee and one copy to the  successor  trustee or
trustees.  If no successor  trustee shall have been so appointed with respect to
any series and have  accepted  appointment  within 30 days after the  mailing of
such notice of  resignation,  the  resigning  trustee may, at the expense of the
Issuer,  petition any court of competent  jurisdiction  for the appointment of a
successor  trustee,  or any  Securityholder who has been a bona fide Holder of a
Security or  Securities  of the  applicable  series for at least six months may,
subject to the  provisions  of Section  5.9, on behalf of himself and all others
similarly  situated,  petition any such court for the appointment of a successor
trustee.  Such court may  thereupon,  after such notice,  if any, as it may deem
proper and prescribe, appoint a successor trustee.

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

                  (i) the Trustee  shall fail to comply with the  provisions  of
         Section  6.8 with  respect to any series of  Securities  after  written
         request therefor by the Issuer or by any  Securityholder who has been a
         bona fide  Holder of a Security  or  Securities  of such  series for at
         least six months; or

                  (ii) the Trustee shall cease to be eligible in accordance with
         the  provisions  of Section 6.9 and shall fail to resign after  written
         request therefor by the Issuer or by any such Securityholder; or

                  (iii) the  Trustee  shall  become  incapable  of  acting  with
         respect to any series of Securities, or shall be adjudged a bankrupt or
         insolvent,  or a  receiver  or  liquidator  of  the  Trustee  or of its
         property shall be appointed, or any public officer shall take charge or
         control of the Trustee or of its property or affairs for the purpose of
         rehabilitation, conservation or liquidation;

         then, in any such case,  the Issuer may remove the Trustee with respect
to the applicable  series of Securities and appoint a successor trustee for such
series by written  instrument,  in duplicate,  executed by order of the Board of
Directors  one copy of which  instrument  shall be  delivered  to the Trustee so
removed and one copy to the successor trustee,  or, subject to the provisions of
Section 5.9, any Securityholder who has been a bona fide Holder of a Security or
Securities  of such  series for at least six months may on behalf of himself and
all others similarly situated,  petition any court of competent jurisdiction for
the removal of the  Trustee and the  appointment  of a  successor  trustee  with
respect to such series. Such court may thereupon,  after such notice, if any, as
it may deem  proper and  prescribe,  remove the  Trustee and appoint a successor
trustee.

         (c) The  Holders of a majority  in  aggregate  principal  amount of the
Securities  of each series then  Outstanding  may at any time remove the Trustee
with respect to Securities  of such series and appoint a successor  trustee with
respect  to the  Securities  of such  series by  delivering  to the  Trustee  so
removed,  to the  successor  trustee so appointed and to the Issuer the evidence
provided  for  in  Section  7.1  of the  action  in  that  regard  taken  by the
Securityholders.  If no  successor  trustee  shall have been so  appointed  with
respect  to any series and have  accepted  appointment  within 30 days after the

<PAGE>

delivery of such  evidence of  removal,  the Trustee  may, at the expense of the
Issuer,  petition any court of competent  jurisdiction  for the appointment of a
successor  trustee,  or any  Securityholder who has been a bona fide Holder of a
Security or  Securities  of the  applicable  series for at least six months may,
subject to the  provisions  of Section  5.9, on behalf of himself and all others
similarly  situated,  petition any such court for the appointment of a successor
trustee.  Such court may  thereupon,  after such notice,  if any, as it may deem
proper and prescribe, appoint a successor trustee.

     (d) Any  resignation  or removal of the Trustee  with respect to any series
and any appointment of a successor  trustee with respect to such series pursuant
to any of the  provisions  of this  Section  6.10 shall  become  effective  upon
acceptance of appointment by the successor trustee as provided in Section 6.11.

     SECTION 6.11 Acceptance of Appointment by Successor Trustee.  Any successor
trustee  appointed as provided in Section 6.10 shall  execute and deliver to the
Issuer and to its predecessor  trustee an instrument  accepting such appointment
hereunder,  and thereupon the resignation or removal of the predecessor  trustee
with respect to all or any  applicable  series shall become  effective  and such
successor  trustee,  without any further act, deed or  conveyance,  shall become
vested with all rights,  powers,  duties and  obligations  with  respect to such
series of its predecessor hereunder,  with like effect as if originally named as
trustee for such series hereunder; but, nevertheless,  on the written request of
the Issuer or of the successor trustee, upon payment of its charges then unpaid,
the  trustee  ceasing to act shall,  subject  to Section  10.4,  pay over to the
successor  trustee all moneys at the time held by it hereunder and shall execute
and  deliver an  instrument  transferring  to such  successor  trustee  all such
rights,  powers,  duties and  obligations.  Upon  request of any such  successor
trustee,  the Issuer shall execute any and all  instruments  in writing for more
fully and certainly vesting in and confirming to such successor trustee all such
rights and powers.  Any  trustee  ceasing to act shall,  nevertheless,  retain a
prior claim upon all  property  or funds held or  collected  by such  trustee to
secure any amounts then due it pursuant to the provisions of Section 6.6.

     If a successor  trustee is appointed  with respect to the Securities of one
or more (but not all)  series,  the  Issuer,  the  predecessor  Trustee and each
successor  trustee with respect to the Securities of any applicable series shall
execute and deliver an indenture  supplemental  hereto which shall  contain such
provisions  as shall be deemed  necessary  or  desirable to confirm that all the
rights, powers, trusts and duties of the predecessor Trustee with respect to the
Securities  of any series as to which the  predecessor  Trustee is not  retiring
shall  continue  to be vested in the  predecessor  Trustee,  and shall add to or
change any of the  provisions of this Indenture as shall be necessary to provide
for or facilitate the  administration  of the trusts  hereunder by more than one
trustee,  it  being  understood  that  nothing  herein  or in such  supplemental
indenture shall constitute such trustees  co-trustees of the same trust and that
each  such  trustee  shall  be  trustee  of a trust  or  trusts  under  separate
indentures.

         No successor  trustee with  respect to any series of  Securities  shall
accept  appointment  as provided in this Section 6.11 unless at the time of such
acceptance  such  successor  trustee shall be qualified  under the provisions of
Section 6.8 and eligible under the provisions of Section 6.9.

     Upon acceptance of appointment by any successor trustee as provided in this
Section 6.11,  the Issuer shall give notice thereof to the Holders of Securities
of each  series  affected,  by  mailing  such  notice to such  Holders  at their
addresses  as they shall appear on the  registry  books.  If the Issuer fails to
give  such  notice  within  ten days  after  acceptance  of  appointment  by the
successor trustee,  the successor trustee shall cause such notice to be given at
the expense of the Issuer.
<PAGE>

     SECTION 6.12 Merger, Conversion, Consolidation or Succession to Business of
Trustee.  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  that such  corporation  shall be  qualified  under the  provisions  of
Section  6.8 and  eligible  under the  provisions  of Section  6.9,  without the
execution  or filing of any paper or any  further  act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.

     In case at the time such  successor  to the  Trustee  shall  succeed to the
trusts  created by this Indenture any of the Securities of any series shall have
been  authenticated  but not  delivered,  any such  successor to the Trustee may
adopt the certificate of authentication  of any predecessor  Trustee and deliver
such  Securities  so  authenticated;  and,  in  case  at  that  time  any of the
Securities of any series shall not have been authenticated, any successor to the
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
certificate  shall have the full force which it is anywhere in the Securities of
such series or in this  Indenture  provided that the  certificate of the Trustee
shall have; provided,  that the right to adopt the certificate of authentication
of any predecessor  Trustee or to  authenticate  Securities of any series in the
name of any predecessor  Trustee shall apply only to its successor or successors
by merger, conversion or consolidation.

     SECTION 6.13  Preferential  Collection  of Claims  Against the Issuer.  (a)
Subject to the  provisions  of this  Section,  if the Trustee  shall be or shall
become a creditor,  directly or indirectly,  secured or unsecured, of the Issuer
within  three months prior to a default,  as defined in  subsection  (c) of this
Section  6.13,  or  subsequent  to such a default,  then,  unless and until such
default  shall be  cured,  the  Trustee  shall  set  apart and hold in a special
account  for  the  benefit  of the  Trustee  individually,  the  Holders  of the
Securities  and the holders of other  indenture  securities  (as defined in this
Section 6.13):

          (1) an amount  equal to any and all  reductions  in the amount due and
     owing upon any claim as such  creditor in respect of principal or interest,
     effected  after the  beginning  of such  three  month  period  and valid as
     against  the Issuer  and its other  creditors,  except  any such  reduction
     resulting  from the receipt or  disposition  of any  property  described in
     subsection  (a) (2) of this  section,  or from the exercise of any right of
     set-off which the Trustee could have  exercised if a petition in bankruptcy
     had been filed by or against the Issuer upon the date of such default; and

          (2) all  property  received  by the Trustee in respect of any claim as
     such  creditor,   either  as  security  therefor,  or  in  satisfaction  or
     composition thereof, or otherwise,  after the beginning of such three month
     period,  or an  amount  equal  to the  proceeds  of any such  property,  if
     disposed of, subject, however, to the rights, if any, of the Issuer and its
     other  creditors  in  such  property  or  such  proceeds.   Nothing  herein
     contained, however, shall affect the right of the Trustee:

                  (A) to retain for its own account (i) payments made on account
         of any such claim by any Person  (other  than the Issuer) who is liable
         thereon,  (ii) the  proceeds of the bona fide sale of any such claim by
         the Trustee to a third Person,  and (iii)  distributions  made in cash,
         securities  or other  property in respect of claims  filed  against the
         Issuer  in   bankruptcy  or   receivership   or  in   proceedings   for
         reorganization pursuant to the Bankruptcy Code or applicable state law;

                  (B) to realize, for its own account, upon any property held by
         it as security for any such claim,  if such  property was so held prior
         to the beginning of such three month period;

                  (C) to realize, for its own account, but only to the extent of
         the  claim  hereinafter  mentioned,  upon  any  property  held by it as
         security  for any such  claim,  if such  claim  was  created  after the
         beginning of such three month period and such  property was received as
         security therefor  simultaneously with the creation thereof, and if the
         Trustee  shall  sustain  the  burden of  proving  that at the time such
         property was so received the Trustee had no reasonable cause to believe
         that a default as defined in subsection (c) of this Section would occur
         within three months; or

                  (D) to receive  payment on any claim  referred to in paragraph
         (B) or (C),  against the release of any  property  held as security for
         such claim as  provided in such  paragraph  (B) or (C), as the case may
         be, to the extent of the fair value of such property.

     For the purposes of paragraphs (B), (C) and (D), property substituted after
the  beginning of such three month  period for property  held as security at the
time of such substitution shall, to the extent of the fair value of the property
released, have the same status as the property released, and, to the extent that
any claim  referred to in any of such  paragraphs is created in renewal of or in
substitution  for or for the purpose of repaying or  refunding  any  preexisting
claim of the Trustee as such creditor,  such claim shall have the same status as
such pre-existing claim.

     If the Trustee shall be required to account, the funds and property held in
such special account and the proceeds  thereof shall be apportioned  between the
Trustee,  the Securityholders  and the holders of other indenture  securities in
such  manner that the  Trustee,  such  Securityholders  and the holders of other
indenture  securities realize, as a result of payments from such special account
and payments of dividends on claims filed  against the Issuer in  bankruptcy  or
receivership  or in proceedings  for  reorganization  pursuant to the Bankruptcy
Code or applicable  state law, the same percentage of their  respective  claims,
figured before  crediting to the claim of the Trustee anything on account of the
receipt by it from the Issuer of the funds and property in such special account,
and  before   crediting  to  the   respective   claims  of  the  Trustee,   such
Securityholders  and the holders of other  indenture  securities,  dividends  on
claims filed against the Issuer in bankruptcy or  receivership or in proceedings
for reorganization  pursuant to the Bankruptcy Code or applicable state law, but
after crediting  thereon receipts on account of the indebtedness  represented by
their respective claims from all sources other than from such dividends and from
the  funds  and  property  so  held  in such  special  account.  As used in this
paragraph,  with respect to any claim,  the term  "dividends"  shall include any

<PAGE>

distribution  with respect to such claim,  in bankruptcy or  receivership  or in
proceedings  for  reorganization  pursuant to the Bankruptcy  Code or applicable
state  law,  whether  such  distribution  is made in cash,  securities  or other
property,  but shall not  include  any such  distribution  with  respect  to the
secured  portion,  if any,  of such claim.  The court in which such  bankruptcy,
receivership or proceeding for reorganization is pending shall have jurisdiction
(i) to apportion between the Trustee,  such  Securityholders  and the holders of
other indenture securities, in accordance with the provisions of this paragraph,
the funds and property held in such special account and the proceeds thereof, or
(ii)  in lieu  of  such  apportionment,  in  whole  or in  part,  to give to the
provisions of this paragraph due  consideration  in determining  the fairness of
the  distributions  to be  made to the  Trustee,  such  Securityholders  and the
holders of other indenture  securities with respect to their respective  claims,
in which event it shall not be  necessary  to liquidate or to appraise the value
of any securities or other property held in such special  account or as security
for any such claim, or to make a specific  allocation of such  distributions  as
between the secured and unsecured portions of such claims, or otherwise to apply
the provisions of this paragraph as a mathematical formula.

     Any Trustee who has  resigned or been removed  after the  beginning of such
three month period shall be subject to the provisions of this  subsection (a) as
though such resignation or removal had not occurred. If any Trustee has resigned
or been removed prior to the  beginning of such three month period,  it shall be
subject to the  provisions of this  subsection  (a) if and only if the following
conditions exist:

                  (i) the receipt of property or  reduction of claim which would
         have given rise to the  obligation  to  account,  if such  Trustee  had
         continued as trustee,  occurred after the beginning of such three month
         period; and

                  (ii) such receipt of property or  reduction of claim  occurred
         within three months after such resignation or removal.

     (b) There shall be  excluded  from the  operation  of this  Section  6.13 a
creditor relationship arising from:

               (1) the ownership or acquisition  of securities  issued under any
          indenture or any security or securities  having a maturity of one year
          or more at the time of acquisition by the Trustee;

               (2) advances  authorized by a receivership or bankruptcy court of
          competent  jurisdiction  or by  this  Indenture  for  the  purpose  of
          preserving any property which shall at any time be subject to the lien
          of this Indenture or of discharging  tax liens or other prior liens or
          encumbrances   thereon,   if  notice  of  such   advance  and  of  the
          circumstances   surrounding   the  making  thereof  is  given  to  the
          Securityholders  at the  time  and  in the  manner  provided  in  this
          Indenture;


<PAGE>

               (3) disbursements  made in the ordinary course of business in the
          capacity of trustee under an  indenture,  transfer  agent,  registrar,
          custodian,  paying agent, fiscal agent or depositary, or other similar
          capacity;

               (4) an indebtedness  created as a result of services  rendered or
          premises  rented or an  indebtedness  created  as a result of goods or
          securities sold in a cash transaction as defined in subsection  (c)(2)
          of this Section;

               (5)  the  ownership  of  stock  or  of  other   securities  of  a
          corporation  organized  under the  provisions of Section 25 (a) of the
          Federal  Reserve  Act, as amended,  which is directly or  indirectly a
          creditor of the Issuer; or

               (6) the acquisition,  ownership, acceptance or negotiation of any
          drafts,  bills of  exchange,  acceptances  or  obligations  which fall
          within  the  classification  of  self-liquidating  paper as defined in
          subsection (c) (3) of this Section.

         (c)      As used in this Section 6.13:

               (1) the term "default"  shall mean any failure to make payment in
          full of the principal of or interest on any of the Securities when and
          as such principal or interest becomes due and payable;

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

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

               (4) the term "Issuer" shall mean any obligor upon the Securities.

         SECTION  6.14  Appointment  of  Authenticating  Agent.  As  long as any
Securities of a series remain Outstanding,  the Trustee may, by an instrument in
writing,  appoint with the approval of the Issuer an  authenticating  agent (the
"Authenticating  Agent")  which  shall be  authorized  to act on  behalf  of the
Trustee to authenticate  Securities,  including Securities issued upon exchange,
registration  of  transfer,  partial  redemption  or  pursuant  to Section  2.9.

<PAGE>

Securities of each such series  authenticated by such Authenticating Agent shall
be entitled to the benefits of this  Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee.  Whenever reference is made
in this Indenture to the authentication and delivery of Securities of any series
by the Trustee or to the Trustee's Certificate of Authentication, such reference
shall be deemed to include  authentication and delivery on behalf of the Trustee
by an  Authenticating  Agent for such series and a Certificate of Authentication
executed  on  behalf  of  the  Trustee  by  such   Authenticating   Agent.  Such
Authenticating  Agent shall at all times be a  corporation  organized  and doing
business  under the laws of the United  States of America or of any state or the
District of Columbia,  authorized  under such laws to exercise  corporate  trust
powers,   having  a  combined  capital  and  surplus  of  at  least  $50,000,000
(determined  as provided in Section 6.9 with respect to the Trustee) and subject
to supervision or examination by federal or state authority.

     Any  corporation  into  which  any  Authenticating  Agent  may be merged or
converted,  or with which it may be consolidated,  or any corporation  resulting
from any merger,  conversion or consolidation to which any Authenticating  Agent
shall be a party, or any corporation succeeding to the corporate agency business
of any Authenticating  Agent, shall continue to be the Authenticating Agent with
respect to all series of Securities for which it served as Authenticating  Agent
without the  execution  or filing of any paper or any further act on the part of
the Trustee or such  Authenticating  Agent. Any Authenticating  Agent may at any
time,  and if it shall  cease to be  eligible  shall,  resign by giving  written
notice of resignation  to the Trustee and to the Issuer.  The Trustee may at any
time  terminate the agency of an  Authenticating  Agent by giving written notice
thereof to such Authenticating Agent and to the Issuer.

     Upon receiving such a notice of resignation or upon such a termination,  or
in case at any time any  Authenticating  Agent  shall  cease to be  eligible  in
accordance  with the provisions of this Section 6.14 with respect to one or more
series of Securities,  the Trustee may appoint a successor  Authenticating Agent
which shall be acceptable  to the Issuer and the Issuer shall provide  notice of
such  appointment  to all Holders of Securities of such series in the manner and
to the extent provided in Section 11.4. Any successor  Authenticating Agent upon
acceptance  of its  appointment  hereunder  shall become vested with all rights,
powers,  duties and  responsibilities  of its predecessor  hereunder,  with like
effect as if originally named as Authenticating  Agent. The Issuer agrees to pay
to the  Authenticating  Agent  for  such  series  from  time to time  reasonable
compensation.  The  Authenticating  Agent for the Securities of any series shall
have no  responsibility  or liability  for any action taken by it as such at the
direction of the Trustee.

     Sections 6.2,  6.3, 6.4 and 7.3 shall be  applicable to any  Authenticating
Agent.


                                  ARTICLE SEVEN
                         CONCERNING THE SECURITYHOLDERS

     SECTION  7.1  Evidence of Action  Taken by  Securityholders.  Any  request,
demand,  authorization,  direction,  notice,  consent,  waiver  or other  action
provided by this  Indenture  to be given or taken by a specified  percentage  in

<PAGE>

principal amount of the  Securityholders of any or all series may be embodied in
and evidenced by one or more instruments of  substantially  similar tenor signed
by such  specified  percentage  of  Securityholders  in person or by agent  duly
appointed in writing;  and, except as herein otherwise expressly provided,  such
action shall become  effective when such instrument or instruments are delivered
to the Trustee.  Proof of execution of any instrument or of a writing appointing
any such  agent  shall be  sufficient  for any  purpose  of this  Indenture  and
(subject to  Sections  6.1 and 6.2)  conclusive  in favor of the Trustee and the
Issuer, if made in the manner provided in this Article Seven.

     SECTION 7.2 Proof of Execution of Instruments and of Holding of Securities.
Subject  to  Sections  6.1  and  6.2,  the  execution  of  any  instrument  by a
Securityholder or his agent or proxy may be proved in the following manner:

     (a) The fact and date of the execution by any Holder of any  instrument may
be proved by the  certificate  of any  notary  public  or other  officer  of any
jurisdiction  authorized to take  acknowledgments  of deeds or administer  oaths
that the person  executing such  instruments  acknowledged  to him the execution
thereof,  or by an affidavit of a witness to such execution  sworn to before any
such notary or other such  officer.  Where such  execution is by or on behalf of
any legal entity other than an individual,  such  certificate or affidavit shall
also constitute  sufficient  proof of the authority of the person  executing the
same.

     (b) The ownership of Securities shall be proved by the Security register or
by a certificate of the Security registrar.

     SECTION  7.3 Holders to be Treated as Owners.  The Issuer,  the Trustee and
any agent of the  Issuer or the  Trustee  may deem and treat the Person in whose
name any Security shall be registered upon the Security register for such series
as the absolute  owner of such Security  (whether or not such Security  shall be
overdue and  notwithstanding any notation of ownership or other writing thereon)
for the purpose of receiving  payment of or on account of the  principal of and,
subject to the provisions of this Indenture,  interest, if any, on such Security
and for all other purposes; and neither the Issuer nor the Trustee nor any agent
of the Issuer or the Trustee shall be affected by any notice to the contrary.

     SECTION  7.4  Securities  Owned  by  Issuer  Deemed  Not  Outstanding.   In
determining  whether the Holders of the requisite  aggregate principal amount of
Outstanding  Securities  of any or all series have  concurred in any  direction,
consent or waiver under this Indenture, Securities which are owned by the Issuer
or any other obligor on the Securities with respect to which such  determination
is being  made or by any  Affiliate  of the  Issuer or any other  obligor on the
Securities  with  respect  to which  such  determination  is being made shall be
disregarded  and  deemed  not to be  Outstanding  for the  purpose  of any  such
determination,  except that for the purpose of  determining  whether the Trustee
shall be  protected  in relying on any such  direction,  consent or waiver  only
securities  which a  Responsible  Officer of the Trustee  actually  knows are 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

<PAGE>

Securities  and that the pledgee is not the Issuer or any other obligor upon the
Securities  or  any  Affiliate  of  the  Issuer  or  any  other  obligor  on the
Securities.  In case of a dispute as to such right,  the advice of counsel shall
be full  protection in respect of any decision made by the Trustee in accordance
with such advice.  Upon request of the Trustee,  the Issuer shall furnish to the
Trustee   promptly  an  Officers'   Certificate   listing  and  identifying  all
Securities,  if any,  known  by the  Issuer  to be  owned  or held by or for the
account of any of the above-described  Persons; and, subject to Sections 6.1 and
6.2,  the Trustee  shall be entitled to accept  such  Officers'  Certificate  as
conclusive  evidence  of the  facts  therein  set forth and of the fact that all
Securities  not  listed  therein  are  Outstanding  for the  purpose of any such
determination.

     SECTION 7.5 Right of Revocation of Action Taken.  At any time prior to (but
not after) the  evidencing  to the  Trustee,  as provided in Section 7.1, of the
taking of any action by the Holders of the  percentage  in  aggregate  principal
amount of the Securities of any or all series,  as the case may be, specified in
this  Indenture in  connection  with such  action,  any Holder of a Security the
serial number of which is shown by the evidence to be included  among the serial
numbers of the  Securities  the Holders of which have  consented  to such action
may, by filing  written  notice at the Corporate  Trust Office and upon proof of
holding as provided in this Article Seven, revoke such action so far as concerns
such Security  provided that such  revocation  shall not become  effective until
three business days after such filing. Except as aforesaid any such action taken
by the Holder of any Security  shall be conclusive  and binding upon such Holder
and upon all future  Holders and owners of such  Security and of any  Securities
issued in  exchange or  substitution  therefor  or on  registration  of transfer
thereof,  irrespective  of whether or not any notation in regard thereto is made
upon any such  Security.  Any action taken by the Holders of the  percentage  in
aggregate  principal amount of the Securities of any or all series,  as the case
may be,  specified  in this  Indenture in  connection  with such action shall be
conclusively  binding  upon the  Issuer,  the Trustee and the Holders of all the
Securities affected by such action.

     SECTION 7.6 Record Date for Consents and Waivers. The Issuer may, but shall
not be  obligated  to,  direct the  Trustee to  establish  a record date for the
purpose of determining  the Persons  entitled to (i) waive any past default with
respect to the  Securities of such series in accordance  with Section 5.7 of the
Indenture, (ii) consent to any supplemental indenture in accordance with Section
8.2 of the  Indenture  or (iii) waive  compliance  with any term,  condition  or
provision of any covenant  hereunder.  If a record date is fixed, the Holders on
such record date, or their duly designated proxies, and any such Persons,  shall
be entitled  to waive any such past  default,  consent to any such  supplemental
indenture  or waive  compliance  with any such  term,  condition  or  provision,
whether or not such Holder  remains a Holder after such record  date;  provided,
however,  that unless such waiver or consent is obtained  from the  Holders,  or
duly  designated  proxies,  of the  requisite  principal  amount of  Outstanding
Securities  of such  series  prior to the date which is the 180th day after such
record date, any such waiver or consent previously given shall automatically and
without further action by any Holder be canceled and of no further effect.

<PAGE>

                                  ARTICLE EIGHT
                             SUPPLEMENTAL INDENTURES

     SECTION 8.1 Supplemental Indentures Without Consent of Securityholders. The
Issuer,  when  authorized  by a  resolution  of its  Board of  Directors  (which
resolution  may  provide  general  terms or  parameters  for such action and may
provide that the specific  terms of such action may be  determined in accordance
with or pursuant to an Issuer Order),  and the Trustee may from time to time and
at any time enter into an indenture or  indentures  supplemental  hereto  (which
shall conform to the  provisions of the Trust  Indenture Act of 1939 as in force
at the date of the execution thereof) for one or more of the following purposes:

     (a) to  convey,  transfer,  assign,  mortgage  or pledge to the  Trustee as
security for the Securities of one or more series any property or assets;

     (b) to evidence the  succession of another  corporation  to the Issuer,  or
successive  successions,  and the assumption by the successor corporation of the
covenants, agreements and obligations of the Issuer pursuant to Article Nine;

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

     (d) to cure  any  ambiguity  or to  correct  or  supplement  any  provision
contained  herein or in any  supplemental  indenture  which may be  defective or
inconsistent  with any other provision  contained  herein or in any supplemental
indenture,  or to make any other  provisions as the Issuer may deem necessary or
desirable,  provided,  however,  that no such action shall adversely  affect the
interests of the Holders of the Securities;

     (e) to establish the form or terms of Securities of any series as permitted
by Sections 2.1 and 2.3; and

     (f) to evidence and provide for the acceptance of appointment hereunder
by a successor  trustee with respect to the Securities of one or more series and
to add to or  change  any of the  provisions  of  this  Indenture  as  shall  be
necessary  to  provide  for or  facilitate  the  administration  of  the  trusts
hereunder  by more than one  trustee,  pursuant to the  requirements  of Section
6.11.


<PAGE>

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

     Any supplemental indenture authorized by the provisions of this Section may
be executed  without the  consent of the Holders of any of the  Securities  then
Outstanding, notwithstanding any of the provisions of Section 8.2.

     SECTION 8.2 Supplemental  Indentures with Consent of Securityholders.  With
the consent  (evidenced as provided in Article Seven) of the Holders of not less
than a majority in aggregate principal amount of the Securities then Outstanding
of any  series  affected  by  such  supplemental  indenture,  the  Issuer,  when
authorized  by a resolution  of its Board of  Directors  (which  resolution  may
provide  general  terms or  parameters  for such action and may provide that the
specific  terms of such action may be determined in accordance  with or pursuant
to an Issuer  Order),  and the Trustee  may,  from time to time and at any time,
enter into an indenture or indentures  supplemental  hereto (which shall conform
to the provisions of the Trust  Indenture Act of 1939 as in force at the date of
execution  thereof) for the purpose of adding any  provisions  to or changing in
any manner or  eliminating  any of the  provisions  of this  Indenture or of any
supplemental  indenture  or of modifying in any manner the rights of the Holders
of the Securities of such series;  provided, that no such supplemental indenture
shall (a) extend the stated final maturity of the principal of any Security,  or
reduce the principal  amount  thereof,  or reduce the rate or extend the time of
payment of  interest,  if any,  thereon  (or, in the case of an  Original  Issue
Discount  Security,  reduce  the rate of  accrual  of  original  issue  discount
thereon),  or reduce or alter the method of computation of any amount payable on
redemption,  repayment  or purchase by the Issuer  thereof (or the time at which
any such  redemption,  repayment or purchase may be made), or make the principal
thereof  (including  any amount in  respect  of  original  issue  discount),  or
interest,  if any,  thereon  payable  in any coin or  currency  other  than that
provided in the Securities or in accordance with the terms of the Securities, or
reduce the amount of the principal of an Original Issue  Discount  Security that
would be due and payable upon an acceleration of the maturity  thereof  pursuant
to Section 5.1 or the amount thereof provable in bankruptcy  pursuant to Section
5.2, or impair or affect the right of any  Securityholder  to institute suit for
the  payment  thereof  or,  if the  Securities  provide  therefor,  any right of
repayment or purchase at the option of the Securityholder,  in each case without
the  consent  of the  Holder of each  Security  so  affected,  or (b) reduce the
aforesaid  percentage of Securities of any series, the consent of the Holders of
which is required for any such  supplemental  indenture,  without the consent of
the  Holders  of each  Security  so  affected.  No  consent of any Holder of any
Security shall be necessary under this Section 8.2 to permit the Trustee and the
Issuer to execute supplemental indentures pursuant to Sections 8.1 and 9.2.
<PAGE>

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

     Upon the request of the Issuer,  accompanied  by a copy of a resolution  of
the Board of Directors (which resolution may provide general terms or parameters
for such action and may provide  that the  specific  terms of such action may be
determined in accordance  with or pursuant to an Issuer Order)  certified by the
secretary or an assistant  secretary of the Issuer  authorizing the execution of
any such  supplemental  indenture,  and  upon the  filing  with the  Trustee  of
evidence of the consent of the Holders of the  Securities as aforesaid and other
documents,  if any,  required by Section  7.1,  the Trustee  shall join with the
Issuer in the execution of such supplemental  indenture unless such supplemental
indenture  affects the  Trustee's own rights,  duties or  immunities  under this
Indenture or  otherwise,  in which case the Trustee may in its  discretion,  but
shall not be obligated to, enter into such supplemental indenture.

     It shall not be necessary for the consent of the Securityholders under this
Section  8.2  to  approve  the  particular  form  of any  proposed  supplemental
indenture,  but it  shall  be  sufficient  if such  consent  shall  approve  the
substance thereof.

     Promptly after the execution by the Issuer and the Trustee of any
supplemental  indenture  pursuant to the  provisions  of this  Section  8.2, the
Trustee shall give notice thereof to the Holders of then Outstanding  Securities
of each series affected thereby, as provided in Section 11.4. Any failure of the
Issuer to give such notice, or any defect therein,  shall not,  however,  in any
way impair or affect the validity of any such supplemental indenture.

     SECTION 8.3 Effect of  Supplemental  Indenture.  Upon the  execution of any
supplemental  indenture pursuant to the provisions hereof,  this Indenture shall
be and shall be deemed to be modified and amended in  accordance  therewith  and
the respective rights, limitations of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Issuer and the Holders of Securities of
each series  affected  thereby  shall  thereafter be  determined,  exercised and
enforced hereunder subject in all respects to such modifications and amendments,
and all the terms and conditions of any such supplemental indenture shall be and
shall be deemed to be part of the terms and conditions of this Indenture for any
and all purposes.

     SECTION 8.4 Documents to Be Given to Trustee.  The Trustee,  subject to the
provisions  of Sections  6.1 and 6.2,  shall be entitled to receive an Officers'
Certificate  and  an  Opinion  of  Counsel  as  conclusive   evidence  that  any
supplemental indenture executed pursuant to this Article Eight complies with the
applicable provisions of this Indenture.

     SECTION 8.5 Notation on Securities in Respect of  Supplemental  Indentures.
Securities of any series  authenticated and delivered after the execution of any
supplemental indenture pursuant to the provisions of this Article Eight may bear
a notation  in form  approved  by the  Trustee  for such series as to any matter
provided  for by  such  supplemental  indenture  or as to any  action  taken  by
Securityholders. If the Issuer or the Trustee shall so determine, new Securities
of any series so modified  as to conform,  in the opinion of the Trustee and the
Issuer, to any modification of this Indenture contained in any such supplemental
indenture  may be  prepared  by the  Issuer,  authenticated  by the  Trustee and
delivered in exchange for the Securities of such series then Outstanding.
<PAGE>

                                  ARTICLE NINE
           CONSOLIDATION, MERGER, SALE, LEASE, EXCHANGE OR DISPOSITION

     SECTION 9.1 Issuer May Consolidate,  etc., on Certain Terms. Subject to the
provisions of Section 9.3, nothing  contained in this Indenture or in any of the
Securities shall prevent any  consolidation or merger of the Issuer with or into
any other  corporation  or  corporations  (whether  or not  affiliated  with the
Issuer),  or  successive  consolidations  or  mergers in which the Issuer or its
successor or successors shall be a party or parties,  or shall prevent any sale,
lease,  exchange or other  disposition of all or substantially  all the property
and assets of the Issuer to any other  corporation  (whether  or not  affiliated
with the Issuer) authorized to acquire and operate the same; provided,  however,
and the Issuer hereby covenants and agrees, that any such consolidation, merger,
sale, lease, exchange or other disposition shall be upon the conditions that (a)
immediately after such  consolidation,  merger,  sale, lease,  exchange or other
disposition of the  corporation  (whether the Issuer or such other  corporation)
formed by or surviving any such  consolidation or merger, or to which such sale,
lease,  exchange  or other  disposition  shall have been  made,  shall not be in
default in the  performance  or  observance  of any of the terms,  covenants and
conditions  of this  Indenture to be kept or  performed  by the Issuer;  (b) the
corporation  (if  other  than  the  Issuer)  formed  by or  surviving  any  such
consolidation  or  merger,  or to which  such  sale,  lease,  exchange  or other
disposition  shall have been made,  shall be a corporation  organized  under the
laws of the United  States of  America,  any state  thereof or the  District  of
Columbia; and (c) the due and punctual payment of the principal of and interest,
if  any,  on all the  Securities,  according  to  their  tenor,  and the due and
punctual  performance  and  observance of all of the covenants and conditions of
this  Indenture to be performed by the Issuer,  shall be expressly  assumed,  by
supplemental  indenture  satisfactory  in  form  to  the  Trustee  executed  and
delivered to the Trustee,  by the  corporation (if other than the Issuer) formed
by such  consolidation,  or into which the Issuer shall have been merged,  or by
the corporation which shall have acquired or leased such property.

     SECTION 9.2 Securities to be Secured in Certain  Events.  If, upon any such
consolidation,  merger,  or  upon  any  such  sale,  lease,  exchange  or  other
disposition,  or upon any  acquisition by the Issuer by purchase or otherwise of
all or any  part of the  properties  of any  other  corporation,  any  Principal
Property  owned by the  Issuer  or a  Restricted  Subsidiary  immediately  prior
thereto  would  thereupon  become  subject to any mortgage,  security  interest,
pledge,  lien or encumbrance,  not permitted by Section 3.6 hereof,  the Issuer,
prior to such consolidation,  merger, sale, lease, exchange or other disposition
or  acquisition,  will  by  indenture  supplemental  hereto  secure  the due and
punctual  payment of the  principal of and interest,  if any, on the  Securities
then  outstanding  (equally and ratably,  or with such other  relative  priority
specified in Section 3.6,  with any other  indebtedness  of or guaranteed by the
Issuer  then  entitled  thereto) by a direct  lien on such  Principal  Property,
together  with any other  properties  and  assets  of the  Issuer or of any such
Restricted  Subsidiary,  whichever  shall be the  owner  of any  such  Principal
Property,  which would thereupon  become subject to any such mortgage,  security
interest,  pledge,  lien or  encumbrance,  prior  to all  liens  other  than any
theretofore existing thereon.


<PAGE>

     SECTION 9.3 Successor  Corporation to be  Substituted.  In case of any such
consolidation or merger or any sale, conveyance or lease of all or substantially
all of the  property  of the Issuer  and upon the  assumption  by the  successor
corporation,  by supplemental  indenture,  executed and delivered to the Trustee
and satisfactory in form to the Trustee,  of the due and punctual payment of the
principal  of and  interest,  if any, on all of the  Securities  and the due and
punctual performance of all of the covenants and conditions of this Indenture to
be performed by the Issuer,  such successor  corporation shall succeed to and be
substituted for the Issuer,  with the same effect as if it had been named herein
as the  party of the first  part,  and the  Issuer  (including  any  intervening
successor to the Issuer which shall have become the obligor  hereunder) shall be
relieved of any further  obligation  under this  Indenture  and the  Securities;
provided,  however,  that in the  case  of a  sale,  lease,  exchange  or  other
disposition  of the  property  and  assets  of the  Issuer  (including  any such
intervening  successor),  the Issuer (including any such intervening  successor)
shall  continue to be liable on its  obligations  under this  Indenture  and the
Securities  to the  extent,  but only to the  extent,  of  liability  to pay the
principal of and interest,  if any, on the  Securities  at the time,  places and
rate prescribed in this Indenture and the Securities. Such successor corporation
thereupon may cause to be signed, and may issue either in its own name or in the
name  of the  Issuer,  any or all of the  Securities  issuable  hereunder  which
theretofore  shall  not have been  signed by the  Issuer  and  delivered  to the
Trustee; and, upon the order of such successor corporation instead of the Issuer
and  subject to all the terms,  conditions  and  limitations  in this  Indenture
prescribed,  the Trustee shall  authenticate  and shall  deliver any  Securities
which  previously  shall have been signed and  delivered  by the officers of the
Issuer  to the  Trustee  for  authentication,  and  any  Securities  which  such
successor  corporation  thereafter shall cause to be signed and delivered to the
Trustee for that  purpose.  All the  Securities  so issued shall in all respects
have the same legal rank and  benefit  under this  Indenture  as the  Securities
theretofore or thereafter  issued in accordance with the terms of this Indenture
as though all of such  Securities  had been issued at the date of the  execution
hereof.

     In case of any such consolidation or merger or any sale, lease, exchange or
other  disposition of all or substantially all of the property and assets of the
Issuer,  such changes in phraseology and form (but not in substance) may be made
in the Securities, thereafter to be issued, as may be appropriate.

     SECTION 9.4 Opinion of Counsel to be Given Trustee. The Trustee, subject to
Sections  6.1 and 6.2,  may  receive an  Officers'  Certificate  and  Opinion of
Counsel as conclusive evidence that any such consolidation, merger, sale, lease,
exchange  or  other  disposition  and any  such  assumption  complies  with  the
provisions of this Article Nine.


                                   ARTICLE TEN
            SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS

          SECTION 10.1 Satisfaction and Discharge of Indenture.
<PAGE>

                  (A) If at any time (a) the Issuer shall have paid or caused to
         be paid the  principal of and interest,  if any, on all the  Securities
         Outstanding  (other than Securities which have been destroyed,  lost or
         stolen and which have been replaced or paid as provided in Section 2.9)
         as and when the same shall  have  become  due and  payable,  or (b) the
         Issuer  shall  have  delivered  to the  Trustee  for  cancellation  all
         Securities theretofore  authenticated (other than Securities which have
         been destroyed,  lost or stolen and which have been replaced or paid as
         provided in Section  2.9);  and if, in any such case,  the Issuer shall
         also pay or cause to be paid all other sums  payable  hereunder  by the
         Issuer,  then this Indenture shall cease to be of further  effect,  and
         the  Trustee,  on  demand of the  Issuer  accompanied  by an  Officers'
         Certificate and an Opinion of Counsel, each stating that all conditions
         precedent  relating to the satisfaction  and discharge  contemplated by
         this  provision have been complied with, and at the cost and expense of
         the  Issuer,  shall  execute  proper  instruments   acknowledging  such
         satisfaction  and  discharging  this  Indenture.  The Issuer  agrees to
         reimburse the Trustee for any costs or expenses  thereafter  reasonably
         and properly  incurred,  and to compensate the Trustee for any services
         thereafter   reasonably  and  properly  rendered,  by  the  Trustee  in
         connection with this Indenture or the Securities.

                  (B) If at any time (a) the Issuer shall have paid or caused to
         be paid the principal of, premium, if any, and interest, if any, on all
         the Securities of any series Outstanding (other than Securities of such
         series  which have been  destroyed,  lost or stolen and which have been
         replaced or paid as provided in Section 2.9) as and when the same shall
         have become due and payable,  or (b) the Issuer shall have delivered to
         the Trustee for cancellation  all Securities of any series  theretofore
         authenticated (other than any Securities of such series which have been
         destroyed,  lost or stolen  and which  have  been  replaced  or paid as
         provided  in  Section  2.9),  or (c)  in the  case  of  any  series  of
         Securities  with respect to which the exact amount  described in clause
         (ii) below can be determined at the time of making the deposit referred
         to in such  clause  (ii),  (i) all the  Securities  of such  series not
         theretofore delivered to the Trustee for cancellation shall have become
         due and payable, or are by their terms to become due and payable within
         one year or are to be  called  for  redemption  within  one year  under
         arrangements  satisfactory  to the  Trustee for the giving of notice of
         redemption,  and (ii) the Issuer  shall have  irrevocably  deposited or
         caused to be deposited with the Trustee as funds in trust, specifically
         pledged as security  for, and  dedicated  solely to, the benefit of the
         Holders of  Securities  of such series,  cash in an amount  (other than
         moneys  repaid by the  Trustee  or any  paying  agent to the  Issuer in
         accordance  with  Section  10.4) or direct  obligations  of the  United
         States  of  America,  backed  by  its  full  faith  and  credit  ("U.S.
         Government  Obligations"),  maturing as to principal and  interest,  if
         any, at such times and in such amounts as will insure the  availability
         of cash,  or a  combination  thereof,  sufficient  in the  opinion of a
         nationally  recognized firm of independent public accountants expressed
         in a written certification thereof delivered to the Trustee, to pay (A)
         the  principal  of,  premium,  if any,  and  interest,  if any,  on all
         Securities of such series on each date that such principal of, premium,
         if any, or interest,  if any, is due and payable, and (B) any mandatory

<PAGE>

         sinking fund  payments on the dates on which such  payments are due and
         payable  in  accordance  with  the  terms  of  the  Indenture  and  the
         Securities of such series; then the Issuer shall be deemed to have paid
         and  discharged the entire  indebtedness  on all the Securities of such
         series on the date of the deposit  referred to in clause (ii) above and
         the provisions of this Indenture with respect to the Securities of such
         series shall no longer be in effect (except,  in the case of clause (c)
         of this Section  10.1(B),  as to (i) rights of registration of transfer
         and exchange of Securities of such series,  (ii) rights of substitution
         of mutilated,  defaced,  destroyed,  lost or stolen  Securities of such
         series, (iii) rights of Holders of Securities of such series to receive
         payments of principal  thereof and premium,  if any, and  interest,  if
         any,  thereon upon the original stated due dates therefor (but not upon
         acceleration),  and  remaining  rights of the Holders of  Securities of
         such series to receive mandatory sinking fund payments thereon, if any,
         when due, (iv) the rights,  obligations,  duties and  immunities of the
         Trustee hereunder,  (v) the rights of the Holders of Securities of such
         series  as  beneficiaries  hereof  with  respect  to  the  property  so
         deposited  with the Trustee  payable to all or any of them and (vi) the
         obligations  of the Issuer under Section 3.2 with respect to Securities
         of such series) and the Trustee, on demand of the Issuer accompanied by
         an Officers'  Certificate and an Opinion of Counsel,  each stating that
         all  conditions  precedent  contemplated  by this  provision  have been
         complied with, and at the cost and expense of the Issuer, shall execute
         proper instruments acknowledging the same.

                  (C) The following  provisions shall apply to the Securities of
         each  series  unless   specifically   otherwise  provided  in  a  Board
         Resolution,  Officers'  Certificate  or indenture  supplemental  hereto
         provided  pursuant to Section  2.3. In  addition  to  discharge  of the
         Indenture pursuant to the next preceding paragraph,  in the case of any
         series of Securities  with respect to which the exact amount  described
         in  subparagraph  (a) below can be determined at the time of making the
         deposit  referred  to in such  subparagraph  (a),  the Issuer  shall be
         deemed to have paid and discharged the entire  indebtedness  on all the
         Securities  of such a  series  on the 91st  day  after  the date of the
         deposit  referred to in subparagraph  (a) below,  and the provisions of
         this  Indenture  with respect to the Securities of such series shall no
         longer  be in  effect  (except  as to (i)  rights  of  registration  of
         transfer and exchange of Securities of such series,  (ii)  substitution
         of mutilated,  defaced,  destroyed,  lost or stolen  Securities of such
         series, (iii) rights of Holders of Securities of such series to receive
         payments of principal thereof,  premium, if any, and interest,  if any,
         thereon  upon the  original  stated  due dates  therefor  (but not upon
         acceleration),  and  remaining  rights of the Holders of  Securities of
         such series to receive  mandatory  sinking fund payments,  if any, (iv)
         the  rights,   obligations,   duties  and  immunities  of  the  Trustee
         hereunder,  (v) the rights of the Holders of  Securities of such series
         as beneficiaries  hereof with respect to the property so deposited with
         the Trustee  payable to all or any of them and (vi) the  obligations of
         the Issuer under Section 3.2 with respect to Securities of such series)
         and the Trustee,  on demand of the Issuer  accompanied  by an Officers'
         Certificate and an Opinion of Counsel, each stating that all conditions
         precedent  contemplated  by this provision have been complied with, and
         at the cost and expense of the Issuer, shall execute proper instruments
         acknowledging the same, if

                           (a) with  reference to this  provision the Issuer has
                  irrevocably  deposited or caused to be  irrevocably  deposited
                  with the  Trustee as funds in trust,  specifically  pledged as

<PAGE>

          security for, and  dedicated  solely to, the benefit of the Holders of
          Securities  of such  series  (i)  cash  in an  amount,  or  (ii)  U.S.
          Government Obligations, maturing as to principal and interest, if any,
          at such times and in such amounts as will insure the  availability  of
          cash, or (iii) a combination thereof,  sufficient, in the opinion of a
          nationally recognized firm of independent public accountants expressed
          in a written  certification  thereof delivered to the Trustee,  to pay
          (A) the principal of,  premium,  if any, and interest,  if any, on all
          Securities  of such  series  on  each  date  that  such  principal  or
          interest,  if any, is due and payable,  and (B) any mandatory  sinking
          fund  payments on the dates on which such payments are due and payable
          in accordance  with the terms of the  Indenture and the  Securities of
          such series;

               (b) such deposit will not result in a breach or violation  of, or
          constitute a default  under,  any agreement or instrument to which the
          Issuer is a party or by which it is bound; and

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

         SECTION 10.2  Application by Trustee of Funds  Deposited for Payment of
Securities.  Subject to Section 10.4, all moneys and U.S. Government Obligations
deposited with the Trustee  pursuant to Section 10.1 shall be held in trust, and
such  moneys  and all  moneys  from such U.S.  Government  Obligations  shall be
applied  by it to the  payment,  either  directly  or through  any paying  agent
(including  the Issuer  acting as its own paying  agent),  to the Holders of the
particular Securities of such series for the payment or redemption of which such
moneys and U.S. Government  Obligations have been deposited with the Trustee, of
all sums due and to become due thereon for principal  and interest,  if any, but
such moneys and U.S.  Government  Obligations  need not be segregated from other
funds except to the extent required by law.

         SECTION 10.3  Repayment of Moneys Held by Paying  Agent.  In connection
with the satisfaction and discharge of this Indenture with respect to Securities
of any series,  all moneys then held by any paying agent under the provisions of
this Indenture with respect to such series of Securities  shall,  upon demand of
the Issuer,  be repaid to it or paid to the Trustee  and  thereupon  such paying
agent shall be released from all further liability with respect to such moneys.

         SECTION  10.4  Return  of  Moneys  Held by  Trustee  and  Paying  Agent
Unclaimed for Two Years. Any moneys deposited with or paid to the Trustee or any
paying agent for the payment of the  principal  of or  interest,  if any, on any
Security  of any series and not applied but  remaining  unclaimed  for two years

<PAGE>

after the date upon which such principal or interest,  if any, shall have become
due and  payable,  shall,  upon the  written  request  of the  Issuer and unless
otherwise required by mandatory provisions of applicable escheat or abandoned or
unclaimed  property  law, be repaid to the Issuer by the Trustee for such series
or such paying  agent,  and the Holder of the  Securities  of such series shall,
unless  otherwise  required by mandatory  provisions  of  applicable  escheat or
abandoned or unclaimed property laws, thereafter look only to the Issuer for any
payment  which such Holder may be entitled to collect,  and all liability of the
Trustee or any paying agent with respect to such moneys shall thereupon cease.

         SECTION 10.5  Indemnity  for U.S.  Government  Obligations.  The Issuer
shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the U.S.  Government  Obligations  deposited  pursuant to
Section  10.1  or  the  principal  or  interest  received  in  respect  of  such
obligations.


                                 ARTICLE ELEVEN
                            MISCELLANEOUS PROVISIONS

         SECTION  11.1  Partners,  Incorporators,   Stockholders,  Officers  and
Directors of Issuer Exempt from IndividuaSECTION  11.1 Partners,  Incorporators,
Stockholders, Officers and Directors of Issuer Exempt from Individual Liability.
No recourse  under or upon any  obligation,  covenant or agreement  contained in
this Indenture,  or in any Security,  or because of any  indebtedness  evidenced
thereby,  shall be had  against any  incorporator,  as such or against any past,
present or future stockholder,  officer or director,  as such, of the Issuer, or
any partner of the Issuer or of any  successor,  either  directly or through the
Issuer  or any  successor,  under  any rule of law,  statute  or  constitutional
provision or by the  enforcement  of any assessment or by any legal or equitable
proceeding or otherwise,  all such liability being expressly waived and released
by the  acceptance of the  Securities by the Holders  thereof and as part of the
consideration for the issue of the Securities.

         SECTION 11.2  Provisions  of Indenture  for the Sole Benefit of Parties
and  Holders of  Securities.  Nothing in this  Indenture  or in the  Securities,
expressed or implied,  shall give or be  construed to give to any Person,  other
than the parties hereto and their  successors and the Holders of the Securities,
any legal or equitable right,  remedy or claim under this Indenture or under any
covenant or provision herein contained,  all such covenants and provisions being
for the sole  benefit  of the  parties  hereto and their  successors  and of the
Holders of the Securities.

         SECTION 11.3  Successors and Assigns of Issuer Bound by Indenture.  All
the covenants, stipulations, promises and agreements in this Indenture contained
by or on behalf of the Issuer shall bind its successors and assigns,  whether so
expressed or not.

         SECTION  11.4  Notices  and  Demands on Issuer,  Trustee and Holders of
Securities.  Any notice or demand which by any  provision  of this  Indenture is
required or  permitted to be given or served by the Trustee or by the Holders of
Securities to or on the Issuer,  or as required  pursuant to the Trust Indenture
Act of  1939,  may be given  or  served  by  being  deposited  postage  prepaid,
first-class mail (except as otherwise  specifically  provided herein)  addressed

<PAGE>

(until another address of the Issuer is filed by the Issuer with the Trustee) to
Seagull  Energy  Corporation,  1001 Fannin,  Suite 1700,  Houston,  Texas 77002,
Attention:  Chairman of the Board. Any notice,  direction,  request or demand by
the Issuer or any Holder of Securities to or upon the Trustee shall be deemed to
have  been  sufficiently  given or served by being  deposited  postage  prepaid,
first-class mail (except as otherwise  specifically  provided herein)  addressed
(until  another  address of the Trustee is filed by the Trustee with the Issuer)
to The Bank of New York, 101 Barclay  Street,  Floor 21 West, New York, New York
10286, Attention:
Corporate Trust Trustee Administration.

         Where this Indenture provides for notice to Holders of Securities, such
notice shall be sufficiently given (unless otherwise herein expressly  provided)
if in writing and mailed,  first-class  postage prepaid, to each Holder entitled
thereto, at his last address as it appears in the Security register.  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,  it shall be  impracticable to mail notice to the Issuer 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  reasonably  satisfactory  to the
Trustee shall be deemed to be sufficient notice.

         SECTION 11.5 Officers' Certificates and Opinions of Counsel; Statements
to Be Contained  Therein.  Upon any  application  or demand by the Issuer to the
Trustee to take any action under any of the provisions of this Indenture,  or as
required  pursuant to the Trust  Indenture Act of 1939, the Issuer shall furnish
to the Trustee an Officers'  Certificate  stating that all conditions  precedent
provided  for in this  Indenture  relating  to the  proposed  action  have  been
complied  with and an  Opinion of Counsel  stating  that in the  opinion of such
counsel all such  conditions  precedent have been complied with,  except that in
the case of any such  application  or demand as to which the  furnishing of such
documents is specifically  required by any provision of this Indenture  relating
to such particular  application or demand, no additional  certificate or opinion
need be furnished.

         Each  certificate or opinion provided for in this Indenture (other than
a certificate  provided pursuant to Section 4.3(d)) and delivered to the Trustee
with respect to  compliance  with a condition  or covenant  provided for in this
Indenture shall include (a) a statement that the person making such  certificate
or opinion has read such covenant or condition,  (b) a brief statement as to the
nature and scope of the examination or  investigation  upon which the statements
or opinions  contained in such certificate or opinion are based, (c) a statement
that,  in  the  opinion  of  such  person,  he  has  made  such  examination  or
investigation  as is necessary to enable him to express an opinion as to whether
or not such covenant or condition has been complied with, and (d) a statement as
to whether or not, in the opinion of such person, such condition or covenant has
been complied with.


<PAGE>

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

         Any certificate, statement or opinion of an officer of the Issuer or of
counsel  may be based,  insofar  as it  relates to  accounting  matters,  upon a
certificate  or  opinion  of or  representations  by an  accountant  or  firm of
accountants in the employ of the Issuer,  unless such officer or counsel, as the
case may be,  knows that the  certificate  or opinion  or  representations  with
respect to the  accounting  matters  upon which his  certificate,  statement  or
opinion  may  be  based  as  aforesaid  are  erroneous,  or in the  exercise  of
reasonable care should know that the same are erroneous.

         Any  certificate  or  opinion  of  any   independent   firm  of  public
accountants  filed with and  directed to the Trustee  shall  contain a statement
that such firm is independent.

         SECTION 11.6  Payments Due on Saturdays,  Sundays and Holidays.  If the
date of maturity of principal of or interest,  if any, on the  Securities of any
series or the date  fixed for  redemption,  purchase  or  repayment  of any such
Security  shall not be a Business  Day,  then  payment of  interest,  if any, or
principal 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 date of  maturity
or the date fixed for  redemption,  purchase or  repayment,  and, in the case of
payment, no interest shall accrue for the period after such date.

         SECTION  11.7  Conflict  of  Any  Provision  of  Indenture  with  Trust
Indenture Act of 1939. If and to the extent that any provision of this Indenture
limits, qualifies or conflicts with another provision included in this Indenture
which  is  required  to be  included  herein  by any  of  Sections  310 to  317,
inclusive,  or  is  deemed  applicable  to  this  Indenture  by  virtue  of  the
provisions,  of the Trust Indenture Act of 1939,  such required  provision shall
control.

         SECTION 11.8  GOVERNING  LAW. THIS INDENTURE AND EACH SECURITY SHALL BE
DEEMED  TO BE A  CONTRACT  UNDER  THE LAWS OF THE  STATE OF NEW YORK AND FOR ALL
PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE  WITH THE LAWS OF SUCH
STATE.

         SECTION 11.9 Counterparts. This Indenture may be executed in any number
of counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.


<PAGE>

         SECTION  11.10  Effect of  Headings.  The Article and Section  headings
herein and the Table of Contents are for  convenience  only and shall not affect
the construction hereof.


                                 ARTICLE TWELVE
                   REDEMPTION OF SECURITIES AND SINKING FUNDS

         SECTION 12.1  Applicability of Article.  The provisions of this Article
shall be applicable to the Securities of any series which are redeemable  before
their  maturity or to any sinking fund for the  retirement  of  Securities  of a
series  except as  otherwise  specified,  as  contemplated  by  Section  2.3 for
Securities of such series.

         SECTION  12.2  Notice of  Redemption;  Partial  Redemptions.  Notice of
redemption  to the Holders of Securities of any series to be redeemed as a whole
or in part at the option of the Issuer shall be given by mailing  notice of such
redemption by first class mail,  postage prepaid,  at least 30 days and not more
than 60 days  prior  to the  date  fixed  for  redemption  to  such  Holders  of
Securities  of such series at their last  addresses  as they shall appear in the
Security  register.  Any notice  which is mailed in the manner  herein  provided
shall be  conclusively  presumed  to have been duly  given,  whether  or not the
Holder receives the notice. Failure to give notice by mail, or any defect in the
notice to the Holder of any Security of a series  designated for redemption as a
whole or in part  shall not  affect  the  validity  of the  proceedings  for the
redemption of any other Security of such series.

         The  notice  of  redemption  to each  such  Holder  shall  specify  the
principal  amount of each  Security  of such  series  held by such  Holder to be
redeemed,  the date fixed for  redemption,  the redemption  price,  the place or
places of payment,  the CUSIP number relating to such  Securities,  that payment
will be made upon  presentation  and  surrender  of such  Securities,  that such
redemption  is pursuant to the  mandatory or optional  sinking fund, or both, if
such be the case,  that  interest,  if any,  (or, in the case of Original  Issue
Discount  Securities,  original  issue  discount)  accrued to the date fixed for
redemption  will be paid as  specified in such notice and that on and after said
date interest,  if any, (or, in the case of Original Issue Discount  Securities,
original issue discount)  thereon or on the portions thereof to be redeemed will
cease to accrue.  In case any  Security  of a series is to be  redeemed  in part
only, the notice of redemption  shall state the portion of the principal  amount
thereof  to be  redeemed  and shall  state  that on and after the date fixed for
redemption,  upon  surrender of such  Security,  a new Security or Securities of
such series in principal amount equal to the unredeemed  portion thereof will be
issued.

         The notice of  redemption of Securities of any series to be redeemed at
the  option of the  Issuer  shall be given by the  Issuer  or,  at the  Issuer's
request, by the Trustee in the name and at the expense of the Issuer.

         On or before the redemption  date specified in the notice of redemption
given as provided in this Section 12.2, the Issuer will deposit with the Trustee

<PAGE>

or with one or more paying agents (or, if the Issuer is acting as its own paying
agent,  set aside,  segregate  and hold in trust as provided in Section  3.5) an
amount of money  sufficient to redeem on the redemption  date all the Securities
of such series so called for  redemption at the  appropriate  redemption  price,
together with accrued  interest,  if any, to the date fixed for redemption.  The
Issuer will  deliver to the Trustee at least 45 days prior to the date fixed for
redemption (unless a shorter notice period shall be satisfactory to the Trustee)
an Officers' Certificate stating the aggregate principal amount of Securities to
be redeemed.  In case of a redemption at the election of the Issuer prior to the
expiration of any  restriction on such  redemption,  the Issuer shall deliver to
the Trustee, prior to the giving of any notice of redemption to Holders pursuant
to this Section, an Officers' Certificate stating that such restriction has been
complied with.

         If less than all the  Securities  of a series are to be  redeemed,  the
Trustee  shall  select,  in such manner as it shall deem  appropriate  and fair,
Securities of such series to be redeemed.  Securities may be redeemed in part in
multiples equal to the minimum  authorized  denomination  for Securities of such
series or any multiple thereof.  The Trustee shall promptly notify the Issuer in
writing of the  Securities of such series  selected for  redemption  and, in the
case of any  Securities  of such series  selected  for partial  redemption,  the
principal  amount  thereof to be redeemed.  For all purposes of this  Indenture,
unless the context otherwise requires, all provisions relating to the redemption
of Securities of any series 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 12.3 Payment of Securities Called for Redemption.  If notice of
redemption  has been given as above  provided,  the  Securities  or  portions of
Securities specified in such notice shall become due and payable on the date and
at the place or places stated in such notice at the applicable redemption price,
together with interest, if any, accrued to the date fixed for redemption, and on
and after said date  (unless  the Issuer  shall  default in the  payment of such
Securities at the redemption price,  together with interest,  if any, accrued to
said date)  interest  (or, in the case of Original  Issue  Discount  Securities,
original  issue  discount) on the Securities or portions of Securities so called
for redemption  shall cease to accrue,  and such Securities shall cease from and
after the date fixed for  redemption  (unless an earlier date shall be specified
in a Board Resolution,  Officers' Certificate or executed supplemental indenture
referred to in  Sections  2.1 and 2.3 by or pursuant to which the form and terms
of the  Securities  of such  series  were  established)  except as  provided  in
Sections  6.5 and 10.4,  to be entitled  to any  benefit or security  under this
Indenture,  and the  Holders  thereof  shall  have no right in  respect  of such
Securities  except the right to receive the redemption  price thereof and unpaid
interest to the date fixed for redemption. On presentation and surrender of such
Securities at a place of payment  specified in said notice,  said  Securities or
the specified  portions  thereof shall be paid and redeemed by the Issuer at the
applicable  redemption price, together with interest, if any, accrued thereon to
the date  fixed for  redemption;  provided  that  payment of  interest,  if any,
becoming  due on or prior to the date fixed for  redemption  shall be payable to
the Holders of Securities registered as such on the relevant record date subject
to the terms and provisions of Sections 2.3 and 2.7 hereof.

         If any  Security  called  for  redemption  shall  not be so  paid  upon

<PAGE>

surrender thereof for redemption, the redemption price shall, until paid or duly
provided for,  bear  interest from the date fixed for  redemption at the rate of
interest  or  Yield  to  Maturity  (in the case of an  Original  Issue  Discount
Security) borne by such Security.

         Upon  presentation  of any Security  redeemed in part only,  the Issuer
shall execute and the Trustee shall  authenticate and deliver to or on the order
of the  Holder  thereof,  at  the  expense  of the  Issuer,  a new  Security  or
Securities of such series,  and of like tenor, of authorized  denominations,  in
principal amount equal to the unredeemed portion of the Security so presented.

         SECTION  12.4  Exclusion of Certain  Securities  from  Eligibility  for
Selection for  Redemption.  Securities  shall be excluded from  eligibility  for
selection for redemption if they are identified by registration  and certificate
number in an  Officers'  Certificate  delivered  to the Trustee at least 45 days
prior to the last date on which notice of redemption may be given as being owned
of record and beneficially by, and not pledged or hypothecated by either (a) the
Issuer, or (b) a Person specifically  identified in such written statement as an
Affiliate of the Issuer.

         SECTION 12.5 Mandatory and Optional  Sinking Funds.  The minimum amount
of any sinking fund payment  provided for by the terms of the  Securities of any
series is herein  referred to as a  "mandatory  sinking fund  payment",  and any
payment  in  excess  of such  minimum  amount  provided  for by the terms of the
Securities  of any series is herein  referred to as an  "optional  sinking  fund
payment".  The date on which a  sinking  fund  payment  is to be made is  herein
referred to as the "sinking fund payment date".

         In lieu of making all or any part of any mandatory sinking fund payment
with respect to any series of Securities  in cash,  the Issuer may at its option
(a) deliver to the Trustee  Securities of such series  theretofore  purchased or
otherwise  acquired  (except upon redemption  pursuant to the mandatory  sinking
fund) by the  Issuer or  receive  credit  for  Securities  of such  series  (not
previously so credited)  theretofore  purchased or otherwise acquired (except as
aforesaid) by the Issuer and delivered to the Trustee for cancellation  pursuant
to Section  2.10,  (b) receive  credit for optional  sinking fund  payments (not
previously  so  credited)  made  pursuant to this Section  12.5,  or (c) receive
credit for  Securities of such series (not  previously so credited)  redeemed by
the Issuer through any optional  redemption  provision contained in the terms of
such series.  Securities so delivered or credited  shall be received or credited
by  the  Trustee  at  the  sinking  fund  redemption  price  specified  in  such
Securities.

         On or before the 60th day next preceding each sinking fund payment date
for any series, the Issuer will deliver to the Trustee an Officers'  Certificate
(a) specifying the portion of the mandatory sinking fund payment to be satisfied
by payment of cash and the portion to be  satisfied by credit of  Securities  of
such  series  and the  basis  for such  credit,  (b)  stating  that  none of the
Securities  of such series to be so credited has  theretofore  been so credited,
(c)  stating  that no  defaults  in the payment of interest or Events of Default
with respect to such series have  occurred  (which have not been waived or cured
or otherwise ceased to exist) and are continuing, and (d) stating whether or not

<PAGE>

the Issuer  intends  to  exercise  its right to make an  optional  sinking  fund
payment  with respect to such series and, if so,  specifying  the amount of such
optional  sinking fund payment which the Issuer  intends to pay on or before the
next  succeeding  sinking fund payment date. Any Securities of such series to be
credited  and required to be delivered to the Trustee in order for the Issuer to
be entitled to credit  therefor as  aforesaid  which have not  theretofore  been
delivered to the Trustee shall be delivered for cancellation pursuant to Section
2.10 to the Trustee with such  Officers'  Certificate  (or  reasonably  promptly
thereafter if acceptable to the Trustee).  Such Officers'  Certificate  shall be
irrevocable  and upon  its  receipt  by the  Trustee  the  Issuer  shall  become
unconditionally  obligated  to make all the cash  payments or  payments  therein
referred to, if any, on or before the next succeeding sinking fund payment date.
Failure of the Issuer, on or before any such 60th day, to deliver such Officers'
Certificate and Securities  (subject to the  parenthetical  clause in the second
preceding sentence) specified in this paragraph,  if any, shall not constitute a
default but shall constitute,  on and as of such date, the irrevocable  election
of the Issuer (i) that the mandatory sinking fund payment for such series due on
the next  succeeding  sinking fund  payment date shall be paid  entirely in cash
without  the option to deliver or credit  Securities  of such  series in respect
thereof,  and (ii) that the Issuer will make no optional  sinking  fund  payment
with respect to such series as provided in this Section 12.5.

         If the sinking fund payment or payments (mandatory or optional or both)
to be made in cash on the next  succeeding  sinking  fund  payment date plus any
unused balance of any preceding  sinking fund payments made in cash shall exceed
$50,000,  or a lesser sum if the Issuer  shall so  request  with  respect to the
Securities  of any  particular  series,  such cash  shall be applied on the next
succeeding  sinking fund payment date to the  redemption  of  Securities of such
series at the sinking fund redemption price together with accrued  interest,  if
any, to the date fixed for  redemption.  If such amount shall be $50,000 or less
and the Issuer makes no such request,  then it shall be carried over until a sum
in excess of $50,000 is  available.  The  Trustee  shall  select,  in the manner
provided in Section  12.2,  for  redemption  on such sinking fund payment date a
sufficient principal amount of Securities of such series to absorb said cash, as
nearly as may be, and shall (if  requested in writing by the Issuer)  inform the
Issuer of the  serial  numbers of the  Securities  of such  series (or  portions
thereof) so selected.  The Trustee, in the name and at the expense of the Issuer
(or the  Issuer,  if it shall so request  the  Trustee in  writing)  shall cause
notice  of  redemption  of  the  Securities  of  such  series  to  be  given  in
substantially  the manner provided in Section 12.2 (and with the effect provided
in Section 12.3) for the  redemption of Securities of such series in part at the
option of the Issuer.  The amount of any sinking fund payments not so applied or
allocated to the  redemption  of Securities of such series shall be added to the
next cash sinking fund payment for such series and,  together with such payment,
shall be applied in accordance with the provisions of this Section 12.5. Any and
all sinking fund moneys held on the stated  maturity  date of the  Securities of
any particular series (or earlier,  if such maturity is accelerated),  which are
not held for the payment or redemption  of particular  Securities of such series
shall be applied,  together with other moneys, if necessary,  sufficient for the
purpose,  to the payment of the  principal  of, and  interest,  if any,  on, the
Securities of such series at maturity.

         On or before each sinking fund  payment  date,  the Issuer shall pay to
the Trustee in cash or shall otherwise  provide for the payment of all interest,
if any, accrued to the date fixed for redemption on Securities to be redeemed on
such sinking fund payment date.


<PAGE>

         The Trustee shall not redeem or cause to be redeemed any  Securities of
a series with sinking fund moneys or give any notice of redemption of Securities
for such series by  operation of the sinking  fund during the  continuance  of a
default in payment of  interest  on such  Securities  or of any Event of Default
with  respect  to such  series  except  that,  where  the  giving  of  notice of
redemption of any Securities shall theretofore have been made, the Trustee shall
redeem or cause to be  redeemed  such  Securities,  provided  that it shall have
received  from  the  Issuer a sum  sufficient  for such  redemption.  Except  as
aforesaid,  any moneys in the sinking  fund for such series at the time when any
such default or Event of Default  shall occur,  and any moneys  thereafter  paid
into the sinking fund, shall, during the continuance of such default or Event of
Default,  be deemed to have been  collected  under Article Five and held for the
payment of all such  Securities.  In case such Event of Default  shall have been
waived as provided in Section 5.7 or the default cured on or before the 60th day
preceding  the  sinking  fund  payment  date  in any  year,  such  moneys  shall
thereafter  be applied  on the next  succeeding  sinking  fund  payment  date in
accordance with this Section to the redemption of such Securities.


<PAGE>



         IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of September 1, 1997.

                                       SEAGULL ENERGY CORPORATION



                                       By:
                                       Title:



                                       THE BANK OF NEW YORK, as Trustee


                                       By:
                                        Title:

<PAGE>

   
         THIS SECURITY IS A GLOBAL  SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER  REFERRED  TO AND IS  REGISTERED  IN THE NAME OF A  DEPOSITORY  OR A
NOMINEE OF A  DEPOSITORY.  UNLESS AND UNTIL IT IS  EXCHANGED IN WHOLE OR IN PART
FOR  SECURITIES  IN  DEFINITIVE  REGISTERED  FORM,  THIS  SECURITY  MAY  NOT  BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO THE NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE  DEPOSITARY TO THE  DEPOSITARY OR ANOTHER  NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR
A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.


         Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation  ("DTC"), to the Company or
its  agent  for  registration  of  transfer,   exchange,  or  payment,  and  any
certificate issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized  representative of DTC (and any payment is made
to  Cede  & Co.  or to  such  other  entity  as is  requested  by an  authorized
representative  of DTC), ANY TRANSFER,  PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE  BY OR TO ANY PERSON IS  WRONGFUL  inasmuch  as the  registered  owner
hereof, Cede & Co., has an interest herein.
<PAGE>


                           SEAGULL ENERGY CORPORATION

                   7 1/2% Senior Notes due September 15, 2027

No. BE-1                                                 CUSIP No.  812007AE2

         SEAGULL ENERGY  CORPORATION,  a corporation duly organized and existing
under the laws of the State of Texas (herein  called the  "Company,"  which term
includes any successor Person under the Indenture  hereinafter referred to), for
value received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of ONE HUNDRED FIFTY MILLION DOLLARS  ($150,000,000)  on September
15, 2027,  and to pay interest  thereon from September 30, 1997 or from the most
recent  interest  payment date to which  interest has been paid or duly provided
for,  semiannually  in  arrears  on  March  15 and  September  15 in each  year,
commencing March 15, 1998, at the rate of 7 1/2% per annum,  until the principal
hereof  is fully  paid or made  available  for full  payment.  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 is  registered  at the close of business on the March 1 or  September 1
(whether  or not a  Business  Day),  as the case  may be,  next  preceding  such
interest payment date (a "Regular Record Date").  Notwithstanding the foregoing,
if and to the extent the Company  shall  default in the payment of the  interest
due on such interest  payment date, any such interest not so punctually  paid or
duly  provided  for will  forthwith  cease to be  payable  to the Holder on such
Regular  Record Date and such  defaulted  interest  shall instead be paid to the
Person in whose name this Security is registered (a) at the close of business on
a subsequent  record date (which shall be not less than five Business Days prior

<PAGE>

to the date of payment of such defaulted  interest)  established by notice given
by mail by or on behalf of the  Company to the  Holders of  Securities  not less
than 15 days preceding such subsequent  record date or (b) as determined by such
other procedure as is mutually acceptable to the Company and the Trustee, all as
more fully described in the Indenture.

         Payment of the principal of (and premium,  if any) and interest on this
Security shall be made at the Corporate Trust Office of the Trustee in New York,
New York,  or at such other office or agency of the Company as it may  designate
for such  purpose  pursuant to the  Indenture  hereinafter  referred to, in such
immediately  available  funds of the United  States of America as at the time of
payment are legal tender for payment of public and private debts.

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

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

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

Dated: September 30, 1997

                                                    SEAGULL ENERGY CORPORATION


                                                    By:_______________________

                                                    Barry J. Galt
                                                    Chairman of the Board and 
                                                    Chief Executive Officer


ATTEST:


--------------------------------------
Stephen A. Thorington
Treasurer


<PAGE>



                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION


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

                                            THE BANK OF NEW YORK
                                            as Trustee


                                            By:________________________________

                                                     Authorized Officer


<PAGE>

<PAGE>

                               REVERSE OF SECURITY


         This  Security is one of a duly  authorized  issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under the Senior Indenture,  dated as of September 1, 1997 (herein called
the  "Indenture"),  between  the  Company  and The Bank of New York,  as Trustee
(herein  called the  "Trustee,"  which term  includes any  additional  successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto  reference  is hereby made for a  statement  of the  respective  rights,
limitation  of rights,  duties and  immunities  thereunder  of the Company,  the
Trustee  and the  Holders  of the  Securities  and of the terms  upon  which the
Securities are, and are to be,  authenticated  and delivered.  Capitalized terms
used but not defined  herein are defined in the  Indenture  and used herein with
the same meanings  ascribed to them therein.  This Security is a Global Security
representing the entire  principal  amount of the series  designated on the face
hereof, limited in aggregate principal amount to $150,000,000.

         The  Securities  of this  series  are not  redeemable  prior to  stated
maturity.

         The  Securities  of this series  shall not be subject to a sinking fund
requirement.

         The  Indenture  contains  provisions  for  defeasance of (a) the entire
indebtedness  of  this  Security  and (b)  certain  restrictive  covenants  upon
compliance by the Company with certain conditions set forth therein.

         If an Event of Default  with respect to the  Securities  of this series
shall occur and be  continuing,  the unpaid  principal of the Securities of this
series  may be  declared  due and  payable  in the  manner  and with the  effect
provided in the Indenture.

         The  Indenture  contains  provisions  permitting  the  Company  and the
Trustee with the consent of the Holders of not less than a majority in aggregate
principal  amount  of each  series  of  Securities  then  Outstanding  under the
Indenture  and  affected  thereby,  evidenced as provided in the  Indenture,  to
execute  supplemental  indentures  adding any  provisions  to or changing in any
manner  or  eliminating  any  of  the  provisions  of  the  Indenture  or of any
supplemental  indenture  or modifying in any manner the rights of the Holders of
the  Securities of such series;  provided,  however,  that no such  supplemental
indenture shall (i) extend the stated final maturity of any Security,  or reduce
the principal  amount thereof,  or reduce the rate or extend the time of payment
of interest  hereon,  or reduce or alter the method of computation of any amount
payable on redemption,  repayment or purchase by the Company, or change the coin
or currency in which  payments are to be made,  or impair or affect the right of
any Holder to  institute  suit for  enforcement  of any  payment  hereof or (ii)
reduce the aforesaid  percentage of any series of such  Securities,  without the
consent of the Holders of each  Security of any series so  affected.  It is also
provided in the Indenture that the Holders of a majority in aggregate  principal
amount of the  Securities  of any series then  Outstanding  may on behalf of the
Holders of all of the  Securities of such series waive any past default or Event
of Default  under the  Indenture  and its  consequences  except a default in the
payment of the principal of or interest on any of the Securities of such Series.

<PAGE>

Any such  consent or waiver by the Holder of this  Security  (unless  revoked as
provided in the Indenture)  shall be conclusive and binding upon such Holder and
upon all future Holders and owners of this Security and any Securities which may
be issued in exchange or  substitution  herefor,  irrespective of whether or not
any notation thereof is made upon this Security or such other Securities.

         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 interest on this
Security at the place, at the respective times, and at the rates and in the coin
or currency herein provided.

         As set forth in, and subject to, the  provisions of the  Indenture,  no
Holder of any  Security of this  series  shall have any right to  institute  any
proceeding  with respect to the Indenture or for any remedy  thereunder,  unless
such Holder shall have previously given to the Trustee written notice of default
and the  continuance  thereof,  as  provided  in the  Indenture,  and unless the
Holders  of not less  than 25% in  principal  amount of the  Securities  of this
series then Outstanding shall have made written request,  and offered reasonable
indemnity,  to the Trustee to  institute  such  proceeding  as trustee,  and the
Trustee shall have failed to institute such proceeding within 60 days; provided,
however,  that such limitations shall not impair the right of a Holder hereof to
institute suit for the enforcement of payment of the principal of or interest on
this Security on or after the respective due dates expressed  herein without the
consent of such Holder.

         This  Security  shall be  exchangeable  for  Securities  of this series
registered  in the names of Persons  other than the  Depository  with respect to
such series or its nominee  only as provided in this  paragraph.  This  Security
shall be so exchangeable if (i) such Depository  notifies the Company that it is
unwilling,  unable or ineligible to continue as Depository for this Security and
a successor  Depository is not  appointed by the Company  within 90 days or (ii)
the Company  executes and delivers to the Trustee a written order providing that
this  Security  shall be so  exchangeable.  Securities so issued in exchange for
this  Security  shall be of the same  series and of like  tenor,  in  authorized
denominations  and in the aggregate  having the same unpaid  principal amount as
this  Security and  registered  in such names as such  Depository  shall direct.
Individual Securities of this series so issued will be issued in registered form
and  denominations,  unless  otherwise  specified by the Company,  of $1,000 and
integral multiples thereof.

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the security register
maintained for that purpose, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the principal
of (and  premium,  if any) and  interest  on this  Security  are  payable,  duly
endorsed  by,  or  accompanied  by a  written  instrument  of  transfer  in form
satisfactory  to the Company and the Trustee duly executed by, the Holder hereof
or its  attorney  duly  authorized  in  writing,  and  thereupon  on or more new
Securities of this series,  and of like tenor, of authorized  denominations  and
for  the  same  aggregate  unpaid  principal  amount,  shall  be  issued  to the

<PAGE>

designated  transferee or transferees.  At the date of the original  issuance of
this Security, such office or agency of the Company is maintained by the Trustee
at its Corporate Trust Office, 101 Barclay Street,  Floor 21 West, New York, New
York.

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

         Prior to due presentment of this Security for registration of transfer,
the  Company,  the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes,  whether or not this Security be overdue, and neither the Company, the
Trustee  nor any such agent shall be  affected  by notice to the  contrary.  All
payments  made to or upon the  order of such  registered  Holder  shall,  to the
extent of the sum or sums so paid,  satisfy  and  discharge  the  liability  for
moneys payable on this Security.

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

         Interest on this  Security  shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.

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

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


<PAGE>



                                 ASSIGNMENT FORM


I or we assign and transfer this Security to




(Print or type name, address and zip code of assignee or transferee)



(Insert Social Security or other identifying number of assignee or transferee)

     and irrevocably appoint agent to transfer this Security on the books of the
Company. The agent may substitute another to act for him.


Dated: _______                                  Signed:_______________________
              
                                               (Sign exactly as name appears
                                                above or on the other side of
                                                this Security)



Signature Guarantee:________________________________
                    Participant  in  a  recognized   Signature  Guarantee
                    Medallion  Program  (or  other  signature   guarantor
                    program reasonably acceptable to the Trustee)