Document:

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                                                                     EXHIBIT 4.8

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                       VALERO LOGISTICS OPERATIONS, L.P.,

                                     ISSUER

                                  VALERO L.P.,

                                    GUARANTOR

                                       AND

                              THE BANK OF NEW YORK,

                                     TRUSTEE

                                    ---------

                                    INDENTURE

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

                                    ---------

                          SUBORDINATED DEBT SECURITIES

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                        VALERO LOGISTICS OPERATIONS, L.P.

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

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

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

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

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                                TABLE OF CONTENTS

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

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

ARTICLE II Security Forms

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

ARTICLE III The Securities

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

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

ARTICLE IV Satisfaction And Discharge

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

ARTICLE V Remedies

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

ARTICLE VI The Trustee

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

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

ARTICLE VII Holders' Lists And Reports By Trustee And Partnership

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

ARTICLE VIII Consolidation, Merger, Conveyance, Transfer Or Lease

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

ARTICLE IX Supplemental Indentures

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

ARTICLE X Covenants

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

ARTICLE XI Redemption Of Securities

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

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

ARTICLE XII Sinking Funds

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

ARTICLE XIII Defeasance

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

ARTICLE XIV Guarantee of Securities

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

ARTICLE XV Subordination of Securities

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

                                       iv
<PAGE>

                                    INDENTURE

                                    PARTIES:

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

                          RECITALS OF THE PARTNERSHIP:

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

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

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

         Now, Therefore, This Indenture Witnesseth:

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

                                   ARTICLE I

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 101. Definitions.

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

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

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

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

<PAGE>

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

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

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

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

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

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

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

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

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

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

                                       2
<PAGE>

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

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

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

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

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

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

                                       3
<PAGE>

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

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

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

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

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

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

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

         "defeasance" has the meaning specified in Section 1302.

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

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

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

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

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

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

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

                                       4
<PAGE>

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

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

         "Guarantee" has the meaning specified in Section 1401.

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

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

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

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

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

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

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

                                       5
<PAGE>

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

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

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

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

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

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

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

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

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

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

                                       6
<PAGE>

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

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

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

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

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

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

                                       7
<PAGE>

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

                                       8
<PAGE>

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

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

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

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

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

                                       9
<PAGE>

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

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

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

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

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

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

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

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

                                       10
<PAGE>

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

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

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

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

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

SECTION 102. Incorporation by Reference of Trust Indenture Act.

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

         "commission" means the Commission.

         "indenture securities" means the Securities.

         "indenture security holder" means a Holder.

         "indenture to be qualified" means this Indenture.

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

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

                                       11
<PAGE>

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

SECTION 103. Compliance Certificates and Opinions.

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

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

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

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

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

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

SECTION 104. Form of Documents Delivered to Trustee.

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

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

                                       12
<PAGE>

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

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

SECTION 105. Acts of Holders; Record Dates.

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

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

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

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

                                       13
<PAGE>

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

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

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

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

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

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

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

SECTION 107. Notice to Holders; Waiver.

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

                                       14
<PAGE>

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

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

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

SECTION 108. Conflict with Trust Indenture Act.

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

SECTION 109. Effect of Headings and Table of Contents.

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

SECTION 110. Successors and Assigns.

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

SECTION 111. Separability Clause.

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

SECTION 112. Benefits of Indenture.

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

                                       15
<PAGE>

SECTION 113. Governing Law.

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

SECTION 114. Legal Holidays.

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

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

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

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

                                       16
<PAGE>

SECTION 116. Judgment Currency.

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

SECTION 117. Language of Notices, Etc.

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

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

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

                                       17
<PAGE>

                                   ARTICLE II

                                 SECURITY FORMS

SECTION 201. Forms Generally.

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

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

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

SECTION 202. Form of Face of Security.

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

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

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

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

                                       18
<PAGE>

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

                        VALERO LOGISTICS OPERATIONS, L.P.

                               [TITLE OF SECURITY]

No. __________                                                  U.S. $__________

[CUSIP No. [__________]]

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

                                       19
<PAGE>

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

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

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

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

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

                                       20
<PAGE>

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

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

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

                                             By: Valero GP, Inc.
                                                 Its General Partner

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

SECTION 203. Form of Reverse of Security.

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

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

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

                                       21
<PAGE>

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

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

</Table>

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

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

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

</Table>

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

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

                                       22
<PAGE>

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

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

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

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

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

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

                                       23
<PAGE>

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

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

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

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

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

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

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

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

                                       24
<PAGE>

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

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

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

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

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

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

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

                                       25
<PAGE>

Please Insert Social Security or Other Identifying Number of Assignee:

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

Signature                                                             Guarantee:

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

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

                          FORM OF NOTATION ON SECURITY
                              RELATING TO GUARANTEE

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

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

                                           Guarantor:

                                           VALERO L.P.

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

                                               By: Valero GP, LLC,
                                                   Its General Partner

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

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

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

                                       26
<PAGE>

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

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

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

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

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

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

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

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

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

                                       27
<PAGE>

                                  ARTICLE III

                                 THE SECURITIES

SECTION 301. Amount Unlimited; Issuable in Series.

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

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

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

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

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

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

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

                                       28
<PAGE>

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

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

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

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

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

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

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

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

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

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

                                       29
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

                                       30
<PAGE>

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

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

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

SECTION 302. Denominations.

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

SECTION 303. Execution, Authentication, Delivery and Dating.

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

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

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

                                       31
<PAGE>

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

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

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

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

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

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

                                       32
<PAGE>

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

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

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

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

SECTION 304. Temporary Securities.

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

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

SECTION 305. Registration, Registration of Transfer and Exchange.

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

                                       33
<PAGE>

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

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

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

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

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

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

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

                                       34
<PAGE>

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

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

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

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

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

                                       35
<PAGE>

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

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

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

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

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

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

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

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

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

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

                                       36
<PAGE>

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

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

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

SECTION 307. Payment of Interest; Interest Rights Preserved.

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

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

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

                                       37
<PAGE>

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

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

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

SECTION 308. Persons Deemed Owners.

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

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

SECTION 309. Cancellation.

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

                                       38
<PAGE>

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

SECTION 310. Computation of Interest.

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

SECTION 311. CUSIP Numbers.

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

                                   ARTICLE IV

                           SATISFACTION AND DISCHARGE

SECTION 401. Satisfaction and Discharge of Indenture.

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

                  (1) either

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

                                       39
<PAGE>

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

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

                                    (i) have become due and payable,

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

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

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

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

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

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

SECTION 402. Application of Trust Money.

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

                                       40
<PAGE>

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

                                   ARTICLE V

                                    REMEDIES

SECTION 501. Events of Default.

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

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

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

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

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

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

                                       41
<PAGE>

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

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

SECTION 502. Acceleration of Maturity; Rescission and Annulment.

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

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

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

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

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

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

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

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<PAGE>

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

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

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

         The Partnership covenants that if

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

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

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

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

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

SECTION 504. Trustee May File Proofs of Claim.

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

                                       43
<PAGE>

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

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

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

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

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

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

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

SECTION 506. Application of Money Collected.

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

                                       44
<PAGE>

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

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

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

SECTION 507. Limitation on Suits.

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

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

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

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

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

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

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

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

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

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<PAGE>

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

SECTION 509. Restoration of Rights and Remedies.

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

SECTION 510. Rights and Remedies Cumulative.

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

SECTION 511. Delay or Omission Not Waiver.

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

SECTION 512. Control by Holders.

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

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

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

                                       46
<PAGE>

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

SECTION 513. Waiver of Past Defaults.

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

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

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

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

SECTION 514. Undertaking for Costs.

         All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant, other
than the Trustee, in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this Section 514 shall not
apply to any suit instituted by the Partnership, to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities of
any series, or to any suit instituted by any Holder for the enforcement of the
payment of the principal of, or premium, if any, or interest on any Security on
or after the Stated Maturity or Maturities expressed in such Security (or, in
the case of redemption, on or after the Redemption Date).

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

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

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<PAGE>

                                   ARTICLE VI

                                   THE TRUSTEE

SECTION 601. Certain Duties and Responsibilities.

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

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

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

                  (b) In case an Event of Default has occurred and is
         continuing, the Trustee shall exercise such of the rights and powers
         vested in it by this Indenture, and use the same degree of care and
         skill in their exercise, as a prudent man would exercise or use under
         the circumstances in the conduct of his own affairs.

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

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

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

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

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<PAGE>

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

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

SECTION 602. Notice of Defaults.

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

SECTION 603. Certain Rights of Trustee.

         Subject to the provisions of Section 601:

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

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

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

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

                                       49
<PAGE>

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

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

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

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

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

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

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

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

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<PAGE>

SECTION 605. May Hold Securities.

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

SECTION 606. Money Held in Trust.

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

SECTION 607. Compensation and Reimbursement.

         The Partnership agrees

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

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

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

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

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

                                       51
<PAGE>

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

SECTION 608. Disqualification; Conflicting Interests.

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

SECTION 609. Corporate Trustee Required; Eligibility.

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

SECTION 610. Resignation and Removal; Appointment of Successor.

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

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

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

                  (d) If at any time:

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

                                       52
<PAGE>

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

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

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

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

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

                                       53
<PAGE>

SECTION 611. Acceptance of Appointment by Successor.

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

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

                  (c) Upon request of any such successor Trustee, the
         Partnership shall execute any and all instruments for more fully and
         certainly vesting in and confirming to such successor Trustee all such
         rights, powers and trusts referred to in paragraph (a) or (b) of this
         Section 611, as the case may be.

                                       54
<PAGE>

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

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

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

SECTION 613. Preferential Collection of Claims Against Partnership.

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

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

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

SECTION 614. Appointment of Authenticating Agent.

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

                                       55
<PAGE>

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

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

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

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

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

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

                                       56
<PAGE>

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

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

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

                                  ARTICLE VII

              HOLDERS' LISTS AND REPORTS BY TRUSTEE AND PARTNERSHIP

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

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

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

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

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

SECTION 702. Preservation of Information; Communications to Holders.

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

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

                                       57
<PAGE>

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

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

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

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

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

SECTION 703. Reports by Trustee.

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

                                       58
<PAGE>

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

SECTION 704. Reports by Partnership.

         The Partnership shall:

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

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

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

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

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<PAGE>

                                  ARTICLE VIII

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

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

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

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

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

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

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

SECTION 802. Successor Substituted.

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

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<PAGE>

                                   ARTICLE IX

                             SUPPLEMENTAL INDENTURES

SECTION 901. Supplemental Indentures Without Consent of Holders.

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

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

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

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

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

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

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

                                       61
<PAGE>

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

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

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

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

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

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

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

SECTION 902. Supplemental Indentures with Consent of Holders.

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

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

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

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

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

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

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

SECTION 903. Execution of Supplemental Indentures.

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

                                       63
<PAGE>

SECTION 904. Effect of Supplemental Indentures.

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

SECTION 905. Conformity with Trust Indenture Act.

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

SECTION 906. Reference in Securities to Supplemental Indentures.

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

                                   ARTICLE X

                                    COVENANTS

SECTION 1001. Payment of Principal, Premium and Interest.

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

SECTION 1002. Maintenance of Office or Agency.

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

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

                                       64
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

SECTION 1004. Statement by Officers as to Default.

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

SECTION 1005. Existence.

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

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SECTION 1006. Waiver of Certain Covenants.

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

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

SECTION 1007. Additional Amounts.

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

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<PAGE>

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

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

SECTION 1008. Calculation of Original Issue Discount.

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

                                   ARTICLE XI

                            REDEMPTION OF SECURITIES

SECTION 1101. Applicability of Article.

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

SECTION 1102. Election to Redeem; Notice to Trustee.

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

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

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

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

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

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

SECTION 1104. Notice of Redemption.

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

         All notices of redemption shall state:

                  (1) the Redemption Date,

                  (2) the Redemption Price,

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

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<PAGE>

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

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

                  (6) applicable CUSIP numbers, and

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

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

SECTION 1105. Deposit of Redemption Price.

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

SECTION 1106. Securities Payable on Redemption Date.

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

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

SECTION 1107. Securities Redeemed in Part.

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

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

                                  ARTICLE XII

                                  SINKING FUNDS

SECTION 1201. Applicability of Article.

         The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.

         The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment." If provided for by the terms of Securities of any series,
the cash amount of any sinking fund payment may be subject to reduction as
provided in Section 1202. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.

SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.

         The Partnership (1) may deliver Outstanding Securities of a series
(other than any previously called for redemption), and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Partnership pursuant to the terms of such Securities or through the application
of permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
series; provided that such Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.

SECTION 1203. Redemption of Securities for Sinking Fund.

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

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<PAGE>

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

                                  ARTICLE XIII

                                   DEFEASANCE

SECTION 1301. Applicability of Article.

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

SECTION 1302. Legal Defeasance.

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

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

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<PAGE>

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

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

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

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

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

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

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

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

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

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<PAGE>

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

SECTION 1303. Covenant Defeasance.

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

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

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

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<PAGE>

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

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

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

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

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

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

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

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

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

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

                                       75
<PAGE>

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

SECTION 1305. Repayment to Partnership.

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

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

                                  ARTICLE XIV

                            GUARANTEE OF SECURITIES

SECTION 1401. Unconditional Guarantee.

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

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

                                       76
<PAGE>
 Guarantor hereby agrees that to the fullest extent permitted by applicable law,
its obligations hereunder shall be full, irrevocable, unconditional and
absolute, irrespective of the validity, regularity or enforceability of the
Securities, the Guarantees or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder with respect to any
provisions hereof or thereof, the recovery of any judgment against the
Partnership, any action to enforce the same or any other circumstance which
might otherwise constitute a legal or equitable discharge or defense of the
Guarantor. The Guarantor hereby agrees that in the event of a default in payment
of the principal of, or premium, if any, or interest on the Securities of any
series or any other amounts payable under this Indenture and the Securities by
the Partnership, whether at the Stated Maturity, upon redemption or by
declaration of acceleration or otherwise, legal proceedings may be instituted by
the Trustee on behalf of the Holders or, subject to Section 507 hereof, by the
Holders, on the terms and conditions set forth in this Indenture, directly
against the Guarantor to enforce the Guarantees without first proceeding against
the Partnership.

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

                                       77
<PAGE>
         To the fullest extent permitted by applicable law, the Guarantor hereby
(i) waives diligence, presentment, demand of payment, notice of acceptance,
filing of claims with a court in the event of the merger, insolvency or
bankruptcy of the Partnership or the Guarantor, and all demands and notices
whatsoever, (ii) acknowledges that any agreement, instrument or document
evidencing the Guarantees may be transferred and that the benefit of its
obligations hereunder shall extend to each holder of any agreement, instrument
or document evidencing the Guarantees without notice to them and (iii) covenants
that its Guarantee will not be discharged except by complete performance of the
Guarantees. The Guarantor further agrees that to the fullest extent permitted
by applicable law, if at any time all or any part of any payment theretofore
applied by any Person to any Guarantee is, or must be, rescinded or returned for
any reason whatsoever, including without limitation, the insolvency, bankruptcy
or reorganization of the Guarantor, such Guarantee shall, to the extent that
such payment is or must be rescinded or returned, be deemed to have continued in
existence notwithstanding such application, and the Guarantees shall continue to
be effective or be reinstated, as the case may be, as though such application
had not been made.

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

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

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

SECTION 1402. Execution and Delivery of Notation of Guarantees.

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

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

                                       78
<PAGE>

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

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

SECTION 1403. Subordination of Guarantees.

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

                                   ARTICLE XV

                           SUBORDINATION OF SECURITIES

SECTION 1501. Securities Subordinated to Senior Debt.

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

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

                                       79
<PAGE>

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

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

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

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

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

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

                                       80
<PAGE>

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

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

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

                                       81
<PAGE>

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

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

SECTION 1503. Payments on Securities Permitted.

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

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

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

SECTION 1505. Notices to Trustee.

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

                                       82
<PAGE>

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

SECTION 1506. Trustee as Holder of Senior Debt.

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

SECTION 1507. Modification of Terms of Senior Debt.

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

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

                                       83
<PAGE>

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

                                      * * *

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

                                       84
<PAGE>

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

                            VALERO LOGISTICS OPERATIONS, L.P.

                            By:      Valero GP, Inc.,
                                     Its General Partner

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

                            VALERO  L.P.

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

                                     By:      Valero GP, LLC,
                                              Its General Partner

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

                            THE BANK OF NEW YORK, as Trustee

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

                                       85<PAGE>
                                                                   EXHIBIT 10.6

                          HASTINGS ENTERTAINMENT, INC.
                        ASSOCIATES' STOCK OWNERSHIP PLAN

                             As Amended and Restated
                   Generally Effective as of February 1, 1997

<PAGE>

                                TABLE OF CONTENTS
<Table>
<Caption>
                                                                                                               PAGE
<S>                                                                                                            <C>
ARTICLE I                  PURPOSE AND AMENDMENT OF THE PLAN......................................................1
         1.01     Amendment of the Plan...........................................................................1
         1.02     Purpose.........................................................................................1
         1.03     Trust Agreement.................................................................................1

ARTICLE II                 DEFINITIONS............................................................................2

ARTICLE III                REQUIREMENTS FOR ELIGIBILITY AND PARTICIPATION........................................16
         3.01     Eligibility....................................................................................16
                  (1)      Service and Age.......................................................................16
                  (2)      Reemployment Prior to Break in Service................................................16
                  (3)      Reemployment After Break in Service...................................................16
                  (4)      Transfer to Non-Participating Affiliated Company Prior to
                           Completion of Eligibility Requirements................................................16
                  (5)      Transfer to Non-Participating Affiliated Company After Completion
                           of Eligibility Requirements...........................................................16
         3.02     Employment with a Predecessor Employer.........................................................17
         3.03     Eligibility Year of Service....................................................................17
         3.04     Participation Upon Reemployment................................................................17
         3.05     Change in Status of Eligible Associate.........................................................17
         3.06     Participation in the Plan......................................................................18

ARTICLE IV                 CONTRIBUTIONS.........................................................................18
         4.01     Company Contributions..........................................................................18
         4.02     Date of Payment and Allocation of Company Contributions........................................18
         4.03     Associate Contributions........................................................................18
         4.04     Special Provisions for Participants Who Enter the Armed Forces.................................18

ARTICLE V                  ALLOCATION TO PARTICIPANTS' ACCOUNTS..................................................19
         5.01     Method of Allocating Company Contributions.....................................................19
         5.02     Suspense Account...............................................................................20
         5.03     Allocation to a Participant Who Ceases to be an Eligible Associate or Who is Transferred to a
                  Non-Participating Affiliated Company...........................................................20
         5.04     Allocation of Contributions and Qualifying Employer Securities Released
                  From Suspense Accounts - General...............................................................20
         5.05     Method of Allocating and Crediting Contributions and Qualifying Employer Securities Released
                  from Suspense Accounts.........................................................................21
         5.06     Limitation on Annual Additions.................................................................21
         5.07     Limitations on Annual Additions for Employers or Affiliated Companies Maintaining Other
                  Defined Contribution Plans.....................................................................22
         5.08     Limitations on Annual Additions for Employers or Affiliated Companies Maintaining Defined
                  Benefit Plans..................................................................................23
         5.09     Definitions for Purposes of Determining the Annual Addition Limitations........................23
         5.10     Dividend Pass-Through..........................................................................25
         5.11     Cessation of Eligible Associate Status.........................................................26
</Table>

                                        i
<PAGE>

<Table>
<S>                                                                                                             <C>
ARTICLE VI                 ACCOUNTS AND VALUATION OF TRUST FUND..................................................26
         6.01     Participant's Accounts.........................................................................26
         6.02     Accounts of Participants Transferred to a Non-Participating Affiliated Company.................26
         6.03     Valuation of the Trust Fund and Account Statements.............................................26
         6.04     Periodic Determination of Participant's Accounts...............................................27
                  (1)      Allocations in General................................................................27
                  (2)      Determination of Net Earnings and Adjustments In Value of the
                           Trust Fund............................................................................27
                  (3)      Allocation of Net Earnings and Adjustments in Value of the Trust
                           Fund..................................................................................27
                  (4)      Allocation of Forfeitures.............................................................28
                  (5)      Computations..........................................................................28
         6.05     Correction of Participants' Accounts...........................................................28
         6.06     Investments....................................................................................28
                  (1)      Funding Policy........................................................................28
                  (2)      Investment of Cash....................................................................28
                  (3)      Reservation of Cash...................................................................28
         6.07     Voting of Company Stock........................................................................28
                  (1)      Voting of Stock - Registered Stock....................................................28
                  (2)      Voting of Company Stock - Non-Registered Stock........................................29

ARTICLE VII                RETIREMENT BENEFITS...................................................................30

ARTICLE VIII               DISABILITY BENEFITS...................................................................30
         8.01     Disability Retirement Benefits.................................................................30
         8.02     Determination of Disability....................................................................30

ARTICLE IX                 DEATH BENEFITS........................................................................30
         9.01     Death Benefits.................................................................................30
         9.02     Designation of Beneficiaries...................................................................31

ARTICLE X                  EMPLOYMENT TERMINATION BENEFITS.......................................................32
         10.01    Vesting Upon Termination of Employment.........................................................32
         10.02    Determination of Vesting Years of Service......................................................32
         10.03    Breaks in Service..............................................................................32
         10.04    Forfeiture - Qualifying Employer Securities....................................................33
         10.05    Forfeiture of Nonvested Amount.................................................................33
         10.06    Restoration of Forfeited Nonvested Amount......................................................34
         10.07    Reemployment of Participant with Partially Vested Company Contribution Account.................34

ARTICLE XI                 PAYMENT OF BENEFITS...................................................................35
         11.01    Methods of Payment of Benefits.................................................................35
         11.02    Form of Payment................................................................................36
         11.03    Securities Law Restrictions....................................................................36
         11.04    Time for Distribution of Benefits..............................................................37
         11.05    Limitations on Timing..........................................................................39
         11.06    Payments on Personal Receipt Except in Case of Legal Disability................................42
         11.07    Benefits Payable Pursuant to a Qualified Domestic Relations Order..............................42
         11.08    Restrictions on Transfer of Company Stock......................................................42
</Table>

                                       ii
<PAGE>

<Table>
<S>                                                                                                             <C>
                  (1)      Federal Securities Laws...............................................................42
                  (2)      Other Restrictions....................................................................43
                  (3)      Legends...............................................................................43
                  (4)      Notices...............................................................................43
         11.09    Distribution Following Diversification Election................................................43
         11.10    Right to Require Repurchase of Shares of Company Stock.........................................44
         11.11    Further Contributions..........................................................................45
         11.12    Right of First Refusal.........................................................................45
         11.13    Execution of Documents.........................................................................47
         11.14    Distribution of More than One Class of Securities..............................................47
         11.15    Direct Rollovers to Eligible Retirement Plans..................................................47
         11.16    Diversification Requirements...................................................................48
                  (1)      Delivery of Diversification Distribution..............................................48
                  (2)      Delivery of Company Stock.............................................................48
                  (3)      No Effect on Other Distributions......................................................48
         11.17    Alternate Forms of Benefit.....................................................................48
         11.18    In-Service Withdrawals.........................................................................49
         11.19    Loans..........................................................................................49

ARTICLE XII                EXEMPT LOANS..........................................................................49
         12.01    Investment Committee Direction.................................................................49
         12.02    Limitations....................................................................................49
                  (1)      Primary Benefit Requirement...........................................................49
                  (2)      Net Effect of Exempt Loan.............................................................49
                  (3)      Arm's Length Standard.................................................................49
                  (4)      Use of Loan Proceeds..................................................................49
                  (5)      Puts, Calls, etc......................................................................49
                  (6)      Interest Rate.........................................................................49
                  (7)      Term..................................................................................49
         12.03    Liability and Collateral.......................................................................49
         12.04    Repayment of Exempt Loan.......................................................................50
         12.05    Default........................................................................................50
         12.06    Release of Collateral..........................................................................51
         12.07    Leveraged Employee Stock Ownership Plan........................................................51

ARTICLE XIII               INSURANCE CONTRACTS...................................................................52
         13.01    General Insurance Investment...................................................................52
         13.02    Insurance Company Not a Party to Agreement.....................................................52
         13.03    Insurance Company Not Responsible for Trustee's Action.........................................52
         13.04    Insurance Company Reliance on Trustee's Signature..............................................52
         13.05    Acquittance....................................................................................53
         13.06    Duties of Insurance Company....................................................................53

ARTICLE XIV                MISCELLANEOUS PROVISIONS RESPECTING PARTICIPANTS......................................53
         14.01    Participants to Furnish Required Information...................................................53
         14.02    Participants' Rights in Trust Fund.............................................................53
         14.03    Inalienability of Benefits.....................................................................54
                  (1)      Restrictions on Assignment............................................................54
                  (2)      Exception for Benefit Payable Pursuant to a Qualified Domestic Relations Order........54
</Table>

                                       iii
<PAGE>

<Table>
<S>                                                                                                             <C>
                  (3)      Exception for Benefit Offset Pursuant to Code Section 401(a)(13)(C)...................55
         14.04    Conditions of Employment Not Affected by Plan..................................................55
         14.05    Address for Mailing of Benefits................................................................55
         14.06    Unclaimed Account Procedure....................................................................56

ARTICLE XV                 ADMINISTRATION OF THE PLAN............................................................56
         15.01    Appointment of Benefits Advisory Committee.....................................................56
         15.02    Compensated Expenses of the Benefits Advisory Committee........................................57
         15.03    Secretary and Agents of the Benefits Advisory Committee........................................57
         15.04    Actions of Benefits Advisory Committee.........................................................57
         15.05    Authority of Benefits Advisory Committee.......................................................58
         15.06    General Administrative Powers..................................................................58
         15.07    Plan Administrator.............................................................................58
         15.08    Duties of Administrative Personnel.............................................................58
         15.09    Designation of Named Fiduciaries and Allocation of Responsibility..............................59
         15.10    Action by Fiduciaries..........................................................................59
         15.11    Appointment of Professional Assistants and the Investment Manager..............................60
         15.12    Bond...........................................................................................60
         15.13    Indemnity......................................................................................60
         15.14    Payment of Expenses............................................................................60

ARTICLE XVI                INVESTMENT COMMITTEE..................................................................61
         16.01    Appointment of Investment Committee............................................................61
         16.02    Compensated Expenses of the Investment Committee...............................................61
         16.03    Secretary and Agents of the Investment Committee...............................................61
         16.04    Powers of the Investment Committee.............................................................61
         16.05    Manner of Action...............................................................................62
         16.06    Authorized Representative......................................................................62
         16.07    Funding Policy.................................................................................62
         16.08    Payment of Expenses............................................................................62

ARTICLE XVII               PARTICIPATION BY EMPLOYERS............................................................62
         17.01    Adoption of Plan by Affiliated Company.........................................................62
         17.02    Rights and Obligations of the Sponsoring Company and the Employers.............................63
         17.03    Withdrawal from Plan...........................................................................63
                  (1)      Notice of Withdrawal..................................................................63
                  (2)      Trustee Segregation of Trust Assets upon Withdrawal...................................63
                  (3)      Exclusive Benefit of Participants.....................................................63
                  (4)      Applicability of Withdrawal Provisions................................................63

ARTICLE XVIII              AMENDMENT OF THE PLAN.................................................................63
         18.01    Amendments by Sponsoring Company or Employer...................................................63
         18.02    Effect of Amendments on Trustee................................................................64
         18.03    Amendment to Vesting Schedule..................................................................64
         18.04    Protected Benefits.............................................................................64
         18.05    Amendment Necessary to Comply with Code or Federal Statute.....................................64
ARTICLE XIX                PERMANENCY OF THE PLAN................................................................65
         19.01    Right to Terminate Plan........................................................................65
         19.02    Merger or Consolidation of Plan and Trust......................................................65
</Table>

                                       iv
<PAGE>

<Table>
<S>                                                                                                             <C>
         19.03    Continuance by Successor Company...............................................................65

ARTICLE XX                 DISCONTINUANCE OF CONTRIBUTIONS AND TERMINATION.......................................65
         20.01    Suspension of Contributions....................................................................65
         20.02    Discontinuance of Contributions................................................................65
         20.03    Termination of Plan and Trust..................................................................66
         20.04    Participant's Rights to Benefits upon Termination or Partial Termination of Plan
                  or Complete Discontinuance of Contributions....................................................66

ARTICLE XXI                EXCLUSIVE BENEFIT OF THE PLAN.........................................................66
         21.01    Limitation on Reversions.......................................................................66
         21.02    Unallocated Amounts upon Termination of Plan and Trust.........................................66
         21.03    Mistake of Fact or Disallowance of Deduction...................................................67
         21.04    Failure of Qualification of Plan and Trust.....................................................67

ARTICLE XXII               TOP HEAVY PLAN RULES..................................................................67
         22.01    Definitions....................................................................................67
         22.02    Determination of Top Heaviness.................................................................69
         22.03    Minimum Requirements...........................................................................71
                  (1)      Vesting...............................................................................71
                  (2)      Required Minimum Allocation of Company Contributions..................................71
         22.04    Minimum Benefits for Employers or Affiliated Companies Maintaining
                  Defined Benefit Plans..........................................................................72
         22.05    Minimum Benefits for Employers or Affiliated Companies Maintaining
                  Defined Contribution Plans.....................................................................72
         22.06    Super Top Heavy Plans..........................................................................72

ARTICLE XXIII              MISCELLANEOUS.........................................................................73
         23.01    Effect of Bankruptcy and Other Contingencies Affecting an Employer.............................73
         23.02    Benefits Payable by Trust......................................................................73
         23.03    Withholding....................................................................................73
         23.04    Interpretation of the Plan and Trust...........................................................73
         23.05    Provisions Hereof for Sole Benefit of Parties Hereto and Participants..........................73
         23.06    Article and Section Headings...................................................................73
         23.07    Formal Action by Employer......................................................................73
         23.08    Applicable Law.................................................................................74

SCHEDULE A                 Service with Predecessor Employer.....................................................75
</Table>

                                        v
<PAGE>

                          HASTINGS ENTERTAINMENT, INC.
                        ASSOCIATES' STOCK OWNERSHIP PLAN

                                    ARTICLE I

                        PURPOSE AND AMENDMENT OF THE PLAN

1.01     Amendment of the Plan. Hastings Entertainment, Inc. (the "Sponsoring
         Company") previously adopted and established a plan intended to be a
         qualified stock bonus plan within the meaning of Section 401(a) of the
         Code and Treasury Regulation Section 1.401-1(b)(iii) and an employee
         stock ownership plan, within the meaning of Section 4975(e) of the Code
         and Treasury Regulation Section 54.4975-11(a) for the exclusive benefit
         of its Eligible Associates and their Beneficiaries, effective as of
         June 1, 1993. Subsequent thereto, the plan was amended from time to
         time. Effective as of February 1, 1997 (the "Effective Date"), except
         where otherwise specifically provided herein, the Sponsoring Company
         has by execution of this document, amended and restated the plan in its
         entirety, subject to the terms and conditions hereinafter set forth.
         The plan as hereby amended and restated shall be known as the "Hastings
         Entertainment, Inc. Associates' Stock Ownership Plan" (the "Plan").

         Except as otherwise provided herein, and subject to the following
         sentence, the provisions of the amended and restated Plan as contained
         herein are applicable to Associates and Participants who have died,
         retired, suffered Total and Permanent Disability or Termination of
         Employment on or after February 1, 1997, or who are reemployed by an
         Employer or Affiliated Company on or after February 1, 1997, and while
         they are still entitled to reinstatement of rights under the Plan.
         Except as otherwise provided herein, any Associate or Participant who
         died, retired, became disabled or terminated employment prior to
         February 1, 1997, shall receive any benefits to which he or she is
         entitled based upon the appropriate provisions of the Plan as in effect
         prior to February 1, 1997 under the First 1997 Prior Plan or under the
         Hastings Books Music & Video, Inc. Employee Stock Ownership Plan
         effective June 1, 1993 (the "1993 Prior Plan").

1.02     Purpose. The purpose of the Plan is to provide certain benefits for the
         Employers' Eligible Associates and their Beneficiaries. The Plan is
         designed to invest primarily in Qualifying Employer Securities, as
         defined herein.

         It is the intention of the Employers that the Plan as amended and
         restated herein shall continue to meet all of the requirements
         necessary or appropriate to qualify it as a profit-sharing plan under
         Code Sections 401(a) and that the Trust made a part hereof shall
         continue to be exempt from tax under Code Section 501(a) and all
         provisions hereof shall be interpreted accordingly. This Plan is
         intended to be an employee stock ownership plan within the meaning of
         Section 4975(e)(7) of the Code. The benefits provided by the Plan will
         be paid from the Trust and will be in addition to the benefits Eligible
         Associates are entitled to receive under any other programs of the
         Employers and from the federal Social Security Act.

1.03     Trust Agreement. In furtherance of this Plan, the Employers have
         amended and restated their previously executed trust agreement by
         entering into the Trust Agreement effective as of __________ ___,
         200__, which is made a part hereof, for the purpose of maintaining the
         Trust to fund the benefits of this Plan as hereinafter set forth.

                                        1
<PAGE>
                                   ARTICLE II

                                   DEFINITIONS

As used in the Plan:

2.01     "Account" or "Accounts" shall mean all or any of the Company
         Contribution Account, the Employment Termination Account, the QDRO
         Account, and any other account maintained by the Benefits Advisory
         Committee under Article IV or any other Section of the Plan to record a
         Participant's interest (or the undistributed interest of a Beneficiary
         or Alternate Payee) in the Trust Fund to the extent any one or more of
         such accounts have been created for a Participant, Beneficiary or
         Alternate Payee.

2.02     "Affiliated Company" shall mean any of the following which, unless the
         context otherwise requires, itself is not an Employer: (1) a member of
         a controlled group of corporations of which the Sponsoring Company is a
         member as defined in Code Section 414(b), (2) any trade or business
         (whether or not incorporated) which is under common control with the
         Sponsoring Company as determined in accordance with Code Section 414(c)
         and regulations issued thereunder, (3) a member of an "affiliated
         service group" (whether or not incorporated) as determined in
         accordance with Code Section 414(m) and regulations issued thereunder,
         of which the Sponsoring Company is a member, or (iv) any other entity
         which is required to be aggregated with the Sponsoring Company in
         accordance with Code Section 414(o) and the regulations issued
         thereunder. "Affiliated Company" as defined in clauses (i) and (ii)
         shall be modified as required by Code Section 415(h) when used in
         Sections 5.06, 5.07 and 5.08 hereof with respect to limitations on
         Annual Additions.

2.03     "Alternate Payee" shall mean an individual or trust entitled to
         benefits under the Plan pursuant to a Qualified Domestic Relations
         Order.

2.04     "Associate" shall mean any person who is employed by one or more
         Employers, is on an Employer's payroll, and whose wages are subject to
         FICA withholding, but shall exclude any person classified in the
         Employer's records as an independent contractor, even if such person is
         subsequently determined to be a person whose wages are subject to FICA
         withholding. Associate also includes any person who is not employed by
         an Employer but is performing services for an Employer pursuant to an
         agreement between such Employer or an Affiliated Company and a leasing
         organization and who is a "leased employee" as that term is defined in
         Code Section 414(n). A "leased employee" shall not be an Associate,
         however, if (1) such person is covered by a money purchase pension plan
         qualified under Code Section 401(a) providing (a) a nonintegrated
         employer contribution rate of at least ten percent (10%) of Limitation
         Year Compensation as defined in Subsection 5.09(7) hereof, but
         including amounts contributed pursuant to a salary reduction agreement
         which are excludible from such person's gross income under Code
         Sections 125, 402(e)(3), 402(h) or 403(b), (b) immediate participation,
         and (c) full and immediate vesting, and (2) "leased employees" do not
         constitute more than twenty percent (20%) of the Employer's or
         Affiliated Company's workforce who are Non-Highly Compensated
         Employees.

2.05     "Beneficiary" shall mean any person or entity entitled to receive
         benefits which are payable upon or after a Participant's death pursuant
         to Article IX hereof.

2.06     "Benefits Advisory Committee" shall mean the Benefits Advisory
         Committee provided for in Section 15.01 hereof.

                                        2
<PAGE>

2.07     "Board" shall mean the Board of Directors of the Sponsoring Company, as
         from time to time constituted, or such other person or group of persons
         referred to in Section 22.07 hereof in case of a Sponsoring Company
         which is not a corporation.

2.08     "Code" shall mean the Internal Revenue Code of 1986, as amended from
         time to time. References to any section of the Internal Revenue Code
         shall include any successor provision thereto.

2.09     "Committees" shall mean, collectively, the Benefits Advisory Committee
         and the Investment Committee as from time to time constituted.

2.10     "Company" shall mean Hastings Entertainment, Inc. or any successor
         thereto which shall adopt this Plan.

2.11     "Company Contribution Account" shall mean the separate account
         maintained for each Participant reflecting Company Contributions and
         Forfeitures, if any, allocated to such Participant, as adjusted in
         accordance with the provisions of Article VI hereof.

2.12     "Company Stock" shall mean shares of any class of capital common stock,
         which are Qualifying Employer Securities issued by Hastings
         Entertainment, Inc., a Texas corporation.

2.13     "Compensation" shall mean:

         (1)      the aggregate of all of the following for the Plan Year:

                  (a)      The Associate's wages, salaries, fees for
                           professional services and other amounts received
                           (without regard to whether or not an amount is paid
                           in cash) for personal services actually rendered in
                           the course of employment with all Employers and
                           Affiliated Companies to the extent the amounts are
                           includable in gross income (including, but not
                           limited to, commissions paid salesmen, compensation
                           for services on the basis of a percentage of profits,
                           commissions on insurance premiums, tips and bonuses,
                           fringe benefits, reimbursements, and expense
                           allowances) as more fully described in Code Section
                           415(c)(3) and the regulations thereunder, which are
                           actually paid or made available to an Associate who
                           is not a Self-Employed Individual;

                  (b)      In the case of any Self-Employed Individual,
                           "Compensation" shall mean the individual's Earned
                           Income for such Plan Year;

                  (c)      Amounts described in Code Sections 104(a)(3), 105(a)
                           and 105(h) but only to the extent that these amounts
                           are includable in the gross income of the Associate;

                  (d)      Amounts paid or reimbursed by the Employer for moving
                           expenses incurred by an Associate, but only to the
                           extent that at the time of the payment it is
                           reasonable to believe that these amounts are not
                           deductible by the Associate under Code Section 217;

                  (e)      The value of a non-qualified stock option granted to
                           an Associate by the Employer, but only to the extent
                           that the value of the option is includable in the
                           gross income of the Associate for the taxable year in
                           which granted; and

                                        3
<PAGE>

                  (f)      The amount includable in the gross income of an
                           Associate upon making the election described in Code
                           Section 83(b).

         (2)      Compensation shall not include the following:

                  (a)      Contributions to a plan of deferred compensation to
                           the extent that, before the application of the
                           limitations of Code Section 415 to the Plan, the
                           contributions are not included in the gross income of
                           the Associate for the taxable year in which
                           contributed, or contributions under a simplified
                           employee pension plan to the extent the contributions
                           are deductible by the Associate, and any
                           distributions from a plan of deferred compensation
                           other than an unfunded nonqualified plan of deferred
                           compensation;

                  (b)      Amounts realized from the exercise of a non-qualified
                           stock option, or amounts realized under Code Section
                           83 with respect to restricted property held by an
                           Associate that becomes freely transferable or is no
                           longer subject to a substantial risk of forfeiture
                           (pursuant to Code section 83 and the regulations and
                           rulings thereunder);

                  (c)      Any distributions from a plan of deferred
                           compensation are not considered as Compensation,
                           regardless of whether such amounts are includable in
                           the gross income of the Participant when distributed.
                           However, any amounts received by a Participant
                           pursuant to an unfunded nonqualified plan shall be
                           considered as Compensation in the year such amounts
                           are includable in the gross income of the
                           Participant;

                  (d)      Amounts realized from the sale, exchange or other
                           disposition of stock acquired under an incentive
                           stock option within the meaning of Code Section 422;

                  (e)      Other amounts that receive special tax benefits
                           within the meaning of Treasury Regulation Section
                           1.415-2(d)(3), such as premiums for group term life
                           insurance (but only to the extent that premiums are
                           not includable in the gross income of the Associate),
                           or contributions made by the Employer (whether or not
                           under a salary reduction agreement) towards the
                           purchase of an annuity contract covered by Code
                           Section 403(b) (whether or not the contributions are
                           excludible from the gross income of the Associate).

         In the event an Associate begins, resumes or ceases to be a Participant
         during a Plan Year, the amount of the Associate's Compensation that
         shall be taken into account shall not include any "Compensation" paid
         for any period prior to the Entry Date on which an Associate first
         becomes a Participant hereunder, or the date on which an Associate
         resumes active participation hereunder, or after the date that an
         Associate ceases to be an active Participant hereunder.

         Notwithstanding the foregoing, Compensation shall include the amount of
         an Associate's elective salary deferral under an Employer's cafeteria
         plan established pursuant to Code Section 125 or any other Employer
         plan established pursuant to Code Section 401(k).

                                        4
<PAGE>

         Effective for Plan Years beginning on or after January 1, 2001,
         Compensation shall also include amounts that are not includable in the
         gross income of the Associate by reason of Code Section 132(f)(4) as
         qualified transportation fringe.

         Compensation shall not include any Compensation in excess of One
         Hundred Fifty Thousand Dollars ($150,000) or such larger amount as
         results from the adjustment provided for in Code Section 401(a)(17)(B).

         Notwithstanding any of the foregoing, for purposes of Section 5.04,
         Allocation of Contributions and Qualifying Employer Securities Released
         From Suspense Accounts - General, Compensation includes only base pay
         and excludes commissions, bonuses, moving expenses, health club dues,
         executive medical reimbursement and other similar perquisites; however,
         Compensation for such Section will include the amount of an Associate's
         elective salary deferral under an Employer's cafeteria plan established
         pursuant to Code Section 125 or any other Employer plan established
         pursuant to Code Section 401(k).

2.14     "Date of Employment" or "Date of Reemployment" shall mean the day on
         which an Associate first commences employment or reemployment following
         Termination of Employment, retirement after attaining his Retirement
         Date or Early Retirement Date or recovery from Total and Permanent
         Disability, as the case may be, with an Employer or an Affiliated
         Company by performing an Hour of Service. All references to Date of
         Employment or Date of Reemployment shall include periods of
         self-employment for a Self-Employed Individual.

2.15     "Diversification Election Period" shall mean the six (6) Plan Year
         period beginning with the first Plan Year in which the Participant
         first became a Qualified Participant for all Participants entering the
         Plan after December 31, 1986, and for all others the later of the first
         Plan Year beginning after December 31, 1986, or the first Plan Year in
         which the individual became a Qualified Participant.

2.16     "Earned Income" shall mean with respect to a Self-Employed Individual,
         the net earnings from self-employment in the trade or business with
         respect to which the Plan is established, for which the personal
         services of the individual are a material income-producing factor. Net
         earnings will be determined without regard to items not included in
         gross income and the deductions allocable to such items as provided for
         in Code Section 401(c)(2)(A). Net earnings are reduced by contributions
         by the taxpayer to a qualified plan to the extent deductible under Code
         Section 404. Additionally, for taxable years beginning after December
         31, 1989, net earnings shall be determined with regard to the deduction
         allowed to the taxpayer by Code Section 164(f).

2.17     "Eligible Associate" shall mean any Associate except the following
         individuals: (1) any Associate who is included in a unit of employees
         covered by an agreement that the Secretary of Labor finds to be a
         collective bargaining agreement between employee representatives
         (within the meaning of Code Section 7701(a)(46)) and one (1) or more
         Employers if retirement benefits were the subject of good faith
         bargaining between such parties, unless the collective bargaining
         agreement expressly provided for the inclusion of such employees as
         Eligible Associates under this Plan, (2) a nonresident alien who
         receives no earned income within the meaning of Code Section 911(b),
         and (3) any Associate who is a "leased employee" as defined in Section
         2.04 hereof.

2.18     "Employer" shall mean the Sponsoring Company or any Affiliated Company
         which adopts the Plan pursuant to Article XVI hereof.

                                        5
<PAGE>

2.19     "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
         as amended from time to time. References to any Section of ERISA shall
         include any successor provision thereto.

2.20     "Exempt Loan" shall mean any direct or indirect loan made to the Trust
         by a "Disqualified Person" (as defined in Section 4975(e)(2) of the
         Code) or a "Party in Interest" (as defined in Section 3(14) of ERISA),
         or any loan to the Trust the repayment of which is guaranteed by a
         Disqualified Person or Party in Interest. The term "Exempt Loan"
         includes, but is not limited to, a direct lending of cash, a
         purchase-money transaction and an assumption of Trust obligations.

2.21     "Fiscal Year" shall mean the fiscal year of an Employer. The Fiscal
         Year of the Sponsoring Company ends on January 31.

2.22     "Highly Compensated Employee" shall mean any Associate of an Employer
         or Affiliated Company who is a highly compensated employee as defined
         in Code Section 414(q) and the regulations thereunder. Generally, any
         such Associate is considered a Highly Compensated Employee if such
         Associate:

         (1)      was at any time during the current Plan Year or the prior Plan
                  Year, a "five percent owner," as defined in Code Section
                  416(i)(1), with respect to an Employer; or

         (2)      received Limitation Year Compensation from the Employer in
                  excess of Eighty Thousand Dollars ($80,000) (as adjusted by
                  the Secretary of Treasury pursuant to Code Section 414(q)(1))
                  during the prior Plan Year, and, if the Employer elects the
                  application of this clause for the prior Plan Year, was in the
                  top-paid group of Associates during the prior Plan Year.

                  An Associate is in the top-paid group of Associates for any
                  Plan Year if such Associate is in the group consisting of the
                  top twenty percent (20%) of the Associates when ranked on the
                  basis of Limitation Year Compensation paid during the Plan
                  Year. For purposes of determining the number of Associates in
                  the top-paid group, there shall not be included Associates who
                  have not completed six (6) months of service, normally work
                  less than seventeen and one-half (17-1/2) hours per week,
                  normally work during six (6) or less months per year, have not
                  attained the age of twenty-one (21), are nonresident aliens
                  with no earned income (within the meaning of Code Section
                  911(d)(2)) from the Employer constituting United States source
                  income (within the meaning of Code Section 861(a)(3)), or are
                  included in a unit of employees covered by a collective
                  bargaining agreement (except to the extent provided in
                  regulations);

         For purposes of this Section, "Limitation Year Compensation" shall have
         the same meaning as set forth in Subsection 5.09(7) hereof, subject to
         the following: (a) the determination of "Limitation Year Compensation"
         shall include amounts deferred pursuant to Code Sections 125, 401(k),
         408(k)(6) and 403(b) which are otherwise excluded under Subsection
         5.09(7) for Plan Years beginning prior to January 1, 1998, and (b)
         Limitation Year Compensation shall include compensation paid by any
         employer required to be aggregated with an Employer under Code Section
         414(b), (c), (m) or (o).

         A Former Associate who is a Participant shall be treated as a Highly
         Compensated Employee if such Former Associate was a Highly Compensated
         Employee when he separated from service with the Employer or was a
         Highly Compensated Employee at any time after attaining age fifty-five
         (55). "Former Associate" shall mean a person who has been an Associate,
         but who ceased to be an Associate for any reason and later returned to
         employment with an Employer.

                                        6
<PAGE>

2.23     "Hour of Service" shall have the meaning respectively indicated below:

         (1)      Performance of Duties. Each hour for which an Associate is
                  directly or indirectly paid, or entitled to payment by an
                  Employer or an Affiliated Company for the performance of
                  duties shall be an Hour of Service. Each such Hour of Service
                  shall be credited to the Employment Period (as defined in
                  Section 3.03 hereof) or the Plan Year, as the case may be, in
                  which the duties were performed. For purposes of this Section
                  2.23, the applicable Employment Period or Plan Year, as the
                  case may be, as the context requires, shall be referred to as
                  the "Computation Period."

         (2)      Back Pay. Each hour for which back pay (irrespective of
                  mitigation of damages) has been either awarded or agreed to by
                  an Employer or an Affiliated Company shall be an Hour of
                  Service. Each such Hour of Service shall be credited to the
                  Computation Period to which the agreement or award for back
                  pay pertains, rather than to the Computation Period in which
                  the award, agreement or payment is made. If back pay is either
                  awarded or agreed to for a period of time during which no
                  duties are performed, the provisions of Subsections 2.23(3)
                  (a) through (c) hereof shall apply to the calculation and
                  crediting of Hours of Service for such period of time.

         (3)      Non-Working Time. Each hour for which an Associate is directly
                  or indirectly paid, or entitled to payment, by an Employer or
                  an Affiliated Company for reasons other than the performance
                  of duties (irrespective of whether the employment relationship
                  with such Employer or Affiliated Company has terminated) (such
                  as vacations, holidays, illness, incapacity, disability,
                  layoff, jury duty, military duty, compensated Leave of Absence
                  or similar periods) shall be an Hour of Service. Each such
                  Hour of Service shall be calculated and credited on the
                  following basis:

                  (a)      Units of Time. If payments for reasons other than the
                           performance of duties are calculated on the basis of
                           units of time, such as hours, days, weeks or months,
                           the number of Hours of Service to be credited shall
                           be the number of regularly scheduled working hours
                           included in the units of time on the basis of which
                           the payments are calculated. In the case of an
                           Associate without a regular work schedule, such
                           Associate shall be credited with Hours of Service on
                           the basis of the equivalency schedule set forth in
                           Subsection 2.23(7) below. Each such Hour of Service
                           shall be credited to the Computation Period in which
                           the period during which no duties are performed
                           occurs, beginning with the first unit of time to
                           which the payment relates.

                  (b)      No Units of Time. If payments for reasons other than
                           the performance of duties are not calculated on the
                           basis of units of time (such as lump sum disability
                           payments for an injury), the number of Hours of
                           Service to be credited shall be equal to the amount
                           of the payment divided by the Associate's most recent
                           hourly rate of Compensation before the period during
                           which no duties are performed.

                           (i)      In the case of an Associate whose
                                    Compensation is determined on the basis of a
                                    fixed rate for specified periods of time
                                    (other than hours), such as days, weeks or
                                    months, such Associate's hourly rate of
                                    Compensation shall be such Associate's most
                                    recent rate of Compensation for a specified
                                    period of time (other than hours), divided
                                    by the number of hours regularly scheduled
                                    for the performance of duties during such
                                    period. In the case of an Associate

                                        7
<PAGE>
                                    without a regular work schedule, such
                                    Associate's rate of Compensation shall be
                                    calculated on the basis of the schedule of
                                    equivalent hours set forth in Subsection
                                    2.23(7) below.

                           (ii)     In the case of an Associate whose
                                    Compensation is not determined on the basis
                                    of an hourly rate or on the basis of a fixed
                                    rate for specified periods of time, such
                                    Associate's hourly rate of Compensation
                                    shall be the lowest hourly wage paid to
                                    employees in the same job classification as
                                    that of such Associate or, if no employees
                                    in the same classification have an hourly
                                    rate of Compensation, the minimum wage as
                                    established from time to time under Section
                                    6(a)(1) of the Fair Labor Standards Act of
                                    1938, as amended.

                           (iii)    Each such Hour of Service shall be credited
                                    to the Computation Period in which the
                                    period during which no duties are performed
                                    occurs, except that if such period extends
                                    beyond one of such Computation Periods such
                                    Hours of Service shall be allocated by the
                                    Benefits Advisory Committee, in its sole
                                    discretion, between not more than the first
                                    two (2) of such Computation Periods on a
                                    reasonable basis which is consistently
                                    applied with respect to all Associates
                                    within the same job classification,
                                    reasonably defined.

                  (c)      Exclusions.  Notwithstanding the foregoing:

                           (i)      An Associate shall not be credited on
                                    account of a period during which no duties
                                    are performed with a number of Hours of
                                    Service which is greater than the number of
                                    hours regularly scheduled for the
                                    performance of duties during such period.

                           (ii)     In no event shall the number of Hours of
                                    Service attributable to a single continuous
                                    period (whether or not such period involves
                                    more than one Computation Period) for which
                                    no duties are performed exceed five hundred
                                    one (501) Hours of Service.

                           (iii)    Hours of Service shall not be credited to a
                                    period for which payments are made to an
                                    Associate where those payments solely
                                    reimburse such Associate for medical or
                                    medically related expenses incurred by such
                                    Associate.

                           (iv)     Hours of Service shall not be credited for a
                                    period to which payments pertain if such
                                    payments are made or due under a plan
                                    maintained solely for the purpose of
                                    complying with applicable workers'
                                    compensation, unemployment compensation or
                                    disability insurance laws.

         (4)      No Duplication of Credit. An Associate shall not be credited
                  with the same Hours of Service under both (a) Subsection
                  2.23(1) or 2.23(3), as the case may be, and (b) Subsection
                  2.23(2).

         (5)      Overlapping Payroll Period. In the case of Hours of Service to
                  be credited to an Associate for a period of no more than
                  thirty-one (31) days which overlap two (2) Computation
                  Periods, all such Hours of Service shall be credited to either
                  the first or the second of such Computation Periods as the
                  Benefits Advisory Committee, in its sole discretion, may
                  determine on a consistent basis with respect to all Associates
                  within the same job classification, reasonably defined.

                                        8
<PAGE>

         (6)      Uncompensated Leaves of Absence. Solely for purposes of
                  determining whether an Associate has a One-Year Break in
                  Service, Hour of Service shall include each hour (credited on
                  the basis of the schedule of equivalent hours set forth in
                  Subsection 2.23(7) below if any, or if not, on the basis of
                  eight (8) Hours of Service for each workday of such Leave of
                  Absence) for which an Associate is not paid but is on a Leave
                  of Absence.

         (7)      Determination of Hours of Service to be Credited to
                  Associates. The determination of the Hours of Service which
                  must be credited to an Associate in accordance with the
                  provisions of this Section 2.23 shall be made from records
                  maintained by an Employer or an Affiliated Company which
                  currently reflect the actual number of Hours of Service
                  required to be credited under this Section 2.23.

         (8)      Service with Predecessor Employer. Notwithstanding anything in
                  this Plan to the contrary, if an Associate becomes an
                  Associate of an Employer or Affiliated Company by reason of a
                  stock or asset acquisition of another company by such Employer
                  or Affiliated Company, such Associate's Hours of Service with
                  the acquired company will be taken into account as indicated
                  on Schedule A attached hereto.

2.24     "Investment Committee" shall mean the Plan Investment Committee
         appointed to direct Plan investments pursuant to Section 16.01.

2.25     "Investment Manager" shall mean any fiduciary other than the trustee or
         a Named Fiduciary that: (1) is either (a) registered as an investment
         adviser under the Investment Advisers Act of 1940, or (b) a bank (as
         defined in the Investment Advisers Act of 1940), or (c) an insurance
         company qualified to manage, acquire or dispose of Plan assets under
         the laws of more than one state, (2) acknowledges in writing that it is
         a fiduciary with respect to the Plan, and (3) is granted the power to
         manage, acquire or dispose of any asset of the Plan pursuant to Section
         15.11 hereof.

2.26     "Leave of Absence" shall mean an absence from the active employment of
         an Employer by reason of an approved absence granted by such Employer
         on the basis of a uniform policy applied by such Employer without
         discrimination.

2.27     "Non-Highly Compensated Employee" shall mean each Associate Participant
         who is not a Highly Compensated Employee.

2.28     "One-Year Break in Service" shall mean, for purposes of eligibility to
         participate, the Employment Period during which an Associate has five
         hundred (500) or fewer Hours of Service and, for purposes of vesting, a
         Plan Year during which an Associate has five hundred (500) or fewer
         Hours of Service.

         Notwithstanding any other provision of this Section 2.27 to the
         contrary, solely for purposes of determining whether an Associate has a
         One-Year Break in Service, Hours of Service shall include hours during
         which an Associate is first absent from work for any period solely for
         one of the following reasons: (1) by reason of (a) the Associate's
         pregnancy, (b) the birth of the Associate's child, (c) the placement of
         a child with the Associate in connection with the adoption of such
         child by the Associate, or (2) for the purpose of caring for such child
         for a period beginning immediately following such birth or placement.
         Hours of Service shall be credited for purposes of this Subsection to
         the Plan Year in which such absence from work begins, provided
         crediting of such Hours of Service in such Plan Year would prevent the
         Participant from incurring a One-Year Break in Service in such Plan
         Year solely because of the crediting of hours in such Plan Year. In any
         other case, Hours of

                                        9
<PAGE>
         Service shall be credited for purposes of this Subsection to the
         immediately following Plan Year. The Hours of Service credited for
         purposes of this Subsection shall be those hours which otherwise
         normally would have been credited but for such absence, or, in any case
         in which the Benefits Advisory Committee is unable to determine the
         hours normally credited, Hours of Service shall be calculated on the
         basis of the schedule of equivalent hours set forth in Subsection
         2.23(7), if any, or if not, on the basis of eight (8) Hours of Service
         for each workday of such absence. The total number of Hours of Service
         required to be credited for any absence described in this Subsection
         shall not exceed five hundred one (501). Notwithstanding the foregoing
         provisions of this Section, no Hours of Service credit shall be given
         pursuant to this Subsection unless the Associate furnishes the Benefits
         Advisory Committee with such information as the Benefits Advisory
         Committee shall require to establish: (1) that the absence from work
         was solely for the reasons referred to herein, and (2) the number of
         days for which there was such an absence.

2.29     "Participant" shall mean an Eligible Associate who participates in the
         Plan as provided in Article III hereof or a former Associate who has a
         vested interest in the Plan. "Former Participant" shall mean an
         individual who was previously a Participant in the Plan but who no
         longer has any vested interest in the Plan.

2.30     "Plan" shall mean the Hastings Entertainment, Inc. Associates' Stock
         Ownership Plan as set forth in this document, and as hereafter amended.

2.31     "Plan Year" shall mean the twelve (12) consecutive month period ending
         on January 31.

         If any Plan Year consists of less than twelve (12) consecutive months
         (hereinafter referred to as the "Short Plan Year"), the following rules
         shall apply:

         (1)      Where Hours of Service are relevant to the allocation of
                  Company Contributions, a Participant receives credit for the
                  requisite number of hours required for purposes of receiving
                  an allocation of Company Contributions if the Participant
                  receives credit for the Applicable Hours during the Short Plan
                  Year. For purposes of this paragraph, "Applicable Hours" shall
                  mean the product of (a) the requisite number of required hours
                  times (b) a fraction whose numerator is the number of complete
                  months in the Short Plan Year and whose denominator is twelve
                  (12).

         (2)      Where hours of service and years of service are relevant for
                  eligibility or vesting purposes under this Plan, an Associate
                  shall receive credit for one (1) Eligibility Year of Service
                  or Vesting Year of Service, as appropriate, for the Short Plan
                  Year, if the Associate completes one thousand (1,000) Hours of
                  Service in the twelve (12) consecutive-month period beginning
                  on the first day of the Short Plan Year (the "Short Year
                  Computation Period") and shall receive credit for another
                  Eligibility Year of Service or Vesting Year of Service, as
                  appropriate, for the Plan Year in which such Short Year
                  Computation Period ends (the "Succeeding Computation Period")
                  if the Associate completes one thousand (1,000) Hours of
                  Service in the Succeeding Computation Period. Hours of Service
                  completed during the period between the end of the Short Plan
                  Year and the end of the Short Year Computation Period shall be
                  credited to both the Short Year Computation Period and to the
                  Succeeding Computation Period.

2.32     "Publicly Traded" shall mean with respect to Company Stock, such a
         security that is listed on a national securities exchange registered
         under Section 6 of the Securities and Exchange Act of 1934

                                       10
<PAGE>
         (the "Securities Exchange Act") or that is quoted on a system sponsored
         by a national securities association registered under Section 15A(b) of
         the Securities Exchange Act.

2.33     "QDRO Account" shall mean that part of any other Account which has been
         isolated from such Account for the benefit of an Alternate Payee
         pursuant to a Qualified Domestic Relations Order.

2.34     "Qualified Contributions" shall mean contributions of Company Stock to
         a Participant's Employer Contribution Account under the Plan after
         December 31, 1986, and any dividends in the form of Company Stock or in
         cash or other property that is used to acquire Company Stock after such
         date that have been transferred to the Participant's Account. Unless
         the employer separately accounted for each Participant's Qualified
         Contributions under the Plan, Qualified Contributions shall be traced
         to each Participant's Account by treating allocations made under the
         Plan after December 31, 1986, as consisting first of Qualified
         Contributions and, secondly, of contributions that are not Qualified
         Contributions.

2.35     "Qualified Domestic Relations Order" shall mean a judgment, order or
         decree which:

         (1)      Relates to the provision of child support, alimony payments,
                  or marital property rights to a spouse, former spouse, child,
                  or other dependent of a Participant; and

         (2)      Is made pursuant to a state domestic relations law (including
                  a community property law); and

         (3)      Creates or recognizes the existence of an Alternate Payee's
                  right to, or assigns to an Alternate Payee the right to,
                  receive all or a portion of the benefits payable with respect
                  to a Participant under the Plan; and

         (4)      Is determined by the Plan Administrator to meet all applicable
                  requirements pursuant to the procedure established by the
                  Benefits Advisory Committee for determining whether an order
                  is a Qualified Domestic Relations Order pursuant to Code
                  Section 414(p).

2.36     "Qualifying Employer Security" shall mean, except as provided in
         Section 12.07, a Company Stock which is (1) stock or otherwise an
         equity security, or (2) a bond, debenture, note or certificate or other
         evidence of indebtedness described in paragraphs (1), (2) and (3) of
         Section 503(3) of the Code.

2.37     "Qualified Participant" shall mean a Participant who has completed at
         least ten (10) years of participation in the Plan and has attained
         fifty-five (55) years of age. In addition, such Participant's Account
         which is derived from Qualified Contributions must have a fair market
         value (as determined by the provisions of the Plan) in excess of five
         hundred dollars ($500).

         For purposes of determining whether the Participant's Account which is
         derived from Qualified Contributions exceeds five hundred dollars
         ($500), all contributions shall be counted that meet the requirements
         of a Qualified Contribution that are made on behalf of the Qualified
         Participant to any other plan maintained by an Employer that is within
         the same controlled group of corporations (within the meaning of Code
         Section 414(b), (c), (m), or (o)) as the Company.

2.38     "Required Beginning Date" shall mean, for Plan Years beginning after
         December 31, 1996, April 1 of the calendar year following the later of:
         (1) the calendar year in which the Participant attains age seventy and
         one-half (70-1/2), or (2) the calendar year in which the Participant
         retires. Notwithstanding the preceding sentence, for a Participant who
         is a five percent (5%) owner within the meaning of Code Section 416(i)
         at any time during the calendar year in which such individual attains

                                       11
<PAGE>

         age seventy and one-half (70-1/2), "Required Beginning Date" shall mean
         April 1 of the calendar year following the calendar year in which the
         Participant attains age seventy and one-half (70-1/2).

2.39     "Retirement Date" shall mean the date on which occurs the sixty-fifth
         (65th) birthday of a Participant. "Early Retirement Date" shall mean
         the first day of the Plan Year coincident with or following the date on
         which occurs the later of: (1) the date on which occurs the fifty-fifth
         (55th) birthday of a Participant, and (2) the Participant's completion
         of ten (10) Vesting Years of Service.

2.40     "Self-Employed Individual" shall mean an individual who has Earned
         Income for the taxable year from a trade or business which has
         established the Plan, and, also, an individual who would have had
         Earned Income but for the fact that the trade or business had no net
         profits for the taxable year.

2.41     "Sponsoring Company" shall mean Hastings Entertainment, Inc., and any
         successor thereto that continues to maintain the Plan.

2.42     "Suspense Account" shall mean the record maintained by the Benefits
         Advisory Committee pursuant to Section 5.04 of shares of Company Stock
         which have been acquired by the Trustee with an Exempt Loan and which
         have not been allocated to the Accounts of Participants.

2.43     "Termination of Employment" shall mean the termination of employment
         with all Employers and all Affiliated Companies, whether voluntarily or
         involuntarily, other than by reason of a Participant's retirement after
         attaining his Retirement Date or Early Retirement Date or after
         sustaining Total and Permanent Disability, or death.

         A Leave of Absence will not constitute a Termination of Employment
         provided the Associate returns to the active employment of the Employer
         at or prior to the expiration of his leave, or if not specified
         therein, within the period of time which accords with such Employer's
         policy with respect to permitted absences. If the Associate does not
         return to the active employment of such Employer at or prior to the
         expiration of his Leave of Absence, his employment will be considered
         terminated as of the date on which his leave began. Notwithstanding the
         above, any termination of employment must also qualify as a "separation
         from service" as required in Code Section 409(d)(1) and the regulations
         and rulings interpreting such Section before any distribution is made
         to a Participant under this Plan.

         Notwithstanding the foregoing provisions of this Section, absence from
         the active Service of the Employer because of military Service will be
         considered a Leave of Absence granted by an Employer and will not
         terminate the employment of an Associate if he returns to the active
         employment of an Employer within the period of time during which he has
         reemployment rights under any applicable federal law or within sixty
         (60) days from and after discharge or separation from such military
         Service if no federal law is applicable. However, no provision of this
         Section or of the remainder of the Plan shall require reemployment of
         any Associate whose active Service with an Employer was terminated by
         reason of military Service.

         All references to Termination of Employment for a Self-Employed
         Individual shall include termination of self-employment with all
         Employers and Affiliated Companies.

2.44     "Total and Permanent Disability" shall mean a physical or mental
         condition of a Participant resulting from bodily injury, disease, or
         mental disorder which constitutes total disability under the federal
         Social Security Act, and for which the Participant has submitted
         evidence that he has actually been approved for Social Security
         disability benefits.

                                       12
<PAGE>

2.45     "Trust" shall mean the legal entity resulting from the Trust Agreement
         between the Sponsoring Company and the Trustee who receives the
         contributions under the Plan, and holds, invests, and disburses funds
         to or for the benefit of Participants and their Beneficiaries.

2.46     "Trust Agreement" shall mean the instrument establishing the Trust, as
         amended from time to time.

2.47     "Trust Fund" shall mean all assets of whatsoever kind or nature from
         time to time held by the Trustee pursuant to the Trust Agreement
         without distinction as to income and principal.

2.48     "Trustee" shall mean the party or parties, individual or corporate,
         named in the Trust Agreement and any duly appointed additional or
         successor Trustee or Trustees acting thereunder.

2.49     "Valuation Date" shall mean each business day of the Plan Year on which
         the New York Stock Exchange is open for business, and also the last day
         of the Plan Year, if not such a business day. In the event that any
         "Y2K" computer programming incompatibilities or issues arise which
         prevent valuations from occurring on each business day, the Valuation
         Date shall be the last day of each quarter of the Plan Year until such
         programming incompatibilities or issues are resolved.

2.50     "Vesting Year of Service" shall mean a Plan Year, beginning with the
         Plan Year in which the Associate commenced employment or reemployment
         with an Employer or any Affiliated Company, during which a Participant
         has completed one thousand (1,000) or more Hours of Service with an
         Employer or Affiliated Company, subject to the provisions of Section
         3.03 hereof.

2.51     Whenever a noun, or a pronoun in lieu thereof, is used in this Plan in
         plural form and there be only one person, thing or institution within
         the scope of the word so used, or in singular form and there be more
         than one person, thing or institution within the scope of the word so
         used, such word, or the pronoun used in lieu thereof, shall have a
         plural or singular meaning, as the case may be. Pronouns of the
         masculine gender may mean the feminine and vice versa.

2.52     The words "herein," "hereof," and "hereunder" shall refer to the Plan.

2.53     The expressions listed below shall have the meanings stated in the
         Sections or Subsections hereof respectively indicated:

         "1933 Act"                                  Subsection 11.08(1)

         "Annual Additions"                          Section 5.06

         "Applicable Life Expectancy"                Subsection 11.05(6)(a)

         "Company Contribution"                      Section 4.01

         "Compensation"                              Section 2.13

         "Computation Period"                        Subsection 2.23(1)

         "Current Value"                             Subsection 6.03(1)

         "Defined Benefit Plan"                      Subsection 5.09(2);
                                                     Subsection 22.01(1)

                                       13
<PAGE>

         "Defined Benefit Plan  Fraction"            Subsection 5.09(3)

         "Defined Contribution Plan"                 Subsection 5.09(4);
                                                     Subsection 22.01(2)

         "Defined Contribution                       Subsection 5.09(5)
           Plan Fraction"

         "Determination Date"                        Subsection 22.01(3)

         "Direct Rollover"                           Subsection 11.16(2)(d)

         "Distributee"                               Subsection 11.16(2)(c)

         "Distribution Calendar Year"                Subsection 11.05(6)(b)

         "Early Retirement Date"                     Section 2.38

         "Effective Date"                            Section 1.01

         "Eligibility Year of Service"               Section 3.03

         "Eligible Participant"                      Section 5.01

         "Eligible Retirement Plan"                  Subsection 11.16(2)(b)

         "Eligible Rollover Distribution"            Subsection 11.16(2)(a)

         "Employment Period"                         Section 3.03

         "Employment Termination Account"            Section 10.07

         "Entry Date"                                Section 3.01

         "Forfeiture"                                Subsection 10.05(5)

         "Former Associate"                          Section 2.22

         "Former Participant"                        Section 2.28

         "Indemnified Person"                        Section 15.13

         "Key Employee"                              Subsection 22.01(4)

         "Key Employee Participant"                  Subsection 22.01(5)

         "Limitation Year"                           Subsection 5.09(6)

                                       14
<PAGE>

         "Limitation Year Compensation"              Section 2.22;
                                                     Subsection 5.09(7);
                                                     Subsection 22.01(6)

         "Named Fiduciaries"                         Section 15.09

         "Net Earnings and Adjustments               Subsection 6.04(2)
           in Value of the Trust Fund"

         "Non-Key Employee"                          Subsection 22.01(7)

         "Non-Participating Affiliated               Subsection 3.01(4)
           Company"

         "Nonvested Amount"                          Subsection 10.05(2)

         "Option Period"                             Section 11.10

         "Option Price"                              Section 11.10

         "Participant Offer"                         Section 11.12(1)

         "Participant's Benefit"                     Subsection 11.05(6)(c)

         "Permissive Aggregation Group"              Subsection 22.01(8)

         "Plan Administrator"                        Section 15.07

         "Put"                                       Section 11.10

         "Qualified Consent"                         Subsection 9.02(2)

         "Qualifying Employer Security"              Section 12.07

         "Required Aggregation Group"                Subsection 22.01(9)

         "Retirement Plan"                           Subsection 5.09(1)

         "Super Top Heavy Plan"                      Subsection 22.02(2)

         "Third Party Offer"                         Subsection 11.12(1)

         "Top Heavy Plan"                            Subsection 22.02(1)

         "Top Heavy Ratio"                           Subsection 22.02(3)

         "Valuation Calendar Year"                   Subsection 11.05(6)(c)

         "Valuation Date"                            Section 2.48;
                                                     Subsection 22.01(10)

                                       15
<PAGE>

                                   ARTICLE III

                 REQUIREMENTS FOR ELIGIBILITY AND PARTICIPATION

3.01     Eligibility. An Eligible Associate who met the eligibility requirements
         under the Plan and was a Participant in the Plan as it existed on the
         date immediately prior to the Effective Date shall continue to be a
         Participant in the Plan on the Effective Date. Each other Eligible
         Associate shall become a Participant in accordance with the applicable
         paragraph of this Section 3.01:

         (1)      Service and Age. An Eligible Associate shall become a
                  Participant as of the February 1 or August 1 (the "Entry
                  Date") coinciding with or next following the later of the date
                  upon which such Eligible Associate (a) completes an
                  Eligibility Year of Service, or (b) attains age twenty-one
                  (21), provided such Eligible Associate is so employed on such
                  Entry Date.

         (2)      Reemployment Prior to Break in Service. In the event an
                  Eligible Associate suffers a Termination of Employment after
                  completing the eligibility requirements of Subsection 3.01(1)
                  but prior to the Entry Date upon which such Eligible Associate
                  would have participated in the Plan, and such Eligible
                  Associate is reemployed by an Employer after the Entry Date
                  upon which the Eligible Associate would have participated in
                  the Plan but prior to a One-Year Break in Service, such
                  Eligible Associate shall participate in the Plan as of his
                  Date of Reemployment.

         (3)      Reemployment After Break in Service. In the event an Eligible
                  Associate suffers a Termination of Employment prior to or
                  after completing the eligibility requirements of Subsection
                  3.01(1) but prior to the Entry Date upon which such Eligible
                  Associate would have participated in the Plan, and such
                  Eligible Associate is reemployed by an Employer after
                  incurring a One-Year Break in Service, such Eligible Associate
                  shall be treated as a new Associate and shall become a
                  Participant as of the Entry Date coinciding with or next
                  following the date upon which such Eligible Associate
                  completes the eligibility requirements of Subsection 3.01(1),
                  provided such Eligible Associate is so employed on such Entry
                  Date.

         (4)      Transfer to Non-Participating Affiliated Company Prior to
                  Completion of Eligibility Requirements. In the event an
                  Eligible Associate transfers to an Affiliated Company that has
                  not adopted the Plan (a "Non-Participating Affiliated
                  Company") prior to completing the eligibility requirements of
                  Subsection 3.01(1) and is employed continuously with a
                  Non-Participating Affiliated Company until his transfer back
                  to an Employer, such Eligible Associate shall become a
                  Participant as of the Entry Date coinciding with or next
                  following the date upon which such Associate completes the
                  eligibility requirements of Subsection 3.01(1), provided such
                  Eligible Associate is so employed on such Entry Date.

         (5)      Transfer to Non-Participating Affiliated Company After
                  Completion of Eligibility Requirements. In the event an
                  Eligible Associate transfers to a Non-Participating Affiliated
                  Company after completing the eligibility requirements of
                  Subsection 3.01(1) but prior to the Entry Date upon which such
                  Eligible Associate would have participated in the Plan, and is
                  employed continuously with a Non-Participating Affiliated
                  Company until his transfer back to an Employer, such Eligible
                  Associate shall become a Participant as of (a) the date of his
                  transfer back to an Employer, if the transfer is after the
                  Entry Date upon which such Eligible Associate would have
                  participated in the Plan, or (b) the Entry Date coinciding
                  with or next

                                       16
<PAGE>
                  following the date upon which such Associate transfers back to
                  an Employer, provided such Eligible Associate is so employed
                  on such Entry Date.

3.02     Employment with a Predecessor Employer. If the Plan had previously been
         maintained by a predecessor of an Employer, whether a corporation,
         partnership, sole proprietorship or other business entity, any period
         of employment with such predecessor shall be treated as a period of
         employment with an Employer. If the Plan had not been previously
         maintained by a predecessor of an Employer, employment with such
         predecessor shall not be taken into account, except to the extent
         required pursuant to regulations prescribed by the Secretary of the
         Treasury or his delegate or as otherwise provided in the Plan.

3.03     Eligibility Year of Service. An "Eligibility Year of Service" shall
         mean the Employment Period during which such Associate performs one
         thousand (1,000) or more Hours of Service subject to the provisions of
         Section 3.02 hereof. For purposes of determining an Associate's
         Eligibility Year of Service, the "Employment Period" to be used shall
         be the initial twelve (12) consecutive month period beginning on an
         Associate's Date of Employment or Date of Reemployment and thereafter
         the Plan Year, beginning with the Plan Year within which occurs the
         Associate's first anniversary of his Date of Employment or Date of
         Reemployment. Any Associate who is credited with one thousand (1,000)
         or more Hours of Service with an Employer or any Affiliated Company in
         both the initial twelve (12) month period beginning on such Associate's
         Date of Employment or, if applicable, an Associate's Date of
         Reemployment, and the Plan Year within which such initial twelve (12)
         month period ends, shall be credited with two (2) Eligibility Years of
         Service at the end of such Plan Year.

3.04     Participation Upon Reemployment. In the event that a Participant or
         Former Participant who has suffered a Termination of Employment and has
         a period of One-Year Breaks in Service is subsequently reemployed by an
         Employer, for purposes of determining his eligibility to participate in
         the Plan after his reemployment, he shall be treated as follows:

         (1)      If such Participant (a) had a vested amount in his Company
                  Contribution Account preceding the period of One-Year Breaks
                  in Service, or (b) had no vested benefit preceding such period
                  of One-Year Breaks in Service and did not have five (5) or
                  more consecutive One-Year Breaks in Service within such
                  period, he shall resume participation in the Plan effective as
                  of his Date of Reemployment.

         (2)      If such Participant had no vested amount in his Company
                  Contribution Account preceding such period of One-Year Breaks
                  in Service and he had five (5) or more consecutive One-Year
                  Breaks in Service within such period, he shall be treated the
                  same as a new Associate who had no prior employment before his
                  Date of Reemployment.

3.05     Change in Status of Eligible Associate.

         (1)      In the event an Associate, including an Associate who
                  previously was not defined as an Eligible Associate under
                  Section 2.17 hereof, becomes defined as an Eligible Associate,
                  such individual shall become a Participant in the Plan as of
                  the date he becomes defined as an Eligible Associate, provided
                  he has met the other requirements for eligibility set forth in
                  Section 3.01 hereof and previously would have begun to
                  participate in the Plan had he been defined as an Eligible
                  Associate. If such individual has not met the other
                  requirements for eligibility set forth in Section 3.01 hereof,
                  such individual shall be treated as if he had always been
                  defined as an Eligible Associate and shall become a
                  Participant in the Plan as of the

                                       17
<PAGE>
                  Entry Date coinciding with or next following the date the
                  individual meets the requirements for eligibility set forth in
                  Section 3.01 hereof.

         (2)      In the event a Participant who ceased to be defined as an
                  Eligible Associate under Section 2.17 hereof but who did not
                  incur a Termination of Employment with an Employer
                  subsequently becomes defined as an Eligible Associate again,
                  such Eligible Associate shall recommence participation in the
                  Plan for all purposes without regard to the limitations
                  imposed by Section 5.11 hereof, as of the date he again
                  becomes defined as an Eligible Associate.

3.06     Participation in the Plan. Each Eligible Associate shall be provided
         with such information as is required by ERISA within the time
         prescribed for providing such information. In addition, each
         Participant shall be provided with a designation of Beneficiary form
         which shall provide for a designation of one or more Beneficiaries to
         receive benefits in the event of the Participant's death.

                                   ARTICLE IV

                                  CONTRIBUTIONS

4.01     Company Contributions. Each Plan Year, each Employer shall make a cash
         contribution (the "Company Contribution") to the Trust in such amount
         as its board of directors (or such other person or group of persons
         referred to in Section 23.07 hereof in case of an Employer which is not
         a corporation) in its sole discretion may authorize; provided, however,
         that an Employer may determine that no Company Contribution shall be
         made for a Plan Year. An Employer's Company Contribution may be made in
         cash or shares of Company Stock or in a combination of cash and Company
         Stock.

         In no event, however, shall any Company Contribution exceed the maximum
         deductible Company Contribution under Code Section 404(a) including any
         amount which may be deductible by the Employer under the carryover
         provisions of the Code. Notwithstanding the foregoing, to the extent
         necessary to provide the required top heavy minimum allocation
         described in Article XXII, an Employer shall make a contribution even
         if it exceeds the amount which is deductible under Code Section 404.

4.02     Date of Payment and Allocation of Company Contributions. An Employer
         shall make its Company Contributions to the Trust Fund for a Plan Year
         on or before the last date, including any extensions thereof, for
         filing its federal income tax return for its Fiscal Year ending with or
         after the last day of such Plan Year. Company Contributions shall be
         deemed to have been made and shall be allocated to the Company
         Contribution Accounts of Eligible Participants in accordance with
         Section 5.01 hereof as of the earlier of (1) the Valuation Date on or
         next following the date on which they are made to the Trust Fund, or
         (2) the last day of the Plan Year for which they are made.

4.03     Associate Contributions. No Associate contributions will be permitted
         to or accepted by this Plan.

4.04     Special Provisions for Participants Who Enter the Armed Forces.

         (1)      If a Participant is absent from employment for voluntary or
                  involuntary military Service with the armed forces of the
                  United States and returns to employment within the period
                  required under the law pertaining to veterans' reemployment
                  rights, the Participant shall not be treated as having
                  incurred any One-Year Breaks in Service for the period of the
                  Participant's absence

                                       18
<PAGE>
                  from employment, in accordance with the Uniformed Services
                  Employment and Reemployment Rights Act of 1994 ("USERRA").

         (2)      The Employer shall contribute all Company Contributions
                  described in Section 4.01 for a Participant returning from a
                  "qualified military leave" (as defined in Code Section
                  414(u)(5)) in the amount, if any, that would have been
                  contributed for such individual during such qualified military
                  leave.

         (3)      In determining the amount of Company Contributions that would
                  be allocated to the Participant under Section 5.01,
                  "Compensation" for purposes of this Section 4.04 shall mean:

                  (a)      the Compensation the Participant would have received
                           during the period of qualified military Service
                           determined based on the rate of pay the Participant
                           would have received but for the military Service
                           absence; or

                  (b)      if the Compensation of the Participant during the
                           qualified military Service is not determinable under
                           Section 4.04(3)(a), then the Participant's average
                           Compensation from the Employer during the twelve (12)
                           month period immediately before the qualified
                           military Service (or, if shorter, the period of
                           employment with the Employer immediately before the
                           qualified military Service).

         (4)      Company Contributions made under Subsection 4.04(3) shall be
                  attributed to the Plan Year and Limitation Year to which they
                  relate.

         (5)      Company Contributions made pursuant to this Section 4.04 shall
                  not cause the Plan to fail to satisfy the requirements of Code
                  Sections 401(a)(4), 410(b) or 416 by reason of the fact these
                  contributions were made or a Participant had the right to
                  receive Company Contributions.

                                    ARTICLE V

                      ALLOCATION TO PARTICIPANTS' ACCOUNTS

5.01     Method of Allocating Company Contributions. Subject to Sections 5.06,
         5.07, 5.08, 5.09 and Subsection 22.03(2) hereof, the total Company
         Contribution made for each Plan Year shall be allocated in accordance
         with Section 4.02 among the Company Contribution Accounts of all
         Participants (the "Eligible Participants") who: (1) have completed one
         thousand (1,000) or more Hours of Service with one (1) or more
         Employers for the Plan Year and are employed by an Employer on the last
         day of the Plan Year, or (2) have died, retired or suffered Total and
         Permanent Disability during such Plan Year, regardless of whether such
         Participants have completed one thousand (1,000) or more Hours of
         Service for such Plan Year, or (3) are on Leave of Absence on the last
         day of the Plan Year who received Compensation form the Employer during
         the Plan Year, regardless if such Participants performed one thousand
         (1,000) Hours of Service during the Plan Year.

         Each Eligible Participant's allocable share of Company Contributions
         shall be in the proportion that his Compensation for such Plan Year
         bears to the total Compensation of all Eligible Participants for such
         Plan Year. In the event the Company Contribution consists of Company
         Stock, the Company Stock should be allocated in this ratio according to
         the number of shares contributed.

                                       19
<PAGE>

5.02     Suspense Account. The Benefits Advisory Committee shall establish a
         Suspense Account for each Exempt Loan made pursuant to Article XII and
         shall allocate thereto any Qualifying Employer Securities acquired with
         the proceeds of such Exempt Loan provided, however, that the Benefits
         Advisory Committee need not establish a separate Suspense Account for
         each Exempt Loan that is made for purposes of repaying a prior Exempt
         Loan. Any Qualifying Employer Securities allocated to a Suspense
         Account shall be treated as if they were given as collateral for the
         Exempt Loan as provided in Section 12.3 without regard to whether they
         are actually given as collateral for such loan, and shall be released
         from the Suspense Account in accordance with the provisions of Section
         12.6 for allocation to the Participants and Beneficiaries in accordance
         with Section 6.04(4).

5.03     Allocation to a Participant Who Ceases to be an Eligible Associate or
         Who is Transferred to a Non-Participating Affiliated Company. If a
         Participant who is an Eligible Associate ceases to be an Eligible
         Associate or is transferred from an Employer to a Non-Participating
         Affiliated Company, he shall participate in the allocation of Company
         Contributions for the Plan Year in which the cessation or transfer took
         place, provided the Associate either (1) completes one thousand (1,000)
         Hours of Service with an Employer or a Non-Participating Affiliated
         Company in such Plan Year and is employed by an Employer or a
         Non-Participating Affiliated Company on the last day of the Plan Year
         or (2) dies, retires or suffers Total and Permanent Disability during
         such Plan Year, regardless of whether such Participant has completed
         one thousand (1,000) or more Hours of Service for such Plan Year. Such
         allocation shall be made upon the basis of such Participant's
         Compensation from the Employer up to the date of the cessation of
         Eligible Associate status or transfer. In any subsequent Plan Year,
         such Participant shall receive no further allocations of any Company
         Contributions under the Plan unless and until he subsequently becomes
         an Eligible Associate.

5.04     Allocation of Contributions and Qualifying Employer Securities Released
         From Suspense Accounts - General. As of the Valuation Date coinciding
         with the last day of the Plan Year, the Benefits Advisory Committee
         shall:

         (1)      First, determine the aggregate limitation prescribed by
                  Section 5.06 for all Participants described in Section 5.01.
                  To the aggregate limitation add any amounts described in
                  Section 4.01.

         (2)      Next, allocate (a) Company Contributions, if any, not used to
                  repay Exempt Loans, and (b) any Qualifying Employer Securities
                  released from Suspense Accounts that are not given as
                  collateral for a new Exempt Loan (the proceeds of which are
                  used to repay a prior Exempt Loan), to the Accounts of all
                  Associates entitled to share in the amount described in
                  Section 4.01 in the proportion that the amount required for
                  all entitled Associates until the amount described in Section
                  4.01 is fully allocated. Former Associates and Beneficiaries
                  shall be treated as Associates for purposes of this paragraph.

         (3)      Finally, allocate (a) any Qualifying Employer Securities
                  released from Suspense Accounts that are not given as
                  collateral for a new Exempt Loan, the proceeds of which are
                  used to repay a prior Exempt Loan, and (b) Company
                  Contributions, if any, not used to repay Exempt Loans, in
                  accordance with Section 5.05 to the Accounts of each
                  Participant entitled to an allocation under Section 5.01. The
                  allocation of Company Contributions for any such Participant
                  shall not exceed the amount determined pursuant to Section
                  5.06. If, after the first such allocation, any Company
                  Contributions remain, the remainder shall be allocated and
                  reallocated in the same manner prescribed in this paragraph
                  until exhausted.

                                       20
<PAGE>

5.05     Method of Allocating and Crediting Contributions and Qualifying
         Employer Securities Released from Suspense Accounts. Subject to the
         conditions of Section 5.06, as of the last day of the Plan Year, the
         Company Contributions, if any, for the Plan Year ending on that date
         that are not used to repay Exempt Loans, if any, which arose under the
         Plan that year, and Qualifying Employer Securities, if any, released
         from Suspense Accounts for that year that are not given as collateral
         for an Exempt Loan, the proceeds of which are used to repay a prior
         Exempt Loan, shall be allocated among and credited to the Accounts of
         Participants entitled to share in the Company Contributions for that
         Plan Year (as provided in Section 5.01) in the proportion that each
         such Participant's Compensation for the Plan Year bears to the
         Compensation of all such Participants for such Plan Year.

         For purposes of this Section 5.05, "Compensation" includes only base
         pay and excludes commissions, bonuses, moving expenses, health club
         dues, and executive medical reimbursement, and other similar
         perquisites; however, Compensation does include in base pay amounts
         that have been deferred in connection with the Employer's 401(k) plan
         and pursuant to a cafeteria plan for medical insurance premiums or
         other benefit programs. For the purposes of determining Compensation,
         as defined herein, amounts accrued to a Participant shall be equivalent
         to qualifying amounts paid to a Participant hereunder.

5.06     Limitation on Annual Additions.

         (1)      Notwithstanding any other provision of the Plan, the sum of
                  the Annual Additions to a Participant's Account for any
                  Limitation Year shall not exceed the lesser of: (a) Thirty
                  Thousand Dollars ($30,000) (or such higher amount to which
                  such amount shall be adjusted by the Secretary of the Treasury
                  or his delegate pursuant to Code Section 415(d)), or (b)
                  twenty-five percent (25%) of such Participant's Limitation
                  Year Compensation for the entire Limitation Year (even though
                  such Participant may not have been a Participant for the
                  entire Limitation Year). For purposes of the preceding
                  sentence, if the Trustee enters into an Exempt Loan pursuant
                  to Article XII hereof and no more than one-third (1/3) of the
                  Company Contributions made to the Plan for the Plan Year are
                  allocated to the Accounts of Highly Compensated Employees
                  (within the meaning of Section 414(q) of the Code), the
                  Company Contributions that are used to pay the interest on the
                  Exempt Loan for the Plan Year, will not be included in
                  determining whether the Plan satisfies the limitations of this
                  Section 5.06(1). If a Limitation Year is less than a twelve
                  (12) consecutive month period, the above dollar limitations
                  for the short Limitation Year shall not exceed the amount
                  determined in the preceding sentence multiplied by a fraction,
                  the numerator of which is the number of whole months in the
                  short Limitation Year and the denominator of which is twelve
                  (12). The term "Annual Additions" to a Participant's Account
                  for any Limitation Year shall mean the sum of:

                  (a)      such Participant's allocable share of the Company
                           Contributions credited to such Participant within
                           such Limitation Year; and

                  (b)      such Participant's allocable share of Forfeitures, if
                           any, credited to such Participant within such
                           Limitation Year; and

                  (c)      any amount allocated to an "individual medical
                           account," as defined in Code Section 415(l)(2), which
                           is part of a Defined Benefit Plan maintained by an
                           Employer; and

                  (d)      any amounts derived from contributions paid or
                           accrued after December 31, 1985, in taxable years
                           ending after such date, which are attributable to
                           post-retirement

                                       21
<PAGE>
                           medical benefits allocated to the separate account of
                           a key employee (as defined in Code Section
                           419A(d)(3)) under a welfare benefit fund (as defined
                           in Code Section 419(e)) maintained by an Employer.

                  Solely for purposes of this Section 5.06, the determination of
                  a Participant's allocable share of Company Contributions and
                  Forfeitures, if any, for a Limitation Year shall exclude any
                  Company Contributions, and Forfeitures, if any, allocated to
                  such Participant for any of the reasons set forth in Sections
                  1.415-6(b)(2)(ii)-(vi) of the Income Tax Regulations (except
                  as otherwise provided in such Sections).

         (2)      In the event that as a result of: (a) the allocation of
                  Forfeitures, (b) a reasonable error in estimating a
                  Participant's Limitation Year Compensation, or (c) other facts
                  and circumstances which the Internal Revenue Service finds
                  justify the availability of the provisions of this Subsection
                  and Subsection 5.06(3), it is determined that the Annual
                  Additions to a Participant's Account for any Limitation Year
                  would be in excess of the limitations contained in Subsection
                  5.06(1) herein, such Annual Additions shall be reduced to the
                  extent necessary to bring such Annual Additions within the
                  limitations contained in Subsection 5.06(1) by reducing such
                  Participant's allocable share of Forfeitures, if any, and
                  Company Contributions for the Plan Year ending within such
                  Limitation Year.

         (3)      If, and to the extent that the amount of any Participant's
                  allocable share of Forfeitures, if any, or Company
                  Contributions is reduced in accordance with the provisions of
                  Subsection 5.06(2) above, the amount of such reduction shall
                  be maintained in a separate suspense account under the Trust
                  to be used to reduce Company Contributions for that
                  Participant for the next succeeding Limitation Year (and
                  succeeding Limitation Years, as necessary), if that
                  Participant is employed as of the end of such Limitation Year.

                  If such Participant is no longer employed as of the end of
                  such next succeeding Limitation Year (or succeeding Limitation
                  Years, if applicable), then the amount in the suspense account
                  shall continue to be held in such suspense account for such
                  Limitation Year and shall reduce Company Contributions for
                  such next succeeding Limitation Year (and succeeding
                  Limitation Years, if applicable) and shall, subject to the
                  provisions of Subsection 5.06(1), be allocated and reallocated
                  in such next succeeding Limitation Year (and succeeding
                  Limitation Years, if applicable), among all of the remaining
                  Participants in the Plan. Any suspense account established
                  pursuant to this Subsection shall not be adjusted to reflect
                  net income, loss, appreciation or depreciation in the value of
                  the Trust Fund as provided for a Participant's regular
                  Accounts pursuant to Article VI hereof.

                  Notwithstanding any other provision of the Plan to the
                  contrary, in the event amounts are credited to a suspense
                  account, no Company Contributions shall be made to the Plan
                  for a Plan Year while there are any amounts in such separate
                  suspense account attributable to prior Plan Years which cannot
                  be allocated to Participants in accordance with the terms of
                  this Subsection.

5.07     Limitations on Annual Additions for Employers or Affiliated Companies
         Maintaining Other Defined Contribution Plans. In the event that any
         Participant in this Plan is also a participant under any other Defined
         Contribution Plan maintained by an Employer or an Affiliated Company
         (whether or not terminated), the total amount of Annual Additions to
         such Participant's accounts under all such Defined Contribution Plans
         shall not exceed the limitations set forth in Subsection 5.06(1)
         hereof. If such total amount of Annual Additions to a Participant's
         accounts under all such Defined

                                       22
<PAGE>
         Contribution Plans does exceed the limitations set forth in Subsection
         5.06(1) hereof, then the Annual Additions to such Participant's
         Accounts in this Plan shall be reduced, and such reduction shall be
         accomplished in accordance with the provisions of Section 5.06 hereof.

5.08     Limitations on Annual Additions for Employers or Affiliated Companies
         Maintaining Defined Benefit Plans. For Limitation Years beginning prior
         to December 31, 1999, in the event that any Participant under this Plan
         is a participant under one or more Defined Benefit Plans maintained by
         an Employer or an Affiliated Company (whether or not terminated), then
         the sum of the Defined Benefit Plan Fraction for such Limitation Year
         and the Defined Contribution Plan Fraction for such Limitation Year
         shall not exceed one (1.0). If the sum of the Defined Benefit Plan
         Fraction for any Limitation Year and the Defined Contribution Plan
         Fraction for such Limitation Year does exceed one (1.0), then such
         Participant's benefits under the Defined Benefit Plan shall be reduced
         in accordance with the requirements of Code Section 415 and the
         applicable regulations thereunder to the extent necessary to comply
         with the limitations set forth in this Section. The provisions of this
         Section 5.08 shall not apply for Limitation Years beginning on or after
         January 1, 2000.

5.09     Definitions for Purposes of Determining the Annual Addition
         Limitations. For purposes of Sections 5.06, 5.07, and 5.08 hereof and
         this Section 5.09, the following definitions shall apply:

         (1)      "Retirement Plan" shall mean (a) any profit-sharing, pension
                  or stock bonus plan described in Code Sections 401(a) and
                  501(a), (b) any annuity plan or annuity contract described in
                  Code Section 403(a) or 403(b), and (c) any simplified employee
                  pension plan described in Code Section 408(k).

         (2)      "Defined Benefit Plan" shall mean any Retirement Plan which
                  does not meet the definition of a Defined Contribution Plan.

         (3)      "Defined Benefit Plan Fraction" shall mean a fraction
                  calculated in accordance with Code Section 415(e)(2).
                  Notwithstanding the preceding sentence, if the Participant was
                  a Participant as of the first day of the first Limitation Year
                  beginning after December 31, 1986, in one or more Defined
                  Benefit Plans maintained by an Employer or an Affiliated
                  Company which were in existence on May 6, 1986, the
                  denominator of the Defined Benefit Plan Fraction will not be
                  less than one hundred twenty-five percent (125%) of the sum of
                  the projected annual benefits under such plans which the
                  Participant had accrued as of the close of the last Limitation
                  Year beginning before January 1, 1987, disregarding any
                  changes in the terms and conditions of the plan after May 5,
                  1986. The preceding sentence applies only if the Defined
                  Benefit Plans individually and in the aggregate satisfied the
                  requirements of Code Section 415 for all Limitation Years
                  beginning before January 1, 1987.

         (4)      "Defined Contribution Plan" shall mean a Retirement Plan which
                  provides for an individual account for each participant and
                  for benefits based solely on the amount contributed to the
                  participant's account, and any income, expenses, gains or
                  losses, and any forfeitures of accounts of other participants
                  which may be allocated to such participant's account. For
                  purposes of Sections 5.06, 5.07 and 5.08, a Participant's
                  voluntary nondeductible contributions to a Defined Benefit
                  Plan shall be treated as being part of a separate Defined
                  Contribution Plan.

         (5)      "Defined Contribution Plan Fraction" shall mean a fraction
                  calculated in accordance with Code Sections 415(e)(3), (4) and
                  (6). If the Associate was a Participant as of the end of the
                  first day of the first Limitation Year beginning after
                  December 31, 1986, in one or more

                                       23
<PAGE>
                  Defined Contribution Plans maintained by an Employer or an
                  Affiliated Company which were in existence on May 6, 1986, the
                  numerator of the Defined Contribution Plan Fraction will be
                  adjusted if the sum of this fraction and the Defined Benefit
                  Fraction would otherwise exceed one (1.0) under the terms of
                  this Plan. Under the adjustment, an amount equal to the
                  product of (a) the excess of the sum of the fractions over one
                  (1.0) times (b) the denominator of the Defined Contribution
                  Plan Fraction, will be permanently subtracted from the
                  numerator of the Defined Contribution Plan Fraction. The
                  adjustment is calculated using the fractions as they would be
                  computed as of the end of the last Limitation Year beginning
                  before January 1, 1987, and disregarding any changes in the
                  terms and conditions of the plan made after May 5, 1986, but
                  using the Code Section 415 limitation applicable to the first
                  Limitation Year beginning on or after January 1, 1987.

         (6)      "Limitation Year" shall mean the Plan Year.

         (7)      "Limitation Year Compensation" shall mean:

                  (a)      the aggregate of all of the following for the
                           Limitation Year:

                           (i)      The Associate's wages, salaries, fees for
                                    professional services and other amounts
                                    received (without regard to whether or not
                                    an amount is paid in cash) for personal
                                    services actually rendered in the course of
                                    employment with all Employers and Affiliated
                                    Companies to the extent the amounts are
                                    includable in gross income (including, but
                                    not limited to, commissions paid salesmen,
                                    compensation for services on the basis of a
                                    percentage of profits, commissions on
                                    insurance premiums, tips and bonuses, fringe
                                    benefits, reimbursements, and expense
                                    allowances) as more fully described in Code
                                    Section 415(c)(3) and the regulations
                                    thereunder, which are actually paid or made
                                    available to an Associate who is not a
                                    Self-Employed Individual;

                           (ii)     In the case of any Self-Employed Individual,
                                    "Compensation" shall mean the individual's
                                    Earned Income for such Limitation Year;

                           (iii)    Amounts described in Code Sections
                                    104(a)(3), 105(a) and 105(h) but only to the
                                    extent that these amounts are includable in
                                    the gross income of the Associate;

                           (iv)     Amounts paid or reimbursed by the Employer
                                    for moving expenses incurred by an
                                    Associate, but only to the extent that at
                                    the time of the payment it is reasonable to
                                    believe that these amounts are not
                                    deductible by the Associate under Code
                                    Section 217;

                           (v)      The value of a non-qualified stock option
                                    granted to an Associate by the Employer, but
                                    only to the extent that the value of the
                                    option is includable in the gross income of
                                    the Associate for the taxable year in which
                                    granted; and

                           (vi)     The amount includable in the gross income of
                                    an Associate upon making the election
                                    described in Code Section 83(b).

                  (b)      Limitation Year Compensation shall not include the
                           following:

                                       24
<PAGE>

                           (i)      Contributions to a plan of deferred
                                    compensation to the extent that, before the
                                    application of the limitations of Code
                                    Section 415 to the Plan, the contributions
                                    are not included in the gross income of the
                                    Associate for the taxable year in which
                                    contributed, or contributions under a
                                    simplified employee pension plan to the
                                    extent the contributions are deductible by
                                    the Associate, and any distributions from a
                                    plan of deferred compensation other than an
                                    unfunded nonqualified plan of deferred
                                    compensation;

                           (ii)     Amounts realized from the exercise of a
                                    non-qualified stock option, or amounts
                                    realized under Code Section 83 with respect
                                    to restricted property held by an Associate
                                    that becomes freely transferable or is no
                                    longer subject to a substantial risk of
                                    forfeiture;

                           (iii)    Amounts realized from the sale, exchange or
                                    other disposition of stock acquired under an
                                    incentive stock option within the meaning of
                                    Code Section 422;

                           (iv)     Other amounts that receive special tax
                                    benefits within the meaning of Treasury
                                    Regulation Section 1.415-2(d)(3), such as
                                    premiums for group term life insurance (but
                                    only to the extent that premiums are not
                                    includable in the gross income of the
                                    Associate), or contributions made by the
                                    Employer (whether or not under a salary
                                    reduction agreement) towards the purchase of
                                    an annuity contract covered by Code Section
                                    403(b) (whether or not the contributions are
                                    excludible from the gross income of the
                                    Associate).

                  Effective for Plan Years beginning after December 31, 1997,
                  "Limitation Year Compensation" shall also include any elective
                  deferral (as defined in Code Section 402(g)(3)) and any amount
                  which is contributed or deferred by the Employer at the
                  election of the Participant and which is not includable in the
                  gross income of the Participant by reason of Code Sections 125
                  or 457.

5.10     Dividend Pass-Through. With respect to any cash dividend paid on
         Qualifying Employer Securities held by the Trust, whether held in
         Participant's Accounts or a Suspense Account, the Company shall have
         the obligation to:

         (1)      Pay such dividend directly to the Participants or their
                  Beneficiaries;

         (2)      Pay such dividend to the Trust and direct the Trustee to
                  distribute the dividend to the Participants or their
                  Beneficiaries within ninety (90) days after the close of the
                  Plan Year in which paid;

         (3)      Direct the Trustee to use said dividend to make payments on an
                  Exempt Loan, the proceeds of which were used to acquire the
                  Qualifying Employer Securities; or

         (4)      Allocate such dividend to all Participants' Accounts as income
                  from the Trust Fund.

         In the case of a payment of dividends to Participants and Beneficiaries
         under (1) or (2) above, the payments shall be allocated as follows.
         With respect to dividends paid on Qualifying Employer Securities held
         in Participants' or Beneficiaries' Accounts, such dividends shall be
         allocated in the ratio that the number of shares of Qualifying Employer
         Securities credited to each Participants' or

                                       25
<PAGE>
         Beneficiaries' Accounts bears to the total number of such shares
         credited to all such Accounts. With respect to dividends paid on
         Qualifying Employer Securities held in a Suspense Account, such
         dividends shall be allocated in the ratio that each Participant's or
         Beneficiary's total Account balance bears to the total of all such
         Account balances. In the case of a payment of dividends under (3)
         above, Qualifying Employer Securities with a fair market value of not
         less than the amount of such dividends shall be released from the
         Suspense Account and allocated to Participant's Accounts pursuant to
         Section 5.05 for the Plan Year in which the dividend is paid. The
         Company shall be allowed a federal income tax deduction for any
         dividend paid pursuant to the terms of this Section 5.10.

5.11     Cessation of Eligible Associate Status. Subject to the exception at
         Section 5.03, if any Participant does not incur a Termination of
         Employment but ceases to be an Eligible Associate as defined in Section
         2.17 hereof, then, during the period that such Participant is not an
         Eligible Associate: (1) such Participant shall not receive any further
         allocation of any Company Contributions and Forfeitures, if any, under
         the Plan pursuant to Article IV, (2) such Participant's Accounts shall
         continue to share in the earnings or losses of the Trust Fund, and (3)
         such Participant shall receive credit for vesting purposes pursuant to
         Section 10.01 hereof for any Vesting Years of Service completed during
         such period.

                                   ARTICLE VI

                      ACCOUNTS AND VALUATION OF TRUST FUND

6.01     Participant's Accounts. The assets of the Trust Fund shall constitute a
         single fund in which each Participant, Beneficiary or Alternate Payee
         shall have his proportionate interest as provided in this Plan. The
         Benefits Advisory Committee shall maintain, or cause to be maintained,
         with respect to each Employer, individual Accounts for each
         Participant, Beneficiary or Alternate Payee. A Participant may have a
         Company Contribution Account and an Employment Termination Account,
         and, where appropriate, an Alternate Payee shall have a QDRO Account.
         Each Account shall reflect the credits and charges allocable thereto in
         accordance with the Plan. The Benefits Advisory Committee shall
         maintain, or cause to be maintained, records which will adequately
         disclose at all times the state of the Trust Fund and of each separate
         interest therein. The books, forms and methods of accounting shall be
         entirely in the hands of and subject to the supervision of the Benefits
         Advisory Committee.

6.02     Accounts of Participants Transferred to a Non-Participating Affiliated
         Company. If a Participant is transferred to a Non-Participating
         Affiliated Company, the amount in the Trust which is credited to his
         Accounts shall continue to share in the earnings or losses of the Trust
         Fund, and such Participant's rights and obligations with respect to
         such Accounts shall be governed by the provisions of the Plan and
         Trust.

6.03     Valuation of the Trust Fund and Account Statements.

         (1)      Within a reasonable time after the Valuation Date that
                  coincides with the last day of the Plan Year, and at such
                  other times, if any, during the Plan Year as the Benefits
                  Advisory Committee may require, the Benefits Advisory
                  Committee shall have the Trustee prepare a statement of the
                  condition of the Trust Fund as of the close of business of
                  such Valuation Date or such other date setting forth: (a) the
                  assets of the Trust Fund as of such Valuation Date or other
                  date, and the cost and current value thereof as defined in
                  ERISA Section 3(26) (the "Current Value"), and (b) all
                  investments, receipts, disbursements and other transactions

                                       26
<PAGE>

                  effected by it during the Plan Year or other period. This
                  statement shall be delivered to the Benefits Advisory
                  Committee. The Benefits Advisory Committee shall then cause to
                  be prepared, and shall deliver to each Participant,
                  Beneficiary or Alternate Payee, a report disclosing the status
                  of each such individual's Accounts in the Trust Fund.

         (2)      The Trustee's determination of the Current Value of the assets
                  in the Trust Fund and the Benefits Advisory Committee's
                  charges or credits to the individual Accounts with respect to
                  Participants, Beneficiaries or Alternate Payees, as provided
                  in Section 6.04, shall be final and conclusive on all persons
                  ever interested hereunder.

6.04     Periodic Determination of Participant's Accounts.

         (1)      Allocations in General. For the purpose of making allocations
                  as of any Valuation Date, the Net Earnings and Adjustments in
                  Value of the Trust Fund shall be allocated pursuant to
                  Subsection 6.04(3); and Company Contributions shall be
                  allocated pursuant to Section 4.02 hereof. Whenever an
                  allocation or credit is required to be made hereunder, it
                  shall be made by the Benefits Advisory Committee, or at the
                  Benefits Advisory Committee's direction, and subject to its
                  supervision.

         (2)      Determination of Net Earnings and Adjustments In Value of the
                  Trust Fund. "Net Earnings and Adjustments in Value of the
                  Trust Fund" for a particular period means the Current Value
                  (determined pursuant to Section 6.03 hereof) of the Trust Fund
                  as of a Valuation Date, less the sum of:

                  (a)      The total of all Account balances allocated to the
                           Trust Fund as of the close of the previous Valuation
                           Date of all Participants, Beneficiaries and Alternate
                           Payees as of such time; and

                  (b)      Company Contributions for the period under
                           consideration, to the extent that such Company
                           Contributions were actually paid over to the Trustee
                           since the previous Valuation Date and allocated to
                           the Trust Fund.

         (3)      Allocation of Net Earnings and Adjustments in Value of the
                  Trust Fund. Subject to the provisions of Subsection 6.04(2)
                  hereof, the Net Earnings and Adjustments in Value of the Trust
                  Fund for a particular period shall be allocated as of the
                  Valuation Date to those Accounts allocated to the Trust Fund
                  the total value of which had not been distributed prior to the
                  Valuation Date, as follows: Each such Account shall be
                  credited with an amount equal to such Net Earnings and
                  Adjustments in Value of the Trust Fund multiplied by a
                  fraction:

                  (a)      The numerator of which is the portion of the
                           particular Account balance allocated to the Trust
                           Fund as of the close of the previous Valuation Date
                           minus the amounts distributed or loaned, if
                           applicable, from such Account since such previous
                           Valuation Date plus any contributions pursuant to
                           Article IV made since such previous Valuation Date to
                           all such Accounts; and

                  (b)      The denominator of which is the total of all portions
                           of the Account balances allocated to the Trust Fund
                           as of the close of the previous Valuation Date minus
                           the total amounts distributed or loaned, if
                           applicable, from all such portions of the Accounts
                           since such previous Valuation Date, plus all
                           contributions pursuant to Article IV made since such
                           previous Valuation Date to all such Accounts.

                                       27
<PAGE>

         (4)      Allocation of Forfeitures. The total of all Forfeitures under
                  this Plan shall be applied first to fund any restorations of
                  Forfeitures pursuant to Section 10.06 hereof, and thereafter
                  shall be applied to reduce the amount of each Employer's
                  Company Contributions under Section 4.01. Forfeitures shall be
                  applied to reduce each Employer's Company Contribution in the
                  proportion that each such Employer's Company Contributions for
                  such Plan Year bears to the total of all Employers' Company
                  Contributions for such Plan Year.

         (5)      Computations. All of the computations required to be made
                  under the provisions of this Article VI, when made, shall be
                  conclusive with respect thereto and shall be binding upon all
                  the Participants, Beneficiaries, Alternate Payees, and all
                  other persons ever having an interest in the Trust Fund.

6.05     Correction of Participants' Accounts. If an error or omission is
         discovered in the Accounts of a Participant, or in the amount
         distributed to a Participant, the Benefits Advisory Committee, as
         authorized by Section 15.05 hereof, shall make such equitable
         adjustments in the records of the Plan as may be necessary or
         appropriate to correct such error or omission as of the Plan Year in
         which such error or omission is discovered. Further, an Employer may,
         in its discretion, make a special contribution to the Plan which shall
         be allocated by the Benefits Advisory Committee only to the Accounts of
         a Participant as is necessary to correct such error or omission.

6.06     Investments.

         (1)      Funding Policy. The Investment Committee shall establish a
                  funding policy and method consistent with the objectives of
                  the Plan, the investments authorized under the Trust Agreement
                  and the requirements of Title I of ERISA. The Benefits
                  Advisory Committee shall periodically review such funding
                  policy and method. In establishing and reviewing such funding
                  policy and method, the Benefits Advisory Committee shall
                  endeavor to determine the Plan's short-term and long-term
                  objectives and financial needs, taking into account the need
                  for liquidity to pay benefits and the need for investment
                  growth. All actions of the Benefits Advisory Committee taken
                  pursuant to this Subsection 6.06(1) shall be communicated to
                  the Trustee and to the Board of Directors of the Sponsoring
                  Company.

         (2)      Investment of Cash. Any cash received by the Trustee for the
                  Account of any Participant or credited to the Account of any
                  Participant shall be invested to the extent practicable in
                  common shares or other securities of the Employer. The Trustee
                  is authorized to invest and hold up to one hundred percent
                  (100%) of the Trust assets in Qualifying Employer Securities.

         (3)      Reservation of Cash. In the implementation of its duties under
                  Subsection 6.06(1), the Benefits Advisory Committee may
                  communicate to the Trustee the need to reserve from permanent
                  investment from time to time such amounts of cash as it deems
                  necessary or advisable in the administration of the Plan. Such
                  cash shall be reserved equally from all investment funds
                  administered as part of the Trust Fund.

6.07     Voting of Company Stock.

         (1)      Voting of Stock - Registered Stock. Each Participant and
                  Former Participant shall be entitled to instruct the Trustee
                  in the manner of voting the number of shares of Company Stock
                  held in the Trust Fund which have been allocated to his
                  Account. For all purposes of this Section 6.07(1), the shares
                  of Company Stock allocated to an active Participant's Account
                  (not

                                       28
<PAGE>
                  including Former Participants) shall be treated as including a
                  portion of the unallocated shares of Company Stock held in a
                  Suspense Account; for this purpose the unallocated shares
                  shall be considered allocated to active Participants' Accounts
                  by assuming that all such unallocated shares of Company Stock
                  had been allocated to active Participants in the Plan as of a
                  date selected by the Benefits Advisory Committee, based upon
                  such active Participants' comparative Company Stock Account
                  balances (i.e., Company Stock in an active Participant's
                  Account as a percentage of all Company Stock in the Accounts
                  of all active Participants). The Trustee shall establish
                  procedures to solicit instructions from Participants with
                  respect to voting shares of Company Stock allocated to their
                  Accounts. The Trustee shall be bound to follow the
                  instructions of Participants, acting as Named Fiduciaries
                  under Section 401(a)(1) of ERISA, with respect to voting
                  shares of Company Stock which have been allocated (or treated
                  as having been allocated) to Accounts with fractional shares
                  being voted on a combined basis to the extent possible to
                  reflect the directions of the voting Participants; provided,
                  however, that if a Participant does not respond in a timely
                  fashion to the solicitation of voting instructions, the shares
                  of Company Stock allocated (or treated as having been
                  allocated) to such Participant's Accounts shall, to the extent
                  consistent with ERISA, be voted by the Trustee in the same
                  manner (and in the same proportions) as the shares for which
                  the Trustee does receive instructions from Participants.
                  Reasonable means shall be employed by the Trustee to provide
                  confidentiality with respect to the voting by such
                  Participants and the Trustee shall hold such directions in
                  confidence and shall not divulge or release such directions to
                  any person, including all Employers or any director, officer,
                  employee or agent of an Employer, it being the intent of this
                  provision of this Section to ensure that the Employers (and
                  their directors, officers, employees and agents) cannot
                  determine the direction given by any Participant.

         (2)      Voting of Company Stock - Non-Registered Stock.
                  Notwithstanding the provisions of Section 6.07(1), if any
                  Company Stock allocated to a Participant's Account is not a
                  "registration type class of securities," the Participant shall
                  be entitled to instruct the Trustee with respect to voting
                  such Company Stock (in accordance with the provisions of
                  Section 6.07(1)) only with respect to any corporate matter
                  which involves the approval or disapproval of any corporate
                  merger or consolidation, recapitalization, reclassification,
                  liquidation, dissolution, sale of substantially all assets of
                  a trade or business, or such similar transaction as the
                  Secretary of the Treasury may prescribe in regulations
                  pursuant to the provisions of Section 409(e) of the Code.

                  If a matter is to be submitted to the holders of Company Stock
                  which is not a "registration type class of securities" and it
                  is not necessary that the Participant be entitled to instruct
                  the Trustee with respect to voting in accordance with this
                  Section, the Trustee, in its discretion, shall vote all shares
                  of Company Stock held by it (or exercise dissenter's rights,
                  if applicable) after consultation with the Benefits Advisory
                  Committee. "Registration type class of securities" shall mean
                  any class of securities required to be registered under
                  Section 12 of the Securities Exchange Act of 1934, or exempt
                  from such registration solely by reason of Section 12(g)(2)(h)
                  (concerning interests in pooled investment vehicles issued to
                  annuity plans or qualified pension, profit sharing, or stock
                  bonus plans.)

                                       29
<PAGE>

                                   ARTICLE VII

                               RETIREMENT BENEFITS

A Participant's Company Contribution Account shall fully vest on his Retirement
Date or Early Retirement Date, provided such Participant is employed by an
Employer or an Affiliated Company on such date. A Participant who continues in
the Employer's employment after his Retirement Date or Early Retirement Date
shall continue to be a Participant in the Plan until his actual retirement. Upon
actual retirement on or after his Retirement Date or Early Retirement Date, a
Participant shall be entitled to the benefits provided for in this Article VII.
Subject to the provisions of Subsections 11.04(4), 11.05(1), 14.03(2) and
14.03(3) hereof, any Participant who becomes entitled to benefits under this
Article VII shall receive benefits equal to the total amounts in his Accounts
plus any contributions due and owing to such Participant pursuant to Article IV
for the Plan Year in which he retired but which have not been credited to his
respective Accounts. Payment upon retirement shall be made by the Trustee at the
direction of the Benefits Advisory Committee at the time and manner provided in
Article XI hereof.

                                  ARTICLE VIII

                               DISABILITY BENEFITS

8.01     Disability Retirement Benefits. If a Participant retires by reason of
         Total and Permanent Disability while in the employ of an Employer or an
         Affiliated Company or on Leave of Absence, his Company Contribution
         Account shall fully vest and, subject to the provisions of Subsections
         11.04(4), 11.05(1), 14.03(2) and 14.03(3) hereof, he shall be entitled
         to receive benefits equal to the total amounts in his Accounts plus any
         contributions due and owing to such Participant pursuant to Article IV
         for the Plan Year in which he retires on account of Total and Permanent
         Disability but which have not been credited to his respective Accounts.
         Payments resulting from a Participant's retirement on account of Total
         and Permanent Disability shall be made by the Trustee at the direction
         of the Benefits Advisory Committee at the time and in the manner
         provided in Article XI hereof.

8.02     Determination of Disability. The Benefits Advisory Committee shall
         determine whether a Participant has suffered Total and Permanent
         Disability as provided for in Section 2.43 hereof, and its
         determination in that respect is binding upon the Participant. The
         provisions of this Article VIII shall be uniformly and consistently
         applied to all Participants.

                                   ARTICLE IX

                                 DEATH BENEFITS

9.01     Death Benefits. Upon the death of a Participant while in the employ of
         an Employer or an Affiliated Company or on Leave of Absence, subject to
         the provisions of Subsections 11.04(4), 11.05(1), 14.03(2) and 14.03(3)
         hereof, his Beneficiary, determined in accordance with Section 9.02
         hereof, shall receive, provided proper proof of death has been filed
         with the Benefits Advisory Committee, the full amount of his Accounts
         plus any contributions due and owing to such Participant pursuant to
         Article IV for the Plan Year in which he dies but which have not been
         credited to his respective Accounts.

         Upon the death of a Participant who is no longer employed by an
         Employer or an Affiliated Company, his Beneficiary, determined in
         accordance with Section 9.02, shall receive the vested balance of such
         Participant's Accounts.

                                       30
<PAGE>

         Payments resulting from the death of a Participant shall be made by the
         Trustee at the direction of the Benefits Advisory Committee at the time
         and in the manner provided in Article XI hereof.

9.02     Designation of Beneficiaries.

         (1)      Subject to the provisions of Subsections 9.02(2),14.03(2) and
                  14.03(3) hereof, each Participant may designate a Beneficiary
                  or Beneficiaries, and contingent Beneficiary or Beneficiaries,
                  if desired, including the executor or administrator of his
                  estate, to receive his interest in the Trust Fund in the event
                  of his death, but the designation of a Beneficiary shall not
                  be effective for any purpose unless and until it has been
                  filed with the Benefits Advisory Committee on the form
                  provided therefor. If the Participant has a surviving spouse
                  and the surviving spouse consented to the naming of another
                  Beneficiary in accordance with Subsection 9.02(2) hereof, but
                  the deceased Participant failed to name a Beneficiary in the
                  manner herein prescribed, or the Beneficiary or Beneficiaries
                  so named predecease the Participant, the amount, if any, which
                  is payable hereunder in respect of such deceased Participant
                  shall be paid to the surviving spouse. If the Participant does
                  not have a surviving spouse and the deceased Participant
                  failed to name a Beneficiary in the manner herein prescribed,
                  or the Beneficiary or Beneficiaries so named predecease the
                  Participant, the amount, if any, which is payable hereunder in
                  respect of such deceased Participant shall be paid to his
                  surviving children in equal shares, or, if he has no surviving
                  children at the time of his death, then to the estate of the
                  last to dies of the Participant and his Beneficiary, by
                  payment in a lump sum. Notwithstanding the foregoing, the
                  Benefits Advisory Committee may elect to have a court of
                  applicable jurisdiction determine to whom a payment or
                  payments should be made. Any payment made to any person
                  pursuant to the power and discretion conferred upon the
                  Benefits Advisory Committee by the preceding sentence shall
                  operate as a complete discharge of all obligations under the
                  Plan in respect of such deceased Participant and shall not be
                  subject to review by anyone, but shall be final, binding and
                  conclusive on all persons ever interested hereunder.

                  Subject to the provisions of Subsection 9.02(2) below, a
                  Participant may from time to time change any Beneficiary
                  designated by him without notice to such Beneficiary, under
                  such rules and regulations as the Benefits Advisory Committee
                  may from time to time promulgate, but the last Beneficiary
                  designation filed with the Benefits Advisory Committee shall
                  control.

         (2)      With respect to a Participant who has been credited with an
                  Hour of Service on or after August 23, 1984, notwithstanding
                  any other provision herein to the contrary, but subject to the
                  provisions of Subsection 14.03(2) hereof, if, as of such
                  Participant's death, such Participant is married, such
                  Participant's Accounts shall, on his death, be paid to the
                  surviving spouse to whom he was married at the date of his
                  death unless the surviving spouse has made a Qualified Consent
                  to the payment of any or all of said Accounts to a designated
                  Beneficiary other than the surviving spouse. "Qualified
                  Consent" means an irrevocable written consent executed by the
                  Participant's spouse which acknowledges the effect of the
                  consent and is witnessed by a Plan representative or a notary
                  public. A Participant may, after obtaining a Qualified
                  Consent, change his Beneficiary designation as permitted by
                  Subsection 9.02(1) above, but any such change is subject to
                  the requirements of this Subsection 9.02(2) and will require
                  another Qualified Consent should the spouse, if surviving, not
                  be the sole Beneficiary of all amounts in the Account, unless
                  a Qualified Consent previously executed by such spouse
                  expressly authorizes changes in the Beneficiary without
                  further consent of the spouse. A Qualified Consent is
                  effective only with respect to the spouse who executes it. If
                  the Plan Administrator is satisfied that there is no spouse,
                  or that the spouse cannot reasonably

                                       31
<PAGE>
                  be located, or in such other circumstances as permitted by
                  governmental regulations, no Qualified Consent shall be
                  required as a condition to payment, under Section 9.01 hereof,
                  to a Beneficiary who is not the surviving spouse.

                                    ARTICLE X

                         EMPLOYMENT TERMINATION BENEFITS

10.01    Vesting Upon Termination of Employment. Subject to the provisions of
         Section 10.05 and Subsections 11.04(4), 11.05(1), 14.03(2) and 14.03(3)
         hereof, in the event of the Termination of Employment of a Participant,
         such Participant shall be entitled to receive a percentage of the
         amount in his Company Contribution Account plus any Company
         Contributions due and owing to such Participant pursuant to Article IV
         for the Plan Year in which he suffers a Termination of Employment but
         which have not been credited to his Company Contribution Account and
         shall also be entitled to receive the entire balance in his other
         Accounts plus any other contributions due and owing to such Participant
         pursuant to Article IV for the Plan Year but which have not been
         credited to his Accounts. The percentage of Company Contributions to
         which the Participant shall be entitled will be determined as follows:

<Table>
<Caption>
                                                                 NONFORFEITABLE PERCENTAGE
                  VESTING YEARS OF SERVICE                              OF ACCOUNT
<S>                                                              <C>
                  Less than 3 years                                          0%
                  3 years but less than 4 years                             20%
                  4 years but less than 5 years                             40%
                  5 years but less than 6 years                             60%
                  6 years but less than 7 years                             80%
                  7 years or more                                          100%
</Table>

         Payment pursuant to this Article X shall be made by the Trustee, at the
         direction of the Benefits Advisory Committee, at the time and manner
         provided in Article XI hereof.

10.02    Determination of Vesting Years of Service. All Vesting Years of Service
         (whether or not continuous) shall be taken into account, except as
         follows:

         (1)      Vesting Years of Service with any Employer or any Affiliated
                  Company before the Participant attained age eighteen (18); and

         (2)      Vesting Years of Service not taken into account in accordance
                  with Section 10.03.

10.03    Breaks in Service. Except as otherwise provided in Section 10.02,
         subject to the provisions of Section 10.06 hereof, Vesting Years of
         Service shall be disregarded as follows:

         (1)      In the case of any Participant who suffers a Termination of
                  Employment and who has a One-Year Break in Service, Vesting
                  Years of Service before such break shall not be taken into
                  account until such Participant has completed a Vesting Year of
                  Service after such break.

         (2)      In the case of any Participant who suffers a Termination of
                  Employment and who has no vested amount in his Company
                  Contribution Account in accordance with the provisions of

                                       32
<PAGE>
                  Section 10.01 hereof, Vesting Years of Service before any
                  period of One-Year Breaks in Service shall not be taken into
                  account if such Participant had five (5) or more consecutive
                  One-Year Breaks in Service within such period. Such aggregate
                  number of Vesting Years of Service before such period shall be
                  deemed not to include any Vesting Years of Service not
                  required to be taken into account under this Section 10.03 by
                  reason of any prior break in Service.

         (3)      In the case of any Participant who has at least five (5)
                  consecutive One-Year Breaks in Service, Vesting Years of
                  Service after such five (5)-year period shall not be taken
                  into account for purposes of determining the vested amount in
                  his Company Contribution Account which accrued prior to such
                  five (5)-year period. However, Vesting Years of Service
                  accrued both before and after such five (5)-year period will
                  count for purposes of determining the vested amount in his
                  Company Contribution Account which accrues after such five
                  (5)-year period.

10.04    Forfeiture - Qualifying Employer Securities. If a portion of a
         Participant's Account is forfeited, Qualifying Employer Securities
         allocated to such account after being released from a Suspense Account
         in accordance with the provisions of Section 5.04 shall be forfeited
         only after all other assets allocated to such Account are forfeited. If
         more than one (1) class of such Qualifying Employer Securities have
         been allocated to the Participant's Account and such securities are
         forfeited, the Participant shall forfeit the same proportion of each
         such class.

10.05    Forfeiture of Nonvested Amount.

         (1)      If a Participant has a Termination of Employment at a time
                  when he has no vested amount in his Company Contribution
                  Account, the amount in his Company Contribution Account shall
                  be deemed cashed out and forfeited as of the date on which
                  such Participant incurs such Termination of Employment.

         (2)      If a partially vested Participant has a Termination of
                  Employment and has received a distribution of the vested
                  amount in his Company Contribution Account as provided for in
                  Sections 10.01 and 11.04 hereof on or prior to the close of
                  the second Plan Year following the Plan Year in which such
                  Termination of Employment occurs, the excess of the amount in
                  his Company Contribution Account over the vested amount (the
                  "Nonvested Amount") shall be forfeited as of the date on which
                  such Participant receives such cash-out distribution.

         (3)      If a partially vested Participant has a Termination of
                  Employment and has not received a distribution of the vested
                  amount in his Company Contribution Account on or prior to the
                  close of the second Plan Year following the Plan Year in which
                  such Termination of Employment occurs, the Nonvested Amount
                  shall be forfeited as of the earlier of: (a) the last day of
                  the Plan Year in which such Participant has incurred five (5)
                  consecutive One-Year Breaks in Service, or (b) the date on
                  which such Participant receives his distribution.

         (4)      If a partially vested Participant who has a Termination of
                  Employment and has not received a distribution of the vested
                  amount in his Company Contribution Account as provided in
                  Sections 10.01 and 11.04 hereof on or prior to the close of
                  the second Plan Year following the Plan Year in which such
                  Termination of Employment occurs, is reemployed prior to
                  incurring five (5) consecutive One-Year Breaks in Service,
                  such Participant shall not forfeit the Nonvested Amount, and
                  the vested amount in his Company Contribution Account shall

                                       33
<PAGE>
                  be determined in accordance with the provisions of this
                  Article X without regard to such Participant's cessation of
                  employment.

         (5)      All amounts forfeited as provided in this Section 10.05 are
                  herein referred to as "Forfeitures." Subject to the
                  restorations pursuant to Section 10.06 hereof, any Forfeitures
                  shall be allocated as provided in Subsection 6.04(4) hereof.

         (6)      If a portion of a Participant's Account is forfeited, Company
                  Stock allocated to his Account shall be forfeited only after
                  all other assets in his Account. If interests in more than one
                  (1) class of Company Stock have been allocated to the
                  Participant's Account, the Participant shall be treated as
                  forfeiting the same proportion of each such class.

10.06    Restoration of Forfeited Nonvested Amount.

         (1)      In the event a Participant: (a) who has received a
                  distribution of the vested amount in his Company Contribution
                  Account in accordance with Subsection 10.05(2) hereof, or (b)
                  who has no vested amount in his Company Contribution Account
                  at the time of his Termination of Employment as described in
                  Subsection 10.05(1) hereof is reemployed by an Employer prior
                  to the date on which such Participant has incurred five (5)
                  consecutive One-Year Breaks in Service, an amount equal to his
                  Nonvested Amount which was forfeited pursuant to Section 10.05
                  hereof (without adjustment for any gains or losses in the
                  Trust Fund subsequent to such Forfeiture) shall be restored to
                  such Company Contribution Account; provided, however, that if
                  a Participant received a distribution of the vested portion of
                  his Company Contribution Account, such restoration shall not
                  occur unless and until: (a) such Participant repays to the
                  Plan the full amount of his Company Contribution Account
                  previously distributed to him, and (b) such Participant's
                  repayment is made before the earlier of the end of (i) the
                  five (5)-year period beginning with the Participant's Date of
                  Reemployment or (ii) a period of five (5) consecutive One-Year
                  Breaks in Service commencing after the date on which such
                  Participant received such distribution. Upon the restoration
                  of a Company Contribution Account as provided for herein, the
                  vested amount in such Company Contribution Account (whether
                  attributable to amounts restored, amounts, if any, repaid by
                  the Participant, or additional amounts added to such Account
                  after such reemployment) shall thereafter be determined in
                  accordance with the provisions of this Article X without
                  regard to such Participant's original Termination of
                  Employment.

         (2)      The restoration of a Participant's Nonvested Amount in his
                  Company Contribution Account as provided for in Subsection
                  10.06(1) above, shall be made from the Forfeitures which
                  occurred during the Plan Year of such restoration before any
                  use of such Forfeitures as otherwise provided in Subsection
                  6.04(4) hereof. Should such Forfeitures be insufficient to
                  restore the aggregate Nonvested Amounts owing to any
                  Participant under Subsection 10.06(1) above, the additional
                  amount necessary for restoration shall be made from Net
                  Earnings of the Trust Fund for the Plan Year. Should such
                  Forfeitures and Net Earnings of the Trust Fund be insufficient
                  to restore the aggregate Nonvested Amounts, the additional
                  amount necessary for restoration shall be made from Company
                  Contributions, if any, for the Plan Year, which Company
                  Contributions shall be supplemented for the Plan Year by an
                  amount equal to such remainder.

10.07    Reemployment of Participant with Partially Vested Company Contribution
         Account. This Section 10.07 shall apply to any Participant who: (1) has
         a Termination of Employment, at a time when he is partially vested in
         his Company Contribution Account, (2) does not receive a distribution
         of the

                                       34
<PAGE>
         vested portion of the Company Contribution Account, (3) has five (5) or
         more consecutive One-Year Breaks in Service, and (4) is reemployed by
         an Employer. After such reemployment, the vested portion of such
         Participant's Company Contribution Account, valued as of the Valuation
         Date immediately preceding the time of his reemployment, shall be
         credited to a separate account (his "Employment Termination Account")
         which shall be fully vested and nonforfeitable. Following such
         Participant's reemployment, all subsequent Company Contributions and
         Forfeitures, if any, allocated to such Participant shall be allocated
         to his Company Contribution Account and shall be subject to the vesting
         provisions of this Plan otherwise applicable to such Participant. Any
         adjustments provided for in Article VI hereof shall be made separately
         with respect to such Participant's Employment Termination Account and
         his Company Contribution Account, and distribution of such Employment
         Termination Account shall be made at such time and in the same manner
         as provided in the Plan for the distribution of a Participant's other
         Accounts in the Plan.

                                   ARTICLE XI

                               PAYMENT OF BENEFITS

11.01    Methods of Payment of Benefits. The Trustee shall make a distribution
         of benefits pursuant to Articles VII, VIII, IX, or X hereof, as the
         case may be, in accordance with any one or a combination of the methods
         of distribution set forth in this Section 11.01, as elected by the
         Participant or Beneficiary on such forms as are provided by the
         Benefits Advisory Committee. The available methods of distribution,
         singly or in any combination, are as follows:

         (1)      Installment Payments. Benefits may be paid in the form of
                  approximately equal annual, semiannual or quarterly
                  installments, over a fixed period of time unrelated to the
                  life (but not the life expectancy) of any person. The
                  Participant or his Beneficiary may accelerate installment
                  payments by electing to have the unpaid balance distributed to
                  such Participant or Beneficiary in a single lump sum cash
                  payment.

         (2)      Lump-Sum Distribution. Benefits may be paid in the form of a
                  total distribution of the amount payable, in cash or in whole
                  shares of Company Stock and any fractional shares of Company
                  Stock in cash, to a Participant or Beneficiary within one
                  taxable year after the close of the Plan Year in which (a)
                  such Participant's Termination of Employment, attainment of
                  Normal Retirement Age or Disability occurs or within one
                  taxable year after the close of the Plan Year of the
                  Participant's death for a Beneficiary or (b) the fifth Plan
                  Year following the Plan Year in which the Participant
                  otherwise had a Termination of Employment and was not
                  subsequently reemployed by the Employer or an Affiliated
                  Employer.

         (3)      By transfer to another plan qualified under Section 401(a) of
                  the Code.

         (4)      By transfer to:

                  (a)      an individual retirement account described in Section
                           408(a) of the Code, or

                  (b)      an individual retirement annuity described in Section
                           408(b) of the Code.

         (5)      By payment in substantially equal periodic payments (not less
                  frequently than annually) over a period not longer than the
                  greater of five (5) years or, in the case of a Participant
                  with a vested Account balance in excess of Five Hundred
                  Thousand Dollars ($500,000), five (5)

                                       35
<PAGE>
                  years plus one (1) additional year (but no more than five (5)
                  additional years) for each One Hundred Thousand Dollars
                  ($100,000) or fraction thereof by which such benefit exceeds
                  Five Hundred Thousand Dollars ($500,000).

         (6)      By direct transfer to a plan qualified under Section 401(a) of
                  the Code which accepts direct transfer contributions, an
                  individual retirement account describe in Section 408(a) of
                  the Code, an individual retirement annuity described in
                  Section 408(b) of the Code (other than an endowment contract)
                  or an annuity plan described in Section 403(a) of the Code;
                  provided, that the distribution form elected pursuant to this
                  Section 11.01(6) qualified for transfer pursuant to Section
                  401(a)(31) of the Code. The Benefits Advisory Committee shall
                  provide each Participant entitled to a distribution of his
                  vested Account balance with a written explanation of his
                  distribution options under the Plan and shall prescribe the
                  procedures a Participant must follow to request a direct
                  transfer pursuant to this Section 11.01(6).

         (7)      Notwithstanding any provision of this Plan to the contrary, a
                  Participant may not elect that his Accounts be paid in the
                  form of a life annuity.

         If a Participant does not make an election hereunder, his vested
         Account balance shall automatically be paid in the form specified in
         Section 11.01(1) above. Notwithstanding the foregoing provisions of
         this Section 11.01, the phrase "payment in a lump sum" as used herein
         shall not include the distribution of an Insurance Contract providing
         for (1) a life annuity to a Participant, (2) a joint and survivor
         annuity to a Participant and his Beneficiary, or (3) any other form of
         payment having the effect of (1) or (2) above.

11.02    Form of Payment. A Participant, Former Participant, or the Beneficiary
         of a deceased Participant or Former Participant may elect to have his
         vested Account balance distributed entirely in cash or in shares of
         Company Stock; provided, however, that if Company Stock is elected, the
         Benefits Advisory Committee shall direct the Trustee to pay the value
         of any fractional shares of Company Stock in cash. Any whole shares of
         Company Stock distributed pursuant to this Section 11.02 may be subject
         to a right of first refusal in accordance with Section 11.12 hereof,
         and may be eligible for put option rights in accordance with Section
         11.10 hereof. However, if the Company's charter or bylaws restrict the
         ownership of substantially all outstanding Company Stock to Associates
         or to the Trust, any distribution hereunder may be made entirely in
         cash without granting the right to demand a distribution of Company
         Stock.

         A Participant, Former Participant or Beneficiary shall make an election
         under this Section 11.02 by filing an election form with the Benefits
         Advisory Committee on or before the date that is sixty (60) days prior
         to the date that the distribution of his vested Account balance
         hereunder is to commence. If a Participant, Former Participant, or
         Beneficiary does not make an election as to the form of distribution of
         his vested Account balance, the Benefits Advisory Committee shall
         direct the Trustee to distribute the Participant's vested Account
         balance in cash as provided in Section 11.01.

11.03    Securities Law Restrictions. If at the time shares of Company Stock are
         to be distributed to a Participant (or, in the event of his death, his
         Beneficiary), to the extent deemed necessary or desirable by the
         Benefits Advisory Committee, the Benefits Advisory Committee may, as a
         condition precedent to the distribution of such shares, require from
         the Participant (or his Beneficiary) such written representations, if
         any, concerning his or their intentions with regard to the retention or
         disposition of the Company Stock being distributed or such written
         covenants and agreements, if any, as to the manner of any such
         disposition of such shares as, in the opinion of the Benefits Advisory
         Committee, may be necessary to ensure that any such disposition by the
         Participant or his Beneficiary will not

                                       36
<PAGE>
         result in a violation of the Securities Act of 1933, as amended, or any
         similar or superseding statute or statutes, or any other applicable
         statute, statutes, or regulations then in effect. The Trustee may stamp
         or imprint on the stock certificates issued to the Participant or his
         Beneficiary pursuant to a distribution from the Trust a legend
         referring to (1) the provisions of the immediately preceding sentence
         and to any representations, covenants, or agreements made by the
         Participant or his Beneficiary with respect thereto, and (2) the right
         of first refusal provisions and restrictions of Section 11.12.

11.04    Time for Distribution of Benefits.

         (1)      Upon a Participant's: (a) retirement on or after his
                  Retirement Date or Early Retirement Date, (b) retirement due
                  to Total and Permanent Disability, (c) death, or (d)
                  Termination of Employment, subject to the provisions of this
                  Section 11.04 and Section 11.05, the Participant or his
                  Beneficiary shall be entitled to a distribution pursuant to
                  Article VII, VIII, IX or X, as the case may be. Such
                  distribution will be valued as of the Valuation Date
                  immediately preceding the actual date of distribution. A
                  Participant who remains in the employ of the Company past his
                  or her Retirement Date shall not be required to receive a
                  distribution hereunder until after such Participant's actual
                  retirement, except that payment of such Participant's Accounts
                  shall commence not later than the Required Beginning Date.

         (2)      Distribution forms will be sent to the Participant or his
                  Beneficiary on or shortly following the date of such
                  Participant's retirement on or after his Retirement Date or
                  Early Retirement Date, retirement due to Total and Permanent
                  Disability, death or Termination of Employment, and, except as
                  otherwise provided in Subsection 11.04(2) hereof, such amounts
                  shall be distributed within ninety (90) days following receipt
                  by the Benefits Advisory Committee of all completed
                  distribution forms from the Participant, or as soon as
                  administratively practicable thereafter, but in no event later
                  than the sixtieth (60th) day after the close of the Plan Year
                  in which occurs the latest of:

                  (a)      The date on which the Participant attains or would
                           have attained sixty-five (65) years of age or if
                           earlier, his Retirement Date;

                  (b)      The tenth (10th) anniversary of the year in which the
                           Participant commenced participation in the Plan; or

                  (c)      The date the Participant terminates his employment
                           with the Employer for any reason.

         (3)      A Former Participant or a Beneficiary may be entitled to
                  receive more than one (1) distribution from the Plan. Account
                  balances will be valued as of the Valuation Date prior to the
                  actual date of distribution. If a Participant had not received
                  an allocation of contributions to which he was entitled under
                  Article IV or dividends to which he was entitled as of his
                  date of termination of employment, such Participant will be
                  entitled to an additional distribution, which will be made in
                  accordance with procedures established by the Benefits
                  Advisory Committee. Notwithstanding the foregoing, a
                  Participant or Beneficiary who is entitled to more than one
                  (1) distribution as described herein may elect to delay his or
                  her initial distribution and receive one (1) distribution that
                  includes the additional allocation, even if his initial
                  distribution is Five Thousand Dollars ($5,000) or less, if
                  such Participant or Beneficiary indicates this election on his
                  or her initial distribution forms.

                                       37
<PAGE>

         (4)      Notwithstanding the provisions of Subsection 11.04(1), and
                  subject to Section 11.05 below, for distributions occurring
                  prior to January 1, 1998 if a Participant has a Termination of
                  Employment or retires due to Total and Permanent Disability
                  and the vested portion of the Participant's Accounts at such
                  time exceeds or ever exceeded at the time of any prior
                  distribution Three Thousand Five Hundred Dollars ($3,500), the
                  amounts owing to such Participant will not be distributed
                  until such Participant attains age sixty-five (65) or dies,
                  unless such Participant delivers to the Plan Administrator his
                  written consent to an earlier distribution. For distributions
                  occurring in Plan Years beginning on or after January 1, 1998
                  and on or prior to March 22, 1999, notwithstanding the
                  provisions of Subsection 11.04(1), and subject to Section
                  11.05 below, if a Participant has a Termination of Employment
                  or retires due to Total and Permanent Disability and the
                  vested portion of the Participant's Accounts at such time
                  exceeds or at the time of any prior distribution exceeded Five
                  Thousand Dollars ($5,000), the amounts owing to such
                  Participant will not be distributed until such Participant
                  attains age sixty-five (65) or dies, unless the Participant
                  delivers to the Plan Administrator his written consent to an
                  earlier distribution. For distributions occurring after March
                  22, 1999, notwithstanding the provisions of Subsection
                  11.04(1), and subject to Section 11.05 below, if a Participant
                  has a Termination of Employment or retires due to Total and
                  Permanent Disability and the vested portion of the
                  Participant's Accounts at such time exceeds Five Thousand
                  Dollars ($5,000), the amounts owing to such Participant will
                  not be distributed until such Participant attains age
                  sixty-five (65) or dies, unless the Participant delivers to
                  the Plan Administrator his written consent to an earlier
                  distribution.

         (5)      (a)      For distributions prior to January 1, 1998, if at the
                           time a distribution is to be made pursuant to
                           Subsection 11.04(1) or 11.05(1) to a Participant, or
                           in the case of his death, to his Beneficiary or
                           Beneficiaries, the value of the vested portion of his
                           Accounts does not exceed or did not ever exceed at
                           the time of a prior distribution Three Thousand Five
                           Hundred Dollars ($3,500), then his total Account
                           shall be paid to or for the benefit of the
                           Participant (or, in the case of his death, to or for
                           the benefit of his Beneficiary or Beneficiaries) as
                           provided in Subsection 11.04(1), and such Participant
                           or Beneficiary or Beneficiaries may not defer their
                           distribution.

                  (b)      For distributions occurring in Plan Years beginning
                           on and after January 1, 1998 and on or prior to March
                           22, 1999, if at the time a distribution is to be made
                           pursuant to Subsection 11.04(1) or 11.05(1) to a
                           Participant, or in the case of his death, to his
                           Beneficiary or Beneficiaries, the value of the vested
                           portion of his Accounts does not exceed Five Thousand
                           Dollars ($5,000) at the time of the current
                           distribution or at the time of any prior
                           distribution, then his total Account shall be paid to
                           or for the benefit of the Participant (or, in the
                           case of his death, to or for the benefit of his
                           Beneficiary or Beneficiaries) as provided in
                           Subsection 11.04(1), and such Participant or
                           Beneficiary or Beneficiaries may not defer their
                           distribution. Notwithstanding the provisions of
                           Subsection 11.04(1), and subject to Section 11.05
                           below, if a Participant has a Termination of
                           Employment or retires due to Total and Permanent
                           Disability and the vested portion of the
                           Participant's Accounts at such time or at the time of
                           any previous distribution exceeds Five Thousand
                           Dollars ($5,000), the amounts owing to such
                           Participant will not be distributed until such
                           Participant attains age sixty-five (65) or dies,
                           unless the Participant delivers to the Plan
                           Administrator his written consent to an earlier
                           distribution.

                  (c)      For distributions occurring after March 22, 1999, if
                           at the time a distribution is to be made pursuant to
                           Subsection 11.04(1) or 11.05(1) to a Participant, or
                           in the case of

                                       38
<PAGE>
                           his death, to his Beneficiary or Beneficiaries, the
                           value of the vested portion of his Accounts does not
                           exceed Five Thousand Dollars ($5,000) at the time of
                           the current distribution, then his total Account
                           shall be paid to or for the benefit of the
                           Participant (or, in the case of his death, to or for
                           the benefit of his Beneficiary or Beneficiaries) as
                           provided in Subsection 11.04(1), and such Participant
                           or Beneficiary or Beneficiaries may not defer their
                           distribution. Notwithstanding the provisions of
                           Subsection 11.04(1), and subject to Section 11.05
                           below, if a Participant has a Termination of
                           Employment or retires due to Total and Permanent
                           Disability and the vested portion of the
                           Participant's Accounts at such time exceeds Five
                           Thousand Dollars ($5,000), the amounts owing to such
                           Participant will not be distributed until such
                           Participant attains age sixty-five (65) or dies,
                           unless the Participant delivers to the Plan
                           Administrator his written consent to an earlier
                           distribution.

         (6)      If a distribution is one to which Code Sections 401(a)(11) and
                  417 do not apply, such distribution may commence less than
                  thirty (30) days after the notice required under Section
                  1.411(a)-11(c) of the Income Tax Regulations, provided that
                  the Benefits Advisory Committee clearly informs the
                  Participant that the Participant has a right to a period of at
                  least thirty (30) days after receiving the notice to consider
                  the decision of whether or not to elect a distribution (and a
                  particular distribution option) and the Participant, after
                  receiving the notice, affirmatively elects a distribution.

         (7)      Notwithstanding any provision contained herein to the
                  contrary, if any portion of a Participant's Account balance
                  consists of Qualifying Employer Securities acquired with the
                  proceeds of an Exempt Loan that has not been fully repaid, the
                  Benefits Advisory Committee may elect to defer the
                  distribution of such Qualifying Employer Securities until the
                  last day of the Plan Year following the Plan Year in which the
                  Exempt Loan is repaid. The Benefits Advisory Committee shall
                  apply the provisions of this Section 11.04(7) in a
                  nondiscriminatory and uniform manner.

11.05    Limitations on Timing. Notwithstanding any other provision of the Plan
         to the contrary, distributions must occur at least as rapidly as
         required under this Section 11.05.

         (1)      A Participant's entire interest in the Plan shall be
                  distributed to him no later than the Required Beginning Date
                  based on the balance in his Accounts as of the Valuation Date
                  coinciding with or immediately preceding the Required
                  Beginning Date.

                  If a Participant dies prior to the payment of benefits, the
                  Participant's benefits shall be distributed as soon as
                  practicable following the Participant's death, and, in any
                  event, within five (5) years of the Participant's death.

                  All distributions of or with respect to a Participant's
                  benefits shall be made in accordance with Code Section
                  401(a)(9) (including the regulations thereunder), and the
                  provisions of the Plan relating to the payment of such
                  distributions shall be interpreted and applied in accordance
                  with Code Section 401(a)(9). The provisions of Code Section
                  401(a)(9) shall control over any distribution option or other
                  provision of the Plan which is inconsistent with the
                  provisions of Code Section 401(a)(9).

         (2)      As of the first Distribution Calendar Year, distributions, if
                  not made in a lump sum, may only be made over one of the
                  following periods (or a combination thereof):

                                       39
<PAGE>

                  (a)      a period certain not extending beyond the life
                           expectancy of the Participant, or

                  (b)      a period certain not extending beyond the joint and
                           last survivor expectancy of the Participant and a
                           designated Beneficiary.

         (3)      If the Participant's interest is to be distributed in other
                  than a lump sum, the following minimum distribution rules
                  shall apply on or after the Required Beginning Date:

                  (a)      If a Participant's Benefit is to be distributed over
                           (i) a period not extending beyond the life expectancy
                           of the Participant or the joint life and last
                           survivor expectancy of the Participant and the
                           Participant's designated beneficiary or (ii) a period
                           not extending beyond the life expectancy of the
                           designated Beneficiary, the amount required to be
                           distributed for each calendar year, beginning with
                           distributions for the first Distribution Calendar
                           Year, must at least equal the quotient obtained by
                           dividing the Participant's Benefit by the Applicable
                           Life Expectancy.

                  (b)      The amount to be distributed each year, beginning
                           with distributions for the first Distribution
                           Calendar Year shall not be less than the quotient
                           obtained by dividing the Participant's Benefit by the
                           lesser of (i) the Applicable Life Expectancy or (ii)
                           if the Participant's spouse is not the designated
                           Beneficiary, the applicable divisor determined from
                           the table set forth in Q&A-4 of Section 1.401(a)(9)-2
                           of the Proposed Regulations. Distributions after the
                           death of the Participant shall be distributed using
                           the Applicable Life Expectancy in Subsection
                           11.05(3)(a) above as the relevant divisor without
                           regard to Proposed Regulations Section 1.401(a)(9)-2.

                  (c)      The minimum distribution required for the
                           Participant's first Distribution Calendar Year must
                           be made on or before the Participant's Required
                           Beginning Date. The minimum distribution for other
                           calendar years, including the minimum distribution
                           for the Distribution Calendar Year in which the
                           Associate's Required Beginning Date occurs, must be
                           made on or before December 31 of that Distribution
                           Calendar Year.

         (4)      If a Participant dies after distribution of his or her benefit
                  under the Plan has commenced, the remaining portion of such
                  benefit will continue to be distributed at least as rapidly as
                  under the method of distribution being used prior to the
                  Participant's death.

                  If the Participant dies before distribution of his or her
                  benefit commences, the Participant's entire interest will be
                  distributed no later than the December 31 of the calendar year
                  which contains the fifth anniversary of the date of the
                  Participant's death except to the extent that an election is
                  made to receive the distribution in accordance with Subsection
                  11.05(4)(a) or (b) below:

                  (a)      if any portion of the Participant's interest is
                           payable to a designated Beneficiary, distributions
                           may be made in substantially equal installments over
                           a period certain not greater than the life expectancy
                           of the designated Beneficiary commencing no later
                           than the December 31 of the calendar year following
                           the calendar year of the Participant's death;

                                       40
<PAGE>

                  (b)      if the designated Beneficiary is the Participant's
                           surviving spouse, the date distributions are required
                           to begin shall not be earlier than the December 31 of
                           the calendar year in which the Participant would have
                           attained age seventy and one-half (70-1/2), or, if
                           later, the December 31 of the calendar year following
                           the calendar year in which the Participant died, and,
                           if the spouse dies before payments begin, subsequent
                           distributions shall be made as if the spouse had been
                           the Participant.

                  If the Participant's designated Beneficiary does not elect a
                  method of distribution by the earlier of (i) the December 31
                  of the calendar year in which distributions would be required
                  to begin under (a) or (b) of this Subsection 11.05(4), or (ii)
                  December 31 of the calendar year which contains the fifth
                  anniversary of the date of death of the Participant, the
                  Participant's entire interest will be distributed no later
                  than the December 31 of the calendar year which contains the
                  fifth anniversary of the Participant's death.

                  For purposes of this Subsection 11.05(4), any amount paid to a
                  child of the Participant will be treated as if it had been
                  paid to the surviving spouse if the amount becomes payable to
                  the surviving spouse when the child reaches the age of
                  majority.

         (5)      For purposes of this Section 11.05, payments will be
                  calculated by use of the return multiples specified in
                  Treasury Regulation Section 1.72-9. Life expectancy of a
                  Participant, or his surviving spouse, or both, may be
                  recalculated annually; provided, however, that if such
                  Participant or his surviving spouse do not elect to have his
                  or her life expectancy recalculated, it shall not be
                  recalculated; provided further, in the case of any other
                  designated Beneficiary, such life expectancy shall be
                  calculated at the time payment first commences without further
                  recalculation.

         (6)      For purposes of this Section 11.05, the following terms shall
                  have the following meanings:

                  (a)      "Applicable Life Expectancy" means the life
                           expectancy (or joint and last survivor expectancy)
                           calculated using the attained age of the Participant
                           (or designated Beneficiary) as of the Participant's
                           (or designated Beneficiary's) birthday in the
                           applicable calendar year reduced by one (1) for each
                           calendar year which has elapsed since the date life
                           expectancy was first calculated. If life expectancy
                           is being recalculated, the Applicable Life Expectancy
                           shall be the life expectancy as so recalculated. The
                           applicable calendar year shall be the first
                           Distribution Calendar Year, and if life expectancy is
                           being recalculated such succeeding calendar year.

                  (b)      "Distribution Calendar Year" shall mean a calendar
                           year for which a minimum distribution is required.
                           For distributions beginning before the Participant's
                           death, the first Distribution Calendar Year is the
                           calendar year immediately preceding the calendar year
                           which contains the Participant's Required Beginning
                           Date. For distributions beginning after the
                           Participant's death, the first Distribution Calendar
                           Year is the calendar year in which distributions are
                           required to begin pursuant to Subsection 11.05(4)
                           above.

                  (c)      "Participant's Benefit" shall mean the Account as of
                           the last Valuation Date in the calendar year
                           immediately preceding the Distribution Calendar Year
                           ("Valuation Calendar Year") increased by the amount
                           of any contributions or forfeitures allocated to the
                           Account as of dates in the Valuation Calendar Year
                           after the Valuation Date and decreased by
                           distributions made in the Valuation Calendar Year
                           after the

                                       41
<PAGE>
                           Valuation Date; provided, however, that if any
                           portion of the minimum distribution for the first
                           Distribution Calendar Year is made in the second
                           Distribution Calendar Year on or before the Required
                           Beginning Date, the amount of the minimum
                           distribution made in the second Distribution Calendar
                           Year shall be treated as if it had been made in the
                           immediately preceding Distribution Calendar Year.

11.06    Payments on Personal Receipt Except in Case of Legal Disability. All
         payments to any Participant, Beneficiary or Alternate Payee from the
         Trust Fund shall be made to the recipient entitled thereto in person or
         upon his personal receipt, in a form satisfactory to the Benefits
         Advisory Committee, except when the recipient entitled thereto shall be
         under a legal disability, or, in the sole judgment of the Benefits
         Advisory Committee, shall otherwise be unable to apply such payments in
         furtherance of his own interests and advantage. The Benefits Advisory
         Committee may, in such event, in its sole discretion, direct all or any
         portion of such payments to be made in any one or more of the following
         ways: (1) directly to such person, (2) to the guardian of his person or
         of his estate, even though appointed by a court other than a Texas
         state court, (3) to a custodian under any applicable Uniform Gifts to
         Minors Act or Uniform Transfers to Minors Act, or (4) to a person
         appointed as his personal representative.

         Notwithstanding the foregoing, the Benefits Advisory Committee may
         elect to have a court of applicable jurisdiction determine to whom a
         payment or payments should be made. The decision of the Benefits
         Advisory Committee, in each case, will be final, binding and conclusive
         upon all persons ever interested hereunder, and the Benefits Advisory
         Committee shall not be obliged to see to the proper application or
         expenditure of any payments so made. Any payment made pursuant to the
         power herein conferred upon the Benefits Advisory Committee shall
         operate as a complete discharge of all obligations of the Trustee and
         the Benefits Advisory Committee, to the extent of the amounts so paid.

11.07    Benefits Payable Pursuant to a Qualified Domestic Relations Order.
         Notwithstanding any other provision of the Plan to the contrary,
         immediate distribution of benefits payable to an Alternate Payee
         pursuant to a Qualified Domestic Relations Order shall be permitted
         even though the Participant whose benefits have been assigned to the
         Alternate Payee would not be entitled to receive a distribution at such
         time, if all of the following requirements are met: (a) the
         Participant's Account is one hundred percent (100%) vested and
         nonforfeitable at such time pursuant to Section 10.01 hereof, (2) the
         entire amount payable to the Alternate Payee does not exceed Five
         Thousand Dollars ($5,000), or the Alternate Payee has requested
         immediate distribution in writing, (3) allocation pursuant to Section
         6.04 hereof of all amounts required to be paid to the Alternate Payee
         has been completed, and (4) the Qualified Domestic Relations Order
         requires or permits immediate distribution.

         In the event an Alternate Payee dies prior to distribution of the
         amounts payable to the Alternate Payee pursuant to the Qualified
         Domestic Relations Order, the amount payable shall be distributed as
         provided in the Qualified Domestic Relations Order. If the Qualified
         Domestic Relations Order does not specify how such amounts are to be
         distributed in the event of the Alternate Payee's death, the Benefits
         Advisory Committee may ascertain the requirements of applicable law by
         filing an interpleader or declaratory judgment action in a court of
         competent jurisdiction.

11.08    Restrictions on Transfer of Company Stock.

         (1)      Federal Securities Laws. The Company presently does not intend
                  to register under the Securities Act of 1993 (the "1993 Act")
                  the shares of Company Stock to be distributed to Participants
                  or their Beneficiaries. As a result, shares of Company Stock
                  distributed under

                                       42
<PAGE>
                  the Plan may be "restricted securities." Restricted securities
                  may not be sold unless they are registered under the 1933 Act
                  by the Company, or unless an exemption from registration is
                  available. If the Company does not register the shares of
                  Company Stock for resale by Participants or their
                  Beneficiaries, and if such persons desire to sell the shares
                  of Company Stock distributed to them, they will be required to
                  sell the shares of Company Stock in transactions exempt from
                  registration under the 1933 Act. The Company will not permit
                  shares of Company Stock to be transferred unless it is
                  satisfied that any proposed transfer of Company Stock is
                  exempt from the registration requirements of the 1933 Act.

         (2)      Other Restrictions. All transactions involving shares of
                  Company Stock, including distributions, purchases, and sales,
                  shall be made only in compliance with applicable federal and
                  state laws, regulations and rules. All such transactions shall
                  also be subject to all restrictions and limitations imposed on
                  all shares of Company Stock provided for in the Company's
                  articles of incorporation and bylaws, as amended from time to
                  time.

         (3)      Legends. The Company reserves the right to cause appropriate
                  legends to be imprinted on the certificates representing
                  shares of Company Stock distributed under this Plan to reflect
                  all restrictions and limitations referred to in this Section
                  11.08.

         (4)      Notices. The Benefits Advisory Committee and the Company shall
                  send all notices required with respect to shares of Company
                  Stock to the last known address of each Participant or
                  Beneficiary who is required to receive notices regarding such
                  Company Stock, and it shall be the duty of the Participant and
                  Beneficiary to inform the Benefits Advisory Committee of any
                  changes in address.

11.09    Distribution Following Diversification Election. A Participant who has
         attained age fifty-five (55) and completed at least ten (10) years of
         participation in the Plan may elect in writing, within ninety (90) days
         after the close of each Plan Year during the applicable election
         period, to diversify the investment of twenty-five percent (25%) of his
         Account balance to the extent that such portion of his Account balance
         exceeds the amount to which all prior elections under this Section
         applies. However, this Section 11.09 shall only apply to that portion
         of the Participant's Account balances attributable to Company Stock
         acquired by or contributed to the Plan after December 31, 1986.
         Further, this Section 11.09 shall only apply to a Participant if the
         fair market value (determined at the Valuation Date immediately
         preceding the first day on which the Participant would otherwise be
         eligible to make an election hereunder) of Company Stock acquired by or
         contributed to the Plan (and any other employee stock ownership plan
         maintained by the Sponsoring Company or any affiliated company) after
         December 31, 1986, and allocated to such Participant's Account, is more
         than Five Hundred Dollars ($500) (or such larger de minimis amount as
         may be designated by the Secretary of Treasury). If a Participant's
         Account includes post-1986 Company Stock exceeding the above-described
         de minimis amount at any time during the election period, then such
         post-1986 Company Stock shall be subject to this Section 11.09 for all
         subsequent years of the election period regardless of the value of such
         Company Stock.

         The portion of a Participant's Account balances subject to this Section
         11.09 shall be determined by multiplying the number of shares of
         Company Stock held in the Account by a fraction, the numerator of which
         is the number of shares acquired by the Plan after December 31, 1986,
         and allocated to the Participants' Accounts (not to exceed the number
         of shares held by the Plan on the date the individual becomes eligible
         to make an election under this Section) and the denominator of which is
         the total number of shares held by the Plan at the date the individual
         becomes eligible to make an election under this Section.

                                       43
<PAGE>

         With respect to the last Plan Year during the election period, the
         Participant may elect to diversity the investment of fifty percent
         (50%) of his Account balances subject to this Section less the amount
         subject to all prior elections. The applicable election period for
         purposes of this Section shall be the six (6) Plan Year period
         beginning with the Plan Year following the later of the Plan Year in
         which the Participant attains age fifty-five (55) or the Plan Year in
         which the Participant completes ten (10) years of participation in the
         Plan. If a Participant elects to diversify his Account balances in
         accordance with this Section, he shall receive a distribution of the
         portion of his Account balances subject to the election, in whole
         shares of Company Stock plus cash for any fractional shares, or an
         equivalent amount of cash, no later than one hundred eighty (180) days
         after the last day of the Plan Year to which the election applies. No
         fractional shares shall be distributed under this Section 11.09.

11.10    Right to Require Repurchase of Shares of Company Stock. Subject to the
         following provisions of this Section 11.10, if at the time of
         distribution hereunder the shares of Company Stock distributed from the
         Trust Fund to a Participant or his Beneficiary with respect to a Plan
         Year are not publicly traded or are subject to a trading limitation (as
         hereafter defined), the Former Participant or Beneficiary shall have an
         option (the "Put") to require the Sponsoring Company to purchase all
         shares of Company Stock distributed from the Trust Fund to the Former
         Participant or Beneficiary for such Plan Year. For purposes of the
         preceding sentence, a "trading limitation" is a restriction under any
         federal or state securities law, or any regulation thereunder, or an
         agreement, which would make the shares of Company Stock not as freely
         tradeable as shares of Company Stock not subject to such restriction.

         The Put may be exercised at any time during the Option Period (as
         hereinafter defined) by giving the Sponsoring Company written notice of
         the election to exercise the Put. The Option Price (as hereinafter
         defined) shall be payable in cash and/or in installments (as provided
         below) beginning not later than thirty (30) days after the Sponsoring
         Company receives written notice of the election by the Former
         Participant or Beneficiary to exercise the Put. The Put may be
         exercised by a Former Participant or Beneficiary only during the Option
         Period relating to a distribution of shares of Company Stock under
         Section 11.01 to the Former Participant or Beneficiary.

         The "Option Period" shall be the sixty (60) day period following the
         day on which a Participant or his Beneficiary receives a distribution
         of shares of Common Stock under Section 11.01; if the Put is not
         exercised within this first sixty (60) day period, it may be exercised
         during a second "Option Period" which shall be a sixty (60) day period
         beginning on the first day of the third month of the Plan Year which
         follows the Plan Year of distribution of such shares of Common Stock.
         Notwithstanding the foregoing, the Option Period shall be extended by
         the amount of time during which the Sponsoring Company is unable to
         honor the Put by reason of applicable federal or state law.

         The "Option Price" shall be the fair market value as determined
         pursuant to Treasury Regulations Section 54.4975-11(d)(5) of each share
         of Company Stock as determined by the Sponsoring Company as of the
         Valuation Date immediately preceding the date the Put is exercised,
         multiplied by the number of shares to be sold under the Put.
         Notwithstanding the provisions of this paragraph, the Option Price
         shall be determined on the date the Put is exercised if the transaction
         involves a "Disqualified Person" within the meaning of Code Section
         4975.

         Payment of the Option Price for shares of Company Stock subject to the
         Put shall be made either in a lump sum or in installments as determined
         by the Sponsoring Company. In the event payments are made in
         installments, the installment obligation shall (1) be adequately
         secured as determined by the Sponsoring Company, (2) bear interest
         equal to the Sponsoring Company's long-term debt borrowing rate from
         its senior lenders or such other reasonable rate of interest as
         determined by the Sponsoring

                                       44
<PAGE>
         Company to be determined on a uniform and nondiscriminatory basis, but
         in no event shall such rate of interest be greater than the maximum
         non-usurious rate of interest permitted to be charged on such
         indebtedness under Texas law, (3) require that the payments be made in
         annual installments, (4) have a payment period of five (5) years from
         the date the Put is exercised, (5) require that any payments pursuant
         to the installment obligation must begin to be made no later than
         thirty (30) days after the date the Put is exercised, and (6) permit
         the Sponsoring Company to prepay the amount of any remaining
         installments without penalty.

         The Put granted to a Former Participant or Beneficiary hereunder shall
         not be assignable, except that the Former Participant's donees or, in
         the event of a Participant's death, his personal representative shall
         be entitled to exercise the Put during the Option Period for which it
         is applicable.

         The Benefits Advisory Committee shall notify each Former Participant or
         Beneficiary who is eligible to exercise the Put of the fair market
         value of each share of Company Stock for the Valuation Date next
         following the date the Participant receives a distribution as soon as
         practicable following such determination.

         The Benefits Advisory Committee and the Sponsoring Company shall send
         all notices required under this Section to the last known address of a
         Former Participant or Beneficiary, and it shall be the duty of such
         persons to inform the Benefits Advisory Committee of any changes in
         address.

         The Trustee in its discretion may, with the Sponsoring Company's
         consent, assume the Sponsoring Company's obligation under this Section
         at the time a Former Participant or Beneficiary exercises the Put. If
         the Trustee does assume the Sponsoring Company's obligations, the
         foregoing provisions of this Section that apply to the Sponsoring
         Company shall also apply to the Trustee.

         The Put provided for in this Section shall also apply to shares of
         Company Stock that are publicly traded without restriction when
         distributed but which cease to be publicly traded or which become
         subject to a trading limitation during the Option Period. In such
         event, the Benefits Advisory Committee shall notify in writing each
         Former Participant or Beneficiary to whom the Put becomes applicable
         that the shares of Company Stock held by the Former Participant or
         Beneficiary are subject to the Put for the remainder of such Option
         Period and shall inform the Participant or Beneficiary of the terms of
         the Put. If written notice is given pursuant to this Section later than
         ten (10) days after the shares of Company Stock cease to be publicly
         traded or become subject to a trading limitation, the period during
         which the Put may be exercised shall be extended by the number of days
         between such tenth day and the date such notice is actually given.

11.11    Further Contributions. Except as otherwise provided in Section 11.07,
         shares of Company Stock acquired with an Exempt Loan shall not be
         subject to any other Put, call, or other option, or buy-sell or similar
         arrangement while held under the Plan or when distributed from the Plan
         to a Participant or Beneficiary, whether or not the Plan then
         constitutes an "employee stock ownership plan" within the meaning of
         Section 4975(e)(7) of the Code. In addition, the provisions of the
         preceding sentence and of Section 11.10 shall continue to apply to
         shares of Company Stock acquired with an Exempt Loan after the Exempt
         Loan has been satisfied and after the Plan ceases to constitute an
         "employee stock ownership plan" as described above.

11.12    Right of First Refusal.

         (1)      Except as provided in this Section 11.12, any Participant,
                  Beneficiary, or other person to whom shares of Company Stock
                  have been distributed shall, prior to any sale or other
                  transfer

                                       45
<PAGE>
                  of such shares (whether voluntary, involuntary, or by
                  operation of law, or bequest and whether for consideration or
                  gratuitous), first offer such shares to the Trustee in
                  writing, and then, if the offer is refused by the Trustee, to
                  the Company (such offer being hereinafter referred to as a
                  "Participant Offer"). In the event that the shares are offered
                  because the Distributee has received a bona fide offer from a
                  prospective purchaser (such offer being hereinafter referred
                  to as a "Third Party Offer"), then the Participant Offer shall
                  state the terms of the Third Party Offer received by the
                  Distributee, including the number of shares and price offered
                  for such shares. Subject to the provisions of Subsection
                  11.12(2), if the Trustee shall determine that there are
                  sufficient Trust assets, it may purchase the shares in
                  accordance with the written Participant Offer to the Trust. If
                  the Trustee elects not to purchase the shares, the Trustee
                  shall notify the Company of the written Participant Offer. If
                  the Trustee does not purchase the shares, the Company shall
                  have the right to purchase the shares upon the terms provided
                  above.

         (2)      Notwithstanding the terms of any offer to purchase shares of
                  Company Stock under this Section 11.12, the purchase price to
                  the shares so offered shall be deemed to be the greater of (a)
                  the fair market value of the shares of Company Stock as
                  determined pursuant to Section 54.4975-11(d)(5) of the
                  Treasury Regulations or (b) the price set out in the
                  Participant's Offer.

                  Payment for the Company Stock shall be paid for by the Trustee
                  (or if the Trustee refuses the Participant Offer, by the
                  Company) in a lump sum or in installments as determined by the
                  Company. In the event payments are made in installments, the
                  installment obligation shall (a) be adequately secured as
                  determined by the Company, (b) bear interest equal to the
                  Company's long-term debt borrowing rate from its senior
                  lenders or such other reasonable rate of interest as
                  determined by the Company to be determined on a uniform and
                  nondiscriminatory basis, but in no event shall such rate of
                  interest be greater than the maximum non-usurious rate of
                  interest permitted to be charged on such indebtedness under
                  Texas law, (c) require that the payments be made in annual
                  installments, (d) have a payment period of five (5) years from
                  the date the Company Stock is purchased, (e) require that any
                  payments pursuant to the installment obligation must begin to
                  be made no later than thirty (30) days after the date the
                  Company Stock is purchased, and (f) permit the Company to
                  prepay the amount of any remaining installments without
                  penalty.

         (3)      If neither the Trustee nor the Company purchases the shares as
                  set forth above within fourteen (14) days after receipt of
                  notice of the offer, then the Distributee shall be free to
                  sell or otherwise dispose of the shares for the price, on the
                  terms and for the reason stated in the written Participant
                  Offer to the Trustee.

         (4)      Any certificate issued by the Company representing shares of
                  Company Stock to be distributed pursuant to this Plan shall
                  bear (together with any other legend customarily placed on
                  certificates representing such stock) a conspicuous legend
                  describing the right of first refusal provided under this
                  Section 11.12 and identifying the restrictions upon the
                  transfer of such shares imposed under federal and state
                  securities laws and regulations. The legend shall state that
                  the shares have been issued without registration under the
                  federal or state securities laws, (and, if applicable, are
                  "restricted securities" as that term is defined in Rule 144
                  (promulgated pursuant to the Securities Act of 1933)) and may
                  be transferred only in compliance with the restrictions on
                  resale set forth in Rule 144. Anything to the contrary herein
                  notwithstanding, no purchase of Company Stock shall be made
                  pursuant to this Article if such purchase would violate
                  federal or state law, statutes, regulations or rulings.

                                       46
<PAGE>

         (5)      Notwithstanding anything to the contrary herein contained,
                  shares of Company Stock originally purchased by the Trustee
                  with the proceeds of an Exempt Loan shall be subject to a
                  right of first refusal only on the following conditions:

                  (a)      the Company Stock must not be publicly traded at the
                           time the right of first refusal is to be exercised;

                  (b)      the total period of time during which the Trustee or
                           the Sponsoring Company may exercise the right of
                           first refusal will be fourteen (14) days after
                           notification of the offer is received by the Trustee;
                           and

                  (c)      the purchase price paid for the Company Stock shall
                           not be less than the greater of (i) the fair market
                           value of the Company Stock determined pursuant to
                           Section 54.4975-11(d)(5) of the Treasury Regulations
                           or (ii) the price offered for the Company Stock by a
                           third party.

11.13    Execution of Documents. In the event that a purchase of shares is made
         by the Trustee or the Company as provided for in Article XI, the
         Distributee shall execute, at such time as requested by the Trustee,
         such stock powers or other documents required by the Trustee to
         transfer and convey ownership of the shares purchased to the Trustee or
         the Company.

11.14    Distribution of More than One Class of Securities. If interests in more
         than one (1) class of Company Stock have been allocated to the
         Participant's Account, each distribution to the Participant shall be
         made in substantially the same proportion of each such class.

11.15    Direct Rollovers to Eligible Retirement Plans.

         (1)      Notwithstanding any provision of the Plan to the contrary that
                  would otherwise limit a Distributee's election under this
                  Section, a Distributee may elect, at the time and in the
                  manner prescribed by the Benefits Advisory Committee, to have
                  any portion of an Eligible Rollover Distribution paid directly
                  to an Eligible Retirement Plan specified by the Distributee in
                  a Direct Rollover.

         (2)      For purposes of this Section 11.15, the following terms shall
                  have the following meanings:

                  (a)      "Eligible Rollover Distribution" means any
                           distribution of all or any portion of the balance to
                           the credit of the Distributee, except that an
                           Eligible Rollover Distribution does not include: (i)
                           any distribution that is one (1) of a series of
                           substantially equal periodic payments (not less
                           frequently than annually) made for the life (or life
                           expectancy) of the Distributee or the joint lives (or
                           joint life expectancies) of the Distributee and the
                           Distributee's designated Beneficiary, or for a
                           specified period of ten (10) years or more; (ii) any
                           distribution to the extent such distribution is
                           required under Code Section 401(a)(9); (iii) the
                           portion of any distribution that is not includable in
                           gross income (determined without regard to the
                           exclusion for net unrealized appreciation with
                           respect to employer securities); and (iv) for Plan
                           Years beginning on or after January 1, 1999, any
                           hardship distribution described in Code Section
                           401(k)(2)(B)(i)(IV).

                                       47
<PAGE>

                  (b)      "Eligible Retirement Plan" means an individual
                           retirement account described in Code Section 408(a),
                           an individual retirement annuity described in Code
                           Section 408(b), an annuity plan described in Code
                           Section 403(a), or a qualified trust described in
                           Code Section 401(a), that accepts the Distributee's
                           Eligible Rollover Distribution. However, in the case
                           of an Eligible Rollover Distribution to the surviving
                           spouse, an Eligible Retirement Plan is an individual
                           retirement account or individual retirement annuity.

                  (c)      "Distributee" means an Associate or former Associate.
                           In addition, the Associate's or former Associate's
                           surviving spouse and the Associate's or former
                           Associate's spouse or former spouse who is the
                           Alternate Payee under a Qualified Domestic Relations
                           Order are Distributees with regard to the interest of
                           the spouse or former spouse.

                  (d)      "Direct Rollover" means a payment by the Plan to the
                           Eligible Retirement Plan specified by the
                           Distributee.

11.16    Diversification Requirements. Subject to paragraph (d) of this Section
         11.16, to the extent required by Section 401(a)(28)(B) of the Code, and
         notwithstanding the provisions of Section 16.04, each Qualified
         Participant may elect, within ninety (90) days after the end of each
         Plan Year that is within the Diversification Election Period, to
         receive a distribution from the Plan of up to (a) twenty-five percent
         (25%) of Qualified Contributions that have ever been allocated to the
         Qualified Participant's Account, less (b) the number of shares of
         Company Stock previously distributed, transferred or diversified
         pursuant to a diversification election. However, in the last year of
         the Diversification Election Period, the preceding sentence shall be
         applied by substituting "fifty percent (50%)" for "twenty-five percent
         (25%)."

         (1)      Delivery of Diversification Distribution. A Qualified
                  Participant shall receive a distribution elected pursuant to
                  this Section 11.16 within ninety (90) days after the last day
                  of the period during which an election can be made.

         (2)      Delivery of Company Stock. The number of shares of Company
                  Stock that are delivered to a Participant who makes an
                  election hereunder shall be the whole number of shares elected
                  to be received hereunder with any fractional amount paid in
                  cash, based upon fair market value of the shares. Such shares
                  of Company Stock delivered to the Participant must consist of
                  Company Stock that, immediately prior to distribution
                  hereunder, is subject to the Put option requirements of
                  Section 11.10.

         (3)      No Effect on Other Distributions. Any distribution that is
                  made pursuant to this Section 11.16 shall not be taken into
                  consideration in determining whether or not subsequent
                  distribution is a lump sum distribution, as defined in Section
                  402(d)(4)(A) of the Code.

11.17    Alternate Forms of Benefit. Notwithstanding anything to the contrary
         herein, any Plan provision which restricts or would deny a Participant
         through the withholding of consent or the exercise of discretion by
         some person or persons other than the Participant (and where relevant,
         other than the Participant's spouse) of an "alternate form of benefit"
         is hereby amended by the deletion of the consent or discretion
         requirement. An "alternate form of benefit" encompasses the different
         forms of benefit payment available under the Pan which provides that:
         (a) a Participant's benefits under the Plan may be paid in more than
         one (1) form, or (b) payment of a particular form of benefit may
         commence at some time earlier than the normal date for the commencement
         of such benefit.

                                       48
<PAGE>

11.18    In-Service Withdrawals. In-Service withdrawals to Participants are not
         allowed under the Plan for any reason.

11.19    Loans. Loans to Participants are not allowed under the Plan for any
         reason.

                                   ARTICLE XII

                                  EXEMPT LOANS

12.01    Investment Committee Direction. Subject to the limitations of Section
         12.02, the Investment Committee may direct the Trustee to make Exempt
         Loans, the proceeds of which are to be used for acquiring Qualifying
         Employer Securities or repaying a prior Exempt Loan.

12.02    Limitations.

         (1)      Primary Benefit Requirement. An Exempt Loan must be made
                  primarily for the benefit of Participants and Beneficiaries.

         (2)      Net Effect of Exempt Loan. At the time that an Exempt Loan is
                  made, the interest rate charged therefor and the price of the
                  Qualifying Employer Securities to be acquired with the
                  proceeds thereof must not be such that the assets of the Trust
                  Fund might be drained off.

         (3)      Arm's Length Standard. The terms of an Exempt Loan must, at
                  the time such loan is made, be at least as favorable to the
                  Trust as the terms of a comparable loan resulting from arm's
                  length negotiations between independent parties.

         (4)      Use of Loan Proceeds. The proceeds of an Exempt Loan must be
                  used within a reasonable time after their receipt by the
                  Trustee only for any or all of the following purposes:

                  (a)      To acquire Qualifying Employer Securities;

                  (b)      To repay such loan; or

                  (c)      To repay a prior Exempt Loan.

         (5)      Puts, Calls, etc. Except as provided in Sections 11.10 and
                  11.12 hereof, no Qualifying Employer Security acquired with
                  the proceeds of an Exempt Loan may be subject to a Put, call
                  other option, or buy-sell or similar arrangement while held by
                  the Trustee and when distributed from the Trust.

         (6)      Interest Rate. The interest rate charged under an Exempt Loan
                  must not be in excess of a reasonable rate of interest.

         (7)      Term. An Exempt Loan must be for a specific term, and may not
                  be payable at the demand of any person, except in the case of
                  default.

12.03    Liability and Collateral. All Exempt Loans shall be without recourse
         against the Trust. Furthermore, the only Trust assets that may be given
         as collateral for an Exempt Loan are Qualifying Employer

                                       49
<PAGE>
         Securities acquired with the proceeds of the Exempt Loan and Qualifying
         Employer Securities that were given as collateral for a prior Exempt
         Loan that is to be repaid out of the proceeds of a current Exempt Loan.

         Any Qualifying Employer Securities given as collateral for an Exempt
         Loan shall be allocated to a Suspense Account created pursuant to
         Section 5.02. No person entitled to payment under an Exempt Loan shall
         have any right to Trust assets other than the following:

         (1)      Collateral given for the Exempt Loan;

         (2)      Company Contributions (other than contributions of Qualifying
                  Employer Securities) that are made hereunder for purposes of
                  being applied by the Trustee to satisfy its obligations under
                  the Exempt Loan; and

         (3)      Earnings attributable to Qualifying Employer Securities given
                  as collateral for the Exempt Loan and earnings attributable to
                  the investment of Company Contributions described in paragraph
                  (1) of this Section 12.03.

12.04    Repayment of Exempt Loan. Principal and interest payable under an
         Exempt Loan shall be satisfied out of:

         (1)      Company Contributions (other than contributions of the Trustee
                  to satisfy its obligations under the Exempt Loan);

         (2)      Earnings attributable to the investment of such contributions;
                  and

         (3)      Earnings attributable to Qualifying Employer Securities
                  purchased with the proceeds of the Exempt Loan;

         provided, however, that the payments made under an Exempt Loan by the
         Trustee during any Plan Year shall not exceed an amount equal to the
         sum of such contributions and earnings received during the Plan Year
         and prior Plan Years minus payments that may be used by the Trustee to
         make payments under an Exempt Loan and shall be accounted for
         separately in the books and records of the Trust until the Exempt Loan
         is repaid in full.

         Notwithstanding any provision to the contrary, all Company
         Contributions (except contributions of Qualifying Employer Securities)
         made hereunder during the term of an Exempt Loan shall be deemed to be
         made for purposes of being used by the Trustee to satisfy its
         obligations under the Exempt Loan. Furthermore, all payments made by
         the Trustee under an Exempt Loan shall be first charged against Company
         Contributions available for making such payments. Earnings that may be
         used under this Section 12.04 to make payments under an Exempt Loan
         shall be deemed to have been used for that purpose only to the extent
         that payments made under the Exempt Loan during any Plan Year are in
         excess of the total Company Contributions available to the Trustee for
         making payments under the Exempt Loan.

12.05    Default. In the event of default upon an Exempt Loan, the value of
         Trust assets transferred in satisfaction of such loan shall not exceed
         the amount of default. In addition, if the payee under an Exempt Loan
         is a Disqualified Person or a Party in Interest, Trust assets will be
         transferred in satisfaction of the loan upon default only upon and to
         the extent of the failure of the Trustee to meet the payment schedule
         under the loan.

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<PAGE>

12.06    Release of Collateral. A portion of any Qualifying Employer Securities
         purchased with the proceeds of an Exempt Loan and given as security
         therefore shall be released from the Suspense Account established with
         respect to such loan each Plan Year during which the payment of amounts
         due under the loan is made. For each Plan Year during the term of the
         Exempt Loan the number of Qualifying Employer Securities to be released
         from the Suspense Account relating to such loan shall equal the number
         of Qualifying Employer Securities allocated to such account immediately
         before the lease for the current Plan Year multiplied by a fraction,
         the numerator of which is the amount of principal and interest paid
         under the Exempt Loan for the current Plan Year and the denominator of
         which is the sum of the numerator plus the principal and interest to be
         paid under the Exempt Loan for all future years. For purposes of
         computing the denominator of the above fraction, the number of future
         years under the Exempt Loan shall be determined without taking into
         account any possible extension or renewal periods. If the interest rate
         under the Exempt Loan is variable, the interest to be paid in future
         years shall be computed by using the interest rate applicable as of the
         end of the current Plan Year.

         Notwithstanding the preceding provisions of this Section 12.06, the
         Benefits Advisory Committee, in its sole and absolute discretion, may
         determine the number of Qualifying Employer Securities to be released
         from the Suspense Account for any Plan Year by reference to principal
         payments only; provided, however, that if this method of determination
         is used, the following requirements must be satisfied:

         (1)      The Exempt Loan must provide for annual payments of principal
                  and interest at a cumulative rate that is not less rapid at
                  any time than level payments of such amounts for ten (10)
                  years.

         (2)      The interest included in any payment under the Exempt Loan is
                  disregarded only to the extent that it would be determined to
                  be interest under standard loan amortization tables.

         This alternative method of determining the number of Qualifying
         Employer Securities to be released from the Suspense Account for any
         Plan Year may not be used if, by reason of a renewal, extension, or
         refinancing, the sum of the expired duration of the Exempt Loan, the
         renewal period, the extension period, and the duration of a new Exempt
         Loan (the proceeds of which are to be used to repay the Exempt Loan)
         exceeds ten (10) years.

         If more than one (1) class of Qualifying Employer Securities is given
         as collateral for the Exempt Loan, the number of Qualifying Employer
         Securities of each class to be released from the Suspense Account for
         any Plan Year shall be determined by applying the same fraction to each
         class.

12.07    Leveraged Employee Stock Ownership Plan. If an Exempt Loan is made by
         the Trustee pursuant to Section 12.01, concurrently therewith the Plan
         shall become a "Leveraged Employee Stock Ownership Plan" (as defined in
         Section 4975(e)(7) of the Code).

         Notwithstanding any provision contained herein to the contrary, upon
         the making of an Exempt Loan by the Trustee, the term "Qualifying
         Employer Security" shall mean:

         (1)      Common stock issued by the Employer (or by a corporation which
                  is a member of the same controlled group as defined in Section
                  1563(a) of the Code determined without regard to Section 1563
                  (a)(4) and Section 1563(e)(3)(C) of the Code) which is readily
                  tradeable on an established stock market; or

                                       51
<PAGE>

         (2)      If there is no common stock which meets the requirements of
                  subparagraph (1), common stock issued by the Employer (or by a
                  corporation which is a member of the same controlled group as
                  defined in Section 1563(a) of the Code determined without
                  regard to Section 1563(a)(4) and Section 1563(e)(3)(C) of the
                  Code) having a combination of voting power and dividend rights
                  equal to or in excess of:

                  (a)      that class of common stock of the Employer (or of any
                           other such corporation) having the greatest voting
                           power; and

                  (b)      that class of stock of the Employer (or of any other
                           such corporation) having the greatest dividend
                           rights; or

         (3)      Noncallable preferred stock issued by the Employer (or by a
                  corporation which is a member of the same controlled group as
                  defined in Section 1563(a) of the Code determined without
                  regard to Section 1563(a)(4) and Section 1563(e)(3)(C) of the
                  Code) if:

                  (a)      such stock is convertible at any time into common
                           stock which is readily tradeable on an established
                           securities market; and

                  (b)      such conversion is set at a conversion price which
                           (as of the date of the acquisition by the Plan) is
                           reasonable.

                                  ARTICLE XIII

                               INSURANCE CONTRACTS

13.01    General Insurance Investment. Upon the written direction of the
         Investment Committee, the Trustee shall apply for and pay premiums on
         Insurance Contracts for the benefit of the Trust Fund as a whole, and
         such contract may be on the lives of any persons in whom there is an
         insurable interest, including Participants. Insurance Contracts held
         for the benefit of the Trust Fund as a whole shall be treated as
         investments of the Trust Fund and the cash value thereof shall be used
         in valuing the Trust Fund. All premiums paid thereon by the Trustee
         shall be charged against the Trust Fund as a whole and not to any
         specific Accounts. All dividends, death benefits, and other payments
         received by the Trustee by reason of such Insurance Contracts shall be
         credited to the Trust Fund the same as proceeds derived from the sale
         of an asset held thereunder. The Investment Committee may, in its sole
         discretion, authorize the Trustee to use any amount of dividends to pay
         premiums; or borrow against the cash surrender value of an Insurance
         Contract on the Participant's life in order to pay the premiums.

13.02    Insurance Company Not a Party to Agreement. No insurance company is a
         party to this Plan nor shall any insurance company be responsible for
         its validity.

13.03    Insurance Company Not Responsible for Trustee's Action. No insurance
         company is required to examine the terms of this Plan nor be
         responsible for any action taken by the Trustee.

13.04    Insurance Company Reliance on Trustee's Signature. For the purpose of
         making application to any insurance company and in the exercise of any
         right or option contained in any policy or annuity, the insurance
         company may rely upon the signature of the Trustee and shall be saved
         harmless and completely discharged in acting at the direction and
         authorization of the Trustee.

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<PAGE>

13.05    Acquittance. An insurance company shall be discharged from liability
         for any amount paid to the Trustee or paid in accordance with the
         direction of the Trustee, and it shall not be obligated to see to the
         distribution or further application of any monies it so pays.

13.06    Duties of Insurance Company. Each insurance company shall keep such
         records; make such identification of contracts, funds and accounts
         within funds; and supply such information as may be necessary for the
         proper administration of the Plan under which it is carrying Insurance
         Contracts.

                                   ARTICLE XIV

                MISCELLANEOUS PROVISIONS RESPECTING PARTICIPANTS

14.01    Participants to Furnish Required Information.

         (1)      Each Participant shall furnish to the Benefits Advisory
                  Committee such information as the Benefits Advisory Committee
                  considers necessary or desirable for purposes of administering
                  the Plan, and the provisions of the Plan respecting any
                  payments hereunder are conditional upon the Participant's
                  furnishing promptly such true, full and complete information
                  as the Benefits Advisory Committee may reasonably request.

         (2)      Each Participant shall submit proof of such Participant's age
                  to the Benefits Advisory Committee. The Benefits Advisory
                  Committee shall, if such proof of age is not submitted as
                  required, use as conclusive evidence thereof, such information
                  as is deemed by it to be reliable, regardless of the source of
                  such information. Any adjustment required by reason of lack of
                  proof or the misstatement of the age of persons entitled to
                  benefits hereunder, by the Participant or otherwise, shall be
                  in such manner as the Benefits Advisory Committee deems
                  equitable.

         (3)      Any notice or information which according to the terms of the
                  Plan or the rules of the Benefits Advisory Committee must be
                  filed with the Benefits Advisory Committee, shall be deemed so
                  filed if addressed and either delivered in person or mailed,
                  postage fully prepaid, to the Benefits Advisory Committee.
                  Whenever a provision herein requires that a Participant (or
                  the Participant's Beneficiary) give notice to the Benefits
                  Advisory Committee within a specified number of days or by a
                  certain date, and the last day of such period, or such date,
                  falls on a Saturday, Sunday, or Employer holiday, the
                  Participant (or the Participant's Beneficiary) will be deemed
                  in compliance with such provision if notice is delivered in
                  person to the Benefits Advisory Committee or is mailed,
                  properly addressed, postage prepaid, and postmarked on or
                  before the business day next following such Saturday, Sunday
                  or Employer holiday. The Benefits Advisory Committee may, in
                  its sole discretion, modify or waive any specified notice
                  requirement; provided, however, that such modification or
                  waiver must be administratively feasible, must be in the best
                  interest of the Participant, and must be made on the basis of
                  rules of the Benefits Advisory Committee which are applied
                  uniformly to all Participants.

14.02    Participants' Rights in Trust Fund. No Participant or other person
         shall have any right, title or interest in, to or under the Trust Fund,
         or any part of the assets thereof, except and to the extent expressly
         provided in the Plan.

                                       53
<PAGE>

14.03    Inalienability of Benefits.

         (1)      Restrictions on Assignment. The benefits provided hereunder
                  are intended for the personal security of persons entitled to
                  payment under the Plan, and are not subject in any manner to
                  the debts or other obligations of the persons to whom they are
                  payable. The interest of a Participant or such Participant's
                  Beneficiary or Beneficiaries may not be sold, transferred,
                  assigned or encumbered in any manner, either voluntarily or
                  involuntarily, and any attempt so to anticipate, alienate,
                  sell, transfer, assign, pledge, encumber, or charge the same
                  shall be null and void; neither shall the Trust Fund nor any
                  benefits thereunder or hereunder be liable for or subject to
                  the debts, contracts, liabilities, engagements or torts of any
                  person to whom such benefits or funds are payable, nor shall
                  they be subject to garnishment, attachment, or other legal or
                  equitable process nor shall they be an asset in bankruptcy.
                  All of the provisions of this Section 14.03, however, are
                  subject to Section 11.06 to withholding of any applicable
                  taxes and to assignments permitted by Code Section 401(a)(13).

         (2)      Exception for Benefit Payable Pursuant to a Qualified Domestic
                  Relations Order.

                  (a)      The prohibitions contained in Subsection 14.03(1)
                           hereof shall not apply to the creation, assignment or
                           recognition of a right to any benefit payable with
                           respect to a Participant pursuant to a Qualified
                           Domestic Relations Order.

                  (b)      The Plan Administrator shall establish written
                           procedures for the determination of the qualified
                           status of a domestic relations order.

                  (c)      Upon receiving a domestic relations order, the Plan
                           Administrator shall notify the Participant and
                           Alternate Payee named in the order, in writing, of
                           the receipt of the order and the Plan's procedures
                           for determining the qualified status of the order.
                           Within a reasonable period of time after receiving
                           the domestic relations order, the Plan Administrator
                           shall determine the qualified status of the order and
                           shall notify the Participant and the Alternate Payee,
                           in writing, of its determination. The Plan
                           Administrator shall provide notice under this
                           paragraph by mailing such notice to the individual's
                           address specified in the domestic relations order, or
                           in a manner consistent with Department of Labor
                           regulations.

                  (d)      During any period in which the issue of whether a
                           domestic relations order is a Qualified Domestic
                           Relations Order is being determined, notwithstanding
                           any other provision of the Plan to the contrary, the
                           Benefits Advisory Committee shall separately account
                           for the amounts which would have been payable during
                           such period to an Alternate Payee pursuant to a
                           Qualified Domestic Relations Order, if such order had
                           been determined to be a Qualified Domestic Relations
                           Order. During the period such amounts are separately
                           accounted for under the Plan, such amounts shall
                           remain subject to the general investment provisions
                           of the Plan. If within the eighteen (18) month period
                           beginning with the date on which the first payment
                           would be required to be made under such domestic
                           relations order, the domestic relations order is
                           determined to be a Qualified Domestic Relations
                           Order, the Benefits Advisory Committee shall direct
                           the Trustee to distribute to the Alternate Payee the
                           separately accounted for amounts including any
                           earnings (or losses) thereon in accordance with
                           Section 11.07 and the order. However, if within such
                           eighteen (18) month period, it is determined that
                           such order is not qualified, or if by the end of such
                           eighteen (18) month period the issue of qualification
                           is not resolved, then the

                                       54
<PAGE>
                           Benefits Advisory Committee shall pay the separately
                           accounted for amounts including any earnings (or
                           losses) thereon to the person or persons who would
                           have been entitled to such amounts if there had been
                           no such order.

                  (e)      Notwithstanding any other provision of the Plan to
                           the contrary, all rights and benefits, including
                           rights to make elections or to give directions,
                           provided to a Participant under this Plan shall be
                           subject to the rights, benefits and elections or
                           directions afforded to an Alternate Payee, pursuant
                           to a Qualified Domestic Relations Order, and this
                           Plan shall be interpreted and administered by the
                           Benefits Advisory Committee in such manner as to
                           effectuate the provisions of any such Qualified
                           Domestic Relations Order as they relate to the
                           rights, benefits and elections or directions afforded
                           to such Alternate Payee under such Qualified Domestic
                           Relations Order. Furthermore, to the extent provided
                           in any such Qualified Domestic Relations Order, a
                           former spouse of a Participant shall be treated as a
                           spouse or surviving spouse for all applicable
                           purposes under the Plan.

                  (f)      The Trustee shall make any payments or distributions
                           required under this Subsection 14.03(2) by separate
                           benefit checks or other separate distribution to the
                           Alternate Payee(s).

         (3)      Exception for Benefit Offset Pursuant to Code Section
                  401(a)(13)(C). The prohibitions contained in Subsection
                  14.03(1) hereof shall not apply to any offset of a
                  Participant's benefits provided under the Plan in an amount
                  that the Participant is ordered or required to pay to the Plan
                  in accordance with the provisions of Code Section
                  401(a)(13)(C).

14.04    Conditions of Employment Not Affected by Plan. Neither the Plan nor the
         Trust nor the Trust Agreement shall confer on any Associate, including
         any Participant, any right to be retained in the Service of any
         Employer or any Affiliated Company, and nothing contained herein or in
         the Trust Agreement shall be construed in any way to limit or restrict
         the right of any Employer or any Affiliated Company to discharge any
         Associate, regardless of whether such Associate is a Participant, or to
         change such Associate's position or the basis or amount of such
         Associate's compensation.

14.05    Address for Mailing of Benefits.

         (1)      Each Participant and each other person entitled to benefits
                  hereunder shall file with the Benefits Advisory Committee from
                  time to time in writing such Participant's post office address
                  and each change of address. Any check representing payment
                  hereunder and any communication addressed to a Participant, an
                  Associate or Beneficiary, at such person's last address filed
                  with the Benefits Advisory Committee, or if no such address
                  has been filed, then at such person's last address as
                  indicated on the records of an Employer, shall be deemed to
                  have been delivered to such person on the date on which such
                  check or communication is deposited, postage prepaid, in the
                  United States mail.

         (2)      If the Benefits Advisory Committee is in doubt as to whether
                  payments are being received by the person entitled thereto, it
                  shall, by registered mail addressed to the person concerned,
                  at his address last known to the Benefits Advisory Committee,
                  notify such person that all unmailed and future payments shall
                  be withheld until he provides the Benefits Advisory Committee
                  with a sworn statement, properly notarized, evidencing his
                  continued life and his proper mailing address.

                                       55
<PAGE>

14.06    Unclaimed Account Procedure.

         (1)      Neither the Trustee nor the Benefits Advisory Committee shall
                  be obliged to search for, or ascertain the whereabouts of any
                  Participant, Beneficiary or Alternate Payee. The Benefits
                  Advisory Committee, by certified or registered mail addressed
                  to such Participant's, Beneficiary's or Alternate Payee's last
                  known address, shall notify the Participant, Beneficiary or
                  Alternate Payee that such Participant, Beneficiary or
                  Alternate Payee is entitled to a distribution under this Plan,
                  and the notice shall quote the provisions of this Section
                  14.06. The Benefits Advisory Committee may, but is not
                  required to, utilize the services of the Internal Revenue
                  Service (pursuant to Revenue Procedure 94-22 or any successor
                  thereto) in attempting to ascertain the current mailing
                  address of a Participant, Beneficiary or Alternate Payee.

         (2)      If any distribution or payment is not claimed by the person
                  entitled thereto within one (1) year from the date of the
                  mailing of the notice referred to in subsection (1) above, the
                  Participant's, Beneficiary's or Alternate Payee's Accounts,
                  valued as of the Valuation Date coinciding with or immediately
                  preceding the date such one (1) year period ends, shall be
                  forfeited. If a Participant, Beneficiary or Alternate Payee
                  makes a claim, at any time, such forfeited amount shall be
                  restored and the Benefits Advisory Committee shall direct the
                  Trustee to distribute such amount to the individual entitled
                  to the distribution. Such restorations shall be made as
                  provided for in Subsection 10.06(2).

         (3)      Notwithstanding Subsection 14.06(1) or 14.06(2) above, if upon
                  termination of the Plan and the liquidation of the Trust, all
                  or any distribution payable to a Participant or his
                  Beneficiary has not been claimed after sending the notice
                  described in Subsection 14.06(1) above, the Benefits Advisory
                  Committee shall establish an Individual Retirement Account or
                  an interest-bearing, federally insured account in a bank or
                  savings and loan association in the name of the Participant or
                  Beneficiary, shall purchase a deferred annuity providing the
                  form(s) of benefit prescribed in Article XI or, if the
                  Benefits Advisory Committee is unable to accomplish any of the
                  foregoing, shall dispose of the Participant's Account in any
                  other method permitted by the Code and ERISA. If a
                  Participant's Account has been forfeited pursuant to
                  Subsection 14.06(2) above, it shall be restored upon Plan
                  termination and distributed as provided in the preceding
                  sentence. The Benefits Advisory Committee shall direct the
                  Trustee to distribute the Participant's Account valued as of
                  the last Valuation Date, or special valuation date as provided
                  in Section 20.03 hereof, preceding distribution.

                                   ARTICLE XV

                           ADMINISTRATION OF THE PLAN

15.01    Appointment of Benefits Advisory Committee. The administration of the
         Plan will be the responsibility of the Benefits Advisory Committee
         which shall be appointed by the Board and shall consist of one (1) or
         more members. Each member of the Benefits Advisory Committee shall
         serve for a term of one (1) year and until his successor shall be
         appointed. A member may serve for more than one (1) term. If the
         Benefits Advisory Committee consists of more than one (1) member, the
         Board shall appoint one (1) of the members as Chairman. The Board shall
         be authorized to remove any member of the Benefits Advisory Committee
         with or without cause by notifying such member and the Chairman, in
         writing, and may fill vacancies in the Benefits Advisory Committee,
         however caused. A member of the Benefits Advisory Committee may resign
         upon ten (10) days' prior notice by

                                       56
<PAGE>
         delivery of his written resignation to the Board and other members of
         the Benefits Advisory Committee. The Benefits Advisory Committee shall
         have the sole power, duty and responsibility for directing the
         administration of the Plan in accordance with its provisions.

15.02    Compensated Expenses of the Benefits Advisory Committee. The members of
         the Benefits Advisory Committee shall serve without compensation for
         their services as such, but the reasonable and necessary expenses of
         the Benefits Advisory Committee shall be paid as provided in Section
         15.14. When, in its discretion, the Benefits Advisory Committee, or any
         Employer, deems it advisable, the Benefits Advisory Committee shall be
         authorized to have the records of the Benefits Advisory Committee and
         the Trustee audited by an independent auditor, and reasonable and
         necessary expenses thereby incurred shall be paid as provided in
         Section 15.14 hereof.

15.03    Secretary and Agents of the Benefits Advisory Committee. The Benefits
         Advisory Committee may appoint a Secretary who may, but need not, be a
         member of the Benefits Advisory Committee, and may employ such agents
         and such clerical and other administrative personnel as reasonably may
         be required for the purpose of administering the Plan. Such
         administrative personnel shall carry out the duties and
         responsibilities assigned to them by the Benefits Advisory Committee.
         Expenses necessarily incurred for such purpose shall be paid by the
         Trust Fund unless paid by the Employers, as provided in Section 15.14.

15.04    Actions of Benefits Advisory Committee.

         (1)      A majority of the members of the Benefits Advisory Committee
                  shall constitute a quorum for the transaction of business, and
                  shall have full power to act hereunder. Action by the Benefits
                  Advisory Committee shall be official if approved by a vote of
                  a majority of the members present at any official meeting. The
                  Benefits Advisory Committee may, without a meeting, authorize
                  or approve any action by written instrument signed by a
                  majority of all of the members. Any written memorandum signed
                  by the Chairman, or any other member of the Benefits Advisory
                  Committee, or by any other person duly authorized by the
                  Benefits Advisory Committee to act, in respect of the subject
                  matter of the memorandum, shall have the same force and effect
                  as a formal resolution adopted in open meeting. The Benefits
                  Advisory Committee shall give to the Trustee any order,
                  direction, consent, certificate or advice required or
                  permitted under the terms of the Trust Agreement, and the
                  Trustee shall be entitled to rely on, as evidencing the action
                  of the Benefits Advisory Committee, any instrument delivered
                  to the Trustee when: (a) if a resolution, it is certified by
                  the Chairman and Secretary, or (b) if a memorandum, it is
                  signed by a majority of all of the members of the Benefits
                  Advisory Committee, or by a person who shall have been
                  authorized to act for the Benefits Advisory Committee in
                  respect of the subject matter thereof.

         (2)      A member of the Benefits Advisory Committee may not vote or
                  decide upon any matter relating solely to him or vote in any
                  case in which his individual right or claim to any benefit
                  under the Plan is specifically involved. If, in any case in
                  which a Benefits Advisory Committee member is so disqualified
                  to act, the remaining members then present cannot, by majority
                  vote, act or decide, the Board will appoint a temporary
                  substitute member to exercise all of the powers of the
                  disqualified member concerning the matter in which he is
                  disqualified.

         (3)      The Benefits Advisory Committee shall maintain minutes of its
                  meetings and written records of its actions, and as long as
                  such minutes and written records are maintained, members may
                  participate and hold a meeting of the Benefits Advisory
                  Committee by means of conference telephone or similar
                  communications equipment which permits all persons
                  participating in

                                       57
<PAGE>
                  the meeting to hear each other. Participation in such a
                  meeting constitutes presence in person at such meeting.

15.05    Authority of Benefits Advisory Committee. The Benefits Advisory
         Committee is authorized to take such actions as may be necessary to
         carry out the provisions and purposes of the Plan, including complying
         in all respects with the requirements of ERISA Section 404(c) and the
         regulations thereunder to the extent it is applicable, and shall have
         the discretionary authority to control and manage the operation and
         administration of the Plan, including the discretionary authority to
         determine whether the Participant, Beneficiary or Alternate Payee is
         entitled to payment of benefits under this Plan. In order to effectuate
         the purposes of the Plan, the Benefits Advisory Committee shall have
         the fiduciary power to construe and interpret the Plan, to supply any
         omissions therein, to reconcile and correct any errors or
         inconsistencies, to decide any questions in the administration and
         application of the Plan, and to make equitable adjustments for any
         mistakes or errors made in the administration of the Plan. All such
         actions or determinations made by the Benefits Advisory Committee, and
         the application of rules and regulations to a particular case or issue
         by the Benefits Advisory Committee, in good faith, shall not be subject
         to review by anyone, but shall be final, binding and conclusive on all
         persons ever interested hereunder. In construing the Plan and in
         exercising its fiduciary power under provisions requiring Benefits
         Advisory Committee approval, the Benefits Advisory Committee shall
         attempt to ascertain the purpose of the provisions in question and when
         such purpose is known or reasonably ascertainable, such purpose shall
         be given effect to the extent feasible. Likewise, the Benefits Advisory
         Committee is, in the exercise of its fiduciary powers, authorized to
         determine all questions with respect to the individual rights of all
         Participants and their Beneficiaries and Alternate Payees under this
         Plan, including, but not limited to, all issues with respect to
         eligibility, Compensation, Service, valuation of Accounts, allocation
         of consolidated contributions and Trust Fund earnings, and retirement
         or Termination of Employment, and shall direct the Trustee concerning
         the allocation, payment and distribution of all funds held in trust for
         purposes of the Plan. The Benefits Advisory Committee, in the exercise
         of any discretionary powers hereunder, shall not exercise that
         discretion so as to discriminate in favor of Associates who are
         officers, shareholders, or Highly Compensated Employees. The Benefits
         Advisory Committee shall establish investment objectives and monitor,
         or cause to be monitored, the investment performance of the Trustee or
         any Investment Manager which may be appointed with respect to any
         assets of the Plan, and shall make such reports and give such
         recommendations to the Board as it requests with respect thereto.

15.06    General Administrative Powers. The Benefits Advisory Committee shall
         have authority to make, and from time to time, revise, rules and
         regulations for the administration of the Plan.

15.07    Plan Administrator. "Plan Administrator" (as defined in Section
         3(16)(A) of ERISA) shall mean the Benefits Advisory Committee. The Plan
         Administrator shall be responsible for the performance of all reporting
         and disclosure obligations under ERISA and all other obligations
         required or permitted to be performed by the Plan Administrator under
         ERISA and not otherwise delegated to other parties under the terms of
         the Plan or the Trust Agreement. The Plan Administrator is hereby
         designated as the agent for Service of process unless the Benefits
         Advisory Committee designates another person or entity.

15.08    Duties of Administrative Personnel. Administrative personnel appointed
         pursuant to Section 15.03 hereof, shall be responsible for such matters
         as the Benefits Advisory Committee shall delegate to them by written
         instrument, including, but not limited to communications to Associates
         at the direction of the Benefits Advisory Committee, reports to the
         Benefits Advisory Committee involving questions of eligibility and the
         amount of Compensation of Participants, assisting Participants,
         Beneficiaries and Alternate Payees in the completion of forms
         prescribed by the Benefits Advisory Committee,

                                       58
<PAGE>
         maintenance of records concerning terminated vested Participants,
         Participants who have retired and Beneficiaries. Administrative
         personnel may not make any decision as to Plan policy, interpretations,
         practices or procedures unless the authority to make such decisions has
         been delegated to them in writing by the Benefits Advisory Committee
         and they accept fiduciary responsibilities in accordance with the
         provisions of Section 15.09 hereof. All administrative personnel shall
         perform their allocated function within the policies, interpretations,
         rules, practices and procedures established by the Benefits Advisory
         Committee, except that administrative personnel shall coordinate
         matters related to the Plan with the appropriate departments of each
         Employer as the Benefits Advisory Committee directs.

15.09    Designation of Named Fiduciaries and Allocation of Responsibility.
         ERISA requires that certain persons, who are deemed to be
         "fiduciaries," as defined in ERISA Section 3(21)(A), be designated as
         "Named Fiduciaries" in the Plan. The Board, the Benefits Advisory
         Committee, the Investment Committee and the Plan Administrator are
         hereby designated Named Fiduciaries. Each Named Fiduciary shall have
         only the powers, duties and responsibilities specifically allocated to
         such fiduciary pursuant to the terms of this Plan. The Board shall not
         have any power or fiduciary responsibility hereunder other than (1) the
         power to name and to remove the persons who shall comprise the Benefits
         Advisory Committee and to continue to those persons such allocation of
         fiduciary responsibilities, (2) the power to appoint (and remove), or
         cause the Investment Committee to appoint (and remove), one (1) or more
         Investment Managers, (3) the power to establish or change the
         Investment Funds, and (4) the power to appoint (and remove) the
         Trustee. Each Named Fiduciary may, by written instrument, allocate some
         or all of its responsibilities to another fiduciary or designate
         another person to carry out some or all of its fiduciary
         responsibilities. The Benefits Advisory Committee, the Investment
         Committee, Plan Administrator and each other fiduciary under the Plan
         (including fiduciaries to whom responsibilities are allocated by a
         Named Fiduciary) will be furnished a copy of the Plan, and their
         acceptance of such responsibility will be made by agreeing in writing
         to act in the capacity designated. No Named Fiduciary shall be liable
         for an act or omission of any person who is allocated a fiduciary
         responsibility or who is designated to carry out such responsibility by
         a Named Fiduciary, except to the extent that the Named Fiduciary did
         not act in accordance with the standards contained in Subsection
         15.10(2) hereof with respect to the allocation or designation of a
         fiduciary duty. Any person or group of persons may serve in more than
         one (1) fiduciary capacity with respect to the Plan.

15.10    Action by Fiduciaries.

         (1)      Any action herein permitted or required to be taken by an
                  Employer shall, subject to the provisions of Section 23.07
                  hereof, be by resolution of its board of directors or by
                  written instrument signed by a person or group of persons who
                  has been authorized by resolution of such board of directors
                  as having authority to take such action. Any action herein
                  permitted or required to be taken by the Benefits Advisory
                  Committee shall be in the manner specified in Section 15.04
                  hereof.

         (2)      Each fiduciary with respect to the Plan shall perform all of
                  his duties and responsibilities and exercise his powers
                  hereunder with the care, skill, prudence, and diligence under
                  the circumstances then prevailing that a prudent man acting in
                  like capacity and familiar with such matters would use in the
                  conduct of an enterprise of like character and with like aims,
                  and no fiduciary shall be liable for any act or failure to act
                  on his part (including reliance on the advice of counsel)
                  which conforms to that standard, unless: (a) he knowingly
                  participates in or knowingly undertakes to conceal an act or
                  omission of another fiduciary of the Plan, with the knowledge
                  that such act or omission is a breach of fiduciary
                  responsibility, or (b) knowing of a breach of fiduciary
                  responsibility, he fails to make reasonable efforts under the
                  circumstances to remedy the breach, or (c) by failing to carry
                  out his specific responsibilities,

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                  in accordance with such standard, he has enabled another
                  fiduciary of the Plan to commit a breach.

         (3)      Each fiduciary shall furnish or cause to be furnished to each
                  other fiduciary all information needed for the proper
                  performance of its duties. Each fiduciary warrants that any
                  directions given, information furnished or action taken by it
                  shall be in accordance with the provisions of the Plan or the
                  Trust Agreement, as the case may be, authorizing or providing
                  for such direction, information or action.

15.11    Appointment of Professional Assistants and the Investment Manager. A
         Named Fiduciary may appoint such accountants, counsel, and actuaries
         and other advisers as it deems necessary or desirable in connection
         with the administration of the Plan. The Board in its sole discretion,
         may appoint, or cause the Investment Committee to appoint, one or more
         Investment Managers to manage (including the power to acquire or
         dispose of) all or any of the assets of the Trust Fund. A Named
         Fiduciary shall be entitled to rely upon and shall not be liable for
         any act or failure to act in reliance, on any opinion or reports, which
         shall be furnished to such Named Fiduciary by any such accountant with
         respect to accounting matters, counsel in respect to legal matters, or
         actuary in respect of actuarial matters as long as the Named
         Fiduciary's reliance is in accordance with the standard set forth in
         Subsection 15.10(2) hereof. The fees and costs of such services are an
         administrative expense to the Plan to be paid out of the Trust Fund
         except to the extent that such fees and costs are paid by any of the
         Employers.

15.12    Bond. The Plan Administrator shall see that the appropriate fiduciaries
         are bonded as required by federal law or regulation. Except as required
         by the Board or by state or federal statute, irrespective of this
         provision, no bond or other security shall be required of any
         fiduciary.

15.13    Indemnity. In the event and to the extent not insured against under any
         contract of insurance with an insurance company, the Sponsoring Company
         shall indemnify and hold harmless each "Indemnified Person," as defined
         below, against any and all claims, demands, suits, proceedings, losses,
         damages, interest, penalties, expenses (specifically including, but not
         limited to counsel fees to the extent approved by the Board of
         Directors of the Sponsoring Company or otherwise provided by law, court
         costs and other reasonable expenses of litigation), and liability of
         every kind, including amounts paid in settlement, with the approval of
         the Board of Directors, arising from any action or cause of action
         related to the Indemnified Person's act or acts or failure to act. Such
         indemnity shall apply regardless of whether such claims, demands,
         suits, proceedings, losses, damages, interest, penalties, expenses, and
         liability arise in whole or in part from (1) the negligence or other
         fault of the Indemnified Person, except when the same is judicially
         determined to be due to gross negligence, fraud, recklessness, willful
         or intentional misconduct of such Indemnified Person or (2) from the
         imposition on such Indemnified Person of any penalties imposed by the
         Secretary of Labor, pursuant to Section 502(1) of ERISA, relating to
         any breaches of fiduciary responsibility under Part 4 of Title I of
         ERISA. "Indemnified Person" shall mean each member of the Board of
         Directors of the Company and the Benefits Advisory Committee, each
         other individual who is allocated fiduciary responsibility hereunder,
         and each individual otherwise acting in an administrative capacity with
         respect to the Plan.

15.14    Payment of Expenses. The expenses of agents or advisers, and any other
         reasonable expenses of the Benefits Advisory Committee approved by the
         Sponsoring Company or as otherwise provided for in Section 15.02 shall
         be paid by the Plan out of the Trust Fund unless paid by the Employers.
         If such expenses are to be paid by the Employers, the portion thereof
         payable by each shall be determined by the ratio that the number of
         Participants who are Associates of each Employer bears to the total of
         all such Participants; provided, that if any expense is incurred solely
         on account of a single Employer or

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         group of Employers, such expense shall be paid by such Employer or
         Employers to the extent and in such proportion as the Sponsoring
         Company may determine.

                                   ARTICLE XVI

                              INVESTMENT COMMITTEE

16.01    Appointment of Investment Committee. The Board of Directors shall
         appoint an Investment Committee to direct Plan investments, the members
         of which may or may not be Participants in the Plan, and shall consist
         of one (1) or more members. Each member of the Investment Committee
         shall serve for a term of one (1) year and until his successor shall be
         appointed. A member may serve for more than one (1) term. If the
         Investment Committee consists of more than one (1) member, the Board
         shall appoint one (1) of the members as Chairman. The Board shall be
         authorized to remove any member of the Investment Committee with or
         without cause by notifying such member and the Chairman, in writing,
         and may fill vacancies in the Investment Committee, however caused. A
         member of the Investment Committee may resign upon ten (10) days' prior
         notice by delivery of his written resignation to the Board and other
         members of the Investment Committee.

16.02    Compensated Expenses of the Investment Committee. The members of the
         Investment Committee shall serve without compensation for their
         services as such, but the reasonable and necessary expenses of the
         Investment Committee shall be paid as provided in Section 16.08.

16.03    Secretary and Agents of the Investment Committee. The Investment
         Committee may appoint a Secretary who may, but need not, be a member of
         the Investment Committee, and may employ such agents and such clerical
         and other administrative personnel as reasonably may be required. Such
         administrative personnel shall carry out the duties and
         responsibilities assigned to them by the Investment Committee. Expenses
         necessarily incurred for such purpose shall be paid by the Trust Fund
         unless paid by the Employers.

16.04    Powers of the Investment Committee. The Investment Committee shall have
         the following powers and duties:

         (1)      To direct the Trustee in the investment, reinvestment and
                  disposition of the Trust Fund, including the investment of the
                  Trust Fund in Qualifying Employer Securities without regard to
                  the limitations set for in Sections 407(a)(2), (3), or (4) of
                  ERISA, as provided in the Trust Agreement.

         (2)      To direct the Trustee to make Exempt Loans, the proceeds of
                  which are to be used for the purposes enumerated in Section
                  12.02.

         (3)      To furnish the Employer with information which the Employer
                  may require for tax or other purposes.

         (4)      To engage the services of counsel (who may, if appropriate, be
                  counsel for the Employer) and agents whom it may deem
                  advisable to assist it with the performance of its duties.

         (5)      To receive and review reports of the financial condition and
                  of the receipts and disbursements of the Trust Fund from the
                  Trustee.

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<PAGE>

         (6)      To select the issuing company or companies from which
                  Insurance Contracts shall be purchased as provided herein, and
                  to determine the form, type and kind of such contract.

         (7)      To engage the services of an Investment Manger or Managers (as
                  defined in Section 3(38) of ERISA), each of whom shall have
                  full power and authority to manage, acquire or dispose (or
                  direct the Trustee with respect to acquisition or disposition)
                  of any Plan assets under its control.

         (8)      To select a secretary, who need not be a member of the
                  Investment Committee.

         (9)      To interpret and construe the Plan with respect to the
                  investment, reinvestment, and disposition of Plan assets.

16.05    Manner of Action. The decision of a majority of the members of the
         Investment Committee shall control. In the case of a vacancy in the
         membership of the Investment Committee, the remaining members may
         exercise any and all of the powers, authorities, duties and discretions
         conferred upon the Investment Committee pending the filling of the
         vacancy. The Investment Committee may, but need not, call or hold
         formal meetings. Any decisions made or action taken pursuant to written
         approval of a majority of the then members shall be sufficient. The
         Investment Committee shall maintain adequate records of its decisions.

16.06    Authorized Representative. The Investment Committee may authorize any
         one (1) of its members, or its secretary, to sign on its behalf any
         notices, directions, applications, certificates, consents, approvals,
         waivers, letters or other documents.

16.07    Funding Policy. The Investment Committee shall review, not less often
         than annually, all pertinent Employer information and Plan data in
         order to establish the funding policy of the Plan and to determine the
         appropriate methods of carrying out the Plan's objectives. The
         Investment Committee shall communicate annually to the Trustee and to
         any Plan Investment Manager, if any, the Plan's short-term and
         long-term financial needs so investment policy can be coordinated with
         Plan financial requirements.

16.08    Payment of Expenses. The expenses of agents or advisers, and any other
         reasonable expenses of the Investment Committee approved by the
         Sponsoring Company or as otherwise provided for in Section 16.02 shall
         be paid by the Plan out of the Trust Fund unless paid by the Employers.
         If such expenses are to be paid by the Employers, the portion thereof
         payable by each shall be determined by the ratio that the number of
         Participants who are Associates of each Employer bears to the total of
         all such Participants; provided, that if any expense is incurred solely
         on account of a single Employer or group of Employers, such expense
         shall be paid by such Employer or Employers to the extent and in such
         proportion as the Sponsoring Company may determine.

                                  ARTICLE XVII

                           PARTICIPATION BY EMPLOYERS

17.01    Adoption of Plan by Affiliated Company. Any Affiliated Company, whether
         or not presently existing, may adopt this Plan, effective as of the
         date indicated in the instrument of adoption, if such Affiliated
         Company and the Sponsoring Company execute an instrument in writing
         allowing for the Affiliated Company's adoption of this Plan and the
         Trust forming a part hereof. The provisions of this Plan

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<PAGE>
         shall apply only to each Employer severally, except as otherwise
         specifically provided herein or in such Employer's instrument of
         adoption.

17.02    Rights and Obligations of the Sponsoring Company and the Employers.
         Throughout this instrument, a distinction is purposely drawn between
         rights and obligations of the Sponsoring Company and rights and
         obligations of each other Employer. The rights and obligations
         specified as belonging to the Sponsoring Company shall belong only to
         the Sponsoring Company. Each Employer shall have the obligation, as
         hereinafter provided, to make Company Contributions for its own
         Participants, and no Employer shall have the obligation to make Company
         Contributions for the Participants of any other Employer. Any failure
         by an Employer to fulfill its own obligations under this Plan shall
         have no effect upon any other Employer. An Employer may withdraw from
         this Plan without affecting any other Employer.

17.03    Withdrawal from Plan.

         (1)      Notice of Withdrawal. Any Employer may, as of any date,
                  withdraw from the Plan upon giving the Benefits Advisory
                  Committee, the Sponsoring Company and the Trustee at least
                  sixty (60) days' notice in writing of its intention to
                  withdraw.

         (2)      Trustee Segregation of Trust Assets upon Withdrawal. Upon the
                  withdrawal by an Employer pursuant to this Article, the
                  Trustee shall segregate the share of the assets in the Trust
                  Fund, the value of which shall equal the total credited to the
                  Accounts of Participants of the withdrawing Employer. The
                  determination as to which assets are to be so segregated shall
                  be made by the Trustee in its sole discretion.

         (3)      Exclusive Benefit of Participants. Neither the segregation and
                  transfer of any Trust assets upon the withdrawal of an
                  Employer nor the execution of a new agreement and declaration
                  of trust by such withdrawing Employer shall operate to permit
                  any part of the Trust Fund to be used for or diverted to
                  purposes other than for the exclusive benefit of the
                  Participants.

         (4)      Applicability of Withdrawal Provisions. The withdrawal
                  provisions contained in this Section 17.03 shall be applicable
                  only if the withdrawing Employer continues to cover its
                  Participants and eligible Associates in another defined
                  contribution plan and trust qualified under Code Sections 401
                  and 501. Otherwise, the termination provisions of the Plan and
                  Trust shall apply.

                                  ARTICLE XVIII

                              AMENDMENT OF THE PLAN

18.01    Amendments by Sponsoring Company or Employer. The Sponsoring Company
         reserves the right to amend the Plan with respect to all Employers at
         any time and from time to time. Each Employer may amend the Plan with
         respect to such Employer at any time, and from time to time, provided
         the Sponsoring Company approves such amendment. No amendment shall
         permit any part of the Trust Fund to revert to or be recoverable by an
         Employer or be used for or diverted to purposes other than the
         exclusive benefit of the Participants or their Beneficiaries, or
         deprive any Participant of any interest he might have in the Trust Fund
         at the time of the amendment to the extent that such interest would be
         available to the Participant under Article X hereof were he to
         voluntarily resign as of the effective date of the amendment.

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<PAGE>

18.02    Effect of Amendments on Trustee. Under no condition shall any amendment
         increase the duties or responsibilities, or decrease the compensation,
         privileges, and immunities of the Trustee without the Trustee's written
         consent.

18.03    Amendment to Vesting Schedule. Under no condition shall any amendment
         change the vesting schedule to one which would result in the
         nonforfeitable percentage of the accrued benefit derived from Company
         Contributions (determined as of the later of the date of the adoption
         of the amendment or of the effective date of the amendment) of any
         Participant being less than such nonforfeitable percentage computed
         under the Plan without regard to such amendment. No amendment shall
         change the vesting schedule unless each Participant with three (3) or
         more Vesting Years of Service (determined without regard to the
         provisions of Section 10.02) as of the expiration date of the election
         period described below, is permitted to elect, within the election
         period described below, to have his nonforfeitable percentage computed
         under the Plan without regard to the amendment.

         The election period described herein shall begin no later than the date
         upon which the amendment is adopted and shall end no later than the
         latest of the following dates:

         (a)      the date which is sixty (60) days after the day the amendment
                  is adopted,

         (b)      the date which is sixty (60) days after the day the amendment
                  becomes effective, or

         (c)      the date which is sixty (60) days after the day the
                  Participant is issued a written notice of the amendment by the
                  Sponsoring Company.

         Any election made pursuant to this Section 18.03 shall be irrevocable.
         The Benefits Advisory Committee, as soon as practicable, shall forward
         a true copy of any amendment to the vesting schedule to each affected
         Participant, together with an explanation of the effect of the
         amendment, the appropriate form upon which the Participant may make an
         election to remain under the vesting schedule provided under the Plan
         prior to the amendment, and notice of the time within which the
         Participant must make an election to remain under the prior vesting
         schedule.

18.04    Protected Benefits. Subject to the above stated limitations and the
         requirement that no amendment shall eliminate, except with respect to
         any future contributions or future accrual of benefits, any
         nondiscretionary optional form of payment (as provided in Treasury
         Regulation Section 1.411(d)-4, and Treasury Regulation Section
         1.401(a)(4)-4(d) with respect to Plan Years beginning after January 1,
         1992, and Code Section 411(d)(6)) with respect to any Participant who
         is a Participant immediately prior to the amendment, the Sponsoring
         Company shall have the power to amend the Plan and Trust Agreement,
         retroactively or otherwise, in any manner in which it deems desirable,
         including, but not by way of limitation, the power to change any
         provisions relating to the administration of the Plan and Trust Fund,
         and to change any provisions relating to the benefits or payment of any
         of the assets of the Trust Fund. Each such amendment shall become
         effective when executed by the Sponsoring Company unless a different
         effective date is specified in the amendment.

18.05    Amendment Necessary to Comply with Code or Federal Statute.
         Notwithstanding anything herein to the contrary, this Plan may be
         amended at any time by the Sponsoring Company if necessary or desirable
         in order to have it conform to the provisions and requirements of the
         Code or any federal statute with respect to qualified employees' plans
         and trusts, and no such amendment shall be considered prejudicial to
         the rights of any Participant hereunder or of any Beneficiary,
         Alternate Payee or Associate. Further, it is understood that any
         provisions of this Plan as herein contained which are

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<PAGE>
         contrary to the requirements of the Code for a qualified tax exempt
         employees' plan and trust shall be deemed void and of no effect,
         without affecting the validity of other provisions hereof.

                                   ARTICLE XIX

                             PERMANENCY OF THE PLAN

19.01    Right to Terminate Plan. Each Employer contemplates that the Plan shall
         be permanent and that it shall be able to make contributions to the
         Plan. Nevertheless, in recognition of the fact that future conditions
         and circumstances cannot now be entirely foreseen, the Sponsoring
         Company reserves the right to terminate the Plan and each Employer
         reserves the right to terminate the Plan as to such Employer.

19.02    Merger or Consolidation of Plan and Trust. Neither the Plan nor the
         Trust may be merged or consolidated with, nor may its assets or
         liabilities be transferred to, any other plan or trust, unless each
         Participant would (if the Plan then terminated) receive a benefit
         immediately after the merger, consolidation, or transfer which is equal
         to or greater than the benefit he would have been entitled to receive
         immediately before the merger, consolidation, or transfer (if the Plan
         had then terminated). Additionally, another plan or trust may be merged
         into or consolidated with, or its assets or liabilities may be
         transferred to, this Plan, provided that the conditions of the
         preceding sentence are satisfied with respect to such other plan.

19.03    Continuance by Successor Company. In the event of the liquidation,
         dissolution, merger, consolidation or reorganization of an Employer,
         the successor company may adopt the Plan and Trust for the benefit of
         the Associates of such Employer. If such successor company does adopt
         the Plan and Trust, it shall, in all respects, be substituted for such
         Employer under the Plan and Trust. Any such substitution of such
         successor company shall constitute an assumption of Plan liabilities by
         such successor company, and such successor company shall have all of
         the powers, duties and responsibilities of such Employer under the Plan
         and Trust. If such successor company does not adopt the Plan and Trust,
         the Plan and Trust shall be terminated with respect to such Employer in
         accordance with the provisions of the Plan and Trust Agreement.

                                   ARTICLE XX

                 DISCONTINUANCE OF CONTRIBUTIONS AND TERMINATION

20.01    Suspension of Contributions. Should an Employer fail for any reason to
         make Company Contributions in any one (1) or more years, such failure
         shall not, of itself, terminate or discontinue this Plan and Trust as
         to the Employer and its Participants, nor shall the Employer incur any
         obligation to make up such Company Contributions in whole or in part.

20.02    Discontinuance of Contributions. Whenever an Employer determines that
         it is impossible or inadvisable for it to make further Company
         Contributions, such Employer may, without terminating the Trust,
         permanently discontinue all further Company Contributions by such
         Employer. A certified copy of such Employer's resolution or other
         formal written instrument pursuant to Section 23.07 hereof, shall be
         delivered to the Benefits Advisory Committee and the Trustee.
         Thereafter, the Benefits Advisory Committee and the Trustee shall
         continue to administer all the provisions of the Plan which are
         necessary and remain in force, other than the provisions relating to
         Company

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         Contributions by such Employer. Unless otherwise provided by such
         resolutions, the Trust shall remain in existence with respect to such
         Employer and all of the provisions of the Trust Agreement shall remain
         in force.

20.03    Termination of Plan and Trust. If an Employer determines to terminate
         (as to such Employer) the Plan and Trust completely, they shall be
         terminated insofar as they are applicable to such Employer as of the
         date specified in certified copies of resolutions or other formal
         written instrument pursuant to Section 23.07 hereof, delivered to the
         Benefits Advisory Committee and the Trustee. Upon such termination of
         the Plan and Trust and before liquidation of the Trust, the Benefits
         Advisory Committee shall require a special valuation of the Trust, if
         the liquidation is not to occur as of a Valuation Date. After payment
         of all expenses and proportional adjustment of Accounts of Participants
         with respect to such Employer to reflect such expenses, Trust Fund
         profits or losses, and subject to the limitations contained in Section
         5.06 hereof, allocations of any previously unallocated funds to the
         date of termination, such Employer's Participants shall be entitled to
         receive the amount then credited to their respective Accounts in the
         Trust Fund in a lump sum payment. If, in the opinion of the Benefits
         Advisory Committee, assets in the Trust Fund or certain of them may
         possibly not be readily salable (1) because of federal or state
         securities laws, or the rules and regulations thereunder, or (2) at
         their fair market value, the Benefits Advisory Committee may direct and
         the Trustee shall effect, a distribution of such assets in kind. If the
         entire Plan is terminating, upon completion of liquidation and
         distribution of the assets of the Trust to the Participants as provided
         for herein, the Trustee shall thereby complete the Trustee's duties,
         and the Trust shall terminate.

20.04    Participant's Rights to Benefits upon Termination or Partial
         Termination of Plan or Complete Discontinuance of Contributions. Upon
         the termination or partial termination (as determined by the Internal
         Revenue Service) of the Plan or the complete discontinuance of Company
         Contributions by an Employer, the rights of each such Employer's
         Associates who are then Participants (or, in the case of a partial
         termination, who are then Participants affected by the partial
         termination) and the rights of each other person, other than a person
         who has forfeited his Nonvested Amounts pursuant to Section 10.05
         hereof prior to the effective date of such termination (or partial
         termination) or complete discontinuance, to the amounts credited to his
         Accounts at such time shall be nonforfeitable without reference to any
         formal action on the part of such Employer, the Benefits Advisory
         Committee or the Trustee.

                                   ARTICLE XXI

                          EXCLUSIVE BENEFIT OF THE PLAN

21.01    Limitation on Reversions. Except as otherwise provided in this Article
         XXI, it shall be impossible, at any time, for any part of the Trust
         Fund, other than such part as is required to pay taxes and
         administration expenses or such part as may otherwise be permitted by
         law to be returned to the Employer, to be recoverable by an Employer,
         or to be used for, or diverted to, purposes other than for the
         exclusive benefit of the Participants, Beneficiaries and Alternate
         Payees.

21.02    Unallocated Amounts upon Termination of Plan and Trust. In the event
         the Plan and Trust are terminated, any previously unallocated amounts
         maintained in the suspense account in accordance with the provisions of
         Section 5.06 hereof which cannot be allocated to Participants upon the
         termination of the Plan and Trust pursuant to Section 20.03 hereof
         because of the limitations contained in Sections 5.06 through 5.09
         hereof, shall revert to the Employer or Employers employing the
         Participant at the time of such termination.

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21.03    Mistake of Fact or Disallowance of Deduction. If the Benefits Advisory
         Committee in good faith determines that (1) a Company Contribution was
         made by reason of a mistake of fact, or (2) a Company Contribution is
         conditioned on its being deductible under Code Section 404, but the
         Internal Revenue Service disallows such deduction, the Trustee shall,
         upon direction of the Benefits Advisory Committee, return the amount of
         the excess Company Contribution to the contributing Employer. All
         payments of returned Company Contributions under this Section shall be
         made within one (1) year from the date of the payment of such mistaken
         Company Contribution or the disallowance by the Internal Revenue
         Service of the deduction, whichever is applicable. The amount of the
         excess Company Contribution shall be the excess of (1) the amount
         contributed over (2) the amount that would have been contributed had
         there not occurred a mistake of fact or had the deduction not been
         disallowed. Earnings attributable to the excess Company Contribution
         shall not be returned to the contributing Employer, but losses
         attributable thereto shall reduce the amount of such Company
         Contribution to be so returned. Furthermore, if the withdrawal of the
         amount attributable to the mistaken Company Contribution would cause
         the balance of a Participant's Account to be reduced to an amount which
         is less than the balance which would have been in said Account had the
         mistaken amount not been contributed, then the amount to be returned to
         the Employer under this Section will be reduced so as to avoid any such
         reduction.

21.04    Failure of Qualification of Plan and Trust. The initial establishment
         of the Plan and Trust by any Employer is contingent upon obtaining the
         approval of the Internal Revenue Service. In the event that the
         Internal Revenue Service fails initially to approve the Plan and Trust
         as to any Employer and the application for determination of the initial
         qualification of the Plan was made within the time prescribed by law
         for filing the Employer's federal income tax return for the taxable
         year in which the Plan was adopted, or such later date as the Secretary
         of the Treasury may prescribe, the Trustee shall, after paying any
         expenses attributable to such initial establishment, return to such
         Employer any remaining Company Contribution made by such Employer. Such
         remaining Company Contribution shall be returned as promptly as
         practicable, but in no event later than one (1) year after the date of
         the final denial of qualification of the Plan as to such Employer,
         including the final resolution of any appeals before the Internal
         Revenue Service or the courts.

                                  ARTICLE XXII

                              TOP HEAVY PLAN RULES

22.01    Definitions.  As used in this Article XIX:

         (1)      "Defined Benefit Plan" shall have the meaning set forth in
                  Subsection 5.09(2) hereof.

         (2)      "Defined Contribution Plan" shall have the meaning set forth
                  in Subsection 5.09(4) hereof.

         (3)      "Determination Date" shall mean with respect to any Plan Year,
                  the last day of the preceding Plan Year, except that in the
                  case of the first Plan Year of any plan, the last day of such
                  first Plan Year.

         (4)      "Key Employee" shall mean any person employed or formerly
                  employed by any Employer or Affiliated Company (and the
                  beneficiaries of any such person) who is, at any time during
                  the Plan Year, or who was, during any one or more of the four
                  (4) preceding Plan Years, any one or more of the following:

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                  (a)      An officer of an Employer or an Affiliated Company
                           having Limitation Year Compensation for the
                           applicable Plan Year greater than fifty percent (50%)
                           of the maximum dollar limitation under Code Section
                           415(b)(1)(A) (as in effect for the calendar year in
                           which the Determination Date for such Plan Year
                           falls).

                  (b)      One of the ten (10) persons employed by an Employer
                           or an Affiliated Company having Limitation Year
                           Compensation for the applicable Plan Year greater
                           than the maximum dollar limitation under Code Section
                           415(c)(1)(A) as in effect for the calendar year in
                           which the Determination Date for such Plan Year
                           falls, and owning (or considered as owning within the
                           meaning of Code Section 318) both more than one-half
                           of one percent (1/2 of 1%) interest and the largest
                           interests in the Employer or an Affiliated Company.
                           For purposes of this Subsection (b): (i) a person who
                           has some ownership interest is considered to be one
                           of the top ten (10) owners unless at least ten (10)
                           other persons own a larger interest than that person,
                           and (ii) if two (2) or more persons have the same
                           ownership interest in the Employer or an Affiliated
                           Company, the person having greater annual Limitation
                           Year Compensation from all Employers and Affiliated
                           Companies shall be treated as having the larger
                           interest.

                  (c)      Any person owning (or considered as owning within the
                           meaning of Code Section 318) more than five percent
                           (5%) of the outstanding stock of an Employer or an
                           Affiliated Company or stock possessing more than five
                           percent (5%) of the total combined voting power of
                           such stock or more than five percent (5%) of the
                           capital or profits interest of an Employer or an
                           Affiliated Company which is not a corporation.

                  (d)      A person who would be described in Subsection (c)
                           above if "one percent (1%)" were substituted for
                           "five percent (5%)" each place it appears in said
                           Subsection (c), and whose aggregate annual Limitation
                           Year Compensation from all Employers and Affiliated
                           Companies is more than One Hundred Fifty Thousand
                           Dollars ($150,000).

                  (e)      Notwithstanding any other provision in this Plan to
                           the contrary, for purposes of determining ownership
                           under this Subsection 22.01(4) the rules of Code
                           Sections 414(b), (c) and (m) shall not apply in
                           defining who is an Employer.

                  The determination of who is a Key Employee hereunder shall be
                  made in accordance with the provisions of Code Section
                  416(i)(1) and the regulations thereunder.

         (5)      "Key Employee Participant" shall mean a Participant in this
                  Plan who is a Key Employee.

         (6)      "Limitation Year Compensation" shall have the meaning set
                  forth in Subsection 5.09(7) hereof but including amounts
                  contributed by an Employer or Affiliated Company pursuant to a
                  salary reduction agreement which are excludible from the
                  Associate's gross income under Code Sections 125, 402(a)(8),
                  402(h) or 403(b) which are otherwise excluded under Subsection
                  5.09(7) for Plan Years beginning prior to January 1, 1998,
                  except that if the Limitation Year and the Plan Year under the
                  applicable plan are not the same, then for purposes of this
                  Article XXII, "Plan Year" shall be substituted for "Limitation
                  Year" every place it occurs in said Subsection 5.09(7).

                                       68
<PAGE>

         (7)      "Non-Key Employee" shall mean any person employed or formerly
                  employed by any Employer or Affiliated Company, including the
                  Beneficiaries of any such person, who is not a Key Employee.

         (8)      "Permissive Aggregation Group" shall mean the Required
                  Aggregation Group, plus any other plan or plans of any
                  Employer or Affiliated Company selected by the Sponsoring
                  Company, provided that such selected plans, when considered as
                  a group with the Required Aggregation Group, would continue to
                  satisfy the requirements of Code Sections 401(a)(4) and 410.

         (9)      "Required Aggregation Group" shall mean the group of plans
                  consisting of: (a) all tax qualified plans maintained by the
                  Employers or Affiliated Companies in which at least one Key
                  Employee participates, and (b) any other tax qualified plan
                  maintained by the Employers or Affiliated Companies which
                  enables a plan described in clause (a) above to meet the
                  requirements of Code Sections 401(a)(4) or 410.

         (10)     "Valuation Date" shall mean: (a) in the case of a Defined
                  Contribution Plan, the last day of the Plan Year for the
                  appropriate plan, and (b) in the case of a Defined Benefit
                  Plan, the date used for computing plan costs for minimum
                  funding, regardless of whether a valuation is performed that
                  year.

         (11)     All of the definitions set forth in Article II hereof and not
                  set forth herein shall have the same meaning in this Article.

22.02    Determination of Top Heaviness.

         (1)      This Plan shall be a "Top Heavy Plan" with respect to any Plan
                  Year if, as of the Determination Date for said Plan Year, any
                  of the following conditions exists:

                  (a)      The Top Heavy Ratio for this Plan exceeds sixty
                           percent (60%), and this Plan is not part of a
                           Required Aggregation Group or a Permissive
                           Aggregation Group.

                  (b)      This Plan is part of a Required Aggregation Group,
                           but not part of a Permissive Aggregation Group, and
                           the Top Heavy Ratio for the Required Aggregation
                           Group exceeds sixty percent (60%).

                  (c)      This Plan is part of a Required Aggregation Group and
                           part of a Permissive Aggregation Group, and the Top
                           Heavy Ratio for the Permissive Aggregation Group
                           exceeds sixty percent (60%).

         (2)      This Plan shall be a "Super Top Heavy Plan" if it would be a
                  Top Heavy Plan under the provisions of Subsection 22.02(1)
                  above if "ninety percent (90%)" were substituted for "sixty
                  percent (60%)" everywhere sixty percent (60%) appears in said
                  Subsection 22.02(1).

         (3)      The "Top Heavy Ratio" referred to in Subsection 22.02(1) above
                  shall be determined as follows:

                  (a)      If the Employers or Affiliated Companies maintain or
                           have maintained one or more Defined Contribution
                           Plans but have never maintained a Defined Benefit
                           Plan which during the five (5) year period ending on
                           the Determination Date(s) has covered or could cover
                           a Participant in this Plan, the Top Heavy Ratio for
                           this Plan alone or for

                                       69
<PAGE>
                           the Required Aggregation Group or the Permissive
                           Aggregation Group, as appropriate, is a fraction, the
                           numerator of which is the sum of the account balances
                           under the Defined Contribution Plans for all Key
                           Employees as of the Determination Date (including any
                           part of any such account balance distributed in the
                           five (5) year period ending on the Determination
                           Date), and the denominator of which is the sum of all
                           account balances under the Defined Contribution Plans
                           for all participants as of the Determination Date
                           (including any part of any such account balance
                           distributed in the five (5) year period ending on the
                           Determination Date), both computed in accordance with
                           Code Section 416 and the regulations thereunder.

                           Both the numerator and the denominator of the Top
                           Heavy Ratio shall be increased to reflect any
                           contribution not actually made as of the appropriate
                           Determination Date but which is required to be taken
                           into account on that date under Code Section 416 and
                           the regulations thereunder. In determining the
                           account balances which have been distributed in the
                           five (5) year period ending on the Determination
                           Date, distributions under a terminated plan shall be
                           included, provided such terminated plan, if it had
                           not been terminated, would have been included in a
                           Required Aggregation Group.

                  (b)      If the Employers or Affiliated Companies maintain one
                           or more Defined Contribution Plans and maintain or
                           have maintained one or more Defined Benefit Plans
                           which during the five (5) year period ending on the
                           Determination Date(s) have covered or could cover a
                           Participant in this Plan, the Top Heavy Ratio for any
                           Required Aggregation Group or Permissive Aggregation
                           Group is a fraction, the numerator of which is the
                           sum of account balances under the aggregated Defined
                           Contribution Plans for all Key Employees determined
                           in accordance with Subsection 22.02(3)(a) above, and
                           the present value of accrued benefits under the
                           aggregated Defined Benefit Plans for all Key
                           Employees, both calculated as of the Determination
                           Date, and the denominator of which is the sum of the
                           account balances under the aggregated Defined
                           Contribution Plans for all participants determined
                           under Subsection 22.02(3)(a) above, and the present
                           value of accrued benefits under the Defined Benefit
                           Plans for all participants, both calculated as of the
                           Determination Date, all determined in accordance with
                           Code Section 416 and the regulations thereunder.

                           The accrued benefits under a Defined Benefit Plan in
                           both the numerator and denominator of the Top Heavy
                           Ratio are increased for any distribution of an
                           accrued benefit made in the five (5) year period
                           ending on the appropriate Determination Date. In
                           determining the account balances or accrued benefits
                           which have been distributed in the five (5) year
                           period ending on the Determination Date,
                           distributions under a terminated plan shall be
                           included, provided such terminated plan, if it had
                           not been terminated would have been included in a
                           Required Aggregation Group.

                  (c)      For purposes of Subsections (a) and (b) above, the
                           value of account balances and the present value of
                           accrued benefits shall be determined as of the most
                           recent Valuation Date that falls within or ends with
                           the twelve (12) month period ending on the
                           Determination Date except as provided in Code Section
                           416 and the regulations thereunder for the first and
                           second plan years of a Defined Benefit Plan. The
                           present value of accrued benefits under Defined
                           Benefit Plans shall be determined using the single
                           accrual method used for all plans of the Employers
                           and Affiliated Companies, or if no such single method
                           exists, using a method which results in benefits
                           accruing

                                       70
<PAGE>
                           not more rapidly than the slowest accrual rate
                           permitted under Code Section 411(b)(1)(C) as of said
                           Valuation Date as if the person voluntarily
                           terminated employment as of such Valuation Date.

                           For Plan Years beginning prior to January 1, 1987,
                           the present value of accrued benefits shall be
                           determined under the provisions of the applicable
                           Defined Benefit Plan without regard to the preceding
                           sentence. If any Participant was a Key Employee as
                           set forth in Subsection 22.01(4) above for any prior
                           Plan Year, but such Participant ceases to be a Key
                           Employee for any Plan Year, such Participant's
                           account balances and accrued benefits shall not be
                           taken into account for purposes of determining
                           whether or not this Plan is a Top Heavy Plan or a
                           Super Top Heavy Plan as of the Determination Date of
                           said Plan Year. Accounts and accrued benefits shall
                           be calculated to include all amounts attributable to
                           both contributions by an Employer or an Affiliated
                           Company and contributions by persons employed by the
                           Employer or Affiliated Company, but shall exclude
                           amounts attributable to voluntary deductible
                           contributions by said persons.

                           The calculation of the Top Heavy Ratios, and the
                           extent to which distributions, rollovers and
                           transfers are taken into account shall be made in
                           accordance with Code Section 416 and the regulations
                           thereunder. When aggregating plans for purposes of a
                           Permissive Aggregation Group or a Required
                           Aggregation Group, the value of account balances and
                           accrued benefits will be calculated with reference to
                           the Determination Dates that fall within the same
                           calendar year. Notwithstanding the provisions of
                           Subsections (a) and (b) above, in determining the
                           fractions referred to therein, there shall not be
                           taken into account the accrued benefits or account
                           balances of any person who has not performed services
                           for any Employer or Affiliated Company maintaining
                           any Defined Contribution Plan or Defined Benefit Plan
                           referred to in such Subsections at any time during
                           the five (5) year period ending on the Determination
                           Date.

22.03    Minimum Requirements. Notwithstanding any other provision of this Plan
         to the contrary, if the Plan is a Top Heavy Plan for any Plan Year,
         then the following provisions shall apply:

         (1)      Vesting. Any Participant who is credited with an Hour of
                  Service in the first Plan Year in which the Plan is a Top
                  Heavy Plan, or in any subsequent Plan Year after such first
                  Plan Year (whether or not the Plan is a Top Heavy Plan in such
                  subsequent Plan Year) shall have his percentage of vested
                  benefits owing upon a Termination of Employment determined
                  pursuant to the following schedule, in lieu of the schedule
                  set forth in Section 10.01 hereof:

<Table>
<Caption>
                           VESTING YEARS OF SERVICE                 PERCENTAGE
<S>                                                                 <C>
                           Less than 2 years                             0%
                           2 years but less than 3 years                20%
                           3 years but less than 4 years                40%
                           4 years but less than 5 years                60%
                           5 years but less than 6 years                80%
                           6 years or more                             100%
</Table>

         (2)      Required Minimum Allocation of Company Contributions. Except
                  as otherwise provided in this Article XXII and notwithstanding
                  any other provision of this Plan to the contrary, for any

                                       71
<PAGE>
                  Plan Year in which the Plan is a Top Heavy Plan, the Company
                  Contributions and Forfeitures, if any, allocated on behalf of
                  each Participant who is a Non-Key Employee shall not be less
                  than the lesser of: (a) three percent (3%) of such
                  Participant's Limitation Year Compensation, or (b) the largest
                  percentage of Company Contributions and Forfeitures, if any,
                  as a percentage of the Key Employee Participant's
                  Compensation, allocated on behalf of any Key Employee
                  Participant for that Plan Year; provided, however, that the
                  provisions of clause (b) hereof shall not apply to any plan
                  included in a Required Aggregation Group if such plan enables
                  a Defined Benefit Plan included in such Required Aggregation
                  Group to meet the requirements of Code Section 401(a)(4) or
                  410. The minimum allocation provided for herein shall be
                  determined without taking into account any Social Security
                  contributions, and shall be made without regard to any
                  contrary provisions of the Plan regarding the allocation of
                  Company Contributions and Forfeitures to affected Participants
                  which might otherwise result in such Participant being
                  entitled to no allocation or a lesser allocation due to the
                  Participant's failure to complete one thousand (1,000) Hours
                  of Service (or the equivalent) during the Plan Year, the
                  Participant's failure to make mandatory employee
                  contributions, or, in the case of a cash or deferred
                  arrangement, elective contributions, or the Participant's
                  failure to earn a stated amount of Compensation; provided,
                  however, that such minimum allocation shall not be required to
                  be made on behalf of any Participant who is not actively
                  employed by an Employer on the last day of the applicable Plan
                  Year. For purposes of this Section 22.03, all Defined
                  Contribution Plans required to be included in a Required
                  Aggregation Group shall be treated as one plan.

22.04    Minimum Benefits for Employers or Affiliated Companies Maintaining
         Defined Benefit Plans. If any Participant who is a Non-Key Employee is
         also a participant under a Defined Benefit Plan maintained by an
         Employer or Affiliated Company which is also a Top Heavy Plan, then
         Subsection 22.03(2) shall not apply, and such Participant shall receive
         an allocation of Company Contributions and Forfeitures in an amount no
         less than five percent (5%) of such Participant's Compensation under
         the Plan for the applicable Plan Year. Such allocation shall be made
         without regard to the amount allocated under the Plan on behalf of any
         Key Employee Participant for such Plan Year. For purposes of this
         Section 22.04, all Defined Contribution Plans required to be included
         in a Required Aggregation Group shall be treated as one plan.

22.05    Minimum Benefits for Employers or Affiliated Companies Maintaining
         Defined Contribution Plans. If any Participant who is a Non-Key
         Employee is also a participant under another Defined Contribution Plan
         maintained by an Employer or Affiliated Company which is also a Top
         Heavy Plan, the minimum allocation required under Code Section 416
         shall be made in this Plan pursuant to Subsection 22.03(2).

22.06    Super Top Heavy Plans. If in any Plan Year in which the Plan is a Top
         Heavy Plan: (1) it is also a Super Top Heavy Plan, or (2) it does not
         provide minimum benefits under Subsection 22.03(2) after substituting
         "four percent (4%)" for "three percent (3%)" contained in clause (1) of
         the first sentence of said Subsection, or (3) if Section 22.04 hereof
         applies, it does not provide minimum benefits under said Section 22.04
         after substituting "seven and one-half percent (7 1/2%)" for "five
         percent (5%)" contained in the first sentence of said Section, then, in
         any such event, for purposes of the definitions set forth in
         Subsections 5.09(3) and 5.09(5) hereof, the dollar limitations
         contained in Code Sections 415(e)(2)(B) and 415(e)(3)(B) shall be
         multiplied by 1.0 rather than 1.25.

         Notwithstanding the foregoing provisions of this Section 22.06, for
         Limitation Years beginning prior to December 31, 1999, if the
         application of said provisions would cause any individual to exceed the
         combined limits of Section 5.08 hereof, if applicable, then the
         requirements of this Section 22.06 shall

                                       72
<PAGE>
         be suspended as to such individual until such time as he no longer
         exceeds the limitations of said Section 5.08 as modified by this
         Section 22.06, and during the period of such suspension, said
         individual shall receive no allocation of Company Contributions or
         Forfeitures, if any, and shall be entitled to make no voluntary
         employee contributions, if any, under this Plan or any other Defined
         Contribution Plan, maintained by an Employer or an Affiliated Company,
         and there shall be no accruals of benefits for such individual under
         any Defined Benefit Plan maintained by an Employer or an Affiliated
         Company. The provisions of this paragraph shall not apply for
         Limitation Years beginning on or after January 1, 2000.

                                  ARTICLE XXIII

                                  MISCELLANEOUS

23.01    Effect of Bankruptcy and Other Contingencies Affecting an Employer.
         Neither the bankruptcy, receivership, insolvency, liquidation,
         dissolution, merger, consolidation or reorganization of an Employer, or
         any other eventuality affecting the Employer, shall terminate the Trust
         or render ineffectual this Plan or discharge any Employer from any
         liabilities to the Trust for which it shall already have become
         obligated, but the same shall continue in full force and effect as
         though such eventuality had not occurred; however, the Benefits
         Advisory Committee shall in such event be authorized hereby to make any
         and all rules and regulations not inconsistent with the purposes of the
         Plan as shall be necessary to deal with such change in the situation of
         the Plan and Trust.

23.02    Benefits Payable by Trust. All benefits payable under the Plan shall be
         paid or provided for solely from the Trust Fund. No Employer assumes
         any liability or responsibility therefor.

23.03    Withholding. The Plan Administrator shall determine whether or not
         federal income tax withholding is required with respect to any
         distribution or withdrawal hereunder, shall direct the Trustee to
         withhold any amounts required by law to be withheld, and shall furnish
         the Trustee with any information required by Treasury regulations
         regarding withholding. Notwithstanding any other provision of this Plan
         to the contrary, all rights and benefits of a Participant, Beneficiary
         or Alternate Payee are subject to withholding of any tax required by
         law to be withheld.

23.04    Interpretation of the Plan and Trust. It is the intention of the
         Employers that the Plan, and the Trust established by the Employers to
         implement the Plan, shall comply with the provisions of Code Sections
         401 and 501 and the requirements of ERISA, and the corresponding
         provisions of any subsequent laws, and the provisions of the Plan and
         Trust Agreement shall be construed to effectuate such intention.

23.05    Provisions Hereof for Sole Benefit of Parties Hereto and Participants.
         All of the covenants, stipulations and agreements contained in this
         Plan are and shall be for the sole and exclusive benefit of and binding
         upon the parties hereto, their successors and assigns, and the
         Participants and their Beneficiaries.

23.06    Article and Section Headings. The titles or headings of the respective
         Articles and Sections in this Plan are inserted merely for convenience
         and shall be given no legal effect.

23.07    Formal Action by Employer. Any formal action herein permitted or
         required to be taken by an Employer shall be:

                                       73
<PAGE>

         (1)      if and when a partnership, by written instrument executed by
                  one or more of its general partners or by written instrument
                  executed by a person or group of persons who has been
                  authorized by written instrument executed by one or more
                  general partners as having authority to take such action;

         (2)      if and when a proprietorship, by written instrument executed
                  by the proprietor or by written instrument executed by a
                  person or group of persons who has been authorized by written
                  instrument executed by the proprietor as having authority to
                  take such action;

         (3)      if and when a corporation, by resolution of its board of
                  directors or other governing board, or by written instrument
                  executed by a person or group of persons who has been
                  authorized by resolution of its board of directors or other
                  governing board as having authority to take such action;

         (4)      if and when a joint venture, by written instrument executed by
                  one of the joint venturers or by written instrument executed
                  by a person or group of persons who has been authorized by
                  written instrument executed by one of the joint venturers as
                  having authority to take such action; or

         (5)      if and when a limited liability company, by written instrument
                  executed by one of more of its members or by written
                  instrument executed by a person or group of persons who has
                  been authorized by written instrument executed by one or more
                  of its members as having authority to take such action.

23.08    Applicable Law. This Plan shall be governed by the laws of the State of
         Texas to the extent not preempted by applicable federal law.

         IN WITNESS WHEREOF, Hastings Entertainment, Inc. has caused this Plan
to be executed by its duly authorized representative this 7th day of February,
2002.

                                          HASTINGS ENTERTAINMENT, INC.

                                          By: /s/ Dan Crow
                                          Name: Dan Crow
                                          Title: Vice President and Chief
                                                   Financial Officer

                                       74
<PAGE>

                        SERVICE WITH PREDECESSOR EMPLOYER

None

                                       75
<PAGE>

                             PARTICIPATION AGREEMENT

         The undersigned Affiliated Company, by executing this Participation
Agreement, elects to become a participating employer in the Hastings
Entertainment, Inc. Associates' Stock Ownership Plan and Trust Agreement
("Plan") as provided for in Section 17.01 of the Plan, as if the Affiliated
Company were a signatory to that Plan. The Affiliated Company accepts, and
agrees to be bound by, all of the elections granted under the provisions of the
Plan as made by Hastings Entertainment, Inc., the Sponsoring Company.

         1. The Effective Date of the undersigned Affiliated Company's
participation in the designated Plan is April 1, 2000.

         2. The undersigned Affiliated Company's adoption of this Plan
constitutes the adoption of an amendment and restatement of a this Plan as it is
currently maintained by the Plan Sponsor, and having an original effective date
of June 1, 1993.

         Dated this 7th day of February, 2002.

                                         AFFILIATED COMPANY:
                                         HASTINGS INTERNET, INC.
                                         ------------------------------
                                         EIN: 85-0450809

                                         By: /s/ Dan Crow
                                         Name: Dan Crow
                                         Title: Vice President and Chief
                                                  Financial Officer

                                         SPONSORING COMPANY:

                                         HASTINGS ENTERTAINMENT, INC.
                                         EIN: 75-1386375

                                         By: /s/ Dan Crow
                                         Name: Dan Crow
                                         Title: Vice President and Chief
                                                  Financial Officer

                                       76

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